HomeMy WebLinkAbout2015-04-20 City Council Agenda PacketCITY OF PALO ALTO
CITY COUNCIL
April 20, 2015
Special Meeting
Council Chambers
5:30 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 April 20, 2015
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PUBLIC COMMENT
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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 5:30-6:30 PM
Public Comments: Members of the public may speak to the Closed Session item(s); three minutes per speaker.
1. CONFERENCE WITH LABOR NEGOTIATORS
City Designated Representatives: City Manager and his designees
pursuant to Merit System Rules and Regulations (James Keene,
Molly Stump, Kathy Shen, Melissa Tronquet, Dania Torres Wong,
Sandra Blanch, David Ramberg, Joe Saccio, Walter Rossmann,
Eric Nickel, Dennis Burns)
Employee Organizations: Palo Alto Police Officers Association (PAPOA);
International Association of Fire Fighters (IAFF), Local 1319
Authority: Government Code Section 54957.6(a)
Study Session
6:30-7:30 PM
2.Joint Study Session of the City Council and the Utilities Advisory
Commission
REVISED
2 April 20, 2015
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7:30-9:00 PM
3. Annual Earth Day Report Study Session and Sustainability/Climate
Action Plan (S/CAP) Update
Agenda Changes, Additions and Deletions
City Manager Comments 9:00-9:10 PM
Oral Communications 9:10-9:25 PM
Members of the public may speak to any item NOT on the agenda. Council reserves the right to limit the duration of
Oral Communications period to 30 minutes.
Minutes Approval 9:25-9:30 PM
4. February 23, 2015
March 2, 2015
March 9, 2015
Consent Calendar 9:30-9:35 PM
Items will be voted on in one motion unless removed from the calendar by three Council Members.
5. Finance Committee Recommends Adoption of a Budget Amendment
Ordinance Amending the Budget for Fiscal Year 2015 to Adjust
Budgeted Revenues and Expenditures in Accordance with the
Recommendations in the FY 2015 Midyear Budget Review Report and
to Adopt a Resolution to Amend the Compensation Plan for the
Management/Professional Group to Add a Principal Attorney
6. Staff Recommendation that the City Council Adopt a Resolution
Amending Gas Rate Schedule G-10 (Compressed Natural Gas Service)
to Recover Cap-and-Trade Regulatory Compliance Costs and Approving
New Palo AltoGreen Gas Rate Schedule G-10-G (Compressed Natural
Green Gas Service)
7. Approval of Three Contracts with: 1) Delta Dental for Dental Claim
Administration; 2) Vision Service Plan for Vision Claim Administration
and Fully Insured Vision Plan; and 3) Life Insurance Company of North
America (CIGNA) for Underwriting of the City of Palo Alto’s Group Life,
Accidental Death and Dismemberment (AD&D), and Long Term
Disability Insurance (LTD) Plans for up to Three Years for Each
Contract
3 April 20, 2015
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8.Approval of Loan Documents and Agreements Providing $1,000,000
for the Rehabilitation of the Stevenson House and Adoption of a
Budget Amendment Ordinance Appropriating Funds from the
Residential Housing In-Lieu Fund for this Purpose
9.Adoption of Amended Ordinance Amending Chapter 9.14 (Smoking
and Tobacco Regulations) of the Palo Alto Municipal Code to Establish
New Outdoor Smoking Restrictions in Commercial Areas and Outdoor
Dining
Action Items
Include: Reports of Committees/Commissions, Ordinances and Resolutions, Public Hearings, Reports of Officials, Unfinished Business and Council Matters.
9:35-10:00 PM
10.PUBLIC HEARING: Adoption of Ordinances Amending Chapters 16.14,
16.17, and 16.18 to Adopt Local Amendments to the California Green
Building Code and the California Energy Code 10:00-10:30 PM
11.Colleagues’ Memo from Mayor Holman, Council Members Burt, Schmid,
and Wolbach Regarding Strengthening City Engagement with
Neighborhoods (Continued from March 16, 2015)
10:30-10:45 PM
12.Discussion and Appointment of a Council Member to the Board of
Directors of the Bay Area Water Supply & Conservation Agency
(BAWSCA) and the Bay Area Regional Water System Financing
Authority
Inter-Governmental Legislative Affairs
Council Member Questions, Comments and Announcements
Members of the public may not speak to the item(s)
Adjournment
AMERICANS WITH DISABILITY ACT (ADA)
Persons with disabilities who require auxiliary aids or services in using City facilities, services or programs or who
would like information on the City’s compliance with the Americans with Disabilities Act (ADA) of 1990, may
contact (650) 329-2550 (Voice) 24 hours in advance.
4 April 20, 2015
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DURING NORMAL BUSINESS HOURS.
Additional Information
Standing Committee Meetings
Special City Council Meeting
Special Finance Committee Meeting
City/School Committee Meeting
Schedule of Meetings
Schedule of Meetings
Tentative Agenda
Tentative Agenda
Public Letters to Council
Set 1 Set 2
April 17, 2015
April 22, 2015
April 23, 2015
City of Palo Alto (ID # 5721)
City Council Staff Report
Report Type: Study Session Meeting Date: 4/20/2015
City of Palo Alto Page 1
Summary Title: Study Session Between the Council and UAC
Title: Joint Study Session of the City Council and the Utilities Advisory
Commission
From: City Manager
Lead Department: Utilities
This is a joint study session of the City Council and the Utilities Advisory Commission (“UAC” or
“Commission”). No action is recommended.
The City Council and the UAC periodically meet in a joint study session to discuss matters that
fall within or are otherwise related to the role, purposes and duties of the UAC. Below is the list
of potential topics for discussion during the joint Council-UAC study session scheduled for 6:00
p.m. on April 20, 2015:
1. Opportunity for Council Members to identify specific areas of interest within the
purview of the UAC.
2. Opportunity for UAC Members to identify specific areas of interest within the purview of
the UAC.
3. Issues identified by the UAC at the Commission’s April meeting to be discussed with the
City Council:
UAC’s role related to Fiber-to-the-Premises Projects, including in the municipal and
third party space (e.g. Google Fiber);
UAC’s Role and Responsibilities: Delegation of Authority from City Council;
Electric Undergrounding;
UAC Role in the Sustainability Climate Action Plan; and
Utilities Rate Increases.
The joint UAC-Council study session discussion is likely to focus on the topics identified above
and may also touch on other matters concerning to the role, duties and purpose of the UAC
(See Palo Alto Municipal Code § 2.23.050).
City of Palo Alto (ID # 5693)
City Council Staff Report
Report Type: Study Session Meeting Date: 4/20/2015
City of Palo Alto Page 1
Summary Title: Earth Day Report (EDR15)
Title: Annual Earth Day Report Study Session and Sustainability/Climate
Action Plan (S/CAP) Update
From: City Manager
Lead Department: City Manager
This is a Study Session report and requires no Council Action.
Executive Summary
As the heart of the region that drives the eighth largest economy in the world, what is created
in Palo Alto has influence far beyond its borders. Palo Alto has made impressive—and in some
cases remarkable—progress toward reducing its carbon impacts, greenhouse gas emissions,
and resource consumption since establishing its first Climate Protection Plan in 2007.
Bold actions like carbon neutral electricity, and systematic improvements ranging from water
conservation and EV readiness to green building ordinances and safe routes to schools, have
put Palo Alto in the forefront of sustainability leadership internationally. Based on annual data
for the calendar year 2014, the community of Palo Alto has cut its overall greenhouse gas (GHG)
emissions by an estimated 32% from 2005 levels and 37% from 1990 levels1 2. It has energy
efficiency initiatives underway for further reductions at City facilities and in the community, and
the City of Palo Alto Utilities (CPAU) is increasing renewable power sourcing and encouraging
local solar generation. Having passed the initial climate protection goal set by Council in 2007
(20% reduction in 1990 levels of GHG emissions by 2012), the City is in the position to establish
new goals that not only generate cost savings but set the conditions for Palo Alto to take a
global leadership position, commit to a low- or zero-carbon future, and create a roadmap to
that future.
1 GHG reductions were overstated in the 2014 Earth Day Report, due to a transcription error; the correct figures
should have been 29% and 35%, respectively, not 29% and 41%.
2 These figures are net of RECs (Renewable Energy Certificates), and reflect estimates of transportation emissions
that were still being updated at the time this report was prepared, and do not include “scope three” emissions.
See discussion below.
City of Palo Alto Page 2
But, like most cities, it is a long way from meeting the challenge of the looming climate crisis, in
both its global and local aspects. Our present GHG reduction trajectory will not take us to
California’s stated goal of 80% reduction by 2050—much less to the steeper reductions that will
be required if we adopt more aggressive targets. Meeting those climate goals will require
courage, focus, and a commitment to data-driven agility that is rare in most organizations. And
it will require adequately resourcing the sustainability and climate commitments the City
decides to make.
While cities around the world ratchet up their own sustainability initiatives, Palo Alto will need
to act boldly in order to maintain its legendary leadership position—and to ensure the well-
being of this community in the face of the challenges ahead. Specifically, Palo Alto will have to
find ways to address GHG emissions from the use of natural gas and significantly reduce the use
of single occupant automobiles in order to make meaningful progress toward reducing carbon
emissions. In the context of California’s worsening drought there will also be increasing need to
reduce water consumption, address risks of reduced hydroelectric supplies and adapt to the
other potential impacts of climate change. If we’re smart, we can use the climate crisis to
catalyze the community around a better life as well as a better environment.
Background
The City of Palo Alto is poised to initiate a series of ambitious programs in order to
appropriately respond to changes in climate, markets, and the needs of its Community. The
drivers for this work are varied, and come from a range of authoritative sources:3
Science: The International Panel on Climate Change (IPCC) has determined that “we risk
severe, pervasive and irreversible impacts” from climate change, and need “substantial”
emissions reductions (of 40-70% or more) by mid-century. The International Energy
Agency has asserted that 80% of proven fossil fuel reserves must “stay in the ground” if
the planet is to avoid the worst of climate projection.
Meanwhile, climate disruption records continued to be broken in 2014, which was the
warmest year recorded since 1880. Munich Re America reported that “Insured winter
storm losses in the United States in 2014 were the highest in eight years, at $2.3 billion,
while insured losses due to severe thunderstorm events exceeded $10 billion for the
sixth year in a row.” 4
The UN World Meteorological Organization (WMO)5 reported that high ocean
temperatures contributed to exceptionally heavy rainfall and floods in many countries
and extreme drought in others. Twelve major Atlantic storms battered the United
Kingdom in early months of 2014, while floods devastated much of the Balkans
throughout May. The monthly precipitation over the Pacific side of western Japan for
3 From the Office of Sustainability’s Sustainability & Climate Action Plan S/CAP FAQ’s
4 http://www.claimsjournal.com/news/national/2015/03/04/262111.htm
5 http://www.un.org/apps/news/story.asp?NewsID=49970#.VRm-yvnF-So
City of Palo Alto Page 3
August 2014, meanwhile, was 301 per cent above normal – the highest since area-
averaged statistics began in 1946. At the same time, crippling droughts have struck large
swathes of the continental United States while Northeast China and parts of the Yellow
River basin did not reach half of the summer average, causing severe drought.
California: The State of California, in AB32, committed the state to reduce its
greenhouse gas emissions by 20% from 1990 levels by 2020, and set an aspirational goal
to reduce emissions 80% by 2050.6 Recent revisions to California’s Title 24 will require
that all new residential buildings be Zero Net Energy (ZNE) by 2020, and new all
commercial buildings by 2030; this will apply to retrofit projects above certain
thresholds.7 Meanwhile, Governor Brown has challenged the state to Increase the
renewable portfolio to 50% of needs, reduce petroleum up to 50% and double the
efficiency of existing buildings by 2030.8
Europe: The European Union has adopted an emissions reduction target of 40 percent
below 1990 levels by 2030. The United Kingdom has committed to reduce its emissions
by 50 percent below 1990 levels within the 2022–2027 timeframe, and Germany has set
2030 emissions target of 55 percent below 1990 levels.
United States: President Obama’s March 19 2015 Executive Order9 requires the federal
government to cut GHGs by 40% by 2025 from 2008 levels and increase Federal
renewable energy sources to 30%; estimated savings: $18 billion. Several major federal
suppliers, including Lockheed Martin, General Electric, and IBM, announced new
voluntary GHG reduction commitments; IBM says it will cut energy-related greenhouse
gas emissions 35% (against 2005 levels) by 2020.10
Other cities: Cities around the world have become the leaders on climate initiatives;
more than 17 cities in the Climate Neutral Cities Alliance have already declared the goal
of carbon neutrality by 2050 (which they are defining as 80% reduction in GHGs by
2050)—and Copenhagen and Melbourne have committed to 100% emissions reductions
by 2025, while Burlington VT11 and other cities have already achieved 100% renewable
energy supply.
6 First Update to the Climate Change Scoping Plan: Building on the Framework Pursuant to AB32--The California
Global Warming Solutions Act of 2006
http://www.arb.ca.gov/cc/scopingplan/2013_update/first_update_climate_change_scoping_plan.pdf
7 http://cleantechnica.com/2014/04/15/californias-net-zero-energy-building-will-reshape-us-construction-
industry/
8 http://gov.ca.gov/news.php?id=18828
9 https://www.whitehouse.gov/the-press-office/2015/03/19/executive-order-planning-federal-sustainability-next-
decade
10 http://thinkprogress.org/climate/2015/03/19/3635953/obama-federal-ghg-emissions-executive-order/
11 http://thinkprogress.org/climate/2014/09/15/3567307/vermont-renewable-power/
City of Palo Alto Page 4
City Measure Results
Benicia, CA12 Benicia has budgeted $625,000 to
incentivize businesses to make
resource and management
improvements to reduce energy,
water, solid waste, recycling, and
fuel costs.
As of November 2013 the program has
assisted ten businesses for annual
cumulative annual savings of nearly
$140,000 while reducing annual GHG
emissions by 135 metric tons.
New York
City13
In 2007, New York committed to
reducing emissions and by
prioritizing efficient modes of
travel and broadened its
commitment in 2011 to include
equity, by expanding travel
choices
Cycling: largest bike share system, with
6,000 bikes serving up to 40,000 daily
trips.
Electric Vehicles: City fleet uses 600 EVs
and has 153 charging stations. City Council
passed a law that requires 20 percent of
new off street parking to be built “charger
ready”.
Fort Collins,
CO14
Fort Collins Utilities is central in
the public/private FortZED
partnership to reduce 40MWh (15
MWh residential, 25 MWh
commercial) and develop a new
business model to help customers
access a broader range of energy
services—efficiency
improvements, distributed
renewable energy options, and
demand response—all offered as
a bundled package of integrated
utility services.
Unanimous approval from the City Council
for a climate plan that “requires all sectors
of the city’s economy to aggressively
ratchet down greenhouse gas pollution.
The Council set benchmark reductions
from 2005 levels of 20 percent by 2020;
80% by 2030; and 100% by 2050.”
Copenhagen,
Denmark15
Carbon neutral and 75% modal
share for bicycles to work and
educational institutions by 2025
Plan adopted and underway
Helsinki,
Finland16
Car-free by 2025 Kutsuplus “dynamically re-routable”
shuttle deployed; first “mobility operator”
formed (23 company consortium);
collaboration with Palo Alto and Silicon
Valley in development.
12 Climate Change Scoping Plan: Chapter III: California’s Approach to Climate Change
13 PlaNYC Progress Report 2014: http://www.nyc.gov/html/planyc2030/downloads/pdf/140422_PlaNYCP-
Report_FINAL_Web.pdf
14 FortZED http://fortzed.com/; http://www.environmentcolorado.org/news/coe/fort-collins-sets-gold-standard-climate-action
15 Good, Better, Best: The City of Copenhagen’s Bicycle Strategy 2011-2025
kk.sites.itera.dk/apps/kk_pub2/pdf/823_Bg65v7UH2t.pdf
16 Kutsuplus https://kutsuplus.fi/home
City of Palo Alto Page 5
There are multiple reasons for Palo Alto to pursue the sustainability and climate initiatives
discussed here: to make a small contribution to reducing global emissions; to provide a
leadership example to other cities; to save the City and community money through improved
efficiency; to reduce future risk; and balance fiscal responsibility with other community values.
Solutions appropriate for Palo Alto will need to address specific local economic considerations
and community needs. This in turn requires understanding the specific needs of the City and
community related to energy and resource consumption, transportation, development and the
considerations of daily life. And it requires the data systems that provide this view into the
systems that produce the experience of living and working in Palo Alto.
Discussion
Palo Alto’s climate risks are significant, and are the most difficult kind to address: low
likelihood, high potential impact. It can be hard to justify significant investment in risks that are
seen as small or distant. It’s certainly not prudent to go “all in” on such risks. But it’s also not
prudent to ignore risks with impacts as potentially large as significant, long term disruption of
the climatic regime on which California’s prosperity depends.
Fortunately there are ways to address these concerns—with considerable near-term benefit.
Efficiency, for example, can be seen as performance improvement and innovation, not sacrifice.
Approached intelligently, Palo Alto can approach the climate challenge in ways improve City’s
governments operational and financial effectiveness, while improving quality of life for all Palo
Altans, —with actions that make sense both by today’s criteria and by the criteria that one of
the “low risk, high impact” futures would require.
This will require cooperation across City departments and diverse community stakeholders, in
which staff and stakeholders understand their roles within their individual domains of
influence, and connect with partners outside to do the larger work together.
This discussion includes:
Sustainability and Climate Action Plan (S/CAP)
GHG Emissions from City Operations
GHG Emissions from City and Community Activities
GHG Emissions from City of Palo Alto Utilities
Water Consumption and Considerations
Highlights and Accomplishments from City Departments
Future Vision
Next Steps
Sustainability and Climate Action Plan (S/CAP)
Every major city in our region, and in the world, has made a commitment to meet the challenge
of climate change with local solutions to a global issue. Palo Alto led the way with one of the
City of Palo Alto Page 6
nation’s first Climate Protection Plans in 2007, and is now poised to take the next step in
climate leadership.
The Sustainability and Climate Action Plan (S/CAP) is Palo Alto’s ambitious plan to create a
prosperous, resilient city for all residents. It supports Palo Alto’s leadership position on climate
protection and shows how the City will meet—or exceed, state requirements for GHG emission
reductions.
The City has named this initiative the Sustainability and Climate Action Plan, not the Climate
Action Plan, as a reminder that it’s about water and ecosystem function as well as climate and
tons of GHGs. It’s also an organizing frame for considering the future we want—and, as such, it
will need to integrate with the Comprehensive Plan and other City initiatives now underway.
But, in contrast to most City initiatives, it will attempt to explicitly link the City’s more
traditional approach toward safely achievable goals with a “reverse engineered” future vision—
planning backwards from “impossible” goals to the present—and ensuring that those two
approaches meet.
Together with a world-class consulting team, staff has held an invitational expert charrette17,
convened an open call community "Ideas Expo" (at which more than 75 people presented 18
poster sessions and other ideas), convened an “executive advisory board”, provided interim
briefings to City Council on developing themes, and is planning a community climate summit,
and participation in relevant CompPlan events this year.
Staff and consultants are exploring three “goals scenarios”:
California’s aspiration of 80% reduction by 2050 (80x50);
a more aggressive goal of 80% reduction by 2030 (80x30); and
the “California Moonshot”: 100% carbon neutral by 2025 (100x25).
The S/CAP team is testing these challenging scenarios with a disciplined process:
Surveying the world to identify best practices and performance goals
Generating a range of potential technology and policy options
Filtering these options for technical, financial, political, behavioral and legal
feasibility
Developing a series of implementation "roadmaps" for meeting each of the potential
goals, along with prospective budgets—and financing strategies—for achieving
those goals
Presenting these roadmaps to the community and Council as part of a grounded
conversation to determine the plan and path we will choose.
17 Charrette: A public meeting or workshop devoted to a concerted effort to solve a problem or plan the design of
something.
City of Palo Alto Page 7
Staff has not yet determined whether the Moonshot—or any of these goals—is achievable
either financially, politically or socially. But these challenges affect the questions the S/CAP
team is asking, and the questions that are asked affect the answers we find.
Some of the key strategies under evaluation for Palo Alto’s pathway to a low-carbon—or no-
carbon—future include radical resource efficiency, comprehensive electrification (“fuel
switching” from fossil fuels to carbon-neutral electricity), local renewable energy generation
and distributed energy storage, rethinking mobility to provide more convenient transportation
with less congestion, forthrightly facing water risk, bringing municipal operations—from
facilities to fleets—in line with Council policy and community vision, exploring future business
implications for CPAU as it adapts to new conditions, and broadening our focus from
“sustainability” —a broad notion of “do no harm”—to “adaptation” —expanding our capacity
to respond and thrive in the face of shocks and stresses like drought and sea level rise—to
“regeneration” —building the health and vitality and the ecosystems, both local and far-flung,
that support it.
GHG Emissions from City Operations
Overall the performance of City Operations is mixed for 2014, with steady declines in emissions
from Vehicle Fleet, Wastewater Facilities, and Water Delivery Facilities. There were increases in
emissions for Buildings & Other Facilities and Solid Waste Facilities, and the City will explore
action items in these areas.
City of Palo Alto Page 8
Figure 1: GHG Emissions for City Operations by Activity Category (2005-2014)
Source: CPAU: GHG Emissions Analysis (February 2015)
The increased Facility emissions correspond to increases in energy and natural gas consumption
during 2013 and 2014, which is due in part to large construction projects across the City, and
several buildings being returned to service. Staff expects that the improvements made to
buildings and systems will result in improved resource and GHG performance in years to come.
The past three years of consumption and cost data for City Operations shows steady increase in
electricity consumption across all facilities, with slight declines in gas and water usage. To
identify opportunities to optimize the portfolio of buildings, staff recommends that the City
conduct regular resource efficiency audits to reduce any non-essential consumption and
spending.
Year Electricity
(kWh)
Electricity
Cost
Gas
Usage
(Therms)
Gas
Cost
Water
Usage
(CCF)
Water
Cost
Annual
Totals
2014
29,713,565 $3,126,178
891,292 $938,600
242,336 $1,893,504 $5,958,281
2013
28,809,795 $3,193,814
842,020 $832,556
283,943 $2,137,872 $6,164,243
2012
29,037,416 $3,331,729
827,295 $780,787
230,204 $1,650,344 $5,762,860
3-Year
Totals $9,651,721 $2,551,942 $5,681,720
Source: CPAU: All City Accounts (2012-14)
Some performance-driven upgrades have been performed to reduce energy consumption and
manage resources more effectively as Public Works renovated several properties, specifically
City of Palo Alto Page 9
the LEED construction of the Mitchell Park Library and Community Center (which is awaiting
LEED platinum certification) and the Rinconada Library expansion, low-water landscaping at
Eleanor Pardee Park which is projected to save 360,000 gallons of water per year—from a 2014
baseline of 3.3 million gallons, and a storm water runoff mitigation program at Green Street in
the Southgate Neighborhood.
Combined GHG Emissions from City & Community Activities
Combined City and community emissions continue to decline, as a result of CPAU efficiency
programs and exogenous factors, though there has been some fluctuation in City facility
resource use as a result of various construction programs that have taken buildings out of
service and back into service.
City of Palo Alto Page 10
Figure 2 shows the greenhouse gas impacts across the Palo Alto Community:
Figure 2: Palo Alto Municipal & Community GHG Emissions (net of Renewable Energy Credits)18
Source:
2014 City Accounts Utilities Usage
The emissions shown are net of the RECs purchased by CPAU and reflect the emissions that will
be reported (after third-party verification) to The Climate Registry according to the Electric
Power Sector protocol.
(Note: Road travel emissions in this chart use a calculation generated by transportation
consultants Fehr & Peers in 2012 for 2013 and 2014 as well. New analysis of 2014
transportation emissions is now underway, and will be updated for the April 20 study session.)
18 Net Brown Power (fossil fuel-based) electricity emissions taper down and are not present in 2013 because the CPAU began
purchasing RECs to offset the all GHG emissions for this power source. This will continue as CPAU’s carbon neutral energy
strategy until 2017, when the utility has secured renewable energy contracts for a “native” carbon made up of renewable and
hydroelectric power, and thus carbon neutral without application of RECs. But the purchase of RECs may have to be resumed if
hydropower cannot provide sufficient electricity because of continued drought conditions.
City of Palo Alto Page 11
The majority of these emissions are not from City fleet vehicles—and Fleet Services is reporting
a steady reduction in fuel consumption and emissions over the past years; these are emissions
from residents, workers, and people moving to and from, and doing business in, Palo Alto.
There’s no getting around the fact that a large percentage of emission reductions will have to
come from changing behavior and reducing vehicle miles traveled (VMT). The State’s fuel
efficiency standards and clean fuel initiatives will reduce vehicle emissions somewhat over
time, as will a shift from fossil fuels to hybrid and electric vehicles. The City can’t control the
cars, which will continue to get more efficient and more electrified, but it can influence the
driving environment. The S/CAP is exploring multiple strategies to help people shift from using
single occupancy vehicles (which dominate the commute and around town traffic flows) to a
comprehensive suite of attractive mobility options. The Office of Sustainability is working with
its partners in the Planning Department, Development Services, Fleet Services, regional
business and regional agencies, and the community to envision a spectrum approach for
transforming mobility within the City, inspired by Finland’s “mobility as a service” (MaaS)
initiatives.
The second largest component of the community’s GHG emissions is Natural Gas, which is
discussed under “Electrification” below.
This report does not include such significant “scope three19” emissions (indirect emissions not
owned or controlled by the reporting entity) as impacts of community air travel and purchases,
and most notably of food. These have not been included in prior staff reports, but, as shown in
Figure 3, they represent significant emissions sources. These sources are much larger than the
transportation and natural gas emissions on which discussion has focused to date, and Council
may want to discuss how to address them in the S/CAP and subsequent reports.
19 The GHG Protocol further categorizes these direct and indirect emissions into three broad scopes: Scope 1: All direct GHG
emissions. Scope 2: Indirect GHG emissions from consumption of purchased electricity, heat or steam. Scope 3: Other indirect
emissions, such as the extraction and production of purchased materials and fuels, transport-related activities in vehicles not
owned or controlled by the reporting entity, electricity-related activities (e.g. T&D losses) not covered in Scope 2, outsourced
activities, waste disposal, etc. http://www.ghgprotocol.org/calculation-tools/faq
City of Palo Alto Page 12
Figure 3: Example Estimated Annual Household GHG Emissions (MT CO2e)
Source: CPAU
GHG Emissions from City of Palo Alto Utilities
Palo Alto’s biggest source of leverage to increase resource efficiency and reduce carbon impacts
resides with its largest municipal business entity: City of Palo Alto Utilities (CPAU).
In 2013, the Palo Alto City Council committed to pursuing only carbon-neutral electric
resources. CPAU is currently achieving “carbon neutrality” for its electricity by purchasing RECs
to offset the GHG impacts of the market power in its energy mix, as a bridge to 2017 when
CPAU electricity will be generated entirely from hydroelectric and renewable sources, with no
RECs needed except in the event of shortfalls such as droughts.
City of Palo Alto Page 13
Figure 4: CPAU Electricity Portfolio Actual & Projected (Percentage of Supply, CY 2005-2025)
Source: CPAU: Resource Management
CPAU reports cumulative electricity savings of 5.2% and cumulative natural gas savings of 2.6%-
-with a combined reduction of 15,233 MT CO2e—from 2006-2014. These savings are reductions
from the total energy load for all Municipal, Residential, and Commercial accounts. While
respectable, these reduction rates are not sufficient to reduce natural gas 80% by 2050.
City of Palo Alto Page 14
Figure 5: CPAU Use Data Trends for Natural Gas, Electricity & Water 2007-2014
Source: CPAU: Utility Billing Based Consumption Information History by Class 2015
City of Palo Alto Page 15
CPAU purchased PaloAltoGreen RECs to offset a percentage of the market power during the
years 2005-2012 (as a result of ultimately 22% of customers participating in this voluntary
program) and began offsetting all market power purchases starting in 2013. CPAU purchases
market power to fill the gap between the renewable and hydropower provided to customers,
and the total demand of nearly 1000 Gigawatt hours per year (GWh).
The use of market power with RECs is a transitional step to the fully carbon neutral electricity
(without RECs) slated to be in place by 2017 (See Figure 6.) This projection of the renewables
portfolio in Figure 6 does not include expected local rooftop solar power generation (“local
PV”), and does not show the base supply of large hydro energy (about 40-50% of supply in an
average year), or the possible future use of market power to fill any gaps between energy
demand and hydroelectric and renewables supply.
Figure 6: CPAU Renewable Energy Portfolio Actuals and Projections (with renewable energy credits)
Source: CPAU
In addition to its plans to expand the renewable energy portfolio, the City is developing
strategies for exploring two potential future scenarios: Electrification and Facilitating Electric
Vehicles.
Electrification: Palo Alto’s use of RECs and expansion of its renewable energy supply
makes its electricity “cleaner” than natural gas. Removing this significant source of GHG
emissions (more than 30% of the total) would enable would enable CPAU to deliver
carbon neutral energy, not just carbon neutral electricity. At Council’s direction, CPAU,
The Office of Sustainability, Public Works, Development Services and other departments
are exploring and evaluating potential options for replacing natural gas appliances (for
example for water and space heating, cooking, clothes drying) with electric, in addition
City of Palo Alto Page 16
to encouraging electric vehicles.20 This approach, if adopted, could require an innovative
approach to CPAU’s business model to enable the Utility to stay profitable and deliver a
high quality service as it replaces one of its current revenue streams (natural gas) and
expands another (electricity). The transition challenges, across a number of fronts,
should not be underestimated. In the short term, the newly launched PaloAltoGreen
Gas program has a goal of enrolling 20% of existing natural gas customers into an offset
program with a target of purchasing high quality carbon allowances to offset 16,000
metric tonnes of greenhouse gas (MT GHG)—about 10% of natural gas load—by 2020.
Long term, CPAU will also need to explore how it will maintain existing gas
infrastructure in the face of declining gas revenues.21
Facilitating Electric Vehicles: The projected increase in EVs used by residential and
commercial customers will have significant impact on grid demand and the potential
need for energy storage capacity. CPAU is working to keep pace with demand and
infrastructure needs, and CPAU and Development Services are working together to
ensure that building codes and energy strategy are in sync, since electrical panels in
existing homes will need to be upgraded to handle the increased power requirements
from charging an EV.
Water Consumption
Just as CPAU’s supply of electricity from large hydro has been reduced due to drought
conditions, the City’s drinking water supply is under pressure as well. Figure 7 provides a
snapshot from August 2014 of residential water consumption (in gallons per day per capita) for
the municipalities and water districts in the San Francisco Bay hydrologic region, based on data
from the California Environmental Protection Agency. Hillsborough is at one end of the
spectrum, with high consumption and low population, and San Francisco is at the other end,
with a large population and very low consumption. Palo Alto is in the middle with similar per
capita residential consumption to San Jose and the East Bay Municipal Utilities District
(EBMUD).
20 http://www.cityofpaloalto.org/civicax/filebank/documents/45640
21 Any proposed funding, incentive or other design elements in this area must be specifically analyzed and
considered in the context of all applicable legal, statutory and regulatory requirements and guidance, including, for
instance, constitutional limitations on utility rates imposed by Californians when they adopted Proposition 26,
obligations set forth in the Cap-and-Trade regulations adopted by the California Air Resources Board, and other
miscellaneous requirements embedded in the California Public Utilities Code.
City of Palo Alto Page 17
Figure 7: Water Supplier Data Gallons Per Day (San Francisco Bay Hydrologic Region, 2014)
Source: California Environmental Protection Agency, State Water Resources Control Board
CPAU data shows that total water consumption declined 9% from 2007 to 2013, and an
additional 16% over 2013 usage for the period from January 31, 2014, when the SFPUC
requested a 10% cutback, to the end of 2014. The utility is on target to meet its long term 20%
per capita reduction by 2020 goal (set by the State Water Conservation Bill of 2009 (SBx7-7)22,
and is updating its Urban Water Management Plan,23 which is the long term policy document
with projections for demand, population and supply resources. In addition, CPAU and other
departments are actively working to meet the Governor’s directive of 25% reductions24, and
even greater reductions if the drought continues.
23 2010 Urban Water Management Plan: Cityofpaloalto.org/UWMP
24 Note that the Governor’s Executive Order calling for a statewide reduction of 25% for urban potable water use
does not necessarily mean 25% for Palo Alto. The State Board released its regulatory framework April 7 2015 and
the target for Palo Alto was 20%.
City of Palo Alto Page 18
Figure 8: CPAU Total Water & Gallons Per Capita Per Day Consumption: FY 2007-2014
Source: CPAU: Utility Billing Based Consumption information history by class 2015
Water presents multiple challenges:
Are we conserving enough to adapt to drought conditions? If the current drought
represents a long term shift in California’s precipitation regime, there could be impacts
on potable water supply, hydroelectric power capacity and even California agriculture.
Santa Clara Valley Water District has already set a new target of 30% reduction;
Livermore and Dublin have targeted 50% and 60% reductions in outdoor water use.
CPAU does not have detailed local data on how water is used; “…according to the state
water board, outdoor irrigation makes up 44% of the state’s urban and suburban water
use.”25 Better data might support more effective conservation programs.
Most of Palo Alto’s economic urban forest is made up of species that are neither native
nor drought-adapted. How will Palo Alto preserve and protect this resource in the face
of climate change, beyond the measures addressed in the Urban Forest Master Plan?
Successful conservation programs result in reduced utility revenues; regional water
agencies are considering up to 30% rate increases this spring to make up the shortfall.
Zero Waste
The City is on track to meet its 2021 goal of 90% diversion of recyclable and compostable
material from landfill; since 2010, the diversion rate has been steady at or just below 80%. Food
scraps and food soiled paper, currently being landfilled, provide the greatest diversion
opportunity. The collection of residential food scraps co-mingled with yard trimmings is
scheduled to begin in July 2015. A commercial Recycling and Composting Ordinance was
approved by Council for implementation in early 2016. Both the residential and commercial
reduction productions would lower emissions from landfilled food waste by 35% from 2013
levels.
25 http://www.mercurynews.com/drought/ci_27772022/santa-clara-valley-water-district-considers-upping-its
City of Palo Alto Page 19
Figure 9: Diversion of Recyclable & Compostable Material from Landfill
(1990-2013, percentage)
Source: Public Works
Highlights and Accomplishments from City Departments
Staff is implementing more than 150 sustainability programs across the city. This section
provides a summary of key activities.
In 2014 Council approved the Local Solar Program designed to increase local power generation
more than four-fold; in 2015, it launched the PaloAltoGreen Gas voluntary program to invite
customers to offset residential natural gas emissions. CPAU projects that 10% of customers will
enroll in the program in its first year.
The City has a robust green building program, with a new Green Building Ordinance and an
Energy Reach Code coming to Council this Spring, and a commitment to continue to advance
our green building ahead of California standards with each three-year code cycle. We have
continued our commitment to electric vehicles with Code requirements for EV readiness in new
construction and significant retrofits, an EV preference policy for City fleet, additional charging
capacity at City facilities, and a forthcoming update to the City’s EV infrastructure policy.
Staff is working with procurement systems and key vendors to improve implementation of the
City’s Environmentally Preferable Purchasing (EPP) policy and institute “default to green”
policies and systems for key procurement categories. This has already been implemented for
key office products purchases and implementation is in process for city fleet electrification
(initial analysis estimates 20% savings in Total Cost of Ownership for light duty vehicles.)
Finally, as mentioned in part earlier in this report, the Office of Sustainability engaged
consultants at DNV-GL and Rocky Mountain Institute to work with the City to develop a new
Sustainability and Carbon Action Plan (S/CAP), a first draft of which will be brought to Council in
spring 2015. This plan engages all City departments and articulates a wide spectrum of bold
goals to achieve significant GHG reductions, promote operational and resource efficiency
through City policies and programs, and engage the public, institutional, and business
communities in contributing to a low-carbon, high quality of life for all Palo Altans. The S/CAP is
City of Palo Alto Page 20
being developed in parallel with the Comprehensive Plan, and efforts are underway to further
integrate sustainability strategy into the City’s overarching policy document, which both sets
forth a collective vision or blueprint for the community, and informs day-to-day decision
making about land use and development, infrastructure investments, and related issues.
The City continues to gain acknowledgement for its leadership. Some of the awards won in the
last year include26:
Date Organization
Giving Award or
Recognition
Person/Program
Receiving Award
or Recognition
Title and Description of Award or Recognition
2015 Acterra City of Palo Alto
Business Environmental Award, in recognition
of the City's overall approach, commitment and
leadership in sustainability.
2014
Solar Electric
Power Association
(SEPA)
City of Palo Alto
Utilities Public Power Utility of the Year
2014 Institute for Local
Government
City of Palo Alto
Beacon Award – Silver Level for leading in
implementing innovative energy efficiency and
resource conservation programs, achieving
notable greenhouse gas emissions reductions.
2014 SAP EV Ready
Award City of Palo Alto Small Community Award
2014
Annual Solar
Power Generation
USA Congress
City of Palo Alto Best Solar Collaboration Award
2014
Silicon Valley
Water
Conservation
Awards Coalition
City of Palo Alto
Utilities
Water Utility of the Year, for a range of
consumer facing efficiency and monitoring
programs:
2014
American Public
Power Association
(APPA)
City of Palo Alto
Utilities
Reliable Public Power Provider (RP3) - for
proficiency, sound business practices, and a
utility-wide commitment to safe and reliable
delivery of electricity, system improvement,
energy efficiency and workforce development
2014
(for 2013
Achievements)
National Resource
Electric
Laboratory (NREL)
PaloAltoGreen
Ranked Number One in the Nation for
Participation Levels and Number Five in the
Nation for Total Per Capita Electric Sales
26 http://www.cityofpaloalto.org/gov/depts/utl/about/awards.asp
City of Palo Alto Page 21
Expanded departmental reports, including goals, activities and challenges, can be found in
Attachment D for:
City of Palo Alto Utilities (CPAU)
Environmental Services Division Landfill Operations
Development Services
Planning
Fleet Services
Watershed Protection
Urban Forestry
Administrative Services Department Purchasing Division
Office of Emergency Services
Economic Development
Office of Sustainability
The City Manager has been clear in insisting that in City Operations, “we go first”—ensuring
that the City model the actions and programs that we challenge the community to undertake.
So far, our record is good but needs to be accelerated:
Observations
Leadership, but not adequate to the challenge before us
Palo Alto has done better than most communities. Bold actions like carbon neutral electricity
have put Palo Alto in the forefront of actual GHG reductions—not just goals—internationally.
But our present GHG reduction trajectory will not take us to California’s stated goal of 80%
reduction by 2050—much less to the steeper reductions that will be required. Meeting that
goal—or the “moonshot” goal of carbon neutral in ten years or less—will require courage, focus
and momentum, and a commitment to data-driven agility that is rare in most organizations.
Issue Status Program/Plan/Need
The City is undertaking new
construction and building
retrofits with a commitment to
environmental efficiency but
without confidence that we are
doing all that can be done
City Facilities have not
received performance
audits in 10 years
City will bring in Environmental Defense
Fund Climate Corps intern this summer
to assess key City facilities and propose
ongoing resource efficiency program.
Program will fall under the purview of
new Facilities Manager to be hired FY16.
Data across all City operations
not transparent and not being
used to manage for resource
efficiency
Sustainability data
collection and analysis is
often manual, annual, and
used more for reporting
that for management
Staff is deploying a comprehensive
sustainability dashboard to make timely,
automatic performance tracking easily
available to council, staff and community
Many sustainability policies
exist, but are not easily found,
tracked and evaluated
Resource and energy
reduction initiatives at
City department level not
integrated with Citywide
operations
Staff is reviewing, consolidating and,
where warranted, updating
sustainability-relevant policies, and
implementing “default to green” in City
procurement
City of Palo Alto Page 22
And it will require adequately resourcing the sustainability and climate commitments the City
decides to make.
Significant risks
Palo Alto faces substantial risks in relation to climate change, but of the most difficult sort to
address: risks that are of relatively low (or debatable, or distant) likelihood but are of relatively
large potential impact. These include disruption of water supply, disruption of hydroelectric
supply, sea level rise and rising temperatures—each of which could have implications for
operations, infrastructure and public health. It’s hard to justify significant investment in
mitigating risks that are seen as small or distant; it’s certainly problematic to go “all in” on such
risks. But it’s also not prudent to ignore risks with impacts as potentially large as significant,
long tern disruption of the climatic regime on which California’s prosperity depends.
Opportunities
Fortunately there are ways to address these concerns—in many cases with considerable
benefit. Efficiency, for example, does not necessarily require sacrifice. Approached intelligently,
Palo Alto can approach the climate challenge in ways improve City’s governments operational
and financial effectiveness, while improving quality of life for all Palo Altans.
The City can learn from other cities, and major companies around the world, that are
developing strategies that make sense both by today’s criteria and by the criteria that one of
the “low risk, high impact” futures would require.
The City’s full potential will be achieved with coordinated, interdepartmental cooperation. We
are making progress but any such transformative systems effort requires a degree of
integration and alignment that is rare and challenging in any organization. We will need to lead
in this regard also, to meet our goals.
Future Vision
The GHG reductions in 2014 (and 2013) have come from the purchase of RECs, improvements
to wastewater treatment processes, lower natural gas consumption community-wide and long-
standing efficiency programs. The results have exceeded the initial targets set in the 2007
Climate Protection Plan.
To put Palo Alto’s performance in context with other US and international cities, this chart from
the C40 Cities Climate Leadership Group shows a representative sample of emissions reduction
targets (percentages represented planned reductions, and bars begin at start of reduction
period).
City of Palo Alto Page 23
Figure 10: C40 Cities Climate Leadership Group
Representative Sample of City Emission Reduction Targets
Source: C40
Palo Alto’s current performance is in line with many cities, but leading cities (including 17
members of the Carbon Neutral Cities Alliance) are setting a high bar as they commit to carbon
neutrality by 2050, or in the cases of Melbourne and Copenhagen, decades earlier. Setting goals
versus achieving them are very different matters. But goals are a necessary prelude to
accomplishment.
The Office of Sustainability is approaching its work for the City as a provocative force for
thoughtful transformation within a community that has never regarded “business as usual” as a
guiding principle. Its mandate is to develop the strategy, guide the implementation, and spark
the innovation that will allow all Palo Altans to thrive in a changing economy and climate.
The development of the S/CAP strategy is happening in parallel with the update to the City’s
Comprehensive Plan. As the S/CAP is revisits and expands upon the existing action plan created
in 2007, the new document will reflect the latest policy, technology, and community input, in
addition to the policies adopted by City Council. To plan for the implementation of these new
goals, the OOS and its S/CAP consultants are working closely with the Planning Department to
integrate sustainability into the vision for Palo Alto 2030 is being drafted.
City of Palo Alto Page 24
Implementing a world-class sustainability strategy across the city means paying close attention
to operations, policies, and engagement for staff, and community members. The Office of
Sustainability is working with other departments to make doing the right thing—such as
implementing Council's environmentally-preferable purchasing policies—the norm rather than
an extra effort. From procurement to performance data analysis, the focus should be on finding
the easiest way for Staff to make the right choices every day, and then to track our progress
toward our shared goals. This is true for City Staff responding to the City Manager’s "we go
first" challenge, and for Community members who can benefit from better systems that deliver
better service to citizens without the carbon impacts and resource consumption that they
currently generate.
Next steps
In the coming year, in addition to the initiatives summarized above, staff will
deploy a comprehensive sustainability dashboard to make timely performance tracking
easily available to council, staff and community;
engage Council and community in discussion of the S/CAP, and propose initiatives,
budgets and financial strategies to implement it;
evaluate electrification to shift energy loads from natural gas (currently more than 30%
of our carbon footprint) to CPAU’s carbon neutral electricity27;
explore the development of local and regional pilots of “mobility as a service” (to
address the more than 60% of our carbon footprint generated by transportation;
explore implications of these dramatic changes for CPAU’s business models;
begin discussion on another reach code that would drive new residential construction
toward net zero energy; and
pursue the development of complementary funding strategies to finance the strategies
that the community chooses to pursue.
But Palo Alto’s biggest challenge may be making fundamental shifts in perspective as we
determine how to address the opportunities before us:
A big challenge demands bold moves.
Palo Alto may not face locally the severity that climate chaos threatens to bring to other
communities, but it is a part of the regional and global community—and has long seen itself as
a leader, and been acknowledged as a leader. That fact, plus our relative privilege, as well as
the very real risks we do face, demand that we take bold action in face of the challenges ahead.
27 Any proposed funding, incentive or other design elements in this area must be specifically analyzed and
considered in the context of all applicable legal, statutory and regulatory requirements and guidance, including, for
instance, constitutional limitations on utility rates imposed by Californians when they adopted Proposition 26,
obligations set forth in the Cap-and-Trade regulations adopted by the California Air Resources Board, and other
miscellaneous requirements embedded in the California Public Utilities Code.
City of Palo Alto Page 25
But our present GHG reduction trajectory will not take us to California’s stated goal of 80%
reduction by 2050—much less to the steeper reductions that will be required.
Moonshot
A big, time-bound, aspirational goal—“let's go all the way,” in addition to the usual “let’s make
things a little better”—can provide both an innovation driver and a rallying point than can
enable breakthroughs in policy and performance.
The “California moonshot” target under consideration in the S/CAP—climate neutral in ten
years or less (a goal already set by Copenhagen and Melbourne)—as well as the more “modest”
goal of 80x50, will require each require multiple initiatives, each of them challenging, all of
them necessary. Here are some of the key potential initiatives staff is studying, and will bring to
Council and community for further discussion:
Mobility as a Service (MaaS)
User-centric, all-in design, designed to solve the transportation/congestion/parking problem,
with multi-modal, subscription based, service-level solutions (like the systems being developed
by Finland, and large and small companies around the world) to make it “more convenient for
anyone, anywhere at any time, to not have to get into a car and drive.” (This user-centric,
systems design approach may be applicable in many domains besides transportation.)
Electrification
Staff is exploring whether it is feasible to eliminate the 30% of Palo Alto’s carbon footprint
that’s attributable to natural gas by taking advantage of Palo Alto’s carbon-neutral electricity
and systematically switching water heating, space heating, clothes drying, cooking to electric.
As previously noted in this report, any proposed funding, incentive or other design elements in
this area must be specifically analyzed and considered in the context of all applicable legal,
statutory and regulatory requirements and guidance, including, for instance, constitutional
limitations on utility rates imposed by Californians when they adopted Proposition 26,
obligations set forth in the Cap-and-Trade regulations adopted by the California Air Resources
Board, and other miscellaneous requirements embedded in the California Public Utilities Code
Becoming Future Fit28 (including biology, water & the common wealth)
Develop de-risking strategies to address “low likelihood, high impact” risks such as ongoing
disruption of rainfall patterns in ways that enhance community resilience and build the
common wealth of our biological, built and social infrastructure.
Net Zero/Net Positive
Use performance based, rather than prescriptive approaches, to building and energy
conservation regulations in order to encourage innovation focused on the outcomes the
community wants, not necessarily on the pathways to achieve those outcomes. Consider the
same approach for planning and development, such as programmatic mitigation measures
28 See, for example, http://www.futurefitbusiness.org
City of Palo Alto Page 26
requiring outcomes and impacts, while being as flexible as possible on the best ways to achieve
those outcomes.
Agile government
Encourage rapid experimentation and rapid learning, inspired by the “lean startup” business
model. Consider pilot projects where Council gives staff greater operating discretion within a
small set of clear boundaries and reporting requirements, to enable experimentation and
learning cycles on the order of weeks and months rather than years.
City/Community dashboards
In keeping with the City’s open data commitment—and the reality that “to be in a state of self-
control, person needs to know what’s expected of them, how well they’re doing, and what
resources are available to do differently”—deploy visual dashboards that provide “closer to real
time” performance feedback and steering to staff, Council and community.
Behavior change at scale
Encourage neighborhood and district based collaboration, such as the Cool City Challenge ("one
cool block at a time") and eco-districts, to support rapid horizontal scaling of sustainability
initiatives. This approach will support the community as a whole to make changes on a
personal, neighborhood and city-wide scale, by embracing new technologies, leaving the car at
home and supporting changes in the built environment to reduce reliance on the automobile.
Financial acceleration
Investigate both new capital resources and new financial management tools, such as internal
carbon pricing, municipal carbon taxes and new utility business models, to enable the City to
achieve its sustainability goals—not just for reduced emissions, but also for more quality of life,
prosperity and resilience—in financially sound ways. Pursuit of carbon pricing strategies,
municipal carbon taxes and new or alternate utilities business models must also be specifically
analyzed and considered in the context of all applicable legal, statutory and regulatory
requirements and guidance prior to any staff recommendation or Council decision to move
forward.
In conclusion
Staff closed the 2014 Earth Day report with three questions that are still relevant for the City
and the community to consider, both for our own well-being, and for the contribution one
small, innovative city can make to the sustainability revolution:
How good do we really want it to be?
What would it take—in technology, investment, innovation and personal change—to
get there?
In view of those requirements, are we willing to do it—to make the necessary
commitments, and to act to deliver the world we want?
Attachments:
Attachment A: Summary of 2007 Climate Protection Plan (PDF)
City of Palo Alto Page 27
Attachment B: City Municipal Operations Emissions (PDF)
Attachment C: Palo Alto Community and City Municipal Operations GHG Emission
(PDF)
Attachment D: Highlights of Sustainability Initiatives by City Municipal Operations
(DOCX)
Attachment E: Sustainability Policy and Organizational Structure (PDF)
Attachment A: Summary of 2007 Climate Protection Plan & Updates from 2010
Page 1 of 3
Summary Description of the 2007 Climate Protection Plan
NOTE: Emissions estimate have been updated since 2007, and is reflected in the body of the
report. This summary is for reference purposes only.
In December 2007 Council approved a Climate Protection Plan (CPP) that set a short, medium,
and long term goals to reduce City operations and community greenhouse gas (GHG) emissions.
These goals were:
1. Short Term Goal: By 2009, the City Operations will reduce emissions by 5% from 2005
emission levels for a total reduction of 3,266 metric tons of CO2.
2. Medium Term Goal: By 2012 the City Operations and Community will reduce emissions
by 5% from 2005 emissions level for a total reduction of 29,702 metric tons of CO2.
3. Long Term Goals: By 2020, the City Operations and Community will reduce emissions by
15% of 2005 levels, equal to 119,140 metric tons of CO2, and bring the community in
line with State emission reduction goals.
Outlined below in Figure 1 and Figure 2 are the City’s and Community’s GHG emissions profiles,
as outlined in the 2007 CPP. The City’s emissions of 65,329 Metric Tons of CO2e (MT CO2e) and
the community’s emissions of 728,720 MT CO2e combined is equivalent to approximately 14
tons per resident. Electricity and natural gas related emissions account for approximately 40%
of the 793,621 MT CO2e total municipal plus community emissions. (Note: the natural gas
leakage estimate has since been substantially revised downwards, from 19,358 MT CO2e to
4,717 MTCO2e.)
Figure 1: Municipal (City Operations) GHG Emission Sources in 2005
(65,329 MT CO2e)
Source: Climate Protection Plan: December 2007
Note: Natural gas leakage numbers were updated with more accurate numbers since 2007 that resulted
in considerable reduction in leakage estimates.
Attachment A: Summary of 2007 Climate Protection Plan & Updates from 2010
Page 2 of 3
Figure 2: Community GHG Emission Sources in 2005
(726,720 MT CO2e)
Source: Climate Protection Plan: December 2007
B. Short Term GHG Reduction Goals
The City operations undertook a number of departmental level initiatives to meet the goal to
reduce municipal GHG emissions by 5% at the end of 2009. Utilities energy efficiency and
conservation programs were integral part of this effort. The initiative was classified under five
main categories: employee education, electricity conservation and efficiency upgrades, paper
use reduction, commute reduction, and waste reduction. A revised 2005 benchmark of 29,364
MT CO2e was established. This lower benchmark down from 65, 329 MT, figure 1 above)
reflects the reduced estimate for natural gas leakage and biogenic emissions from the waste
water treatment plant because the facility serves other cities too and Palo Alto has minimal
control over those emissions.
Attachment A: Summary of 2007 Climate Protection Plan & Updates from 2010
Page 3 of 3
April 2010 Update
In April 2010, staff reported to Council that municipal GHG emissions declined by 11% in 2009
relative to the revised baseline year of 2005 (excluding employee commute estimates) (CMR:
194:10). Emissions were down from 29,364 MT CO2e to 25,518 MT CO2e. The principle
contributors to this reduction are outlined below:
Major upgrades and process improvements at the water quality plant, accounted for
75% of the reduction
o Replace natural gas used in the biosolids incinerator emission control equipment
with landfill gas that had previously been burned in a flare
o Improve aeration system and replace air diffusers
o Install more efficient motors and lighting fixtures
Upgrade building systems and fixtures
o Lighting fixture upgrades at the Elwell Court building
o Reduced lighting levels at selected locations
o City hall upgrades: motors, boilers, HVAC system
Updated 2012 GHG Reduction Goal for the City
Based on the progress made since 2007, City Council in 2010 increased the City municipal GHG
reduction goal to 20% below 2005 levels by 2012.
Attachment B: GHG Emissions of City Municipal Operations
Page 1 of 4
Attachment B: GHG Emissions of City Municipal Operations: Comparison Data
City municipal operations related emissions drivers and associated emissions are shown below.
Table B1: City Operations GHG Emission in 2005, 2012 & 2014 (in MT of CO2 equivalent)
– Biogenic and Anthropogenic, no adjustment for hydro conditions of PAG purchases -
2005 2012 2013 2014
Scope
1 Biogenic
Scope
2
Scope
1 Biogenic
Scope
2
Scope
1 Biogenic
Scope
2
Scope
1 Biogenic
Scope
2
Buildings
and Other
Facilities 8,723 0 1,819 7,016 0 1,155 5,365 0 0 8,175 0 0
Streetlights
and Traffic
Signals 689 534 0 0
Water
Delivery
Facilities 2 0 67 34 0 42 91 0 0 41 0 0
Wastewater
Facilities 8,504 16,689 2,546 6,414 15,602 1,950 5,024 11,183 0 4,616 11,385 0
Vehicle Fleet 2,835 1 0 2,546 0 0 2,399 0 0 2,346 0 0
Power
Generation
Facilities 0 0 8,570 227 0 3,839 0 0 0 23 0 0
Solid Waste
Facilities 6,846 5,853 29 4,336 3,827 19 6,642 5,789 0 8,470 7,520 0
Other
Processes &
Fugitive
Emissions 3 9 4 4
26,912 22,543 13,720 20,582 19,429 7,539 19,525 16,972 0 23,674 18,905 0
Scope 1 and Scope 2 emissions are non-biogenic emissions and caused by human activity.
Biogenic emissions are assumed to be net carbon neutral and not reported under GHG emission
reporting protocols. Scope 2 emissions from electricity were eliminated in 2013 by the purchase
of Renewable Energy Credits (REC’s). Table B2 below shows the transformation of the Table B1
above by excluding biogenic emissions, and shows an emissions reduction of 41.7% from the
2005 baseline.
Attachment B: GHG Emissions of City Municipal Operations
Page 2 of 4
Table B2: City Operations GHG Emission in 2005, 2012, 2013 & 2014 (in MT of CO2 equivalent)
Excludes Biogenic, not normalized for hydro conditions of PAG purchases
GHG Emissions comparison (Scope 1 & 2) 2005 2012 2013 2014
Water Delivery Facilities 69 76 91 41
Wastewater Facilities 11,049 8,364 5,024 4,616
Vehicle Fleet 2,835 2,546 2,399 2,346
Streetlights & Traffic Signals 689 534 0 0
Solid Waste Facilities 6,876 4,354 6,642 8,470
Power Generation Facilities 8,570 4,067 0 23
Buildings & Other Facilities 10,542 8,172 5,365 8,175
TOTAL 40,629 28,112 19,521 23,670
Percentage reduction from 2005 baseline 30.8% 52.0% 41.7%
Table B2 does not include the effects of the purchase of PaloAltoGreen resources and the
normalization of the vagaries of hydroelectric supply conditions. The Table B3 below accounts
for these two effects and shows a 43.4% reduction in emissions from the 2005 baseline year.
Table B3: City Operations GHG Emission in 2005, 2012 and 2013 (in MT of CO2 equivalent)
Excludes Biogenic, normalized for hydro conditions and PAG purchases
GHG Emissions comparison (Scope 1 & 2) 2005 2012 2013 2014
Water Delivery Facilities 74 64 91 41
Wastewater Facilities 11,269 4,659 5,024 4,616
Vehicle Fleet 2,835 2,546 2,399 2,346
Streetlights & Traffic Signals 748 387 0 0
Solid Waste Facilities 6,878 4,349 6,642 8,470
Power Generation Facilities 9,308 3,008 0 23
Buildings & Other Facilities 10,698 4,643 5,365 8,175
TOTAL 41,811 19,655 19,521 23,670
Percentage reduction from 2005 baseline 53.0% 53.3% 43.4%
Attachment B: GHG Emissions of City Municipal Operations
Page 3 of 4
Figure 1 below graphically illustrates Table B3 and is a reproduction of Figure 1 from the body of the
report.
Figure 1: City Operations GHG Emissions: 2005, 2012, 2013 & 2014 (Hydro and PAG-adjusted)
Total Emissions Reduced from 42,000 MT to 19,700 MT, a 10% increase from 2013
The primary drivers for GHG emission reduction performance are:
Building and Other Facilities – Due to enactment of the Carbon Neutral Plan in March 2013, all
electricity consumed by the City in 2013 had zero carbon emissions. Emissions from natural gas
consumption and leakage from the natural gas distribution system are the primary sources for
the increased building emissions in 2014.
Power Generation Facilities – This category accounts for transmission and distribution system
losses. City divested its ownership of the COTP transmission line in 2009 resulting in lower loss
allocation to the City. Distribution loss-related emissions also were eliminated in 2013 due to
carbon neutral electric supplies.
Solid Waste Facilities – Closure and capping of the landfill, resulting in less methane production
and leakage in CY 2012. Higher collection and improved monitoring, combustion of biogenic
landfill gas through flaring, and uncaptured methane leakage have resulted in increased
emissions in 2014.
Streetlights and Traffic Signals – No emissions are reported due to conversions to highly efficient
LED streetlights (note, only metered fixtures are shown) and carbon neutral electricity supply.
Vehicle Fleet – Fleet Services saw a slight reduction in consumption of CNG fuels.
Wastewater Facilities – 59% emissions reduction from 2005 baseline reflects use of landfill gas
for incinerator, optimized use of gas from incinerator tuning, and use of carbon neutral
Attachment B: GHG Emissions of City Municipal Operations
Page 4 of 4
electricity. The 8% decrease from 2013 was due to decreases in the volume of nitrogen effluent
discharge.
Water Delivery Facilities – There has been fluctuating energy use for water pumping, with a
decrease in activity for 2014.
Attachment C: GHG Emissions of Palo Alto Community and City Municipal Operations
Palo Alto Community & City Municipal Operations GHG Emission: Reduction of 32% since 2005
City Municipal Operations* & Palo Alto Community GHG Emissions Summary
Excludes Biogenic Emissions**, All units in Metric Tons (MT) of CO2 equivalent
Consumption
Quantity
2005
Emissions
in 2005
(MT of
CO2e)
Consumption
Quantity
2012
Emissions in
2012
(MT of
CO2e)
Consumption
Quantity
2013
Emissions in
2013
(MT of CO2e)
Consumption
Quantity
2014
Emissions in
2014
(MT of CO2e) Notes
Scope 1
Emissions
Natural Gas Use
(in Therms)
31,374,970 166,350 30,086,536 159,519 30,336,076 160,842 26,103,713 138,402 1
Natural Gas
Distribution
Leakage
4,718 4,718 4,718 4,781 2
Palo Alto
Landfill Fugitive
Emissions
6,811 4,336 6,640 8,470 3
Palo Alto
Landfill Gas
Flaring
(biogenic)
5,853 3,827 3
Wastewater
Process
Emissions
8,504 6,414 5,024 4,616 4
Scope 2 Emissions -- Actual Total Electric
Load in MWh
996,091 966,839 986,241 978,561
Hydro Supply
(MWh)
548,760 413,584 406,570 266,026
Renewables
Supply (MWh)
49,980 188,566 188,086 172,139
Brown Power
Supply (MWh)
397,352 158,427 364,689 145,404 391,585 0 540,370 0 5a
Palo Alto Green
Purchases
(MWh)
30,601 (12,201) 75,805 (30,224) N/A N/A 6
Scope 2 Emissions -- Weather Adjusted*** Total Electric
Load
996,091 966,839 986,241 978,561
Hydro Supply
(MWh)
514,073 514,073 514,073 514,073
Renewables
Supply (MWh)
49,980 188,566 188,086 172,139
Brown Power
Supply (MWh)
432,038 172,257 264,200 105,339 284,082 113,266 292,324 116,552 5b
Palo Alto Green
Purchases
(MWh)
30,601 (12,201) 75,805 (30,224) 0 0 0 0 6
Scope 3
Emissions
Commute into,
from, and
within City
371,870 335,390 335,390 335,390 7
Life Cycle
Emissions From
Annual Total
Waste Placed in
Landfills
69,491 24,823 43,947 15,698 45,411 16,221 47,088 16,820 8
Landfilling
Recyclable
Material
54,838 34,680 35,836 37,159 8
Total (weather
adjust., biogenic
excl.)
797,970 635,870 564,671 545,638
Emission
Reduction
(since 2005)
20% Emission
Reduction
(since 2005)
29% Emission
Reduction
(since 2005)
32%
Attachment C: GHG Emissions of Palo Alto Community and City Municipal Operations
Notes
1 Total Community supply of natural gas use/delivery.
2 Leakage from the natural gas distribution system- modeled result, unchanged over the period.
3 Calculated using total captured landfill gas, actual methane percentage; fugitive gas assumed to be 33% of captured rate.
2005 estimate has been revised to reflect current methodologies.
4 Represents N2O emissions from biological treatment process and release of Nitrogen.
5 a. Represents actual quantity of brown power related emission @879/lbs/MWh in 2005 and 2012; not applicable beyond
2012 due to Carbon Neutral electric supply.
b. Weather normalized (for hydro electric generation) quantity of brown power. No GHG impact in 2014.
6 Emissions saved due to purchase of PaloAltoGreen related RECs. PAG related RECs not included in 2014 due to Carbon
Neutral electric supply.
7 Study results from Fehr and Peer (03/19/2013) using Valley Transportation Authority regional transportation model based
Vehicular Miles Travelled (VMT) and vehicular profiles - does not account for Palo Alto specific parameters related to greater
penetration of alternate fuel vehicles, bicylce use, etc. Study results under review. 2014 assumed to be same as 2012.
8 Based on characteristics and tons of material landfilled: 2005, 2011, 2012 and 2013 figures; Landfilled amount in 2014 up 4%
in 2013 compared to 2012.
* Municipal emissions related to electricity and natural gas consumption included within utility load numbers; fleet vehicle
emissions also assumed to be included in community wide commute related emissions estimates made by consultant.
** Table excludes biogenic emissions related to: Landfill gas flaring and WQCP sludge incineration.
*** Normalized to account for the vagaries of weather on hydroelectric supplies. No GHG impact in 2013.
1
Department: City of Palo Alto Utilities (CPAU)
Background: The mission of CPAU is to earn high level of customer satisfaction by providing cost
competitive, safe, reliable and environmentally sustainable utility services.
Strategy:
Continue to implement cost effective energy efficiency and water conservation programs
Implement Local Solar Plan with objective of providing 4% of the community’s electrical energy
needs from local solar resources by 2023
Maintain the City’s 100% carbon neutral electric supply
Facilitate adoption of electric vehicles (EV) in Palo Alto by providing time of use (TOU) electric
rate option to residential customers and by optimally utilizing Low Carbon Fuel Standard (LCFS)
revenue for the benefit of EV owners in Palo Alto
Analyze potential for cost-effective natural gas-to-electric residential fuel switching program,
including consideration all relevant policy, legal and regulatory implications of such a strategy
Concerted effort in CY 2015 and 2016 to engage residential customers to reduce energy use to
compete in the Georgetown energy prize
Implement the new PaloAltoGreen Gas program to offset the carbon emissions associated with
natural gas use in Palo Alto
Seek and test emerging technologies that have the potential to enable CPAU to provide more
effective utility services
Examine utility retail rate structures and that have the potential to enable higher level of EV
adoption and fuel switching from natural gas to electricity, including an analysis of all relevant
policy, legal and regulatory implications of such a strategy
Goals: 1
1. Reduce Electric energy use by at least 4.8% by 20232 (no GHG impact since electric supply
portfolio carbon neutral)
2. Reduce Natural Gas use by at least 2.85% by 2023 (4,500 metric tons per year of GHG reduction
by 2023)
3. Reduce Water use by at least 13% by 20303
4. Generate at least 4% of electrical energy from local solar by 20234 (no GHG impact)
5. Achieve PaloAltoGreen Gas program subscription of 20% of natural gas customers by 2020,
representing around 10% of gas load (16,000 metric tons per year of GHG reduction)
6. Continue to procure long term renewable electric supplies to maintain carbon neutral electric
supplies (no GHG impact since electric supply portfolio carbon neutral)
1 Many of these goals are included in Utilities’ 10-year plan, which is re-evaluated every 4 years.
2 For electric and gas efficiency goals, see: http://www.cityofpaloalto.org/civicax/filebank/documents/32390
2
3 For City’s Urban Water Management Plan, see: http://www.cityofpaloalto.org/civicax/filebank/documents/41297
4 For Local Solar Plan, see: https://www.cityofpaloalto.org/civicax/filebank/documents/39981
3
Initiatives and Activities:
Top Sustainability Initiatives in 2014
Sustainability Initiative Objective Outcome
Electricity and Natural Gas
Efficiency Programs
Promote resource efficiency to
commercial and residential
customers for cost savings,
lowered consumption, and
avoided greenhouse gas
emissions.
See impact of energy efficiency
programs on utility loads in
Figures D-2 and D-3.
Renewable Portfolio Standard
(RPS) eligible electric supplies
Achieve increases in renewable
energy in CPUA portfolio
City’s RPS was 20.6% in 2013,
23.3% in 2014.
Executed contracts will result in
RPS of 32.2% in 2015, 41.3% in
2016 and 51.3% in 2017
Local Solar Program Increase local generation from
0.7% of total load to 4.0% by
2023.
Program to launch in 2015
Palo Alto Green Gas Enroll 20% of all natural gas
customers in a voluntary carbon
offset program by 2020
Program to launch in 2015
Resource
FY 2014
Savings Goals
(% of load)
FY 2014
Savings Achieved
(% of load)
FY 2014
Savings Achieved
Electricity 0.60% 0.86% 8,218 MWh
Gas 0.50% 1.20% 337,079 therms
Water 0.91% 0.64% 32,324 CCF
Customer-side Cumulative
Renewable Program Goal FY 2014 Achievement Achievement
Solar Electric (PV) 6,500 kW by 2017 1,600 kW 5,600 kW since 1999
Solar Water Heating 30 systems/year 2 systems 44 systems since 2008
For more details on programs and achievements, please review report linked below:
https://www.cityofpaloalto.org/civicax/filebank/documents/43191
Data:
1. Achieved Carbon Neutrality in CY 2013 – see trend over the past 5 years
http://www.cityofpaloalto.org/gov/depts/utl/residents/resources/default.asp
2. See impact of energy efficiency programs on utility loads in Figures D-2 and D-3.
3. See RPS increase since 2005 in Figure D-1.
4
Challenges:
1. Higher appliance standards are achieving high levels of energy efficiency savings; however,
these savings are mostly achieved when appliances are replaced at their end of life. CPAU
programs encourage early replacement of appliances and replacement with appliances that
exceed the newer high standards.
2. Higher building code standards result in lower use of energy in new buildings and after major
building renovations. However, building stock turnover takes decades. CPAU’s new
construction rebate programs encourage levels of efficiency greater than those required by Title
24.
3. Reduction of residential natural gas use through switching from natural gas using appliances to
electric appliances is not cost effective (for space heating, water heating and cooking), except
for new construction. However, heat pump water heaters appear to be a good candidate to
begin the process of fuel switching in single family homes.
4. Per capita water use in Palo Alto remains high compared to other cities; economic incentives
alone (even $2/square foot to remove lawns) may not be sufficient to move the needle should
drought conditions continue.
5. Hydroelectric power as well as potable water supplies could be at risk in potentially disruptive
climate change scenarios.
6. Disruptive innovation in local PV generation, distributed energy storage (including rolling
storage provided by growing EV fleets ) and net zero buildings may require re-examination of
CPAU business models.
7. Cost of service based retail rate making processes may limit the options available to
encourage electrification through retail rate structures. (Note: Any proposed funding,
incentives, or other design elements of/for the programs under consideration here that
involve the use of ratepayer funds will need to be specifically analyzed and considered in
the context of legal, statutory and regulatory requirements.)
8. While CPAU is delivering efficiency gains generally ahead of targets, greater progress will be
needed to achieve California’s 80% by 2050 GHG reduction goals. “Low hanging fruit” efficiency
gains may have reached saturation, so deeper gains may require new approaches.
9. If Fuel switching/Electrification generate rising electricity demand and shrinking natural gas
demand, CPAU will have to maintain natural gas system in the face of potentially declining
natural gas revenues .
5
Supplemental Graphs:
Figure D-1: Electricity Portfolio: 2005-2025 (Actuals and Projections)
100%
90%
80%
70%
Market Power,
with Carbon
Neutral Plan RECs
(includes
PaloAltoGreen)
Market Power
60%
50%
40%
PaloAltoGreen
RECs
30%
20%
Renewables (RPS)
10%
0%
Figure D-2: Impact of Energy Efficiency on Electric Sales
Ma rk t P w er a rk e t P o w e r, wit h R ECs
w a bl P S)
P a lo lt r e e n
2
0
4
lo w
er
ge
d
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dr
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u
o
p
ug
pl
h t
n
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o
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5
20
0
6
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0
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0
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6
Figure D-3: Impact of Energy Efficiency on Gas Sales
Figure D-4: Residential Per Capita Utility Consumption Declining
Department Name: Public Works Environmental Services Division, Zero Waste and Landfill Operations
Background: The City of Palo Alto adopted a Zero Waste policy in 2005. Since then, the City as a whole
dramatically has reduced the amount of material going into landfills. The City now has a waste diversion
rate of 78%, up from a 63% diversion rate in 2005.
The City’s solid waste related greenhouse gas emissions stem primarily from two sources: (1) the
fugitive emissions from the landfill where materials are buried; and (2) the emissions that are a result
from having to mine or fabricate new resources (e.g., aluminum, glass, paper, plastic, etc.) instead of
recovering these resources from recycled materials. Simplifying the residential recycling collection
process, collecting and composting commercial food scraps, and engaging the community with effective
zero waste marketing campaigns, are programs that have helped the City progress towards its its
greenhouse gas emissions reduction goals as well as zero waste goals.
While economic activity and construction have an impact on the overall amount of material disposed,
Zero Waste programs have helped keep tens of thousands of tons of material out of the landfill. In 2008,
68,228 tons were disposed in landfills. By 2013, that amount was reduced to 47,088 tons. Many more
tons are now recycled or composted at homes, businesses, and construction sites. The amount of
recyclable materials collected and diverted from the landfill increased from about 13,000 tons diverted
in 2008 to 18,707 tons in 2013. Commercial compost collection, which started in 2009, diverts over
11,000 tons per year of food scraps and food soiled paper from the landfill. For new construction, 75
percent of all material must be recycled or reused on site as part of the City’s Green Building Program
put into place in 2013, which superseded the Construction and Demolition Debris Ordinance of 2004.
The Palo Alto Landfill is owned, monitored and maintained by the City of Palo Alto. The municipal solid
waste landfill operated from the 1930’s to 2011 and is now in the closure/post-closure phase. The long-
planned end use of the landfill is parkland. The Environmental Services Division in the Public Works
Department is responsible for the closure and post-closure care of the landfill. By law, the City is
required to monitor the landfill for a minimum of 30 years to assure it does not pose an environmental
hazard resulting from the release of landfill gas or the creation/release of leachate—the liquid that is
created inside the landfill that must be pumped out for treatment at the Palo Alto Regional Water
Quality Control Plant (RWQCP). Landfill gas is collected and either combusted in the RWQCP sludge
incinerator facility or flared.
Strategy:
The zero waste strategy seeks to eliminate waste wherever possible, and then manage the discards we
do create through reuse and recycling. Cities tend to focus on “end of pipe” solutions to recover
materials for recycling and/or composting. Palo Alto goes even further by emphasizing the elimination of
waste with programs like the food waste reduction program and internal environmentally preferred
purchasing policies.
For the landfill, staff has pursued two strategies to reduce greenhouse gas emissions: 1) capping the
landfill; and 2) beneficially reusing the landfill gas.
Goals:
Achieve a 90 percent diversion rate by 2021.
Improve consumption habits and reduce the total amount material sent to the landfill.
Provide local recycling and composting resources.
Finalize landfill closure and conversion to parkland
Maximize the amount of landfill gas sent to the Regional Water Quality Control Plant.
Initiatives and Activities:
Food scraps and food soiled paper, currently being landfilled, provide the greatest diversion
opportunity. The collection of residential food scraps commingled with yard trimmings is scheduled to
begin in July 2015. The project should yield GHG emission reductions of approximately 1,140 MT CO2e
per year. A Recycling and Composting Ordinance for commercial customers, which would require
commercial customers to subscribe to compost service and properly sort both their recyclable and
compostable materials, was approved in concept by the Finance Committee March and will come
before Council later this year. The proposed ordinance– currently planned for phased implementation
beginning in early 2016, may yield GHG emission reductions in excess of 2,500 MT CO2e per year. Both
the residential and commercial reduction productions, taken together, would lower emissions from
landfilled food waste by 35% from 2013 levels.
The landfill is going through final closure. The closure work includes capping the remaining landfill
phase by the end of 2015. Capping will reduce the amount of fugitive landfill gas emissions. In addition
the landfill continues to send landfill gas to the Regional Water Quality Control Plant where it is used in
their incinerator. This reduces the amount of carbon dioxide emitted by the combustion of landfill gas.
Top Sustainability Initiatives in 2014
Sustainability Initiative Objective Outcome
Food Waste Reduction program
Deliver outreach messages and
tools to residents and businesses
on how to reduce the amount of
food wasted.
The quantity of waste diverted is
not currently measured by the
City’s implementation partner.
Evaluate whether local handling
of all City organics, food scraps,
yard trimmings, and biosolids
should be completed on the
Measure E parcel at Byxbee
Park.
Reduce transportation-related
GHG emissions from organics
processing and generate
renewable energy.
Council chose not to pursue an
energy or compost project on
the Measure E site, mainly
because of cost. Staff will
propose processing residential
food scraps and yard trimmings
along with commercial food
scraps at the Zero Waste Energy
Development dry anaerobic
digester in San Jose. This facility
is only 15 miles away while the
current composting facility is
over 50 miles away.
Cap the landfill Cap the last phase of the landfill More than 50% of the final
(Phase IIC) that will reduce
fugitive landfill gas emissions.
landfill phase has been capped
as of December 31, 2014. The
remaining cap will be
constructed by the end of 2015.
Increase beneficial reuse of
landfill gas
Modify controls at the flare
station and incinerator
Better control and metering of
landfill gas to the incinerator
Data:
Annual Diversion Rate, 1995-2013
Note: Diversion rate percentages from 2008-2013 include a composite percentage calculating diversion rates for
both the commercial and residential sectors. Percentages prior to 2008 only reflect the residential sector.
Forecast: Solid Waste Related GHG Emissions in metric tons (MT) carbon dioxide equivalents (CO2e)
for the Palo Alto Landfill.
Emissions Source 2015
Emissions
2016
Emissions
2017
Emissions
Palo Alto Landfill fugitive emissions during the
year 11,350 13,580 13,810
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Trend: Solid Waste Related GHG Emissions in metric tons (MT) carbon dioxide equivalents (CO2e).
Emissions
Source
2005
Emissions1
(baseline)
2011
Emissions
2012
Emissions
2013
Emissions
2014
Emissions
(current)
Difference
(current-
baseline)
Percent
Difference
Palo Alto
Landfill
fugitive
emissions
during the
year2
6,811
9,750
4,745
7,250
9,281
2,470
36
Life cycle
fugitive
emissions3
24,823
11,586
12,725
16,221
18,474
(6,349)
26
Landfilling
recyclable
materials3
54,838
25,595
20,702
35,836
27,000
(27,838)
51
1 2005 GHG Emissions are baseline calculations. 2 Local Government Operations Protocol (LGOP) model used to calculate greenhouse gas emissions produced by Palo Alto
Landfill.
3 EPA WARM model using CalRecycle landfill data used to calculate greenhouse gas emissions produced by handling and disposal
of City generated solid waste.
Challenges:
While the amount of landfill gas that is beneficially reused by the Regional Water Quality Control
Plant incinerator has been increasing, the City has hired a consultant to help analyze and
optimize incinerator operation. By controlling the process, the plant will be able to improve its
metering of landfill gas from the landfill flare station to the incinerator.
Product design and packaging development is largely outside of the City’s control. The City has
implemented a number of internal programs to reduce packaging and waste including the
banning polystyrene packaging for City purchases.
The audience with the most control over waste sorting--janitorial and custodial staff--is
challenging to reach, train, and keep informed of new programs. To address this audience,
Staff, along with Spanish-language support from the City’s contract trash hauler GreenWaste
of Palo Alto, conducts regular trainings for employees of City facilities.
In keeping with a City-wide “we go first” strategy, the municipal diversion rate should be equal
or higher to the residential and commercial waste streams. Staff is providing training and
improved signage to City departments, and has begun internal benchmarking to build awareness
and engagement.
Department Name: Development Services
Background: Development Services is committed to the design and construction of high-performance
green buildings that reduce the impact on natural resources and provide healthy environments to live
and work.
Strategy: Development Services will continue to provide leadership in the area of green building
programs and enforcement protocol. We will develop green building policy for new and existing building
stock that leads the State in incorporating high performance, resource efficient buildings, net-zero
energy and carbon neutral strategies, and encouraging deconstruction and recycling of construction
waste, Our policies, programs, and incentives will promote energy, water, and resource efficiency across
our community, resulting in occupant comfort, better indoor air quality, and better environmental
quality.
Goals: Calendar year goal is to improve annual water use reduction, annual energy use reduction, and
metric tons of CO2 avoided by 25% over the FY2014 data of in the area of. Our target equals a total
water use reduction amount of 3.9M kBTu/year, 9.6M gallons/year of water, and 90.1 metric tons of
CO2 (compared to 2014 performance data reported below). We will publish a green building survey to
better track these building metrics related to building permit applications.
Initiatives and Activities: Deliver interdepartmental training enabling all development review staff and
community to answer basic green building questions to the community. Gain approval on two
sustainability ordinances related to green building, including the green building ordinance and the
energy reach code ordinance. Continue to meet with Green Building Advisory Group for future code
cycles and to resolve issues from previous review cycles. Publish a streamlined website promoting
design clarity in green building policy and enforcement expectations.
Top Three Sustainability Initiatives in 2014
Sustainability Initiative Objective Outcome
New Green Building Ordinance Expand and update the existing
green building ordinance with
new criteria that reflects current
building technology.
A new green building code will
be proposed to the City Council
during the second quarter of
2015.
New Energy Reach Code Conduct a cost-effectiveness
study enabling the requirement
of enforcing a 15% improvement
beyond the energy code.
A new energy reach code will be
proposed to the City Council
during the second quarter of
2015.
New Green Building Compliance
Process
Educate, train, and delegate
green building enforcement
responsibilities to staff within
the Planning, Plan Check, and
Inspection teams.
The new green building
compliance process will be rolled
out during the first quarter of
2015.
Training and Outreach Solicit input on future building
code amendments, enforce
existing codes, and support
Successful outcomes include
improved code compliance and
increased capacity from our
awareness and compliance with
existing codes
community partners.
Electric Vehicle and Photo
Voltaic (PV) Installation
Permitting Streamlining
Process to move from over-the-
counter permitting to on-the-
web.
To be implemented in 2015
Study PV as Default for New
Construction
Explore feasibility of developing
“default to solar” codes and
policy
To be conducted in 2015
Data:
Performance
Measure Name
FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014
Green Building -
revenue $
- $25,808 $73,895 $94,113 $127,186 $89,911
Green Building
valuations with
mandatory
regulations $
$80,412,694 $81,238,249 $187,725,366 $543,237,137 $569,451,035 $349,128,085
Green Building
square feet with
mandatory
regulations
666,500 774,482 1,249,748 1,342,448 2,441,575 3,432,025
Energy savings
(kBtu/yr) (sf)
0 449 3,399 1,701 1,922,532 3,141,510
Water reduction
(gallons/yr)
119,500 84,539 2,119,485 4,976,775 5,580,485 7,730,840
CO2 emissions
reduction (metric
tons)
200 1,013 2,818 21 19,269 72,168
Challenges:
Development Services faces continuous change in the area of state, local, and federal policy—
particularly policies that don’t align with the specific needs of Palo Alto.
Statewide regulatory processes designed for non-carbon-neutral electricity regimes, plus problems with
mandated cost-effectiveness analysis software can slow adoption of Palo Alto- appropriate green
building innovations.
Maintaining an educated community of city staff, local architects, and contractors is a concern that
impacts our green building and energy policy.
Development Services will be rolling out a comprehensive green building training protocol to address
this challenge amongst staff and the community.
Cost effectiveness analysis that accounts for environmental costs needs to be performed to support
reach codes.
Department Name: Planning
Background: The Planning and Community Environment (PCE) Department aspires to create a safe and
beautiful City with diverse housing opportunities and multi-modal transportation solutions, where the
natural environment is protected, where it’s a good place to do business, where excellent services are
provided, and where citizens have a say in government. The department is responsible for:
• maintaining and overseeing compliance with the City’s Comprehensive Plan
• monitoring and enhancing the City’s transportation infrastructure
• gathering and analyzing data in support of land-use and transportation policy
• reviewing projects for potential environmental impacts on the City and its residents
• complying with and enforcing the Zoning Ordinance
• reviewing commercial and home project applications
• implementing programs that support alternatives to the private automobile
• administration of the City's Community Development Block Grant (CDBG) programs
• management and implementation of the City’s Housing Programs
• and oversight and implementation of the City’s Historic Preservation Ordinance
Strategy: 1-2 year: Prepare an update to the Comprehensive Plan for Palo Alto, with active community
input, that addressing issues related to:
Land Use
Transportation
Natural Environment
Community Services and Facilities
Business and Economics
Governance
Housing
Goals: PCE’s goals for the current year are:
Incorporate the concept of sustainability into the Comprehensive Plan where appropriate and
incorporate by reference the stand-alone Sustainability/Climate Action Plan that is being
prepared concurrently.
Quantify anticipated GHG emissions in the Draft Environmental Impact Report (EIR) for the
Comprehensive Plan Update and identify mitigation measures that can be included policies and
programs in the Plan.
Concurrently implement transportation programs to address traffic congestion and parking
demand generated by single occupant vehicles.
Initiatives and Activities: Top Three Sustainability Initiatives in Progress
Sustainability Initiative Objective Desired Outcome
Free Shuttle Service Provide free and accessible
transportation on three routes
for trips through Palo Alto
Strategies are being developed
to increase trip frequency and
ridership, and conduct
community outreach (1 year
planning phase)
Parking Management Provide parking to visitors and
customers to business districts in
off-street lots and parking
garages
Evaluation of technologies and
policies to improve management
of parking in neighborhoods near
business districts (2 year
planning phase)
Transportation Management
Association formation
Address transportation and
parking concerns in Palo Alto
Opportunities to reduce the
need for single occupancy
vehicle trips (SOV), and provide
incentives to businesses,
residents, and the regional
community (3 year planning
phase)
In addition, PCE will:
Begin implementation of the 2015-2023 Housing Element, which was certified by the state in
January 2015.
Examine, as part of the Comp Plan Update, whether to eliminate housing sites in south Palo
Alto, and instead increase densities in Downtown and other areas with more transit accessibility
and services.
Undertake zoning initiatives to ensure the preservation of neighborhood retail and services,
which contribute to the “walkability” of our neighborhoods, and we will be continuing projects
to implement the City’s 2013 Bicycle and Pedestrian Plan, with two dozen separate priority
projects.
Challenges:
Staffing: PCE recognizes the importance of its sustainability-related initiatives, and has been challenged
to hire the staff needed to implement these programs.
Comprehensive Plan Engagement: The public process for the Comprehensive Plan is the department’s
priority. Enrolling City department, residential, and commercial stakeholders in creating a vision for the
future of Palo Alto, and developing policy that expresses that vision, takes precedence over the launch
of any new programs.
Metrics and Performance Indicators: PCE recognizes the importance of using meaningful metrics to track
performance of programs to meet intended resource conservation, energy/fuel consumption, or carbon
impact targets. The department is building performance tracking capacity into the programs it is
currently developing (especially for mobility issues like transit, mode shift to cycling or walking, and
parking) to have quantifiable evidence for program effectiveness and outcomes.
Supplemental Materials: For more information about the work being done by PCE to guide the
preservation and development of Palo Alto, please explore the website to the Comprehensive Plan:
Our Palo Alto 2030: http://www.paloaltocompplan.org/
Department: Public Works– Fleet Division
Overview: The Public Works Fleet Division is responsible for maintenance, repairs, and compliance of all
City of Palo Alto vehicles and equipment. The division is charged with meeting all local, state, and
federal air pollution requirements and vehicle safety standards. It also conducts the proper disposal of
declared surplus and acquisition of replacement vehicles and equipment. The division’s mandate is to:
1. Maintain fleet availability by providing the vehicles and equipment to all of the departments
daily in order for the departments to be able to provide the services to the city of Palo Alto.
2. Work with all operators, managers and departments to prevent air pollution by training the
drivers on reducing idle time as well as demonstrate the proper and safe use and operation of
the vehicles and equipment
3. Perform preventive maintenance inspections and repairs on a daily basis to all of the vehicles
and equipment
4. Ensure regulatory compliance with the BAAQMD, BAR, CHP, DOORS, OSHA and CAL OSHA
5. Perform vehicle and equipment usage analysis to be able to identify underutilized vehicles and
equipment and recommend right-sizing the number of vehicles and equipment needed in the
city of Palo Alto.
Strategy: Improve fleet efficiency and reduce vehicle and equipment emission by electrifying the fleet,
maintaining it in top operating conditions, and training staff in safe and efficient operation.
Goals: The Fleet Division is moving toward a low-emission transportation future with these department
goals:
1. Identify new technologies and bold strategies to reduce fleet GHG emissions 80% from
1990 levels by 2050
2. Reduce unleaded fuel consumption by at least 10% each year, by scheduling
replacement of all vehicles older than 10 years with current energy efficient, low
emissions models.
3. Meet or exceed all regulatory requirements for air pollution reduction and air emissions
required by BAAQMD, BAR, DOORS, PERP and EPA while providing an increasingly high
level of service to all members of the Palo Alto community
Initiatives and Activities: Fleet Services is has been replacing gasoline-powered vehicles and other
equipment with cars and trucks that use alternative fuels, such as compressed natural gas, or electric
vehicles (EV). The City invested in a compressed natural gas (CNG) fueling station at the Municipal
Service Center for the 10% CNG vehicles in the fleet. However, choices for vehicle types are limited from
manufacturers. We have added some hybrid vehicles, running on 87-octane unleaded fuel, and have
budgeted to replace four older sedans with hybrids in the 2015 fiscal year. We have developed a new
policy (early 2015) to preference the purchase or lease for EVs over CNG, where appropriate, to take
advantage of the City’s carbon-neutral electricity.
Top Sustainability 2014 Initiatives and Activities:
Sustainability
Initiative
Objective Outcome
Reduce
Greenhouse Gas
emissions
Monitor and reduce
GHG emissions
associated with
vehicles and
equipment
Number of vehicles purchased and gas powered
vehicles retired (data in progress)
15% GHG emissions reduction from 2005 baseline
through 2014?
Reduce unleaded
and diesel fuel
consumption in the
fleet
Establish policy and
procedure for the
operators to minimize
the idle time on the
vehicle and
equipment they are
using.
Reduce the number of
vehicles and
equipment in the fleet
by performing a
vehicle utilization
analysis and identify
those vehicles that
could be declared
surplus and sold at
auction.
The City has been increasing its unleaded fuel use since
2009, and its diesel consumption has been flat for the
past two years. Additional measures are needed to
reduce the Fleet Services’ reliance on fossil fuels—which
can best be achieved by replacing older vehicles with
current models.
Data:
Table: Fuel Use by Type (Gallons), 2005-2014)
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Gasoline 149,861 156,142 152,153 146,398 131,096 137,850 146,595 147,849 146,479 150,732
Diesel 97,676 103,888 131,810 131,423 122,341 126,500 134,262 95,036 83,539 83,535
Biodiesel (B20) 46,667 27,261 0 0 0 0 0 0 0 0
CNG (City operations) 20,217 18,799 28,197 36,387 36,713 49,948 36,554 40,136 37,854 24,427
CNG (PASCO, PAUSD) 44,273 60,928 80,491 88,088 86,786 87,635 85,872 91,125 86,570 51,492
Fuel Use by Type (Gallons), 2005-2014
Fleet GHG Emissions (Metric Tons of Carbon Dioxide Equivalents, CO2e), 2005-2014
Fuel Type 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Gasoline 1,316 1,371 1,336 1,285 1,151 1,210 1,287 1,298 1,286 1,323
Diesel 997 1,061 1,346 1,342 1,249 1,292 1,371 970 853 853
Biodiesel (B20) 381 223 0 0 0 0 0 0 0 0
CNG (City
operations)
139 129 193 250 252 343 251 275 260 168
CNG (including
PASCO, PAUSD)
304 418 552 604 595 601 589 625 594 353
Total Emissions 2,833 2,783 2,875 2,877 2,652 2,845 2,909 2,544 2,399 2,344
Percent Change
from 2005 baseline
-1.8% 1.5% 1.6% -6.4% 0.4% 2.7% -10.2% -15.3% -17.3%
Challenges:
Existing fleet fueling data system is unable to consistently provide information needed to effectively
manage fuel use, and requires upgrade. The department is exploring the feasibility of identifying a fleet
and fuel management software solution. The least expensive option may not be the most effective
option on a “total cost of operation” [TCO] basis.
Programs designed for traditional fleet maintenance goals haven’t been focused on meet the bold target
of 80% GHG reduction by 2050; the department needs to develop new programs and manage its
performance to achieve its incremental annual reduction targets.
Fleet’s vehicle replacement was developed when CNG fueling was the environmentally preferred option;
with the advent of carbon-neutral electricity, EVs are now preferred from an environmental perspective.
Gasoline
Diesel
Biodiesel (B20)
CNG (City
operations)
350,000
300,000
250,000
200,000
150,000
100,000
50,000
0
2014
Fu
el Co
n
s
u
mpt
i
o
n
(G
a
l
)
However they can be less desirable replacement options than current model gas-powered vehicles for
many service requirements. Lowest first cost requirements and separation of capital costs and operating
costs can prevent acquisition of most the cost effective fleet, so staff is developing operating policies to
prudently preference EVs where appropriate. As price/performance factors improve, it may be
appropriate to revisit and in some cases accelerate existing replacement cycles.
Supplemental Materials:
Greenhouse Gas Reduction from Fleet Division: Section 12 in 2015 Clean Bay Plan, available at
cleanbay.org.
Reduced unleaded and diesel fuel consumption in the fleet: Section 12 in 2015 Clean Bay Plan, available
at cleanbay.org.
Compliance with regulatory and policy requirements to reduce other priority air pollutants in the
atmosphere: 2015 CleanBay Plan report, located at cleanbay.org.
Department: Public Works–Watershed Protection
Background: The Public Works–Watershed Protection Division assists the Regional Water Quality
Control Plant (RWQCP) in reducing pollutants entering the Bay through award winning pollution
prevention, pretreatment, stormwater and air management programs. Since 1990, the goals of
Watershed Protection have been to:
1. Treat wastewater from the RWQCP six-community service area of East Palo Alto Sanitary
District, Los Altos, Los Altos Hills, Palo Alto, Mountain View, and Stanford;
2. Work with industry and businesses to prevent pollution;
3. Ensure regulatory compliance with the RWQCP wastewater permit, air permit, and as a co-
permittee in the Municipal Regional Stormwater Permit shared by all municipalities in the
nine-county Bay Area, and;
4. Provide residential services and education to prevent pollution in Palo Alto’s creeks and San
Francisco Bay.
Strategy: Given strict stormwater and wastewater permit requirements, Palo Alto must explore all
feasible methods of reducing its metals and toxic organic pollutant discharges to San Francisco Bay.
After initially focusing on pretreatment programs at major industrial facilities, the RWQCP expanded its
efforts to include commercial and residential programs. Strategies include:
Commercial and industrial: Integrating pollution prevention into business requirements via
ordinance and incentives such as the Clean Bay Business Program.
Residential: Providing programs with collection services for pollutants of concern (e.g.,
pharmaceuticals and sharps) and extensive public outreach including., classroom presentations
throughout the RWQCP service area ongoing informational campaigns coordinated locally,
regionally and state-wide; workshops, tours and special events.
Key 2014 Goals: The RWQCP had several 2014 goals to reduce industrial and residential pollutants for
stormwater and wastewater, including the following higher-profile efforts:
1. Identify strategies to reduce greenhouse gasses (GHGs) associated with wastewater treatment
and continue to meet goal of 20% reduction from 2005 emissions;
2. Reduce salinity in RWQCP recycled water to 600 ppm total dissolved solids (TDS); evaluate other
metrics of salinity that may be more appropriate and consider proposing policy revision;
3. Meet the 40% trash reduction (volume) target in Palo Alto creeks, streets and Bay shoreline as
part of the Municipal Regional Stormwater Permit requirement;
4. Continue to meet regulatory requirements for additional pollutant reduction in stormwater,
wastewater and air emissions as required by relevant RWQCP permits.
For a complete summary of 2014 pollution prevention efforts see the 2015 CleanBay Plan report located
at cleanbay.org
Top Three Sustainability 2014 Initiatives and Activities:
Sustainability Initiative Objective Outcome
Greenhouse Gas Reduction
from RWQCP
Continue to reduce and
track GHG emissions
associated with wastewater
treatment.
1. RWQCP direct & indirect GHG emissions have reduced
to 4,616 metric tons of carbon dioxide equivalents (MT
CO2e), a 59% reduction since 2005. This reduction
marks the continuous achievement of the goal set forth
in the 2010 update to the City of Palo Alto’s Climate
Protection Plan: 20% reduction of City GHG emissions
below 2005 emissions by 2012.
2. The RWQCP purchases carbon neutral power from the
City’s electricity portfolio. The RWQCP will consider
purchasing natural gas from the new green gas
portfolio in 2015.
3. In early January, 2015, Council approved a contract
with CH2M-Hill to design the facilities needed to phase
out the City’s sewage sludge incinerator as soon as
possible – a dewatering and truck off-haul facility. This
is expected to greatly reduce RWQCP GHG emissions.
Note: For more information, see Section 11 in 2015 Clean
Bay Plan available at cleanbay.org.
Recycled Water Salinity
Reduction
Reduce salinity (total
dissolved solids) to 600
parts per million (ppm) per
City policy to increase
quality of recycled water
for irrigation in Palo Alto
and surrounding
communities.
Salinity levels are declining. In 2014 the annual average
was 841 ppm total dissolved solids down from 1,100 ppm
total dissolved solids in 2008. Successes in salinity
reduction are attributed to ongoing efforts to line sewer
pipes in the RWQCP service area to reduce saltwater
intrusion.
Note: For more information, see Section 12 in 2015 Clean
Bay Plan available at cleanbay.org.
Trash Reduction in creeks,
streets, and along Bay
1. Meet Municipal
Regional Permit
Requirement of 40%
trash reduction by
2014 along Palo Alto
creeks and shoreline
(current requirement
is 60% by 2017 and
100% reduction by
2021, however, this
target may change as
the permit is being
reissued this year).
2. Report to Council with
implementation
update on 2013 Bag
Ordinance Expansion.
In December 2014, The Regional Board confirmed that Palo
Alto had met its 40% trash reduction requirement.* The
City of Palo Alto claimed 60% trash reduction. Due to
evolving quantification standards, the Board is authorizing
the 40% milestone and clarifying its metrics for how 60%
will be achieved before authorizing Palo Alto’s reported
60% milestone. The Regional Board is still in the process of
verifying and reviewing the quantification standards for
trash reduction. Reduction is currently quantified based on
on-land visual assessments (i.e. monitoring of trash
reduction activity success) and the success of product bans.
1. In early 2015, RWQCP staff confirmed several
indicators of success with the 2013 expansion of Palo
Alto’s Bag Ordinance**:
a. 76% of customers at pharmacies and large
grocery stores now use reusable bags or no bag
when making their purchases;
b. A comparison of litter counts at the Matadero
creek clean up events between 2014 and 2012
shows an 85% reduction in total plastic check out
bag litter (151 bags compared to 23 in 2012 and
2014 respectively);
c. Retailers and food service establishments are
largely in compliance with key ordinance
provisions.
* More info located in the Long-Term Trash Plan
www.cityofpaloalto.org/civicax/filebank/documents/43934
and the 2013-14 Stormwater Annual report:
www.cityofpaloalto.org/civicax/filebank/documents/39505
** For more information, see Section 7 in 2015 Clean Bay
Plan available at cleanbay.org. In addition, a complete
update on the impacts of the 2013 Bag Ordinance
expansion is summarized in CMR #5278, March 2, 2015).
Data:
1. RWQCP GHG Emissions Data
The RWQCP GHG emissions are categorized into 3 main components: Scope 1 – direct GHG emissions
from the combustion of gases and sewage sludge in the incinerator as well as emissions from the
treatment process itself (i.e. process and effluent discharge emissions); Scope 2 – electricity usage GHG
emissions; and Scope 3 – biogenic GHG emissions from the combustion of sewage sludge and landfill gas
in the incinerator.
RWQCP GHG emissions decreased by 59% since 2005 mainly due to the increased purchase of green
power electricity, increased use of landfill gas as a replacement for natural gas in the incinerator
afterburner, and decreased incinerator hearth natural gas usage due to incinerator tuning (Figures 1-3).
RWQCP Scope 1 and 2 GHG emissions decreased by 8% from 2013 to 2014 mainly from decreased
effluent discharge emissions caused by decreased effluent nitrogen loads. RWQCP natural gas usage,
and its associated GHG emissions, increased slightly in 2014 from the previous year due to the
decreased availability of landfill gas for incinerator auxiliary fuel. Landfill gas is often unavailable due to
maintenance and/or quality control; when landfill gas is unavailable, natural gas must be used instead.
Additionally, the RWQCP runs one incinerator at a time (typically for a year) while the other is
undergoing preventative maintenance. Although the incinerators are the same make and model, they
vary in natural gas requirements and could explain part of the yearly differences in natural gas usage.
RWQCP GHG emissions as reported to the California Air Resources Board may differ from the values
presented in Table 1 due to different high heat values, global warming potentials, and/or emission
factors. GHG emissions reported in Table 1 were calculated using a static document, the Local
Government Operations Protocol, Version 1.1 (2010) for analysis of historical trends and reductions; in
contrast, the California Air Resources Board has periodically updated their GHG calculation methods to
better reflect recent advances in science and federal regulations.
Table 1: RWQCP Historical Greenhouse Gas (GHG) Emissions*
2005 2012 2013 2014
Scope 1 & 2 Emissions – Direct & Indirect (MT CO2e) 11,269 4,659 5,024 4,616
Scope 3 Emissions – Biogenic (MT CO2e) 16,689 15,602 11,183 11,385
*Calculated using the Local Government Operations Protocol, Version 1.1; not equal to what is reported to the
California Air Resources Board due to updated high heat values, global warming potentials, and/or emissions
factors. GHG emissions are not normalized for hydroelectric supply and excludes Palo Alto Green Purchases.
Figure 1: RWQCP Greenhouse Gas Emissions as Calculated by the Local Government Operations Protocol, Version 1.1 (2010)
Figure 2: RWQCP Historical Natural Gas Purchased (for 2005 – 2011 data may be taken from internal meter vs. utility bills;
however internal meter captures +95% of natural gas purchased)
Figure 3: RWQCP Historical Electricity Usage
2. Recycled Water Salinity Reduction Data
The RWQCP analyzes Recycled Water salinity using numerous metrics: total dissolved solids (TDS),
sodium adsorption ratio (SAR), and specific conductivity. RWQCP and its partner agencies (referenced
above in “Background”) are taking efforts to decrease salinity entering the RWQCP from their collection
systems (Figure 4). For example, the City of Mountain View decreased their TDS loading to the RWQCP
by 40% from 40 tons/day in 2008 to 23.5 tons/day in 2014 (Figure 5). Similar decreases were seen in
Mountain View’s SAR and specific conductivity.
Figure 4: RWQCP Daily Total Dissolved Solids (TDS) Concentration (used as an indicator of salinity)
Figure 5: Average Total Dissolved Solids (TDS) by RWQCP Partner Agencies (Stanford is included in Palo Alto and Los Altos
Hills is included in Los Altos data).
3. Continue to meet regulatory requirements for additional pollutant reduction- The RWQCP has many
numerical and programmatic regulatory requirements for pollutant reduction. An annual report of
compliance and programmatic achievements is provided at cleanbay.org.
Challenges
1. Future GHG Reductions-–The RWQCP has made large reductions in GHG emissions over the past
5 years due to incinerator tuning, landfill gas replacement of natural gas in the afterburner,
aeration basin optimization, and installation of variable frequency drive lift pump controls for the
trickling filters. Ongoing RWQCP optimization will continue, however the major GHG reductions
from optimization projects have already occurred. Future GHG reductions will be
largely contingent on future plans to phase out sewage sludge incineration expected in 2019, the
availability of landfill gas as a replacement for natural gas in the incinerator, and the source
of natural gas. Landfill gas is used as much as possible in the incinerator afterburner. However
the lower quality of landfill gas requires that natural gas continue to be used in other areas of
the incinerator. Additionally, maintenance requirements on the landfill gas collection and
distribution system varies from year-to-year and often makes landfill gas unavailable for RWQCP
use thus requiring more natural gas be used during those times. The RWQCP is considering
purchasing green natural gas, however this decision would have to be approved by the RWQCP
partner agencies and/or be a City-wide decision, and subject to an analysis of all relevant policy,
legal and regulatory implications of such a strategy.
2. Drought and Increased Economic Activity: Drought conditions in the service area have increased
water conservation efforts and significantly decreased flows entering the RWQCP (14%
from 2009 to 2014). Additionally, the recent economic recovery and growth in the service area
(for example the increase in Google employees) increases the daytime population that increases
inputs to the RWQCP from toilet flushing versus more dilute inputs such as showering.
Decreased flows combined with increased daytime populations have a combined impact of
increased loads and concentrations of pollutants such as ammonia and total dissolved solids.
Higher pollutant loading and concentrations strain the current treatment process that was
originally designed for treating more dilute wastewater. As such, unexpected challenges arise.
For example, the RWQCP violated its NPDES permit limit for pH in December 2014 indirectly due
to the increased ammonia and decreased flow entering the RWQCP (Figure 6). The RWQCP was
able to quickly install a temporary solution until a more permanent one could be designed and
constructed, but this issue is anticipated to pose continued challenges with meeting permit limits
and internal goals (such as salinity reduction goals) should drought become more common with
predicted climate change.
Figure 6: Example of Impacts from Drought and Increased Economic Activity on Wastewater Characteristics
3. Recycled Water: Primary challenges are to continue with relining targeted pipes throughout
RWQCP service area to reduce saltwater intrusion, expand recycled water distribution (EIR is in
process to extend to west Palo Alto), and public education on the value, high quality, and
appropriate use of recycled water to accelerate acceptance of recycled water use. In addition, in
2014, the drought coupled with water conservation and increased economic activity caused the
salinity (measured as total dissolved solids) to increase since there is less dilution. Refer to
Challenge No. 2 for more details on drought and increased economic challenges.
4. Trash Reduction: The primary challenge is measuring the impact the City’s programs have on
the amount of trash in the creeks and Bay since trash is also transported to creeks and the Bay
via wind and direct dumping and not only via the storm drain system. This is a challenge faced
by all stormwater co-permittees (the regional stormwater permit is shared by cities in all nine
Bay Area Counties). Palo Alto will continue its programs to manage illegal dumping and to
provide clean-up events in an effort to address this challenge.
5. Continue to meet regulatory requirements for additional pollutant reduction: While the
RWQCP continuously seeks to meet or exceed its regulatory requirements, policy commitments
and sustainability goals, many pollutants are contaminants that cannot be removed through the
wastewater treatment process (e.g., pharmaceutical and personal care products that are
excreted or washed into the sanitary sewer system from residents throughout the RWQCP
service area). Regulatory challenges restrict the ability of the RWQCP to make some desired
changes (e.g., local agencies cannot restrict the sale of pesticides).
Supplemental Materials:
2015 Clean Bay Plan
Department Name: Administrative Services Department (ASD)
Background: ASD provides financial, analytical, budget, strategic and administrative support services for
City departments. The Purchasing Division has lead responsibility for implementing city policies to
incorporate sustainability considerations into the City’s purchasing processes.
Strategy: The Purchasing Division works closely with the City’s interdepartmental Green Purchasing
Team to bring sustainably sourced, produced and delivered products and services to all municipal
departments, and to provide track and evaluate the success and impacts of these programs.
Goals: To increase the City’s purchasing of green alternatives in goods and services and to embed green
purchasing into the organization in partnership with the City’s Public Works–Environmental Services
Division. To eliminate the use of paper for managing solicitations by moving to an entirely electronic
process.
Initiatives and Activities: The City‘s award-winning green purchasing program has “greened” structural
and landscaping pest control, custodial supplies, office supplies, certain computer and monitor
standards, and copier and printer performance requirements. We have eliminated the use of certain
plastic products and pesticides prohibited by City policy, and made significant strides to reduce
pollutants such as mercury and dioxins that are associated with the purchase of City supplies.
Top Three Sustainability Initiatives in 2014
Sustainability Initiative Objective Outcome
Develop 2015-2017 green
purchasing goals, objectives, tasks
and timeline to further embed
Green Purchasing Palo Alto
operations.
Develop a three year plan
building on efforts of previous
years’ work.
Develop “default to green”
options where appropriate.
Drafted a three year plan (2015-2017)
which includes green purchasing goals,
objectives and a timeline.
See supplemental materials for plan
timeline, recommendations and related
policy.
Continue to iteratively green
prioritized goods, services and
purchasing operations.
Prioritize high-dollar and high
carbon footprint purchases, and
target opportunities to reduce
waste, pollution and maximize
energy efficiency.
1. Increased the purchase of green
office supplies via Staples contract
and blocked key items from
purchase on this contract including:
foam foodware, pesticides, virgin
copy paper and antibacterial soaps.
2. Configured online purchasing of
office supplies to simplify and
encourage the purchase of 100%
recycled content copy paper and
remanufactured toner cartridges.
3. Increased green office supplies in
FY2015
4. Began process to improve copier
contract to improve performance
of required preset duplexing.
Implement eProcurement Use new eProcurement system
to build in green purchasing
objectives into solicitations and
reduce paper use and storage.
Increase instances where green
initiatives are included in solicitations
with related response from vendors
Data: Data hasn’t been analyzed, but partial data is available, via Staples.
Challenges
ASD is working with vendors and the Office of Sustainability to ensure that reporting systems, both internal
and from vendors, provide sufficient information to evaluate and manage the initiative.
Supplemental Materials:
Green Purchasing Recommendations
2015-2017 Green Purchasing Workplan
Green Purchasing Policy
Department Name: Library
Background: In addition to bringing the Mitchell Park Library and Community Center online in 2014 –
which is on track to being LEED Platinum certified (the highest level for LEED) – the Palo Alto community
also enjoyed the completion of the Rinconada Library renovation in 2015, which included ecological
upgrades and is also on target for being LEED certified.
The Library also provides educational opportunities that provide users with tools for reducing waste and
energy.
Strategy:
The Mitchell Park Library not only works at the highest efficiency level possible, it also informs the public
on conservation – through displays throughout Mitchell Park Library. As a library, information is the most
critical resource we offer the public. The Library also provides space for the public to engage and
discuss conservation. In addition to library buildings we offer a wide range of programs, books (that are
continuously reused) and other forms of information to assist customers in learning more about their
opportunities to conserve.
Here are some programs coming up:
Meet Author, Jaimie Hicks, Planning for Community Resilience: A Handbook for Reducing
Vulnerability to Disasters (February 24, 2015)
Meet author Evelyn Hadden, Hellstrip Gardening: Create a Paradise Between the Sidewalk and
the Curb (March 19, 2015)
TBD..Author event on Tactical Urbanism
Similar programs listed under Initiatives and Activities for 2014 will also be offered in 2015.
Initiatives and Activities:
Here are some of the Library’s activities from 2014:
4/16 Going Green – Worm composting for kids (Kids)
4/30 Fabulous Dishes, No Shopping Required – Using food you already have in the cupboard to
make great dishes (Adults)
5/14 Green Shopping – Refresh your wardrobe the eco-friendly way (Adults)
7/26 Urban Farming with Chickens – Raising chickens and growing a vegetable garden (Adults)
Top Three Sustainability Initiatives in 2014
Sustainability Initiative Objective Outcome
Two new energy efficient
buildings
Significantly reduce carbon
footprint and waste.
See Public Works for details on
conservation through better
design and functioning of library
buildings.
Promote conservation through
library programs.
Provide participants with tools at
reducing energy and waste.
Customers and staff of the
Library will reduce waste and
conserve as a result of the
information they learn at our
programs.
Promote conservation with
environmental tips through
digital media.
Reach all library users with tools
for reducing energy and waste.
Customers and staff of the
Library will reduce waste and
conserve as a result of the
information they learn through
our media.
Challenges: The Library’s books are still shipped from other systems and within the Library’s system. The
Library relies on vans that depend on fossil fuel. The Library, while using energy efficient equipment,
nevertheless, relies on automation that requires high energy usage.
Department Name: The Office of Emergency Services (OES)
Background: The Office of Emergency Services works with all City departments to promote resilience to
threats and risks of all types.
Strategy: The mission of the Office of Emergency Services is to prevent, prepare for and mitigate,
respond to, and recover from all hazards. These hazards were recently codified in the Threat and
Hazard Identification and Risk Assessment (THIRA) that was presented to City Council in September 2014
(www.cityofpaloalto.org/thira). The THIRA lists a number of hazards that either directly (criminal
sabotage or cyber attack) or indirectly (storm that knocks out power) could endanger critical utilities and
fuel supplies.
Goals: OES is working with the Chief Sustainability Officer, the Public Works Department, Utilities, and
other staff to bolster "energy assurance" for key facilities. For example, OES is investigating whether
the design of the new Public Safety Building (PSB) should incorporate microgrids, islanding, and other
alternative energy elements to reduce dependence on 1) the power grid and 2) diesel fuel for
generators, especially during prolonged incidents. OES also operates a number of vehicles and
portable equipment, such as the Mobile Emergency Operations Center (MEOC). OES is investigating
solar-battery generator trailers as a means to similarly improve energy resilience for those key assets.
OES is even seeking to acquire an all-electric All-Terrain Vehicle (ATV) for rescue operations and routine
use.
Initiatives and Activities: In addition to these energy assurance efforts, OES leads a number of other
community resilience efforts, including the Emergency Services Volunteer (ESV) program that
encompasses CERT, Neighborhood Watch, and other programs
(www.cityofpaloalto.org/emergencyvolunteers), support of Stanford University and affiliates (such as
Stanford Hospital), regional public safety planning efforts, regional training programs, coordination with
private sector entities for emergency response and recovery, technology development for public safety,
grant management, and other all hazards activities. OES believes that the development of local
resources, including, for example, locally-grown farm-to-table food (Victory Gardens!), is not only good
for the environment but will help us through a crisis.
Challenges: The department has a number of initiatives it wants to develop and implement, but could
use stronger project management capacity. Enhanced interdepartmental cooperation can accelerate
implementation of safety programs that interconnect across City Operations.
Department Name: Office of Sustainability, City Manager’s Office
Background: The Office of Sustainability (OOS), established in December 2013, is responsible for
working with other City departments to develop and implement a world class sustainability strategy for
Palo Alto that improves quality of life, grows prosperity and builds resilience, while protecting and
improving the living systems that sustain us—and leads Palo Alto to recognized as one of the greenest
cities in America.
Strategy: OOS focus for its first year of operation was to create the platform, strategy and resources to
deliver on that mission, while advancing key existing and new programs. Priorities included establishing
cross-departmental governance process; conducting initial reviews and assessments of City
sustainability initiatives, policies, operations and impacts, and identifying priorities for improvement;
reactivating the employee Green Team; initiating a new sustainability and climate action plan (S/CAP);
and engaging staff, Council and community in these efforts as appropriate.
Goals:
Establish bold, coherent & grounded goals, strategy and plans, including the S/CAP
Integrate sustainability programs and practices into City operations & Community
actions, including management systems, procurement, finance and training.
Foster experimentation, alliances & big leaps, such as exploration of potential
opportunities for electrification, “mobility as a service,” “net positive” initiatives
and smart city initiatives.
Initiatives and Activities:
Strategy: Together with a great consulting team and key city staff, we have framed and are developing
a new sustainability and climate action plan (the City’s first since 2007), that will once again put Palo
Alto in the forefront of sustainability strategy. We have held an invitational expert charrette, and an
open call community "Ideas Expo" at which more than 75 people presented poster sessions and other
ideas; convened an “executive advisory board”; have provided interim briefings to City Council on
developing themes; are planning a community climate summit, and participation in the CompPlan
Summit, this spring; and plan to present the draft plan, including roadmaps, before the end of FY15.
OOS is implementing a sustainability performance dashboard to collect accurate data across all
municipal activities, produce timely reports for management and the public, and provide a fact-based
foundation for bold strategic thinking. This platform is designed to reduce staff time on these tasks,
improve transparency and auditability, and give Council and city managers actionable and timely data to
optimize their activity and drive performance.
Implementation: Reactivated the staff GreenTeam, with more than 60 people participating; worked with
Development Services and Utilities to advance the City’s Green Building and EV ordinances and
programs; implemented "default to green" for office products procurement (for estimated savings
$9,000 per year) and fleet procurement (estimated lifecycle savings of $5,000-$15,000 per vehicle);
prioritized carbon impact of city spend; developed SharePoint database of 150 city sustainability
initiatives; developing SharePoint database of all sustainability policies; streamlined commute
alternatives management (estimated savings TBD); initiated “lean” training for three managers; and are
streamlining performance reporting processes (estimated savings TBD).
Innovation: OOS is coordinating a multi-departmental staff effort, as directed by Council1, to evaluate
the potential for a citywide electrification strategy; has convened and are supporting a region-wide
strategy with Joint Venture Silicon Valley to transform transportation, collaborating with Finland's
Ministry of transportation and communications "mobility as a service" initiative; is working with the Net
Positive Silicon Valley project, and the Living Futures Institute, among others, to support and develop
neighborhood scale pilots the demonstrate advanced sustainability strategies; conducted initial
evaluation of the “scope three” GHG emissions of City operations; initiated one of two global pilots (the
other is with the UN) exploring how government policies could concretize sustainability’s commitment
to future generations”; works closely with peer networks such as Green Cities California and the Urban
Sustainability Directors Network, including multi-city collaborations on alternative mobility, smart cities,
and sustainable procurement; has submitted $1.5 million worth of funding applications, and procured
the eCivis funding database to improve funding effectiveness.
Key Initiatives:
Sustainability Initiative Objective Outcome
S/CAP Establish bold, coherent &
grounded goals, strategy and
plans for continue City
leadership in climate crisis
response
In development; draft late Spring
2015
Sustainability performance
dashboard
Streamline collection and
analysis of sustainability
performance data across all
municipal activities
Being deployed. Will produce
timely reports for management
and the public, and provide a
fact-based foundation for bold
strategic thinking
Operational efficiency Embed “default to green” in
Citywide operations
Initial projected savings of
$9,000 per year for office
products procurement and
estimated lifecycle savings of
$5,000-$10,000 per vehicle for
fleet EV procurement
Mobility Pilot local and regional "mobility
as a service" initiatives
In development; goal: “make it
more convenient for anyone,
anywhere, at any time to not
have to get into a car and drive.”
1 http://www.cityofpaloalto.org/civicax/filebank/documents/45640
Challenges:
Staffing: The work has been performed by a single staff member (the Chief Sustainability Officer) until
November 2014, when two hourly staff were hired to lead fundraising, outreach and data analytics.
While much of OOS’s work must be done collaboratively with other departments’ staff, cities with
comparable sustainability aspirations and commitments tend to have larger core sustainability teams
and/or formal part-time assignment of other staff to sustainability functions.
Data Transparency: The process of generating the Earth Day Report for the last two years has
demonstrated the need for increasing clarity, auditability, and strategic use of data. Current data
management processes are time consuming, with more manual data entry and spreadsheet calculation
than we would like, or are based on infrequent modeling. Sustainability performance data can be used
more consistently and help improve operations.
Organizational Culture: City staff work hard, but are often absorbed by immediate concerns, with
inadequate bandwidth and competing demands that can reduce time for long-term, reflective
thinking.
Enterprise-wide Engagement: The City’s full potential will be achieved with coordinated,
interdepartmental cooperation. While the Sustainability Board provides that mechanism formally, as in
any organization, collaboration can be enhanced. As we make systemic improvements across City
operations, organizational alignment under the common goal of reducing emissions and improving
quality of life will accelerate.
Attachment E: Sustainability Policy and Organizational Structure
Page 1 of 3
Attachment E: Sustainability Policy & Organization Structure
Shown below is the City’s Sustainability Policy approved by the Council in 2007.
POLICY AND PROCEDURES 5-01/MGR
First adopted in April, 2000
Revised June 18, 2007 CMR: 260:07
SUPPORT FOR SUSTAINABILITY
POLICY STATEMENT
It is the intent of the City of Palo Alto to be a sustainable community – one which meets
its current needs without compromising the ability of future generations to meet their
own needs. In adopting this policy, the City of Palo Alto accepts its responsibility,
through its operations, programs and services to:
Economy: Maintain a healthy, thriving and well-balanced economy comprising a
blend of large and small business, which encourages the development of independent businesses and is resilient to the economic changes common to California’s economy
Social Equity: Continuously improve the quality of life for all Palo Alto
community members without adversely affecting others
Environment: Enhance the quality of the air, water, land and other natural
resources by minimizing human impacts on local, regional and global ecosystems
through greater conservancy, reduced pollution, increased efficiency, and
protection of native vegetation, fish, wildlife habitats and other ecosystems.
In working toward these goals, the City will, when appropriate, align and partner with
community groups, businesses, non-profits, and neighboring communities.
NOTE: Questions and/or clarification of this policy should be directed to the City Manager’s Office.
Attachment E: Sustainability Policy and Organizational Structure
Page 2 of 3
Organizational Structure to Facilitate Sustainability Actions and to Achieve Goals
City Manager determined that the City’s many cross-departmental environmental sustainability
activities requires a clear organizational structure to succeed. In preparation for the
recruitment of the new position of Chief Sustainability Officer (CSO), roles and responsibilities
for each part of the organization was established.
Sustainability Board: Comprising of Directors from key departments, will establish the vision
and goals for the overall effort, approve the CSO’s work plan, and identify and approve
resources to complete the work plan tasks.
Sustainability Executive Advisory Group: To solicit input from outside the City, the City Manager
will organize and lead such an ad hoc group, whose membership will include key executives
from Palo Alto institutions, community leaders, and representatives from Stanford and large
companies. The function of the group is to give advice and feedback to the City Manager, get
input from the “real world”, forge and leverage international relationships/partnerships, build
excitement, and model and motivate behavioral changes.
Chief Sustainability Officer: The CSO will report to the City Manager and take direction from the
Sustainability Board. A critical task of the CSO is to develop the long-term sustainability work
plan and prioritize tasks for each fiscal year. The CSO will work with a larger group of
individuals from many City departments to complete the tasks on the work plan. That larger
group, the Sustainability Team, will organize itself into committees to implement the work plan
as prioritized by the CSO. Participants in the Sustainability Team will be embedded in job
descriptions and annual appraisals to ensure that team members understand that the
sustainability work plan tasks are key City priorities. The CSO will also be responsible for
community outreach on sustainability efforts and will act as the co-chair of community based
Community Environmental Action Partnership (CEAP).
Green Team: This is a long standing individual employee initiative driven team with voluntary
membership. The Green Team includes employees from many work groups and has historically
been project-based with the goal to complete projects and a bias towards action. This group of
engaged employees will be a valuable asset for the CSO to work with as they act as
ambassadors to their own work groups and spread the word on sustainability throughout the
City. Many Green Team members will also be on the Sustainability Team. The CSO will act as
the liaison to the Green Team co-chairs and will convey information to and from the
Sustainability Board.
One of the key tasks for the CSO and the Sustainability Board, the Sustainability Team and the
Green Team is to update the 2007 Climate Protection Plan. In addition, measuring performance
with respect to the goals of the plan must be done on an annual basis.
Attached is the line-diagram of the proposed governance structure.
Attachment E: Sustainability Policy and Organizational Structure
Page 3 of 3
Special Meeting
February 23, 2015
Closed Session .......................................................................................3
1. CONFERENCE WITH CITY ATTORNEY/LEGAL COUNSEL ANTICIPATED
LITIGATION (as defendant/plaintiff) .................................................3
Special Orders of the Day ........................................................................3
2. Acknowledgement of Recipients of Mayor’s “Green Leader Business
Award\ .........................................................................................3
3. Heart Across America Presentation ...................................................4
City Manager Comments .........................................................................4
Oral Communications ..............................................................................5
Minutes Approval ....................................................................................5
Consent Calendar ...................................................................................6
4. Resolution 9495 entitled “Resolution of the Council of the City of Palo
Alto Amending Electric Rate Schedule E-1 TOU (Residential Time-of-
Use Rate Adjustment) to Extend its Term Through December 31,
2017.” ..........................................................................................6
5. Approval of Utilities Enterprise Fund Contract with Daleo, Inc. In The
Amount of $4,409,031 for Water Main Replacement Capital
Improvement Program WS-11000 Project 25 in University South and
the Leland Manor/Garland Subdivisions .............................................6
6. Approval of a Contract with St Francis Electric in the Amount of $274,290 for Traffic Signal Modifications at the Embarcadero Road
Town and Country-Palo Alto High School Intersection .........................6
7. Approval of Continuation of Valet-Assist Services at Lot R for the
Remainder of FY2015 and Adoption of a Budget Amendment Ordinance
5305 entitled “Budget Amendment Ordinance of the Council of the City
of Palo Alto in the University Avenue Parking Permit Fund in the
Amount of $30,000.” ......................................................................6
02/23/2015 117- 001
MINUTES
8. Approval of an Amendment to Contract C14153012 with Metropolitan
Planning Group for Planning Support Services Needed Due to
Unanticipated Staff Vacancies Adding $98,000 for a Not to Exceed
Amount of $150,000 .......................................................................6
9. Approval of Utilities Enterprise Fund Contract with Utility Tree Service,
Inc. (UTS), Not To Exceed $1,209,406 for the First Year and up to
$5,251,499 for Four Additional Years for the 2015 Power Line Clearing
Project ..........................................................................................6
10. Appointment of 2015 Emergency Standby Council ..............................6
11. Resolution 9496 entitled “Resolution of the Council of the City of Palo
Alto Approving Interim Appointment of James Lightbody to Chief
Transportation Official Position Pursuant to Government Code Section
21221(h).” ....................................................................................6
12. Approval to Cast Ballot for Council Member Liz Kniss for Vice President
of the Peninsula Division Executive Committee of the League of
California Cities ..............................................................................7
Action Items ..........................................................................................7
13. Appeal of Director of Planning and Community Environment’s
Individual Review Approval of a New Two-Story Home located at 3864
Corina Way (Continued from February 2, 2015) .................................7
14. Policy and Services Committee Recommends the City Council Amend
Policy and Procedure 1-48/ASD (Procedure for Sale/Transfer of Surplus
City-Owned Real Property) to Address Unsolicited Offers and Provide
for Broad Marketing of City Lands Through Use of Electronic Media .......18
Inter-Governmental Legislative Affairs ......................................................20
15. Review and Approval of the Draft Legislative Program Manual and
Draft Semi-Annual Legislative Strategic Initiatives ..............................20
Adjournment: The meeting was adjourned at 11:13 P.M. ............................24
02/17/2015 117- 2
MINUTES
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, Filseth, Holman, Kniss, Schmid, Wolbach arrived
at 6:10 P.M.
Absent: DuBois, Scharff
Closed Session
MOTION: Council Member Kniss moved, seconded by Vice Mayor Schmid to
go into Closed Session.
MOTION PASSED: 6-0 DuBois, Scharff, Wolbach absent
City Council went into Closed Session at 6:03 P.M.
1. CONFERENCE WITH CITY ATTORNEY/LEGAL COUNSEL ANTICIPATED
LITIGATION (as defendant/plaintiff)
Subject: Turner Construction – Construction Management Services, Mitchell Park Library and Community Center
Authority: California Government Code Sections 54956.9(d)(2) and
54956.9(d)(4)
Council reconvened from Closed Session at 6:49 P.M.
Mayor Holman advised no reportable action.
Special Orders of the Day
2. Acknowledgement of Recipients of Mayor’s “Green Leader Business
Award".
Mayor Holman advised that the Green Leader Business Award program was
initiated in 2012 to support and reward business owners and managers who
improved the energy efficiency of their buildings. Business owners tracked
energy use and compared energy consumption through the Environmental
Protection Agency's (EPA) Portfolio Manager Program. Owners of buildings
scoring 90 or better in Portfolio Manager received the Gold Level Green
Business Leader Award. Mayor Holman presented awards for buildings
located at 435 Tasso Street, 3450 Hillview Avenue, 601 California Avenue,
650 Page Mill Road, 3210 Porter Drive, and 975 Page Mill Road.
02/17/2015 117- 3
MINUTES
3. Heart Across America Presentation.
Amy Brennan, Heart Across America Campaign Manager, introduced
community supporters of Heart Across America. She played a video about
Sean Maloney and his recovery from a debilitating stroke.
Sean Maloney reported Heart Across America was a cross-country bike ride
to increase awareness of strokes and heart attacks. Normally, heart attacks
and strokes were the result of thickening of arteries, which was detectable
by an ultrasound. Heart attacks and strokes are the number one cause of
deaths worldwide.
Ms. Brennan indicated Heart Across America would provide a number of
events and activities for the community. Event sponsors included
corporations, health and wellness organizations, bicycle clubs and shops. A
beginner's ride would extend from City Hall to Hewlett-Packard. The ride
would continue for 52 miles for experienced bicyclists.
Tana and Alexandria Maloney hoped the children of Palo Alto would bring
their parents to the event.
Mayor Holman was pleased Heart Across America was being launched in Palo
Alto.
Council Member Kniss noted the Council adopted Healthy City/Healthy
Community as a Priority.
Ms. Malone inquired whether Heart Across America could fulfill a portion of
the Council's Priority of Healthy City/Healthy Community.
James Keene, City Manager, responded yes.
Council Member Filseth read the Proclamation into the record.
Mayor Holman advised that the ride would begin at City Hall on March 22,
2015 at 10:00 A.M.
Wynn Grcich stated ammonia was added to drinking water, and ammonia
caused strokes. Fluoridation could speed the aging process. Chlorine
caused heart attacks.
City Manager Comments
James Keene, City Manager, announced approximately 800 customers had
registered for the Palo Alto Green Gas Program in the first month.
Participation in Palo Alto Green Gas would add approximately $5 to each
02/17/2015 117- 4
MINUTES
customer's monthly utility bill. The Our Palo Alto app was available for
download. He read an email from a customer who appreciated a City
repairman's service. Palo Alto firefighters would read to students in honor of
Read Across America Day on March 2, 2015. City Staff and Cubberley
Community Center tenants would host Cubberley Community Day on March
28, 2015.
Oral Communications
David Carnahan, Deputy City Clerk, reported the City was searching for
applicants to fill three terms on the Human Relations Commission, three
terms on the Public Art Commission, and two terms on the Utilities Advisory
Commission. He reviewed requirements for each Commission. Deadline for
applications was March 3, 2015. Terms began May 1, 2015 and ended April
30, 2018.
Stephan Rosenblum presented a petition signed by 155 people asking the Council to divest City investment funds from utilities that consumed coal and
from investment banks that financed fossil fuel extraction. The Council
could accomplish this by directing Staff to do so.
Stephanie Munoz spoke about the sale of the Maybell property and the
closing of Buena Vista Mobile Home Park. Tearing down the Palo Alto High
School gymnasium was a waste when it could be utilized for many purposes.
Mila Zelkha, Palo Alto Forward Steering Committee, believed funds set aside
for Buena Vista Mobile Home Park marked the beginning of a renewed
community discussion of preserving the property for affordable housing.
Palo Alto Forward had partnered with Friends of Buena Vista and looked
forward to supporting the discussion.
Elaine Uang indicated many livability challenges could be managed through
better mobility policies. Residents needed all types of transportation
options. She requested the Council consider better incentives for buildings,
new and old.
Wynn Grcich spoke against fluoridation of drinking water. She provided
studies indicating fluoridation caused genetic damage.
Minutes Approval
MOTION: Council Member Berman moved, seconded by Council Member Kniss to approve the Minutes of November 10 and 17, 2014.
Vice Mayor Schmid requested timely return of Minutes.
02/17/2015 117- 5
MINUTES
Beth Minor, Acting City Clerk, reported Minutes would be timely.
MOTION PASSED: 7-0 DuBois, Scharff absent
Consent Calendar
MOTION: Council Member Kniss moved, seconded by Vice Mayor Schmid to
approve Agenda Item Numbers 4-12.
4. Resolution 9495 entitled “Resolution of the Council of the City of Palo
Alto Amending Electric Rate Schedule E-1 TOU (Residential Time-of-
Use Rate Adjustment) to Extend its Term Through December 31,
2017.”
5. Approval of Utilities Enterprise Fund Contract with Daleo, Inc. In The
Amount of $4,409,031 for Water Main Replacement Capital
Improvement Program WS-11000 Project 25 in University South and
the Leland Manor/Garland Subdivisions.
6. Approval of a Contract with St Francis Electric in the Amount of
$274,290 for Traffic Signal Modifications at the Embarcadero Road
Town and Country-Palo Alto High School Intersection.
7. Approval of Continuation of Valet-Assist Services at Lot R for the
Remainder of FY2015 and Adoption of a Budget Amendment Ordinance
5305 entitled “Budget Amendment Ordinance of the Council of the City
of Palo Alto in the University Avenue Parking Permit Fund in the
Amount of $30,000.”
8. Approval of an Amendment to Contract C14153012 with Metropolitan
Planning Group for Planning Support Services Needed Due to
Unanticipated Staff Vacancies Adding $98,000 for a Not to Exceed
Amount of $150,000.
9. Approval of Utilities Enterprise Fund Contract with Utility Tree Service,
Inc. (UTS), Not To Exceed $1,209,406 for the First Year and up to
$5,251,499 for Four Additional Years for the 2015 Power Line Clearing
Project.
10. Appointment of 2015 Emergency Standby Council.
11. Resolution 9496 entitled “Resolution of the Council of the City of Palo
Alto Approving Interim Appointment of James Lightbody to Chief
Transportation Official Position Pursuant to Government Code Section 21221(h).”
02/17/2015 117- 6
MINUTES
12. Approval to Cast Ballot for Council Member Liz Kniss for Vice President
of the Peninsula Division Executive Committee of the League of
California Cities.
MOTION PASSED: 7-0 DuBois, Scharff absent
Action Items
13. Appeal of Director of Planning and Community Environment’s
Individual Review Approval of a New Two-Story Home located at 3864
Corina Way (Continued from February 2, 2015).
Amy French, Chief Planning Official, reported the project was a two-story
home in an R-1 (single-family residence) Zone and a flood zone. The site
was currently a vacant lot. The street-side property line was located along
the cul-de-sac. The front property line was located along Corina Way. The
Municipal Code required notice for Individual Review (IR) projects to be
provided to abutting properties only. Staff sent four courtesy notices to all
properties within a 150-foot radius of the property. Building setbacks were
determined in accordance with appropriate Palo Alto Municipal Code
sections. The appellants owned a pie-shaped lot adjacent to the subject
property. The Appellant's rear setback was measured from the rearmost
point of the lot. Staff did not approve the original design submitted July
2013 given the scale, mass, and height of the proposed design. The
Applicant revised plans and met with neighbors prior to submitting revisions
in August 2014 and again in October 2014. The project was a
contemporary, two-story home. The design changed significantly over time,
including reducing height and mass, adjusting the second floor toward the
cul-de-sac, increasing setbacks, obscuring second-floor windows, and
providing greater articulation and landscaping. The revised design met IR
Guidelines. The Record of Land Use Action set forth the IR Guidelines and
the determination that the project met those Guidelines.
Cara Silver, Senior Assistant City Attorney, mentioned that the Council
needed to adopt a Record of Land Use Action. Five votes would be needed
to grant the appeal and affirm the Director's decision or to deny the appeal
and overturn the Director's decision.
Mayor Holman requested disclosures from Council Members.
Molly Stump, City Attorney, advised that traditionally Council Members had
not disclosed visits to the project site; however, it would be a good idea to
do so.
Mayor Holman asked if a visit to the site would include driving by it.
02/17/2015 117- 7
MINUTES
Ms. Stump clarified that Council Members should disclose any gathering of
information outside of the formal material submitted by the parties or
presented during the meeting.
Council Member Kniss had twice visited the site, walking around the property
and along the cul-de-sac.
Council Member Berman visited the site.
Council Member Burt visited the site.
Vice Mayor Schmid had traveled along Corina Way many times.
Council Member Filseth visited the site and viewed adjacent properties.
Mayor Holman drove around the site several times.
Helen Koo, Applicant, reported the project site was bordered by two streets,
approximately 133 feet along one street and 62 feet along the other. Three
sides of the property shared property lines. According to Zoning Guidelines,
the short side of the property facing the street was designated the front
property line. The opposite side was the rear property line. The long side of
the property facing Corina Way was the side yard. The lot was surrounded
on three sides by mature, 30-40 foot evergreen trees. The rear of the lot
contained the most dense and tallest trees. Those trees screened the back
from surrounding properties. Deciduous street trees would screen homes
opposite the project and at the end of the cul-de-sac. She proposed
planting six evergreen trees along the fence. At planting those six trees
would be 10 feet in height. At maturity, those trees would be approximately
20 feet in height. Front and rear setbacks were 20 feet; the street-facing
side setback was 16 feet, and the interior side setback was 8 feet. The
proposed footprint was located within all setbacks. Although the setback
requirement for the interior side was 8 feet, the Applicant increased the
setback for the ground floor of the proposed home to 10 feet and 24 feet for
the second story. The allowed height for the proposed home was 31 feet 3
inches; however, the maximum height of the proposed two-story section
would be 23 feet 7 inches. The façade would be an earthy tone and
comprised of natural materials to blend with the site and the neighborhood.
All bathrooms were located within the home to face the street. On the side
of the proposed home facing the neighbor, three windows were obscured and located above eye-level.
Jeanie Tooker Stephens, Appellant, remarked that the proposed house did
not meet single-family IR Guidelines, which resulted in adverse impacts to
adjacent neighbors. The lot was configured for a smaller home. Setbacks
02/17/2015 117- 8
MINUTES
did not meet zoning goals and intensified the impacts to neighbors. The
City's failure to follow Code and post the second design denied neighbors the
right to comment and significantly damaged the appeal. Corina Way was
comprised largely of single-story, 1,200-1,800 square foot homes containing
three bedrooms, two baths, and a shared living, dining, kitchen and family
room space with extensive use of outdoor areas. Some homes had been
remodeled with ground-floor extensions or second-story additions, which
respected the context and style of the neighborhood. In the context of the
neighborhood, the proposed home was equivalent to two traditional homes.
The proposed home contained five bedrooms, four baths, and separate
living, dining, family and kitchen rooms. The proposed house was sited to
be an object building, rather than a part of the broad horizontal landscape.
The wide second-floor volume defined the scale, which was not mitigated by
the tacked on one-story mass. Features not in compliance with IR
Guidelines included inappropriate height and mass, ridge lines extending
above neighbors' ridge lines, tall wall planes, and monumentally scaled
forms. The broad upper floor was almost twice the height of neighboring
rooflines and called attention to height compatibility. Reducing visual mass
was key to reducing the impact to neighbors. Every view from her home
would be dominated by the proposed home. The rear of the house would be
located on 8-foot setbacks, while other homes had a minimum 20-foot rear
setback. The proposed house placement and size supported repositioning
the house on the lot to lessen impacts to neighbors. The first design was
posted in July 2013 and generated significant neighborhood opposition. The
second design was never posted on the property. A Planning Department
email to eight nearby neighbors did not constitute adequate notice to the
neighborhood. She asked the Council to include residents in the review of IR
Guidelines.
Frank Ingle supported the Appellant. IR goals were routinely ignored.
Applications did not appear to be examined for compliance unless neighbors
protested. He requested the Council instruct the Planning Department
regarding interpretation of Guidelines and appoint an ombudsman to
adjudicate disagreements about Guideline interpretations.
Cheryl Lilienstein supported the Appellant. The Council should appoint
someone to represent residents in the Planning Department. The proposed
design was not compatible with the neighborhood. The Applicant should
reposition the home.
Ken Allen, President of the Adobe Meadow Neighborhood Association, advised that the Association took no stand on the issue. He requested the
Council provide guidance for future modifications to the neighborhood. The
lot begged for a variance in order to make the proposed home more
02/17/2015 117- 9
MINUTES
compatible with the neighborhood. The proposed home was jarringly out of
place in the neighborhood.
Arthur Keller referenced Policy L-12 of the Comprehensive Plan regarding
compatibility. The Applicant and Staff had not rebutted the Appellant's claim
that the proposed structure was not compatible with the neighborhood. The
proposed home should be redesigned to be more compatible with the
neighborhood in structure, style, and form.
Dagmar Becker supported the Appellant. City trees would not screen the
proposed home. The structure was massive and did not resemble the style
of adjacent homes. The review of Guidelines should ensure homes were
compatible with neighborhoods.
Shani Kleinhaus advised that the vacant lot was utilized by children as a
playground. She had seen various wildlife on the lot. The house was too
large and did not blend with the neighborhood.
Mike Murnane supported the Appellant and redesign of the proposed home.
David Hammond supported the Appellant. The house was awfully large.
Rita Vrhel supported the Appellant. The building of large houses
incompatible with neighborhoods was endemic to Palo Alto. The Planning
Department assisted the Applicant rather than residents.
Ms. Koo stated she had posted the second notice at the site; although, it
was removed twice and she reposted it. At the beginning of the process,
she personally visited 11 adjacent neighbors to share plans for the site.
Nine of those 11 neighbors supported plans for the site. The previous
weekend, six of seven neighbors supported plans for the site. Because of
the flood plain, the house had to be built 2 1/2 feet above ground. She
voluntarily increased the interior setback to 24 feet.
Council Member Burt requested the list of neighbors supporting her plans for
the site.
Ms. Koo had emailed the list to the Council.
Council Member Wolbach inquired about reasons for placement of windows
on the second floor of the home facing the Appellant.
Ms. Koo reported the height of the windows addressed privacy concerns.
Three windows facing the Appellant's property would be obscured and would be placed above eye-level.
02/17/2015 117- 10
MINUTES
Ms. Tooker Stephens noted the IR Guidelines did not contain exceptions for
flood plains. The setback did not mitigate the height and mass of the house.
The large, square corners of the house blocked the entire area. She
requested the Council utilize an ombudsman to change the process and to
allow compromise.
Vice Mayor Schmid noted South Palo Alto was developed with modest-sized
lots resulting in modest-sized homes. Homes were designed to blend indoor
and outdoor spaces. The question was whether new construction that was
out-of-scale with a neighborhood reduced the value of the neighborhood.
During the Comprehensive Plan Update, the City and residents should
consider whether interpretation of IR Guidelines was adequate to fulfill the
goal of the Comprehensive Plan.
Council Member Burt requested the Appellant clarify minimally acceptable
changes to the proposed home.
Ms. Tooker Stephens wanted the home repositioned on the lot and the
height reduced. The proposed home dominated her backyard.
Council Member Burt explained that the IR Guidelines were created in order
to add details to Policy L-12 of the Comprehensive Plan. Perhaps the IR
Guidelines should be changed; however, the Council had to review the
proposed project according to existing Guidelines. The Council should
review interpretation of Guidelines and the Guidelines themselves. A flat
roof was more compatible with the neighborhood than a pitched roof, and a
flat roof reduced height. The proposed project was below the height limit
set by the Zoning Code. The use of the vacant lot as a park was irrelevant.
The average lot size in south Palo Alto was larger than many lots in north
Palo Alto. Designating the narrow side of the lot as the front yard was
mandated by the Code. The Council should consider a change to the appeal
process. In some ways the proposed home was not compatible with the
surrounding homes; however, the proposed home was not massive or
monumental. The Applicant made several efforts to address Guidelines, and
addressed Guidelines better than other projects that had been approved. He
asked if the Council could identify specific changes without directing the
Applicant to begin anew.
Ms. Silver suggested the Council could identify changes and impose them as
Conditions of Approval. If changes were extensive, the Applicant would
have to redesign the project.
Council Member Filseth believed the Code was clear with respect to setbacks
and selection of front and back yards. The proposed home was larger than the home next door; however, other two-story homes were located in the
02/17/2015 117- 11
MINUTES
neighborhood. The presence of a Mediterranean-style home in the
neighborhood weakened the argument that the proposed home conflicted
with the prevailing style of the neighborhood. The City did not review style
per se. The proposed home met the requirements of the Code.
Council Member Berman noted a second house across the street from the
proposed home was a different style from the neighborhood. The proposed
home met the Code requirements.
Council Member Wolbach felt the key issue was livability; whether neighbors
would have diminished enjoyment and use of their property. The additional
setback for the second-story was an effort to address privacy concerns. The
design and placement of windows on the second story precluded the owners
from viewing their own backyard. Yet, neighbors criticized that wall for not
containing design elements. The Applicant had seemingly attempted to
respect the neighborhood and neighbors. Compatible did not mean
identical; respecting the context did not mean homogenous. A home was a
personal expression of the owner. Whether the proposed home met the
Guidelines was a gray area. Within a gray area, he would support personal
property rights and personal expression with respect to a home.
Council Member Kniss explained that style was difficult to assess and was a
personal opinion. She sympathized with the Appellant's feelings.
Mayor Holman agreed the revised design was better. The issue was not
style, but compatibility and neighborhood pattern. She inquired whether
Staff worked with the Applicant to reduce height by moving square footage
to the ground floor. If square footage was moved from the second story to
the first, setbacks would be less.
Ms. French indicated the Applicant submitted a new design after talking with
neighbors. Moving square footage to the ground floor was a means of
mitigating second-floor mass, but not one chosen by the Applicant in this
project.
Mayor Holman questioned whether the Appellant was requesting that
revision.
Ms. French did not notice that request in reviewing emails between the
parties.
Mayor Holman noted homes located in the flood plain were difficult to
design. She inquired whether materials changed a short distance above the
ground. A feature was needed to break up the taller wall of houses located
in the flood plain.
02/17/2015 117- 12
MINUTES
Ms. French asked if Mayor Holman was referring to the east elevation facing
the Appellant's home.
Mayor Holman referred to the cul-de-sac and street side, the west and south
elevations.
Hillary Gitelman, Planning and Community Environment Director, reported in
general the IR Guidelines had served the City well. Staff granted
approximately 70 IR approvals in a calendar year. Out of those, a handful
became controversial. Staff would like to consider some adjustments to the
IR Guidelines for construction within the flood plain.
Ms. Koo did not believe different materials were used on the outside walls.
The proposed home would consist primarily of smooth stucco and wood
siding. Horizontal lines would be featured above windows to create interest
and to break up the mass.
Mayor Holman advised that windows were located at the height of the roof
eave of the single-story house next door because of flood plain
requirements. She asked if it would be feasible to lower those windows and
to break up the fairly large wall.
Ms. French commented that those windows appeared to be located in the
family room. The dining area contained the small, square window. Staff did
not view lowering the windows as necessary because it was not a privacy
concern. It would be a choice for the Applicant.
Mayor Holman viewed it as a compatibility issue.
Ms. Gitelman explained that the floor height of the proposed home was 2
1/2 feet taller than the floor height of the adjacent structure. If windows
were lowered, then they would reach floor level. That could make the
situation more jarring.
Ms. French felt the design as proposed would be better with respect to
proportions.
Mayor Holman inquired whether the ceiling height and windows could be
lowered to increase compatibility.
Ms. Gitelman reported many new two-story homes contained large floor-to-
ceiling heights. When a project fell within height limits, it was difficult to
pressure an Applicant to do more than a modest adjustment. Staff did not have tools in the IR process to do more than work with Applicants to lower
the floor-to-ceiling height.
02/17/2015 117- 13
MINUTES
Mr. Koo indicated the majority of the proposed home contained 9-foot
ceilings. A nine-foot ceiling was the minimum standard for an average
house.
Mayor Holman understood the standard was 10 feet.
Mr. Koo clarified that the living room matched the single-story height.
Mayor Holman was unaware of a means to deal with the tradeoff between
design and privacy issues. Condition Number 6: Six 24” box sized “Tristania
Laurina” screen trees shall be planted along the easterly property line
(reflected in Sheet A-060 of revised plans date-stamped 10/2/14) prior to
final planning inspection of the project. An alternate evergreen tree species
may be proposed for Director review and approval (these trees shall reach a
minimum of 20 feet in height at maturity. A combination of trees and
climbing vines on the building wall shall be used to soften the building, of
the Record of Land Use Action did not reference maintenance of trees. She
inquired whether the Council could include maintaining a tree line in the
language of Number 6.
Ms. Gitelman would be happy to incorporate a change to that condition if
Mayor Holman would suggest language.
Mayor Holman noted Condition Number 8: The trees in the rear yard are to
remain, or if they are to be removed, comparable replacement screening
vegetation shall be planted subject to approval of the Director, did not
require long-term maintenance of vines on the building. She asked if Staff
considered planting some of the trees proposed for the east property line
closer to the house to soften the image and to provide a screen.
Ms. Koo planned to plant tall trees against the wall of the house facing the
Appellant's side yard.
Mayor Holman referred to Number 8, and asked if the neighbor to the rear
had raised concerns about daylight. She inquired about the location and
long-term maintenance of trees at the rear of the property.
Ms. Gitelman noted the condition stated that the trees were to remain. That
implied a requirement for them to be present into the future. If Mayor Holman would suggest some language, Staff would be happy to incorporate
it.
Mayor Holman felt the condition should address long-term retention. The
ombudsman suggestion had been noted. A Colleague's Memo regarding an
ombudsman program would be presented in March 2015.
02/17/2015 117- 14
MINUTES
Council Member Wolbach respected the Applicant's wish for 9-foot ceilings.
He inquired about the process for the Council to make subtle modifications
to the project with respect to Mayor Holman's concerns about Condition
Numbers 6 and 8.
Ms. Gitelman advised that the Council could either specify the language for
changes or adopt a Motion directing Staff to incorporate those concepts into
the conditions where appropriate.
Council Member Burt asked if Staff considered accommodating square
footage from the second floor on the ground floor.
Ms. Gitelman explained that typically the second floor accommodated
bedrooms and bathrooms. Applicants usually rebuffed Staff's attempts to
move square footage to the ground floor.
Council Member Burt would be surprised if all five bedrooms were located on
the second floor.
Ms. Gitelman noted one bedroom was located on the ground floor. The
second floor was comprised of bedrooms and bathrooms.
Council Member Burt wanted to know if Staff had discussed with the
Applicant moving any space from the second floor to the ground floor.
Ms. French was not present for all discussions with the Applicant, but
believed such discussions likely occurred. With respect to lot coverage,
Applicants were allowed 2,681 square feet. The proposed home covered
2,006 square feet.
Council Member Burt asked if Staff had evaluated the possibility of moving
some second-story square footage to the ground floor.
Ms. Koo did consider that. She preferred all family members sleep together
on the second floor. She proposed utilizing the ground-floor bedroom as an
office/guest bedroom initially. When her parents could no longer access the
second floor, they would move to the first-floor bedroom.
Council Member Burt asked if the Applicant would choose denial of the
project or moving square footage.
Ms. Koo remarked that she had made many compromises in the design over
the three years the project had been pending.
Council Member Burt asked if she would move one bedroom to the ground floor in order to obtain approval of the project.
02/17/2015 117- 15
MINUTES
Ms. Koo clarified that moving one bedroom would be complicated and would
require a significant redesign over several months.
MOTION: Council Member Wolbach moved, seconded by Council Member
Kniss to uphold the Director of Planning and Community Environment
approval by adopting the Record of Land Use Action approving an Individual
Review (IR) application for a new two-story home at 3864 Corina Way,
adding to Section 6 – Conditions of Approval, Condition Number 6 – “The
trees and climbing vines shall be maintained in perpetuity.”
Council Member Wolbach initiated the effort to remove the item from the
Consent Calendar. Both the Applicant and the Appellant made strong
arguments. The issue was whether the Applicant or the Appellant would be
more negatively impacted. The Applicant had done an admirable job in
providing a project that fulfilled her needs, respected the Appellant's privacy,
and was compatible with the neighborhood.
Council Member Kniss inquired whether Condition Number 8 addressed
Mayor Holman's concerns regarding maintaining trees.
Mayor Holman answered no, it did not address the issue of retention.
Council Member Kniss indicated the Council's decision would not please
everyone. In visiting the site that afternoon, she noted seven two-story
houses in the neighborhood that were completely different in style.
INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to add to Section 6 – Conditions of Approval,
Condition Number 8 – “In either event screening trees are to be
maintained.”
Ms. Gitelman concurred with using the term "maintained" in Condition
Numbers 6 and 8.
Council Member Wolbach was open to language indicating the length of
retention or maintenance of the greenery.
INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE
MAKER AND SECONDER to modify addition to Section 6 – Conditions of
Approval, Condition Number 8 – “in either event screening trees are to be
maintained for the natural life of the home.”
Council Member Burt commented that the Council's discussion highlighted issues that should be included in a potential revision of IR Guidelines. The
02/17/2015 117- 16
MINUTES
discussion was worthwhile even though the Council made only minor
modifications.
Vice Mayor Schmid referenced the final sentences of the Staff Report and
suggested the Council discuss whether the Guidelines were achieving City
goals.
Mayor Holman understood the Applicant stated she would plant trees closer
to the house, but did not find that in the landscape plan.
Ms. Gitelman advised that Condition Number 6 referred to trees and climbing
vines on the building wall to soften the building. The intention of the
condition was to memorialize the screening trees along the property line as
well as vegetation along the wall of the home.
Mayor Holman expressed concern that the screening trees would deprive the
Appellant of daylight plane. If the trees were not planted along the property
line, the Appellant would receive more daylight.
Ms. French reported six trees would be planted between the outdoor patio
and the property line abutting the Appellant's property. Seven shrubs would
be planted adjacent to the garage.
Mayor Holman stated shrubs did not mitigate the height of the building and
the blank wall.
Ms. Gitelman explained that those trees were intended to screen at the
property line. If those trees were planted closer to the house, they would
impact the patio and yard area of the home.
Mayor Holman suggested Staff work with the Applicant and the Appellant to
resolve that. Staff should follow up regarding placement of those trees in an
attempt to satisfy both parties.
Ms. French added that those trees were added as part of the Director's
hearing. The closer those trees were to the property line, the more they
would screen the home for the Appellant.
Mayor Holman reiterated that Staff should attempt to resolve that with the
Applicant and Appellant.
Ms. Gitelman clarified that the screening at the property line resulted from
Staff's conversations with the Appellant and others regarding the desire to
screen the two-story portion of the house. Those trees were the product of conversations among Staff, the Applicant, and the Appellant.
02/17/2015 117- 17
MINUTES
AMENDMENT: Mayor Holman moved, seconded by Vice Mayor Schmid to
direct Staff to look at locating an additional bedroom on the first floor to
reduce the second-floor mass.
AMENDMENT FAILED: 2-5 Holman, Schmid yes
Council Member Wolbach felt the Amendment for Condition Numbers 6 and 8
should incorporate a more specific time period, such as life of the home.
INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE
MAKER AND SECONDER to modify Section 6 – Conditions of Approval,
Condition Number 6 – “Trees and vines will be maintained for the natural life
of the home.”
Ms. Gitelman indicated "natural life of the home" was unusual language but
comprehensible.
Council Member Wolbach suggested 20 years, 50 years.
Ms. Gitelman recommended retaining the language of "life of the home."
MOTION AS AMENDED PASSED: 6-1 Schmid no, DuBois, Scharff absent
14. Policy and Services Committee Recommends the City Council Amend
Policy and Procedure 1-48/ASD (Procedure for Sale/Transfer of Surplus
City-Owned Real Property) to Address Unsolicited Offers and Provide
for Broad Marketing of City Lands Through Use of Electronic Media.
Lalo Perez, Chief Financial Officer, recalled the Council reviewed and
discussed the Santa Clara County Grand Jury Report in September 2014. At
that time, the Council referred to the Policy and Services Committee
(Committee) Policy and Procedure 1-48 relating to the sale and transfer of
surplus City-owned property. In November 2014, the Committee heard the
item and made two recommendations. The first recommendation was to
specify that unsolicited offers would be referred to the Council as
recommended by the City Manager. The second recommendation was to
market City property broadly using appropriate modes of advertising
including electronic media.
Vice Mayor Schmid reported the Committee voted unanimously in favor of
the two recommendations. He dissented with respect to Section A.3 in that
it should be more explicit as to whether the City Manager could present an
unsolicited bid in an Open or Closed Session.
MOTION: Vice Mayor Schmid moved, seconded by Mayor Holman to
approve the Policy and Services Committee recommendation to amend
02/17/2015 117- 18
MINUTES
"Policy and Procedures 1-48/ASD (Procedure for Sale/Transfer of Surplus
City – Owned Real Property"); adding to the last sentence of Procedure
Section A.3, "and shall provide public notice of any deed restrictions on the
property."
Vice Mayor Schmid indicated the additional language applied specifically to
the Grand Jury Report regarding the 7.7 acres. The Council directed Staff to
prepare a list of all City property and land donated to the City. The Council
adopted a policy to hold public votes before moving into a Closed Session.
James Keene, City Manager, inquired about the distinction between deed
restrictions and other kinds of special restrictions that could exist on various
property. An easement on property could have some environmental
significance. He preferred the language be more general in order to identify
any conditions.
INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE
MAKER AND SECONDER to add to Procedure Section A.3 “and shall
provide public notice of any deed restrictions, easements, or any other
encumbrances on the property.”
Molly Stump, City Attorney, clarified that for real estate Closed Sessions the
property must be identified on the Agenda. The 7.7 acres did not have a
street address; therefore, it was identified on the Agenda by the Tax
Assessor's parcel number. A description of adjacent properties would be
provided for future parcels without street addresses. The Council procedure
to vote to convene a Closed Session could be an opportunity for Council
Members to inquire about the real property. That discussion could
accomplish Vice Mayor Schmid's purpose.
Council Member Berman asked if there was any reason for not stating any
special conditions pertaining to a parcel of real property.
Ms. Stump answered no. The City Manager wished to broaden the language
to include more situations. The Council would want Staff to disclose any
additional relevant items.
Council Member Berman would support the Motion if it did not create a
hardship for Staff.
Vice Mayor Schmid concurred with the language inclusion of easements.
MOTION AS AMENDED PASSED: 7-0 DuBois, Scharff absent
02/17/2015 117- 19
MINUTES
Inter-Governmental Legislative Affairs
15. Review and Approval of the Draft Legislative Program Manual and
Draft Semi-Annual Legislative Strategic Initiatives.
Richard Hackmann, Management Analyst, reported the draft Legislative
Program Manual and Semi-Annual Legislative Strategic Initiatives
represented a comprehensive legislative program framework. The draft
Legislative Program Manual was intended to serve as the City's ongoing
guide to legislative policy and procedures to be reviewed every 2 to 3 years.
The draft Semi-Annual Legislative Strategic Initiatives was intended to be
revised in the fall and spring of each year. The fall meeting would be a
proactive planning session focused on legislation advocacy. The spring
meeting would be a planning session focused on reacting to and taking
positions on proposed legislation. The Semi-Annual Legislative Strategic
Initiatives allowed the Council to provide a clear framework within which
Staff and legislative advocates could work.
James Keene, City Manager, added that the City mostly reacted to emergent
legislation. The Manual, containing the City's basic policies and philosophy,
would inform Staff with respect to stating the City's position or drafting a
response letter. Should legislation fall outside policy areas, Staff would
present an item for Council discussion. Planning legislative strategy would
allow the City to be proactive in responding to legislation. He recommended
the Council adopt some initiatives and guidelines for Staff. Having recently
discussed changes to the Density Bonus Law, the Council should note the
proposed initiative regarding reform of housing allocations.
Vice Mayor Schmid advised that the Policy and Services Committee
(Committee) was meeting with State and Federal lobbyists in the fall and
spring of each year. The draft Manual and the presentation were
contradictory as to whether the Council or the Committee would review
legislative planning in the spring and fall. The Council should prioritize
initiatives.
Mr. Keene indicated the full list of issues was the result of brainstorming by
the Committee.
Vice Mayor Schmid clarified that the Executive Leadership Team (ELT) presented a series of topics for the Committee to consider.
Mr. Keene remarked that the Council could identify other topics as important
issues.
02/17/2015 117- 20
MINUTES
Council Member Wolbach suggested strengthening language of the climate
change and renewable resources initiative to advocate for very strong
climate change initiatives to protect against sea level rise. The initiative
regarding funding for public safety, housing, etc., should include rainwater
capture and other efficient water use initiatives at the local level. Additional
initiatives should be to seek grants for single-occupancy vehicle trip
reduction and to clarify or change the State Density Bonus Law to ensure it
did not encourage worsening of jobs/housing imbalances in areas with a
surplus of jobs. With respect to Regulatory initiatives, he wanted to include
anything about California Environmental Quality Act (CEQA) reform. He
questioned whether the California High Speed Rail (HSR) Project remained a
top priority. Initiatives should advocate for Caltrain electrification, for grade
separation of Caltrain, and for State and Federal policies promoting regional,
subregional, and municipal initiatives to improve public transportation and
reduce single-occupancy vehicle trips. The initiative about housing
mandates needed clarity regarding the how and why of a revised formula.
Council Member Burt requested the Utilities Staff and Sustainability Officer
identify existing barriers to fuel switching and methods to support removal
of barriers. The Density Bonus Law initiative should include rectification of
counterproductive aspects that exacerbated jobs/housing imbalances. The
City's support for local commuter rail and HSR remained important topics.
When considering possible funding sources for Caltrain grade separation and
modernization, the City should recommend that funding be applied to
environmentally beneficial enhancements to commuter rail and perhaps
feeder systems. He suggested initiatives include continued seismic retrofits
and identification of supplemental funding sources for retrofits and
modification of the permit approval process of Regional Water Quality
Control Boards in the State. He questioned whether legislative change was
needed for water conveyance fees. He requested a process for the Council
to move the list of initiatives forward while revising it. The list should be a
two-year agenda.
Mr. Keene recommended the Council adopt the Manual which did not include
the Semi-Annual Legislative Strategic Initiatives. The Council was discussing the building of a formal strategic process to focus on proactively advocating
for legislation. The City could advocate for a limited number of bills. The
Council could identify important topics, but should also understand when
goals could not be achieved in a specified timeframe.
Council Member Burt noted a distinction between emerging legislation that the City could support versus topics for which the Council wanted to take a
leadership role. Taking a leadership role was more important.
02/17/2015 117- 21
MINUTES
Mr. Keene reiterated that the purpose of the Manual and initiatives was for
the City to become active with legislation. If the Council wanted to make
changes, it could adopt the Manual and instruct Staff to add detail.
Mayor Holman suggested Council Members propose a Motion to approve the
draft Legislative Program Manual and draft Semi-Annual Legislative Strategic
Initiatives, and then propose changes.
Mr. Keene indicated the Council could reframe some topics or make them
more specific.
MOTION: Council Member Wolbach moved, seconded by Vice Mayor
Schmid to approve the Draft Legislative Program Manual and the Draft
Spring 2015 Semi-Annual Legislative Strategic Initiatives documents.
Vice Mayor Schmid felt approving the documents was a way for the Council
to proceed. Staff could gather ideas for elements from Council Member
comments and at a later time discuss an update of strategic initiatives.
Mr. Keene requested the Council clarify the process for Staff returning.
Council Member Kniss felt the Council should not refine the list of initiatives
in the current discussion. The State lobbyist would interact with Staff, the
Council or the Committee.
Mr. Hackmann reported the State and Federal lobbyists would attend fall and
spring Committee meetings.
Council Member Kniss added that the Committee could hold conference calls
with the State lobbyist.
Mr. Keene advised that Staff received a weekly or biweekly update from
State lobbyist.
Council Member Kniss suggested the State lobbyist attend a Council meeting
soon.
Mayor Holman noted the deadline for legislators to submit proposed
legislation was Friday, February 27, 2015.
Council Member Filseth stated the Council should focus on legislation that
directly affected Palo Alto as taxpayer dollars were paying for lobbyists.
Council Member Berman believed the list of initiatives was a way for the City
to inform representatives of the City's priorities. The Council could also
identify three to five tangible initiatives to target in 2016.
02/17/2015 117- 22
MINUTES
Council Member Wolbach explained that the Council could not propose
legislation and have it introduced in the next four days. Knowing the City's
priorities would allow legislators to consider those priorities in determining
whether to support or amend legislation. The Council should begin a
discussion of legislation for 2016 soon. He supported a brief Council
discussion of initiatives to include and delete at the current time.
Mayor Holman believed the Committee should vet initiatives and report to
the Council. The Council should set points in time for the Committee and
the Council to discuss initiatives to prevent delays. She suggested referring
the Manual to the Committee to review those two issues.
Mr. Keene clarified that if the Council passed the Motion, Staff would
understand the Council's interest and be able to confer with lobbyists
regarding the City's positions. Staff would return to the Council if bills of
particular interest to the City were proposed.
Mayor Holman believed the Council was also attempting to establish a
framework to influence proposed legislation. A two-year strategy for
legislation was appropriate. She asked when the item could be returned to
the Committee. Each initiative on the list should include any action taken or
proposed for the topic. She and the City Manager had discussed renewing
Mayor/City Manager conversations with neighboring communities to
determine support for issues.
Mr. Keene would work with the Committee Chair to determine a date. The
Committee could recommend initiatives to the Council.
INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE
MAKER AND SECONDER to refer the adopted Legislative Program Manual
and Spring 2015 Semi-Annual Legislative Strategic Initiatives document to
Policy and Services Committee for review and refinement.
Mr. Keene explained that the Council could adopt both documents and refer
only the strategic initiatives to the Committee for review.
Mayor Holman wanted to refer both documents to clarify procedural issues.
Council Member Wolbach suggested the Committee review initiatives
annually. He did not want to return initiatives to the Committee without
reviewing proposed initiatives. The Council should discuss initiatives before referring them to the Committee.
INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE
MAKER AND SECONDER to add under Top Six 2015 Semi-Annual
02/17/2015 117- 23
MINUTES
Legislative Strategic Initiatives: Advocate for policies at the state and
federal level to provide protection against sea level rise for local
communities.
INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to add under Transportation: Advocate for
federal and state policies that support local rail and other local
transportation programs that reduce single occupancy vehicle trips.
INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE
MAKER AND SECONDER to add under Top Six 2015 Semi-Annual
Legislative Strategic Initiatives: Initiative 5 add “and reforms to the State
Density Bonus Law to correct elements that are counterproductive to the
jobs/housing imbalance."
Council Member Burt indicated revision was needed to remove superfluous
items and to regroup items.
Mayor Holman asked when the item would be presented to the Committee.
Mr. Keene would work with the Chair to schedule it.
MOTION AS AMENDED PASSED: 7-0 DuBois, Scharff absent
Mr. Keene reported in the next few weeks Staff would present Utilities
legislative policies which could include items discussed in the current
meeting. The Council could adopt some of those policies and refer them to
the Committee for review.
Adjournment: The meeting was adjourned at 11:13 P.M.
ATTEST: APPROVED:
City Clerk Mayor
NOTE: Sense minutes (synopsis) are prepared in accordance with Palo Alto
Municipal Code Sections 2.04.180(a) and (b). The City Council and Standing
Committee meeting tapes are made solely for the purpose of facilitating the preparation of the minutes of the meetings. City Council and Standing Committee
meeting tapes are recycled 90 days from the date of the meeting. The tapes are
available for members of the public to listen to during regular office hours.
02/17/2015 117- 24
Special Meeting
March 2, 2015
Study Session ........................................................................................28
1. Study Session on Shuttle and Rideshare Program for the Future
(Continued from February 2, 2015) ..................................................28
City Manager Comments .........................................................................32
Oral Communications ..............................................................................32
Minutes Approval ....................................................................................33
Consent Calendar ...................................................................................33
2. Approval of Amendment No. 2 to Contract C12143475 with Alta
Planning + Design to Extend the Contract Term to December 31, 2015
for the Safe Routes to School Planning Project ...................................33
3. Approval and Authorization for the City Manager to Execute an Electric
Fund Construction Contract with MP Nexlevel of California, Inc., in the Amount of $1,697,836.50, for Trenching and Installation of Utility
Substructures for Underground Utility District No. 47 (Project: EL-
11010) in the Area of Middlefield Road, Homer Avenue, Webster
Street, and Addison Avenue; and Approval and Authorization for the
City Manager to Execute Addendum No. 2 to the Agreement for Joint
Participation in the Installation of the Underground Facilities System
Between the City of Palo Alto, AT&T, and Comcast Corporation of
California IX, Inc. ...........................................................................34
4. Resolution 9497 entitled “Resolution of the Council of the City of Palo
Alto Designating 300 Homer Street Known as the Roth Building as a
“Sender Site” in the Transfer of Development Rights (TDR) Program
and Direction to Staff to Advertise Request for Proposal to Market the
TDRs.” ..........................................................................................34
5. Utilities Advisory Commission Recommendation that the City Council
Adopt a Resolution 9498 entitled “Resolution of the Council of the City
of Palo Alto Approving the City of Palo Alto Utilities Legislative
Guidelines.” ...................................................................................34
6. Appeal of Director of Planning and Community Environment’s
Architectural and Historic Review Approval of a Rehabilitation of a
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Category 3 Historic Resource located at 261 Hamilton – Request for
Continuance to April 6, 2015 ...........................................................34
7. Approval of Amendment Number 3 to Contract C08125506 with The
Planning Center ¦ DCE, now Known as Placeworks, to Increase the
Contract by $157,525 to an Amount Not to Exceed $1,894,731 and
Adoption of a Budget Amendment Ordinance (BAO) 5306 entitled
“Budget Amendment Ordinance of the Council of the City of Palo Alto
to Increase the Fiscal Year 2015 Appropriation to the Planning and
Community Environment Department for Preparation of a Fiscal Study
in Conjunction with the Comprehensive Plan Update.”.........................34
Action Items ..........................................................................................34
8. Public Hearing: Objections to Weed Abatement and Adoption of
Resolution 9499 entitled “Resolution of the Council of the City of Palo
Alto #9489 Ordering Weed Nuisance Abated.” ...................................34
9. Public Hearing: Adoption of a Resolution 9500 entitled “Resolution of
the Council of the City of Palo Alto Amending Water, Gas and
Wastewater Connection and Capacity Fees and Miscellaneous Utility
Charges (Utility Rate Schedules S-5, G-5, W-5 and C-1)” ....................35
10. Discussion and Direction to Staff Regarding Establishment of an
Office/R&D Annual Growth Limit (Continued from February 9, 2015) ....35
Council Member Questions, Comments and Announcements ........................53
Adjournment: The meeting was adjourned at 12:00 A.M. ............................53
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The City Council of the City of Palo Alto met on this date in the Council
Chambers at 6:07 P.M.
Present: Berman, Burt, DuBois, Filseth, Holman, Kniss, Scharff, Schmid,
Wolbach
Absent:
Study Session
1. Study Session on Shuttle and Rideshare Program for the Future
(Continued from February 2, 2015).
Hillary Gitelman, Planning and Community Environment Director, reported
the City had a vision for a multimodal transportation system. The Council
had supported significant investment in implementing the Bicycle and
Pedestrian Transportation Plan, forming a Transportation Management
Association (TMA), implementing advanced traffic signal systems, and implementing parking management programs. The existing shuttle program
combined community shuttles and last-mile shuttles. Regional services are
provided by the Santa Clara Valley Transportation Authority (VTA) and
Stanford University. Based on prior Council direction, Staff had undertaken
a number of near-term improvements to the shuttle program. Staff hoped
to initiate a new west shuttle route once private-sector or grant funds were
obtained. In addition, Staff was working on live tracking of shuttles and a
mobile application and was increasing frequency of the Crosstown Route.
The contract with the shuttle provider expires in 2017; therefore, the City
had approximately 1 1/2 years to test pilot programs.
Gil Friend, Chief Sustainability Officer, invited the Council to provide its
thoughts, aspirations, and expectations for future transportation efforts.
The question was how to make transportation more convenient such that no
one would need to drive. Without that convenience, mode shifts in
transportation would not occur. Local government's role in transportation
was not necessarily as a service provider. Private-sector transportation was
experiencing a flurry of activity.
Local governments needed agility in service delivery and in the governance
process. There was interest in exploring single subscription access to all transportation modes.
Council Member Kniss was concerned that the sharing economy was not
sharing with cities with respect to taxes. Before committing to a long-term
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program that involved ridesharing, the City should consider methods to
collect taxes and to ensure the public's safety.
Council Member Burt felt the shuttle system was an important element in
achieving the objective of a 30 percent reduction in Single Occupancy
Vehicles (SOV). He inquired whether the objective was calculated by a
reduction in the percentage of vehicles on the road or the number of SOVs
on the road.
Ms. Gitelman would have to review the memorandum. The 30 percent
decrease was articulated in a Colleague's Memorandum that informed the
effort to establish a TMA.
Jessica Sullivan, Parking Manager, advised that the memo did not specify
details for calculating that number.
Council Member Burt indicated core shuttle routes had not been expanded
since the inception of the shuttle system. He was concerned whether Staff
had identified the routes of highest value in the near-term. The City should
engage community partners with expertise and explore collaboration with
the Palo Alto Unified School District (PAUSD) and neighboring communities
to identify an integrated approach to transportation. Wi-Fi on buses would
be attractive to riders. He was unsure whether grants and private-sector
funding would create comprehensive and sustainable funding. At a policy
level, the Council should raise the issue of partnering with VTA for a regional
transit system. The Council should consider a business license tax solely for
the purpose of funding Transportation Demand Management (TDM)
Programs.
Vice Mayor Schmid believed businesses, Caltrain, and Bay Area Rapid Transit
(BART) should provide transportation for commuters, and the City should
invest in transportation for the community. Many SOV trips were from
households to jobs, schools, healthcare, and shopping. This was an
opportunity not to invest in additional shuttles, but to think about
alternatives for a low density community to displace car trips with shared
vehicles.
Council Member Berman was pleased by the use of technology and proposal
of Wi-Fi for shuttles. A robust shuttle system encompassing residential areas of the community could be an asset. The City should improve
transportation for commuters and residents, especially if private employers
were willing to fund routes to job centers. Staff should analyze the cost for
a Citywide network of shuttles stopping every 15 minutes. The City should
strive for a robust shuttle system that removed cars from roads and moved residents to destinations faster and easier. Transportation was an important
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issue, and the Council should support transportation with more time and
more resources.
Council Member Wolbach was excited about improving the shuttle system.
Public transit should be a superior alternative to driving. A good
transportation system needed good routes, good frequency, useful hours of
service, easy access to information, ease of payment, and good branding.
VTA did not view its role as removing cars from the road. The City would
have to change VTA's view or seek other partners. He prioritized riders in
the order of commuters, students, residents who were unable to drive, and
residents who preferred not to drive.
Council Member Scharff suggested Staff provide concrete methods to
accomplish the goals of alleviating parking issues, reducing congestion, and
reducing greenhouse gas emissions. He requested more information about
NextBus, DoubleMap, and TransitScreen. Staff should propose concrete
transportation alternatives and revenue streams. The City's TMA should
work with smaller companies to reach an SOV goal of 40 percent. He asked
why the Embarcadero shuttle was not included in live tracking.
Ms. Gitelman explained it was a separate contract.
Council Member Scharff wanted Staff to provide concrete proposals to open
contracts in 2017. The Council needed sufficient information about mobility
as a service so it could provide Staff with direction.
Council Member DuBois inquired whether Staff planned to meet with Uber.
Ms. Gitelman would be happy to meet with other providers. Businesses had
subsidized Lyft to encourage employees' use.
Council Member DuBois asked if any cities or public agencies utilized Lyft.
Ms. Gitelman was not aware of any cities. In the New York area, businesses
funded a discount on Uber as a way to bring people to the businesses.
Council Member DuBois inquired whether the $1 million committed to
shuttles could be used to explore ridesharing.
Ms. Gitelman reported much of the $1 million was utilized for parking
programs at Council direction. The Council could determine whether 2016
funds would be used for parking, shuttles, or other solutions.
Council Member DuBois found the Chariot service interesting. It leveraged corporate commuter dollars, pretax dollars, to pay for vans on semi-custom
routes.
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Mr. Friend added that Chariot was calling itself "Google bus for the rest of
us." Many different kinds of funding and many creative ideas were available
in the marketplace.
Council Member DuBois expressed concern that the City was investing in
legacy technology, large buses on fixed routes.
Ms. Gitelman advised that many transit agencies were experimenting with
hybrid systems with fixed routes. She did not believe the City could operate
without the Crosstown Route because it served a large number of students.
Transportation agencies were also experimenting with a door-to-door service
as a supplement to fixed routes.
Council Member DuBois felt buses or shuttles could become outmoded
systems.
Mr. Friend explained that the City would not be as agile as private providers
if it over specified and defined systems and routes and used the normal
decision cycle to make changes. The Council could think about defining
parameters and metrics for the system, and then allow flexibility for private
providers and City Staff to innovate in a more agile way.
Council Member DuBois wanted to offer point-to-point service for seniors.
Staff should return with proposals to experiment with a rideshare service so
the Council could compare them with the shuttle program. With the City's
lower density, a rideshare program could be a better direction than fixed
routes.
Mayor Holman stated Google buses seemed to operate as offices, so there
could be confidentiality issues. People's habits did not change overnight.
She had not heard anybody in transportation refer to a rider as a customer.
Mr. Friend noted the Finnish system was designed around making the
system work better for the customer. That would be worthwhile for the City
to consider.
Mayor Holman indicated residents, commuters, seniors, and students had
different destinations. She wanted to offer better senior services. The
Council did not have sufficient information. The Council needed to identify
an ongoing and sustainable funding source. One funding source had to be
PAUSD. The mapping for the shuttle system was unavailable and not user-friendly.
James Keene, City Manager, advised that Staff's and the Council's thinking
had expanded from focusing on shuttles to mobility as a service. The
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Council charged Staff with designing different solutions. There was no
turnkey operation the City could copy. The idea of tweaking the shuttle
system was not viable.
Mr. Friend would return with specific ideas for transportation. These things
were central to the Sustainability/Climate Action Plan. The City would not
make any significant impact on greenhouse gas emissions without
transforming transportation.
Mayor Holman suggested Staff not be limited by current concepts.
City Manager Comments
James Keene, City Manager, asked if he should acknowledge the National
Arbor Day Proclamation.
Mayor Holman read the Proclamation into the record.
Mr. Keene announced commercial compostables would be sent to a new,
higher-use facility to eventually generate sustainable electric energy and to
be converted to a soil amendment. The City launched the online Business
Registry which should provide critical insight into the business community.
Staff had completed renovations to the Airport terminal building, resulting in
a savings of $140,000.
Oral Communications
Urban Cummings invited the public to a celebration of Arbor Day on March 7,
2015.
Bonnie Packer, Palo Alto Housing Corporation Board President, explained
Palo Alto Housing Corporation's rental of a house to its employee and the
sale of the Maybell property.
Mila Zelkha, speaking as an individual, was disappointed by attacks from a
few individuals on Palo Alto Housing Corporation and its Executive Director.
Sea Reddy spoke about relations between Israel and Iran.
Dan Garber reported in 2014 property and business-related revenues
contributed more than half of the funds in the City's General Fund.
Commercial property contributed 71 percent of revenues while single-family
residences contributed 29 percent. City data showed the contribution from
commercial property would increase significantly over the next ten years.
Changes to the uses and availability of commercial property could have
03/02/2015 117- 32
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advantageous or detrimental impacts that would directly affect residents'
quality of life. He provided a report to the Council.
Deb Goldeen believed the City contracted with a company whose employees
were not qualified to perform gas line replacements. She expressed concern
about the safety of those workers and residents.
Omar Chatty hoped the Council would begin efforts to eliminate Caltrain
service. Another person died on Caltrain tracks in San Jose. Bay Area Rapid
Transit (BART) was an alternative to Caltrain.
Winter Dellenbach invited the public to a rally in support of Buena Vista
Mobile Home Park on March 9, 2015.
Minutes Approval
MOTION: Vice Mayor Schmid moved, seconded by Council Member Kniss to
approve the minutes of December 1, 2 and 8, 2014.
MOTION PASSED: 8-0 DuBois not participating
Consent Calendar
Jeff Hoel spoke regarding Agenda Item Number 5. Staff should follow
Assembly Bill (AB) 57 as it appeared to have been written for the benefit of
AT&T.
Stephanie Munoz spoke regarding Agenda Item Number 4. The concept of
Transferable Development Rights (TDR) was outmoded and not well
conceived.
MOTION: Council Member Scharff moved, seconded by Vice Mayor Schmid
to approve Agenda Item Numbers 2-7.
2. Approval of Amendment No. 2 to Contract C12143475 with Alta
Planning + Design to Extend the Contract Term to December 31, 2015
for the Safe Routes to School Planning Project.
3. Approval and Authorization for the City Manager to Execute an Electric
Fund Construction Contract with MP Nexlevel of California, Inc., in the
Amount of $1,697,836.50, for Trenching and Installation of Utility
Substructures for Underground Utility District No. 47 (Project: EL-
11010) in the Area of Middlefield Road, Homer Avenue, Webster
Street, and Addison Avenue; and Approval and Authorization for the
City Manager to Execute Addendum No. 2 to the Agreement for Joint Participation in the Installation of the Underground Facilities System
03/02/2015 117- 33
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Between the City of Palo Alto, AT&T, and Comcast Corporation of
California IX, Inc.
4. Resolution 9497 entitled “Resolution of the Council of the City of Palo
Alto Designating 300 Homer Street Known as the Roth Building as a
“Sender Site” in the Transfer of Development Rights (TDR) Program
and Direction to Staff to Advertise Request for Proposal to Market the
TDRs.”
5. Utilities Advisory Commission Recommendation that the City Council
Adopt a Resolution 9498 entitled “Resolution of the Council of the City
of Palo Alto Approving the City of Palo Alto Utilities Legislative
Guidelines.”
6. Appeal of Director of Planning and Community Environment’s
Architectural and Historic Review Approval of a Rehabilitation of a
Category 3 Historic Resource located at 261 Hamilton – Request for
Continuance to April 6, 2015.
7. Approval of Amendment Number 3 to Contract C08125506 with The
Planning Center ¦ DCE, now Known as Placeworks, to Increase the
Contract by $157,525 to an Amount Not to Exceed $1,894,731 and
Adoption of a Budget Amendment Ordinance (BAO) 5306 entitled
“Budget Amendment Ordinance of the Council of the City of Palo Alto
to Increase the Fiscal Year 2015 Appropriation to the Planning and
Community Environment Department for Preparation of a Fiscal Study
in Conjunction with the Comprehensive Plan Update.”
MOTION PASSED: 9-0
Action Items
8. Public Hearing: Objections to Weed Abatement and Adoption of
Resolution 9499 entitled “Resolution of the Council of the City of Palo
Alto #9489 Ordering Weed Nuisance Abated.”
Mayor Holman noted an at-places communication had been provided.
Molly Stump, City Attorney, advised that the correct year was 2014 rather
than 2013.
Public Hearing opened and closed at 7:50 P.M. without public comment.
MOTION: Council Member Kniss moved, seconded by Council Member Filseth to adopt the Resolution ordering the abatement of weed nuisances in
the City of Palo Alto.
03/02/2015 117- 34
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MOTION PASSED: 9-0
9. Public Hearing: Adoption of a Resolution 9500 entitled “Resolution of
the Council of the City of Palo Alto Amending Water, Gas and
Wastewater Connection and Capacity Fees and Miscellaneous Utility
Charges (Utility Rate Schedules S-5, G-5, W-5 and C-1)”
Public Hearing opened and closed at 7:51 P.M. without public comment.
MOTION: Council Member Kniss moved, seconded by Vice Mayor Schmid to
adopt the Resolution amending the following Utility Rate Schedules: W-5
(Water Service Connection Fees), G-5 (Gas Service Connection Fees), S-5
(Wastewater Service Connection Fees), and C-1 (Utility Miscellaneous
Charges), effective May 1, 2015.
Council Member Scharff requested an explanation for placing the Utilities
Legislative Guidelines on the Consent Calendar and the rate amendments as
an Action Item.
Molly Stump, City Attorney, reported the rate item needed to be approved
by the Council as an Action Item under rate setting procedures. The Utilities
Legislative Guidelines were placed on the Consent Calendar consistent with
Council direction. A Council Member could request the item be removed
from the Consent Calendar. Staff felt Council time should be reserved for
items requiring a great deal of discussion.
Mayor Holman added that the rate item was placed as an Action Item to
allow public comment.
MOTION PASSED: 8-0 DuBois absent
10. Discussion and Direction to Staff Regarding Establishment of an
Office/R&D Annual Growth Limit (Continued from February 9, 2015).
Mayor Holman advised that Item Number 10 was a continuation of the
discussion started on February 9, 2015.
Hillary Gitelman, Planning and Community Environment Director, recalled
issues and possible remedies raised in the February 9 discussion. Possible
remedies were grouped as either long-term ideas that could be analyzed in
the Comprehensive Plan Update or short-term ideas that could be
implemented on a temporary basis. Strategies discussed on February 9
included an annual limit of Office/Research and Development (R&D) square footage; programs and performance measures that would directly address
the impacts of development; and slowing the pace of development by
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increasing development costs and imposing fees. The Council had discussed
other zoning changes or modifications to existing regulations that could
affect the amount or pace of development. The question was whether the
City needed to change its development standards or moderate the pace of
new development while the Comprehensive Plan was being updated and, if
so, how. Possible remedies discussed on February 9 included requiring a
Conditional Use Permit for new Office/R&D and imposing conditions on
development; instituting a district-specific moratorium; suspending the use
of exceptions; and instituting temporary reductions in allowable densities.
An issue with short-term strategies was their effect on projects in the
pipeline. Staff believed the Congestion Management Plan (CMP) data set
was more useful because it utilized Citywide data and segregated uses.
Using that data set of December 2014, the pipeline contained 16 projects
totaling approximately 185,000 square feet. Of those 16 projects, five
contained less than 5,000 square feet, and none contained more than
30,000 square feet.
Mayor Holman noted Council Members asked questions at the prior meeting.
She requested Council Member Kniss, who was absent on February 9, submit
her questions.
Council Member Kniss asked if Staff included the Stanford areas in the nine
planning areas.
Ms. Gitelman indicated Stanford Research Park and Stanford University
Medical Center were included.
Council Member Kniss asked if they were separate.
Ms. Gitelman could not recall. The data set of nine planning areas was not
Citywide.
Council Member Kniss inquired about the number of pipeline projects located
in the Downtown area.
Ms. Gitelman could return with details of the pipeline projects. The at-places
memorandum included a breakdown of Office/R&D square footage by several
districts. It was an overview of data presented in the Staff Report broken
down by district.
Council Member Kniss asked if the total number was spread out over nine planning areas.
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Ms. Gitelman explained that the total amount on packet page 359 pertained
to the nine planning areas, dating to 1989. Data presented on packet page
357 pertained to the City as a whole, dating to 2001.
Herb Borock felt information regarding the nine planning areas would be
useful should the Council wish to take action in relation to particular areas of
the City. Information in the at-places memorandum counted Stanford
campus employment as employment in the City of Palo Alto. If the Council
wished to include Stanford University employment, then it had to consider
secondary effects.
Dan Garber indicated real estate consultants were recommending office
space rental rates increase because of Council discussions. An office cap
would increase rental rates, make attracting employees more difficult, and
increase the cost of working in Palo Alto.
Hamilton Hitchings suggested the Council reduce the estimated square feet
per worker to 100 square feet per worker; adopt Palo Alto Forward's
suggestion of a Transportation Demand Management (TDM) Program;
implement an annual cap of 20,000 square feet for office space; and
implement an office space selection process.
Frank Ingle endorsed imposition of a cap in combination with an application
selection process. The Business Registry should be useful in determining the
source of the Downtown parking problem. Perhaps the Council could apply
parking fees per employee to mitigate parking problems.
Jerry Schwarz supported Palo Alto Forward's suggestions to address traffic
and parking problems. The main problem for Downtown residents was the
type of retail.
David Bena, Watercourse Way, felt a development cap would increase rents
and cause businesses to leave Palo Alto.
Ben Lerner supported a cap on new office development, but preferred a
moratorium. Unrestricted office growth threatened the quality of life in Palo
Alto. The jobs/housing imbalance pressured the City to approve higher
density housing.
Stephen Levy stated the fiscal study was critical to understanding the
impacts of development. In considering a cap, the Council should think about pipeline projects, when a cap would end, and the legality of a cap.
Judy Kleinberg, Chamber of Commerce, urged the City to engage in a
strategic examination of facts and surveys before imposing an annual or
03/02/2015 117- 37
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interim office development cap. An annual cap would create problems
without solving traffic and parking problems.
Peter Stone advised that a hastily imposed cap would discourage the
innovative elements of the business community. The existing business
climate reflected the vitality of the local community, which supported a
healthy General Fund.
Terry McCarthy, Survey Monkey, did not believe parking and traffic problems
were caused by office workers or office space. Employees of Survey
Monkey, Palantir, and RelateIQ spent on average $210 per week per
employee in Downtown Palo Alto. Survey Monkey looked forward to working
with the City to develop solutions that would benefit everyone.
Susan Graf stated the vibrant Downtown environment would die without
growth. She suggested the Council review results from the new TDM
Program and Residential Parking Permit (RPP) Programs before considering
more zoning rules.
Olya Kransnykh advised that imposing an office cap would ensure the office
environment remained static. Limiting growth would result in energy
inefficient buildings and reduced worker productivity. Limiting growth would
not solve parking and traffic problems.
Robert McGrew, Palantir, expressed concern about the imposition of an
annual office cap as a solution to parking and traffic problems. The Council
should understand root causes of parking and traffic problems before
imposing measures that would add collateral damage to Palo Alto
businesses. He reviewed findings from a survey of Palantir, Survey Monkey,
and RelateIQ's 1,186 local staff and contractors.
Tara Nussbaum, Palo Alto Forward Steering Committee, believed an
Office/R&D cap would not solve problems of parking, traffic, housing, and
retail climate. A development cap would cause businesses to intensify their
usage of existing buildings with a corresponding increase in traffic and
parking issues.
Bob Moss felt limiting office space would have no impact on jobs, growth, or
rent increases. A temporary cap of 25,000 to 35,000 square feet would
allow some growth while studies were conducted.
Stephanie Munoz suggested Stanford University house its workers within
walking distance of their jobs. An interim cap was necessary.
03/02/2015 117- 38
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Margaret Heath suggested the Council impose a moratorium on office
development applications until pipeline projects were completed, perform an
accurate traffic study, implement a Business Registry including employee
counts, and cease exceptions and incentives.
Fred Balin reported office space had increased by more than 500,000 square
feet while retail space had shrunk significantly in the past seven years. The
Council should also prohibit conversion of retail space to office space and
reject any project that required Council discretion.
Randy Popp, speaking as an individual, agreed with comments published by
the Chamber of Commerce, Palo Alto Forward, and Stephen Levy. Capping
growth would be a tragic misstep. Incentivizing people to behave better
would have little effect in the short term. Replacing inefficient and obsolete
structures with new building stock, if done thoughtfully, would improve
traffic and parking problems.
Ian Irwin advised that sidewalks were not wide enough for the number of
pedestrians and bicyclists occupying them. A moratorium was appropriate
while issues were resolved.
Lee Lippert reported carbon neutrality could not be achieved by slowing
development. Building efficiency could only be achieved through building
replacement.
Terry Holzemer believed the growth in office space was changing the
environment. It was time to stop development exceptions and impose a
limit, cap, or moratorium on office development.
John Kelley felt a moratorium was a horrible idea. Even worse was the
Council deciding an issue when it had instituted a process in which the
community could participate.
William Ross favored a moratorium and a temporary cap. The Council
needed a cumulative traffic study and should consider a zero water footprint
requirement for new development.
Stephen Ehikian, RelateIQ, reported the company subsidized Lyft and Uber
services for employees commuting into Palo Alto via Caltrain. If the Council
could focus office development near arteries of transportation hubs, then
business owners could develop methods to reduce congestion.
Richard Brand encouraged the Council to act on a six to nine-month
development moratorium. The Council should act now rather than waiting
for additional data.
03/02/2015 117- 39
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Neilson Buchanan was convinced that 800 nonresidents parked in the
Downtown North neighborhood daily. The private sector would have to
cooperate with the public sector in order to resolve parking and traffic
issues.
Doria Summa supported a short-term moratorium in order to evaluate and
resolve problems.
Adina Levin, Friends of Caltrain, indicated the City had collected a great deal
of data. Existing buildings were responsible for a larger share of traffic and
parking problems than new buildings. The number of employees that could
result from intensification of use was higher than the number from new
buildings. The Council could impose a strict trip limit on new development
and require new development to contribute funding to reduce trips.
Ruth Lowy supported a cap on growth of office space. She hoped the
updated Comprehensive Plan would not contain loopholes that allowed more
growth.
Stuart Hansen indicated the City was now obligated to build 2,000 new
housing units, which would further burden traffic and parking. He requested
the Council consider a near-term cap or moratorium on continued
development.
Jeff Brown suggested the Council review the carrying capacity of the City.
The construction of buildings emitted more carbon than the operation of
buildings.
Rainier Pitthan supported better transportation and housing. Council
Member Scharff was a member of the Council that attempted to reverse the
Ordinance which did allowed conversion of retail to office. That should be
reversed.
Council Member Scharff reported that action was taken before he joined the
Council.
Mr. Pitthan clarified that Council Member Scharff attempted to reverse that
Ordinance. Good regulation was mandatory for a vibrant community.
Mayor Holman recalled the prior discussion ended before Council Members
Burt, Scharff, and Berman could speak.
Council Member Scharff clarified that the prior discussion ended with the Council agreeing to a round of comments and questions without offering
03/02/2015 117- 40
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Motions. He wanted to hear comments from all Council Members prior to
offering Motions.
Mayor Holman agreed. She proposed Council Members limit their comments
and questions to 7 minutes each.
James Keene, City Manager, asked if Mayor Holman was planning to end the
discussion at a particular time.
Mayor Holman noted the item was scheduled to end at 11:15 with another
date scheduled for a follow-up discussion. The item could extend past 11:15
in order to accomplish as much as possible. She requested Council Members
speak for 7 minutes and not offer Motions during the first round of
comments.
Council Member Wolbach proposed the three remaining speakers be allowed
10 minutes as he spoke for that length of time at the prior meeting.
Mayor Holman would limit all speakers to 7 minutes.
Council Member Burt summarized problems, issues, and alternatives
mentioned by the community, colleagues, and others in order to frame the
discussion. Many issues were interrelated. He was not prepared to institute
a solution immediately. He was interested in a cap because it would not be
an onerous tool. A carefully crafted cap could add quality of life and control
the future.
Council Member Scharff advised that the Council needed good data in order
to understand the ramifications of a cap. He was not comfortable with his
understanding of the consequences. The Council needed to address the
negative impacts identified by community members. A cap would not make
a difference in any of those negative impacts. The Council needed to
eliminate congestion, to solve the parking issue, and to protect retail.
Protecting retail should have an easy solution.
There should be no issue with expanding ground-floor retail throughout the
City. Office development did not increase the number of mandated housing
units. An office cap could increase rents to the point that professional
service providers could not afford them. The Council should dedicate more
resources to implementing RPP and TDM Programs than to implementing a
cap. He questioned whether the Council would arbitrate an application selection process, as people were not happy with Architectural Review Board
(ARB) decisions. The Council needed to approach this carefully and
thoughtfully. Perhaps the Council and community could explore a cap
through the Comprehensive Plan. If the community was concerned about
03/02/2015 117- 41
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sustainability and trips, the Santa Monica model would probably be a better
approach. The question was how to minimize congestion and increase
mobility.
Council Member Berman reported the Council had heard concerns about and
initiated programs in relation to traffic, parking, and retail space. Those
programs remained in the 2015 work plan and would require a considerable
amount of Council and Staff time. Implementing an office cap on
development would not preserve local retail, would not address rising rental
rates, and would not reduce greenhouse gas emissions from new
construction. A low cap or a moratorium would likely eliminate a few dozen
trips into Palo Alto and the need for a few dozen parking spaces, but would
require massive amounts of Staff and Council time to plan and initiate. Staff
and Council time would be better spent on other initiatives. He would not
support the implementation of a moratorium or a cap. The Council had an
opportunity to begin studying programs and performance measures that
would directly address problems and impacts of development. He was
interested in requiring new construction to meet target Single Occupancy
Vehicle (SOV) rates and identifying revenue-generating options from new
and existing buildings.
Vice Mayor Schmid felt the Staff Report asked the Council to frame a
discussion, to begin a debate. The current ratio of 3 employees to 1
employed resident would increase over the next 20 years; therefore,
parking, congestion, and density would worsen. The 1988 Citywide Land
Use and Transportation Study Final Report listed TDM as a solution to Palo
Alto's problems. TDM did not appear to be the solution by itself. Agenda
Item Number 7 authorized a consultant to assist Staff with answering
questions of who paid and who benefited. That was part of the debate.
Council Member Kniss believed Council Member Burt's list indicated the
complexity of the issues. Retail was one of the most difficult issues. Office
workers were the best retail customers. Businesses in adjacent communities
were expanding which would affect Palo Alto.
She was surprised by Palo Alto's lack of a parking app. A parking app would
reduce the number of cars driving around looking for a parking space. She preferred to implement other initiatives prior to a cap on development.
Council Member DuBois stated the status quo was creating an environment
dominated by office space and decreasing diversity. Traffic, parking, noise
and air pollution, and bike safety were symptoms of the underlying issue.
The discussion was an opportunity for the Council to focus on root causes and have a clear discussion regarding a fundamental vision for Palo Alto.
03/02/2015 117- 42
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The Council had to discuss rate and type of growth for the future. The issue
concerned creating space in zoning for residential and retail at the expense
of Office/R&D. It was time for a new kind of mixed use such as
retail/residential. The Council should ensure impacts were considered in the
Comprehensive Plan Update. Staff asked the Council to consider two
scenarios in the Comprehensive Plan Environmental Impact Report (EIR)
process. Evaluating those scenarios was both wise and prudent. The transit
hub and the Transportation Management Association (TMA) would be located
Downtown; therefore, an annual cap would be logical. The Council should
agree on the need for a cap prior to discussing its creation. The Council
should consider immediate protection of ground-floor uses and conversion
from retail to office, density assumption changes, and exceptions. He was
interested in directing Staff to explore an annual cap as part of the
Comprehensive Plan Update.
Mayor Holman indicated rental rates had been increasing without an office
cap. An interim moratorium or office cap could exacerbate that. With
respect to the lack of energy efficiency of older buildings, a 50-year old
building received the highest Green Business Award the prior week. Office
space was a component of the problem. An office cap or moratorium could
affect retail space and services. The Council should initiate an Interim
Ordinance as well as a cap in order to eliminate the Citywide conversion of
retail and service to office until the Council could determine zoning
parameters to protect retail and services. If the Council did not act, more
changes would occur that could not be reversed. If the Council did not act
with respect to office development, data would be collected in a mercurial
environment. Rather than implementing a cap or moratorium, the Council
could require full impact fees. Obtaining data from new initiatives would
take a long time.
Council Member Filseth noted the City had fixed limits similar to a cap. An
office space limit was surgical compared to a Floor Area Ratio (FAR) limit.
The advantage of a development cap was it provided a level of predictability
for the amount of office space to be developed.
Combined with Business Registry data, the City might be able to predict job growth accurately over an extended period of years. An infinitely increasing
jobs/housing ratio was unsustainable. It was not complicated to slow office
growth while implementing TDM and other measures and zoning relief for
retail. If the Council directed Staff to consider limitations on office growth as
part of the Comprehensive Plan Update, nothing would happen for another 18 to 24 months. The Council should direct Staff to include an office
development cap within the Comprehensive Plan Update.
03/02/2015 117- 43
MINUTES
Council Member Berman clarified that an RPP Program was delayed because
the Council continued to add initiatives to Staff's work plan. The Council
should attend to and provide resources for a TDM Program so that it could
be successful. Palo Alto should consider a cap for no net trips. A cap did not
address existing buildings, existing employers, and existing tenants. Council
Member Burt listed the many issues the Council would need to address in
implementing a development cap. Addressing those issues would require
thousands of man hours. The Council had identified many programs that
addressed the problems of parking and traffic.
MOTION: Council Member Berman moved, seconded by Council Member
Wolbach to direct Staff to study and bring back to Council:
1. Methods for requiring new construction to meet target Single Occupancy
Vehicle (SOV) rates;
2. Different revenue generating options from new building construction
including development fees that can be spent on trip reduction efforts;
and
3. Different revenue generating options from existing buildings potentially
including fees on commute trips or square footage that can be spent on
trip reduction efforts.
Council Member Berman believed the City had finite monetary and time
resources and major issues to be addressed. The Council should dedicate
resources to the programs and policies that would accomplish the most
good. Methods contained in the Motion addressed concerns of the
community.
Council Member Wolbach remarked that precluding opportunities to
negotiate was nonsensical. The Motion focused Staff time on challenges
caused by development, excessive car trips, and intensification of use. He
favored slowing but not capping office development unless it was
accompanied by significant efforts to control transportation and housing
costs.
The City needed the business community as a partner in solving
transportation and housing problems. The Council should direct Staff to
return with options for retail protection.
SUBSTITUTE MOTION: Vice Mayor Schmid moved, seconded by Council
Member Filseth to direct Staff to analyze the impacts of an annual
development limit on Office/R&D of 10,000 sq. ft. and 40,000 sq. ft. for the
draft Environmental Impact Report.
03/02/2015 117- 44
MINUTES
Vice Mayor Schmid advised that numbers effectively demonstrated that
office development and job creation continued to grow faster than residential
housing. The Substitute Motion was an attempt to initiate a debate
regarding a limit on development.
Council Member Filseth explained that an annual limit would slow but not
stop office development in order to allow housing to grow. The high
concentration of jobs relative to housing increased housing rates. Adding
new office space near mass transit did not reduce car trips. The difficulty
with the Motion was measuring outcomes. The Substitute Motion addressed
the heart of the problem.
Council Member Kniss noted the Downtown Cap reported office space grew
by approximately 10,000 square feet per year. Office space in Downtown
had not grown at an incredible rate. She questioned whether the cap
contained in the Substitute Motion would apply to all nine areas or only
certain areas.
INCORPORATED INTO THE SUBSTITUTE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to direct Staff to analyze and
report back to the Council within 45 days the impact implemented (on a
temporary basis as the Comprehensive Plan is developed) of immediate
zoning changes to include:
A. Chapter 18.52 change the parking requirements only for general business
administrative office, professional and general business offices and R&D
space to 1 parking space per 125 sq. ft. until sufficient data is available
from the Business Registry to modify;
B. Expand ground-floor retail protections Citywide and prevent conversion of
retail to office; and
C. End exceptions in Zoning Ordinances. Staff to provide a complete list of
current exceptions and suggestions on which to modify.
Mr. Keene interpreted the Amendment as asking Staff to analyze and return
with the impact of listed changes. If passed, the Council would not be
directing to Staff to make those changes. He was unclear whether the
Substitute Motion directed Staff to analyze the impact of the stated caps.
Council Member DuBois suggested the intent of the Substitute Motion was for Staff to analyze the impact for the Comprehensive Plan Update. The
Amendment directed Staff to analyze potential immediate changes to the
Ordinance.
03/02/2015 117- 45
MINUTES
Mr. Keene clarified that Staff would return with information within 45 days
under the Amendment. Including the draft EIR language seemed to take the
Motion further than simply directing Staff to return with an analysis.
Vice Mayor Schmid noted the Council approved Agenda Item Number 7, to
hire a consultant to evaluate results from each of the Comprehensive Plan
options. He wanted to ensure that was included in those options. He
inquired whether "draft EIR" was the wrong terminology.
Ms. Gitelman indicated the draft EIR associated with the Comprehensive Plan
Update was correct. The Substitute Motion directed study as part of the
Comprehensive Plan Update, and the Amendment directed study of interim
measures to be considered prior to the Comprehensive Plan Update. She
asked if that was intentional.
Council Member DuBois replied yes. He asked if there was an issue.
Council Member Filseth inquired whether items b) and c) of the Amendment
contained sufficient detail for Staff to perform the work.
Ms. Gitelman could return with information responsive to items b) and c). If
adopted, the Council would direct Staff to study the impact of items b) and
c). She was unsure whether Staff would know the fiscal or environmental
impacts of significant changes in Zoning Regulations within 45 days. Staff
could provide their judgment of methods to implement them and possible
impacts.
Council Member Filseth asked if that information met Council Member
DuBois' goals.
Council Member DuBois answered yes.
Mr. Keene added that Staff would more likely provide advantages and
disadvantages in Staff's judgment. The Amendment was a separate step
from the Substitute Motion and could stand on its own regardless of whether
the Council adopted the Motion or the Substitute Motion.
Council Member Filseth felt 125 square feet per employee was extremely low
as a Citywide average.
Council Member DuBois explained that the categories in item a) were a
subset of other categories. He was suggesting Staff evaluate the square
footage at half the existing rate until data was available from the Business Registry. The rate of 250 square feet was out of date.
03/02/2015 117- 46
MINUTES
Council Member Filseth reiterated that 125 square feet was aggressive as a
Citywide average.
Council Member DuBois asked if Council Member Filseth could propose a
different number.
Council Member Filseth replied 175 square feet.
Ms. Gitelman wanted to ensure the Amendment distinguished between
parking requirements and employment densities. More parking spaces
generated more traffic.
Council Member DuBois referred specifically to Chapter 18.52 because it was
the base parking requirement. The remainder of Chapter 18 discussed TMA
and other ways to mitigate that requirement. Chapter 18.52 set the base
usage assumption, which could be adjusted below that.
Ms. Gitelman clarified that the adjustments available in the Code were
limited. By changing the base requirement dramatically, more parking space
would result.
Mayor Holman had been told that the parking requirement determined
whether development occurred and the size of the building. Requiring more
parking would limit the size of the building rather than creating more traffic.
Council Member Burt stated Council Members were debating a nuance. Only
the maker and seconder could speak to their Motion.
Mr. Keene was interested in whether the Council wanted to direct Staff to
return with additional information prior to deciding which direction it wanted
to take.
Council Member DuBois advised that the Substitute Motion was directing
Staff to analyze the impact of a Citywide cap. At 20,000 to 40,000 square
feet, the cap covered the average growth rate over the last few years.
He proposed the Amendment because the Substitute Motion was part of the
Comprehensive Plan Update. The Amendment was meant to address
concerns regarding a rush to file development applications.
Council Member Burt did not feel the Council had adequately discussed
issues in order to make thoughtful recommendations. The Motion and
Substitute Motion were premature. A 20,000 square foot cap was a near
moratorium that would expire in 15 years when the Comprehensive Plan was again scheduled for update. He was interested in reducing development
peaks significantly and increasing quality of projects. An alternative to a cap
03/02/2015 117- 47
MINUTES
would motivate the community to review better solutions. If traffic and
parking issues improved through other initiatives, the Council could be
willing to institute a moderately higher cap. He wanted a tool that would
allow the Council to differentiate among detrimental projects. Some
exceptions in Zoning Ordinances were good, and some should be
reconsidered. He would not support the Motion or Substitute Motion. If
neither passed, then the Council should schedule a follow-up meeting after
framing the issues.
INCORPORATED INTO THE SUBSTITUTE MOTION WITH THE
CONSENT OF THE MAKER AND SECONDER to change “10,000 sq. ft.” to
“20,000 sq. ft.”
Council Member Scharff agreed with Council Member Burt for the most part.
Allowing 175 square feet would provide a third more parking. The cost of
the additional parking was the equivalent of a moratorium. The proposed
development cap was also the equivalent of a moratorium. The Council
needed to think through the issues. The City needed to work on congestion
and target SOV rates. The Council was focused on implementing initiatives
to improve traffic and parking problems. The City needed new revenues to
focus on initiatives.
INCORPORATED INTO THE SUBSTITUTE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to change in Section A “125
sq. ft.” to “175 sq. ft.”
Council Member Wolbach would not support the Substitute Motion. The
Substitute Motion as amended was intended to be a moratorium. Office
development should be slowed because of its negative impacts. If a
development project could mitigate all its negative impacts, it should be
approved.
Council Member Berman would not support the Substitute Motion.
Mayor Holman believed the Substitute Motion attempted to accomplish too
many objectives. Some exceptions in the Zoning Ordinance were beneficial
and should not be abolished. She favored preservation of retail space. The
Council did not have sufficient data to propose a number for item a).
SUBSTITUTE MOTION AS AMENDED FAILED: 3-6 DuBois, Filseth,
Schmid yes
SUBSTITUTE MOTION: Council Member Scharff moved, seconded by
Council Member Berman to direct Staff to return with:
03/02/2015 117- 48
MINUTES
1) An Interim Ordinance prohibiting the conversion of retail to any other
use; and
2) Options to strengthen and expand ground-floor retail protections
Mr. Keene suggested Staff could return with information for Item 1) prior to
Item 2).
Council Member Scharff asked when Staff could return with an Interim
Ordinance prohibiting conversion of retail.
Molly Stump, City Attorney, reported Staff would need to review some
details and refinements with respect to an Ordinance prohibiting the
conversion of retail to other uses. Staff could need to return for more
specific direction prior to presenting an Ordinance.
Council Member Scharff requested a timeline.
Mr. Keene indicated Staff would return as quickly as possible.
INCORPORATED INTO THE SUBSTITUTE MOTION WITH THE
CONSENT OF THE MAKER AND SECONDER to add at the end of Number 1
in the Motion-as quickly as possible.
Mayor Holman bifurcated the Amendment and Motion for voting purposes.
Cara Silver, Senior Assistant City Attorney, advised that was allowed.
Mayor Holman asked if the Amendment applied Citywide or in commercial
areas.
Council Member Scharff reiterated that the Amendment stated in commercial
areas. He wanted an Interim Ordinance to prevent further loss of retail
while Staff developed options.
Mayor Holman asked if Council Member Scharff meant retail only or retail
and services.
Council Member Scharff felt services destroyed retail in many places.
Council Member Burt inquired whether the Council should consider expanding ground-floor retail locations and refining the definitions of retail
and services.
Council Member Scharff responded yes.
03/02/2015 117- 49
MINUTES
INCORPORATED INTO THE SUBSTITUTE MOTION WITH THE
CONSENT OF THE MAKER AND SECONDER to change in Number 1 of the
Motion- “retail” to “retail and services”.
Ms. Stump reported Staff would need to return to the Council to discuss
detailed issues and to notice a discussion focused on retail preservation.
The current Agenda Item was focused on growth management.
Mayor Holman asked if Council Member Scharff intended for Staff to return
with an Interim Ordinance after Staff conducted the analysis of retail
locations.
Council Member Scharff intended Staff to return with an Interim Ordinance
as soon as possible.
Ms. Stump asked if Council Member Scharff was seeking an Ordinance
applicable to specific properties outside an area that required retail but
where retail was present.
Council Member Scharff wanted an Interim Ordinance to be in effect while
the Council clarified the ground-floor retail requirement.
Ms. Stump inquired whether the Interim Ordinance should pertain to retail
property regardless of where those properties were located in the City.
Council Member Scharff replied yes. The Ordinance could expire in six
months or a year.
Ms. Stump would need to review a variety of issues and return with a
properly agendized item for public participation. That type of focused
direction in asking for a specific Ordinance was not a current Agenda Item.
INCORPORATED INTO THE SUBSTITUTE MOTION WITH THE
CONSENT OF THE MAKER AND SECONDER to add to the end of Number 2
in the Motion-: “and reconsider: a) definitions of retail and services; and b)
locations throughout commercial areas.
Council Member Kniss inquired whether the City Attorney would return to the
Council prior to presenting or when presenting an Interim Ordinance.
Ms. Stump understood Council Member Scharff wanted Staff to address the issue with all possible speed. Staff would review different ways to do that
and present them to the Council as choices.
Council Member Kniss asked if that would be publicized.
03/02/2015 117- 50
MINUTES
Ms. Stump replied absolutely. The Council was not taking action at the
current time.
Vice Mayor Schmid asked if the Council was voting on an Amended Motion.
Mayor Holman explained that the Council was voting on the Amendment
independent of the Motion.
Ms. Stump indicated the Amendment could be characterized as a separate
Motion and would survive if the underlying Motion failed.
SUBSTITUTE MOTION AS AMENDED PASSED: 9-0
Mr. Keene reported Staff would return to the Council with issues involved
with Item 2. The Council wished to make a public statement of its intentions
in the area of ground-floor retail. Staff would return as quickly as possible
with an Interim Ordinance and a detailed report of the work needed to
accomplish other things.
Council Member Burt believed the Motion was intended to be inclusive of
measures the Council might take outside of the Comprehensive Plan to
address development issues and other issues relating to traffic impacts.
That was not all he wanted to do. In the fall of 2014, the Council was
considering either changing the Zoning Code prior to the Comprehensive
Plan or a cap. Neither of which were included in the Motion. Within zoning
changes, he wanted to include review of exceptions. He would not support
the Motion. He preferred to hold an additional discussion of all measures.
Council Member Berman inquired whether Council Member Bert was
requesting clarification of the Motion.
Council Member Burt was not willing to support the Motion unless it returned
for further discussion of either a cap or zoning on an interim basis or within
the Comprehensive Plan.
Council Member Berman intended the Motion to be an alternative to a cap,
but did not intend for it to include potential zoning changes.
Council Member Burt had not ruled out a moderate, reasonable cap.
Vice Mayor Schmid concurred with Council Member Burt that the Motion did
not effectively deal with the range of issues discussed. He would not
support the Motion.
Mr. Keene suggested the Council hold the Motion as a draft so that Staff could provide additional information.
03/02/2015 117- 51
MINUTES
Mayor Holman asked if the continuation date for the discussion was March
23, 2015.
Beth Minor, Acting City Clerk, indicated possible dates were March 23 or
March 30.
Mayor Holman requested objections to carrying the Motion forward to March
23.
Council Member Burt preferred the Motion be withdrawn and the Council
begin a discussion of alternatives on March 23.
Council Member Wolbach believed the Motion was clear and targeted the
core concerns around development. It seemed to support and encourage
further work on TDM and tying that to development. The Motion did not
preclude the Council from holding additional discussions. The Council should
support the Motion unless Staff indicated it was superfluous or would create
excessive work for Staff.
Mayor Holman clarified that the Motion needed clarification or an
amendment.
Council Member Scharff suggested a Motion to Continue was needed.
Mayor Holman concurred.
MOTION TO CONTINUE: Council Member Scharff moved, seconded by
Council Member Berman to continue this Agenda Item and Motion until
March 23, 2015.
Council Member Scharff stated the hour was late and Council was not at its
best. The Motion should remain on the table for amendments or a vote.
Council Member Wolbach inquired whether Staff could provide some
feedback regarding the amount of work required for the Motion prior to
March 23.
Mr. Keene advised that a direction for Staff to perform work was out of order
with a Motion to Continue on the floor.
Council Member Burt believed supporters of the Motion would want to
continue it to the next meeting.
MOTION TO CONTINUE FAILED: 4-5, Berman, Kniss, Scharff, Wolbach
yes
03/02/2015 117- 52
MINUTES
MOTION TO CONTINUE: Council Member DuBois moved, seconded by
Council Member Burt to withdraw the Motion and to continue the Agenda
Item to March 23, 2015.
Council Member Scharff stated a Motion to Withdraw should be made
separately from a Motion to Continue.
Ms. Stump reported the Council could vote once on both issues unless a
Council Member requested the Motions be bifurcated.
Council Member Wolbach wanted to vote on the Motion and then discuss a
Motion to Continue.
Mayor Holman explained a Substitute Motion was on the floor.
MOTION TO CONTINUE PASSED: 6-3 Berman, Kniss, Wolbach no
Council Member Questions, Comments and Announcements
Council Member Wolbach attended the Library Advisory Commission meeting
the prior week. The Palo Alto Library Foundation would dissolve in June
2015.
Council Member Kniss was elected Vice President of the Peninsula Division of
the League of California Cities.
Adjournment: The meeting was adjourned at 12:00 A.M.
ATTEST: APPROVED:
City Clerk Mayor
NOTE: Sense minutes (synopsis) are prepared in accordance with Palo Alto
Municipal Code Sections 2.04.180(a) and (b). The City Council and Standing
Committee meeting tapes are made solely for the purpose of facilitating the
preparation of the minutes of the meetings. City Council and Standing Committee
meeting tapes are recycled 90 days from the date of the meeting. The tapes are available for members of the public to listen to during regular office hours.
03/02/2015 117- 53
Regular Meeting
March 9, 2015
Oral Communications ..............................................................................56
Study Session ........................................................................................57
1. Joint Study Session with the Human Relations Commission on
Accomplishments, Projects and Priorities in 2015 ...............................57
2. Short-Term Rentals and Home Occupation Uses in Residential
Neighborhoods ...............................................................................61
City Manager Comments .........................................................................69
Oral Communications ..............................................................................69
Minutes Approval ....................................................................................70
Consent Calendar ...................................................................................71
3. Ratification of Code Enforcement Settlement Agreement - 2040
Cowper Street ...............................................................................71
4. Approval of Contract to Hunt Design for $104,600 for Design of
Downtown Parking Wayfinding and Signage and Development of a
Parking Brand, and Approve a Budget Amendment Ordinance 5307
entitled “Budget Amendment Ordinance of the Council of the City of Palo Alto in the Amount of $104,600 Transferring Funds from the
University Avenue Parking Permit Fund to CIP PL-15004, Parking
Wayfinding Project.” .......................................................................71
5. Approval of Amendment No. 1 to Contract #C13148075 with West
Coast Arborists, Inc., for an Additional Amount of $182,410 for a Third Year of a Three Year Term for a Total Amount Not to Exceed
$1,232,410 for Tree Pruning and Removal Services; and Adoption of a
Related Budget Amendment Ordinance 5308 entitled “Budget
Amendment Ordinance of the Council of the City of Palo Alto in the
General Fund.” ...............................................................................71
6. Approval of a Signage Contract with McGuire-Pacific Contractors in the
Amount Not to Exceed $368,500 and Adoption of a Related Budget
Amendment Ordinance 5309 entitled “Budget Amendment Ordinance
of the Council of the City of Palo Alto in the Amount of $368,500.” .......71
03/09/2015 117- 054
MINUTES
7. Request for Finding that Stevenson House Rehabilitation Proposed
Ownership Structure is Compliant With the Site-Specific Planned
Community Zoning Ordinance Adopted in June 1965 ..........................71
8. Ordinance 5310 entitled “Ordinance of the Council of the City of Palo
Alto Authorizing Closing of the Budget for the Fiscal Year Ending June
30, 2014 (First Reading: February 9, 2015 PASSED: 8-0 Kniss
absent).” .......................................................................................72
9. Ordinance 5311 entitled “Ordinance of the Council of the City of Palo
Alto Amending Municipal Code Sections 2.16.070, 2.20.020, 2.21.025,
2.25.030, 2.27.020 to Change the Start of Terms on the Architectural
Review Board, the Historic Resources Board, the Parks and Recreation
Commission and the Planning and Transportation Commission from
November 1st to December 16th (First Reading: February 9, 2015
PASSED: 8-0 Kniss absent).” ...........................................................72
10. Ordinance 5312 entitled “Ordinance of the Council of the City of Palo
Alto to Update the Fiscal Year 2015 Table of Organization for Fiscal
Year 2015 Incorporating Technical Changes (First Reading: February 9,
2015 PASSED: 8-0 Kniss absent).” ...................................................72
11. Resolution 9501 entitled “Resolution of the Council of the City of Palo
Alto Approving Interim Appointment of James Lightbody to Chief
Transportation Official Position Pursuant to Government Code Section
21221(h).” ....................................................................................72
Action Items ..........................................................................................72
11a. (Former Agenda Item Number 7) Request for Finding that Stevenson
House Rehabilitation Proposed Ownership Structure is Compliant With
the Site-Specific Planned Community Zoning Ordinance Adopted in
June 1965 .....................................................................................72
12. Finance Committee Recommendation to Accept the Fiscal Year 2016 to
2025 General Fund Long Range Financial Forecast .............................79
Council Member Questions, Comments and Announcements ........................84
Closed Session .......................................................................................84
13. THIS CLOSED SESSION ITEM HAS BEEN CANCELLED .........................84
Adjournment: The meeting was adjourned at 10:43 P.M. ............................84
03/09/2015 117- 55
MINUTES
The City Council of the City of Palo Alto met on this date in the Council
Chambers at 6:03 P.M.
Present: Berman, Burt, DuBois, Filseth, Scharff, Schmid, Wolbach
Absent: Holman, Kniss
Human Relations Commissioners
Present: Alhassani, Chen, Morin, O’Nan, Savage, Stone
Absent: Bacchetti
Oral Communications
Nancy Krep, Sixth District Parent Teacher Association and Palo Alto Unified
School District Parent Teacher Council, urged the Council to approve the City
Manager's recommendation to release $8 million for preservation of Buena
Vista Mobilehome Park. The PTA supported the children of Buena Vista
Mobilehome Park.
Erika Escalante, Buena Vista Mobilehome Park Residents Association,
advised that Buena Vista Mobilehome Park was an affordable and safe place
to live and raise children. Residents of Buena Vista were an important part
of Palo Alto. Many residents worked in Palo Alto and at Stanford University.
She urged the Council to release funds for purchase of Buena Vista
Mobilehome Park as soon as appropriate.
Lisa Kenkel, Law Foundation of Silicon Valley Board Member, supported
homeowners of Buena Vista Mobilehome Park. She urged the Council to
ratify the City Manager's setting aside of $8 million for Buena Vista
Mobilehome Park.
Vice Mayor Schmid encouraged the public to share their opinions with the
Council. The Council would hold a hearing on the appeal of the closure
application for Buena Vista Mobilehome Park on April 13 and 14, 2015. The
Council was obligated to remain neutral, fair, and open-minded during that
appeal hearing. The City could comment on possible actions only after that
hearing was held.
03/09/2015 117- 56
MINUTES
Study Session
1. Joint Study Session with the Human Relations Commission on
Accomplishments, Projects and Priorities in 2015.
Jill O’Nan, Human Relations Commission Chair, related the Human Relations
Commission's (HRC) Mission and areas of responsibilities.
Daryl Savage, Human Relations Commissioner, reported a subcommittee of
the HRC met quarterly with Chief Burns of the Palo Alto Police Department.
The Citizens Academy would return in the spring. Police Department staffing
had improved. The Police Department could institute a Juvenile Citizens
Academy for high school students. Daytime residential and automobile
burglaries had increased over the prior year. Four citizens filed complaints
against the Police Department in 2014, a few of which warranted an internal
investigation. Each patrol car was equipped with five cameras. Each police
officer could receive a body camera in 2015. The Police Department was
considering four locations for a new Public Safety Building.
Ms. O’Nan noted the HRC had a longstanding relationship with Project Safety
Net. In 2014, the Council allocated additional funds to the Human Services
Resource Allocation Process (HSRAP). With additional funding, the HRC
facilitated additional services for Palo Alto residents. The HRC reviewed the
second year of Community Development Block Grant (CDBG) funds,
conducted site visits to many HSRAP agencies, and hosted and moderated a
Senior Summit.
Council Member DuBois asked if the HRC planned to hold a second Senior
Summit.
Ms. O'Nan advised that the HRC received extremely positive feedback and
could make it an annual or biennial event. The HRC was also considering
developing a directory of senior services. The HRC attended the Annual
Regional Human Relations Breakfast. Several HRC Commissioners attended
the California Association of Human Relations Organizations Conference in
San Francisco. The HRC approved new appointments of mediators for the
Palo Alto Mediation Program (PAMP) and reviewed PAMP's annual report. In
2015, the HRC reviewed applications and would recommend agencies for
HSRAP funding.
The HRC was reviewing data regarding ways other communities funded
human services and would make recommendations to the Council.
Greer Stone, Human Relations Commissioner, began researching the issue of
homeless veterans in Santa Clara County. Santa Clara County had the
03/09/2015 117- 57
MINUTES
highest rate of homeless veterans across the country. Forty homeless
veterans were located in Palo Alto, 50 percent of whom had mental
disabilities and 23 percent struggled with substance abuse. A summit of
veteran homelessness issues could be the best method to educate the
public.
Mehdi Alhassani, Human Relations Commissioner, was engaging the
Veterans Administration, Veteran Service Organizations (VSO) and non-
profit agencies for a summit of services for homeless veterans.
Diane Morin, Human Relations Commissioner, conducted seven or eight site
visits to HSRAP agencies. Site visits allowed Commissioners to understand
changes in services and agency needs.
Ms. O’Nan began a learning series on affordable housing a few years ago.
Theresa Chen, Human Relations Commissioner, along with Vice Chair
Bacchetti researched affordable housing and low-income residents of Palo
Alto. Thirty percent of Palo Alto residents were in the low-income category.
Sixty-one to Seventy-two percent of low-income residents were renters and
60-80 percent paid more than 30 percent of their monthly income for rent.
Less than 10 percent of Palo Alto workers were Palo Alto residents. Director
Gitelman recommended the HRC focus on senior co-housing and tenant's
rights and collaborate with non-profit agencies.
Vice Mayor Schmid noted the HRC provided an outline of priorities for 2015
and requested Council feedback.
Council Member DuBois inquired about the status of the Betty Wright Aquatic
Center.
Ms. Morin understood that the pool had to be rebuilt before services could
resume. Abilities United was focusing on expanding programs.
Ms. O’Nan indicated the pool served Santa Clara County and offered unique
services.
Council Member DuBois asked if Abilities United owned the building.
Ms. Morin believed Abilities United owned the building and was expanding
the facilities.
Council Member DuBois liked the idea of continuing the Senior Summit
through an online forum or presence. The City/School Liaison Committee was focused on Project Safety Net and would welcome information from the
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HRC. He asked if the Palo Alto Police Department had a policy for use of
body cameras.
Ms. Savage advised that the Police Chief would have to provide that
information. Body cameras would protect both police officers and the public.
Council Member Berman was pleased the HRC was using its time
strategically to create the largest impact. Bringing different agencies
together to focus on needs in the community was an excellent use of time
and resources. The HRC should collaborate with other agencies with respect
to Project Safety Net. Affordable housing was an important issue in the
region and community.
Ms. O’Nan indicated Adolescent Counseling Services received HSRAP funding
and was a frontline resource for troubled children.
Council Member Burt suggested the HRC create an online tool and a
collaborative for senior service providers. He inquired whether the HRC was
aware of an emerging crisis for market rate housing. Perhaps the HRC or a
non-profit agency could develop a service to connect interested parties with
available rental space in existing homes or apartments.
Council Member Wolbach suggested the HRC consider hosting a civility
roundtable based on the Mountain View model. Perhaps the HRC could
confer with the Planning Manager for East Palo Alto regarding housing. The
HRC should review the County of San Mateo white paper regarding
affordable housing.
Council Member Scharff was interested in the HRC targeting homeless
veterans. He inquired about the total number of homeless people in Palo
Alto and the percentage of those who were veterans.
Mr. Alhassani reported Community Technology Alliance provided the number
of 40 homeless veterans between June 30, 2013 and July 1, 2014.
Minka Van Der Zwaag, Human Services Manager, added that the U.S.
Department of Housing and Urban Development (HUD) required each county
to provide a point-in-time count of the homeless population. The last
available total for Santa Clara County was approximately 170. Figures from
the count conducted in January 2015 were not yet available.
Council Member Scharff asked if 50 percent of homeless veterans suffered from mental disabilities and 23 percent from substance abuse.
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Mr. Alhassani answered yes. Community Technology Alliance statistics could
provide details by age, sex, and location. He could provide a link to that
information.
Council Member Scharff suggested the Veterans Administration could provide
assistance as well.
Council Member Filseth agreed with targeting homeless veterans for
services. In-place senior housing was an interesting concept. He inquired
about the number of CDBG grants awarded each year.
Ms. O’Nan advised that grants were spread across three categories.
Council Member Filseth asked which category received the most funding.
Ms. Van Der Zwaag explained that the public service category funded five
agencies for domestic violence and homeless services.
Mr. Alhassani added Catholic Charities.
Ms. Chen included Downtown Streets Team.
Ms. Van Der Zwaag clarified that Downtown Streets Team fell under the
economic development category. Different parts of the InnVision Shelter
Network received funding from both CDBG and HSRAP. The HRC attempted
to target each funding source to different agencies to provide a broad
impact.
Ms. O'Nan indicated CDBG grants funded the Microenterprise Assistance
Program (MAP) which allowed low-income people to start their own
businesses.
Vice Mayor Schmid stated the HRC provided good information to the
community and the Council, built valuable relationships, leveraged
resources, and identified priorities. He was surprised by the number of
homeless veterans in Santa Clara County and Palo Alto.
Stephanie Munoz suggested the Cities of Palo Alto, Mountain View, and
Sunnyvale demand the Federal Government fulfill its obligations to veterans.
The Federal Government had land available to house homeless veterans.
The Birge Clark gymnasium could house homeless people.
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2. Short-Term Rentals and Home Occupation Uses in Residential
Neighborhoods.
Hillary Gitelman, Planning and Community Environment Director, reported
the Study Session resulted from a Colleague's Memo in late 2014. The Staff
Report summarized the current zoning provisions related to transient or
short-term rentals of residences in Palo Alto. There currently were no
exceptions to the prohibition of short-term use of residences despite the
prevalence of vacation rentals. The Zoning Ordinance permitted home
occupations subject to specific parameters; however, there was no permit
process. All Code provisions predated the sharing economy. Staff provided
sample Ordinances from San Luis Obispo and the City and County of San
Francisco. The Staff Report contained information regarding the current
Code Enforcement Program.
Molly Stump, City Attorney, advised that Transient Occupancy Tax (TOT)
receipts were due to the City for any short-term rental of 30 days or less. In
the fall of 2014, voters updated the TOT to increase the rate and to clarify
that any broker that arranged a rental was responsible for collecting and
remitting the TOT to the City. The City was informing various entities that
arranged vacation rentals through websites of the new tax requirement. In
recent months, larger entities agreed to collect and remit taxes in other,
larger jurisdictions. Staff hoped to have productive dialogs with those
entities. As a policy matter, there could be a connection between the
approach the Council wanted Staff to take on tax matters and zoning issues.
Ms. Gitelman indicated the issue raised a number of policy questions such as
the effect on the availability of housing; the potential commercialization of
residential properties and Palo Alto neighborhoods; and the issue of fairness
for both hotels and vacation rentals to pay taxes. On the other hand,
property owners were utilizing short-term rental income to pay their
mortgages or rent each month. The Council could address changing needs
through policy changes. Next steps included collection of the TOT,
continuing Code Enforcement efforts, and potential amendments to the
Zoning Ordinance if directed by the Council. This would be a time-
consuming endeavor because of the high amount of public interest and the amount of effort needed to develop an updated set of Zoning Regulations.
Chris Casey indicated her Airbnb guests, one at a time, received a bedroom,
half-bath, shared shower facilities, and a full breakfast and snacks.
She was careful about who stayed in her home. After taxes and expenses,
she received sufficient income to pay her utility bills.
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Sarah McDermott, Unite Here Local 19, was concerned about short-term
rentals that replaced long-term rental units. She cautioned against utilizing
a hosted versus unhosted model as it was nearly impossible to monitor. The
San Luis Obispo Ordinance seemed to better fit Palo Alto's situation.
Bob Moss remarked that unregulated short-term rentals created a number of
problems including commercialization of residential zones, lack of safety
inspections, and fewer tax receipts. He suggested Staff review websites to
determine which residents were offering short-term rentals.
Stephanie Munoz felt absentee owners rented their properties in order to
retain ownership. She was unsure whether making short-term rentals illegal
would be popular.
Rita Tetzlaff believed the Council should first discuss whether Palo Alto
should continue to thrive or whether Palo Alto should convert to a transient
living environment. A Zoning Officer told her he would not enforce the
current Code if the homeowner rented space while remaining in the home.
The City should enforce Zoning Codes.
Marvin Weinstein concurred with Ms. Tetzlaff's comments. He shared his
experience with an Airbnb rental of a neighboring home. The City should
require homeowners to be in residence when renting space in their homes.
E. Segre related her experience with an adjacent home being a short-term
rental. The Council should prohibit short-term rentals of homes.
Wynn Grcich suggested the Council remember that many homeowners
rented space in their homes in order to pay their mortgages. Those rentals
also provided housing for low-income workers.
Katherine Glassey felt guilty for occupying a large home when the City was
experiencing a housing crisis. She was considering short-term rentals
through a website in order to have company, to obtain background checks
on renters, and to help alleviate the housing situation.
Council Member Burt believed the Council should not make policy decisions
based upon TOT revenue that could come to the City as a result of those
policy decisions. The Council also referred use of homes as offices for staff
to investigate; however, he found nothing in the Staff report about that.
Ms. Gitelman reported the City had received approximately ten complaints related to home occupations in the past year. Most of those had been
located in the Downtown area. The complaints involved overuse of a
residence for an office-type use.
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Council Member Burt did not find an analysis of policy direction on that
issue.
Ms. Gitelman indicated that one way to pursue that issue more diligently
would be to create a permit process for home occupations. Currently home
occupations were allowed subject to specific conditions, but the property
owner was responsible for investigating and complying with those conditions.
The City was not involved. A permit process, similar to those other
jurisdictions had established for vacation rentals, would require the owner to
come to the City and acknowledge the need to comply with conditions. If
those conditions were not followed, then the City could revoke the permit.
Council Member Burt asked how a vacation rental permit would apply to
occupancy for office use. The office use would not necessarily be short-
term.
Ms. Gitelman meant that the permit process would be similar to other
jurisdictions' methods to regulate vacation rentals. Other jurisdictions had
created an administrative permit process so that the owner was responsible
for obtaining a permit and the permit could be revoked if conditions were not
followed. The City could implement a similar process for home occupations.
Council Member Burt understood the City defined home businesses and
deliberately excluded them from the Business Registry. The permit process
Ms. Gitelman described appeared to apply to residents who also had a home
office. That was not the direction he wanted to take. The Staff Report did
not mention this problem or whether there were alternative ways to address
it.
Ms. Gitelman suggested one method to address overuses beyond permitted
activities was to institute some type of permit process. The Staff Report did
not provide any details, because Council input was needed to shape that
type of program. If the Council wished Staff to investigate other methods
for regulating uses that exceeded Section 18.42.060 for home occupations,
Staff could do so.
Council Member Burt was not interested in requiring every homeowner with
a home office to obtain a permit. He was interested in better mechanisms to
prohibit full-scale businesses with multiple employees from operating in a home. Perhaps the Council should explore methods for residents to rent
spare rooms once per month or for a longer term. That could help address
the lack of housing supply. The Staff Report indicated Staff could not
determine the number of units available because website listings did not
include addresses. He asked if websites listed properties by city.
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Ms. Gitelman explained that it was not always possible to determine whether
a property was located in a given jurisdiction through a location search. The
number of listings provided through a location search fluctuated; therefore,
identifying the number of listed properties was difficult.
Council Member Burt felt Staff could obtain a rough estimate of the number
of properties based upon the city in which the property was listed and the
average number of properties listed. He requested Staff provide better data.
Ms. Gitelman advised that Staff attempted to do that; however, the number
fluctuated dramatically. One weekend, a search listed 15 properties; a
second weekend 53 properties; a third weekend even more properties. Staff
did not have the best tools to accomplish that measurement.
Council Member Burt recalled the Colleague's Memo referred to the San Jose
Mercury News article which indicated 300-400 properties were listed as
available in Palo Alto. It was important for the Council to know if the
number was dozens, 100, or 300. He inquired whether the short-term rental
Ordinance applied the same whether an owner was present or not.
Molly Stump, City Attorney, did not believe the Zoning Code distinguished
between the owner being present or not. The issue was the definition of
short-term occupancy as 30 days or less.
Council Member Burt was inclined to limit the number of rentals per month
and to encourage longer-term rentals. If the Council considered some
permissibility for short-term rentals, then the San Luis Obispo option of
limiting the number of guests would be important.
Council Member Scharff noted the Staff Report stated that Staff would not
have time to work on other initiatives if the Council decided to prioritize the
current issue. He inquired about the actual number of complaints the City
had received. The Staff Report indicated seven complaints, two of which
were not legitimate. Five complaints did not indicate a severe problem that
warranted the expenditure of large amounts of resources.
Ms. Gitelman reported the City had received a number of complaints. The
seven complaints indicated in the Staff Report occurred in the past 1 to 1
1/2 years for vacation rentals. A similar number or slightly more complaints
were received for home occupation. The numbers were not high, but each complaint required a great deal of work and was disruptive to the
neighborhood around the home.
Council Member Scharff felt conflating home occupation and short-term
rentals would be a mistake. The existing Zoning Code prohibited a home-
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based business with 30 employees. He would allow home stays as provided
in the San Luis Obispo Ordinance. He did not view home stays as being
disruptive to the neighborhood. The City could allow the homeowner to be
absent with restrictions similar to those stated in the San Francisco
Ordinance. Homeowners should not be allowed to rent their homes
continuously as a hotel. The sharing economy was good for consumers. He
was concerned that efforts to collect the TOT would cost far more than the
amount of TOT collected. Collection of the TOT should not drive the
discussion. The discussion should center around the severity of the problem,
the number of complaints, and impacts to quality of life in neighborhoods.
Enforcement should remain on a complaint basis; however, the City should
resolve those complaints.
Council Member Filseth agreed that the amount of TOT collected would be
small. The City should not allow rental of homes as hotels. Ordinance
provisions for vacation rental of homes and home stays should be a low
priority for Staff. He inquired whether the City could institute harsher
penalties for renters committing egregious acts.
Ms. Gitelman advised that the two Code Enforcement Officers had
experience and received support from the City Attorney's Office. Officers
investigated complaints, and the City Attorney's Office moved against
violators as quickly as possible.
Council Member Filseth asked if the City could impose a fine for violators.
Ms. Gitelman reported the City could issue citations. Staff preferred
homeowners cease and desist from egregious violations without the need to
impose fines.
Council Member DuBois expressed concern that rentals under the hotel
model were removing housing from the market. Homes rented to more
people than the number of bedrooms seemed particularly egregious. He was
comfortable with the home stay model and longer-term rentals.
Enforcement seemed to place the burden on citizens to gather proof.
The concept of enforcement based on advertising had some merit. In
December 2014, he searched for online listings and found approximately
300. Requiring occupants to register and limiting the number of occupants were logical means to identify egregious users. The Council and Staff should
be cognizant of websites that advertised rentals versus websites that
collected transactions. He inquired whether collection of the TOT could be
retroactive.
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Ms. Stump suggested the Council first determine whether it wished Staff to
focus on the tax issue prospectively. Looking backwards would be a second
step, because that involved homeowners or renters who legitimately claimed
they were unaware of the obligation. Retroactive collection involved many
issues such as gathering information that would allow Staff to collect the
TOT, collecting the TOT efficiently, and equity issues.
Council Member DuBois asked if Staff was aware of the period of
retroactivity San Francisco utilized. Retroactive collection could make efforts
worthwhile.
Ms. Stump explained that there would be a statute of limitations of one to
three years.
Council Member DuBois indicated this issue was not a high priority except for
egregious abuses. More and more cities were collecting TOT from short-
term rentals. The City could be deemed irresponsible for not collecting TOT
when other cities were collecting TOT.
Council Member Wolbach was concerned about Staff spending time on this
issue. If a black market addressed a serious need for housing, it would be
logical to bring reasonable components of the black market to the open
market and to prohibit those components incompatible with residential
neighborhoods. The issue should be a low priority for Staff. The City could
explore methods to incentivize below-market rental rates or longer-term
rentals. The Council would be remiss if it did not attempt to accommodate
the need for short-term housing. Perhaps the City should require an absent
resident to register his renter. The City should enforce complaints of noise,
garbage, parking, and crime. Negative impacts to neighborhoods rather
than cost recovery should be the primary factor in developing and enforcing
an Ordinance.
Council Member Berman asked if Staff could easily collect the TOT from
Airbnb.
Ms. Stump advised that the situation was fluid. Airbnb had changed its
approach over the past several months. Staff was just beginning discussions
with Airbnb, because the new tax language became effective recently. Staff
hoped collection of the TOT from Airbnb would not be labor intensive.
Council Member Berman felt the City could emulate systems created by
other municipalities.
Ms. Stump hoped Airbnb would be interested in collecting the TOT through
its software, which Staff believed was possible.
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Council Member Berman agreed that collection of the TOT should not drive
Council or Staff actions. He would not oppose collection efforts if they were
not extensive. There was a difference between owner-occupied rentals and
owner-absent rentals. The Council should attempt to eliminate owner-
absent rentals, because it negatively impacted neighbors. He inquired
whether Staff could easily make that distinction in an Ordinance.
Ms. Gitelman believed that was the approach of the San Luis Obispo
Ordinance.
Council Member Berman asked if drafting such an Ordinance would require
extensive Staff time.
Ms. Gitelman reported it would be quite an endeavor to prepare and adopt
an Ordinance such as that, because of public interest.
Council Member Berman asked if all uses were illegal under the current
Ordinance.
James Keene, City Manager, reiterated that enforcement was based on
complaints.
Council Member Berman inquired about methods to simplify the complaint
process and to resolve complaints more quickly.
Ms. Gitelman felt those problems could be solved by adding resources to the
Code Enforcement function. The City employed two Code Enforcement
Officers who handled all code enforcement activity. Additional resources
could allow more action in areas prioritized by the Council.
Mr. Keene indicated Staff was discussing additional funding for Code
Enforcement in developing the Budget. Enforcement also involved better
awareness and outreach. With more Code Enforcement Officers,
investigations could proceed more quickly.
Council Member Berman felt the Police Department was also involved when
Code Enforcement Officers were off duty. He inquired whether Police
Officers could evict people from a rental residence.
Ms. Stump reported Police Officers were often the first line of interaction
with the public. However, Police Officers' first responsibility was addressing
violations of criminal law and to abate any health or safety problems. Police
Officers would refer a complaint of a Zoning Code violation to Code Enforcement Officers. Code Enforcement Officers would work with the City
Attorney's Office to inform the owner or a long-term tenant of City rules.
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Council Member Filseth asked if the Council could impose a financial penalty
for the fourth citation in 12 months with increasing financial penalties for
each successive citation or a similar program.
Ms. Stump would review such a program. For complaints regarding many
occupants of a rental unit, the City had been successful in working through
the existing process. Usually, a second complaint did not occur because
renters agreed to cease and desist.
Council Member Filseth was referring to people renting residences as hotels.
Ms. Stump indicated residents should file a complaint.
Council Member Filseth asked if the City Attorney had sufficient support in
the Code to handle complaints.
Ms. Stump responded yes.
Vice Mayor Schmid noted benefits of short-term rentals. The key issue was
whether the City could work with newer and better-established online
organizations to collect the TOT and to vet individuals. Short-term rentals
would be valuable if handled appropriately. The question was whether the
City could establish a process that was nonintrusive and that utilized a third
party to vet both sides of a transaction.
Council Member Burt advised that recommendations for owner occupancy
and a limitation of the number of occupants required Code changes. Council
Members offered recommendations but did not reach a consensus for Staff
to prioritize work on the item. Ongoing egregious situations would need to
be addressed. If Staff could better enforce Ordinances in egregious
situations and neighbors could resolve complaints fairly quickly, then the
City may have reached an appropriate balance. The Council needed to
provide Staff with better guidance.
Vice Mayor Schmid inquired about what information Staff needed to proceed.
Mr. Keene reported Staff indicated the challenges of making significant
changes in the near term. Based on the conversation, other initiatives were
more important than this issue. He would not recommend the City pursue
collection of the TOT. Code changes would require much work that would be
better spent in other initiatives. The Council should revisit the issues in a
year to reassess Staff resources. Staff could review improvements to Code Enforcement such as enhanced coordination and additional outreach.
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Vice Mayor Schmid reiterated that the issue was complex, and the item
would return in a year.
Council Member DuBois suggested Staff place a low priority on the issue but
continue to monitor it. If issues arose, Staff could return to the Council
sooner than one year. He inquired whether the City should pursue collection
of the TOT through Airbnb as Airbnb was beginning to collect and remit
taxes.
Ms. Stump reported Staff had contacted Airbnb. If Airbnb agreed to comply,
then it would be relatively easy to collect taxes.
Council Member DuBois inquired whether the City could collect taxes on an
activity while enforcing an Ordinance that prohibited the activity.
Ms. Stump replied absolutely.
City Manager Comments
James Keene, City Manager, announced the City was participating in the
second Multi-City Innovation Campaign to produce a mobile app related to
health which aligned with the Council Priority of Healthy City/Healthy
Community. On March 28, 2015, City Staff and Cubberley Community
Center tenants would host a Cubberley Community Day. On March 29,
2015, the Palo Alto Art Center would host a program of drawing activities
inspired by the Exhibit.
Oral Communications
Eamonn Gormley, Transform, explained that a road diet allowed drivers to
find alternative routes and did not cause congestion.
Traffic engineering could be counterintuitive. The Council should remember
that when considering dedicated lanes for the Bus Rapid Transit System on
El Camino Real.
Ken Horowitz felt the hot topic in Palo Alto was loss of retail space. The
former Page Mill Road YMCA building remained vacant. The building should
continue to be zoned for recreational use.
Stephanie Munoz suggested Council Members distribute comments for major
Agenda Items in advance of meetings in order to facilitate discussions. A
vibrant community could be achieved through prohibiting office space on the
ground floor of buildings.
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William Zhuu, Project Anybody, was hosting a #pa.green contest for middle
and high school students to submit art work or writings regarding green
activities and opportunities in Palo Alto.
Emily, Project Anybody, encouraged youth to submit art, writings or
photography that would raise the awareness of environmental issues in the
community.
Mr. Zhuu invited the Council to a VIP reception following the contest on
March 26, 2015 at Mitchell Park Community Center.
Vice Mayor Schmid requested Mr. Zhuu send the Council a reminder of the
date and time.
Wynn Grcich reported the Sonoma City Council opposed water fluoridation.
Fluoridation caused cancer and heart attacks, lowered IQ scores, and
increased the aging process.
Sally Lieber believed Caltrain should gather and analyze data for suicides
committed on Caltrain tracks. Caltrain currently collected only the names of
victims. Caltrain should install video surveillance.
Omar Chatty noted another death on Caltrain tracks. Caltrain should be
replaced with Bay Area Rapid Transit (BART). The Council should build a
consensus to implement BART around the Bay.
Mike Francois felt the residents of Palo Alto were under great pressure to
succeed which contributed to suicides.
Sea Reddy indicated the average rental rate for a one bedroom apartment
was $2,900 per month. Landlords should be less greedy.
Rent control should not be instituted. The minimum wage should be
approximately $17 per hour.
Minutes Approval
MOTION: Council Member DuBois moved, seconded by Council Member
Berman to approve the Minutes of December 15, 2014, January 5 and 12,
2015.
MOTION PASSED: 7-0 Holman, Kniss absent
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Consent Calendar
MOTION: Council Member DuBois moved, seconded by Council Member
Burt, third by Council Member Wolbach to pull Agenda Item Number 7 -
Request for Finding that Stevenson House Rehabilitation Proposed
Ownership Structure is Compliant with the Site-Specific Planned Community
Zoning Ordinance Adopted in June 1965, to be heard after the Consent
Calendar as Agenda Item Number 11a.
James Keene, City Manager, suggested the Council discuss Agenda Item
Number 7 following the Consent Calendar.
MOTION: Council Member Scharff moved, seconded by Council Member
Burt to approve Agenda Item Numbers 3-6, 8-11.
3. Ratification of Code Enforcement Settlement Agreement - 2040
Cowper Street.
4. Approval of Contract to Hunt Design for $104,600 for Design of
Downtown Parking Wayfinding and Signage and Development of a
Parking Brand, and Approve a Budget Amendment Ordinance 5307
entitled “Budget Amendment Ordinance of the Council of the City of
Palo Alto in the Amount of $104,600 Transferring Funds from the
University Avenue Parking Permit Fund to CIP PL-15004, Parking
Wayfinding Project.”
5. Approval of Amendment No. 1 to Contract #C13148075 with West
Coast Arborists, Inc., for an Additional Amount of $182,410 for a Third
Year of a Three Year Term for a Total Amount Not to Exceed
$1,232,410 for Tree Pruning and Removal Services; and Adoption of a
Related Budget Amendment Ordinance 5308 entitled “Budget
Amendment Ordinance of the Council of the City of Palo Alto in the
General Fund.”
6. Approval of a Signage Contract with McGuire-Pacific Contractors in the
Amount Not to Exceed $368,500 and Adoption of a Related Budget
Amendment Ordinance 5309 entitled “Budget Amendment Ordinance
of the Council of the City of Palo Alto in the Amount of $368,500.”
7. Request for Finding that Stevenson House Rehabilitation Proposed
Ownership Structure is Compliant With the Site-Specific Planned Community Zoning Ordinance Adopted in June 1965.
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8. Ordinance 5310 entitled “Ordinance of the Council of the City of Palo
Alto Authorizing Closing of the Budget for the Fiscal Year Ending June
30, 2014 (First Reading: February 9, 2015 PASSED: 8-0 Kniss
absent).”
9. Ordinance 5311 entitled “Ordinance of the Council of the City of Palo
Alto Amending Municipal Code Sections 2.16.070, 2.20.020, 2.21.025,
2.25.030, 2.27.020 to Change the Start of Terms on the Architectural
Review Board, the Historic Resources Board, the Parks and Recreation
Commission and the Planning and Transportation Commission from
November 1st to December 16th (First Reading: February 9, 2015
PASSED: 8-0 Kniss absent).”
10. Ordinance 5312 entitled “Ordinance of the Council of the City of Palo
Alto to Update the Fiscal Year 2015 Table of Organization for Fiscal
Year 2015 Incorporating Technical Changes (First Reading: February 9,
2015 PASSED: 8-0 Kniss absent).”
11. Resolution 9501 entitled “Resolution of the Council of the City of Palo
Alto Approving Interim Appointment of James Lightbody to Chief
Transportation Official Position Pursuant to Government Code Section
21221(h).”
MOTION PASSED FOR AGENDA ITEM NUMBERS 3-6 AND 8-11: 7-0
Holman, Kniss absent
Action Items
11a. (Former Agenda Item Number 7) Request for Finding that Stevenson
House Rehabilitation Proposed Ownership Structure is Compliant With
the Site-Specific Planned Community Zoning Ordinance Adopted in
June 1965.
Hillary Gitelman, Planning and Community Environment Director, reported
the item was an interpretation of a Planned Community (PC) Ordinance
which permitted a use of a non-profit senior citizens housing development
with not more than 120 dwelling units with dining, cultural, and recreational
facilities for the use of tenants. Staff requested the Council interpret the
phrase "non-profit senior citizens housing development" as "affordable."
Changing the ownership structure of the non-profit entity would allow it to qualify for tax credits to fund rehabilitation of the facility. Loan documents
to effectuate a City loan of $1 million to fund rehabilitation would be
presented to the Council in early April 2015.
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James Keene, City Manager, noted Cara Silver, Senior Assistant City
Attorney, provided a supplemental memorandum to the Council.
Council Member DuBois inquired whether the Council needed to amend the
original PC Zoning Ordinance to state affordable senior housing.
Cara Silver, Senior Assistant City Attorney, did not believe the PC Ordinance
needed an amendment. Staff requested an interpretation that the project as
stated fell within the definition of the PC Ordinance. Staff recommended the
Council direct Staff to work with the Applicant regarding the zoning
compliance letter to clarify that affordability would continue for the project.
Council Member DuBois inquired about the length of the affordability
requirement.
Ms. Silver explained that the PC Ordinance did not require affordability.
Prospectively affordability would be required through deed restrictions.
Several layers of deed restrictions would apply and had different terms.
Council Member DuBois asked if deed restrictions were associated with
loans.
Ms. Silver responded loans, tax credits, and various items.
Council Member DuBois inquired whether amending the underlying PC
Zoning Ordinance would disrupt financing.
Ms. Silver suggested the Applicant address that question. Staff would advise
amending the PC Ordinance concurrent with financing so as not to delay the
compliance letter.
Council Member Burt asked if the Council could substitute non-profit for
affordable as the two terms would have the same meaning.
Ms. Silver clarified that the recommendation was not a substitution but an
interpretation of the PC Ordinance. When the PC Ordinance was adopted,
the ownership entity of the project was a non-profit organization, and the
project was operated as an affordable housing project. The situation would
remain the same under the current ownership structure; however, the
project would not be owned by a non-profit organization. Staff viewed the
item as a zoning interpretation as opposed to formally requiring a Zoning
Amendment.
Council Member Burt recalled concerns were that Palo Alto Senior Housing Project, Inc. (PASHPI) hired a new management company that terminated
most if not all staff, then hired some back as temporary workers without
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medical benefits. Additional concerns were whether tenants would receive
the same level of service. He inquired about the Council's discretionary
control over those actions through approval of the change.
Ms. Silver advised that the item involved a zoning interpretation. In April,
the Council would be asked to provide a $1 million loan. Stephenson House
had a long history of partnership with the City. The City could pursue many
avenues to address issues.
Ms. Gitelman reported the loan item in April would be accompanied by a
commitment to a regulatory agreement to ensure the long-term affordability
of the senior housing. In that context, the Council most likely would not
consider the entity selected to manage the facility. An agreement would
ensure the affordability and level of services that were required.
Council Member Burt had heard concerns regarding changes to the level of
service and the new for-profit management company. He wanted to
understand the Council's discretionary approval and the City's leverage to
ensure services remained consistent.
Ms. Gitelman suggested the Council view the regulatory agreement as a
vehicle to ensure the level of service. The Applicant could speak to its
intentions to ensure the level of services and to address concerns.
Council Member Burt asked if Staff could explain why the management and
employee status changes had to occur concurrently with the tax exempt
agreement.
Jill Harris as a resident of Stephenson House knew the value of affordable
housing. Residents of Stephenson House were not informed of changes in
staff. Residents wanted honesty and the support of staff.
Patrick O’Reagan, Applicant, advised that Board Members of Stephenson
House were all volunteers and committed to retaining Stephenson House as
affordable housing. The Board was working on a low-income housing tax
credit deal, the most common method for rehabilitating affordable housing.
As part of the deal, the Board had to utilize a management company
approved by the U.S. Department of Housing and Urban Development
(HUD). The Board wanted to maintain the high level of services that
residents currently enjoyed.
Lydia Tan, Stephenson House volunteer, previously worked as a professional
consultant to Stephenson House to assist with recapitalizing the project.
Stephenson House indicated a desire to retain local non-profit control of the
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community asset. The management company was working for Stephenson
House as a consultant.
Jonathan Casey, representing Lytton Gardens, explained that partnerships
between for-profit and non-profit organizations had to be created to apply
for tax credits, because HUD funds were no longer available. The $1 million
City loan would fill funding gaps.
Mark Weiss expressed concern about the for-profit entity managing the non-
profit entity. It appeared the Applicant was forming an entity to avoid
paying taxes.
Sylvia Karl, Episcopal Senior Communities, stated Lytton Gardens was the
affordable housing entity for Episcopal Senior Communities, a non-profit
organization. Tax credits were the best option for refinancing affordable
housing projects, because the program required an entity manage more
than three low-income tax projects. Many layers of HUD financing ensured
accountability for property management.
Herb Borock remarked that speakers referred to Stephenson House as
affordable housing but did not indicate whether it would remain the same
type of housing. With respect to Staff's recommendation to interpret the
words in the PC Ordinance, the appropriate action was to change the words
by amending the Ordinance.
Tim Gray suggested the Council not worry about the tax-exempt status if it
transferred tax credits from the Federal Government to the local community.
He questioned whether affordable meant the Board would rehabilitate the
property for the benefit of the management company, and then increase
rental rates. The community wanted to preserve Stephenson House.
Phyllis Cassel, Stephenson House Rehabilitation Task Force Chair, reported
Stephenson House was not an assisted living center and did not provide
assisted living services. Stephenson House could not pay for sewer and
seismic repairs; therefore, it had to utilize a complex process to obtain
funding. Six agreements with six entities required Stephenson House to
continue to serve low-income residents into the future. Stephenson House
replaced staff with a management company as required by HUD. The Board
regretted having to release employees.
Council Member Burt noted press reports indicated staff members who were
retained received reduced earnings and lost benefits.
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Ms. Cassel explained that the Stephenson House Board worked to ensure
that did not happen. The turnover required a long time period, because the
Board wanted to provide benefits to employees.
Council Member Burt asked if retained employees would have benefits
comparable to those in the past.
Ms. Cassel answered yes.
Council Member Burt inquired whether the Board could demonstrate that
when the Council discussed the loan in April.
Ms. Cassel presumed so. The Stephenson House Board would continue to
provide the same services.
Council Member Burt inquired whether Stephenson House would have the
same type and mix of affordable housing.
Ms. Cassel indicated Stephenson House would provide housing for lower
income individuals. Future residents would be limited to income at 50
percent of the median income. A significant number of current residents
were very low-income.
Council Member Filseth stated introduction of the management company and
a cost-cutting regimen appeared to happen simultaneously which raised
concerns. He inquired whether the management change was an aggressive
cost-cutting regimen.
Ms. Cassel advised the change occurred for other reasons. Once the
rehabilitation project was complete, fewer staff members would be needed.
Ted Marston, Stephenson House Treasurer, reported Stephenson House was
writing investment policy statements and gift acceptance policies in order to
obtain funding. Residents were providing positive feedback regarding the
management company.
Stephanie Munoz remarked that Stephenson House was important to the
community. The Council should ask questions and obtain additional
information.
Vice Mayor Schmid commented that low-income senior housing was valuable
to the City. A for-profit organization was needed to obtain tax credits.
Unfortunately, the for-profit organization held 99 percent of control. A 2009
agreement contained a clause stating the property would be used solely for the operation of senior rental housing subject to affordability requirements.
That was the wording the Council sought. The Council needed to determine
03/09/2015 117- 76
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when it provided oversight. Lytton Gardens would be a member of the
general partnership. Under Lytton Gardens' deed of trust, it accepted a
Council Member as a liaison to the Board of Directors. That was the only
continuing relationship between the City and those organizations.
Council Member Filseth believed it was incumbent upon the Council to
exercise caution. He asked if the property would remain as affordable low-
income senior housing decades into the future should the Council and
Stephenson House mutually agree the $1 million loan was not necessary.
Ms. Silver responded absolutely. Several levels of deed restriction were in
place.
Council Member DuBois inquired whether the Council should direct Staff to
clarify in the letter that Stephenson House would remain affordable housing.
Ms. Gitelman understood lenders were interested in the City affirming an
understanding of a permitted use as allowed by the PC Ordinance. The
Council should direct Staff to execute the letter.
MOTION: Council Member DuBois moved, seconded by Council Member
Wolbach to direct Staff to work with the Applicant on the “letter regarding
zoning compliance” to clarify that Stevenson House must remain affordable
senior housing for the change to the specific Planned Community Zoning
Ordinance to remain in effect; and the Council finds that the Stevenson
House property at 455 E. Charleston Road will be in compliance with its
existing zoning under the proposed financing and ownership structure
described in the Staff Report.
Council Member Burt requested clarification as to why the Council did not
amend the PC Ordinance to provide a clear interpretation.
Ms. Silver reported the intent behind the original PC Ordinance for
Stephenson House was to entitle the particular project which included
affordable housing. Staff viewed the Council's action as consistent with the
overall PC Ordinance. The Council could initiate a Zone Change
Amendment; however, the Applicant initiating an Amendment to the PC
Ordinance would be more appropriate. Staff would need time to engage the
public and present items to the Planning and Transportation Commission and
the Council to enact an Amendment.
Council Member Burt understood the Council's greater discretion because of
the PC Ordinance.
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Council Member Scharff indicated the item was a lender requirement for a
loan. Typically, lenders wanted a particular statement. The Motion did not
match the Staff recommendation. He inquired whether the Motion should
state that the Council found the Stephenson House property would be in
compliance with its existing zoning under the proposed financing and
ownership structure.
Ms. Gitelman believed the concluding statement on packet page 334 was
consistent with the Motion and Staff would need to insert the word
"affordable."
Vice Mayor Schmid wished to ensure the Motion met the lender's
requirements so that the loan could be completed.
Ms. Gitelman understood the lender had accepted the letter provided in the
packet.
Mr. O'Reagan stated the language was acceptable.
Vice Mayor Schmid inquired whether the Board wished to make a statement.
Mr. O'Reagan explained that the management company was a limited
partner and had no control of operations other than meeting financial
obligations to pay the loan. The Board would continue managing the
property.
Vice Mayor Schmid asked if the letter as amended to include "affordable"
was acceptable.
Ms. Tan reported the tax credit investor had read and approved the letter as
provided in the Council packet. The word "affordable" was not inserted in
that letter. She requested the Council consider the letter as presented in the
packet.
Ms. Gitelman suggested the regulatory agreements as part of the $1 million
and existing agreements provided by Ms. Silver could assure the Council that
Stephenson House was an affordable project.
Council Member DuBois asked if the letter had already been approved.
Ms. Tan advised that the letter was reviewed by the investor's counsel as
presented. Any change would have to be submitted for approval. The letter
and the change to zoning was inoperable without the use of low-income
housing tax credits. Tax credits included a 55-year regulatory agreement. Therefore, both were necessary.
03/09/2015 117- 78
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MOTION WITHDRAWN BY THE MAKER
MOTION: Council Member Scharff moved, seconded by Council Member
Berman that the City Council finds that the Stevenson House property at 455
E. Charleston Road will be in compliance with its existing zoning under the
proposed financing and ownership structure described in the Staff Report.
MOTION PASSED: 7-0 Holman, Kniss absent
12. Finance Committee Recommendation to Accept the Fiscal Year 2016 to
2025 General Fund Long Range Financial Forecast.
James Keene, City Manager, noted an At-Places memorandum corrected two
of the expenditure tables in the General Fund Long Range Financial Forecast
(LRFF). Inadvertently employees' paid leave and assumed vacancy savings
were categorized as a benefit rather than a salary expense.
Walter Rossmann, Office of Management and Budget Director, reported the
release of the LRFF marked the beginning of the Fiscal Year (FY) 2016
Budget process. Ideally, each year the City would afford its current service
level and generate a slight ongoing surplus. For FY 2016, Staff projected a
slight surplus of $0.5 million. For FY 2017, primarily due to a reduction of
the Utility Users Tax revenue estimates related to the ongoing drought, the
model predicted a slight shortfall. Thereafter, Staff projected annual
surpluses between $1 million and $3.4 million. As part of the annual Budget
process, the City spent the surplus in response to new service needs. New
service needs had ongoing Budget impacts.
Over the next ten years, the City should continue a prudent approach to
budgeting while addressing the important needs of the organization. The
City was currently in labor negotiations with two Public Safety Unions and
the Utility Management Union. The contract for the Service Employees
International Union (SEIU), would expire in December 2015. The outcome
of negotiations could affect the long-term financial outlook. Staff was
negotiating a contract with Stanford University to provide fire services for
Stanford land as the existing contract was scheduled to end in early October
2015. The Council approved the Infrastructure Funding Plan in June 2014 in
the amount of $126 million with a funding gap of $7.5 million. The LRFF
assumed as part of the FY 2016 Budget the entire gap would be closed. No funds had been set aside for potential higher costs of land acquisition and
construction. The last valuation of the City's pension and retiree healthcare
plans identified total unfunded liabilities of $439 million. Staff recommended
the Council refer a discussion of unfunded liabilities to the Finance
Committee and direct Staff to provide potential strategies to address unfunded liabilities. During the forecast period, non-tax revenues steadily
03/09/2015 117- 79
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increased while tax revenues grew at a faster pace. In 2016, tax revenues
comprised 56 percent of all revenues. By 2025, tax revenues would
comprise approximately 60 percent of all revenues. By the end of the
forecast period, Staff projected tax revenues would comprise a larger share
of all revenues. In 2005, Sales Tax receipts comprised the largest share of
all tax revenues at 38 percent. Property Tax receipts were the second
largest share at 28 percent. By 2016, Sales Tax and Property Tax would
shift positions for two reasons. Starting in FY 2015, the former revenue
stream from Motor Vehicle License Fees was shifted over three years to
Property Tax. Property Tax receipts had increased faster than Sales Tax
receipts during the prior 11 years. The following year, Property Tax receipts
were expected to comprise about one-third of all tax revenues. Due to the
recent voter-approved tax rate increase, the Transient Occupancy Tax (TOT)
represented a larger share of all tax revenues. Over the next ten years,
Property Tax receipts were projected to comprise an even larger share of tax
revenues. This was primarily due to the forecast model which considered 20
years of actual revenue receipts and projected them forward. As part of the
historical analysis, Property Tax receipts were projected to increase faster
than the other two major tax revenues. Salary and benefits comprised
approximately two-thirds of annual expenditures. The forecast assumed an
annual 2 percent salary increase for planning purposes only. Staff expected
pension, medical, and retiree healthcare costs to rise substantially faster
than salaries. Therefore, the City needed to continue working with
bargaining groups to reduce the cost escalation of benefits.
The City had reached successful agreements with bargaining groups to
establish a tiered pension system, to have most employees pay pension
costs, and to cap annual healthcare increases for most bargaining units. As
a result, the City contained today's costs; however, the City had to continue
to work to contain future costs. Over the next ten years, Staff projected a
positive fiscal outlook. Staff recommended the Council accept the LRFF and
refer the City's unfunded pension and retiree healthcare liabilities to the
Finance Committee for strategic discussion.
Council Member Berman advised that the Finance Committee assumed colleagues would want to provide input for analysis of unfunded liabilities.
Council Member Burt noted the City had large unfunded liabilities. Reducing
those liabilities would be an important long-term decision. The Council
should begin the process of determining whether to build that into long-
range planning and provide guidance to the Finance Committee. He asked if the projection for growth of Property Tax revenue was slightly less than 6
percent per year.
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Joe Saccio, Administrative Services Department Assistant Director, utilized
the compound annual growth rate. The average was approximately 5.6
percent.
Council Member Scharff asked if the City would fully fund the Annual
Required Contribution (ARC).
Mr. Rossmann answered yes. On the pension side, the ARC was based on
the rate of payroll. Because of vacancies, the ARC was not fully funded at
yearend. As part of the FY 2016 Proposed Budget, Staff would recommend
the ARC be fully paid each year.
Council Member Scharff understood the City was fully funding the ARC each
year, and the ARC was the retiree healthcare.
Mr. Rossmann explained that if the City paid the ARC yearly, then it would
pay off the unfunded liability. However, a retiree healthcare valuation was
issued every two years and a pension valuation every year, both of which
changed the amounts due.
Council Member Scharff asked if the City computed the payment as though
refinancing a 30-year mortgage each year or as a closed 30-year period.
Mr. Keene responded the City used a closed amortization.
Council Member Scharff did not understand why the unfunded liability would
not be paid in full at the end of 30 years.
Mr. Rossmann stated the unfunded liability would be paid at the end of 30
years if all things were equal. However, the valuations were constantly
changing and increasing the amount of the unfunded liability. The City could
pay the ARC annually and pay any difference in valuations.
Council Member Scharff wanted to know the value of contributing additional
funds to pay the ARC sooner than 30 years.
Mr. Rossmann indicated the benefit was paying less interest.
Council Member Scharff requested the interest rate.
Mr. Rossmann explained that the interest rate was based on the 7.5 percent
investment earnings. Of the unfunded liability, the actuaries factored in the
interest rate and calculated it over 30 years. If the unfunded liability was
reduced sooner, the annual payment would decrease over 30 years and less
interest would be paid.
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Council Member Scharff asked if the City had an ARC for pension liability.
Mr. Rossmann answered yes, in the amount of $239 million.
Council Member Scharff asked if Staff had a plan for funding the pension
liability.
Mr. Rossmann advised the only plan was to pay the ARC. Staff would
explore options with the Finance Committee at the direction of the Council.
The City could fully pay the ARC every year; utilize Budget surpluses to
reduce the unfunded liability; or reduce the number of active employees.
Council Member Scharff inquired about the decrease in FY 2017.
Mr. Rossmann reported that would result from a decrease in the Telephone
Tax rate and decreased water and gas consumption. Staff expected lower
gas and water consumption would continue.
Council Member Scharff asked what would cause the increase the following
year.
Mr. Rossmann indicated other tax revenues would increase.
Mr. Keene noted the Council would review unfunded liabilities each year for
the next ten years.
Council Member Filseth remarked that the size of the surplus was sensitive
to the assumption of the California Public Employees' Retirement System
(CalPERS) interest rate returns. The Finance Committee should discuss that
in-depth. He inquired whether the additional transfer of $4.7 million
annually to the Capital Fund was the debt service cost.
Mr. Rossmann advised that the annual debt service cost for the
Infrastructure Funding Plan was $4.7 million for 30 years. The City had not
issued any debt but was collecting the tax; therefore, Staff proposed using
those funds to fill the funding gap.
Council Member Filseth asked if the interest rate was approximately 3 3/4
percent.
Mr. Saccio indicated the $4.7 million would support approximately $70
million in debt.
Council Member Filseth requested the anticipated interest rate.
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Mr. Saccio utilized an interest rate of 4.75 percent to 5 percent. The rate
would depend on the date debt was issued.
Vice Mayor Schmid expressed concern about pension obligations. He
inquired about the pension obligations of Public Safety Employees currently
paid through the fire services contract with Stanford University.
Mr. Rossmann had not fully explored that. The City Attorney indicated Staff
should review the contract with Stanford University to determine whether
the obligation could be transferred to Stanford University.
Vice Mayor Schmid assumed increased productivity over time would result in
fewer workers. Therefore, the ratio between existing employees and retired
employees would decrease. He inquired whether that would change the
City's pension obligations.
Mr. Rossmann reported larger issues in relation to pensions. The City
implemented a three-tiered retirement system. Staff requested the actuary
determine a timeframe for a change in the ARC and unfunded liability as
more active employees comprised Tiers 1 and 2. The actuary determined
the change would occur in approximately ten years.
Vice Mayor Schmid was concerned that Tier 3 employees would contribute
more in order to fund retiree benefits.
Mr. Keene stated that was a possibility. If the ratio of active employees to
retirees declined, then existing employees would carry more of the burden to
pay for that liability.
Mr. Rossmann added that existing employees paid normal costs only, not the
unfunded liability. All unfunded liability was currently paid by the City.
Vice Mayor Schmid noted Staff forecast the number of jobs and residents
would grow faster than in the past. He asked if that had implications for the
LRFF.
Mr. Rossmann reported Staff had not integrated the Comprehensive Plan
direction into the LRFF. Staff was performing a study at Council direction. If
the study was complete, he expected Staff would include that information in
the following year's LRFF.
Vice Mayor Schmid suggested the Council would make a mistake in using the
current LRFF to inform decisions regarding the Comprehensive Plan.
Mr. Keene was not worried about that issue.
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Vice Mayor Schmid recalled a couple of large exceptions in Sales Tax
revenues over the past few years. He asked if that distorted the projection
for Sales Tax revenues.
Mr. Saccio indicated recessions were a factor. The compound annual growth
rate included both recessions. Stanford revenues would be factored into the
future. Staff adjusted for one-time Sales Tax increases.
Vice Mayor Schmid asked if the LRFF attempted to account for one-time
effects.
Mr. Saccio replied yes.
MOTION: Council Member Filseth moved, seconded by Council Member
Wolbach to approve the Fiscal Year 2016 to 2025 General Fund Long Range
Financial Forecast and refer to the Finance Committee a discussion for
recommendations about means by which to address the City’s unfunded
pension and retiree healthcare liabilities.
MOTION PASSED: 7-0 Homan, Kniss absent
Council Member Questions, Comments and Announcements
Council Member Berman attended the inauguration of the Dawoodi Bohra
Mosque. The Dawoodi Bohra spiritual leader from India attended the
festivities.
Council Member Wolbach attended a summit hosted by Transform. Sessions
covered transportation, housing, and health. Presentations of those sessions
were available on the Transform website. He spoke at Gunn High School for
Public Service Day.
Council Member Scharff requested an update regarding sense versus
verbatim Minutes.
James Keene, City Manager, would send an update to Council Members.
Beth Minor, Acting City Clerk, reported the item would return to the Council
in May 2015.
Closed Session
13. THIS CLOSED SESSION ITEM HAS BEEN CANCELLED.
Adjournment: The meeting was adjourned at 10:43 P.M.
03/09/2015 117- 84
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ATTEST: APPROVED:
City Clerk Mayor
NOTE: Sense minutes (synopsis) are prepared in accordance with Palo Alto Municipal Code Sections 2.04.180(a) and (b). The City Council and Standing
Committee meeting tapes are made solely for the purpose of facilitating the
preparation of the minutes of the meetings. City Council and Standing Committee
meeting tapes are recycled 90 days from the date of the meeting. The tapes are
available for members of the public to listen to during regular office hours.
03/09/2015 117- 85
City of Palo Alto (ID # 5647)
City Council Staff Report
Report Type: Consent Calendar Meeting Date: 4/20/2015
City of Palo Alto Page 1
Summary Title: Fiscal Year 2015 Midyear Budget Review and Budget
Amendment Ordinance
Title: Finance Committee Recommends Adoption of a Budget Amendment
Ordinance Amending the Budget for Fiscal Year 2015 to Adjust Budgeted
Revenues and Expenditures in Accordance with the Recommendations in the
FY 2015 Midyear Budget Review Report and to Adopt a Resolution to Amend
the Compensation Plan for the Management/Professional Group to Add a
Principal Attorney
From: City Manager
Lead Department: Administrative Services
Recommendation
Finance Committee and staff recommend that City Council approve the adoption of
1. the FY 2015 Midyear Budget Amendment Ordinance (BAO) (Attachment A) which
includes:
a. Proposed midyear adjustments to the FY 2015 Budget for the General Fund,
Enterprise Funds, Special Revenue Funds, Internal Service Funds, and Capital
Improvement Projects Fund (Exhibit 1);
b. FY 2015 Midyear CIP Adjustments (Exhibit 2); and
c. Amendments to the FY 2015 Table of Organization (Exhibit 3) to add 1.0 Chief
Attorney position;
2. a resolution to amend the Management/Professional Compensation Plan to add the
Principal Attorney classification (Attachment B).
Executive Summary
Annually, in March, staff presents to the Finance Committee the status of revenues and
expenditures for major funds and Capital Improvement Program as of December 31 of the
current fiscal year. As part of that status report, staff also brings forward recommendations to
adjust the annual adopted budget. The attached documents summarize and outline changes to
the City’s FY 2015 adopted budget as recommended for approval unanimously by the Finance
Committee at the March 3, 2015 committee meeting (Attachment A and Attachment C).
City of Palo Alto Page 2
Adjustments to the city’s budget may become necessary as revenues and expenditures may
vary from the original budget plan. These require amendments to department budgets which
the Finance Committee reviews and responds to staff’s recommendation for approval. In this
report, recommended budget adjustments are related to new requests, reimbursements,
grants, previous Council direction, the ongoing drought, or technical clean-ups.
The attached Finance Committee report (Attachment D) includes financial reports of the
General Fund and Enterprise Funds as of December 31, 2014. Overall, with the adjustments
recommended in this report, the General Fund and all enterprise funds are on track to end the
fiscal year within budgeted amounts. Including recommendations contained in this report, the
General Fund is projected to generate a one-time budget surplus of $5.3 million and the Budget
Stabilization Reserve is projected at $38.0 million, or 22.1 percent of adopted expenditures.
This level is $6.1 million above the target level of 18.5 percent of total operating expenditures.
As part of the development of the FY 2016 Proposed Budget (late April/early May) as well as
closing of the FY 2015 budget (November/December), staff will bring forward
recommendations for use of the FY 2015 projected budget surplus.
The FY 2015 Midyear Budget review report includes recommendations to adjust projected
budgets for the City’s 2015 Capital Improvement Plan (CIP) for various funds. The majority
actions recommend closing out existing projects and transferring the remaining balances to the
appropriate fund. Further, additional funding is requested in order to start design work or
complete an existing project.
This report also includes a recommendation to add 1.0 Full-Time Equivalent (FTE) Principal
Attorney position to the Table of Organization to facilitate the recruitment of this position in
advance of the FY 2016 budget process. The funding for this position of approximately
$330,000 will be included in the FY 2016 Base Budget. In addition, staff recommends an
amendment to the Management/Professional Compensation Plan to include the Principal
Attorney position job classification in the compensation plan. Please note that after approval of
the FY 2015 Midyear Budget report by the Finance Committee, staff determined that the job
title of the position in the Attorney’s Office should be Principal Attorney versus Chief Attorney.
As per the memorandum distributed to the Finance Committee on March 3, 2015, staff is also
adding 0.5 FTE Performance Auditor to the City Auditor’s Office to support the Animal Services
audit and the City Auditor’s approved annual work plan.
As is customary, the attached Finance Committee report provides an overtime analysis for the
Fire and Police departments. As of December 31, 2014, the Fire Department expended $1.4
million or 95.6 percent of its FY 2015 Adopted overtime budget, which is slightly higher than
the $1.3 million expended for the same period in FY 2014. The increase is largely attributable
to staff deployment as part of the 2014 Fire season (this report recommends a reimbursement
from the State to the Fire Department for the incurred overtime cost in the amount of
$185,000) and backfilling for vacant positions and staff who are on workers’ compensation paid
City of Palo Alto Page 3
leave. As of December 31, 2014, the Police Department expended $1.0 million or 66.7 percent
of its annual overtime budget primarily due to backfilling for vacant positions and staff who are
on workers’ compensation paid leave.
Finance Committee Discussion
As part of the review of this report, staff responded to numerous questions from the Finance
Committee as captured in the attached minutes (Attachment E). Questions raised were related
to the current FY 2015 projected budget surplus of $5.1 million, which is primarily due to higher
than expected tax revenues, and the outstanding Infrastructure Plan funding gap of $7.5
million. In June 2014, the City Council approved a $126 million infrastructure plan. At the time
of approval, the plan had a $7.5 million funding gap. As part of the Fiscal Year 2016 – 2020
Proposed Capital Improvement Program, staff will recommend an additional transfer of $4.7
million annually for FY 2016 and FY 2017 from the General Fund to the Capital Improvement
Fund to close the gap and set aside some additional funding for unforeseen Infrastructure Plan
needs.
After conclusion of discussions, the Finance Committee recommended unanimously (4-0) for
the Council to approve the Midyear Budget Review report and the related Budget Amendment
Ordinance.
Resource Impact
Adoption of the attached ordinance will allow for adjustments to the FY 2015 budget, along
with amendments to the Table of Organization, and General Fund CIP projects. With the
approval of this ordinance, the projected ending balance of the General Fund Budget
Stabilization Reserve is projected at $38.0 million.
The projected ending Rate Stabilization Reserve total for all Enterprise funds increases by $18.4
million
Policy Implications
These recommendations are consistent with existing City policies.
Environmental Assessment
This is not a project under Section 21065 for purposes of the California Environmental Quality
Act (CEQA).
Attachments:
Attachment A - FY 2015 Midyear Budget Amendment Ordinance (PDF)
Attachment A, Exhibit 1 - Proposed Fiscal Year 2015 Midyear Adjustments (PDF)
Attachment A, Exhibit 2 - Midyear CIP Adjustments (PDF)
Attachment A, Exhibit 3 - Table of Organization (PDF)
Attachment B - Resolution Amending the Management & Professional Compensation
Plan (PDF)
Attachment B, Exhibit 1 - Salary Schedule for Management & Professional (PDF)
City of Palo Alto Page 4
Attachment C - FC March 3, 2015 At-Places Memorandum (PDF)
Attachment D - FC Midyear Report March 3, 2015 (Without Budget Amendment
Ordinance) (PDF)
Attachment E: 03-03-2015 FCM transcript Midyear Only (PDF)
ATTACHMENT A
1
BAOXXX/cp updated 3/20/2015
Ordinance No. XXXX
ORDINANCE OF THE COUNCIL OF THE CITY OF PALO ALTO AMENDING THE BUDGET
FOR THE FISCAL YEAR 2015 TO ADJUST BUDGETED REVENUES AND EXPENDITURES
IN ACCORDANCE WITH THE RECOMMENDATIONS IN THE MIDYEAR REPORT
The Council of the City of Palo Alto does ordain as follows:
SECTION 1. The Council of the City of Palo Alto finds and determines as follows:
A. Pursuant to the provisions of Section 12 of Article III of the Charter of the City of
Palo Alto, the Council on June 16, 2014 did adopt a budget for Fiscal Year 2015, including a
Table of Organization describing the staffing for each department; and
B. After reviewing the current budgeted revenues and expenditures for Fiscal Year
2015, adjustments to the budget are recommended to more accurately reflect year‐end
projections; and
C. A staffing adjustment requiring an amendment to the Table of Organization for
the addition of 1 Full‐Time Equivalent (FTE) Principal Attorney and 0.5 FTE Performance
Auditor; and
D. City Council authorization is needed to amend the fiscal year 2015 budget as
hereinafter set forth;
SECTION 2. As provided in Section 2.04.330 of the Palo Alto Municipal Code, this
ordinance shall become effective upon adoption.
SECTION 3. As specified in Section 2.28.080(a) of the Palo Alto Municipal Code, a
two‐thirds vote of the City Council is required to adopt this ordinance.
SECTION 4. The General Fund Budget Stabilization Reserve is hereby increased by
the sum of Five Million Two Hundred Eighty Four Thousand Seven Hundred Eighty Nine
Dollars ($5,261,789), as described in Exhibit 1. As a result of this change, the Budget
Stabilization Reserve will change to Thirty Seven Million Nine Hundred Sixty One Thousand
($37,938,000).
SECTION 5. The Capital Fund Infrastructure Reserve is hereby increased by the sum
of Three Million Two Hundred Ninety Thousand Two Hundred Sixty Five Dollars
($3,290,265), as described in Exhibit 1.
SECTION 4. The Supply Rate Stabilization Reserve in the Electric Fund is hereby
decreased by the sum of Seven Million Ninety Thousand Thirty Eight Dollars ($7,090,038) as
described in Exhibit 1.
ATTACHMENT A
2
BAOXXX/cp updated 3/20/2015
SECTION 5. The Distribution Rate Stabilization Reserve in the Electric Fund is hereby
decreased by the sum of Eight Million Four Thousand Seven Hundred Eighteen Dollars
($8,004,718) as described in Exhibit 1.
SECTION 6. The Rate Stabilization Reserve in the Fiber Optics Fund is hereby
decreased by the sum of Eight Thousand Three Hundred Ninety Dollars ($8,390) as
described in Exhibit 1.
SECTION 7. The Supply Rate Stabilization Reserve in the Gas Fund is hereby
decreased by the sum of Four Million Seven Hundred Thirty Four Thousand Seven Hundred
Seventy Nine Dollars ($4,734,779) as described in Exhibit 1.
SECTION 8. The Distribution Rate Stabilization Reserve in the Gas Fund is hereby
increased by the sum of One Million Three Hundred Twelve Thousand Five Hundred Eighty
One Dollars ($1,312,581) as described in Exhibit 1.
SECTION 9. The Rate Stabilization Reserve in the Wastewater Collection Fund is
hereby increased by the sum of Two Hundred Six Thousand Nine Hundred Twelve Dollars
($206,912) as described in Exhibit 1.
SECTION 10. The Rate Stabilization Reserve in the Water Fund is hereby increased by
the sum of Forty Two Thousand Nine Hundred Seventy Three Dollars ($42,973) as described
in Exhibit 1.
SECTION 11. The Rate Stabilization Reserve in the Refuse Fund is hereby decreased
by the sum of Three Hundred Sixty Three Dollars ($363) as described in Exhibit 1.
SECTION 12. The Rate Stabilization Reserve in the Storm Drainage Fund is hereby
increased by the sum of One Thousand Six Hundred Seven Dollars ($1,607) as described in
Exhibit 1.
SECTION 13. The Rate Stabilization Reserve in the Wastewater Treatment Fund is
hereby increased by the sum of Seven Thousand Four Hundred Thirty Two Dollars ($7,432)
as described in Exhibit 1.
SECTION 14. Adjustments to other funds are made as shown in Exhibit 1. These
changes impact Special Revenue, Internal Service, and Other Funds Reserves as indicated in
Exhibit 1.
SECTION 15. Adjustments to decrease or increase amounts allocated to various
Capital Improvement Projects are made as shown in Exhibit 2. These changes impact the
Infrastructure Reserve and are reflected in the adjustments as shown in Exhibit 1.
ATTACHMENT A
3
BAOXXX/cp updated 3/20/2015
SECTION 17. The Table of Organization is hereby amended to reflect the changes
shown in Exhibit 3, which is attached hereto and incorporated herein by reference.
SECTION 18. The Council of the City of Palo Alto hereby finds that this midyear
adjustment is not a project under Section 21065 of the California Environmental Quality Act
and, therefore, no environmental impact assessment is necessary. Capital improvement
projects described in this ordinance will be assessed individually as appropriate.
INTRODUCED AND PASSED: Enter Date Here
AYES:
NOES:
ABSENT:
ABSTENTIONS:
NOT PARTICIPATING:
ATTEST:
____________________________ ____________________________
City Clerk Mayor
APPROVED AS TO FORM: APPROVED:
____________________________ ____________________________
Senior Assistant City Attorney City Manager
____________________________
Director of Administrative Services
ATTACHMENT A, EXHIBIT 1
Category Amount Description
GENERAL FUND
NON‐DEPARTMENTAL
Sales Tax 3,281,000 The FY 2015 Adopted Sales Tax revenue estimate was approximately $26.0 million. This report
includes a recommendation to increase the Sales Tax revenue estimate for FY 2015 by $3.3 million
to $29.2 million. Of this growth, a one‐time $1.7 million is attributable to a change in the accrual
period to bring sales receipts accruals in line with all other tax revenue accruals. Prior to FY 2015,
except for Sales Tax, the accrual period for all other major tax revenues was from July 1 to June 30.
For Sales Tax, the accrual period was from mid‐May to mid‐May the following calendar year. This
accrual change results in a one‐time increase in sales receipts for FY 2015 to account for sales tax
receipts from mid‐May 2014 until June 30, 2015 – a 13 ½ month accrual period versus the standard
12 month accrual period. Ongoing sales tax revenue is also showing continued positive growth.
Restaurant and electronic sales are trending higher and auto sales in key, older dealerships are
risingProperty Tax 629,000 The FY 2015 Property Tax receipt was estimated at $31.9 million. The midyear property tax updated
estimate is based on information received from quarterly meetings with the Santa Clara County
Assessor’s Office. The estimate includes appeals on record with the Assessor’s Office, additions to
the roll, and movements in assessed values. After analyzing property tax receipts for the first six
months of the fiscal year, staff recommends increasing the FY 2015 Property Tax revenues by $0.6
million to $32.6 million.Transient Occupancy Tax 1,745,000 During the first six months of the fiscal year, TOT receipts are trending above budgeted levels. In the
first five months of FY 2015 average occupancy and daily room rates were 82 percent and $228,
respectively. While occupancy percentage has held steady, daily room rates has increased 14.3
percent over the prior year. As part of this report, staff recommends increasing TOT projections by
$1.7 million from $14.2 million to $15.9 million. Of this increase, $1.3 million is attributable to the
voter approved TOT rate increase from 12 to 14 percent that took effect on January 1, 2015 and
$0.4 million is due to continued improvement in room rates. The City’s newest hotels (Hilton
Garden Inn and Homewood Suites by Hilton) are expected to open for business on March 1st; the
additional expected TOT revenue has been already included in FY 2015 revenue projections.
Documentary Transfer Tax (1,014,000) This economically sensitive revenue source has experienced ups and downs tied to the City’s
housing market as the mix of commercial and residential transactions can vary significantly from
year to year. Through December 2014, Documentary Transfer Tax receipts are running 44 percent
below the prior year period. As a result, staff recommends a reduction in estimated revenue of $1.0
million from the FY 2015 Adopted Budget amount.
Utility Users Tax (390,000) The City’s utility tax revenue is based on a 5 percent tax on electric, water, gas and telephone usage.
Based on current receipt levels, staff recommends a slight decrease in the revenue estimate by $0.4
million from $11.3 million to $10.9 million primarily due drought related water and gas usage
decreases. Gas usage has been lower than expected due to a warmer than expected winter.
Further, at the November 2014 general election, the voters approved a reduction of the utility user
tax for telephony services from 5 percent to 4.75 percent.
Operating Transfers‐In 91,500 Increases the transfer from the Information Technology Fund to reflect the return of funding from
Technology CIP TE‐13002 Employee Self Service Manager/Self Service Enhancements
Source Changes 4,342,500
Contract Services (8,660) The FY 2015 budget included $1,000,000 in a Shuttle Service Reserve for enhanced shuttle services.
This action transfers $8,660 from the Shuttle Service Reserve to the Planning and Community
Environment Department for additional base shuttle expenses incurred during the fiscal year for the
Crosstown and Embarcadero routes.
General Expense (11,600) The FY 2015 budget included $40,000 for grant writing services to assist City departments in
researching and submitting grant applications to fund or enhance City services. This action transfers
$11,600 from the non‐departmental budget to the Community Services Department to support the
submittal of the three grant applications. (1) Silicon Valley Creates ($1,600) ‐ If awarded, this grant
will be used to supplement the budget for Art Center exhibitions, providing for artist honoraria for
site‐specific project installations, lectures, fine art shipping, and other related exhibition expenses.
(2) ArtPlace America ($5,000) ‐ If awarded, this grant will help transition Cubberley to an arts
destination by leveraging public art, wayfinding, public events, and collaborative arts programming
to create a sense of place for public engagement. (3) National Endowment for the Arts ‐ Our Town
($5,000) ‐ If awarded, this grant will help transition Cubberley to an arts destination by leveraging
public art, wayfinding, public events, and collaborative arts programming to create a sense of place
for public engagement.
CITY OF PALO ALTO
MIDYEAR ADJUSTMENTS TO THE CITY MANAGER'S 2015 ADOPTED BUDGET
3/20/2015
General Fund 2015
ATTACHMENT A, EXHIBIT 1
Category Amount Description
GENERAL FUND
CITY OF PALO ALTO
MIDYEAR ADJUSTMENTS TO THE CITY MANAGER'S 2015 ADOPTED BUDGET
Contingent Account 25,000 Replenish the City Manager's Office Contingency Account for funds to pay for the Know Your
Neighbor program. Request for grants in this amount were accepted as part of the annual grant
submission process. These funds were inadvertently not included in the FY 2015 Adopted Budget
and will be funded in the FY 2016 Base Budget for the City Manager's Office.
Contingent Account 87,356 Replenish the City Manager's Office Contingency Account for funds temporarily reallocated to the
Administrative Services Department to pay Ada's Cafe $87,356 for construction delays at Mitchell
Park Library and Community Center. The reimbursement for Ada's Cafe was approved by the City
Council on Dec. 15, 2014.
Operating Transfers‐Out (932,124) As part of the new five‐year lease agreement with the Palo Alto Unified School District and the City,
the parties agreed to designate approximately $1.8 million per lease year (January through
December) for infrastructure repairs at the Cubberley site. To separately track these funds, the City
established a Cubberley Infrastructure Fund. This action transfers $932,124 from the Cubberley Not‐
To‐Develop Reserve to the newly established Cubberley Infrastructure Fund.
Use Changes (840,028)
5,182,528
CITY ATTORNEY
Salary & Benefits ‐ This action adds 1.0 Chief Attorney position to the Table of Organization to facilitate the
recruitment of this position in advance of the FY 2016 budget process. The funding for this position
of approximately $330,000 will be included in the FY 2016 Base Budget. The position will increase
the ability of the City Attorney’s Office to provide high‐level legal services for strategic advice and
transactional legal services on complex projects, strategic oversight of the litigation portfolio,
assistance with managing and coordinating the Office’s workload, and communicating and
reporting on the Office’s work to City policymakers and the public. It is expected that a portion of
the cost for this position will be offset with a reduction of contractual services for outside counsel
and/or the City Attorney's contingency reserve.
Use Changes ‐
‐
CITY AUDITOR
Salary & Benefits 23,000 Council approved the Animal Services audit as part of the Office of the City Auditor's annual work
plan. Subsequent to approval of the City Auditor's work plan and due to the high level of interest in
the future of Palo Alto Animal Services, the City Manager requested that the Animal Services audit
be prioritized. Per the Finance Committee's request to complete the Animal Services Audit by end of
April and to support timely completion of the audit, the City Auditor requests a 0.5 FTE Performance
Auditor increase.
Use Changes 23,000
(23,000)
COMMUNITY SERVICES
Charges for Services (23,000) Decrease in Charges for Services revenue from Ballroom Dancing program budget. The City will
continue to provide a Ballroom Dancing program, however, in lieu of directly contracting for the
ballroom dancing instructors and collecting the fees for the program, the City will rent the facility to
the ballroom dancing instructors and participants will pay the instructors directly.
Charges for Services (20,000) Decrease in Charges for Services revenue from Vocal Lessons program budget. The City will
continue to provide a Vocal Lessons program, however, in lieu of directly contracting for the
ballroom dancing instructors and collecting the fees for the program, the City will rent the facility to
the ballroom dancing instructors and participants will pay the instructors directly.
Source Changes (43,000)
General Expense (23,000) Decrease in General Expenses revenue from Ballroom Dancing program budget. The City will
continue to provide a Ballroom Dancing program, however, in lieu of directly contracting for the
ballroom dancing instructors and collecting the fees for the program, the City will rent the facility to
the ballroom dancing instructors and participants will pay the instructors directly.
Net Changes To (From) Reserves
Net Changes To (From) Reserves
Net Changes To (From) Reserves
3/20/2015
General Fund 2015
ATTACHMENT A, EXHIBIT 1
Category Amount Description
GENERAL FUND
CITY OF PALO ALTO
MIDYEAR ADJUSTMENTS TO THE CITY MANAGER'S 2015 ADOPTED BUDGET
General Expense (20,000) Decrease in General Expenses revenue from Vocal Lessons program budget. The City will continue
to provide a Ballroom Dancing program, however, in lieu of directly contracting for the ballroom
dancing instructors and collecting the fees for the program, the City will rent the facility to the
ballroom dancing instructors and participants will pay the instructors directly.
General Expense (28,000) On June 2, 2014, the Council approved the FY 2015 Teen Programs using the net revenue collected
from the Bryant Street Garage. This action transfers $28,000 from the Community Services
Department budget to the Library Department to hire a Teen Activity Specialist for the Library to
support the continuation of the MakeX program. Make is a high profile, innovative program
consisting of a mobile makers space originally created by teens for teens under the supervision of
the Library and the Art Center and funded by a California State Library grant. Without this position
the Library will not be able to continue managing and developing this program.
General Expense 11,600 The FY 2015 budget included $40,000 for grant writing services to assist City departments in
researching and submitting grant applications to fund or enhance City services. This action transfers
$11,600 from the non‐departmental budget to the Community Services Department to support the
submittal of the three grant applications. (1) Silicon Valley Creates ($1,600) ‐ If awarded, this grant
will be used to supplement the budget for Art Center exhibitions, providing for artist honoraria for
site‐specific project installations, lectures, fine art shipping, and other related exhibition expenses.
(2) ArtPlace America ($5,000) ‐ If awarded, this grant will help transition Cubberley to an arts
destination by leveraging public art, wayfinding, public events, and collaborative arts programming
to create a sense of place for public engagement. (3) National Endowment for the Arts ‐ Our Town
($5,000) ‐ If awarded, this grant will help transition Cubberley to an arts destination by leveraging
public art, wayfinding, public events, and collaborative arts programming to create a sense of place
for public engagement.
Use Changes (59,400)
16,400
DEVELOPMENT SERVICES
Salary & Benefits 5,000 This action transfers $5,000 in Management and Professional development training funds from the
Planning and Community Environment Department to the Development Services Department. As
part of the transition to the newly created Development Services Departments, funds were
inadvertently over allocated to Planning and Community Environment Department.
Contract Services 122,579 This action transfers $122,579 in contract services funds from the Planning and Community
Environment Department to the Development Services. As part of the annual reappropriation
process contract funds were erroneously allocated to incorrect cost centers. As a result,
Development Services was underfunded by the amount listed. This action corrects this error.
Use Changes 127,579
(127,579)
FIRE
Charges for Services 275,126 This action increases revenue from Stanford for the Fiscal Year 2014 Year‐End Adjustment by
$275,126 due to a variance between the budgeted and actual costs of providing Fire Services to the
University. The primary contributor to the variance is higher overtime expenses incurred in FY 2014
that the Department used to support succession planning and career development in anticipation of
several key leadership promotions in Fiscal Year 2015.
From Other Agencies 184,296 This action increases revenue from the California Office of Emergency Services for reimbursement
for emergency fire services provided on overtime as part of mutual aid for Strike Teams that
responded to wildfires that were burning during the summer of 2014 around the State.
Source Changes 459,422
Net Changes To (From) Reserves
Net Changes To (From) Reserves
3/20/2015
General Fund 2015
ATTACHMENT A, EXHIBIT 1
Category Amount Description
GENERAL FUND
CITY OF PALO ALTO
MIDYEAR ADJUSTMENTS TO THE CITY MANAGER'S 2015 ADOPTED BUDGET
Salary & Benefits 184,296 This action increases overtime funding for reimbursement from the California Office of Emergency
Services for emergency fire services provided as part of mutual aid for Strike Teams that responded
to wildfires that were burning during the summer of 2014 around the State.
Facilities & Equipment 20,000 This action funds a Fire Deployment Modeling and Predictive Analytic Software which will be used
for dynamic resource deployment modeling to measure the impact to response times, patient care,
staff workload, and other metrics based on deployment changes. Advanced deployment system
modeling will allow the Department to identify areas of efficiency for system resources and support
decisions to redeploy personnel and apparatus throughout the City and at Stanford University. The
ongoing cost for system maintenance is approximately $3,500.
Use Changes 204,296
255,126
LIBRARY
Other Revenues 4,845 This action increases revenue the City has received from the Pacific Library Partnership (PLP) due to
a one time budget augmentation of California Library Services Act (CLSA) funds offset with a
corresponding expenditure increase. The funds will be used to offset costs of the Linked +
interlibrary loan program for participating organizations. Linked + is a union catalog of contributed
holdings from participating libraries in California. Patrons from member libraries electronically
request an item not available in their own library and it is delivered to them for check‐out.
Other Revenues 15,000 This action increases grant revenue for Maker +: A Summer Maker Program to support the STEAM
(Science, Technology, Engineering, Art & Math) and foster interdisciplinary exploration among
sciences, art, and social sciences. By participating in the program, students will discover solutions
for today's social issues through technology. The program includes opportunities for people of all
ages to participate in a week long structured programming at the Rinconada and Mitchell Park
libraries.Source Changes 19,845
General Expense 4,845 This action increases expenses offset with revenue for a one time budget augmentation of
California Library Services Act (CLSA) funds. The funds will be used to offset costs of the Linked +
interlibrary loan program for participating organizations. Linked + is a union catalog of contributed
holdings from participating libraries in California. Patrons from member libraries electronically
request an item not available in their own library and it is delivered to them for check‐out.
General Expense 15,000 This action increases general expenses for Maker +: A Summer Maker Program to support the
STEAM (Science, Technology, Engineering, Art & Math) and foster interdisciplinary exploration
among sciences, art, and social sciences. By participating in the program, students will discover
solutions for today's social issues through technology. The program includes opportunities for
people of all ages to participate in a week long structured programming at the Rinconada and
Mitchell Park libraries.
General Expense 28,000 On June 2, 2014, the Council approved the FY 2015 Teen Programs using the net revenue collected
from the Bryant Street Garage. This action transfers $28,000 from the Community Services
Department budget to the Library Department to hire a Teen Activity Specialist for the Library to
support the continuation of the MakeX program. Make is a high profile, innovative program
consisting of a mobile makers space originally created by teens for teens under the supervision of
the Library and the Art Center and funded by a California State Library grant. Without this position
the Library will not be able to continue managing and developing this program.
Use Changes 47,845
(28,000) Net Changes To (From) Reserves
Net Changes To (From) Reserves
3/20/2015
General Fund 2015
ATTACHMENT A, EXHIBIT 1
Category Amount Description
GENERAL FUND
CITY OF PALO ALTO
MIDYEAR ADJUSTMENTS TO THE CITY MANAGER'S 2015 ADOPTED BUDGET
PLANNING & COMMUNITY ENVIRONMENT
Charges for Services 3,400 Additional revenue received for Greenwaste code enforcement abatement action billed to resident.
Greenwaste is the City of Palo Alto's contractor to collect recyclables, garbage, and yard trimmings
from Palo Alto residents and businesses.
Source Changes 3,400
Salary & Benefits (5,000) This action transfers $5,000 in Management and Professional development training funds from the
Planning and Community Environment Department to the Development Services Department. As
part of the transition to the newly created Development Services Departments, these funds were
inadvertently allocated to Planning and Community Environment Department.
Contract Services 8,660 The FY 2015 budget included $1,000,000 in a Shuttle Service Reserve for enhanced shuttle services.
This action transfers $8,660 from the Shuttle Service Reserve to the Planning and Community
Environment Department for additional base shuttle expenses incurred during the fiscal year for the
Crosstown and Embarcadero routes.
Contract Services 18,000 This action provides additional contract funding to integrate development impact fees into Accela,
the City's online permit processing and tracking system. Currently, development impact fees are
calculated by using a complex and outdated spreadsheets. To provide for better monitoring and a
clearer paper trail, adding impact fees to Accela will allow impact fees to be consistently calculated
and taken over the counter at the Development Center. Adding online permitting capabilities for
simple entitlements will reduce the impact on staff resources and move toward the online
permittingmodelContract Services 3,400 Additional expenses incurred for Greenwaste code enforcement abatement action billed to
resident. Greenwaste is the City of Palo Alto's contractor to collect recyclables, garbage, and yard
trimmings from Palo Alto residents and businesses.
Contract Services (122,579) This action transfers $122,579 in contract services funds from Planning and Community
Environment Department the to the Development Services. As part of the annual reappropriation
process contract funds were erroneously allocated to incorrect cost centers. As a result,
Development Services was underfunded by the amount listed. This action corrects this error.
Use Changes (97,519)
100,919
POLICE
Charges for Services 145,395 Increase revenue from Stanford for the Fiscal Year 2014 Year‐End Adjustment by $145,395 due to a
variance between the budgeted and actual costs of providing Public Safety Communication Services
to the University. The primary contributor to the variance is related to benefit expenses that were
incurred in the Communications Division; however, the funds were budgeted in other divisions
within the Police Department. This issue was corrected as part of the Fiscal Year 2015 adopted
budget to reduce budget to actual discrepancies in future years.
Source Changes 145,395
Salary & Benefits 260,000 Increase funding for the Retention/Career Incentive Program that is described in the Palo Alto
Peace Officers' Association (PAPOA) Memorandum of Agreement (MOA). The Retention/Career
Incentive Program gives PAPOA employees a 3% special pay after 5 years of service and a 6% special
pay after 10 years of service. This action is a technical correction to add funding for this special pay
to the Police Department's Budget, because it was not included as part of the development of the
Fiscal Year 2015 Operating Budget. This funding will be included as part of the Fiscal Year 2016
BudgetUse Changes 260,000
(114,605)
Total General Fund Changes to BSR 5,261,789
Transfer from the
Cubberley Property
Infrastructure Fund
55,126 Transfers funds from the Cubberley Property Infrastructure Fund to offset costs incurred after
January 1, 2015 in the Cubberley Roof Replacement Project (PF‐14000).
CIP 250 Changes in CIP Projects (See Attachment B, Exhibit 2 for more detail)
Source Changes 55,376
Net Changes To (From) Reserves
GENERAL FUND CIP
Net Changes To (From) Reserves
3/20/2015
General Fund 2015
ATTACHMENT A, EXHIBIT 1
Category Amount Description
GENERAL FUND
CITY OF PALO ALTO
MIDYEAR ADJUSTMENTS TO THE CITY MANAGER'S 2015 ADOPTED BUDGET
CIP (3,290,515) Changes in CIP Projects (See Attachment B, Exhibit 2 for more detail)
Transfer to University
Avenue Parking Debt
Service Fund
240,402 Transfers funds from the Capital Improvement Fund to the University Avenue Parking Debt Service
Fund. As identified by the City Auditor's Office, $240,402 in unused 2002 University Avenue Off‐
Street Parking Assessments District bonds were left in this fund due to a clerical error. When the
bond funds final expenditure reconciliation was completed for the Lot S/L (PE‐95030) in September
2007 it was incorrectly determined that all the bond funds were expended. As a result, the unused
bond funds need to be transferred to the University Avenue Parking Debt Service Fund to offset the
FY 2016 debt service payment and the related property tax assessment.
Transfer to University
Avenue Parking Permit
Fund
300,000 As mentioned elsewhere in this report, the FY 2015 Adopted Capital Budget included funds in the
Transportation and Parking Improvements Project (PL‐12000) for the purchase of parking guidance
system, access control, and revenue collection equipment. The amount allocated for parking
guidance system equipment ($400,000) was offset by a transfer from the University Avenue Parking
Permit Fund. As the funding for this project is recommended to be removed from the budget as
part of this report, until costs are better defined and the design is completed, it is recommended
that funding is returned to the University Avenue Parking Permit Fund. $100,000 is recommended
to be retained in the Capital Improvement Fund to be used for the design work associated with a
future CIP project to fund the purchase and installation of such equipment.
Use Changes (2,750,113)
2,805,489 Net Changes To (From) Reserves
3/20/2015
General Fund 2015
ATTACHMENT A, EXHIBIT 1
Category Amount Description
ENTERPRISE FUNDS
AIRPORT FUND
Other Income 15,000 The Palo Alto Airport (PAO) is providing temporary storage for Audi Palo Alto. A Revocable License
Agreement with the Audi Palo Alto dealership was established to store cars on a monthly basis
during their construction project at the Audi dealership. Currently, this parking lot area at the
Airport is not being used for any aviation uses and the cars stored at the Airport are not on display
to the public. This agreement is anticipated to generate approximately $40,000 this year. Partially
offsetting this additional revenue is a $25,000 reduction in revenue that was budgeted for cell
phone tower rentals and has yet to materialize.
Source Changes 15,000
Allocated Charges 100,000 Provides funding for the annual Liability Insurance payment at the Palo Alto Airport. In August 2014
the City took possession of the Palo Alto Airport. When the FY 2015 Adopted Budget was approved,
the timing of the transfer was in question and costs of insurance were unknown. Therefore, the
funding for the liability insurance is requested as part of this report.
Use Changes 100,000
Net Changes To (From) Reserves (85,000)
Fund Balancing Entries
(85,000)Change in Fund Balance
Total Airport Fund (85,000)
ELECTRIC FUND
Net Sales (7,077,000) Previous electric fund revenue forecasts were overestimated given that key customers projected
expansion did not occur. The latest forecast has been adjusted, but the FY 2015 budget reflected
the overestimation. The decrease reflects the correction to the forecasted revenues, not a decrease
in actual revenues received for the first six months of the current fiscal year and as projected for the
remainder of the fiscal year.
Other Income 20,962 Increases the transfer from the Information Technology Fund to reflect the return of funding from
Technology CIP TE‐13002 Employee Self Service Manager/Self Service Enhancements
Net Sales (956,000) Decrease to expected surplus energy revenue by approximately $1 million as a result of lower than
expected hydroelectric generation due to dry weather conditions. Lower hydro‐electric power
generation led to lower sales of surplus electric energy in the market.
Other Income 922,000 The City is one of several Western customers who assists the Western Area Power Administration
and Bureau of Reclamation by providing payment of certain charges one month in advance, which
allows those agencies to commit those funds to major capital projects under Federal appropriations
rules. These advance payments are offset by bill discounts one month later. The charges and credits
exactly offset each other, and therefore have no budget impact.
Source Changes (7,090,038)
CIP (1,796,795) Close outs/Changes in CIP Projects (See Attachment A, Exhibit 2 for more detail)
Utility Purchases 902,000 Decrease in costs associated with sales of surplus energy in the summer months. This decrease
offset decreases in revenue for sales of surplus energy. lower hydro‐electric power generation led
to lower sales of surplus electric energy in the market and it is recommended to lower the
estimated revenue.
Utility Purchases (902,000) Decrease in costs associated with sales of energy in the summer months in excess of the City's load.
This decrease is exactly offset by expenditures in Contra Surplus Energy Cost.
Utility Purchases 922,000 The City is one of several Western customers who assists the Western Area Power Administration
and Bureau of Reclamation by providing payment of certain charges one month in advance, which
allows those agencies to commit those funds to major capital projects under Federal appropriations
rules. In accordance with the contract with the WAPA, these advance payments are offset by bill
discounts one month later and therefore have no budget impact.
CITY OF PALO ALTO
MIDYEAR ADJUSTMENTS TO THE CITY MANAGER'S 2015 ADOPTED BUDGET
3/20/2015
Enterprise Funds 2015
ATTACHMENT A, EXHIBIT 1
Category Amount Description
ENTERPRISE FUNDS
CITY OF PALO ALTO
MIDYEAR ADJUSTMENTS TO THE CITY MANAGER'S 2015 ADOPTED BUDGET
Utility Purchases 2,765,000 Increase in charges by Western Area Power Administration for Central Valley Project hydropower
this year due to low revenues from CVP water contractors.
Utility Purchases (2,391,000) Decreases current year transmission costs. Increases in transmission charges forecasted by the
California Independent System Operator have been delayed or are not expected to be implemented
until the next fiscal year.
Utility Purchases (148,000) Prices for local capacity in 2015 were slightly lower than projected.
Utility Purchases 306,000 Increase in commodity purchases is driven by the decreased hydroelectric production via the
Northern California Power Agency (NCPA) Power Pool.
Utility Purchases 795,000 Increased funding for a one‐time charge for the startup of the San Joaquin landfill gas project.
Project was originally projected for FY 2014, but was delayed until FY 2015.
Utility Purchases 7,543,000 Increased funding requested for electricity commodities purchases in the amount of $7.5 million
due to low output from hydroelectric resources caused by to the drought. CPAU has had to
purchase more power in electric markets than was projected in the budget.
Operating Transfer Out 9,513 Increases the transfer to the Utilities Administration Fund by $9,513 ($687 from the Electric
Operating Fund and $8,826 from the Electric Supply Fund) to fund the Utilities Department portion
of the Sustainability Dashboard to streamline the collection and analysis of sustainability data and
make this data available for staff to use to in making decisions related to sustainability.
Use Changes 8,004,718
Net Changes To (From) Reserves (15,094,756)
Fund Balancing Entries
(15,094,756)Change in Fund Balance
Total Electric Fund (15,094,756)
FIBER OPTICS FUND
Allocated Charges 169 Increases the transfer from the Information Technology Fund to reflect the return of funding from
Technology CIP TE‐13002 Employee Self Service Manager/Self Service Enhancements
Source Changes 169
Operating Transfers Out 8,500 Increases the transfer to the Technology Fund by $8,500 to fund the Fiber Optics specific portion of
the Sustainability Dashboard to streamline the collection and analysis of sustainability data and
make this data available for staff to use to in making decisions related to sustainability.
Operating Transfers Out 599 Increases the transfer to the Utilities Administration Fund by $599 to fund the Utilities Department
portion of the Sustainability Dashboard to streamline the collection and analysis of sustainability
data and make this data available for staff to use to in making decisions related to sustainability.
Use Changes 9,099
Net Changes To (From) Reserves (8,930)
Fund Balancing Entries
(8,930)Change in Fund Balance
Total Fiber Optics Fund (8,930)
GAS FUND
Net Sales (4,743,000) Due to declining gas market prices and a switch to a pass‐through commodity rate as lower
residential consumption, gas sales revenue is expected to be $4.7 million or 13% lower than the
original budget. Residential consumption is lower than normal due to warmer than average
weather.
Other Income 8,221 Increases the transfer from the Information Technology Fund to reflect the return of funding from
Technology CIP TE‐13002 Employee Self Service Manager/Self Service Enhancements
Source Changes (4,734,779)
CIP (23,264) Close outs/changes in CIP Projects (See Attachment B, Exhibit 2 for more detail)
Utility Purchases (2,098,754) Commodity Market prices have declined through January 2015.
3/20/2015
Enterprise Funds 2015
ATTACHMENT A, EXHIBIT 1
Category Amount Description
ENTERPRISE FUNDS
CITY OF PALO ALTO
MIDYEAR ADJUSTMENTS TO THE CITY MANAGER'S 2015 ADOPTED BUDGET
Utility Purchases 804,934 Projected cost of transportation increases. PG&E costs are rising due to infrastructure expenses,
passed on to City.
Operating Transfers Out 4,503 Increases the transfer to the Utilities Administration Fund by $4,503 ($192 from the Gas Operating
Fund and $4,311 from the Gas Supply Fund) to fund the Utilities Department portion of the
Sustainability Dashboard to streamline the collection and analysis of sustainability data and make
this data available for staff to use to in making decisions related to sustainability.
Use Changes (1,312,581)
Net Changes To (From) Reserves (3,422,198)
Fund Balancing Entries
(3,422,198)Change in Fund Balance
Total Gas Fund (3,422,198)
Other Income 3,887 Increases the transfer from the Information Technology Fund to reflect the return of funding from
Technology CIP TE‐13002 Employee Self Service Manager/Self Service Enhancements
Source Changes 3,887
CIP
Operating Transfers Out 4,250 Increases the transfer to the Technology Fund by $4,250 to fund the Refuse Fund portion of the
Sustainability Dashboard to streamline the collection and analysis of sustainability data and make
this data available for staff to use to in making decisions related to sustainability.
Use Changes 4,250
Net Changes To (From) Reserves (363)
Fund Balancing Entries
(363 Change in Fund Balance
Total Refuse Fund (363)
Other Income 1,607 Increases the transfer from the Information Technology Fund to reflect the return of funding from
Technology CIP TE‐13002 Employee Self Service Manager/Self Service Enhancements
Source Changes 1,607
Net Changes To (From) Reserves 1,607
Fund Balancing Entries
1,607 Change in Fund Balance
Total Storm Drainage Fund 1,607
Operating Transfers In 9,513 Increases the transfer from the Electric Fund by $9,513 ($687 from the Electric Operating Fund and
$8,826 from the Electric Supply Fund) to fund the Utilities Department portion of the Sustainability
Dashboard to streamline the collection and analysis of sustainability data and make this data
available for staff to use to in making decisions related to sustainability.
REFUSE FUND
STORM DRAINAGE FUND
UTILITIES ADMINISTRATION FUND
3/20/2015
Enterprise Funds 2015
ATTACHMENT A, EXHIBIT 1
Category Amount Description
ENTERPRISE FUNDS
CITY OF PALO ALTO
MIDYEAR ADJUSTMENTS TO THE CITY MANAGER'S 2015 ADOPTED BUDGET
Operating Transfers In 4,503 Increases the transfer from the Gas Fund by $4,503 ($192 from the Gas Operating Fund and $4,311
from the Gas Supply Fund) to fund the Utilities Department portion of the Sustainability Dashboard
to streamline the collection and analysis of sustainability data and make this data available for staff
to use to in making decisions related to sustainability.
Operating Transfers In 599 Increases the transfer from the Fiber Optics Fund by $599 to fund the Utilities Department portion
of the Sustainability Dashboard to streamline the collection and analysis of sustainability data and
make this data available for staff to use to in making decisions related to sustainability.
Operating Transfers In 4,064 Increases the transfer from the Water Fund by $4,064 to fund the Utilities Department portion of
the Sustainability Dashboard to streamline the collection and analysis of sustainability data and
make this data available for staff to use to in making decisions related to sustainability.
Operating Transfers In 2,571 Increases the transfer from the Wastewater Collections Fund by $2,571 to fund the Utilities
Department portion of the Sustainability Dashboard to streamline the collection and analysis of
sustainability data and make this data available for staff to use to in making decisions related to
sustainability.
Source Changes 21,250
Operating Transfers Out 21,250 Increases the transfer to the Technology Fund by $21,250 to fund the Utility Department's portion
of the Sustainability Dashboard to streamline the collection and analysis of sustainability data and
make this data available for staff to use to in making decisions related to sustainability.
Use Changes 21,250
Net Changes To (From) Reserves ‐
Fund Balancing Entries
‐ Change in Fund Balance
Total Storm Drainage Fund ‐
Other Income 4,467 Increases the transfer from the Information Technology Fund to reflect the return of funding from
Technology CIP TE‐13002 Employee Self Service Manager/Self Service Enhancements
Source Changes 4,467
CIP (205,016) Close outs/Changes in CIP Projects (See Attachment B, Exhibit 2 for more detail)
Operating Transfers Out 2,571 Increases the transfer to the Utilities Administration Fund by $2,571 to fund the Utilities
Department portion of the Sustainability Dashboard to streamline the collection and analysis of
sustainability data and make this data available for staff to use to in making decisions related to
sustainability.
Use Changes (202,445)
Net Changes To (From) Reserves 206,912
Fund Balancing Entries
206,912 Change in Fund Balance
Total Wastewater Collection Fund 206,912
WASTEWATER COLLECTION FUND
3/20/2015
Enterprise Funds 2015
ATTACHMENT A, EXHIBIT 1
Category Amount Description
ENTERPRISE FUNDS
CITY OF PALO ALTO
MIDYEAR ADJUSTMENTS TO THE CITY MANAGER'S 2015 ADOPTED BUDGET
Other Income 11,682 Increases the transfer from the Information Technology Fund to reflect the return of funding from
Technology CIP TE‐13002 Employee Self Service Manager/Self Service Enhancements
Source Changes 11,682
CIP
Operating Transfers Out 4,250 Increases the transfer to the Technology Fund by $4,250 to fund the Wastewater Treatment Fund
portion of the Sustainability Dashboard to streamline the collection and analysis of sustainability
data and make this data available for staff to use to in making decisions related to sustainability.
Use Changes 4,250
Net Changes To (From) Reserves 7,432
Fund Balancing Entries
7,432 Change in Fund Balance
Total Wastewater Collection Fund 7,432
WATER FUND 7
Other Income 7,505 Increases the transfer from the Information Technology Fund to reflect the return of funding from
Technology CIP TE‐13002 Employee Self Service Manager/Self Service Enhancements
Net Sales (1,676,079) Decrease in revenue projections due to drought effects as water use has declined across the board
from residential, commercial, industrial and internal (City) customers. This year, these revenue
decreases are largely offset by corresponding decrease in water purchases. Rates projected to
increase slightly next few years to stabilize revenue. If drought conditions persist beyond FY 2015,
staff may recommend to implement drought rate surcharges.
Source Changes (1,668,574)
CIP (320,326) Close outs/changes in CIP Projects (See Attachment B, Exhibit 2 for more detail)
Utility Purchases (1,395,285) Water Purchase costs are lower than projected because the final adopted FY 2015 wholesale water
rate from the San Francisco Public Utilities Commission (SFPUC), the City's water supplier, was
substantially lower than projected in the City's FY 2015 budget. In addition, water sales are
substantially lower due to drought restrictions. This budget assumes average rainfall and drought
restrictions lifted in February, but purchase costs may be even lower if the drought continues and
restrictions are not lifted.
Operating Transfers Out 4,064 Increases the transfer to the Utilities Administration Fund by $4,064 to fund the Utilities
Department portion of the Sustainability Dashboard to streamline the collection and analysis of
sustainability data and make this data available for staff to use to in making decisions related to
sustainability.
Use Changes (1,711,547)
Net Changes To (From) Reserves 42,973
Fund Balancing Entries
42,973 Change in Fund Balance
Total Water Fund 42,973
WASTEWATER TREATMENT FUND
3/20/2015
Enterprise Funds 2015
ATTACHMENT A, EXHIBIT 1
Category Description
Operating Transfers In 994,217 In FY 2009, the City transferred $994,217 from the Gas Tax Fund to the Stanford Research Park Fund
for various street‐related costs. However, it was determined that the transfers were not used, and
therefore the amount originally transferred needs to be returned to the Gas Tax Fund.
Source Changes 994,217
994,217
Operating Transfers
Out
994,217 In FY 2009, the City transferred $994,217 from the Gas Tax Fund to the Stanford Research Park Fund
for various street‐related costs. However, it was determined that the transfers were not used, and
therefore the amount originally transferred needs to be returned to the Gas Tax Fund.
Use Changes 994,217
(994,217)
Operating Transfers In 409,442 Stanford's portion of the Fire Department Vehicle Replacement CIP for VR‐13000 ($105,057) and VR‐
14000 ($304,385)
Source Changes 409,442
CIP (419,681) Close outs/changes in CIP Projects (See Attachment B, Exhibit 2 for more detail)
Use Changes (419,681)
829,123
INTERNAL SERVICE FUNDS
Net Changes To (From) Reserves
VEHICLE REPLACEMENT FUND
CITY OF PALO ALTO
MIDYEAR ADJUSTMENTS TO THE CITY MANAGER'S 2015 ADOPTED BUDGET
Amount
SPECIAL REVENUE FUNDS
Gas Tax Fund
Net Changes To (From) Reserves
Stanford Research Park Fund
Net Changes To (From) Reserves
3/20/2015
Other Funds 2015
ATTACHMENT A, EXHIBIT 1
Category Description
CITY OF PALO ALTO
MIDYEAR ADJUSTMENTS TO THE CITY MANAGER'S 2015 ADOPTED BUDGET
Amount
Operating Transfers In 53,540 Stanford's portion of the Radio Infrastructure Replacement CIP (TE‐05000) $30,237 and Computer
Aided Dispatch Replacement CIP (TE‐09000) $23,303
Operating Transfers In 21,250 Increases the transfer from the Utilities Administration Fund by $21,250 to fund the Utilities
Department portion of the Sustainability Dashboard to streamline the collection and analysis of
sustainability data and make this data available for staff to use to in making decisions related to
sustainability.
Operating Transfers In 8,500 Increases the transfer from the Fiber Optics Fund by $8,500 to fund the Fiber Optics related portion of
the Sustainability Dashboard to streamline the collection and analysis of sustainability data and make
this data available for staff to use to in making decisions related to sustainability.
Operating Transfers In 4,250 Increases the transfer from the Refuse Fund by $4,250 to fund the Refuse related portion of the
Sustainability Dashboard to streamline the collection and analysis of sustainability data and make this
data available for staff to use to in making decisions related to sustainability.
Operating Transfers In 4,250 Increases the transfer from the Wastewater Treatment Fund by $4,250 to fund the Wastewater
Treatment related portion of the Sustainability Dashboard to streamline the collection and analysis of
sustainability data and make this data available for staff to use to in making decisions related to
sustainability.
Source Changes 91,790
Operating Transfers
Out
20,962 Close TE‐13002 (Employee Self Service Manager/Self Service Enhancements)
Operating Transfers
Out
169 Close TE‐13002 (Employee Self Service Manager/Self Service Enhancements)
Operating Transfers
Out
8,221 Close TE‐13002 (Employee Self Service Manager/Self Service Enhancements)
Operating Transfers
Out
91,500 Close TE‐13002 (Employee Self Service Manager/Self Service Enhancements)
Operating Transfers
Out
3,887 Close TE‐13002 (Employee Self Service Manager/Self Service Enhancements)
Operating Transfers
Out
1,607 Close TE‐13002 (Employee Self Service Manager/Self Service Enhancements)
Operating Transfers
Out
4,467 Close TE‐13002 (Employee Self Service Manager/Self Service Enhancements)
Operating Transfers
Out
11,682 Close TE‐13002 (Employee Self Service Manager/Self Service Enhancements)
Operating Transfers
Out
7,505 Close TE‐13002 (Employee Self Service Manager/Self Service Enhancements)
Contract Services 85,000 Increase computer software funding to purchase a Sustainability Dashboard Application to streamline
the collection and analysis of sustainability data and make this data available for staff to use to in
making decisions related to sustainability. Based on the current funding split of the Office of
Sustainability, 55% of the cost is covered by the General Fund through funds collected from the
Technology Surcharge ($46,750). The remaining 45% ($38,250) is funded by transfers from the
Utilities Administration Fund (25%, $21,250); Fiber Optics Fund (10%, $8,500); Refuse Fund (5%,
$4,250); and Wastewater Treatment Fund (5%, $4,250).
Use Changes 235,000
(143,210)
INFORMATION TECHNOLOGY FUND
Net Changes To (From) Reserves
3/20/2015
Other Funds 2015
Attachment A, Exhibit 2
Project Funding
Title Number Revenue Expense Source Comments
PROJECT COMPLETIONS
ALS EKG Monitor Replacements FD-12000 $ (3) Infrastructure Reserve Removes remaining funding due to completion of
the project
Dimmer Replacement CC-09001 $ (25) Infrastructure Reserve Removes remaining funding due to completion of
the project
Cubberley Restroom PF-06004 $ (50) Infrastructure Reserve Removes remaining funding due to completion of
the project
Alma Guardrail PE-12009 $ (232) Infrastructure Reserve Removes remaining funding due to completion of
the project
Lytton Plaza Renovation PE-08004 $ (1,500) Infrastructure Reserve Removes remaining funding due to completion of
the project
Tree Wells - University Avenue PE-12002 $ (4,299) Infrastructure Reserve Removes remaining funding due to completion of
the project
Art Center Electrical PF-07000 $ (1,530) Infrastructure Reserve Removes remaining funding due to completion of
the project
Parks and PWD Trees PF-12001 $ (41,604) Infrastructure Reserve Removes remaining funding due to completion of
the work programmed within this project, which
rehabilitated office space for the Public Works
Department Street Trees group.
City-Wide Backflow Prevention Installation PF-12004 $ (5,000) Infrastructure Reserve Removes remaining funding due to completion of
the project
Wilkie Way Bridge Design PO-12000 $ (13,566) Infrastructure Reserve Removes remaining funding due to completion of
the project
LATP Site Development PO-12002 $ (2,853) Infrastructure Reserve Removes remaining funding due to completion of
the project
Ventura Community Center PE-10002 $ (34,209) Infrastructure Reserve Removes remaining funding due to completion of
the work programmed within this project, which
included play equipment at Ventura Community
Center.
Subtotal - Project Completions $ - $ (104,871)
STRATEGIC ADJUSTMENTS
LATP Site Development PE-14010 $ (1,486,705) The funding for this project is being returned to the
Infrastructure Reserve because regulatory agencies
have indicated that the proposed site development
work cannot be permitted until there is a use
proposed for the site. The project as proposed was
intended to prepare the site for an as yet
undetermined future use. Once an intended use for
the site is determined, staff will work with regulatory
agencies to approve the new use and return to
Council with a related funding request. During the
FY 2015 budget process, a $500,000 reduction to
this project was approved by Council to fund the
Baylands Levee Improvements Feasibility Study.
Park Restroom Installation PE-06007 $ (65,572) Infrastructure Reserve Removes remaining funding for the Park Restroom
Installation project. The installation of additional
park restrooms is recommended to be deferred until
completion of the Parks Master Plan.
FY 2015 CIP Mid-Year Adjustments
CAPITAL PROJECT FUND
1 2/18/2015
Attachment A, Exhibit 2
Project Funding
Title Number Revenue Expense Source Comments
FY 2015 CIP Mid-Year Adjustments
Parking and Transportation Improvements PL-12000 $ (1,653,367) As part of the FY 2015 budget process, $2.0 million
was allocated to this project for the purchase of
Parking Guidance System, Access Control, and
Revenue Collection equipment for the downtown
parking garages. Staff is in the process of awarding
a contract for the design of this equipment.
Funding associated with the construction of this
equipment is recommended to be removed until the
costs are better defined. Funding remains in the
project for the necessary design work ($100,000).
It should be noted that the project's original budget
of $1.9 million is not fully reduced as funds for this
project were used on unanticipated expenditures
such as improvements along Embracadero Road
and a study for the widening of the intersection at
University and Middlefield.
Parking Guidance Systems, Access Controls, and
Revenue Collection Equipment
$ 20,000 Provides funding for design work associated with
the Parking Guidance Systems, Access Controls,
and Revenue Collection Equipment project. The
installation of this equipment is recommended to be
accounted for in a separate project, rather than the
Parking and Transportation Improvements project.
A reduction to the Parking and Transportation
Improvements project is recommended as part of
this project to offset this cost. It is anticipated that
the 2016-2020 Proposed Capital Improvement
Program will include a recommendation to fund an
additional $80,000 for the design of this project.
Funding for the purchase and installation of this
equipment will be requested once the costs and
associated policy implications are clearly defined.
Subtotal - Strategic Adjustments -$ (3,185,644)$
REVENUE AND ALTERNATIVE FUNDING
SOURCESFire Station 1 Improvements PF-14002 $ 250 $ - Charges for Service Increase revenue for Charges for Service to
recognize reimbursement from Stanford for its
portion (25%) of the Fire Station 1 Improvements
CIP based on the Fire Safety Services contract
between Stanford and Palo Alto.
Subtotal - Revenue and Alternative
Funding Sources
$ 250 $ -
TOTAL GENERAL FUND CIP MID-YEAR
ADJUSTMENTS
$ 250 $ (3,290,515)
2 2/18/2015
Attachment A, Exhibit 2
Project Funding
Title Number Revenue Expense Source Comments
FY 2015 CIP Mid-Year Adjustments
PROJECT COMPLETIONS
Foothills System Rehab EL-04010 $ (82,129) Electric Reserve Removes remaining funding due to completion of
the project
Rebuild UG District 17 EL-09003 $ (82,586) Electric Reserve Removes remaining funding due to completion of
the project
W. Charleston/Wilkie Way EL-09004 $ (85,483) Electric Reserve Removes remaining funding due to completion of
the project
Torreya Court Rebuild EL-11001 $ (7,195) Electric Reserve Removes remaining funding due to completion of
the project
Hewlett Subdivision EL-11004 $ (60,634) Electric Reserve Removes remaining funding due to completion of
the project
Reconductor 60 kV OH EL-11015 $ (67,089) Electric Reserve Removes remaining funding due to completion of
the project
Hanover 22 -Transformer EL-12002 $ (6,679) Electric Reserve Removes remaining funding due to completion of
the project
El Camino Underground EL-05000 $ (200,000) Electric Reserve Removes remaining funding due to completion of
the project
230 kV Electric Intertie EL-06001 $ - Electric Reserve Removes remaining funding due to completion of
the project
UG District 45 EL-06002 $ (75,000) Electric Reserve Removes remaining funding due to completion of
the project
E. Charleston 4/12 k EL-08000 $ (30,000) Electric Reserve Removes remaining funding due to completion of
the project
Smart Grid Technology EL-11014 $ (300,000) Electric Reserve Removes remaining funding due to completion of
the project
Sand Hill / Quarry 1 EL-13006 $ (50,000) Electric Reserve Removes remaining funding due to completion of
the project
Electric System Improvement EL-98003 $ (750,000) Electric Reserve Removes remaining funding due to completion of
the project
Total $ - $ (1,796,795)
TOTAL ELECTRIC FUND CIP MID-YEAR
ADJUSTMENTS
$ - $ (1,796,795)
ADDITIONAL APPROPRIATIONS
Gas Station 3 Rebuild GS-10000 $ 21,640 Gas Reserve Remaining balance of $30,125 in a contract for this
project was inadvertently disencumbered and
omitted in the annual reappropriation process. This
action allows for the project to be completed.
Total $ - $ 21,640
PROJECT COMPLETIONS
Directional Boring Machine GS-02013
($414)
Gas Reserve Removes remaining funding due to completion of
the project
Directional Boring Equipment GS-03007
($408)
Gas Reserve Removes remaining funding due to completion of
the project
Gas Station 2 Rebuild GS-08000
($10,023)
Gas Reserve Removes remaining funding due to completion of
the project
Gas Main Replacement 18 GS-08011
($10,531)
Gas Reserve Removes remaining funding due to completion of
the project
Gas Station 1 Rebuild GS-09000
($6,631)
Gas Reserve Removes remaining funding due to completion of
the project
Gas Station 4 Rebuild GS-11001
($16,897)
Gas Reserve Removes remaining funding due to completion of
the project
Total $ - $ (44,904)
GAS FUND
ELECTRIC FUND
3 2/18/2015
Attachment A, Exhibit 2
Project Funding
Title Number Revenue Expense Source Comments
FY 2015 CIP Mid-Year Adjustments
TOTAL GAS FUND CIP MID-YEAR
ADJUSTMENTS
$ - $ (23,264)
PROJECT COMPLETIONS
Automated Motor Poll Reservation and Vehicle Key
Management System
VR-07001 $ (10,979) Removes remaining funding due to completion of
the project
Vehicle Replacement VR-11000 $ (325,177) Removes remaining funding due to completion of
the project
In-Ground Vehicle Lift VR-12001 $ (83,525) Removes remaining funding due to completion of
the project
TOTAL VEHICLE REPLACEMENT FUND CIP
MID-YEAR ADJUSTMENTS
(419,681)$
ADDITIONAL APPROPRIATIONS
Total $ - $ -
PROJECT COMPLETIONS
Water Main Replacement Project 23 WS-09001 $ (112,021) Removes remaining funding due to completion of
the project
Water Main Replacement Project 24 WS-10001 $ (208,305) Removes remaining funding due to completion of
the project
Total $ - $ (208,305)
TOTAL WATER FUND CIP MID-YEAR
ADJUSTMENTS
$ - $ (208,305)
PROJECT COMPLETIONS
ESS/MSS Enhancements TE-13002 $ (150,000)
TOTAL TECHNOLOGY FUND CIP MID-YEAR
ADJUSTMENTS
(150,000)$
TECHNOLOGY FUND
WATER FUND
VEHICLE REPLACEMENT FUND
4 2/18/2015
Table of Organization
FY 2012
Actuals
FY 2013
Actuals
FY 2014
Adopted
Budget
FY 2015
Adopted
Budget
FY 2015
Modified
Budget
FY 2015
Change FTE
FY 2015
Change %
1.00 1.00 1.00 1.00 1.00 0.00 0.00%
1.00 1.00 1.00 1.00 1.00 0.00 0.00%
1.00 1.00 1.00 1.00 1.00 0.00 0.00%
0.00 0.00 0.00 1.00 1.00 1.00 0.00%
1.00 1.00 1.00 1.00 0.00 -1.00 (100.00)%
0.00 0.00 0.00 0.00 1.00 1.00 0.00%
1.00 1.00 1.00 1.00 1.00 0.00 0.00%
2.00 2.00 2.00 2.00 2.00 0.00 0.00%
1.00 1.00 1.00 1.00 1.00 0.00 0.00%
1.00 1.00 1.00 1.00 1.00 0.00 0.00%
0.00 0.00 0.00 0.00 1.00 1.00 0.00%
General Fund
City Attorney
Assistant City Attorney
City Attorney
Claims Investigator
Legal Fellow
Legal Services Administrator
Principal Attorney
Secretary To City Attorney
Senior Assistant City Attorney
Senior Deputy City Attorney
Senior Legal Secretary - Confidential
Senior Management Analyst
Total City Attorney 9.00 9.00 9.00 10.00 11.00 2.00 22.22%
City Auditor
Administrative Assistant 1.00 1.00 1.00 1.00 1.00 0.00 0.00%
City Auditor 1.00 1.00 1.00 1.00 1.00 0.00 0.00%
Performance Auditor 0.00 0.50 0.50 0.50 1.00 0.50 100.00%
Senior Performance Auditor 2.00 2.00 2.00 2.00 2.00 0.00 0.00%
Total City Auditor 4.00 4.50 4.50 4.50 5.00 0.50 11.11%
Total General Fund 576.40 579.71 577.80 588.58 590.08 12.28 2.13%
Total Citywide Positions 1,016.60 1,015.35 1,019.35 1,033.80 1,028.30 8.95 0.88%
ATTACHMENT A, EXHIBIT 3
ATTACHMENT B
Resolution No. ______
Resolution of the Council of the City of Palo Alto Amending the 2014‐
2016 Compensation Plan for Management and Professional Adopted
by Resolution No. 9492 to Add One New Position
The Council of the City of Palo Alto does RESOLVE as follows:
SECTION 1. Pursuant to the provisions of Section 12 of Article III of the Charter of the
City of Palo Alto, the 2014‐2016 Compensation Plan for Management and Professional
Personnel, adopted by Resolution No. 9492 (CMR 5456), is hereby amended as shown in the
amended salary schedule attached as Exhibit 1 to add one new position, titled, “Principal
Attorney”, attached hereto and incorporated herein by reference.
SECTION 2. The Director of Administrative Services is authorized to implement the
amended Compensation Plan as set forth in Section 1.
SECTION 3. The Council finds that this is not a project under the California
Environmental Quality Act and, therefore, no environmental impact assessment is necessary.
INTRODUCED AND PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:
___________________________ ______________________________
City Clerk Mayor
APPROVED AS TO FORM: APPROVED:
___________________________ ______________________________
Sr. Deputy City Attorney City Manager
_____________________________
Director of Administrative Services/CFO
____________________________
Chief People Officer
ATTACHMENT B, EXHIBIT 1
Job Code Classifications
Grade
Codes
Min Hourly
Rate Mid Point Hourly Rate
Max Hourly
Rate
Approx Mid‐Point
Monthly Approx. Mid‐Point Annual Salary FLSA Status
190 Accountant 690P $31.30 $39.12 $46.95 $6,781 $81,370 Non-Exempt
76 Administrative Assistant 750P $27.00 $33.74 $40.49 $5,848 $70,179 Exempt
132 Assistant Chief of Police 100A $71.79 $89.73 $107.68 $15,553 $186,638 Exempt
108 Assistant City Attorney 165A $60.85 $76.06 $91.28 $13,184 $158,205 Exempt
109 Assistant City Clerk 630M $35.41 $44.26 $53.12 $7,672 $92,061 Exempt
107 Assistant City Manager/Chief Operating Officer 20E $74.57 $93.21 $111.86 $16,156 $193,877 Exempt
73 Assistant Director Administrative Services 120A $61.36 $76.69 $92.03 $13,293 $159,515 Exempt
126 Assistant Director Community Services 150A $58.73 $73.41 $88.10 $12,724 $152,693 Exempt
1007 Assistant Director Human Resources 155A $56.77 $70.96 $85.16 $12,300 $147,597 Exempt
2001 Assistant Director Library Services 160A $56.18 $70.22 $84.27 $12,171 $146,058 Exempt
10 Assistant Director Planning & Community Environment 130A $60.17 $75.21 $90.26 $13,036 $156,437 Exempt
143 Assistant Director Public Works 140A $59.48 $74.34 $89.21 $12,886 $154,627 Exempt
168 Assistant Fleet Manager 585M $37.21 $46.51 $55.82 $8,062 $96,741 Exempt
102 Assistant Manager WQCP 240D $48.08 $60.09 $72.11 $10,416 $124,987 Exempt
30 Assistant to the City Manager 390M $46.46 $58.07 $69.69 $10,065 $120,786 Exempt
118 Chief Building Official 290M $57.09 $71.36 $85.64 $12,369 $148,429 Exempt
2008 Chief Communications Officer 135A $59.85 $74.81 $89.78 $12,967 $155,605 Exempt
112 Chief Planning Official 220D $51.02 $63.77 $76.53 $11,053 $132,642 Exempt
95 Chief Procurement Officer 235D $48.27 $60.33 $72.40 $10,457 $125,486 Exempt
2010 Chief Sustainability Officer 435M $52.11 $65.13 $78.16 $11,289 $135,470 Exempt
82 Chief Transportation Official 204M $53.68 $67.10 $80.52 $11,631 $139,568 Exempt
96 Claims Investigator 660P $32.88 $41.10 $49.32 $7,124 $85,488 Exempt
24 Communication Specialist 615M $35.61 $44.51 $53.42 $7,715 $92,581 Exempt
89 Contracts Administrator 585P $37.21 $46.51 $55.82 $8,062 $96,741 Exempt
186 Coordinator Library Circulation 675M $31.36 $39.19 $47.03 $6,793 $81,515 Non-Exempt
191 Deputy Chief/Fire Marshall 125A $60.63 $75.78 $90.94 $13,135 $157,622 Exempt
9 Deputy City Attorney 480P $43.15 $53.93 $64.72 $9,348 $112,174 Exempt
71 Deputy City Clerk 720M $28.36 $35.45 $42.54 $6,145 $73,736 Exempt
City of Palo Alto
Management, Professional and Confidential Salary Schedule
Effective pay period including 07/01/2014
(Amended XX‐XX‐2015 to add Principal Attorney)
3/25/2015
ATTACHMENT B, EXHIBIT 1
Job Code Classifications
Grade
Codes
Min Hourly
Rate Mid Point Hourly Rate
Max Hourly
Rate
Approx Mid‐Point
Monthly Approx. Mid‐Point Annual Salary FLSA Status
195 Deputy Director Technical Services Division 200D $60.45 $75.56 $90.68 $13,097 $157,165 Exempt
20 Deputy Fire Chief 110A $63.17 $78.96 $94.76 $13,686 $164,237 Exempt
81 Director Administrative Services/Chief Financial Officer 50E $71.48 $89.35 $107.22 $15,487 $185,848 Exempt
72 Director Community Services 45E $72.03 $90.03 $108.04 $15,605 $187,262 Exempt
1012 Director Development Services 145A $63.24 $79.05 $94.86 $13,702 $164,424 Exempt
133 Director Human Resources/Chief People Officer 55E $68.12 $85.15 $102.18 $14,759 $177,112 Exempt
128 Director Information Technology/Chief Information Officer 25E $74.44 $93.04 $111.65 $16,127 $193,523 Exempt
131 Director Libraries 60E $67.42 $84.27 $101.13 $14,607 $175,282 Exempt
2005 Director Office of Emergency Services 215D $52.89 $66.11 $79.34 $11,459 $137,509 Exempt
49 Director Office of Management and Budget 120A $61.36 $76.69 $92.03 $13,293 $159,515 Exempt
134 Director Planning & Community Environment 40E $72.20 $90.24 $108.29 $15,642 $187,699 Exempt
135 Director Public Works/City Engineer 30E $73.12 $91.40 $109.68 $15,843 $190,112 Exempt
121 Director Utilities 10E $93.72 $117.14 $140.57 $20,304 $243,651 Exempt
2002 Division Head Library Services 260D $44.12 $55.15 $66.18 $9,559 $114,712 Exempt
172 Division Manager Open Space, Parks & Golf 245D $47.43 $59.28 $71.14 $10,275 $123,302 Exempt
1005 Executive Assistant to the City Manager 705M $30.54 $38.17 $45.81 $6,616 $79,394 Exempt
139 Fire Chief 35E $72.72 $90.90 $109.08 $15,756 $189,072 Exempt
163 Hearing Officer 480M $43.15 $53.93 $64.72 $9,348 $112,174 Exempt
101 Human Resources Representative 735P $27.67 $34.58 $41.50 $5,994 $71,926 Exempt
90 Landscape Architect Park Planner 510M $41.07 $51.33 $61.60 $8,897 $106,766 Exempt
2015 Legal Fellow 755P $35.31 $44.13 $52.96 $7,649 $91,790 Exempt
171 Management Analyst 585M $37.21 $46.51 $55.82 $8,062 $96,741 Exempt
79 Manager Accounting 235D $48.27 $60.33 $72.40 $10,457 $125,486 Exempt
2007 Manager Airport 210D $52.90 $66.12 $79.35 $11,461 $137,530 Exempt
38 Manager Communications 525M $40.07 $50.08 $60.10 $8,681 $104,166 Exempt
154 Manager Community Services 630M $35.41 $44.26 $53.12 $7,672 $92,061 Exempt
169 Manager Community Services Sr Program 585M $37.21 $46.51 $55.82 $8,062 $96,741 Exempt
1013 Manager Development Center 495M $42.10 $52.62 $63.15 $9,121 $109,450 Exempt
63 Manager Economic Development 220D $51.02 $63.77 $76.53 $11,053 $132,642 Exempt
44 Manager Employee Benefits 450M $43.60 $54.49 $65.39 $9,445 $113,339 Exempt
45 Manager Employee Relations & Training 235D $48.27 $60.33 $72.40 $10,457 $125,486 Exempt
93 Manager Environmental Control Program 419M $44.64 $55.80 $66.96 $9,672 $116,064 Exempt
127 Manager Fleet 255D $44.70 $55.87 $67.05 $9,684 $116,210 Exempt
2018 Manager Human Services 540M $39.09 $48.86 $58.64 $8,469 $101,629 Exempt
3/25/2015
ATTACHMENT B, EXHIBIT 1
Job Code Classifications
Grade
Codes
Min Hourly
Rate Mid Point Hourly Rate
Max Hourly
Rate
Approx Mid‐Point
Monthly Approx. Mid‐Point Annual Salary FLSA Status
32 Manager Information Technology 230D $49.34 $61.67 $74.01 $10,689 $128,274 Exempt
2006 Manager Information Technology Security 420M $44.74 $55.92 $67.11 $9,693 $116,314 Exempt
158 Manager Laboratory Services 495M $42.10 $52.62 $63.15 $9,121 $109,450 Exempt
78 Manager Library Services 565M $36.75 $45.93 $55.12 $7,961 $95,534 Exempt
92 Manager Maintenance Operations 469M $41.24 $51.54 $61.85 $8,934 $107,203 Exempt
26 Manager Parking 345M $48.26 $60.32 $72.39 $10,455 $125,466 Exempt
51 Manager Planning 435M $44.69 $55.86 $67.04 $9,682 $116,189 Exempt
103 Manager Real Property 235D $48.27 $60.33 $72.40 $10,457 $125,486 Exempt
2011 Manager Revenue Collections 250D $45.34 $56.67 $68.01 $9,823 $117,874 Exempt
160 Manager Solid Waste 330M $48.82 $61.02 $73.23 $10,577 $126,922 Exempt
86 Manager Urban Forestry 436M $43.30 $54.12 $64.95 $9,381 $112,570 Exempt
178 Manager Water Quality Control Plant 205D $54.32 $67.90 $81.48 $11,769 $141,232 Exempt
39 Manager Watershed Protection 330M $48.82 $61.02 $73.23 $10,577 $126,922 Exempt
1008 Office of Emergency Services Coordinator 525M $40.07 $50.08 $60.10 $8,681 $104,166 Exempt
100 Performance Auditor 585M $37.21 $46.51 $55.82 $8,062 $96,741 Exempt
148 Police Chief 15E $80.86 $101.07 $121.29 $17,519 $210,226 Exempt
TBD Principal Attorney TBD $73.63 $92.03 $110.44 $15,952 $191,422 Exempt
2016 Principal Business Analyst 310M $51.45 $64.31 $77.18 $11,147 $133,765 Exempt
2003 Principal Management Analyst 360M $51.23 $64.03 $76.84 $11,099 $133,182 Exempt
2009 Project Manager 570M $37.46 $46.82 $56.19 $8,115 $97,386 Exempt
166 Public Safety Program Manager 585M $37.21 $46.51 $55.82 $8,062 $96,741 Exempt
2012 Public Safety Communications Manager 540M $39.09 $48.86 $58.64 $8,469 $101,629 Exempt
117 Senior Accountant 555M $38.14 $47.67 $57.21 $8,263 $99,154 Exempt
152 Senior Assistant City Attorney 105A $66.93 $83.66 $100.40 $14,501 $174,013 Exempt
2013 Senior Business Analyst - M 420M $44.74 $55.92 $67.11 $9,693 $116,314 Exempt
11 Senior Deputy City Attorney 375M $47.63 $59.53 $71.44 $10,319 $123,822 Exempt
187 Senior Engineer 300M $51.29 $64.11 $76.94 $11,112 $133,349 Exempt
106 Senior Executive Assistant 450M $43.60 $54.49 $65.39 $9,445 $113,339 Exempt
157 Senior Human Resources Administrator 545M $38.00 $47.50 $57.00 $8,233 $98,800 Exempt
14 Senior Management Analyst 465M $43.56 $54.44 $65.33 $9,436 $113,235 Exempt
130 Senior Performance Auditor 510M $41.07 $51.33 $61.60 $8,897 $106,766 Exempt
53 Senior Project Manager 300M $51.29 $64.11 $76.94 $11,112 $133,349 Exempt
33 Senior Technologist 420M $44.74 $55.92 $67.11 $9,693 $116,314 Exempt
155 Superintendent Animal Services 540M $39.09 $48.86 $58.64 $8,469 $101,629 Exempt
3/25/2015
ATTACHMENT B, EXHIBIT 1
Job Code Classifications
Grade
Codes
Min Hourly
Rate Mid Point Hourly Rate
Max Hourly
Rate
Approx Mid‐Point
Monthly Approx. Mid‐Point Annual Salary FLSA Status
83 Superintendent Community Services 480M $43.15 $53.93 $64.72 $9,348 $112,174 Exempt
161 Supervisor Facilities Management 600M $36.39 $45.48 $54.58 $7,883 $94,598 Exempt
113 Supervisor Inspection and Surveying 540M $39.09 $48.86 $58.64 $8,469 $101,629 Exempt
146 Supervisor Warehouse 660M $32.88 $41.10 $49.32 $7,124 $85,488 Exempt
181 Supervisor Water Quality Control Operations 525M $40.07 $50.08 $60.10 $8,681 $104,166 Exempt
184 Veterinarian 555M $38.14 $47.67 $57.21 $8,263 $99,154 Exempt
Confidential Classifications
Job Code Classifications
Grade
Codes
Min Hourly
Rate Mid Point Hourly Rate
Max Hourly
Rate
Approx Mid‐Point
Monthly Salary Approx. Mid‐Point Annual Salary FLSA Status
905 Human Resource Assistant - Confidential 830C $23.86 $29.82 $35.79 $5,169 $62,026 Non-Exempt
903 Legal Secretary-Confidential 820C $24.45 $30.56 $36.68 $5,297 $63,565 Non-Exempt
67 Secretary to City Attorney 800C $29.07 $36.33 $43.60 $6,297 $75,566 Exempt
1004 Senior Legal Secretary - Confidential 810C $27.00 $33.74 $40.49 $5,848 $70,179 Non-Exempt
3/25/2015
TO: Finance Committee
DATE: March 3, 2015
City of Palo Alto
MEMORANDUM
FINANCECOMMimE MEETING . ·2
3/3/2015
[X) Placed Before Meeting
[ ) Received at Meeting
Item #2
SUBJECT: .Additional one-time Funding Request for FY 2015 for the City Auditor's Office
On October 20, 2014, Council approved the Animal Services audit as part of the Office of the City
Auditor's annual work plan. Shortly after that, the City Manager requested that this audit be prioritized
because of the high level of interest In the future ofthe Palo Alto Animal Services. On December 2,
2014, the Finance Committee requested thatthe Au~itor's Office complete the audit by the end of April
to coi.ncide with the ~ity M~nager's return to co·mmittee after the City's engagement of stakehoiders.
and interest groups.
To support the timely completion of the audit/the Office of the City Auditor isn!questing a FY 2015 mid-
year budget adjustment to incr~ase 0.5 Performance Auditor position from 0.5 FTE to 1.0 FTE effective·
March 1, 2015 u~til June ~0, 2015. Additionally, th~ funding will provide flexibility in the amount of time
that the incumbent Performance Auditor can complet!l other pending work before the end of the fiscal
year.
Therefore, staff recommends an increase in the City Auditor's budget in the amount of $23,000 offset
with a reduction in the General Fund Budget Stabilization Reserve to fund the position increase.
DEPARTMENT HEAD:
HARRIET RICHARDSON
City Auditor
CITY MANAGER:
3/3/2015
Attachment C
City of Palo Alto (ID # 5544)
Finance Committee Staff Report
Report Type: Action Items Meeting Date: 3/3/2015
City of Palo Alto Page 1
Summary Title: Fiscal Year 2015 Midyear Budget Review and Budget
Amendment Ordinance
Title: Finance Committee Recommendation Regarding Adoption of a Budget
Amendment Ordinance Amending the Budget for Fiscal Year 2015 to Adjust
Budgeted Revenues and Expenditures in Accordance with the
Recommendations in the FY 2015 Midyear Budget Review Report
From: City Manager
Lead Department: Administrative Services
Recommendation
Staff recommends that the Finance Committee recommend to the City Council adoption of the
FY 2015 Midyear Budget Amendment Ordinance (BAO) (Attachment A) which includes:
1) Proposed midyear adjustments to the FY 2015 Budget for the General Fund, Enterprise
Funds, Special Revenue Funds, Internal Service Funds, and Capital Improvement Projects
Fund (Exhibit 1)
2) FY 2015 Midyear CIP Adjustments (Exhibit 2)
3) Amendments to the FY 2015 Table of Organization (Exhibit 3) to add 1.0 Chief Attorney
position
The following documents are attached as informational items; no action is required on these
items:
1) FY 2015 Midyear Financial Reports (Attachment B)
2) General Fund Capital Improvement Program Project Expenditures for FYs 2011-2015
(Attachment C)
3) FY 2015 Midyear Capital Improvement Program Projects Status Report (Attachment D)
4) Continuous Capital Projects Expenditures for FYs 2011-2015 (Attachment E)
5) Public Safety Overtime Analysis FY 2013 - FY 2015 (Attachment F)
Motions
Motion to recommend to the City Council to adopt the FY 2015 Midyear Budget Amendment
Ordinance (BAO) for the proposed midyear adjustments to the FY 2015 budget for the General
Fund, Capital Improvement Projects Fund, Enterprise Funds, Special Revenue Funds, Internal
Service Funds as identified in Attachment A and related exhibits.
Attachment D
City of Palo Alto Page 2
Executive Summary
Annually, in March, staff presents to the Finance Committee the status of revenues and
expenditures for major funds and Capital Improvement Program as of December 31 of the
current fiscal year. As part of that status report, staff also brings forward recommendations to
adjust the annual adopted budget. The attached documents summarize and outline changes to
the City’s FY 2015 adopted budget. Adjustments to the city’s budget may become necessary as
revenues and expenditures may vary from the original budget plan. These require
amendments to department budgets which the Finance Committee reviews and responds to
staff’s recommendation for approval. In this report, recommended budget adjustments are
related to new requests, reimbursements, grants, previous Council direction, the ongoing
drought, or technical clean-ups.
The FY 2015 Midyear Budget Summaries (Attachment A, Exhibit 1) provide a financial report of
the General Fund and Enterprise Funds as of December 31, 2014. This report compares FY 2015
actual expenditures with the FY 2015 Midyear Budget, including budget adjustment
recommendations contained in this report and carryover encumbrance balances. Since in some
funds, the carryover encumbrance balances are quite high in comparison to the original
budgeted amounts, the actual percent expended in comparison to the budget may well be
above 50 percent. Overall, with the adjustments recommended in this report, the General
Fund and all enterprise funds are on track to end the fiscal year within budgeted amounts.
Including recommendations contained in this report, the General Fund is projected to generate
a one-time budget surplus of $5.3 million and the Budget Stabilization Reserve is projected at
$38.0 million, or 22.1 percent of adopted expenditures. This level is $6.1 million above the
target level of 18.5 percent of total operating expenditures. As part of the development of the
FY 2016 Proposed Budget (late April/early May) as well as closing of the FY 2015 budget
(November/December), staff will bring forward recommendations for use of the FY 2015
projected budget surplus.
The FY 2015 Midyear Budget review report includes recommendations to adjust project
budgets for the City’s 2015 Capital Improvement Plan (CIP) for various funds. The majority
actions recommend closing out existing projects and transferring the remaining balances to the
appropriate fund. Additionally, additional funding is requested in order to start design work or
complete an existing project.
Background
This report summarizes proposed changes to the FY 2015 Adopted Budget and reports financial
activity through December 31, 2014. Where possible, budget change recommendations are
brought forward for City Council consideration as part of the approval of the FY 2015 Midyear
Budget Review report to consolidate requests and streamline the Budget Amendment
Ordinance process. This report is organized by fund with a primary focus on major changes in
the General Fund. Financial results and midyear changes for the Enterprise, Internal Service,
and Special Revenue Funds are also included in this report. Adjustments, as well as all fund
Attachment D
City of Palo Alto Page 3
summaries, are detailed in Attachment A and related exhibits and Attachment B. The Midyear
CIP Program Project Status report (Attachment D) provides the Finance Committee with
information on the status of the City’s CIP projects as of December 31, 2014.
Discussion
The following pages provide an overview of the FY 2015 Midyear fund status for the General
Fund and enterprise funds and recommended budget adjustments as they pertain to the City’s
FY 2015 Operating and Capital budget.
Operating Budget
Under this section of the report, citywide changes to the FY 2015 Adopted Operating Budget
are described for the General Fund, Enterprise Funds, Internal Service Funds, and two Special
Revenue Funds.
General Fund
After six months experience in the current fiscal year, the General Fund is expected to generate
a one-time budget surplus of approximately $5.3 million by the end of the fiscal year primarily
due to higher than expected revenue receipts for property tax, sales tax, and Transient
Occupancy Tax receipts offset with lower than expected receipts for Utility Users Tax and
Documentary Transfer Tax. As described in more detail below and detailed in Exhibit 2, staff
recommends various adjustments to the FY 2015 General Fund Budget related to new requests,
reimbursements, grants, previous Council direction, the ongoing drought, or technical clean-
ups.
General Fund Revenue
The chart below compares the FY 2015 Adopted Budget revenue estimates for all revenue
categories with the FY 2015 Midyear Budget Review projections. As depicted in the chart, the
majority of revenue categories are trending upwards offset by decreases in the Utility User Tax
and Documentary Transfer Tax receipts. A detailed discussion by revenue category follows.
Attachment D
City of Palo Alto Page 4
$0
$5
$10
$15
$20
$25
$30
$35
General Fund Revenues
FY 2015 Adopted Compared to FY 2015 Midyear Projected
Adopted Budget Midyear Budget
Major Tax Revenue Estimate Adjustments
Sales Tax
As shown in the graph above, the FY 2015 Adopted Sales Tax revenue estimate was
approximately $26.0 million. This report includes a recommendation to increase the Sales Tax
revenue estimate for FY 2015 by $3.3 million to $29.2 million. Of this growth, a one-time $1.7
million is attributable to a change in the accrual period to bring sales receipts accruals in line
with all other tax revenue accruals. Prior to FY 2015, except for Sales Tax, the accrual period for
all other major tax revenues was from July 1 to June 30. For Sales Tax, the accrual period was
from mid-May to mid-May the following calendar year. This accrual change results in a one-
time increase in sales receipts for FY 2015 to account for sales tax receipts from mid-May 2014
until June 30, 2015 – a 13 ½ month accrual period versus the standard 12 month accrual period.
Ongoing sales tax revenue is also showing continued positive growth. Restaurant and electronic
sales are trending higher and auto sales in key, older dealerships are rising.
Property Tax
The FY 2015 Property Tax receipt was estimated at $31.9 million. The midyear property tax
updated estimate is based on information received from quarterly meetings with the Santa
Clara County Assessor’s Office. The estimate includes appeals on record with the Assessor’s
Office, additions to the roll, and movements in assessed values. After analyzing property tax
receipts for the first six months of the fiscal year, staff recommends increasing the FY 2015
Property Tax revenues by $0.6 million to $32.6 million.
Attachment D
City of Palo Alto Page 5
Transient Occupancy Tax (TOT)
During the first six months of the fiscal year, TOT receipts are trending above budgeted levels.
In the first five months of FY 2015 average occupancy and daily room rates were 82 percent and
$228, respectively. While occupancy percentage has held steady, daily room rates has
increased 14.3 percent over the prior year. As part of this report, staff recommends increasing
TOT projections by $1.7 million from $14.2 million to $15.9 million. Of this increase, $1.3 million
is attributable to the voter approved TOT rate increase from 12 to 14 percent that took effect
on January 1, 2015 and $0.4 million is due to continued improvement in room rates. The City’s
newest hotels (Hilton Garden Inn and Homewood Suites by Hilton) are expected to open for
business on March 1st; the additional expected TOT revenue has been already included in FY
2015 revenue projections.
Documentary Transfer Tax
This economically sensitive revenue source has experienced ups and downs tied to the City’s
housing market as the mix of commercial and residential transactions can vary significantly
from year to year. Through December 2014, Documentary Transfer Tax receipts are running 44
percent below the prior year period. As a result, staff recommends a reduction in estimated
revenue of $1.0 million from the FY 2015 Adopted Budget amount.
Utility Users’ Tax (UUT)
The City’s utility tax revenue is based on a 5 percent tax on electric, water, gas and telephone
usage. Based on current receipt levels, staff recommends a slight decrease in the revenue
estimate by $0.4 million from $11.3 million to $10.9 million primarily due drought related water
and gas usage decreases. Gas usage has been lower than expected due to a warmer than
expected winter. Further, at the November 2014 general election, the voters approved a
reduction of the utility user tax for telephony services from 5 percent to 4.75 percent.
Other General Fund Revenues:
Charges for Services
The FY 2015 Adopted Budget revenue estimate for this revenue category is $24.1 million. This
report includes recommendations to increase the revenue estimate by $0.4 million due to the
year-end adjustment of the Stanford Fire Services revenue billing that captures the variance
between quarterly billing to the University and final, year-end FY 2014 Actuals.
From Other Agencies
The FY 2015 Adopted Budget revenue estimate projected $0.5 million in revenues from other
Agencies. A $0.2 million revenue increase is recommended in this category for the Fire
Department reimbursement from the State of California Office of Emergency Services for
emergency fire services provided on overtime as part of mutual aid for Strike Teams responding
to wildfires burning across the state during the Summer of 2014. This revenue increase is offset
by a corresponding increase to the Fire Department’s overtime expense appropriation as
discussed elsewhere in this report.
Attachment D
City of Palo Alto Page 6
Other Revenue
The FY 2015 Adopted Budget assumes $1.1 million in other revenue. This report recommends
increasing this amount by $0.03 million for grants and reimbursements including a donation of
$15,000 from the Pacific Library Partnership for the Maker + science summer program and a
$4,845 budget augmentation in California Library Services Act funds.
Operating Transfers In
The General Fund will receive reimbursements from the Information Technology Fund in the
amount of $0.09 million for closing out of Technology CIP TE-13002 Employee Self Service
Manager/Self Service Enhancements.
General Fund Expense
Attachment A, Exhibit2 identifies General Fund budget recommendations. These
recommendations can generally be grouped by new requests, reimbursements and grants,
previous Council direction, and technical adjustments.
New requests: This report recommends three new requests. As part of the City’s sustainability
effort, staff recommends funding the acquisition of a sustainability dashboard to streamline the
collection and analysis of sustainability data and make this data available for staff and the
public ($85,000 from various funds with $47,000 from the Technology Surcharge added to
Municipal Fees). In continuation of analyzing Fire response data, it is recommended to fund a
Fire Deployment Modeling and Predictive Analytic Software which will be used for dynamic
resource deployment modeling throughout the City and at Stanford University ($20,000). For
the Planning Department, staff recommends funding to integrate development impact fees into
Accela, the City's online permit processing and tracking system.
Reimbursements and Grants: As part of this report, staff recommends adjusting the Fire and
Police department budgets to reimburse the City for additional costs incurred for providing fire
and dispatch services to Stanford University in FY 2014 ($421,000); reimbursing the Fire
department for overtime cost incurred during the 2014 fire season from the State of California
($184,000); and recognizes revenue and expenses for two grants the Library department
received ($20,000).
Previous Council Direction: This report recommends a transfer of $932,124 from the Cubberley
Not-To-Develop Reserve to the newly established Cubberley Property Infrastructure Fund in
accordance with the new Cubberley lease agreement between the City and the Palo Alto
Unified School District. Further, it is recommended to transfer $28,000 from the Community
Services Department to the Library Department to hire a Teen Activity Specialist for the Library
to support the continuation of the MakeX program. Lastly, it is recommended to replenish the
City Manager's Office Contingency Account for funds temporarily reallocated to the
Administrative Services Department to pay Ada's Cafe $87,356 for construction delays at
Mitchell Park Library and Community Center (approved by the City Council on Dec. 15, 2014).
Attachment D
City of Palo Alto Page 7
Technical Clean-ups: The FY 2015 budget included $40,000 for grant writing services to assist
City departments in researching and submitting grant applications to fund or enhance City
services. This report recommends transferring $11,600 from the non-departmental budget to
the Community Services Department to support the submittal of the three grant applications.
As part of the FY 2015 budget, the Development Services department was fully established.
After adoption of the budget, staff identified that some contractual dollars ($123,000) and
Management and Professional development training funds ($5,000) were erroneously
budgeted in the Planning Department. Also, as part of the development of the FY 2015 budget,
staff did not include the sworn Police personnel retention/career incentive program in the
Police Department budget. Finally, it is recommended to replenish the City Manager's Office
Contingency Account for funds to pay for the Know Your Neighbor program as funds for this
program were inadvertently not included in the FY 2015 Adopted Budget. The contingency
account was used to fund the grants for the FY 2015 grant cycle. This report recommends
correcting these errors.
Chief Attorney position: This report recommends adding 1.0 Chief Attorney position to the
Table of Organization to facilitate the recruitment of this position in advance of the FY 2016
budget process. The funding for this position of approximately $330,000 will be included in the
FY 2016 Base Budget. The position will increase the ability of the City Attorney’s Office to
provide high-level legal services for strategic advice and transactional legal services on complex
projects, strategic oversight of the litigation portfolio, assistance with managing and
coordinating the Office’s workload, and communicating and reporting on the Office’s work to
City policymakers and the public. It is expected that a portion of the cost for this position will
be offset with a reduction of contractual services for outside counsel and/or the City Attorney's
contingency reserve.
Budget Stabilization Reserve
The General Fund began FY 2015, after the closing out of the FY 2014 budget, with a $33.1
million Budget Stabilization Reserve (BSR) balance which was 19.33 percent of the operating
budget expenditures. Subsequent to the FY 2015 budget adoption, Council has approved BAOs
totaling $0.4 million which reduced the BSR to $32.7 million by the end of December 31, 2014.
As a result of better than expected revenue income, midyear adjustments result in a $5.3
million supplement to the General Fund BSR. The midyear budget adjustments reflect a
projected $4.9 million increase in sources and a $0.4 million decrease in uses. These changes
result in a projected $38.0 million BSR balance, or 22.1 percent of adopted expenditures. This
level is $6.1 million above the target level of 18.5 percent of total operating expenditures. As
part of the development of the FY 2016 Proposed Budget (late April/early May) as well as
closing of the FY 2015 budget (November/December), staff will bring forward
recommendations for use of the FY 2015 projected budget surplus.
Overtime Analysis
The Public Safety Overtime Analysis Fiscal Year 2013 - Fiscal Year 2015 (Attachment F)
Attachment D
City of Palo Alto Page 8
compares the net overtime cost for the Fire and Police departments for Fiscal Years 2013, 2014
and the first six months of FY 2015. Net overtime cost represents the Public Safety
departments’ modified overtime budgets offset with revenue received to fund overtime along
with vacancy savings that are being covered by overtime expenditures. Overtime expenditures
for each department are discussed in further detail below.
Fire Department
As of December 31, 2014, the Fire Department expended $1.4 million or 95.6 percent of its FY
2015 Adopted overtime budget, which is slightly higher than the $1.3 million expended for the
same period in FY 2014. The increase is largely attributable to having more vacancies in FY
2015 (approximately 10 vacancies, nine sworn and one non-sworn management position)
compared to FY 2014 (approximately eight vacancies, five sworn, two non-sworn administrative
positions, and one non-sworn management position). Also, during the first half of Fiscal Year
2015 the Fire Department had nine personnel on workers’ compensation paid leave which is
half the number of positions on workers’ compensation paid leave in for the entire Fiscal Year
2014. After adjusting for reimbursement for overtime from Stanford University and vacancies
being backfilled with overtime, the net overtime cost is approximately $346,000.
Staff vacancies and workers' compensation disabilities are the major reasons for the high level
of overtime spending. The remaining use of overtime is related to succession planning, sick
leave, vacation, other leaves (military, bereavement, jury duty), special events (Stanford
Football, Senior Games and Earthquake’s Soccer), seasonal fire station coverage and multiple
mutual aid responses (Strike Teams) to wild land fires and fire station cover assignments
throughout the State during the summer of 2014. To reimburse the City for its participation in
these Strike Teams, the California Office of Emergency Services has approved a reimbursement
to the City for these mutual aid services, in the amount of approximately $185,000 in revenue
from other agencies and a corresponding increase to the Fire Department’s overtime
appropriation are recommended elsewhere in this report. Overall, the Department is tracking
to remain under budget in salary and benefits expenditures, despite the above average
overtime expenses. Staff will continue to monitor overtime expenditures to ensure the
Department will remain within budget by the end of FY 2015.
Police Department
As of December 31, 2014, the Police Department expended $1.0 million or 66.7 percent of its
annual overtime budget, which is similar to the $964,000 expended during the same period in
FY 2014. The similar level of overtime expenditures is attributable to having the same number
of vacancies in FY 2015 (approximately nine vacancies, two sworn, one community service
officer, three dispatchers, two non-sworn administrative positions, and one non-sworn
management position) compared to FY 2014 (approximately nine vacancies, one sworn, two
community service officers, one dispatcher, four non-sworn administrative positions, and one
non-sworn management position). Also, during the first half of Fiscal Year 2015 the Police
Department had 11 personnel on workers’ compensation paid leave which is only three fewer
Attachment D
City of Palo Alto Page 9
than the number of positions on workers’ compensation paid leave in for the entire Fiscal Year
2014, 14.
After adjusting for overtime reimbursements from Stanford and the Utilities Department for
dispatch services, and from neighboring cities for animal control and care services and
vacancies backfilled with overtime, the net overtime cost is approximately $463,000. Traffic
control services at Stanford football games and other events are partially offset by
reimbursements from the University and other organizations. Although, these reimbursements
bring down the net overtime costs for the Department; overall the Department is tracking to
exceed its budget for salary and benefits expenditures. An action is recommended elsewhere
in this report to correct the Department’s budget for Retention/Career Incentive Program
funding that was inadvertently left out of the FY 2015 budget. This funding will only partially
correct the Department’s salary and benefits expenditures. Staff will continue to monitor
overtime expenditures to ensure the Department will come within budget by the end of FY
2015.
Enterprise Funds
The FY 2015 Midyear Budget Summaries (Attachment A, Exhibit 1) provide a financial report of
the Enterprise Funds as of December 31, 2014. This report compares FY 2015 actual
expenditures with FY 2015 Adopted Budget levels including carryover encumbrance balances.
Since in some funds, the carryover encumbrance balances are quite high in comparison to the
budgeted amounts, the actual percent expended in comparison to the budget may well be
above 50 percent. Overall, with the adjustments recommended in this report all enterprise
funds are on track to end the fiscal year within budgeted amounts.
While most of the Enterprise Fund midyear adjustments actions are net zero changes, revenue
and expenditures offsets, and budgetary cleanup items. Notable midyear adjustments to the
City’s Electric, Gas, Water and Airport Enterprise Funds operating budgets are discussed below.
The midyear transactions for the other Enterprise Funds: Fiber Optics, Refuse, Storm Drainage,
Utilities Administration, Wastewater Collection, and Wastewater Treatment reflect small
allocated expenses for the Sustainability Dashboard software and the return of closed out CIP
funding. Detail on those funds and all of the Enterprise Fund midyear adjustments are
presented in greater detail in Exhibit 1. Staff recommendations related to the Enterprise Fund
Capital Improvement Program are discussed later in this report.
Electric Fund
Net reserve reduction of $15,094,756 is recommended primarily due to the drought and
updated revenue projections as summarized below:
Electric commodity purchases are recommended to be increased by $11.3M to reflect
the most current forecasted electric commodity costs. The primary driver of the
commodity increase is low hydroelectric power as a result of the drought conditions.
Hydroelectric power represents approximately 50% of the total electric supply and is
Attachment D
City of Palo Alto Page 10
expected to be 25% lower than budgeted. The low hydroelectric output has resulted in
the need to purchase additional power in the market. Electric market purchases will be
increased by $7.5M to meet customer load. In addition, Western Area Power
Administration has increased the City’s shared cost of the Central Valley Project
Improvement Act (CVPIA) Restoration Fund obligations by $2.8M to offset lower
revenues from CVP water customers. There is also a one-time startup charge of $0.8M
for a new 4.3 megawatt landfill gas-to-energy project in San Joaquin County.
Electric customer sales revenue is recommended to be decreased by $7.1M to reflect
the latest revenue projection. Customer sales revenue in the adopted FY 2015 budget
was inadvertently overstated by $5.3M. Revenue was forecasted lower because
commercial load is growing less than anticipated due to delays in several large
construction projects. In addition, there is continued lower usage and a shift in
commercial consumption patterns. Based on the most recent projections, revenue is
expected to decrease by another $1.8M by the end of FY 2015 including $1.0M
reduction in surplus energy. There are lower sales of surplus electric energy in the
market due to lower hydroelectric power generation.
Transmission costs will be decreased by $2.4M based on the latest forecast by the
California Independent System Operator. Transmission charges are projected lower due
to delays in constructing new transmission lines throughout California to accommodate
new renewable projects.
Gas Fund
Net reserve use in the amount of $3.4 million is recommended primarily due to lower than
expected gas commodity purchase costs and a warmer than expected winter as detailed below:
Gas commodity purchases is recommended to be decreased by $2.1M due to declining
market prices. Driven by ample gas in storage, high production rates, and a lack of cold
winter weather, natural gas prices have declined significantly over the first half of FY
2015. Gas commodity purchases are 10% lower than budgeted.
Gas customer sales is recommended to be decreased by $4.7M to reflect the latest
revenue projection. Customer sales revenue in the adopted FY 2015 budget was
inadvertently overstated by $2.6M. Gas consumption has been trending downward in
the past five years as a result of continued investments in energy efficiency programs.
Due to warmer than average weather, customer consumption is 13% lower than
expected in the financial plan for the first half of FY 2015. As a result of declining
market prices and usage, revenue is expected to decrease by another $2.1M by the end
of FY 2015.
Gas transportation cost will be increased by $0.8M due to rising infrastructure expenses
passed through by PG&E. Palo Alto receives gas at four receiving stations where CPAU’s
distribution system connects with PG&E’s system. PG&E provides only local
transportation service (transportation from the PG&E City Gate gas delivery hub across
PG&E’s distribution system to Palo Alto).
Attachment D
City of Palo Alto Page 11
Water Fund
Net reserve increase in the amount of $43,000 is recommended primarily due to the drought as
detailed below:
A decrease of $1,676,000 in projected revenue due to drought effects as water use has
declined across the board from residential, commercial, industrial and internal (City)
customers.
A corresponding decrease of $1,395,000 in water commodity expenditures as the water
rate from the San Francisco Public Utilities Commission (SFPUC), the City's water
supplier, was substantially lower than projected.
Airport Fund
For the Airport Fund staff recommends a budget augmentation in the amount of $100,000 to
provide for Liability Funding at the Palo Alto Airport as well as a net revenue increase of
$15,000 primarily due to renting space to a local auto dealership partially offset due to lower
than expected revenues from a cell phone tower.
Internal Service Funds
Information Technology
Net reserve reduction in the amount of $143,210 due to the following budget adjustment
recommendations:
$85,000 increase in computer software funding to purchase a Sustainability Dashboard
Application to streamline the collection and analysis of sustainability data and make this
data available for staff to use to in making decisions related to sustainability. 55% of
funding is from the technology surcharge assessed on Municipal Fees, with the
remaining 45% funded by transfers from Enterprise Funds.
$53,540 revenue increase to reflect Stanford's portion of the Radio Infrastructure
Replacement and Computer Aided Dispatch Replacement, based on the Fire Safety
Services contract with Stanford University.
Vehicle Replacement Fund
Net reserve gain in the amount of $409,442 due to Stanford's portion of the Fire Department
Vehicle Replacement CIP for VR-13000 ($105,057) and VR-14000 ($304,385).
Special Revenue Funds
Gas Tax Fund
A technical correction to eliminate the budgeted transfer to the Stanford Research Park Fund is
recommended. In FY 2009, the City transferred $994,217 from the Gas Tax Fund to the Stanford
Research Park Fund for various street-related costs. However, it was determined that the
transfers were not used, and therefore the $994,217 originally transferred needs to be
returned to the Gas Tax Fund.
Attachment D
City of Palo Alto Page 12
Stanford Research Park Fund
A technical correction to eliminate the budgeted transfer from the Gas Tax Fund is
recommended. In FY 2009, the City transferred $994,217 from the Gas Tax Fund to the Stanford
Research Park Fund for various street-related costs. However, it was determined that the
transfers were not used, and therefore the $994,217 originally transferred needs to be
returned to the Gas Tax Fund.
Capital Improvement Program Budget
Adjustments to the City’s 2015 Capital Improvement Plan for various projects are noted in
Attachment A, Exhibit 2, with specific project adjustments described in Exhibit 3. CIP changes
fall into three basic categories: 1) projects requiring additional appropriations; 2) projects
having reductions in appropriations; and 3) projects with other adjustments such as transfer of
funding between projects, closing completed projects or creating new projects. For General
Fund Capital Projects, different categories have been created, as described below. Highlights of
CIP changes by fund are as follows:
General Fund
The Infrastructure Reserve (IR) serves as the ending fund balance of the Capital Improvement
Fund and is required primarily for cash flow purposes, unforeseen urgent projects, and funding
for future projects not yet budgeted in the Capital Improvement Program. The actions
recommended as part of this report will result in $3.3 million being restored to the IR. This
increase in the IR will be considered in the development of the 2016-2020 Proposed Capital
Improvement Program.
In FY 2015, a significant change to the Municipal Code was approved by the City Council which
will impact the Infrastructure Reserve. Previously, unexpended funds carried over from one
year to the next automatically, as long as the project had expenditures in the previous two
years. As a result of the Municipal Code change that was approved, the City Council will need
to approve the reappropriation of funds annually and funds will no longer automatically carry
forward from one year to the next. Because funds will be reappropriated through the annual
budget document, staff will need to estimate current year expenditures and estimate how
much can be carried forward into the subsequent budget year. It is intended that this change
will give better insight to staff regarding the funding needed for all active projects. This change
in methodology will result in a higher starting IR balance when the IR is presented in the
Proposed Capital Budget.
The table on the following page, as well as the subsequent analysis, summarizes the various
reduction recommendations by category. Additionally, staff is currently reviewing the funding
strategies for future years, and will incorporate adjustments into the FY 2016 capital budget
process with the intention of further increasing the IR to align funding with the assumptions of
the Council approved Infrastructure Plan.
Attachment D
City of Palo Alto Page 13
Mid-Year Increases to the Infrastructure Reserve by
Category
Impact
Project Completions $104,871
Revenue and Alternative Funding Sources $55,376
Strategic Adjustments $3,185,644
Total Mid-Year Increase to IR $3,345,891
Project completions: $104,871 will be realized by closing twelve completed projects.
Revenues and alternative funding sources: $55,126 will be realized through a transfer from
the Cubberley Property Infrastructure Fund to reimburse the Capital Improvement Fund for
projected expenses incurred after January 1, 2015 for the Cubberley Roof Replacement Project
(PF-14000). Additionally, a minor increase in revenue for Charges for Service to recognize
reimbursement from Stanford for its portion (25%) of the Fire Station 1 Improvements CIP
based on the Fire Safety Services contract between Stanford and Palo Alto.
Strategic adjustments: A net contribution to the IR balance in the amount of $3,185,644 is
recommended by reducing funding for the four projects discussed below:
LATP Site Development ($1,486,705 reduction): The LATP Site Development Project is
recommended to be closed as the proposed site development work will not be
permitted by regulatory agencies until there is a proposed use for the site. Once an
intended use for the site is determined, staff will work with regulatory agencies to
approve the new use and return to Council with a related funding request.
Parking and Transportation Improvements ($1,653,367 reduction): As part of the FY
2015 budget process, $2.0 million was allocated for the purchase of Parking Guidance
System, Access Control, and Revenue Collection equipment for the downtown parking
garages. Staff is in the process of awarding a contract for the design of this equipment.
Funding associated with the construction of this equipment is recommended to be
removed until the costs are better defined, however funding is being retained in the
project for the necessary design work ($100,000).
Parking Guidance System, Access Controls & Revenue Collection Equipment ($20,000
addition): Allocates funds for the design of parking guidance systems, access controls,
and revenue collection equipment. Funds were previously allocated in the Parking and
Transportation Improvements Project, as described above, however are being
eliminated from that project until the costs are better defined, and are recommended
to be accounted for in a separate project.
Park Restroom Installation ($65,572 reduction): Funding is recommended to be reduced
from this project until the completion of the Parks Master Plan, which will identify the
ideal location of additional park restrooms.
Enterprise Funds
Consistent with the recommendations of the City Auditor’s Utilities Reserves Audit, the Utilities
Attachment D
City of Palo Alto Page 14
Department is disencumbering funds for several projects as part of an ongoing effort to
improve CIP project management and budgeting for projects. This year, one project has a
revised engineering estimate and needs additional funding to be completed. Projects
requesting additional funding are listed here. All capital project funding adjustments, including
disencumbering and close-outs are shown in Attachment B, Exhibit 2. The net result of midyear
capital adjustments to the Enterprise Funds are shown in the table below.
Gas Fund
WBS GS-10000 - Gas Station 3 Rebuild
Increase funding by $21,640 to complete the project. The remaining balance of $30,125 in the
related contract was accidentally disencumbered, thus omitted in the annual re-appropriation
process; there was also a lengthy delay in the procurement of a specialized part for the rebuild.
Fund # of Projects Total Increase
Total Reduction/Closing
of Projects Net
Electric 14 $0 ($1,796,795) ($1,796,795)
Gas 7 $21,640 ($44,904) ($23,264)
Water 2 $0 ($209,305) ($209,305)
Total Enterprise Funds 21 $21,640 ($2,051,004) ($2,029,364)
Internal Service Funds
The Internal Service Departments have several projects disencumbering funds for several
projects as part of an ongoing effort to improve CIP project management and budgeting for
projects. The complete list of Internal Service Fund capital funding adjustments is shown in
Attachment B, Exhibit 2. The net result of midyear capital adjustments to the Internal Service
Funds are shown in the table below.
Fund # of Projects Total Increase
Total Reduction/Closing
of Projects Net
Vehicle Replacement 3 $0 ($419,681) ($419,681)
Technology 1 $0 ($150,000) ($150,000)
Total Internal Service Funds 4 $0 ($569,681) ($569,681)
Fiscal Year 2015 Midyear Capital Improvement Program Projects Status Report
This report provides the Finance Committee with information on the status of the City’s Capital
Improvement Program (CIP) projects as of December 31, 2014. The following graph summarizes
all General Fund projects by project category and provides five years of actual expenditures.
Information about individual projects within each project category is provided in Attachment C.
Attachment D
City of Palo Alto Page 15
Buildings &
Facilities
Streets &
Sidewalks
Parks &
Open Space
Land &
Land
Improveme
nts
Other
FY 2011 20,250 7,422 1,731 98 1,100
FY 2012 23,868 6,977 1,113 17 259
FY 2013 14,040 12,748 1,480 460 1,340
FY 2014 17,935 10,546 2,898 80 642
FY 2015 YTD 11,607 7,888 2,663 40 400
0
5,000
10,000
15,000
20,000
25,000 General Fund Capital Improvement Program Expenditures Summarized by
Project Category for Five Years: Fiscal Years 2011-2015
($ in thousands)
In the attached matrix (Attachment C), City departments have submitted information on
current projects and commented on any issues that might cause a change in the scope or timing
of the projects. The report is intended to update Council on the progress of all CIP projects
opened at the beginning of FY 2014, and on those that were added or completed during the
fiscal year. The matrix categorizes CIP projects into minor projects (projects that can be
completed within a one-year period) and multi-year projects (projects that have multi-year
budgets and/or complex implementation schedules with identifiable phases). The project
status portion of the matrix identifies the phase of the project as of December 31, 2014 and
illustrates how much progress was made. The table on the following page provides a
description of activities for each phase.
Attachment D
City of Palo Alto Page 16
Phase Activities
Pre-Design Preparation of a feasibility study
Development of a master plan
Definition of a project scope
Preparation of an Environmental Impact Report
Design Hiring a design consultant
Completion of project design
Soliciting bids or proposals
Construction Acquisition of major equipment
Installation
Implementation of a project
In the attached matrix (Attachment C), projects are listed by department for the General Fund
and by fund for the Enterprise and Internal Service Funds. The matrix also includes information
on the total budget of the project from inception; available budget as of the beginning of the
fiscal year; fiscal year expenditures, contingencies, and encumbrances through December 31st;
remaining balance in the project budget as of midyear; and the percentage of completion for
the project.
The matrix does not include “continuous” projects. These projects, such as water meter
replacement, have no definitive beginning or end dates and receive ongoing funding to reflect
continuing replacement cycles or commitments. Continuous projects are listed by responsible
department and fund and include five years of actual expenditures including the current fiscal
year through December 31, 2014 (Attachment D).
Table of Organization Changes
The proposed Full Time Equivalent (FTE) adjustments to the Table of Organization (Attachment
A, Exhibit 3) include the request to add 1.0 Chief Attorney position. Funding for this position
will be added as part of the FY 2016 budget. As an update to the total FTE count for the City,
the table below shows the reduction in FTEs as approved by the Council on Sept. 22, 2014 as
part of outsourcing street sweeping services.
FY 2015
Adopted
FY 2015
Midyear
Change
FY 2015
Adjusted
General Fund 588.58 1.00 589.58
Enterprise Funds 358.34 (7.00) 351.34
Other Funds 86.88 0.00 86.88
Total 1033.80 (6.00) 1027.80
FY 2015 Midyear Position Change Summary
* Approved at September 22, 2015 City Council Meeting
*
Attachment D
City of Palo Alto Page 17
Resource Impact
Adoption of the attached ordinance will allow for adjustments to the FY 2015 budget, along
with amendments to the Table of Organization, and General Fund CIP projects. With the
approval of this ordinance, the projected ending balance of the General Fund Budget
Stabilization Reserve is $38.0 million.
The projected ending Rate Stabilization Reserve total for all Enterprise funds increases by $18.4
million
Policy Implications
These recommendations are consistent with existing City policies.
Environmental Assessment
This is not a project under Section 21065 for purposes of the California Environmental Quality
Act (CEQA).
Attachments:
Attachment A - FY 2015 Midyear Budget Amendment Ordinance (PDF)
Attachment A, Exhibit 1 - Proposed Fiscal Year 2015 Midyear Adjustments (PDF)
Attachment A, Exhibit 2 - Midyear CIP Adjustments (PDF)
Attachment A, Exhibit 3 - Table of Organization (PDF)
Attachment B - FY 2015 Midyear Financial Report (PDF)
Attachment C - GF CIP Project Expenditures For FYs 2011-2015 (PDF)
Attachment D - FY 2015 Midyear Capital Improvement Program Status Report (PDF)
Attachment E - Continuous Capital Projects Expenditures for Fiscal Years 2011-2015
(PDF)
Attachment F - Public Safety Overtime Analysis FY 2013 - FY 2015 (PDF)
Attachment D
ATTACHMENT B
FISCAL YEAR 2015 MIDYEAR FINANCIAL REPORT
GENERAL FUND
(in thousands)
BUDGET ACTUALS (as of 12/31/14)
Adopted Adjusted Midyear Midyear Pre % of Midyr % Midyr
Categories Budget Budget Budget Changes Encumbr Encumbr Actual Budget*
Revenues & Other Sources
Sales Tax 25,957 25,957 29,238 3,281 4,251 ‐ 8,634 44%
Property Tax 31,927 31,927 32,556 629 ‐ ‐ 11,716 36%
Transient Occupancy Tax 14,156 14,156 15,901 1,745 ‐ ‐ 5,983 38%
Documentary Transfer Tax 7,514 7,514 6,500 (1,014) ‐ ‐ 2,458 38%
Utility Users Tax 11,285 11,285 10,895 (390) ‐ ‐ 5,250 48%
Motor Vehicle Tax, Penalties & Fines 2,164 2,164 2,164 ‐ ‐ ‐ 925 43%
Charges for Services 23,013 24,130 24,510 380 ‐ ‐ 9,182 37%
Permits & Licenses 7,804 7,738 7,738 ‐ ‐ ‐ 3,392 44%
Return on Investment 685 685 685 ‐ ‐ ‐ 289 42%
Rental Income 14,254 14,206 14,206 ‐ ‐ ‐ 7,397 52%
From Other Agencies 453 453 637 184 ‐ ‐ 408 64%
Charges To Other Funds 10,647 10,647 10,647 ‐ ‐ ‐ 5,310 50%
Other Revenues 1,060 1,289 1,309 20 ‐ ‐ 663 51%
Total Revenues 150,919 152,151 156,986 4,835 4,251 ‐ 61,607 42%
Operating Transfers‐In 18,433 18,528 18,620 92 ‐ ‐ 8,804 47%
Encumbrances and Reappropriation 6,386 6,386 ‐ ‐ ‐
From Infrastructure Reserve ‐ ‐ ‐
Contribution from Budget Stabilization Reserve ‐ ‐ ‐
As Assumed in the Adopted Budget 1,732 1,732 1,732 ‐
Total Sources of Funds 171,084 178,797 183,724 4,927 4,251 ‐ 70,411 ‐ 42%
Expenditures & Other Uses
City Attorney 2,578 3,129 3,129 ‐ 10 450 1,303 56%
City Auditor 1,065 1,075 1,075 ‐ 10 39 549 56%
City Clerk 1,276 1,286 1,286 ‐ 10 72 576 51%
City Council 432 517 517 ‐ ‐ 61 173 45%
City Manager 2,728 2,485 2,485 98 227 1,063 56%
Administrative Services 7,175 7,413 7,476 ‐ 21 136 3,453 48%
Community Services 22,764 24,115 24,056 (59) 53 2,729 11,291 59%
Development Services 10,535 10,772 10,900 128 28 385 4,453 45%
Library 7,521 8,253 8,301 48 14 619 3,833 54%
Office of Sustainability 272 575 575 ‐ ‐ 131 244 65%
Public Safety 62,054 62,996 63,460 464 123 1,069 30,175 49%
People Strategy and Operations 3,264 3,757 3,757 ‐ 315 140 1,573 54%
Planning and Community Environment 7,015 8,839 8,741 (98) 100 1,110 3,450 53%
Public Works 13,397 14,315 14,315 311 600 6,492 52%
Non‐Departmental 13,272 12,945 13,036 91 4,251 33%
Total Expenditures 155,348 162,472 163,046 574 1,093 7,768 72,879 50%
Operating Transfers‐Out 2,077 2,276 1,344 (932) ‐ ‐ 1,138 85%
Transfer to Infrastructure 13,659 13,659 13,659 ‐ ‐ 6,830 50%
Total Uses of Funds 171,084 178,407 178,049 (358) 1,093 7,768 80,847 50%
Net Surplus/(Deficit)‐ 390 5,675 5,285
Budget Amendments Authorized by Council thru 12/31/14:* Including reappropriations and prior year encumbrances
Shuttle Contract, EPA Contribution (6/23/14)‐ ‐
Golf Course Operating Budget (6/23/14)‐ ‐
Transportation Management Authority (8/4/14)(30) (30)
Sustainability and Climate Action Plan (8/18/14)(137) (137)
Increase Airport Fund loan for legal counsel (9/22/14)(200) (200)
Golf Course Operating Loss Reserve (9/22/14)‐ ‐
Golf Restaurant Lease Revenue (10/6/14)(23) (23)
Total Augmentations Authorized by Council ‐ (390) (390) ‐
Net Surplus/(Deficit) Without BAOs ‐ 0 5,285 5,285
Net Surplus/(Deficit) After BSR Drawdown ‐ 0 5,285 5,285
BSR Balance as of 12/31/14 33,066 32,676 37,961
BSR % of Total Use of Funds 19.33% 19.00% 22.11%
2/18/2015
Attachment D
ATTACHMENT B
ACTUALS
Adopted Adjusted Midyear Midyear Pre-% of
Budget Budget Budget Changes Encumbr Encumbr Actual Midyear Budget
Sources of Funds
Net Sales 122,484 122,516 114,483 (8,033) 59,485 52%
Interest Income 2,698 2,698 2,698 1,328 49%
Other Income 9,247 9,247 10,169 922 5,884 58%
Reapprop/Encumbrances 14,452 14,473 21 -
Total Sources 134,429 148,913 141,823 (7,090) - - 66,697 52%**
Uses of Funds
Utility Purchases 71,967 71,979 81,781 9,802 13 42,448 52%
Salaries & Benefits 12,803 12,804 12,804 5,942 46%
Contract Services 4,538 6,744 6,744 166 2,655 537 50%
Supplies and Materials 886 912 912 12 43 238 32%
Facilities and Equipment 48 48 48 0%
General Expenses 4,953 5,739 5,739 781 897 29%
Rent and Leases 4,226 4,226 4,226 1,086 26%
Allocated Charges 8,349 8,349 8,349 1,404 17%
Debt Service 9,131 9,131 9,131 4,514 49%
Subtotal 116,901 119,932 129,734 9,802 178 3,492 57,066 47%
Equity Transfer 11,412 11,412 11,412 2,853 25%
Operating Transfers Out 123 123 123 31 25%
Capital Improvement Program 9,740 24,359 22,562 (1,797) 3,246 1,843 5,796 48%
Total Uses 138,176 155,826 163,831 8,005 3,424 5,335 65,746 45%
Net To (From) Reserves (3,747) (6,913) (22,008) (15,095)
Beginning Reserves 133,046 126,013 126,013 -
Projected Ending Reserves 129,299 119,100 104,005 (15,095)
** Excludes encumbrances and reappropriation
BUDGET (as of 12-31-14)
CITY OF PALO ALTO
FISCAL YEAR 2015 MIDYEAR BUDGET SUMMARY
ELECTRIC FUND
(in thousands of dollars)
2/18/2015
Attachment D
ATTACHMENT B
ACTUALS
Adopted Adjusted Midyear Midyear Pre-% of
Budget Budget Budget Changes Encumbr Encumbr Actual Midyear Budget
Sources of Funds
Net Sales 4,025 4,025 4,025 - 1,901 47%
Interest Income 341 341 341 - 198 58%
Other Income - - - - 0%
Reapprop/Encumbrances 518 518 - -
Total Sources 4,366 4,884 4,884 - - - 2,099 48%**
Uses of Funds
Salaries & Benefits 1,080 1,080 1,080 399 37%
Contract Services 168 467 467 26 97 26%
Supplies and Materials 10 10 10 0%
General Expenses 22 22 22 1 5%
Rent and Leases 55 55 55 13 24%
Allocated Charges 645 645 654 9 93 14%
Subtotal 1,980 2,279 2,288 9 - 26 603 27%
Operating Transfers Out 1 1 1 - 0%
Capital Improvement Program 400 1,200 1,200 - 93 146 20%
Total Uses 2,381 3,480 3,489 9 - 119 749 25%
Net To (From) Reserves 1,985 1,404 1,395 (9)
Beginning Reserves 15,557 19,415 19,415
Projected Ending Reserves 17,542 20,819 20,810 (9)
** Excludes encumbrances and reappropriation
BUDGET (as of 12-31-14)
CITY OF PALO ALTO
FISCAL YEAR 2015 MIDYEAR BUDGET SUMMARY
FIBER OPTICS FUND
(in thousands of dollars)
2/18/2015
Attachment D
ATTACHMENT B
ACTUALS
Adopted Adjusted Midyear Midyear Pre-% of
Budget Budget Budget Changes Encumbr Encumbr Actual Midyear Budget
Sources of Funds
Net Sales 37,583 37,583 32,840 (4,743) 13,181 40%
Interest Income 715 715 715 278 39%
Other Income 709 709 717 8 413 58%
Reapprop/Encumbrances 11,305 11,305 -
Total Sources 39,007 50,312 45,577 (4,735) - - 13,872 40%**
Uses of Funds
Utility Purchases 14,114 14,114 12,015 (2,099) 3,361 3,931 61%
Salaries & Benefits 5,107 5,121 5,121 2,461 48%
Contract Services 1,400 3,087 3,087 114 1,752 278 69%
Supplies and Materials 478 576 576 154 220 65%
Facilities and Equipment 22 22 22 0%
General Expenses 752 765 1,570 805 59 336 25%
Rent and Leases 529 529 529 149 28%
Allocated Charges 3,923 3,923 3,928 5 716 18%
Debt Service 802 802 802 111 14%
Subtotal 27,127 28,939 27,650 (1,289) 114 5,326 8,202 49%
Equity Transfer 5,730 5,730 5,730 1,433 25%
Operating Transfers Out 472 472 472 437 93%
Capital Improvement Program 2,075 20,677 20,654 (23) 58 6,600 3,516 49%
Total Uses 35,404 55,818 54,506 (1,312) 172 11,926 13,588 47%
Net To (From) Reserves 3,603 (5,506) (8,929) (3,423)
Beginning Reserves 14,326 16,981 16,981 -
Projected Ending Reserves 17,929 11,475 8,052 (3,423)
CITY OF PALO ALTO
FISCAL YEAR 2015 MIDYEAR BUDGET SUMMARY
GAS FUND
(in thousands of dollars)
BUDGET (as of 12-31-14)
** Excludes encumbrances and reappropriation
2/18/2015
Attachment D
ATTACHMENT B
ACTUALS
Adopted Adjusted Midyear Midyear Pre-% of
Budget Budget Budget Changes Encumbr Encumbr Actual Midyear Budget
Sources of Funds
Net Sales 15,270 15,270 15,270 7,400 48%
Interest Income 309 309 309 - 160 52%
Other Income 996 996 1,000 4 674 67%
Reapprop/Encumbrances 8,312 8,312 - -
Total Sources 16,575 24,887 24,891 4 - - 8,234 50%**
Uses of Funds
Utility Purchases 8,589 8,589 8,589 4,295 50%
Salaries & Benefits 2,241 2,242 2,242 1,070 48%
Contract Services 319 370 370 25 45 27 26%
Supplies and Materials 325 389 389 138 121 67%
Facilities and Equipment 3 3 3 0%
General Expenses 102 102 102 1 41 41%
Rent and Leases 283 283 283 85 30%
Allocated Charges 2,246 2,246 2,249 3 329 15%
Debt Service 128 128 128 21 16%
Subtotal 14,236 14,352 14,355 3 26 183 5,989 43%
Operating Transfers Out 107 107 107 - 96 90%
Capital Improvement Program 4,067 13,895 13,690 (205) 7,664 2,033 1,461 82%
Total Uses 18,410 28,354 28,152 (202) 7,690 2,216 7,546 62%
Net To (From) Reserves (1,835) (3,467) (3,261) 206
Beginning Reserves 4,554 8,285 8,285 -
Projected Ending Reserves 2,719 4,818 5,024 206
CITY OF PALO ALTO
FISCAL YEAR 2015 MIDYEAR BUDGET SUMMARY
WASTEWATER COLLECTION FUND
(in thousands of dollars)
BUDGET (as of 12-31-14)
** Excludes encumbrances and reappropriation
2/18/2015
Attachment D
ATTACHMENT B
ACTUALS
Adopted Adjusted Midyear Midyear Pre-% of
Budget Budget Budget Changes Encumbr Encumbr Actual Midyear Budget
Sources of Funds
Net Sales 38,081 38,081 36,405 (1,676) 20,201 55%
Interest Income 752 752 752 416 55%
Other Income 1,632 1,707 1,715 8 1,592 93%
Reapprop/Encumbrances 15,995 15,995 -
Total Sources 40,465 56,535 54,867 (1,669) - - 22,209 57%**
Uses of Funds
Utility Purchases 18,430 18,430 17,035 (1,395) 9,554 7,413 100%
Salaries & Benefits 5,725 5,705 5,705 2,694 47%
Contract Services 723 1,193 1,193 17 609 192 69%
Supplies and Materials 533 648 648 204 176 59%
Facilities and Equipment 6 6 6 0%
General Expense 542 465 465 5 184 41%
Rents and Leases 3,333 3,333 3,333 606 18%
Allocated Charges 3,654 3,654 3,658 4 825 23%
Debt Service 3,219 3,219 3,219 777 24%
Subtotal 36,165 36,653 35,262 (1,391) 17 10,372 12,867 66%
Equity Transfer - - - -
Operating Transfers Out 362 362 362 340 94%
Capital Improvement Program 5,355 26,372 26,052 (320) 4,469 4,133 1,565 39%
Total Uses 41,882 63,387 61,676 (1,711) 4,486 14,505 14,772 55%
Net To (From) Reserves (1,417) (6,852) (6,810) 43
Beginning Reserves 11,865 21,132 21,132
Projected Ending Reserves 10,448 14,280 14,323 43
** Excludes encumbrances and reappropriation
CITY OF PALO ALTO
FISCAL YEAR 2015 MIDYEAR BUDGET SUMMARY
WATER FUND
(in thousands of dollars)
BUDGET (as of 12-31-14)
2/18/2015
Attachment D
ATTACHMENT B
ACTUALS
Adopted Adjusted Midyear Midyear Pre-% of
Budget Budget Budget Changes Encumbr Encumbr Actual Midyear Budget
Sources of Funds
Net Sales 26,761 26,761 26,761 13,789 52%
Interest Income 187 187 187 114 61%
Other Income 2,744 3,805 3,809 4 1,810 48%
Reapprop/Encumbrances 1,046 1,046 -
Total Sources 29,692 31,799 31,803 4 - - 15,713 51%**
Uses of Funds
GreenWaste Hauling Contract 14,131 14,131 14,131 10,146 5,515 111%
Salaries and Benefits 2,968 2,519 2,519 1,361 54%
Contract Services 5,896 7,246 7,246 228 1,075 2,485 52%
Supplies and Materials 154 157 157 18 64 52%
Facilities and Equipment 3 3 3 0%
General Expenses 87 87 87 2 28 34%
Rents and Leases 2,579 2,579 2,579 635 25%
Allocated Charges 2,088 1,730 1,734 4 725 42%
Debt Service 625 625 625 567 91%
Subtotal 28,531 29,077 29,081 4 228 11,241 11,380 79%
Operating Transfers Out 29 29 29 7 24%
Capital Improvement Program 187 5,327 5,327 14 1,020 1,657 51%
Total Uses 28,747 34,433 34,437 4 242 12,261 13,044 74%
Net (From) Landfill Closure Liab - -
Net To (From) Reserves 945 (2,634) (2,634) -
Beginning Reserves (1,857) (672) (672) -
Projected Ending Reserves (912) (3,306) (3,306) -
CITY OF PALO ALTO
FISCAL YEAR 2015 MIDYEAR BUDGET SUMMARY
REFUSE FUND
(in thousands of dollars)
BUDGET (as of 12-31-14)
** Excludes encumbrances and reappropriation
2/18/2015
Attachment D
ATTACHMENT B
ACTUALS
Adopted Adjusted Midyear Midyear Pre-% of
Budget Budget Budget Changes Encumbr Encumbr Actual Midyear Budget
Sources of Funds
Net Sales 5,954 5,954 5,954 3,112 52%
Interest Income 135 135 135 78 58%
Other Income 92 92 94 2 (3) -3%
Reapprop/Encumbrances 6,319 6,319 -
Total Sources 6,181 12,500 12,502 2 - - 3,187 52%**
Uses of Funds
Salaries and Benefits 1,192 1,192 1,192 595 50%
Contract Services 471 603 603 92 125 242 76%
Supplies and Materials 95 112 112 22 24 41%
Facilities and Equipment 8 9 9 0%
General Expenses 168 168 168 179 107%
Rents and Leases 40 40 40 0%
Allocated Charges 905 905 905 247 27%
Debt Service 947 947 947 0%
Subtotal 3,826 3,976 3,976 - 92 147 1,287 38%
Operating Transfers Out 6 6 6 2 33%
Capital Improvement Program 2,811 10,585 10,585 470 1,488 18%
Total Uses 6,643 14,567 14,567 - 92 617 2,777 24%
Net Surplus (Deficit)(462) (2,067) (2,065) 2
Beginning Reserves 2,007 1,601 1,601 -
Projected Ending Reserves 1,545 (466) (464) 2
CITY OF PALO ALTO
FISCAL YEAR 2015 MIDYEAR BUDGET SUMMARY
STORM DRAINAGE FUND
(in thousands of dollars)
BUDGET (as of 12-31-14)
** Excludes encumbrances and reappropriation
2/18/2015
Attachment D
ATTACHMENT B
ACTUALS
Adopted Adjusted Midyear Midyear Pre-% of
Budget Budget Budget Changes Encumbr Encumbr Actual Midyear Budget
Sources of Funds
Net Sales 22,286 22,286 22,286 - 11,075 50%
Interest Income 317 317 317 - 130 41%
Other Income 55 55 67 12 234 349%
Reapprop/Encumbrances 22,599 22,599 -
Total Sources 22,658 45,257 45,269 12 - - 11,439 50%**
Uses of Funds
Salaries and Benefits 10,318 10,318 10,318 5,035 49%
Contract Services 1,898 2,740 2,740 116 1,112 531 64%
Supplies and Materials 1,636 1,925 1,925 5 815 838 86%
Facilities and Equipment 7 7 7 0%
General Expenses 431 431 431 469 109%
Rents and Leases - - - 0%
Allocated Charges 4,982 4,982 4,986 4 2,024 41%
Debt Service 821 821 821 0%
Subtotal 20,093 21,224 21,228 4 121 1,927 8,897 52%
Operating Transfers Out - - - - 0%
Capital Improvement Program 3,478 13,205 13,205 - 778 2,638 1,026 34%
Total Uses 23,571 34,429 34,433 4 899 4,565 9,923 45%
Net To (From) Reserves (913) 10,828 10,836 8
Beginning Reserves 10,169 8,022 8,022 -
Projected Ending Reserves 9,256 18,850 18,858 8
** Excludes encumbrances and reappropriation
CITY OF PALO ALTO
FISCAL YEAR 2015 MIDYEAR BUDGET SUMMARY
WASTEWATER TREATMENT FUND
(in thousands of dollars)
BUDGET (as of 12-31-14)
2/18/2015
Attachment D
ATTACHMENT B
ACTUALS
Adopted Adjusted Midyear Midyear Pre-% of
Budget Budget Budget Changes Encumbr Encumbr Actual Midyear Budget
Sources of Funds
Net Sales - - - - - 0%
Interest Income 5 5 5 - 1 20%
Other Income 1,305 2,045 2,060 15 587 28%
Reapprop/Encumbrances 151 151 -
Total Sources 1,310 2,201 2,216 15 - - 588 28%**
Uses of Funds
Salaries and Benefits 363 363 363 - 248 68%
Contract Services 307 658 658 55 52 339 68%
Supplies and Materials 32 32 32 - 5 0%
Facilities and Equipment 15 15 15 - - 0%
General Expenses 5 5 5 - 2 0%
Rents and Leases 5 5 5 - 4 0%
Allocated Charges 57 57 157 100 19 12%
Debt Service - - - - - 0%
Subtotal 784 1,135 1,235 100 55 52 617 59%
Operating Transfers Out - - - - - 0%
Capital Improvement Program 180 540 540 - - 0%
Total Uses 964 1,675 1,775 100 55 52 617 41%
Net To (From) Reserves 346 526 441 (85)
Beginning Reserves (520) (1,039) (1,039) -
Projected Ending Reserves (174) (513) (598) (85)
** Excludes encumbrances and reappropriation
CITY OF PALO ALTO
FISCAL YEAR 2015 MIDYEAR BUDGET SUMMARY
AIRPORT FUND
(in thousands of dollars)
BUDGET (as of 12-31-14)
2/18/2015
Attachment D
FY 2011 FY 2012 FY 2013 FY 2014 FY 2015
Project Project Project Expenditures Expenditures Expenditures Expenditures Expenditures
Number Title Category YTD
AC-09001 Children's Theatre
Replacement and Expansion
Buildings
and
Facilities
5,019$ 4,581$ 64,235$
AC-09002 Community Theatre Sound
System Replacement
Buildings
and
Facilities
6,844 86,389 59,513
AC-14000 Art Center Auditorium
Audio, Visual, and
Furnishings
Buildings
and
Facilities
5,678
CC-09001 Dimmer Replacement and
Lighting System
Buildings
and
Facilities
7,611$ 4,609$ 11,266 149,191
CC-10000 Replacement of Cubberley
Gym B Bleachers
Buildings
and
Facilities
29,495
CC-11000 Cubberley Gym Activity
Room
Buildings
and
Facilities
58,041
FD-08001 Fire Station #6
Improvements
Buildings
and
Facilities
48,110 271
General Fund Capital Improvement Program Expenditures by Project Category for Fiscal Years 2011-2015
Attachment D
FY 2011 FY 2012 FY 2013 FY 2014 FY 2015
Project Project Project Expenditures Expenditures Expenditures Expenditures Expenditures
Number Title Category YTD
General Fund Capital Improvement Program Expenditures by Project Category for Fiscal Years 2011-2015
PE-05010 College Terrace Library
Improvements
Buildings
and
Facilities
846,020 7,344 4,600
PE-06001 San Antonio Bridge
Structural Repairs &
Maintenance
Buildings
and
Facilities
82,782
PE-09003 City Facility Parking Lot
Maintenance
Buildings
and
Facilities
51,098 30,634 12,446 3,030
PE-09005 Downtown Library
Improvements
Buildings
and
Facilities
3,133,576 714,043 31,093 580
PE-09006 Mitchell Park Library &
Community Center
(New Construction)
Buildings
and
Facilities
10,381,000 14,213,182 8,691,974 4,150,743 1,151,848
PE-09010 Library & Community
Center Temporary Facilities
Buildings
and
Facilities
110,020 2,205 412 4,540
PE-10002 Ventura Community Center
and Park
Buildings
and
Facilities
21,130 287,503 140,475
Attachment D
FY 2011 FY 2012 FY 2013 FY 2014 FY 2015
Project Project Project Expenditures Expenditures Expenditures Expenditures Expenditures
Number Title Category YTD
General Fund Capital Improvement Program Expenditures by Project Category for Fiscal Years 2011-2015
PE-11000 Main Library New
Construction and
Improvements
Buildings
and
Facilities
792,913 1,139,804 741,837 11,548,567 8,591,707
PE-11012 Temporary Main Library Buildings
and
Facilities
96,435 429,616 29,997
PE-12017 City Hall 1st Floor Buildings
and
Facilities
63,537 91,491 377,655 1,153,722
PE-14015 Lucie Stern
Mechanical/Elecrical
Upgrades
Buildings
and
Facilities
219,686 72,331
PE-14018 Baylands Interpretive Center
Improvements & Boardwalk
Repair
Buildings
and
Facilities
28,738 1,063
PE-98020 Public Safety Building Buildings
and
Facilities
30,910 14,943 7,252 17,143 3,604
PE-95030 Downtown Parking Structure Buildings
and
Facilities
469
Attachment D
FY 2011 FY 2012 FY 2013 FY 2014 FY 2015
Project Project Project Expenditures Expenditures Expenditures Expenditures Expenditures
Number Title Category YTD
General Fund Capital Improvement Program Expenditures by Project Category for Fiscal Years 2011-2015
PF-00006 Roofing Replacement Buildings
and
Facilities
104,617 319,495 246,068 119,682 3,559
PF-01002 Civic Center Infrastructure
Improvements
Buildings
and
Facilities
3,803,962 1,950,609 423,121 344,298 42,329
PF-01003 Building Systems
Improvements
Buildings
and
Facilities
74,876 59,798 34,320 150,878
PF-01004 Fire Station Improvements Buildings
and
Facilities
394
PF-02022 Facility Interior Finishes Buildings
and
Facilities
23,874 234,085 70,609 390,667 17,940
PF-04000 Security System
Improvements
Buildings
and
Facilities
3,581
PF-05002 Municipal Service Center
Renovation
Buildings
and
Facilities
12,176
Attachment D
FY 2011 FY 2012 FY 2013 FY 2014 FY 2015
Project Project Project Expenditures Expenditures Expenditures Expenditures Expenditures
Number Title Category YTD
General Fund Capital Improvement Program Expenditures by Project Category for Fiscal Years 2011-2015
PF-05003 Foothills Park Interpretive
Center Improvements
Buildings
and
Facilities
12,897 141,633 7,869 36,063 2,768
PF-06004 Cubberley Restroom
Renovation
Buildings
and
Facilities
27,422 3,129 11,849 86
PF-07000 Art Center Electrical &
Mechanical Upgrades
Buildings
and
Facilities
543,877 4,628,983 2,418,160 5,223 1,470
PF-07003 Children's Theatre Fire/Life
Safety Upgrade
Buildings
and
Facilities
6,150 131
PF-07011 Roth Building Maintenance Buildings
and
Facilities
1,205
PF-09000 Children's Theatre
Improvements
Buildings
and
Facilities
30,199 52,172
PF-09002 Lucie Stern Community
Center and Theatre Exterior
Paint
Buildings
and
Facilities
90,816
Attachment D
FY 2011 FY 2012 FY 2013 FY 2014 FY 2015
Project Project Project Expenditures Expenditures Expenditures Expenditures Expenditures
Number Title Category YTD
General Fund Capital Improvement Program Expenditures by Project Category for Fiscal Years 2011-2015
PF-10002 Lot "J" Cowper/Webster
Structural Repairs
Buildings
and
Facilities
15,260 32,672 448,804
PF-11001 Council Chambers Carpet
Replacement
Buildings
and
Facilities
80,000
PF-14000 Cubberley Roof
Replacements
Buildings
and
Facilities
1,489 298,696
PF-14002 Fire Station 1 Improvements Buildings
and
Facilities
820 151
PF-14003 University Avenue Parking
District Parking
Improvements
Buildings
and
Facilities
51,117
PF-15005 Emergency Facility
Improvements
Buildings
and
Facilities
48,058
PF-93009 ADA Compliance Buildings
and
Facilities
9,994 167,537 10,019 16,024 834
Total Buildings and
Facilities
20,250,843$ 23,867,878$ 14,040,559$ 17,934,710$ 11,607,076$
Attachment D
FY 2011 FY 2012 FY 2013 FY 2014 FY 2015
Project Project Project Expenditures Expenditures Expenditures Expenditures Expenditures
Number Title Category YTD
General Fund Capital Improvement Program Expenditures by Project Category for Fiscal Years 2011-2015
AC-86017 Art in Public Places Land
and
Land
Improvements
77,956$ 17,171$ 59,526$ 80,497$ 40,015$
AS-08000 Acquisition of Los Altos
Treatment Plant
Land
and
Land
Improvements
400,000
AS-09000 City of Palo Alto Municipal
Airport Transition Project
Land
and
Land
Improvements
4,050
PE-09004 Los Altos Treatment Plant
Master Plan Study
Land
and
Land
Improvements
16,278
Total Land and Land
Improvements
98,284$ 17,171$ 459,526$ 80,497$ 40,015$
FD-12000 ALS EKG Monitor
Replacement
Miscellaneous 517,914$ 92,966$
Attachment D
FY 2011 FY 2012 FY 2013 FY 2014 FY 2015
Project Project Project Expenditures Expenditures Expenditures Expenditures Expenditures
Number Title Category YTD
General Fund Capital Improvement Program Expenditures by Project Category for Fiscal Years 2011-2015
LB-11000 Furniture & Technology for
Measure N Project
Miscellaneous 28,124$ 178,774$ 531,457 449,827 399,653$
PE-12002 Tree Wells - University
Avenue Irrigation
Miscellaneous 28,743 152,993 37,553 350
PE-12004 Municipal Services Center
Facilities Study
Miscellaneous 220
PE-12009 Alma Guardrail Miscellaneous 5,888 34,353 397
PD-08000 Crime Scene Evidence
Collection Vehicle
Miscellaneous 174,201 6,039
PF-12004 Citywide Backflow
Preventer Installations
Miscellaneous 95,643
PO-10002 Downtown Tree Grates Miscellaneous 8,136
PO-12002 LATP Site Development
Preparation & Security
Miscellaneous 8,636 7,668 61,147
Attachment D
FY 2011 FY 2012 FY 2013 FY 2014 FY 2015
Project Project Project Expenditures Expenditures Expenditures Expenditures Expenditures
Number Title Category YTD
General Fund Capital Improvement Program Expenditures by Project Category for Fiscal Years 2011-2015
Total Miscellaneous 210,461$ 228,300$ 1,340,028$ 641,890$ 400,003$
FD-05000 Sixteen (16) ALS Monitors Non-Infrastructure
Management
Plan
434$
PD-07000 Mobile Command Vehicle Non-Infrastructure
Management
Plan
695,337
PL-05002 Charleston/Arastradero
Corridor Plan
Non-Infrastructure
Management
Plan
193,613 26,988$
PL-06002 Comprehensive Parking
Signage Plan
Non-Infrastructure
Management
Plan
4,248
Total Non-Infrastructure
Management Plan
889,384$ 31,236$ -$ -$ -$
AC-10000 Junior Museum & Zoo New
Bobcat Habitat
Parks
and
Open Space
23,210$
Attachment D
FY 2011 FY 2012 FY 2013 FY 2014 FY 2015
Project Project Project Expenditures Expenditures Expenditures Expenditures Expenditures
Number Title Category YTD
General Fund Capital Improvement Program Expenditures by Project Category for Fiscal Years 2011-2015
AC-12001 Junior Museum & Zoo
Perimeter Fence and
Footpath
Parks
and
Open Space
31,101$
OS-00001 Open Space Trails and
Amenities
Parks
and
Open Space
47,473 162,466$ 125,150 93,274$ 136,816$
OS-00002 Open Space Lakes & Ponds
Maintenance
Parks
and
Open Space
54,097 24,615 15,000 35,000 14,067
OS-07000 Foothills Park Road
Improvements
Parks
and
Open Space
150,000
OS-09001 Off-Road Pathway
Resurfacing and Repair
Parks
and
Open Space
4,130 13,248 52,060 1,250
OS-09002 Baylands Emergency Access
Levee Repair
Parks
and
Open Space
54,098
PE-06005 University Avenue Gateway
Landscaping Improvements
Parks
and
Open Space
1,479 429 486
Attachment D
FY 2011 FY 2012 FY 2013 FY 2014 FY 2015
Project Project Project Expenditures Expenditures Expenditures Expenditures Expenditures
Number Title Category YTD
General Fund Capital Improvement Program Expenditures by Project Category for Fiscal Years 2011-2015
PE-06007 Park Restroom Installation Parks
and
Open Space
224,048 98,119 147,865 132,515
PE-07005 California Avenue
Improvements
Parks
and
Open Space
53,810
PE-08001 Rinconade Park
Improvements
Parks
and
Open Space
2,591 1,089
PE-08004 Lytton Plaza Renovation Parks
and
Open Space
2,545 11,793 11,570 3,542
PE-09002 Greer Park Phase IV Parks
and
Open Space
925,076 142,030 8,078
PE-12003 Rinconada Park Master Plan
& Design
Parks
and
Open Space
121,690 118,299 36,125 5,706
PE-12012 Eleanor Pardee Park
Improvements
Parks
and
Open Space
21,827 26,641 657,659 308
Attachment D
FY 2011 FY 2012 FY 2013 FY 2014 FY 2015
Project Project Project Expenditures Expenditures Expenditures Expenditures Expenditures
Number Title Category YTD
General Fund Capital Improvement Program Expenditures by Project Category for Fiscal Years 2011-2015
PE-12013 Magical Bridge Playground Parks
and
Open Space
129,237 92,606 134,795 1,967,097
PE-13003 Parks Master Plan Parks
and
Open Space
29,193 120,719 168,612
PE-13005 City Hall/King Plaza
Landscape
Parks
and
Open Space
1,337 72,956 13,462
PE-13007 El Camino Park Dog Park Parks
and
Open Space
977 2,117 347
PE-13008 Bowden Park Improvements Parks
and
Open Space
36,961 27,719
PE-13010 Greer Park Renovations Parks
and
Open Space
1,896 58,589 1,559
PE-13016 El Camino Park Expanded
Parking Lot and New
Restroom
Parks
and
Open Space
8,886 33,976 52,543
Attachment D
FY 2011 FY 2012 FY 2013 FY 2014 FY 2015
Project Project Project Expenditures Expenditures Expenditures Expenditures Expenditures
Number Title Category YTD
General Fund Capital Improvement Program Expenditures by Project Category for Fiscal Years 2011-2015
PE-13020 Byxbee Park Trails Parks
and
Open Space
21,374 4,625 56,061
PE-14010 LATP Site Development
Preparation & Security
Improvements
Parks
and
Open Space
9,764 1,322
PE-15022 Palo Alto Community
Gardens Irrigation System
Parks
and
Open Space
5,203
PE-15028 Baylands Levee
Improvements Feasibility
Study
Parks
and
Open Space
58,500
PF-12001 Parks and PWD Trees Work
Space Improvements
Parks
and
Open Space
836 7,515 371,406 249
PG-06001 Tennis and Basketball Court
Resurfacing
Parks
and
Open Space
77,512 53,635 506
PG-06003 Benches, Signage, Fencing,
Walkways, and Perimeter
Landscaping
Parks
and
Open Space
118,366 105,225 168,788 242,964 34,056
Attachment D
FY 2011 FY 2012 FY 2013 FY 2014 FY 2015
Project Project Project Expenditures Expenditures Expenditures Expenditures Expenditures
Number Title Category YTD
General Fund Capital Improvement Program Expenditures by Project Category for Fiscal Years 2011-2015
PG-09002 Park and Open Space
Emergency Repairs
Parks
and
Open Space
147,651 52,875 42,793 100,044 12,070
PG-09003 Park Maintenance Shop
Remodel
Parks
and
Open Space
55,414 2,244 3,760
PG-11000 Hopkins Park Improvements Parks
and
Open Space
4,100 8,400
PG-11001 Cogswell Plaza
Improvements
Parks
and
Open Space
11,123 134,635
PG-11002 Monroe Park Improvements Parks
and
Open Space
3,200 794 3,000
PG-11003 Scott Park Improvements Parks
and
Open Space
618
PG-12002 Golf Course Tree
Maintenance
Parks
and
Open Space
21,014 3,597 28,358
Attachment D
FY 2011 FY 2012 FY 2013 FY 2014 FY 2015
Project Project Project Expenditures Expenditures Expenditures Expenditures Expenditures
Number Title Category YTD
General Fund Capital Improvement Program Expenditures by Project Category for Fiscal Years 2011-2015
PG-13001 Stanford/Palo Alto Soccer
Turf Replacement
Parks
and
Open Space
373
PG-13002 El Camino Park Playing
Fields and Amenities
Parks
and
Open Space
314,994 22,300
PG-13003 Golf Reconfiguring Parks
and
Open Space
406,950 367,478 50,583
Total Parks and Open
Space
1,730,681$ 1,113,288$ 1,480,052$ 2,897,563$ 2,662,650$
PE-00104 San Antonio Road Median
Improvements
Streets
and
Sidewalks
142,556$ 676,384$ 314,834$ 58,823$
PE-11011 Highway 101 Pedestrian /
Bicycle Overcrossing
Streets
and
Sidewalks
194,020 115,011 263,479 270,055 115,010$
PE-12011 Newell Road Bridge / San
Francisquito Creek Bridge
Replacement
Streets
and
Sidewalks
55,715 328,933 163,774 27,642
Attachment D
FY 2011 FY 2012 FY 2013 FY 2014 FY 2015
Project Project Project Expenditures Expenditures Expenditures Expenditures Expenditures
Number Title Category YTD
General Fund Capital Improvement Program Expenditures by Project Category for Fiscal Years 2011-2015
PE-13011 Charleston/Arastradero
Corridor Project
Streets
and
Sidewalks
32,880 106,656 264,107
PE-13012 Structural Assessment of
City Bridges
Streets
and
Sidewalks
285
PE-13014 Streetlight Condition
Assessment
Streets
and
Sidewalks
662
PE-13017 El Camino Median
Landscape Improvements
Streets
and
Sidewalks
2,620
PE-13022 University Avenue
Pedestrian/Bicycle
Underpass Rehabilitation
Streets
and
Sidewalks
178,901
PE-86070 Street Improvements (Street
Improvement Fund)
Streets
and
Sidewalks
4,710,791 3,170,679 7,097,782 5,072,597 2,467,328
PL-00026 Safe Routes to School Streets
and
Sidewalks
20,750 87,321 294,601 439,395 76,843
Attachment D
FY 2011 FY 2012 FY 2013 FY 2014 FY 2015
Project Project Project Expenditures Expenditures Expenditures Expenditures Expenditures
Number Title Category YTD
General Fund Capital Improvement Program Expenditures by Project Category for Fiscal Years 2011-2015
PL-04010 Bicycle Transportation Plan
Implementation Project
Streets
and
Sidewalks
80,862 103,599 57,921 135,827 430,287
PL-05030 Traffic Signal Upgrades Streets
and
Sidewalks
183,141 244,272 385,302 290,944 236,636
PL-07002 El Camino Real/ Stanford
Intersection
Streets
and
Sidewalks
247,112 341,683 963,546
PL-11001 Dinah SummerHill
Pedestrian/Bicycle Path
Streets
and
Sidewalks
188,187 2,845 6,853
PL-11002 California Avenue Transit
Hub Corridor
Streets
and
Sidewalks
16,361 81,210 573,960 2,576,593
PL-11003 Palo Alto Traffic Signal
Central System
Streets
and
Sidewalks
35,528
PL-11004 Alma Street Traffic Signal
Improvements
Streets
and
Sidewalks
645
Attachment D
FY 2011 FY 2012 FY 2013 FY 2014 FY 2015
Project Project Project Expenditures Expenditures Expenditures Expenditures Expenditures
Number Title Category YTD
General Fund Capital Improvement Program Expenditures by Project Category for Fiscal Years 2011-2015
PL-12000 Transportation and Parking
Improvements
Streets
and
Sidewalks
91,002 292,854 579,002 293,888
PL-14000 El Camino Real and
Churchill Avenue
Intersection Improvements
Streets
and
Sidewalks
8,225 9,292
PL-14001 Matador Creek Trail Streets
and
Sidewalks
12,054
PL-98013 School Commute Safety
Improvements (SIF)
Streets
and
Sidewalks
6,170
PO-05054 Street Light Improvements Streets
and
Sidewalks
159,070 61,844 69,707 74,636 18,147
PO-11000 Sign Reflectivity Upgrade Streets
and
Sidewalks
20,792 136,380 2,029 17,475
PO-11001 Thermoplastic Lane Marking
and Striping
Streets
and
Sidewalks
29,639 127,958 74,614 82,332
Attachment D
FY 2011 FY 2012 FY 2013 FY 2014 FY 2015
Project Project Project Expenditures Expenditures Expenditures Expenditures Expenditures
Number Title Category YTD
General Fund Capital Improvement Program Expenditures by Project Category for Fiscal Years 2011-2015
PO-12000 Wilkie Way Bridge Deck
Replacement
Streets
and
Sidewalks
37,944
PO-12001 Curb and Gutter Repairs Streets
and
Sidewalks
1,851 287,582 368,699 2,962
PO-12003 Foothills Fire Management Streets
and
Sidewalks
19,884 113,723
PO-89003 Sidewalk Improvements Streets
and
Sidewalks
1,611,917 1,673,715 1,864,954 2,160,793 1,336,097
Total Streets and Sidewalks 7,421,556$ 6,977,019$ 12,748,209$ 10,546,267$ 7,887,928$
Grand Total 30,601,209$ 32,234,892$ 30,068,374$ 32,100,927$ 22,597,672$
Attachment D
Attachment D
GENERAL FUND
COMMUNITY SERVICES DEPARTMENT
Total
Budget FY 2015 FY 2015 FY 2015 FY 2015 Percent Estimated
Project Project Project From Available Expenditures Labor Encumbrances Remaining Expended/Project Completion
Number Title Category Inception Budget Adjustments Balance Encumbered Status Date Comments
AC-09001 Children's Theatre
Replacement and
Expansion
Buildings
and
Facilities
$107,600 $98,000 $64,235 $0 $33,765 $0 100%Construction Jun 15 Construction began in May 2014 for installation of a
theatrical audio system, inclusive of an assisted listening
system.
AC-09002 Community Theater
Sound System
Replacement
Buildings
and
Facilities
$200,000 $106,767 $59,513 $0 $26,594 $20,660 90%Construction Oct 15 This project is under construction and it is anticipated that
it will be fully expended upon completion in Fall 2015.
AC-14000 Art Center Auditorium
Audio, Visual, and
Furnishings
Buildings
and
Facilities
$150,000 $150,000 $5,678 $0 $0 $144,322 4%Design Sep 15 Replacement of audio visual equipment and furnishings to
return auditorium back to intended use after being vacated
by temporary library.
CC-09001 Dimmer Replacement
and Lighting System
Buildings
and
Facilities
$180,651 $11,590 $0 $0 $11,565 $25 100%Complete Nov '13 Theatre dimmer system replaced and most lights converted
to LED. Remaining funding recommended to be restored
to Infrastructure Reserve as part of this report.
OS-09002 Baylands Emergency
Access Levee Repair
Parks
and
Open Space
$175,000 $120,902 $0 $0 $0 $120,902 31%Design Sept 15 Design and EIR complete. Project now independent of
JPA and will no longer be paired with JPA flood control
project. Construction start date pending permits.
PG-09003 Park Maintenance Shop
Remodel
Parks
and
Open Space
$159,096 $94,419 $0 $0 $0 $94,419 41%Complete Feb 15 This project is complete and will be closed out as part of
the 2016 budget process.
PG-11000 Hopkins Park
Improvements
Parks
and
Open Space
$95,000 $82,500 $0 $0 $82,500 $0 100%Construction Feb 15 Design Complete. Construction contract awarded. Project
scheduled for completion in February 2015.
PG-11002 Monroe Park
Improvements
Parks
and
Open Space
$250,000 $246,006 $3,000 $0 $6,300 $236,706 5%Design Aug 15 Design is 90% complete. This proect is scheduled to go
out to bid in April 2015.
PG-11003 Scott Park
Improvements
Parks
and
Open Space
$100,000 $99,383 $0 $0 $99,383 $0 100%Design Jun 15 Design complete.(paid under PG-06003). Out to bid
December 2014.
PG-12001 Stanford / Palo Alto
Playing Field Netting
Parks
and
Open Space
$50,000 $50,000 $0 $0 $0 $50,000 0%Design TBD Project to be done concurrently with project PG-13001
Stanford Palo Alto Soccer Turf Replacement.
PG-12002 Golf Course Tree
Maintenance
Parks
and
Open Space
$43,597 $40,000 $28,358 $0 $0 $11,642 73%Ongoing TBD Further utilization of this project may be necessary for
emergency tree care until the Golf Course reconfiguration
project commences.
PG-12004 Sarah Wallis Park
Improvements
Parks
and
Open Space
$65,000 $65,000 $0 $0 $0 $65,000 0%Pre-Design TBD Staff in initial planning and development of scope of
contract.
PG-14000 Ramos Park
Improvements
Parks
and
Open Space
$175,000 $175,000 $0 $0 $0 $175,000 0% Design Aug 15 Staff in initial planning and development of scope of
contract.
OS-00001 Open Space Trails &
Amenities
Parks
and
Open Space
$2,401,209 $388,640 $136,816 $0 $32,712 $219,112 N/A Ongoing Ongoing Various trail improvements at Arastradero, Foothills Park
and Baylands. In Year 1 of a 3 year contract.
OS-00002 Open Space Lakes &
Ponds Maintenance
Parks
and
Open Space
$442,183 $14,920 $14,067 $0 $3,517 ($2,664)N/A Ongoing Ongoing Contract awarded in October 2014. In year 1 of 3 year
contract for maintenance of Boronda Lake.
MULTI-YEAR PROJECTS
FY 2015 MID-YEAR CAPITAL IMPROVEMENT PROGRAM PROJECTS STATUS
MINOR PROJECTS
2/18/2015
Attachment D
Attachment D
GENERAL FUND
COMMUNITY SERVICES DEPARTMENT
Total
Budget FY 2015 FY 2015 FY 2015 FY 2015 Percent Estimated
Project Project Project From Available Expenditures Labor Encumbrances Remaining Expended/Project Completion
Number Title Category Inception Budget Adjustments Balance Encumbered Status Date Comments
FY 2015 MID-YEAR CAPITAL IMPROVEMENT PROGRAM PROJECTS STATUS
OS-09001 Off-Road Pathway
Resurfacing and Repair
Parks
and
Open Space
$426,357 $361,049 $1,250 $0 $0 $359,799 N/A Ongoing Ongoing Work is now done in-house by Public Works Engineering
or combined with their paving contracts.
PG-06001 Tennis & Basketball
Court Resurfacing
Parks
and
Open Space
$956,443 $465,112 $0 $0 $13,360 $451,752 N/A Ongoing Ongoing Staff in planning and development of scope of contract.
PG-06003 Benches, Signage,
Fencing, Walkways, and
Perimeter Landscaping
Parks
and
Open Space
$928,643 $160,092 $34,056 $0 $66,568 $59,468 N/A Ongoing Ongoing Recent projects completed: Golf Course signage, Lucie
Stern brick pathway design, and Baylands Nature Preserve
picnic area site improvements.
PG-09002 Park and Open Space
Emergency Repairs
Parks
and
Open Space
$492,761 $100,325 $12,070 $0 $73,617 $14,638 N/A Ongoing Ongoing Recent projects completed: Playground equipment repairs
at Cameron, Werry and Rinconada Parks.
PG-13001 Stanford / Palo Alto
Soccer Turf
Replacement
Parks
and
Open Space
$725,000 $725,000 $373 $0 $0 $724,627 0%Design Aug 15 It is expected that this project will go out to bid in May
2015. Estimated completion is August 2015.
PG-13002 El Camino Park Playing
Fields and Amenities
Parks
and
Open Space
$3,538,700 $3,223,706 $22,300 $0 $2,614 $3,198,792 10%Construction Nov 15 Currently under construction. Estimated project
completion is November 2015.
PG-13003 Golf Course
Reconfiguration and
Baylands Athletic
Center
Parks
and
Open Space
$11,258,312 $10,483,884 $50,583 $0 $436,314 $9,996,987 11%Design Oct 17 Waiting for permits from state and federal resource
agencies to begin construction; funds anticipated to be
reappropriated to FY 2016 as part of FY 2016 Proposed
Capital Budget.
2/18/2015
Attachment D
Attachment D
FY 2015 MID-YEAR CAPITAL IMPROVEMENT PROGRAM PROJECTS STATUS
Total
Budget FY 2015 FY 2015 FY 2015 FY 2015 Percent Estimated
Project Project Project From Available Expenditures Labor Encumbrances Remaining Percent Expended/Completion
Number Title Category Inception Budget Adjustments Balance Complete Encumbered Date Comments
FD-14002 Fire Ringdown
System
Replacement
Buildings and
Facilities
$157,500 $157,500 $0 $0 $0 $157,500 0%Pre-design Jun-2016 It is anticipated that
funding will be
reappropriated to FY
2016 as part of the
2016 Proposed Capital
Budget.
FD-12000 ALS EKG
Monitor
Replacement
Miscellaneous $610,884 $3 $0 $0 $0 $3 100%Complete Project Complete.
Remaining funding
recommended to be
restored to the
Infrastructure Reserve
as part of this report.
FD-13000 Long Range
CCTV Cameras
Miscellaneous $65,000 $65,000 $0 $0 $0 $65,000 0%Pre-design It is anticipated that
funding will be
reappropriated to FY
2016 as part of the
2016 Proposed Capital
Budget.
GENERAL FUND
FIRE DEPARTMENT
MULTI-YEAR PROJECTS
MINOR PROJECTS
2/18/2015
Attachment D
Attachment D
Total
Budget FY 2015 FY 2015 FY 2015 FY 2015 Percent Estimated
Project Project Project From Available Expenditures Labor Encumbrances Remaining Expended/Project Completion
Number Title Category Inception Budget Adjustments Balance Encumbered Status Date Comments
LB-11000 Furniture &
Technology for
Library Measure N
Project
Miscellaneous $2,471,000 $1,282,817 $399,653 $0 $806,861 $76,303 97%Construction Jun 15 It is anticipated that this
project will be complete by
the end of this fiscal year.
FY 2015 MID-YEAR CAPITAL IMPROVEMENT PROGRAM PROJECTS STATUS
GENERAL FUND
LIBRARY SERVICES DEPARTMENT
MULTI-YEAR PROJECTS
2/18/2015
Attachment D
Attachment D
GENERAL FUND
PLANNING AND COMMUNITY ENVIRONMENT DEPARTMENT
Total
Budget FY 2015 FY 2015 FY 2015 FY 2015 Percent Estimated
Project Project Project From Available Expenditures Labor Encumbrances Remaining Expended/Project Completion
Number Title Category Inception Budget Adjustments Balance Encumbered Status Date Comments
PL-11001 Dinah SummerHill
Pedestrian Bicycle
Path
Streets
and
Sidewalks
$309,101 $116,052 $0 $0 $0 $116,052 62%Design Jun 15 It is anticipated that construction on this
project will commence in Summer 2015.
PL-14000 El Camino Real and
Churchill Avenue
Intersection
Improvements
Streets
and
Sidewalks
$307,608 $299,384 $9,292 $0 $257,483 $32,609 89%Construction Jun 15 It is anticipated that this project will be
completed by the end of this fiscal year.
PL-15001 Embarcadero Road
Corridor
Improvements
Streets
and
Sidewalks
$498,957 $498,957 $0 $0 $0 $498,957 0%Design Fall 2015 It is anticipated that construction on this
project will commence in May 2015.
PL-00026 Local and
Neighborhood
Collector Street
Traffic Calming
Program (SIF)
("Safe Routes To
Schools")
Streets
and
Sidewalks
$1,772,077 $523,920 $76,843 $0 $212,274 $234,803 N/A Ongoing N/A Ongoing project
PL-04010 Bicycle and
Pedestrian
Transportation Plan
Implementation
Project
Streets
and
Sidewalks
$2,765,106 $2,348,414 $430,287 $0 $530,883 $1,387,244 N/A Ongoing N/A Ongoing project
PL-11002 California Avenue
Transit Hub
Corridor
Streets
and
Sidewalks
$6,873,206 $6,201,983 $2,576,593 $0 $1,282,971 $2,342,419 66%Construction Spring 2015 It is anticipated that this project will be
completed by the end of this fiscal year.
PL-11003 Palo Alto Traffic
Signal Central
System
Streets
and
Sidewalks
$400,000 $364,472 $0 $0 $0 $364,472 9%Design December 2015 It is anticipated that this project will be
completed by the end of this calendar year.
PL-12000 Transportation and
Parking
Improvements
Streets
and
Sidewalks
$3,435,255 $2,563,397 $293,888 $0 $828,510 $1,440,999 58%Ongoing N/A Ongoing project
FY 2015 MID-YEAR CAPITAL IMPROVEMENT PROGRAM PROJECTS STATUS
MINOR PROJECTS
MULTI-YEAR PROJECTS
2/18/2015
Attachment D
Attachment D
GENERAL FUND
PLANNING AND COMMUNITY ENVIRONMENT DEPARTMENT
Total
Budget FY 2015 FY 2015 FY 2015 FY 2015 Percent Estimated
Project Project Project From Available Expenditures Labor Encumbrances Remaining Expended/Project Completion
Number Title Category Inception Budget Adjustments Balance Encumbered Status Date Comments
FY 2015 MID-YEAR CAPITAL IMPROVEMENT PROGRAM PROJECTS STATUS
PL-14001 Matadero Creek
Trail
Streets
and
Sidewalks
$425,814 $425,814 $12,054 $0 $357,392 $56,368 87%Design FY 2018 It is anticiapted that design for this project
will continue through FY 2016 and the
project will be completed in FY 2018.
2/18/2015
Attachment D
Attachment D
Budget FY 2015 FY 2015 Percent Estimated
Project Project Project From Available FY 2015 Labor FY 2015 Remaining Expended/Project Completion
Number Title Category Inception Budget Expenditures Adjustments Encumbrances Balance Encumbered Status Date Comments
PD-14000 Internal Alarm
System
Replacement
Buildings and
Facilities
$78,000 $78,000 $0 $0 $0 $78,000 0%Pre-design Dec-2015 It is anticipated that funding
will be reappropriated to FY
2016 as part of the 2016
Proposed Capital Budget.
FY 2015 MID-YEAR CAPITAL IMPROVEMENT PROGRAM PROJECTS STATUS
GENERAL FUND
POLICE DEPARTMENT
MINOR PROJECTS
2/18/2015
Attachment D
Attachment DFY 2015 MID-YEAR CAPITAL IMPROVEMENT PROGRAM PROJECTS STATUS
Total
Budget FY 2015 FY 2015 FY 2015 FY 2015 Percent Estimated
Project Project Project From Available Expenditures Labor Encumbrances Remaining Expended/Project Completion
Number Title Category Inception Budget Adjustments Balance Encumbered Status Date Comments
PE-08004 Lytton Plaza Renovation Parks
and
Open Space
$777,668 $1,500 $0 $0 $0 $1,500 100%Complete 2010 This project has been completed. A recommendation to restore remaining
funding to the Infrastructure Reserve is recommended as part of this report.
PE-11011 Highway 101
Pedestrian/Bicycle
Overcrossing
Streets
and
Sidewalks
$2,205,232 $1,437,927 $115,010 $0 $138,182 $1,184,735 46%Design Dec-18 Design competition completed, currently reviewing options with boards and
commissions
PE-12002 Tree Wells - University
Avenue Irrigation
Miscellaneous $194,845 $4,299 $350 $0 $0 $3,949 100%Complete 2013 This project has been completed. A recommendation to restore remaining
funding to the Infrastructure Reserve is recommended as part of this report.
PE-12003 Rinconada Park Long Range
Plan & Design
Parks
and
Open Space
$225,893 $13,228 $5,706 $0 $121,565 ($114,043)150%Environmental
Review
15-Dec Completion pending environmental review
PE-12009 Alma Guardrail Miscellaneous $40,871 $232 $0 $0 $0 $232 100%Complete This project has been completed. A recommendation to restore remaining
funding to the Infrastructure Reserve is recommended as part of this report.
PE-12013 Magical Bridge Playground Parks
and
Open Space
$3,454,665 $3,163,074 $1,967,097 $0 $1,151,980 $43,997 99%Construction Spring 2015 Construction started June 2014 and is anticipated to be completed in FY 2015
PE-12017 City Hall First Floor
Renovations
Buildings
and
Facilities
$4,087,633 $3,618,484 $1,153,722 $0 $2,315,872 $148,890 96%Construction Jun-15 Renovated 1st floor HR space; moved utilities cust service to 1st floor; began
2nd floor renovation;
PE-13003 Parks Master Plan Parks
and
Open Space
$566,947 $417,035 $168,612 $0 $231,770 $16,653 97%Design Winter 2015 Completed community outreach and site analysis; starting prioritization phase
PE-13008 Bowden Park Improvements Parks
and
Open Space
$357,595 $320,634 $27,719 $0 $16,120 $276,795 23%Design Winter 2015 Design approved by ARB; Construction plans being drafted
PE-13010 Greer Park Renovations Parks
and
Open Space
$318,562 $258,077 $1,559 $0 $46,500 $210,018 34%Construction Summer
2015
Completed design of skate park and pathways
PE-13012 Structural Assessment of City
Bridges
Streets
and
Sidewalks
$185,394 $185,394 $285 $0 $150,000 $35,109 81%Study Oct-15 Anticipate award of consultant contract by City Council in March/April 2015,
with work expected to take 5-6 months to complete. It is anticipated that request
to reappropriate some portion of remaining funding to FY 2016 will be included
in the Proposed Capital Budget.
PE-13014 Streetlight Condition
Assessment
Streets
and
Sidewalks
$220,078 $220,078 $662 $0 $0 $219,416 0%Study Dec-15 Sending out RFP in spring 2015
PE-13016 El Camino Park Expanded
Parking Lot and New
Restroom
Parks
and
Open Space
$1,002,860 $959,999 $52,543 $0 $5,025,621 ($4,118,165)511%Construction Dec-15 Construction contract awarded in December 2014; construction to start in
February 2015. BAO to be posted.
PE-13020 Byxbee Park Trails Parks
and
Open Space
$360,607 $334,608 $56,061 $0 $8,410 $270,137 25%Design Jun-16 The interim park plan (design) is near 100% complete and will go to the PRC in
March. Trails are being constructed as landfill capping occurs; other amenities
such as benches, signage and vegetative islands to be added/constructed in FY
2016.
PE-14010 LATP Site Development
Preparation & Security
Improvements
Parks
and
Open Space
$1,668,782 $1,659,018 $1,322 $0 $170,991 $1,486,705 11%Close Permitting agencies would not accept applications without proposed use of
property. A recommendation to restore remaining funding to the Infrastructure
Reserve is included as part of this report.
PE-14015 Lucie Stern
Mechanical/Electrical
Upgrades
Buildings
and
Facilities
$2,808,133 $2,588,447 $72,331 $0 $54,725 $2,461,391 12%Design Dec-15 Submitted for building permit
PE-15020 Civic Center Waterproffing
Study
Buildings
and
Facilities
$258,492 $258,492 $0 $0 $0 $258,492 0%Pre-design Dec-15 RFP to be issued in second half of FY 2015.
PE-15022 Palo Alto Community Gardens
Irrigation System
Parks
and
Open Space
$256,504 $256,504 $5,203 $0 $0 $251,301 2%Design Dec-15 Community outreach and construction plan being drafted
GENERAL FUND
PUBLIC WORKS DEPARTMENT
MINOR PROJECTS
2/18/2015
Attachment D
Attachment DFY 2015 MID-YEAR CAPITAL IMPROVEMENT PROGRAM PROJECTS STATUS
Total
Budget FY 2015 FY 2015 FY 2015 FY 2015 Percent Estimated
Project Project Project From Available Expenditures Labor Encumbrances Remaining Expended/Project Completion
Number Title Category Inception Budget Adjustments Balance Encumbered Status Date Comments
GENERAL FUND
PUBLIC WORKS DEPARTMENT
PE-15028 Baylands Levee Improvements
Feasibility Study
Parks
and
Open Space
$500,000 $500,000 $58,500 $0 $441,500 $0 100%Pre-design Dec-15 Project being conducted in partnership with San Francisquito Creek Joint Powers
Authority (JPA); funds will need to be reappropriated into FY2016.
PF-04000 Security System Improvements Buildings
and
Facilities
$275,000 $59,768 $0 $0 $0 $59,768 78%Construction Jun-15 Work should be complete as of end of fiscal year.
PF-06004 Cubberley Restroom
Renovation
Buildings
and
Facilities
$41,678 $50 $0 $0 $0 $50 100%Close Jun-15 Project funding reduced in FY 2014. Remaining funding is recommended to be
restored to Infrastructure Reserve as part of this report.
PF-07011 Roth Building Maintenance Buildings
and
Facilities
$224,395 $58,576 $0 $0 $9,108 $49,468 78%Ongoing Jun-20 Patch of roofing completed.
PF-11001 Council Chambers Carpet
Replacement
Buildings
and
Facilities
$80,000 $80,000 $80,000 $0 $0 $0 100%Complete Aug-14 Project completed.
PF-12001 Parks and PWD Trees Work
Space Improvements
Parks
and
Open Space
$420,773 $41,853 $249 $0 $0 $41,604 100%Complete Dec-15 Project completed. Remaining funding is recommended to be restored to the
Infrastructure Reserve as part of this report.
PF-12004 Citywide Backflow Preventer
Installations
Miscellaneous $100,643 $5,000 $0 $0 $0 $5,000 100%Complete Dec-15 Project completed. Remaining funding is recommended to be restored to the
Infrastructure Reserve as part of this report.
PF-14002 Fire Station 1 Improvements Buildings
and
Facilities
$280,377 $279,557 $151 $0 $1 $279,405 0%Pre-construction Jun-15 It is anticipated that work will be complete by the end of FY 2015.
PF-15000 Rinconada Pool Locker Room Buildings
and
Facilities
$423,218 $423,218 $0 $0 $0 $423,218 0%Pre-construction Jun-16 Meetings have been held and it was determined to schedule construction for
January 2016 since committee wanted to look at all of Rinconada and not just
pool area. As a result, it is anticipated that the 2016 Proposed Capital Budget
will include a recommendation to carry forward remaining funding to FY 2015.
PF-15005 Emergency Facility
Improvements
Buildings
and
Facilities
$250,000 $250,000 $48,058 $0 $0 $201,942 19%Construction N/A
PO-12000 Wilkie Way Bridge Deck
Replacement
Streets
and
Sidewalks
$51,509 $13,566 $0 $0 $0 $13,566 100%Complete 2013 Project completed. Remaining funding is recommended to be restored to the
Infrastructure Reserve as part of this report.
PO-12001 Curb and Gutter Repairs Streets
and
Sidewalks
$1,108,119 $451,838 $2,962 $0 $418,213 $30,663 N/A Construction N/A Award construction contract in January 2015; construction starts in March with
sidewalk project PO 89003
PO-12002 LATP Site Development
Preparation & Security
Miscellaneous $80,303 $2,853 $0 $0 $0 $2,853 100%Complete 2012 Project to be closed.
PO-12003 Foothills Fire Management Streets
and
Sidewalks
$200,000 $66,393 $0 $0 $41,498 $24,895 88%Construction Aug-15 All funds should be encumbered by fiscal year end for work scheduled during
summer months.
PE-06007 Park Restroom Installation Parks
and
Open Space
$531,666 $65,572 $0 $0 $0 $65,572 100%Defunded 2015 Future restroom installation plans are awaiting completion of Parks Master Plan.
As a result, this project will be closed and remaining funds are recommended to
be restored to the Infrastructure Reserve as part of this report.
PE-08001 Rinconada Park Improvements Parks
and
Open Space
$1,356,313 $1,353,722 $1,089 $0 $0 $1,352,633 0%Design TBD Design for improvements will be begin upon approval of the Rinconada Park
Long Range Plan.
PE-09003 City Facility Parking Lot
Maintenance
Buildings
and
Facilities
$942,386 $899,306 $3,030 $0 $367,206 $529,070 N/A Construction N/A Recurring Project
PE-09005 Downtown Library
Improvements
Buildings
and
Facilities
$4,530,212 $45,051 $0 $0 $43,716 $1,335 100%Project to be closed.
PE-09006 Mitchell Park Library &
Community Center
(New Construction)
Buildings
and
Facilities
$49,704,775 $8,941,106 $1,151,848 $0 $1,956,787 $5,832,471 88%Complete Dec-14 Construction complete; project closeout and warranty period continuing
PE-09010 Library & Community Center
Temporary Facilities
Buildings
and
Facilities
$793,181 $135,261 $4,540 $0 $3,540 $127,181 84%Construction Aug-15 Temp facility closed; clearing out library equipment, to be followed by
restoration of kitchen.
MULTI-YEAR PROJECTS
2/18/2015
Attachment D
Attachment DFY 2015 MID-YEAR CAPITAL IMPROVEMENT PROGRAM PROJECTS STATUS
Total
Budget FY 2015 FY 2015 FY 2015 FY 2015 Percent Estimated
Project Project Project From Available Expenditures Labor Encumbrances Remaining Expended/Project Completion
Number Title Category Inception Budget Adjustments Balance Encumbered Status Date Comments
GENERAL FUND
PUBLIC WORKS DEPARTMENT
PE-10002 Ventura Community Center
and Park
Buildings
and
Facilities
$477,219 $34,209 $0 $0 $0 $34,209 100%Complete 2014 Project to be closed.
PE-11000 Main Library New
Construction and
Improvements
Buildings
and
Facilities
$23,362,045 $11,071,641 $8,591,707 $0 $2,499,080 ($19,146)100%Complete Nov-14 Construction complete; project closeout and warranty period continuing
PE-11012 Temporary Main Library Buildings
and
Facilities
$665,218 $109,169 $0 $0 $4,888 $104,281 84%Construction Apr-15 Temp facility closed; clearing out library equipment;
PE-12011 Newell Road Bridge / San
Francisquito Creek Bridge
Replacement
Streets
and
Sidewalks
$3,348,787 $2,856,081 $27,642 $0 $279,475 $2,548,964 24%Design Oct-17 Caltrans just approved additional grant funding for Environmental Impact Report
(EIR); staff will be returning to Council in March 2015 for BAO to fund EIR;
programmed construction funds of $2.5 million can be returned to IR; remaining
design funds are anticipated to be reappropriated to FY 2016 as part of FY 2016
Proposed Capital Budget.
PE-12012 Eleanor Pardee Park
Improvements
Parks
and
Open Space
$755,439 $70,818 $308 $0 $53,681 $16,829 98%Complete Project to be closed.
PE-13005 City Hall/King Plaza
Landscape
Parks
and
Open Space
$190,150 $115,857 $13,462 $0 $19,213 $83,182 56%Design Winter 2015 IFB to go out March 2015
PE-13007 El Camino Park Dog Park Parks
and
Open Space
$3,178 $104 $347 $0 $0 ($243)108%Project to be closed.
PE-13011 Charleston/Arastradero
Corridor Project
Streets
and
Sidewalks
$1,525,651 $1,386,116 $264,107 $0 $495,935 $626,074 59%Preliminary
design/environmental
assessment
Jun-16 Held 3 community meetings to develop conceptual plan line; PTC & Council
approval of plan line in spring 2015; start environmental assessment
PE-13017 El Camino Median Landscape
Improvements
Streets
and
Sidewalks
$296,729 $296,729 $2,620 $0 $0 $294,109 1%Design Winter 2015 Preparing Request for Proposals
PE-14018 Baylands Interpretive Center
Boardwalk Repair
Buildings
and
Facilities
$98,738 $70,000 $1,063 $0 $0 $68,937 30%Predesign Summer
2015
Boardwalk Feasibility Study to begin in second half of FY 2015. A request for
proposals was issued in February 2015 and anticipate study to be complete by
June 2015.
PE-15029 Baylands Interpretive Center
Improvements
Parks
and
Open Space
$136,298 $136,298 $0 $0 $0 $136,298 0%Design Early 2016 A request for proposals was issued in January with anticipation of design
complete by December 2015; permitting for work may begin in early 2016.
PE-98020 Police Building Project Buildings
and
Facilities
$4,254,781 $33,467 $3,604 $0 $0 $29,863 99%New Public Safety Building project to be created in second half of FY 2015 with
funding from Council Infrastructure Plan. Funding for this project will be
recommended to be eliminated at that time.
PF-01002 Civic Center Infrastructure
Improvements
Buildings
and
Facilities
$16,077,749 $78,895 $42,329 $0 $0 $36,566 100%Pre-construction Jun-16 Pre-construction complete and construction to be completed next fiscal year.
PF-05003 Foothills Park Interpretive
Center Improvements
Buildings
and
Facilities
$369,004 $67,491 $2,768 $0 $5,851 $58,872 84%Construction Jun-15 Work should be complete as of end of fiscal year.
PF-07000 Art Center Electrical &
Mechanical Upgrades
Buildings
and
Facilities
$7,780,362 $11,508 $1,470 $0 $8,508 $1,530 100%Complete Dec-14 Project Complete. Remaining funding recommended to be restored to
Infrastructure Reserve as part of this report.
PF-14000 Cubberley Roof Replacements Buildings
and
Facilities
$455,420 $453,931 $298,696 $0 $42,824 $112,411 75%Ongoing Jun-20 Roofs on Building S and L complete.
PF-14003 University Avenue Parking
District Parking Improvements
Buildings
and
Facilities
$400,700 $349,583 $0 $0 $38,720 $310,863 22%Ongoing Jun-15 Paved Lots G, A & P as part of construction contract for street resurfacing
August 2014
PF-14004 California Avenue Parking
District Parking Improvements
Buildings
and
Facilities
$186,400 $186,400 $0 $0 $0 $186,400 0%Ongoing Jun-15 Waiting to pave Lot 7 once Cal Ave Streetscape project complete
PO-11000 Sign Reflectivity Upgrade Streets
and
Sidewalks
$288,362 $149,953 $17,475 $0 $7,525 $124,953 N/A Ongoing N/A Project is ongoing, but survey of signs has been completed for 2014.
2/18/2015
Attachment D
Attachment DFY 2015 MID-YEAR CAPITAL IMPROVEMENT PROGRAM PROJECTS STATUS
Total
Budget FY 2015 FY 2015 FY 2015 FY 2015 Percent Estimated
Project Project Project From Available Expenditures Labor Encumbrances Remaining Expended/Project Completion
Number Title Category Inception Budget Adjustments Balance Encumbered Status Date Comments
GENERAL FUND
PUBLIC WORKS DEPARTMENT
PO-11001 Thermoplastic Lane Marking
& Striping
Streets
and
Sidewalks
$404,361 $139,818 $0 $0 $83,266 $56,552 N/A Ongoing N/A List of streets needing thermoplastic completed for FY14.
2/18/2015
Attachment D
Attachment D
Total Budget FY 2015 Percent Estimated
Project Project Project From Available FY 2015 FY 2015 Remaining Expended/Project Completion
Number Title Category Inception Budget Expenditures Encumbrances Balance Encumbered Status Date Comments
EL-04010 Foothills System Rebuild Minor $931,517 $82,129 $0 $0 $82,129 100% Complete Project Complete. Remaining funding
recommended to be restored to Electric
Fund reserves as part of this report.
EL-09004 W. Charleston/Wilkie Way
to South City Limit 4/12 kV
Conversion
Minor $562,466 $85,483 $701 $0 $84,782 100% Complete Project Complete. Remaining funding
recommended to be restored to Electric
Fund reserves as part of this report.
EL-10008 Advanced Metering
Infrastructure System
Minor $183,885 $56,188 $7,887 $5,000 $43,301 76% Complete Project Complete.
EL-11001 Torreya Court Rebuild Minor $103,301 $7,195 $0 $0 $7,195 100% Complete Project Complete. Remaining funding
recommended to be restored to Electric
Fund reserves as part of this report.
EL-11004 Hewlett Subdivision Rebuild
Los Trancos
Minor $697,050 $60,634 $0 $0 $60,634 100% Complete Project Complete. Remaining funding
recommended to be restored to Electric
Fund reserves as part of this report.
EL-11006 Rebuild UG District 18 Minor $629,298 $517,955 $0 $475,000 $42,955 93% Bid Jun-15 Bid received and reviewed; Staff report
requesting approval to award contract
scheduled for March 2015 Council
meeting.
EL-12002 Hanover 22 - Transformer
Replacement
Minor $1,200,450 $6,679 $0 $0 $6,679 100% Complete Project Complete. Remaining funding
recommended to be restored to Electric
Fund reserves as part of this report.
EL-14004 Maybell 1 and 2 4/12 kV
Conversion
Minor $450,000 $444,127 $37,473 $0 $406,654 10% Construction Jun-15 Construction is in progress with CPAU
personnel.
EL-15000 Colorado/Hopkins System
Improvement
Minor $50,000 $50,000 $0 $0 $50,000 0% Pre-Design Nov-15 Load study completed and alternatives
being reviewed.
EL-15001 Electric Substation Battery
Replacement
Minor $400,000 $400,000 $0 $180,000 $220,000 45% Bid Jun-16 IFB for materials is with Purchasing.
Installation will be done by CPAU
personnel.
ELECTRIC FUND
FY 2015 MID-YEAR CAPITAL IMPROVEMENT PROGRAM PROJECTS STATUSENTERPRISE FUND
UTILITIES DEPARTMENT
MINOR PROJECTS
2/18/2015
Attachment D
Attachment D
Total Budget FY 2015 Percent Estimated
Project Project Project From Available FY 2015 FY 2015 Remaining Expended/Project Completion
Number Title Category Inception Budget Expenditures Encumbrances Balance Encumbered Status Date Comments
ELECTRIC FUND
FY 2015 MID-YEAR CAPITAL IMPROVEMENT PROGRAM PROJECTS STATUSENTERPRISE FUND
UTILITIES DEPARTMENT
MULTI-YEAR PROJECTS
EL-02010 SCADA System Upgrades Multi-Year $912,565 $186,716 $63,807 $10,965 $111,944 88% Construction Jun-15 Upgrades completed; commissioning
and staff training on changes scheduled.
EL-04012 Utility Site Security
Improvements
Multi-Year $1,375,373 $305,274 $27,286 $12,661 $265,327 81% Design Jun-15 Design of Phase IV completed; IFB
being prepared.
EL-05000 El Camino Underground
Rebuild
Multi-Year $2,000,994 $282,513 $57,378 $0 $225,135 89% Complete Project Complete. Remaining funding
recommended to be restored to Electric
Fund reserves as part of this report.
EL-11008 Rebuild UG District 19 Multi-Year $161,286 $101,473 $2,602 $0 $98,871 39% Design Nov-15 Design completed, preparing IFB
documents for project and ordering long
lead-time equipment.
EL-06001 230 KV Electric Intertie Multi-Year $656,154 $126,515 $40,679 $56,233 $29,603 95% Pre-Design TBD Awaiting agreement for project from
SLAC and Stanford.
EL-06002 Underground District 45 Multi-Year $3,622,018 $134,271 $0 $0 $134,271 96% Construction Apr-15 CPAU work completed; awaiting
completion of AT&T work and
payment of AT&T joint poles invoices
(submitted to CPAU when AT&T
removes poles) to close project.
EL-08000 E. Charleston 4/12kV
Conversion
Multi-Year $768,125 $413,586 $300,006 $51,716 $61,864 92% Construction Mar-15 Physical construction completed;
awaiting final invoices before closing
project. A reduction to this project is
recommended as part of this report,
with funding being returned to the
Electric Fund reserves.
EL-09000 Middlefield Underground
Rebuild
Multi-Year $1,099,489 $407,927 $0 $0 $407,927 63% Bid Jun-15 Bid received and reviewed; Staff report
requesting approval to award contract
scheduled for March 2015 Council
meeting.
EL-09003 Rebuild UG District 17
(Downtown)
Multi-Year $851,693 $82,586 $0 $0 $82,586 100% Complete Project Complete. Remaining funding
recommended to be restored to Electric
Fund reserves as part of this report.
MULTI-YEAR PROJECTS
2/18/2015
Attachment D
Attachment D
Total Budget FY 2015 Percent Estimated
Project Project Project From Available FY 2015 FY 2015 Remaining Expended/Project Completion
Number Title Category Inception Budget Expenditures Encumbrances Balance Encumbered Status Date Comments
ELECTRIC FUND
FY 2015 MID-YEAR CAPITAL IMPROVEMENT PROGRAM PROJECTS STATUSENTERPRISE FUND
UTILITIES DEPARTMENT
EL-10006 Rebuild UG District 24 Multi-Year $2,200,481 $1,612,899 $198,611 $26,374 $1,387,914 37% Design Nov-15 Design completed, preparing IFB
documents for project and ordering long
lead-time equipment.
EL-13006 Sand Hill/Quarry 12kV Tie Multi-Year $250,011 $237,500 $3,015 $0 $234,485 6% Design Dec-15 Waiting for guidance from Attorneys
office on easement request, for
electrical equipment, that was
submitted to Stanford.
EL-13007 Underground Distribution
System Security
Multi-Year $300,000 $299,172 $7,853 $0 $291,319 3% Design Jun-16 Evaluating options for securing utility
vaults and boxes; samples have been
received for evaluation by Engineering
and Operations.
EL-13008 Upgrade Electric Estimating
System
Multi-Year $150,000 $148,650 $0 $0 $148,650 1% Design TBD Bids for development of construction
standards exceeded anticipated cost.
Alternatives for creation of standards
and Bills of Material are being
evaluated.
EL-14005 Reconfigure Quarry Feeders Multi-Year $450,000 $449,951 $5,429 $0 $444,522 1% Design TBD Waiting for completion of Substation
Relay replacement to start construction.
EL-10009 Street Light System
Conversion Project
Multi-Year $2,279,558 $548,876 $218,990 $237,378 $92,508 96% Construction Dec-14 Contractor has completed construction
of Phase III; awaiting receipt and
payment of final invoice before closing
project.
EL-11003 Rebuild UG District 15 Multi-Year $481,079 $456,427 $1,453 $0 $454,974 5% Pre-Design Jun-16 Design work on hold due to other
projects. This will be coordinated with
other projects planned along
Arastradero Road.
EL-11007 Rebuild Greenhouse Condo
Area
Multi-Year $508,843 $333,591 $266,898 $23,522 $43,171 92% Construction Mar-15 Physical construction completed;
awaiting final invoices before closing
project.
EL-11010 UG District 47 - Middlefield,
Homer Avenue, Webster
Street and Addison Avenue
Multi-Year $2,255,574 $2,093,808 $54,050 $1,402,500 $637,258 72% Bid Jun-16 Bids for substructure installation
received and reviewed; Staff report
requesting approval to award contract
scheduled for February 2015 Council
meeting.
MULTI-YEAR PROJECTS
2/18/2015
Attachment D
Attachment D
Total Budget FY 2015 Percent Estimated
Project Project Project From Available FY 2015 FY 2015 Remaining Expended/Project Completion
Number Title Category Inception Budget Expenditures Encumbrances Balance Encumbered Status Date Comments
ELECTRIC FUND
FY 2015 MID-YEAR CAPITAL IMPROVEMENT PROGRAM PROJECTS STATUSENTERPRISE FUND
UTILITIES DEPARTMENT
EL-11014 Smart Grid Technology
Installation
Multi-Year $1,102,846 $743,286 $45,324 $94,906 $603,056 N/A Ongoing Jan-17 This project is to implement pilot
projects as necessary to validate smart
grid technology and cost.
Two pilot projects constructed and
being evaluated; others in development.
EL-11015 Reconductor 60kV Overhead
Transmission System with
ACCR conductor
Multi-Year $3,002,412 $67,089 $0 $0 $67,089 100% Complete Remaining funds are recommended to
be restored to Electric Fund reserves as
part of this report.
EL-12000 Rebuild UG District 12 Multi-Year $530,781 $433,379 $414,059 $28,146 ($8,826) 102% Construction Mar-15 Physical construction of this project has
been completed, and the project will be
closed once final invoices have been
received. The project reflects as being
over budget, however this is due to the
fact that some invoices were incorrectly
charged to this project and need to be
charged against other projects. This
project is currently being reconciled,
and once all adjustments are made it is
anticipated that the project will be
below budget.
EL-12001 UG District 46 -
Charleston/El Camino Real
Multi-Year $553,954 $488,347 $2,263 $0 $486,084 12% Design Nov-16 Design work in process.
$11,664,226 $1,755,764 $2,604,401
2/18/2015
Attachment D
Attachment DFY 2015 MID-YEAR CAPITAL IMPROVEMENT PROGRAM PROJECTS STATUS
Total
Budget FY 2015 Percent Estimated
Project Project Project From Available FY 2015 FY 2015 Remaining Expended/Project Completion
Number Title Category Inception Budget Expenditures Encumbrances Balance Encumbered Status Date Comments
GS-08000 Gas Station 2 Rebuild Minor $207,007 $10,023 $0 $0 $10,023 100%Completed Project completed. A
recommendation to remove
remaining funding and restore
funding to Gas Fund reserves is
recommended as part of this report.
GS-09000 Gas Station 1 Rebuild Minor $201,000 $6,631 $0 $0 $6,631 100%Completed Project completed. A
recommendation to remove
remaining funding and restore
funding to Gas Fund reserves is
recommended as part of this report.
GS-10000 Gas Station 3 Rebuild Minor $207,007 $8,489 $30,125 $0 ($21,636)110%Completed Project completed, and currently
reflected as over budget. A
recommendation to increase the
funding for this project is included as
part of this report, as an encumbrance
that was required for the project was
inadvertently disencumbered in FY
2014.
GS-11001 Gas Station 4 Rebuild Minor $337,000 $16,897 $0 $0 $16,897 100%Completed Project completed. A
recommendation to remove
remaining funding and restore
funding to Gas Fund reserves is
recommended as part of this report.
GS-14004 Gas Distribution System
Model
Minor $150,000 $148,608 $0 $60,918 $87,690 42%Pre-Construction Jan 17 Contract signing stage. A computer
model for natural gas distribution
system analyses will be created and
maintenance of the model will be
provided till 1/1/2017. It is
anticipated that funds will need to be
carried forward to FY 17.
GS-15001 Security at City Gas
Receiving Stations
Minor $150,000 $150,000 $0 $0 $150,000 0%Pre-design TBD It is anticipated that the 2016
Proposed Capital Budget will include
a recommendation to carry funds
forward into FY 2016.
ENTERPRISE FUND
UTILITIES DEPARTMENT
MINOR PROJECTS
GAS FUND
2/18/2015
Attachment D
Attachment DFY 2015 MID-YEAR CAPITAL IMPROVEMENT PROGRAM PROJECTS STATUS
Total
Budget FY 2015 Percent Estimated
Project Project Project From Available FY 2015 FY 2015 Remaining Expended/Project Completion
Number Title Category Inception Budget Expenditures Encumbrances Balance Encumbered Status Date Comments
ENTERPRISE FUND
UTILITIES DEPARTMENT
GAS FUND
GS-01019 Global Positioning System Multi-Year $381,062 $80,306 $3,637 $2,810 $73,859 81%Ongoing Jun 16 Integrating field data into mapping
system, defining additional
equipment needs.
GS-08011 GMR - Project 18 Multi-Year $5,900,883 $10,531 $0 $0 $10,531 100%Completed Project completed. A
recommendation to remove
remaining funding and restore
funding to Gas Fund reserves is
recommended as part of this report.
GS-09002 GMR - Project 19 Multi-Year $5,787,828 $2,348,249 $1,048,708 $1,441,383 ($141,842)102%95%Feb 15 Projects 19B/20/21 are combined. It
is anticipated that the budget overage
will be resolved upon completion of
the project by disencumbering unused
contingency funding.
GS-10001 GMR - Project 20 Multi-Year $6,616,749 $4,755,580 $1,570,223 $3,157,251 $28,106 100%95%Feb 15 Projects 19B/20/21 are combined.
GS-11000 GMR - Project 21 Multi-Year $6,667,478 $2,314,846 $450,003 $1,769,516 $95,327 99%95%Feb 15 Projects 19B/20/21 are combined.
GS-11002 Gas System Improvements Multi-Year $945,149 $485,370 $184,117 $179,150 $122,103 N/A Ongoing Jun 16 This project addresses ongoing
capital system improvements. A
current project for Risk Assessment
Study of PVC/PE gas pipes will be
completed by Dec 15.
GS-12001 Gas Main Replacement -
Project 22
Multi-Year $602,669 $602,575 $3,579 $43,854 $555,142 8%Design Jun 16 It is anticipated that the 2016
Proposed Capital Budget will include
a recommendation to carry funds
forward into FY 2016.
GS-13002 Gas Equipment and Tools Multi-Year $150,000 $148,062 $12,857 $0 $135,205 N/A Ongoing Jun 16 This project is for replacement of
equipment and tools for Operations.
MULTI-YEAR PROJECTS
2/18/2015
Attachment D
Attachment D
ENTERPRISE FUND
REFUSE FUND
PUBLIC WORKS DEPARTMENT
Total
Budget FY 2015 Budget Estimated
Project Project Project From Available FY 2015 FY 2015 Remaining Percent Project Completion
Number Title Category Inception Budget Expenditures Encumbrances Balance Complete Status Date Comments
RF-10002 Flare Relocation Project Minor $867,734 $42,350 $0 $318 $42,032 95%Completed Completed Project completed and closed in Feb 14.
RF-07001 Relocation of Landfill Facilities Multi-Year $825,968 $18,698 $0 $0 $18,698 98%Completed Completed This project was completed in October 2013 and will be
closed.
RF-11001 Landfill Closure Multi-Year $4,718,404 $2,978,662 $1,593,954 $1,034,181 $350,527 93%Construction Dec 15 Construction of the new cap - an evapotranspirative soil cap -
began in January 2014. Approximately 57% of the site has
been capped and the remainder to be capped by December
2015. It is anticipated that unencumbered and unspent funds
for this project will be reappropriated to FY 2016 as part of
the 2016 Proposed Capital Budget. An additional
appropriation of $1,200,000 will be needed in FY16 to
complete the project by December 2015, and it is
anticipated that a request for this funding will be included in
the 2016 Proposed Capital Budget. Revenue received from
the imported cap soils is estimated at $750,000 during FY15
and $250,000 in FY2016.
FY 2015 MID-YEAR CAPITAL IMPROVEMENT PROGRAM PROJECTS STATUS
MINOR PROJECTS
MULTI-YEAR PROJECTS
2/18/2015
Attachment D
Attachment DFY 2015 MID-YEAR CAPITAL IMPROVEMENT PROGRAM PROJECTS STATUS
Total Budget FY 2015 Percent Estimated
Project Project Project From Available FY 2015 FY 2015 Remaining Expended/Project Completion
Number Title Category Inception Budget Expenditures Encumbrances Balance Encumbered Status Date Comments
SD-06101 Storm Drain System Replacement
and Rehabilitation
Minor $319,320 $319,320 $30,451 $0 $288,869 10%Ongoing Ongoing It is anticipated that funds for this
ongoing project will be reappropriated
to FY 2016 as part of the Proposed
Capital Budget.
SD-06102 San Francisquito Creek Storm
Water Pump Station
Multi-Year $6,387,642 $35,158 $0 $0 $35,158 99%Complete Complete This project is complete and can be
closed.
SD-06104 Connect Clara Drive Storm Drains
to Matadero Pump Station
Multi-Year $953,480 $70,507 $35,030 $0 $35,477 96%Complete Complete This project is complete and can be
closed.
SD-10101 Southgate Neighborhood Storm
Drain Improvements
Multi-Year $2,176,878 $1,743,145 $1,306,441 $370,484 $66,220 97%Construction Sep-15 It is anticipated that a request to
reappropriate remaining funds to FY
2016 will be included in the 2016
Proposed Capital Budget in order to
cover landscape maintenance
expenses.
SD-11101 Channing Avenue/Lincoln
Avenue Storm Drain
Improvements
Multi-Year $7,442,779 $3,316,971 $177,287 $94,998 $3,044,686 59%Design Mar-16 Final project construction is
anticipated to begin in Summer 2015.
It is anticipated that a request to
reappropriate remaining funds to FY
2016 will be included in the 2016
Proposed Capital Budget to cover the
construction cost of the last project
phase.
SD-13002 Matadero Creek Storm Water
Pump Station & Trunk Lines
Improvements
Multi-Year $2,252,633 $2,252,333 $4,200 $1 $2,248,132 0%Design Oct-17 RFP for consultant services to be
issued in February 2015. It is
anticipated that the 2016 Proposed
Capital Budget will include a request
to reappropriate remaining funds to
FY 2016 to cover project design costs.
MINOR PROJECTS
STORM DRAINAGE FUND
ENTERPRISE FUND
PUBLIC WORKS DEPARTMENT
MULTI-YEAR PROJECTS
2/18/2015
Attachment D
Attachment DFY 2015 MID-YEAR CAPITAL IMPROVEMENT PROGRAM PROJECTS STATUS
Total
Budget FY 2015 Percent Estimated
Project Project Project From Available FY 2015 FY 2015 Remaining Expended/Project Completion
Number Title Category Inception Budget Expenditures Encumbrances Balance Encumbered Status Date Comments
WC-11000 Wastewater Collection
Rehabilitation/Augmentation
Project 24
Multi-Year $3,119,809 $2,512,435 $63,576 $2,282,801 $166,058 95%Pre-construction Nov 16
Projects 24/25/26 are combined.
The estimated start date is 5/2015.
Project duration expected to be
560 calendar days.
WC-12001 Wastewater Collection
Rehabilitation/Augmentation
Project 25
Multi-Year $3,212,000 $2,854,977 $71,352 $2,296,851 $486,774 85%Pre-construction Nov 16
Projects 24/25/26 are combined.
The estimated start date is 5/2015.
Project duration expected to be
560 calendar days.
WC-13001 Wastewater Collection
Rehabilitation/Augmentation
Project 26
Multi-Year $3,310,000 $3,272,550 $27,811 $3,040,000 $204,739 94%Pre-construction Nov 16
Projects 24/25/26 are combined.
The estimated start date is 5/2015.
Project duration expected to be
560 calendar days.
WC-13002 Wastewater Fusion and
General Equipment/Tools
Multi-Year $102,187 $78,132 $0 $0 $78,132 24%Ongoing N/A This project addresses ongoing
needs for equipment/tools by
WGW Operations to perform their
work.
WC-14001 Wastewater Collection
Rehabilitation/Augmentation
Project 27
Multi-Year $320,000 $320,000 $0 $40,950 $279,050 13%Design Jun 16 Project currently in design phase
and anticipated to be complete
during FY 2016. It is anticipated
that the 2016 Proposed Capital
Budget will include a
recommendation to reappropriate
funds into FY 2016.
WC-15002 Wastewater System
Improvements
Multi-Year $641,403 $506,701 $45,729 $80,823 $380,149 41%Ongoing N/A
This project addresses ongoing
capital system improvements.
MULTI-YEAR PROJECTS
ENTERPRISE FUND
UTILITIES DEPARTMENT
WASTEWATER COLLECTION FUND
2/18/2015
Attachment D
Attachment DFY 2015 MID-YEAR CAPITAL IMPROVEMENT PROGRAM PROJECTS STATUS
Total
Budget FY 2015 Budget Estimated
Project Project Project From Available FY 2015 FY 2015 Remaining Percent Project Completion
Number Title Category Inception Budget Expenditures Encumbrances Balance Complete Status Date Comments
WQ-10001 Plant Master Plan Minor $1,594,697 $146,435 $45,521 $34,472 $66,442 96%Construction Jun 19 Long Range facilities Plan Report 100%
completed Oct 12; BAO for Biosolids Plan
completed in Jan 13 for $421,678.
Biosolids Facility Plan completed Oct 14.
Biosolids Facility Plan 100% complete.
WQ-04011 Facility Condition Assessment
and Retrofit
Multi-Year $4,426,192 $1,505,901 $31,152 $0 $1,474,749 67%Design Jun 19 Ongoing retrofit projects. Facility Repair
and Retrofit Project #2 construction
completed. Facility Repair and Retrofit
Project #3 contract awarded to Anderson
Pacific Engineering.
WQ-14001 Biosolids Facility Multi-Year $575,104 $575,104 $0 $216,534 $358,570 38%pursuing state
loan
Dec-19
WQ-14003 Primary Sedimentation Tank
Rehabilitation
Multi-Year $80,532 $80,532 $0 $0 $80,532 0%pursuing state
loan
Jun-19
WQ-14004 Fixed Film Reactor
Rehabilitation
Multi-Year $127,398 $127,398 $0 $0 $127,398 0%pursuing state
loan
Jun-18
MINOR PROJECTS
ENTERPRISE FUND
PUBLIC WORKS DEPARTMENT
WASTEWATER TREATMENT FUND
MULTI-YEAR PROJECTS
2/18/2015
Attachment D
Attachment D
Total
Budget FY 2015 Percent Estimated
Project Project Project From Available FY 2015 FY 2015 Remaining Expended/Project Completion
Number Title Category Inception Budget Expenditures Encumbrances Balance Encumbered Status Date Comments
WS-09000 Seismic Water Tank Valve Minor $6,673,000 $6,514,420 $40,620 $2,327,155 $4,146,645 38%Pre-
construction
Oct 17 Council Award in Spring 2015.
Anticipated completion date is
Spring 2019.
WS-13003 GPS Equipment Upgrade Minor $200,000 $200,000 $0 $0 $200,000 0%Pre-design Jun 15 The Department is evaluating the
latest GPS technology to determine
the need to upgrade the existing
equipment.
WS-13004 Asset Management Mobile
Deployment
Minor $100,000 $98,471 $3,229 $0 $95,242 5%Pre-design Jun 15 The Department is assessing the
options for mobile device
deployment.
WS-13006 Water Meter Shop
Renovations
Minor $315,000 $56,893 $10,001 $0 $46,892 85%Complete This project is complete. The
Utilities Department is in the
process of closing out this project.
WS-15004 Water System Master Plan Minor $500,000 $500,000 $0 $268,400 $231,600 54%Construction Dec 15 Foothills transmission main
assessment was completed. G&E is
currently assessing capital
improvement needs for remaining
transmission and distribution water
system. It is anticipated that funds
will need to be carried forward to
FY 16.
WATER FUND
FY 2015 MID-YEAR CAPITAL IMPROVEMENT PROGRAM PROJECTS STATUS
ENTERPRISE FUND
UTILITIES DEPARTMENT
MINOR PROJECTS
2/18/2015
Attachment D
Attachment D
Total
Budget FY 2015 Percent Estimated
Project Project Project From Available FY 2015 FY 2015 Remaining Expended/Project Completion
Number Title Category Inception Budget Expenditures Encumbrances Balance Encumbered Status Date Comments
WATER FUND
FY 2015 MID-YEAR CAPITAL IMPROVEMENT PROGRAM PROJECTS STATUS
ENTERPRISE FUND
UTILITIES DEPARTMENT
MINOR PROJECTS
WS-07000 Water Regulation Station
Improvements
Multi-Year $544,001 $370,823 $15,406 $354,503 $914 100%Pre-
construction
Oct 17 URS completed the design of the
seismic retrofit project for 4 steel
tanks and 3 turnouts with combined
budget from WS-07000, WS-08001,
and WS-09000. IFB for the retrofit
work is being prepared and
construction will start in Apr/May
15. It is anticipated that funds will
need to be carried forward to FY 16.
WS-07001 Water Recycling Facilities Multi-Year $901,126 $388,421 $37,469 $157,380 $193,572 79%On-going Jun 16 Resource Management is preparing
Environmental Impact Report
(EIR). Assessment and
sustainability recommendation to be
completed in 2016. It is anticipated
that funds will need to be carried
forward to FY 16.
WS-08001 Water Reservoir Coating
Improvements
Multi-Year $3,226,491 $2,927,560 $15,406 $354,503 $2,557,651 21%Pre-
construction
Oct 17 URS completed the design of the
seismic retrofit project for 4 steel
tanks and 3 turnouts with combined
budget from WS-07000, WS-08001,
and WS-09000. IFB for the retrofit
work is being prepared and
construction will start in Apr/May
15. Anticipated completion Spring
2019.
WS-08002 Emergency Water Supply
Project
Multi-Year $36,463,630 $1,210,490 $296,577 $570,929 $342,984 99%Pre-
construction
Sep 15 Well Rehabilitation Phase 3 (site
and facilities restoration). It is
anticipated that funds will need to
be carried forward to FY 16.
WS-09001 Water Main Replacement -
Project 23
Multi-Year $3,136,843 $112,021 $0 $0 $112,021 100%Complete Project complete. Remaining
funding is recommended to be
restored to Water Fund reserves as
part of this report.
MULTI-YEAR PROJECTS
2/18/2015
Attachment D
Attachment D
Total
Budget FY 2015 Percent Estimated
Project Project Project From Available FY 2015 FY 2015 Remaining Expended/Project Completion
Number Title Category Inception Budget Expenditures Encumbrances Balance Encumbered Status Date Comments
WATER FUND
FY 2015 MID-YEAR CAPITAL IMPROVEMENT PROGRAM PROJECTS STATUS
ENTERPRISE FUND
UTILITIES DEPARTMENT
MINOR PROJECTS
WS-10001 Water Main Replacement -
Project 24
Multi-Year $3,259,205 $208,305 $0 $0 $208,305 100%Complete Project complete. Remaining
funding is recommended to be
restored to Water Fund reserves as
part of this report.
WS-11000 Water Main Replacement -
Project 25
Multi-Year $5,252,600 $5,238,360 $51,181 $4,105,435 $1,081,744 79%Pre-
construction
Oct 15 Tentative Council Approval date is
2/23/15. It is anticipated that funds
will need to be carried forward to
FY 16.
WS-11003 Water Distribution System
Improvements
Multi-Year $1,270,745 $916,693 $671,418 $40,556 $204,719 N/A Ongoing On-going This project addresses ongoing
capital distribution system
improvement needs.
WS-11004 Water System Supply
Improvements
Multi-Year $936,995 $382,622 $119,723 $75,643 $187,256 N/A Ongoing On-going This project addresses ongoing
capital supply system improvement
needs.
WS-12001 Water Main Replacement -
Project 26
Multi-Year $505,000 $461,065 $1,176 $0 $459,889 9%Design Jun 15 Design is on targeted schedule.
WS-13002 Water Fusion and General
Equipment/Tools
Multi-Year $100,000 $78,132 $6,068 $0 $72,064 N/A Ongoing On-going This project addresses the purchase
of PE fusion equipment for
Operations to perform their work of
maintaining and operating the water
system.
MULTI-YEAR PROJECTS
2/18/2015
Attachment D
Attachment D
FY 2015 MID-YEAR CAPITAL IMPROVEMENT PROGRAM PROJECTS STATUS
TECHNOLOGY FUND
Total
Budget FY 2015 Percent
Project Project Project From Available FY 2015 Labor FY 2015 Remaining Encumbered/Project Completion
Number Title Category Inception Budget Expenditures Adjustments Encumbrances Balance Expended Status Date Comments
TE-01012 IT Disaster Recovery Plan Minor $578,626 $466,309 $101,082 $0 $189,367 $175,860 70%
TE-08004 Fire Mobile Data Computer Minor $250,000 $61,083 $34,040 $0 $1 $27,042 89%On-going
Final phase of the project is in progress to update Fire Mobile
Date Computers and add new Fire Mobile Data Computers to
the fire engines for patient and permit reporting purposes.
TE-09000 Public Safety Computer-Aided
Dispatch Replacement
Minor $1,400,000 $918,980 $131,388 $0 $0 $787,592 44%On-going Jun-16 It is anticipated that remaining funding will be reappropriated
to FY 2016 as part of the 2016 Proposed Capital Budget.
TE-11001 Library Computer System
Software
Minor $570,250 $441,313 $21,500 $0 $651 $419,162 26%Pre-design Project is currently in the planning phase and an RFP has been
started for a software solution.
TE-11002 Police Mobile In-Car Video
System Replacement
Minor $310,000 $34,070 $0 $0 $31,546 $2,524 99%On-going Dec-14 Project near completion, the remainder of funding will be
allocated toward body-worn camera outfitting. It is
anticipated that funding will be reappropriated to FY 2016 as
part of the 2016 Proposed Capital Budget.
TE-95016 Permit Information Tracking
System
Multi-Year $980,050 $176,648 $0 $0 $0 $176,648 82%
TE-07006 SAP Continuous Improvement
Project
Multi-Year $8,898,680 $30,266 $0 $0 $1,949 $28,317 100%
TE-99010 Acquisition of New Computers Multi-Year $437,350 $188,074 $0 $0 $0 $188,074 57%This project is recommended to be closed, as new computers
are no longer being purchased through this project. It is
anticipated that the project will be closed before the end of
FY 2015.
TE-00010 Telephone System Replacement Multi-Year $2,646,587 $605,245 $79,457 $0 $45,472 $480,316 82%Construction
TE-13001 Interactive Voice Response
System
Multi-Year $200,000 $200,000 $0 $0 $0 $200,000 0%
TE-13002 ESS/MSS Enhancements Multi-Year $150,000 $150,000 $0 $0 $0 $150,000 0%Project recommended to be closed as part of this report, with
remaining funding being returned to various funds that initially
supported this project.
TE-13003 SAP Refuse Billing Improvements Multi-Year $250,000 $250,000 $0 $0 $0 $250,000 0%
MULTI-YEAR PROJECTS $0
TE-13004 Infrastructure Management
System
Multi-Year $300,000 $251,192 $23,975 $17,450 $209,767 30%This CIP has been split into two phases, an analysis of
enterprise asset management systems (EAMS) to determine
requirements and solutions that will fit the City's needs, and
the implementation of the chosen solution.
TE-14002 Library Virtual Branch Multi-Year $195,000 $192,971 $0 $0 $13,100 $179,871 8%
TE-05000 Radio Infrastructure Replacement Multi-Year $2,665,980 $1,417,859 $78,394 $0 $43,314 $1,296,151 51%On-going Jun-18 It is anticipated that a recommendation to reappropriate
remaining funding to FY 2016 will be included as part of the
2016 Proposed Capital Budget.
TE-06001 Library Radio Frequency
Identification (RFID)
Implementation
Multi-Year $810,000 $489,448 $76,168 $0 $122,527 $290,753 64%
TE-10001 Utility Customer Billing System Multi-Year $850,000 $766,088 $0 $0 $4,500 $761,588 N/A On-going N/A Recurring Project
INTERNAL SERVICE FUND
INFORMATION TECHNOLOGY DEPARTMENT
MINOR PROJECTS
MULTI-YEAR PROJECTS $1
2/18/2015
Attachment D
Attachment D
FY 2015 MID-YEAR CAPITAL IMPROVEMENT PROGRAM PROJECTS STATUS
TECHNOLOGY FUND
Total
Budget FY 2015 Percent
Project Project Project From Available FY 2015 Labor FY 2015 Remaining Encumbered/Project Completion
Number Title Category Inception Budget Expenditures Adjustments Encumbrances Balance Expended Status Date Comments
INTERNAL SERVICE FUND
INFORMATION TECHNOLOGY DEPARTMENT
MINOR PROJECTSTE-12001 Development Center Blueprint Multi-Year $1,738,001 $1,278,574 $237,121 $0 $188,715 $852,738 51%On-going TBD Work is continuing on this project, and it is anticipated that a
recommendation to reappropriate remaining funding to FY
2016 will be included in the 2016 Proposed Capital Budget.
$23,230,524 $7,918,120 $783,125 0 $658,592 $6,476,403
2/18/2015
Attachment D
Attachment D
Total
Budget FY 2015 Budget Estimated
Project Project Project From Available FY 2015 Labor FY 2015 Remaining Percent Project Completion Number Title Category Inception Budget Expenditures Adjustments*Encumbrances Balance Complete Status Date Comments
VR-01001 MSC Fuel Storage Tank /Svc Island
Replacement
Minor $2,623,368 $63,083 $1,165 $0 $62,267 ($349) 100% Ongoing Dec 14 Project to be closed.
VR-06801 Replace City-Wide Fuel Transaction
and Inventory Management System
Minor $310,831 $108,955 $9,203 $0 $13,765 $85,987 72% Ongoing June 16 Looking into Inventory Management
Systems. Remaining funds will need to
be reappropriated for projects in
FY16.
VR-07001 Automated Motor Pool Reservation and
Vehicle Key Management System
Minor $127,875 $10,979 $0 $0 $0 $10,979 100% Complete Dec 14 Project to be closed.
VR-11000 Vehicle Replacement Minor $1,585,767 $325,177 $0 $0 $0 $325,177 100% Complete Dec 14 Project to be closed.
VR-12001 In-Ground Vehicle Lift Minor $450,000 $83,525 $0 $0 $0 $83,525 100% Complete Dec 14 Project to be closed.
VR-13000 Vehicle Replacement Minor $4,424,664 $1,474,682 $56,915 $0 $1,406,990 $10,777 100% Ongoing Dec 15 Remaining funds will need to be
reappropriated for vehicle outfitting in
FY16.
VR-14000 Vehicle Replacement Minor $3,000,000 $1,782,462 $644,501 $0 $1,010,833 $127,128 96% Ongoing Dec 15 Remaining funds will need to be
reappropriated for vehicle outfitting in
FY16.
VR-14001 Emergency Repair and Minor $100,000 $26,462 $5,418 $0 $0 $21,044 100% Complete Dec 14 Project to be closed.
VR-14002 MSC Fuel Station Demo Minor $240,000 $216,344 $42,001 $0 $18,589 $155,754 35% Ongoing Dec15 Remaining funds will need to be
reappropriated for completing project.
VR-04010 Vehicle Maintenance Facility Upgrades Multi-Year $561,733 $262,860 $0 $0 $1 $262,859 100% Complete Dec 14 CIP has been TECO'D and is ready to
close.
VR-07002 Diesel Truck Engine Emissions
Retrofits
Multi-Year $846,488 $25,344 $0 $0 $0 $25,344 97% Ongoing Dec 17 Remaining funds will need to be
reappropriated for diesel particulate
filters to be added to appropriate
vehicles.
VR-92006 Fuel Tank Storage/Upgrade Multi-Year $260,378 $9,199 $0 $0 $0 $9,199 96% Ongoing Dec 15 Remaining funds will need to be
reappropriated for upgrade in FY16.
FY 2015 MID-YEAR CAPITAL IMPROVEMENT PROGRAM PROJECTS STATUS
MINOR PROJECTS
MULTI-YEAR PROJECTS
INTERNAL SERVICE FUND
VEHICLE REPLACEMENT AND MAINTENANCE FUNDPUBLIC WORKS DEPARTMENT
2/18/2015
Attachment D
Attachment D
Total
Budget FY 2015 Budget Estimated
Project Project Project From Available FY 2015 Labor FY 2015 Remaining Percent Project Completion Number Title Category Inception Budget Expenditures Adjustments*Encumbrances Balance Complete Status Date Comments
FY 2015 MID-YEAR CAPITAL IMPROVEMENT PROGRAM PROJECTS STATUS
INTERNAL SERVICE FUND
VEHICLE REPLACEMENT AND MAINTENANCE FUNDPUBLIC WORKS DEPARTMENT
VR-15000 Scheduled Vehicle and Equipment
Replacements
Multi-Year $3,786,000 $3,786,000 $112,301 $0 $245,439 $3,428,260 9% Ongoing June 16 Remaining funds will need to be
reappropriated for purchase of
vehicles that remain on replacement
schedule for Fiscal Year 2015.
VR-15001 Emergency Repair and Replacement
Program
Multi-Year $100,000 $100,000 $9,792 $0 $0 $90,208 10% Ongoing June 20 Remaining funds at end of each fiscal
year can go back to Vehicle Reserve
Fund since new budget will be added
each year.
2/18/2015
Attachment D
YTD
Project Category Department/Fund Project Title FY 2011 FY 2012 FY 2013 FY 2014 FY 2015
Community Services - General Fund :
Land & Land Improvements AC-86017 Art in Public Places $77,956 $17,171 $59,526 80,497 40,015
Planning & Community Environment - General Fund :
Streets & Sidewalks PL-05030 Traffic Signal Upgrades 183,141 244,272 385,302 290,944 236,636
Public Works - General Fund :
Streets & Sidewalks PE-86070
Street Improvements (Street Improvement
Fund)4,710,791 3,170,679 7,097,782 5,072,597 2,467,328
Building & Facilities PF-00006 Roofing Replacement 104,617 319,495 246,068 119,682 3,599
Building & Facilities PF-01003 Building Systems Improvements 74,876 59,798 34,320 150,878 0
Building & Facilities PF-02022 Facility Interior Finishes 23,874 234,085 70,609 390,667 17,940
Building & Facilities PF-93009 ADA Compliance 9,994 167,537 10,019 16,024 834
Streets & Sidewalks PO-05054 Street lights Improvements 159,070 61,844 69,707 74,636 18,147
Streets & Sidewalks PO-89003 Sidewalk Improvements 1,611,917 1,673,715 1,864,954 2,160,793 1,336,097
Public Works - Storm Drainage Fund :
SD-06101 Storm Drain System Replacement 488,793 242,488 745,927 98,479 1,273
Public Works - Wastewater Treatment Fund :
WQ-80021 RWQCP Plant Equipment Replacement 66,916 589,965 1,840,887 2,449,616 1,431,677
WQ-80022 RWQCP System Flow Metering 28,468 0 0 9,770 0
Electric Fund :
EL-02011 Electric Utility GIS 321,713 175,382 127,798 65,294 32,894
EL-06005 Fiber Optics Ring System Improvements 0 0 0 0 0
EL-06006
Fiber Optics Customer Design and
Connection Services 0 0 0 0 0
EL-89028 Electric Customer Connections 1,882,242 2,522,815 2,802,451 2,922,100 703,382
EL-89031 Communications System Improvements 3,501 0 3,345 13,935 5,003
EL-89038 Substation Protection Improvements 129,086 200,418 188,049 158,683 93,032
EL-89044 Substation Facility Improvements 148,871 180,672 60,458 243,564 115,776
EL-98003
Electric Distribution System Reconstruction
and Improvements 1,608,521 2,389,593 1,453,123 1,319,059 1,240,197
Fiber Optics Fund :
FO-10000 Fiber Optic Customer Connections 88,061 125,913 291,425 360,428 138,793
FO-10001 Fiber Optic Network System Improvements 327,736 448,950 137,878 154,906 76,926
Five Years of Expenditures for Fiscal Years 2011-2015
Continuous Capital Projects
Attachment D
YTD
Project Category Department/Fund Project Title FY 2011 FY 2012 FY 2013 FY 2014 FY 2015
Five Years of Expenditures for Fiscal Years 2011-2015
Continuous Capital Projects
Gas Fund :
GS-02013
GS-03007 Directional Boring Equipment 162 20,160 0 289,195 0
GS-03002
GS-04003
GS-05002 Gas Main Replacements 86,159 54,157 0 0 0
GS-03008
Polyethylene Fusion Equipment
Replacement 444 0 24,055 26,718 0
GS-03009 System Extensions-Unreimbursed 7,718 0 90,838 92,466 17,272
GS-06001 Gas Main Replacements, GMR-Project 16 127,056 0 0 0 0
GS-07002 Gas Main Replacements, GMR-Project 17 211,515 139,958 577 0 0
GS-80017 Gas System Extensions 471,001 605,635 932,035 904,684 400,747
GS-80019 Gas Meters and Regulators 294,191 325,988 25,652 2,178 0
Wastewater Collection Fund:
WC-02002
WC-03003
WC-04002
Sewer System Rehabilitation and
Augmentation, Project 15,16 and 17 122,870 57,715 0 0 0
WC-05003
WC-06003
WC-07004
Sewer System Rehabilitation and
Augmentation, Project 18,19 and 20 94,468 188,511 241,489 56,751 0
WC-08012
WC-09001
WC-10002
Sewer System Rehabilitation and
Augmentation, Project 21,22 and 23 1,928,374 1,023,537 2,139,395 2,236,935 155,983
WC-80020 Sewer System Extensions 224,066 270,793 445,570 279,411 85,519
WC-99013 Sewer Manhole Rehabilitation 378,841 357,343 555,382 516,840 224,260
Water Fund :
WS-02014 Water-Gas Wastewater Utilities GIS Data 289,694 222,244 282,573 195,881 98,683
WS-06002 Water Main Replacements, Project 20 10,821 0 0 0 0
WS-07003 Water Main Replacements, Project 21 1,432,826 528 0 0 0
WS-80013 Water System Extensions 258,968 551,131 528,788 528,260 254,477
WS-80014 Service and Hydrant Replacements 44,232 151,928 359,994 67,570 81,388
WS-80015 Water Meters 0 34,000 4,183 346,743 89,841
Attachment D
Attachment F
Public Safety Departments
Overtime Analysis for Fiscal Years 2013 through 2015
thru 12/31/14
2013 2014 2015
POLICE DEPARTMENT
Overtime Expense
Adopted Budget $967,900 $1,500,000 $1,500,000
Modified Budget 970,382 1,500,000 1,500,000
Net Overtime Cost - see below (82,848) 593,565 463,414
Variance to Budget $1,053,230 $906,435 $1,036,586
Overtime Net Cost
Actual Expense $1,542,754 $1,711,764 $999,694
Less Reimbursements
Stanford Communications 51,299 54,552 36,493
Utilities Communications Reimbursement 28,247 29,845 21,127
Local Agencies (A)16,255 8,905 5,452
Police Service Fees 83,785 73,934 54,808
Total Reimbursements 179,586 167,236 117,881
Less Department Vacancies 1,446,017 950,963 418,399
Net Overtime Cost ($82,848) $593,565 $463,414
Department Vacancies (number of days)5,543 4,251 1,754
Workers' Compensation Cases 10 14 11
Department Disabilities (number of days)641 776 418
FIRE DEPARTMENT
Overtime Expense
Original Budget $1,624,415 $1,424,414 $1,424,414
Modified Budget (B)1,624,415 1,750,956 1,424,414
Net Overtime Cost - see below 628,711 1,012,521 346,310
Variance to Budget $995,704 $738,435 $1,078,104
Overtime Net Cost
Actual Expense $1,812,170 $2,562,549 $1,361,295
Less Reimbursements
Stanford Fire Services (C)549,088 776,452 412,472
Cal-Fire/FEMA (Strike Teams) - 50,542 -
Total Reimbursements 549,088 826,994 412,472
Less Department Vacancies 634,371 723,034 602,513
Net Overtime Cost $628,711 $1,012,521 $346,310
Department Vacancies (number of days)2,340 2,618 1,821
Workers' Compensation Cases 9 18 9
Department Disabilities (number of days)216 489 141
NOTES:
(A)Includes Animal Services contract with Los Altos and Los Altos Hills.
(B)Does not include Strike Team Reimbursement of $184,296 recommended in this Report.
(C )Stanford reimburses 30.3% of Fire Service expenditures.
2/18/2015
Attachment D
FINANCE COMMITTEE
DRAFT MINUTES
Page 1 of 11
Regular Meeting
Tuesday, March 3, 2015
Chairperson Schmid called the meeting to order at 7:02 P.M. in the Council
Chambers, 250 Hamilton Avenue, Palo Alto, California.
Present: Filseth, Kniss, Scharff, Schmid (Chair)
Absent:
Oral Communications
None
Agenda Items
James Keene, City Manager, requested the meeting begin with Agenda Item
Number 2.
Chair Schmid concurred.
2. Finance Committee Recommendation Regarding Adoption of a Budget
Amendment Ordinance Amending the Budget for Fiscal Year 2015 to
Adjust Budgeted Revenues and Expenditures in Accordance with the
Recommendations in the FY 2015 Midyear Budget Review Report.
Walter Rossmann, Office of Management and Budget Director, reported Staff
had evaluated the financial status of all funds and recommended Budget
adjustments. Staff expected the General Fund to generate a one-time
surplus of approximately $5 million by year end, because some revenues
had performed better than expected. With the surplus, the Budget
Stabilization Reserve (BSR) balance was projected to be $38 million by the end of the fiscal year (FY) or 22 percent of the Adopted Expenditure Budget.
The Council target for the BSR was 18.5 percent or $32 million. As part of
the FY 2016 Proposed Budget and the closing of the current year Budget,
Staff would recommend actions to align the BSR balance to the Council
target of 18.5 percent.
DRAFT MINUTES
Page 2 of 11
Finance Committee Regular Meeting
Draft Minutes 3/3/2015
Council Member Scharff asked if the Council voted to dedicate surplus funds
to infrastructure projects.
James Keene, City Manager, advised that the Council made some decisions
in 2014 with respect to closing the infrastructure gap. The Council had
authorized the City Manger on a standing basis to dedicate a surplus in any
year to the Infrastructure Reserve which had been Staff's practice. That
would be one of the recommendations Staff would review for FY 2016.
Mr. Rossmann projected property tax revenues to increase by $600,000.
Primarily due to a one-time adjustment of the accrual period from 12 to 13
1/2 months in the current year, sales tax was projected to increase by $3.3
million. The Transient Occupancy Tax (TOT) rate increased from 12 percent
to 14 percent. That increase was the primary reason for the increase in
projections for TOT receipts in the amount of $1.7 million. Charges for
Services showed significant increases as well primarily due to the Golf
Course staying open. The Adopted Budget assumed the golf course would
be closed; however, it had remained open and generated revenue. The City
was receiving additional reimbursement from the fire contract with Stanford
University due to the reconciliation of FY 2014 charges. Revenue increases
were offset by lower than expected receipts from the Utility User Tax (UUT) and documentary transfer tax. The recommended adjustments for UUT
projections were primarily due to lower water and gas consumption by Palo
Alto residents. As previously reported, receipts from the documentary
transfer tax could vary significantly from year to year. Through December
2014, tax receipts were running 44 percent below the prior year. Therefore,
Staff recommended reducing that revenue receipt projection by $1 million at
the current time. Expense adjustments were net increases to departmental
budgets. Staff recommended approval of funding for four items with an
impact of slightly more than $100,000 to the General Fund: 1) a temporary
increase to a performance audit position from half-time to full-time; 2) an
online sustainability dashboard; 3) a Fire Services resources deployment
software; and 4) an integration of Development Impact Fees in the Planning
Department as part of the City's online permit processing and tracking
system Accela. The City received reimbursement from the State for
overtime incurred during the 2014 fire season, and the Library received two
grants. Reimbursement for Fire Department overtime totaled $184,000
which Staff recommended be used to increase the Overtime Budget. In
December 2014, the Council approved reimbursement to Ada's Café for
construction delays at Mitchell Park Community Center which was initially
paid from the City Manager Contingency Account. Staff recommended
reimbursing the City Manager Contingency Account. As part of developing
the FY 2015 Budget, Staff inadvertently did not budget for the Know Your
Neighbor Grant Program in the amount of $25,000, which was paid from the
DRAFT MINUTES
Page 3 of 11
Finance Committee Regular Meeting
Draft Minutes 3/3/2015
City Manager Contingency Account. Staff recommended reimbursement of
the City Manager Contingency Account for that amount. Staff proposed
adding one position in the City Attorney's Office without funding. That would
allow the City Attorney to recruit for a principle attorney position, and the
funding would be included in the FY 2016 Proposed Budget. As part of the
Finance Committee's (Committee) discussion of Police and Fire Department
overtime expenditures, the Staff Report contained a detailed discussion of overtime for those two departments and a net cost analysis in Attachment F
of the staff report. As of December 31, 2014, the Fire Department had
expended approximately 95 percent of its $1.4 million Budget. The primary
reasons for the current level of overtime expenditure were threefold: 1) the
deployment of fire staff to Northern California during the 2014 fire season;
2) the number of vacancies; and 3) staff on workers' compensation leave.
Staff recommended reimbursement of amounts due to the fire season
deployment of $184,000. Given the current level of vacancies and related
vacancy savings, Staff expected the Fire Department Salary and Fringe
Benefits Budget combined would not exceed projections by year end. For
the first six months of the fiscal year, the Police Department had expended
two-thirds of its Overtime Budget primarily due to vacancies and staff on workers' compensation leave. At the current time, the Salary and Fringe
Benefits Budget was tracking slightly higher than expected; therefore, Staff
would carefully monitor the Budget so that it would remain within budgeted
levels by year end. As part of the approval of the Midyear Budget Review,
Staff recommended significant adjustments in the Electric, Gas, and Water
Funds. The primary reasons for the recommended adjustments were the
ongoing drought and the warmer than expected winter. In the Electric Fund,
the drought resulted in a lower generation of hydroelectric power and the
necessity to purchase more electricity. In the Gas Fund, lower costs for
commodities and the warmer than expected winter resulted in lower
commodity purchase costs and even lower revenues from utility customers.
Due to the drought, Palo Alto residents consumed less water resulting in
lower commodity costs and revenues with a near zero impact to the Fund.
In preparation for the FY 2016-2020 Capital Improvement Program (CIP)
Budget, Staff reviewed all active projects and recommended closing 36
projects in all funds. The impact of closing projects returned $2.7 million to
the various funds. Staff recommended adjusting funding for five projects to
align funding with the circumstances of these projects. With the
recommended adjustments, all funds were expected to end the fiscal year
within budgeted levels. Staff requested the Committee recommend the
Council approve Staff recommendations.
Mr. Keene reiterated that the sales tax revenue increase was one-time due
to adjustment of the accrual period. The increase in TOT was not entirely
DRAFT MINUTES
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Finance Committee Regular Meeting
Draft Minutes 3/3/2015
fungible. That money would be dedicated to the Infrastructure Funding Plan.
A later discussion of utility rates would relate to changes in costs.
Council Member Kniss inquired about the amount of the 2010 deficit.
Mr. Rossmann would report that information shortly.
Council Member Kniss felt the City was in good financial shape. At some
point, the public would want to know how the City spent surplus funds. She
requested additional details regarding expenditure of the surplus. Water customers would question an increase in water rates when they were using
less water.
Mr. Keene advised that the deficit in 2010 was $10 million. Since then, Staff
reduced General Fund positions by approximately 12 percent. In the
downturn, the City did not tap into reserves below the Council's established
ranges. The City's AAA bond rating served it well. When the City generated
surpluses, the Council decided to spend down those surpluses on one-time
expenses rather than obligating the City to recurring costs. The City had
almost closed the gap in the Infrastructure Funding Plan. In 2014, the
Council approved a series of one-time items for FY 2015 to spend down the
surplus.
Council Member Kniss reiterated that the City had a surplus because it had not hired employees. There was a big difference between a deficit of $10
million and a surplus of $5 million. She wanted to enjoy having a healthy
Budget.
Council Member Filseth noted the surplus was mainly a result of an
accounting change which would not recur.
Mr. Keene wished to prevent the community from misunderstanding that
good times would extend forever. Staff's focus and recommendations for
the FY 2016 Budget would be to carefully evaluate position increases. The
City had unfunded obligations to which Staff and the Council had to pay
attention.
Council Member Kniss suggested the unfunded liabilities were worthy of a
separate discussion. Other agencies were handling them differently, and the
Committee should review those actions.
Council Member Scharff asked what was a sustainability dashboard.
Mr. Keene indicated dashboards rather than spreadsheets were used to
assemble metrics.
DRAFT MINUTES
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Finance Committee Regular Meeting
Draft Minutes 3/3/2015
Gil Friend, Chief Sustainability Officer, explained that the sustainability
dashboard was a cloud-based performance management system that would
make it easier to streamline collection and analysis of sustainability
performance data. Staff currently collected metrics slowly and manually.
Use of automated data collection from existing systems reduced the chance
of error. A dashboard would allow the Council and the community to have a
better and more accurate real-time view of trends and performance.
Council Member Scharff inquired whether it was a software package.
Mr. Friend advised the dashboard was a software package hosted in the
cloud.
Council Member Scharff understood a dashboard would free Staff to do other
things.
Mr. Friend added that was a strong motivation for having a dashboard.
Mr. Keene remarked that a dashboard would provide ongoing trend
comparative data and the ability to report data in graphic and visual forms
that allowed easier identification of trends.
Mr. Friend reported Staff would be able to compare greenhouse gas
emissions year-by-year, by department, or by function or activity. Staff
would be able to review energy and resource use across the City and commercial and residential customers of Palo Alto utilities to understand
increases and decreases and rates of change and to target efficiency
programs. Staff was reviewing methods to improve the profile of the City's
fleet by prioritizing electric vehicles where appropriate in order to more
effectively optimize decisions, allocations, purchases, and management of all
that. Equally important, that information should be easy to access and easy
to understand so that more and more Staff could manage their actions more
effectively.
Council Member Scharff inquired whether data would be available for people
to integrate into applications.
Mr. Friend answered not in the first phase. The first phase would implement
the dashboard and integrate data. Data could possibly be opened to the
community subject to confidentiality concerns.
Council Member Scharff noted the City had a strong open data policy and
wanted to ensure the City was not locked into something.
DRAFT MINUTES
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Finance Committee Regular Meeting
Draft Minutes 3/3/2015
Mr. Friend advised that the Request for Proposal (RFP) and selection of
vendors contained no lock-in provision.
Council Member Scharff requested the rationale for not providing data in the
first phase.
Mr. Friend wanted to ensure data was clean and accurate. The license
negotiated with the selected vendor provided a finite number of seats;
therefore, Staff had to negotiate the scope and breadth of data to be provided. The default for data should be as open as possible and as wide as
possible.
Council Member Scharff asked if using the software package would limit the
number of people who could view data.
Mr. Keene explained that the City purchased a certain number of licenses for
any software. The City would purchase licenses for Staff use. Staff would
utilize accurate data to produce a dashboard report. At the same time, the
City's policy was open data. Data from the dashboard would be loaded into
the open data website which would allow other people to access and use it.
He hoped someone would develop a free app that would multiply the
benefits of the data.
Mr. Friend reported Staff would increasingly place selected, highly useful data streams on the website and work to open as much data as possible as
quickly as possible, with the understanding that the community would find
meaning in the data beyond what Staff found.
Council Member Scharff believed the increase in TOT receipts should be
listed as a separate amount, because the Council had dedicated those
receipts for infrastructure projects.
Mr. Rossmann would do so as part of closing the FY 2015 Budget.
Joe Saccio, Administrative Services Assistant Director, added that TOT
receipts from new hotels would also be segregated.
Council Member Scharff felt the $3.4 million reduction in the Gas Reserve
Fund was a warning sign. People were buying less gas which was offset by
lower commodity purchases. Without lower commodity purchase prices, the
Gas Fund would be in worse shape. He inquired whether a $2.6 million
accounting error in the original Budget was part of the reason for reducing
the Reserve.
DRAFT MINUTES
Page 7 of 11
Finance Committee Regular Meeting
Draft Minutes 3/3/2015
Mr. Rossmann replied yes. When Staff set up the Budget for the Gas Fund
in FY 2015, they did not align it well to the Financial Plan. Staff was
correcting that for FY 2016.
Council Member Scharff inquired about Staff actions to ensure the City did
not deplete the Gas Reserve Fund.
Mr. Keene advised that Staff was responding to the Colleague's Memo from
the Council regarding fuel switching. Staff would present the implications of fuel switching to the Council, at which point he raise Council Member
Scharff's question.
Council Member Filseth commented that the reduction to the Gas Reserve
Fund would have been $5.5 million if gas prices had not been low. Staff
inadvertently overstated customer sales revenue in the FY 2015 Budget. He
noticed a similar line in the Electricity Fund and asked if that was the same
error.
Mr. Rossmann stated Staff should have aligned the Financial Plan to the
Budget document. Staff was working closely with Utilities to ensure the FY
2016 Budget aligned with the Financial Plan.
Council Member Filseth asked if it was a one-time error.
Mr. Rossmann replied yes.
Jon Abendschein, Senior Resources Planner, added that decreases in
reserves were not directly related to the coordination issue. Staff set rates
based on accurate revenue numbers. The revenue decreases were
accounted for in rate planning.
Chair Schmid noted three columns for Adopted Budget, Adjusted Budget,
and Midyear Budget. He inquired whether the Committee should approve
the Adjusted Budget or the Midyear Budget.
Mr. Rossmann explained that the Adjusted Budget reflected all actions
approved by the Council in the prior six months with Budget Amendment
Ordinances (BAO) as well encumbrances. Staff requested the Committee
approve each action identified in Attachment A of the report.
Chair Schmid asked if every adjustment was contained in the Midyear
Budget.
Mr. Rossmann responded yes.
DRAFT MINUTES
Page 8 of 11
Finance Committee Regular Meeting
Draft Minutes 3/3/2015
Chair Schmid remarked that there were astounding differences between the
Adopted Budget and the Midyear Budget, especially in Utility Funds. The net
reserves in the Adopted Budget indicated a $3.7 million decline. The
Midyear Budget indicated a $22 million decline. Total sources of revenue,
reappropriations, and encumbrances of $14 million were added in. He
requested Staff provide reasons for these dramatic differences.
Mr. Rossmann explained that the Capital Improvement Program (CIP) totaled $9.7 million in the Adopted Budget and $24 million in the Adjusted
Budget. The majority of that amount was reappropriations, funds in existing
projects that would be carried forward from year to year. Starting in FY
2016, Staff would request Council approval to reappropriate existing funds
annually rather than on an accounting basis. That would change the
variance.
Chair Schmid asked if a line item for reappropriations and encumbrances
would be included as a revenue item in the FY 2016 Proposed Budget.
Mr. Rossmann indicated reappropriations would not have a line item but
encumbrances would continue to be shown as a line item.
Mr. Keene advised that the City typically had sizeable reappropriations in the
Capital Budget. When the Council adopted both the Capital and Operating Budgets, Staff had not reconciled those at the beginning of the year. At this
point in the year, Staff was making significant reappropriations. He
instructed Staff to anticipate funds that would not be spent in the current
year in the Capital Budget and to include reappropriations at the beginning
of the year.
Chair Schmid inquired whether reappropriations were submitted through a
Reserve account.
Mr. Rossmann responded yes.
Chair Schmid assumed Staff had some other means of accounting for
reappropriations that were not placed into General Fund Reserves or other
general reserves.
Mr. Rossmann advised that funds in existing projects were carried forward or
reappropriated. Staff would recommend to the Committee and the Council
uses for yearend surplus funds in the General Fund.
Chair Schmid asked if the first category of funds was encumbered.
DRAFT MINUTES
Page 9 of 11
Finance Committee Regular Meeting
Draft Minutes 3/3/2015
Mr. Rossmann explained that those funds were encumbered to some degree,
but not necessarily in contracts. The former Code allowed Staff to
reappropriate funds automatically if funds for the project had been spent
except if no funds had been spent for two years. The Council approved a
change of that process. Regardless of whether funds had been spent for a
project, Staff will have to obtain Council approval to reappropriate funds
starting with FY 2015.
Chair Schmid suggested Staff explain that in the FY 2016 Budget process.
David Ramberg, Administrative Services Assistant Director, reported during
the year end process, the Committee and the Council approved the transfer
of encumbrances from the prior fiscal year to the new fiscal year. That was
a Council approved item. A large share of those encumbrances were
different from reappropriations. The encumbrances were for contracts and
commitments that Staff needed to carry forward into the next year.
Council Member Filseth inquired whether a process to reappropriate funds at
the beginning of each year would create a "spend it or lose it" situation.
Mr. Rossmann answered no. Staff requested an estimate of expenditures for
the remainder of the fiscal year from each department and appropriated the
balance forward. Staff could recommend a clean-up action to reappropriate remaining funds. Funds would remain in those projects that could not be
spent in that fiscal year.
Mr. Keene added that reappropriating funds guarded against Staff rushing to
spend funds.
Council Member Kniss inquired whether sales tax increased substantially
without the $1.7 million resulting from changing the accrual period.
Mr. Rossmann responded yes.
Council Member Kniss calculated the increase was approximately 8 or 9
percent.
Mr. Rossmann indicated approximately 6-7 percent.
Council Member Kniss asked if that was a substantial increase in sales tax.
Mr. Rossmann answered yes. Staff reviewed sales tax and vendor receipts
to predict which sales tax group would generate more sales tax.
Council Member Kniss inquired about the amount of sales tax generated by
retail.
DRAFT MINUTES
Page 10 of 11
Finance Committee Regular Meeting
Draft Minutes 3/3/2015
Mr. Saccio reported most of the increase came from retail sales.
Council Member Kniss remarked that the amount of sales tax generated by
retail sales seemed to indicate a robust retail environment.
Mr. Saccio agreed. Staff had seen good numbers on sales tax from retail.
Council Member Kniss noted receipts from retail sales tax and property tax
were robust.
Chair Schmid inquired whether the City had only one new position.
Mr. Rossmann indicated the City had one new approved position.
Sometimes the Council authorized Staff to hire up to 20 people to fill over-
strength positions. Temporary positions were sometimes used to backfill
vacant positions.
Chair Schmid asked if the FY 2016 Proposed Budget would contain a
statement of new positions.
Mr. Rossmann replied yes. Any position the City Manager recommended
would be presented as part of the Proposed Budget.
Chair Schmid expressed concerned about the number of workers'
compensation vacancies in the Police and Fire Departments and their impact
on overtime. He asked if there was an association between workers'
compensation cases and the age structure of the Fire Department.
Eric Nickel, Fire Chief, reported some studies showed a correlation between
increased workers' compensation injuries and the age of employees. That
was true for all Public Safety Employees. 40 percent of Fire Department
employees were eligible for retirement in the next five years. The number of
workers' compensation cases were half those of the prior year. Ten
vacancies within the Fire Department were not associated with workers'
compensation leave.
Chair Schmid inquired about the cause of the decrease in documentary
transfer tax receipts.
Mr. Saccio advised that the number of transactions was down by almost 100
over last year.
Chair Schmid asked if the number of transactions declined because of a
decrease in residential construction.
DRAFT MINUTES
Page 11 of 11
Finance Committee Regular Meeting
Draft Minutes 3/3/2015
Mr. Saccio indicated the dollar volumes decreased by almost 37 percent.
Compared to the prior year, large commercial transactions had decreased.
Staff did not have information to segregate residential from commercial.
Chair Schmid felt that was striking given the growth in commercial
construction.
Mr. Saccio had been tracking the Palo Alto Square project, but did not know
when a transaction would occur. That transaction could be a sizeable amount. The adjustment was based on activity year to date.
Chair Schmid noted the Electric Fund had a decline in Reserves of $22
million.
Mr. Abendschein reported decreases within the Electric Utility were related to
the drought. He would review information to determine the amount of the
decrease related to revenue adjustments resulting from the coordination
issue mentioned earlier. There were some substantial changes related to
the drought. The Electric Utility had substantial Reserves.
MOTION: Council Member Kniss moved, seconded by Council Member
Filseth to recommend to the City Council to adopt the Fiscal Year 2015
Midyear Budget Amendment Ordinance for the proposed midyear
adjustments to the Fiscal Year 2015 Budget for the General Fund, Capital Improvement Projects Fund, Enterprise Funds, Special Revenue Funds,
Internal Service Funds and related exhibits.
MOTION PASSED: 4-0
City of Palo Alto (ID # 5593)
City Council Staff Report
Report Type: Consent Calendar Meeting Date: 4/20/2015
City of Palo Alto Page 1
Summary Title: Gas Compressed Natural Gas (CNG) Rate Option
Title: Staff Recommendation that the City Council Adopt a Resolution
Amending Gas Rate Schedule G-10 (Compressed Natural Gas Service) to
Recover Cap-and-Trade Regulatory Compliance Costs and Approving New
Palo AltoGreen Gas Rate Schedule G-10-G (Compressed Natural Green Gas
Service)
From: City Manager
Lead Department: Utilities
Recommendation
Staff recommends that Council adopt a resolution (Attachment A) amending Gas Rate Schedule
G-10 (Compressed Natural Gas Service) and adding new PaloAltoGreen Gas Rate Schedule G-
10-G (Compressed Natural Green Gas Service).
Executive Summary
At its 2014 “Earth Day” meeting, the City Council established the PaloAltoGreen Gas Program
and created new PaloAltoGreen Gas rate schedules for all residential and commercial gas rates.
However, a new PaloAltoGreen Gas rate schedule for the City’s compressed natural gas (CNG)
fueling station (Rate Schedule G-10) was not included. In addition, in January 2015, the City
Council amended retail gas rate schedules to include a new rate component for State’s
mandated cap-and-trade regulatory compliance costs. Again, the G-10 rate was inadvertently
omitted from the updated gas rate schedules. Approval of this recommendation will align the
gas rate schedules for CNG service with the rest of the City’s gas rate schedules.
Discussion
In March 2013, Council adopted the Carbon Neutral Plan for electricity supplies (Staff Report
3550). On April 21, 2014, the City Council adopted a resolution establishing the PaloAltoGreen
Gas Program (Staff Report 4596, Resolution 9405) to allow customers to voluntarily reduce or
eliminate the greenhouse has (GHG) emissions associated with their use of natural gas.
Although new PaloAltoGreen Gas rate schedules were created for all residential and
commercial gas rates, a new PaloAltoGreen Gas rate schedule for the City’s CNG fueling station
(Rate Schedule G-10) was not included. Creating new Rate Schedule G-10-G would allow the
City of Palo Alto Page 2
City’s CNG station to participate in the PaloAltoGreen Gas program and enable the CNG station
to provide their users carbon-neutral CNG supplies
At its January 26, 2015, City Council adopted a new rate component, the Cap-and-Trade
Compliance Charge, which applies to all of the City’s natural gas rate schedules to pass-through
costs related to the requirement to purchase GHG allowances in the California Air Resource
Board’s (CARB) cap-and-trade program (Staff Report 5397). Unfortunately, the G-10 Rate
Schedule was again unintentionally omitted from the list of rate schedules updated with this
change
Resource Impact
Both the PaloAltoGreen Gas and the Cap-and-Trade Compliance Cost rate components were
designed to be revenue neutral and collect the costs of their respective programs. The Cap-
and-Trade Compliance Charge will vary based on auction market prices for allowances, from
$0.00 to $0.25 per therm over the 2015 – 2020 compliance period. Based on recent auction
market clearing prices, the initial rate range is projected to be between $0.01 and $0.02 per
therm. Since usage at the CNG facility is about 10,000 therms per month, the cost impact to
the CNG facility is initially expected to be between $100 and $200 per month. If the CNG
facility participates in the PaloAltoGreen Gas program at $0.12 per therm, the additional cost
would be about $1,200 per month.
Policy Impact
The recommendation does not change City policy and supports the Council-approved Utilities
Strategic Plan’s environmental sustainability and customer service objectives.
Environmental Impact
The proposal to amend the City’s natural gas rate schedules to cover the cost of regulatory
compliance with the state’s cap-and-trade program and to meet the operating expenses of the
voluntary PaloAltoGreen gas program is statutorily exempt from environmental review,
pursuant to Public Resources Code section 21080(b)(8) and Title 14 of the California Code of
Regulations Sec. 15273(a).
Attachments:
Attachment A: Resolution of the Council of the City of Palo Alto Amending Gas Rate
Schedule G-10 and Adding Gas Rate Schedule G-10-G (PDF)
Attachment B: Proposed Amendment to Gas Rate Schedule G-10 (Compressed Natural
Gas Service) (PDF)
Attachment C: Proposed New Gas Rate Schedule G-10-G (Compressed Natural Green
Gas Service) (PDF)
Attachment A
* NOT YET APPROVED *
1
150402 sdl 6053291
Resolution No. _________
Resolution of the Council of the City of Palo Alto Amending Rate
Schedule G-10 (Compressed Natural Gas Service) to Recover Cap-
and-Trade Regulatory Compliance Costs and Approving New Palo
AltoGreen Gas Rate Schedule G-10-G (Compressed Natural Green
Gas Service)
R E C I T A L S
A. On January 26, 2015, the City Council amended retail gas rate schedules to
recover compliance costs associated with the state’s mandatory cap-and-trade program (Staff
Report 5397, Resolution 9488), however rate schedule G-10 (Compressed Natural Gas Service)
was inadvertently omitted from the package of gas rate schedules presented.
B. On April 21, 2014, the City Council established the PaloAltoGreen Gas Program
(Staff Report 4596, Resolution 9405) to allow customers to voluntarily reduce or eliminate the
greenhouse gas emissions associated with their natural gas usage, however rate schedule G-10
(Compressed Natural Gas Service) was unintentionally omitted from inclusion in the Green Gas
Program.
C. The Council wishes to correct this oversight in order to enable the City’s gas
utility to recover the cost of providing service under the state mandated cap-and-trade
program, and to include all gas rate schedules in the City’s voluntary Palo AltoGreen Gas
Program.
D. Pursuant to Chapter 12.20.010 of the Palo Alto Municipal Code, the Council of
the City of Palo Alto may by resolution adopt rules and regulations governing utility services,
fees and charges.
The Council of the City of Palo Alto does hereby RESOLVE as follows:
SECTION 1. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility
Rate Schedule G-10 (Compressed Natural Gas Service ) is hereby amended to read as attached
and incorporated. Utility Rate Schedule G-10, as amended, shall become effective April 20,
2015.
SECTION 2. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility
Rate Schedule G-10-G (Compressed Natural Green Gas Service) is added as attached and
incorporated. Utility Rate Schedule G-10-G, as amended, shall become effective April 20, 2015.
SECTION 3. The Council finds that the revenue derived from the adoption of this
resolution shall be used only for the purpose set forth in Article VII, Section 2, of the Charter of
the City of Palo Alto.
Attachment A
* NOT YET APPROVED *
2
150402 sdl 6053291
SECTION 4. The Council finds that the fees and charges adopted by this resolution are
charges imposed for a specific government service or product provided directly to the payor
that are not provided to those not charged, and do not exceed the reasonable costs to the City
of providing the service or product.
SECTION 5. The Council finds that the adoption of this resolution changing gas rates
to cover the cost of regulatory compliance with the state’s cap-and-trade program and to meet
the voluntary Palo AltoGreen Gas Program’s operating expenses is statutorily exempt from
environmental review under the California Environmental Quality Act (CEQA), pursuant to
California Public Resources Code Sec. 21080(b)(8) and Title 14 of the California Code of
Regulations Sec. 15273(a). After reviewing the staff report and all attachments presented to
Council, the Council incorporates these documents herein and finds that sufficient evidence has
been presented setting forth with specificity the basis for this claim of CEQA exemption.
INTRODUCED AND PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:
___________________________ ___________________________
City Clerk Mayor
APPROVED AS TO FORM: APPROVED:
___________________________ ___________________________
Senior Deputy City Attorney City Manager
___________________________
Director of Utilities
___________________________
Director of Administrative Services
COMPRESSED NATURAL GAS SERVICE
UTILITY RATE SCHEDULE G-10
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Supersedes Sheet No G-10-1 Effective 14-120-20135
dated 71-1-20123 Sheet No.G-10-1
A. APPLICABILITY:
This schedule applies to the wholesale sale of natural gas to the City-owned compressed natural gas
(CNG) fueling station at the Municipal Service Center in Palo Alto
B. TERRITORY:
The City-owned compressed natural gas (CNG) fueling station located Applies to location at the
Municipal Service Center in City of Palo Alto.
C. UNBUNDLED RATES: Per Service
Monthly Service Charge: ........................................................................................................$50.65
Per Therm
Supply Charges:
Commodity (Monthly Market Based) ................................................................ $0.10-$2.00
Administrative ..........................................................................................................$0.0074
Transportation ..........................................................................................................$0.0435
Cap and Trade Compliance Charges .............................................................. $0.00 to $0.25
Distribution Charge ...............................................................................................................$0.0509
D. SPECIAL CONDITIONS
1. Calculation of Cost Components
The actual bill amount is calculated based on the applicable rates in Section C above and adjusted for
any applicable discounts, surcharges and/or Ttaxes. On a Customer’s bill statement, the bill amount
may be broken down into appropriate components as calculated under Section C.
The Commodity charge is based on the monthly natural gas Bidweek Price Index for delivery at
PG&E Citygate, accounting for delivery losses to the Ccustomer’s Mmeter. The Cap and Trade
Compliance Charge reflects the City’s cost of regulatory compliance with the state’s Cap and Trade
Program, including the cost of acquiring compliance instruments sufficient to cover the City’s Gas
Utility’s compliance obligations. The Cap and Trade Compliance Charge will change in response to
changing market conditions, retail sales volumes and the quantity of allowances required. The
Commodity and Cap and Trade Compliance Ccharges will fall within the minimum/maximum range
set forth in Section C.
ATTACHMENT B
COMPRESSED NATURAL GAS SERVICE
UTILITY RATE SCHEDULE G-10
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Supersedes Sheet No G-10-2 Effective 14-120-20135
dated 71-1-20123 Sheet No.G-10-2
{End}
COMPRESSED NATURAL GREEN GAS SERVICE
UTILITY RATE SCHEDULE G-10-G
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Effective 4-20-2015
Sheet No.G-10-G-1
A. APPLICABILITY:
This schedule applies to the wholesale sale of natural gas to the City-owned compressed natural gas
(CNG) fueling station at the Municipal Service Center in Palo Alto under the PaloAltoGreen Gas
Program:
B. TERRITORY:
The City-owned compressed natural gas (CNG) fueling station located at the Municipal Service Center
in City of Palo Alto.
C. UNBUNDLED RATES: Per Service
Monthly Service Charge: ........................................................................................................$50.65
Per Therm
Supply Charges:
Commodity (Monthly Market Based) .................................................... $0.10-$2.00
Cap and Trade Compliance Charges .................................................. $0.00 to $0.25
Distribution Charge ...............................................................................................................$0.0509
PaloAltoGreen Gas Charge ...................................................................................................$0.1200
D. SPECIAL CONDITIONS
1. Calculation of Cost Components
The actual bill amount is calculated based on the applicable rates in Section C above and adjusted for
any applicable discounts, surcharges and/or Taxes. On a Customer’s bill statement, the bill amount
may be broken down into appropriate components as calculated under Section C.
The Commodity charge is based on the monthly natural gas Bidweek Price Index for delivery at
PG&E Citygate, accounting for delivery losses to the Customer’s Meter. The Cap and Trade
Compliance Charge reflects the City’s cost of regulatory compliance with the state’s Cap and Trade
Program, including the cost of acquiring compliance instruments sufficient to cover the City’s Gas
Utility’s compliance obligations. The Cap and Trade Compliance Charge will change in response to
ATTACHMENT C
COMPRESSED NATURAL GREEN GAS SERVICE
UTILITY RATE SCHEDULE G-10-G
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Effective 4-20-2015
Sheet No.G-10-G-2
changing market conditions, retail sales volumes and the quantity of allowances required. The
Commodity and Cap and Trade Compliance Charges will fall within the minimum/maximum range
set forth in Section C.
2. PaloAltoGreen Gas Program Description and Participation
PaloAltoGreen Gas provides for the reduction of green-house gas (GHG) emissions associated with a
Customer’s Gas usage, through the purchase of certified environmental offsets, with a preference to
projects located in California. Purchases are made to match 100% of the therm usage at the
Customer’s premises every month.
Customers choosing to participate shall fill out a PaloAltoGreen Gas Program application provided
by the Customer Service Center.
{End}
City of Palo Alto (ID # 5497)
City Council Staff Report
Report Type: Consent Calendar Meeting Date: 4/20/2015
City of Palo Alto Page 1
Summary Title: Approval of Employee Benefits Contracts for Dental, Vision,
Life, AD&D, and LTD
Title: Approval of Three Contracts with: 1) Delta Dental for Dental Claim
Administration; 2) Vision Service Plan for Vision Claim Administration and
Fully Insured Vision Plan; and 3) Life Insurance Company of North America
(CIGNA) for Underwriting of the City of Palo Alto’s Group Life, Accidental
Death and Dismemberment (AD&D), and Long Term Disability Insurance
(LTD) Plans for Up to Three Years for Each Contract
From: City Manager
Lead Department: City Manager
Recommendation
Staff recommends that Council:
1. Approve and authorize the City Manager or his designee to execute the attached
contract with Delta Dental in the amount of $359,522 for a three-year term to provide
third-party claims administration services for the City of Palo Alto’s dental plan.
2. Approve and authorize the City Manager or his designee to execute the attached
contract with VSP in the amount of $603,849 for a three-year term to provide third-
party claims administration services for the City of Palo Alto’s basic vision plan and
provide a fully insured option for the premier vision plan.
3. Approve and authorize the City Manager or his designee to execute the attached
contract with Life Insurance Company of North America (CIGNA) in the amount up to
$2,137,758 a for three-year term to provide group life, accidental death and
dismemberment (AD&D), and long-term disability (LTD) insurance benefits and Leave of
Absence administration (LOA).
City of Palo Alto Page 2
Background
The City offers a benefit package to employees that includes Dental, Vision, and group life,
AD&D, LTD, and leave benefits, as negotiated in various bargaining unit agreements. The City
provides these benefits through a combination of self-insured and fully-insured plans. This
report covers the contract renewal for benefit administration and/or insurance related to these
benefits.
Dental Discussion
The work to be performed under the dental contract is for third-party claims payment
administration services for the City’s self-funded dental plan, currently provided by Delta
Dental. Delta Dental was originally selected in 2005 following a Request for Proposal (RFP) for
dental claims administration services. That contract allowed the City to lower its claims cost
and achieve cost savings in the amount of $61,951 annually. At the end of the most recent
third-year term of the current contract with Delta Dental, the City again requested proposals
for these services to determine if lower claims costs could be achieved beginning in 2015.
Following the most recent competitive RFP process, Delta Dental was again selected as the
most competitive vendor for the City.
The most recent competitive solicitation process was conducted with the assistance of the
City’s benefit broker, Wells Fargo Insurance Services, with the intent to seek a third-party
claims administrator who can: 1) continue to reduce claims costs; 2) provide high quality
customer service; and 3) administer the City’s current “incentive model” plan design. The City’s
dental plan has a unique incentive plan design that pays an increasing share of the diagnostic
and preventive treatment cost provided that the individual utilizes the plan once during each
calendar year, recognizing that preventive care will help to control future treatment costs. The
percentage of payment for diagnostic and preventive treatment is as follows:
First year of eligibility 70%
Second year of eligibility 80%
Third year of eligibility 90%
Fourth year of eligibility 100%
City of Palo Alto Page 3
Summary of solicitation process:
Human Resources staff carefully reviewed the five (5) responding firms’ qualifications and
recommends continuing its third-party administrator services with Delta Dental. The Preferred
Provider Option (PPO) plan alternative offered through Delta Dental has the largest network of
providers which will have lower costs for the City and employees who use providers in that
plan. Delta Dental has a superior reputation for quality customer service and overall has
provided good dental administration services to City staff during the previous three contracts
while at the same time, producing claims savings for the City and its employees through its
extensive provider network. Finally, Delta Dental was the only responsive bidder that could
keep the same benefit structure currently offered to all employees. Significant changes in plan
could require the City to enter negotiations with some employee groups.
Vision Discussion
The work to be performed under this contract is for both third-party claims payment
administration services for the City’s self-funded vision plan, and a fully insured buy-up premier
vision option. Vision services are currently provided by Vision Services Plan (VSP).
This year a Request for Proposals (RFP) was conducted with the assistance of the City’s benefit
broker with the intent to seek a third-party claims administrator who can continue to reduce
claims costs while providing high quality customer service, as well as being able to provide the
City’s fully insured premier vision option.
Proposal Description/Number RFP (via Broker) for provision of
Dental Claims Administration Service
Proposed Length of Project 3 years
Number of Proposals Mailed 5
Total Days to Respond to Proposal 3 weeks
Pre-proposal Meeting Date 8/26/14
Number of Company Attendees at
Pre- proposal Meeting N/A
Number of Proposals Received: 5 Company Name Location (State) Proposal Amount Comment
1. Ameritas NE $1,802,174 Lacks network breadth
nnnnncovcoscopescopenetworks 2. Cigna CT $1,812,270 Reduces fluoride coverage
3. MetLife NY $1,838,540 Reduces sealant frequency
4. Guardian NY $1,803,092 Reduces sealant
5. Delta Dental CA $1,865,844 Only response with same benefit
structure
Range of Proposal Amounts Submitted
(including claims costs)
$1,800,000 to
$1,838,000 annually
City of Palo Alto Page 4
Summary of solicitation process:
Human Resources staff carefully reviewed the one (1) responding firm’s qualifications and
recommends continuing its relationship with VSP, for both basic third-party administrator
services and fully insured benefits. Of the requests for responses to the RFP, only VSP can offer
the same benefit structure as is currently provided to City employees. Other bidders had
reduced benefit frequency options and age restrictions for certain procedures that are not
currently in place and therefore, declined to present a proposal. Significant changes in benefit
structure could require the City to enter negotiations with some employee groups. VSP has a
superior reputation for quality customer service and overall has provided good vision
administration services to City staff during past contracts while at the same time, producing
claims savings for the City and its employees. Additionally, the increase in cost of the premier
plan is 100% paid by the employee. The City funds the basic plan and gives a credit equal to
that amount for employees that select the more costly premier plan. The difference and
increase in cost to participate in the premier plan is paid entirely by the employee.
Group Life, Accidental Death & Dismemberment (AD&D), Long Term Disability (LTD) Benefits
and Leave of Absence (LOA) Administration Discussion
The work to be performed under this contract is for underwriting the City’s group life, AD&D,
and LTD benefits, as well as administering the City’s LOA benefits. Existing agreements with
City employee bargaining units provide for maintaining these standard benefit policies offered
by most employers. While the City pays for basic life insurance coverage for its employees,
employees can choose to purchase an additional supplemental plan. For LTD, employees
contribute to participate in the LTD plan.
The prior Request for Proposal (RFP) for underwriting the Life, AD&D, and LTD insurance
policies was conducted in 2011. That process resulted staff selecting CIGNA due to cost savings.
Proposal Description/Number RFP (via Broker) for provision of Vision
Claims Administration Service and Fully
Insured Option
Proposed Length of Project 3 years
Number of Proposals Mailed 3
Total Days to Respond to Proposal 3 weeks
Pre-proposal Meeting Date 8/26/14
Number of Company Attendees at Pre-
proposal Meeting
N/A
Number of Proposals Received: 1
Company Name Location (City, State) Selected for oral interview?
1. VSP Sacramento, CA N/A
Proposal Amount Submitted $191,546 annually
City of Palo Alto Page 5
A Request for Proposals (RFP) was conducted to obtain a group life, AD&D, and LTD policies at a
reduced cost to the employees and the City if possible. City staff was aware that the increased
number of long term disability claims and life insurance claims due to several employee deaths
during the last three years could impact this goal. Proposals were sent to six insurance
companies. Four proposals were received from The Standard Insurance Company, Reliance
Standard, The Hartford Insurance Company, and CIGNA.
Human Resources staff reviewed the proposals with the assistance of the City’s benefits broker.
Staff carefully reviewed each firm’s qualifications relative to the following criteria: plan
administration, cost, claims paying administration, integrated leave of absence administration,
knowledge of and experience working with public agencies and the Public Employees’
Retirement System, customer service capabilities, workers’ compensation interface, and
statistical reports.
CIGNA submitted a proposal with no rate change and a 3 year guarantee to December 31, 2017.
CIGNA was again chosen due to its ability to coordinate disability and insurance payments with
LOA administration, with focus on federal compliance requirements related to the Family
Medical Leave Act. CIGNA was the only responsive bidder able to provide this level of
coordination of benefits. The Standard Insurance Company provided a quote but ultimately
declined to present because they could not provide competitive rates as they proposed a 33%
increase. Three other companies were contacted but declined to present quotes
Proposal Description/Number RFP (via Broker) for provision of BASIC LIFE,
AD&D, LTD, & LOA Services
Proposed Length of Project 3 years
Number of Proposals Mailed 6
Total Days to Respond to Proposal 3 weeks
Pre-proposal Meeting Date 8/26/14
Number of Company Attendees at Pre-
proposal Meeting
N/A
Number of Proposals Received: 4
Company Name Location (City, State) Selected for oral interview?
1. Reliance Standard Philadelphia, PA N/A
2. Hartford Hartford, CT N/A
3. The Standard Portland, OR N/A
4. Cigna Philadelphia, PA N/A
Range of Proposal Amounts Submitted $620,000 – 680,000
annually
City of Palo Alto Page 6
Resource Impact
Funds for dental and vision plan administration costs are included in the FY 2015 Adopted
Budget in the General Benefits Fund. The increased administration costs for these two
contracts will be included in the FY 2016 Proposed Budget. Funds for vision and dental claims
costs are also budgeted in the General Benefits and Insurance Fund and they are budgeted
according to the employees’ election of coverage as of the beginning of the current calendar
year. Funding for claims costs is adjusted as part the annual budget process to reflect the
change in employees’ election of coverage and the change in coverage level costs.
The rates for group life, AD&D, and LTD insurance policies are based on the number of City
employees, and on the current salary of employees. With a three year rate guarantee, the
annual rate would not increase in years two (2) and three (3), however, the total annual
premium for group life and AD&D will vary based on changes to employee salaries. Because a
portion of the LTD costs are paid by the employees, the City will have minimal changes in years
two (2) and three (3) as salaries change. Funds for group life, AD&D, and LTD insurance are
included in the 2015 Adopted Budget in the General Benefits and Insurance Fund. The
increased administration costs for this contract will be included in the FY 2016 Proposed
Budget.
Policy Implications
This request supports the Finance Committee’s recommendation for staff to bring alternatives
forward on how to slow the increasing cost of employee benefits and lessen the impact on
other City priorities.
Environmental Review
This is not a project requiring review under the California Environmental Quality Act
Attachments:
Attachment A: C15157538 Vision Services Plan Contract (PDF)
Attachment B: C15157156 Delta Dental Contract (PDF)
Attachment C: C15157537 Cigna Corporation Contract (PDF)
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CITY OF PALO ALTO CONTRACT NO. C15157538
AGREEMENT BETWEEN THE CITY OF PALO ALTO AND
VISION SERVICE PLAN FOR PROFESSIONAL SERVICES
This Agreement is entered into on this 13th day of April, 2015, (“Agreement”) by and
between the CITY OF PALO ALTO, a California chartered municipal corporation
(“CITY”), and VISION SERVICE PLAN, a California corporation, located at 3333
Quality Drive, Rancho Cordova, California, 95670, Telephone (916)851-5000
("CONSULTANT").
RECITALS
The following recitals are a substantive portion of this Agreement.
A. CITY intends to administrate its vision care program (“Project”) and desires to
engage a consultant to provide services in connection with the Project (“Services”).
B. CONSULTANT has represented that it has the necessary professional expertise,
qualifications, and capability, and all required licenses and/or certifications to provide the
Services.
C. CITY in reliance on these representations desires to engage CONSULTANT to
provide the Services as more fully described in Exhibit “A”, attached to and made a part
of this Agreement.
NOW, THEREFORE, in consideration of the recitals, covenants, terms, and
conditions, 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.
SECTION 2. TERM.
The term of this Agreement shall be from the date of its full execution through December
31, 2017 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
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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 Six
Hundred Three Thousand Eight Hundred Forty Eight Dollars ($603,848.00). 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 will
generally process and pay invoices within thirty (30) days of receipt.
SECTION 6. QUALIFICATIONS/STANDARD OF CARE. All of the Services shall
be performed by CONSULTANT or under CONSULTANT’s supervision.
CONSULTANT represents that it possesses the professional and technical personnel
necessary to perform the Services required by this Agreement and that the personnel have
sufficient skill and experience to perform the Services assigned to them. CONSULTANT
represents that it, its employees and subconsultants, if permitted, have and shall maintain
during the term of this Agreement all licenses, permits, qualifications, insurance and
approvals of whatever nature that are legally required to perform the Services.
All of the services to be furnished by CONSULTANT under this agreement shall meet the
professional standard and quality that prevail among professionals in the same discipline
and of 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.
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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. CONSULTANT shall not subcontract any
portion of the work to be performed under this Agreement without the prior written
authorization of the city manager or designee.
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 Hanh Mc
Murray as the Account Manager to have supervisory responsibility for the performance,
progress, and execution of the Services and 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.
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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 Brenna Rowe, Human Resources, People Strategy &
Operations Department, 250 Hamilton Avenue, Palo Alto, CA 94303, Telephone: (650)
329-2574. The project manager will be CONSULTANT’s point of contact with respect to
performance, progress and execution of the Services. The CITY may designate an
alternate project manager from time to time.
SECTION 14. OWNERSHIP OF MATERIALS. Upon delivery, all work product,
including without limitation, all writings, drawings, plans, reports, specifications,
calculations, documents, other materials and copyright interests developed under this
Agreement shall be and remain the exclusive property of CITY without restriction or
limitation upon their use. CONSULTANT agrees that all copyrights which arise from
creation of the work pursuant to this Agreement shall be vested in CITY, and
CONSULTANT waives and relinquishes all claims to copyright or other intellectual
property rights in favor of the CITY. Neither CONSULTANT nor its contractors, if any,
shall make any of such materials available to any individual or organization without the
prior written approval of the City Manager or designee. CONSULTANT makes no
representation of the suitability of the work product for use in or application to
circumstances not contemplated by the scope of work.
SECTION 15. AUDITS. CONSULTANT will permit CITY to audit, at any reasonable
time during the term of this Agreement and for three (3) years thereafter,
CONSULTANT’s records pertaining to matters covered by this Agreement.
CONSULTANT further agrees to maintain and retain such records for at least three (3)
years after the expiration or earlier termination of this Agreement.
SECTION 16. INDEMNITY.
16.1. To the fullest extent permitted by law, CONSULTANT shall protect,
indemnify, defend and hold harmless CITY, its Council members, officers, employees and
agents (each an “Indemnified Party”) from and against any and all demands, claims, or
liability of any nature, including death or injury to any person, property damage or any
other loss, including all costs 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.
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16.3. The acceptance of CONSULTANT’s services and duties by CITY shall
not operate as a waiver of the right of indemnification. The provisions of this Section 16
shall survive the expiration or early termination of this Agreement.
SECTION 17. WAIVERS. The waiver by either party of any breach or violation of
any covenant, term, condition or provision of this Agreement, or of the provisions of any
ordinance or law, will not be deemed to be a waiver of any other term, covenant,
condition, provisions, ordinance or law, or of any subsequent breach or violation of the
same or of any other term, covenant, condition, provision, ordinance or law.
SECTION 18. INSURANCE.
18.1. CONSULTANT, at its sole cost and expense, shall obtain and maintain, in full
force and effect during the term of this Agreement, the insurance coverage described in
Exhibit "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
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SERVICES.
19.1. The City Manager may suspend the performance of the Services, in whole or in
part, or terminate this Agreement, with or without cause, by giving ten (10) days prior
written notice thereof to CONSULTANT. Upon receipt of such notice, CONSULTANT
will immediately discontinue its performance of the Services.
19.2. CONSULTANT may terminate this Agreement or suspend its performance of
the Services by giving thirty (30) days prior written notice thereof to CITY, but only in the
event of a substantial failure of performance by CITY.
19.3. Upon such suspension or termination, CONSULTANT shall deliver to the City
Manager immediately any and all copies of studies, sketches, drawings, computations, and
other data, whether or not completed, prepared by CONSULTANT or its contractors, if
any, or given to CONSULTANT or its contractors, if any, in connection with this
Agreement. Such materials will become the property of CITY.
19.4. Upon such suspension or termination by CITY, CONSULTANT will be paid
for the Services rendered or materials delivered to CITY in accordance with the scope of
services on or before the effective date (i.e., 10 days after giving notice) of suspension or
termination; provided, however, if this Agreement is suspended or terminated on account
of a default by CONSULTANT, CITY will be obligated to compensate CONSULTANT
only for that portion of CONSULTANT’s services which are of direct and immediate
benefit to CITY as such determination may be made by the City Manager acting in the
reasonable exercise of his/her discretion. The following Sections will survive any
expiration or termination of this Agreement: 14, 15, 16, 19.4, 20, and 25.
19.5. No payment, partial payment, acceptance, or partial acceptance by CITY will
operate as a waiver on the part of CITY of any of its rights under this Agreement.
SECTION 20. NOTICES.
All notices hereunder will be given in writing and mailed, postage prepaid, by
certified mail, addressed as follows:
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
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SECTION 21. CONFLICT OF INTEREST.
21.1. In accepting this Agreement, CONSULTANT covenants that it presently has
no interest, and will not acquire any interest, direct or indirect, financial or otherwise,
which would conflict in any manner or degree with the performance of the Services.
21.2. CONSULTANT further covenants that, in the performance of this Agreement,
it will not employ subconsultants, contractors or persons having such an interest.
CONSULTANT certifies that no person who has or will have any financial interest under
this Agreement is an officer or employee of CITY; this provision will be interpreted in
accordance with the applicable provisions of the Palo Alto Municipal Code and the
Government Code of the State of California.
21.3. If the Project Manager determines that CONSULTANT is a “Consultant” as
that term is defined by the Regulations of the Fair Political Practices Commission,
CONSULTANT shall be required and agrees to file the appropriate financial disclosure
documents required by the Palo Alto Municipal Code and the Political Reform Act.
SECTION 22. NONDISCRIMINATION. As set forth in Palo Alto Municipal Code
section 2.30.510, CONSULTANT certifies that in the performance of this Agreement, it
shall not discriminate in the employment of any person because of the race, skin color,
gender, age, religion, disability, national origin, ancestry, sexual orientation, housing
status, marital status, familial status, weight or height of such person. CONSULTANT
acknowledges that it has read and understands the provisions of Section 2.30.510 of the
Palo Alto Municipal Code relating to Nondiscrimination Requirements and the penalties
for violation thereof, and agrees to meet all requirements of Section 2.30.510 pertaining to
nondiscrimination in employment.
SECTION 23. ENVIRONMENTALLY PREFERRED PURCHASING AND ZERO
WASTE REQUIREMENTS. CONSULTANT shall comply with the City’s
Environmentally Preferred Purchasing policies which are available at the City’s
Purchasing Department, incorporated by reference and may be amended from time to
time. CONSULTANT shall comply with waste reduction, reuse, recycling and disposal
requirements of the City’s Zero Waste 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.
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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.
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. In the event of a conflict between this Professional Services Agreement and
any attachment or exhibit hereto, the terms of this Agreement shall prevail.
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.
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25.8 If, pursuant to this contract with CONSULTANT, City shares with
CONSULTANT personal information as defined in California Civil Code section
1798.81.5(d) about a California resident (“Personal Information”), CONSULTANT shall
maintain reasonable and appropriate security procedures to protect that Personal
Information, and shall inform City immediately upon learning that there has been a breach
in the security of the system or in the security of the Personal Information.
CONSULTANT shall not use Personal Information for direct marketing purposes without
City’s express written consent.
25.9 All unchecked boxes do not apply to this agreement.
25.10 The individuals executing this Agreement represent and warrant that they have the
legal capacity and authority to do so on behalf of their respective legal entities.
25.11 This Agreement may be signed in multiple counterparts, which shall, when executed
by all the parties, constitute a single binding agreement
IN WITNESS WHEREOF, the parties hereto have by their duly authorized representatives
executed this Agreement on the date first above written.
CITY OF PALO ALTO
APPROVED AS TO FORM:
VISION SERVICE PLAN
Attachments:
EXHIBIT “A”: SCOPE OF WORK
EXHIBIT “A-1” GROUP VISION CARE PLAN ADMINISTRATIVE SERVICES PROGRAM
EXHIBIT “A-2 EVIDENCE OF DISCLOSURE & DISCLOSURE FORM
EXHIBIT “B”: SCHEDULE OF PERFORMANCE
EXHIBIT “C”: COMPENSATION
EXHIBIT “C-1”: SCHEDULE OF RATES
EXHIBIT “D”: INSURANCE REQUIREMENTS
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EXHIBIT “A”
SCOPE OF SERVICES
CONSULTANT shall provide CITY with administration of the group vision care benefits and/or full group vision
case insurance in accordance with the policies provided in this Agreement and the attached EXHIBITS “A-1” &
“A-2”
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EXHIBIT “A-1”
GROUP VISION CARE PLAN ADMINISTRATIVE SERVICES PROGRAM
VISION SERVICE PLAN
3333 QUALITY DRIVE
RANCHO CORDOVA, CALIFORNIA 95670
GROUP VISION CARE PLAN
ADMINISTRATIVE SERVICES PROGRAM
Group Name CITY OF PALO ALTO
Plan Number 00102584
State of Delivery CALIFORNIA
Effective Date JANUARY 1, 2015
Plan Term THIRTY-SIX (36) MONTHS
Premium Due Date FIRST DAY OF MONTH
In consideration of the statements and agreements contained in the Group Application and in consideration of payment by
the Group of the premiums as herein provided, ("VSP") agrees to Plan certain individuals under this Group Vision Care
Plan (“Plan”) the benefits provided herein, subject to the exceptions, limitations and exclusions hereinafter set forth. This
Plan is delivered in and governed by the laws of the state of delivery and is subject to the terms and conditions recited on
the subsequent pages hereof, including any Exhibits or state-specific Addenda, which are a part of this Plan.
____________________________________________
James M. McGrann, President, VSP Vision Care
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TABLE OF CONTENTS
I. DEFINITIONS.............................................................................................................. 1
II. TERM, TERMINATION, AND RENEWAL................................................................... 2
III. OBLIGATIONS OF VSP.............................................................................................. 3
IV. OBLIGATIONS OF THE GROUP................................................................................ 5
V. OBLIGATIONS OF COVERED PERSONS UNDER THE PLAN.................................. 7
VI. ELIGIBILITY FOR COVERAGE................................................................................... 10
VII. CONTINUATION OF COVERAGE.............................................................................. 13
VIII. ARBITRATION OF DISPUTES.................................................................................... 14
IX. NOTICES..................................................................................................................... 15
X. MISCELLANEOUS...................................................................................................... 16
EXHIBIT A
SCHEDULE OF BENEFITS........................................................................... 19
EXHIBIT B
SCHEDULE OF PREMIUMS......................................................................... 24
ADDENDUM
ADDITIONAL BENEFIT – COMPUTER VISIONCARE PLAN......................... 25
ADDITIONAL BENEFIT – SAFETY EYECARE PLAN.................................... 28
ADDITIONAL BENEFIT – REPAIR AND REPLACEMENT............................ 31
ADDENDUM
TO GROUP VISION CARE PLAN.................................................................. 34
EXHIBIT A
SCHEDULE OF BENEFITS........................................................................... 36
EXHIBIT B
SCHEDULE OF PREMIUMS.......................................................................... 41
ADDENDUM
ADDITIONAL BENEFIT – SECOND PAIR…………………............................ 42
ADDITIONAL BENEFIT – COMPUTER VISIONCARE PLAN….................... 46
ADDITIONAL BENEFIT – SAFETY EYECARE PLAN.................................... 49
ADDITIONAL BENEFIT – REPAIR AND REPLACEMENT............................ 52
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ADDENDUM
CALIFORNIA CONTINUATION BENEFITS………………….......................... 55
ADDENDUM
DOMESTIC PARTNER ELIGIBILITY………………………….......................... 56
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I.
DEFINITIONS
Key terms used in this Plan are defined:
1.01 ADMINISTRATIVE SERVICES PROGRAM: A group vision care plan where by Group pays VSP for the Plan
Benefits in addition to a monthly administrative fee.
1.02. BENEFIT AUTHORIZATION: Authorization from VSP identifying the individual named a Covered Person of VSP,
and identifying those Plan Benefits to which Covered Person is entitled.
1.03. CONFIDENTIAL MATTER: All confidential information concerning the medical, personal, financial or business
affairs of Covered Persons obtained while providing Plan Benefits hereunder.
1.04. COPAYMENTS: Any amounts required to be paid by or on behalf of a Covered Person for Plan Benefits which are
not fully covered.
1.05. COVERED PERSON: An Enrollee or Eligible Dependent who meets VSP's eligibility criteria and on whose behalf
Premiums have been paid to VSP, and who is covered under this Plan.
1.06. ELIGIBLE DEPENDENT: Any legal dependent of an Enrollee of Group who meets the criteria for eligibility
established by Group and approved by VSP in Article VI of this Plan under which such Enrollee is covered.
1.07. EMERGENCY CONDITION: A condition, with sudden onset and acute symptoms, that requires the Covered
Person to obtain immediate medical care, or an unforeseen occurrence calling for immediate, non-medical action.
1.08. ENROLLEE: An employee or member of Group who meets the criteria for eligibility specified under Article VI.
ELIGIBILITY FOR COVERAGE.
1.09. EXPERIMENTAL NATURE: Procedure or lens that is not used universally or accepted by the vision care
profession, as determined by VSP.
1.10. GROUP: An employer or other entity which contracts with VSP for coverage under this Plan in order to provide
vision care coverage to its Enrollees and their Eligible Dependents.
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1.11. GROUP APPLICATION: The form signed by an authorized representative of the Group to signify the Group's
intention to have its Enrollees and their Eligible Dependents become Covered Persons of VSP.
1.12. GROUP VISION CARE PLAN (also, "THE PLAN"): The Plan issued by VSP to a Group, under which its Enrollees
or members, and their Eligible Dependents are entitled to become Covered Persons of VSP and receive Plan Benefits in
accordance with the terms of such Plan.
1.13. MEMBER DOCTOR: An optometrist or ophthalmologist licensed and otherwise qualified to practice vision care
and/or provide vision care materials who has contracted with VSP to provide vision care services and/or vision care
materials on behalf of Covered Persons of VSP.
1.14. NON-MEMBER PROVIDER: Any optometrist, optician, ophthalmologist, or other licensed and qualified vision care
provider who has not contracted with VSP to provide vision care services and/or vision care materials to Covered Persons
of VSP.
1.15. PLAN BENEFITS: The vision care services and vision care materials which Covered Person is entitled to receive
by virtue of coverage under this Plan, as defined in the Schedule of Benefits attached hereto as Exhibit A.
1.16. RENEWAL DATE: The date when the Plan shall renew, or terminate if proper notice is given.
1.17. SCHEDULE OF BENEFITS: The document, attached hereto as Exhibit A to this Plan, which lists the vision care
services and vision care materials which Covered Person is entitled to receive under this Plan.
1.18. SCHEDULE OF PREMIUMS: The document, attached hereto as Exhibit B, which states the payments to be made
to VSP by or on behalf of a Covered Person to entitle him/her to Plan Benefits.
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II.
TERM, TERMINATION, AND RENEWAL
2.01. Plan Term: This Plan is effective on the Effective Date and shall remain in effect for the Plan Term. At the end of
the Plan Term, the Plan shall renew on a month to month basis unless either party notifies the other in writing, at least sixty
(60) days before the end of the Plan Term that such party is unwilling to renew the Plan. If such notice is given, the Plan
shall terminate at 11:59 p.m. on the last day of the Plan Term unless the parties agree on its renewal of the Plan. If the Plan
continues on a month to month basis after the Plan Term, either party may terminate the Plan upon thirty (30) days advance
notice to the other party.
If VSP issues written renewal materials to Group at least sixty (60) days before the end of the Plan Term and Group fails to
accept the new terms and/or rates in writing prior to the end of the Plan Term, this Plan shall terminate at 11:59 p.m. on the
last day of the Plan Term.
2.02. Early Termination Provision: The Premium rate payable by Group to VSP under this Plan is based on an
assumption that VSP will receive these amounts over the full Plan Term in order to cover costs associated with greater
vision utilization that tends to occur during the first portion of a Plan Term. If Group terminates this Plan before the end of
the Plan Term or before the end of any subsequent renewal terms, for any reason other than material breach by VSP,
Group will remain liable to VSP for the lesser amount of any deficit incurred by VSP or the payments which Group would
have paid for the remaining term of this Plan, not to exceed one year. A deficit incurred by VSP will be calculated by
subtracting the cost of incurred and outstanding claims, as calculated on an incurred date basis with a claim run-out not to
exceed six months from the date of termination, from the net premiums received by VSP from Group. Net premiums shall
mean premiums paid by Group minus any applicable retention amounts and/or broker commissions. Group agrees to pay
VSP within thirty-one (31) days of notification of the amount due.
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III.
OBLIGATIONS OF VSP
3.01. Coverage of Covered Persons: VSP will enroll for coverage each eligible Enrollee and his/her Eligible
Dependents, if dependent coverage is provided, all of who shall be referred to upon enrollment as “Covered Persons.” To
institute coverage, VSP may require Group to complete, sign and forward to VSP a Group Application along with information
regarding Enrollees and Eligible Dependents, and all applicable premiums. (Refer to VI. ELIGIBILITY FOR COVERAGE
for further details.)
Following the enrollment of the Covered Persons, VSP will provide Group with Member Benefit Summaries for distribution to
Covered Persons. Such Member Benefit Summaries will summarize the terms and conditions set forth in this Plan.
3.02. Provision of Plan Benefits: Through its Member Doctors (or through other licensed vision care providers where a
Covered Person is eligible for, and chooses to receive Plan Benefits from a Non-Member Provider) VSP shall provide
Covered Persons such Plan Benefits listed in the Schedule of Benefits, Exhibit A hereto, subject to any limitations,
exclusions, or Copayments therein stated. Benefit Authorization must be obtained prior to a Covered Person obtaining Plan
Benefits from a Member Doctor. When a Covered Person seeks Plan Benefits from a Member Doctor, the Covered Person
must schedule an appointment and identify himself as a VSP Covered Person so the Member Doctor can obtain Benefit
Authorization from VSP. VSP shall provide Benefit Authorization to the Member Doctor to authorize the provision of Plan
Benefits to the Covered Person. Each Benefit Authorization will contain an expiration date, stating a specific time period for
the Covered Person to obtain Plan Benefits. VSP shall issue Benefit Authorizations in accordance with the latest eligibility
information furnished by Group and the Covered Person’s past service utilization, if any. Any Benefit Authorization so
issued by VSP shall constitute a certification to the Member Doctor that payment will be made, irrespective of a later loss of
eligibility of the Covered Person, provided Plan Benefits are received prior to the Benefit Authorization expiration date.
VSP shall pay or deny claims for Plan Benefits provided to Covered Persons, less any applicable Copayment, within a
reasonable time but not more than thirty (30) calendar days after VSP has received a completed claim, unless special
circumstances require additional time. In such cases, VSP may obtain an extension of fifteen (15) calendar days of this
time limit by providing notice to the claimant of the reasons for the extension.
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3.03. Provision of Information to Covered Persons: Upon request, VSP shall make available to Covered Persons
necessary information describing Plan Benefits and how to use them. A copy of this Plan shall be placed with Group and
also will be made available at the offices of VSP for any Covered Persons. VSP shall provide Group with an updated list of
Member Doctors’ names, addresses, and telephone numbers for distribution to Covered Persons twice a year. Covered
Persons may also obtain a copy of the Member Doctor directory through contacting VSP’s Customer Service Department’s
toll-free Customer Service telephone line, VSP’s Web site at www.vsp.com, or by written request.
3.04. Preservation of Confidentiality: VSP shall hold in strict confidence all Confidential Matters and exercise its best
efforts to prevent any of its employees, Member Doctors, or agents, from disclosing any Confidential Matter, except to the
extent that such disclosure is necessary to enable any of the above to perform their obligations under this Plan, including
but not limited to sharing information with medical information bureaus, or complying with applicable law. Covered Persons
and/or Groups that want more information on VSP’s Confidentiality policy may obtain a copy of the policy by contacting
VSP’s Customer Service Department or VSP's Web site at www.vsp.com.
3.05. Emergency Vision Care: When vision care is necessary for Emergency Conditions, Covered Persons may obtain
Plan Benefits by contacting a Member Doctor or Non-Member Provider. No prior approval from VSP is required for Covered
Person to obtain vision care for Emergency Conditions of a medical nature. However, services for medical conditions,
including emergencies, are covered by VSP only under the Acute EyeCare and Supplemental Primary EyeCare Plans. If
Group has not purchased one of these plans, Covered Persons are not covered by VSP for medical services and should
contact a physician under Covered Persons' medical insurance plan for care. For emergency conditions of a non-medical
nature, such as lost, broken or stolen glasses, the Covered Person should contact VSP's Customer Service Department for
assistance. Reimbursement and eligibility are subject to the terms of this Plan.
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IV.
OBLIGATIONS OF THE GROUP
4.01. Identification of Eligible Enrollees: An Enrollee is eligible for coverage under this Plan if he/she satisfies the
enrollment criteria specified in Paragraph 6.01(a) and/or as mutually agreed to by VSP and Group. By the Effective Date of
this Plan, Group shall provide VSP with eligibility information, in a mutually agreed upon format and medium, to identify all
Enrollees who are eligible for coverage under this Plan as of that date. Thereafter, Group shall supply to VSP by the last
day of each month, eligibility information sufficient to identify all Enrollees to be added to or deleted from VSP’s coverage
rosters for the next month. The eligibility information shall include designation of each Enrollee’s family status if dependent
coverage is provided. Upon VSP’s request, Group shall make available for inspection records regarding the coverage of
Covered Persons under this Plan.
4.02. Payment of Premiums: By the last day of each month, Group shall remit to VSP the premiums payable for the next
month on behalf of each Enrollee and Eligible Dependents, if any, to be covered under this Plan. The Schedule of
Premiums incorporated in this Plan as Exhibit B provides the premium amount for each Covered Person. Only Covered
Persons for whom premiums are actually received by VSP shall be entitled to Plan Benefits under this Plan and only for the
period for which such payment is received, subject to the grace period provision below. If payment for any Covered Person
is not received on time, VSP may terminate all rights of such Covered Person. Such rights may be reinstated only in
accordance with the requirements of this Plan.
VSP may change the premiums set forth in Exhibit B (Schedule of Premiums) by giving Group at least sixty (60) days
advance written notice. No change will be made during the Plan Term unless there is a change in the Schedule of Benefits
or there is a material change in Plan terms or conditions, provided any such change is mutually agreed upon in writing by
VSP and Group.
Notwithstanding the above, VSP may increase premiums during a Plan Term by the amount of any tax or assessment not
now in effect but subsequently levied by any taxing authority, which is attributable to premiums VSP received from Group.
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4.03. Grace Period: Group shall be allowed a grace period of thirty-one (31) days following the premium payment due
date to pay premiums due under this Plan. During said grace period, this Plan shall remain in full force and effect for all
Covered Persons of Group. VSP will consider late payments at the time of Plan renewal. Such payment may impact
Group’s premium rates in future Plan Terms.
If Group fails to make any premiums payment due by the end of any grace period, VSP may notify Group that the premiums
payment has not been made, that coverage is canceled and that Group is responsible for payment for all Plan Benefits
provided to Covered Persons after the last period for which premiums were paid in full, including the grace period through
the effective date of termination. Group shall also be responsible for any legal and/or collection fees incurred by VSP to
collect amounts due under this Plan.
4.04. Distribution of Required Documents: Group shall distribute to Enrollees any disclosure forms, plan summaries
or other material required to be given to plan subscribers by any regulatory authority. Such materials shall be distributed by
Group no later than thirty (30) days after the receipt thereof, or as required under state law.
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V.
OBLIGATIONS OF COVERED PERSONS UNDER THE PLAN
5.01. General: By this Plan, Group makes coverage available to its Enrollees and their Eligible Dependents, if
dependent coverage is provided. However, this Plan may be amended or terminated by agreement between VSP and
Group as indicated herein, without the consent or concurrence of Covered Persons. This Plan, and all Exhibits, Riders and
attachments hereto, constitute VSP’s sole and entire undertaking to Covered Persons under this Plan.
As conditions of coverage, all Covered Persons under this Plan have the following obligations:
5.02. Copayment for Services Received: Where, as indicated in Exhibit A (Schedule of Benefits), Copayments are
required for certain Plan Benefits, Copayments shall be the personal responsibility of the Covered Person receiving the care
and must be paid to the Member Doctor the date services are rendered.
5.03. Obtaining Services from Member Doctors: Benefit Authorization must be obtained prior to receiving Plan
Benefits from a Member Doctor. When a Covered Person seeks Plan Benefits, the Covered Person must select a Member
Doctor, schedule an appointment, and identify himself as a Covered Person so the Member Doctor can obtain Benefit
Authorization from VSP. Should the Covered Person receive Plan Benefits from a Member Doctor without such Benefit
Authorization, then for the purposes of those Plan Benefits provided to the Covered Person, the Member Doctor will be
considered a Non-Member Provider and the benefits available will be limited to those for a Non-Member Provider, if any.
5.04. Submission of Non-Member Provider Claims: If Non-Member Provider coverage is indicated in Exhibit A
(Schedule of Benefits), written proof (receipt and the Covered Person’s identification information) of all claims for services
received from Non-Member Providers shall be submitted by Covered Persons to VSP within three hundred sixty-five (365)
days of the date of service. VSP may reject such claims filed more than three hundred sixty-five (365) days after the date of
service.
Failure to submit a claim within this time period, however, shall not invalidate or reduce the claim if it was not reasonably
possible to submit the claim within such time period, provided the claim was submitted as soon as reasonably possible and
in no event, except in absence of legal capacity, later than one year from the required date of three hundred sixty-five (365)
days after the date of service.
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5.05. Complaints and Grievances: Covered Persons shall report any complaints and/or grievances to VSP at the
address given herein. Complaints and grievances are disagreements regarding access to care, quality of care, treatment or
service. Complaints and grievances may be submitted to VSP verbally or in writing. A Covered Person may submit written
comments or supporting documentation concerning his complaint or grievance to assist in VSP’s review. VSP will resolve
the complaint or grievance within thirty (30) days after receipt.
5.06. Claim Denial Appeals: If, under the terms of this Plan, a claim is denied in whole or in part, a request may be
submitted to VSP by Covered Person or Covered Person's authorized representative for a full review of the denial. Covered
Person may designate any person, including his/her provider, as his/her authorized representative. References in this
section to "Covered Person" include Covered Person's authorized representative, where applicable.
a) Initial Appeal: The request must be made within one hundred eighty (180) days following denial of a claim
and should contain sufficient information to identify the Covered Person for whom the claim was denied, including the VSP
Enrollee's name, the VSP Enrollee's Member Identification Number, the Covered Person's name and date of birth, the
provider of services and the claim number. The Covered Person may review, during normal working hours, any documents
held by VSP pertinent to the denial. The Covered Person may also submit written comments or supporting documentation
concerning the claim to assist in VSP's review. VSP's determination, including specific reasons for the decision, shall be
provided and communicated to the Covered Person within thirty (30) calendar days after receipt of a request for appeal from
the Covered Person or Covered Person’s authorized representative.
b) Second Level Appeal: If the Covered Person disagrees with the response to the initial appeal of the
claim, the Covered Person has a right to a second level appeal. Within sixty (60) calendar days after receipt of VSP's
response to the initial appeal, the Covered Person may submit a second appeal to VSP along with any pertinent
documentation. VSP shall communicate its final determination to the Covered Person in compliance with all applicable
state and federal laws and regulations and shall include the specific reasons for the determination.
c) Other Remedies: When Covered Person has completed the appeals process stated herein, additional
voluntary alternative dispute resolution options may be available, including mediation, or Group should advise Covered
Person to contact the U.S. Department of Labor or the state insurance regulatory agency for details. Additionally, under the
provisions of ERISA (Section 502(a)(1)(B)) [29 U.S.C. 1132(a)(l)(B)], Covered Person has the right to bring a civil action
when all available levels of review of denied claims, including the appeals process, have been completed, the claims were
not approved in whole or in part, and Covered Person disagrees with the outcome.
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5.07. Time of Action: No action in law or in equity shall be brought to recover on the Plan prior to the Covered Person
exhausting his/her grievance rights under this Plan and/or prior to the expiration of sixty (60) days after the claim and any
applicable invoices have been filed with VSP. No such action shall be brought after the expiration of six (6) years from the
last date that the claim and any applicable invoices were submitted to VSP, in accordance with the terms of this Plan.
5.08. Insurance Fraud: Any Group and/or person who intends to defraud, knowingly facilitates a fraud or submits an
application or files a claim with a false or deceptive statement, is guilty of insurance fraud. Such an act is grounds for
immediate termination of the Plan for the Group or individual that committed the fraud.
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VI.
ELIGIBILITY FOR COVERAGE
6.01. Eligibility Criteria: Individuals will be accepted for coverage hereunder only upon meeting all the applicable
requirements set forth below.
(a) Enrollees: To be eligible for coverage, a person must:
(1) currently be an employee or member of the Group, and
(2) meet the criteria established in the coverage criteria mutually agreed upon by Group and VSP.
(b) Eligible Dependents: If dependent coverage is provided, the persons eligible for dependent coverage are:
(1) the legal spouse of any Enrollee, and
(2) any child of an Enrollee, including any natural child from the moment of birth, legally adopted child from
the moment of placement for adoption with the Enrollee, or other child for whom a court holds the Enrollee responsible; and
who has not yet attained the age of 26 years, or
(3) as further defined by Group.
If a dependent, unmarried child prior to attainment of the prescribed age for termination of eligibility becomes, and continues
to be, incapable of self-sustaining employment because of mental or physical disability, that Eligible Dependent's coverage
shall not terminate so long as he remains chiefly dependent on the Enrollee for support and the Enrollee's coverage
remains in force; PROVIDED that satisfactory proof of the dependent's incapacity can be furnished to VSP within thirty-one
(31) days of the date the Eligible Dependent's coverage would have otherwise terminated or at such other times as VSP
may request proof, but not more frequently than annually.
6.02. Documentation of Eligibility: Persons satisfying the coverage requirements under either of the above criteria
shall be eligible if:
(a) for an Enrollee, the individual's name and Social Security Number have been reported by Group to VSP in the
manner provided hereunder, and
(b) for changes to an Eligible Dependent's status, the change has been reported by the Group to VSP in the
manner provided herein. As stated in Paragraph 4.01 above, VSP may elect to audit Group's records in order to verify
eligibility of Enrollees and dependents and any errors. Subject to the terms of Paragraph 4.03 above, only persons on
whose behalf premiums have been paid for the current period shall be entitled to Plan Benefits hereunder. If a clerical error
is made, it will not affect the coverage a Covered Person is entitled under the Plan.
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6.03. Retroactive Eligibility Changes: Retroactive eligibility changes are limited to sixty (60) days prior to the date
notice of any such requested change is received by VSP. VSP may refuse retroactive termination of a Covered Person if
Plan Benefits have been obtained by, or authorized for, the Covered Person after the effective date of the requested
termination.
6.04. Change of Participation Requirements, Contribution of Fees, and Eligibility Rules: Composition of the Group,
percentage of Enrollees covered under the Plan, and Group’s contribution and eligibility requirements, are all material to
VSP's obligations under this Plan. During the term of this Plan, Group must provide VSP with written notice of changes to
its composition, percentage of Enrollees covered, contribution and eligibility requirements. Any change which materially
affects VSP's obligations under this Plan must be agreed upon in writing between VSP and Group and may constitute a
material change to the terms and conditions of this Plan for purposes of Paragraph 4.02. Nothing in this section shall limit
Group's ability to add Enrollees or Eligible Dependents under the terms of this Plan.
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6.05. Change in Family Status: In the event Group is notified of any change in a Covered Person's family status [by
marriage, the addition (e.g., newborn or adopted child) or deletion of Dependent, etc.] Group shall provide notice of such
change to VSP via the next eligibility listing required under Paragraph 4.01. If notice is given, the change in the Covered
Person's status will be effective on the first day of the month following the change request, or at such later date as may be
requested by or on behalf of the Covered Person. Notwithstanding any other provision in this section, a newborn child will
be covered during the thirty-one (31) day period after birth, and an adopted child will be covered for the thirty-one (31) day
period after the date the Enrollee or Enrollee's spouse acquires the right to control that child's health care. To continue
coverage for a newborn or adopted child beyond the initial thirty-one (31) day period, the Group must be properly notified of
the Enrollee's change in family status and applicable premiums must be paid to VSP.
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VII.
CONTINUATION OF COVERAGE
7.01. COBRA: The Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) requires that, under certain
circumstances, health plan benefits available to an Enrollee and his or her Eligible Dependents be made available for
purchase by said persons upon the occurrence of a COBRA-qualifying event. If, and only to the extent, COBRA applies,
VSP shall make the statutorily-required continuation coverage available for purchase in accordance with COBRA.
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VIII.
ARBITRATION OF DISPUTES
8.01. Dispute Resolution: Any dispute or question arising between VSP and Group or any Covered Person involving
the application, interpretation, or performance under this Plan shall be settled, if possible, by amicable and informal
negotiations. This will allow such opportunity as may be appropriate under the circumstances for fact-finding and mediation.
If any issue cannot be resolved in this fashion, it shall be submitted to arbitration.
8.02. Procedure: The procedure for arbitration hereunder shall be conducted pursuant to the Rules of the American
Arbitration Association.
8.03. Choice of Law: If any matter arises in connection with this Plan which becomes the subject of arbitration or legal
process, the law of the State of Delivery of the Plan shall be the applicable law.
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IX.
NOTICES
9.01. Required Notices: Any notices required under this Plan to either Group or VSP shall be in written format. Notices
sent to Group will be sent to the address or email address shown on the Group's Application unless otherwise directed by
the Group. Notices sent to VSP shall be sent to the address shown on the first page of this Plan. Notwithstanding the
above, any notices may be hand-delivered by either party to an appropriate representative of the other party. The party
effecting hand-delivery bears the burden to prove delivery was made, if questioned.
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X.
MISCELLANEOUS
10.01. Entire Plan: This Plan, the Group Application, the Evidence of Coverage, and all Exhibits, Riders and attachments
hereto, and any amendments hereto, constitute the entire agreement of the parties and supersedes any prior
understandings and agreements between them, either written or oral. Any change or amendment to the Plan must be
approved by an officer of VSP and attached hereto to be valid. No agent has the authority to change this Plan or waive any
of its provisions. Communication materials prepared by Group for distribution to Enrollees do not constitute a part of this
Plan.
10.02. Indemnity: VSP agrees to indemnify, defend and hold harmless Group, its shareholders, directors, officers, agents,
employees, successors and assigns from and against any and all liability, claim, loss, injury, cause of action and expense
(including defense costs and legal fees) of any nature whatsoever arising from the failure of VSP, its officers, agents or
employees, to perform any of the activities, duties or responsibilities specified herein. Group agrees to indemnify, defend
and hold harmless VSP, its members, shareholders, directors, officers, agents, employees, successors and assigns from
and against any and all liability, claim, loss, injury, cause of action and expense (including defense costs and legal fees) of
any nature whatsoever arising or resulting from the failure of Group, its officers or employees to perform any of the duties or
responsibilities specified herein.
10.03. Liability: VSP arranges for the provision of vision care services and materials through agreements with Member
Doctors. Member Doctors are independent contractors and responsible for exercising independent judgment. VSP does not
itself directly furnish vision care services or supply materials. Under no circumstances shall VSP or Group be liable for the
negligence, wrongful acts or omissions of any doctor, laboratory, or any other person or organization performing services or
supplying materials in connection with this Plan.
10.04. Assignment: Neither this Plan nor any of the rights or obligations of either of the parties hereto may be assigned
or transferred without the prior written consent of both parties hereto except as expressly authorized herein.
10.05. Severability: Should any provision of this Plan be declared invalid, the remaining provisions shall remain in full
force and effect.
10.06. Governing Law: This Plan shall be governed by and construed in accordance with applicable federal and state
law. Any provision that is in conflict with, or not in compliance with, applicable federal or state statutes or regulations is
hereby amended to conform with the requirements of such statutes or regulations, now or hereafter existing.
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10.07. Gender: All pronouns used herein are deemed to refer to the masculine, feminine, neuter, singular, or plural, as
the identity(ies) of the person(s) may require.
10.08. Equal Opportunity: VSP is an Equal Opportunity and Affirmative Action employer.
10.09. Grievances/Complaints: The California Department of Managed Health Care is responsible for regulating health
care service plans. If you have a grievance against your health plan, you should first telephone your health plan at (800)
877-7195 and use your health plan's grievance process before contacting the Department. Utilizing this grievance
procedure does not prohibit any potential legal rights or remedies that may be available to you. If you need help with a
grievance involving an emergency, a grievance that has not been satisfactorily resolved by your health plan, or a grievance
that has remained unresolved for more than 30 days, you may call the Department for assistance.
The Department also has a toll-free telephone number (1-888-HMO-2219), a TDD line (1-877-688-9891) for the hearing
impaired and its Internet Web site (http://www.hmohelp.ca.gov) has complaint forms online. The plan’s grievance process
and the Department's complaint review process are in addition to any other dispute resolution procedures that may be
available to Covered Persons, and the failure to use these procedures does not preclude Covered Person's use of any other
remedy provided by law.
10.10. Communication Materials: Communication materials created by Group which relate to this vision care Plan must
adhere to VSP’s Member Communication Guidelines distributed to Group by VSP. Such communication materials may be
sent to VSP for review and approval prior to use. VSP’s review of such materials shall be limited to approving the accuracy
of Plan Benefits and shall not encompass or constitute certification that Group’s materials meet any applicable legal or
regulatory requirements, including but not limited to, ERISA requirements.
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EXHIBIT A
SCHEDULE OF BENEFITS
Signature Plan
GENERAL
This Schedule lists the vision care services and vision care materials to which Covered Persons of VSP are entitled, subject
to any Copayments and other conditions, limitations and/or exclusions stated herein. If Plan Benefits are available for Non-
Member Provider services, as indicated by the reimbursement provisions below, vision care services and vision care
materials may be received from any licensed optometrist, ophthalmologist, or dispensing optician, whether Member Doctors
or Non-Member Providers. This Schedule forms a part of the Plan or Policy to which it is attached.
When Plan Benefits are received from Member Doctors, benefits appearing in the first column below are applicable subject
to any Copayments as stated below. When Plan Benefits are available and received from Non-Member Providers, the
Covered Person is reimbursed for such benefits according to the schedule in the second column below less any applicable
Copayments.
COPAYMENT
The benefits described herein are available to each Covered Person subject only to payment of the applicable Copayment
by the Covered Person. Copayments are required for Plan Benefits received from Member Doctors and Non-Member
Providers. Covered Persons must also follow the proper procedures for obtaining Benefit Authorization.
A Copayment amount of $20.00 shall be payable by the Covered Person to the Member Doctor at the time services are
rendered.
PLAN BENEFITS
MEMBER DOCTOR
BENEFIT
NON-MEMBER
PROVIDER BENEFIT
VISION CARE SERVICES
Eye Examination Covered in Full* Up to $ 50.00*
Complete initial vision analysis which includes an appropriate examination of visual functions, including the prescription of
corrective eyewear where indicated.
Subsequent regular eye examinations every 12 months beginning with the first date of service
*Less any applicable Copayment
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VISION CARE MATERIALS
MEMBER DOCTOR NON-MEMBER
BENEFIT PROVIDER BENEFIT
Lenses
Single Vision Covered in full* Up to $ 50.00*
Bifocal Covered in full* Up to $ 75.00*
Trifocal Covered in full* Up to $ 100.00*
Lenticular Covered in full* Up to $ 125.00*
Available once every 24 months beginning with the first date of service
Frames Covered up to Plan
Allowance*
Up to $ 70.00*
Available once every 24 months beginning with the first date of service
*Less any applicable Copayment
Frame allowance may be applied towards non-prescription sunglasses for post PRK, LASIK, or Custom LASIK patients.
Lenses and frames include such professional services as are necessary, which shall include:
• Prescribing and ordering proper lenses;
• Assisting in the selection of frames;
• Verifying the accuracy of the finished lenses;
• Proper fitting and adjustment of frames;
• Subsequent adjustments to frames to maintain comfort and efficiency;
• Progress or follow-up work as necessary.
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CONTACT LENSES
Contact lenses are available once every 24 months in lieu of all other lens and frame benefits available herein. When
contact lenses are obtained, the Covered Person shall not be eligible for lenses again for 24 months and frames for 24
months.
Necessary-
Necessary Contact Lenses are a Plan Benefit when specific benefit criteria are satisfied and when prescribed by Covered
Person's Member Doctor or Non-Member Provider. Prior review and approval by Plan are not required for Covered Person
to be eligible for Necessary Contact Lenses.
MEMBER DOCTOR NON-MEMBER
BENEFIT PROVIDER BENEFIT
Professional Fees and Materials Professional Fees and Materials
Covered in full* Up to $210.00*
Elective -
MEMBER DOCTOR NON-MEMBER
BENEFIT PROVIDER BENEFIT
Professional Fees** and Materials Professional Fees and Materials
Up to $105.00 Up to $105.00
*Subject to Copayment
**15% discount applies to Member Doctor’s usual and customary professional fees for contact lens evaluation
and fitting.
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LOW VISION BENEFIT
The Low Vision benefit is available to Covered Persons who have severe visual problems that are not correctable with
regular lenses.
MEMBER DOCTOR
BENEFIT
NON-MEMBER
PROVIDER BENEFIT
Supplementary Testing Covered in Full Up to $125.00
Complete low vision analysis/diagnosis, which includes a comprehensive examination of visual functions, including the
prescription of corrective eyewear or vision aids where indicated.
Supplemental Care Aids 75% of Cost 75% of Cost
Subsequent low vision aids.
Copayment for Supplemental Aids: 25% payable by Covered Person.
Benefit Maximum
The maximum benefit available is $1000.00 (excluding Copayment) every two years.
NON-MEMBER PROVIDER BENEFIT
Low Vision benefits secured from a Non-Member Provider are subject to the same time limits and Copayment arrangements
as described above for a Member Doctor. The Covered Person should pay the Non-Member Provider his full fee. The
Covered Person will be reimbursed in accordance with an amount not to exceed what VSP would pay a Member Doctor in
similar circumstances. NOTE: There is no assurance that this amount will be within the 25% Copayment feature.
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EXCLUSIONS AND LIMITATIONS OF BENEFITS
Some brands of spectacle frames may be unavailable for purchase as Plan Benefits, or may be subject to additional
limitations. Covered Persons may obtain details regarding frame brand availability from their VSP Member Doctor or by
calling VSP’s Customer Care Division at (800) 877-7195.
PATIENT OPTIONS
This Plan is designed to cover visual needs rather than cosmetic materials. When the Covered Person selects any of the
following extras, the Plan will pay the basic cost of the allowed lenses or frames, and the Covered Person will pay the
additional costs for the options.
• Optional cosmetic processes.
• Anti-reflective coating.
• Color coating.
• Mirror coating.
• Scratch coating.
• Blended lenses.
• Cosmetic lenses.
• Laminated lenses.
• Oversize lenses.
• Polycarbonate lenses.
• Photochromic lenses, tinted lenses except Pink #1 and Pink #2.
• Progressive multifocal lenses.
• UV (ultraviolet) protected lenses.
• Certain limitations on low vision care.
• A frame that costs more than the Plan allowance.
• Contact lenses (except as noted elsewhere herein).
NOT COVERED
There is no benefit for professional services or materials connected with:
• Orthoptics or vision training and any associated supplemental testing; plano lenses (less than a ± .50 diopter power); or
two pair of glasses in lieu of bifocals;
• Replacement of lenses and frames furnished under this Plan which are lost or broken, except at the normal intervals
when services are otherwise available;
• Medical or surgical treatment of the eyes;
• Corrective vision treatment of an Experimental Nature;
• Costs for services and/or materials above Plan Benefit allowances;
• Services and/or materials not indicated on this Schedule as covered Plan Benefits.
VSP MAY, AT ITS DISCRETION, WAIVE ANY OF THE Plan LIMITATIONS IF, IN THE OPINION OF VSP's OPTOMETRIC
CONSULTANTS, IT IS NECESSARY FOR THE VISUAL WELFARE OF THE COVERED PERSON.
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EXHIBIT B
VISION SERVICE PLAN SCHEDULE OF ADVANCE PAYMENT AND ADMINISTRATIVE FEE
Signature Plan
VSP shall be entitled to receive premiums for each month on behalf of each Enrollee and his/her Eligible Dependents, if
any, in the amounts specified below:
ADVANCE PAYMENT: $ 0.00
ADMINISTRATIVE FEE: $ 1.49 PER ELIGIBLE ENROLLEE
(INCLUDES COVERAGE FOR ELIGIBLE DEPENDENTS)
NOTICE: The premium under this Plan is subject to change upon renewal (after the end of the Initial Plan Term or any
subsequent Plan Term), or upon change of the Schedule of Benefits or a material change in any other terms or conditions of
the Plan.
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ADDENDUM
VISION SERVICE PLAN ADDITIONAL BENEFIT - COMPUTER VISIONCARE PLAN
DIVISION 0014 & 0019
GENERAL
This Rider lists the vision care benefits to which Covered Persons of VSP are entitled, subject to any applicable
Copayments and other conditions, limitations and/or exclusions stated herein. This Rider forms a part of the Policy or
Evidence of Coverage to which it is attached.
COVERED PERSONS WHO MEET THE ELIGIBILITY REQUIREMENTS OUTLINED BELOW AND WHO UTILIZE A
COMPUTER MONITOR SHALL BE ELIGIBLE FOR THE COMPUTER VISIONCARE (CVC) PLAN.
ELIGIBILITY
The following are Covered Persons under this Plan.
• Enrollee.
See schedule below for Plan Benefits, payments and/or reimbursement subject to any Copayment(s) as stated:
COPAYMENT
The benefits herein are available to each Covered Person subject only to payment of the applicable Copayment by the
Covered Person. Plan Benefits received from Member Doctors and Non-Member Providers require Copayments. Covered
Persons must also follow Benefit Authorization procedures.
There shall be no Copayment payable by the Covered Person to the Member Doctor at the time services are rendered.
PLAN BENEFITS
SERVICE OR MATERIAL
MEMBER DOCTOR
BENEFIT
FREQUENCY
Eye Examination
Covered in full*
Available once each 12 months**
A Limited Level supplemental vision analysis of the eyes and related structures that addresses the
specific visual needs of computer use.
*Less any applicable Copayment
**Beginning with the first date of service
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Lenses
Available once each 12 months**
Single Vision Covered in full *
Bifocal
Covered in full *
Trifocal
Covered in full *
Near Variable Focus Covered in full *
Occupational Progressive
Covered in full *
Available only when the Covered Person has been diagnosed by an eye care professional as having a vision condition
affecting computer use.
*Less any applicable Copayment
**Beginning with the first date of service
Frames Covered up to Plan
Allowance*
Available once each 24 months**
VSP reserves the right to limit the cost of the frames provided by Member Doctors under this Plan. The current allowance
shall be published periodically by VSP to its Member Doctors and will be set at a level to cover a sufficient number of frames
in common use.
*Less any applicable Copayment
**Beginning with the first date of service
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ASSOCIATED VISION THERAPY
Specific to computer use $200.00 per year Available once each 12 months**
This benefit is limited to Covered Persons who are eligible for CVC Coverage and who are
diagnosed as having one of the following conditions:
Accommodative Infacility – The inability (or inefficiency) to change focus quickly when looking
from one distance to another or the inability to maintain focus at one distance for a prolonged
period of time. (Primarily when looking at things up close.)
Convergence Insufficiency – The occasional problem with the eye muscles’ ability to point the
eyes straight when working up close.
**Beginning with the first date of service
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EXCLUSIONS AND LIMITATIONS OF BENEFITS
CVC VISIONCARE PLAN
Some brands of spectacle frames may be unavailable for purchase as Plan Benefits, or may be subject to additional
limitations. Covered Persons may obtain details regarding frame brand availability from their VSP Member Doctor or by
calling VSP’s Customer Care Division at (800) 877-7195.
PATIENT OPTIONS
This vision service plan is designed to cover visual needs rather than cosmetic materials. When a Covered Person selects
any of the following extras, the Plan will pay the basic cost of the allowed lenses or frames, and the Covered Person will pay
the additional costs for the options.
• Optional cosmetic processes.
• Anti-reflective coating.
• Color coating.
• Mirror coating.
• Scratch coating.
• Blended lenses.
• Cosmetic lenses.
• Laminated lenses.
• Oversize lenses.
• Polycarbonate lenses.
• Photochromic lenses, tinted lenses except Pink #1 and Pink #2.
• Progressive multifocal lenses.
• UV (ultraviolet) protected lenses.
NOT COVERED
There are no benefits for professional services or materials connected with:
• Subnormal vision aids.
• Orthoptics or vision training and any associated supplementary testing not specifically related to working with a
computer.
• Plano lenses.
• Two pair of glasses in lieu of bifocals.
• Contact lenses.
• Photochromic or tints greater than 20%.
• Laminated lenses.
• Replacement of lenses and frames furnished under this Plan which are lost or broken, except at the normal intervals
when services are otherwise available.
• Medical or surgical treatment of the eyes.
• Corrective vision treatment of an Experimental Nature.
• Services or materials of a cosmetic nature.
• Services and/or materials not indicated on this Rider as covered Plan Benefits.
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ADDENDUM
ADDITIONAL BENEFIT RIDER SAFETY EYECARE PLAN DIVISIONS 0010 & 0019
GENERAL
This Rider lists additional vision care benefits to which Covered Persons of VISION SERVICE PLAN ("VSP") are entitled,
subject to any applicable Copayments and other conditions, limitations and/or exclusions stated herein. This Rider forms a
part of the Plan or Evidence of Coverage to which it is attached.
COVERED PERSONS WHO MEET THE ELIGIBILITY REQUIREMENTS OUTLINED UNDER ARTICLE VI. OF THE
GROUP VISION CARE PLAN AND WHO REQUIRE SAFETY EYEWEAR DUE TO THE NATURE OF THEIR WORK
SHALL BE ELIGIBLE FOR THE SAFETY EYECARE PLAN.
ELIGIBILITY
The following are Covered Persons under this Plan.
• Enrollee.
See schedule below for Plan Benefits, payments and/or reimbursement subject to any Copayment(s) as stated:
COPAYMENT
The benefits herein are available to each Covered Person subject only to payment of the applicable Copayment by the
Covered person. Plan Benefits received from Member Doctors and Non-Member Providers require Copayments. Covered
Persons must also follow Benefit Authorization procedures.
There shall be no Copayment payable by the Covered Person to the Member Doctor or the Non-Member Provider at the
time services are rendered.
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PLAN BENEFITS
SERVICE OR MATERIAL
MEMBER DOCTOR
BENEFIT
Lenses
Covered in full*
Member Doctors shall ensure that lenses provided under the Safety EyeCare Plan meet the following minimum
standards:
• Be no less than 3mm at the thinnest point.
• Be impact-tested with a one-inch steel ball dropped from a height of 50 inches.
• Be engraved by the manufacturer that it is a safety lens.
*Less any applicable Copayment
Available once every 12 months beginning with the first date of service
SERVICE OR MATERIAL MEMBER DOCTOR BENEFIT
Frames
Covered up to Plan Allowance*
Member Doctors shall ensure that frames provided under the Safety EyeCare Plan meet the following minimum
standards:
• Have a “Z-87” stamp on the front and temples.
• Be fabricated of a slow-burning material.
• Have the manufacturer’s logo imprint.
• Be constructed so that, if impacted from the front, the lens will not come out through the back of the frame.
Materials will be certified as safe for a work environment by meeting the required test standards as set forth by the
American National Standards Institute (ANSI).
VSP reserves the right to limit the cost of the frames provided by Member Doctors under this Plan. The current allowance
shall be published periodically by VSP to its Member Doctors and will be set at a level to cover a sufficient number of frames
in common use.
Available once every 24 months beginning with the first date of service
*Less any applicable Copayment
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EXCLUSIONS AND LIMITATIONS OF BENEFITS
SAFETY EYECARE PLAN
Some brands of spectacle frames may be unavailable for purchase as Plan Benefits, or may be subject to additional
limitations. Covered Persons may obtain details regarding frame brand availability from their VSP Member Doctor or by
calling VSP’s Customer Care Division at (800) 877-7195.
PATIENT OPTIONS
This vision service plan is designed to cover visual needs rather than cosmetic materials. When a Covered Person selects
any of the following extras, the Plan will pay the basic cost of the allowed lenses or frames, and the Covered Person will pay
the additional costs for the options.
• Optional cosmetic processes.
• Anti-reflective coating.
• Color coating.
• Mirror coating.
• Scratch coating.
• Blended lenses.
• Cosmetic lenses.
• Laminated lenses.
• Oversize lenses.
• Polycarbonate lenses.
• Photochromic lenses, tinted lenses except Pink #1 and Pink #2.
• Progressive multifocal lenses.
• UV (ultraviolet) protected lenses.
NOT COVERED
There are no benefits for professional services or materials connected with:
• Subnormal vision aids.
• Orthoptics or vision training and any associated supplementary testing not specifically related to Safety EyeCare.
• Plano lenses.
• Two pair of glasses in lieu of bifocals.
• Contact lenses.
• Replacement of lenses and frames furnished under this Plan that are lost or broken, except at the normal intervals
when services are otherwise available.
• Medical or surgical treatment of the eyes.
• Corrective vision treatment of an Experimental Nature.
• Examinations above a Limited Level unless the Covered Person: (i) is not eligible for an eye examination under the
Plan to which this Rider is attached; (ii) received an eye examination from another Member Doctor during the same eligibility
period; or (iii) received an eye examination during the preceding 6 months from a practitioner in the same Member Doctor’s
office that will be providing the Safety EyeCare examination.
• Rimless frames.
• Services and/or materials not indicated on this Rider as covered Plan Benefits.
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ADDENDUM
ADDITIONAL BENEFIT RIDER
REPAIR/REPLACE BENEFITS
DIVISIONS 0010 & 0019
GENERAL
This Rider lists additional vision care benefits to which Covered Persons of VISION SERVICE PLAN ("VSP") are entitled,
subject to any applicable Copayments and other conditions, limitations and/or exclusions stated herein or in the Schedule of
Benefits with which it is associated. This Rider forms a part of the Plan and Evidence of Coverage to which it is attached.
Repair/Replace Benefits provide coverage for materials obtained when the Covered Person is not eligible for materials
under the Schedule of Benefits to which this Rider is attached. Covered Persons are eligible if their spectacle lenses or
frame are broken or damaged and in need of repair or replacement.
Persons covered under this additional benefit may be entitled to eyeglass frame repairs, which shall include but not be
limited to temples only, front only, hinge and miscellaneous repairs; or replacement of complete frame and single vision and
multifocal lens repair or replacement.
ELIGIBILITY
The following are Covered Persons under this Plan:
Enrollee
See schedule below for Plan Benefits, payments and/or reimbursement subject to any Copayment(s) as stated.
COPAYMENT
There shall be no Copayment payable by the Covered Person to the Member Doctor at the time services are rendered.
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PLAN BENEFITS
VSP may authorize payment under this Rider for materials for Covered Persons more frequently than 12 months if
Eyeglass frames are broken or damaged, which shall include but are not limited to temples only, front only, hinge and
miscellaneous repairs. Replacement of complete frame may be covered if frame is damaged beyond repair.
Single vision and multifocal lens require repair or replacement.
SERVICE OR MATERIAL MEMBER DOCTOR BENEFIT FREQUENCY
Lenses Refer to Schedule of Benefits Available once each 12 months**
Frames Refer to Schedule of Benefits Available once each 12 months**
VSP reserves the right to limit the cost of the frames provided by its Member Doctors under the Plan. The current
allowance shall be published periodically by VSP to its Member Doctors and will be set at a level to cover a
sufficient number of frames in common use.
If the Covered Person wishes to select a more expensive frame than that allowed under this Rider, the cost
difference shall be by agreement between the Covered Person and Member Doctor.
Plan Benefits for lenses are per complete set, not per lens.
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EXCLUSIONS AND LIMITATIONS OF BENEFITS
REPAIR/REPLACE BENEFIT ONLY
Some brands of spectacle frames may be unavailable for purchase as Plan Benefits, or may be subject to additional
limitations. Covered Persons may obtain details regarding frame brand availability from their VSP Member Doctor or by
calling VSP’s Customer Care Division at (800) 877-7195.
NOT COVERED
There is no benefit for professional services or materials connected with:
Orthoptics or vision training and any associated supplemental testing.
Plano lenses (lenses with refractive correction of less than ± .50 diopter).
Two pair of glasses in lieu of bifocals.
Medical or surgical treatment of the eyes.
Corrective vision treatment of an Experimental Nature.
Services or materials of a cosmetic nature.
Costs for services and/or materials exceeding Plan Benefit allowances.
Services and/or materials not indicated on this Rider as covered Plan Benefits.
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AMENDMENT TO
GROUP VISON CARE PLAN
ADMINISTRATIVE SERVICES PROGRAM
This Amendment shall be attached to and made a part of Group Vision Care Plan Number 00102584 (“Plan”), issued by
VISION SERVICE PLAN to CITY OF PALO ALTO.
EXCEPT as otherwise specifically stated herein, all terms and conditions of said Plan shall remain unchanged and are in full
force and effect.
IT IS HEREBY AGREED that effective January 1, 2015, the Plan shall be amended to include a fully insured risk individually
rated program for CITY OF PALO ALTO. The following changes are hereby incorporated into the Plan as it pertains to the
risk individually rated portion of the agreement.
1. Section 2.02 shall be deleted in its entirety.
2. Section 4.02, add the following:
Payment of Premiums: By the last day of each month, Group shall remit to VSP the premiums payable for the next month on behalf of each Enrollee and Eligible Dependents, if any, to be covered under this Plan. The Schedule of Premiums incorporated in this Plan as Exhibit B provides the premium amount for each Covered Person. Only Covered Persons for whom premiums are actually received by VSP shall be entitled to Plan Benefits under this Plan and only for the period for which such payment is received, subject to the grace period provision below. If payment for any Covered Person is not received on time, VSP may terminate all rights of such Covered Person. Such rights may be reinstated only in accordance with the requirements of this Plan. VSP may change the premiums set forth in Exhibit B (Schedule of Premiums) by giving Group at least sixty (60) days advance written notice. No change will be made during the Plan Term unless there is a change in the Schedule of Benefits or there is a material change in Plan terms or conditions, provided any such change is mutually agreed upon in writing by VSP and Group. Notwithstanding the above, VSP may increase premiums during a Plan Term by the amount of any tax or assessment not now in effect but subsequently levied by any taxing authority, which is attributable to premiums VSP received from Group.
3. Section 4.06 shall be added as follows:
Converting to an Administrative Services Program: Due to the cyclical nature of vision care, in the event Client wishes to convert its method of funding from a risk program to an Administrative Services Program, an appropriate level of reserve will need to have been established. Upon conversion to an Administrative Services Program, for vision care beginning on and after the effective date of conversion, all claims will be paid through the Administrative Services Program.
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4. Section 6.03 shall be revised as follows:
Retroactive Eligibility Changes: Retroactive eligibility changes are limited to sixty (60) days prior to the date notice of any such requested change is received by VSP. VSP may refuse retroactive termination of a Covered Person if Plan Benefits have been obtained by, or authorized for the Covered Person after the effective date of the requested termination.
IT IS FURTHER AGREED THAT the attached Exhibit A, Schedule of Benefits and Exhibit B, Schedule of
Premiums, and Addenda, Additional Benefit Riders, shall be added to the Agreement for CITY OF PALO ALTO.
____________________________________________
James M. McGrann, President, VSP Vision Care
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EXHIBIT A
SCHEDULE OF BENEFITS
Signature Plan
GENERAL
This Schedule lists the vision care services and vision care materials to which Covered Persons of VSP are entitled, subject
to any Copayments and other conditions, limitations and/or exclusions stated herein. If Plan Benefits are available for Non-
Member Provider services, as indicated by the reimbursement provisions below, vision care services and vision care
materials may be received from any licensed optometrist, ophthalmologist, or dispensing optician, whether Member Doctors
or Non-Member Providers. This Schedule forms a part of the Plan or Policy to which it is attached.
When Plan Benefits are received from Member Doctors, benefits appearing in the first column below are applicable subject
to any Copayments as stated below. When Plan Benefits are available and received from Non-Member Providers, the
Covered Person is reimbursed for such benefits according to the schedule in the second column below less any applicable
Copayments.
COPAYMENT
The benefits described herein are available to each Covered Person subject only to payment of the applicable Copayment
by the Covered Person. Copayments are required for Plan Benefits received from Member Doctors and Non-Member
Providers. Covered Persons must also follow the proper procedures for obtaining Benefit Authorization.
A Copayment amount of $10.00 shall be payable by the Covered Person to the Member Doctor at the time services are
rendered.
PLAN BENEFITS
MEMBER DOCTOR
BENEFIT
NON-MEMBER
PROVIDER BENEFIT
VISION CARE SERVICES
Eye Examination Covered in Full* Up to $ 50.00*
Complete initial vision analysis which includes an appropriate examination of visual functions, including the prescription of
corrective eyewear where indicated.
Subsequent regular eye examinations every 12 months beginning with the first date of service
*Less any applicable Copayment
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VISION CARE MATERIALS
MEMBER DOCTOR NON-MEMBER
BENEFIT PROVIDER BENEFIT
Lenses
Single Vision Covered in full* Up to $ 50.00*
Bifocal Covered in full* Up to $ 75.00*
Trifocal Covered in full* Up to $ 100.00*
Lenticular Covered in full* Up to $ 125.00*
Available once every 12 months beginning with the first date of service
Frames Covered up to Plan
Allowance*
Up to $ 70.00*
Available once every 12 months beginning with the first date of service
*Less any applicable Copayment
Frame allowance may be applied towards non-prescription sunglasses for post PRK, LASIK, or Custom LASIK patients.
Lenses and frames include such professional services as are necessary, which shall include:
• Prescribing and ordering proper lenses;
• Assisting in the selection of frames;
• Verifying the accuracy of the finished lenses;
• Proper fitting and adjustment of frames;
• Subsequent adjustments to frames to maintain comfort and efficiency;
• Progress or follow-up work as necessary.
Lens Options
Anti-reflective coating Covered in full** Not Covered
Polycarbonate lenses
**Less $25.00 Copayment
Covered in full Not Covered
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CONTACT LENSES
Contact lenses are available once every 12 months in lieu of all other lens and frame benefits available herein. When
contact lenses are obtained, the Covered Person shall not be eligible for lenses again for 12 months and frames for 12
months.
Necessary-
Necessary Contact Lenses are a Plan Benefit when specific benefit criteria are satisfied and when prescribed by Covered
Person's Member Doctor or Non-Member Provider. Prior review and approval by Plan are not required for Covered Person
to be eligible for Necessary Contact Lenses.
MEMBER DOCTOR NON-MEMBER
BENEFIT PROVIDER BENEFIT
Professional Fees and Materials Professional Fees and Materials
Covered in full* Up to $210.00*
Elective -
MEMBER DOCTOR NON-MEMBER
BENEFIT PROVIDER BENEFIT
Professional Fees** and Materials Professional Fees and Materials
Up to $200.00 Up to $105.00
*Subject to Copayment
**15% discount applies to Member Doctor’s usual and customary professional fees for contact lens evaluation
and fitting.
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LOW VISION BENEFIT
The Low Vision benefit is available to Covered Persons who have severe visual problems that are not correctable with
regular lenses.
MEMBER DOCTOR
BENEFIT
NON-MEMBER
PROVIDER BENEFIT
Supplementary Testing Covered in Full Up to $125.00
Complete low vision analysis/diagnosis, which includes a comprehensive examination of visual functions, including the
prescription of corrective eyewear or vision aids where indicated.
Supplemental Care Aids 75% of Cost 75% of Cost
Subsequent low vision aids.
Copayment for Supplemental Aids: 25% payable by Covered Person.
Benefit Maximum
The maximum benefit available is $1000.00 (excluding Copayment) every two years.
NON-MEMBER PROVIDER BENEFIT
Low Vision benefits secured from a Non-Member Provider are subject to the same time limits and Copayment arrangements
as described above for a Member Doctor. The Covered Person should pay the Non-Member Provider his full fee. The
Covered Person will be reimbursed in accordance with an amount not to exceed what VSP would pay a Member Doctor in
similar circumstances. NOTE: There is no assurance that this amount will be within the 25% Copayment feature.
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EXCLUSIONS AND LIMITATIONS OF BENEFITS
Some brands of spectacle frames may be unavailable for purchase as Plan Benefits, or may be subject to additional
limitations. Covered Persons may obtain details regarding frame brand availability from their VSP Member Doctor or by
calling VSP’s Customer Care Division at (800) 877-7195.
PATIENT OPTIONS
This Plan is designed to cover visual needs rather than cosmetic materials. When the Covered Person selects any of the
following extras, the Plan will pay the basic cost of the allowed lenses or frames, and the Covered Person will pay the
additional costs for the options.
• Optional cosmetic processes.
• Color coating.
• Mirror coating.
• Scratch coating.
• Blended lenses.
• Cosmetic lenses.
• Laminated lenses.
• Oversize lenses.
• Photochromic lenses, tinted lenses except Pink #1 and Pink #2.
• Progressive multifocal lenses.
• UV (ultraviolet) protected lenses.
• Certain limitations on low vision care.
• A frame that costs more than the Plan allowance.
• Contact lenses (except as noted elsewhere herein).
NOT COVERED
There is no benefit for professional services or materials connected with:
• Orthoptics or vision training and any associated supplemental testing; plano lenses (less than a ± .50 diopter power); or
two pair of glasses in lieu of bifocals;
• Replacement of lenses and frames furnished under this Plan which are lost or broken, except at the normal intervals
when services are otherwise available;
• Medical or surgical treatment of the eyes;
• Corrective vision treatment of an Experimental Nature;
• Costs for services and/or materials above Plan Benefit allowances;
• Services and/or materials not indicated on this Schedule as covered Plan Benefits.
VSP MAY, AT ITS DISCRETION, WAIVE ANY OF THE Plan LIMITATIONS IF, IN THE OPINION OF VSP's OPTOMETRIC
CONSULTANTS, IT IS NECESSARY FOR THE VISUAL WELFARE OF THE COVERED PERSON.
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EXHIBIT B
SCHEDULE OF PREMIUMS
Signature Plan
VSP shall be entitled to receive premiums for each month on behalf of each Enrollee and his/her Eligible Dependents, if
any, in the amounts specified below:
$ 23.81 per month for each eligible Enrollee without Eligible Dependents.
$ 47.31 per month for each eligible Enrollee with one Eligible Dependent.
$ 75.98 per month for each eligible Enrollee with two or more Eligible Dependents.
NOTICE: The premium under this Plan is subject to change upon renewal (after the end of the Initial Plan Term or any
subsequent Plan Term), or upon change of the Schedule of Benefits or a material change in any other terms or conditions of
the Plan.
let
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ADDENDUM
ADDITIONAL BENEFIT RIDER
SECOND PAIR
GENERAL
This Rider lists additional vision care benefits to which Covered Persons of VISION SERVICE PLAN (“VSP”) are entitled,
subject to any applicable Copayments and other conditions, limitations and/or exclusions stated herein or in the Schedule of
Benefits with which it is associated. This Rider forms a part of the Plan and Evidence of Coverage to which it is attached.
ELIGIBILITY
The following are Covered Persons under this Plan:
• Enrollee.
• The legal spouse of Enrollee.
• The domestic partner of the same or opposite in gender as Enrollee, pursuant to the Group's eligibility rules.
• Any child of Enrollee, including any natural child from the date of birth, legally adopted child from the date of placement
for adoption with the Enrollee, or other child for whom a court or administrative agency holds the Enrollee responsible.
Dependent children are covered up to age 26.
A dependent, unmarried child over the limiting age may continue to be eligible as a dependent if the child is incapable of
self-sustaining employment because of mental or physical disability, and chiefly dependent upon Enrollee for support and
maintenance.
See schedule below for Plan Benefits, payments and/or reimbursement subject to any Copayment(s) as stated.
COPAYMENT
A Copayment amount of $10.00 shall be payable by the Covered Person at the time services are rendered.
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PLAN BENEFITS
MATERIAL MEMBER DOCTOR BENEFIT FREQUENCY
Lenses Covered in full* Available once each 12 months**
*Less any applicable Copayment
**Beginning with the first date of service
Plan Benefits for lenses are per complete set, not per lens.
Frames Covered up to Plan allowance* Available once each 12 months**
MATERIAL MEMBER DOCTOR BENEFIT FREQUENCY
Lens Options Available once each 12 months**
Anti-reflective coating
**Less $25.00 copayment
Covered in full**
Polycarbonate lenses Covered in full
Contact Lenses
Necessary Covered in full* Available once every 12 months**
Elective Up to $ 200.00* Available once every 12 months**
*Less any applicable Copayment
**Beginning with the first date of service
Necessary Contact Lenses are a Plan Benefit when specific benefit criteria are satisfied and when prescribed by Covered
Person's Member Doctor or Out-of-network provider. Prior review and approval by VSP are not required for Covered Person
to be eligible for Necessary Contact Lenses.
Contact lenses are provided in lieu of all other lens and frame benefits available herein.
When contact lenses are obtained, the Covered Person shall not be eligible for lenses again for 12 months and
frames for 12 months.
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EXCLUSIONS AND LIMITATIONS OF BENEFITS
SECOND PAIR BENEFIT ONLY
Some brands of spectacle frames may be unavailable for purchase as Plan Benefits, or may be subject to additional
limitations. Covered Persons may obtain details regarding frame brand availability from their VSP Member Doctor or by
calling VSP’s Customer Care Division at (800) 877-7195.
NOT COVERED
There are no benefits for professional services or materials connected with:
• Orthoptics or vision training and any associated supplemental testing.
• Eye examinations.
• Plano contact lenses to change eye color cosmetically.
• Plano lenses (lenses with refractive correction of less than ± .50 diopter).
• Replacement of lenses and frames furnished under this Plan which are lost or broken, except at the normal intervals
when services are otherwise available.
• Two pair of glasses in lieu of bifocals.
• Corrective vision treatment of an Experimental Nature.
• Medical or surgical treatment of the eyes.
• Contact lens modification, polishing or cleaning.
• Artistically-painted contact lenses.
• Services and/or materials not included on this Rider as covered Plan Benefits.
• Costs for services and/or materials exceeding Plan Benefit allowance.
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SERVICES FROM NON-MEMBER PROVIDERS
LIABILITY OF COVERED PERSONS FOR PAYMENT
REIMBURSEMENT PROVISIONS
When a Covered Person chooses to receive services from a Non-Member Provider, services may be secured from any
optometrist, ophthalmologist and/or dispensing optician. This Plan then becomes an indemnity plan reimbursing according
to a schedule of allowances. The Covered Person should pay the Provider’s fee in full. VSP will reimburse the Covered
Person in accordance with the following schedule.
THERE IS NO ASSURANCE THAT THE AMOUNT REIMBURSED WILL BE SUFFICIENT TO PAY THE EXAMINATION
OR THE MATERIALS IN FULL.
AVAILABILITY OF SERVICES UNDER THIS REIMBURSEMENT SCHEDULE IS SUBJECT TO THE SAME TIME LIMITS
AND COPAYMENT AS THOSE DESCRIBED FOR MEMBER DOCTORS. SERVICES OBTAINED FROM NON-MEMBER
PROVIDERS ARE IN LIEU OF SERVICES FROM A MEMBER DOCTOR.
VSP IS UNABLE TO REQUIRE NON-MEMBER PROVIDERS TO ADHERE TO VSP’S QUALITY STANDARDS.
SCHEDULE OF ALLOWANCES
MATERIAL NON-MEMBER PROVIDER BENEFIT FREQUENCY
Lenses
Single Vision Up to $ 50.00* Available once each 12 months**
Bifocal Up to $ 75.00* Available once each 12 months**
Trifocal Up to $ 100.00* Available once each 12 months**
Lenticular Up to $ 125.00* Available once each 12 months**
Frame Up to $ 70.00* Available once each 12 months**
*Less any applicable Copayment
**Beginning with the first date of service
Plan Benefits for lenses are per complete set, not per lens
Contact Lenses
Necessary Up to $ 210.00* Available once each 12 months**
Elective Up to $ 105.00* Available once each 12 months**
Necessary Contact Lenses are a Plan Benefit when specific benefit criteria are satisfied and when prescribed by Covered
Person's Member doctor or Non-Member Provider. Prior review and approval by VSP are not required for Covered Person
to be eligible for Necessary Contact Lenses.
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ADDENDUM
VISION SERVICE PLAN ADDITIONAL BENEFIT - COMPUTER VISIONCARE PLAN DIVISIONS 0020 & 0021
GENERAL
This Rider lists the vision care benefits to which Covered Persons of VSP are entitled, subject to any applicable
Copayments and other conditions, limitations and/or exclusions stated herein. This Rider forms a part of the Policy or
Evidence of Coverage to which it is attached.
COVERED PERSONS WHO MEET THE ELIGIBILITY REQUIREMENTS OUTLINED BELOW AND WHO UTILIZE A
COMPUTER MONITOR SHALL BE ELIGIBLE FOR THE COMPUTER VISIONCARE (CVC) PLAN.
ELIGIBILITY
The following are Covered Persons under this Plan.
• Enrollee.
See schedule below for Plan Benefits, payments and/or reimbursement subject to any Copayment(s) as stated:
COPAYMENT
The benefits herein are available to each Covered Person subject only to payment of the applicable Copayment by the
Covered Person. Plan Benefits received from Member Doctors and Non-Member Providers require Copayments. Covered
Persons must also follow Benefit Authorization procedures.
There shall be no Copayment payable by the Covered Person to the Member Doctor at the time services are rendered.
PLAN BENEFITS
SERVICE OR MATERIAL
MEMBER DOCTOR
BENEFIT
FREQUENCY
Eye Examination
Covered in full*
Available once each 12 months**
A Limited Level supplemental vision analysis of the eyes and related structures that addresses the
specific visual needs of computer use.
*Less any applicable Copayment
**Beginning with the first date of service
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Lenses
Available once each 12 months**
Single Vision Covered in full *
Bifocal
Covered in full *
Trifocal
Covered in full *
Near Variable Focus Covered in full *
Occupational Progressive Covered in full *
Available only when the Covered Person has been diagnosed by an eye care professional as having a vision condition
affecting computer use.
*Less any applicable Copayment.
**Beginning with the first date of service.
Frames Covered up to Plan
Allowance*
Available once each 12 months**
VSP reserves the right to limit the cost of the frames provided by Member Doctors under this Plan. The current allowance
shall be published periodically by VSP to its Member Doctors and will be set at a level to cover a sufficient number of frames
in common use.
*Less any applicable Copayment
**Beginning with the first date of service
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ASSOCIATED VISION THERAPY
Specific to computer use $200.00 per year Available once each 12 months**
This benefit is limited to Covered Persons who are eligible for CVC Coverage and who are
diagnosed as having one of the following conditions:
Accommodative Infacility – The inability (or inefficiency) to change focus quickly when looking
from one distance to another or the inability to maintain focus at one distance for a prolonged
period of time. (Primarily when looking at things up close.)
Convergence Insufficiency – The occasional problem with the eye muscles’ ability to point the
eyes straight when working up close.
**Beginning with the first date of service
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EXCLUSIONS AND LIMITATIONS OF BENEFITS
CVC VISIONCARE PLAN
Some brands of spectacle frames may be unavailable for purchase as Plan Benefits, or may be subject to additional
limitations. Covered Persons may obtain details regarding frame brand availability from their VSP Member Doctor or by
calling VSP’s Customer Care Division at (800) 877-7195.
PATIENT OPTIONS
This vision service plan is designed to cover visual needs rather than cosmetic materials. When a Covered Person selects
any of the following extras, the Plan will pay the basic cost of the allowed lenses or frames, and the Covered Person will pay
the additional costs for the options.
• Optional cosmetic processes.
• Anti-reflective coating.
• Color coating.
• Mirror coating.
• Scratch coating.
• Blended lenses.
• Cosmetic lenses.
• Laminated lenses.
• Oversize lenses.
• Polycarbonate lenses.
• Photochromic lenses, tinted lenses except Pink #1 and Pink #2.
• Progressive multifocal lenses.
• UV (ultraviolet) protected lenses.
NOT COVERED
There are no benefits for professional services or materials connected with:
• Subnormal vision aids.
• Orthoptics or vision training and any associated supplementary testing not specifically related to working with a
computer.
• Plano lenses.
• Two pair of glasses in lieu of bifocals.
• Contact lenses.
• Photochromic or tints greater than 20%.
• Laminated lenses.
• Replacement of lenses and frames furnished under this Plan which are lost or broken, except at the normal intervals
when services are otherwise available.
• Medical or surgical treatment of the eyes.
• Corrective vision treatment of an Experimental Nature.
• Services or materials of a cosmetic nature.
• Services and/or materials not indicated on this Rider as covered Plan Benefits.
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ADDENDUM
ADDITIONAL BENEFIT RIDER SAFETY EYECARE PLAN DIVISIONS 0016 & 0021
GENERAL
This Rider lists additional vision care benefits to which Covered Persons of ("VSP") are entitled, subject to any applicable
Copayments and other conditions, limitations and/or exclusions stated herein. This Rider forms a part of the Plan or
Evidence of Coverage to which it is attached.
COVERED PERSONS WHO MEET THE ELIGIBILITY REQUIREMENTS OUTLINED UNDER ARTICLE VI. OF THE
GROUP VISION CARE Plan AND WHO REQUIRE SAFETY EYEWEAR DUE TO THE NATURE OF THEIR WORK SHALL
BE ELIGIBLE FOR THE SAFETY EYECARE PLAN.
ELIGIBILITY
The following are Covered Persons under this Plan.
• Enrollee.
See schedule below for Plan Benefits, payments and/or reimbursement subject to any Copayment(s) as stated:
COPAYMENT
The benefits herein are available to each Covered Person subject only to payment of the applicable Copayment by the
Covered person. Plan Benefits received from Member Doctors and Non-Member Providers require Copayments. Covered
Persons must also follow Benefit Authorization procedures.
There shall be no Copayment payable by the Covered Person to the Member Doctor or the Non-Member Provider at the
time services are rendered.
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PLAN BENEFITS
SERVICE OR MATERIAL
MEMBER DOCTOR
BENEFIT
Lenses
Covered in full*
Member Doctors shall ensure that lenses provided under the Safety EyeCare Plan meet the following minimum
standards:
• Be no less than 3mm at the thinnest point.
• Be impact-tested with a one-inch steel ball dropped from a height of 50 inches.
• Be engraved by the manufacturer that it is a safety lens.
*Less any applicable Copayment
Available once every 12 months beginning with the first date of service
SERVICE OR MATERIAL MEMBER DOCTOR BENEFIT
Frames
Covered up to Plan Allowance*
Member Doctors shall ensure that frames provided under the Safety EyeCare Plan meet the following minimum
standards:
• Have a “Z-87” stamp on the front and temples.
• Be fabricated of a slow-burning material.
• Have the manufacturer’s logo imprint.
• Be constructed so that, if impacted from the front, the lens will not come out through the back of the frame.
Materials will be certified as safe for a work environment by meeting the required test standards as set forth by the
American National Standards Institute (ANSI).
VSP reserves the right to limit the cost of the frames provided by Member Doctors under this Plan. The current allowance
shall be published periodically by VSP to its Member Doctors and will be set at a level to cover a sufficient number of frames
in common use.
Available once every 24 months beginning with the first date of service
*Less any applicable Copayment
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EXCLUSIONS AND LIMITATIONS OF BENEFITS
SAFETY EYECARE PLAN
Some brands of spectacle frames may be unavailable for purchase as Plan Benefits, or may be subject to additional
limitations. Covered Persons may obtain details regarding frame brand availability from their VSP Member Doctor or by
calling VSP’s Customer Care Division at (800) 877-7195.
PATIENT OPTIONS
This vision service plan is designed to cover visual needs rather than cosmetic materials. When a Covered Person selects
any of the following extras, the Plan will pay the basic cost of the allowed lenses or frames, and the Covered Person will pay
the additional costs for the options.
• Optional cosmetic processes.
• Anti-reflective coating.
• Color coating.
• Mirror coating.
• Scratch coating.
• Blended lenses.
• Cosmetic lenses.
• Laminated lenses.
• Oversize lenses.
• Polycarbonate lenses.
• Photochromic lenses, tinted lenses except Pink #1 and Pink #2.
• Progressive multifocal lenses.
• UV (ultraviolet) protected lenses.
NOT COVERED
There are no benefits for professional services or materials connected with:
• Subnormal vision aids.
• Orthoptics or vision training and any associated supplementary testing not specifically related to Safety EyeCare.
• Plano lenses.
• Two pair of glasses in lieu of bifocals.
• Contact lenses.
• Replacement of lenses and frames furnished under this Plan that are lost or broken, except at the normal intervals
when services are otherwise available.
• Medical or surgical treatment of the eyes.
• Corrective vision treatment of an Experimental Nature.
• Examinations above a Limited Level unless the Covered Person: (i) is not eligible for an eye examination under the
Plan to which this Rider is attached; (ii) received an eye examination from another Member Doctor during the same eligibility
period; or (iii) received an eye examination during the preceding 6 months from a practitioner in the same Member Doctor’s
office that will be providing the Safety EyeCare examination.
• Rimless frames.
• Services and/or materials not indicated on this Rider as covered Plan Benefits.
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ADDENDUM
ADDITIONAL BENEFIT RIDER
REPAIR/REPLACE BENEFITS
DIVISIONS 0016 & 0021
GENERAL
This Rider lists additional vision care benefits to which Covered Persons of VISION SERVICE PLAN ("VSP") are entitled,
subject to any applicable Copayments and other conditions, limitations and/or exclusions stated herein or in the Schedule of
Benefits with which it is associated. This Rider forms a part of the Plan and Evidence of Coverage to which it is attached.
Repair/Replace Benefits provide coverage for materials obtained when the Covered Person is not eligible for materials
under the Schedule of Benefits to which this Rider is attached. Covered Persons are eligible if their spectacle lenses or
frame are broken or damaged and in need of repair or replacement.
Persons covered under this additional benefit may be entitled to eyeglass frame repairs, which shall include but not be
limited to temples only, front only, hinge and miscellaneous repairs; or replacement of complete frame and single vision and
multifocal lens repair or replacement.
ELIGIBILITY
The following are Covered Persons under this Plan:
Enrollee
See schedule below for Plan Benefits, payments and/or reimbursement subject to any Copayment(s) as stated.
COPAYMENT
There shall be no Copayment payable by the Covered Person to the Member Doctor at the time services are rendered.
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PLAN BENEFITS
VSP may authorize payment under this Rider for materials for Covered Persons more frequently than 12 months if
1. Eyeglass frames are broken or damaged, which shall include but are not limited to temples only, front only, hinge
and miscellaneous repairs. Replacement of complete frame may be covered if frame is damaged beyond repair.
2. Single vision and multifocal lens require repair or replacement.
SERVICE OR MATERIAL MEMBER DOCTOR BENEFIT FREQUENCY
Lenses Refer to Schedule of Benefits Available once each 12 months**
Frames Refer to Schedule of Benefits Available once each 12 months**
VSP reserves the right to limit the cost of the frames provided by its Member Doctors under the Plan. The current
allowance shall be published periodically by VSP to its Member Doctors and will be set at a level to cover a
sufficient number of frames in common use.
If the Covered Person wishes to select a more expensive frame than that allowed under this Rider, the cost
difference shall be by agreement between the Covered Person and Member Doctor.
Plan Benefits for lenses are per complete set, not per lens.
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EXCLUSIONS AND LIMITATIONS OF BENEFITS
REPAIR/REPLACE BENEFIT ONLY
Some brands of spectacle frames may be unavailable for purchase as Plan Benefits, or may be subject to additional
limitations. Covered Persons may obtain details regarding frame brand availability from their VSP Member Doctor or by
calling VSP’s Customer Care Division at (800) 877-7195.
NOT COVERED
There is no benefit for professional services or materials connected with:
1. Orthoptics or vision training and any associated supplemental testing.
2. Plano lenses (lenses with refractive correction of less than ± .50 diopter).
3. Two pair of glasses in lieu of bifocals.
4. Medical or surgical treatment of the eyes.
5. Corrective vision treatment of an Experimental Nature.
6. Services or materials of a cosmetic nature.
7. Costs for services and/or materials exceeding Plan Benefit allowances.
8. Services and/or materials not indicated on this Rider as covered Plan Benefits.
ADDENDUM
VISION SERVICE PLAN
THE CALIFORNIA CONTINUATION BENEFITS
REPLACEMENT ACT OF 1997 (CAL-COBRA)
Pursuant to California Health and Safety Code Section 1366.25, the following section is hereby incorporated into the Group
Vision Care Plan, if, and only to the extent Cal-COBRA applies to the parties to this Plan:
The California Continuation Benefits Replacement Act of 1997 (Cal-COBRA) requires health care service plans providing
contracted coverage to employers with 2 to 19 eligible employees to offer continuation coverage for purchase by qualified
beneficiaries upon the occurrence of a qualifying event. VSP and Group are subject to the following obligations in
connection with continuation coverage:
1. Group agrees to provide VSP with notice of any employee who has had a “qualifying event”, within 31 days of the
qualifying event. A “qualifying event” means any of the following events that, but for the election of continuation coverage
provided thereunder, would result in a loss of coverage under the group benefit plan to a qualified beneficiary:
• The death of the covered employee.
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• The termination or reduction of hours of the covered employee’s employment, except that termination for gross
misconduct does not constitute a qualifying event.
• The divorce or legal separation of the covered employee from the covered employee’s spouse.
• The loss of dependent status by a dependent enrolled in the group benefit plan.
• With respect to a dependent only, the covered employee’s eligibility for coverage under Title XVIII of the United States
Social Security Act (Medicare).
Within 14 days of receipt of the foregoing notice of a qualifying event from Group, VSP will send to the qualified
beneficiary’s last known address, as provided by Group, the necessary benefits information, premium information,
enrollment forms, and instructions to allow the qualified beneficiary to formally elect continuation coverage.
2. Group agrees to notify qualified beneficiaries currently receiving continuation coverage, whose continuation
coverage will terminate under one group benefit plan prior to the end of the period the qualified beneficiary would have
remained covered under Cal-COBRA, as specified in Health and Safety Code Section 1366.27, a minimum of 30 days prior
to the termination, of the qualified beneficiary’s ability to continue coverage under a new group benefit plan for the balance
of the period the qualified beneficiary would have remained covered under the prior group benefit plan. Group agrees to
provide qualified beneficiaries subject to this paragraph with the necessary benefits information, premium information,
enrollment forms, and instructions to allow the qualified beneficiary to continue coverage. This information shall be sent to
the qualified beneficiary’s last known address, as provided by the plan currently providing continuation coverage to the
qualified beneficiary.
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ADDENDUM
VISION SERVICE PLAN
DOMESTIC PARTNER COVERAGE
VI. ELIGIBILITY FOR COVERAGE
6.01 (b) Eligible Dependents, Add the Following:
(1a) The domestic partner of the same or opposite in gender as Enrollee, pursuant to the Group's eligibility
rules which are applicable to the Group's general medical benefits.
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EXHIBIT “A-2
EVIDENCE OF DISCLOSURE & DISCLOSURE FORM
Group Vision Care Plan
EVIDENCE OF COVERAGE
&
DISCLOSURE FORM
Provided by:
3333 Quality Drive, Rancho Cordova, CA 95670
(916) 851-5000 (800) 877-7195
THIS EVIDENCE OF COVERAGE AND DISCLOSURE FORM DISCLOSES THE TERMS AND CONDITIONS OF
COVERAGE. PLEASE READ THE FORM COMPLETELY AND CAREFULLY. INDIVIDUALS WITH SPECIAL
HEALTHCARE NEEDS SHOULD CAREFULLY READ THOSE SECTIONS THAT APPLY TO THEM. ALL APPLICANTS
HAVE A RIGHT TO REVIEW THE EVIDENCE OF COVERAGE AND DISCLOSURE FORM PRIOR TO ENROLLMENT.
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To be filled in by employer in the event this document is used to develop a Summary Plan Description:
NAME OF EMPLOYER:
NAME OF PLAN:
PRINCIPAL ADDRESS:
EMPLOYER I.D.#:
PLAN #:
PLAN ADMINISTRATOR:
ADDRESS:
PHONE NUMBER:
REGISTERED AGENT FOR SERVICE OF LEGAL PROCESS, IF DIFFERENT FROM PLAN ADMINISTRATOR:
ADDRESS:
THIS EVIDENCE OF COVERAGE AND DISCLOSURE FORM CONSTITUTES ONLY A SUMMARY OF THE TERMS AND CONDITIONS OF
COVERAGE. THE PLAN CONTRACT ITSELF SHOULD BE CONSULTED TO DETERMINE GOVERNING TERMS AND CONDITIONS OF
COVERAGE.
DEFINITIONS:
ADDITIONAL BENEFIT
RIDER
The document attached to this Evidence of Coverage,, when purchased by Group, which lists selected vision
care services and vision care materials that a Covered Person is entitled to receive by virtue of the Plan.
ANISOMETROPIA A condition of unequal refractive state for the two eyes, one eye requiring a different lens correction than the
other.
BENEFIT AUTHORIZATION Authorization issued by VSP identifying the individual named as a Covered Person of VSP, and identifying
those Plan Benefits to which a Covered Person is entitled.
COPAYMENTS Any amounts required to be paid by or on behalf of a Covered Person for Plan Benefits which are not fully
covered.
COVERED PERSON An Enrollee or Eligible Dependent who meets VSP’s eligibility criteria and on whose behalf Premiums have
been paid to VSP, and who is covered under this plan.
ELIGIBLE DEPENDENT Any legal dependent of an Enrollee of Group who meets the criteria for eligibility established by Group and
approved by VSP under section VI. ELIGIBILITY FOR COVERAGE of the Group Plan document maintained by
your Group Administrator under which such Enrollee is covered.
EMERGENCY CONDITION A condition, with sudden onset and acute symptoms, that requires the Covered Person to obtain immediate
medical care, or an unforeseen occurrence requiring immediate, non-medical action.
ENROLLEE An employee or member of Group who meets the criteria for eligibility specified under section VI. ELIGIBILITY
FOR COVERAGE of the Group Plan document maintained by your Group Administrator.
EXPERIMENTAL NATURE Procedure or lens that is not used universally or accepted by the vision care profession, as determined by
VSP.
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GROUP An employer or other entity which contracts with VSP for coverage under this plan in order to provide vision
care coverage to its Enrollees and their Eligible Dependents.
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KERATOCONUS A development or dystrophic deformity of the cornea in which it becomes coneshaped due to a thinning and
stretching of the tissue in its central area.
MEMBER DOCTOR An optometrist or ophthalmologist licensed and otherwise qualified to practice vision care and/or provide vision
care materials who has contracted with VSP to provide vision care services and/or vision care materials on
behalf of Covered Persons of VSP.
NON-MEMBER PROVIDER Any optometrist, optician, ophthalmologist, or other licensed and qualified vision care provider who has not
contracted with VSP to provide vision care services and/or vision care materials to Covered Persons of VSP.
PLAN BENEFITS The vision care services and vision care materials which a Covered Person is entitled to receive by virtue of
coverage under this plan, as defined on the enclosed insert or in the Schedule of Benefits attached as Exhibit
A to the Group Plan document maintained by your Group Administrator.
PREMIUMS The payments made to VSP by or on behalf of a Covered Person to entitle him/her to Plan Benefits, as stated
in the Schedule of Premiums attached as Exhibit B to the Group Plan document maintained by your Group
Administrator.
RENEWAL DATE The date on which this plan shall renew or terminate if proper notice is given.
SCHEDULE OF BENEFITS The document, attached as Exhibit A to the Group Plan document maintained by your Group Administrator,
which lists the vision care services and vision care materials which a Covered Person is entitled to receive by
virtue of this plan.
SCHEDULE OF PREMIUMS The document, attached as Exhibit B to the Group Plan document maintained by your Group Administrator,
which states the payments to be made to VSP by or on behalf of a Covered Person to entitle him/her to Plan
Benefits.
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ELIGIBILITY FOR COVERAGE
Enrollees: To be eligible for coverage, a person must currently be an employee or member of the Group, and meet the criteria established in the
coverage criteria mutually agreed upon by Group and VSP.
Eligible Dependents: If dependent coverage is provided, the persons eligible for coverage as dependents shall include the legal spouse of any
Enrollee, and any child of an Enrollee who has not attained the limiting age as shown on the enclosed insert, including any natural child from the
moment of birth, legally adopted child from the moment of placement for adoption with the Enrollee, or other child for whom a court holds the
Enrollee responsible.
A dependent, unmarried child over the limiting age as shown on the enclosed insert may continue to be eligible as a dependent if the child is
incapable of self-sustaining employment because of mental or physical disability, and chiefly dependent upon the Enrollee for support and
maintenance.
ANNUAL ENROLLMENT/DISENROLLMENT
Except for new Enrollees joining this plan, Enrollees and Eligible Dependents shall have the right to become covered or cancel coverage once each
year during the thirty (30) day period beginning sixty (60) days prior to the anniversary of the effective date of this plan (or as may otherwise be
allowed by mutual agreement between the Group and VSP). Any such coverage or cancellation of coverage may be accomplished only by Group
giving VSP written notice thereof on behalf of the Enrollee or Eligible Dependent before the end of the prescribed thirty (30) day period and will take
effect on the anniversary date following receipt of such notice.
PREMIUMS
Your Group is responsible for payments to VSP of the periodic charges for your coverage. You will be notified of your share of the charges, if any,
by your Group. The entire cost of the program is paid to VSP by your Group.
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PROCEDURES FOR USING THIS PLAN
PLEASE READ THE FOLLOWING INFORMATION SO YOU WILL KNOW FROM WHOM OR WHAT GROUP OF PROVIDERS HEALTH CARE
MAY BE OBTAINED.
1. When you desire to obtain Plan Benefits from a Member Doctor, you should contact a Member Doctor or VSP. A list of names, addresses, and
phone numbers of Member Doctors in your geographic location can be obtained from your Group, Plan Administrator, or VSP. If this list does not
cover the geographic area in which you desire to seek services, you may call or write the VSP office nearest you to obtain one which does.
2. If you are eligible for Plan Benefits, VSP will provide Benefit Authorization directly to the Member Doctor. If you contact a Member Doctor
directly, you must identify yourself as a VSP member so the doctor knows to obtain Benefit Authorization from VSP.
3. When such Benefit Authorization is provided by VSP and services are performed prior to the expiration date of the Benefit Authorization, this will
constitute a claim against this plan in spite of your termination of coverage or the termination of this plan. Should you receive services from a
Member Doctor without such Benefit Authorization or obtain services from a provider who is not a Member Doctor, you are responsible for payment
in full to the provider.
4. You pay only the Copayment (if any) to the Member Doctor for the services covered by this plan. VSP will pay the Member Doctor directly
according to their agreement with the doctor. VSP reimburses its Member Doctors on a fee-for-service basis. There are no incentives or financial
bonuses paid to Member Doctors for services covered under this plan.
Note: If you are eligible for and obtain Plan Benefits from a Non-Member Provider, you should pay the provider his full fee. You will be
reimbursed by VSP in accordance with the Non-Member Provider reimbursement schedule shown on the enclosed insert, less any
applicable Copayments.
5. In emergency conditions, when immediate vision care of a medical nature such as for bodily trauma or disease is necessary, Covered Person
can obtain covered services by contacting a Member Doctor (or Out-of-Network Provider if the attached Schedule of Benefits indicates Covered
Person’s Plan includes such coverage). No prior approval from VSP is required for Covered Person to obtain vision care for Emergency Conditions
of a medical nature. However, services for medical conditions, including emergencies, are covered by VSP only under the Acute EyeCare and
Primary EyeCare Plans. If coverage for one of these plans is not indicated on the attached Schedule of Benefits or Addendum, Covered Person is
not covered by VSP for medical services and should contact a physician under Covered Person’s medical insurance plan for care. For emergency
conditions of a non-medical nature, such as lost, broken or stolen glasses, the Covered Person should contact VSP’s Customer Service Department
for assistance.
Emergency vision care is subject to the same benefit frequencies, plan allowances, Copayments and exclusions stated herein. Reimbursement to
Member Doctors will be made in accordance with their agreement with VSP.
6. In the event of termination of a Member Doctor’s membership in VSP, VSP will remain liable to the Member Doctor for services rendered to you
at the time of termination and permit Member Doctor to continue to provide you with Plan Benefits until the services are completed or until VSP
makes reasonable and appropriate arrangements for the provision of such services by another authorized doctor.
BENEFIT AUTHORIZATION PROCESS
VSP authorizes Plan Benefits according to the latest eligibility information furnished to VSP by Covered Person's Group and the level of coverage
(i.e. service frequencies, covered materials, reimbursement amounts, limitations, and exclusions) purchased for Covered Person by Group under this
Plan. When Covered Person requests services under this Plan, Covered Person's prior utilization of Plan Benefits will be reviewed by VSP to
determine if Covered Person is eligible for new services based upon Covered Person's Plan’s level of coverage. Please refer to the attached
Schedule of Benefits for a summary of the level of coverage provided to Covered Person by Group.
A. Appeals: If VSP denies the doctor’s request for prior authorization, the doctor, Covered Person or the Covered Person’s authorized
representative may request an appeal of the denial. Please refer to the section on Claim Appeals, below, for details on how to request an appeal.
VSP shall provide the requestor with a final review determination within thirty (30) calendar days from the date the request is received. A second
level appeal, and other remedies as described below, is also available. VSP shall resolve any second level appeal within thirty (30) calendar days.
Covered Person may designate any person, including the provider, as Covered Person’s authorized representative.
For more information regarding VSP’s criteria for authorizing or denying Plan Benefits, please contact VSP’s Customer Service Department.
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BENEFITS AND COVERAGES
Through its Member Doctors, VSP provides Plan Benefits to Covered Persons, subject to the limitations, exclusions, and Copayment(s) described
herein. When you wish to obtain Plan Benefits from a Member Doctor, you should contact the Member Doctor of your choice, identify yourself as a
VSP member, and schedule an appointment. If you are eligible for Plan Benefits, VSP will provide Benefit Authorization for you directly to the
Member Doctor prior to your appointment.
IMPORTANT: The benefits described below are typical services and materials available under most VSP plans. However, the actual Plan
Benefits provided to you by your Group may be different. Refer to the attached Schedule of Benefits and/or Disclosure to determine your
specific Plan Benefits.
1. Eye Examination: A complete initial vision analysis which includes an appropriate examination of visual functions, including the prescription of
corrective eyewear where indicated. Each Covered Person is entitled to a Eye Examination as indicated on the enclosed insert.
2. Lenses: The Member Doctor will order the proper lenses necessary for your visual welfare. The doctor shall verify the accuracy of the finished
lenses. Each Covered Person is entitled to new lenses as indicated on the enclosed insert.
3. Frames: The Member Doctor will assist in the selection of frames, properly fit and adjust the frames, and provide subsequent adjustments to
frames to maintain comfort and efficiency. Each Covered Person is entitled to new frames as indicated on the enclosed insert.
4. Contact lenses: Unless otherwise indicated on the enclosed insert, contact lenses are available under this Plan in lieu of all other lens and
frame benefits described herein.
When you obtain Necessary contact lenses from a Member Doctor, professional fees and materials will be covered as indicated on the enclosed
insert.
When Elective contact lenses are obtained from a Member Doctor, VSP will provide an allowance toward the cost of professional fees and materials.
A 15% discount shall also be applied to the Member Doctor’s usual and customary professional fees for contact lens evaluation and fitting. Contact
lens materials are provided at the Member Doctor’s usual and customary charges.
5. If you elect to receive vision care services from one of the Member Doctors, Plan Benefits are provided subject only to your payment of any
applicable Copayment. If your Plan includes Non-Member Provider coverage and you choose to obtain Plan Benefits from a Non-Member Provider,
you should pay the Non-Member Provider his full fee. VSP will reimburse you in accordance with the reimbursement schedule shown on the
enclosed insert, less any applicable Copayment. THERE IS NO ASSURANCE THAT THE SCHEDULE WILL BE SUFFICIENT TO PAY FOR THE
EXAMINATION OR THE MATERIALS. Availability of services under the Non-Member Provider reimbursement schedule is subject to the same time
limits and Copayments as those described for Member Doctor services. Services obtained from a Non-Member Provider are in lieu of obtaining
services from a Member Doctor and count toward plan benefit frequencies.
6. Low Vision Services and Materials (applicable only if included in your Plan Benefits outlined on the enclosed insert): The Low Vision Benefit
provides special aid for people who have acuity or visual field loss that cannot be corrected with regular lenses. If a Covered Person falls within this
category, he or she will be entitled to professional services as well as ophthalmic materials including but not limited to supplemental testing,
evaluations, visual training, low vision prescription services, plus optical and non-optical aids, subject to the frequency and benefit limitations as
outlined on the enclosed insert. Consult your Member Doctor for details.
COPAYMENT
The benefits described herein are available to you subject only to your payment of any applicable Copayment(s) as described in this booklet and on
the enclosed insert. ANY ADDITIONAL CARE, SERVICE AND/OR MATERIALS NOT COVERED BY THIS PLAN MAY BE ARRANGED BETWEEN
YOU AND THE DOCTOR.
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EXCLUSIONS AND LIMITATIONS OF BENEFITS
Some brands of spectacle frames may be unavailable for purchase as Plan Benefits, or may be subject to additional limitations. Covered
Persons may obtain details regarding frame brand availability from their VSP Member Doctor or by calling VSP’s Customer Care Division
at (800) 877-7195.
This Plan is designed to cover visual needs rather than cosmetic materials. If you select any of the following extras, this Plan will pay the
basic cost of the allowed lenses or frames, and you will be responsible for the additional costs for the options, unless the extra is defined
as a Plan Benefit in the enclosed Schedule of Benefits insert.
• Optional cosmetic processes.
• Anti-reflective coating.
• Color coating.
• Mirror coating.
• Scratch coating.
• Blended lenses.
• Cosmetic lenses.
• Laminated lenses.
• Oversize lenses.
• Polycarbonate lenses.
• Photochromic lenses, tinted lenses except Pink #1 and Pink #2.
• Progressive multifocal lenses.
• UV (ultraviolet) protected lenses.
• Certain limitations on low vision care.
NOT COVERED
There is no benefit under this plan for professional services or materials connected with:
• Orthoptics or vision training and any associated supplemental testing; plano lenses (less than ±.50 diopter power); or two pair of glasses in lieu
of bifocals.
• Replacement of lenses and frames furnished under this plan which are lost or broken except at the normal intervals when services are
otherwise available.
• Medical or surgical treatment of the eyes.
• Corrective vision treatment of an Experimental Nature.
• Costs for services and/or materials above Plan Benefit allowances indicated on the enclosed insert.
• Services/materials not indicated as covered Plan Benefits on the enclosed insert.
LIABILITY IN EVENT OF NON-PAYMENT
In the event VSP fails to pay the provider, you shall not be liable for any sums owed by VSP other than those not covered by the policy.
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COMPLAINTS AND GRIEVANCES
If Covered Person ever has a question or problem, Covered Person’s first step is to call VSP’s Customer Service Department. The Customer Service
Department will make every effort to answer Covered Person’s question and/or resolve the matter informally. If a matter is not initially resolved to the
satisfaction of a Covered Person, the Covered Person may communicate a complaint or grievance to VSP orally or in writing by using the complaint
form that may be obtained upon request from the Customer Service Department. Complaints and grievances include disagreements regarding
access to care, or the quality of care, treatment or service. Covered Persons also have the right to submit written comments or supporting
documentation concerning a complaint or grievance to assist in VSP’s review. VSP will resolve the complaint or grievance within thirty (30) days after
receipt.
Claim Payments and Denials
A. Initial Determination: VSP will pay or deny claims within thirty (30) calendar days of the receipt of the claim from the Covered Person or
Covered Person’s authorized representative. In the event that a claim cannot be resolved within the time indicated VSP may, if necessary, extend
the time for decision by no more than fifteen (15) calendar days.
B. Request for Appeals: If a Covered Person’s claim for benefits is denied by VSP in whole or in part, VSP will notify the Covered Person in
writing of the reason or reasons for the denial. Within one hundred eighty (180) days after receipt of such notice of denial of a claim, Covered Person
may make a verbal or written request to VSP for a full review of such denial. The request should contain sufficient information to identify the Covered
Person for whom a claim for benefits was denied, including the name of the VSP Enrollee, Member Identification Number of the VSP Enrollee, the
Covered Person’s name and date of birth, the name of the provider of services and the claim number. The Covered Person may state the reasons
the Covered Person believes that the claim denial was in error. The Covered Person may also provide any pertinent documents to be reviewed. VSP
will review the claim and give the Covered Person the opportunity to review pertinent documents, submit any statements, documents, or written
arguments in support of the claim, and appear personally to present materials or arguments. Covered Person or Covered Person’s authorized
representative should submit all requests for appeals to:
VSP
Member Appeals
3333 Quality Drive
Rancho Cordova, CA 95670
(800) 877-7195
VSP’s determination, including specific reasons for the decision, shall be provided and communicated to the Covered Person within thirty (30)
calendar days after receipt of a request for appeal from the Covered Person or Covered Person’s authorized representative.
When Covered Person has completed all appeals mandated by the Employee Retirement Income Security Act of 1974 (“ERISA”), additional
voluntary alternative dispute resolution options may be available, including mediation and arbitration. Covered Person should contact the U. S.
Department of Labor or the State insurance regulatory agency for details. Additionally, under ERISA (Section 502(a)(1)(B)) [29 U.S.C.
1132(a)(1)(B)], Covered Person has the right to bring a civil (court) action when all available levels of denied claims, including the appeal process,
have been completed, the claims were not approved in whole or in part, and Covered Person disagrees with the outcome.
C. Review by the Department of Managed Health Care: The California Department of Managed Health Care is responsible for regulating
health care service plans. If you have a grievance against VSP, you should first telephone VSP at (800) 877-7195 and use VSP’s health plan
grievance process before contacting the Department. Utilizing this grievance procedure does not prohibit any potential legal rights or remedies that
may be available to you. If you need help with any grievance involving an emergency, a grievance that has not been satisfactorily resolved by VSP,
or a grievance that has remained unresolved for more than 30 days, you may call the Department for assistance. You may also be eligible for an
Independent Medical Review (IMR). If you are eligible for IMR, the IMR process will provide an impartial review of medical decisions made by a
health plan related to the medical necessity of a proposed service or treatment, coverage for treatments that are experimental or investigational in
nature and payment disputes for emergency or urgent medical services. The Department also has a toll-free telephone number (1-888-466-2219)
and a TDD line (1-877-688-9891) for the hearing and speech impaired. The Department’s Web site http://www.hmohelp.ca.gov has complaint forms,
IMR application forms and instructions online.
ARBITRATION
Any dispute or question arising between VSP and Group or any Covered Person involving the application, interpretation, or performance under this
plan shall be settled, if possible, by amicable and informal negotiations. This will allow such opportunity as may be appropriate under the
circumstances for fact-finding and mediation. If any issue cannot be resolved in this fashion, it shall be submitted to arbitration. The procedure for
arbitration hereunder shall be conducted pursuant to the Rules of the American Arbitration Association.
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TERMINATION OF BENEFITS
Terms and cancellation conditions of this plan are shown on the enclosed insert. Plan Benefits will cease on the date of cancellation of this plan
whether the cancellation is by Group or by VSP due to non-payment of Premium. If service is being rendered to you as of the termination date of
this plan, such service shall be continued to completion, but in no event beyond six (6) months after the termination date of this plan.
INDIVIDUAL CONTINUATION OF BENEFITS
This program is available to groups of a minimum of ten (10) employees and is, therefore, not available on an individual basis. When a Group
terminates its coverage, individual coverage is not available for Enrollees of the Group who may desire to retain their coverage.
THE CONSOLIDATED OMNIBUS BUDGET RECONCILIATION ACT OF 1985 (COBRA)
The Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) requires that, under certain circumstances, health plan benefits available to
an eligible Enrollee and his or her Eligible Dependents be made available for purchase by said persons upon the occurrence of a COBRA-qualifying
event. If, and only to the extent COBRA applies, VSP shall make the statutorily-required continuation coverage available for purchase in accordance
with COBRA.
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3333 Quality Drive
Rancho Cordova, CA 95670
Group Name: CITY OF PALO ALTO
Plan Number: 00102584
Effective Date: JANUARY 1, 2015
Plan Term: THIRTY-SIX (36) MONTHS
VISION CARE PLAN
DISCLOSURE FORM AND EVIDENCE OF COVERAGE
PLAN ADMINISTRATOR: Brenna Rowe
(Name)
Po Box 10250
(Address)
Palo Alto, CA 94303-0862
(City, State, Zip)
MONTHLY PREMIUM: YOUR GROUP IS RESPONSIBLE FOR PAYMENT TO VISION SERVICE
PLAN OF THE PERIODIC CHARGES FOR YOUR COVERAGE. YOU WILL
BE NOTIFIED OF YOUR SHARE OF THE CHARGES, IF ANY, BY YOUR
GROUP.
ELIGIBILITY: ENROLLEES & ELIGIBLE DEPENDENTS: DEPENDENT CHILDREN ARE
COVERED TO AGE 26. THE WAITING PERIOD IS THE SAME AS YOUR
OTHER HEALTH BENEFITS.
PLAN AND SCHEDULE: SIGNATURE PLAN $20 Copay
EXAMINATION: ONCE EVERY 12 MONTHS*
LENSES: ONCE EVERY 24 MONTHS*
FRAMES: ONCE EVERY 24 MONTHS*
*Beginning with the first date of service
TERM, TERMINATION AND RENEWAL: AFTER THE PLAN TERM, THIS PLAN WILL CONTINUE ON A MONTH TO
MONTH BASIS OR UNTIL TERMINATED BY EITHER PARTY GIVING THE
OTHER SIXTY (60) DAYS PRIOR WRITTEN NOTICE.
TYPE OF ADMINISTRATION: BENEFITS ARE FURNISHED UNDER A VISION CARE PLAN PURCHASED
BY THE GROUP AND PROVIDED BY VISION SERVICE PLAN (VSP)
UNDER WHICH VSP IS FINANCIALLY RESPONSIBLE FOR THE PAYMENT
OF CLAIMS.
VSP'S ADDRESS IS: VISION SERVICE PLAN
3333 QUALITY DRIVE
RANCHO CORDOVA, CA 95670
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SCHEDULE OF BENEFITS
GENERAL
This Schedule and any Additional Benefit Rider(s), when purchased by Group, attached hereto list the vision care services and vision care materials
to which Covered Persons of VSP are entitled, subject to any Copayments and other conditions, limitations and/or exclusions stated herein. If Plan
Benefits are available for Non-Member Provider services as indicated by the reimbursement provisions below, vision care services and vision care
materials may be received from any licensed optometrist, ophthalmologist, or dispensing optician, whether Member Doctors or Non-Member
Providers.
When Plan Benefits are received from Member Doctors, benefits appearing in the first column below are applicable subject to any Copayment(s) as
stated below. When Plan Benefits are available and received from Non-Member Providers, you are reimbursed for such benefits according to the
schedule in the second column below less any applicable Copayment.
PLAN BENEFITS MEMBER DOCTOR BENEFIT NON-MEMBER PROVIDER BENEFIT
VISION CARE SERVICES
Vision Examination Covered in Full* Up to $ 50.00*
VISION CARE MATERIALS
Lenses
Single Vision Covered in Full* Up to $ 50.00*
Bifocal Covered in Full* Up to $ 75.00*
Trifocal Covered in Full* Up to $ 100.00*
Lenticular Covered in Full* Up to $ 125.00*
Frames Covered up to Plan Allowance* Up to $ 70.00*
Frame allowance may be applied towards non-prescription sunglasses for post PRK, LASIK, or Custom LASIK patients.
CONTACT LENSES
Necessary
Professional Fees and Materials Covered in Full* Up to $ 210.00*
Elective
Professional Fees** and Materials Up to $ 105.00 Up to $ 105.00
Necessary Contact Lenses are a Plan Benefit when specific benefit criteria are satisfied and when prescribed by Covered Person's Member Doctor
or Non-Member Provider. Prior review and approval by VSP are not required for Covered Person to be eligible for Necessary Contact Lenses.
*Subject to Copayment, if any.
**15% discount applies to Member Doctor's usual and customary professional fees for contact lens evaluation and fitting.
COPAYMENT
A Copayment amount of $20.00 shall be payable by the Covered Person to the Member Doctor or Non-Member Doctor at the time services are
rendered.
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LOW VISION
Professional services for severe visual problems not corrected with regular lenses, including:
Supplemental Testing Covered in Full Up to $125.00
(includes evaluation, diagnosis and prescription of vision aids where indicated)
Supplemental Aids 75% of cost 75% of cost
Maximum allowable for all Low Vision benefits of $1000.00 every two (2) years.
THIS EVIDENCE OF COVERAGE CONSTITUTES ONLY A SUMMARY OF THE VISION PLAN. THE VISION PLAN DOCUMENT MUST BE
CONSULTED TO DETERMINE THE EXACT TERMS AND CONDITIONS OF COVERAGE.
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3333 Quality Drive
Rancho Cordova, CA 95670
Group Name: CITY OF PALO ALTO
Plan Number: 00102584
Effective Date: JANUARY 1, 2015
Plan Term: THIRTY-SIX (36) MONTHS
VISION CARE PLAN
DISCLOSURE FORM AND EVIDENCE OF COVERAGE
PLAN ADMINISTRATOR: Brenna Rowe
(Name)
Po Box 10250
(Address)
Palo Alto, CA 94303-0862
(City, State, Zip)
MONTHLY PREMIUM: YOUR GROUP IS RESPONSIBLE FOR PAYMENT TO VISION SERVICE
PLAN OF THE PERIODIC CHARGES FOR YOUR COVERAGE. YOU WILL
BE NOTIFIED OF YOUR SHARE OF THE CHARGES, IF ANY, BY YOUR
GROUP.
ELIGIBILITY: ENROLLEES & ELIGIBLE DEPENDENTS: DEPENDENT CHILDREN ARE
COVERED TO AGE 26. THE WAITING PERIOD IS THE SAME AS YOUR
OTHER HEALTH BENEFITS.
PLAN AND SCHEDULE: SIGNATURE PLAN $10 Copay
EXAMINATION: ONCE EVERY 12 MONTHS**
LENSES: ONCE EVERY 12 MONTHS**
FRAMES: ONCE EVERY 12 MONTHS**
**Beginning with the first date of service
TERM, TERMINATION AND RENEWAL: AFTER THE PLAN TERM, THIS PLAN WILL CONTINUE ON A MONTH TO
MONTH BASIS OR UNTIL TERMINATED BY EITHER PARTY GIVING THE
OTHER SIXTY (60) DAYS PRIOR WRITTEN NOTICE.
TYPE OF ADMINISTRATION: BENEFITS ARE FURNISHED UNDER A VISION CARE PLAN PURCHASED
BY THE GROUP AND PROVIDED BY VISION SERVICE PLAN (VSP)
UNDER WHICH VSP IS FINANCIALLY RESPONSIBLE FOR THE PAYMENT
OF CLAIMS.
VSP'S ADDRESS IS: VISION SERVICE PLAN
3333 QUALITY DRIVE
RANCHO CORDOVA, CA 95670
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SCHEDULE OF BENEFITS
GENERAL
This Schedule and any Additional Benefit Rider(s), when purchased by Group, attached hereto list the vision care services and vision care materials
to which Covered Persons of VSP are entitled, subject to any Copayments and other conditions, limitations and/or exclusions stated herein. If Plan
Benefits are available for Non-Member Provider services as indicated by the reimbursement provisions below, vision care services and vision care
materials may be received from any licensed optometrist, ophthalmologist, or dispensing optician, whether Member Doctors or Non-Member
Providers.
When Plan Benefits are received from Member Doctors, benefits appearing in the first column below are applicable subject to any Copayment(s) as
stated below. When Plan Benefits are available and received from Non-Member Providers, you are reimbursed for such benefits according to the
schedule in the second column below less any applicable Copayment.
PLAN BENEFITS MEMBER DOCTOR BENEFIT NON-MEMBER PROVIDER BENEFIT
VISION CARE SERVICES
Vision Examination Covered in Full* Up to $ 50.00*
VISION CARE MATERIALS
Lenses
Single Vision Covered in Full* Up to $ 50.00*
Bifocal Covered in Full* Up to $ 75.00*
Trifocal Covered in Full* Up to $ 100.00*
Lenticular Covered in Full* Up to $ 125.00*
Frames Covered up to Plan Allowance* Up to $ 70.00*
Frame allowance may be applied towards non-prescription sunglasses for post PRK, LASIK, or Custom LASIK patients.
CONTACT LENSES
Necessary
Professional Fees and Materials Covered in Full* Up to $ 210.00*
Elective
Professional Fees** and Materials Up to $ 200.00 Up to $ 105.00
Necessary Contact Lenses are a Plan Benefit when specific benefit criteria are satisfied and when prescribed by Covered Person's Member Doctor
or Non-Member Provider. Prior review and approval by VSP are not required for Covered Person to be eligible for Necessary Contact Lenses.
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LENS OPTIONS
Anti-reflective coating Covered in full** Not Covered
Polycarbonate Lenses Covered in full Not Covered
**Less $25.00 copayment
*Subject to Copayment, if any.
**15% discount applies to Member Doctor's usual and customary professional fees for contact lens evaluation and fitting.
COPAYMENT
A Copayment amount of $10.00 shall be payable by the Covered Person to the Member Doctor or Non-Member Doctor at the time services are
rendered.
LOW VISION
Professional services for severe visual problems not corrected with regular lenses, including:
Supplemental Testing Covered in Full Up to $125.00
(includes evaluation, diagnosis and prescription of vision aids where indicated)
Supplemental Aids 75% of cost 75% of cost
Maximum allowable for all Low Vision benefits of $1000.00 every two (2) years.
THIS EVIDENCE OF COVERAGE CONSTITUTES ONLY A SUMMARY OF THE VISION PLAN. THE VISION PLAN DOCUMENT MUST BE
CONSULTED TO DETERMINE THE EXACT TERMS AND CONDITIONS OF COVERAGE.
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ADDENDUM
ADDITIONAL BENEFIT RIDER
SECOND PAIR
(DIVISIONS 0015, 0016, 0017, 0020, 0021)
GENERAL
This Rider lists additional vision care benefits to which Covered Persons of VISION SERVICE PLAN (“VSP”) are entitled, subject to any applicable
Copayments and other conditions, limitations and/or exclusions stated herein or in the Schedule of Benefits with which it is associated. This Rider
forms a part of the Plan and Evidence of Coverage to which it is attached.
ELIGIBILITY
The following are Covered Persons under this Plan:
• Enrollee.
• The legal spouse of Enrollee.
• Domestic partners of the same or opposite gender as the Enrollee shall be covered pursuant to the Group's eligibility rules.
• Any child of Enrollee, including any natural child from the date of birth, legally adopted child from the date of placement for adoption with the
Enrollee, or other child for whom a court or administrative agency holds the Enrollee responsible.
Dependent children are covered up to age 26.
See schedule below for Plan Benefits, payments and/or reimbursement subject to any Copayment(s) as stated.
COPAYMENT
A Copayment amount of $10.00 shall be payable by the Covered Person at the time services are rendered.
PLAN BENEFITS
MATERIAL MEMBER DOCTOR BENEFIT FREQUENCY
Lenses Covered in full* Available once each 12 months**
*Less any applicable Copayment
**Beginning with the first date of service
Plan Benefits for lenses are per complete set, not per lens.
Frames Covered up to Plan allowance* Available once each 12 months**
MATERIAL MEMBER DOCTOR BENEFIT FREQUENCY
Lens Options Available once each 12 months**
Anti-reflective coating
**Less $25.00 copayment
Covered in full**
Polycarbonate lenses Covered in full
Contact Lenses
Necessary Covered in full * Available once every 12 months**
Elective Up to $ 200.00* Available once every 12 months**
*Less any applicable Copayment
**Beginning with the first date of service
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Necessary Contact Lenses are a Plan Benefit when specific benefit criteria are satisfied and when prescribed by Covered Person's Member Doctor
or Non-Member Provider. Prior review and approval by VSP are not required for Covered Person to be eligible for Necessary Contact Lenses.
Contact lenses are provided in lieu of all other lens and frame benefits available herein.
When contact lenses are obtained, the Covered Person shall not be eligible for lenses again for 12 months and frames for 12 months.
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EXCLUSIONS AND LIMITATIONS OF BENEFITS
SECOND PAIR BENEFIT ONLY
Some brands of spectacle frames may be unavailable for purchase as Plan Benefits, or may be subject to additional limitations. Covered Persons
may obtain details regarding frame brand availability from their VSP Member Doctor or by calling VSP’s Customer Care Division at (800) 877-7195.
NOT COVERED
There are no benefits for professional services or materials connected with:
• Eye examinations.
• Orthoptics or vision training and any associated supplemental testing.
• Plano lenses (lenses with refractive correction of less than ± .50 diopter).
• Plano contact lenses to change eye color cosmetically.
• Two pair of glasses in lieu of bifocals.
• Replacement of lenses and frames furnished under this Plan which are lost or broken, except at the normal intervals when services are otherwise
available.
• Medical or surgical treatment of the eyes.
• Corrective vision treatment of an Experimental Nature.
• Artistically-painted contact lenses.
• Contact lens modification, polishing or cleaning.
• Costs for services and/or materials exceeding Plan Benefit allowance.
• Services and/or materials not included on this Rider as covered Plan Benefits.
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SERVICES FROM NON-MEMBER PROVIDERS
LIABILITY OF COVERED PERSONS FOR PAYMENT
REIMBURSEMENT PROVISIONS
When a Covered Person chooses to receive services from a Non-Member Provider, services may be secured from any optometrist, ophthalmologist
and/or dispensing optician. This Plan then becomes an indemnity plan reimbursing according to a schedule of allowances. The Covered Person
should pay the Provider’s fee in full. VSP will reimburse the Covered Person in accordance with the following schedule.
THERE IS NO ASSURANCE THAT THE AMOUNT REIMBURSED WILL BE SUFFICIENT TO PAY THE EXAMINATION OR THE MATERIALS IN
FULL.
AVAILABILITY OF SERVICES UNDER THIS REIMBURSEMENT SCHEDULE IS SUBJECT TO THE SAME TIME LIMITS AND COPAYMENT AS
THOSE DESCRIBED FOR MEMBER DOCTORS. SERVICES OBTAINED FROM NON-MEMBER PROVIDERS ARE IN LIEU OF SERVICES
FROM A MEMBER DOCTOR.
VSP IS UNABLE TO REQUIRE NON-MEMBER PROVIDERS TO ADHERE TO VSP’S QUALITY STANDARDS.
SCHEDULE OF ALLOWANCES
MATERIAL NON-MEMBER PROVIDER BENEFIT FREQUENCY
Lenses
Single Vision Up to $ 50.00* Available once each 12 months**
Bifocal Up to $ 75.00* Available once each 12 months**
Trifocal Up to $ 100.00* Available once each 12 months**
Lenticular Up to $ 125.00* Available once each 12 months**
Frame Up to $ 70.00* Available once each 12 months**
*Less any applicable Copayment
**Beginning with the first date of service.
Plan Benefits for lenses are per complete set, not per lens.
Contact Lenses
Necessary Up to $ 210.00* Available once each 12 months**
Elective Up to $ 105.00* Available once each 12 months**
Necessary Contact Lenses are a Plan Benefit when specific benefit criteria are satisfied and when prescribed by Covered Person's Member Doctor
or Non-Member Provider. Prior review and approval by VSP are not required for Covered Person to be eligible for Necessary Contact Lenses.
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ADDENDUM
ADDITIONAL BENEFIT RIDER
COMPUTER VISIONCARE PLAN
(DIVISIONS 0014 & 0019)
GENERAL
This Rider lists the vision care benefits to which Covered Persons of VISION SERVICE PLAN ("VSP") are entitled, subject to any applicable
Copayments and other conditions, limitations and/or exclusions stated herein. This Rider forms a part of the Plan or Evidence of Coverage to which it
is attached.
COVERED PERSONS WHO MEET THE ELIGIBILITY REQUIREMENTS OUTLINED BELOW AND WHO UTILIZE A COMPUTER MONITOR
SHALL BE ELIGIBLE FOR THE COMPUTER VISIONCARE (CVC) PLAN.
ELIGIBILITY
The following are Covered Persons under this Plan.
• Enrollee.
See schedule below for Plan Benefits, payments and/or reimbursement subject to any Copayment(s) as stated:
COPAYMENT
The benefits herein are available to each Covered Person subject only to payment of the applicable Copayment by the Covered Person. Plan
Benefits received from Member Doctors and Non-Member Providers require Copayments. Covered Persons must also follow Benefit Authorization
procedures.
There shall be no Copayment payable by the Covered Person to the Member Doctor or the Non-Member Provider at the time services are rendered.
PLAN BENEFITS
SERVICE OR MATERIAL MEMBER DOCTOR BENEFIT FREQUENCY
Eye Examination
Covered in full*
Available once each 12 months**
A Limited Level supplemental vision analysis of the eyes and related structures that addresses the specific visual needs
of computer use.
*Less any applicable Copayment
**Beginning with the first date of service
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SERVICE OR MATERIAL
Lenses
Available only when the Covered Person has been diagnosed by an eye care
professional as having a vision condition affecting computer use.
MEMBER DOCTOR BENEFIT FREQUENCY
Single Vision Covered in full *
Bifocal
Covered in full *
Trifocal
Covered in full * Available once each 12 months**
Near Variable Focus
Covered in full *
Occupational Progressive
Covered in full *
Plan Benefits for lenses are per complete set, not per lens.
*Less any applicable Copayment
**Beginning with the first date of service
SERVICE OR MATERIAL MEMBER DOCTOR BENEFIT FREQUENCY
Frames
Covered up to Plan Allowance*
Available once each 24 months**
VSP reserves the right to limit the cost of the frames provided by Member Doctors under this Plan. The current allowance
shall be published periodically by VSP to its Member Doctors and will be set at a level to cover a sufficient number of
frames in common use.
*Less any applicable Copayment
**Beginning with the first date of service.
SERVICE OR MATERIAL MEMBER DOCTOR BENEFIT FREQUENCY
Associated Vision Therapy
(specific to computer use)
Up to $200.00 per year
(includes any supplemental testing)
Available once each 12 months**
**Beginning with the first date of service.
This benefit is limited to Covered Persons who are eligible for CVC Coverage and who are diagnosed as having one of
the following conditions:
Accommodative Infacility – The inability (or inefficiency) to change focus quickly when looking from one distance to another
or the inability to maintain focus at one distance for a prolonged period of time. (Primarily when looking at things up close.)
Convergence Insufficiency – The occasional problem with the eye muscles’ ability to point the eyes straight when working up
close.
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EXCLUSIONS AND LIMITATIONS OF BENEFITS
CVC VISIONCARE PLAN
Some brands of spectacle frames may be unavailable for purchase as Plan Benefits, or may be subject to additional limitations. Covered Persons
may obtain details regarding frame brand availability from their VSP Member Doctor or by calling VSP’s Customer Care Division at (800) 877-7195.
PATIENT OPTIONS
This vision service plan is designed to cover visual needs rather than cosmetic materials. When a Covered Person selects any of the following
extras, the Plan will pay the basic cost of the allowed lenses or frames, and the Covered Person will pay the additional costs for the options.
Optional cosmetic processes.
• Anti-reflective coating.
• Color coating.
• Mirror coating.
• Scratch coating.
• Blended lenses.
• Cosmetic lenses.
• Laminated lenses.
• Oversize lenses.
• Polycarbonate lenses.
• Photochromic lenses, tinted lenses except Pink #1 and Pink #2.
• Progressive multifocal lenses.
• UV (ultraviolet) protected lenses.
NOT COVERED
There are no benefits for professional services or materials connected with:
• Subnormal vision aids.
• Orthoptics or vision training and any associated supplementary testing not specifically related to working with a computer.
• Plano lenses.
• Two pair of glasses in lieu of bifocals.
• Contact lenses.
• Photochromic or tints greater than 20%.
• Laminated lenses.
• Replacement of lenses and frames furnished under this Plan which are lost or broken, except at the normal intervals when services are
otherwise available.
• Medical or surgical treatment of the eyes.
• Corrective vision treatment of an Experimental Nature.
• Services or materials of a cosmetic nature.
• Services and/or materials not indicated on this Schedule as covered Plan Benefits.
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ADDENDUM
ADDITIONAL BENEFIT RIDER
COMPUTER VISIONCARE PLAN
(DIVISIONS 0020 & 0021)
GENERAL
This Rider lists the vision care benefits to which Covered Persons of VISION SERVICE PLAN ("VSP") are entitled, subject to any applicable
Copayments and other conditions, limitations and/or exclusions stated herein. This Rider forms a part of the Plan or Evidence of Coverage to which it
is attached.
COVERED PERSONS WHO MEET THE ELIGIBILITY REQUIREMENTS OUTLINED BELOW AND WHO UTILIZE A COMPUTER MONITOR
SHALL BE ELIGIBLE FOR THE COMPUTER VISIONCARE (CVC) PLAN.
ELIGIBILITY
The following are Covered Persons under this Plan.
• Enrollee.
See schedule below for Plan Benefits, payments and/or reimbursement subject to any Copayment(s) as stated:
COPAYMENT
The benefits herein are available to each Covered Person subject only to payment of the applicable Copayment by the Covered Person. Plan
Benefits received from Member Doctors and Non-Member Providers require Copayments. Covered Persons must also follow Benefit Authorization
procedures.
A Copayment amount of $10.00 shall be payable by the Covered Person at the time services are rendered.
PLAN BENEFITS
SERVICE OR MATERIAL MEMBER DOCTOR BENEFIT FREQUENCY
Eye Examination
Covered in full*
Available once each 12 months**
A Limited Level supplemental vision analysis of the eyes and related structures that addresses the specific visual needs
of computer use.
*Less any applicable Copayment
**Beginning with the first date of service
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SERVICE OR MATERIAL
Lenses
Available only when the Covered Person has been diagnosed by an eye care
professional as having a vision condition affecting computer use.
MEMBER DOCTOR BENEFIT FREQUENCY
Single Vision Covered in full *
Bifocal
Covered in full *
Trifocal
Covered in full * Available once each 12 months**
Near Variable Focus
Covered in full *
Occupational Progressive
Covered in full *
Plan Benefits for lenses are per complete set, not per lens.
*Less any applicable Copayment
**Beginning with the first date of service
SERVICE OR MATERIAL MEMBER DOCTOR BENEFIT FREQUENCY
Frames
Covered up to Plan Allowance*
Available once each 12 months**
VSP reserves the right to limit the cost of the frames provided by Member Doctors under this Plan. The current allowance
shall be published periodically by VSP to its Member Doctors and will be set at a level to cover a sufficient number of
frames in common use.
*Less any applicable Copayment
**Beginning with the first date of service
SERVICE OR MATERIAL MEMBER DOCTOR BENEFIT FREQUENCY
Associated Vision Therapy
(specific to computer use)
Up to $200.00 per year
(includes any supplemental testing)
Available once each 12 months**
**Beginning with the first date of service
This benefit is limited to Covered Persons who are eligible for CVC Coverage and who are diagnosed as having one of
the following conditions:
Accommodative Infacility – The inability (or inefficiency) to change focus quickly when looking from one distance to another
or the inability to maintain focus at one distance for a prolonged period of time. (Primarily when looking at things up close.)
Convergence Insufficiency – The occasional problem with the eye muscles’ ability to point the eyes straight when working up
close.
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EXCLUSIONS AND LIMITATIONS OF BENEFITS
CVC VISIONCARE PLAN
Some brands of spectacle frames may be unavailable for purchase as Plan Benefits, or may be subject to additional limitations. Covered Persons
may obtain details regarding frame brand availability from their VSP Member Doctor or by calling VSP’s Customer Care Division at (800) 877-7195.
PATIENT OPTIONS
This vision service plan is designed to cover visual needs rather than cosmetic materials. When a Covered Person selects any of the following
extras, the Plan will pay the basic cost of the allowed lenses or frames, and the Covered Person will pay the additional costs for the options.
Optional cosmetic processes.
• Anti-reflective coating.
• Color coating.
• Mirror coating.
• Scratch coating.
• Blended lenses.
• Cosmetic lenses.
• Laminated lenses.
• Oversize lenses.
• Polycarbonate lenses.
• Photochromic lenses, tinted lenses except Pink #1 and Pink #2.
• Progressive multifocal lenses.
• UV (ultraviolet) protected lenses.
NOT COVERED
There are no benefits for professional services or materials connected with:
• Subnormal vision aids.
• Orthoptics or vision training and any associated supplementary testing not specifically related to working with a computer.
• Plano lenses.
• Two pair of glasses in lieu of bifocals.
• Contact lenses.
• Photochromic or tints greater than 20%.
• Laminated lenses.
• Replacement of lenses and frames furnished under this Plan which are lost or broken, except at the normal intervals when services are
otherwise available.
• Medical or surgical treatment of the eyes.
• Corrective vision treatment of an Experimental Nature.
• Services or materials of a cosmetic nature.
• Services and/or materials not indicated on this Schedule as covered Plan Benefits.
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ADDENDUM
ADDITIONAL BENEFIT RIDER
SAFETY EYECARE PLAN
(DIVISIONS 0010, 0019 AND 0016, 0021)
GENERAL
This Rider lists additional vision care benefits to which Covered Persons of VISION SERVICE PLAN ("VSP") are entitled, subject to any applicable
Copayments and other conditions, limitations and/or exclusions stated herein. This Rider forms a part of the Plan or Evidence of Coverage to which it
is attached.
COVERED PERSONS WHO MEET THE ELIGIBILITY REQUIREMENTS OUTLINED UNDER ARTICLE VI. OF THE GROUP VISION CARE Plan
AND WHO REQUIRE SAFETY EYEWEAR DUE TO THE NATURE OF THEIR WORK SHALL BE ELIGIBLE FOR THE SAFETY EYECARE PLAN.
ELIGIBILITY
The following are Covered Persons under this Plan.
• Enrollee.
See schedule below for Plan Benefits, payments and/or reimbursement subject to any Copayment(s) as stated:
COPAYMENT
The benefits herein are available to each Covered Person subject only to payment of the applicable Copayment by the Covered person. Plan
Benefits received from Member Doctors and Non-Member Providers require Copayments. Covered Persons must also follow Benefit Authorization
procedures.
There shall be no Copayment payable by the Covered Person to the Member Doctor or the Non-Member Provider at the time services are rendered.
PLAN BENEFITS
SERVICE OR MATERIAL MEMBER DOCTOR BENEFIT FREQUENCY
Lenses
Covered in full*
Available once each 12 months**
Member Doctors shall ensure that lenses provided under the Safety EyeCare Plan meet the following minimum
standards:
• Be no less than 3mm at the thinnest point.
• Be impact-tested with a one-inch steel ball dropped from a height of 50 inches.
• Be engraved by the manufacturer that it is a safety lens.
*Less any applicable Copayment
**Beginning with the first date of service
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SERVICE OR MATERIAL MEMBER DOCTOR BENEFIT FREQUENCY
Frames
Covered up to Plan Allowance*
Available once each 24 months**
Member Doctors shall ensure that frames provided under the Safety EyeCare Plan meet the following
minimum standards:
• Have a “Z-87” stamp on the front and temples.
• Be fabricated of a slow-burning material.
• Have the manufacturer’s logo imprint.
• Be constructed so that, if impacted from the front, the lens will not come out through the back of the frame.
Materials will be certified as safe for a work environment by meeting the required test standards as set forth by the American
National Standards Institute (ANSI).
VSP reserves the right to limit the cost of the frames provided by Member Doctors under this Plan. The current allowance shall be
published periodically by VSP to its Member Doctors and will be set at a level to cover a sufficient number of frames in common
use.
*Less any applicable Copayment
**Beginning with the first date of service
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EXCLUSIONS AND LIMITATIONS OF BENEFITS
SAFETY EYECARE PLAN
Some brands of spectacle frames may be unavailable for purchase as Plan Benefits, or may be subject to additional limitations. Covered Persons
may obtain details regarding frame brand availability from their VSP Member Doctor or by calling VSP’s Customer Care Division at (800) 877-7195.
PATIENT OPTIONS
This vision service plan is designed to cover visual needs rather than cosmetic materials. When a Covered Person selects any of the following
extras, the Plan will pay the basic cost of the allowed lenses or frames, and the Covered Person will pay the additional costs for the options.
• Optional cosmetic processes.
• Anti-reflective coating.
• Color coating.
• Mirror coating.
• Scratch coating.
• Blended lenses.
• Cosmetic lenses.
• Laminated lenses.
• Oversize lenses.
• Polycarbonate lenses.
• Photochromic lenses, tinted lenses except Pink #1 and Pink #2.
• Progressive multifocal lenses.
• UV (ultraviolet) protected lenses.
NOT COVERED
There are no benefits for professional services or materials connected with:
• Subnormal vision aids.
• Orthoptics or vision training and any associated supplementary testing not specifically related to VDT eye care.
• Plano lenses.
• Two pair of glasses in lieu of bifocals.
• Contact lenses.
• Photochromic or tints greater than 20%
• Laminated lenses
• Replacement of lenses and frames furnished under this Plan which are lost or broken, except at the normal intervals when services are
otherwise available.
• Medical or surgical treatment of the eyes.
• Corrective vision treatment of an Experimental Nature.
• Examinations above a Limited Level unless the Covered Person: (i) is not eligible for an eye examination under the Plan to which this Rider is
attached; (ii) received an eye examination from another Member Doctor during the same eligibility period; or (iii) received an eye examination during
the preceding 6 months from a practitioner in the same Member Doctor’s office that will be providing the VDT eye care examination.
• Services and/or materials not indicated on this Rider as covered Plan Benefits.
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ADDENDUM
ADDITIONAL BENEFIT RIDER
REPAIR/REPLACE BENEFITS
(DIVISIONS 0010, 0019 and 0016, 0021)
GENERAL
This Rider lists additional vision care benefits to which Covered Persons of VISION SERVICE PLAN ("VSP") are entitled, subject to any applicable
Copayments and other conditions, limitations and/or exclusions stated herein or in the Schedule of Benefits with which it is associated. This Rider
forms a part of the Plan and Evidence of Coverage to which it is attached.
Repair/Replace Benefits provide coverage for materials obtained when the Covered Person is not eligible for materials under the Schedule of
Benefits to which this Rider is attached. Covered Persons are eligible if their spectacle lenses or frame are broken or damaged and in need of repair
or replacement.
Persons covered under this additional benefit may be entitled to eyeglass frame repairs, which shall include but not be limited to temples only, front
only, hinge and miscellaneous repairs; or replacement of complete frame and single vision and multifocal lens repair or replacement.
ELIGIBILITY
The following are Covered Persons under this Plan:
Enrollee
See schedule below for Plan Benefits, payments and/or reimbursement subject to any Copayment(s) as stated.
COPAYMENT
There shall be no Copayment payable by the Covered Person to the Member Doctor at the time services are rendered.
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PLAN BENEFITS
VSP may authorize payment under this Rider for materials for Covered Persons more frequently than 12 months if
3. Eyeglass frames are broken or damaged, which shall include but are not limited to temples only, front only, hinge and miscellaneous
repairs. Replacement of complete frame may be covered if frame is damaged beyond repair.
4. Single vision and multifocal lens require repair or replacement.
SERVICE OR MATERIAL MEMBER DOCTOR BENEFIT FREQUENCY
Lenses Refer to Schedule of Benefits Available once each 12 months**
Frames Refer to Schedule of Benefits Available once each 12 months**
VSP reserves the right to limit the cost of the frames provided by its Member Doctors under the Plan. The current allowance shall be
published periodically by VSP to its Member Doctors and will be set at a level to cover a sufficient number of frames in common use.
If the Covered Person wishes to select a more expensive frame than that allowed under this Rider, the cost difference shall be by
agreement between the Covered Person and Member Doctor.
Plan Benefits for lenses are per complete set, not per lens.
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EXCLUSIONS AND LIMITATIONS OF BENEFITS
REPAIR/REPLACE BENEFIT ONLY
Some brands of spectacle frames may be unavailable for purchase as Plan Benefits, or may be subject to additional limitations. Covered Persons
may obtain details regarding frame brand availability from their VSP Member Doctor or by calling VSP’s Customer Care Division at (800) 877-7195.
NOT COVERED
There is no benefit for professional services or materials connected with:
9. Orthoptics or vision training and any associated supplemental testing.
10. Plano lenses (lenses with refractive correction of less than ± .50 diopter).
11. Two pair of glasses in lieu of bifocals.
12. Medical or surgical treatment of the eyes.
13. Corrective vision treatment of an Experimental Nature.
14. Services or materials of a cosmetic nature.
15. Costs for services and/or materials exceeding Plan Benefit allowances.
16. Services and/or materials not indicated on this Rider as covered Plan Benefits.
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Vision Care for Life
CONTINUATION COVERAGE UNDER CAL-COBRA
If you are covered under a group policy providing coverage to 2 to 19 eligible employees, you may be eligible to purchase continued coverage under
this group vision plan under California Health and Safety Code Section 1366.20 et seq. (Cal-COBRA).
You may qualify for Cal-COBRA continuation coverage if you lose coverage for one of the following reasons:
a. The death of the covered employee.
b. The termination of employment or reduction in hours of the covered employee’s employment, except that termination for gross misconduct
does not constitute a qualifying event.
c. The divorce or legal separation of the covered employee from the covered employee’s spouse.
d. The loss of dependent status by a dependent enrolled in the group benefit plan.
e. With respect to a covered dependent only, the covered employee’s entitlement to benefits under Title XVIII of the United States Social
Security Act (Medicare).
As a condition of receiving benefits, you must notify VSP within 60 days of the loss of coverage for one of the foregoing reasons. FAILURE TO
NOTIFY VSP WITHIN THE REQUIRED 60 DAY PERIOD WILL DISQUALIFY YOU FROM RECEIVING CONTINUATION COVERAGE.
You must request the continuation in writing and deliver the written request to VSP by first class mail or other reliable means of delivery within the 60
day period following the later of (1) the date your coverage under the group benefit plan terminated or will terminate by reason of a qualifying reason,
or (2) the date you were sent notice from the group benefit plan or VSP of eligibility to continue coverage under Cal-COBRA.
In order to continue receiving coverage under this plan, you are responsible for making all of the required premium payments in accordance with the
terms and conditions of the plan contract. The first premium payment must be made to VSP by first-class mail, certified mail or other reliable means
of delivery including personal delivery, express mail, or private courier within 45 days of the date you provided written notice to VSP of your election
of continuation of benefits. The first premium payment must equal an amount sufficient to pay any required premiums and all premiums due. Failure
to submit the correct premium amount within the 45 day period will disqualify you from receiving continuation coverage.
Notice: If the contract between VSP and the employer is terminated prior to the date your continuation coverage would terminate pursuant to the
Cal-COBRA statute, you may elect continuation coverage under the employer’s subsequent group benefit plan, if any, for the balance of the period
you would have remained covered under this plan. However, continuation coverage shall terminate if you fail to comply with the requirements
pertaining to enrollment in and payment of premiums to the new benefit plan within 30 days of receiving notice of termination of the prior group
benefit plan.
All notices to VSP must be sent to:
VISION SERVICE PLAN
Attn: COBRA Administration
3333 Quality Drive
Rancho Cordova, CA 95670
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ADDENDUM
EVIDENCE OF COVERAGE & DISCLOSURE FORM
Please note the following revisions to your Evidence of Coverage and Disclosure Form. Keep this document with your Evidence of Coverage and
Disclosure Form for a complete and accurate description of your benefits.
1. The following provision is added to the section titled DEPENDENT ELIGIBILITY:
Domestic Partners: Domestic partners of the same or opposite gender as the Enrollee shall be covered pursuant to the Group's eligibility rules which
are applicable to the Group's general medical benefits.
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VISION SERVICE PLAN - HEALTH BENEFITS AND COVERAGE MATRIX
This matrix is intended to be used to help you compare coverage benefits and is a summary only, the evidence of coverage and plan contract should be consulted for a detailed description of
coverage benefits and limitations.
TYPE OF
SERVICE
(Not all services are
listed)
Call VSP or
check Official
Plan Documents for details.
Benefit Description Copayment Patient Out-of-
Pocket
Plan Maximum
(Eligibility)
Emergency Service Out-Patient
Service
Hospitalization
Service
Ambulance
Service
Prescription
Drug Coverage
Durable
Medical
Equipment
Mental Health
Service
Chemical
Dependency
Service
Home
Health
Service
Eye Examination Complete vision analysis which includes
an appropriate
examination of visual
functions, including the prescription of corrective eyewear
where indicated.
Normally ranges from $0 - $50 (Can
be group specific)
None. Covered in full. Once every 12, 24 or 36 months (as
determined by the
group)
Yes. In emergency cases, when immediate
vision care is necessary,
Covered Persons may
obtain Plan Benefits by contacting a Member Doctor or Non-Member
Provider. Emergency
Vision care is subject to
the same benefit
frequencies, plan allowances, Copayments,
and exclusions stated
herein for Member Doctor
and Non-Member
Provider services.
NONE NONE NONE NONE NONE NONE NONE NONE
Lenses Includes such
professional services as are necessary, which
shall include:
prescribing and
ordering proper lenses;
verifying the accuracy of the finished lenses; progress or follow-up
work as necessary.
Covered lenses include:
Single vision, Bi-focal, Tri-focal and Lenticular
Normally ranges
from $0 - $50 (Can be group specific
and may be a
combined
copayment with
frame)
Any cosmetic
options not covered by the group
Once every 12, 24
or 36 months (as determined by the
group)
Yes NONE NONE NONE NONE NONE NONE NONE NONE
Frame Includes such professional services as are necessary, which
shall include: assisting
in the selection of
frames; proper fitting
and adjustment of frames; subsequent
adjustments to frames
Normally ranges from $0 - $50 (Can be group specific
and may be a
combined
copayment with
lenses)
Any amount exceeding VSP's frame allowance
(as determined by
the group)
Once every 12, 24 or 36 months (as determined by the
group)
Yes NONE NONE NONE NONE NONE NONE NONE NONE
DocuSign Envelope ID: 916B4B27-2B62-48AF-B273-01C3EF35D77B
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to maintain comfort and
efficiency; progress or follow-up work as necessary.
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Contact
Lenses (Elective)
Includes such
professional services as are necessary, which shall include: contact
lens evaluation, fitting,
and verifying the
accuracy of the finished
lenses.
Copay for exam (if
applicable) would apply here.
Normally ranges
from $0 - $50 (Can
be group specific)
Any amount
exceeding VSP's contact lens allowance (as
determined by the
group).
Maximum
determined by lens eligibility.
Can be once every
12, 24 or 36
months (as
determined by the group)
Yes NONE NONE NONE NONE NONE NONE NONE NONE
Contact Lenses
(Necessary)
Prior Authorization required.
Includes such
professional services as are necessary, which shall include: contact lens evaluation, fitting,
and verifying the
accuracy of the finished
lenses.
Copay for exam and materials (lenses
and frame - if
applicable) would
apply here Normally ranges from $0 - $50 (Can be group specific)
None. Covered in full for
most lens types.
Maximum determined by lens
eligibility.
Can be once every 12, 24 or 36 months (as determined by
group)
Yes NONE NONE NONE NONE NONE NONE NONE NONE
Low Vision If included in the plan: Prior authorization required.
Includes such
professional services as
are necessary, which
shall include: Supplemental testing Low Vision RX
Evaluations
Optical & non-optical
aids
Training Plan pays 50-75% of
the approved allowable
amount (maximum
allowable is $500 to
$1,000. Benefit is plan specific and can be group specific.
25-50% of the approved allowable amount
(Maximum allowable
is $500 to $1,000.
Benefit is plan
specific and can be group specific.)
Any amount exceeding the maximum allowable
amount.
Every 2 years No NONE NONE NONE NONE NONE NONE NONE NONE
CA Benefits&Cov.doc 7/99
DocuSign Envelope ID: 916B4B27-2B62-48AF-B273-01C3EF35D77B
Professional Services
Rev. Feb. 2014
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Summary of Benefits and Coverage
SIGNATURE PLAN ($20 Copay)
Prepared for: CITY OF PALO ALTO
Group ID: 00102584
Effective Date: JANUARY 1, 2015
The Affordable Care Act requires that health insurance companies and group health plans provide
consumers with a simple and consistent benefit and coverage information document, beginning
September 23, 2012. This document is a Summary of Benefits and Coverage (SBC).
The grid below is being provided for your convenience and mirrors the sample SBC that the U.S.
Department of Labor has published. All the information provided is relative to your plan and described
in detail in the preceding Evidence of Coverage.
Common Services You Your cost if you use an Limitations and
Medical May Need In-Network Out-of-Network Exceptions
Event Provider Provider
If you or your
dependents (if
applicable)
need eyecare
Eye Exam *
Reimbursed up to
$50.00
Exam covered in
full every 12
months**
Frames, Lenses or
Contacts
*
Frames reimbursed up
to $ 70.00
SV Lenses reimbursed
up to $ 50.00
Bi-Focal Lenses
reimbursed up to
$ 75.00
Tri-Focal Lenses
reimbursed up to
$100.00
Lenticular Lenses
reimbursed up to
$125.00
ECL reimbursed up to
$105.00
Frames covered
every 24 months**
Lenses covered
every 24 months**
Fees $20.00 Copay
* Fees copay applies to first service used
** Beginning with the first date of service
DocuSign Envelope ID: 916B4B27-2B62-48AF-B273-01C3EF35D77B
Professional Services
Rev. Feb. 2014
112 of 119
Your Grievance and Appeals Rights:
If you have a complaint or are dissatisfied with a denial of coverage for claims under your plan, you may
be able to appeal or file a grievance. For questions about your rights, this notice, or assistance, you can
contact: 800-877-7195.
DocuSign Envelope ID: 916B4B27-2B62-48AF-B273-01C3EF35D77B
Professional Services
Rev. Feb. 2014
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Summary of Benefits and Coverage
SIGNATURE PLAN ($10 Copay)
Prepared for: CITY OF PALO ALTO
Group ID: 00102584
Effective Date: JANUARY 1, 2015
The Affordable Care Act requires that health insurance companies and group health plans provide
consumers with a simple and consistent benefit and coverage information document, beginning
September 23, 2012. This document is a Summary of Benefits and Coverage (SBC).
The grid below is being provided for your convenience and mirrors the sample SBC that the U.S.
Department of Labor has published. All the information provided is relative to your plan and described
in detail in the preceding Evidence of Coverage.
Common Services You Your cost if you use an Limitations and
Medical May Need In-Network Out-of-Network Exceptions
Event Provider Provider
If you or your
dependents (if
applicable)
need eyecare
Eye Exam *
Reimbursed up to
$50.00
Exam covered in
full every 12
months**
Frames, Lenses or
Contacts
*
Frames reimbursed up
to $ 70.00
SV Lenses reimbursed
up to $ 50.00
Bi-Focal Lenses
reimbursed up to
$ 75.00
Tri-Focal Lenses
reimbursed up to
$100.00
Lenticular Lenses
reimbursed up to
$125.00
ECL reimbursed up to
$105.00
Frames covered
every 12 months**
Lenses covered
every 12 months**
Fees $10.00 Copay
* Fees copay applies to first service used
** Beginning with the first date of service
DocuSign Envelope ID: 916B4B27-2B62-48AF-B273-01C3EF35D77B
Professional Services
Rev. Feb. 2014
114 of 119
Your Grievance and Appeals Rights:
If you have a complaint or are dissatisfied with a denial of coverage for claims under your plan, you
may be able to appeal or file a grievance. For questions about your rights, this notice, or assistance,
you can contact: 800-877-7195
DocuSign Envelope ID: 916B4B27-2B62-48AF-B273-01C3EF35D77B
Professional Services
Rev. Feb. 2014
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EXHIBIT “B”
SCHEDULE OF PERFORMANCE
CONSULTANT shall provide Vision Care Plan Administration described in EXHIBIT
“A” Scope of Services in a timely manner to the reasonable satisfaction of the CITY
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Professional Services
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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 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
$603,848.00. CONSULTANT agrees to complete all Services, including reimbursable
expenses, within this amount. Any work performed or expenses incurred for which
payment would result in a total exceeding the maximum amount of compensation set forth
herein shall be at no cost to the CITY.
CITY’s project manager will monitor the projected premium payment to CONSULTANT
and, if necessary, request City Council to increase the contract compensation amount if it
appears the amount of $603,848.00 will be exceeded during the contract term.
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: NONE
All requests for payment of expenses shall be accompanied by appropriate backup
information. Any expense 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.
DocuSign Envelope ID: 916B4B27-2B62-48AF-B273-01C3EF35D77B
Professional Services
Rev Sep. 2014
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EXHIBIT “C-1”
RATE SCHEDULE
VISION SERVICE PLAN
SCHEDULE OF ADVANCE PAYMENT AND ADMINISTRATIVE FEE
Signature Plan ($20 Copay)
VSP shall be entitled to receive premiums for each month on behalf of each Enrollee and his/her Eligible
Dependents, if any, in the amounts specified below:
ADVANCE PAYMENT: $ 0.00
ADMINISTRATIVE FEE: $ 1.49 PER ELIGIBLE ENROLLEE
(INCLUDES COVERAGE FOR ELIGIBLE DEPENDENTS)
NOTICE: The premium under this Plan is subject to change upon renewal (after the end of the Initial Plan Term or
any subsequent Plan Term), or upon change of the Schedule of Benefits or a material change in any other terms
or conditions of the Plan.
VISION SERVICE PLAN PLAN PREMIUMS
Signature Plan ($10 Copay)
VSP shall be entitled to receive premiums for each month on behalf of each Enrollee and his/her
Eligible Dependents, if any, in the amounts specified below:
$ $23.81 per month for each eligible Enrollee without Eligible Dependents.
$47.31 per month for each eligible Enrollee with one Eligible Dependent.
$ $75.98 per month for each eligible Enrollee with two or more Eligible Dependents.
NOTICE: The premium under this Plan is subject to change upon renewal (after the end of the Initial
Plan Term or any subsequent Plan Term), or upon change of the Schedule of Benefits or a material
change in any other terms or conditions of the Plan.
DocuSign Envelope ID: 916B4B27-2B62-48AF-B273-01C3EF35D77B
Professional Services
Rev Sep. 2014
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EXHIBIT “D”
INSURANCE REQUIREMENTS
CONTRACTORS TO THE CITY OF PALO ALTO (CITY), AT THEIR SOLE EXPENSE, SHALL FOR THE TERM OF THE CONTRACT
OBTAIN AND MAINTAIN INSURANCE IN THE AMOUNTS FOR THE COVERAGE SPECIFIED BELOW, AFFORDED BY COMPANIES
WITH AM BEST’S KEY RATING OF A-:VII, OR HIGHER, LICENSED OR AUTHORIZED TO TRANSACT INSURANCE BUSINESS
IN THE STATE OF CALIFORNIA.
AWARD IS CONTINGENT ON COMPLIANCE WITH CITY’S INSURANCE REQUIREMENTS, AS SPECIFIED, BELOW:
REQU
IRED TYPE OF COVERAGE REQUIREMENT
MINIMUM LIMITS
EACH
OCCURRENC
E
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: CONTRACTOR, AT ITS SOLE COST AND
EXPENSE, SHALL OBTAIN AND MAINTAIN, IN FULL FORCE AND EFFECT THROUGHOUT THE ENTIRE TERM OF ANY
RESULTANT AGREEMENT, THE INSURANCE COVERAGE HEREIN DESCRIBED, INSURING NOT ONLY CONTRACTOR AND
ITS SUBCONSULTANTS, IF ANY, BUT ALSO, WITH THE EXCEPTION OF WORKERS’ COMPENSATION, EMPLOYER’S
LIABILITY AND PROFESSIONAL INSURANCE, NAMING AS ADDITIONAL INSUREDS CITY, ITS COUNCIL MEMBERS,
OFFICERS, AGENTS, AND EMPLOYEES.
I. INSURANCE COVERAGE MUST INCLUDE:
A. A PROVISION FOR A WRITTEN THIRTY (30) DAY ADVANCE NOTICE TO CITY OF CHANGE IN
COVERAGE OR OF COVERAGE CANCELLATION; AND
B. A CONTRACTUAL LIABILITY ENDORSEMENT PROVIDING INSURANCE COVERAGE FOR
CONTRACTOR’S AGREEMENT TO INDEMNIFY CITY.
C. DEDUCTIBLE AMOUNTS IN EXCESS OF $5,000 REQUIRE CITY’S PRIOR APPROVAL.
II. CONTACTOR MUST SUBMIT CERTIFICATES(S) OF INSURANCE EVIDENCING REQUIRED COVERAGE.
III. ENDORSEMENT PROVISIONS, WITH RESPECT TO THE INSURANCE AFFORDED TO “ADDITIONAL INSUREDS”
A. PRIMARY COVERAGE
WITH RESPECT TO CLAIMS ARISING OUT OF THE OPERATIONS OF THE NAMED INSURED, INSURANCE AS
AFFORDED BY THIS POLICY IS PRIMARY AND IS NOT ADDITIONAL TO OR CONTRIBUTING WITH ANY OTHER
INSURANCE CARRIED BY OR FOR THE BENEFIT OF THE ADDITIONAL INSUREDS.
B. CROSS LIABILITY
DocuSign Envelope ID: 916B4B27-2B62-48AF-B273-01C3EF35D77B
Professional Services
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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 CONSULTANT 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 CONSULTANT SHALL PROVIDE CITY AT LEAST A TEN (10) DAY WRITTEN NOTICE BEFORE THE
EFFECTIVE DATE OF CANCELLATION.
NOTICES SHALL BE EMAILED OR MAILED TO:
EMAIL: InsuranceCerts@CityofPaloAlto.org
PURCHASING AND CONTRACT ADMINISTRATION
CITY OF PALO ALTO
P.O. BOX 10250
PALO ALTO, CA 94303.
DocuSign Envelope ID: 916B4B27-2B62-48AF-B273-01C3EF35D77B
Certificate of Completion
Envelope Number: 916B4B272B6248AFB27301C3EF35D77B Status: Completed
Subject: Please DocuSign this document: C15157538 VSP Contract.pdf
Source Envelope:
Document Pages: 118 Signatures: 1 Envelope Originator:
Certificate Pages: 4 Initials: 0 Chris Anastole
AutoNav: Enabled
EnvelopeId Stamping: Enabled
250 Hamilton Ave
Palo Alto , CA 94301
chris.anastole@cityofpaloalto.org
IP Address: 199.33.32.254
Record Tracking
Status: Original
3/16/2015 1:23:43 PM PT
Holder: Chris Anastole
chris.anastole@cityofpaloalto.org
Location: DocuSign
Signer Events Signature Timestamp
Jim McGrann
Jim.McGrann@vsp.com
President
Security Level: Email, Account Authentication
(None)Using IP Address: 198.135.203.249
Sent: 3/16/2015 1:29:45 PM PT
Viewed: 3/16/2015 1:31:27 PM PT
Signed: 3/16/2015 1:34:31 PM PT
Electronic Record and Signature Disclosure:
Accepted: 3/16/2015 1:31:27 PM PT
ID: 70f53504-f7bd-408c-9aa0-9421ed2cda03
In Person Signer Events Signature Timestamp
Editor Delivery Events Status Timestamp
Agent Delivery Events Status Timestamp
Intermediary Delivery Events Status Timestamp
Certified Delivery Events Status Timestamp
Carbon Copy Events Status Timestamp
Khashayar Alaee
Khashayar.Alaee@CityofPaloAlto.org
Security Level: Email, Account Authentication
(None)
Sent: 3/16/2015 1:34:33 PM PT
Electronic Record and Signature Disclosure:
Accepted: 6/18/2014 9:19:26 PM PT
ID: 5f824cad-c8bd-46d0-8e86-011facbd6d14
Notary Events Timestamp
Envelope Summary Events Status Timestamps
Envelope Sent Hashed/Encrypted 3/16/2015 1:34:33 PM PT
Certified Delivered Security Checked 3/16/2015 1:34:33 PM PT
Signing Complete Security Checked 3/16/2015 1:34:33 PM PT
Completed Security Checked 3/16/2015 1:34:33 PM PT
Electronic Record and Signature Disclosure
CONSUMER DISCLOSURE
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Electronic Record and Signature Disclosure created on: 10/1/2013 3:33:53 PM
Parties agreed to: Jim McGrann, Khashayar Alaee
How to contact City of Palo Alto:
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Professional Services
Rev. Feb. 2014
1of 53
CITY OF PALO ALTO CONTRACT NO. C15157156
AGREEMENT BETWEEN THE CITY OF PALO ALTO AND
DELTA DENTAL OF CALIFORNIA FOR PROFESSIONAL SERVICES
This Agreement is entered into on this 16th day of March, 2015, (“Agreement”) by
and between the CITY OF PALO ALTO, a California chartered municipal corporation
(“CITY”), and DELTA DENTAL OF CALIFORNIA, a Not for Profit corporation,
incorporated in California and a member of the Delta Dental Plans Association, located at 100
First Street, San Francisco, California, 94105, Telephone (415) 972-8300 ("CONSULTANT").
RECITALS
The following recitals are a substantive portion of this Agreement.
A. CITY intends to administrate its dental care program (“Project”) and desires to engage a
consultant to provide services in connection with the Project (“Services”).
B. CONSULTANT has represented that it has the necessary professional expertise,
qualifications, and capability, and all required licenses and/or certifications to provide the
Services.
C. CITY in reliance on these representations desires to engage CONSULTANT to provide
the Services as more fully described in Exhibit “A”, attached to and made a part of this
Agreement.
NOW, THEREFORE, in consideration of the recitals, covenants, terms, and conditions,
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.
SECTION 2. TERM.
The term of this Agreement shall be from the date of its full execution through December 31,
2017 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.
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.
SECTION 4. NOT TO EXCEED COMPENSATION. The compensation to be paid to
CONSULTANT for performance of the Administrative Services described in Exhibit “A”, shall
not exceed Three Hundred Fifty Nine Thousand Five Hundred Twenty-Two Dollars
($359,522.00). The applicable rates and schedule of payment are set out in Exhibit “C-1”,
entitled “RATE SCHEDULE,” which is attached to and made a part of this Agreement. The
forgoing maximum administrative fee is based upon no more than an average enrollment of
1,085 primary enrollees over the three year contract period beginning January 1, 2015.
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 will generally process and pay invoices within thirty (30) days of
receipt.
SECTION 6. QUALIFICATIONS/STANDARD OF CARE. All of the Services shall be
performed by CONSULTANT or under CONSULTANT’s supervision. CONSULTANT
represents that it possesses the professional and technical personnel necessary to perform the
Services required by this Agreement and that the personnel have sufficient skill and experience
to perform the Services assigned to them. CONSULTANT represents that it, its employees and
subconsultants, if permitted, have and shall maintain during the term of this Agreement all
licenses, permits, qualifications, insurance and approvals of whatever nature that are legally
required to perform the Services.
All of the services to be furnished by CONSULTANT under this agreement shall meet the
professional standard and quality that prevail among professionals in the same discipline and of
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
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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. CONSULTANT shall not subcontract any portion of
the work to be performed under this Agreement without the prior written authorization of the city
manager or designee.
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 R.C. Martinez
as the Account Manager to have supervisory responsibility for the performance, progress, and
execution of the Services and Brenda Davis as the Account Management Assistant 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 Brenna Rowe, Human Resources, People Strategy & Operations
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Department, 250 Hamilton Avenue, Palo Alto, CA 94303, Telephone: (650) 329-2574. The
project manager will be CONSULTANT’s point of contact with respect to performance, progress
and execution of the Services. The CITY may designate an alternate project manager from time
to time.
SECTION 14. OWNERSHIP OF MATERIALS. Upon delivery, all work product, including
without limitation, all writings, drawings, plans, reports, specifications, calculations, documents,
other materials and copyright interests developed under this Agreement shall be and remain the
exclusive property of CITY without restriction or limitation upon their use. CONSULTANT
agrees that all copyrights which arise from creation of the work pursuant to this Agreement shall
be vested in CITY, and CONSULTANT waives and relinquishes all claims to copyright or other
intellectual property rights in favor of the CITY. Neither CONSULTANT nor its contractors, if
any, shall make any of such materials available to any individual or organization without the
prior written approval of the City Manager or designee. CONSULTANT makes no
representation of the suitability of the work product for use in or application to circumstances not
contemplated by the scope of work.
SECTION 15. AUDITS. CONSULTANT will permit CITY to audit, at any reasonable time
during the term of this Agreement and for three (3) years thereafter, CONSULTANT’s records
pertaining to matters covered by this Agreement. CONSULTANT further agrees to maintain and
retain such records for at least three (3) years after the expiration or earlier termination of this
Agreement.
SECTION 16. INDEMNITY.
16.1. To the fullest extent permitted by law, CONSULTANT shall protect,
indemnify, defend and hold harmless CITY, its Council members, officers, employees and
agents (each an “Indemnified Party”) from and against any and all demands, claims, or liability
of any nature, including death or injury to any person, property damage or any other loss,
including all costs 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,
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ordinance or law, or of any subsequent breach or violation of the same or of any other term,
covenant, condition, provision, ordinance or law.
SECTION 18. INSURANCE.
18.1. CONSULTANT, at its sole cost and expense, shall obtain and maintain, in
full force and effect during the term of this Agreement, the insurance coverage described in
Exhibit "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
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only in the event of a substantial failure of performance by CITY.
19.3. Upon such suspension or termination, CONSULTANT shall deliver to the
City Manager immediately any and all copies of studies, sketches, drawings, computations, and
other data, whether or not completed, prepared by CONSULTANT or its contractors, if any, or
given to CONSULTANT or its contractors, if any, in connection with this Agreement. Such
materials will become the property of CITY.
19.4. Upon such suspension or termination by CITY, CONSULTANT will be
paid for the Services rendered or materials delivered to CITY in accordance with the scope of
services on or before the effective date (i.e., 10 days after giving notice) of suspension or
termination; provided, however, if this Agreement is suspended or terminated on account of a
default by CONSULTANT, CITY will be obligated to compensate CONSULTANT only for that
portion of CONSULTANT’s services which are of direct and immediate benefit to CITY as such
determination may be made by the City Manager acting in the reasonable exercise of his/her
discretion. The following Sections will survive any expiration or termination of this Agreement:
14, 15, 16, 19.4, 20, and 25.
19.5. No payment, partial payment, acceptance, or partial acceptance by CITY
will operate as a waiver on the part of CITY of any of its rights under this Agreement.
SECTION 20. NOTICES.
All notices hereunder will be given in writing and mailed, postage prepaid, by
certified mail, addressed as follows:
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
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with the applicable provisions of the Palo Alto Municipal Code and the Government Code of the
State of California.
21.3. If the Project Manager determines that CONSULTANT is a “Consultant”
as that term is defined by the Regulations of the Fair Political Practices Commission,
CONSULTANT shall be required and agrees to file the appropriate financial disclosure
documents required by the Palo Alto Municipal Code and the Political Reform Act.
SECTION 22. NONDISCRIMINATION. As set forth in Palo Alto Municipal Code section
2.30.510, CONSULTANT certifies that in the performance of this Agreement, it shall not
discriminate in the employment of any person because of the race, skin color, gender, age,
religion, disability, national origin, ancestry, sexual orientation, housing status, marital status,
familial status, weight or height of such person. CONSULTANT acknowledges that it has read
and understands the provisions of Section 2.30.510 of the Palo Alto Municipal Code relating to
Nondiscrimination Requirements and the penalties for violation thereof, and agrees to meet all
requirements of Section 2.30.510 pertaining to nondiscrimination in employment.
SECTION 23. ENVIRONMENTALLY PREFERRED PURCHASING AND ZERO
WASTE REQUIREMENTS. CONSULTANT shall comply with the City’s Environmentally
Preferred Purchasing policies which are available at the City’s Purchasing Department,
incorporated by reference and may be amended from time to time. CONSULTANT shall comply
with waste reduction, reuse, recycling and disposal requirements of the City’s Zero Waste
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.
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This section shall take precedence in the event of a conflict with any other covenant, term,
condition, or provision of this Agreement.
SECTION 25. MISCELLANEOUS PROVISIONS.
25.1. This Agreement will be governed by the laws of the State of California.
25.2. In the event that an action is brought, the parties agree that trial of such
action will be vested exclusively in the state courts of California in the County of Santa Clara,
State of California.
25.3. The prevailing party in any action brought to enforce the provisions of this
Agreement may recover its reasonable costs and attorneys' fees expended in connection with that
action. The prevailing party shall be entitled to recover an amount equal to the fair market value
of legal services provided by attorneys employed by it as well as any attorneys’ fees paid to third
parties.
25.4. This document represents the entire and integrated agreement between the
parties and supersedes all prior negotiations, representations, and contracts, either written or oral.
This document may be amended only by a written instrument, which is signed by the parties. In
the event of a conflict between this Professional Services Agreement and any attachment or
exhibit hereto, the terms of this Agreement shall prevail.
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.
25.10 The individuals executing this Agreement represent and warrant that they
have the legal capacity and authority to do so on behalf of their respective legal entities.
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25.11 This Agreement may be signed in multiple counterparts, which shall, when
executed by all the parties, constitute a single binding agreement
IN WITNESS WHEREOF, the parties hereto have by their duly authorized
representatives executed this Agreement on the date first above written.
CITY OF PALO ALTO
APPROVED AS TO FORM:
DELTA DENTAL OF CALIFORNIA
Attachments:
EXHIBIT “A”: SCOPE OF WORK
EXHIBIT “A-1” DELTA DENTAL OF CALIFORNIA CONTRACT FOR GROUP
NUMBER 02795, EFFECTIVE DATE JANUARY 1, 2015
EXHIBIT “B”: SCHEDULE OF PERFORMANCE
EXHIBIT “C”: COMPENSATION
EXHIBIT “C-1”: SCHEDULE OF RATES
EXHIBIT “D”: INSURANCE REQUIREMENTS
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EXHIBIT “A”
SCOPE OF SERVICES
CONSULTANT shall provide CITY with administration of the group dental care benefits in
accordance with the policies provided in this Agreement and the attached EXHIBITS “A-1” .
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EXHIBIT “A1”
DELTA DENTAL OF CALIFORNIA
(A Not-for-Profit Corporation Incorporated in California and a Member
of the Delta Dental Plans Association)
Home Office:100 First Street, San Francisco, California 94105 (Herein
referred to as “Delta Dental”)
415-972-8300
Group Number 02795
IN CONSIDERATION of the application made by CITY OF PALO ALTO, referred to in this Contract
as “the Contractholder,” and IN CONSIDERATION of payments by the Contractholder as stated in
Article 3, Delta Dental agrees to provide the Benefits in Article 4 for a period of three years,
beginning at 12:01 a.m., Standard Time, on the Effective Date, January 1, 2015, and continuing
from year to year thereafter, unless this Contract is terminated in accordance with Article 9.
The following documents are attached to this Contract and made a part hereof:
Appendix A Orthodontic Benefit Rider
Appendix B Current Dental Terminology
This Contract contains the following Articles:
Article 1 Definitions
Article 2 Eligibility
Article 3 Payments
Article 4 Benefits Provided; Limitations and Exclusions
Article 5 Maximum Amount
Article 6 Coordination of Benefits
Article 7 Conditions Under Which Delta Dental Will Provide Benefits
Article 8 Other Delta Dental Obligations
Article 9 Termination and Renewal
Article 10 Continued Coverage Option
Article 11 General Provisions
ARTICLE 1 - DEFINITIONS
These terms, when used in this Contract, mean the following:
1.1 Administrator - a third party entity designated by Delta Dental to perform administrative
functions described throughout this Contract, including, but not limited to, the collection of
dues and eligibility.
1.2 Benefits - those dental services that are available under the terms of this Contract as set
out in Article 4.
1.3 Contract - this agreement between Delta Dental and the Contractholder including the
attached appendices. This Contract is the entire Contract between the parties.
1.4 Contract Term - the period beginning on the Effective Date, and ending on December 31,
2017, and each subsequent yearly period during which this Contract remains in effect.
1.5 Delta Dental PPOSM Dentist - a Dentist with whom Delta Dental has a written agreement
to provide services at the in-network level for Enrollees in this Delta Dental PPO Plan.
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1.6 Delta Dental PPO Dentist’s Fee - the fee that a Delta Dental PPO Dentist has
contractually agreed with Delta Dental to accept for treating Enrollees under this plan, or
the Fee Actually Charged, whichever is less, for a Single Procedure.
1.7 Delta Dental PPO Dentist’s Prevailing Fee - the fee for a Single Procedure that satisfies
the majority of Delta Dental PPO Dentists, as determined by Delta Dental based upon
confidential fee listing accepted by Delta Dental from Delta Dental PPO Dentists.
1.8 Delta Dental Dentist - a Dentist who has signed an agreement with Delta Dental or a
Participating Plan, agreeing to provide services under the terms and conditions established
by Delta Dental or the Participating Plan.
1.9 Dentist - a duly licensed Dentist legally entitled to practice dentistry when and where
services are provided.
1.10 Dependent - a Primary Enrollee’s Dependent who is eligible for Benefits under Article 2 of
this Contract.
1.11 Eligibility Date - the date an Enrollee’s eligibility for Benefits becomes effective under the
terms of this Contract
1.12 Enrollee - a Primary Enrollee or a Dependent who is eligible and enrolls for Benefits under
Article 2 of this Contract, or a person ceasing to meet such conditions who chooses
Continued Coverage as set out in Article 10, and for whom Delta Dental receives the
appropriate monthly payment as set out in Article 3.
1.13 Enrollee Copayment - the portion of the Dentist’s fees or allowances charged for Benefits
that is the Enrollee’s responsibility.
1.14 Fee Actually Charged - the fee for a particular dental service or procedure that a Dentist
submits to Delta Dental on a claim form, less any portion of such fee that is discounted,
waived or rebated, or which the Dentist does not use good faith efforts to collect.
1.15 Participating Plan - Delta Dental and any other member of the Delta Dental Plans
Association with which Delta Dental contracts to assist it in administering the Benefits of
this Contract.
1.16 Prevailing Fee – an allowance determined by Delta Dental and/or a Participating Plan for
services provided by a dentist who is not a Delta Dental Dentist.
1.17 Primary Enrollee - an individual, who by their employment with the Contractholder, is
eligible for Benefits under Article 2 of this Contract.
1.18 Procedure Numbers - the Procedure Numbers shown on Appendix B.
1.19 Single Procedure – a dental procedure to which a separate Procedure Number has been
assigned by the American Dental Association in the current version of Current Dental
Terminology (CDT). Many CDT codes are listed in Appendix B of this Contract.
1.20 For a Dentist who has signed a Delta Dental Dentist Agreement with Delta Dental of
California, his or her “Usual, Customary and Reasonable Fee” for any Single Procedure is
the fee that the Dentist has filed with Delta Dental and which Delta Dental has accepted.
For these Dentists, the words “Usual, Customary and Reasonable” means the following:
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Usual - the amount which a Dentist regularly charges and receives for a given service. If
the Dentist charges more than one fee for a given service, the “usual” fee for that service
is the lowest fee which the Dentist regularly charges or offers to Enrollees.
Customary - the fee is within the range of usual fees charged and received for a particular
service by Dentists of similar training in the same geographic area that Delta Dental
determines is statistically relevant.
Reasonable - a fee schedule is reasonable if it is “usual” and “customary.” Additionally, a
specific fee to a specific Enrollee is reasonable if it is justifiable considering special
circumstances, or extraordinary difficulty, of the case in question.
ARTICLE 2 - ELIGIBILITY
2.1 All regular employees are required to enroll in this plan and will become eligible to receive
Benefits on their date of hire.
2.2 Dependents are the Primary Enrollee’s legal spouse or domestic partner and unmarried
dependent children from birth to age 19, or to age 26 if enrolled as full-time students in an
accredited school, college or university. Children include natural children, stepchildren,
children of a domestic partner, adopted children, children placed for adoption and foster
children, provided they depend upon the Primary Enrollee for support and maintenance.
The Dependents of Primary Enrollees are eligible to enroll on the same date that the
employee, of whom they are a Dependent, becomes a Primary Enrollee. Later-acquired
Dependents become eligible as soon as they acquire Dependent status.
Domestic partners are defined as same sex partners, who are both at least 18 years of age,
and opposite sex partners when one or both partners are over the age of 62. Domestic
partners may be required to provide the Contractholder with a copy of the Declaration of
Domestic Partnership registered with the Secretary of State of the State of California.
Domestic partners of the opposite sex when both are under age 62 may not register a
partnership with the Secretary of State. However, the Contractholder has elected to extend
coverage to such partners. An affidavit of opposite sex domestic partnerships under age 62
may be required by the Contractholder.
A domestic partner is subject to the same terms and conditions as any other Dependent
enrolled under this Contract. Domestic partners and their Dependents are eligible for
continuation of coverage under COBRA.
2.3 An unmarried dependent child may continue eligibility if:
a) He or she is incapable of self-sustaining employment because of a physically or
mentally disabling injury, illness or condition that began prior to reaching the limiting
age;
b) He or she is chiefly dependent on the eligible employee for support; and
c) Proof of Dependent’s disability is provided within 60 days of request. Such requests will
not be made more than once a year following a two year period after this Dependent
reaches the limiting age. Eligibility will continue as long as the Dependent relies on the
eligible employee for support because of a physically or mentally disabling injury,
illness or condition that began before he or she reached the limiting age.
2.4 Dependents in military service are not eligible.
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2.5 Every enrolled employee and Dependent meeting the preceding conditions of eligibility is
an Enrollee. However, Delta Dental will not provide Benefits for any employee or his or her
Dependents unless (1) the employee is included on the list of Primary Enrollees submitted
as required by this Article (or any revision or correction of such a list), and (2) the
appropriate payments are made as required by Article 3 of this Contract, for the months in
which Delta Dental provides covered dental services.
2.6 The Contractholder agrees to enroll all of its Primary Enrollees in this plan. All employees
of the Contractholder meeting the eligibility requirements of this Article are “Primary
Enrollees” under this plan unless the Contractholder offers one or more alternate plans of
dental coverage. In that event, Primary Enrollees will continue to be eligible under this
plan unless they file a choice card with the Contractholder electing an alternate plan during
an open enrollment period agreed upon between Delta Dental and the Contractholder.
2.7 The Contractholder will compile and furnish Delta Dental with an initial report of all
Primary Enrollees, showing their Enrollee ID numbers, their dates of hire and division
codes. The initial report shall be provided to Delta Dental or prior to the Effective Date of
this Contract. The Contractholder also agrees to report all persons electing continued
coverage under Article 10, showing their Enrollee ID numbers and date of election.
2.8 The Contractholder may continue to submit subsequent eligibility reports monthly or may
report only additions or deletions to the initial report. If the report is not updated by the
Contractholder or has not arrived or been processed for the current month, Delta Dental
will extend the last report received to process claims. The extension of the eligibility report
does not waive the requirement that the Contract holder provide an updated report to
Delta Dental each month indicating additions or deletions from any previous report. The
Contractholder shall pay, as set forth in Article 3, dues applicable for Primary Enrollees
reported in the updated report.
2.9 Enrollees are not eligible during a period the Primary Enrollee does not report to work on a
regular basis and is not actively employed as determined by the Contractholder. Eligibility
resumes on the first day of the month following the return to active employment if
amounts due to Delta Dental for Enrollees have been paid. But, eligibility can continue
without interruption if the Contractholder continues to report the employee as a Primary
Enrollee and the amounts due to Delta Dental are paid on the employee’s behalf.
Coverage is reinstated on the day employment is resumed for Enrollees that are members
of the National Guard or a military reserve unit absent from work due to active military
duty. Any waiting period applied as a result of an Enrollee's absence from active
employment due to service in the National Guard or military reserve unit shall be waived.
2.10 A Primary Enrollee absent from work due to a leave of absence governed by the “Family
and Medical Leave Act of 1993” (P.L. 103-3) will not be subject to Section 2.9.
2.11 A Primary Enrollee absent from work due to a leave of absence governed by the
“Uniformed Services Employment and Re-employment Rights Act of 1994” (P.L. 103-353)
will not be subject to Section 2.9. Such Primary Enrollee shall have the right to continue
coverage for up to 24 months while he or she is on military leave. If the Primary Enrollee
elects this continued coverage, he or she must submit the dues necessary to the
Contractholder.
2.12 A Primary Enrollee’s eligibility ends on the last day of the month in which his or her full-
time employment ends, unless he or she chooses to continue coverage under Article 10. A
Dependent’s eligibility ends along with the Primary Enrollee’s, or sooner if the Dependent
loses his or her Dependent status, unless continued coverage is chosen in a timely fashion
by or on behalf of the Dependent(s) under Article 10. Eligibility for such continued
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coverage will continue for the period required by the Option. In any event, eligibility ends
immediately when this Contract ends.
ARTICLE 3 – PAYMENTS
3.1 Delta Dental will transmit a weekly invoice summarizing claims paid and administration
charges. The weekly invoice will be transmitted by fax or e-mail to the Contractholder’s
designated representative. Delta Dental will initiate an electronic fund transfer for the
invoiced amount from the Contractholder’s designated bank account within three business
days of sending the weekly invoice.
The Contractholder agrees to pay Delta Dental $9.20 per Primary Enrollee per month to
compensate Delta Dental for its administration of the dental plan.
3.2 The amount payable for each person electing continued coverage as provided in Article 10
for himself or herself will be the same as those for a single Primary Enrollee. The amounts
payable for a person who also elects continued coverage for his or her Dependents will be
the same as those for a Primary Enrollee with the same number of Dependents.
3.3 The Contractholder and Delta Dental agree that the administrative charge set out in this
Contract are contingent upon the composition of the Contractholder’s group at the
beginning of each Contract Term.
Delta Dental may propose a choice of changes in administration or Benefits for a 15
percent change in composition during the Contract Term, such as an increase or decrease
in enrollment, change in location, change in job classifications, change in mix of active
versus retiree enrollment or other similar change in the Contractholder’s group
composition that lasts three months in a row or longer and results in an increase in cost
per person of the Contractholder’s group.
Within 31 days of receipt of the proposed change(s), Contractholder will select one of the
choices by written notice to Delta Dental. If Contractholder fails to do so, Delta Dental may
select one of the choices by written notice to Contractholder. This Contract will be modified
for all dental services predetermined and incurred after notice.
3.4 If during a Contract Term any new or increased tax, assessment or fee is imposed on the
amounts payable to, or by, Delta Dental under this Contract or any immediately preceding
contract between Delta Dental and the Contractholder, the amount stated in paragraph 3.1
will be increased by the amount of any such new or increased tax, assessment or fee by
written notice to Contractholder, and the Contract shall thereby be modified on the date
set forth in the notice.
3.5 Delta Dental may change the amounts due charge whenever the Contract is amended or
whenever the Contractholder requests a change in Benefits, eligibility or when due to a
state and/or federally mandated change. Any change in amounts due shall not be effective
during a Contract Term unless Contractholder and Delta Dental agree in writing (except as
provided in paragraphs 3.3 and 3.4, or a state and/or federally mandated change).
3.6 Administration and eligibility may be adjusted retroactively by Delta Dental or the
Contractholder, but such adjustments are limited to the three-month period prior to the
most current month for which the Contractholder provides eligibility data.
ARTICLE 4 - BENEFITS PROVIDED; LIMITATIONS AND EXCLUSIONS
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4.1 Subject to the limitations and exclusions set forth below, the following services are
Benefits when they are provided by a Dentist and when they are necessary and customary
as determined by the standards of generally accepted dental practice.
4.2 Delta Dental shall pay or otherwise discharge the Applicable Percentage of the Dentist's
Usual, Customary and Reasonable fees or of the Fee Actually Charged, whichever is less, or
the Delta Dental PPO Dentist’s Fee for the Basic Benefits listed below. During the first
calendar year of an Enrollee’s eligibility, the Applicable Percentage for Basic Benefits shall be
70%. Provided the Enrollee has utilized the plan during the calendar year in which the
Applicable Percentage was 70%, the Applicable Percentage for Basic Benefits shall be
increased to 80% for care provided during the next succeeding calendar year of eligibility;
and the Applicable Percentage for Basic Benefits shall increase to 90% in the calendar year
succeeding a period in which the Applicable Percentage was 80% and the Applicable
Percentage for Basic Benefits shall increase to 100% in the calendar year succeeding a period
in which the Applicable Percentage was 90%. If during a calendar year of eligibility the
Enrollee does not utilize the plan, the Applicable Percentage for Basic Benefits provided
during the next calendar year shall remain the same. (For example, if during a period in
which the Applicable Percentage was 90% the Enrollee fails to utilize the plan, the Applicable
Percentage for the succeeding calendar year shall remain 90%). If an Enrollee loses
eligibility, the Applicable Percentage for Basic Benefits provided during any subsequent
period of eligibility shall commence at 70%.
Diagnostic- oral examinations (including
initial examinations periodic
examinations emergency
examinations)
x-rays diagnostic casts
examination of biopsied tissue
palliative (emergency) treatment of dental pain specialist
consultation
Preventive- prophylaxis (cleaning)
topical application of fluoride solution space
maintainers
Oral Surgery- extractions and certain other surgical procedures, including pre- and post-
operative care
Restorative- amalgam, silicate or composite (resin) restorations (fillings) for treatment of carious
lesions (visible destruction of hard tooth structure resulting from the process of
dental decay)
Endodontic- treatment of the tooth pulp
Periodontic- treatment of gums and bones supporting teeth
Sealants- topically-applied acrylic, plastic, or composite material used to seal developmental
grooves and pits in teeth for the purpose of preventing dental decay
Night Guards intraoral removable appliances provided for the treatment of harmful oral habits
associated with periodontal disease
Crowns, Inlays, Onlays
and Cast
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Restorations - treatment of carious lesions (visible destructions of hard tooth
structure resulting from the process of dental decay) which cannot be
restored with amalgam, synthetic porcelain or plastic restorations
Adjunctive General
Services- general anesthesia; I.V. sedation; office visit for observation; office visit after
regularly scheduled hours; therapeutic drug injection; treatment of post-
surgical complications (unusual circumstances); occlusal adjustment, limited
Note on additional Benefits during pregnancy – When an Enrollee is pregnant, Delta Dental
will pay for additional services to help improve the oral health of the Enrollee during the
pregnancy. The additional services each calendar year while the Enrollee is covered under this
Contract include: one additional oral exam and either one additional routine cleaning or one
additional periodontal scaling and root planing per quadrant. Written confirmation of the
pregnancy must be provided by the Enrollee or her dentist when the claim is submitted.
4.3 PROSTHODONTIC BENEFITS. Delta Dental agrees to pay 50% of the Dentist’s Usual,
Customary, and Reasonable fees or the Fee Actually Charged, whichever is less, or 50% of
the Delta Dental PPO Dentist’s Fee for the construction or repair of fixed bridges, partial or
complete dentures to replace missing, natural teeth; for implant placement and removal;
and for implant supported prosthetics, including implant repair and recementation.
4.4 ORTHODONTIC BENEFITS. Delta Dental will provide Orthodontic Benefits in accordance with
the Orthodontic Benefit Rider attached hereto as Appendix A.
4.5 LIMITATIONS:
(a) An oral examination including office visits for observation and specialist
consultations, or combination thereof, is a Benefits twice each calendar year while
the patient is an Enrollee under any Delta Dental plan. See note on additional
Benefits during pregnancy.
(b) Delta Dental pays for full-mouth x-rays only after three years have elapsed since
any prior set of full-mouth x-rays was provided under any Delta Dental plan.
Delta Dental pays for a panoramic x-ray provided as an individual service only after
three years have elapsed since any prior panoramic x-ray was provided under any
Delta Dental plan.
(c) Bitewing x-rays are provided on request by the Dentist, but not more than twice in
a calendar year for children to age 18, or once in a calendar year for adults ages 18
and over, while the patient is an Enrollee under any Delta Dental plan.
(d) Diagnostic casts are a Benefit only when made in connection with subsequent
orthodontic treatment covered under this plan.
(e) A prophylaxis (cleaning) or Single Procedure that includes a prophylaxis is a Benefit
twice each calendar year under any Delta Dental plan. See note on additional
Benefits during pregnancy.
Routine prophylaxes are covered as a Diagnostic and Preventive Benefit and
periodontal prophylaxes are covered as a Basic Benefit.
(f) Periodontal scaling and root planing is a Benefit once for each quadrant each 12
month period. See note on additional Benefits during pregnancy.
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(g) Fluoride treatment is a Benefit twice each calendar year under any Delta Dental
plan.
(h) Sealant Benefits include the application of sealants only to permanent first molars
through age eight and second molars through age 15 if they are without caries
(decay) or restorations on the occlusal surface. Sealant Benefits do not include the
repair or replacement of a sealant on any tooth within two years of its application.
(i) Delta Dental will not pay for the repair or replacement of any appliance furnished in
whole or in part under this or any other Delta Dental plan.
(j) Crowns, Inlays, Onlays or Cast Restoration are Benefits on the same tooth only
once every five years while the patient is an Enrollee under any Delta Dental plan,
unless Delta Dental determines that replacement is required because the
restoration is unsatisfactory as a result of poor quality of care, or because the tooth
involved has experienced extensive loss or changes to tooth structure or supporting
tissues since the replacement of the restoration.
(k) Prosthodontic appliances and implants that were provided under any Delta Dental
plan will be replaced only after five years have passed, except when Delta Dental
determines that there is such extensive loss of remaining teeth or change in
supporting tissues that the existing fixed bridge, partial denture or complete
denture cannot be made satisfactory.
Replacement of a prosthodontic appliance or implant supported prosthesis not
provided under a Delta Dental plan will be covered if it is unsatisfactory and cannot
be made satisfactory.
Implant removal is limited to one for each tooth during the Enrollee’s lifetime
whether provided under a Delta Dental or any other dental care plan.
(l) Delta Dental will pay the applicable percentage of the Dentist’s Fee for a standard
cast chrome or acrylic partial denture or a standard complete denture. A “standard”
complete or partial denture is defined as a removable prosthetic appliance provided
to replace missing natural, permanent teeth and which is constructed using
accepted and conventional procedures and materials.
(m) If an Enrollee selects a more expensive plan of treatment than is customarily
provided, or specialized techniques, an allowance will be made for the least
expensive, professionally acceptable alternative treatment plan. Delta Dental will
pay the applicable percentage of the lesser fee and the Enrollee is responsible for
the remainder of the Dentist’s fee. For example: a crown, where an amalgam filling
would restore the tooth, or a precision denture, where a standard denture would
suffice.
4.6 EXCLUSIONS - The following services are not Benefits:
(a) Services for injuries or conditions that are covered under Workers’ Compensation or
Employer’s Liability Laws.
(b) Services which are provided to the Enrollee by any, Federal or State Government
Agency or are provided without cost to the Enrollee by any municipality, county or
other political subdivision, except as provided in California Health and Safety Code
Section 1373(a).
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(c) Any tax imposed (or incurred) by a government, state or other entity, in connection
with any fees charged for Benefits provided under the Contract, will be the
responsibility of the Enrollee and is not a covered Benefit.
(d) Services with respect to congenital (hereditary) or developmental (following birth)
malformations or cosmetic surgery or dentistry for purely cosmetic reasons,
including but not limited to: cleft palate, upper or lower jaw malformations, enamel
hypoplasia (lack of development), fluorosis (a type of discoloration of the teeth)
and anodontia (congenitally missing teeth).
(e) Services for restoring tooth structure lost from wear (abrasion, erosion, attrition, or
abfraction), for rebuilding or maintaining chewing surfaces due to teeth out of
alignment, or for stabilizing the teeth. Such services include but are not limited to
equilibration and periodontal splinting.
(f) Prosthodontic services or any Single Procedure started prior to the date the person
became eligible for such services under this Contract.
(g) Prescribed or applied therapeutic drugs, premedication or analgesia.
(h) Experimental procedures.
(i) All hospital costs and any additional fees charged by the Dentist for hospital
treatment.
(j) Charges for anesthesia, other than general anesthesia I.V. sedation administered by
a licensed Dentist in connection with covered Oral Surgery services and select
Endodontic and Periodontic procedures.
(k) Extra-oral grafts (grafting of tissues from outside the mouth to oral tissue).
(l) Diagnosis or treatment by any method of any condition related to the
temporomandibular (jaw) joint or associated musculature, nerves and other tissues.
(m) Complete occlusal adjustment.
(n) Replacement of existing restorations for any purposes other than active tooth
decay.
4.7 An agreement between the Contractholder and Delta Dental is required to change Benefits
during a Contract Term.
ARTICLE 5 - DEDUCTIBLES & MAXIMUM AMOUNT
5.1 If provided by a Delta Dental PPO Dentist:
The maximum amount Delta Dental will pay for Diagnostic and Preventive, Basic, Crowns,
Inlays, Onlays and Cast Restorations and Prosthodontic Benefits provided to any Enrollee
in a calendar year is $2,100.00
If provided by other dentists:
The maximum amount Delta Dental will pay for Diagnostic and Preventive, Basic, Crowns,
Inlays, Onlays and Cast Restorations and Prosthodontic Benefits provided to any Enrollee
in a calendar year is $2,000.00
ARTICLE 6 - COORDINATION OF BENEFITS
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6.1 If a group insurance policy or any other group health Benefits plan, including another Delta
Dental plan, entitles a person to receive or be reimbursed for the cost of dental services,
which are also Benefits under this plan, and if this plan is “primary” under the rules
described below, Delta Dental will provide Benefits as if the other plan did not exist. If the
other plan is “primary” under these rules, then Delta Dental will coordinate Benefits under
this plan with the primary plan in accordance with California law (California Health and
Safety Code 1374.19 (2007).
6.2 If the other plan mainly covers services or expenses other than dental care, this plan is
“primary.” Otherwise, Delta Dental will use the following rules to determine which plan is
“primary”:
(a) The plan that covers the person as other than a Dependent is primary over the plan
that covers the person as a Dependent, with the following exception:
If the person is also a Medicare Beneficiary and Medicare is:
(i) secondary to the plan covering the person as a Dependent; and
(ii) primary to the plan covering the person as other than a Dependent (for
example, a retired employee),
then the Benefits of the plan covering the person as a Dependent are determined
before the Benefits of the plan covering the person as other than a Dependent.
(b) The plan which covers a child as a Dependent of a parent whose birthday occurs
earlier in a calendar year is primary over the plan which covers a child as a
Dependent of a parent whose birthday occurs later in a calendar year (except for a
Dependent child whose parents are separated or divorced as described in (c)
below).
(c) In the case of a Dependent child whose parents are legally separated or divorced:
(i) If the parent with custody has not remarried, the plan that covers the child
as a Dependent of the parent with custody is primary over the plan which
covers the child as a Dependent of the parent without custody.
(ii) If the parent with custody has remarried, the plan which covers the child as
a Dependent of the parent with custody is primary over the plan which
covers the child as a Dependent of the step-parent, and the plan which
covers the child as a Dependent of the step-parent is primary over the policy
or plan which covers the child as a Dependent of the parent without custody.
(iii) If there is a court decree that establishes financial responsibility for dental
services which are Benefits under this plan, then notwithstanding (i) and
(ii), the plan which covers the child as a Dependent of the parent with such
financial responsibility is primary over any other plan which covers the child.
6.3 The Benefits of a plan covering a laid-off or retired employee (or Dependent of such
person) shall be determined after the Benefits of any other plan covering such person as
an employee.
6.4 If a person whose coverage is provided under federal or state law requiring continuation is
covered under more than one plan, Benefits order shall be determined as follows:
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(a) The Benefits of the plan covering the person as an employee or Dependent shall be
primary.
(b) The Benefits under continuation coverage shall be secondary.
6.5 If the primary plan cannot be determined by the rules described in this Article 6, the plan
that has covered the person longer shall be primary.
6.6 An Enrollee will provide Delta Dental with any information about the person that is needed
to administer this Article, and Delta Dental may release any information to or obtain any
information from any insurance company or other organization in order to coordinate the
Benefits of an Enrollee. Delta Dental in its sole discretion will determine whether any
reimbursement is warranted to an insurance company or other organization under this
provision, and it is agreed that any such reimbursement paid by Delta Dental will be
Benefits under this Contract. Delta Dental has the right to recover the value of any
Benefits provided by Delta Dental which exceed its obligations under the terms of this
provision from a Delta Dental Dentist, Enrollee, insurance company or other organization,
as Delta Dental chooses.
ARTICLE 7 - CONDITIONS UNDER WHICH DELTA DENTAL WILL PROVIDE BENEFITS
7.1 Benefits, unless otherwise provided in Article 4, are available from the Eligibility Date of an
Enrollee.
7.2 An Enrollee may choose the services of any licensed Dentist, but neither Delta Dental nor
the Contractholder guarantees the availability of any particular Dentist.
7.3 Before Delta Dental is obligated to approve and/or satisfy any claims under this Contract,
Delta Dental is entitled to receive, to such extent as is lawful, such information and records
relating to attendance to or examination of or treatment provided to an Enrollee from any
attending or examining Dentist, or from hospitals in which a Dentist’s care is provided, as
may be required in the administration of such claims, or to require that an Enrollee be
examined by a dental consultant retained by Delta Dental in or near his or her community
or residence. Delta Dental agrees in every case to hold such information and records as
confidential.
7.4 The process Delta Dental uses to determine or deny payment for services are distributed to
all Delta Dental Dentists. They describe in detail the dental procedures covered as
Benefits, the conditions under which coverage is provided and the limitations and
exclusions applicable to the plan. Claims are reviewed for eligibility and are paid according
to these processing policies. Those claims that require additional review are evaluated by
Delta Dental’s Dentist consultants. If any claims are not covered or if limitations or
exclusions apply to services the Enrollee has received by a Delta Dental Dentist, the
Enrollee will be notified by an adjustment notice on the Notice of Payment or Action. The
Enrollee may contact Delta Dental’s Customer Service Department for more information
regarding Delta Dental’s processing policies.
7.5 Second Opinions. Delta Dental reserves the right to obtain second opinions through
regional consultant members of its quality review committee. This committee conducts
clinical examinations, prepares objective reports of dental conditions, and evaluates
treatment that is proposed or has been proposed.
Delta Dental will authorize such an examination prior to treatment when necessary to
make a Benefit determination in response to a request for a predetermination of treatment
cost by a Dentist. Delta Dental will also authorize a second opinion after treatment if an
Enrollee has a complaint regarding the quality of care provided. Delta Dental will notify the
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Enrollee and the treating Dentist when a second opinion is necessary and appropriate, and
direct the Enrollee to the regional consultant selected by Delta Dental to perform the
clinical examination. When Delta Dental authorizes a second opinion through a regional
consultant Delta Dental will pay for all charges.
The Enrollee may otherwise obtain second opinions about treatment from any Dentist they
choose, and claims for the examination may be submitted to Delta Dental for payment.
Delta Dental will pay such claims in accordance with the Benefits of the plan.
7.6 For services provided by a Dentist who is not a Delta Dental PPO Dentist or a Delta Dental
Dentist, Delta Dental will not pay more than the lesser of the fees entered on the claim
reporting such services to Delta Dental or the Prevailing Fee, multiplied by the applicable
percentage specified in Article 4 for such services. However, if the Dentist discounts,
waives, rebates or does not use good faith efforts to collect some portion of the fees
entered on the claim from the Enrollee, Delta Dental will not pay more than the applicable
percentage specified in Article 4 of the lesser of (1) the fees entered on the claim form,
reduced by the portion discounted, waived, rebated or not collected, or (2) the Prevailing
Fee, reduced by the portion discounted, waived, rebated or not collected.
7.7 Delta Dental will pay a Delta Dental Dentist directly for services provided by that Dentist.
Contracts between Delta Dental of California and its Delta Dental Dentists provide that, in
the event Delta Dental fails to pay the Dentist, the Enrollee will not owe the dentist for any
sums owed by Delta Dental.
7.8 Delta Dental will pay an Enrollee directly for services provided by a Dentist who is not a
Delta Dental Dentist, and those payments are not assignable. The Enrollee is liable to the
Dentist for payment to the Dentist for the cost of the service. In addition, Delta Dental will
pay for services from dental school clinics by students of dentistry or instructors who are
not licensed by the State of California. In the event Delta Dental fails to pay the Dentist
who has not contracted with Delta Dental as a Delta Dental Dentist, the Enrollee may be
liable to the dentist for the cost of the service.
7.9 Delta Dental is not obligated to pay claims submitted more than 12 months after the date
the service was provided. If a claim is denied because a Delta Dental Dentist failed to
make a timely submission, the Enrollee does not owe the Dentist the amount which would
have been payable by Delta Dental, provided that the Enrollee advised the Dentist of his or
her eligibility for Benefits at the time of treatment.
7.10 Delta Dental, with the assistance of Participating Plans, will give each Delta Dental Dentist,
and any other Dentist or Enrollee on request, a standard form to make a claim for payment
for services covered by this Contract. In order to make a claim for payment, such form,
completed by the Dentist who provided the service and by the Enrollee (or the Enrollee’s
parent or guardian if such Enrollee is a minor) must be submitted to Delta Dental.
7.11 If an Enrollee has any questions about the services received from a Delta Dental Dentist,
Delta Dental recommends that he or she first discuss the matter with the Dentist. If he or
she continues to have concerns, the Enrollee may call or write Delta Dental. Delta Dental
will provide notifications if any dental services or claims are denied, in whole or part,
stating the specific reason or reasons for denial. Any questions of ineligibility should first
be handled directly between the Enrollee and the group. If an Enrollee has any question or
complaint regarding the denial of dental services or claims, the policies, procedures and
operations of Delta Dental, or the quality of dental services performed by a Delta Dental
Dentist, he or she may call Delta Dental toll-free at 800-765-6003, contact Delta Dental on
the Internet through the website: deltadentalins.com or write Delta Dental at P. O. Box
997330, Sacramento, CA 95899-7330, Attention: Customer Service Department.
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If an Enrollee’s claim has been denied or modified, the Enrollee may file a request for
review with Delta Dental within 180 days after receipt of the denial or modification. If in
writing, the correspondence must include the group name and number, the Primary
Enrollee’s name and Enrollee ID number, the inquirer’s telephone number and any
additional information that would support the claim for benefits.
The correspondence should also include a copy of the treatment form, Notice of Payment
and any other relevant information. Upon request and free of charge, Delta Dental will
provide the Enrollee with copies of any pertinent documents that are relevant to the claim,
a copy of any internal rule, guideline, protocol, and/or explanation of the scientific or
clinical judgment if relied upon in denying or modifying the claim.
Delta Dental’s review will take into account all information, regardless of whether such
information was submitted or considered initially. The review shall be conducted by a
person who is neither the individual who made the original claim denial, nor the
subordinate of such individual, and Delta Dental will not give deference to the initial
decision. If the review of a claim denial is based in whole or in part on a lack of dental
necessity, experimental treatment, or a clinical judgment in applying the terms of the
contract terms, Delta Dental shall consult with a dentist who has appropriate training and
experience. The identity of such dental consultant is available upon request. Certain cases
may be referred to one of Delta Dental’s regional consultants, to a review committee of the
dental society or to the state dental association for evaluation.
Delta Dental will provide the Enrollee a written acknowledgement within five calendar days
of receipt of the request for review. Delta Dental will render a decision and respond to the
Enrollee within 60 calendar days of receipt of the request for review. Delta Dental will
respond, within 72 hours to grievances involving severe pain and imminent and serious
threat to an Enrollee’s health (urgent care grievance).
7.12 The Benefits that Delta Dental provides are limited to the applicable percentages of the
Dentist’s fees or allowances specified in Article 4. The Contractholder requires the Enrollee
to pay the balance of any such fee or Allowance, known as the “Enrollee Co-payment,” as a
method of sharing the costs of providing dental Benefits between the Contractholder and
Enrollees. If the Dentist discounts, waives or rebates any portion of the Enrollee Co-
payment to the Enrollee, Delta Dental only provides as Benefits the Dentist’s fees or
allowances reduced by the amount that such fees or allowances are discounted, waived or
rebated.
ARTICLE 8 - OTHER DELTA DENTAL OBLIGATIONS
8.1 Delta Dental shall encourage Delta Dental Dentists to submit a standardized claim form
before providing service, showing the Enrollee’s dental needs and the treatment necessary
in the professional judgment of the Dentist.
Delta Dental shall predetermine, from the claim form and other data, what would be
payable by Delta Dental and an Enrollee for the proposed service under the terms of this
plan as of the date of predetermination.
Such predetermination shall not constitute a guaranty or authorization of Benefits under
this Contract, and any actual payment by Delta Dental will depend upon the Enrollee’s
eligibility and remaining annual maximum when completed services are reported to Delta
Dental.
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Delta Dental shall advise Delta Dental Dentists to notify the Enrollee of all information
provided by Delta Dental in the predetermination.
8.2 A Dentist may file a statement before treatment, showing the services to be provided to an
Enrollee. Delta Dental will predetermine the amount of Benefits payable under this
Contract for the listed services. A predetermination will become invalid at the end of the
Contract Term or the date the Enrollee’s eligibility ends.
8.3 Delta Dental will not make any payment for services provided to an Enrollee who is not
reported to Delta Dental as an Enrollee under this Contract when the service is provided.
Delta Dental shall not be obligated to recover claims paid to a Dentist as a result of
Contractholder’s retroactive eligibility adjustments to eligibility reports. The Contractholder
agrees to reimburse Delta Dental for any erroneous claims payments made by Delta Dental
as a result of incorrect eligibility reporting by the Contractholder.
8.4 Delta Dental will provide professional review of the adequacy of service provided by Delta
Dental Dentists.
8.5 Delta Dental, with the assistance of a Participating Plan, agrees to furnish to the
Contractholder on the effective date, and at reasonable times thereafter, a directory of
Delta Dental Dentists and Delta Dental PPO Dentists who have agreed to provide the
services described in this Contract. It is understood that the Dentists listed in that
directory may change from time to time and Delta Dental reserves the right to update the
directory without prior notice to the Contractholder. However, Delta Dental agrees to give
notice to the Contractholder within a reasonable time of any Delta Dental Dentist’s
termination or breach of Contract, or inability to perform, which will materially and
adversely affect the Contractholder. Current information concerning the Delta Dental
Dentist status of any Dentist may be obtained by telephoning the Delta Dental Customer
Service Department at 800-765-6003. The Dentists providing or contracting to provide
dental services under this Contract are solely responsible for those dental services, and in
no case will Delta Dental or the Contractholder be liable for any act or omission by such
Dentists, their agents or employees.
8.6 Delta Dental shall furnish the Contractholder weekly accountings showing the
amount of Dentists’ statements paid or discharged during the preceding
week and the amount payable for administration (pursuant to paragraph 3.1 of
the Contract). Delta Dental may render interim accountings at any time, if it has
insufficient funds on hand to pay Dentists’ statements and may suspend
payments of such statements until the funds are received. Delta Dental shall in
no event be obligated to pay for or provide Benefits except out of funds paid by
the Contractholder.
8.7 Delta Dental shall return to the Contractholder after the end of the Contract Term
monies remaining, if any, after payment or other discharge of current bills
for services. For purposes of computations of amounts payable hereunder,
amounts, if any, withheld from payments to Delta Dental Dentists by Delta
Dental for its reserves, research or other purposes deemed proper by the
governing board of Delta Dental will be deemed to have been paid to Delta Dental
in discharge of claims of such Dentists.
ARTICLE 9 - TERMINATION AND RENEWAL
9.1 This Contract may be terminated for the following causes:
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(a) By Delta Dental, if the Contractholder fails (1) to give Delta Dental a
list of all Primary Enrollees, as required under Article 2, or (2) to permit
the inspection of the Contractholder’s records as called for under Article
2, or (3) to pay the amounts charged in the manner required in Article 3,
provided the Contractholder has been duly notified of such failure and at
least 15 days have elapsed since the date of notification.
(b) By either the Contractholder or Delta Dental, upon expiration of a Contract
Term.
9.2 If Delta Dental terminates this Contract under paragraph 9.1 (a), all Benefits
end and Delta Dental is released from all further obligations of this Contract,
effective the last day of the month in which written notice of termination is
given. The Contractholder will remain liable to Delta Dental for the full
amount of all Dentist’s Statements paid or otherwise discharged by Delta
Dental pursuant to this Contract, including claims discharged by Delta Dental
pursuant to this paragraph less amounts actually paid by the Contractholder to
Delta Dental.
9.3 A party choosing to terminate this Contract at the end of a Contract Term must
give at least 60 days written notice of termination to the other party. If Delta
Dental wants to change the administration or Benefits effective at the beginning of
the next Contract Term, Delta Dental will give at least 60 days advance written
notice of such changes to the Contractholder. Such an advance notice will have
the effect of a notice of termination as of the end of the Contract Term, unless
the Contractholder agrees to the new Contract provisions.
9.4 If the Contractholder notifies Delta Dental in writing of its intention to
terminate this Contract as of any date other than the end of the Contract Term,
such termination will be treated as termination under paragraph 9.1(a).
9.5 If this Contract is terminated for any cause, Delta Dental is not required to
predetermine services beyond the termination date or to pay for services provided
after such termination date, except for the completion of Single Procedures
begun while this Contract was in effect which are otherwise Benefits under this
Contract.
9.6 All Benefits end for all Enrollees, when this Contract ends, and Delta Dental
will not provide any right to continuation, renewal or reinstatement of Benefits to
such persons in that event.
9.7 Delta Dental must notify the Contractholder in writing of any termination by Delta
Dental under paragraph 9.1, and the Contractholder shall promptly mail a copy of
such notice to each Primary Enrollee and provide Delta Dental with proof of mailing
and the date thereof.
ARTICLE 10 - OPTIONAL CONTINUATION OF COVERAGE (COBRA)
10.1 The federal Consolidated Omnibus Budget Reconciliation Act (or COBRA,
pertaining to certain employers having 20 or more employees) and the California
Continuation Benefits Replacement Act (or Cal-COBRA, pertaining to employers
with two to 19 employees), both require that continued health care coverage be
made available to “Qualified Beneficiaries” who lose health care coverage under
the group plan as a result of a “Qualifying Event.” Enrollees may be entitled to
continue coverage under this plan, at the Qualified Beneficiary’s expense, if
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certain conditions are met. The period of continued coverage depends on the
Qualifying Event and whether the enrollee is covered under federal COBRA or Cal-
COBRA.
10.2 DEFINITIONS
The meaning of key terms used in this Article are shown below and apply to both
federal and Cal-COBRA.
Qualified Beneficiary means:
1. Enrollees who are enrolled in the Delta Dental plan on the day before the
Qualifying Event, or
2. A child who is born to or placed for adoption with the Primary Enrollee
during the period of continued coverage, provided such child is enrolled
within 30 days of birth or placement for adoption.
Qualifying Event means any of the following events which, except for the election
of this continued coverage, would result in a loss of coverage under the dental plan:
Event 1: The termination of employment (other than termination for gross
misconduct), or the reduction in work hours, by the Primary Enrollee’s
employer;
Event 2: The death of the Primary Enrollee;
Event 3: Divorce or legal separation from the Primary Enrollee;
Event 4: A Dependent child ceasing to meet the description of Dependent
child; Event 5: As to Dependents only, a Primary Enrollee becoming entitled
to Medicare.
10.3 PERIODS OF CONTINUED COVERAGE UNDER FEDERAL COBRA
Qualified Beneficiaries may continue coverage for 18 months following the
occurrence Qualifying Event 1.
This 18-month period can be extended for a total of 29 months, provided:
1. A determination is made under Title II or Title XVI of the Social Security Act
that an individual is disabled on the date of the Qualifying Event or became
disabled at any time during the first 60 days of continued coverage; and
2. Notice of the determination is given to the employer during the initial 18
months of continued coverage and within 60 days of the date of the
determination.
This period of coverage will end on the first of the month that begins more than
30 days after the date of the final determination that the disabled individual is no
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longer disabled. The Primary Enrollee must notify the employer/administrator
within 30 days of any such determination.
If, during the 18-month continuation period resulting from Qualifying Event 1, the
Primary Enrollee’s Dependents experience Qualifying Events 2, 3, 4 or 5, they
may choose to extend coverage for up to a total of 36 months (inclusive of the
period continued under Qualifying Event 1).
The Primary Enrollee’s Dependents may continue coverage for 36 months
following the month in which Qualifying Events 2, 3, 4 or 5 occur.
Under federal COBRA law only, when an employer has filed for bankruptcy under
Title II, United States Code, benefits may be substantially reduced or
eliminated for retired employees and their Dependents, or the surviving spouse
of a deceased retired employee. If this benefit reduction or elimination occurs
within one year before or one year after the filing, it is considered a Qualifying
Event. If the Primary Enrollee is a retiree, and has lost coverage because of this
Qualifying Event, he or she may choose to continue coverage until his or her
death. The Primary Enrollee’s Dependents who have lost coverage because of this
Qualifying Event may choose to continue coverage for up to 36 months following
the Primary Enrollee’s death.
10.4 An enrollee who has exhausted continuation of coverage under federal
COBRA may continue coverage for up to 36 months from the date the
enrollee’s continuation of coverage began, if the enrollee is entitled to less
than 36 months of continuation of coverage under federal COBRA.
10.5 PERIODS OF CONTINUED COVERAGE UNDER CAL-COBRA (groups of 2 - 19)
In the case of Cal-COBRA, Delta Dental will act as the administrator.
Notification and premium payments should be made directly to Delta Dental.
Notifications and payments should be delivered by first-class mail, certified mail,
or other reliable means of delivery.
Individuals who are eligible for coverage under the federal COBRA law are not
eligible for coverage under Cal-COBRA. The employer must notify Delta Dental
in writing within 30 days of the date when the employer becomes subject to
COBRA.
Qualified Beneficiaries may continue coverage for 36 months following the month
in which Qualifying Events 1, 2, 3, 4 or 5 occur.
If, during the 36-month continuation period resulting from Qualifying Event 1, the
Qualified Beneficiary is determined under Title II or Title XVI of the Social
Security Act to be disabled on the date of the Qualifying Event or became disabled
at any time during the first 60 days of continuation coverage; and notice of the
determination is given to the employer during the initial period of continuation
coverage and within 60 days of the date of the social security determination letter,
the Qualified Beneficiary may continue coverage for a total of 36 months following
the month in which Qualifying Event 1 occurs.
This period of coverage will end on the first of the month that begins more than
thirty (30) days after the date of the final determination that the disabled
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individual is no longer disabled. The Qualified Beneficiary must notify the
employer or administrator within 30 days of any such determination.
If, during the 36-month continuation period resulting from Qualifying Event 1, the
Qualified Beneficiary experiences Qualifying Events 2, 3, 4 or 5, he or she must
notify the employer within 60 days of the second qualifying event and has a
total of 36 months continuation coverage after the date of the date of the first
Qualifying Event.
Delta Dental shall notify the Primary Enrollee of the date his or her continued
coverage will terminate. This termination notification will be sent during the 180-
day period prior to the end of coverage.
10.6 ELECTION OF CONTINUED COVERAGE
The Primary Enrollee’s employer shall notify Delta Dental in writing within 30
days of Qualifying Event 1. A Qualified Beneficiary must notify his or her
employer or the administrator in writing within 60 days of Qualifying Events 2, 3,
4 or 5, or within 60 days of receiving the election notice from the employer.
Otherwise, the option of continued coverage will be lost.
Within 14 days of receiving notice of a Qualifying Event, the employer or the
administrator will provide a Qualified Beneficiary with the necessary benefits
information, monthly Premium charge, enrollment forms, and instructions to
allow election of continued coverage.
A Qualified Beneficiary will then have 60 days to give the employer or the
administrator written notice of the election to continue coverage. Failure to
provide this written notice of election to the employer or the administrator within
60 days will result in the loss of the right to continue coverage.
A Qualified Beneficiary has 45 days from the written election of continued
coverage to pay the initial Premium to his or her employer or the
administrator, which includes the Premium for each month since the loss of
coverage. Failure to pay the required Premium within the 45 days will result in
loss of the right to continued coverage, and any Premiums received after that date
will be returned to the Qualified Beneficiary.
10.7 CONTINUED COVERAGE BENEFITS
The Benefits under the continued coverage will be the same as those provided
to active employees and their Dependents who are still enrolled in the dental
plan. If the employer changes the coverage for active employees, the continued
coverage will change as well. Premiums will be adjusted to reflect the changes
made.
10.8 TERMINATION OF COVERAGE
A Qualified Beneficiary's coverage will terminate at the end of the month in which
any of the following events first occur:
1. The allowable number of consecutive months of continued coverage is
reached;
2. Failure to pay the required Premium in a timely manner;
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3. The employer ceases to provide any group dental plan to its employees;
4. The individual moves out of the plan’s service area;
5. The individual first obtains coverage for dental benefits, after the date
of the election of continued coverage, under another group health plan (as
an employee or Dependent) which does not contain or apply any exclusion
or limitation with respect to any pre-existing condition of such person, if
that pre-existing condition is covered under this plan;
6. Entitlement to Medicare.
The employer or Primary Enrollee shall notify Delta Dental or the administrator
within 30 days of the occurrence of any of the above events. Once continued
coverage terminates, it cannot be reinstated.
10.9 TERMINATION OF THE EMPLOYER’S DENTAL CONTRACT
If the dental contract between the employer and Delta Dental terminates prior to
the time that the continuation coverage would otherwise terminate, the
employer shall notify a Qualified Beneficiary (either 30 days prior to the
termination or when all Enrollees are notified whichever is later) of that person’s
ability to elect continuation coverage under the employer’s subsequent dental
plan, if any. The employer must notify the successor plan of the Qualified
Beneficiaries receiving continuation coverage so they may be notified of how to
continue coverage under that plan.
The continuation coverage will be provided only for the balance of the period
that a Qualified Beneficiary would have remained covered under the Delta Dental
plan had such plan with the former employer not terminated. The continuation
coverage will terminate if a Qualified Beneficiary fails to comply with the
requirements pertaining to enrollment in, and payment of Premium to the new
group benefit plan within 30 days of receiving notice of the termination of the
Delta Dental plan.
10.10 OPEN ENROLLMENT CHANGE OF COVERAGE
A Qualified Beneficiary may elect to change continuation coverage during any
subsequent open enrollment period, if the employer has contracted with
another plan to provide coverage to its active employees. The continuation
coverage under the other plan will be provided only for the balance of the
period that a Qualified Beneficiary would have remained covered under the
Delta Dental plan.
ARTICLE 11 - GENERAL PROVISIONS
11.1 No agent has authority to change this Contract or waive any of its provisions. No
change in this Contract is valid unless approved by an executive officer of Delta
Dental and included in this Contract by written amendment.
11.2 The provisions of this Contract are severable. If any portion of this Contract
or any Amendment of it is determined to be illegal, void or unenforceable by any
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arbitrator, court or other competent authority, all other provisions of this Contract
will remain in effect.
11.3 The parties agree that the laws of the State of California, where the Contract was
entered into and is to be performed, govern all questions regarding the
interpretation or enforcement of this Contract. Delta Dental is subject to the
requirements of Chapter 2.2 of Division 2 of the California Health and Safety Code
and Chapter 1 of Division 1 of Title 28 of the California Code of Regulations.
Any provisions required to be in the Contract by those laws bind Delta Dental
whether or not stated in this Contract.
11.4 Delta Dental and the Contractholder agree to consult each other to the extent
reasonably practical concerning all materials published or distributed relating to
this Contract. Neither Delta Dental nor the Contractholder will publish or
distribute materials that are contrary to the terms of this Contract.
11.5 Delta Dental and the Contractholder agree to permit and encourage the
professional relationship between Dentist and Enrollee to be maintained without
interference.
11.6 The Contractholder shall designate in writing a representative for purposes of
receiving notices from Delta Dental under this Contract. The Contractholder may
change its representative at any time on 30 days notice to Delta Dental. Any
notice required from Delta Dental to any Enrollee may be given to the
Contractholder’s representative, who shall disseminate such notice to the Enrollee
by the next regular communication but in no event later than 30 days after receipt
thereof.
11.7 The Contractholder shall comply in all respects with all applicable federal, state
and local laws and regulations relating to administrative simplification,
security and privacy of individually identifiable Enrollee information. The
Contractholder agrees that this Contract may be amended as necessary to comply
with federal regulations issued under the Health Insurance Portability and
Accountability Act of 1996 or to comply with any other enacted administrative
simplification, security or privacy laws or regulations.
11.8 Delta Dental is a member of the Delta Dental of California Holding Company
System (the “Enterprise”). There are service agreements between and among
the controlled member companies of the Enterprise. Delta Dental is a party to
some of these service agreements, and it is expected that the services, which
include certain ministerial tasks, will continue to be performed by these controlled
member companies, which operate under strict confidentially and/or business
associate agreements. All such service agreements have been approved by the
respective regulatory agencies.
11.9 Any notice under this Contract will be sufficient if given by either the
Contractholder or Delta Dental to the other or, in the case of employees of
the Contractholder, to its representative at the addresses below:
For the Contractholder: For Delta
Dental: 250 Hamilton Avenue, 1st Floor 100
First Street
Palo Alto, CA 94301 San Francisco, CA 94105
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Such notice will be effective 48 hours after deposit in the United States mail with
postage fully prepaid thereon.
CITY OF PALO ALTO
DELTA DENTAL GROUP NUMBER 02795
By:
Printed Name:
Title:
Date:
FOR:
DELTA DENTAL OF CALIFORNIA
By:
Belinda Martinez, Senior Vice
President Sales/Marketing
And By:
Kevin Jackson, Group Vice
President Underwriting &
Actuarial
DATE: January 29, 2015
APPENDIX A
ORTHODONTIC BENEFIT
RIDER
In consideration of the payments stated in Article 3 of the attached Contract, and subject
to all of the terms and conditions thereof, except as herein otherwise specified, Delta
Dental agrees to provide Orthodontic Benefits to eligible enrollees, as follows:
1. Orthodontics are the procedures performed by a licensed Dentist, involving
surgical repositioning of the teeth or jaws in whole or in part and/or the
use of an active orthodontic appliance and post-treatment retentive appliances
for treatment of mal- alignment of teeth and/or jaws which significantly
interferes with their function.
2. Delta Dental will pay or otherwise discharge 50% of the Dentist’s Usual,
Customary and Reasonable fees or the Fee Actually Charged, whichever is less, or
50% of the Delta Dental PPO Dentist’s Fees for Orthodontics.
3. The lifetime maximum amount payable by Delta Dental for all Orthodontics
whether paid for under the provisions of this Contract or under any prior dental
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care plan rendered to each Enrollee shall be $2,000.00 and the limitations on
maximum amounts payable during a calendar year, if any, specified in the attached
Contract, shall not apply to Orthodontics.
EXCLUSIONS AND LIMITATIONS: In addition to Exclusions and Limitations stated in
Article 4 to the attached Contract, the following exclusions and limitations shall
apply to Orthodontic Benefits:
(a) The obligation of Delta Dental to make payments for an Orthodontic
treatment plan begun prior to the Eligibility Date of the patient shall
commence with the first payment due following the patient’s Eligibility
Date. The above-mentioned maximum amount payable will apply fully to
this and subsequent payments.
(b) The obligation of Delta Dental to make payments for Orthodontics shall
terminate on the payment due next following the date the Dependent
loses eligibility or the employee loses eligibility, or upon the termination of
treatment for any reason prior to completion of the case, or upon
termination of the Contract, whichever shall occur first.
(c) Delta Dental will not make any payment for repair or replacement of an
Orthodontic appliance furnished, in whole or in part, under this plan.
(d) X-rays and extraction procedures incident to Orthodontics are not
covered by Orthodontic Benefits, but may be covered under the
provisions of the attached Contract, subject to all of the terms and
provisions thereof.
(e) Delta Dental will pay the applicable percentage of the Dentist’s fee for a
standard orthodontic treatment plan involving surgical and/or non-surgical
procedures. If the Enrollee selects specialized orthodontic appliances or
procedures, an allowance will be made for the cost of the standard
orthodontic treatment plan and the patient is responsible for the remainder
of the Dentist’s fee.
APPENDIX B
CODE ON DENTAL PROCEDURES AND
NOMENCLATURE
NOTE: All the listed procedures may not be benefits under the terms of your contract.
Refer to your contract for your specific benefits.
D0100 – D0999 DIAGNOSTIC
Clinical oral evaluations
D0120 Periodic oral evaluation – established patient
D0140 Limited oral evaluation — problem focused
DO145 Oral evaluation for a patient under three years of age and counseling
with primary caregiver D0150 Comprehensive oral evaluation — new or established patient
D0160 Detailed and extensive oral evaluation — problem focused, by report
D0170 Re-evaluation — limited, problem focused (established patient; not
post- operative visit)
D0180 Comprehensive periodontal evaluation — new or established
patient D0190 Screening of a patient D0191 Assessment of a patient
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Radiographs/diagnostic imaging (including
interpretation) D0210 Intraoral — complete series of
radiographic images D0220 Intraoral — periapical first
radiographic image
D0230 Intraoral — periapical each additional radiographic image
D0240 Intraoral — occlusal radiographic image
D0250 Extraoral — first radiographic image
D0260 Extraoral — each additional radiographic image
D0270 Bitewing — single radiographic image
D0272 Bitewings — two radiographic images
DO273 Bitewings - three radiographic images
D0274 Bitewings — four radiographic
images
D0277 Vertical bitewings — 7 to 8 radiographic images
D0290 Posterior — anterior or lateral skull and facial bone survey radiographic
image D0310 Sialography
D0320 Temporomandibular joint arthrogram, including injection
D0321 Other temporomandibular joint radiographic images, by
report D0322 Tomographic survey
D0330 Panoramic radiographic image
D0340 Cephalometric radiographic image
D0350 Oral/facial photographic images obtained intraorally or extraorally
Tests and examinations
D0415 Collection of microorganisms for culture and sensitivity
D0416 Viral culture
D0421 Genetic test for susceptibility to oral diseases
D0425 Caries susceptibility tests
D0431 Adjunctive pre-diagnostic test that aids in detection of mucosal abnormalities
including premalignant and malignant lesions, not to include cytology
or biopsy procedures D0460 Pulp vitality tests
D0470 Diagnostic casts
Oral pathology laboratory
D0472 Accession of tissue, gross examination, preparation and transmission
of written report
D0473 Accession of tissue, gross and microscopic examination, preparation
and transmission of written report
D0474 Accession of tissue, gross and microscopic examination, including
assessment of surgical margins for presence of disease, preparation and
transmission of written report D0475 Decalcification procedure
D0476 Special stains for microorganisms
D0477 Special stains, not for
microorganisms D0478
Immunohistochemical stains D0479 Tissue in-situ hybridization, including interpretation
D0480 Accession of exfoliative cytologic smears, microscopic
examination, preparation and transmission of written report
D0481 Electron microscopy -
diagnostic D0482 Direct
immunofluorescence D0483 Indirect
immunofluorescence D0484 Consultation on slides prepared elsewhere
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D0485 Consultation, including preparation of slides from biopsy material supplied
by referring source
D0486 Accession of brush biopsy sample, microscopic examination, preparation
and transmission of written report
D0502 Other oral pathology procedures, by report
D0601 Caries risk assessment and documentation, with a finding of low risk
D0602 Caries risk assessment and documentation, with a finding of moderate
risk D0603 Caries risk assessment and documentation, with a finding of high
risk D0999 Unspecified diagnostic procedure, by report
D1000 – D1999 PREVENTIVE
Dental prophylaxis
D1110 Prophylaxis — adult
D1120 Prophylaxis — child through age 13
Topical fluoride treatment (office procedure)
D1206 Topical application of fluoride varnish
D1208 Topical application of fluoride - excluding varnish
Other preventive services
D1310 Nutritional counseling for control of dental disease
D1320 Tobacco counseling for the control and prevention of oral disease
D1330 Oral hygiene instructions
D1351 Sealant — per tooth
D1352 Preventive resin restoration in a moderate to high caries risk patient
– permanent tooth
Space maintenance (passive appliances)
D1510 Space maintainer — fixed — unilateral
D1515 Space maintainer — fixed — bilateral
D1520 Space maintainer — removable —
unilateral D1525 Space maintainer — removable
— bilateral D1550 Re-cement or re-bond space
maintainer D1555 Removal of fixed space
maintainer
D2000 – D2999 RESTORATIVE
Amalgam restorations (including polishing)
D2140 Amalgam — one surface, primary or permanent
D2150 Amalgam — two surfaces, primary or permanent
D2160 Amalgam — three surfaces, primary or permanent
D2161 Amalgam — four or more surfaces, primary or permanent
Resin-based composite restorations-direct
D2330 Resin-based composite — one surface, anterior
D2331 Resin-based composite — two surfaces, anterior
D2332 Resin-based composite — three surfaces, anterior
D2335 Resin-based composite — four or more surfaces or involving incisal
angle (anterior)
D2390 Resin-based composite crown, anterior
D2391 Resin-based composite — one surface, posterior
D2392 Resin-based composite — two surfaces, posterior
D2393 Resin-based composite — three surfaces,
posterior
D2394 Resin-based composite — four or more surfaces, posterior
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Gold foil restorations
D2410 Gold foil — one surface
D2420 Gold foil — two surfaces
D2430 Gold foil — three surfaces
Inlay/onlay restorations
D2510 Inlay — metallic — one surface
D2520 Inlay — metallic — two surfaces
D2530 Inlay — metallic — three or more
surfaces D2542 Onlay — metallic — two
surfaces
D2543 Onlay — metallic — three surfaces
D2544 Onlay — metallic — four or more surfaces
D2610 Inlay — porcelain/ceramic — one surface
D2620 Inlay — porcelain/ceramic — two
surfaces
D2630 Inlay — porcelain/ceramic — three or more surfaces
D2642 Onlay — porcelain/ceramic — two surfaces
D2643 Onlay — porcelain/ceramic — three surfaces
D2644 Onlay — porcelain/ceramic — four or more
surfaces D2650 Inlay — resin-based composite — one
surface D2651 Inlay — resin-based composite — two
surfaces
D2652 Inlay — resin-based composite — three or more
surfaces D2662 Onlay — resin-based composite — two
surfaces
D2663 Onlay — resin-based composite — three surfaces
D2664 Onlay — resin-based composite — four or more surfaces
Crowns — single restorations only
D2710 Crown — resin-based composite (indirect)
D2712 Crown — 3/4 resin-based composite
(indirect) D2720 Crown — resin with high noble
metal
D2721 Crown — resin with predominantly base metal
D2722 Crown — resin with noble metal
D2740 Crown — porcelain/ceramic substrate
D2750 Crown — porcelain fused to high noble metal
D2751 Crown — porcelain fused to predominantly base metal
D2752 Crown — porcelain fused to noble metal
D2780 Crown — 3/4 cast high noble metal
D2781 Crown — 3/4 cast predominantly base
metal D2782 Crown — 3/4 cast noble metal
D2783 Crown — 3/4 porcelain/ceramic
D2790 Crown — full cast high noble
metal
D2791 Crown — full cast predominantly base metal
D2792 Crown — full cast noble metal
D2794 Crown — titanium
D2799 Provisional crown- further treatment or completion of a diagnosis
necessary prior to final impression
Other restorative services
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D2910 Re-cement or re-bond inlay, onlay, veneer or partial coverage restorations
D2915 Re-cement or re-bond indirectly fabricated or prefabricated post and core
D2920 Re-cement or re-bond crown
D2921 Reattachment of tooth fragment, incisal edge or cusp
D2929 Prefabricated porcelain/ceramic crown – primary tooth
D2930 Prefabricated stainless steel crown — primary tooth
D2931 Prefabricated stainless steel crown — permanent tooth
D2932 Prefabricated resin crown
D2933 Prefabricated stainless steel crown with resin window
D2934 Prefabricated esthetic coated stainless steel crown — primary
tooth D2940 Sedative filling
D2941 Interim therapeutic restoration – primary
dentition D2950 Core buildup, including any pins when
required D2951 Pin retention — per tooth, in addition to
restoration
D2952 Post and core in addition to crown, indirectly fabricated
D2953 Each additional indirectly fabricated post — same tooth
D2954 Prefabricated post and core in addition to crown
D2955 Post removal
D2957 Each additional prefabricated post — same
tooth D2960 Labial veneer (resin laminate) —
chairside D2961 Labial veneer (resin laminate) —
laboratory D2962 Labial veneer (porcelain laminate)
— laboratory D2970 Temporary crown (fractured
tooth)
D2971 Additional procedures to construct new crown under existing partial
denture framework
D2975 Coping
D2980 Crown repair, necessitated by restorative material failure
D2999 Unspecified restorative procedure, by report
D3000 – D3999 ENDODONTICS
Pulp capping
D3110 Pulp cap — direct (excluding final restoration)
D3120 Pulp cap — indirect (excluding final restoration)
Pulpotomy
D3220 Therapeutic pulpotomy (excluding final restoration) — removal of pulp
coronal to the dentinocemental junction and application of medicament
D3221 Pulpal debridement, primary and permanent teeth
D3222 Partial pulpotomy for apexogenesis-permanent tooth with incomplete
root development
D3230 Pulpal therapy (resorbable filling) — anterior, primary tooth (excluding
final restoration)
D3240 Pulpal therapy (resorbable filling) — posterior, primary tooth (excluding
final restoration)
Endodontic therapy on primary teeth (including treatment plan, clinical
procedures and follow-up care)
D3310 Endodontic therapy, anterior tooth (excluding final restoration)
D3320 Endodontic therapy, bicuspid tooth (excluding final restoration)
D3330 Endodontic therapy, molar tooth (excluding final restoration)
D3331 Treatment of root canal obstruction; non-surgical access
D3332 Incomplete endodontic therapy; inoperable, unrestorable or fractured tooth
D3333 Internal root repair of perforation defects
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Endodontic retreatment
D3346 Retreatment of previous root canal therapy — anterior
D3347 Retreatment of previous root canal therapy — bicuspid
D3348 Retreatment of previous root canal therapy — molar
Apexification/recalcification procedures
D3351 Apexification/recalcification — initial visit (apical closure/calcific repair
of perforations, root resorption, etc.)
D3352 Apexification/recalcification — interim medication replacement (apical
closure/calcific repair of perforations, root resorption, pulpal space
disinfection, etc.)
D3353 Apexification/recalcification — final visit (includes completed root
canal therapy — apical closure/calcific repair of perforations, root
resorption, etc.)
Apicoectomy/periradicular services
D3410 Apicoectomy — anterior
D3421 Apicoectomy — bicuspid (first
root) D3425 Apicoectomy — molar (first
root) D3426 Apicoectomy (each
additional root)
D3427 Periadicular surgery without apicoectomy
D3430 Retrograde filling — per root
D3450 Root amputation — per root
D3460 Endodontic endosseous implant
D3470 Intentional reimplantation (including necessary splinting)
Other endodontic procedures
D3910 Surgical procedure for isolation of tooth with rubber dam
D3920 Hemisection (including any root removal), not including root canal therapy
D3950 Canal preparation and fitting of preformed dowel or post
D3999 Unspecified endodontic procedure, by report
D4000 – D4999 PERIODONTICS
Surgical services (including usual post-operative care)
D4210 Gingivectomy or gingivoplasty — four or more contiguous teeth or
bounded teeth spaces per quadrant
D4211 Gingivectomy or gingivoplasty — one to three contiguous teeth or
bounded teeth spaces per quadrant
D4212 Gingivectomy or gingivoplasty – to allow access for restorative procedure,
per tooth
D4230 Anatomical crown exposure – four or more contiguous teeth per quadrant
D4231 Anatomical crown exposure – one to three teeth per quadrant
D4240 Gingival flap procedure, including root planing — four or more
contiguous teeth or bounded teeth spaces per quadrant
D4241 Gingival flap procedure, including root planing — one to three
contiguous teeth or bounded teeth spaces per quadrant
D4245 Apically positioned flap
D4249 Clinical crown lengthening — hard tissue
D4260 Osseous surgery (including elevation of a full thickness flap and closure)
— four or more contiguous teeth or tooth bounded spaces per quadrant
D4261 Osseous surgery (including elevation of a full thickness flap and closure)
— one to three contiguous teeth or tooth bounded spaces per quadrant
D4263 Bone replacement graft — first site in quadrant
D4264 Bone replacement graft — each additional site in quadrant
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D4265 Biologic materials to aid in soft and osseous tissue regeneration
D4266 Guided tissue regeneration — resorbable barrier, per site
D4267 Guided tissue regeneration — nonresorbable barrier, per site
(includes membrane removal)
D4268 Surgical revision procedure, per tooth
D4270 Pedicle soft tissue graft procedure
D4273 Subepithelial connective tissue graft procedures, per tooth
D4274 Distal or proximal wedge procedure (when not performed in conjunction
with surgical procedures in the same anatomical area)
D4275 Soft tissue allograft
D4276 Combined connective tissue and double pedicle graft, per tooth
D4277 Free soft tissue graft procedure (including donor site surgery), first tooth
or edentulous tooth position in graft
D4278 Free soft tissue graft procedure (including donor site surgery), each
additional contiguous tooth or edentulous tooth position in same graft
site
Non-surgical periodontal service
D4320 Provisional splinting —
intracoronal D4321 Provisional splinting
— extracoronal
D4341 Periodontal scaling and root planing — four or more teeth per quadrant
D4342 Periodontal scaling and root planing, — one to three teeth, per quadrant
D4355 Full mouth debridement to enable comprehensive evaluation and
diagnosis
D4381 Localized delivery of antimicrobial agents via controlled release vehicle
into diseased crevicular tissue, per tooth
Other periodontal services
D4910 Periodontal maintenance
D4920 Unscheduled dressing change (by someone other than treating dentist or
their staff)
D4999 Unspecified periodontal procedure, by report
D5000 – D5899 PROSTHODONTICS (REMOVABLE)
Complete dentures (including routine post-delivery care)
D5110 Complete denture — maxillary
D5120 Complete denture — mandibular
D5130 Immediate denture — maxillary
D5140 Immediate denture — mandibular
Partial dentures (including routine post-delivery care)
D5211 Maxillary partial denture — resin base (including any conventional
clasps, rests and teeth)
D5212 Mandibular partial denture — resin base (including any conventional
clasps, rests and teeth)
D5213 Maxillary partial denture — cast metal framework with resin denture
bases (including any conventional clasps, rests and teeth)
D5214 Mandibular partial denture — cast metal framework with resin denture
bases (including any conventional clasps, rests and teeth)
D5225 Maxillary partial denture — flexible base (including any clasps, rests
and teeth)
D5226 Mandibular partial denture — flexible base (including any clasps, rests
and teeth)
D5281 Removable unilateral partial denture — one piece cast metal (including
clasps and teeth)
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Adjustments to dentures
D5410 Adjust complete denture — maxillary
D5411 Adjust complete denture —
mandibular D5421 Adjust partial denture —
maxillary D5422 Adjust partial denture —
mandibular
Repairs to complete dentures
D5510 Repair broken complete denture base
D5520 Replace missing or broken teeth — complete denture (each tooth)
Repairs to partial dentures
D5610 Repair resin denture base
D5620 Repair cast framework
D5630 Repair or replace broken clasp
D5640 Replace broken teeth — per tooth
D5650 Add tooth to existing partial
denture D5660 Add clasp to existing
partial denture
D5670 Replace all teeth and acrylic on cast metal framework (maxillary)
D5671 Replace all teeth and acrylic on cast metal framework
(mandibular)
Denture rebase procedures
D5710 Rebase complete maxillary denture
D5711 Rebase complete mandibular
denture D5720 Rebase maxillary partial
denture D5721 Rebase mandibular partial
denture
Denture reline procedures
D5730 Reline complete maxillary denture (chairside)
D5731 Reline complete mandibular denture
(chairside) D5740 Reline maxillary partial denture
(chairside) D5741 Reline mandibular partial denture
(chairside) D5750 Reline complete maxillary denture
(laboratory) D5751 Reline complete mandibular
denture (laboratory) D5760 Reline maxillary partial
denture (laboratory) D5761 Reline mandibular partial
denture (laboratory)
Interim prosthesis
D5810 Interim complete denture (maxillary)
D5811 Interim complete denture
(mandibular) D5820 Interim partial denture
(maxillary) D5821 Interim partial denture
(mandibular)
Other removable prosthetic services
D5850 Tissue conditioning — maxillary
D5851 Tissue conditioning — mandibular
D5862 Precision attachment, by report
D5863 Overdenture – complete maxillary
D5864 Overdenture – partial maxillary
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D5865 Overdenture – complete
mandibular D5866 Overdenture – partial
mandibular
D5867 Replacement of replaceable part of semi-precision or precision
attachment (male or female component)
D5875 Modification of removable prosthesis following implant surgery
D5899 Unspecified removable prosthodontic procedure, by report
D5900 – D5999 MAXILLOFACIAL PROSTHETICS
D5911 Facial moulage (sectional)
D5912 Facial moulage (complete)
D5913 Nasal prosthesis
D5914 Auricular prosthesis
D5915 Orbital prosthesis
D5916 Ocular prosthesis
D5919 Facial prosthesis
D5922 Nasal septal prosthesis
D5923 Ocular prosthesis, interim
D5924 Cranial prosthesis
D5925 Facial augmentation implant
prosthesis D5926 Nasal prosthesis,
replacement
D5927 Auricular prosthesis, replacement
D5928 Orbital prosthesis, replacement
D5929 Facial prosthesis, replacement
D5931 Obturator prosthesis, surgical
D5932 Obturator prosthesis, definitive
D5933 Obturator prosthesis,
modification
D5934 Mandibular resection prosthesis with guide flange
D5935 Mandibular resection prosthesis without guide
flange D5936 Obturator prosthesis, interim
D5937 Trismus appliance (not for TMD treatment)
D5951 Feeding aid
D5952 Speech aid prosthesis, pediatric
D5953 Speech aid prosthesis, adult
D5954 Palatal augmentation prosthesis
D5955 Palatal lift prosthesis, definitive
D5958 Palatal lift prosthesis, interim
D5959 Palatal lift prosthesis,
modification D5960 Speech aid
prosthesis, modification D5982 Surgical
stent
D5983 Radiation carrier
D5984 Radiation shield
D5985 Radiation cone locator
D5986 Fluoride gel carrier
D5987 Commissure splint
D5988 Surgical splint
D5999 Unspecified maxillofacial prosthesis, by report
D6000 – D6199 IMPLANT SERVICES
D6010 Surgical placement of implant body: endosteal implant
D6012 Surgical placement of interim implant body for transitional
prosthesis: endosteal implant
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D6013 Surgical placement of mini implant
D6040 Surgical placement: eposteal implant
D6050 Surgical placement: transosteal
implant
Implant supported prosthetics
D6055 Dental implant supported connecting bar
D6056 Prefabricated abutment — includes modification and placement
D6057 Custom fabricated abutment — includes placement
D6058 Abutment supported porcelain/ceramic crown
D6059 Abutment supported porcelain fused to metal crown (high noble metal)
D6060 Abutment supported porcelain fused to metal crown (predominantly
base metal)
D6061 Abutment supported porcelain fused to metal crown (noble metal)
D6062 Abutment supported cast metal crown (high noble metal)
D6063 Abutment supported cast metal crown (predominantly base metal)
D6064 Abutment supported cast metal crown (noble metal)
D6065 Implant supported porcelain/ceramic crown
D6066 Implant supported porcelain fused to metal crown (titanium, titanium
alloy, high noble metal)
D6067 Implant supported metal crown (titanium, titanium alloy, high noble metal)
D6068 Abutment supported retainer for porcelain/ceramic FPD
D6069 Abutment supported retainer for porcelain fused to metal FPD (high
noble metal)
D6070 Abutment supported retainer for porcelain fused to metal FPD
(predominantly base metal)
D6071 Abutment supported retainer for porcelain fused to metal FPD (noble metal)
D6072 Abutment supported retainer for cast metal FPD (high noble metal)
D6073 Abutment supported retainer for cast metal FPD (predominantly base metal)
D6074 Abutment supported retainer for cast metal FPD (noble metal)
D6075 Implant supported retainer for ceramic FPD
D6076 Implant supported retainer for porcelain fused to metal FPD
(titanium, titanium alloy, or high noble metal)
D6077 Implant supported retainer for cast metal FPD (titanium, titanium alloy,
or high noble metal)
Other implant services
D6080 Implant maintenance procedures, including removal of prosthesis,
cleansing of prosthesis and abutments and reinsertion of prosthesis
D6090 Repair implant supported prosthesis, by report
D6091 Replacement of semi-precision or precision attachment (male or
female component) of implant/abutment supported prosthesis, per
attachment
D6092 Re-cement or re-bond implant/abutment supported crown
D6094 Abutment supported crown — (titanium)
D6095 Repair implant abutment, by
report D6100 Implant removal, by report
D6101 Debridement of a periimplant defect or defects surrounding a single implant,
and surface cleaning of the exposed implant surfaces, including flap entry
and closure
D6102 Debridement and osseous contouring of a periimplant defect or defects
surrounding a single implant, and surface cleaning includes surface
cleaning of the exposed implant surfaces, including flap entry and closure
D6110 Implant/abutment supported removable denture for edentulous arch
- maxillary
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D6111 Implant/ abutment supported removable denture for edentulous arch
- mandibular
D6112 Implant/abutment supported removable denture for partially edentulous
arch- maxillary
D6113 Implant/abutment supported removable denture for partially edentulous
arch - mandibular
D6114 Implant/ abutment supported fixed denture for edentulous arch - maxillary
D6115 Implant / abutment supported fixed denture for edentulous arch - mandibular
D6116 Implant / abutment supported fixed denture for partially edentulous arch
-
maxillary
D6117 Implant / abutment supported fixed denture for partially edentulous arch
- mandibular
D6190 Radiographic/surgical implant index, by Report
D6093 Re-cement or re-bond implant/abutment supported fixed partial denture
D6194 Abutment supported retainer crown for FPD — (titanium)
D6199 Unspecified implant procedure, by report
D6200 – D6999 PROSTHODONTICS, FIXED
(Each retainer and each pontic constitutes a unit in a fixed partial
denture) Fixed partial denture pontics
D6205 Pontic — indirect resin based composite
D6210 Pontic — cast high noble metal
D6211 Pontic — cast predominantly base metal
D6212 Pontic — cast noble metal
D6214 Pontic — titanium
D6240 Pontic — porcelain fused to high noble metal
D6241 Pontic — porcelain fused to predominantly base metal
D6242 Pontic — porcelain fused to noble metal
D6245 Pontic — porcelain/ceramic
D6250 Pontic — resin with high noble metal
D6251 Pontic — resin with predominantly base metal
D6252 Pontic — resin with noble metal
D6253 Provisional pontic – further treatment or completion of a diagnosis
necessary prior to impression
Fixed partial denture retainers — inlays/ onlays
D6545 Retainer — cast metal for resin bonded fixed prosthesis
D6548 Retainer — porcelain/ceramic for resin bonded fixed prosthesis
D6549 Resin retainer - for resin bonded fixed prosthesis D6600 Inlay — porcelain/ceramic, two surfaces
D6601 Inlay — porcelain/ceramic, three or more
surfaces D6602 Inlay — cast high metal, two surfaces
D6603 Inlay — cast high metal, three or more surfaces
D6604 Inlay — cast predominantly base metal, two
surfaces
D6605 Inlay — cast predominantly base metal, three or more surfaces
D6606 Inlay — cast noble metal, two surfaces
D6607 Inlay — cast noble metal, three or more surfaces
D6608 Onlay — porcelain/ceramic, two surfaces
D6609 Onlay — porcelain/ceramic, three or more surfaces
D6610 Onlay — cast high noble metal, two surfaces
D6611 Onlay — cast high noble metal, three or more surfaces
D6612 Onlay — cast predominantly base metal, two surfaces
D6613 Onlay — cast predominantly base metal, three or more
surfaces D6614 Onlay — cast noble metal, two surfaces
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D6615 Onlay — cast noble metal, three or more surfaces
D6624 Inlay — titanium
D6634 Onlay — titanium
Fixed partial denture retainers — crowns
D6710 Crown — indirect resin based composite
D6720 Crown — resin with high noble metal
D6721 Crown — resin with predominantly base metal
D6722 Crown — resin with noble metal
D6740 Crown — porcelain/ceramic
D6750 Crown — porcelain fused to high noble metal
D6751 Crown — porcelain fused to predominantly base metal
D6752 Crown — porcelain fused to noble metal
D6780 Crown — 3/4 cast high noble metal
D6781 Crown — 3/4 cast predominantly base
metal D6782 Crown — 3/4 cast noble metal
D6783 Crown — 3/4 porcelain/ceramic
D6790 Crown — full cast high noble
metal
D6791 Crown — full cast predominantly base metal
D6792 Crown — full cast noble metal
D6793 Provisional retainer crown – further treatment of completion or a
diagnosis necessary prior to final impression
D6794 Crown — titanium
Other fixed partial denture services
D6920 Connector bar
D6930 Re-cement or re-bond fixed partial
denture D6940 Stress breaker
D6950 Precision attachment
D6980 Fixed partial denture repair necessitated by restorative material
D6985 Pediatric partial denture, fixed
D6999 Unspecified, fixed prosthodontic procedure, by report
D7000 – D7999 ORAL AND MAXILLOFACIAL SURGERY
Extractions (includes local anesthesia, suturing, if needed, and
routine postoperative care)
D7111 Extraction, coronal remnants — deciduous tooth
D7140 Extraction, erupted tooth or exposed root (elevation and/or forceps removal)
Surgical extractions (includes local anesthesia, suturing, if needed, and
routine postoperative care)
D7210 Surgical removal of erupted tooth requiring removal of bone and/or
sectioning of tooth, and including elevation of mucoperiosteal flap if
indicated
D7220 Removal of impacted tooth — soft tissue
D7230 Removal of impacted tooth — partially bony
D7240 Removal of impacted tooth — completely
bony
D7241 Removal of impacted tooth — completely bony, with unusual
surgical complications D7250 Surgical removal of residual tooth roots (cutting procedure)
Other surgical procedures
D7260 Oroantral fistual closure
D7261 Primary closure of a sinus perforation
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D7270 Tooth reimplantation and/or stabilization of accidentally evulsed or
displaced tooth
D7272 Tooth transplantation (includes reimplantation from one site to another
and splinting and/or stabilization)
D7280 Surgical access of an unerupted tooth
D7282 Mobilization of erupted or malpositioned tooth to aid
eruption D7283 Placement of device to facilitate eruption of
impacted tooth D7285 Incisional biopsy of oral tissue — hard
(bone, tooth)
D7286 Incisional biopsy of oral tissue — soft
D7287 Exfoliative cytological sample collection
D7288 Brush biopsy — transepithelial sample collection
D7290 Surgical repositioning of teeth
D7291 Transseptal fiberotomy/supra crestal fiberotomy, by report
D7292 Placement of temporary anchorage device [screw retained plate]
requiring surgical flap; includes device removal
D7293 Placement of temporary anchorage device requiring surgical flap;
includes device removal
D7294 Placement of temporary anchorage device without surgical flap;
includes device removal
Alveoloplasty — surgical preparation of ridge for dentures
D7310 Alveoloplasty in conjunction with extractions — four or more teeth or
tooth spaces, per quadrant
D7311 Alveoloplasty in conjunction with extractions — one to three teeth or
tooth spaces, per quadrant
D7320 Alveoloplasty not in conjunction with extractions — four or more teeth
or tooth spaces, per quadrant
D7321 Alveoloplasty not in conjunction with extractions — one to three teeth or
tooth spaces, per quadrant
Vestibuloplasty
D7340 Vestibuloplasty — ridge extension (secondary epithelialization)
D7350 Vestibuloplasty — ridge extension (including soft tissue grafts, muscle
reattachment, revision of soft tissue attachment and management of
hypertrophied and hyperplastic tissue)
Surgical excision of of soft tissue lesions
D7410 Excision of benign lesion up to 1.25 cm
D7411 Excision of benign lesion greater than 1.25
cm D7412 Excision of benign lesion, complicated
D7413 Excision of malignant lesion up to 1.25 cm
D7414 Excision of malignant lesion greater than 1.25
cm D7415 Excision of malignant lesion complicated
D7465 Destruction of lesion(s) by physical or chemical method, by report
Surgical excision of intra-osseous lesions
D7440 Excision of malignant tumor — lesion diameter up to 1.25 cm
D7441 Excision of malignant tumor — lesion diameter greater than 1.25
cm
D7450 Removal of benign odontogenic cyst or tumor — lesion diameter up to
1.25 cm
D7451 Removal of benign odontogenic cyst or tumor — lesion diameter greater than
1.25 cm
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D7460 Removal of benign nonodontogenic cyst or tumor — lesion diameter up
to
1.25 cm
D7461 Removal of benign nonodontogenic cyst or tumor — lesion diameter
greater than 1.25 cm
Excision of bone tissue
D7471 Removal of lateral exostosis (maxilla or mandible)
D7472 Removal of torus palatinus
D7473 Removal of torus manibularis
D7485 Surgical reduction of osseous tuberosity
D7490 Radical resection of maxilla or mandible
Surgical incision
D7510 Incision and drainage of abscess — intraoral soft tissue
D7511 Incision and drainage of abscess — intraoral soft tissue —
complicated (includes drainage of multiple fascial spaces)
D7520 Incision and drainage of abscess — extraoral soft tissue
D7521 Incision and drainage of abscess — extraoral soft tissue —
complicated (includes drainage of multiple fascial spaces)
D7530 Removal of foreign body from mucosa, skin or subcutaneous alveolar
tissue D7540 Removal of reaction-producing foreign bodies, musculoskeletal
system D7550 Partial ostectomy/sequestrectomy for removal of non-vital bone
D7560 Maxillary sinusotomy for removal of tooth fragment or foreign body
Treatment of fractures — simple
D7610 Maxilla — open reduction (teeth immobilized, if present)
D7620 Maxilla — closed reduction (teeth immobilized, if present)
D7630 Mandible — open reduction (teeth immobilized, if present)
D7640 Mandible — closed reduction (teeth immobilized, if present)
D7650 Malar and/or zygomatic arch — open reduction
D7660 Malar and/or zygomatic arch — closed reduction
D7670 Alveolus — closed reduction, may include stabilization of teeth
D7671 Alveolus — open reduction, may include stabilization of teeth
D7680 Facial bones — complicated reduction with fixation and multiple
surgical approaches
Treatment of fractures — compound
D7710 Maxilla — open reduction
D7720 Maxilla — closed reduction
D7730 Mandible — open reduction
D7740 Mandible — closed
reduction
D7750 Malar and/or zygomatic arch — open reduction
D7760 Malar and/or zygomatic arch — closed reduction
D7770 Alveolus — open reduction splinting stabilization of
teeth D7771 Alveolus — closed reduction stabilization of
teeth
D7780 Facial bones — complicated reduction with fixation and multiple
surgical approaches
Reduction of dislocation and management of other temporomandibular
joint dysfunctions
D7810 Open reduction of dislocation
D7820 Closed reduction of dislocation
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D7830 Manipulation under anesthesia
D7840 Condylectomy
D7850 Surgical discectomy, with/without implant
D7852 Disc repair
D7854 Synovectomy
D7856 Myotomy
D7858 Joint reconstruction
D7860 Arthrotomy
D7865 Arthroplasty
D7870 Arthrocentesis
D7871 Non-arthroscopic lysis and lavage
D7872 Arthroscopy — diagnosis, with or without biopsy
D7873 Arthroscopy — surgical: lavage and lysis of
adhesions
D7874 Arthroscopy — surgical: disc repositioning and stabilization
D7875 Arthroscopy — surgical: synovectomy
D7876 Arthroscopy — surgical: discectomy
D7877 Arthroscopy — surgical: debridement
D7880 Occlusal orthotic device, by report
D7899 Unspecified TMD therapy, by report
Repair of traumatic wounds
D7910 Suture of recent small wounds up to 5 cm
Complicated suturing (reconstruction requiring delicate handling of tissues
and wide undermining for meticulous closure)
D7911 Complicated suture — up to 5 cm D7912
Complicated suture — greater than 5 cm
Other repair procedures
D7920 Skin graft (identify defect covered, location and type of graft)
D7940 Osteoplasty — for orthognathic deformities D7941 Osteotomy — mandibular rami
D7943 Osteotomy — mandibular rami with bone graft; includes obtaining the graft
D7944 Osteotomy — segmented or subapical
D7945 Osteotomy — body of
mandible D7946 LeFort I (maxilla —
total) D7947 LeFort I (maxilla —
segmented) D7948 LeFort II or LeFort III (osteoplasty of
facial bones for midface hypoplasia or retrusion) — without bone graft
D7949 LeFort II or LeFort III — with bone graft
D7950 Osseous, osteoperiosteal, or cartilage graft of the mandible or maxilla
- autogenous or nonautogenous, by report
D7951 Sinus augmentation with bone or bone substitutes via a lateral open
approach D7952 Sinus augmentation via a vertical approach
D7953 Bone replacement graft for ridge preservation — per
site D7955 Repair of maxillofacial soft and/or hard tissue
defect
D7960 Frenulectomy – also known as frenectomy or frenotomy — separate
procedure not incidental to another procedure D7963 Frenuloplasty
D7970 Excision of hyperplastic tissue — per arch
D7971 Excision of pericoronal gingiva
D7972 Surgical reduction of fibrous
tuberosity D7980 Sialolithotomy
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D7981 Excision of salivary gland, by report
D7982 Sialodochoplasty
D7983 Closure of salivary fistula
D7990 Emergency tracheotomy
D7991 Coronoidectomy
D7995 Synthetic graft — mandible or facial bones, by report
D7996 Implant — mandible for augmentation purposes (excluding alveolar ridge),
by report
D7997 Appliance removal (not by dentist who placed appliance), includes removal
of archbar
D7998 Intraoral placement of a fixation device not in conjunction with a fracture
D7999 Unspecified oral surgery procedure, by report
D8000 – D8999 ORTHODONTICS
Limited orthodontic treatment
D8010 Limited orthodontic treatment of the primary dentition
D8020 Limited orthodontic treatment of the transitional dentition
D8030 Limited orthodontic treatment of the adolescent dentition
D8040 Limited orthodontic treatment of the adult dentition
Interceptive orthodontic treatment
D8050 Interceptive orthodontic treatment of the primary dentition
D8060 Interceptive orthodontic treatment of the transitional dentition
Comprehensive orthodontic treatment
D8070 Comprehensive orthodontic treatment of the transitional dentition
D8080 Comprehensive orthodontic treatment of the adolescent dentition
D8090 Comprehensive orthodontic treatment of the adult dentition
Minor treatment to control harmful habits
D8210 Removable appliance therapy
D8220 Fixed appliance therapy
Other orthodontic services
D8660 Pre-orthodontic treatment examination to monitor growth and development
D8670 Periodic orthodontic treatment visit
D8680 Orthodontic retention (removal of appliances, construction and placement
of retainer[s])
D8690 Orthodontic treatment (alternative billing to a contract fee)
D8691 Repair of orthodontic appliance
D8692 Replacement of lost or broken retainer
D8693 Re-bond or re-cement fixed retainer
D8694 Repair of fixed retainers, includes reattachment
D8999 Unspecified orthodontic procedure, by report
D9000 – D9999 ADJUNCTIVE GENERAL SERVICES
Unclassified treatment
D9110 Palliative (emergency) treatment of dental pain — minor procedure
D9120 Fixed partial denture sectioning
Anesthesia
D9210 Local anesthesia not in conjunction with operative or surgical procedures
D9211 Regional block anesthesia
D9212 Trigeminal division block
anesthesia D9215 Local anesthesia
D9220 Deep sedation/general anesthesia — first 30 minutes
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D9221 Deep sedation/general anesthesia — each additional 15
minutes D9230 Analgesia, anxiolysis, inhalation of nitrous oxide
D9241 Intravenous moderate (conscious) sedation/analgesia – first 30 minutes
D9242 Intravenous moderate (conscious) sedation/analgesia – each additional
15
minutes
D9248 Non-intravenous moderate (conscious) sedation
Professional consultation
D9310 Consultation (diagnostic service provided by dentist or physician other
than requesting dentist or physician
Professional visits
D9410 House/extended care facility call
D9420 Hospital call
D9430 Office visit for observation (during regularly scheduled hours) — no
other services performed
D9440 Office visit — after regularly scheduled hours
D9450 Case presentation, detailed and extensive treatment planning
Drugs
D9610 Therapeutic parenteral drug, single administration
D9612 Therapeutic parenteral drugs, two or more administrations,
different medications
D9630 Other drugs and/or medicaments, by report
Miscellaneous services
D9910 Application of desensitizing medicament
D9911 Application of desensitizing resin for cervical and/or root surface, per tooth
D9920 Behavior management, by report
D9930 Treatment of complications (post-surgical) — unusual circumstances,
by report
D9940 Occlusal guard, by report
D9941 Fabrication of athletic mouthguard
D9942 Repair and/or reline of occlusal
guard D9950 Occlusion analysis —
mounted case D9951 Occlusal adjustment
— limited D9952 Occlusal adjustment —
complete D9970 Enamel microabrasion
D9971 Odontoplasty 1-2 teeth; includes removal of enamel
projections D9972 External bleaching — per arch – performed in
office
D9973 External bleaching — per tooth
D9974 Internal bleaching — per tooth
D9999 Unspecified adjunctive procedure, by report
Note: This Appendix represents codes and nomenclature excerpted from the version of
Current Dental Terminology (CDT) in effect at the date of this printing. CDT coding
and nomenclature are the copyright of the American Dental Association, and have been
accepted as the standard for data transmission purposes under federal Administrative
Simplification regulations. For the purposes of this Appendix, Delta Dental’s
administration of Benefits, Limitations and Exclusions under this Contract will at all times
be based on the then-current version of CDT whether or not a revised Appendix B is
provided.
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EXHIBIT “B”
SCHEDULE OF PERFORMANCE
CONSULTANT shall provide Dental Care Plan Administration as specified in EXHIBIT “A”
Scope of Services in a timely manner to the reasonable satisfaction of the CITY.
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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 rate schedule
attached as Exhibit C-1.
The compensation to be paid to CONSULTANT under this Agreement for performance of
the Administrative Services described in Exhibit “A” (“Services”) shall not exceed
$359,521.00. CONSULTANT agrees to complete all Serviceswithin this amount. Any
work performed or expenses incurred for which payment would result in a total exceeding
the maximum amount of compensation set forth herein shall be at no cost to the CITY.
CITY will pay CONSULTANT for the full amount of the dentists’ statements for
approved services submitted to DELTA DENTAL.
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: None
All requests for payment of expenses shall be accompanied by appropriate backup
information. Any expense 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.
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EXHIBIT “C-1”
RATE SCHEDULE
CITY agrees to pay CONSULTANT $9.20 per Primary Enrollee per month to
compensate Delta Dental for its administration of the dental plan.
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EXHIBIT “D”
INSURANCE REQUIREMENTS
CONTRACTORS TO THE CITY OF PALO ALTO (CITY), AT THEIR SOLE EXPENSE, SHALL FOR THE TERM OF THE CONTRACT
OBTAIN AND MAINTAIN INSURANCE IN THE AMOUNTS FOR THE COVERAGE SPECIFIED BELOW, AFFORDED BY
COMPANIES WITH AM BEST’S KEY RATING OF A-:VII, OR HIGHER, LICENSED OR AUTHORIZED TO TRANSACT
INSURANCE BUSINESS IN THE STATE OF CALIFORNIA.
AWARD IS CONTINGENT ON COMPLIANCE WITH CITY’S INSURANCE REQUIREMENTS, AS SPECIFIED, BELOW:
REQUIRE
D 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: CONTRACTOR, AT ITS SOLE COST AND
EXPENSE, SHALL OBTAIN AND MAINTAIN, IN FULL FORCE AND EFFECT THROUGHOUT THE ENTIRE TERM OF ANY
RESULTANT AGREEMENT, THE INSURANCE COVERAGE HEREIN DESCRIBED, INSURING NOT ONLY CONTRACTOR AND ITS
SUBCONSULTANTS, IF ANY, BUT ALSO, WITH THE EXCEPTION OF WORKERS’ COMPENSATION, EMPLOYER’S LIABILITY AND
PROFESSIONAL INSURANCE, NAMING AS ADDITIONAL INSUREDS CITY, ITS COUNCIL MEMBERS, OFFICERS, AGENTS,
AND EMPLOYEES.
I. INSURANCE COVERAGE MUST INCLUDE:
A. A PROVISION FOR A WRITTEN THIRTY (30) DAY ADVANCE NOTICE TO CITY OF CHANGE IN
COVERAGE OR OF COVERAGE CANCELLATION; AND
B. A CONTRACTUAL LIABILITY ENDORSEMENT PROVIDING INSURANCE COVERAGE FOR
CONTRACTOR’S AGREEMENT TO INDEMNIFY CITY.
C. DEDUCTIBLE AMOUNTS IN EXCESS OF $5,000 REQUIRE CITY’S PRIOR APPROVAL.
II. CONTACTOR MUST SUBMIT CERTIFICATES(S) OF INSURANCE EVIDENCING REQUIRED COVERAGE.
III. ENDORSEMENT PROVISIONS, WITH RESPECT TO THE INSURANCE AFFORDED TO “ADDITIONAL
INSUREDS”
A. PRIMARY COVERAGE
WITH RESPECT TO CLAIMS ARISING OUT OF THE OPERATIONS OF THE NAMED INSURED, INSURANCE AS
AFFORDED BY THIS POLICY IS PRIMARY AND IS NOT ADDITIONAL TO OR CONTRIBUTING WITH ANY OTHER
INSURANCE CARRIED BY OR FOR THE BENEFIT OF THE ADDITIONAL INSUREDS.
B. CROSS LIABILITY
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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 CONSULTANT 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 CONSULTANT 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
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CITY OF PALO ALTO CONTRACT NO. C15157537
AGREEMENT BETWEEN THE CITY OF PALO ALTO AND
LIFE INSURANCE COMPANY OF NORTH AMERICA, A WHOLLY OWNED
SUBSIDIARY OF THE CIGNA CORPORATION
FOR PROFESSIONAL SERVICES
This Agreement is entered into on this 26th day of March, 2015, (“Agreement”)
by and between the CITY OF PALO ALTO, a California chartered municipal corporation
(“CITY”), and LIFE INSURANCE COMPANY OF NORTH AMERICA, A WHOLLY
OWNED SUBSIDIARY OF THE CIGNA CORPORATION, located at 1601 Chestnut Street,
Philadelphia, PA 19192 ("CONSULTANT").
RECITALS
The following recitals are a substantive portion of this Agreement.
A. CITY intends to provide for its employees Group Life, Accidental Death and
Dismemberment (AD&D), and Long Term Disability Insurance (LTD) (“Project”) and desires to
engage a consultant to underwrite these insurance benefits (“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”, Scope of Service, Exhibit “A-1” Life
Insurance Policy, Exhibit “A-2” Supplemental Life Insurance Policy, Exhibit “A-3” Long Term
Disability Insurance Policy 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. The Services to be provided by CONSULTANT shall
consist of group insurance of the types described in Exhibit “A” in accordance with the terms
and conditions contained in this Agreement and the policies of group insurance attached as
Exhibits A-1, A-2 and A-3, in compliance with all requirements of this Agreement and
applicable laws.
SECTION 2. TERM.
The term of this Agreement shall be from the date of its full execution through December 31,
2017 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
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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”, shall consist of the
payment of insurance premiums at the rates specified in Exhibits A-1, A-2 and A-3. The total
amount authorized for these services shall not exceed Two Million One Hundred Thirty Seven
Thousand Seven Hundred Fifty Eight Dollars ($2,137,758.00)
The applicable rates and schedule of payment are set out in Exhibit “C”, entitled
“COMPENSATION,” which is attached to and made a part of this Agreement. In the event that,
during any fiscal year of the City, the total required insurance premiums exceeds the amount
stated above, as a result of increased enrollment or increased volume of insurance coverage: (1)
the parties may amend this provision to increase the authorized compensation; or (2) Exhibits A-
1, A-2 and A-3 shall lapse according to their terms, subject to the grace period provisions
contained therein.
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. CITY is responsible for calculating and remitting premiums at the
rates specified in Exhibits A-1, A-2 and A-3, and maintaining records to support such
calculations and remittances.
SECTION 6. QUALIFICATIONS/STANDARD OF CARE. All of the Services shall be
performed by CONSULTANT or under CONSULTANT’s supervision. CONSULTANT
represents that it possesses the professional and technical personnel necessary to perform the
Services required by this Agreement and that the personnel have sufficient skill and experience
to perform the Services assigned to them. CONSULTANT represents that it, its employees and
subconsultants, if permitted, have and shall maintain during the term of this Agreement all
licenses, permits, qualifications, insurance and approvals of whatever nature that are legally
required to perform the Services.
All of the services to be furnished by CONSULTANT under this agreement shall meet the
professional standard and quality that prevail among professionals in the same discipline and of
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
applicable to it that may affect in any manner the Project or the performance of the Services or
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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. CONSULTANT assumes no responsibility for CITY’S own
compliance with laws applicable to it and cannot provide CITY with legal advice.
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. This obligation shall survive termination of the Agreement.
SECTION 9. COST ESTIMATES. [Intentionally omitted.]
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. CONSULTANT shall not subcontract any portion of
the work to be performed under this Agreement without the prior written authorization of the city
manager or designee. Notwithstanding, CONSULTANT may retain and utilize the services of
professional advisors and other vendors; provided, CONSULTANT shall remain fully
responsible and liable for all claim payment decisions and benefit obligations under Exhibits A-
1, A-2 and A-3.
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 Elizabeth
Lucido as the Sr. Client Representative to have supervisory responsibility for the performance,
progress, and execution of the Services and Angela Asamoah as the Client Representative 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, which consent shall not unreasonably be withheld. 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.
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The City’s project manager is Brenna Rowe, Human Resources, People Strategy & Operations
Department, 250 Hamilton Avenue, Palo Alto, CA 94303, Telephone: (650) 329-2574. 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. [Intentionally omitted.]
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. Audits shall be subject to execution of a confidentiality agreement reasonably
satisfactory to the party subject to audit. The City shall maintain records relating to premium
calculations as required by federal, state, and local law, and the City’s records retention schedule,
as they may be amended from time to time.
SECTION 16. INDEMNITY.
16.1. To the fullest extent permitted by law, CONSULTANT shall protect,
indemnify, defend and hold harmless CITY, its Council members, officers, employees and
agents (each an “Indemnified Party”) from and against any and all demands, claims, or liability
of any nature, including death or injury to any person, property damage or any other loss,
including all costs 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
negligent performance or nonperformance by CONSULTANT, its officers, employees, agents or
contractors under this Agreement.
16.2. Notwithstanding the above, nothing in this Section 16 shall be construed
to require CONSULTANT to indemnify an Indemnified Party from Claims to the extent that
such Claims are attributable to the negligent performance or nonperformance 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
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full force and effect during the term of this Agreement, the insurance coverage described in
Exhibit "D". CONSULTANT 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.
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. 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 terminate this Agreement, with or without cause,
by giving written notice thereof to CONSULTANT. Termination of this Agreement shall be
deemed notice of termination of the policies, Exhibits A-1, A-2 and A-3, which shall thereafter
terminate according to their terms.
19.2. CONSULTANT may terminate this Agreement or suspend its
performance of the Services as provided under Exhibits A-1, A-2 or A-3.
19.3. Upon such suspension or termination, CONSULTANT shall remain
responsible for the payment and servicing of all claims for insurance benefits under the policies,
Exhibits A-1, A-2 or A-3, incurred while such policies are in force.
19.4. CITY’S sole financial obligation to CONSULTANT shall be the payment
of premiums, at the rates specified in the policies, Exhibits A-1, A-2 and A-3, for such period of
time as such policies are in force. 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.
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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.
SECTION 22. NONDISCRIMINATION. As set forth in Palo Alto Municipal Code section
2.30.510, CONSULTANT certifies that in the performance of this Agreement, it shall not
discriminate in the employment of any person because of the race, skin color, gender, age,
religion, disability, national origin, ancestry, sexual orientation, housing status, marital status,
familial status, weight or height of such person. CONSULTANT acknowledges that it has read
and understands the provisions of Section 2.30.510 of the Palo Alto Municipal Code relating to
Nondiscrimination Requirements and the penalties for violation thereof, and agrees to meet all
requirements of Section 2.30.510 pertaining to nondiscrimination in employment.
SECTION 23. ENVIRONMENTALLY PREFERRED PURCHASING AND ZERO
WASTE REQUIREMENTS. CONSULTANT shall comply with the City’s Environmentally
Preferred Purchasing policies which are available at the City’s Purchasing Department,
incorporated by reference and may be amended from time to time. CONSULTANT shall comply
with waste reduction, reuse, recycling and disposal requirements of the City’s Zero Waste
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
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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.
City shall, insofar as practicable, notify Consultant at least 31 days prior to the end of a fiscal
year in the event that sufficient funds are not appropriated for the following fiscal year. Nothing
herein contained shall be construed as affecting the provisions of Exhibits A-1, A-2 and A-3
under which insurance coverage terminates if required premiums are not paid within the
applicable grace periods provided therein. 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.
Notwithstanding, any policies of insurance will be governed by the laws of the state(s) in which
they are delivered.
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, or in federal courts having jurisdiction within the County of Santa Clara,
State of California.
25.3. The prevailing party in any action brought to enforce the provisions of this
Agreement may recover its reasonable costs and attorneys' fees expended in connection with that
action. The prevailing party shall be entitled to recover an amount equal to the fair market value
of legal services provided by attorneys employed by it as well as any attorneys’ fees paid to third
parties.
25.4. This document and any attachment or exhibit hereto 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. In the event of a conflict between this
Professional Services Agreement and any attachment or exhibit hereto, the terms of this
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Professional Services
Rev. Feb. 2014
8
Agreement shall prevail. Notwithstanding, it is not the intention of the parties that any
provisions of this Agreement shall impair or supersede the provisions of Exhibits A-1, A-2 and
A-3, and any conflict between Exhibits A-1, A-2 and A-3 and this document shall be resolved, to
the extent reasonably feasible, in a manner that does not alter or impair the terms of either this
Agreement or Exhibits A-1, A-2 and A-3.
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. Nothing herein contained shall be construed as permitting
any actions not permitted by the California Insurance Information and Privacy Protection Act,
Insurance Code Section 791 et seq. CONSULTANT shall not use Personal Information for
direct marketing purposes without City’s express written consent.
25.9 All unchecked boxes do not apply to this agreement.
25.10 The individuals executing this Agreement represent and warrant that they
have the legal capacity and authority to do so on behalf of their respective legal entities.
25.11 This Agreement may be signed in multiple counterparts, which shall, when
executed by all the parties, constitute a single binding agreement
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Professional Services
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IN WITNESS WHEREOF, the parties hereto have by their duly authorized
representatives executed this Agreement on the date first above written.
CITY OF PALO ALTO
APPROVED AS TO FORM:
LIFE INSURANCE COMPANY OF
NORTH AMERICA, A WHOLLY
OWNED SUBSIDIARY OF THE CIGNA
CORPORATION
Attachments:
EXHIBIT “A”: SCOPE OF WORK
EXHIBIT “A-1” BASIC & VOLUNTARY LIFE INSURANCE POLICY
[NO. FLX 962659] (Including Amendments 1 & 2)
EXHIBIT “A-2” BASIC & VOLUNTARY AD&D LIFE INSURANCE POLICY
[NO. OK 964302] (Including Amendments 1, 2 & 3)
EXHIBIT “A-3” LONG TERM DISABILITY INSURANCE POLICY
[NO. LK 961943] (Including Amendments 1, 2 & 3)
EXHIBIT “B”: SCHEDULE OF PERFORMANCE
EXHIBIT “C”: COMPENSATION
EXHIBIT “D”: INSURANCE REQUIREMENTS
DocuSign Envelope ID: 0112B579-44D3-4350-9B91-C12A494DDC60
Director of Underwriting
Professional Services
Rev. Feb. 2014
11
EXHIBIT “A”
SCOPE OF SERVICES
CONSULTANT shall provide employees of CITY: BASIC AND VOLUNTARY LIFE
INSURANCE, BASIC & VOLUNTARY ACCIDENTAL DEATH AND DISMEMBERMENT
(AD&D) and LONG TERM DISABILITY LIFE INSURANCE (LTD) plans. CONSULTANT
shall administer the above named insurance benefits in accordance of the policies provided in
this Agreement and attached as EXHIBITS “A-1”, “A-2” & “A-3”.
DocuSign Envelope ID: 0112B579-44D3-4350-9B91-C12A494DDC60
CALIFORNIA LIFE AND HEALTH INSURANCE GUARANTY ASSOCIATION ACT SUMMARY DOCUMENT AND DISCLAIMER
Residents of California who purchase life and health insurance and annuities should know that the insurance
companies licensed in this state to write these types of insurance are members of the California Life and Health
Insurance Guaranty Association. The purpose of this Association is to assure that policyholders will be protected,
within limits, in the unlikely event that a member insurer becomes financially unable to meet its obligations. If
this should happen, the Association will assess its other member insurance companies for the money to pay the
claims of insured persons who live in this state and, in some cases, to keep coverage in force. The valuable extra
protection provided through the Association is not unlimited, as noted in the box below, and is not a substitute for
consumers' care in selecting well managed and financially stable insurers.
The California Life and Health Insurance Guaranty Association may not provide coverage for this insurance. If coverage is provided, it may be subject to substantial limitations or exclusions, and require continued residency in the state. You should not rely on coverage by the Association in selecting an
insurance company or in selecting an insurance policy.
Coverage is NOT provided for your insurance or any portion of it that is not guaranteed by the Insurer or for which you have assumed the risk, such as a variable contract sold by prospectus.
Insurance companies or their agents are required by law to give or send you this notice. However, insurance companies and their agents are prohibited by law from using the existence of the Association to induce you to purchase any kind of insurance policy.
If you have additional questions, you should first contact your insurer or agent and then may contact:
California Life and Health OR Consumer Service Division Insurance Guaranty Association California Department of Insurance P.O. Box 16860 300 South Spring Street
Beverly Hills, CA 90209 Los Angeles, CA 90013
Below is a brief summary of this law's coverages, exclusions and limits. This summary does not cover all
provisions of the law; nor does it in any way change anyone's rights or obligations under the Act or the
rights or obligations of the Association.
EXHIBIT "A-1"
BASIC & VOLUNTARY LIFE INSURANCE POLICYDocuSign Envelope ID: 0112B579-44D3-4350-9B91-C12A494DDC60
COVERAGE
Generally, individuals will be protected by the California Life and Health Insurance Guaranty Association
if they live in this state and hold a life or health insurance contract, or an annuity, or if they are insured
under a group insurance contract, issued by a member insurer. The beneficiaries, payees or assignees of
insured persons are protected as well, even if they live in another state.
EXCLUSIONS FROM COVERAGE
However, persons holding such policies are not protected by this Association if:
their insurer was not authorized to do business in this state when it issued the policy or contract;
their policy was issued by a health care service plan (HMO), Blue Cross, Blue Shield, a charitable
organization, a fraternal benefit society, a mandatory state pooling plan, a mutual assessment
company, an insurance exchange, or a grants and annuities society;
they are eligible for protection under the laws of another state. This may occur when the insolvent
insurer was incorporated in another state whose Guaranty Association protects insureds who live
outside that state.
The Association also does not provide coverage for:
unallocated annuity contracts; that is, contracts which are not issued to and owned by an individual
and which guarantee rights to group contract holders, not individuals;
employer and association plans to the extent they are self-funded or uninsured;
synthetic guaranteed interest contracts;
any policy or portion of a policy which is not guaranteed by the insurer or for which the individual
has assumed the risk, such as a variable contract sold by prospectus;
any policy of reinsurance unless an assumption certificate was issued;
interest rate yields that exceed an average rate; and
any portion of a contract that provides dividends or experience rating credits.
LIMITS ON AMOUNT OF COVERAGE
The Act limits the Association to pay benefits as follows:
Life and Annuity Benefits
80% of what the life insurance company would owe under a life policy or annuity contract up to
$100,000 in cash surrender values;
$100,000 in present value of annuities; or
$250,000 in life insurance death benefits.
A maximum of $250,000 for any one insured life no matter how many policies and contracts there
were with the same company, even if the policies provided different types of coverages.
Health Benefits
A maximum of $200,000 of the contractual obligations that the health insurance company would owe
were it not insolvent. The maximum may increase or decrease annually based upon changes in the
health care cost component of the consumer price index.
PREMIUM SURCHARGE
Member insurers are required to recoup assessments paid to the Association by way of a surcharge on
premiums charged for health insurance policies to which the act applies.
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NOTICE
Benefits paid under the Accelerated Benefits provision will reduce the Death Benefit payable for life insurance. Benefits payable under the Accelerated Benefits provision may be taxable. If so, the
Employee or the Employee's beneficiary may incur a tax obligation. As with all tax
matters, an Employee should consult with a personal tax advisor to assess the impact of this benefit. Accelerated Benefits are not payable if life insurance coverage under the Policy is not in force.
TL-004788
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DocuSign Envelope ID: 0112B579-44D3-4350-9B91-C12A494DDC60
LIFE INSURANCE COMPANY OF NORTH AMERICA
1601 CHESTNUT STREET GROUP POLICY
PHILADELPHIA, PA 19192-2235
(800) 732-1603 TDD (800) 552-5744 A STOCK INSURANCE COMPANY
POLICYHOLDER: TRUSTEE OF THE GROUP INSURANCE
TRUST FOR EMPLOYERS IN THE PUBLIC
ADMINISTRATION INDUSTRY
SUBSCRIBER: City of Palo Alto
POLICY NUMBER: FLX-962659
POLICY EFFECTIVE DATE: January 1, 2009
POLICY ANNIVERSARY DATE: January 1
This Policy describes the terms and conditions of coverage. It is issued in Delaware and shall be
governed by its laws. The Policy goes into effect on the Policy Effective Date, 12:01 a.m. at the
Policyholder's address.
In return for the required premium, the Insurance Company and the Policyholder have agreed to all the
terms of this Policy.
Deborah Young, Corporate Secretary Karen S. Rohan, President
TL-004700
DocuSign Envelope ID: 0112B579-44D3-4350-9B91-C12A494DDC60
TABLE OF CONTENTS
SCHEDULE OF BENEFITS........................................................................................................................1
SCHEDULE OF BENEFITS FOR CLASS 1...............................................................................................2
SCHEDULE OF BENEFITS FOR CLASS 2...............................................................................................5
SCHEDULE OF BENEFITS FOR CLASS 3...............................................................................................2
ELIGIBILITY FOR INSURANCE ..............................................................................................................2
ENROLLING FOR INSURANCE...............................................................................................................2
EFFECTIVE DATE OF INSURANCE........................................................................................................2
TERMINATION OF INSURANCE.............................................................................................................3
CONTINUATION OF INSURANCE..........................................................................................................3
LIFE INSURANCE BENEFITS...................................................................................................................6
LIFE INSURANCE EXCLUSIONS ............................................................................................................8
CLAIM PROVISIONS.................................................................................................................................8
ADMINISTRATIVE PROVISIONS..........................................................................................................10
SCHEDULE OF RATES............................................................................................................................12
GENERAL PROVISIONS .........................................................................................................................13
DEFINITIONS............................................................................................................................................14
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SCHEDULE OF BENEFITS
Premium Due Date: The last day of each month
Classes of Eligible Employees
On the pages following the definition of eligible employees there is a Schedule of Benefits for each Class
of Eligible Employees listed below. For an explanation of these benefits, please see the Description of
Benefits provision.
If an Employee is eligible under one Class of Eligible Employees and later becomes eligible under a
different Class of Eligible Employees, changes in his or her insurance due to the class change will be
effective on the first of the month following the change in class.
Class 1 All active Full-time Employees of the Employer, regularly working a minimum of 20
hours per week excluding Employees who are classified as Management.
Class 2 All active Full-time Employees of the Employer, regularly working a minimum of 20
hours per week who are classified as Management.
Class 3 All active employees as defined under the prior carrier policy number 643835 and on file
with the Insurance Company. (Closed Class)
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SCHEDULE OF BENEFITS FOR CLASS 1
Eligibility Waiting Period
The Eligibility Waiting Period is the period of time the Employee must be in Active Service to be eligible
for coverage. It will be extended by the number of days the Employee is not in Active Service.
For Employees hired on or
before the Policy Effective Date: No Waiting Period.
For Employees hired after
the Policy Effective Date: No Waiting Period.
LIFE INSURANCE BENEFITS
Employee Benefits
Basic Benefit 1 times Annual Compensation
rounded to the next higher $1,000, if not already a multiple
thereof.
Guaranteed Issue Amount: the lesser of 1 times Annual Compensation or $325,000
Maximum Benefit: the lesser of 1 times Annual Compensation or $325,000
Voluntary Benefit 1 times Annual Compensation
rounded to the next higher $1,000, if not already a multiple
thereof.
Guaranteed Issue Amount: the lesser of 1 times Annual Compensation or $325,000
Maximum Benefit: the lesser of 1 times Annual Compensation or $325,000
Age Based Reductions Life Insurance Benefit for an Employee age 70 and over will
reduce to:
65% of the Life Insurance Benefit at age 70
50% of the Life Insurance Benefit at age 75
Continuation Options
For Layoff
Maximum Benefit Period: Coverage continues through the end of the month in which the
layoff begins
For Leave of Absence
Maximum Benefit Period: Coverage continues through the end of the month in which the
leave of absence begins
For Family Medical Leave
Maximum Benefit Period: 12 weeks
For Disability for Employees over Age 60
Maximum Benefit Period: 12 months
Applicable Coverages: Life Insurance Benefits for the Employee
Extended Death Benefit with Waiver of Premium
Extended Death Benefit
Applicable Coverages Life Insurance Benefits for the Employee
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Waiver of Premium
Waiver Waiting Period 9 months from the date the Employee's Active Service ends
Maximum Benefit Period To Age 65
Applicable Coverages Life Insurance Benefits for the Employee
Portability Options
For Employees See the Former Employee sections in this Schedule of Benefits
for the amounts of insurance an Insured is eligible to continue
under this option.
Terminal Illness Benefit 75% of Life Insurance Benefits in force on the date the Insured is
determined by the Insurance Company to be Terminally Ill,
subject to a Maximum Benefit of $500,000.
Automatic Increase Feature
If an Employee’s Voluntary Life Insurance Benefit is based on Annual Compensation, it will
automatically increase. The amount of the increase may be up to 25% of the Employee’s previous salary
but not more than $25,000. It will automatically increase, subject to the conditions below.
Conditions for Automatic Increase:
1. the Employer provides the Insurance Company with the required notice of an increase in Annual
Compensation; and
2. the Employee is in Active Service on the effective date of the increase.
If an Employee is not in Active Service on that date, his or her benefit will not increase until he or she
returns to Active Service.
The Employee may stop the Automatic Increase Feature at any time. If an Employee stops the feature, it
may not be restarted at a later date.
TL-004736-1
Re-solicitation Period
During a Re-solicitation Period, an Employee currently insured under the Voluntary Life Insurance
portion of this Policy may increase his or her Voluntary Life Insurance Benefits, and an Employee who is
eligible for the Voluntary Life Insurance portion of this Policy but who has not previously enrolled may
become insured under the Policy, by satisfying the Insurability Requirement. An Employee’s insurance
will be effective on the date the Insurance Company agrees in writing to insure the Employee.
An Employee may reduce Insurance Benefits at any time. A request for a Benefit reduction received
during a Re-solicitation Period will become effective on the Policy Anniversary following the Re-
solicitation Period. Any other Benefit reduction will be effective on the date the Insurance Company
receives the completed change form.
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Former Employee Benefits
Amount of Insurance An amount elected subject to the Maximum Benefit amount for
Life Insurance Benefits allowable to an Employee, less any
amount of conversion insurance issued under the Conversion
Privilege for Life Insurance.
Any amount elected in excess of the Life Insurance Benefits in
effect on the date he or she no longer qualifies as an Employee
will be effective on the date the Insurance Company agrees in
writing to insure him or her.
The Maximum Benefit for Basic Life Insurance Benefits is
$50,000.
Maximum Benefit Period To Age 70
Terminal Illness Benefit 75% of Life Insurance Benefits in force on the date the Insured is
determined by the Insurance Company to be Terminally Ill,
subject to a Maximum Benefit of $500,000.
TL-004774
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SCHEDULE OF BENEFITS FOR CLASS 2
Eligibility Waiting Period
The Eligibility Waiting Period is the period of time the Employee must be in Active Service to be eligible
for coverage. It will be extended by the number of days the Employee is not in Active Service.
For Employees hired on or
before the Policy Effective Date: No Waiting Period.
For Employees hired after
the Policy Effective Date: No Waiting Period.
LIFE INSURANCE BENEFITS
Employee Benefits
Basic Benefit 1 times Annual Compensation
rounded to the next higher $1,000, if not already a multiple
thereof.
Guaranteed Issue Amount: the lesser of 1 times Annual Compensation or $325,000
Maximum Benefit: the lesser of 1 times Annual Compensation or $325,000
Voluntary Benefit 1 or 2 times Annual Compensation
rounded to the next higher $1,000, if not already a multiple
thereof.
Guaranteed Issue Amount: the lesser of 2 times Annual Compensation or $325,000
Maximum Benefit: the lesser of 2 times Annual Compensation or $325,000
Age Based Reductions Life Insurance Benefit for an Employee age 70 and over will
reduce to:
65% of the Life Insurance Benefit at age 70
50% of the Life Insurance Benefit at age 75
Continuation Options
For Layoff
Maximum Benefit Period: Coverage continues through the end of the month in which the
layoff begins
For Leave of Absence
Maximum Benefit Period: Coverage continues through the end of the month in which the
leave of absence begins
For Family Medical Leave
Maximum Benefit Period: 12 weeks
For Disability for Employees over Age 60
Maximum Benefit Period: 12 months
Applicable Coverages: Life Insurance Benefits for the Employee
Extended Death Benefit with Waiver of Premium
Extended Death Benefit
Applicable Coverages Life Insurance Benefits for the Employee
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Waiver of Premium
Waiver Waiting Period 9 months from the date the Employee's Active Service ends
Maximum Benefit Period To Age 65
Applicable Coverages Life Insurance Benefits for the Employee
Portability Options
For Employees See the Former Employee sections in this Schedule of Benefits
for the amounts of insurance an Insured is eligible to continue
under this option.
Terminal Illness Benefit 75% of Life Insurance Benefits in force on the date the Insured is
determined by the Insurance Company to be Terminally Ill,
subject to a Maximum Benefit of $500,000.
Automatic Increase Feature
If an Employee’s Voluntary Life Insurance Benefit is based on Annual Compensation, it will
automatically increase. The amount of the increase may be up to 25% of the Employee’s previous salary
but not more than $25,000. It will automatically increase, subject to the conditions below.
Conditions for Automatic Increase:
1. the Employer provides the Insurance Company with the required notice of an increase in Annual
Compensation; and
2. the Employee is in Active Service on the effective date of the increase.
If an Employee is not in Active Service on that date, his or her benefit will not increase until he or she
returns to Active Service.
The Employee may stop the Automatic Increase Feature at any time. If an Employee stops the feature, it
may not be restarted at a later date.
TL-004736-1
Re-solicitation Period
During a Re-solicitation Period, an Employee currently insured under the Voluntary Life Insurance
portion of this Policy may increase his or her Voluntary Life Insurance Benefits, and an Employee who is
eligible for the Voluntary Life Insurance portion of this Policy but who has not previously enrolled may
become insured under the Policy, by satisfying the Insurability Requirement. An Employee’s insurance
will be effective on the date the Insurance Company agrees in writing to insure the Employee.
An Employee may reduce Insurance Benefits at any time. A request for a Benefit reduction received
during a Re-solicitation Period will become effective on the Policy Anniversary following the Re-
solicitation Period. Any other Benefit reduction will be effective on the date the Insurance Company
receives the completed change form.
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Former Employee Benefits
Amount of Insurance An amount elected subject to the Maximum Benefit amount for
Life Insurance Benefits allowable to an Employee, less any
amount of conversion insurance issued under the Conversion
Privilege for Life Insurance.
Any amount elected in excess of the Life Insurance Benefits in
effect on the date he or she no longer qualifies as an Employee
will be effective on the date the Insurance Company agrees in
writing to insure him or her.
The Maximum Benefit for Basic Life Insurance Benefits is
$50,000.
Maximum Benefit Period To Age 70
Terminal Illness Benefit 75% of Life Insurance Benefits in force on the date the Insured is
determined by the Insurance Company to be Terminally Ill,
subject to a Maximum Benefit of $500,000.
TL-004774
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SCHEDULE OF BENEFITS FOR CLASS 3
Eligibility Waiting Period
The Eligibility Waiting Period is the period of time the Employee must be in Active Service to be eligible
for coverage. It will be extended by the number of days the Employee is not in Active Service.
For Employees hired on or
before the Policy Effective Date: No Waiting Period.
For Employees hired after
the Policy Effective Date: No Waiting Period.
LIFE INSURANCE BENEFITS
Employee Benefits
Basic Benefit 1 times Annual Compensation
rounded to the next higher $1,000, if not already a multiple
thereof.
Guaranteed Issue Amount: the lesser of 1 times Annual Compensation or $325,000
Maximum Benefit: the lesser of 1 times Annual Compensation or $325,000
Voluntary Benefit 1 or 2 times Annual Compensation
rounded to the next higher $1,000, if not already a multiple
thereof.
Guaranteed Issue Amount: the greater of a) or b) below:
a) the lesser of 2 times Annual Compensation or $325,000, or
b) an amount equal to the Life Insurance Benefit in effect on
the termination date of the Prior Plan
Maximum Benefit: the lesser of 2 times Annual Compensation or $325,000
Age Based Reductions Life Insurance Benefit for an Employee age 70 and over will
reduce to:
65% of the Life Insurance Benefit at age 70
50% of the Life Insurance Benefit at age 75
Continuation Options
For Layoff
Maximum Benefit Period: Coverage continues through the end of the month in which the
layoff begins
For Leave of Absence
Maximum Benefit Period: Coverage continues through the end of the month in which the
leave of absence begins
For Family Medical Leave
Maximum Benefit Period: 12 weeks
For Disability for Employees over Age 60
Maximum Benefit Period: 12 months
Applicable Coverages: Life Insurance Benefits for the Employee
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Extended Death Benefit with Waiver of Premium
Extended Death Benefit
Applicable Coverages Life Insurance Benefits for the Employee
Waiver of Premium
Waiver Waiting Period 9 months from the date the Employee's Active Service ends
Maximum Benefit Period To Age 65
Applicable Coverages Life Insurance Benefits for the Employee
Portability Options
For Employees See the Former Employee sections in this Schedule of Benefits
for the amounts of insurance an Insured is eligible to continue
under this option.
Terminal Illness Benefit 75% of Life Insurance Benefits in force on the date the Insured is
determined by the Insurance Company to be Terminally Ill,
subject to a Maximum Benefit of $500,000.
Automatic Increase Feature
If an Employee’s Voluntary Life Insurance Benefit is based on Annual Compensation, it will
automatically increase. The amount of the increase may be up to 25% of the Employee’s previous salary
but not more than $25,000. It will automatically increase, subject to the conditions below.
Conditions for Automatic Increase:
1. the Employer provides the Insurance Company with the required notice of an increase in Annual
Compensation; and
2. the Employee is in Active Service on the effective date of the increase.
If an Employee is not in Active Service on that date, his or her benefit will not increase until he or she
returns to Active Service.
The Employee may stop the Automatic Increase Feature at any time. If an Employee stops the feature, it
may not be restarted at a later date.
TL-004736-1
Re-solicitation Period
During a Re-solicitation Period, an Employee currently insured under the Voluntary Life Insurance
portion of this Policy may increase his or her Voluntary Life Insurance Benefits, and an Employee who is
eligible for the Voluntary Life Insurance portion of this Policy but who has not previously enrolled may
become insured under the Policy, by satisfying the Insurability Requirement. An Employee’s insurance
will be effective on the date the Insurance Company agrees in writing to insure the Employee.
An Employee may reduce Insurance Benefits at any time. A request for a Benefit reduction received
during a Re-solicitation Period will become effective on the Policy Anniversary following the Re-
solicitation Period. Any other Benefit reduction will be effective on the date the Insurance Company
receives the completed change form.
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Former Employee Benefits
Amount of Insurance An amount elected subject to the Maximum Benefit amount for
Life Insurance Benefits allowable to an Employee, less any
amount of conversion insurance issued under the Conversion
Privilege for Life Insurance.
Any amount elected in excess of the Life Insurance Benefits in
effect on the date he or she no longer qualifies as an Employee
will be effective on the date the Insurance Company agrees in
writing to insure him or her.
The Maximum Benefit for Basic Life Insurance Benefits is
$50,000.
Maximum Benefit Period To Age 70
Terminal Illness Benefit 75% of Life Insurance Benefits in force on the date the Insured is
determined by the Insurance Company to be Terminally Ill,
subject to a Maximum Benefit of $500,000.
TL-004774
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ELIGIBILITY FOR INSURANCE
Classes of Eligible Persons
A person may be insured only once under the Basic Life portion of the Policy even though he or she may
be eligible under more than one class. A person may also be insured only once under the Voluntary Life
portion of the Policy as an Employee, even though he or she may be eligible under more than one class.
Employee
An Employee in one of the Classes of Eligible Employees shown in the Schedule of Benefits is eligible to
be insured on the Policy Effective Date or the day after he or she completes the applicable Eligibility
Waiting Period, if later.
If a person has previously converted his or her insurance under the Policy, he or she will not become
eligible until the converted policy is surrendered. This does not apply to any amount of insurance that
was previously converted under the Policy due to a reduction in the Employee's Life Insurance Benefits
based on age or a change in class unless those conditions no longer affect the amount of coverage
available to the Employee.
Except as noted in the Reinstatement Provision, if an Employee terminates coverage and later wishes to
reapply, or if a former Employee is rehired, a new Eligibility Waiting Period must be satisfied. An
Employee is not required to satisfy a new Eligibility Waiting Period if insurance ends because he or she is
no longer in a Class of Eligible Employees, but continues to be employed by the Employer, and within
one year becomes a member of an eligible class.
TL-004710
ENROLLING FOR INSURANCE
Initial Open Enrollment
During the Initial Open Enrollment Period, an Employee who was insured, or who was eligible to be
insured, under the Prior Plan may become insured under the Voluntary Life Insurance Plan provided by
this Policy for a Benefit of one times Annual Compensation up to this Policy's Guaranteed Issue Amount,
as shown in the Schedule of Benefits, without satisfying any Insurability Requirement. Any Employee
who is not actively at work, due to Injury or Sickness, on the date his or her coverage would otherwise
become effective under this Policy, may not become insured under this Policy until he or she returns to
Active Service.
An Employee may become insured for an amount in excess of the Guaranteed Issue Amount only if he or
she satisfies the Insurability Requirement. Any excess amount will be effective on the date the Insurance
Company agrees in writing to insure the Employee.
EFFECTIVE DATE OF INSURANCE
An Employee will be insured for an amount not to exceed the Guaranteed Issue Amount on the date he or
she becomes eligible, if the Employee is not required to contribute to the cost of this insurance.
An Employee who is required to contribute to the cost of this insurance may elect insurance for himself or
herself only by authorizing payroll deduction in a form approved by the Employer and the Insurance
Company. The effective date of this insurance depends on the date and amount of insurance elected.
If an individual elects coverage within 31 days after becoming eligible to enroll, or for any increases, the
Guaranteed Issue Amount will be effective on the latest of the following dates:
1. The Policy Effective Date.
2. The date payroll deduction is authorized for this insurance.
3. The date the Employer or Insurance Company receives the completed enrollment form.
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If an enrollment form for Employee coverage is received more than 31 days after becoming eligible to
elect coverage, this insurance will be effective on the date the Insurance Company agrees in writing to
insure that eligible person. The Insurance Company will require the eligible Employee to satisfy the
Insurability Requirement before it agrees to insure him or her.
If an eligible Employee is not in Active Service on the date insurance would otherwise be effective, it will
be effective on the date he or she returns to Active Service.
TL-004712
Takeover Provision
Special Terms Applicable to Previously Insured Employees Not in Active Service
Employees not in Active Service on the Policy Effective Date are not covered under the Policy.
However, the Insurance Company agrees to provide a death benefit equal to the lesser of:
1. the amount due under this Policy (without regard to the Active Service provision), or
2. the amount that would have been due under the Prior Plan had it remained in force.
The benefit amount will be reduced by any amount paid by the Prior Plan, or that would have been paid
had this Policy not been issued and had timely filing of the claim been made under the Prior Plan.
These special terms will end on the earliest of the following dates:
1. the date the Employee meets the Active Service requirements;
2. the date insurance terminates for one of the reasons stated in the Termination of Insurance
provision;
3. 12 months after the Policy Effective Date; or
4. the last day the Employee would have been covered under the Prior Plan if that plan was still in
force.
TL-009020
TERMINATION OF INSURANCE
An Insured's coverage will end on the earliest of the following dates:
1. the date the Employee is eligible for coverage under a plan intended to replace this coverage;
2. the date the Policy is terminated by the Insurance Company;
3. the date the Insured is no longer in an eligible class;
4. the date coinciding with the end of the last period for which premiums are paid;
5. the date an Employee is no longer in Active Service; and
6. for an Employee, the date the Employer cancels participation under the Policy.
TL-004714
CONTINUATION OF INSURANCE
If an Employee is no longer in Active Service, he or she may be eligible to continue insurance. The
following provisions explain the continuation options available under the Policy. Please see the Schedule
of Benefits to determine the applicability of these benefits on a class level.
Continuation for Layoff, Temporary Leave of Absence or Family Medical Leave
If an Employee's Active Service ends due to a layoff, Employer approved unpaid leave of absence, or
family medical leave of absence, insurance will continue for up to the Maximum Benefit Period shown in
the Schedule of Benefits, if the required premium is paid.
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Continuation for Disability for Employees over Age 60
If an Employee becomes Disabled and is age 60 or over, the Life Insurance Benefits shown in the
Schedule of Benefits will be continued, provided premiums are paid, until the earlier of the following
dates:
1. The date the Employee is no longer Disabled.
2. The date following the Maximum Benefit Period shown in the Schedule of Benefits.
3. The date coinciding with the end of the last period for which premiums are paid.
4. The date the Policy is terminated by the Insurance Company.
Amount of Insurance
If an Employee dies while he or she is Disabled and coverage is continued under this provision, the
Insurance Company will pay a Death Benefit equal to the amount in effect on the date the Employee
became Disabled. However, the Life Insurance Benefit will be subject to the provisions of the Policy that
reduce the coverage amount because of age, retirement, payment of an Accelerated Benefit or a change in
class. Automatic increases in Life Insurance Benefits will end while coverage is continued under this
provision. The Insurance Company will pay benefits only if due proof of the Employee’s continuous
Disability is received within one year of the date of the loss.
“Disability”/”Disabled” means because of Injury or Sickness the Employee is unable to perform all the
material duties of his or her Regular Occupation; or is receiving disability benefits under the Employer’s
plan.
“Regular Occupation” means the occupation the Employee routinely performs at the time the Disability
begins. The Insurance Company will consider the duties of the occupation as it is normally performed in
the general labor market in the national economy.
Extended Death Benefit with Waiver of Premium
Extended Death Benefit
If an Employee becomes Disabled and is less than age 60, the Life Insurance Benefits shown in the
Schedule of Benefits will be extended without premium payment until the earlier of the following dates:
1. The date the Employee is no longer Disabled.
2. The date the Employee fails to qualify for Waiver of Premium or fails to provide proof of
Disability as indicated under Waiver of Premium.
Amount of Insurance
If an Employee dies while he or she is Disabled and coverage is extended under this provision, the
Insurance Company will pay a Death Benefit equal to the amount in effect on the date the Employee
became Disabled. However, the Life Insurance Benefit will be subject to the provisions of the Policy that
reduce the coverage amount because of age, retirement, payment of an Accelerated Benefit or a change in
class. Automatic increases in Life Insurance Benefits will end while premiums are waived. The
Insurance Company will pay benefits only if due proof of the Employee’s continuous Disability is
received within one year of the date of the loss.
“Disability”/”Disabled” means because of Injury or Sickness the Employee is unable to perform all the
material duties of his or her Regular Occupation; or is receiving disability benefits under the Employer’s
plan.
“Regular Occupation” means the occupation the Employee routinely performs at the time the Disability
begins. The Insurance Company will consider the duties of the occupation as it is normally performed in
the general labor market in the national economy.
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Waiver of Premium
If the Employee submits satisfactory proof that he or she has been continuously Disabled for the Waiver
Waiting Period shown in the Schedule of Benefits, coverage will be extended up to the Maximum Benefit
Period shown in the Schedule of Benefits.
Such proof must be submitted to the Insurance Company no later than 3 months after the date the Waiver
Waiting Period ends. Premiums will be waived from the date the Insurance Company agrees in writing to
waive premiums for that Employee.
After premiums have been waived for 12 months, they will be waived for future periods of 12 months, if
the Employee remains Disabled and submits satisfactory proof that Disability continues. Satisfactory
proof must be submitted to the Insurance Company 3 months before the end of the 12-month period.
Amount of Insurance
If an Employee dies while he or she is Disabled and coverage is continued under this provision, the
Insurance Company will pay a Death Benefit equal to the amount in effect on the date the Employee
became Disabled. However, the Life Insurance Benefit will be subject to the provisions of the Policy that
reduce the coverage amount because of age, retirement, payment of an Accelerated Benefit or a change in
class. Automatic increases in Life Insurance Benefits will end while premiums are waived. The
Insurance Company will pay benefits only if due proof of the Employee’s continuous Disability is
received within one year of the date of the loss.
Termination of Waiver
Insurance will end for any Employee whose premiums are waived on the earliest of the following dates.
1. The date he or she is no longer Disabled.
2. The date he or she refuses to submit to any physical examination required by the Insurance
Company.
3. The last day of the 12-month period of Disability during which he or she fails to submit
satisfactory proof of continued Disability.
4. The date following the end of the Maximum Benefit Period shown in the Schedule of Benefits.
“Disability”/”Disabled” means because of Injury or Sickness an Employee is unable to perform all the
material duties of any occupation which he or she may reasonably become qualified based on education,
training or experience.
TL-009745
Portability Options
For Employees
If an Employee’s coverage under the Policy ends prior to age 70, for any of the following reasons:
a. termination of employment; or
b. termination of membership in an eligible class under the Policy;
Life Insurance Benefits may be continued up to the Maximum Benefit shown in the Schedule of Benefits
for this option.
The Employee must apply to the Insurance Company and pay the required premium. The application
must be submitted:
a. within 31 days of the Employee’s termination of employment or membership in an eligible class
under the Policy; or
b. during the time that the Employee has to exercise the Conversion Privilege.
Coverage under this option may not be elected at a later date.
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When applying for this option, the Employee must name a beneficiary. Any beneficiary named
previously under the Policy is no longer in effect. If there is no named or surviving beneficiary, Death
Benefits will be paid to the first surviving class of the following living relatives:
a. spouse;
b. child or children;
c. mother or father;
d. brothers or sisters; or
e. the executors or administrators of the Insured’s estate.
When coverage is continued under this option, the Employee becomes a Former Employee.
Coverage will end on the earliest of the following dates.
a. The date the Insurance Company cancels coverage for all Former Employees.
b. The end of the period for which premiums are paid.
c. The date an Insured reaches age 70.
d. The date the Maximum Benefit Period shown in the Schedule of Benefits for this option ends.
TL-004716 as modified by TL-009330
DESCRIPTION OF BENEFITS
The following provisions explain the benefits available under the Policy. Please see the Schedule of
Benefits for the applicability of these benefits on a class level.
LIFE INSURANCE BENEFITS Death Benefit
If an Insured dies, the Insurance Company will pay the Life Insurance Benefit in force for that Insured on
the date of his or her death.
TL-004730
Accelerated Benefits
Any benefits payable under this Accelerated Benefits provision will reduce the Death Benefit payable for
Life Insurance. Any automatic increases in Life Insurance Benefits will end when benefits are payable
under this provision.
Terminal Illness Benefit
The Insurance Company will pay a Terminal Illness Benefit to an Insured who has been determined by
the Insurance Company to be Terminally Ill.
The Terminal Illness Benefit is payable only once in an Insured's lifetime.
Determination of Terminal Illness
For the purpose of determining the existence of a Terminal Illness, the Insurance Company will require
the Insured submit the following proof.
1. A written diagnosis and prognosis by two Physicians licensed to practice in the United States.
2. Supportive evidence satisfactory to the Insurance Company, including but not limited to
radiological, histological or laboratory reports documenting the Terminal Illness.
The Insurance Company may require, at its expense, an examination of the Insured and a review of the
documented evidence by a Physician of its choice.
"Terminal Illness" means a person has a prognosis of 12 months or less to live, as diagnosed by a
Physician.
TL-004748
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Conversion Privilege for Life Insurance
Each Insured may convert all or any portion of his or her Life Insurance that would end under the Policy
due to:
1. termination of employment;
2. termination of membership in an eligible class under the Policy;
3. termination of the Policy.
The Insured may apply for any type of life insurance the Insurance Company offers to persons of the
same age in the amount applied for, except the Insured may not:
1. choose term insurance;
2. apply for an amount of insurance greater than the coverage amount terminating under the Policy
(also, the conversion policy will not provide accident, disability or other benefits); or
3. apply for more than $10,000 of insurance if the Policy is terminated or amended to terminate the
insurance for any class of Insureds, or the Employer cancels participation under the Policy.
Conversion in these cases is only permitted if the Insured has been covered by the Policy or, any
group life insurance policy issued to the Employer which the Policy replaced, for at least 3 years.
If the Insured becomes eligible for coverage under any group life policy within 31 days of termination of
coverage under this Policy, the Insured may not convert an amount of insurance greater than the amount
of coverage terminating under the Policy less the amount for which he or she may be covered under the
other policy.
To apply for conversion insurance, the Insured must, within 31 days after coverage under the Policy ends:
1. submit an application to the Insurance Company; and
2. pay the required premium.
Evidence of insurability is not required.
Premium for the conversion insurance will be based on the age and class of risk of the Insured and the
type and amount of coverage issued. If the Insured has assigned ownership of his group coverage, the
owner/assignee must apply for the individual policy. Conversion insurance will become effective on the
31st day after the date coverage under the Policy ends provided the application is received by the
Insurance Company and the required premium has been paid.
If the Insured dies during the 31-day conversion period, the Life Insurance benefits will be paid under the
Policy regardless of whether he or she applied for conversion insurance. If a conversion policy is issued,
it will be in exchange for any further benefits for that type and amount of insurance from this Policy.
Extension of Conversion Period
If an Insured is eligible for conversion insurance and is not notified of this right at least 15 days prior to
the end of the 31-day conversion period, the conversion period will be extended. The Insured will have
15 days from the date notice is given to apply for conversion insurance. In no event will the conversion
period be extended beyond 90 days. Notice, for the purpose of this section, means written notice
presented to the Insured by the Employer or mailed to the Insured's last known address as reported by the
Employer.
If the Insured dies during the extended conversion period, but more than 31 days after his or her coverage
under the Policy terminates, Life Insurance benefits:
1. will not be paid under the Policy; and
2. will be payable under the conversion insurance; provided:
a. the Insured's application for conversion insurance has been received by the Insurance
Company; and
b. the required premium has been paid.
Prior Conversion Limitation
If an Insured is covered under a life insurance conversion policy previously issued by the Insurance
Company, he or she will not be eligible for this Conversion Privilege unless the prior coverage has ended.
TL-009740
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LIFE INSURANCE EXCLUSIONS
If an Insured commits suicide, while sane or insane, within 2 years from the date his or her insurance
under the Policy becomes effective, Voluntary Life Insurance Benefits will be limited to a refund of the
premiums paid on the Insured's behalf. The suicide exclusion applies from the effective date of any
additional benefits or increases in Life Insurance Benefits.
Except for any amount of benefits in excess of the Prior Plan's benefits, this exclusion will not apply to
any person covered under the Prior Plan for more than two years. If a person was not insured for two
years under the Prior Plan, credit will be given for the time he or she was insured.
TL-004752
CLAIM PROVISIONS
Notice of Claim
Written notice, or notice by any other electronic/telephonic means authorized by the Insurance Company,
must be given to the Insurance Company within 31 days after a covered loss occurs or begins or as soon
as reasonably possible. If written notice, or notice by any other electronic/telephonic means authorized
by the Insurance Company, is not given in that time, the claim will not be invalidated or reduced if it is
shown that notice was given as soon as was reasonably possible. Notice can be given at our home office
in Philadelphia, Pennsylvania or to our agent. Notice should include the Employer's Name, the Policy
Number and the claimant's name and address.
Written notice or any other electronic/telephonic means authorized by the Insurance Company of a
diagnosis of a Terminal Illness on which claim is based must be given to us within 60 days after the
diagnosis. If notice is not given in that time, the claim will not be invalidated or reduced if it is shown
that written notice or any other electronic/telephonic means authorized by the Insurance Company was
given as soon as reasonably possible.
Claim Forms
When the Insurance Company receives notice of claim, the Insurance Company will send claim forms for
filing proof of loss. If claim forms are not sent within 15 days after notice is received by the Insurance
Company, the proof requirements will be met by submitting, within the time required under the "Proof of
Loss" section, written proof, or proof by any other electronic/telephonic means authorized by the
Insurance Company, of the nature and extent of the loss.
Claimant Cooperation Provision
Failure of a claimant to cooperate with the Insurance Company in the administration of the claim may
result in termination of the claim. Such cooperation includes, but is not limited to, providing any
information or documents needed to determine whether benefits are payable or the actual benefit amount
due.
Insurance Data
The Employer is required to cooperate with the Insurance Company in the review of claims and
applications for coverage. Any information the Insurance Company provides in these areas is
confidential and may not be used or released by the Employer if not permitted by applicable privacy laws.
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Proof of Loss
Written proof of loss, or proof by any other electronic/telephonic means authorized by the Insurance
Company, must be given to the Insurance Company within 90 days after the date of the loss for which a
claim is made. If written proof of loss, or proof by any other electronic/telephonic means authorized by
the Insurance Company, is not given in that 90 day period, the claim will not be invalidated nor reduced if
it is shown that it was given as soon as was reasonably possible. In any case, written proof of loss, or
proof by any other electronic/telephonic means authorized by the Insurance Company, must be given not
more than one year after that 90 day period. If written proof of loss, or proof by any other
electronic/telephonic means authorized by the Insurance Company, is provided outside of these time
limits, the claim will be denied. These time limits will not apply while the person making the claim lacks
legal capacity.
Written proof, or any other electronic/telephonic means authorized by the Insurance Company, of loss for
Accelerated Benefits must be furnished 90 days after the date of diagnosis. This proof must describe the
occurrence, character and diagnosis for which claim is made.
In case of claim for any other loss, proof must be furnished within 90 days after the date of such loss.
If it is not reasonably possible to submit proof of loss within these time periods, the Insurance Company
will not deny or reduce any claim if proof is furnished as soon as reasonably possible. Proof must, in any
case, be furnished not more than a year later, except for lack of legal capacity.
Time of Payment
Benefits due under the Policy for a loss, other than a loss for which the Policy provides installment
payments, will be paid immediately upon receipt of due written proof of such loss.
Subject to the receipt of satisfactory written proof of loss, all accrued benefits for loss for which the
Policy provides installments will be paid monthly; any balance remaining unpaid upon the termination of
liability will be paid immediately upon receipt of due written proof, unless otherwise stated in the
Description of Benefits.
To Whom Payable
Death Benefits will be paid to the Insured's named beneficiary, if any, on file at the time of payment. If
there is no named beneficiary or surviving beneficiary, Death Benefits will be paid to the first surviving
class of the following living relatives: spouse; child or children; mother or father; brothers or sisters; or to
the executors or administrators of the Insured's estate. The Insurance Company may reduce the amount
payable by any indebtedness due.
All benefits payable under the Accelerated Benefits section are payable to the Insured, if living. If the
Insured dies prior to the payment of an eligible claim for an Accelerated Benefit, benefits will be paid in
accordance with the provisions applicable to the payment of Life Insurance proceeds, unless the Insured
has directed us otherwise in writing. However, any payment made by us prior to notice of the Insured's
death shall discharge us of any benefit that was paid.
All other benefits, unless otherwise stated in the Policy, will be payable to the Insured or the certificate
owner if other than the Insured.
Any other accrued benefits which are unpaid at the Insured's death may, at the Insurance Company's
option, be paid either to the Insured's beneficiary or to the executor or administrator of the Insured's
estate.
If the Insurance Company pays benefits to the executor or administrator of the Insured's estate or to a
person who is incapable of giving a valid release, the Insurance Company may pay up to $1,000 to a
relative by blood or marriage whom it believes is equitably entitled. This good faith payment satisfies the
Insurance Company's legal duty to the extent of that payment.
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Change of Beneficiary
The Insured may change the beneficiary at any time by giving written notice to the Employer or the
Insurance Company. The beneficiary's consent is not required for this or any other change which the
Insured may make unless the designation of beneficiary is irrevocable.
No change in beneficiary will take effect until the form is received by the Employer or the Insurance
Company. When this form is received, it will take effect as of the date of the form. If the Insured dies
before the form is received, the Insurance Company will not be liable for any payment that was made
before receipt of the form.
Physical Examination and Autopsy
The Insurance Company, at its expense, will have the right to examine any person for whom a claim is
pending as often as it may reasonably require. The Insurance Company may, at its expense, require an
autopsy unless prohibited by law.
Legal Actions
No action at law or in equity may be brought to recover benefits under the Policy less than 60 days after
written proof of loss, or proof by any other electronic/telephonic means authorized by the Insurance
Company, has been furnished as required by the Policy. No such action shall be brought more than 3
years after the time satisfactory proof of loss is required to be furnished.
Time Limitations
If any time limit stated in the Policy for giving notice of claim or proof of loss, or for bringing any action
at law or in equity, is less than that permitted by the law of the state in which the Employee lives when
the Policy is issued, then the time limit provided in the Policy is extended to agree with the minimum
permitted by the law of that state.
Physician/Patient Relationship
The Insured will have the right to choose any Physician who is practicing legally. The Insurance
Company will in no way disturb the Physician/patient relationship.
TL-004724
ADMINISTRATIVE PROVISIONS Premiums
The premiums for this Policy will be based on the rates currently in force, the plan and the amount of
insurance in effect.
If the Insured's coverage amount is reduced due to acceleration of his or her Death Benefit, his or her
premium will be based on the amount of coverage he or she has in force on the day before the reduction
took place. If the Insured's coverage amount is reduced due to his or her attained age, premium will be
based on the amount of coverage in force on the day after the reduction took place.
Changes in Premium Rates
The premium rates may be changed by the Insurance Company from time to time with at least 31 days
advance written notice. No change in rates will be made until 48 months after the Policy Effective Date.
An increase in rates will not be made more often than once in a 12 month period. However, the Insurance
Company reserves the right to change the rates even during a period for which the rate is guaranteed if
any of the following events take place.
1. The terms of the Policy change.
2. A division, subsidiary, affiliated company or eligible class is added or deleted from the Policy.
3. There is a change in the factors bearing on the risk assumed.
4. Any federal or state law or regulation is amended to the extent it affects the Insurance Company's
benefit obligation.
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5. The Insurance Company determines that the Employer has failed to promptly furnish any
necessary information requested by the Insurance Company, or has failed to perform any other
obligations in relation to the Policy.
If an increase or decrease in rates takes place on a date that is not a Premium Due Date, a pro rata
adjustment will apply from the date of the change to the next Premium Due Date.
Reporting Requirements
The Employer must, upon request, give the Insurance Company any information required to determine
who is insured, the amount of insurance in force and any other information needed to administer the plan
of insurance.
Payment of Premium
The first premium is due on the Policy Effective Date. After that, premiums will be due monthly unless
the Employer and the Insurance Company agree on some other method of premium payment.
If any premium is not paid when due, the plan will be canceled as of the Premium Due Date, except as
provided in the Policy Grace Period section.
Notice of Cancellation
The Employer or the Insurance Company may cancel the Policy as of any Premium Due Date by giving
31 days advance written notice. If a premium is not paid when due, the Policy will automatically be
canceled as of the Premium Due Date, except as provided in the Policy Grace Period section.
Policy Grace Period
A Policy Grace Period of 60 days will be granted for the payment of the required premiums under this
Policy. This Policy will be in force during the Policy Grace Period. The Employer is liable to the
Insurance Company for any unpaid premium for the time this Policy was in force.
Grace Period for the Insured
If the required premium is not paid on the Premium Due Date, there is a 60 day grace period after each
premium due date after the first. If the required premium is not paid during the grace period, insurance
will end on the last day for which premium was paid.
If benefits are paid during the Grace Period for the Insured, the Insurance Company will deduct any
overdue premium from the proceeds payable under the Policy.
Reinstatement of Insurance
Coverage may be reinstated without satisfying the Insurability Requirement, if an Employee's insurance
ends because he or she is on an unpaid leave of absence and he or she applies for Reinstatement within 31
days of his return to Active Service.
After an Insured's coverage has ceased, it may be reinstated at any date prior to five years after the date of
termination if the following conditions are met:
1. The Policy is still in force.
2. The Insured is eligible under the Policy.
3. A written request for reinstatement and a new enrollment form are sent to the Insurance
Company.
4. The required premium is paid.
5. The Insurability Requirement, if any, is satisfied.
TL-004720
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SCHEDULE OF RATES
The following monthly rates apply to all Classes of Eligible Persons unless otherwise indicated.
FOR EMPLOYEE BENEFITS
Basic Life Insurance $.13 Per $1,000
Voluntary Life Insurance $.24 Per $1,000
FOR FORMER EMPLOYEE BENEFITS
Monthly Rates are based on units of $1,000.
Under Age 20 $.153 Age 45 - 49 $.384
Age 20 - 24 $.144 Age 50 - 54 $.726
Age 25 - 29 $.153 Age 55 - 59 $1.347
Age 30 - 34 $.177 Age 60 - 64 $2.461
Age 35 - 39 $.19 Age 65 - 69 $4.065
Age 40 - 44 $.243
A change in rates due to a change in the Former Employee's age will become effective on the Policy
Anniversary Date coinciding with or following the Former Employee's birthday.
TL-004718
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GENERAL PROVISIONS
Entire Contract
The entire contract will be made up of the Policy, the application of the Employer, a copy of which is
attached to the Policy, and the applications, if any, of the Insureds.
Incontestability
All statements made by the Employer or by an Insured are representations not warranties. No statement
will be used to deny or reduce benefits or as a defense to a claim, unless a copy of the instrument
containing the statement has been furnished to the claimant. In the event of death or legal incapacity, the
beneficiary or representative must receive the copy.
After two years from an Insured's effective date of insurance, or from the effective date of any added or
increased benefits, no such statement will cause insurance to be contested except for fraud or eligibility
for coverage.
Misstatement of Age
If an Insured's age has been misstated, the Insurance Company will adjust all benefits to the amounts that
would have been purchased for the correct age.
Policy Changes
No change in the Policy will be valid until approved by an executive officer of the Insurance Company.
This approval must be endorsed on, or attached to, the Policy. No agent may change the Policy or waive
any of its provisions.
Workers' Compensation Insurance
The Policy is not in lieu of and does not affect any requirements for insurance under any Workers'
Compensation Insurance Law.
Certificates
A certificate of insurance will be delivered to the Employer for delivery to Insureds. Each certificate will
list the benefits, conditions and limits of the Policy. It will state to whom benefits will be paid.
Assignment of Benefits
The Insurance Company will not be affected by the assignment of an Insured's certificate until the
original assignment or a certified copy of the assignment is filed with the Insurance Company. The
Insurance Company will not be responsible for the validity or sufficiency of an assignment. An
assignment of benefits will operate so long as the assignment remains in force provided insurance under
the Policy is in effect. This insurance may not be levied on, attached, garnisheed, or otherwise taken for a
person's debts. This prohibition does not apply where contrary to law.
Clerical Error
A person's insurance will not be affected by error or delay in keeping records of insurance under the
Policy. If such an error is found, the premium will be adjusted fairly.
Agency
The Employer and Plan Administrator are agents of the Employee for transactions relating to insurance
under the Policy. The Insurance Company is not liable for any of their acts or omissions.
TL-004726
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DEFINITIONS
Please note, certain words used in this document have specific meanings. These terms will be capitalized
throughout this document. The definition of any word, if not defined in the text where it is used, may be
found either in this Definitions section or in the Schedule of Benefits.
Accident
An Accident is a sudden, unforeseeable external event that causes bodily Injury to an Insured while
coverage is in force under the Policy.
Active Service
An Employee will be considered in Active Service with the Employer on a day which is one of the
Employer's scheduled work days if either of the following conditions are met.
1. He or she is actively at work. This means the Employee is performing his or her regular
occupation for the Employer on a Full-time basis, either at one of the Employer's usual places of
business or at some location to which the Employer's business requires the Employee to travel.
2. The day is a scheduled holiday, vacation day or period of Employer approved paid leave of
absence, other than disability or sick leave after 7 days.
An Employee is considered in Active Service on a day which is not one of the Employer's scheduled
work days only if he or she was in Active Service on the preceding scheduled work day.
Annual Compensation
An Employee's annual wage or salary as reported by the Employer for work performed for the Employer
as of the date the covered loss occurs. It includes earnings received as commissions, but not bonuses,
overtime pay or other extra compensation.
Commissions will be averaged for the 12 months just prior to the date the covered loss occurs, or the
months employed, if less than 12 months.
Employee
For eligibility purposes, an Employee is an employee of the Employer in one of the "Classes of Eligible
Employees." Otherwise, Employee means an employee of the Employer who is insured under the Policy.
Employer
The Employer who has subscribed to the Policyholder and for the benefit of whose Employees this policy
has been issued. The Employer, named as the Subscriber on the front of this Policy, includes any
affiliates or subsidiaries covered under the Policy. The Employer is acting as an agent of the Insured for
transactions relating to this insurance. The actions of the Employer shall not be considered the actions of
the Insurance Company.
Full-time
Full-time means the number of hours set by the Employer as a regular work day for Employees in the
Employee's eligibility class.
Initial Open Enrollment Period
The period in the calendar year when an eligible Employee who was hired on or before the Policy
Effective Date may enroll for the first time for Insurance Benefits under this Policy. This period must be
agreed upon by the Employer and the Insurance Company. Refer to Initial Open Enrollment under the
Enrolling for Insurance section of the Policy.
Injury
Any accidental loss or bodily harm which results directly and independently of all other causes from an
Accident.
DocuSign Envelope ID: 0112B579-44D3-4350-9B91-C12A494DDC60
15
Insurability Requirement
An eligible person will satisfy the Insurability Requirement for an amount of coverage on the day the
Insurance Company agrees in writing to accept him or her as insured for that amount. To determine a
person's acceptability for coverage, the Insurance Company will require evidence of good health and may
require it be provided at the Employee's expense.
Insurance Company
The Insurance Company underwriting the Policy is named on the Policy cover page.
Insured
A person who is eligible for insurance under the Policy, for whom insurance is elected, the required
premium is paid and coverage is in force under the Policy.
Physician
Physician means a licensed doctor practicing within the scope of his or her license and rendering care and
treatment to an Insured that is appropriate for the condition and locality. The term does not include an
Employee, an Employee's spouse, the immediate family (including parents, children, siblings or spouses
of any of the foregoing, whether the relationship derives from blood or marriage), of an Employee or
spouse, or a person living in an Employee's household.
Prior Plan
The Prior Plan refers to the plan of insurance providing similar benefits sponsored by the Employer in
effect directly prior to the Policy Effective Date.
Sickness
Any physical or mental illness.
TL-004708
DocuSign Envelope ID: 0112B579-44D3-4350-9B91-C12A494DDC60
16
IMPORTANT CHANGES FOR STATE REQUIREMENTS
If an Employee resides in one of the following states, the provisions of the certificate are modified for
residents of the following states. The modifications listed apply only to residents of that state.
California Residents: Conversion Privilege for Life Insurance
Insured Employees and Insured Spouses may convert to an individual policy of life insurance for an
amount not greater than the Conversion Amount shown below when the Policy ends, without regard
to any requirement that the person be insured under the policy for a specified period of time, if all of
the following apply.
a. The Insured became Totally Disabled while covered for the Life Benefit of the Policy.
Totally Disabled means the person is unable to perform all the material duties of any
occupation for which he or she may reasonably be qualified based on training, education and
experience.
b. The Insured remained Totally Disabled until the Policy ended while covered for the Life
Benefit of this Policy.
c. The Policy does not provide a Waiver of Premium, Extended Death Benefit Provision or
monthly payments to Totally Disabled Insureds for the Life Benefit.
d. The person meets all other conditions for converting the insurance.
Conversion Amount - Insured’s life insurance amount under the Policy on the date the Policy ends
minus the amount for which the Insured is insured under a group policy that provides life coverage to
employees of the Insured Employee’s Employer covered under this Policy. The dollar limit that
applies to the amount for conversion at Policy termination does not apply.
The requirement that the Insured be covered under the Policy for the stated number of years in order
to convert life insurance does not apply.
Missouri residents:
Regardless of any language to the contrary in the Policy, suicide is no defense to payment of life
insurance benefits. However, if an Insured commits suicide within 2 years from the date their
insurance under the Policy becomes effective, and the Insurance Company can show that the Insured
intended suicide at the time they applied for the insurance, life insurance benefits will be limited to a
refund of premium paid on the Insured's behalf.
North Dakota residents:
The Suicide exclusion, if any, is limited to one year from the effective date of insurance. The suicide
exclusion with respect to any increase in death benefits which results from an application of the
insured subsequent to the effective date, if any, is limited to one year from the effective date of the
increase.
DocuSign Envelope ID: 0112B579-44D3-4350-9B91-C12A494DDC60
LIFE INSURANCE COMPANY OF NORTH AMERICA
PHILADELPHIA, PA 19192-2235
We, City of Palo Alto, whose main office address is Palo Alto, CA, hereby approve and accept the terms of
Group Policy Number FLX-962659 issued by the LIFE INSURANCE COMPANY OF NORTH AMERICA
to the TRUSTEE OF THE GROUP INSURANCE TRUST FOR EMPLOYERS IN THE PUBLIC
ADMINISTRATION INDUSTRY.
This form is to be signed in duplicate. One part is to be retained by City of Palo Alto; the other part is to be
returned to the LIFE INSURANCE COMPANY OF NORTH AMERICA.
City of Palo Alto
Signature and Title: _________________________________________ Date:__________________________
(This Copy Is To Be Returned To Life Insurance Company of North America)
--------------------------------------------------------------------------------------------------------------------------------------
LIFE INSURANCE COMPANY OF NORTH AMERICA
PHILADELPHIA, PA 19192-2235
We, City of Palo Alto, whose main office address is Palo Alto, CA, hereby approve and accept the terms of
Group Policy Number FLX-962659 issued by the LIFE INSURANCE COMPANY OF NORTH AMERICA
to the TRUSTEE OF THE GROUP INSURANCE TRUST FOR EMPLOYERS IN THE PUBLIC
ADMINISTRATION INDUSTRY.
This form is to be signed in duplicate. One part is to be retained by City of Palo Alto; the other part is to be
returned to the LIFE INSURANCE COMPANY OF NORTH AMERICA.
City of Palo Alto
Signature and Title: _________________________________________ Date:__________________________
(This Copy Is To Be Retained By City of Palo Alto)
DocuSign Envelope ID: 0112B579-44D3-4350-9B91-C12A494DDC60
1
LIFE INSURANCE COMPANY OF NORTH AMERICA (herein called the Company)
Amendment to be attached to and made a part of the Group Policy
A Contract between the Company and
Policyholder: Trustee of the Group Insurance Trust for Employers in the Public Administration Industry
Participating Subscriber: City of Palo Alto
(herein called the Subscriber)
Policy No.: FLX-962659
The Company and the Subscriber hereby agree that the Policy is amended as follows:
Effective January 1, 2012, the rates shown on the attached Schedule of Rates will remain in force for coverage under the
Policy.
No change in rates will be made until 36 months after the effective date of this Amendment. However, the Company
reserves the right to change the rates at any time during a period for which the rates are guaranteed if the conditions
described in the Changes in Premium Rates provision under the Administrative Provisions section of the Policy apply.
Except for the above, this Amendment does not change the Policy in any way.
FOR THE COMPANY
Matthew G. Manders, President
Date: October 19, 2011
Amendment No. 01
TL-004780
DocuSign Envelope ID: 0112B579-44D3-4350-9B91-C12A494DDC60
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SCHEDULE OF RATES
The following monthly rates apply to all Classes of Eligible Persons unless otherwise indicated.
FOR EMPLOYEE BENEFITS
Basic Life Insurance $.13 Per $1,000
Voluntary Life Insurance $.24 Per $1,000
FOR FORMER EMPLOYEE BENEFITS
Monthly Rates are based on units of $1,000.
Under Age 20 $.153 Age 45 - 49 $.384
Age 20 - 24 $.144 Age 50 - 54 $.726
Age 25 - 29 $.153 Age 55 - 59 $1.347
Age 30 - 34 $.177 Age 60 - 64 $2.461
Age 35 - 39 $.19 Age 65 - 69 $4.065
Age 40 - 44 $.243
A change in rates due to a change in the Former Employee's age will become effective on the Policy Anniversary Date
coinciding with or following the Former Employee's birthday.
TL-004718
EXHIBIT "A-1" BASIC & VOLUNTARY LIFE INSURANCE POLICY
DocuSign Envelope ID: 0112B579-44D3-4350-9B91-C12A494DDC60
LIFE INSURANCE COMPANY OF NORTH AMERICA
(herein called the Company)
Amendment to be attached to and made a part of the Group Policy
A Contract between the Company and
Policyholder: Trustee of the Group Insurance Trust for Employers in the Public Administration Industry
Participating Subscriber: City of Palo Alto
(herein called the Subscriber)
Policy No.: FLX-962659
The Company and the Subscriber hereby agree that the Policy is amended as follows:
Effective January 1, 2015, the rates shown on the attached Schedule of Rates will remain in force for coverage under the
Policy.
No change in rates will be made until 36 months after the effective date of this Amendment. However, the Company
reserves the right to change the rates at any time during a period for which the rates are guaranteed if the conditions
described in the Changes in Premium Rates provision under the Administrative Provisions section of the Policy apply.
Except for the above, this Amendment does not change the Policy in any way.
FOR THE COMPANY
Matthew G. Manders, President
Date: December 22, 2014
Amendment No. 02
TL-004780
DocuSign Envelope ID: 0112B579-44D3-4350-9B91-C12A494DDC60
SCHEDULE OF RATES
The following monthly rates apply to all Classes of Eligible Persons unless otherwise indicated.
FOR EMPLOYEE BENEFITS
Basic Life Insurance $.13 Per $1,000
Voluntary Life Insurance $.24 Per $1,000
FOR FORMER EMPLOYEE BENEFITS
Monthly Rates are based on units of $1,000.
Under Age 20 $.153 Age 45 - 49 $.384
Age 20 - 24 $.144 Age 50 - 54 $.726
Age 25 - 29 $.153 Age 55 - 59 $1.347
Age 30 - 34 $.177 Age 60 - 64 $2.461
Age 35 - 39 $.19 Age 65 - 69 $4.065
Age 40 - 44 $.243
A change in rates due to a change in the Former Employee's age will become effective on the Policy Anniversary Date
coinciding with or following the Former Employee's birthday.
TL-004718
EXHIBIT "A-1" BASIC & VOLUNTARY LIFE INSURANCE POLICY
DocuSign Envelope ID: 0112B579-44D3-4350-9B91-C12A494DDC60
CALIFORNIA LIFE AND HEALTH INSURANCE
GUARANTY ASSOCIATION ACT SUMMARY DOCUMENT AND DISCLAIMER
Residents of California who purchase life and health insurance and annuities should know that the insurance
companies licensed in this state to write these types of insurance are members of the California Life and Health
Insurance Guaranty Association. The purpose of this Association is to assure that policyholders will be protected,
within limits, in the unlikely event that a member insurer becomes financially unable to meet its obligations. If
this should happen, the Association will assess its other member insurance companies for the money to pay the
claims of insured persons who live in this state and, in some cases, to keep coverage in force. The valuable extra
protection provided through the Association is not unlimited, as noted in the box below, and is not a substitute for
consumers' care in selecting well managed and financially stable insurers.
The California Life and Health Insurance Guaranty Association may not provide coverage for this insurance. If coverage is provided, it may be subject to substantial limitations or exclusions, and
require continued residency in the state. You should not rely on coverage by the Association in selecting an insurance company or in selecting an insurance policy.
Coverage is NOT provided for your insurance or any portion of it that is not guaranteed by the Insurer or for which you have assumed the risk, such as a variable contract sold by prospectus.
Insurance companies or their agents are required by law to give or send you this notice. However, insurance companies and their agents are prohibited by law from using the existence of the Association
to induce you to purchase any kind of insurance policy.
If you have additional questions, you should first contact your insurer or agent and then may contact:
California Life and Health OR Consumer Service Division Insurance Guaranty Association California Department of Insurance
P.O. Box 16860 300 South Spring Street Beverly Hills, CA 90209 Los Angeles, CA 90013
Below is a brief summary of this law's coverages, exclusions and limits. This summary does not cover all
provisions of the law; nor does it in any way change anyone's rights or obligations under the Act or the rights or
obligations of the Association.
EXHIBIT "A-2"
BASIC & VOLUNTARY AD&D LIFE INSURANCE POLICY
DocuSign Envelope ID: 0112B579-44D3-4350-9B91-C12A494DDC60
COVERAGE
Generally, individuals will be protected by the California Life and Health Insurance Guaranty Association if they
live in this state and hold a life or health insurance contract, or an annuity, or if they are insured under a group
insurance contract, issued by a member insurer. The beneficiaries, payees or assignees of insured persons are
protected as well, even if they live in another state.
EXCLUSIONS FROM COVERAGE
However, persons holding such policies are not protected by this Association if:
• their insurer was not authorized to do business in this state when it issued the policy or contract;
• their policy was issued by a health care service plan (HMO), Blue Cross, Blue Shield, a charitable
organization, a fraternal benefit society, a mandatory state pooling plan, a mutual assessment company, an
insurance exchange, or a grants and annuities society;
• they are eligible for protection under the laws of another state. This may occur when the insolvent insurer
was incorporated in another state whose Guaranty Association protects insureds who live outside that state.
The Association also does not provide coverage for:
• unallocated annuity contracts; that is, contracts which are not issued to and owned by an individual and which
guarantee rights to group contract holders, not individuals;
• employer and association plans to the extent they are self-funded or uninsured;
• synthetic guaranteed interest contracts;
• any policy or portion of a policy which is not guaranteed by the insurer or for which the individual has
assumed the risk, such as a variable contract sold by prospectus;
• any policy of reinsurance unless an assumption certificate was issued;
• interest rate yields that exceed an average rate; and
• any portion of a contract that provides dividends or experience rating credits.
LIMITS ON AMOUNT OF COVERAGE
The Act limits the Association to pay benefits as follows:
Life and Annuity Benefits
• 80% of what the life insurance company would owe under a life policy or annuity contract up to
• $100,000 in cash surrender values;
• $100,000 in present value of annuities; or
• $250,000 in life insurance death benefits.
• A maximum of $250,000 for any one insured life no matter how many policies and contracts there were with
the same company, even if the policies provided different types of coverages.
Health Benefits
• A maximum of $200,000 of the contractual obligations that the health insurance company would owe were it
not insolvent. The maximum may increase or decrease annually based upon changes in the health care cost
component of the consumer price index.
PREMIUM SURCHARGE
Member insurers are required to recoup assessments paid to the Association by way of a surcharge on premiums
charged for health insurance policies to which the act applies.
DocuSign Envelope ID: 0112B579-44D3-4350-9B91-C12A494DDC60
Life Insurance Company of North America
1601 Chestnut Street, Philadelphia, Pennsylvania 19192-2235
A Stock Insurance Company
GROUP ACCIDENT POLICY
POLICYHOLDER: Trustee of the Group Insurance Trust for
Employers in the Public Administration
Industry
POLICY NUMBER: OK 964302
POLICY EFFECTIVE DATE:
January 1, 2009
POLICY ANNIVERSARY DATE: January 1
STATE OF ISSUE: Delaware
This Policy describes the terms and conditions of insurance. This Policy goes into effect subject to its applicable terms and
conditions at 12:01 AM on the Policy Effective Date shown above at the Policyholder’s address. The laws of the State of
Issue shown above govern this Policy.
We and the Policyholder agree to all of the terms of this Policy.
THIS IS A GROUP ACCIDENT ONLY INSURANCE POLICY. IT DOES NOT PAY BENEFITS FOR LOSS CAUSED BY SICKNESS.
THIS IS A LIMITED POLICY.
PLEASE READ IT CAREFULLY.
Deborah Young, Corporate Secretary Karen S. Rohan, President
Countersigned________________________________________
Where Required By Law
GA-00-1000.00
DocuSign Envelope ID: 0112B579-44D3-4350-9B91-C12A494DDC60
TABLE OF CONTENTS
SECTION PAGE NUMBER
SCHEDULE OF AFFILIATES 1
SCHEDULE OF BENEFITS 2
GENERAL DEFINITIONS 15
ELIGIBILITY AND EFFECTIVE DATE PROVISIONS 18
COMMON EXCLUSIONS 19
CONVERSION PRIVILEGE 20
CLAIM PROVISIONS 22
ADMINISTRATIVE PROVISIONS 24
GENERAL PROVISIONS 25
ACCIDENTAL DEATH AND DISMEMBERMENT COVERAGE 27
EXPOSURE AND DISAPPEARANCE COVERAGE 28
CHILD CARE CENTER BENEFIT 28
COMMON CARRIER BENEFIT 29
FELONIOUS ASSAULT AND VIOLENT CRIME BENEFIT 29
SEATBELT AND AIRBAG BENEFIT 30
SPECIAL EDUCATION BENEFIT 30
SPOUSE RETRAINING BENEFIT 32
GA-00-1000.00
DocuSign Envelope ID: 0112B579-44D3-4350-9B91-C12A494DDC60
1
SCHEDULE OF AFFILIATES
The following affiliates are covered under this Policy on the effective dates listed below.
AFFILIATE NAME LOCATION EFFECTIVE DATE
None
GA-00-1000.00
DocuSign Envelope ID: 0112B579-44D3-4350-9B91-C12A494DDC60
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SCHEDULE OF BENEFITS
This Policy is intended to be read in its entirety. In order to understand all the conditions, exclusions and limitations
applicable to its benefits, please read all the policy provisions carefully.
The Schedule of Benefits provides a brief outline of the coverage and benefits provided by this Policy. Please read the Description of Coverages and Benefits Section for full details.
Subscriber: City of Palo Alto
Effective Date of Subscriber Participation: January 1, 2009
Covered Classes:
Class 1 All active, full-time Employees of the Employer, regularly working a minimum of 20 hours per week
excluding Employees who are classified as Management.
Class 2 All active, full-time Employees of the Employer, regularly working a minimum of 20 hours per week
who are classified as Management.
Class 3 All active, Full-time Employees of the Employer as defined under the prior carrier policy number
643835, and on file with the Insurance Company, and who are regularly working a minimum of 20 hours
per week. (Closed Class)
DocuSign Envelope ID: 0112B579-44D3-4350-9B91-C12A494DDC60
3
SCHEDULE OF BENEFITS FOR CLASS 1
This Schedule of Benefits shows maximums, benefit periods and any limitations applicable to benefits provided in this Policy for each Covered Person unless otherwise indicated. Principal Sum, when referred to in this Schedule,
means the Employee’s Principal Sum in effect on the date of the Covered Accident causing the Covered Injury or Covered Loss unless otherwise specified.
Eligibility Waiting Period
The Eligibility Waiting Period is the period of time the Employee must be in a Covered Class to be eligible for coverage.
For Employees hired on or before the Policy Effective Date: No Waiting Period
For Employees hired after the Policy Effective Date: No Waiting Period
Time Period for Loss:
Any Covered Loss must occur within: 365 days of the Covered Accident
Maximum Age for Insurance: None
BASIC ACCIDENTAL DEATH AND DISMEMBERMENT BENEFITS
Employee Principal Sum: 1 times Annual Compensation rouinded to the next higher $1,000
if not already a multiple thereof, subject to a maximum of
$325,000.
Changes in the Covered Person's amount of insurance resulting from a change in the Employee's amount of
Annual Compensation take effect, subject to any Active Service requirement, on the first day of the month
following the change in Annual Compensation.
SCHEDULE OF COVERED LOSSES
Covered Loss Benefit
Loss of Life 100% of the Principal Sum
Loss of Two or More Hands or Feet 100% of the Principal Sum
Loss of Sight of Both Eyes 100% of the Principal Sum
Loss of One Hand or One Foot and Sight in One Eye 100% of the Principal Sum
Loss of Speech and Hearing (in both ears) 100% of the Principal Sum
Quadriplegia 100% of the Principal Sum
Paraplegia 75% of the Principal Sum
Hemiplegia 50% of the Principal Sum
Uniplegia 25% of the Principal Sum
Coma
Monthly Benefit 1% of the Principal Sum
Number of Monthly Benefits 11
Lump Sum Benefit 100% of the Principal Sum
When Payable Beginning of the 12th month
Loss of One Hand or Foot 50% of the Principal Sum
Loss of Sight in One Eye 50% of the Principal Sum
Loss of Speech 50% of the Principal Sum
Loss of Hearing (in both ears) 50% of the Principal Sum
Loss of all Four Fingers of the Same Hand 25% of the Principal Sum
Loss of Thumb and Index Finger of the Same Hand 25% of the Principal Sum
Loss of all the Toes of the Same Foot 25% of the Principal Sum
DocuSign Envelope ID: 0112B579-44D3-4350-9B91-C12A494DDC60
4
Age Reductions
A Covered Person's Principal Sum will be reduced to the percentage of his Principal Sum in effect on the date
preceding the first reduction, as shown below.
Age Percentage of Benefit Amount
70 but less than 75 65%
75 and over 50%
ADDITIONAL ACCIDENTAL DEATH AND DISMEMBERMENT COVERAGES
Accidental Death and Dismemberment benefits are provided under the following coverages. Any benefits payable under
them are as shown in the Schedule of Covered Losses and are not paid in addition to any other Accidental Death and
Dismemberment benefits.
EXPOSURE AND DISAPPEARANCE COVERAGE Principal Sum multiplied by the percentage applicable to the
Covered Loss, as shown in the Schedule of Covered Losses.
ADDITIONAL ACCIDENT BENEFITS
Any benefits payable under these Additional Accident Benefits shown below are paid in addition to any other Accidental
Death and Dismemberment benefits payable.
CHILD CARE CENTER BENEFIT
Benefit Amount $5,000
Maximum Benefit Period the earlier of 4 years or until the child turns 13 for each
surviving Dependent Child
COMMON CARRIER BENEFIT 100% multiplied by the percentage of the Principal Sum
applicable to the Covered Loss, as shown in the Schedule of
Covered Losses, subject to a maximum of $200,000
FELONIOUS ASSAULT AND VIOLENT CRIME BENEFIT
Accidental Death and Dismemberment Benefit 50% multiplied by the percentage of the Principal Sum
applicable to the Covered Loss, as shown in the Schedule of
Covered Losses, subject to a maximum of $25,000
Hospital Stay Benefit $100 per day
Maximum Benefit Period 365 days per Hospital Stay per Covered Accident
SEATBELT AND AIRBAG BENEFIT
Seatbelt Benefit $10,000
Airbag Benefit $5,000
Default Benefit $1,000
SPECIAL EDUCATION BENEFIT
Surviving Dependent Child Benefit $5,000
Maximum Number of Annual Payments
For Each Surviving Dependent Child 4
Default Benefit $1,000
SPOUSE RETRAINING BENEFIT
Benefit $5,000
DocuSign Envelope ID: 0112B579-44D3-4350-9B91-C12A494DDC60
5
VOLUNTARY ACCIDENTAL DEATH AND DISMEMBERMENT BENEFITS
Employee Principal Sum: Voluntary Benefits match the Voluntary Life Benefits under
policy number FLX 962659. Only Employees covered for the
Voluntary Life can elect Voluntary AD&D.
Changes in the Covered Person's amount of insurance resulting from a change in the Employee's amount of
Annual Compensation take effect, subject to any Active Service requirement, on the first day of the month
following the change in Annual Compensation.
SCHEDULE OF COVERED LOSSES
Covered Loss Benefit
Loss of Life 100% of the Principal Sum
Loss of Two or More Hands or Feet 100% of the Principal Sum
Loss of Sight of Both Eyes 100% of the Principal Sum
Loss of One Hand or One Foot and Sight in One Eye 100% of the Principal Sum
Loss of Speech and Hearing (in both ears) 100% of the Principal Sum
Quadriplegia 100% of the Principal Sum
Paraplegia 75% of the Principal Sum
Hemiplegia 50% of the Principal Sum
Uniplegia 25% of the Principal Sum
Coma
Monthly Benefit 1% of the Principal Sum
Number of Monthly Benefits 11
Lump Sum Benefit 100% of the Principal Sum
When Payable Beginning of the 12th month
Loss of One Hand or Foot 50% of the Principal Sum
Loss of Sight in One Eye 50% of the Principal Sum
Loss of Speech 50% of the Principal Sum
Loss of Hearing (in both ears) 50% of the Principal Sum
Loss of all Four Fingers of the Same Hand 25% of the Principal Sum
Loss of Thumb and Index Finger of the Same Hand 25% of the Principal Sum
Loss of all the Toes of the Same Foot 25% of the Principal Sum
Age Reductions
A Covered Person's Principal Sum will be reduced to the percentage of his Principal Sum in effect on the date
preceding the first reduction, as shown below. Age Percentage of Benefit Amount
70 but less than 75 65%
75 and over 50%
ADDITIONAL ACCIDENTAL DEATH AND DISMEMBERMENT COVERAGES
Accidental Death and Dismemberment benefits are provided under the following coverages. Any benefits payable under
them are as shown in the Schedule of Covered Losses and are not paid in addition to any other Accidental Death and
Dismemberment benefits.
EXPOSURE AND DISAPPEARANCE COVERAGE Principal Sum multiplied by the percentage applicable to the
Covered Loss, as shown in the Schedule of Covered Losses.
DocuSign Envelope ID: 0112B579-44D3-4350-9B91-C12A494DDC60
6
ADDITIONAL ACCIDENT BENEFITS
Any benefits payable under these Additional Accident Benefits shown below are paid in addition to any other Accidental
Death and Dismemberment benefits payable.
CHILD CARE CENTER BENEFIT
Benefit Amount $5,000
Maximum Benefit Period the earlier of 4 years or until the child turns 13 for each
surviving Dependent Child
COMMON CARRIER BENEFIT 100% multiplied by the percentage of the Principal Sum
applicable to the Covered Loss, as shown in the Schedule of
Covered Losses, subject to a maximum of $200,000
FELONIOUS ASSAULT AND VIOLENT CRIME BENEFIT
Accidental Death and Dismemberment Benefit 50% multiplied by the percentage of the Principal Sum
applicable to the Covered Loss, as shown in the Schedule of
Covered Losses, subject to a maximum of $25,000
Hospital Stay Benefit $100 per day
Maximum Benefit Period 365 days per Hospital Stay per Covered Accident
SEATBELT AND AIRBAG BENEFIT
Seatbelt Benefit $10,000
Airbag Benefit $5,000
Default Benefit $1,000
SPECIAL EDUCATION BENEFIT
Surviving Dependent Child Benefit $5,000
Maximum Number of Annual Payments
For Each Surviving Dependent Child 4
Default Benefit $1,000
SPOUSE RETRAINING BENEFIT
Benefit $5,000
INITIAL PREMIUM RATES
Premium Rate: Basic Insurance
Employee Rate: $0.02 per $1,000
Voluntary Insurance
Employee Rate: $0.02 per $1,000
Mode of Premium Payment: Monthly
Contributions: The cost of the coverage is paid by the Subscriber and the Employee
Premium Due Dates: The Policy Effective Date and the first day of each succeeding modal
period
Premium rates are subject to change in accordance with the Changes in Premium Rates section contained in the
Administrative Provisions section of this Policy.
GA-00-1100.00
DocuSign Envelope ID: 0112B579-44D3-4350-9B91-C12A494DDC60
7
SCHEDULE OF BENEFITS FOR CLASS 2
This Schedule of Benefits shows maximums, benefit periods and any limitations applicable to benefits provided in this Policy for each Covered Person unless otherwise indicated. Principal Sum, when referred to in this Schedule,
means the Employee’s Principal Sum in effect on the date of the Covered Accident causing the Covered Injury or Covered Loss unless otherwise specified.
Eligibility Waiting Period
The Eligibility Waiting Period is the period of time the Employee must be in a Covered Class to be eligible for coverage.
For Employees hired on or before the Policy Effective Date: No Waiting Period
For Employees hired after the Policy Effective Date: No Waiting Period
Time Period for Loss:
Any Covered Loss must occur within: 365 days of the Covered Accident
Maximum Age for Insurance: None
BASIC ACCIDENTAL DEATH AND DISMEMBERMENT BENEFITS
Employee Principal Sum: 1 times Annual Compensation rouinded to the next higher $1,000
if not already a multiple thereof, subject to a maximum of
$325,000.
Changes in the Covered Person's amount of insurance resulting from a change in the Employee's amount of
Annual Compensation take effect, subject to any Active Service requirement, on the first day of the month
following the change in Annual Compensation.
SCHEDULE OF COVERED LOSSES
Covered Loss Benefit
Loss of Life 100% of the Principal Sum
Loss of Two or More Hands or Feet 100% of the Principal Sum
Loss of Sight of Both Eyes 100% of the Principal Sum
Loss of One Hand or One Foot and Sight in One Eye 100% of the Principal Sum
Loss of Speech and Hearing (in both ears) 100% of the Principal Sum
Quadriplegia 100% of the Principal Sum
Paraplegia 75% of the Principal Sum
Hemiplegia 50% of the Principal Sum
Uniplegia 25% of the Principal Sum
Coma
Monthly Benefit 1% of the Principal Sum
Number of Monthly Benefits 11
Lump Sum Benefit 100% of the Principal Sum
When Payable Beginning of the 12th month
Loss of One Hand or Foot 50% of the Principal Sum
Loss of Sight in One Eye 50% of the Principal Sum
Loss of Speech 50% of the Principal Sum
Loss of Hearing (in both ears) 50% of the Principal Sum
Loss of all Four Fingers of the Same Hand 25% of the Principal Sum
Loss of Thumb and Index Finger of the Same Hand 25% of the Principal Sum
Loss of all the Toes of the Same Foot 25% of the Principal Sum
DocuSign Envelope ID: 0112B579-44D3-4350-9B91-C12A494DDC60
8
Age Reductions
A Covered Person's Principal Sum will be reduced to the percentage of his Principal Sum in effect on the date
preceding the first reduction, as shown below.
Age Percentage of Benefit Amount
70 but less than 75 65%
75 and over 50%
ADDITIONAL ACCIDENTAL DEATH AND DISMEMBERMENT COVERAGES
Accidental Death and Dismemberment benefits are provided under the following coverages. Any benefits payable under
them are as shown in the Schedule of Covered Losses and are not paid in addition to any other Accidental Death and
Dismemberment benefits.
EXPOSURE AND DISAPPEARANCE COVERAGE Principal Sum multiplied by the percentage applicable to the
Covered Loss, as shown in the Schedule of Covered Losses.
ADDITIONAL ACCIDENT BENEFITS
Any benefits payable under these Additional Accident Benefits shown below are paid in addition to any other Accidental
Death and Dismemberment benefits payable.
CHILD CARE CENTER BENEFIT
Benefit Amount $5,000
Maximum Benefit Period the earlier of 4 years or until the child turns 13 for each
surviving Dependent Child
COMMON CARRIER BENEFIT 100% multiplied by the percentage of the Principal Sum
applicable to the Covered Loss, as shown in the Schedule of
Covered Losses, subject to a maximum of $200,000
FELONIOUS ASSAULT AND VIOLENT CRIME BENEFIT
Accidental Death and Dismemberment Benefit 50% multiplied by the percentage of the Principal Sum
applicable to the Covered Loss, as shown in the Schedule of
Covered Losses, subject to a maximum of $25,000
Hospital Stay Benefit $100 per day
Maximum Benefit Period 365 days per Hospital Stay per Covered Accident
SEATBELT AND AIRBAG BENEFIT
Seatbelt Benefit $10,000
Airbag Benefit $5,000
Default Benefit $1,000
SPECIAL EDUCATION BENEFIT
Surviving Dependent Child Benefit $5,000
Maximum Number of Annual Payments
For Each Surviving Dependent Child 4
Default Benefit $1,000
SPOUSE RETRAINING BENEFIT
Benefit $5,000
DocuSign Envelope ID: 0112B579-44D3-4350-9B91-C12A494DDC60
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VOLUNTARY ACCIDENTAL DEATH AND DISMEMBERMENT BENEFITS
Employee Principal Sum: Voluntary Benefits match the Voluntary Life Benefits under
policy number FLX 962659. Only Employees covered for the
Voluntary Life can elect Voluntary AD&D.
Changes in the Covered Person's amount of insurance resulting from a change in the Employee's amount of
Annual Compensation take effect, subject to any Active Service requirement, on the first day of the month
following the change in Annual Compensation.
SCHEDULE OF COVERED LOSSES
Covered Loss Benefit
Loss of Life 100% of the Principal Sum
Loss of Two or More Hands or Feet 100% of the Principal Sum
Loss of Sight of Both Eyes 100% of the Principal Sum
Loss of One Hand or One Foot and Sight in One Eye 100% of the Principal Sum
Loss of Speech and Hearing (in both ears) 100% of the Principal Sum
Quadriplegia 100% of the Principal Sum
Paraplegia 75% of the Principal Sum
Hemiplegia 50% of the Principal Sum
Uniplegia 25% of the Principal Sum
Coma
Monthly Benefit 1% of the Principal Sum
Number of Monthly Benefits 11
Lump Sum Benefit 100% of the Principal Sum
When Payable Beginning of the 12th month
Loss of One Hand or Foot 50% of the Principal Sum
Loss of Sight in One Eye 50% of the Principal Sum
Loss of Speech 50% of the Principal Sum
Loss of Hearing (in both ears) 50% of the Principal Sum
Loss of all Four Fingers of the Same Hand 25% of the Principal Sum
Loss of Thumb and Index Finger of the Same Hand 25% of the Principal Sum
Loss of all the Toes of the Same Foot 25% of the Principal Sum
Age Reductions
A Covered Person's Principal Sum will be reduced to the percentage of his Principal Sum in effect on the date
preceding the first reduction, as shown below. Age Percentage of Benefit Amount
70 but less than 75 65%
75 and over 50%
ADDITIONAL ACCIDENTAL DEATH AND DISMEMBERMENT COVERAGES
Accidental Death and Dismemberment benefits are provided under the following coverages. Any benefits payable under
them are as shown in the Schedule of Covered Losses and are not paid in addition to any other Accidental Death and
Dismemberment benefits.
EXPOSURE AND DISAPPEARANCE COVERAGE Principal Sum multiplied by the percentage applicable to the
Covered Loss, as shown in the Schedule of Covered Losses.
DocuSign Envelope ID: 0112B579-44D3-4350-9B91-C12A494DDC60
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ADDITIONAL ACCIDENT BENEFITS
Any benefits payable under these Additional Accident Benefits shown below are paid in addition to any other Accidental
Death and Dismemberment benefits payable.
CHILD CARE CENTER BENEFIT
Benefit Amount $5,000
Maximum Benefit Period the earlier of 4 years or until the child turns 13 for each
surviving Dependent Child
COMMON CARRIER BENEFIT 100% multiplied by the percentage of the Principal Sum
applicable to the Covered Loss, as shown in the Schedule of
Covered Losses, subject to a maximum of $200,000
FELONIOUS ASSAULT AND VIOLENT CRIME BENEFIT
Accidental Death and Dismemberment Benefit 50% multiplied by the percentage of the Principal Sum
applicable to the Covered Loss, as shown in the Schedule of
Covered Losses, subject to a maximum of $25,000
Hospital Stay Benefit $100 per day
Maximum Benefit Period 365 days per Hospital Stay per Covered Accident
SEATBELT AND AIRBAG BENEFIT
Seatbelt Benefit $10,000
Airbag Benefit $5,000
Default Benefit $1,000
SPECIAL EDUCATION BENEFIT
Surviving Dependent Child Benefit $5,000
Maximum Number of Annual Payments
For Each Surviving Dependent Child 4
Default Benefit $1,000
SPOUSE RETRAINING BENEFIT
Benefit $5,000
INITIAL PREMIUM RATES
Premium Rate: Basic Insurance
Employee Rate: $0.02 per $1,000
Voluntary Insurance
Employee Rate: $0.02 per $1,000
Mode of Premium Payment: Monthly
Contributions: The cost of the coverage is paid by the Subscriber and the Employee
Premium Due Dates: The Policy Effective Date and the first day of each succeeding modal
period
Premium rates are subject to change in accordance with the Changes in Premium Rates section contained in the
Administrative Provisions section of this Policy.
GA-00-1100.00
DocuSign Envelope ID: 0112B579-44D3-4350-9B91-C12A494DDC60
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SCHEDULE OF BENEFITS FOR CLASS 3
This Schedule of Benefits shows maximums, benefit periods and any limitations applicable to benefits provided in this Policy for each Covered Person unless otherwise indicated. Principal Sum, when referred to in this Schedule,
means the Employee’s Principal Sum in effect on the date of the Covered Accident causing the Covered Injury or Covered Loss unless otherwise specified.
Eligibility Waiting Period
The Eligibility Waiting Period is the period of time the Employee must be in a Covered Class to be eligible for coverage.
For Employees hired on or before the Policy Effective Date: No Waiting Period
For Employees hired after the Policy Effective Date: No Waiting Period
Time Period for Loss:
Any Covered Loss must occur within: 365 days of the Covered Accident
Maximum Age for Insurance: None
BASIC ACCIDENTAL DEATH AND DISMEMBERMENT BENEFITS
Employee Principal Sum: 1 times Annual Compensation rouinded to the next higher $1,000
if not already a multiple thereof, subject to a maximum of
$325,000.
Changes in the Covered Person's amount of insurance resulting from a change in the Employee's amount of
Annual Compensation take effect, subject to any Active Service requirement, on the first day of the month
following the change in Annual Compensation.
SCHEDULE OF COVERED LOSSES
Covered Loss Benefit
Loss of Life 100% of the Principal Sum
Loss of Two or More Hands or Feet 100% of the Principal Sum
Loss of Sight of Both Eyes 100% of the Principal Sum
Loss of One Hand or One Foot and Sight in One Eye 100% of the Principal Sum
Loss of Speech and Hearing (in both ears) 100% of the Principal Sum
Quadriplegia 100% of the Principal Sum
Paraplegia 75% of the Principal Sum
Hemiplegia 50% of the Principal Sum
Uniplegia 25% of the Principal Sum
Coma
Monthly Benefit 1% of the Principal Sum
Number of Monthly Benefits 11
Lump Sum Benefit 100% of the Principal Sum
When Payable Beginning of the 12th month
Loss of One Hand or Foot 50% of the Principal Sum
Loss of Sight in One Eye 50% of the Principal Sum
Loss of Speech 50% of the Principal Sum
Loss of Hearing (in both ears) 50% of the Principal Sum
Loss of all Four Fingers of the Same Hand 25% of the Principal Sum
Loss of Thumb and Index Finger of the Same Hand 25% of the Principal Sum
Loss of all the Toes of the Same Foot 25% of the Principal Sum
DocuSign Envelope ID: 0112B579-44D3-4350-9B91-C12A494DDC60
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Age Reductions
A Covered Person's Principal Sum will be reduced to the percentage of his Principal Sum in effect on the date
preceding the first reduction, as shown below.
Age Percentage of Benefit Amount
70 but less than 75 65%
75 and over 50%
ADDITIONAL ACCIDENTAL DEATH AND DISMEMBERMENT COVERAGES
Accidental Death and Dismemberment benefits are provided under the following coverages. Any benefits payable under
them are as shown in the Schedule of Covered Losses and are not paid in addition to any other Accidental Death and
Dismemberment benefits.
EXPOSURE AND DISAPPEARANCE COVERAGE Principal Sum multiplied by the percentage applicable to the
Covered Loss, as shown in the Schedule of Covered Losses.
ADDITIONAL ACCIDENT BENEFITS
Any benefits payable under these Additional Accident Benefits shown below are paid in addition to any other Accidental
Death and Dismemberment benefits payable.
CHILD CARE CENTER BENEFIT
Benefit Amount $5,000
Maximum Benefit Period the earlier of 4 years or until the child turns 13 for each
surviving Dependent Child
COMMON CARRIER BENEFIT 100% multiplied by the percentage of the Principal Sum
applicable to the Covered Loss, as shown in the Schedule of
Covered Losses, subject to a maximum of $200,000
FELONIOUS ASSAULT AND VIOLENT CRIME BENEFIT
Accidental Death and Dismemberment Benefit 50% multiplied by the percentage of the Principal Sum
applicable to the Covered Loss, as shown in the Schedule of
Covered Losses, subject to a maximum of $25,000
Hospital Stay Benefit $100 per day
Maximum Benefit Period 365 days per Hospital Stay per Covered Accident
SEATBELT AND AIRBAG BENEFIT
Seatbelt Benefit $10,000
Airbag Benefit $5,000
Default Benefit $1,000
SPECIAL EDUCATION BENEFIT
Surviving Dependent Child Benefit $5,000
Maximum Number of Annual Payments
For Each Surviving Dependent Child 4
Default Benefit $1,000
SPOUSE RETRAINING BENEFIT
Benefit $5,000
DocuSign Envelope ID: 0112B579-44D3-4350-9B91-C12A494DDC60
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VOLUNTARY ACCIDENTAL DEATH AND DISMEMBERMENT BENEFITS
Employee Principal Sum: Voluntary Benefits match the Voluntary Life Benefits under
policy number FLX 962659. Only Employees covered for the
Voluntary Life can elect Voluntary AD&D.
Changes in the Covered Person's amount of insurance resulting from a change in the Employee's amount of
Annual Compensation take effect, subject to any Active Service requirement, on the first day of the month
following the change in Annual Compensation.
SCHEDULE OF COVERED LOSSES
Covered Loss Benefit
Loss of Life 100% of the Principal Sum
Loss of Two or More Hands or Feet 100% of the Principal Sum
Loss of Sight of Both Eyes 100% of the Principal Sum
Loss of One Hand or One Foot and Sight in One Eye 100% of the Principal Sum
Loss of Speech and Hearing (in both ears) 100% of the Principal Sum
Quadriplegia 100% of the Principal Sum
Paraplegia 75% of the Principal Sum
Hemiplegia 50% of the Principal Sum
Uniplegia 25% of the Principal Sum
Coma
Monthly Benefit 1% of the Principal Sum
Number of Monthly Benefits 11
Lump Sum Benefit 100% of the Principal Sum
When Payable Beginning of the 12th month
Loss of One Hand or Foot 50% of the Principal Sum
Loss of Sight in One Eye 50% of the Principal Sum
Loss of Speech 50% of the Principal Sum
Loss of Hearing (in both ears) 50% of the Principal Sum
Loss of all Four Fingers of the Same Hand 25% of the Principal Sum
Loss of Thumb and Index Finger of the Same Hand 25% of the Principal Sum
Loss of all the Toes of the Same Foot 25% of the Principal Sum
Age Reductions
A Covered Person's Principal Sum will be reduced to the percentage of his Principal Sum in effect on the date
preceding the first reduction, as shown below. Age Percentage of Benefit Amount
70 but less than 75 65%
75 and over 50%
ADDITIONAL ACCIDENTAL DEATH AND DISMEMBERMENT COVERAGES
Accidental Death and Dismemberment benefits are provided under the following coverages. Any benefits payable under
them are as shown in the Schedule of Covered Losses and are not paid in addition to any other Accidental Death and
Dismemberment benefits.
EXPOSURE AND DISAPPEARANCE COVERAGE Principal Sum multiplied by the percentage applicable to the
Covered Loss, as shown in the Schedule of Covered Losses.
DocuSign Envelope ID: 0112B579-44D3-4350-9B91-C12A494DDC60
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ADDITIONAL ACCIDENT BENEFITS
Any benefits payable under these Additional Accident Benefits shown below are paid in addition to any other Accidental
Death and Dismemberment benefits payable.
CHILD CARE CENTER BENEFIT
Benefit Amount $5,000
Maximum Benefit Period the earlier of 4 years or until the child turns 13 for each
surviving Dependent Child
COMMON CARRIER BENEFIT 100% multiplied by the percentage of the Principal Sum
applicable to the Covered Loss, as shown in the Schedule of
Covered Losses, subject to a maximum of $200,000
FELONIOUS ASSAULT AND VIOLENT CRIME BENEFIT
Accidental Death and Dismemberment Benefit 50% multiplied by the percentage of the Principal Sum
applicable to the Covered Loss, as shown in the Schedule of
Covered Losses, subject to a maximum of $25,000
Hospital Stay Benefit $100 per day
Maximum Benefit Period 365 days per Hospital Stay per Covered Accident
SEATBELT AND AIRBAG BENEFIT
Seatbelt Benefit $10,000
Airbag Benefit $5,000
Default Benefit $1,000
SPECIAL EDUCATION BENEFIT
Surviving Dependent Child Benefit $5,000
Maximum Number of Annual Payments
For Each Surviving Dependent Child 4
Default Benefit $1,000
SPOUSE RETRAINING BENEFIT
Benefit $5,000
INITIAL PREMIUM RATES
Premium Rate: Basic Insurance
Employee Rate: $0.02 per $1,000
Voluntary Insurance
Employee Rate: $0.02 per $1,000
Mode of Premium Payment: Monthly
Contributions: The cost of the coverage is paid by the Subscriber and the Employee
Premium Due Dates: The Policy Effective Date and the first day of each succeeding modal
period
Premium rates are subject to change in accordance with the Changes in Premium Rates section contained in the
Administrative Provisions section of this Policy.
GA-00-1100.00
DocuSign Envelope ID: 0112B579-44D3-4350-9B91-C12A494DDC60
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GENERAL DEFINITIONS
Please note that certain words used in this Policy have specific meanings. The words defined below and capitalized within
the text of this Policy have the meanings set forth below.
Active Service An Employee will be considered in Active Service with his employer on any day
that is either of the following:
1. one of the Employer’s scheduled work days on which the Employee is
performing his regular duties on a full-time basis, either at one of the
Employer’s usual places of business or at some other location to which the
Employer’s business requires the Employee to travel;
2. a scheduled holiday, vacation day or period of Employer-approved paid leave
of absence, other than sick leave, only if the Employee was in Active Service
on the preceding scheduled workday.
Age A Covered Person’s Age, for purposes of initial premium calculations, is his Age
attained on the date coverage becomes effective for him under this Policy.
Thereafter, it is his Age attained on his last birthday.
Aircraft A vehicle which:
1. has a valid certificate of airworthiness; and
2. is being flown by a pilot with a valid license to operate the Aircraft.
Annual Compensation An Employee's annual earnings for normal work established by the Subscriber for
his job classification, including commissions averaged over 12 months, excluding
bonuses or overtime.
Covered Accident A sudden, unforeseeable, external event that results, directly and independently of
all other causes, in a Covered Injury or Covered Loss and meets all of the
following conditions:
1. occurs while the Covered Person is insured under this Policy;
2. is not contributed to by disease, Sickness, mental or bodily infirmity;
3. is not otherwise excluded under the terms of this Policy.
Covered Injury Any bodily harm that results directly and independently of all other causes from a
Covered Accident.
Covered Loss A loss that is all of the following:
1. the result, directly and independently of all other causes, of a Covered
Accident;
2. one of the Covered Losses specified in the Schedule of Covered Losses;
3. suffered by the Covered Person within the applicable time period specified in
the Schedule of Benefits.
Covered Person An eligible person, as defined in the Schedule of Benefits, for whom an enrollment
form has been accepted by Us and required premium has been paid when due and
for whom coverage under this Policy remains in force.
Employee For eligibility purposes, an Employee of the Employer who is in one of the
Covered Classes.
Employer The Subscriber and any affiliates, subsidiaries or divisions shown in the Schedule
of Covered Affiliates and which are covered under this Policy on the date of issue
or subsequently agreed to by Us.
He, His, Him Refers to any individual, male or female.
DocuSign Envelope ID: 0112B579-44D3-4350-9B91-C12A494DDC60
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Hospital An institution that meets all of the following:
1. it is licensed as a Hospital pursuant to applicable law;
2. it is primarily and continuously engaged in providing medical care and
treatment to sick and injured persons;
3. it is managed under the supervision of a staff of medical doctors;
4. it provides 24-hour nursing services by or under the supervision of a graduate
registered nurse (R.N.);
5. it has medical, diagnostic and treatment facilities, with major surgical facilities
on its premises, or available on a prearranged basis;
6. it charges for its services.
The term Hospital does not include a clinic, facility, or unit of a Hospital for:
1. rehabilitation, convalescent, custodial, educational or nursing care;
2. the aged, drug addicts or alcoholics;
3. a Veteran’s Administration Hospital or Federal Government Hospital unless
the Covered Person incurs an expense.
Inpatient A Covered Person who is confined for at least one full day’s Hospital room and
board. The requirement that a person be charged for room and board does not
apply to confinement in a Veteran’s Administration Hospital or Federal
Government Hospital and in such case, the term 'Inpatient' shall mean a Covered
Person who is required to be confined for a period of at least a full day as
determined by the Hospital.
Nurse A licensed graduate Registered Nurse (R.N.), a licensed practical Nurse (L.P.N.) or
a licensed vocational Nurse (L.V.N.) and who is not:
1. employed or retained by the Subscriber;
2. living in the Covered Person’s household; or
3. a parent, sibling, spouse or child of the Covered Person.
Outpatient A Covered Person who receives treatment, services and supplies while not an
Inpatient in a Hospital.
Prior Plan The plan of insurance providing similar benefits, sponsored by the Employer in
effect immediately prior to this Policy’s Effective Date.
Physician A licensed health care provider practicing within the scope of his license and
rendering care and treatment to a Covered Person that is appropriate for the
condition and locality and who is not:
1. employed or retained by the Subscriber;
2. living in the Covered Person’s household;
3. a parent, sibling, spouse or child of the Covered Person.
Sickness A physical or mental illness.
Subscriber Any participating organization that subscribes to the trust to which this Policy is
issued.
Terrorist Act Any hostile or violent act carried out by a group of persons having political or
military goals but not operating on behalf of a foreign state and whose purpose is to
compel an act or omission by any other person or governmental entity.
DocuSign Envelope ID: 0112B579-44D3-4350-9B91-C12A494DDC60
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Totally Disabled or Totally Disabled or Total Disability means either:
Total Disability 1. inability of the Covered Person who is currently employed to do any type of
work for which he is or may become qualified by reason of education, training
or experience; or
2. inability of the Covered Person who is not currently employed to perform all
of the activities of daily living including eating, transferring, dressing,
toileting, bathing, and continence, without human supervision or assistance.
We, Us, Our Life Insurance Company of North America.
GA-00-1200.00
DocuSign Envelope ID: 0112B579-44D3-4350-9B91-C12A494DDC60
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ELIGIBILITY AND EFFECTIVE DATE PROVISIONS
Subscriber Effective Date
Accident Insurance Benefits become effective for each Subscriber in consideration of the Subscriber’s application,
Subscription Agreement and payment of the initial premium when due. Insurance coverage for the Subscriber becomes
effective on the Effective Date of Subscriber Participation.
Eligibility
An Employee becomes eligible for insurance under this Policy on the date he meets all of the requirements of one of the
Covered Classes and completes any Eligibility Waiting Period, as shown in the Schedule of Benefits.
Effective Date for Individuals
Basic Accidental Death and Dismemberment Benefits
Insurance becomes effective for an eligible Employee, subject to the Deferred Effective Date provision below, on the latest
of the following dates:
1. the effective date of this Policy;
2. the date the Employee becomes eligible.
Voluntary Accidental Death and Dismemberment Benefits
Insurance becomes effective for an eligible Employee who applies and agrees to make required contributions within 31
days of eligibility, and subject to the Deferred Effective Date provision below, on the latest of the following dates:
1. the effective date of this Policy;
2. the date the Employee becomes eligible;
3. the date We receive the Employee’s completed enrollment form and the required first premium, during his
lifetime.
DEFERRED EFFECTIVE DATE Active Service
The effective date of insurance will be deferred for any Employee who is not in Active Service on the date coverage would
otherwise become effective. Coverage will become effective on the later of the date he returns to Active Service and the
date coverage would otherwise have become effective.
Effective Date of Changes
Any increase or decrease in the amount of insurance for the Covered Person resulting from:
1. a change in benefits provided by this Policy; or
2. a change in the Employee’s Covered Class will take effect on the date of such change.
Increases will take effect subject to any Active Service requirement.
TERMINATION OF INSURANCE
The insurance on a Covered Person will end on the earliest date below:
1. the date this Policy or insurance for a Covered Class is terminated;
2. the next premium due date after the date the Covered Person is no longer in a Covered Class or satisfies eligibility
requirements under this Policy;
3. the last day of the last period for which premium is paid;
4. the next premium due date after the Covered Person attains the maximum Age for insurance under this Policy.
Termination will not affect a claim for a Covered Loss or Covered Injury that is the result, directly and independently of all
other causes, of a Covered Accident that occurs while coverage was in effect.
Continuation for Layoff, Leave of Absence or Family Medical Leave
Insurance for an Employee may be continued until the earliest of the following dates if: (a) an Employee is on a temporary
layoff, an Employer-approved leave of absence or an Employer-approved family medical leave; and (b) required premium
contributions are paid when due.
1. for a layoff: coverage continues through the end of the month in which the layoff begins;
2. for an Employer-approved leave of absence: coverage continues through the end of the month in which the leave
begins;
3. for an Employer-approved family medical leave: 12 weeks in a consecutive 12-month period.
GA-00-1300.00
DocuSign Envelope ID: 0112B579-44D3-4350-9B91-C12A494DDC60
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COMMON EXCLUSIONS
In addition to any benefit-specific exclusions, benefits will not be paid for any Covered Injury or Covered Loss which,
directly or indirectly, in whole or in part, is caused by or results from any of the following unless coverage is specifically
provided for by name in the Description of Benefits Section:
1. intentionally self-inflicted injury, suicide or any attempt thereat while sane or insane;
2. commission or attempt to commit a felony or an assault;
3. commission of or active participation in a riot, insurrection or Terrorist Act;
4. bungee jumping; parachuting; skydiving; parasailing; hang-gliding;
5. declared or undeclared war or act of war;
6. flight in, boarding or alighting from an Aircraft or any craft designed to fly above the Earth’s surface:
a. except as a passenger on a regularly scheduled commercial airline;
b. being flown by the Covered Person or in which the Covered Person is a member of the crew;
c. being used for:
i. crop dusting, spraying or seeding, giving and receiving flying instruction, fire fighting, sky
writing, sky diving or hang-gliding, pipeline or power line inspection, aerial photography or
exploration, racing, endurance tests, stunt or acrobatic flying; or
ii. any operation that requires a special permit from the FAA, even if it is granted (this does not
apply if the permit is required only because of the territory flown over or landed on);
d. designed for flight above or beyond the earth’s atmosphere;
e. an ultra-light or glider;
f. being used for the purpose of parachuting or skydiving;
g. being used by any military authority, except an Aircraft used by the Air Mobility Command or its foreign
equivalent;
7. Sickness, disease, bodily or mental infirmity, bacterial or viral infection or medical or surgical treatment thereof,
except for any bacterial infection resulting from an accidental external cut or wound or accidental ingestion of
contaminated food;
8. travel in any Aircraft owned, leased or controlled by the Subscriber, or any of its subsidiaries or affiliates. An
Aircraft will be deemed to be ''controlled'' by the Subscriber if the Aircraft may be used as the Subscriber wishes
for more than 10 straight days, or more than 15 days in any year;
9. a Covered Accident that occurs while engaged in the activities of active duty service in the military, navy or air
force of any country or international organization. Covered Accidents that occur while engaged in Reserve or
National Guard training are not excluded until training extends beyond 31 days;
10. operating any type of vehicle while under the influence of alcohol or any drug, narcotic or other intoxicant
including any prescribed drug for which the Covered Person has been provided a written warning against
operating a vehicle while taking it. Under the influence of alcohol, for purposes of this exclusion, means
intoxicated, as defined by the law of the state in which the Covered Accident occurred;
11. voluntary ingestion of any narcotic, drug, poison, gas or fumes, unless prescribed or taken under the direction of a
Physician and taken in accordance with the prescribed dosage;
12. in addition, benefits will not be paid for services or treatment rendered by a Physician, Nurse or any other person
who is:
a. employed or retained by the Subscriber;
b. providing homeopathic, aroma-therapeutic or herbal therapeutic services;
c. living in the Covered Person’s household;
d. a parent, sibling, spouse or child of the Covered Person.
GA-00-1403.00
DocuSign Envelope ID: 0112B579-44D3-4350-9B91-C12A494DDC60
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CONVERSION PRIVILEGE
1. If the Covered Person’s insurance or any portion of it ends for any of the following reasons:
a. employment or membership ends;
b. eligibility ends (except for age for the Employee);
the Covered Person may have Us issue converted accident insurance on an individual policy or an individual certificate
under a designated group policy. The Covered Person may apply for an amount of coverage that is:
a. in $1,000 increments;
b. not less than $25,000, regardless of the amount of insurance under the group policy; and
c. not more than the amount of insurance he had under the group policy, except as provided above, up to a maximum
amount of $250,000.
The Covered Person must be under age 70 to get a converted policy.
If the Covered Person’s insurance or any portion of it ends for non-payment of premium, he may not convert. If the
Covered Person’s insurance ends for a reason described in 2. below, conversion is subject to that section.
The converted policy or certificate will cover accidental death and dismemberment. The policy or certificate will not
contain disability or other additional benefits. The Covered Person need not show Us that he is insurable.
If the Covered Person has converted his group coverage and later becomes insured under the same group plan as
before, he may not convert a second time unless he provides, at his own expense, proof of insurability or proof the
prior converted policy is no longer in force.
The Covered Person must apply for the individual policy within 31 days after his coverage under this Group Policy
ends and pay the required premium, based on Our table of rates for such policies, his Age and class of risk. If the
Covered Person has assigned ownership of his group coverage, the owner/assignee must apply for the individual
policy.
If the Covered Person suffers a Covered Loss or dies during this 31-day period as the result of an accident that would
have been covered under this Group Policy, We will pay as a claim under this Group Policy the amount of insurance
that the Covered Person was entitled to convert. It does not matter whether the Covered Person applied for the
individual policy or certificate. If such policy or certificate is issued, it will be in exchange for any other benefits under
this Group Policy.
The individual policy or certificate will take effect on the day following the date coverage under the Group Policy
ended; or, if later, the date application is made.
Exclusions
The converted policy may exclude the hazards or conditions that apply to the Covered Person’s group coverage at the
time it ends. We will reduce payment under the converted policy by the amount of any benefits paid under the group
policy if both cover the same loss.
2. If the Covered Person’s insurance ends because this Group Policy is terminated or is amended to terminate insurance
for the Covered Person’s class, and he has been covered under this Group Policy or, any group accident insurance
issued to the Employer which the Group Policy replaced, for at least five years, the Covered Person may have Us issue
an individual policy or certificate of accident insurance subject to the same terms, conditions and limitations listed
above. However, the amount he may apply for will be limited to the lesser of the following:
a. coverage under this Group Policy less any amount of group accident insurance for which he is eligible on the date
this Group Policy is terminated or for which he became eligible within 31 days of such termination, or
b. $10,000.
DocuSign Envelope ID: 0112B579-44D3-4350-9B91-C12A494DDC60
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Extension of Conversion Period
If the Covered Person is eligible to convert and is not notified of this right at least 15 days prior to the end of the 31 day
conversion period, the conversion period will be extended. The Covered Person will have 15 days from the date notice is
given to apply for a converted policy or certificate. In no event will the conversion period be extended beyond 90 days.
Notice, for the purpose of this section, means written notice presented to the Covered Person by the Subscriber or mailed to
the Covered Person’s last known address as reported by the Subscriber.
If the Covered Person sustains a Covered Loss or dies during the extended conversion period, but more than 31 days after
his coverage under the Group Policy terminates, benefits will not be paid under the Group Policy. If the Covered Person’s
application for a converted policy or certificate is received by Us and the required premium is paid, benefits may be payable
under the converted policy or certificate.
GA-01-1505.00
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CLAIM PROVISIONS
Notice of Claim
Written or authorized electronic/telephonic notice of claim must be given to Us within 31 days after a Covered Loss occurs
or begins or as soon as reasonably possible. If written or authorized electronic/telephonic notice is not given in that time,
the claim will not be invalidated or reduced if it is shown that written or authorized electronic/telephonic notice was given
as soon as was reasonably possible. Notice can be given to Us at Our Home Office in Philadelphia, Pennsylvania, such
other place as We may designate for the purpose, or to Our authorized agent. Notice should include the Subscriber's name
and policy number and the Covered Person’s name, address, policy and certificate number.
Claim Forms
We will send claim forms for filing proof of loss when We receive notice of a claim. If such forms are not sent within 15
days after We receive notice, the proof requirements will be met by submitting, within the time fixed in this Policy for
filing proof of loss, written or authorized electronic proof of the nature and extent of the loss for which the claim is made.
Claimant Cooperation Provision
Failure of a claimant to cooperate with Us in the administration of the claim may result in termination of the claim. Such
cooperation includes, but is not limited to, providing any information or documents needed to determine whether benefits
are payable or the actual benefit amount due.
Proof of Loss
Written or authorized electronic proof of loss satisfactory to Us must be given to Us at Our office, within 90 days of the
loss for which claim is made. If (a) benefits are payable as periodic payments and (b) each payment is contingent upon
continuing loss, then proof of loss must be submitted within 90 days after the termination of each period for which We are
liable. If written or authorized electronic notice is not given within that time, no claim will be invalidated or reduced if it is
shown that such notice was given as soon as reasonably possible. In any case, written or authorized electronic proof must
be given not more than one year after the time it is otherwise required, except if proof is not given solely due to the lack of
legal capacity.
Time of Payment of Claims
We will pay benefits due under this Policy for any loss other than a loss for which this Policy provides any periodic
payment immediately upon receipt of due written or authorized electronic proof of such loss. Subject to due written or
authorized electronic proof of loss, all accrued benefits for loss for which this Policy provides periodic payment will be
paid monthly unless otherwise specified in the benefits descriptions and any balance remaining unpaid at the termination of
liability will be paid immediately upon receipt of proof satisfactory to Us.
Payment of Claims
All benefits will be paid in United States currency. Benefits for loss of life will be payable in accordance with the
Beneficiary provision and these Claim Provisions. All other proceeds payable under this Policy, unless otherwise stated,
will be payable to the covered Employee or to his estate.
If We are to pay benefits to the estate or to a person who is incapable of giving a valid release, We may pay $1,000 to a
relative by blood or marriage whom We believe is equitably entitled. Any payment made by Us in good faith pursuant to
this provision will fully discharge Us to the extent of such payment and release Us from all liability.
Payment of Claims to Foreign Employees
The Subscriber may, in a fiduciary capacity, receive and hold any benefits payable to covered Employees whose place of
employment is other than the United States of America.
We will not be responsible for the application or disposition by the Subscriber of any such benefits paid. Our payments to
the Subscriber will constitute a full discharge of Our liability for those payments under this Policy.
Physical Examination and Autopsy
We, at Our own expense, have the right and opportunity to examine the Covered Person when and as often as We may
reasonably require while a claim is pending and to make an autopsy in case of death where it is not forbidden by law.
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Legal Actions
No action at law or in equity may be brought to recover under this Policy less than 60 days after written or authorized
electronic proof of loss has been furnished as required by this Policy. No such action will be brought more than three years
after the time such written proof of loss must be furnished.
Beneficiary
The beneficiary is the person or persons the Employee names or changes on a form executed by him and satisfactory to Us.
This form may be in writing or by any electronic means agreed upon between Us and the Subscriber. Consent of the
beneficiary is not required to affect any changes, unless the beneficiary has been designated as an irrevocable beneficiary,
or to make any assignment of rights or benefits permitted by this Policy.
A beneficiary designation or change will become effective on the date the Employee executes it. However, We will not be
liable for any action taken or payment made before We record notice of the change at our Home Office.
If more than one person is named as beneficiary, the interests of each will be equal unless the Employee has specified
otherwise. The share of any beneficiary who does not survive the Covered Person will pass equally to any surviving
beneficiaries unless otherwise specified.
If there is no named beneficiary or surviving beneficiary, or if the Employee dies while benefits are payable to him, We
may make direct payment to the first surviving class of the following classes of persons:
1. spouse;
2. child or children;
3. mother or father;
4. sisters or brothers;
5. estate of the Covered Person.
Recovery of Overpayment
If benefits are overpaid, We have the right to recover the amount overpaid by either of the following methods.
1. A request for lump sum payment of the overpaid amount.
2. A reduction of any amounts payable under this Policy.
If there is an overpayment due when the Covered Person dies, We may recover the overpayment from the Covered Person’s
estate.
GA-00-1600.00
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ADMINISTRATIVE PROVISIONS
Premiums
All premium rates are expressed in, and all premiums are payable in, United States currency. The premiums for this Policy
will be based on the rates set forth in the Schedule of Benefits, the plan and amounts of insurance in effect. If a Covered
Person’s insurance amounts are reduced due to age, premium will be based on the amounts of insurance in force on the day
after the reduction took place.
Changes in Premium Rates
We may change the premium rates from time to time with at least 31 days advance written notice to the Subscriber. No
change in rates will be made until 48 months after the Policy Effective Date. An increase in rates will not be made more
often than once in a 12-month period. However, We reserve the right to change rates at any time if any of the following
events take place:
1. the terms of this Policy change;
2. the terms of the Subscriber's participation change;
3. a division, subsidiary, affiliated company or eligible class is added or deleted from this Policy;
4. there is a change in the factors bearing on the risk assumed;
5. any federal or state law or regulation is amended to the extent it affects Our benefit obligation.
Payment of Premium
The first premium is due on the Subscriber's effective date of participation under this Policy. Thereafter, premiums are due
on the Premium Due Dates agreed upon between Us and the Subscriber. If any premium is not paid when due, the
Subscriber's participation under this Policy will be terminated as of the Premium Due Date on which premium was not paid.
Grace Period
A Grace Period of 60 days will be granted to each Subscriber for payment of required premiums under this Policy. A
Subscriber's participation under this Policy will remain in effect during the Grace Period. The Subscriber is liable to Us for
any unpaid premium for the time its participation under this Policy was in force.
A Grace Period of 60 days will be granted for payment of required premiums under this Policy. A Covered Person’s
insurance under this Policy will remain in force during the Grace Period. We will reduce any benefits payable for any
claims incurred during the grace period by the amount of premium due. If no such claims are incurred and premium is not
paid during the grace period, insurance will end on the last day of the period for which premiums were paid.
GA-00-1701.00
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GENERAL PROVISIONS
Entire Contract; Changes
This Policy, including the endorsements, amendments and any attached papers constitutes the entire contract of insurance.
No change in this Policy will be valid until approved by one of Our executive officers and endorsed on or attached to this
Policy. No agent has authority to change this Policy or to waive any of its provisions.
Subscriber Participation Under This Policy
An organization may elect to participate under this Policy by submitting a signed Subscriber participation agreement to the
Policyholder. No participation by an organization is in effect until approved by Us.
Misstatement of Fact
If the Covered Person has misstated any fact, all amounts payable under this Policy will be such as the premium paid would
have purchased had such fact been correctly stated.
Certificates
Where required by law, We will provide a certificate of insurance for delivery to the Covered Person. Each certificate will
list the benefits, conditions and limits of this Policy. It will state to whom benefits will be paid.
30 Day Right To Examine Certificate
If a Covered Person does not like the Certificate for any reason, it may be returned to Us within 30 days after receipt. We
will return any premium that has been paid and the Certificate will be void as if it had never been issued.
Multiple Certificates
The Covered Person may have in force only one certificate at a time under this Policy. If at any time the Covered Person
has been issued more than one certificate, then only the largest shall be in effect. We will refund premiums paid for the
others for any period of time that more than one certificate was issued.
Assignment
We will be bound by an assignment of a Covered Person's insurance under this Policy only when the original assignment or
a certified copy of the assignment, signed by the Covered Person and any irrevocable beneficiary, is filed with Us. The
assignee may exercise all rights and receive all benefits assigned only while the assignment remains in effect and insurance
under this Policy and the Covered Person’s certificate remains in force.
Incontestability
1. Of This Policy or Participation Under This Policy
All statements made by the Subscriber to obtain this Policy or to participate under this Policy are considered representations
and not warranties. No statement will be used to deny or reduce benefits or be used as a defense to a claim, or to deny the
validity of this Policy or of participation under this Policy unless a copy of the instrument containing the statement is, or
has been, furnished to the Subscriber.
After two years from the Policy Effective Date, no such statement will cause this Policy to be contested except for fraud.
2. Of A Covered Person's Insurance
All statements made by a Covered Person are considered representations and not warranties. No statement will be used to
deny or reduce benefits or be used as a defense to a claim, unless a copy of the instrument containing the statement is, or
has been, furnished to the claimant.
After two years from the Covered Person’s effective date of insurance, or from the effective date of increased benefits, no
such statement will cause insurance or the increased benefits to be contested except for fraud or lack of eligibility for
insurance.
In the event of death or incapacity, the beneficiary or representative shall be given a copy.
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Policy Termination
We may terminate coverage on or after the first anniversary of the policy effective date. The Subscriber may terminate
coverage on any premium due date. Written or authorized electronic notice must be given at least 31 days prior to such
premium due date.
Termination will not affect a claim for a Covered Loss that is the result, directly and independently of all other causes, of a
Covered Accident that occurs while coverage was in effect.
Reinstatement
This Policy may be reinstated if it lapsed for nonpayment of premium. Requirements for reinstatement are written
application of the Subscriber satisfactory to Us and payment of all overdue premiums. Any premium accepted in
connection with a reinstatement will be applied to a period for which premium was not previously paid.
Clerical Error
A Covered Person's insurance will not be affected by error or delay in keeping records of insurance under this Policy. If
such error or delay is found, We will adjust the premium fairly.
Conformity with Statutes
Any provisions in conflict with the requirements of any state or federal law that apply to this Policy are automatically
changed to satisfy the minimum requirements of such laws.
Policy Changes
We may agree with the Subscriber to modify a plan of benefits without the Covered Person’s consent.
Workers’ Compensation Insurance
This Policy is not in place of and does not affect any requirements for coverage under any Workers’ Compensation law.
Examination of the Policy
This Group Policy will be available for inspection at the Subscriber's office during regular business hours.
Examination of Records
We will be permitted to examine all of the Subscriber's records relating to this Group Policy. Examination may occur at
any reasonable time while the Group Policy is in force; or it may occur:
1. at any time for two years after the expiration of this Group Policy; or, if later,
2. upon the final adjustment and settlement of all Group Policy claims.
The Subscriber is acting as an agent of the Covered Person for transactions relating to this insurance. The actions of the
Subscriber will not be considered Our actions.
GA-00-1800.00
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DESCRIPTION OF COVERAGES AND BENEFITS
This Description of Coverages and Benefits Section describes the Accident Coverages and Benefits provided to You. Benefit amounts, benefit periods and any applicable aggregate and benefit maximums are shown in the Schedule of
Benefits. Certain words capitalized in the text of these descriptions have special meanings within this Certificate
and are defined in the General Definitions section. Please read these and the Common Exclusions sections in order to understand all of the terms, conditions and limitations applicable to these coverages and benefits. ACCIDENTAL DEATH AND DISMEMBERMENT BENEFITS
Covered Loss We will pay the benefit for any one of the Covered Losses listed in the Schedule of Benefits, if the
Covered Person suffers a Covered Loss resulting directly and independently of all other causes from a
Covered Accident within the applicable time period specified in the Schedule of Benefits.
If the Covered Person sustains more than one Covered Loss as a result of the same Covered Accident,
benefits will be paid for the Covered Loss for which the largest available benefit is payable. If the loss
results in death, benefits will only be paid under the Loss of Life benefit provision. Any Loss of Life
benefit will be reduced by any paid or payable Accidental Dismemberment benefit. However, if such
Accidental Dismemberment benefit equals or exceeds the Loss of Life benefit, no additional benefit will
be paid.
Definitions Loss of a Hand or Foot means complete Severance through or above the wrist or ankle joint.
Loss of Sight means the total, permanent loss of all vision in one eye which is irrecoverable by natural,
surgical or artificial means.
Loss of Speech means total and permanent loss of audible communication which is irrecoverable by
natural, surgical or artificial means.
Loss of Hearing means total and permanent loss of ability to hear any sound in both ears which is
irrecoverable by natural, surgical or artificial means.
Loss of a Thumb and Index Finger of the Same Hand or Four Fingers of the Same Hand means
complete Severance through or above the metacarpophalangeal joints of the same hand (the joints
between the fingers and the hand).
Loss of Toes means complete Severance through the metatarsalphalangeal joint.
Paralysis or Paralyzed means total loss of use of a limb. A Physician must determine the loss of use to
be complete and irreversible.
Quadriplegia means total Paralysis of both upper and both lower limbs.
Hemiplegia means total Paralysis of the upper and lower limbs on one side of the body.
Paraplegia means total Paralysis of both lower limbs or both upper limbs.
Uniplegia means total Paralysis of one upper or one lower limb.
Coma means a profound state of unconsciousness which resulted directly and independently from all
other causes from a Covered Accident, and from which the Covered Person is not likely to be aroused
through powerful stimulation. This condition must be diagnosed and treated regularly by a Physician.
Coma does not mean any state of unconsciousness intentionally induced during the course of treatment of
a Covered Injury unless the state of unconsciousness results from the administration of anesthesia in
preparation for surgical treatment of that Covered Accident.
Severance means the complete and permanent separation and dismemberment of the part from the body.
Exclusions The exclusions that apply to this benefit are in the Common Exclusions section.
GA-00-2100.00
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ADDITIONAL ACCIDENTAL DEATH AND DISMEMBERMENT COVERAGES
Accidental Death and Dismemberment benefits are provided under the following coverages. Any benefits payable under
them are shown in the Schedule of Covered Losses and will not be paid in addition to any other Accidental Death and
Dismemberment benefits payable.
EXPOSURE AND DISAPPEARANCE COVERAGE
Benefits for Accidental Death and Dismemberment, as shown in the Schedule of Covered Losses, will be payable if a
Covered Person suffers a Covered Loss which results directly and independently of all other causes from unavoidable
exposure to the elements following a Covered Accident.
If the Covered Person disappears and is not found within one year from the date of the wrecking, sinking or disappearance
of the conveyance in which the Covered Person was riding in the course of a trip which would otherwise be covered under
this Policy, it will be presumed that the Covered Person’s death resulted directly and independently of all other causes from
a Covered Accident.
Exclusions The exclusions that apply to this coverage are in the Common Exclusions Section.
GA-00-2202.00
ADDITIONAL ACCIDENT BENEFITS
Accidental Death and Dismemberment benefits are provided under the following Additional Benefits. Any benefits
payable under them will be paid in addition to any other Accidental Death and Dismemberment benefit payable.
CHILD CARE CENTER BENEFIT
We will pay benefits shown in the Schedule of Benefits for the care of each surviving Dependent Child in a Child Care
Center if death of the covered Employee results directly and independently of all other causes from a Covered Accident and
all of the following conditions are met:
1. coverage for his Dependent Children was in force on the date of the Covered Accident causing his death; and
2. one or more surviving Dependent Children is under Age 13 and:
a. was enrolled in a Child Care Center on the date of the Covered Accident; or
b. enrolls in a Child Care Center within 90 days from the date of the Covered Accident.
This benefit will be payable to the Surviving Spouse if the Spouse has custody of the child. If the Surviving Spouse does
not have custody of the child, benefits will be paid to the child’s legally appointed guardian. Payments will be made at the
end of each 12 month period that begins after the date of the covered Employee’s death. A claim must be submitted to Us
at the end of each 12 month period. A 12 month period begins:
1. when the Dependent Child enters a Child Care Center for the first time, within the period specified in (2b) above,
after the covered Employee’s death; or
2. on the first of the month following the covered Employee’s death, if the Dependent Child was enrolled in a Child
Care Center before the covered Employee’s death.
Each succeeding 12 month period begins on the day immediately following the last day of the preceding period. Pro rata
payments will be made for periods of enrollment in a Child Care Center of less than 12 months.
Definitions For purposes of this benefit: Child Care Center is a facility which:
1. is licensed and run according to laws and regulations applicable to child care facilities; and
2. provides care and supervision for children in a group setting on a regular, daily basis.
A Child Care Center does not include any of the following:
1. a Hospital;
2. the child’s home;
3. care provided during normal school hours while a child is attending grades one through twelve.
Exclusions The exclusions that apply to this benefit are in the Common Exclusions Section.
GA-00-2222.00
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COMMON CARRIER BENEFIT
We will pay the benefit shown in the Schedule of Benefits if the Covered Person suffers a Covered Loss that results directly
and independently of all other causes from a Covered Accident that occurs while riding as a fare-paying passenger in, or
being struck by, a Common Carrier. Riding includes getting into and out of the Common Carrier.
Definition For purposes of this benefit: Common Carrier means:
1. a public conveyance, including Aircraft, licensed for hire to carry fare-paying
passengers; or
2. a transport Aircraft operated by the Air Mobility Command of the United States of
America or a similar air transport service of another country.
Exclusions The exclusions that apply to this benefit are in the Common Exclusions Section.
GA-00-2225.00
FELONIOUS ASSAULT AND VIOLENT CRIME BENEFIT
We will pay the amount shown in the Schedule of Benefits, subject to the following conditions and exclusions, when the
Covered Employee suffers a Covered Loss resulting directly and independently of all other causes from a Covered Accident
that occurs during a violent crime or felonious assault as described below. A police report detailing the felonious assault or
violent crime must be provided before any benefits will be paid. The Covered Accident must occur while the Covered
Person is on the business or premises of the Employer.
To qualify for benefit payment, the Covered Accident must occur during any of the following:
1. actual or attempted robbery or holdup;
2. actual or attempted kidnapping;
3. any other type of intentional assault that is a crime classified as a felony by the governing statute or common law
in the state where the felony occurred.
We will pay a Hospital Stay Benefit, subject to the following conditions and exclusions, when the Covered Person suffers a
Covered Loss resulting directly and independently of all other causes from a Covered Accident that occurs during a violent
crime or felonious assault if all of the following conditions are met:
1. the Covered Person is covered for Hospital Stay benefits under this Policy;
2. the Hospital Stay begins within 30 days of the violent crime/felonious assault;
3. the Hospital Stay is at the direction and under the care of a Physician;
4. the Covered Person provides proof satisfactory to Us that his Hospital Stay was necessitated to treat Covered
Injuries sustained in a Covered Accident caused solely by a violent crime or felonious assault;
5. the Hospital Stay begins while the Covered Person’s insurance is in effect.
The benefit will be paid for each day of a continuous Hospital Stay.
Definitions For purposes of this benefit: Family Member means the Covered Person’s parent, step-parent, Spouse or former Spouse,
son, daughter, brother, sister, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-
in-law, sister-in-law, aunt, uncle, cousins, grandparent, grandchild and stepchild.
Fellow Employee means a person employed by the same Employer as the Covered Person or by
an Employer that is an affiliated or subsidiary corporation. It shall also include any person who
was so employed, but whose employment was terminated not more than 45 days prior to the date
on which the defined violent crime/felonious assault was committed.
Member of the Same Household means a person who maintains residence at the same address
as the Covered Person.
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Exclusions Benefits will not be paid for treatment of any Covered Injury sustained or Covered Loss incurred during
any:
1. violent crime or felonious assault committed by the Covered Person; or
2. felonious assault or violent crime committed upon the Covered Person by a Fellow
Employee, Family Member, or Member of the Same Household.
Other exclusions that apply to this benefit are in the Common Exclusions Section.
GA-00-2234.00
SEATBELT AND AIRBAG BENEFIT
We will pay the benefit shown in the Schedule of Benefits, subject to the conditions and exclusions described below, when
the Covered Person dies directly and independently of all other causes from a Covered Accident while wearing a seatbelt
and operating or riding as a passenger in an Automobile. An additional benefit is provided if the Covered Person was also
positioned in a seat protected by a properly-functioning and properly deployed Supplemental Restraint System (Airbag).
Verification of proper use of the seatbelt at the time of the Covered Accident and that the Supplemental Restraint System
properly inflated upon impact must be a part of an official police report of the Covered Accident or be certified, in writing,
by the investigating officer(s) and submitted with the Covered Person’s claim to Us.
If such certification or police report is not available or it is unclear whether the Covered Person was wearing a seatbelt or
positioned in a seat protected by a properly functioning and properly deployed Supplemental Restraint System, We will pay
a default benefit shown in the Schedule of Benefits to the Covered Person’s beneficiary.
In the case of a child, seatbelt means a child restraint, as required by state law and approved by the National Highway
Traffic Safety Administration, properly secured and being used as recommended by its manufacturer for children of like
Age and weight at the time of the Covered Accident.
Definitions For purposes of this benefit:
Supplemental Restraint System means an airbag that inflates upon impact for added protection to the
head and chest areas.
Automobile means a self-propelled, private passenger motor vehicle with four or more wheels which is a
type both designed and required to be licensed for use on the highway of any state or country.
Automobile includes, but is not limited to, a sedan, station wagon, sport utility vehicle, or a motor vehicle
of the pickup, van, camper, or motor-home type. Automobile does not include a mobile home or any
motor vehicle which is used in mass or public transit.
Exclusions The exclusions that apply to this benefit are in the Common Exclusions Section.
GA-00-2251.00
SPECIAL EDUCATION BENEFIT
We will pay the benefit, up to the Maximum Benefit shown in the Schedule of Benefits, for each qualifying Dependent
Child. The Covered Person’s death must result, directly and independently of all other causes from a Covered Accident for
which an Accidental Death Benefit is payable under this Policy. This benefit is subject to the conditions and exclusions
described below.
A qualifying Dependent Child must:
1. enroll as a full-time student at an accredited school of higher learning before reaching the limiting Age for
dependent eligibility stated in this Policy;
2. continue his education as a full-time student; and
3. incur expenses for tuition, fees, books, room and board, transportation and any other costs payable directly to, or
approved and certified by, such school.
A qualifying surviving Spouse must:
1. enroll in any accredited school for the purpose of retraining or refreshing skills needed for employment within one
year of the date of the covered Employee’s Covered Accident;
2. remain enrolled in such accredited school; and
3. incur expenses payable directly to, or approved by, such school.
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Payments will be made to each qualifying Dependent Child or to the child’s legal guardian, if the child is a minor at the end
of each year for the number of years shown in the Schedule of Benefits. We must receive proof satisfactory to Us of the
Dependent Child’s enrollment and attendance within 31 days of the end of each year. The first year for which a Special
Education Benefit is payable will begin on the first of the month following the date the covered Employee died, if the
surviving Dependent Child was enrolled on that date in an accredited school of higher learning beyond the 12th grade;
otherwise on the date he enrolls in such school. Each succeeding year for which benefits are payable will begin on the date
following the end of the preceding year.
If no Dependent Child qualifies for Special Education Benefits within 365 days of the covered Employee’s death, We will
pay the default benefit shown in the Schedule of Benefits to the covered Employee’s beneficiary.
Payments will be made to the surviving Spouse at the end of each year for the number of years shown in the Schedule of
Benefits. We must receive proof satisfactory to Us of the Spouse’s enrollment and attendance within 31 days of the end of
each year. The first year for which a Special Education Benefit is payable will begin on the date the surviving Spouse
enrolls in an accredited school for the first time following the date the Employee died. Each succeeding year for which
benefits are payable will begin on the date following the end of the preceding year.
If a surviving Spouse does not qualify for Special Education Benefits within 365 days of the covered Employee’s death, We
will pay the default benefit shown in the Schedule of Benefits to the covered Employee’s beneficiary.
Definitions For the purposes of this benefit: Dependent Child(ren) An Employee’s unmarried child who meets the following requirements:
1. A child from live birth to 19 years old;
2. A child who is 19 or more years old but less than 25 years old, enrolled in a school as a full-time
student and primarily supported by the Employee;
3. A child who is 19 or more years old, primarily supported by the Employee and incapable of self-
sustaining employment by reason of mental or physical handicap. Proof of the child’s condition
and dependence must be submitted to Us within 31 days after the date the child ceases to qualify
as a Dependent Child for the reasons listed above. During the next two years, We may, from
time to time, require proof of the continuation of such condition and dependence. After that, We
may require proof no more than once a year.
A child, for purposes of this provision, includes an Employee’s:
1. natural child;
2. adopted child, beginning with any waiting period pending finalization of the child’s adoption;
3. stepchild who resides with the Employee;
4. child for whom the Employee is legal guardian, as long as the child resides with the Employee
and depends on the Employee for financial support. Financial support means that the Employee
is eligible to claim the dependent for purposes of Federal and State income tax returns.
Spouse the Employee’s lawful spouse under age 70.
Exclusions The exclusions that apply to this benefit are in the Common Exclusions Section.
GA-00-2252a.00
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SPOUSE RETRAINING BENEFIT
We will pay expenses incurred, as described below, up to the Maximum Benefit shown in the Schedule of Benefits, to
enable the covered Employee’s Spouse to obtain occupational or educational training needed for employment if the covered
Employee dies directly and independently of all other causes from a Covered Accident. This benefit is subject to the
conditions and exclusions described below.
This benefit will be payable if the covered Employee dies within one year of a Covered Accident and is survived by his
Spouse who:
1. enrolls, within three years after the covered Employee’s death in any accredited school for the purpose of
retraining or refreshing skills needed for employment; and
2. incurs expenses payable directly to, or approved and certified by, such school.
If there is no surviving Spouse at the time of the covered Employee’s Covered Accidental Death, the Default Benefit shown
in the Schedule of Benefits will be paid to the covered Employee’s beneficiary. Definitions For the purposes of this benefit:
Spouse will include the Employee’s lawful spouse under age 70.
Exclusions The exclusions that apply to this benefit are in the Common Exclusions Section.
GA-00-2254a.00
DocuSign Envelope ID: 0112B579-44D3-4350-9B91-C12A494DDC60
LIFE INSURANCE COMPANY OF NORTH AMERICA
Philadelphia, PA 19192-2235
We, City of Palo Alto, whose main office address is Palo Alto, CA, hereby approve and accept the terms of Group Policy
Number OK 964302 issued by the LIFE INSURANCE COMPANY OF NORTH AMERICA to the TRUSTEE OF THE
GROUP INSURANCE TRUST FOR EMPLOYERS IN THE PUBLIC ADMINISTRATION INDUSTRY.
This form is to be signed in duplicate. One part is to be retained by City of Palo Alto; the other part is to be returned to the
LIFE INSURANCE COMPANY OF NORTH AMERICA.
City of Palo Alto
Signature and Title:____________________________________________ Date: __________________________
(This Copy Is To Be Returned To Life Insurance Company of North America)
-------------------------------------------------------------------------------------------------------------------------------------------
LIFE INSURANCE COMPANY OF NORTH AMERICA
Philadelphia, PA 19192-2235
We, City of Palo Alto, whose main office address is Palo Alto, CA, hereby approve and accept the terms of Group Policy
Number OK 964302 issued by the LIFE INSURANCE COMPANY OF NORTH AMERICA to the TRUSTEE OF THE
GROUP INSURANCE TRUST FOR EMPLOYERS IN THE PUBLIC ADMINISTRATION INDUSTRY.
This form is to be signed in duplicate. One part is to be retained by City of Palo Alto; the other part is to be returned to the
LIFE INSURANCE COMPANY OF NORTH AMERICA.
City of Palo Alto
Signature and Title:____________________________________________ Date: __________________________
(This Copy Is To Be Retained By City of Palo Alto)
DocuSign Envelope ID: 0112B579-44D3-4350-9B91-C12A494DDC60
Life Insurance Company of North America 1601 Chestnut Street
Philadelphia, Pennsylvania 19192-2235
AMENDMENT
Policyholder: Trustee of the Group Insurance Trust for Employers in the Public Administration Industry
Subscriber: City of Palo Alto Policy No.: OK-964302
This Amendment is attached to and made part of the Policy specified above. It is subject to all of the policy provisions that
do not conflict with its provisions.
Subscriber and We hereby agree that the Policy is amended as follows:
Effective January 1, 2012, the following rates will remain in force for Classes 1, 2 and 3 for coverage under the Policy:
Premium Rate: Basic Insurance
Employee Rate: $0.02 per $1,000
Voluntary Insurance
Employee Rate: $0.02 per $1,000
No change in rates will be made until 36 months after the effective date of this Amendment. However, the Company
reserves the right to change the rates at any time during a period for which the rates are guaranteed if the conditions
described in the Changes in Premium Rates provision under the Administrative Provisions section of the Policy apply.
Except for the above, this Amendment does not change the Policy in any way.
Life Insurance Company of North America
Matthew G. Manders, President
Date: October 19, 2011
Amendment No. 01
GA-00-4000.00
EXHIBIT "A-2" BASIC & VOLUNTARY AD&D LIFE INSURANCE POLICY
DocuSign Envelope ID: 0112B579-44D3-4350-9B91-C12A494DDC60
Life Insurance Company of North America
1601 Chestnut Street
Philadelphia, Pennsylvania 19192-2235
AMENDMENT
Policyholder: Trustee of the Group Insurance Trust for Employers in the Public Administration Industry
Subscriber: City of Palo Alto Policy No.: OK-964302
This amendment will be in effect only for Covered Employees in Active Service on the Effective Date(s) shown below. If
an Employee is not in Active Service on the date he would otherwise become eligible, he will become eligible on the date
he returns to Active Service.
This Amendment is attached to and made part of the Policy specified above. It is subject to all of the policy provisions that
do not conflict with its provisions.
Subscriber and We hereby agree that the Policy is amended as follows:
Effective August 1, 2013, Additional Accident Benefits for Child Care Center Benefits for Classes 1, 2, and 3 is replaced
by the following:
ADDITIONAL ACCIDENT BENEFITS
Accidental Death and Dismemberment benefits are provided under the following Additional Benefits. Any benefits
payable under them will be paid in addition to any other Accidental Death and Dismemberment benefit payable.
CHILD CARE CENTER BENEFIT
We will pay benefits shown in the Schedule of Benefits for the care of each surviving Dependent Child in a Child Care
Center if death of the covered Employee results directly and independently of all other causes from a Covered Accident and
all of the following conditions are met:
1. one or more surviving Dependent Children is under Age 13 and:
a. was enrolled in a Child Care Center on the date of the Covered Accident; or
b. enrolls in a Child Care Center within 90 days from the date of the Covered Accident.
This benefit will be payable to the Surviving Spouse if the Spouse has custody of the child. If the Surviving Spouse does
not have custody of the child, benefits will be paid to the child’s legally appointed guardian. Payments will be made at the
end of each 12 month period that begins after the date of the covered Employee’s death. A claim must be submitted to Us
at the end of each 12 month period. A 12 month period begins:
1. when the Dependent Child enters a Child Care Center for the first time, within the period specified in (1b) above,
after the covered Employee’s death; or
2. on the first of the month following the covered Employee’s death, if the Dependent Child was enrolled in a Child
Care Center before the covered Employee’s death.
Each succeeding 12 month period begins on the day immediately following the last day of the preceding period. Pro rata
payments will be made for periods of enrollment in a Child Care Center of less than 12 months.
If there is no surviving Dependent Child at the time of the covered Employee Covered Accidental Death, the Default
Benefit shown in the Schedule of Benefits will be paid to the covered Employee’s beneficiary.
Definitions For purposes of this benefit:
Child Care Center is a facility which:
1. is licensed and run according to laws and regulations applicable to child care facilities; and
2. provides care and supervision for children in a group setting on a regular, daily basis.
DocuSign Envelope ID: 0112B579-44D3-4350-9B91-C12A494DDC60
A Child Care Center does not include any of the following:
1.a Hospital;
2. the child’s home;
3.care provided during normal school hours while a child is attending grades one through twelve.
Dependent Child(ren) An Employee’s unmarried child who meets the following requirements:
1. A child from live birth to 19 years old;
2. A child who is 19 or more years old but less than 25 years old, enrolled in a school as a full-time
student and primarily supported by the Employee;
3. A child who is 19 or more years old, primarily supported by the Employee and incapable of self-
sustaining employment by reason of mental or physical handicap. Proof of the child’s condition
and dependence must be submitted to Us within 31 days after the date the child ceases to qualify
as a Dependent Child for the reasons listed above. During the next two years, We may, from
time to time, require proof of the continuation of such condition and dependence. After that, We
may require proof no more than once a year.
A child, for purposes of this provision, includes an Employee’s:
1.natural child;
2.adopted child, beginning with any waiting period pending finalization of the child’s adoption;
3. stepchild who resides with the Employee;
4. child for whom the Employee is legal guardian, as long as the child resides with the Employee
and depends on the Employee for financial support. Financial support means that the Employee
is eligible to claim the dependent for purposes of Federal and State income tax returns.
Domestic Partner means a person who is registered as the covered Employee’s domestic partner with the
California Secretary of State.
A covered Employee’s Domestic Partner is an eligible participant under the Child Care Center Benefit if
the Domestic Partner is the only person meeting the Policy’s definition of ''Domestic Partner'' with
respect to the covered Employee.
Surviving Spouse will include the Spouse or Domestic Partner.
Exclusions The exclusions that apply to this benefit are in the Common Exclusions Section.
GA-00-2222a.00
Except for the above, this Amendment does not change the Policy in any way.
Life Insurance Company of North America
Matthew G. Manders, President
Date: August 8, 2013
Amendment No. 02
GA-00-4000.00
EXHIBIT "A-2" BASIC & VOLUNTARY AD&D LIFE INSURANCE POLICY
DocuSign Envelope ID: 0112B579-44D3-4350-9B91-C12A494DDC60
Life Insurance Company of North America
1601 Chestnut Street
Philadelphia, Pennsylvania 19192-2235
AMENDMENT
Policyholder: Trustee of the Group Insurance Trust for Employers in the Public Administration Industry
Subscriber: City of Palo Alto Policy No.: OK 964302
This Amendment is attached to and made part of the Policy specified above. It is subject to all of the policy provisions that
do not conflict with its provisions.
Subscriber and We hereby agree that the Policy is amended as follows:
Effective January 1, 2015, the following rates will remain in force for Classes 1, 2 and 3 for coverage under the Policy:
Premium Rate: Basic Insurance
Employee Rate: $0.02 per $1,000
Voluntary Insurance
Employee Rate: $0.02 per $1,000
No change in rates will be made until 36 months after the effective date of this Amendment. However, the Company
reserves the right to change the rates at any time during a period for which the rates are guaranteed if the conditions
described in the Changes in Premium Rates provision under the Administrative Provisions section of the Policy apply.
Except for the above, this Amendment does not change the Policy in any way.
Life Insurance Company of North America
Matthew G. Manders, President
Date: December 22, 2014
Amendment No. 03
GA-00-4000.00
EXHIBIT "A-2" BASIC & VOLUNTARY AD&D LIFE INSURANCE POLICY
DocuSign Envelope ID: 0112B579-44D3-4350-9B91-C12A494DDC60
CALIFORNIA LIFE AND HEALTH INSURANCE GUARANTY ASSOCIATION ACT SUMMARY DOCUMENT AND DISCLAIMER
Residents of California who purchase life and health insurance and annuities should know that the insurance
companies licensed in this state to write these types of insurance are members of the California Life and Health
Insurance Guaranty Association. The purpose of this Association is to assure that policyholders will be protected,
within limits, in the unlikely event that a member insurer becomes financially unable to meet its obligations. If
this should happen, the Association will assess its other member insurance companies for the money to pay the
claims of insured persons who live in this state and, in some cases, to keep coverage in force. The valuable extra
protection provided through the Association is not unlimited, as noted in the box below, and is not a substitute for
consumers' care in selecting well managed and financially stable insurers.
The California Life and Health Insurance Guaranty Association may not provide coverage for this insurance. If coverage is provided, it may be subject to substantial limitations or exclusions, and require continued residency in the state. You should not rely on coverage by the Association in selecting an
insurance company or in selecting an insurance policy.
Coverage is NOT provided for your insurance or any portion of it that is not guaranteed by the Insurer or for which you have assumed the risk, such as a variable contract sold by prospectus.
Insurance companies or their agents are required by law to give or send you this notice. However, insurance companies and their agents are prohibited by law from using the existence of the Association to induce you to purchase any kind of insurance policy.
If you have additional questions, you should first contact your insurer or agent and then may contact:
California Life and Health OR Consumer Service Division Insurance Guaranty Association California Department of Insurance P.O. Box 16860 300 South Spring Street
Beverly Hills, CA 90209 Los Angeles, CA 90013
Below is a brief summary of this law's coverages, exclusions and limits. This summary does not cover all
provisions of the law; nor does it in any way change anyone's rights or obligations under the Act or the
rights or obligations of the Association.
EXHIBIT “A-3” LONG TERM DISABILITY INSURANCE POLICY DocuSign Envelope ID: 0112B579-44D3-4350-9B91-C12A494DDC60
COVERAGE
Generally, individuals will be protected by the California Life and Health Insurance Guaranty Association
if they live in this state and hold a life or health insurance contract, or an annuity, or if they are insured
under a group insurance contract, issued by a member insurer. The beneficiaries, payees or assignees of
insured persons are protected as well, even if they live in another state.
EXCLUSIONS FROM COVERAGE
However, persons holding such policies are not protected by this Association if:
their insurer was not authorized to do business in this state when it issued the policy or contract;
their policy was issued by a health care service plan (HMO), Blue Cross, Blue Shield, a charitable
organization, a fraternal benefit society, a mandatory state pooling plan, a mutual assessment
company, an insurance exchange, or a grants and annuities society;
they are eligible for protection under the laws of another state. This may occur when the insolvent
insurer was incorporated in another state whose Guaranty Association protects insureds who live
outside that state.
The Association also does not provide coverage for:
unallocated annuity contracts; that is, contracts which are not issued to and owned by an individual
and which guarantee rights to group contract holders, not individuals;
employer and association plans to the extent they are self-funded or uninsured;
synthetic guaranteed interest contracts;
any policy or portion of a policy which is not guaranteed by the insurer or for which the individual
has assumed the risk, such as a variable contract sold by prospectus;
any policy of reinsurance unless an assumption certificate was issued;
interest rate yields that exceed an average rate; and
any portion of a contract that provides dividends or experience rating credits.
LIMITS ON AMOUNT OF COVERAGE
The Act limits the Association to pay benefits as follows:
Life and Annuity Benefits
80% of what the life insurance company would owe under a life policy or annuity contract up to
$100,000 in cash surrender values;
$100,000 in present value of annuities; or
$250,000 in life insurance death benefits.
A maximum of $250,000 for any one insured life no matter how many policies and contracts there
were with the same company, even if the policies provided different types of coverages.
Health Benefits
A maximum of $200,000 of the contractual obligations that the health insurance company would owe
were it not insolvent. The maximum may increase or decrease annually based upon changes in the
health care cost component of the consumer price index.
PREMIUM SURCHARGE
Member insurers are required to recoup assessments paid to the Association by way of a surcharge on
premiums charged for health insurance policies to which the act applies.
DocuSign Envelope ID: 0112B579-44D3-4350-9B91-C12A494DDC60
LIFE INSURANCE COMPANY OF NORTH AMERICA
1601 CHESTNUT STREET GROUP POLICY
PHILADELPHIA, PA 19192-2235
(800) 732-1603 TDD (800) 552-5744 A STOCK INSURANCE COMPANY
POLICYHOLDER: TRUSTEE OF THE GROUP INSURANCE
TRUST FOR EMPLOYERS IN THE PUBLIC
ADMINISTRATION INDUSTRY
SUBSCRIBER: City of Palo Alto
POLICY NUMBER: LK-961943
POLICY EFFECTIVE DATE: January 1, 2009
POLICY ANNIVERSARY DATE: January 1
This Policy describes the terms and conditions of coverage. It is issued in Delaware and shall be
governed by its laws. The Policy goes into effect on the Policy Effective Date, 12:01 a.m. at the
Policyholder's address.
In return for the required premium, the Insurance Company and the Policyholder have agreed to all the
terms of this Policy.
Deborah Young, Corporate Secretary Karen S. Rohan, President
TL-004700 O/O v-2
DocuSign Envelope ID: 0112B579-44D3-4350-9B91-C12A494DDC60
TABLE OF CONTENTS
SCHEDULE OF BENEFITS........................................................................................................................1
SCHEDULE OF BENEFITS FOR CLASS 1...............................................................................................2
SCHEDULE OF BENEFITS FOR CLASS 2...............................................................................................5
SCHEDULE OF BENEFITS FOR CLASS 3...............................................................................................8
ELIGIBILITY FOR INSURANCE ............................................................................................................11
EFFECTIVE DATE OF INSURANCE......................................................................................................11
TERMINATION OF INSURANCE...........................................................................................................11
CONTINUATION OF INSURANCE........................................................................................................12
DESCRIPTION OF BENEFITS.................................................................................................................13
EXCLUSIONS............................................................................................................................................18
CLAIM PROVISIONS...............................................................................................................................18
ADMINISTRATIVE PROVISIONS..........................................................................................................20
GENERAL PROVISIONS .........................................................................................................................21
DEFINITIONS............................................................................................................................................22
DOMESTIC PARTNER RIDER................................................................................................................25
DocuSign Envelope ID: 0112B579-44D3-4350-9B91-C12A494DDC60
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SCHEDULE OF BENEFITS
Premium Due Date: The last day of each month
Classes of Eligible Employees
On the pages following the definition of eligible employees there is a Schedule of Benefits for each Class
of Eligible Employees listed below. For an explanation of these benefits, please see the Description of
Benefits provision.
If an Employee is eligible under one Class of Eligible Employees and later becomes eligible under a
different Class of Eligible Employees, changes in his or her insurance due to the class change will be
effective on the first of the month following the change in class.
Class 1 All active, Full-time Service Employees International Union Employees/Members of the
Employer regularly working a minimum of 20 hours per week.
Class 2 All active, Full-time Employees of the Employer regularly working a minimum of 20
hours per week who are classified as Management, Confidential and Council Officer.
Class 3 All active, Full-time Employees of the Employer as defined under the prior carrier policy,
number 643835, and on file with the Insurance Company, regularly working a minimum
of 20 hours per week. (Closed Class)
DocuSign Envelope ID: 0112B579-44D3-4350-9B91-C12A494DDC60
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SCHEDULE OF BENEFITS FOR CLASS 1
Eligibility Waiting Period
For Employees hired on or before the Policy Effective Date: No Waiting Period
For Employees hired after the Policy Effective Date: No Waiting Period
Definition of Disability/Disabled
The Employee is considered Disabled if, solely because of Injury or Sickness, he or she is:
1. unable to perform the material duties of his or her Regular Occupation; and
2. unable to earn 80% or more of his or her Indexed Earnings from working in his or her Regular
Occupation.
After Disability Benefits have been payable for 24 months, the Employee is considered Disabled if, solely
due to Injury or Sickness, he or she is:
1. unable to perform the material duties of any occupation for which he or she is, or may reasonably
become, qualified based on education, training or experience; and
2. unable to earn 60% or more of his or her Indexed Earnings.
The Insurance Company will require proof of earnings and continued Disability.
Definition of Covered Earnings
Covered Earnings means an Employee's wage or salary as reported by the Employer for work performed
for the Employer as in effect just prior to the date Disability begins. It includes earnings received from
commissions but not bonuses, overtime pay and other extra compensation. Covered Earnings are
determined initially on the date an Employee applies for coverage. A change in the amount of Covered
Earnings is effective on the date of the change, if the Employer gives us written notice of the change and
the required premium is paid.
Commissions will be averaged for the 12 months just prior to the date Disability begins, or the months
employed, if less than 12 months.
Any increase in an Employee's Covered Earnings will not be effective during a period of continuous
Disability.
Elimination Period 60 days
Gross Disability Benefit
Option 1 The lesser of 66.67% of an Employee's monthly Covered
Earnings rounded to the nearest dollar or the Maximum
Disability Benefit.
Option 2 The lesser of 60% of an Employee's monthly Covered Earnings
rounded to the nearest dollar or the Maximum Disability Benefit.
Maximum Disability Benefit
Option 1 $4,000 per month
Option 2 $1,800 per month
Minimum Disability Benefit $100 per month
Disability Benefit Calculation
The Disability Benefit payable to the Employee is figured using the Gross Disability Benefit, Other
Income Benefits and the Return to Work Incentive. Monthly Benefits are based on a 30-day month. The
Disability Benefit will be prorated if payable for any period less than a month.
During any month the Employee has no Disability Earnings, the monthly benefit payable is the Gross
Disability Benefit less Other Income Benefits. During any month the Employee has Disability Earnings,
benefits are determined under the Return to Work Incentive. Benefits will not be less than the minimum
benefit shown in the Schedule of Benefits except as provided under the section Minimum Benefit.
DocuSign Envelope ID: 0112B579-44D3-4350-9B91-C12A494DDC60
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"Other Income Benefits" means any benefits listed in the Other Income Benefits provision that an
Employee receives on his or her own behalf or for dependents, or which the Employee's dependents
receive because of the Employee's entitlement to Other Income Benefits.
Return to Work Incentive
During any month the Employee has Disability Earnings, his or her benefits will be calculated as
follows.
The Employee's monthly benefit payable will be calculated as follows during the first 24 months
disability benefits are payable and the Employee has Disability Earnings:
1.Add the Employee's Gross Disability Benefit and Disability Earnings.
2.Compare the sum from 1. to the Employee's Indexed Earnings.
3.If the sum from 1. exceeds 100% of the Employee's Indexed Earnings, then subtract the
Indexed Earnings from the sum in 1.
4.The Employee's Gross Disability Benefit will be reduced by the difference from 3., as
well as by Other Income Benefits.
5.If the sum from 1. does not exceed 100% of the Employee's Indexed Earnings, the
Employee's Gross Disability Benefit will be reduced by Other Income Benefits.
After disability benefits are payable for 24 months, the monthly benefit payable is the Gross
Disability Benefit reduced by Other Income Benefits and 50% of Disability Earnings.
No Disability Benefits will be paid, and insurance will end if the Insurance Company determines
the Employee is able to work under a modified work arrangement and he or she refuses to do so
without Good Cause.
Additional Benefits
Survivor Benefit
Benefit Waiting Period: After 3 Monthly Benefits are payable.
Amount of Benefit: 100% of the sum of the last full Disability Benefit plus the
amount of any Disability Earnings by which the benefit had been
reduced for that month.
Maximum Benefit Period A single lump sum payment equal to 3 monthly Survivor
Benefits.
Maximum Benefit Period
The later of the Employee’s SSNRA* or the Maximum Benefit Period listed below.
Age When Disability Begins Maximum Benefit Period
Age 62 or under The Employee's 65th birthday or the date the 42nd Monthly
Benefit is payable, if later.
Age 63 The date the 36th Monthly Benefit is payable.
Age 64 The date the 30th Monthly Benefit is payable.
Age 65 The date the 24th Monthly Benefit is payable.
Age 66 The date the 21st Monthly Benefit is payable.
Age 67 The date the 18th Monthly Benefit is payable.
Age 68 The date the 15th Monthly Benefit is payable.
Age 69 or older The date the 12th Monthly Benefit is payable.
*SSNRA means the Social Security Normal Retirement Age in effect under the Social Security Act on the
Policy Effective Date.
DocuSign Envelope ID: 0112B579-44D3-4350-9B91-C12A494DDC60
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Initial Premium Rates – Option 1
$1.23 per $100 of Covered Payroll
Covered Payroll for an Employee will mean his or her Covered Earnings for the insurance month prior to
the date the determination is made. However, an Employee's Covered Payroll will not include any part of
his or her monthly Covered Earnings which exceed $6,000.
Initial Premium Rates – Option 2
$.575 per $100 of Covered Payroll
Covered Payroll for an Employee will mean his or her Covered Earnings for the insurance month prior to
the date the determination is made. However, an Employee's Covered Payroll will not include any part of
his or her monthly Covered Earnings which exceed $3,000.
TL-004774
DocuSign Envelope ID: 0112B579-44D3-4350-9B91-C12A494DDC60
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SCHEDULE OF BENEFITS FOR CLASS 2
Eligibility Waiting Period
For Employees hired on or before the Policy Effective Date: No Waiting Period
For Employees hired after the Policy Effective Date: No Waiting Period
Definition of Disability/Disabled
The Employee is considered Disabled if, solely because of Injury or Sickness, he or she is:
1. unable to perform the material duties of his or her Regular Occupation; and
2. unable to earn 80% or more of his or her Indexed Earnings from working in his or her Regular
Occupation.
After Disability Benefits have been payable for 24 months, the Employee is considered Disabled if, solely
due to Injury or Sickness, he or she is:
1. unable to perform the material duties of any occupation for which he or she is, or may reasonably
become, qualified based on education, training or experience; and
2. unable to earn 60% or more of his or her Indexed Earnings.
The Insurance Company will require proof of earnings and continued Disability.
Definition of Covered Earnings
Covered Earnings means an Employee's wage or salary as reported by the Employer for work performed
for the Employer as in effect just prior to the date Disability begins. It includes earnings received from
commissions but not bonuses, overtime pay and other extra compensation. Covered Earnings are
determined initially on the date an Employee applies for coverage. A change in the amount of Covered
Earnings is effective on the date of the change, if the Employer gives us written notice of the change and
the required premium is paid.
Commissions will be averaged for the 12 months just prior to the date Disability begins, or the months
employed, if less than 12 months.
Any increase in an Employee's Covered Earnings will not be effective during a period of continuous
Disability.
Elimination Period 60 days
Gross Disability Benefit The lesser of 66.67% of an Employee's monthly Covered
Earnings rounded to the nearest dollar or the Maximum
Disability Benefit.
Maximum Disability Benefit $10,000 per month
Minimum Disability Benefit $100 per month
Disability Benefit Calculation
The Disability Benefit payable to the Employee is figured using the Gross Disability Benefit, Other
Income Benefits and the Return to Work Incentive. Monthly Benefits are based on a 30-day month. The
Disability Benefit will be prorated if payable for any period less than a month.
During any month the Employee has no Disability Earnings, the monthly benefit payable is the Gross
Disability Benefit less Other Income Benefits. During any month the Employee has Disability Earnings,
benefits are determined under the Return to Work Incentive. Benefits will not be less than the minimum
benefit shown in the Schedule of Benefits except as provided under the section Minimum Benefit.
DocuSign Envelope ID: 0112B579-44D3-4350-9B91-C12A494DDC60
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"Other Income Benefits" means any benefits listed in the Other Income Benefits provision that an
Employee receives on his or her own behalf or for dependents, or which the Employee's dependents
receive because of the Employee's entitlement to Other Income Benefits.
Return to Work Incentive
During any month the Employee has Disability Earnings, his or her benefits will be calculated as
follows.
The Employee's monthly benefit payable will be calculated as follows during the first 24 months
disability benefits are payable and the Employee has Disability Earnings:
1. Add the Employee's Gross Disability Benefit and Disability Earnings.
2. Compare the sum from 1. to the Employee's Indexed Earnings.
3. If the sum from 1. exceeds 100% of the Employee's Indexed Earnings, then subtract the
Indexed Earnings from the sum in 1.
4. The Employee's Gross Disability Benefit will be reduced by the difference from 3., as
well as by Other Income Benefits.
5. If the sum from 1. does not exceed 100% of the Employee's Indexed Earnings, the
Employee's Gross Disability Benefit will be reduced by Other Income Benefits.
After disability benefits are payable for 24 months, the monthly benefit payable is the Gross
Disability Benefit reduced by Other Income Benefits and 50% of Disability Earnings.
No Disability Benefits will be paid, and insurance will end if the Insurance Company determines
the Employee is able to work under a modified work arrangement and he or she refuses to do so
without Good Cause.
Additional Benefits
Survivor Benefit
Benefit Waiting Period: After 3 Monthly Benefits are payable.
Amount of Benefit: 100% of the sum of the last full Disability Benefit plus the
amount of any Disability Earnings by which the benefit had been
reduced for that month.
Maximum Benefit Period A single lump sum payment equal to 3 monthly Survivor
Benefits.
Maximum Benefit Period
The later of the Employee’s SSNRA* or the Maximum Benefit Period listed below.
Age When Disability Begins Maximum Benefit Period
Age 62 or under The Employee's 65th birthday or the date the 42nd Monthly
Benefit is payable, if later.
Age 63 The date the 36th Monthly Benefit is payable.
Age 64 The date the 30th Monthly Benefit is payable.
Age 65 The date the 24th Monthly Benefit is payable.
Age 66 The date the 21st Monthly Benefit is payable.
Age 67 The date the 18th Monthly Benefit is payable.
Age 68 The date the 15th Monthly Benefit is payable.
Age 69 or older The date the 12th Monthly Benefit is payable.
*SSNRA means the Social Security Normal Retirement Age in effect under the Social Security Act on the
Policy Effective Date.
DocuSign Envelope ID: 0112B579-44D3-4350-9B91-C12A494DDC60
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Initial Premium Rates
$.62 per $100 of Covered Payroll
Covered Payroll for an Employee will mean his or her Covered Earnings for the insurance month prior to
the date the determination is made. However, an Employee's Covered Payroll will not include any part of
his or her monthly Covered Earnings which exceed $15,000.
TL-004774
DocuSign Envelope ID: 0112B579-44D3-4350-9B91-C12A494DDC60
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SCHEDULE OF BENEFITS FOR CLASS 3
Eligibility Waiting Period
For Employees hired on or before the Policy Effective Date: No Waiting Period
For Employees hired after the Policy Effective Date: No Waiting Period
Definition of Disability/Disabled
The Employee is considered Disabled if, solely because of Injury or Sickness, he or she is:
1. unable to perform the material duties of his or her Regular Occupation; and
2. unable to earn 80% or more of his or her Indexed Earnings from working in his or her Regular
Occupation.
After Disability Benefits have been payable for 24 months, the Employee is considered Disabled if, solely
due to Injury or Sickness, he or she is:
1. unable to perform the material duties of any occupation for which he or she is, or may reasonably
become, qualified based on education, training or experience; and
2. unable to earn 60% or more of his or her Indexed Earnings.
The Insurance Company will require proof of earnings and continued Disability.
Definition of Covered Earnings
Covered Earnings means an Employee's wage or salary as reported by the Employer for work performed
for the Employer as in effect just prior to the date Disability begins. It includes earnings received from
commissions but not bonuses, overtime pay and other extra compensation. Covered Earnings are
determined initially on the date an Employee applies for coverage. A change in the amount of Covered
Earnings is effective on the date of the change, if the Employer gives us written notice of the change and
the required premium is paid.
Commissions will be averaged for the 12 months just prior to the date Disability begins, or the months
employed, if less than 12 months.
Any increase in an Employee's Covered Earnings will not be effective during a period of continuous
Disability.
Elimination Period 60 days
Gross Disability Benefit The lesser of 66.67% of an Employee's monthly Covered
Earnings rounded to the nearest dollar or the Maximum
Disability Benefit.
Maximum Disability Benefit $10,000 per month
Minimum Disability Benefit $100 per month
Disability Benefit Calculation
The Disability Benefit payable to the Employee is figured using the Gross Disability Benefit, Other
Income Benefits and the Return to Work Incentive. Monthly Benefits are based on a 30-day month. The
Disability Benefit will be prorated if payable for any period less than a month.
During any month the Employee has no Disability Earnings, the monthly benefit payable is the Gross
Disability Benefit less Other Income Benefits. During any month the Employee has Disability Earnings,
benefits are determined under the Return to Work Incentive. Benefits will not be less than the minimum
benefit shown in the Schedule of Benefits except as provided under the section Minimum Benefit.
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"Other Income Benefits" means any benefits listed in the Other Income Benefits provision that an
Employee receives on his or her own behalf or for dependents, or which the Employee's dependents
receive because of the Employee's entitlement to Other Income Benefits.
Return to Work Incentive
During any month the Employee has Disability Earnings, his or her benefits will be calculated as
follows.
The Employee's monthly benefit payable will be calculated as follows during the first 24 months
disability benefits are payable and the Employee has Disability Earnings:
1. Add the Employee's Gross Disability Benefit and Disability Earnings.
2. Compare the sum from 1. to the Employee's Indexed Earnings.
3. If the sum from 1. exceeds 100% of the Employee's Indexed Earnings, then subtract the
Indexed Earnings from the sum in 1.
4. The Employee's Gross Disability Benefit will be reduced by the difference from 3., as
well as by Other Income Benefits.
5. If the sum from 1. does not exceed 100% of the Employee's Indexed Earnings, the
Employee's Gross Disability Benefit will be reduced by Other Income Benefits.
After disability benefits are payable for 24 months, the monthly benefit payable is the Gross
Disability Benefit reduced by Other Income Benefits and 50% of Disability Earnings.
No Disability Benefits will be paid, and insurance will end if the Insurance Company determines
the Employee is able to work under a modified work arrangement and he or she refuses to do so
without Good Cause.
Additional Benefits
Survivor Benefit
Benefit Waiting Period: After 3 Monthly Benefits are payable.
Amount of Benefit: 100% of the sum of the last full Disability Benefit plus the
amount of any Disability Earnings by which the benefit had been
reduced for that month.
Maximum Benefit Period A single lump sum payment equal to 3 monthly Survivor
Benefits.
Maximum Benefit Period
The later of the Employee’s SSNRA* or the Maximum Benefit Period listed below.
Age When Disability Begins Maximum Benefit Period
Age 62 or under The Employee's 65th birthday or the date the 42nd Monthly
Benefit is payable, if later.
Age 63 The date the 36th Monthly Benefit is payable.
Age 64 The date the 30th Monthly Benefit is payable.
Age 65 The date the 24th Monthly Benefit is payable.
Age 66 The date the 21st Monthly Benefit is payable.
Age 67 The date the 18th Monthly Benefit is payable.
Age 68 The date the 15th Monthly Benefit is payable.
Age 69 or older The date the 12th Monthly Benefit is payable.
*SSNRA means the Social Security Normal Retirement Age in effect under the Social Security Act on the
Policy Effective Date.
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Initial Premium Rates
$.62 per $100 of Covered Payroll
Covered Payroll for an Employee will mean his or her Covered Earnings for the insurance month prior to
the date the determination is made. However, an Employee's Covered Payroll will not include any part of
his or her monthly Covered Earnings which exceed $15,000.
TL-004774
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ELIGIBILITY FOR INSURANCE
An Employee in one of the Classes of Eligible Employees shown in the Schedule of Benefits is eligible to
be insured on the Policy Effective Date, or the day after he or she completes the Eligibility Waiting
Period, if later. The Eligibility Waiting Period is the period of time the Employee must be in Active
Service to be eligible for coverage. It will be extended by the number of days the Employee is not in
Active Service.
Except as noted in the Reinstatement Provision, if an Employee terminates coverage and later wishes to
reapply, or if a former Employee is rehired, a new Eligibility Waiting Period must be satisfied. An
Employee is not required to satisfy a new Eligibility Waiting Period if insurance ends because he or she is
no longer in a Class of Eligible Employees, but continues to be employed and within one year becomes a
member of an eligible class.
TL-004710
EFFECTIVE DATE OF INSURANCE
An Employee will be insured on the date he or she becomes eligible, if the Employee is not required to
contribute to the cost of this insurance.
An Employee who is required to contribute to the cost of this insurance may elect to be insured only by
authorizing payroll deduction in a form approved by the Employer and the Insurance Company. The
effective date of this insurance depends on the date coverage is elected.
Insurance for an Employee who applies for insurance within 31 days after he or she becomes eligible is
effective on the latest of the following dates.
1. The Policy Effective Date.
2. The date payroll deduction is authorized.
3. The date the Insurance Company receives the Employee's completed enrollment form.
If an Employee's enrollment form is received more than 31 days after he or she is eligible for this
insurance, the Insurability Requirement must be satisfied before this insurance is effective. If approved,
this insurance is effective on the date the Insurance Company agrees in writing to insure the Employee.
If an Employee is not in Active Service on the date insurance would otherwise be effective, it will be
effective on the date he or she returns to any occupation for the Employer on a Full-time basis.
TL-004712
TERMINATION OF INSURANCE
An Employee's coverage will end on the earliest of the following dates:
1. the date the Employee is eligible for coverage under a plan intended to replace this coverage;
2. the date the Policy is terminated;
3. the date the Employee is no longer in an eligible class;
4. the day after the end of the period for which premiums are paid;
5. the date the Employee is no longer in Active Service;
6. the date benefits end for failure to comply with the terms and conditions of the Policy.
Disability Benefits will be payable to an Employee who is entitled to receive Disability Benefits when the
Policy terminates, if he or she remains disabled and meets the requirements of the Policy. Any period of
Disability, regardless of cause, that begins when the Employee is eligible under another group disability
coverage provided by any employer, will not be covered.
TL-007505.00
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CONTINUATION OF INSURANCE
This Continuation of Insurance provision modifies the Termination of Insurance provision to allow
insurance to continue under certain circumstances if the Insured Employee is no longer in Active Service.
Insurance that is continued under this provision is subject to all other terms of the Termination of
Insurance provisions.
Disability Insurance continues if an Employee's Active Service ends due to a Disability for which benefits
under the Policy are or may become payable. Premiums for the Employee will be waived while
Disability Benefits are payable. If the Employee does not return to Active Service, this insurance ends
when the Disability ends or when benefits are no longer payable, whichever occurs first.
If an Employee’s Active Service ends due to personal or family medical leave approved timely by the
Employer, insurance will continue for an Employee for up to 12 weeks, if the required premium is paid
when due.
If an Employee’s Active Service ends due to any other leave of absence approved in writing by the
Employer prior to the date the Employee ceases work insurance will continue for an Employee until the
end of the month in which the leave begins if the required premium is paid. An approved leave of
absence does not include termination of employment.
If an Employee’s Active Service ends due to a layoff, insurance will continue for an Employee until the
end of the month in which the leave begins if the required premium is paid.
If an Employee’s Active Service ends due to any other excused short term absence from work that is
reported to the Employer timely in accordance with the Employer’s reporting requirements for such short
term absence, insurance for an Employee will continue until the earlier of:
a. the date the Employee’s employment relationship with the Employer terminates;
b. the date premiums are not paid when due;
c. the end of the 30 day period that begins with the first day of such excused absence;
d. the end of the period for which such short term absence is excused by the Employer.
Notwithstanding any other provision of this policy, if an Employee’s Active Service ends due to
termination of employment, or any other termination of the employment relationship, insurance will
terminate and Continuation of Insurance under this provision will not apply.
If an Employee’s insurance is continued pursuant to this Continuation of Insurance provision, and he or
she becomes Disabled during such period of continuation, Disability Benefits will not begin until the later
of the date the Elimination Period is satisfied or the date he or she is scheduled to return to Active
Service.
TL-004716
TAKEOVER PROVISION
This provision applies only to Employees eligible under this Policy who were covered for long term
disability coverage on the day prior to the effective date of this Policy under the Prior Plan provided by
the Policyholder or by an entity that has been acquired by the Policyholder.
A. This section A applies to Employees who are not in Active Service on the day prior to the effective
date of this Policy due to a reason for which the Prior Plan and this Policy both provide for
continuation of insurance. If required premium is paid when due, the Insurance Company will insure
an Employee to which this section applies against a disability that occurs after the effective date of
this Policy for the affected employee group. This coverage will be provided until the earlier of the
date: (a) the employee returns to Active Service, (b) continuation of insurance under the Prior Plan
would end but for termination of that plan; or (c) the date continuation of insurance under this Policy
would end if computed from the first day the employee was not in Active Service. The Policy will
provide this coverage as follows:
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1. If benefits for a disability are covered under the Prior Plan, no benefits are payable under this
Plan.
2. If the disability is not a covered disability under the Prior Plan solely because the plan terminated,
benefits payable under this Policy for that disability will be the lesser of: (a) the disability benefits
that would have been payable under the Prior Plan; and (b) those provided by this Policy. Credit
will be given for partial completion under the Prior Plan of Elimination Periods and partial
satisfaction of pre-existing condition limitations.
B. The Elimination Period under this Policy will be waived for a Disability which begins while the
Employee is insured under this Policy if all of the following conditions are met:
1. The Disability results from the same or related causes as a Disability for which monthly benefits
were payable under the Prior Plan;
2. Benefits are not payable for the Disability under the Prior Plan solely because it is not in effect;
3. An Elimination Period would not apply to the Disability if the Prior Plan had not ended;
4. The Disability begins within 6 months of the Employee’s return to Active Service and the
Employee’s insurance under this Policy is continuous from this Policy’s Effective Date.
C. Except for any amount of benefit in excess of a Prior Plan's benefits, the Pre-existing Condition
Limitation will not apply to an Employee covered under a Prior Plan who satisfied the pre-existing
condition limitation, if any, under that plan. If an Employee, covered under a Prior Plan, did not fully
satisfy the pre-existing condition limitation of that plan, credit will be given for any time that was
satisfied under the Prior Plan's pre-existing condition limitation.
Benefits will be determined based on the lesser of: (1) the amount of the gross disability benefit under
the Prior Plan and any applicable maximums; and (2) those provided by this Policy.
If benefits are payable under the Prior Plan for the Disability, no benefits are payable under this
Policy.
TL-005108
DESCRIPTION OF BENEFITS
The following provisions explain the benefits available under the Policy. Please see the Schedule of
Benefits for the applicability of these benefits to each class of Insureds.
Disability Benefits
The Insurance Company will pay Disability Benefits if an Employee becomes Disabled while covered
under this Policy. The Employee must satisfy the Elimination Period, be under the Appropriate Care of a
Physician, and meet all the other terms and conditions of the Policy. He or she must provide the
Insurance Company, at his or her own expense, satisfactory proof of Disability before benefits will be
paid. The Disability Benefit is shown in the Schedule of Benefits.
The Insurance Company will require continued proof of the Employee’s Disability for benefits to
continue.
Elimination Period
The Elimination Period is the period of time an Employee must be continuously Disabled before
Disability Benefits are payable. The Elimination Period is shown in the Schedule of Benefits.
A period of Disability is not continuous if separate periods of Disability result from unrelated causes.
Disability Benefit Calculation
The Disability Benefit Calculation is shown in the Schedule of Benefits. Monthly Disability Benefits are
based on a 30 day period. They will be prorated if payable for any period less than a month. If an
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Employee is working while Disabled, the Disability Benefit Calculation will be the Return to Work
Incentive.
Return to Work Incentive
The Return to Work Incentive is shown in the Schedule of Benefits. An Employee may work for wage or
profit while Disabled. In any month in which the Employee works and a Disability Benefit is payable,
the Return to Work Incentive applies.
The Insurance Company will, from time to time, review the Employee's status and will require
satisfactory proof of earnings and continued Disability.
Minimum Benefit
The Insurance Company will pay the Minimum Benefit shown in the Schedule of Benefits despite any
reductions made for Other Income Benefits. The Minimum Benefit will not apply if benefits are being
withheld to recover an overpayment of benefits.
Other Income Benefits
An Employee for whom Disability Benefits are payable under this Policy may be eligible for benefits
from Other Income Benefits. If so, the Insurance Company may reduce the Disability Benefits by the
amount of such Other Income Benefits.
Other Income Benefits include:
1. any amounts received (or assumed to be received*) by the Employee or his or her dependents
under:
- the Canada and Quebec Pension Plans;
- the Railroad Retirement Act;
- any local, state, provincial or federal government disability or retirement plan or law
payable for Injury or Sickness provided as a result of employment with the Employer;
- any sick leave or salary continuation plan of the Employer;
- any work loss provision in mandatory "No-Fault" auto insurance.
2. any Social Security disability or retirement benefits the Employee or any third party receives (or
is assumed to receive*) on his or her own behalf or for his or her dependents; or which his or her
dependents receive (or are assumed to receive*) because of his or her entitlement to such benefits.
3. any Retirement Plan benefits funded by the Employer. "Retirement Plan" means any defined
benefit or defined contribution plan sponsored or funded by the Employer. It does not include an
individual deferred compensation agreement; a profit sharing or any other retirement or savings
plan maintained in addition to a defined benefit or other defined contribution pension plan, or any
employee savings plan including a thrift, stock option or stock bonus plan, individual retirement
account or 40l(k) plan.
4. any proceeds payable under any franchise or group insurance or similar plan. If other insurance
applies to the same claim for Disability, and contains the same or similar provision for reduction
because of other insurance, the Insurance Company will pay for its pro rata share of the total
claim. "Pro rata share" means the proportion of the total benefit that the amount payable under
one policy, without other insurance, bears to the total benefits under all such policies.
5. any amounts received (or assumed to be received*) by the Employee or his or her dependents
under any workers' compensation, occupational disease, unemployment compensation law or
similar state or federal law payable for Injury or Sickness arising out of work with the Employer,
including all permanent and temporary disability benefits. This includes any damages,
compromises or settlement paid in place of such benefits, whether or not liability is admitted.
6. any amounts paid because of loss of earnings or earning capacity through settlement, judgment,
arbitration or otherwise, where a third party may be liable, regardless of whether liability is
determined.
Dependents include any person who receives (or is assumed to receive*) benefits under any applicable
law because of an Employee’s entitlement to benefits.
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*See the Assumed Receipt of Benefits provision.
Increases in Other Income Benefits
Any increase in Other Income Benefits during a period of Disability due to a cost of living adjustment
will not be considered in calculating the Employee’s Disability Benefits after the first reduction is made
for any Other Income Benefits. This section does not apply to any cost of living adjustment for Disability
Earnings.
Lump Sum Payments
Other Income Benefits or earnings paid in a lump sum will be prorated over the period for which the sum
is given. If no time is stated, the lump sum will be prorated over five years.
If no specific allocation of a lump sum payment is made, then the total payment will be an Other Income
Benefit.
Assumed Receipt of Benefits
The Insurance Company will assume the Employee (and his or her dependents, if applicable) are
receiving benefits for which they are eligible from Other Income Benefits. The Insurance Company will
reduce the Employee’s Disability Benefits by the amount from Other Income Benefits it estimates are
payable to the Employee and his or her dependents.
The Insurance Company will waive Assumed Receipt of Benefits, except for Disability Earnings for work
the Employee performs while Disability Benefits are payable, if the Employee:
1. provides satisfactory proof of application for Other Income Benefits;
2. signs a Reimbursement Agreement;
3. provides satisfactory proof that all appeals for Other Income Benefits have been made unless the
Insurance Company determines that further appeals are not likely to succeed; and
4. submits satisfactory proof that Other Income Benefits were denied.
The Insurance Company will not assume receipt of any pension or retirement benefits that are actuarially
reduced according to applicable law, until the Employee actually receives them.
Social Security Assistance
The Insurance Company may help the Employee in applying for Social Security Disability Income
(SSDI) Benefits, and may require the Employee to file an appeal if it believes a reversal of a prior
decision is possible.
The Insurance Company will reduce Disability Benefits by the amount it estimates the Employee will
receive, if the Employee refuses to cooperate with or participate in the Social Security Assistance
Program.
Recovery of Overpayment
The Insurance Company has the right to recover any benefits it has overpaid. The Insurance Company
may use any or all of the following to recover an overpayment:
1. request a lump sum payment of the overpaid amount;
2. reduce any amounts payable under this Policy; and/or
3. take any appropriate collection activity available to it.
The Minimum Benefit amount will not apply when Disability Benefits are reduced in order to recover any
overpayment.
If an overpayment is due when the Employee dies, any benefits payable under the Policy will be reduced
to recover the overpayment.
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Successive Periods of Disability
A separate period of Disability will be considered continuous:
1. if it results from the same or related causes as a prior Disability for which benefits were payable;
and
2. if, after receiving Disability Benefits, the Employee returns to work in his or her Regular
Occupation for less than 6 consecutive months; and
3. if the Employee earns less than the percentage of Indexed Earnings that would still qualify him or
her to meet the definition of Disability/Disabled during at least one month.
Any later period of Disability, regardless of cause, that begins when the Employee is eligible for coverage
under another group disability plan provided by any employer will not be considered a continuous period
of Disability. For any separate period of disability which is not considered continuous, the Employee
must satisfy a new Elimination Period.
LIMITATIONS
Limited Benefit Periods for Mental or Nervous Disorders
The Insurance Company will pay Disability Benefits on a limited basis during an Employee's lifetime for
a Disability caused by, or contributed to by, any one or more of the following conditions. Once 24
monthly Disability Benefits have been paid, no further benefits will be payable for any of the following
conditions.
1) Anxiety disorders
2) Delusional (paranoid) disorders
3) Depressive disorders
4) Eating disorders
5) Mental illness
6) Somatoform disorders (psychosomatic illness)
If, before reaching his or her lifetime maximum benefit, an Employee is confined in a hospital for more
than 14 consecutive days, that period of confinement will not count against his or her lifetime limit. The
confinement must be for the Appropriate Care of any of the conditions listed above.
Limited Benefit Periods for Alcoholism and Drug Addiction or Abuse
The Insurance Company will pay Disability Benefits on a limited basis during an Employee's lifetime for
a Disability caused by, or contributed to by, any one or more of the following conditions. Once 24
monthly Disability Benefits have been paid, no further benefits will be payable for any of the following
conditions.
1) Alcoholism
2) Drug addiction or abuse
If, before reaching his or her lifetime maximum benefit, an Employee is confined in a hospital for more
than 14 consecutive days, that period of confinement will not count against his or her lifetime limit. The
confinement must be for the Appropriate Care of any of the conditions listed above.
Pre-Existing Condition Limitation
The Insurance Company will not pay benefits for any period of Disability caused or contributed to by, or
resulting from, a Pre-existing Condition. A "Pre-existing Condition" means any Injury or Sickness for
which the Employee incurred expenses, received medical treatment, care or services including diagnostic
measures, took prescribed drugs or medicines, or for which a reasonable person would have consulted a
Physician within 3 months before his or her most recent effective date of insurance.
The Pre-existing Condition Limitation will apply to any added benefits or increases in benefits. This
limitation will not apply to a period of Disability that begins after an Employee is covered for at least 12
months after his or her most recent effective date of insurance, or the effective date of any added or
increased benefits.
TL-007500.00
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ADDITIONAL BENEFITS
Rehabilitation During a Period of Disability
If the Insurance Company determines that a Disabled Employee is a suitable candidate for rehabilitation,
the Insurance Company may require the Employee to participate in a Rehabilitation Plan and assessment
at our expense. The Insurance Company has the sole discretion to approve the Employee's participation
in a Rehabilitation Plan and to approve a program as a Rehabilitation Plan. The Insurance Company will
work with the Employee, the Employer and the Employee's Physician and others, as appropriate, to
perform the assessment, develop a Rehabilitation Plan, and discuss return to work opportunities.
The Rehabilitation Plan may, at the Insurance Company's discretion, allow for payment of the Employee's
medical expense, education expense, moving expense, accommodation expense or family care expense
while he or she participates in the program.
If an Employee fails to fully cooperate in all required phases of the Rehabilitation Plan and assessment
without Good Cause, no Disability Benefits will be paid, and insurance will end.
TL-007501.00
Survivor Benefit
The Insurance Company will pay a Survivor Benefit if an Employee dies while Monthly Benefits are
payable. The Employee must have been continuously Disabled for the Survivor Benefit Waiting Period
before the first benefit is payable. These benefits will be payable for the Maximum Benefit Period for
Survivor Benefits.
Benefits will be paid to the Employee's Spouse. If there is no Spouse, benefits will be paid in equal
shares to the Employee's surviving Children. If there are no Spouse and no Children, benefits will be paid
to the Employee's estate.
"Spouse" means an Employee's lawful spouse. "Children" means an Employee's unmarried children
under age 21 who are chiefly dependent upon the Employee for support and maintenance. The term
includes a stepchild living with the Employee at the time of his or her death.
TL-005107
TERMINATION OF DISABILITY BENEFITS
Benefits will end on the earliest of the following dates:
1. the date the Employee earns from any occupation, more than the percentage of Indexed Earnings
set forth in the definition of Disability applicable to him or her at that time;
2. the date the Insurance Company determines he or she is not Disabled;
3. the end of the Maximum Benefit Period;
4. the date the Employee dies;
5. the date the Employee refuses, without Good Cause, to fully cooperate in all required phases of
the Rehabilitation Plan and assessment;
6. the date the Employee is no longer receiving Appropriate Care;
7. the date the Employee fails to cooperate with the Insurance Company in the administration of the
claim. Such cooperation includes, but is not limited to, providing any information or documents
needed to determine whether benefits are payable or the actual benefit amount due.
Benefits may be resumed if the Employee begins to cooperate fully in the Rehabilitation Plan within 30
days of the date benefits terminated.
TL-007502.00
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EXCLUSIONS
The Insurance Company will not pay any Disability Benefits for a Disability that results, directly or
indirectly, from:
1. suicide, attempted suicide, or self-inflicted injury while sane or insane.
2. war or any act of war, whether or not declared.
3. active participation in a riot.
4. commission of a felony.
5. the revocation, restriction or non-renewal of an Employee’s license, permit or certification
necessary to perform the duties of his or her occupation unless due solely to Injury or Sickness
otherwise covered by the Policy.
In addition, the Insurance Company will not pay Disability Benefits for any period of Disability during
which the Employee is incarcerated in a penal or corrections institution.
TL-007503.00
CLAIM PROVISIONS
Notice of Claim
Written notice, or notice by any other electronic/telephonic means authorized by the Insurance Company,
must be given to the Insurance Company within 31 days after a covered loss occurs or begins or as soon
as reasonably possible. If written notice, or notice by any other electronic/telephonic means authorized
by the Insurance Company, is not given in that time, the claim will not be invalidated or reduced if it is
shown that notice was given as soon as was reasonably possible. Notice can be given at our home office
in Philadelphia, Pennsylvania or to our agent. Notice should include the Employer's Name, the Policy
Number and the claimant's name and address.
Claim Forms
When the Insurance Company receives notice of claim, the Insurance Company will send claim forms for
filing proof of loss. If claim forms are not sent within 15 days after notice is received by the Insurance
Company, the proof requirements will be met by submitting, within the time required under the "Proof of
Loss" section, written proof, or proof by any other electronic/telephonic means authorized by the
Insurance Company, of the nature and extent of the loss.
Claimant Cooperation Provision
Failure of a claimant to cooperate with the Insurance Company in the administration of the claim may
result in termination of the claim. Such cooperation includes, but is not limited to, providing any
information or documents needed to determine whether benefits are payable or the actual benefit amount
due.
Insurance Data
The Employer is required to cooperate with the Insurance Company in the review of claims and
applications for coverage. Any information the Insurance Company provides in these areas is
confidential and may not be used or released by the Employer if not permitted by applicable privacy laws.
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Proof of Loss
Written proof of loss, or proof by any other electronic/telephonic means authorized by the Insurance
Company, must be given to the Insurance Company within 90 days after the date of the loss for which a
claim is made. If written proof of loss, or proof by any other electronic/telephonic means authorized by
the Insurance Company, is not given in that 90 day period, the claim will not be invalidated nor reduced if
it is shown that it was given as soon as was reasonably possible. In any case, written proof of loss, or
proof by any other electronic/telephonic means authorized by the Insurance Company, must be given not
more than one year after that 90 day period. If written proof of loss, or proof by any other
electronic/telephonic means authorized by the Insurance Company, is provided outside of these time
limits, the claim will be denied. These time limits will not apply while the person making the claim lacks
legal capacity.
Written proof, or proof by any other electronic/telephonic means authorized by the Insurance Company,
that the loss continues must be furnished to the Insurance Company at intervals required by us. Within 30
days of a request, written proof of continued Disability and Appropriate Care by a Physician must be
given to the Insurance Company.
Time of Payment
Disability Benefits will be paid at regular intervals of not less frequently than once a month. Any
balance, unpaid at the end of any period for which the Insurance Company is liable, will be paid at that
time.
To Whom Payable
Disability Benefits will be paid to the Employee. If any person to whom benefits are payable is a minor
or, in the opinion of the Insurance Company, is not able to give a valid receipt, such payment will be
made to his or her legal guardian. However, if no request for payment has been made by the legal
guardian, the Insurance Company may, at its option, make payment to the person or institution appearing
to have assumed custody and support.
If an Employee dies while any Disability Benefits remain unpaid, the Insurance Company may, at its
option, make direct payment to any of the following living relatives of the Employee: spouse, mother,
father, children, brothers or sisters; or to the executors or administrators of the Employee's estate. The
Insurance Company may reduce the amount payable by any indebtedness due.
Payment in the manner described above will release the Insurance Company from all liability for any
payment made.
Physical Examination and Autopsy
The Insurance Company, at its expense, will have the right to examine any person for whom a claim is
pending as often as it may reasonably require. The Insurance Company may, at its expense, require an
autopsy unless prohibited by law.
Legal Actions
No action at law or in equity may be brought to recover benefits under the Policy less than 60 days after
written proof of loss, or proof by any other electronic/telephonic means authorized by the Insurance
Company, has been furnished as required by the Policy. No such action shall be brought more than 3
years after the time satisfactory proof of loss is required to be furnished.
Time Limitations
If any time limit stated in the Policy for giving notice of claim or proof of loss, or for bringing any action
at law or in equity, is less than that permitted by the law of the state in which the Employee lives when
the Policy is issued, then the time limit provided in the Policy is extended to agree with the minimum
permitted by the law of that state.
Physician/Patient Relationship
The Insured will have the right to choose any Physician who is practicing legally. The Insurance
Company will in no way disturb the Physician/patient relationship.
TL-004724
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ADMINISTRATIVE PROVISIONS
Premiums
The premiums for this Policy will be based on the rates currently in force, the plan and the amount of
insurance in effect.
Changes in Premium Rates
The premium rates may be changed by the Insurance Company from time to time with at least 31 days
advance written notice. No change in rates will be made until 36 months after the Policy Effective Date.
An increase in rates will not be made more often than once in a 12 month period. However, the Insurance
Company reserves the right to change the rates even during a period for which the rate is guaranteed if
any of the following events take place.
1. The terms of the Policy change.
2. A division, subsidiary, affiliated company or eligible class is added or deleted from the Policy.
3. There is a change in the factors bearing on the risk assumed.
4. Any federal or state law or regulation is amended to the extent it affects the Insurance Company's
benefit obligation.
5. The Insurance Company determines that the Employer has failed to promptly furnish any
necessary information requested by the Insurance Company, or has failed to perform any other
obligations in relation to the Policy.
If an increase or decrease in rates takes place on a date that is not a Premium Due Date, a pro rata
adjustment will apply from the date of the change to the next Premium Due Date.
Reporting Requirements
The Employer must, upon request, give the Insurance Company any information required to determine
who is insured, the amount of insurance in force and any other information needed to administer the plan
of insurance.
Payment of Premium
The first premium is due on the Policy Effective Date. After that, premiums will be due monthly unless
the Employer and the Insurance Company agree on some other method of premium payment.
If any premium is not paid when due, the plan will be canceled as of the Premium Due Date, except as
provided in the Policy Grace Period section.
Notice of Cancellation
The Employer or the Insurance Company may cancel the Policy as of any Premium Due Date by giving
31 days advance written notice. If a premium is not paid when due, the Policy will automatically be
canceled as of the Premium Due Date, except as provided in the Policy Grace Period section.
Policy Grace Period
A Policy Grace Period of 60 days will be granted for the payment of the required premiums under this
Policy. This Policy will be in force during the Policy Grace Period. The Employer is liable to the
Insurance Company for any unpaid premium for the time this Policy was in force.
Grace Period for the Insured
If the required premium is not paid on the Premium Due Date, there is a 60 day grace period after each
premium due date after the first. If the required premium is not paid during the grace period, insurance
will end on the last day for which premium was paid.
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Reinstatement of Insurance
An Employee's insurance may be reinstated if it ends because the Employee is on an unpaid leave of
absence.
An Employee's insurance may be reinstated only if reinstatement occurs within 12 weeks from the date
insurance ends due to an Employer approved unpaid leave of absence or must be returning from military
service pursuant to the Uniformed Services Employment and Reemployment Rights Act of 1994
(USERRA). For insurance to be reinstated the following conditions must be met.
1. An Employee must be in a Class of Eligible Employees.
2. The required premium must be paid.
3. A written request for reinstatement must be received by the Insurance Company within 31 days
from the date an Employee returns to Active Service.
Reinstated insurance will be effective on the date the Employee returns to Active Service. If an
Employee did not fully satisfy the Eligibility Waiting Period or the Pre-Existing Condition Limitation (if
any) before insurance ended due to an unpaid leave of absence, credit will be given for any time that was
satisfied.
TL-004720
GENERAL PROVISIONS
Entire Contract
The entire contract will be made up of the Policy, the application of the Employer, a copy of which is
attached to the Policy, and the applications, if any, of the Insureds.
Incontestability
All statements made by the Employer or by an Insured are representations not warranties. No statement
will be used to deny or reduce benefits or as a defense to a claim, unless a copy of the instrument
containing the statement has been furnished to the claimant. In the event of death or legal incapacity, the
beneficiary or representative must receive the copy.
After two years from an Insured's effective date of insurance, or from the effective date of any added or
increased benefits, no such statement will cause insurance to be contested except for fraud or eligibility
for coverage.
Misstatement of Age
If an Insured's age has been misstated, the Insurance Company will adjust all benefits to the amounts that
would have been purchased for the correct age.
Policy Changes
No change in the Policy will be valid until approved by an executive officer of the Insurance Company.
This approval must be endorsed on, or attached to, the Policy. No agent may change the Policy or waive
any of its provisions.
Workers' Compensation Insurance
The Policy is not in lieu of and does not affect any requirements for insurance under any Workers'
Compensation Insurance Law.
Certificates
A certificate of insurance will be delivered to the Employer for delivery to Insureds. Each certificate will
list the benefits, conditions and limits of the Policy. It will state to whom benefits will be paid.
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Assignment of Benefits
The Insurance Company will not be affected by the assignment of an Insured's certificate until the
original assignment or a certified copy of the assignment is filed with the Insurance Company. The
Insurance Company will not be responsible for the validity or sufficiency of an assignment. An
assignment of benefits will operate so long as the assignment remains in force provided insurance under
the Policy is in effect. This insurance may not be levied on, attached, garnisheed, or otherwise taken for a
person's debts. This prohibition does not apply where contrary to law.
Clerical Error
A person's insurance will not be affected by error or delay in keeping records of insurance under the
Policy. If such an error is found, the premium will be adjusted fairly.
Agency
The Employer and Plan Administrator are agents of the Employee for transactions relating to insurance
under the Policy. The Insurance Company is not liable for any of their acts or omissions.
TL-004726
Certain Internal Revenue Code (IRC) & Internal Revenue Service (IRS) Functions
The Insurer may agree with the Subscriber to perform certain functions required by the Internal Revenue
Code and IRS regulations. Such functions may include the preparation and filing of wage and tax
statements (Form W-2) for disability benefit payments made under this Policy. In consideration of the
payment of premiums by the Subscriber, the Insurer waives the right to transfer liability with respect to
the employer taxes imposed on the Insurer by IRS Regulation 32.1(e)(1) for monthly Disability payments
made under this Policy. Employee money may not be used to fund the Premium for the services and
payments of this section.
TL-009230.00
DEFINITIONS
Please note, certain words used in this document have specific meanings. These terms will be capitalized
throughout this document. The definition of any word, if not defined in the text where it is used, may be
found either in this Definitions section or in the Schedule of Benefits.
Active Service
An Employee is in Active Service on a day which is one of the Employer's scheduled work days if either
of the following conditions are met.
1. The Employee is performing his or her regular occupation for the Employer on a full-time basis.
He or she must be working at one of the Employer's usual places of business or at some location
to which the employer's business requires an Employee to travel.
2. The day is a scheduled holiday or vacation day and the Employee was performing his or her
regular occupation on the preceding scheduled work day.
An Employee is in Active Service on a day which is not one of the Employer's scheduled work days only
if he or she was in Active Service on the preceding scheduled work day.
Appropriate Care
Appropriate Care means the determination of an accurate and medically supported diagnosis of the
Employee’s Disability by a Physician, or a plan established by a Physician of ongoing medical treatment
and care of the Disability that conforms to generally accepted medical standards, including frequency of
treatment and care.
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Consumer Price Index (CPI-W)
The Consumer Price Index for Urban Wage Earners and Clerical Workers published by the U.S.
Department of Labor. If the index is discontinued or changed, another nationally published index that is
comparable to the CPI-W will be used.
Disability Earnings
Any wage or salary for any work performed for any employer during the Employee’s Disability,
including commissions, bonus, overtime pay or other extra compensation.
Employee
For eligibility purposes, an Employee is an employee of the Employer in one of the "Classes of Eligible
Employees." Otherwise, Employee means an employee of the Employer who is insured under the Policy.
Employer
The Employer who has subscribed to the Policyholder and for the benefit of whose Employees this policy
has been issued. The Employer, named as the Subscriber on the front of this Policy, includes any
affiliates or subsidiaries covered under the Policy. The Employer is acting as an agent of the Insured for
transactions relating to this insurance. The actions of the Employer shall not be considered the actions of
the Insurance Company.
Full-time
Full-time means the number of hours set by the Employer as a regular work day for Employees in the
Employee's eligibility class.
Good Cause
A medical reason preventing participation in the Rehabilitation Plan. Satisfactory proof of Good Cause
must be provided to the Insurance Company.
Indexed Earnings
For the first 12 months Monthly Benefits are payable, Indexed Earnings will be equal to Covered
Earnings. After 12 Monthly Benefits are payable, Indexed Earnings will be an Employee's Covered
Earnings plus an increase applied on each anniversary of the date Monthly Benefits became payable. The
amount of each increase will be the lesser of:
1. 10% of the Employee's Indexed Earnings during the preceding year of Disability; or
2. the rate of increase in the Consumer Price Index (CPI-W) during the preceding calendar year.
Injury
Any accidental loss or bodily harm which results directly and independently of all other causes from an
Accident.
Insurability Requirement
An eligible person will satisfy the Insurability Requirement for an amount of coverage on the day the
Insurance Company agrees in writing to accept him or her as insured for that amount. To determine a
person's acceptability for coverage, the Insurance Company will require evidence of good health and may
require it be provided at the Employee's expense.
Insurance Company
The Insurance Company underwriting the Policy is named on the Policy cover page.
Insured
A person who is eligible for insurance under the Policy, for whom insurance is elected, the required
premium is paid and coverage is in force under the Policy.
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Physician
Physician means a licensed doctor practicing within the scope of his or her license and rendering care and
treatment to an Insured that is appropriate for the condition and locality. The term does not include an
Employee, an Employee's spouse, the immediate family (including parents, children, siblings or spouses
of any of the foregoing, whether the relationship derives from blood or marriage), of an Employee or
spouse, or a person living in an Employee's household.
Prior Plan
The Prior Plan refers to the plan of insurance providing similar benefits sponsored by the Employer in
effect directly prior to the Policy Effective Date. A Prior Plan will include the plan of a company in
effect on the day prior to that company's addition to this Policy after the Policy Effective Date.
Regular Occupation
The occupation the Employee routinely performs at the time the Disability begins. In evaluating the
Disability, the Insurance Company will consider the duties of the occupation as it is normally performed
in the general labor market in the national economy. It is not work tasks that are performed for a specific
employer or at a specific location.
Rehabilitation Plan
A written plan designed to enable the Employee to return to work. The Rehabilitation Plan will consist of
one or more of the following phases:
1. rehabilitation, under which the Insurance Company may provide, arrange or authorize
educational, vocational or physical rehabilitation or other appropriate services;
2. work, which may include modified work and work on a part-time basis.
Sickness
Any physical or mental illness.
TL-007500.00
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Life Insurance Company of North America
a stock insurance company
Rider to Group Policy No. LK-961943
Effective Date of Rider: January 1, 2009
Eligible Classes to which this Rider applies: All Classes
MODIFICATION OF GROUP DISABILITY POLICY
TO ADD DOMESTIC PARTNER AS AN ELIGIBLE SURVIVOR UNDER THE SURVIVOR
BENEFIT
The Survivor Benefit are modified in the Policy as follows:
1. All references to the term “Spouse” are replaced by "Spouse or Domestic Partner" except for the
following references:
a. The first reference to “Spouse” in the benefit text is changed to “Spouse, or Domestic Partner
if there is no Spouse,”
b. The text pertaining to the definition of “Spouse" remains unchanged.
2. The following definition of Domestic Partner is added.
“Domestic Partner” means a person who is registered as the Employee’s domestic partner with
the California Secretary of State.
Except for the above, this Rider does not change the Group Policy to which it is attached.
Life Insurance Company of North America
By:
Karen S. Rohan, President
TL-007152-1.05
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IMPORTANT CHANGES FOR STATE REQUIREMENTS
If an Employee resides in one of the following states, the provisions of the certificate are modified for
residents of the following states. The modifications listed apply only to residents of that state.
Louisiana residents:
The percentage of Indexed Earnings, if any, that qualifies an insured to meet the definition of
Disability/Disabled may not be less than 80%.
Minnesota residents:
The Pre-existing Condition Limitation, if any, may not be longer than 24 months from the insured’s
most recent effective date of insurance.
Texas residents:
Any provision offsetting or otherwise reducing any benefit by an amount payable under an individual
or franchise policy will not apply.
DocuSign Envelope ID: 0112B579-44D3-4350-9B91-C12A494DDC60
LIFE INSURANCE COMPANY OF NORTH AMERICA
PHILADELPHIA, PA 19192-2235
We, City of Palo Alto, whose main office address is Palo Alto, CA, hereby approve and accept the terms of
Group Policy Number LK-961943 issued by the LIFE INSURANCE COMPANY OF NORTH AMERICA
to the TRUSTEE OF THE GROUP INSURANCE TRUST FOR EMPLOYERS IN THE PUBLIC
ADMINISTRATION INDUSTRY.
This form is to be signed in duplicate. One part is to be retained by City of Palo Alto; the other part is to be
returned to the LIFE INSURANCE COMPANY OF NORTH AMERICA.
City of Palo Alto
Signature and Title: _________________________________________ Date:__________________________
(This Copy Is To Be Returned To Life Insurance Company of North America)
--------------------------------------------------------------------------------------------------------------------------------------
LIFE INSURANCE COMPANY OF NORTH AMERICA
PHILADELPHIA, PA 19192-2235
We, City of Palo Alto, whose main office address is Palo Alto, CA, hereby approve and accept the terms of
Group Policy Number LK-961943 issued by the LIFE INSURANCE COMPANY OF NORTH AMERICA
to the TRUSTEE OF THE GROUP INSURANCE TRUST FOR EMPLOYERS IN THE PUBLIC
ADMINISTRATION INDUSTRY.
This form is to be signed in duplicate. One part is to be retained by City of Palo Alto; the other part is to be
returned to the LIFE INSURANCE COMPANY OF NORTH AMERICA.
City of Palo Alto
Signature and Title: _________________________________________ Date:__________________________
(This Copy Is To Be Retained By City of Palo Alto)
DocuSign Envelope ID: 0112B579-44D3-4350-9B91-C12A494DDC60
1
LIFE INSURANCE COMPANY OF NORTH AMERICA (herein called the Company)
Amendment to be attached to and made a part of the Group Policy
A Contract between the Company and
Policyholder: Trustee of the Group Insurance Trust for Employers in the Public Administration Industry
Participating Subscriber: City of Palo Alto
(herein called the Subscriber)
Policy No.: LK 961943
The Company and the Subscriber hereby agree that the Policy is amended as follows:
Effective November 1, 2009, Other Income Benefits under the Description of Benefits section is hereby revised and made a
part of the Policy.
Except for the above, this Amendment does not change the Policy in any way.
FOR THE COMPANY
Matthew G. Manders, President
Date: January 14, 2010
Amendment No. 01
TL-004780
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DESCRIPTION OF BENEFITS
Other Income Benefits
An Employee for whom Disability Benefits are payable under this Policy may be eligible for benefits from Other Income
Benefits. If so, the Insurance Company may reduce the Disability Benefits by the amount of such Other Income Benefits.
Other Income Benefits include:
1. any amounts received (or assumed to be received*) by the Employee or his or her dependents under:
- the Canada and Quebec Pension Plans;
- the Railroad Retirement Act;
- any work loss provision in mandatory "No-Fault" auto insurance.
2. any Social Security disability or retirement benefits the Employee or any third party receives (or is assumed to
receive*) on his or her own behalf or for his or her dependents; or which his or her dependents receive (or are
assumed to receive*) because of his or her entitlement to such benefits.
3. any Retirement Plan benefits funded by the Employer. "Retirement Plan" means any defined benefit or defined
contribution plan sponsored or funded by the Employer. It does not include an individual deferred compensation
agreement; a profit sharing or any other retirement or savings plan maintained in addition to a defined benefit or
other defined contribution pension plan, or any employee savings plan including a thrift, stock option or stock
bonus plan, individual retirement account or 40l(k) plan.
4. any proceeds payable under any franchise or group insurance or similar plan. If other insurance applies to the
same claim for Disability, and contains the same or similar provision for reduction because of other insurance, the
Insurance Company will pay for its pro rata share of the total claim. "Pro rata share" means the proportion of the
total benefit that the amount payable under one policy, without other insurance, bears to the total benefits under all
such policies.
5. any amounts paid because of loss of earnings or earning capacity through settlement, judgment, arbitration or
otherwise, where a third party may be liable, regardless of whether liability is determined.
Dependents include any person who receives (or is assumed to receive*) benefits under any applicable law because of an
Employee’s entitlement to benefits.
*See the Assumed Receipt of Benefits provision.
Increases in Other Income Benefits
Any increase in Other Income Benefits during a period of Disability due to a cost of living adjustment will not be
considered in calculating the Employee’s Disability Benefits after the first reduction is made for any Other Income
Benefits. This section does not apply to any cost of living adjustment for Disability Earnings.
Lump Sum Payments
Other Income Benefits or earnings paid in a lump sum will be prorated over the period for which the sum is given. If no
time is stated, the lump sum will be prorated over five years.
If no specific allocation of a lump sum payment is made, then the total payment will be an Other Income Benefit.
Assumed Receipt of Benefits
The Insurance Company will assume the Employee (and his or her dependents, if applicable) are receiving benefits for
which they are eligible from Other Income Benefits. The Insurance Company will reduce the Employee’s Disability
Benefits by the amount from Other Income Benefits it estimates are payable to the Employee and his or her dependents.
The Insurance Company will waive Assumed Receipt of Benefits, except for Disability Earnings for work the Employee
performs while Disability Benefits are payable, if the Employee:
1. provides satisfactory proof of application for Other Income Benefits;
2. signs a Reimbursement Agreement;
3. provides satisfactory proof that all appeals for Other Income Benefits have been made unless the Insurance
Company determines that further appeals are not likely to succeed; and
4. submits satisfactory proof that Other Income Benefits were denied.
DocuSign Envelope ID: 0112B579-44D3-4350-9B91-C12A494DDC60
3
The Insurance Company will not assume receipt of any pension or retirement benefits that are actuarially reduced according
to applicable law, until the Employee actually receives them.
Social Security Assistance
The Insurance Company may help the Employee in applying for Social Security Disability Income (SSDI) Benefits, and
may require the Employee to file an appeal if it believes a reversal of a prior decision is possible.
The Insurance Company will reduce Disability Benefits by the amount it estimates the Employee will receive, if the
Employee refuses to cooperate with or participate in the Social Security Assistance Program.
EXHIBIT “A-3”LONG TERM DISABILITY INSURANCE POLICY
DocuSign Envelope ID: 0112B579-44D3-4350-9B91-C12A494DDC60
1
LIFE INSURANCE COMPANY OF NORTH AMERICA (herein called the Company)
Amendment to be attached to and made a part of the Group Policy
A Contract between the Company and
Policyholder: Trustee of the Group Insurance Trust for Employers in the Public Administration Industry
Participating Subscriber: City of Palo Alto
(herein called the Subscriber)
Policy No.: LK-961943
The Company and the Subscriber hereby agree that the Policy is amended as follows:
Effective January 1, 2012, the following rates will remain in force for Classes 1, 2 and 3 for coverage under the Policy:
Applicable to Class 1:
Initial Premium Rates – Option 1
$1.23 per $100 of Covered Payroll
Covered Payroll for an Employee will mean his or her Covered Earnings for the insurance month prior to the date the
determination is made. However, an Employee's Covered Payroll will not include any part of his or her monthly Covered
Earnings which exceed $6,000.
Initial Premium Rates – Option 2
$.575 per $100 of Covered Payroll
Covered Payroll for an Employee will mean his or her Covered Earnings for the insurance month prior to the date the
determination is made. However, an Employee's Covered Payroll will not include any part of his or her monthly Covered
Earnings which exceed $3,000.
Applicable to Classes 2 and 3:
Initial Premium Rates
$.62 per $100 of Covered Payroll
Covered Payroll for an Employee will mean his or her Covered Earnings for the insurance month prior to the date the
determination is made. However, an Employee's Covered Payroll will not include any part of his or her monthly Covered
Earnings which exceed $15,000.
No change in rates will be made until 36 months after the effective date of this Amendment. However, the Company
reserves the right to change the rates at any time during a period for which the rates are guaranteed if the conditions
described in the Changes in Premium Rates provision under the Administrative Provisions section of the Policy apply.
DocuSign Envelope ID: 0112B579-44D3-4350-9B91-C12A494DDC60
2
Except for the above, this Amendment does not change the Policy in any way.
FOR THE COMPANY
Matthew G. Manders, President
Date: October 19, 2011
Amendment No. 02
TL-004780
EXHIBIT “A-3”LONG TERM DISABILITY INSURANCE POLICY
DocuSign Envelope ID: 0112B579-44D3-4350-9B91-C12A494DDC60
LIFE INSURANCE COMPANY OF NORTH AMERICA
(herein called the Company)
Amendment to be attached to and made a part of the Group Policy
A Contract between the Company and
Policyholder: Trustee of the Group Insurance Trust for Employers in the Public Administration Industry
Participating Subscriber: City of Palo Alto
(herein called the Subscriber)
Policy No.: LK-961943
The Company and the Subscriber hereby agree that the Policy is amended as follows:
1. Effective January 1, 2015, the following rates will remain in force for Class 1 for coverage under the Policy:
Option 1
$1.23 per $100 of Covered Payroll
Covered Payroll for an Employee will mean his or her Covered Earnings for the insurance month prior to the date the
determination is made. However, an Employee's Covered Payroll will not include any part of his or her monthly Covered
Earnings which exceed $6,000.
Option 2
$.575 per $100 of Covered Payroll
Covered Payroll for an Employee will mean his or her Covered Earnings for the insurance month prior to the date the
determination is made. However, an Employee's Covered Payroll will not include any part of his or her monthly Covered
Earnings which exceed $3,000.
2. Effective January 1, 2015, the following rates will remain in force for Classes 2 and 3 for coverage under the Policy:
$.62 per $100 of Covered Payroll
Covered Payroll for an Employee will mean his or her Covered Earnings for the insurance month prior to the date the
determination is made. However, an Employee's Covered Payroll will not include any part of his or her monthly Covered
Earnings which exceed $15,000.
No change in rates will be made until 36 months after the effective date of this Amendment. However, the Company
reserves the right to change the rates at any time during a period for which the rates are guaranteed if the conditions
described in the Changes in Premium Rates provision under the Administrative Provisions section of the Policy apply.
DocuSign Envelope ID: 0112B579-44D3-4350-9B91-C12A494DDC60
Except for the above, this Amendment does not change the Policy in any way.
FOR THE COMPANY
Matthew G. Manders, President
Date: December 22, 2014
Amendment No. 03
TL-004780
EXHIBIT “A-3”LONG TERM DISABILITY INSURANCE POLICY
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EXHIBIT “B”
SCHEDULE OF PERFORMANCE
CONSULTANT shall provide Insurance benefits as specified in EXHIBIT “A” Scope of
Services. Claims shall be processed in a timely manner to the reasonable satisfaction of the
CITY.
DocuSign Envelope ID: 0112B579-44D3-4350-9B91-C12A494DDC60
Professional Services
Rev Feb. 2014
14
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 rate schedules
within Exhibits A-1, A-2 and A-3.
The compensation to be paid to CONSULTANT under this Agreement for all services
described in Exhibit “A” (“Services”) and reimbursable expenses shall not exceed
$2,137,758.00. CONSULTANT agrees to complete all Services, including reimbursable
expenses, within this amount. Any work performed or expenses incurred for which
payment would result in a total exceeding the maximum amount of compensation set forth
herein shall be at no cost to the CITY.
REIMBURSABLE EXPENSES
CITY’S sole financial obligation to CONSULTANT shall be the payment of premiums as
provided in the Policies.
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 such proposal. 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.
DocuSign Envelope ID: 0112B579-44D3-4350-9B91-C12A494DDC60
Professional Services
Rev Feb. 2014
15
EXHIBIT “D”
INSURANCE REQUIREMENTS
CONTRACTORS TO THE CITY OF PALO ALTO (CITY), AT THEIR SOLE EXPENSE, SHALL FOR THE TERM OF THE CONTRACT
OBTAIN AND MAINTAIN INSURANCE IN THE AMOUNTS FOR THE COVERAGE SPECIFIED BELOW, AFFORDED BY
COMPANIES WITH AM BEST’S KEY RATING OF A-:VII, OR HIGHER, LICENSED OR AUTHORIZED TO TRANSACT
INSURANCE BUSINESS IN THE STATE OF CALIFORNIA.
AWARD IS CONTINGENT ON COMPLIANCE WITH CITY’S INSURANCE REQUIREMENTS, AS SPECIFIED, BELOW:
REQUIRE
D 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: CONTRACTOR, AT ITS SOLE COST AND
EXPENSE, SHALL OBTAIN AND MAINTAIN, IN FULL FORCE AND EFFECT THROUGHOUT THE ENTIRE TERM OF ANY
RESULTANT AGREEMENT, THE INSURANCE COVERAGE HEREIN DESCRIBED, INSURING NOT ONLY CONTRACTOR, 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. CONTACTOR MUST SUBMIT CERTIFICATES(S) OF INSURANCE EVIDENCING REQUIRED COVERAGE.
II. 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
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City of Palo Alto (ID # 5526)
City Council Staff Report
Report Type: Consent Calendar Meeting Date: 4/20/2015
City of Palo Alto Page 1
Summary Title: Stevenson Loan Approval and related Budget Amendment
Ordinance
Title: Approval of Loan Documents and Agreements Providing $1,000,000 for
the Rehabilitation of the Stevenson House and Adoption of a Budget
Amendment Ordinance Appropriating Funds from the Residential Housing In-
Lieu Fund for this Purpose
From: City Manager
Lead Department: Planning and Community Environment
Recommendation
Staff recommends that the City Council:
1. Authorize the City Manager or his designee to approve and execute the Loan
Agreement in substantially the same form as Attachment A, the Regulatory
Agreement restricting the project to affordable senior rental housing for a period of
55 years (“Joint Regulatory Agreement”) in substantially the same form as
Attachment B and any other necessary and related documents to effectuate the
$1,000,000 City loan for the renovation of Stevenson House and the consolidation of
outstanding Community Development Block Grant (CDBG) loans consistent with the
funding commitment previously approved by the City Council on November 5, 2012;
and
2. Approve a Budget Amendment Ordinance appropriating $1,000,000 from the
Residential Housing In-Lieu Fund for this purpose (Attachment C).
Executive Summary
In November 2012, the City Council considered and approved a request by Palo Alto Senior
Housing Project, Inc. (PASHPI) for $1,000,000 of funds set aside by the Stanford University
Medical Center (SUMC) Development Agreement (DA) for “Infrastructure, Sustainable
Neighborhoods and Communities, and Affordable Housing.”1 At that time, the Council
1 Although the balance for Infrastructure, Sustainable Neighborhoods and Communities and Affordable Housing is
City of Palo Alto Page 2
approved a budget amendment ordinance moving the funds from the SUMC DA Fund to the
City’s Residential Housing In-Lieu Fund. The funds requested by PASHPI were to be used to help
finance the complete rehabilitation of the Stevenson House facility, a 120-unit senior affordable
development that has served the City’s extremely low, very low and low income senior
population for 47 years.
Council approval of the recommended action will finalize the 2012 commitment to loan these
funds to PASHPI. In addition, Council approval will consolidate existing Community
Development Block Grant (CDBG) loans into an Amended and Restated Promissory Note and an
Amended and Restated Deed of Trust, and result in a new Regulatory Agreement ensuring the
long term use of the facility as affordable senior rental housing.
Background
Stevenson House, located at 435 E. Charleston Road, has been serving extremely low, very low
and low income Palo Alto seniors for 47 years. Built in 1968, Stevenson House consists of 120
studio and one bedroom units. In addition to providing affordable housing, it offers services,
meals and social programs for its residents.
Originally funded through HUD Section 202 funds, the facility has been well maintained over its
lifespan. However, certain building system components have recently begun to near the end of
their useful lives. Palo Alto Senior Housing Project, Inc. (PASHPI), the developer, owner and
operator of Stevenson House, received Community Development Block Grant (CDBG) funding
to repair some of those systems but a more comprehensive recapitalization is necessary to
insure the long term viability of the facility. Over the past 20+ years, the City of Palo Alto has
provided CDBG funds to assist in repairing some of the older systems. Approximately $1.4
million has been allocated to the Stevenson House since 1991, of which $1,021,247 is still
outstanding. The breakdown of CDBG funding for Stevenson House is presented in Table 1,
below.
Table 1. Summary of CDBG Funds Provided to Stevenson House
Fiscal Year Project Description Allocation Amount
1994/1995 Accessibility $ 21,000.00
1991/1992 &
1992/1993 Deck/Fire Alarms $ 55,000.00
1997/1998 Building A Reroof $ 48,000.00
2002/2003 Emergency Call System $ 50,000.00
$7.5 million, the DA stipulated that a minimum of $1.7 million must be allocated for affordable housing.
City of Palo Alto Page 3
2004/2005 Hot Water Piping & Freezer Project $ 83,260.00
2006/2007 Windows & Doors $ 370,000.00
2006/2007 Fire Alarm Project $ 47,646.00
2007/2008 Radiant Heating Project $ 144,259.00
2008/2009
(CDBG-R) Sewer Pipe System Repair & Renovation $ 34,100.00
2009/2010 Radiant Heating Repairs – Building A $ 83,200.00
2010/2011 Sewer Repair Project $ 478,808.00
TOTAL $1,415,273.00
Source: Palo Alto Department of Planning & Community Environment, December 2014
On November 5, 2012, the City Council committed an additional $1 million in affordable
housing funds to help PASHPI finance a comprehensive rehabilitation of the facility (CMR
#3176). PASHPI is also receiving County funds and utilizing tax credit financing, which
necessitated a partnership with a for profit entity, as discussed in detail at the March 9, 2015
City Council meeting (CMR #5576).
Discussion
Stevenson House is comprised of three buildings which house 120 units, a commercial kitchen
and other support space, on a 2.32 acre site. Two buildings are three story structures and the
third building is two stories. Some of the amenities that are provided for the residents include
health, social, recreational and art programs. In addition, a nurse visits on a weekly basis to
provide simple tests, advice and referrals. Because of its location, the residents are within close
proximity to services offered in Mitchell Park and Cubberley Community Center.
Scope of Rehabilitation Project
The existing structures will be completely rehabilitated to insure their long term functionality.
The proposed rehabilitation work for Stevenson House includes:
Seismic Upgrades to the buildings
New Roof
Re-pipe Building Water Distribution Systems
Finalize Sewer Line Replacement
City of Palo Alto Page 4
Improve Accessibility to Apartments and Common Areas
Reconfigure Common Area Spaces
New Finishes and Appliances to Apartment Units
Project Financing and Budget
PASHPI proposes to retain a fee interest in the land and enter into a ground lease with the new
Tax Credit Limited Partnership of which an affiliate of PASHPI will be the managing general
partner. The Limited Partnership will own the buildings for the term of the ground lease,
subject to the option PASHPI or an affiliate will have to reacquire the buildings at the end of the
15-year tax credit compliance period. Proceeds from the lease to the Limited Partnership to
PASHPI will be used to help finance the rehabilitation of the buildings in the form of a seller
carryback loan.
The Project budget for the proposed rehabilitation is $45,538,4252. The proposed Sources and
Uses are shown in Table 2 below.
2 Note the Project budget is still preliminary and subject to change.
City of Palo Alto Page 5
Table 2. Summary of Sources and Uses of Funds
Constructions Sources
Tax Credit Equity* $2,284,948
Tax Exempt Bonds, Construction Tranche A $20,250,000
Carryback – Residual Receipts Loan $12,060,991
Stanford GUP Loan $4,000,000
City Housing Loan $1,000,000
Income During Construction $1,375,300
Capitalized Soft Loan Interest $237,500
Deferred Costs
Deferred Developer Fee $1,250,000
Tax Credit Allocation Committee Fees $49,000
Reserves and Other Costs $3,030,686
TOTAL CONSTRUCTION SOURCES $45,538,425
Constructions Uses
Total Development Cost $45,538,425
*20% of tax credit equity
Permanent Sources
Tax Credit Equity $11,424,742
FHA Permanent Mortgage $20,250,000
Carryback – Residual Receipts Loan $7,250,883
Stanford GUP Loan $4,000,000
City of Palo Alto Page 6
City Housing Loan $1,000,000
Income During Construction $1,375,300
Capitalized Soft Loan Interest $237,500
Deferred Costs
Deferred Developer Fee
Tax Credit Allocation Committee Fees $0
Reserves and Other Costs $0
TOTAL CONSTRUCTION SOURCES $0
Permanent Uses
Total Development Cost $45,538,425
Source: Related, March 2015
Project Timeline
The rehabilitation work is projected to start in May 2015. PASHPI is currently working to
complete the financing process and has provided the following project timeline (which is
subject to obtaining all necessary HUD approvals):
June 2012 County approved funding application
July 2012 Submitted HUD prepayment
November 2012 City approved funding commitment
March 2013 Submitted TCAC/CDLAC applications
April/May 2015 Close on City Loan
April/May 2015 Close on Construction Loan
May 2015 Begin Construction
Affordable Housing Loan Agreement
The City’s $1,000,000 Loan Agreement (Attachment A) is similar to other approved loans. The
loan to the Limited Partnership will be evidenced by a Note and Deed of Trust secured the
Limited Partnership’s leasehold interest in the buildings for the term of the lease and by its
leasehold interest in the land. The Note will bear simple interest at 3% per annum, and
payments will be made from residual receipts over and above the project’s net operating
income expenses and will be divided among other funding agencies based on the City’s
City of Palo Alto Page 7
proportionate share of its funding to total development costs. Interest will begin to accrue at
the closing of the loan. Due to the deep affordability of the rents, it is not expected that cash
flow will be sufficient to pay the annual interest in full. The Joint Regulatory Agreement
(Attachment B) will provide that the proposed project will be affordable to extremely low, very
low, and low income households, and the affordability restrictions will be in place for a
minimum of 55 years after the issuance of a certificate of occupancy.
Amended and Restated Community Development Block Grant loan documents
Concurrent with approving the City’s $1,000,000 loan to the project, staff is also recommending
the approval of Amended and Restated CDBG loan Documents. The purpose of this is to
consolidate the outstanding CDBG loans to the property into one CDBG loan evidenced by an
Amended and Restated Promissory Note, Amended and Restated Deed of Trust and the Joint
Regulatory Agreement. The existing CDBG loan documents would be simultaneously terminated
and replaced with these. Unlike the Affordable Housing Loan to the Partnership, this loan will
remain the obligation of PASHPI and will be secured by PASHPI's fee interest in the land. The
Joint Regulatory Agreement will clarify the project’s required income restrictions of 50 units at
30% of Area Median Income (Extremely Low Income), 50 units at 50% of AMI (Very Low
Income), and 20 units at 80% AMI (Low Income), and will provide that the project will be
supported by the HUD SPRAC and Section 8 vouchers.
There may be technical changes to the agreements attached to this staff report as well as
supplemental documents required to effectuate the loan and agreement. In accepting the
staff’s recommendation, the City Council would give the City Manager or his designee the
authority to execute final documents that are substantially similar to those included and
described here.
Resource Impacts
In November 2012, the City Council approved a budget amendment ordinance moving $1
million in funding from the Stanford University Medical Center (SUMC) Development
Agreement Fund to the City’s Residential Housing In-Lieu Fund for the purpose of the
Stevenson House rehabilitation. With the requested action, the City Council would authorize
execution of the final loan documents and agreements and approve a Budget Amendment
Ordinance (Attachment C) to appropriate $1 million in the Residential Housing Fund offset with
a reduction in the fund’s ending fund balance.
Policy Implications
The actions recommended in this report implement the City’s adopted Housing Element
policies and programs supporting the development of extremely low, very low, and low income
housing. Policy H-12 calls for encouraging, foster and preserve diverse housing opportunities
for very low-, low- and moderate-income households. In addition, Policy H-18 supports housing
that incorporates facilities and services to meet the health care, transit, or social service needs
of households with special needs, including seniors and persons with disabilities. The project is
a 100% affordable housing project and serves seniors who are earning well below the area wide
City of Palo Alto Page 8
median income. A large percentage of Palo Alto’s seniors are in the targeted income range.
This population is underserved in the City and cannot afford to pay market rate rents.
Environmental Review
The work proposed is all in the nature of maintenance and rehabilitation of the existing facility,
which is exempt from review under the California Environmental Quality Act (“CEQA”) pursuant
to CEQA Guidelines Section 15301.
Attachments:
Attachment A: Affordable Housing Fund Loan Agreement (PDF)
Attachment B: Regulatory Agreement Restrictive Covenant (PDF)
Attachment C: Budget Amendment Ordinance (PDF)
ATTACHMENT A
Draft 3/31/15
SUBJECT TO CITY APPROVAL
RECORDING REQUESTED BY AND
WHEN RECORDED MAIL TO:
City of Palo Alto
Office of City Attorney
250 Hamilton Avenue
Palo Alto, CA 94301
RECORDED WITHOUT CHARGE
GOVERNMENT CODE §§ 6103, 27383
__________________________________________________________________________
REGULATORY AGREEMENT AND DECLARATION OF RESTRICTIVE COVENANTS
Stevenson House – Affordable Housing Fund Loan and CDBG Loan
(455 East Charleston Road, Palo Alto, California)
This REGULATORY AGREEMENT and DECLARATION OF RESTRICTIVE
COVENANTS, (the "Agreement") is made and entered into as of ________, 2015 (the "Effective
Date"), by and between the CITY OF PALO ALTO, a chartered city and a municipal corporation
("City"), and PASHPI STEVENSON HOUSE LP, a California limited partnership ("Owner") with
reference to the following facts.
RECITALS
A. The City and Owner have entered into an Affordable Housing Fund Loan
Agreement (the "Housing Fund Loan Agreement"), pursuant to which the City agreed to provide
a loan in the principal amount of up to One Million Dollars ($1,000,000) (the "Housing Fund
Loan") to Owner for the rehabilitation of one hundred twenty (120) senior housing units (the
"Project") located on that certain real property located at 455 East Charleston Road, Palo Alto,
California, as further described in Exhibit A attached hereto (the "Property"). The fee interest in
the Property is owned by Palo Alto Senior Housing Project, Inc. ("PASHPI"), the managing
member of the general partner of Owner, and leased to the Owner by a long-term ground lease
(the "Lease").
B. The City previously provided PASHPI a series of loans from Community
Development Block Grant ("CDBG") funds for repairs and upgrades to the Property, as
previously set forth in five (5) sets of CDBG loan documents, including five (5) loan agreements,
promissory notes, deeds of trust and regulatory agreements (the "Previous CDBG Loan
Documents"), as more particularly described in the New CDBG Note.
C. As of the date of this Agreement, the City has consolidated the outstanding
CDBG loans into a single loan to PASHPI in the collective total amount of $985,237.37 (the
"CDBG Loan"), evidenced by an Amended and Restated CDBG Promissory Note executed by
PASHPI (the "New CDBG Note") and Amended and Restated CDBG Deed of Trust,
Assignment of Rents, Security Agreement and Fixture Filing executed by PASHPI and recorded
against the fee interest of PASHPI in the Property (the "New CDBG Deed of Trust") and this
Agreement, which incorporates the remaining material requirements under the previous loan
agreements and regulatory agreements (collectively, the "New CDBG Loan Documents"). The
1
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3/31/2015
ATTACHMENT B
Previous CDBG Loan Documents shall be terminated by the City upon the execution, and
recordation as applicable, of the New CDBG Loan Documents.
D. The New CDBG Loan Documents require the Owner to comply with those CDBG
requirements that relate to the ongoing operation of the Project, as further described in Exhibit C
attached hereto (the "CDBG Related Covenants"). As a condition to the Housing Fund Loan and
the Lease with PASHPI, the Owner has agreed to the CDBG Related Covenants.
E. In conjunction with this Agreement, the Owner has executed the Housing Fund
Loan Agreement, along with a Housing Fund Loan promissory note (the "Note") and a Housing
Fund Loan deed of trust (the "Deed of Trust") secured by Owner's leasehold interest in the
Property and fee interest in the improvements on the Property.
F. The funds loaned to Owner pursuant to the Housing Fund Loan Agreement are
from the City's Affordable Housing Fund, created by the City for the purpose of increasing and
preserving the supply of affordable rental housing in the City. There is a severe shortage of
rental housing affordable to senior households with extremely low, very low and low incomes in
the City and nearby areas. The requirements of this Agreement will result in the long-term
affordability of the entire Project and is consistent with the City's Affordable Housing Fund
Guidelines and the City's affordable housing goals as outlined in the City's Housing Element of
the Comprehensive Plan. The Housing Fund Loan is being made to the Owner at an interest
rate below the market rate in order to increase the supply of affordable rental housing in the
City.
G. As material consideration for both the Housing Fund Loan to Owner and the
Lease, Owner has entered into this Agreement with the City to ensure that one hundred twenty
(120) rental units, excluding one (1) manager's unit, as further described in this Agreement,
including Exhibit B attached hereto (the "Affordable Units"), are maintained for occupancy by
Extremely Low Income, Very Low Income and Low Income senior households at affordable
rents for the Term of this Agreement. This Agreement, in conjunction with any other regulatory
agreements recorded by other parties, will ensure the entire Project's continuing affordability.
This Agreement serves as the regulatory agreement for both the CDBG Loan and the Housing
Fund Loan. The New CDBG Loan Documents provide that an uncured default by Owner under
this Agreement shall also constitute a default on the CDBG Loan to PASHPI.
H. In consideration for the Housing Fund Loan and the Lease to Owner, the Owner
has agreed to observe all the terms and conditions set forth below.
I. This Agreement requires no allocation of Article 34 authority from the County of
Santa Clara, under Measure A as approved by the voters in November 1998, in that this
Agreement is not subject to Article 34 for the following reason: the development consists of the
improvement of dwelling units of a previously existing low-rent housing project. (Health & Safety
Code Section 37001(f).)
J. On April 20, 2015, the City Council authorized the Housing Fund Loan to the
Owner and the New CDBG Loan Documents on certain terms and conditions and authorized
the City Manager to execute all necessary documents required in connection with the Housing
Fund Loan and the CDBG Loan.
2
895\09\1602119.5
3/31/2015
AGREEMENT
THEREFORE, the City and the Owner hereby agree as follows. The foregoing recitals
are hereby incorporated by reference and made part of this Agreement.
ARTICLE 1
DEFINITIONS
1.1 Definitions.
When used in this Agreement, the following terms shall have the respective meanings
assigned to them in this Article 1. Capitalized terms used but not defined in this Agreement shall
have the meanings set forth in the Housing Fund Loan Agreement.
(a) "Actual Household Size" is the actual number of persons in the applicable
household.
(b) "Additional Term" is defined in Section 6.1(a) below.
(c) "Affordable Unit" is defined in Recital G.
(d) "Agreement" is this Regulatory Agreement and Declaration of Restrictive
Covenants.
(e) "Area Median Income" is the area median income for Santa Clara County
as published and periodically updated by the State of California pursuant to California Code of
Regulations, Title 25, Section 6932, or successor provision ("State HCD"), adjusted for Actual
Household Size as specified in this Agreement. In the event that such income determinations
are no longer determined and published by State HCD or HUD or are not updated for a period
of at least 24 months from the date of the previous publication, the City shall provide Owner with
other income determinations that are reasonably similar with respect to previous methods of
calculation by State HCD or HUD.
(f) "CDBG" is the federal Community Development Block Grant program.
(g) "CDBG Loan" is defined in Recital C.
(h) "CDBG Related Covenants" is defined in Recital D.
(i) "City" is defined in the first paragraph of this Agreement.
(j) "Deed of Trust" is the deed of trust to the City on Owner's leasehold
interest in the Property that secures repayment of the Housing Fund Loan and the performance
of all covenants of the Housing Fund Loan Documents, as described in Recital E.
(k) "Default" is defined in Section 7.7(a).
(l) "Effective Date" is defined in the first paragraph of this Agreement.
(m) "Extremely Low Income Household" means a household with gross
income that does not exceed 30% of Area Median Income and which is otherwise a qualified
Tenant under the Section 8 or HUD Program regulations, as applicable.
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(n) "Extremely Low-Income Units" means the Units that are required to be
occupied by Extremely Low-Income Households.
(o) "HAP Contract" means a Housing Assistance Payment or SPRAC
contract with HUD for project-based Section 8 or senior rental assistance, respectively.
(p) "HCD" is the California Department of Housing and Community
Development.
(q) "Housing Fund Loan" is defined in Recital A.
(r) "Housing Fund Loan Agreement" is defined in Recital A.
(s) "HUD" means the United States Department of Housing and Urban
Development.
(t) "HUD Program" means any program of rental assistance to the Project or
the Tenants provided by HUD.
(u) "HUD Regulatory Agreement" means, collectively, the HUD 202 Program
Prepayment Regulatory Agreement and, as applicable, the SPRAC Use Agreement or any other
regulatory agreement approved by City and required by a HUD Program to be recorded against
the Project.
(v) "Lease" is defined in Recital A.
(w) "Loan" is the Housing Fund Loan defined in Recital A.
(x) "Loan Agreement" is the Housing Fund Loan Agreement defined in
Recital A.
(y) "Loan Documents" are, collectively, the Housing Fund Loan Agreement,
the Note, the Deed of Trust, and this Agreement, as they may be amended, modified, or
restated from time to time, along with all exhibits and attachments to these documents.
(z) "Low Income Household" means a household with gross income that
does not exceed 80% of Area Median Income and which is otherwise a qualified Tenant under
the Section 8 or HUD Program regulations, as applicable.
(aa) "Low Income Units" means the Units that are required to be occupied by
Low Income Households.
(bb) "Management Agent" is defined in Section 5.2 below.
(cc) "New CDBG Deed of Trust" is defined in Recital C.
(dd) "New CDBG Loan Documents" are defined in Recital C.
(ee) "New CDBG Note" is defined in Recital C.
(ff) "Note" is defined in Recital E.
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(gg) "Official Records" are the Official Records of Santa Clara County.
(hh) "Owner" is defined in the first paragraph of this Agreement.
(ii) "PASHPI" is by Palo Alto Senior Housing Project, Inc.
(jj) "Previous CDBG Loan Documents" are defined in Recital B.
(kk) "Project" is the Property and the one hundred twenty (120) rental housing
units located on the Property as described in Recital A, as well as any additional improvements,
and all landscaping, roads and parking spaces existing thereon, as the same may from time to
time exist.
(ll) "Property" is defined in Recital A.
(mm) "Rent" is the total of monthly payments by the Tenant of an Affordable
Unit for all of the following: (1) use and occupancy of the Affordable Unit and land and all
facilities associated with the Affordable Unit, including but not limited to parking, bicycle storage,
storage lockers, and use of all common areas; (2) any separately charged fees or service
charges assessed by the Owner which are required of all tenants of Units in the Project, except
security deposits; (3) an allowance for utilities paid by the Tenant as established by the Santa
Clara County Housing Authority, including garbage collection, sewer, water, electricity, gas and
other heating, cooking and refrigeration fuel, but not telephone service or cable TV; and (4) any
other interest, taxes, fees or charges for use of the land or associated facilities that are
assessed by a public or private entity other than the Owner and paid by the Tenant.
(nn) "Section 8" means Section 8 of the United States Housing Act of 1937
("Act"), as amended.
(oo) "Section 8 Assistance" means rental assistance on behalf of households
living at the Property provided pursuant to Section 8, whether indirectly pursuant to a Section 8
Assistance Program contract, or directly pursuant to tenant-based Section 8 vouchers or
certificates, or pursuant to a SPRAC.
(pp) "Section 8 Assistance Program" means a program funded by HUD that
provides rental assistance on behalf of Extremely Low, Very Low and Low Income Households,
including the SPRAC program, or a successor federal or State rental assistance program
providing similar assistance.
(qq) "Section 8 Assisted Household" means a household that holds a valid
voucher or certificate under a Section 8 Assistance Program.
(rr) "SPRAC" means a Senior Preservation Rental Assistance Contract
between Owner and HUD pursuant to _______________ [insert citation].
(ss) "TCAC" is the California Tax Credit Allocation Committee.
(tt) "Tenant" is a household legally occupying an Affordable Unit pursuant to
a valid lease or rental agreement with Owner.
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(uu) "Term" is the term of this Agreement, which shall commence on the date
that this Agreement is recorded in the Official Records and shall continue until the fifty-fifth
(55th) anniversary of the date that this Agreement is recorded in the Official Records.
(vv) "Unit" is one of the one hundred twenty (120) rental housing units
constructed on the Property.
(ww) "Very Low Income Household" means a household with gross income
that does not exceed 50% of Area Median Income and which is otherwise a qualified Tenant
under the Section 8 or HUD Program Regulations, as applicable.
(xx) "Very Low-Income Units" means the Units that are required to be
occupied by Very Low-Income Households.
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: Affordable Units
EXHIBIT C: CDBG Related Covenants
ARTICLE 2
USE, OCCUPANCY AND RENT RESTRICTIONS AND
COVENANTS
2.1 Occupancy Requirements.
The Property shall be used for the operation and maintenance of at 120 Units of
affordable senior rental housing, excluding one (1) manager's unit as described below, subject
to the affordability covenants contained herein, for an effective period of no less than 55 years.
At all times during the term of this Agreement, unless subsequently revised in a written
amendment approved by the City, at least FIFTY (50) of the Units shall be made available to
Extremely Low Income seniors, at least FIFTY (50) of the Units shall be made available to
Extremely Low Income or Very Low Income seniors and at least TWENTY (20) of the Units shall
be made available to Extremely Low Income, Very Low Income or Low Income seniors, subject
to Section 2.1(d). Without derogating the importance of compliance by Owner with the other
provisions of this Agreement, compliance by Owner with this provision is of particular
importance to City and is one of the principal reasons for which City was willing to provide the
CDBG Loan to PASHPI and the Housing Fund Loan to the Owner.
(a) Extremely Low Income Units: At all times during the Term a minimum of
FIFTY (50) Units shall be rented and occupied by, or if vacant, made available for rental and
occupancy by, Extremely Low Income Households.
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(b) Very Low Income Units: At all times during the Term a minimum of FIFTY
(50) Units shall be rented and occupied by, or if vacant, made available for rental and
occupancy by, Very Low Income Households.
(c) Low Income Units: At all times during the Term a minimum of TWENTY
(20) Units shall be rented and occupied by, or if vacant, made available for rental and
occupancy by, Low Income Households, subject to the following subsection (d).
(d) Manager's Unit: A unit made available for an on-site manager would not
be required to comply with the rent and occupancy restrictions of this Section if it is occupied by
a resident manager as a condition of employment.
2.2 Occupancy and Rent for Units Occupied by Section 8 Assisted Households.
Units occupied by Section 8 Assisted Households shall be considered to be qualified
Extremely Low-Income, Very Low-Income, or Low-Income Units based on each household's
annual income as certified pursuant to regulations and procedures of the applicable Section 8
Assistance Program. Notwithstanding anything to the contrary contained herein, the Rent for
Units occupied by Section 8 Assisted Households shall be set pursuant to the applicable
Section 8 Assistance Program regulations and procedures.
2.3. Rent for Units Occupied by Non-Section 8 Assisted Households.
At all times during the term of this Agreement, the maximum monthly Rent charged to
each of the Tenants without a Section 8 rental subsidy shall not exceed the following:
(a) Extremely Low Income Units: The Rent charged to Tenants of the
Extremely Low Income Units shall not exceed the Rent established by TCAC for Extremely Low
Income Households at or below 30% of Area Median Income for the applicable bedroom size.
(b) Very Low Income Units: The Rent charged to Tenants of the Very Low
Income Units shall not exceed the Rent established by TCAC for Very Low Income Households
at or below 50% of Area Median Income for the applicable bedroom size.
(c) Low Income Units: The Rent charged to Tenants of the Low Income Units
shall not exceed the Rent established by TCAC for Low Income Households at or below 80% of
Area Median Income for the applicable bedroom size
2.4 Noncompliance.
Subject to the provisions of this Section 2.4, a failure by Owner to maintain the rent
affordability and occupancy restrictions required by this Agreement shall constitute a default of
this Agreement. The Project will be deemed to be in compliance with the affordability covenants,
notwithstanding a temporary noncompliance with the provisions, if the noncompliance arises as
a result of an increase in the income of any Tenant, and if the next vacancy is filled in
accordance with this Agreement. Notwithstanding any other provision of this Agreement, this
Agreement does not require existing Tenants of the Affordable Units that do not qualify as
Extremely Low, Very Low or Low Income Households to vacate their Units.
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2.5 City Approval of Rents.
Rents for all Affordable Units shall be subject to approval by the City. Owner shall certify
to the City that Owner is not charging any fee other than Rent to Tenants of the Affordable Units
for all of the components of Rent defined in Section 1.1(cc) above.
2.6 Increased Income of Tenants.
(a) Non-Qualifying Household. If, upon recertification of the income of an
Extremely Low Income or Very Low Income Tenant, the Owner determines that a Tenant's
household's income has increased and exceeds the applicable qualifying income for the
Tenant's income category, then, [upon expiration of the Tenant's lease], such Tenant shall be
counted in the next highest Project income level for which such Tenant qualifies. If upon
recertification, the Owner determines that a Tenant's household income exceeds the qualifying
income for a Low Income Household, then [upon expiration of the Tenant's lease], such
Tenant's Rent may be increased to equal one-twelfth (1/12th) of thirty percent (30%) of Tenant's
actual income, upon sixty (60) days written notice to the Tenant.
(b) Tax Credit or State Financing. Federal and State financing requirements
regarding increased incomes of households at recertification shall apply in lieu of this Section
2.6 so long as a regulatory agreement with a Federal or State agency is in force.
(c) Agreement to Limitation on Rents. The Project has received direct
financial assistance in the form of the Loan from the City. Sections 1954.52(b) and
1954.53(a)(2) of the Costa-Hawkins Act provide that, where a developer has received such
assistance, certain provisions of the Costa-Hawkins Act do not apply if a developer has so
agreed by contract. The Owner hereby agrees to limit Rents as provided in this Agreement in
consideration of the Owner's receipt of the Loan and further agrees that any limitations on Rents
imposed on the Affordable Units are in conformance with the Costa-Hawkins Act. The Owner
further covenants that the terms of this Agreement are fully enforceable.
2.7 Lease Provisions.
Except as required by HUD, the Owner shall use a form of Tenant lease approved by the
City for the Affordable Units. The form of Tenant lease shall also comply with all requirements of
the Loan Documents, and shall, among other matters:
(a) provide that the Tenant is subject to the requirement for the execution of
an annual income certification in accordance with Section 3.1 below, and that if the Tenant's
income increases above the applicable income limits, such Tenant's Rent may be increased;
(b) provide for termination of the lease and consent by the Tenant to
immediate eviction for failure: (1) to provide any information required under this Agreement or
reasonably requested by the Owner to establish or recertify the Tenant's qualification, or the
qualification of the Tenant's household, for occupancy of the Affordable Units in accordance
with the standards set forth in this Agreement, or (2) to qualify as an Extremely Low, Very Low
or Low Income Household as a result of any material misrepresentation made by such Tenant
with respect to the income computation or certification;
(c) be for an initial term of not less than one (1) year. After the initial year of
tenancy, the lease may be month to month by mutual agreement of the Owner and the Tenant,
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however the Rent may not be raised more often than once every twelve (12) months after such
initial year. The Owner will provide each Tenant with at least thirty (30) days' written notice of
any increase in Rent applicable to such Tenant, or such notice as otherwise required by law,
and with such further notice as may be required by Section 2.6 above;
(d) prohibit subleasing of the Affordable Unit, contain nondiscrimination
provisions, and include the Tenant's obligation to inform the Owner of any need for maintenance
or repair;
(e) include reasonable rules of conduct consistent with California law; and
(f) allow termination of the tenancy only for good cause, including serious or
repeated violation of the terms and conditions of the rental agreement, violations of applicable
federal, state, or local law; or other good cause.
Notwithstanding the foregoing, HUD approval of the form of Tenant Lease shall
constitute City approval.
2.8 Security Deposits.
Any security deposits collected by Owner or Owner's agent shall be kept separate and
apart from all other funds in a trust account with a depository insured by the Federal Deposit
Insurance Corporation or other comparable federal deposit insurance program and shall be held
and disbursed in accordance with California law. The balance in the trust account shall at all
times equal or exceed the aggregate of all outstanding obligations, plus accrued interest
thereon.
2.9 Applicability of HUD Regulations and HUD Regulatory Agreement.
During the term that a HUD Regulatory Agreement is in effect for the Project, all
definitions, procedures and calculations related to the use and occupancy of the Units and the
qualification of Tenants including, without limitation, determination of Rent, Rent increases,
household income limits, income certification procedures, tenant selection procedures and the
designation of particular Units for each of the income categories as required by a HUD
Regulatory Agreement shall be deemed to be in compliance with this Agreement. Compliance
with the HUD Regulatory Agreement shall be deemed compliance with this Agreement to the
extent the HUD Regulatory Agreement is more restrictive than this Agreement. In case of a
direct conflict between this Agreement and the HUD Regulatory Agreement, the Owner shall
comply with the HUD Regulatory Agreement; however, the Owner shall comply with all
requirements of this Agreement that are in addition to (rather than inconsistent with)
requirements of the HUD Regulatory Agreement.
2.10 Efforts to Seek Section 8 Assistance Payment Contracts for the Units.
As a continuing obligation during the term of this Regulatory Agreement, Owner shall, in
good faith, undertake all actions as required and necessary to seek to obtain such renewals of
the Section 8 Assistance contracts for the Project as may be made available from time to time.
Owner shall seek the longest term available for such contracts and shall seek to renew such
contract assistance for all of the Affordable Units. In the event that any such Section 8
Assistance contract is obtained and then later terminated by HUD for all, or a portion of, the
Units, Owner shall continue to rent to all Tenants residing in the affected Units under the terms
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of any replacement or successor rental assistance program provided by HUD or another
governmental agency to the Tenants. If in the future operation of the Section 8 Assistance
Contract is terminated through no fault of the Owner, the Owner shall notify the City of such
occurrence, the impact of such termination on the financial feasibility of the Project (including
Owner's obligation to comply with Section 2.1 of this Agreement, and Owner's efforts to find an
alternative subsidy. Owner shall use good faith efforts to find a replacement subsidy upon any
indication that the Section 8 Assistance contract may be terminated. If despite its good faith
efforts, Owner is unable to find a replacement subsidy on substantially similar terms to such
terminated Section 8 Assistance within sixty (60) days of the loss of such a contract, and the
City reasonably determines that the City's requirement to rent fifty (50) Units to Extremely Low
Income Households in accordance with Section 2.1(a) has a detrimental impact on the financial
feasibility of the Project given the loss of the Section 8 Assistance contract, the Owner may
implement the remedial measures set forth in California Code of Regulations Title 4, Division
17, Chapter 1, Section 10337(a)(2) or successor regulation applicable to California's Federal
and State Low Income Housing Tax Credit Program.
2.11 Selection Criteria for Applicants for Tenancy; Live-Work Preference.
Owner agrees to accept Section 8 Assisted Households as Tenants on the same basis
as all other prospective tenants. Owner shall not apply selection criteria to Section 8 Assisted
Households that are more burdensome than criteria applied to all other prospective tenants, nor
shall Owner apply or permit the application of management policies or lease provisions that
have the effect of precluding occupancy of Units by Section 8 Assisted Households. The Owner
will use reasonable efforts to make the Units available to participants in the Section 8 tenant-
based voucher program and other rent subsidy programs as may become available.
To the extent allowed by HUD, Owner will give a preference in the selection of Tenants,
and in the maintenance of its waiting list for Units, to those eligible households who have been
displaced, or are threatened to be displaced, from housing within the city limits of the City and to
those otherwise eligible households that have one or more adult household members living,
working (with or without monetary compensation), hired to work, or expected to live, as a result
of planned employment, within the city limits of the City. Owner will use the definitions and
procedures applicable to the City's Below Market Rate housing program to administer this
preference.
ARTICLE 3
INCOME CERTIFICATION AND REPORTING
3.1 Income Certification.
The Owner will obtain, complete and maintain on file, immediately prior to initial
occupancy and annually thereafter, income certifications for each Tenant renting any of the
Affordable Units. Owner shall make a good faith effort to verify that the income statement
provided by an applicant or Tenant is accurate by taking two or more of the following steps as a
part of the verification process: (a) obtain a minimum of the three (3) most current pay stubs for
all adults age eighteen (18) or older; (b) obtain an income tax return for the most recent tax
year; (iii) conduct a credit agency or similar search; (c) obtain the three (3) most current savings
and checking account bank statements; (d) obtain an income verification form from the
applicant's current employer; (e) obtain an income verification form from the Social Security
Administration and/or the California Department of Social Services if the applicant receives
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assistance from either of such agencies; or (f) if the applicant is unemployed and has no such
tax return, obtain another form of independent verification. Owner shall retain in the Tenant's file
all verifications of Tenant's income (tax returns, W-2 forms, paycheck stubs, etc.). Copies of
Tenant income certifications shall be made available to the City upon request.
3.2 Client Data.
The Owner shall maintain confidential records of client data demonstrating client
eligibility for housing. Such data shall include, but not be limited to, client name, address,
income level or other basis for determining eligibility, and ethnicity. Such information shall be
made available to the City's monitors or their designees for review upon request in order to
determine compliance with this Agreement.
3.3 Disclosure.
The Owner understands that client information collected under this Agreement is private
and the use or disclosure of such information, when not directly connected with the
administration of the City's or the Owner's responsibilities under this Agreement, is prohibited by
the laws of the State of California, unless written consent is obtained from such person receiving
the service and, in the case of a minor, that of a responsible parent or guardian.
3.4 Annual Report to City.
(a) The Owner shall provide any information reasonably requested by the
City in connection with the Project. In particular, the Owner shall provide the City with annual
reports, including but not limited to reports regarding the Project's Rent and occupancy levels,
as well as the annual operating budget. Without limitation, the Owner shall provide the City no
later than the ninetieth (90th) day after the close of each fiscal year following the Effective Date,
PDF copies of the following documents:
(1) audited financial statements for the Project; and
(2) an occupancy report including: (i) the verified income of each
Tenant, (ii) the number of members of each Tenant household; (iii) the current Rents charged
Tenant and whether these Rents include utilities, and (iv) the date tenancy commenced for each
Affordable Unit.
(b) Within fifteen (15) days after receipt of a written request, Owner shall
provide any other information or completed forms requested by the City to ensure compliance
with the Loan Documents or this Agreement.
(c) Substitution of Monitoring and Compliance Reports Prepared for Other
Financing Programs. If similar reports on some or all of the Affordable Units are required for
regulatory compliance with other financing programs, those reports may be deemed satisfactory
for the purpose of this Section by the City, with respect to the portion of the requirements of this
Section covered by such reports, provided that copies are provided on an annual basis to the
City with an owner certification addressed to the City certifying that the Owner has complied
with this Agreement.
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3.5 Additional Information.
The Owner shall provide any additional information reasonably requested by the City.
The City shall have the right to examine and make copies of all books, records or other
documents of the Owner which pertain to the Affordable Units.
3.6 Records.
(a) The Owner shall maintain complete, accurate and current records
pertaining to the Affordable Units, and shall permit any duly authorized representative of the City
to inspect records, including but not limited to records pertaining to income and household size
of Tenants and Rent charged Tenants, upon reasonable prior notice during normal business
hours. All Tenant lists, applications and waiting lists relating to the Affordable Units shall at all
times be kept separate and identifiable from any other business of the Owner and shall be
maintained as required by the City, in a reasonable condition for proper audit and subject to
examination during business hours by representatives of the City. The Owner shall retain copies
of all materials obtained or produced with respect to occupancy of the Affordable Units for a
period of at least five (5) years.
(b) The City shall notify Owner of any records it deems insufficient. Owner
shall have fifteen (15) calendar days after the receipt of such a notice to correct any deficiency
in the records specified by the City in such notice, or if a period longer than fifteen (15) days is
reasonably necessary to correct the deficiency, then Owner shall begin to correct the deficiency
within fifteen (15) days and correct the deficiency within thirty (30) days, or as otherwise agreed
by City if a longer time period is reasonably required.
3.7 On-Site Inspection.
The City shall have the right to perform on-site inspections of the Project, including the
Affordable Units, as is reasonably required to ensure compliance with the Loan Documents, but
in any case at least once per year. The Owner agrees to cooperate in such inspection(s). If City
desires to inspect the interior of the Affordable Units, City shall give Owner sufficient notice to
allow Owner to give seventy-two (72) hours' notice to Tenants.
ARTICLE 4
OPERATION OF THE DEVELOPMENT
4.1 Residential Use.
The Property and the Units shall be used only for rental residential purposes consistent
with this Agreement and the other Loan Documents and the Units shall be operated and
maintained as rental residences for the Term of this Agreement. No part of the Affordable Units
shall be operated as transient housing in which the term of occupancy is less than thirty (30)
days, nor shall the Owner convert or apply to convert the Project to condominium or cooperative
ownership or to a community apartment project or sell condominium or cooperative conversion
rights in the Project or the rights to convert the Property or the Project to condominium or
cooperative ownership or as a community apartment project.
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4.2 Compliance with Loan Documents and CDBG Loan Requirements.
Owner shall comply with all the terms and provisions of the Loan Documents and with
the CDBG Related Covenants.
4.3 Taxes and Assessments
. Owner shall pay all real and personal property taxes, assessments and charges and all
franchise, income, employment, old age benefit, withholding, sales, and other taxes assessed
against it, or payable by it, at such times and in such manner as to prevent any penalty from
accruing, or any lien or charge from attaching to the Property; provided, however, that Owner
shall have the right to contest in good faith, any such taxes, assessments, or charges. In the
event Owner exercises its right to contest any tax, assessment, or charge against it, Owner, on
final determination of the proceeding or contest, shall immediately pay or discharge any
decision or judgment rendered against it, together with all costs, charges and interest.
ARTICLE 5
PROPERTY MANAGEMENT AND MAINTENANCE
5.1 Management Responsibilities.
The Owner is responsible for all management functions with respect to the Units,
including without limitation the selection of Tenants, certification and recertification of household
size and income, evictions, collection of rents and deposits, maintenance, landscaping, routine
and extraordinary repairs, replacement of capital items, and security. The City shall have no
responsibility over management of the Units. The Owner shall retain a professional property
management company approved by the City in its reasonable discretion to perform its
management duties hereunder.
5.2 Management.
The Project shall at all times be managed by an experienced management agent
reasonably acceptable to the City, with demonstrated ability to operate residential facilities like
the Project in a manner that will provide decent, safe, and sanitary housing (as approved, the
"Management Agent"). The Owner shall submit for the City's approval the identity of any
proposed Management Agent. The Owner shall also submit such additional information about
the background, experience and financial condition of any proposed Management Agent as is
reasonably necessary for the City to determine whether the proposed Management Agent
meets the standard for a qualified Management Agent set forth above. If the proposed
Management Agent meets the standard for a qualified Management Agent set forth above, the
City shall approve the proposed Management Agent by notifying the Owner in writing. Unless
the proposed Management Agent is disapproved by the City within thirty (30) days, which
disapproval shall state with reasonable specificity the basis for disapproval, it shall be deemed
approved. The City hereby approves The John Stewart Company as the initial Management
Agent.
5.3 Performance Review.
The City reserves the right to conduct an annual (or more frequently, if deemed
necessary by the City) review of the management practices and financial status of the Project.
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The purpose of each periodic review will be to enable the City to determine if the Project is
being operated and managed in accordance with the requirements and standards of this
Agreement. The Owner shall cooperate with the City in such reviews.
5.4 Replacement of Management Agent.
If, as a result of a periodic review, the City determines in its reasonable judgment that
the Project is not being operated and managed in accordance with any of the material
requirements and standards of this Agreement, the City shall deliver notice to Owner of its
intention to cause replacement of the Management Agent, including the reasons therefor. Within
fifteen (15) days of receipt by Owner of such written notice, City staff and the Owner shall meet
in good faith to consider methods for improving the financial and operating status of the Project,
including, without limitation, replacement of the Management Agent.
If, after such meeting, City staff recommends in writing the replacement of the
Management Agent, Owner shall promptly dismiss the then Management Agent, and shall
appoint as the Management Agent a person or entity meeting the standards for a Management
Agent set forth in Section 5.2 above and approved by the City pursuant to Section 5.2 above.
Any contract for the operation or management of the Project entered into by Owner shall
provide that the contract can be terminated as set forth above. Failure to remove the
Management Agent in accordance with the provisions of this Section shall constitute Default
under this Agreement, and the City may enforce this provision through legal proceedings as
specified in Section 7.7 below.
5.5 Approval of Management Policies.
The Owner shall submit its written management policies with respect to the Affordable
Units to the City for its review, and shall amend such policies in any way necessary to ensure
that such policies comply with the provisions of this Agreement.
5.6 Property Maintenance.
(a) The Owner agrees, for the entire Term of this Agreement, to maintain all
interior and exterior improvements, including landscaping, on the Property in good condition and
repair (and, as to landscaping, in a healthy condition) and in accordance with all applicable
laws, rules, ordinances, orders and regulations of all federal, state, county, municipal, and other
governmental agencies and bodies having or claiming jurisdiction and all their respective
departments, bureaus, and officials, and in accordance with the following maintenance
conditions:
(1) Landscaping. The Owner agrees to have landscape maintenance
performed every other week, including replacement of dead or diseased plants with comparable
plants. Owner agrees to adequately water the landscaping on the Property. No improperly
maintained landscaping on the Property shall be visible from public streets and/or rights of way.
(2) Yard Area. No yard areas on the Property shall be left
unmaintained, including:
(A) broken or discarded furniture, appliances and other,
household equipment stored in yard areas for a period exceeding one (1) week;
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(B) packing boxes, lumber trash, dirt and other debris in areas
visible from public property or neighboring properties; and
(C) vehicles parked or stored in other than approved parking
areas.
(3) Building. No buildings located on the Property may be left in an
unmaintained condition so that any of the following exist:
(A) violations of state law, uniform codes, or City ordinances;
(B) conditions that constitute an unsightly appearance that
detracts from the aesthetics or value of the Property or constitutes a private or public nuisance;
(C) broken windows;
(D) graffiti (must be removed within 72 hours); and
(E) conditions constituting hazards and/or inviting trespassers,
or malicious mischief.
(b) The City places prime importance on quality maintenance to protect its
investment and to ensure that all City-assisted affordable housing projects within the City are
not allowed to deteriorate due to below-average maintenance. Normal wear and tear of the
Units will be acceptable to the City assuming the Owner agrees to provide all necessary
improvements to assure the Units are maintained in good condition. The Owner shall make all
repairs and replacements necessary to keep the improvements in good condition and repair.
(c) In the event that the Owner breaches any of the covenants contained in
this Section and such Default continues for a period of ten (10) days after written notice from the
City with respect to graffiti, debris, waste material, and general maintenance or thirty (30) days
after written notice from the City with respect to landscaping and building improvements, then
the City, in addition to whatever other remedy it may have at law or in equity, shall have the right
to enter upon the Property and perform or cause to be performed all such acts and work
necessary to cure the Default. Pursuant to such right of entry, the City shall be permitted (but is
not required) to enter upon the Property and perform all acts and work necessary to protect,
maintain, and preserve the improvements and landscaped areas on the Property, and to attach
a lien on the Property, or to assess the Property, in the amount of the expenditures arising from
such acts and work of protection, maintenance, and preservation by the City and/or costs of
such cure, which amount shall be promptly paid by the Owner to the City upon demand.
ARTICLE 6
EXPIRATION OF TERM
6.1 Notification to City and Tenants.
(a) At least six (6) months but not more than one (1) year prior to the
expiration of the Term, the Owner shall provide irrevocable written notice to the City regarding
whether Owner elects to extend the Term of this Agreement for an additional period of forty-five
(45) years or for the longest feasible period of time mutually acceptable to the City and the
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Owner or that is consistent with the remaining terms of the other regulatory agreements in place
on the Project (the "Additional Term"). If Owner fails to provide written notice to City of Owner's
election, Owner shall be deemed to have provided notice of Owner's decision not to extend the
Term on the date that is six (6) months prior to the expiration of the Term. If Owner elects to
extend the Term of this Agreement for the Additional Term, this Agreement will remain binding
upon Owner and Owner's successors until the expiration of the Additional Term.
(b) At least one (1) year prior to the expiration of the Term or any Additional
Term, the Owner shall provide by first-class mail, postage prepaid, a notice to all Tenants in
Affordable Units containing (1) the anticipated date of the expiration of the Term, (2) any
anticipated Rent increase upon the expiration of the Term or Additional Term, (3) a statement
that a copy of such notice will be sent to the City, and (4) a statement that a public hearing may
be held by the City on the issue and that the Tenant will receive notice of the hearing at least
fifteen (15) days in advance of any such hearing. The Owner shall also file a copy of the above-
described notice with the City Manager. In addition, Owner shall comply with all requirements
set forth in California Government Code Sections 65863.10 and 65863.11 or successor
provisions and all other requirements of State and federal law.
ARTICLE 7
MISCELLANEOUS
7.1 Nondiscrimination; Senior Housing.
(a) Owner covenants by and for itself and its successors and assigns, and all
persons claiming under or through them, that there shall be no discrimination against or
segregation of, nor denial of the benefits of this Agreement to, any person or group of persons,
including employees, applicants for employment, and contractors, on the basis of race, color,
ancestry, national origin or ethnic group identification, religion or religious creed, gender or self-
identified gender, sexual orientation, marital status, age, mental disability, physical disability or
medical condition (including cancer, HIV and AIDS), weight, height, housing status or political
affiliation or belief. Owner will take affirmative action to ensure that all employment practices are
free from such discrimination and in compliance with all Federal, State and local directives and
executive orders regarding nondiscrimination in employment. Such employment practices
include, but are not limited to the following: hiring, upgrading, demotion, transfer, recruitment or
recruitment advertising, layoff, termination, rates of pay or other forms of compensation, and
selection for training, including apprenticeship. Owner agrees to post in conspicuous places,
available to employees and applicants for employment, notices to be provided by the
contracting agency setting forth the provision of this nondiscrimination clause. In addition to the
foregoing general obligations, Owner shall comply with the provisions of the Fair Employment
and Housing Act (Government Code section 12900, et seq.), the regulations promulgated
thereunder (Title 2, California Code of Regulations, section 7285.0, et seq.), the provisions of
Article 9.5, Chapter 1, Part 1, Division 3, Title 2 of the Government Code (sections 11135-
11139.5) and any state or local regulations adopted to implement any of the foregoing, as such
statutes and regulations may be amended from time to time. To the extent this Agreement
subcontracts to Owner services or works required of City by the State of California pursuant to
agreement between City and the State, the applicable regulations of the Fair Employment and
Housing Commission implementing Government Code section 12990 (a) through (f), set forth in
Chapter 5 of Division 4 of Title 2 of the California Code of Regulations are expressly
incorporated into this Agreement by reference and made a part hereof as if set forth in full, and
Owner and any of its subcontractors shall give written notice of their obligations thereunder to
labor organizations with which they have collective bargaining or other agreements.
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(b) The provisions of paragraph (a) shall further apply to the leasing,
subleasing, transferring, use, occupancy, tenure or enjoyment of the Project, and Owner and
any person claiming under or through the Owner, shall not establish or permit any such practice
or practices of discrimination or segregation with reference to the selection, location, number,
use or occupancy of tenants, lessees, sublessees, subtenants, or vendees in the Project.
(c) Owner shall comply with all applicable state and federal laws, rules and
regulations, including those of HUD, regarding multifamily rental housing for seniors.
Notwithstanding paragraph (a), with respect to familial status, paragraph (1) shall not be
construed to apply to housing for older persons, as defined in Section 12955.9 of the
Government Code. With respect to familial status, nothing in paragraph (1) shall be construed to
affect Sections 51.2, 51.3, 51.4, 51.10, 51.11, and 799.5 of the Civil Code, relating to housing
for senior citizens. Subdivision (d) of Section 51 and Section 1360 of the Civil Code and
subdivisions (n), (o), and (p) of Section 12955 of the Government Code shall apply to paragraph
(1).
(d) City Nondiscrimination Provisions. As set forth in Palo Alto Municipal
Code section 2.30.510, Owner 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. Owner 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.
(e) The Owner shall include the provisions contained in this Section in all
contracts and subcontracts related to the Project.
(f) The requirements in this Section shall survive the repayment of the Loan,
and the reconveyance of the Deed of Trust.
7.2 Term.
The provisions of this Agreement shall apply to the Property for the entire Term even if
the Housing Fund Loan or the CDBG Loan and all accrued interest are paid in full prior to the
end of the Term. This Agreement shall bind any successor, heir or assign of the Owner, whether
a change in interest occurs voluntarily or involuntarily, by operation of law or otherwise, except
as expressly released by the City. The City has made the Housing Fund Loan and the CDBG
Loan on the condition, and in consideration of, this provision, and would not have done so
otherwise.
7.3 Effect of Other Financing Programs.
The Project may be subject to the terms of other governmental subsidy programs. This
Agreement and the agreements entered into by the Owner pursuant to these subsidy programs
independently regulate Units in the Project. If any provision of another regulatory agreement is
found in conflict or in contradiction with the terms of this Agreement in relation to the Affordable
Units, the most restrictive requirement, providing the greatest affordability to the most Tenants
for the longest term, shall apply to those Affordable Units, except as otherwise specified.
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7.4 Loan Documents.
In the event of any conflict among the Loan Documents, the most restrictive
requirements shall apply.
7.5 Covenants to Run With the Land.
The City and the Owner hereby declare their express intent that the covenants and
restrictions set forth in this Agreement shall run with the land, and shall bind all successors in
title to the Property, provided, however, that on the expiration of the Term of this Agreement,
said covenants and restrictions shall expire. Each and every contract, deed or other instrument
hereafter executed covering or conveying the Property or any portion thereof, shall be held
conclusively to have been executed, delivered and accepted subject to such covenants and
restrictions, regardless of whether such covenants or restrictions are set forth in such contract,
deed or other instrument, unless the City expressly releases such conveyed portion of the
Property from the requirements of this Agreement.
7.6 Indemnification
(a) To the full extent permitted by law, the Owner shall indemnify, defend at
its own expense, and hold the City and its council members, elected officials, officers,
employees and agents in their official capacity (collectively "Indemnitees") harmless against any
and all claims, suits, actions, losses and liability of every kind, nature and description made
against it and expenses (including reasonable attorneys' fees) which arise out of or in
connection with this Agreement, including but not limited to the purchase of the Property, and
the marketing, maintenance, and operation of the Project, except to the extent such claim arises
from the grossly negligent or willful misconduct of the City or Indemnitees. Each Party shall
notify the other Party immediately in writing of any claim or damage related to activities
performed under this Agreement. The Parties shall cooperate with each other in the
investigation and disposition of any claim arising out of the activities under this Agreement,
provided that nothing shall require either party to disclose any documents, records or
communications that are protected under the attorney-client privilege or attorney work product
privilege.
(b) The provisions of this Section shall survive the expiration of the Term, the
reconveyance of the Deed of Trust, and any release of part or all of the Property from the
burdens of this Agreement.
7.7 Default.
(a) The occurrence of any of the following is a "Default" and shall constitute a
material breach of this Agreement if not corrected, cured or remedied in the time period set forth
in subsection (b) of this Section:
(1) Failure of Owner or any person under its direction or control to
comply with or perform when due any obligation under this Agreement;
(2) Any warranty, representation, or statement made to City by Owner
under this Agreement that is false or misleading in any material respect either now or at the time
made or furnished; or
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(3) A Default pursuant to the Loan Agreement or any Loan Document,
including, but not limited to, any Default under the provisions of the Loan Agreement restricting
Transfers, as defined in the Loan Agreement.
(b) If the Owner fails to cure the Default within thirty (30) days after the City
has notified the Owner in writing of the Default or, if the Default cannot be cured within thirty
(30) days, failed to commence to cure within thirty (30) days and thereafter diligently pursue
such cure and complete such cure within sixty (60) days, or such longer period as approved by
the City, in writing, the City shall have the right to enforce this Agreement by any or all of the
following actions, or by any other remedy provided by law.
(c) Calling the Loan. The City may declare a Default under the Note,
accelerate the indebtedness evidenced by the Note, and with respect to the Loan, proceed with
foreclosure under the Deed of Trust.
(d) Action to Compel Performance or for Damages. The City may bring an
action at law or in equity to compel the Owner's performance of its obligations under this
Agreement, and/or for damages.
(e) Remedies Provided Under Loan Agreement. The City may exercise any
other remedy provided under the Loan Agreement.
7.8 Recording and Filing.
The City and the Owner shall cause this Agreement, and all amendments and
supplements to it, to be recorded in the Official Records.
7.9 Governing Law and Venue.
This Agreement shall be governed by the laws of the State of California. Venue shall be
Santa Clara County.
7.10 Title of Parts and Sections.
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.
7.11 Waiver of Requirements.
No waiver of the requirements of this Agreement shall occur unless expressly waived by
the City in writing. No waiver will be implied from any delay or failure by the City to take action
on any breach or Default of Owner or to pursue any remedy permitted under this Agreement or
applicable law. Any extension of time granted to Owner 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 Owner shall not be construed to be
consent to any other or subsequent act or omission or to waive the requirement for the City's
written consent to future waivers.
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7.12 Amendments.
This Agreement may be amended only by a written instrument executed by all the
parties hereto or their successors in title, and duly recorded in the Official Records.
7.13 Notices.
Any notice requirement set forth herein shall be deemed to be satisfied three (3) days
after mailing of the notice first-class United States certified mail, postage prepaid, addressed to
the appropriate party as follows:
Owner: PASHPI Stevenson House LP
c/o PASHPI Stevenson House LLC
455 E. Charleston Road
Palo Alto, CA 94306
Attn: President
With a
copy to: Wincopin Circle LLLP
c/o Enterprise Community Asset Management, Inc.
70 Corporate Center
11000 Broken Land Parkway, Suite 700
Columbia, MD 21044
Attn: General Counsel
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
PO Box 10250
Palo Alto, CA 94303
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 as the date of delivery or refusal of delivery (or attempted delivery if undeliverable).
7.14 Severability.
If any provision of this Agreement shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining portions of this Agreement shall not in any way be
affected or impaired thereby.
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7.15 Multiple Originals; Counterparts.
This Agreement may be executed in multiple originals, each of which is deemed to be an
original, and may be signed in counterparts.
SIGNATURES TO FOLLOW ON NEXT PAGE
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IN WITNESS WHEREOF, the City and the Owner have executed this Agreement by duly
authorized representatives, all on the date first written above.
CITY:
CITY OF PALO ALTO, a chartered city and
municipal corporation
By:________________________________
James Keene, City Manager
APPROVED AS TO FORM:
By:__________________________________
Cara Silver, Senior Assistant City Attorney
OWNER:
PASHPI STEVENSON HOUSE LP, a
California limited partnership
By: PASHPI Stevenson House LLC, a
California limited liability company, its
general partner
By: Palo Alto Senior Housing Project,
Inc., a California nonprofit public
benefit corporation, its managing
member
By:________________________
Patrick O'Regan
President
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STATE OF CALIFORNIA )
)
COUNTY OF __________________ )
On ____________________, before me, ___________________________, Notary
Public, personally appeared ______________________________________, who proved to me
on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the
within instrument and acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s),
or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify UNDER PENALTY OF PERJURY under the laws of the State of California that
the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
_______________________________
Name: ______________________________
Notary Public
A notary public or other officer completing this certificate verifies only
the identity of the individual who signed the document to which this certificate
is attached, and not the truthfulness, accuracy, or validity of that document.
895\09\1602119.5
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STATE OF CALIFORNIA )
)
COUNTY OF __________________ )
On ____________________, before me, ___________________________, Notary
Public, personally appeared ______________________________________, who proved to me
on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the
within instrument and acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s),
or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify UNDER PENALTY OF PERJURY under the laws of the State of California that
the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
_______________________________
Name: ______________________________
Notary Public
A notary public or other officer completing this certificate verifies only
the identity of the individual who signed the document to which this certificate
is attached, and not the truthfulness, accuracy, or validity of that document.
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EXHIBIT A
LEGAL DESCRIPTION OF THE PROPERTY
Leasehold Interest in that certain real property in the City of Palo Alto, County of Santa Clara, State of
California, described as follows:
PARCEL ONE:
BEGINNING AT THE POINT OF INTERSECTION OF THE SOUTHWESTERLY LINE OF THAT CERTAIN 6.01
ACRE TRACT OF LAND AS SHOWN UPON THAT CERTAIN MAP ENTITLED, "RECORD OF SURVEY OF A
PORTION OF THE RANCHO RINCON DE SAN FRANCISQUITO, PALO ALTO, SANTA CLARA COUNTY,
CALIFORNIA", WHICH MAP WAS FILED FOR RECORD IN THE OFFICE OF THE RECORDER OF THE COUNTY OF SANTA CLARA, STATE OF CALIFORNIA, ON JUNE 30, 1952 IN BOOK 37 OF MAPS, PAGE 30, WITH THE NORTHWESTERLY LINE OF CHARLESTON ROAD, AS SAID LINE WAS ESTABLISHED BY PARCEL 142 IN THE FINAL ORDER OF CONDEMNATION TO CERTAIN DEFENDANTS, ENTERED ON
JANUARY 25, 1957 IN THE SUPERIOR COURT OF THE STATE OF CALIFORNIA, IN AND FOR THE
COUNTY OF SANTA CLARA, IN THAT CERTAIN ACTION ENTITLED, "THE CITY OF PALO ALTO, A
MUNICIPAL CORPORATION, PLAINTIFF VS. JAMES H. ALTEIRI, ET AL, DEFENDANTS", CASE NO. 100068,
A CERTIFIED COPY OF WHICH ORDER WAS FILED FOR RECORD IN THE OFFICE OF THE RECORDER OF
THE COUNTY OF SANTA CLARA, STATE OF CALIFORNIA, ON JANUARY 25, 1957 IN BOOK 3715
OFFICIAL RECORDS, PAGE 448; THENCE FROM SAID POINT OF BEGINNING NORTH 35° 34' 50" WEST,
ALONG THE SOUTHWESTERLY LINE OF SAID 6.01 ACRE TRACT FOR A DISTANCE OF 195.50 FEET TO
THE SOUTHERNMOST CORNER OF THAT CERTAIN 5.01 ACRE TRACT OF LAND DESCRIBED IN THE
DEED FROM LOUIS J. FREITAS, ET UX, TO THE PALO ALTO UNITARIAN CHURCH DATED AUGUST 30,
1954, RECORDED SEPTEMBER 10, 1954 IN BOOK 2957 OFFICIAL RECORDS, PAGE 100, SANTA CLARA
COUNTY RECORDS; THENCE NORTH 54° 26' 10" EAST ALONG A SOUTHEASTERLY LINE OF SAID 5.01 ACRE TRACT FOR A DISTANCE OF 200.00 FEET; THENCE SOUTH 35° 34' 50" EAST ALONG A SOUTHWESTERLY LINE OF SAID 5.01 ACRE TRACT FOR A DISTANCE OF 139.55 FEET TO THE
NORTHERNMOST CORNER OF THAT CERTAIN TRACT OF LAND DESCRIBED IN THE DEED FROM LOUIS
J. FREITAS, ET UX, TO CITY OF PALO ALTO, A MUNICIPAL CORPORATION, DATED SEPTEMBER 16,
1955, RECORDED NOVEMBER 23, 1955, IN BOOK 3342 OFFICIAL RECORDS, PAGE 242, SANTA CLARA
COUNTY RECORDS; THENCE SOUTH 0° 13' 50" EAST ALONG THE WESTERLY LINE OF LAND SO
DESCRIBED IN THE DEED TO SAID CITY OF PALO ALTO FOR A DISTANCE OF 68.16 FEET TO THE POINT
OF INTERSECTION THEREOF WITH THE SAID NORTHWESTERLY LINE OF CHARLESTON ROAD; THENCE
SOUTH 54° 26' 10" WEST ALONG SAID LAST MENTIONED LINE 160.31 FEET TO THE POINT OF
BEGINNING, AS SURVEYED IN MARCH, 1965 BY RILEY & FLOYD, CIVIL ENGINEERS.
PARCEL TWO:
BEGINNING AT A POINT IN A SOUTHWESTERLY LINE OF THAT CERTAIN 5.01 ACRE TRACT OF LAND DESCRIBED IN THE DEED FROM LOUIS F. FREITAS ET UX, TO THE PALO ALTO UNITARIAN CHURCH, INC., A CORPORATION, DATED AUGUST 27, 1954, RECORDED SEPTEMBER 10, 1954, IN BOOK 2957 OFFICIAL RECORDS, PAGE 100, SANTA CLARA COUNTY RECORDS, DISTANT THEREON NORTH 35° 34' 50" WEST 78.95 FEET FROM THE SOUTHERNMOST CORNER THEREOF IN THE NORTHWESTERLY LINE
OF CHARLESTON ROAD, AS THE SAME ORIGINALLY EXISTED (40.00 FEET IN WIDTH), SAID POINT OF
BEGINNING BEING IN THE WESTERLY LINE OF THAT CERTAIN TRACT OF LAND DESCRIBED IN THE
DEED FROM THE PALO ALTO UNITARIAN CHURCH, INC. A CORPORATION, TO CITY OF PALO ALTO, A
MUNICIPAL CORPORATION, DATED FEBRUARY 9, 1956, RECORDED MARCH 2, 1956 IN BOOK 3428
OFFICIAL RECORDS, PAGE 465, SANTA CLARA COUNTY RECORDS; THENCE FROM SAID POINT OF
BEGINNING NORTHWESTERLY ALONG THE SOUTHWESTERLY LINE OF LAND SO DESCRIBED IN THE
DEED TO SAID CITY OF PALO ALTO FOR THE FOLLOWING COURSES AND DISTANCES: NORTH 0° 13'
50" WEST 0.44 FEET; THENCE NORTHERLY ALONG AN ARC OF A CURVE TO THE LEFT, WITH A RADIUS
OF 80.00 FEET, THROUGH A CENTRAL ANGLE OF 35° 21', FOR AN ARC DISTANCE OF 49.36 FEET AND
NORTH 35° 34' 50" WEST 361.00 FEET TO THE WESTERNMOST CORNER THEREOF IN THE
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NORTHWESTERLY LINE OF SAID 5.01 ACRE TRACT ABOVE REFERRED TO; THENCE SOUTH 54° 30' 00"
WEST ALONG SAID LAST MENTIONED LINE FOR A DISTANCE OF 215.00 FEET TO THE WESTERNMOST CORNER THEREOF; THENCE SOUTH 35° 34' 50" EAST ALONG A SOUTHWESTERLY LINE OF SAID 5.01 ACRE TRACT FOR A DISTANCE OF 268.35 FEET TO A SOUTHERLY CORNER THEREOF; THENCE NORTH 54° 26' 10" EAST ALONG A SOUTHEASTERLY LINE OF SAID 5.01 ACRE TRACT FOR A DISTANCE OF
200.00 FEET TO AN ANGLE CORNER THEREIN; THENCE SOUTH 35° 34' 50" EAST ALONG A
SOUTHWESTERLY LINE OF SAID 5.01 ACRE TRACT FOR A DISTANCE OF 139.55 FEET TO THE POINT OF
BEGINNING, AND BEING A PORTION OF RANCHO RINCON DE SAN FRANCISQUITO, AS SURVEYED IN
MARCH 1965 BY RILEY & FLOYD, CIVIL ENGINEERS.
PARCEL THREE:
AN EASEMENT 30.00 FEET IN WIDTH ACROSS THAT CERTAIN PARCEL SITUATE IN THE CITY OF PALO
ALTO, COUNTY OF SANTA CLARA, STATE OF CALIFORNIA, WHICH PARCEL WAS DESCRIBED IN THE
DEED FROM THE PALO ALTO UNITARIAN CHURCH, INC., A CORPORATION, TO CITY OF PALO ALTO, A
MUNICIPAL CORPORATION, DATED FEBRUARY 9, 1956, RECORDED MARCH 2, 1956 IN BOOK 3428
OFFICIAL RECORDS, PAGE 465, SANTA CLARA COUNTY RECORDS, AS RESERVED BY SAID PALO ALTO UNITARIAN CHURCH, INC., IN SAID DEED TO CITY OF PALO ALTO TO PERMIT INGRESS AND EGRESS TO CONTIGUOUS PROPERTIES, THE CENTER LINE OF WHICH EASEMENT IS DESCRIBED AS FOLLOWS:
BEGINNING AT A POINT IN THE SOUTHWESTERLY LINE OF THE PARCEL DESCRIBED IN SAID DEED TO
CITY OF PALO ALTO, DISTANT THEREON SOUTH 35° 34' 50" EAST 230.00 FEET FROM THE
WESTERNMOST CORNER THEREOF; THENCE RUNNING AT RIGHT ANGLES TO SAID LAST MENTIONED
LINE NORTH 54° 25' 10" EAST 40.00 FEET TO THE NORTHEASTERLY LINE OF SAID PARCEL SO
CONVEYED TO CITY OF PALO ALTO.
APN: 132-06-037
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EXHIBIT B
AFFORDABLE UNITS
Number of Bedrooms Number of Units
Studio 68
Jumbo Studio 23
One Bedroom 28
TOTAL 119
Manager (Studio) 1
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EXHIBIT C
CDBG RELATED COVENANTS
A. CDBG Requirements.
Owner shall comply with all CDBG Related Covenants and Regulations to the extent such
pertain to the ongoing operation of the Project by the Owner during Owner’s ownership of the
Project.
B. The following CDBG and related City requirements shall apply to the Project:
1. Compliance with Federal Regulations; Laws.
The Owner agrees to comply with all applicable requirements of the Housing and Urban
Development regulations concerning Community Development Block Grants (24 CFR Part 570)
and all federal and policies issued pursuant to such regulations (the "Regulations") pertaining to
the ongoing operation of the Project by the Owner. For convenience, this Exhibit C lists certain
of these requirements pertaining to the ongoing operation of the Project. In the event any of the
provisions of this Exhibit C conflict with the Regulations, the Regulations shall prevail.
2. Civil Rights.
a. Compliance. The Owner agrees to comply with all federal, state, and local laws,
including, without limitation, Title VI of the Civil Rights Act of 1964, as amended, Title VIII of the
Civil Rights Act of 1968, as amended, Section 104(b) and Section 109 of Title I of the Housing
and Community Development Act of 1974, as amended, Section 504 of the Rehabilitation Act of
1973, the Americans with Disabilities Act of 1990, the Age Discrimination Act of 1975, Executive
Order 11063, and Executive Order 11246, as amended by Executive Orders 11375 and 12086.
b. Lease Covenants. This Agreement is subject to the requirements of Title VI of
the Civil Rights Act of 1964, as amended, and 24 CFR Part 570.601 and 602. In regard to the
lease or other transfer of land acquired, cleared or improved with assistance provided to
PASHPI under the Previous CDBG Loan Agreement, the Owner shall cause or require a
covenant running with the land to be inserted in the lease or other instrument of such transfer,
prohibiting discrimination as herein defined, in the lease or rental, or in the use or occupancy of
such land, or in any improvements erected or to be erected thereon, providing that the City and
the United States are beneficiaries of and entitled to enforce such covenants. Owner agrees to
take such measures as are necessary to enforce such covenant, and will not itself so
discriminate.
c. Section 504. The Owner agrees to comply with any federal regulations issued
pursuant to and in compliance with Section 504 of the Rehabilitation Act of 1973 (29 U.S.C.
706), as amended, which prohibits discrimination against the disabled in any federally assisted
program.
3. Affirmative Action.
a. Compliance With California Constitution. Article I, Section 31 of the California
Constitution, adopted by the People of the State of California as Proposition 209 in 1996,
prohibits the City from discrimination or the grant of preferential treatment on the basis of race,
sex, color, ethnicity or national origin in public employment, public education, and public
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contracting. Article I, Section 31 (e) provides that nothing in Section 31 shall be interpreted as
prohibiting actions which must be taken to establish or maintain eligibility for any federal
program where ineligibility would result in a loss of federal funds to the City. The provisions of
this subsection (a) are those necessary to establish and maintain eligibility for federal funds. At
such time as any provision of this subsection (a) is not required to establish and maintain such
eligibility, that provision shall be waived by City. If Owner believes any provision of this
subsection (a) should be waived under this subsection (a), Owner shall provide notice to City in
writing, identifying the provision for which a waiver is sought and the legal basis for the waiver.
City shall respond to the request for waiver within thirty days after notice is received.
b. EEO/AA Statement. The Owner will, in all solicitations or advertisements for
employees placed by or on behalf of the Owner, state that it is an Equal Opportunity or
Affirmative Action Employer.
4. Conduct.
a. Hatch Act. The Owner agrees that no personnel employed under this
Agreement, shall be in any way or to any extent engaged in the conduct of political activities in
violation of Chapter 15 of Title 5 of the United States Code.
b. Conflict of Interest. The Owner agrees to abide by the provisions of 24 CFR
Section 570.611 with respect to conflicts of interest, and covenants that it presently has no
financial interest and shall not acquire any financial interest, direct or indirect, which would
conflict in any manner or degree with the performance of this Agreement. The Owner further
covenants that in the performance of this Agreement, no person having such a financial interest
shall be employed or retained by the Owner hereunder. These conflict of interest provisions
apply to any person who is an employee, agent, consultant, officer, or elected official or
appointed official of the City, or of any designated public agencies or Owners which are
receiving funds under the CDBG Program.
c. Copyrights. If this Agreement results in any copyrightable material, the City or
grantor agency, or both, reserves the right to royalty-free, non-exclusive and irrevocable license
to reproduce, publish or otherwise use and to authorize others to use, the work for government
purposes.
5. ENVIRONMENTAL CONDITIONS
a. Air and Water. The Owner agrees to comply with the following regulations
insofar as they apply to the performance of this Agreement: Clean Air Act, 42 U.S.C. 7401, et
seq.; Federal Water Pollution Control Act, as amended, 33 U.S.C. 1251, et seq., as amended,
1318 relating to inspection, monitoring, entry, reports, and information, as well as other
requirements specified in said Section 114 and Section 308, and all regulations and guidelines
issued thereunder; U.S. Environmental Protection Agency regulations pursuant to 40 CFR Part
50, as amended.
b. Flood Disaster Protection. In accordance with the requirements of the Flood
Disaster Protection Act of 1973 (42 USC 4001), the Owner shall assure that for activities located
in an area identified by FEMA as having special flood hazards, flood insurance under the
National Flood Insurance Program is obtained and maintained as a condition of financial
assistance for acquisition or construction purposes (including rehabilitation).
895\09\1602119.5
3/31/2015 C-2
c. Lead-Based Paint. The Owner agrees that any construction or rehabilitation of
residential structures with assistance provided under this Agreement shall be subject to HUD
Lead-Based Paint Regulations at 24 CFR Section 570.608, and 24 CFR Part 35. Such
regulations pertain to all HUD-assisted housing and require that all owners, prospective owners,
and tenants or properties constructed prior to 1978 be properly noticed that such properties may
include lead-based paint. Such notification shall point out the hazards of lead-based paint and
explain the symptoms, treatment and precautions that should be taken when dealing with lead-
based paint poisoning and the advisability and availability of blood level screening for children
under seven. The notice should also point out that if lead-based paint is found on the property,
abatement measures may be undertaken.
d. Historic Preservation. The Owner agrees to comply with the historic preservation
requirements set forth in the National Historic Preservation Act of 1966, as amended (16 U.S.C.
470) and the procedures set forth in 36 CFR Part 800, Advisory Council on Historic Preservation
Procedures for Protection of Historic Properties, insofar as they apply to the performance of this
Agreement. In general, this requires concurrence from the State Historic Preservation Officer for
all rehabilitation and demolition of historic properties that are fifty years old or older or that are
included on a federal, state, or local historic property list.
895\09\1602119.5
3/31/2015 C-3
Not Yet Approved
1
5526/mb
Ordinance No. _______
Ordinance of the Council of the City of Palo Alto Amending the Fiscal Year
2015 Budget to Provide An Additional Appropriation of $1,000,000 in the
Residential Housing In-Lieu Fund for the Stevenson House Rehabilitation
Project
R E C I T A L S
The Council of the City of Palo Alto ORDAINS as follows:
SECTION 1. The Council of the City of Palo Alto finds and determines as follows:
A. Pursuant to the provisions of Section 12 of Article III of the Charter of the City of
Palo Alto, the Council on June 16, 2014 did adopt a budget for Fiscal Year 2015.
B. The 2011 Stanford University Medical Center (SUMC) Development Agreement
provided funds for use in connection with infrastructure, sustainable neighborhoods and
communities, and affordable housing.
C. In 2012, the City Council approved a Budget Amendment Ordinance transferring
$1,000,000 from the SUMC Fund to the Residential Housing In-Lieu Fund to finance a
request by the Palo Alto Senior Housing Project, Inc. (PASHPI) for $1,000,000 to rehabilitate
Stevenson House.
D. The Stevenson House facility is a 120 unit senior affordable development that
serves the City’s extremely very low and low income senior population and with City Council
approval this action will finalize the 2012 commitment to loan these funds to PAHSPI for the
Stevenson House Rehabilitation Project.
SECTION 2. Therefore, the sum of One Million Dollars ($1,000,000) is hereby
appropriated in the Residential Housing In-Lieu Fund for Stevenson House and the ending
fund balance in the Residential Housing In-Lieu Fund is decreased by One Million Dollars
($1,000,000).
SECTION 3. As provided in Section 2.04.330 of the Palo Alto Municipal Code, this
ordinance shall become effective upon adoption.
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//
//
//
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ATTACHMENT C
Not Yet Approved
2
5526/mb
SECTION 4. The Council of the City of Palo Alto hereby finds that this is not a project
under the California Environmental Quality Act and, therefore, no environmental impact
assessment is necessary.
INTRODUCED AND PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
NOT PARTICIPATING:
ATTEST:
____________________________ ____________________________
City Clerk Mayor
APPROVED AS TO FORM: APPROVED:
____________________________ ____________________________
Senior Assistant City Attorney City Manager
____________________________
Director of Planning & Community
Environment
____________________________
Director of Administrative Services
CITY OF PALO ALTO OFFICE OF THE CITY ATTORNEY
April 20, 2015
The Honorable City Council
Palo Alto, California
Adoption of Amended Ordinance Amending Chapter 9.14 (Smoking
and Tobacco Regulations) of the Palo Alto Municipal Code to Establish
New Outdoor Smoking Restrictions in Commercial Areas and Outdoor
Dining
Recommendation
Staff recommends that Council approve the attached revised ordinance regarding
outdoor smoking restrictions. The ordinance was revised to add four non-codified
sections. The revision does not change the effective date of the original
ordinance, which was passed on second reading on February 2, 2015.
On February 2, 2015, Council passed, on second reading, Ordinance No. 5330 an
ordinance of the City Council of Palo Alto, Amending Chapter 9.14 of the Palo Alto
Municipal Code to Establish New Outdoor Smoking Restrictions in Commercial
Areas and Outdoor Dining. That ordinance contained a clerical error in as much
as it omitted four non-codified sections, including a severability clause, CEQA
impact statement, effective date and signature block. A copy of the original
Ordinance is attached hereto as Attachment A.
The attached revised Ordinance (Attachment B) amends the original ordinance
(Attachment A) to include the previously omitted sections, as follows:
“SECTION 3. Severability. If any provision, clause, sentence or paragraph of
this ordinance, or the application to any person or circumstances, shall be held
invalid, such invalidity shall not affect the other provisions of this Ordinance
which can be given effect without the invalid provision or application and, to this
end, the provisions of this Ordinance are hereby declared to be severable.
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
Page 2
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:
____________________________
____________________________
Assistant City Attorney City Manager
____________________________
Director of Public Works “
Resource Impact
No impact on budget.
Policy Implications
This ordinance is consistent with adopted Council policy.
Page 3
Environmental Review
The action recommended is not a project for purposes of the California
Environmental Quality Act.
ATTACHMENTS:
Attachment A - Original Ordinance of the Council of the City of Palo Alto Amending Chapter
9.14 of the Palo Alto Municipal Code to Establish New Outdoor Smoking Restrictions (PDF)
Attachment B - The Revised Ordinance (PDF)
Department Head: Molly Stump, City Attorney
Page 4
ATTACHMENT A
Ordinance No. 5300
Ordinance of the Council of the City of Palo Alto Amending Chapter 9.14
(Smoking and Tobacco Regulations) of the Palo Alto Municipal Code to
Establish New Outdoor Smoking Restrictions in Commercial Areas and
Outdoor Dining
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:
(a) That the adoption of this Ordinance is necessary to protect the public health, safety
and welfare for the reasons set forth in amended section 9.14.005. The purposes of
this Ordinance are to ban smoking in commercial areas, all dining areas, and worksite
in order to reduce the risks of second hand smoke, reduce litter, and enhance
enjoyment of these areas.
SECTION 2. Chapter 9.14 of the Palo Alto Municipal Code is hereby amended to read as
follows:
Palo Alto Municipal Code Chapter 9.14: Smoking and Tobacco Regulations
9.14.005 Purpose.
The purpose of this Chapter is to:
(a) Protect the public health, safety and general welfare by prohibiting smoking in public
parks, public places, service locations, city pool cars, child day care facilities, and unenclosed
eating establishments.
(b) Ensure a cleaner and more hygienic environment within the city, reduce litter, and protect
the City's natural resources, including creeks and streams.
(c) Enhance the welfare of residents, workers, and visitors by reducing exposure to second
hand smoke, which studies confirm can cause negative health effects in non-smokers.
(d) Balance the needs of persons who smoke with the needs of nonsmokers, including
children and youth, to be free from the discomforts and health threats created by exposure to
second-hand smoke.
(Ord. 5207 § 2, 2013)
9.14.010 Definitions.
The following words and phrases, whenever used in this chapter shall be construed as defined
in this section:
(a) "Bar" means an area which is devoted to serving alcoholic beverages and in which serving
food is only incidental to the consumption of such beverages. "Bar" shall include bar areas
ATTACHMENT A
within eating establishments which are devoted to serving alcoholic beverages and in which
serving food is only incidental to the consumption of such beverages.
(b) "City pool car" means any truck, van or automobile owned by the city and operated by a
city employee. City pool car does not include vehicles operated by the police department.
(c) “Commercial Area” means an area, including all publicly owned sidewalks, alleys, parking
areas, public places, outdoor dining areas, service areas, etc. within areas zoned in the City’s
Comprehensive Plan as regional/community commercial (including Downtown, California
Avenue Business District, Town and Country, and Stanford Shopping Center) and Neighborhood
Commercial.
(d) "Eating establishment" means a coffee shop, cafeteria, short-order café, luncheonette,
sandwich shop, soda fountain, restaurant, or other establishment serving food to members of the
public.
(e) "Employee" means any person who is employed by any employer in consideration for
direct or indirect monetary wages or profit.
(f) "Employee eating place" means any place serving as an employee cafeteria, lunchrooms,
lounge, or like place.
(g) "Employer" means any person who employs the services of an individual person or
persons.
(h) "Enclosed" means either closed in by a roof and four walls with appropriate openings for
ingress and egress or not open to the sky due to a cover or shelter consisting of a tarpaulin, tent
structure or other impermeable or semi-permeable materials or fabric.
(i) "Motion picture theater" means any theater engaged in the business of exhibiting motion
pictures.
(j) “Public Event” means events open to the general public, including but not limited to a
farmers’ market, parade, craft fair, festival, or any other such event.
(k) "Public places" means enclosed areas within publicly and privately owned buildings,
structures, facilities, or complexes that are open to, used by, or accessible to the general public.
Public places include, but are not limited to, stores, banks, eating establishments, bars, hotels,
motels, depots and transit terminals, theaters and auditoriums, enclosed sports arenas, convention
centers, museums, galleries, polling places, hospitals and other health care facilities of any kind
(including clinics, dental, chiropractic, or physical therapy facilities), automotive service centers,
general business offices, nonprofit entity offices and libraries. Public places further include, but
are not limited to, hallways, restrooms, stairways, escalators, elevators, lobbies, reception areas,
waiting rooms, indoor service lines, checkout stations, counters and other pay stations,
classrooms, meeting or conference rooms, lecture rooms, buses, or other enclosed places that are
open to, used by, or accessible to the general public.
(l) "Service locations" means those enclosed or unenclosed areas open to, used by, or
accessible to the general public that are listed below:
(1) Bus, train and taxi shelters;
ATTACHMENT A
(2) Service waiting areas including, but not limited to, ticket or service lines, public
transportation waiting areas, and public telephones;
(3) Areas within twenty-five feet of the entrance or exit to an enclosed public place, where
smoking is prohibited;
(4) Areas in dedicated parks or other publicly accessible areas that are within twenty-five feet
of bleachers, backstops, or play structures.
(m) "Smoking" means the combustion of any cigar, cigarette, tobacco or any similar article
(n) "Tobacco product" means any substance containing tobacco leaf, including but not limited
to cigarettes, cigars, smoking tobacco, and smokeless tobacco.
(o) "Tobacco store" means a retail store utilized primarily for the sale of tobacco products and
accessories and in which the sale of other products is incidental.
(p) "Tobacco vending machine" means any electronic or mechanical device or appliance the
operation of which-depends upon the insertion of money, whether coin or paper bill, or other
thing representative of value, which dispenses or releases a tobacco product and/or tobacco
accessories.
(q) "Workplace" means any enclosed area of a structure or portion thereof used as a place of
employment as well as unenclosed workplaces, such as outdoor construction sites.
(Ord. 52.07 § 3, 2013: Ord. 4294 § 2, 1995: Ord. 4164 § 2 (part), 1993: Ord. 4056 § 4 (part),
1991)
9.14.020 Smoking prohibited - Enclosed Places
Smoking is prohibited in the Enclosed Areas of the following places within the City of Palo
Alto, except in places subject to prohibition on smoking contained in Labor Code section 6404.5,
in which case that law applies
(1) Workplaces;
(2) Public places;
Any places exempted by the California smokefree workplace law (Labor Code Section
6404.5(d)) are not exempt under this chapter. Smoking is prohibited by this chapter in all places
exempted by that State law, except as provided in 9.14.070.
(Ord. 4056 § 4 (part), 1991)
9.14.025 Smoking prohibited - Unenclosed Areas
(a) Smoking in all unenclosed areas defined as Service Locations shall be prohibited,
including a buffer zone within 25 feet from any doorway, window, opening, crack, or
vent into an Enclosed Area in which Smoking is prohibited, except while the Person
Smoking is actively passing on the way to another destination and provided Smoke does
not enter any Enclosed Area in which Smoking is prohibited.
(b) Smoking is prohibited in unenclosed eating establishments and bars.
ATTACHMENT A
(Ord. 4164 § 3, 1993)
9.14.030 Smoking prohibited - City pool cars.
Smoking is prohibited in all city pool cars.
(Ord. 4056 § 4 (part), 1991)
9.14.035 Smoking Prohibited - Public Parks and Public Events.
Smoking is prohibited in all parks, including at public events.
(Ord. 5207 § 4, 2013)
9.14.040 Smoking prohibited - Child day care facilities.
Smoking is prohibited in a private residence which is licensed as a child day care facility
within the meaning of Health and Safety Code Section 1596.750 and Section 1596.795 and
amendments.
(Ord. 4056 § 4 (part), 1991)
9.14.050 Smoking prohibited – Commercial Areas and Public Events.
Smoking is prohibited in commercial areas, except places where smoking is already prohibited
by state or federal law, in which case those laws apply. This prohibition includes public events
held on public streets. A shopping center or commercial areas may establish a designated
smoking area that is at least 25 feet away from any openings and includes receptacles to control
litter.
9.14.060 Reserved.*
* Editor's Note: Former Section 9.14.060, Regulation of Smoking in the Workplace,
previously codified herein and containing portions of Ordinance Nos. 4056 and 4164 was
repealed in its entirety by Ordinance No. 4294.
9.14.070 Exemptions.
The following places and workplaces are exempt from Section 9.14.020:
(a) Smoking at theatrical production sites is not prohibited by this subsection if the theater
general manager certifies that smoking is an essential part of the story and the use of a fake,
prop, or special effect cannot reasonably convey the idea of smoking in an effective way to
a reasonable member of the anticipated audience. This exception will not apply if minors
are performers within the production.
(b) Bingo games, consistent with prohibition on smoking contained in Labor Code section
6404.5 and licensed pursuant to the Palo Alto Municipal Code, which do not permit access by
minors under eighteen years of age;
(c) A fully enclosed room in a hotel, motel, other transient lodging establishment similar to a
hotel, motel, or public convention center which is being used entirely for a private function and
ATTACHMENT A
which is not open to the general public, except while food or beverage functions are taking place,
including setup, service, and cleanup activities, or when the room is being used for exhibit
purposes, sixty-five percent of the guest rooms in a hotel, motel, or similar transient lodging
establishment;
(d) Tobacco stores with private smokers' lounges meeting the requirements of the applicable
portions of subdivision (d)(4) of Labor Code Section 6404.5.
(Ord. 4294 § 3, 1995: Ord. 4164 § 2 (part), 1993: Ord. 4056 § 4 (part), 1991)
9.14.080 Location of tobacco vending machines.
(a) No person shall locate, install, keep or maintain a tobacco vending machine except in a
place which under state law is not lawfully accessible to minors.
(b) This section shall become effective ninety days after its enactment. Any tobacco vending
machine not in conformance with this section upon its effective date shall be removed.
(Ord. 4056 § 4 (part), 1991)
9.14.090 Display of tobacco products for sale.
No person shall display or offer tobacco products for sale except in an area, or from within an
enclosure, which physically precludes the removal of the tobacco products without the assistance
of the person authorizing such display or offer, or an employee of such person.
(Ord. 4056 § 4 (part), 1991)
9.14.100 Posting of signs required.
With the exception of service locations, wherever this ordinance prohibits smoking,
conspicuous signs shall be posted so stating, containing all capital lettering not less than one inch
in height, on a contrasting background. Signs of similar size containing the international "no
smoking" symbol consisting of a pictorial representation of a burning cigarette enclosed in a red
circle with a red bar across it may be used in addition to or in lieu of any signs required
hereunder. Such signs shall be placed by the owner, operator, manager, or other persons having
control of such room, building, or other place where smoking is prohibited. Signs placed at each
entrance of buildings in which smoking is totally prohibited shall be sufficient.
(Ord. 4294 § 4, 1995: Ord. 4164 § 2 (part), 1993: Ord. 4056 § 4 (part), 1991)
9.14.110 Enforcement.
Pursuant to Section 6 of Article IV of the Palo Alto City Charter, the city manager is hereby
granted authority to enforce the provisions of this chapter and Labor Code Section 6404.5.
(Ord. 4294 § 5, 1995)
9.14.120 Public nuisance.
Any violation of this chapter is a public nuisance and may be abated in accordance
with Chapter 9.56 of the Palo Alto Municipal Code and/or Code of Civil Procedure Section 731.
ATTACHMENT A
(Ord. 4056 § 4 (part), 1991)
9.14.130 Violation to be misdemeanors.
Violation of any provision of this chapter shall be a misdemeanor punishable as provided in
this code. Violations shall be punishable by:
(1) A fine not exceeding $250 for the first violation
(2) A fine not exceeding $300 for the second violation
(3) A fine not exceeding $500 for each additional violation within one year
(Ord. 4056 § 4 (part), 1991)
ATTACHMENT B
*NOT YET APPROVED*
Ordinance No. ______
Ordinance of the Council of the City of Palo Alto Amending
Chapter 9.14 (Smoking and Tobacco Regulations) of the Palo Alto
Municipal Code to Establish New Outdoor Smoking Restrictions in
Commercial Areas and Outdoor Dining
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:
(a) That the adoption of this Ordinance is necessary to protect the public health,
safety and welfare for the reasons set forth in amended section 9.14.005. The purposes of this
Ordinance are to ban smoking in commercial areas, all dining areas, and worksite in order to
reduce the risks of second hand smoke, reduce litter, and enhance enjoyment of these areas.
SECTION 2. Chapter 9.14 of the Palo Alto Municipal Code is hereby amended to read as
follows:
Palo Alto Municipal Code Chapter 9.14: Smoking and Tobacco Regulations
9.14.005 Purpose.
The purpose of this Chapter is to:
(a) Protect the public health, safety and general welfare by prohibiting smoking in
public parks, public places, service locations, city pool cars, child day care facilities, and
unenclosed eating establishments.
(b) Ensure a cleaner and more hygienic environment within the city, reduce litter,
and protect the City's natural resources, including creeks and streams.
(c) Enhance the welfare of residents, workers, and visitors by reducing exposure to
second hand smoke, which studies confirm can cause negative health effects in non-smokers.
(d) Balance the needs of persons who smoke with the needs of nonsmokers,
including children and youth, to be free from the discomforts and health threats created by
exposure to second-hand smoke.
9.14.010 Definitions.
The following words and phrases, whenever used in this chapter shall be construed as defined
in this section:
(a) "Bar" means an area which is devoted to serving alcoholic beverages and in
which serving food is only incidental to the consumption of such beverages. "Bar" shall include
1
150310 sh 0170010
ATTACHMENT B
*NOT YET APPROVED*
bar areas within eating establishments which are devoted to serving alcoholic beverages and in
which serving food is only incidental to the consumption of such beverages.
(b) ”City pool car" means any truck, van or automobile owned by the city and
operated by a city employee. City pool car does not include vehicles operated by the police
department.
(c) “Commercial Area” means an area, including all publicly owned sidewalks, alleys,
parking areas, public places, outdoor dining areas, service areas, etc. within areas zoned in the
City’s Comprehensive Plan as regional/community commercial (including Downtown, California
Avenue Business District, Town and Country, and Stanford Shopping Center) and Neighborhood
Commercial.
(d) "Eating establishment" means a coffee shop, cafeteria, short-order café,
luncheonette, sandwich shop, soda fountain, restaurant, or other establishment serving food to
members of the public.
(e) "Employee" means any person who is employed by any employer in
consideration for direct or indirect monetary wages or profit.
(f) "Employee eating place" means any place serving as an employee cafeteria,
lunchrooms, lounge, or like place.
(g) "Employer" means any person who employs the services of an individual person
or persons.
(h) "Enclosed" means either closed in by a roof and four walls with appropriate
openings for ingress and egress or not open to the sky due to a cover or shelter consisting of a
tarpaulin, tent structure or other impermeable or semi-permeable materials or fabric.
(i) "Motion picture theater" means any theater engaged in the business of
exhibiting motion pictures.
(j) “Public Event” means events open to the general public, including but not
limited to a farmers’ market, parade, craft fair, festival, or any other such event.
(k) "Public places" means enclosed areas within publicly and privately owned
buildings, structures, facilities, or complexes that are open to, used by, or accessible to the
general public. Public places include, but are not limited to, stores, banks, eating
establishments, bars, hotels, motels, depots and transit terminals, theaters and auditoriums,
enclosed sports arenas, convention centers, museums, galleries, polling places, hospitals and
other health care facilities of any kind (including clinics, dental, chiropractic, or physical therapy
facilities), automotive service centers, general business offices, nonprofit entity offices and
libraries. Public places further include, but are not limited to, hallways, restrooms, stairways,
escalators, elevators, lobbies, reception areas, waiting rooms, indoor service lines, checkout
stations, counters and other pay stations, classrooms, meeting or conference rooms, lecture
2
150310 sh 0170010
ATTACHMENT B
*NOT YET APPROVED*
rooms, buses, or other enclosed places that are open to, used by, or accessible to the general
public.
(l) "Service locations" means those enclosed or unenclosed areas open to, used by,
or accessible to the general public that are listed below:
(1) Bus, train and taxi shelters;
(2) Service waiting areas including, but not limited to, ticket or service lines, public
transportation waiting areas, and public telephones;
(3) Areas within twenty-five feet of the entrance or exit to an enclosed public place,
where smoking is prohibited;
(4) Areas in dedicated parks or other publicly accessible areas that are within
twenty-five feet of bleachers, backstops, or play structures.
(m) "Smoking" means the combustion of any cigar, cigarette, tobacco or any similar
article
(n) "Tobacco product" means any substance containing tobacco leaf, including but
not limited to cigarettes, cigars, smoking tobacco, and smokeless tobacco.
(o) "Tobacco store" means a retail store utilized primarily for the sale of tobacco
products and accessories and in which the sale of other products is incidental.
(p) "Tobacco vending machine" means any electronic or mechanical device or
appliance the operation of which-depends upon the insertion of money, whether coin or paper
bill, or other thing representative of value, which dispenses or releases a tobacco product
and/or tobacco accessories.
(q) "Workplace" means any enclosed area of a structure or portion thereof used as a
place of employment as well as unenclosed workplaces, such as outdoor construction sites.
9.14.020 Smoking prohibited - Enclosed Places.
Smoking is prohibited in the Enclosed Areas of the following places within the City of Palo Alto,
except in places subject to prohibition on smoking contained in Labor Code section 6404.5, in
which case that law applies
(1) Workplaces;
(2) Public places;
Any places exempted by the California smoke free workplace law (Labor Code Section
6404.5(d)) are not exempt under this chapter. Smoking is prohibited by this chapter in all places
exempted by that State law, except as provided in 9.14.070.
3
150310 sh 0170010
ATTACHMENT B
*NOT YET APPROVED*
9.14.025 Smoking prohibited - Unenclosed Areas.
(a) Smoking in all unenclosed areas defined as Service Locations shall be prohibited,
including a buffer zone within 25 feet from any doorway, window, opening, crack, or vent into
an Enclosed Area in which Smoking is prohibited, except while the Person Smoking is actively
passing on the way to another destination and provided Smoke does not enter any Enclosed
Area in which Smoking is prohibited.
(b) Smoking is prohibited in unenclosed eating establishments and bars.
9.14.030 Smoking prohibited - City pool cars.
Smoking is prohibited in all city pool cars.
9.14.035 Smoking Prohibited - Public Parks and Public Events.
Smoking is prohibited in all parks, including at public events.
9.14.040 Smoking prohibited - Child day care facilities.
Smoking is prohibited in a private residence which is licensed as a child day care facility within
the meaning of Health and Safety Code Section 1596.750 and Section 1596.795 and
amendments.
9.14.050 Smoking prohibited – Commercial Areas and Public Events.
Smoking is prohibited in commercial areas, except places where smoking is already prohibited
by state or federal law, in which case those laws apply. This prohibition includes public events
held on public streets. A shopping center or commercial areas may establish a designated
smoking area that is at least 25 feet away from any openings and includes receptacles to
control litter.
9.14.060 Reserved.*
* Editor's Note: Former Section 9.14.060, Regulation of Smoking in the Workplace, previously
codified herein and containing portions of Ordinance Nos. 4056 and 4164 was repealed in its
entirety by Ordinance No. 4294.
9.14.070 Exemptions.
The following places and workplaces are exempt from Section 9.14.020:
(a) Smoking at theatrical production sites is not prohibited by this subsection if the
theater general manager certifies that smoking is an essential part of the story and the use of a
fake, prop, or special effect cannot reasonably convey the idea of smoking in an effective way
to a reasonable member of the anticipated audience. This exception will not apply if minors are
performers within the production.
4
150310 sh 0170010
ATTACHMENT B
*NOT YET APPROVED*
(b) Bingo games, consistent with prohibition on smoking contained in Labor Code
section 6404.5 and licensed pursuant to the Palo Alto Municipal Code, which do not permit
access by minors under eighteen years of age
(c) A fully enclosed room in a hotel, motel, other transient lodging establishment
similar to a hotel, motel, or public convention center which is being used entirely for a private
function and which is not open to the general public, except while food or beverage functions
are taking place, including setup, service, and cleanup activities, or when the room is being
used for exhibit purposes, sixty-five percent of the guest rooms in a hotel, motel, or similar
transient lodging establishment;
(d) Tobacco stores with private smokers' lounges meeting the requirements of the
applicable portions of subdivision (d)(4) of Labor Code Section 6404.5.
9.14.080 Location of tobacco vending machines.
(a) No person shall locate, install, keep or maintain a tobacco vending machine
except in a place which under state law is not lawfully accessible to minors.
(b) This section shall become effective ninety days after its enactment. Any tobacco
vending machine not in conformance with this section upon its effective date shall be removed.
9.14.090 Display of tobacco products for sale.
No person shall display or offer tobacco products for sale except in an area, or from within an
enclosure, which physically precludes the removal of the tobacco products without the
assistance of the person authorizing such display or offer, or an employee of such person.
(Ord. 4056 § 4 (part), 1991)
9.14.100 Posting of signs required.
With the exception of service locations, wherever this ordinance prohibits smoking,
conspicuous signs shall be posted so stating, containing all capital lettering not less than one
inch in height, on a contrasting background. Signs of similar size containing the international
"no smoking" symbol consisting of a pictorial representation of a burning cigarette enclosed in
a red circle with a red bar across it may be used in addition to or in lieu of any signs required
hereunder. Such signs shall be placed by the owner, operator, manager, or other persons
having control of such room, building, or other place where smoking is prohibited. Signs placed
at each entrance of buildings in which smoking is totally prohibited shall be sufficient.
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ATTACHMENT B
*NOT YET APPROVED*
9.14.110 Enforcement.
Pursuant to Section 6 of Article IV of the Palo Alto City Charter, the city manager is hereby
granted authority to enforce the provisions of this chapter and Labor Code Section 6404.5.
9.14.120 Public nuisance.
Any violation of this chapter is a public nuisance and may be abated in accordance with Chapter
9.56 of the Palo Alto Municipal Code and/or Code of Civil Procedure Section 731.
9.14.130 Violation to be misdemeanors.
Violation of any provision of this chapter shall be a misdemeanor punishable as provided in this
code. Violations shall be punishable by:
(1) A fine not exceeding $250 for the first violation
(2) A fine not exceeding $300 for the second violation
(3) A fine not exceeding $500 for each additional violation within one year
SECTION 3. Severability. If any provision, clause, sentence or paragraph of this
ordinance, or the application to any person or circumstances, shall be held invalid, such
invalidity shall not affect the other provisions of this Ordinance which can be given effect
without the invalid provision or application and, to this end, the provisions of this Ordinance
are hereby declared to be severable.
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.
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ATTACHMENT B
*NOT YET APPROVED*
SECTION 5. This ordinance shall be effective on the thirty-first day after the date of its
adoption.
INTRODUCED:
PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:
____________________________ ____________________________
City Clerk Mayor
APPROVED AS TO FORM: APPROVED:
____________________________ ____________________________
Assistant City Attorney City Manager
____________________________
Director of Public Works
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City of Palo Alto (ID # 5667)
City Council Staff Report
Report Type: Action Items Meeting Date: 4/20/2015
City of Palo Alto Page 1
Summary Title: Green Building and Energy Ordinance Staff Report
Title: PUBLIC HEARING: Adoption of Local Amendments to the California
Green Building Code and the California Energy Code
From: City Manager
Lead Department: Development Services Department
Recommendation
The Policy and Services Committee and staff recommend that the City Council conduct a public
hearing and then adopt: 1) an ordinance repealing and restating Palo Alto Municipal Code
Chapter 16.14 to adopt and amend the 2013 California Green Building Standards Code, Title 24,
Chapter 11, of the California Code of Regulations (Attachment A); and 2) an ordinance repealing
PAMC Chapters 16.17 and 16.18 and restating Chapter 16.17 to adopt and amend the 2013
California Energy Code, Title 24, Chapter 6, of the California Code of Regulations (Attachment
B).
Executive Summary
The proposed revisions to the green building ordinance and energy code ordinance would
continue Palo Alto’s leadership position in promoting sustainable and high-performance
building design and construction. The technical implications include more stringent
requirements in the following areas: 1) a new energy “reach code” requiring building design to
exceed the minimum State energy code requirements by fifteen percent (15%); 2) solar-ready
infrastructure for new residential buildings; 3) “laundry-to-landscape ready” infrastructure for
residential buildings; 4) water-efficient landscape strategies; and 5) Cal Green Residential Tier 1
and Tier 2 standards for new and remodel residential projects in lieu of the prior Build it Green
framework.
On March 10th, 2015, the Policy and Services Committee met for a special meeting to review
the recommended changes of the green building ordinance and energy reach code ordinance.
The Committee directed staff to proceed with the vast majority of the recommendations, with
some modifications. The Committee’s direction has been incorporated into the attached
ordinances.
Background
City of Palo Alto Page 2
Every three years, the State of California adopts new building standards that are codified in
Title 24 of the California Code of Regulations, referred to as the California Building Standards
Code. The 2013 California Energy Code contains mandated energy efficiency measures. The
2013 California Green Building Standards Code (Cal Green) contains environmental
performance requirements related to site design, water efficiency, material conservation, and
air quality issues.
Palo Alto has a history of leadership in the area of sustainability, energy efficiency, and green
building. Over the past three code cycles, Palo Alto has developed a green building code that is
more aggressive than the State of California requirements. Staff has meet multiple times with
the Green Building Advisory Group (GBAG), a group of green building stakeholders including
architects, engineers, contractors, and other related parties to develop new recommendations
brought before the City Council.
In August 2013, Staff held a GBAG Retreat to define and prioritize the green building
requirements that are most important to the stakeholders. Two policy action items that
resulted from the retreat include; 1) the development of the new green building ordinance,
which is based on the 2013 California Green Building Standards Code; and 2) the development
of a new energy reach code, which is based on the 2013 California Energy Code. After the
retreat, the Green Building Technical Advisory Group (GBTAG) was formed with staff across
multiple departments within Development Services. The GBTAG met to implement the policy
set by the GBAG by developing technical green building recommendations.
The California Energy Commission (CEC) requires that a cost-effectiveness study be conducted
and filed in the case of a local amendment to the California Energy Code. It is required that the
City demonstrate to the CEC, using the cost-effectiveness study, that the amendments to the
code are financially responsible to the non-residential and residential applicants.
As a result of the CEC requirements, staff conducted an informal bid process to select a
consultant to conduct a cost effectiveness study. Staff selected TRC Solutions based on their
ability to provide both residential and non-residential services within the same study and their
ability to meet the project timeline. TRC Solutions performed the study using CEC-approved
energy modeling software. The results of this study are located in Attachment C of this report.
Discussion
Energy Code Ordinance
With the updated Energy Code ordinance, the City of Palo Alto (CPA) will increase the minimum
requirements for building energy performance. The primary metric associated with this
requirement is called Time-Dependent Valuation (TDV). Palo Alto’s increased requirements are
generally expressed as percentage above the minimum TDV threshold using a methodology
called the “performance approach”. The result of the increased requirement above the
City of Palo Alto Page 3
minimum is commonly referred to as an “energy reach code” since it improves upon the
baseline standards.
The proposed ordinance adopts the performance approach specified within the 2013 California
Energy Code to demonstrate that the TDV Energy of the proposed building exceeds the TDV
Energy of the Standard Design by the prescribed percentage. Based on the results of the cost-
effectiveness study, a target of 15% savings is proposed for new single-family, new multi-family,
and new non-residential projects. A series of alternative requirements are applicable to
alterations and additions.
The proposed ordinance mandates additional “solar ready” infrastructure for residential
projects beyond the current regulation. Single-family residential structures will be required to
dedicate 500 square feet on the roof surface in the event of the installation of future solar
panels. In addition, the applicant will be required to provide conduit to support the installation
of future wiring to support a solar system. Development Services has coordinated with the
Building division, Public Works Department, and Urban Forestry division to address a condition
in which shading from protective trees may impact a solar ready zone. In the event of a conflict
between the Green Building Ordinance, the Solar Shade Act, and the Palo Alto Tree Ordinance,
the requirement most protective of existing tree canopies will prevail.
Green Building Code Ordinance
With the updated Green Building Code ordinance, the City of Palo Alto (CPA) will replace the
residential green building compliance methodology from Build It Green/Green Point Rated, a
points-based rating system, to CAL Green Tier 1 and Tier 2 compliance, which is part of the
California Building Code. This change represents Development Services’ goal of de-emphasizing
the value of “points” and increasing the focus on the environmental performance requirements
within the building code. In addition, adopting Cal Green over Green Point Rated allows staff to
enforce green building requirements using similar methods to that of other codes.
The Green Point Rated program utilizes industry experts, called Green Point Raters, to provide
field verification of program construction requirements.. In the past, these Green Point Raters
have been critical to staff’s ability to enforce local green building requirements. Staff
recommends that Green Point Raters remain an integral component for the enforcement of the
green building requirements, as presented in the proposed ordinance.
Water Efficiency
During the Green Building Advisory Group retreat, water use was identified as a high-priority
item to address within the new green building ordinance. As a result, the proposed technical
amendments to Cal Green include an increased emphasis on greywater and irrigation efficiency.
In the area of greywater, the ordinance mandates the installation of a “laundry-to-landscape
ready” irrigation system. This would require all new construction projects to install a three-way
City of Palo Alto Page 4
diverter valve in the drain line of all laundry fixtures to assist in the future installation of a
“laundry-to-landscape” system. The installation of such a valve will enable a homeowner to
install a future “laundry-to-landscape” system with limited barriers.
The ordinance also lowers the square footage trigger for irrigation efficiency. Irrigation
efficiency in California is regulated using the Model Water Landscape Ordinance (MWLO). For
non-residential projects, the existing regulation requires compliance with the MWLO for
landscapes of any size associated with new construction and landscapes of 1,000 square feet
for renovations projects. Under the new ordinance, compliance with the California Model
Water Ordinance is required for landscapes of any size on all non-residential construction
projects regardless of scope size. For residential projects, the new ordinance requires
compliance with the local Model Water Ordinance for all residential construction projects when
a landscaped area of 1,000 square feet or more is included in the scope.
Policy and Services Committee Recommendations
At its March 10, 2015 meeting, the Policy and Services Committee approved the recommended
ordinance updates with the following modifications and direction.
First, the Committee directed staff to include an infeasibility exemption section of the
ordinances allowing staff to permit alternative measures where strict compliance is not feasible
or cost effective. This section has been included in the energy code ordinance in Attachment B,
outlining clear guidelines for infeasibility.
Second, the Committee directed staff to modify the energy ordinance to lower the residential
square footage trigger from 1,250 square feet to 1,000 square feet. This modification was
recommended by the Green Building Advisory Group. This will provide alignment with the
triggers associated with the Green Building Ordinance. This change has been made to the
energy reach code ordinance in Attachment B.
Third, the Committee directed staff to convene the Green Building Advisory Group to clarify the
requirements for the Residential Tier 1 and Tier 2 requirements. Staff has convened the Green
Building Advisory Group for two meetings and has incorporated the requested clarifications in
Attachment A.
Fourth, the Committee directed staff to add estimated Green House Gas (GHG) savings
calculations associated with the updates to the ordinances. These calculations have been
incorporated into Chapter 4, Section 4.3 of the Cost-Effectiveness Study found in Attachment C.
Fifth, the Committee directed staff to provide cost assumptions associated with the “laundry to
landscape ready” diverter valve hardware and installation. The cost assumptions have been
provided in Attachment D.
City of Palo Alto Page 5
Policy and Services Considerations for Future Energy and Green Building Ordinances
At the March 10, 2015 meeting, the Policy and Services Committee provided the following
feedback for the next code cycle and updates to the green building and energy reach code
ordinances.
First, staff presented a rough timeline for goals towards a Zero Net-Energy ordinance for both
commercial and residential construction projects. The timeline presented followed similar
goals to the state’s goal for Zero Net Energy. The state set a goal for Zero Net Energy at the
year 2020 for new residential projects and 2030 for new commercial projects. Similarly, staff
presented a preliminary timeline for Zero Net Energy as 2017 for larger residential projects and
2025 for some commercial buildings. The committee requested that staff re-examine the
sequencing of this timeline during the next code cycle to ensure that using the same goal
sequencing as the state is the appropriate methodology. This item will be included in the next
code-cycle ordinance update.
Second, the Committee requested that staff include the study of mandating the installation of
photovoltaic panels with specific exemption requirements. This item will be included in the next
code-cycle ordinance update.
Resource Impact
Resource impacts from the adoption of these ordinances will be the additional staff time in plan
checking and inspection requirements. In addition, staff will be reviewing the green building
permit fees and process to ensure it is cost neutral and, if necessary, bring forward
recommendations to adjust the fees to achieve cost neutrality as part of the annual budget
process. The Fiscal Year 2016 Proposed Budget will include contractual support for a cost
effectiveness study that is required as a result of the ordinance exceeding minimum State
requirements.
Environmental Review
This action is exempt from the California Environmental Quality Act under CEQA Guidelines
section 15061.
Attachments:
Attachment A Draft ORD Amending Chptr 16 14 Green Building v7 (PDF)
Attachment B Draft ORD Amending Chptr 16 17 Energy Code (PDF)
Attachment C: Palo Alto Reach Code Cost Effectiveness (PDF)
Attachment D: Three Way Valve (PDF)
NOT YET APPROVED
Ordinance No. ______
Ordinance of the Council of the City of Palo Alto Amending and
Restating Chapter 16.14 of the Palo Alto Municipal Code, California
Green Building Standards Code 2013 Edition, and Local Amendments
and Related Findings
The Council of the City of Palo Alto does ORDAIN as follows:
SECTION 1. Chapter 16.14 of the Palo Alto Municipal Code is hereby amended by
repealing in its entirety Chapter 16.14 and adopting a new Chapter 16.14 to read as follows:
16.14.010 2013 California Green Building Standards Code adopted.
The California Green Building Standards Code, 2013 Edition, Title 24, Part 11 of the California Code
of Regulations, together with those omissions, amendments, exceptions and additions thereto, is
adopted and hereby incorporated in this Chapter by reference and made a part hereof the same
as if fully set forth herein.
Unless superseded and expressly repealed, references in City of Palo Alto forms, documents and
regulations to the chapters and sections of the former California Code of Regulations, Title 24,
2010, shall be construed to apply to the corresponding provisions contained within the California
Code of Regulations, Title 24, 2013. Ordinance Nos. 5220 and 5263 of the City of Palo Alto and all
other ordinances or parts of ordinances in conflict herewith are hereby suspended and expressly
repealed.
Wherever the phrases “California Green Building Standards Code” or “Cal Green” are used in this
code or any ordinance of the City, such phrases shall be deemed and construed to refer and apply
to the California Green Building Standards Code, 2013 Edition, as adopted by this chapter.
One copy of the California Green Building Standards Code, 2013 Edition, has been filed for use and
examination of the public in the Office of the Building Official of the City of Palo Alto.
16.14.020 2013 California Green Building Standards Code Appendix Chapters adopted.
The following Appendix Chapters of the California Green Building Standards Code, 2013 Edition,
are adopted and hereby incorporated in this Chapter by reference and made a part hereof the
same as if fully set forth herein:
A. Appendix A4 - Residential Voluntary Measures (Tier 1 and Tier 2)
B. Appendix A5 – Nonresidential Voluntary Measures (Tier 1 and Tier 2)
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16.14.030 Cross - References to California Green Building Standards Code.
The provisions of this Chapter contain cross-references to the provisions of the California Green
Building Standards Code, 2013 Edition, in order to facilitate reference and comparison to those
provisions.
16.14.040 Violations – Penalties.
Any person, firm or corporation violating any provision of this chapter is guilty of a
misdemeanor and upon conviction thereof shall be punished as provided in subsection (a) of
Section 1.08.010 of this code. Each separate day or any portion thereof during which any
violation of this chapter occurs or continues shall be deemed to constitute a separate offense,
and upon conviction thereof shall be punishable as provided in this section.
16.14.050 Enforcement -- Citation authority.
The employee positions designated in this section may enforce the provisions of this chapter by
the issuance of citations; persons employed in such positions are authorized to exercise the
authority provided in Penal Code section 836.5 and are authorized to issue citations for
violations of this chapter. The designated employee positions are: (1) chief building official; (2)
building inspection supervisor; (3) Director of Development Services, and (4) Code enforcement
officer.
16.14.060 Local Amendments.
The provisions of this Chapter shall constitute local amendments to the cross-referenced
provisions of the California Green Building Standards Code, 2013 Edition, and shall be deemed to
replace the cross-referenced sections of said Code with the respective provisions set forth in this
Chapter.
16.14.070 Section 202 amended – Definitions added.
Section 202 of the California Green Building Standards Code is amended to include the following
definitions:
CPAU: The City of Palo Alto Utilities Department.
CALGREEN MANDATORY: Calgreen mandatory requirements are triggered for projects
outlined in Section 301.1 Scope of the code, as amended. Projects that trigger only
Calgreen mandatory measures are not required to fulfill Calgreen Tier 1 or Tier 2 as
listed in Appendix A4 and A5.
CALGREEN “TIER 1”: To achieve Tier 1 status, a project must comply with the
requirements identified in Appendix A4, Division A4.601.4 for residential projects and
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NOT YET APPROVED
Appendix A5.601.2 for non-residential projects. The local adaptations to these
appendices are identified in this ordinance. Projects subject to Tier 1 must fulfill on
Calgreen mandatory measures and Calgreen Tier 1 prerequisite measures. Tier 1
projects must also select the minimum amount Calgreen elective measures required for
Tier 1.
CALGREEN “TIER 2”: To achieve Tier 2 status, a project must comply with the
requirements identified in Appendix A4, Division A4.601.5 for residential projects and
Appendix A5.601.3 for non-residential projects. The local adaptations to these
appendices are identified in this ordinance. Projects subject to Tier 2 must fulfill on
Calgreen mandatory measures and Calgreen Tier 2 prerequisite measures. Tier 2
projects must also select the minimum amount of Calgreen elective measures required
for Tier 2.
CALGREEN “TIER 1” AND “TIER 2” PREREQUISITE MEASURES: Projects subject to
Calgreen Tier 1 or Tier 2 must fulfill the minimum prerequisites as described within
Appendix A4, Division A4.6 for Residential projects and Appendix A5.6 for Non-
Residential Projects, and local amendments within this ordinance. Tier 1 and Tier 2
prerequisite and elective measures are generally preceded by an “A”.
CALGREEN “TIER 1” AND “TIER 2” ELECTIVE MEASURES: Projects subject to Calgreen
Tier 1 or Tier 2 must fulfill the minimum number of electives as described within
Appendix A4, Division A4.6 for Residential projects and Appendix A5.6 for Non-
Residential Projects, and local amendments within this ordinance. Tier 1 and Tier 2
prerequisite and elective measures are generally preceded by an “A”.
DEDICATED IRRIGATION METER. A dedicated irrigation meter is a water meter that
exclusively meters water used for outdoor watering and irrigation, and is completely
independent from the meter used for indoor water use.
GREEN POINT RATER: A GreenPoint Rater is an individual rated by Build It Green—a
professional non-profit membership organization whose mission is to promote healthy,
energy- and resource-efficient buildings in California. For projects that require Green
Point Rater verification, the Green Point Rater must be contracted directly with the
owner and may not be a contractor or employee of the design or construction firm.
CALGREEN PLANS EXAMINER: A Calgreen Plans Examiner is an individual certified
through the International Code Council (ICC) for demonstrating knowledge and
application of Green Building concepts during plan review. For projects that require a
Calgreen Plans Examiner verification, the Examiner must be contracted directly with the
owner and may not be a contractor or employee of the design or construction firm.
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CALGREEN INSPECTOR: A Calgreen Inspector is an individual certified through the
International Code Council (ICC) for demonstrating knowledge and application of Green
Building concepts during inspection. For projects that require a Calgreen Inspector
verification, the Inspector must be contracted directly with the owner and may not be a
contractor or employee of the design or construction firm.
INVASIVE PLANTS. Invasive plants are both indigenous and non-indigenous species with
growth habits that are characteristically aggressive. Invasive plants that are of concern
and may be prohibited by this code are defined as such in the “Water Use Classification
of Landscape Species (WUCOLS), A Guide to the Water Needs of Landscape Plants,”
from the University of California Cooperative Extension.
MODEL WATER EFFICIENT LANDSCAPE ORDINANCE. The California Department of
Water Resources Model Water Efficient Landscape Ordinance (or “Model Water
Ordinance) ordinance regulating new construction and rehabilitated landscape project
design, installation and maintenance. The Model Water Ordinance assigns a Maximum
Applied Water Allowance (MAWA) based on landscaped area and climatological
parameters. The City of Palo Alto has adopted more stringent compliance regulations in
this code than the Model Water Ordinance; however, the Model Water Ordinance is
referenced as the guiding document for water use calculations, irrigation system design,
and water waste prevention.
PROCESS WATER. Process water means untreated wastewater, uncontaminated by
toilet discharge or an unhealthy bodily waste, which is not a threat from unhealthful
processing, manufacturing or operating wastes.
SALVAGE. Salvage means the controlled removal of construction or demolition debris/
material from a building, construction, or demolition site for the purpose of on- or off-
site reuse, or storage for later reuse. Examples include air conditioning and heating
systems, columns, balustrades, fountains, gazebos, molding, mantels, pavers, planters,
quoins, stair treads, trim, wall caps, bath tubs, bricks, cabinetry, carpet, doors, ceiling
fans, lighting fixtures, electrical panel boxes, fencing, fireplaces, flooring materials of
wood, marble, stone or tile, furnaces, plate glass, wall mirrors, door knobs, door
brackets, door hinges, marble, iron work, metal balconies, structural steel, plumbing
fixtures, refrigerators, rock, roofing materials, siding materials, sinks, stairs, stone,
stoves, toilets, windows, wood fencing, lumber and plywood.
SQUARE FOOTAGE. For application of green building requirements, square footage
means all new and replacement square footage, including basement areas (7 feet or
greater in height) and garages, except that unconditioned garage space shall only count
as 50% . Areas demolished shall not be deducted from the total new construction
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square footage. Square footage may also apply to landscapes, in which case it is the
total surface area of the site not covered by impervious surfaces.
16.14.080 Section 301 amended – voluntary tiers added.
Section 301 of the California Green Building Standards Code is amended to read:
SECTION 301
GENERAL
301.1 Scope. Buildings shall be designed to include the green building measures
specified as mandatory in the application checklists contained in this code and any
applicable local amendments. In addition, the City requires the use of Voluntary Tiers, as
provided in Sections A4.601 and A5.601, for certain residential and nonresidential new
construction, additions, and alterations.
301.1.1 Residential additions and alterations. [HCD] The mandatory provisions of
Chapter 4 shall be applied to additions or alterations of existing residential buildings
where the addition or alteration increases the building's conditioned area, volume, or
size. The requirements shall apply only to and/or within the specific area of the addition
or alteration.
Tier 1 adopted. All residential building additions or alterations exceeding 1000 square
feet must meet California Green Building Standards Code Mandatory plus Tier 1
requirements, as amended by this Chapter and as applicable to the scope of work.
Note: On and after January 1, 2014, residential buildings undergoing permitted
alterations, additions or improvements shall replace noncompliant plumbing
fixtures with water-conserving plumbing fixtures. Plumbing fixture replacement
is required prior to issuance of a certificate of final completion, certificate of
occupancy or final permit approval by the local building department. See Civil
Code Section 1101.1, et seq., for the definition of a noncompliant plumbing
fixture, types of residential buildings affected and other important enactment
dates.
301.2 Low-rise and high-rise residential buildings. [HCD] The provisions of individual
sections of CALGreen may apply to either low-rise residential buildings, high-rise
residential buildings, or both. Individual sections will be designated by banners to
indicate where the section applies specifically to low-rise only (LR) or high-rise only (HR).
When the section applies to both low-rise and high-rise buildings, no banner will be
used.
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NOT YET APPROVED
301.3 Nonresidential additions and alterations. [BSC] The provisions of individual
sections of Chapter 5 apply to building nonresidential additions of 1,000 square feet or
greater, and/or building alterations with a permit valuation of $200,000 or above (for
occupancies within the authority of California Building Standards Commission). Code
sections relevant to additions and alterations shall only apply to the portions of the
building being added or altered within the scope of the permitted work.
A code section will be designated by a banner to indicate where the code section only
applies to newly constructed buildings [N] or to additions and alterations [AA]. When
the code section applies to both, no banner will be used.
Tier 1 adopted. Nonresidential alterations (including tenant improvements or
renovations) of 5,000 square feet that include replacement or alteration of at least two
of the following: HVAC system, building envelope, hot water system, or lighting system,
must comply with Mandatory California Green Building Standards Code plus Tier 1
requirements, as amended by this Chapter and as applicable to the scope of work.
Tier 2 adopted. Nonresidential additions of 1000 square feet or greater must comply
with California Green Building Standards Code Mandatory plus Tier 2 requirements, as
amended by this Chapter and as applicable to the scope of work.
301.4 Residential new construction – Tier 2 adopted. All newly constructed Residential
Buildings must meet California Green Building Standards Code Mandatory plus Tier 2
requirements, as amended by this Chapter and as applicable to the scope of work.
301.5 Non-residential new construction – Tier 2 adopted. All new nonresidential
construction must meet California Green Building Standards Code Mandatory plus Tier 2
requirements, as amended by this Chapter and as applicable to the scope of work.
301.6 Special Inspector Requirements. Residential project owners subject to Calgreen
Mandatory plus Tier 1 or Tier 2 requirements shall contract a special inspector in
accordance with section 702.2 of this code, as amended.
16.14.090 Special Inspection.
Section 702.2 of the California Green Building Standards Code is amended to read:
702.2 Special Inspection. [HCD] When required by the enforcing agency, the owner or
responsible entity acting as the owner’s agent shall employ one or more special
inspectors to provide inspection or other duties necessary to substantiate compliance
with this code. Special inspectors shall demonstrate competence to the satisfaction of
the enforcing agency for the particular type of inspection or task to be performed. In
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addition to other certifications or qualifications acceptable to the enforcing agency, the
following certifications or education may be considered by the enforcing agency when
evaluating the qualifications of a special inspector. The city shall maintain a list of pre-
approved Special Inspectors in accordance with this section. The owner shall contract a
Special Inspector meeting one of the following;
1) Certification by a national or regional green building program:
ICC Certified Plans Examiner and ICC Certified Calgreen Inspector: Contract a
Calgreen Plans Examiner and Calgreen Inspector to provide third-party
verification of compliance prior to Permit Issuance and prior to Final Inspection.
This Special Inspector may fulfill both requirements if the individual, or company,
maintains both the Calgreen Plans Examiner and Calgreen Inspector designation.
Green Point Rater: Contract a Green Point Rater to provide third-party
verification of compliance prior to Permit Issuance and prior to Final Inspection.
2) Other programs acceptable to the enforcing agency.
Notes:
1. Special inspectors shall be independent entities with no financial interest in the
materials or the project they are inspecting for compliance with this code.
[BSC] When required by the enforcing agency, the owner or responsible entity acting as
the owner’s agent shall employ one or more special inspectors to provide inspection or
other duties necessary to substantiate compliance with this code. Special inspectors
shall demonstrate competence to the satisfaction of the enforcing agency for the
particular type of inspection or task to be performed. In addition, the special inspector
shall have a certification from a recognized state, national or international association,
as determined by the local agency. The city shall maintain a list of pre-approved Special
Inspectors in accordance with this section.
Note: Special inspectors shall be independent entities with no financial interest
in the materials or the project they are inspecting for compliance with this code.
16.14.100 Section 303.1.2 Cumulative construction.
Section 303.1.2 is added to the California Green Building Standards Code to read:
303.1.2 Cumulative construction. Cumulative construction over any two-year period, or
a project completed in phases, shall be considered as a single project, subject to the
highest level of green building requirements for that project, unless exempted by the
Director of Development Services as impractical for compliance. If a project is developed
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in phases, such as a core and shell development following by a tenant improvement,
regardless of ownership each phase will be subject to the green building requirements
which apply to the scope of work constructed as part of that phase.
16.14.110 Residential Projects. Chapter 4 Preface: Green building requirements for
project type and scope.
A preface is added to Chapter 4 of the California Green Building Standards Code to read:
Preface - Green Building Requirements for Project Type and Scope For design and
construction of residential projects, the City requires compliance with the mandatory
measures of Chapter 4, in addition to use of Tier 1 and Tier 2 as specified in Palo Alto
Municipal Code Chapter 16.14. See Section 202 for definitions on Calgreen mandatory,
Tier 1 prerequisites and electives, and Tier 2 prerequisites and electives. All elective
measures are adopted as written under Appendix A4 unless otherwise indicated in this
Section.
16.14.120 Section A4.104 Site Preservation.
Section A4.104.1 is adopted as a Tier 1 and Tier 2 elective and is amended to read:
A4.104.1 Supervision and Education by a Special Inspector. Individuals with oversight
authority on the project, as defined in 16.14.090 of this code, who have been trained in
areas related to environmentally friendly development, can teach green concepts to
other members of the builder’s staff and ensure training and written instruction has
been provided to all parties associated with the development of the project. Prior to the
beginning the construction activities, all the builder shall receive a written guideline and
instruction specifying the green goals of the project.
Note: Lack of adequate supervision and dissemination of the project goals can
result in negative effects on green building projects. If the theme of green
building is not carried through the project, the overall benefit can be
substantially reduced by the lack of knowledge and information provided to the
various entities involved with the construction of the project.
16.14.130 Section A4.105 Deconstruction and Reuse of Existing Materials.
Section A4.105 is adopted as a Tier 1 and Tier 2 elective measure and is amended to read:
A4.105.1 General. Existing buildings on the site are deconstructed and the
salvaged materials are reused. Reused materials or products must comply with
the current building standards requirements or be an accepted alternate method
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or material. Salvaged materials may be reused onsite or for a different project.
The Chief Building Official may require documentation confirming that
salvageable materials have been reused.
A4.105.2 Reuse of materials. Non-hazardous materials which can be easily
reused include but are not limited to the following:
1. Light fixtures
2. Plumbing fixtures
3. Doors and trim
4. Masonry
5. Electrical devices
6. Appliances
7. Foundations or portions of foundations
Note: Reused material must be in compliance with the appropriate Title 24
requirements.
16.14.140 Section A4.106.3 Landscape Design.
Section A4.106.3 is adopted as a Tier 1 and Tier 2 elective measure and is amended to read:
A4.106.3 Landscape Design Post construction landscape design shall accomplish
one or more of the following:
1. Areas disrupted during construction are restored to be consistent with native
vegetation species and patterns.
2. Limit Turf areas to the greatest extent possible
a. Tier 1 not more than 25 percent of the total landscaped area.
b. Tier 2 not more than 10 percent of the total landscaped area.
3. Utilize at least 75 percent native California or drought tolerant plant and tree
species appropriate for the climate zone region.
4. Hydrozoning irrigation techniques are incorporated into the landscape
design.
16.14.150 Section A4.106.8 Electric Vehicle (EV) Charging for New Construction.
Section A4.106.8 is not adopted as a Tier 1 and Tier 2 elective measure. Projects must comply
with the mandatory electric vehicle supply equipment (EVSE) requirements stated in Section
4.106.4, as amended.
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16.14.160 Section A4.106.9 Bicycle Parking.
Section A4.106.9 is not adopted as a Tier 1 and Tier 2 elective measure. Projects must comply
with the bicycle parking requirements in the Palo Alto Municipal Code.
16.14.170 Section A4.106.10 Light Pollution Reduction.
Section A4.106.10 is adopted as a Tier 1 and Tier 2 elective measure and shall apply to all
covered projects. “[HR]”, or “High-rise”, only, is omitted.
16.14.180 Section A4.203.1 Performance Approach for Newly Constructed Buildings.
Sections A4.203.1 is not adopted as a Tier 1 and Tier 2 elective measure. Projects shall comply
with Chapter 16.17 of the Palo Alto Municipal Code (Energy Reach Code).
16.14.190 Section A4.204.1 Performance Approach for Alterations and Additions.
Section A4.204.1 is not adopted as a Tier 1 and Tier 2 elective measure. Projects shall comply
with the Chapter 16.17 of the Palo Alto Municipal Code (Energy Reach Code).
16.14.200 Section A4.304.1 Low-Water Consumption Irrigation System.
Section A4.304.1 is adopted as a Tier 1 and Tier 2 elective measure and is amended to read:
A4.104.1 Low-water consumption irrigation system Install a low-water
consumption irrigation system which minimizes the use of spray type heads.
Spray type irrigation may only be used at turf areas. No turf shall be installed on
slopes exceeding 10%. No overhead sprinklers shall be installed in areas less than
eight feet wide.
The remaining irrigation systems shall use only the following types of low volume
irrigation systems:
1. Drip Irrigation.
2. Bubblers.
3. Drip emitters.
4. Soak hose.
5. Stream-rotator spray heads
6. Other systems acceptable to the enforcing agency.
//
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16.14.210 Section A4.304.4 Potable Water Reduction.
Section A4.304.4 is adopted as a Tier 1 and Tier 2 prerequisite and is amended to read:
A4.304.2.1 Potable water reduction. When landscaping is provided by the
builder, a water efficient landscape irrigation system shall be installed that
reduces potable water use. The potable water use reduction shall be calculated
beyond the initial requirements for plant installation and establishment.
Calculations for the reduction shall be based on the water budget developed
pursuant to Section A4.304.3.
Tier 1 . Reduce the use of potable water to a quantity that does not
exceed 65 of ETo times the landscaped area.
Tier 2 . Reduce the use of potable water to a quantity that does not
exceed 60 of ETo times the landscaped area.
Documentation is required to demonstrate the Estimated Total Water
Use (ETWU) falls within a Maximum Applied Water Allowance (MAWA)
using the appropriate evapotranspiration adjustment factor (ETAF)
designated by the prescribed potable water reduction tier.
Note: Methods used to comply with this section must be designed to
meet the requirements of other parts of the California Building Standards
Code and may include, but are not limited to, the following:
1. Plant coefficient
2. Irrigation efficiency and distribution uniformity
3. Use of captured rainwater
4. Use of recycled water
5. Water treated for irrigation purposes and conveyed by a water
district of public entity.
6. Use of graywater.
16.14.220 Section A4.304.6 Irrigation Metering Device.
Section A4.304.4 is adopted as a Tier 1 and Tier 2 prerequisite and is amended to read:
A4.304.2.1 Irrigation Metering Device. Dedicated irrigation meters are to be
installed in all new construction and rehabilitated landscapes when the
landscape is greater than 1,000 square feet.
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16.14.230 Section A4.305 Water Reuse Systems.
Sections A4.305.1 through A4.305.3 are adopted as Tier 1 and Tier 2 electives and are amended
to read:
A4.305.1 Graywater. Alternative plumbing piping is installed to permit the discharge
from the clothes washer or other fixtures to be used for an irrigation system in
compliance with the California Plumbing Code.
A4.305.2 Recycled Water Piping. Based on projected availability, dual water piping is
installed for future use of recycled water at the following locations:
1. Interior piping for the use of recycled water is installed to serve all water closets,
urinals, and floor drains.
2. Exterior piping is installed to transport recycled water from the point of
connection to the structure. Recycled water systems shall be designed and
installed in accordance with the California Plumbing Code.
A4.305.3 Recycled water for landscape irrigation. Recycled water is used for landscape
irrigation.
Section A4.305.4 is added and adopted as Tier 1 and Tier 2 prerequisite and shall read as
follows:
A4.305.4 Additions and alterations. All multifamily residential additions and alterations
must install recycled water infrastructure for irrigation when the landscape area
exceeds 1,000 square feet.
Section A4.305.5 is added and adopted a Tier 2 prerequisite and shall read as follows:
A4.305.5 Diverter Valve. Newly constructed Residential Buildings with a landscape area
of any size shall install a three-way diverter valve in the drain-line of all laundry fixtures
to assist in the future installation of a “Laundry-to-Landscape” irrigation system.
A4.305.5.1 Identification. The diverter valve shall be labeled as "LAUNDRY-TO-
LANDSCAPE CABABLE".
16.14.240 Section A4.403.1 Frost Protection Foundation Systems.
Sections A4.203.1 is not adopted as a Tier 1 and Tier 2 elective measure.
//
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16.14.250 Section A4.403.2 Reduction in cement use.
Section A4.403 is not adopted as a Tier 1 and Tier 2 prerequisite. Section A4.403 is adopted as a
Tier 1 and Tier 2 elective measure and shall read as:
A4.403.2 Reduction in cement use. As allowed by the enforcing agency, cement used in
foundation mix design shall be reduced as follows:
Tier 1. Not less than a 20 percent reduction in cement.
Tier 2: Not less than a 25 percent reduction in cement.
Note: Products commonly used to replace cement in concrete mix designs
include, but are not limited to:
1. Fly ash
2. Slag
3. Silica fume
4. Rice hull ash
16.14.260 Section A4.408.1 Enhanced Construction Waste Reduction.
Section A4.408.1 is adopted as mandatory and is amended to read:
Section A4.408.1 Enhanced Construction Waste Reduction. Nonhazardous construction
and demolition debris generated at the site is diverted to recycle or salvage facilities.
75% construction waste reduction is required for all Residential Projects, including new
construction, additions, and alterations, as long as the construction has a valuation
exceeding $25,000. Residential projects with a lower valuation shall remain subject to
California Green Building Code Chapter 4 mandatory requirements.
16.14.270 Section A4.504.3 Thermal insulation.
Section A4.504.3 is not adopted as a Tier 1 and Tier 2 prerequisite. Section A4.403 is adopted as
a Tier 1 and Tier 2 elective measure.
//
//
//
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16.14.280 Non-Residential Projects: Chapter 5 Preface Green Building Requirements for
Project Type and Scope.
A Preface is added to Chapter 5 of the California Green Building Standards Code to read:
Preface – Green Building Requirements for Project Type and Scope. For design and
construction of non-residential projects, the City requires compliance with the
mandatory measures of Chapter 5, in addition to use of Tier 1 and Tier 2 as specified in
Palo Alto Municipal Code Chapter 16.14. See Section 202 for definitions on Calgreen
mandatory, Tier 1 prerequisites and electives, and Tier 2 prerequisites and electives. All
elective measures are adopted as written under Appendix A5 unless otherwise indicated
in this Section.
16.14.290 Section 5.106.1.1 Local storm water pollution prevention.
Section 5.106.1.1 Local ordinance is amended to read:
5.106.1.1 Local ordinance. Newly constructed projects and additions shall comply with
additional storm water pollution prevention measures as applicable. (See Chapter 16.11,
Storm Water Pollution Prevention, of the Palo Alto Municipal Code.)
16.14.300 Section 5.303.5 Dual Plumbing.
Section 5.303.5 Dual plumbing is added as mandatory and is amended to read:
5.303.5 Dual plumbing. New buildings and facilities shall be dual plumbed for potable
and recycled water systems for toilet flushing when recycled water is available. All
building projects for which CPAU recycled water service is available must install dual
Plumbing and use recycled water for toilet and urinal flushing when the building area is
greater than 10,000 square feet or where installation of 25 or more toilets and urinals is
proposed. All projects for which CPAU recycled water service is not yet available must
install dual plumbing for use of recycled water for toilet and urinal flushing when the
building area exceeds 100,000 square feet or where installation of 100 or more toilets
and urinals is proposed.
16.14.310 Section 5.304.3.2 Irrigation efficiency.
Section 5.304.3.2 Irrigation efficiency is added as mandatory and is amended to read:
5.304.3.2 Irrigation efficiency. The irrigation system must meet an efficiency level of
71%, and subsurface and/or low volume irrigation must be used in all areas that exhibit
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any of these characteristics: less than 8 feet in width, with a slope greater than 25%,
setback area within 24 inches of a non-permeable surface.
16.14.320 Section 5.304.3.3 Water waste.
Section 5.304.3.3 Waste water is added as mandatory and is amended to read:
5.304.3.3 Water waste. The irrigation system must be designed and installed to prevent
water waste due to overspray, low head drainage, or other conditions where water
flows onto adjacent property, non-irrigated areas, walks, roadways, parking lots, or
structures.
16.14.330 Section 5.304.3.4 Irrigation scheduling.
Section 5.304.3.4 Irrigation scheduling is added as mandatory and is amended to read:
5.304.3.4 Irrigation scheduling. Overhead irrigation shall be scheduled between 8:00
p.m. and 10:00 a.m. unless weather conditions prevent it. Operation of the irrigation
system outside the normal watering window is allowed for auditing and system
maintenance. Total annual applied water shall be less than or equal to Maximum
Applied Water Allowance (MAWA) as calculated per the potable water use reduction
tier.
16.14.340 Section A5.304.4 Potable Water Reduction.
Section A5.304.4 Potable water reduction is adopted as Tier 1 and Tier 2 prerequisites.
Documentation is required to demonstrate the Estimated Total Water Use (ETWU) falls within a
Maximum Applied Water Allowance (MAWA) using the appropriate evapotranspiration
adjustment factor (ETAF) designated by the prescribed potable water reduction tier.
16.14.350 Section 5.304.5 Potable water elimination.
Section 5.304.5 Potable water elimination is adopted as mandatory and amended to read:
5.304.5 Potable water elimination. Recycled water infrastructure for irrigation systems
is required for all projects for which CPAU recycled water service is available. All projects
for which CPAU recycled water service is not yet available must install recycled water
infrastructure for irrigation when the landscape area exceeds 1,000 square feet.
Dedicated irrigation meters are to be installed in all new construction and rehabilitated
landscapes when the landscape is greater than 1,000 square feet.
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16.14.360 Section 5.304.6 Invasive species prohibited.
Section 5.304.6 is added as mandatory to read:
5.304.6 Invasive species prohibited. All nonresidential new construction, additions, and
alterations shall not install invasive species in a landscape area of any size.
16.14.370 Section A5.408 Construction Waste, Reduction, Disposal and Recycling.
Section A5.408.3.1.1 Enhanced Construction Waste Reduction is adopted at Tier 2 (80%
construction waste reduction) as a mandatory requirement for all nonresidential construction,
including new construction, additions, and alterations, as long as the construction has a
valuation exceeding $25,000. Nonresidential projects with a lower valuation shall remain
subject to California Green Building Code Chapter 5 mandatory requirements.
16.14.380 Section 5.410.4.6 Energy STAR portfolio manager.
Section 5.410.4.6 Energy STAR portfolio manager is added as mandatory to read:
5.410.4.6 Energy STAR portfolio manager. All nonresidential projects exceeding
$100,000 valuation must provide evidence of an Energy STAR Portfolio Manager project
profile prior to Permit Issuance, acquire an Energy STAR Portfolio Manager Rating, and
submit the rating to the City of Palo Alto once the project has been occupied after 12
months.
16.14.390 Section 5.410.4.7 Performance reviews – energy.
Section 5.410.4.7 Performance reviews - energy is added to read:
5.410.4.7 Performance reviews – energy. All projects over 10,000 square feet. The City
reserves the right to conduct a performance review, no more frequently than once
every five years unless a project fails review, to evaluate the building's energy use to
ensure that resources used at the building and/or site do not exceed the maximum
allowance set forth in the rehabilitation or new construction design. Energy use reviews
may be initiated by the Building Division or as a coordinated effort between the City's
Utilities Department and/or its designated contractors. Following the findings and
recommendations of the review, the City may require adjustments to the energy usage
or energy-using equipment or systems if the building is no longer compliant with the
original design. Renovation or rehabilitation resulting from such audit activity shall be
considered a project, and shall be subject to applicable documentation submittal
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requirements of the City. This section is effective only for those projects for which a
building permit was issued after January 1, 2009.
16.14.400 Section 5.410.4.8 Performance reviews – water.
Section 5.410.4.8 Performance reviews - water is added to read:
5.410.4.8 Performance reviews – water. All sites greater than one acre: The City
reserves the right to conduct performance reviews, no more frequently than once every
five years unless a project fails review, to evaluate water use to ensure that resources
used at the building and/or site do not exceed a maximum allowance set forth in the
rehabilitation or new construction design. Water use reviews may be initiated by the
Building Division, or as a coordinated effort between the City's Utilities Department and
the Santa Clara Valley Water District (SCVWD), or as part of SCVWD's established water
conservation programs. Following the findings and recommendations of the review, the
City may require adjustments to irrigation usage, irrigation hardware, and/or landscape
materials to reduce consumption and improve efficiency. Renovation or rehabilitation
resulting from such audit activity shall be considered a project, and shall be subject to
applicable documentation submittal requirements of the City.
16.14.410 Section 5.105 Deconstruction and Reuse of Existing Structures.
Section 5.105.1 is added as mandatory to read:
5.105.1 Salvage. Salvage structural and non-structural items in good condition such as
wood, light fixtures, plumbing fixtures, and doors as follows. Document the weight and
number of the items salvaged.
1. Salvage for reuse on the project items that conform to other provisions of Title
24 in an onsite storage area.
2. Nonconforming items may be salvaged in dedicated collection bins for exempt
projects or other uses.
16.14.420 Section A4.106.8 Electric Vehicle (EV) Charging.
Section 4.106.8 of the California Green Building Standards Code is added as mandatory and
amended to read:
A4.106.8 Electric Vehicle (EV) Charging for Residential Structures. Newly constructed
single family and multifamily residential structures, including residential structures
constructed as part of a mixed use development, shall comply with the following
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requirements for electric vehicle supply equipment (EVSE). All parking space calculations
under this section shall be rounded up to the next full space. The requirements stated
in this section are in addition to those contained in Section 4.106.4 of the California
Green Building Standards Code. In the event of a conflict between this section and
Section 4.106.4 of the California Green Building Standards Code, the more robust EV
Charging requirements shall prevail.
A4.106.8.1 Definitions. For the purposes of this section, the following
definitions shall apply:
(a) Level 2 EVSE. “Level 2 EVSE” shall mean an EVSE capable of charging at 30
amperes or higher at 208 or 240 VAC. An EVSE capable of simultaneously
charging at 30 amperes for each of two vehicles shall be counted as two
Level 2 EVSE.
(b) Conduit Only. “Conduit Only” shall mean, at minimum: (1) a panel capable to
accommodate a dedicated branch circuit and service capacity to install a
208/240V, 50 amperes grounded AC outlet; and (2) raceway or wiring with
capacity to accommodate a 100 ampere circuit; terminating in (3) a listed
cabinet, box, enclosure, or NEMA receptacle. The raceway shall be installed
so that minimal removal of materials is necessary to complete the final
installation.
(c) EVSE-Ready Outlet. “EVSE-Ready Outlet” shall mean, at minimum: (1) a panel
capable to accommodate a dedicated branch circuit and service capacity to
install a 208/240V, 50 amperes grounded AC outlet; (2) a two-pole circuit
breaker; (3) raceway with capacity to accommodate 100-ampere circuit; (4)
50 ampere wiring; terminating in (5) a 50 ampere NEMA receptacle in a
covered outlet box.
(d) EVSE Installed. “EVSE Installed” shall mean an installed Level 2 EVSE.
A4.106.8.2 Single Family Residences. The following standards apply to newly
constructed detached and attached single family residences.
(a) In general. The property owner shall provide Conduit Only, EVSE-Ready
Outlet, or EVSE Installed for each residence.
(b) Location. 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 consistent with City guidelines, rules, and regulations.
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A4.106.8.3 Multi-Family Residential Structures. The following standards apply
to newly constructed residences in a multi-family residential structure, except as
provided in section A4.106.8.4.
(a) Resident parking. The property owner shall provide at least one EVSE-Ready
Outlet or EVSE Installed for each residential unit in the structure.
(b) Guest parking. The property owner shall provide Conduit Only, EVSE-Ready
Outlet, or EVSE Installed, for at least 25% of guest parking spaces, among
which at least 5% (and no fewer than one) shall be EVSE Installed.
(c) Accessible spaces. The percentage calculations and substantive
requirements imposed by this section shall be applied separately to
accessible parking spaces. Parking at accessible spaces where an EVSE is
installed shall not be limited to electric vehicles.
(d) Minimum total circuit capacity. The property owner shall ensure sufficient
circuit capacity, as determined by the Chief Building Official, to support a
Level 2 EVSE in every location where Circuit Only, EVSE-Ready Outlet or
EVSE Installed is required.
(e) Location. The EVSE, receptacles, and/or raceway required by this section
shall be placed in locations allowing convenient installation of and access to
EVSE. In addition, if parking is deed-restricted to individual residential units,
the EVSE or receptacles required by subsection (a) shall be located such that
each unit has access to its own EVSE or receptacle. Location of EVSE or
receptacles shall be consistent with all City guidelines, rules, and
regulations.
A4.106.8.4 Exception – Multi-Family Residential Structures with Individual,
Attached Parking. The property owner shall provide Conduit Only, EVSE-Ready
Outlet, or EVSE Installed for each newly constructed residence in a multi-family
residential structure featuring: (1) a parking space attached to the residence; and
(2) a shared electrical panel between the residence and parking space (e.g., a
multi-family structure with tuck-under garages).
//
//
//
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16.14.430 Section A5.106.5.3 Electric Vehicle (EV) Charging for Non-Residential Structures.
Section 5.106.5.3 of the California Green Building Standards Code is added as mandatory and
amended to read:
A5.106.5.3 Electric Vehicle (EV) Charging for Non-Residential Structures. New non-
residential structures shall comply with the following requirements for electric vehicle
supply equipment (EVSE). All parking space calculations under this section shall be
rounded up to the next full space. The requirements stated in this section are in
addition to those contained in Section 5.106.5.3 of the California Green Building
Standards Code. In the event of a conflict between this section and Section 5.106.5.3,
the more robust EV Charging requirements shall prevail.
A5.106.5.3.1 Definitions. For the purposes of this section, the following
definitions shall apply:
(a) Level 2 EVSE. “Level 2 EVSE” shall mean an EVSE capable of charging at 30
amperes or higher at 208 or 240 VAC. An EVSE capable of simultaneously
charging at 30 amperes for each of two vehicles shall be counted as two
Level 2 EVSE.
(b) Conduit Only. “Conduit Only” shall mean, at minimum: (1) a panel capable to
accommodate a dedicated branch circuit and service capacity to install at
least a 208/240V, 50 amperes grounded AC outlet; and (2) raceway or wiring
with capacity to accommodate a 100 ampere circuit; terminating in (3) a
listed cabinet, box, enclosure, or NEMA receptacle. The raceway shall be
installed so that minimal removal of materials is necessary to complete the
final installation.
(c) EVSE-Ready Outlet. “EVSE-Ready Outlet” shall mean, at minimum: (1) a panel
capable to accommodate a dedicated branch circuit and service capacity to
install at least a 208/240V, 50 amperes grounded AC outlet; (2) a two-pole
circuit breaker; (3) raceway with capacity to accommodate a 100-ampere
circuit; (4) 50 ampere wiring; terminating in (5) a 50 ampere NEMA
receptacle in a covered outlet box.
(d) EVSE Installed. “EVSE Installed” shall mean an installed Level 2 EVSE.
A5.106.5.3.2 Non-Residential Structures Other than Hotels. The following
standards apply newly constructed non-residential structures other than hotels.
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(a) In general. The property owner shall provide Conduit Only, EVSE-Ready
Outlet, or EVSE Installed for at least 25% of parking spaces, among which at
least 5% (and no fewer than one) shall be EVSE Installed.
(b) Accessible spaces. The percentage calculations and substantive
requirements imposed by this section shall be applied separately to
accessible parking spaces. Parking at accessible spaces where an EVSE is
installed shall not be limited to electric vehicles.
(c) Minimum total circuit capacity. The property owner shall ensure sufficient
circuit capacity, as determined by the Chief Building Official, to support a
Level 2 EVSE in every location where Circuit Only, EVSE-Ready Outlet or
EVSE Installed is required.
(d) Location. The EVSE, receptacles, and/or raceway required by this section
shall be placed in locations allowing convenient installation of and access to
EVSE. Location of EVSE or receptacles shall be consistent with all City
guidelines, rules, and regulations.
A5.106.5.3.3 Hotels. The following standards apply newly constructed hotels.
(a) In general. The property owner shall provide Conduit Only, EVSE-Ready
Outlet, or EVSE Installed for at least 30% of parking spaces, among which at
least 10% (and no fewer than one) shall be EVSE Installed.
(b) Accessible spaces. The percentage calculations and substantive
requirements imposed by this section shall be applied separately to
accessible parking spaces. Parking at accessible spaces where an EVSE is
installed shall not be limited to electric vehicles.
(c) Minimum total circuit capacity. The property owner shall ensure sufficient
circuit capacity, as determined by the Chief Building Official, to support a
Level 2 EVSE in every location where Circuit Only, EVSE-Ready Outlet or
EVSE Installed is required.
(d) Location. The EVSE, receptacles, and/or raceway required by this section
shall be placed in locations allowing convenient installation of and access to
EVSE. Location of EVSE or receptacles shall be consistent with all City
guidelines, rules, and regulations.
SECTION 2. The Council adopts the findings for local amendments to the California
Green Building Standards Code, 2013 Edition, attached hereto as Exhibit “A” and incorporated
herein by reference.
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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
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
amendments herein adopted 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:
____________________________ ____________________________
Deputy City Attorney City Manager
____________________________
Director of Development Services
____________________________
Director of Administrative Services
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Exhibit A
FINDINGS FOR LOCAL AMENDMENTS TO
CALIFORNIA GREEN BUILDING STANDARD CODE, 2013 EDITION
Section 17958 of the California Health and Safety Code provides that the City may make changes
to the provisions in the uniform codes that are published in the California Building Standards Code. Sections
17958.5 and 17958.7 of the Health and Safety Code require that for each proposed local change to those
provisions in the uniform codes and published in the California Building Standards Code which regulate
buildings used for human habitation, the City Council must make findings supporting its determination that
each such local change is reasonably necessary because of local climatic, geological, or topographical
conditions.
Local building regulations having the effect of amending the uniform codes, which were adopted
by the City prior to November 23, 1970, were unaffected by the regulations of Sections 17958, 17958.5 and
17958.7 of the Health and Safety Code. Therefore, amendments to the uniform codes which were adopted by
the City Council prior to November 23, 1970, and have been carried through from year to year without
significant change, need no required findings. Also, amendments to provisions not regulating buildings used
for human habitation, including amendments made only for administrative consistency, do not require
findings.
Code: Cal Green
Section Title Add Deleted Amended Justification (See
below for keys)
301 Scope C & E
303.1.2 Cumulative Construction C & E
4.302 Outdoor Water Use C
4.305 Water Reuse Systems C
5.105.1 Salvage E
5.106.1.1 Local ordinance C
5.303.5 Dual Plumbing C
5.304.3.2 Irrigation Efficiency C
5.304.3.3 Water Waste C
5.304.3.4 Irrigation Scheduling C
5.304.5 Potable Water Elimination C
5.304.6 Invasive Species E
5.410.4.6 Energy STAR portfolio manager C & E
5.410.4.7 Performance reviews – energy C & E
5.410.4.8 Performance reviews – water C & E
702.2 Special Inspection E
A4.106.8 Electric Vehicle Charging C & E
A5.106.5.3 Electric Vehicle Charging for Non-
residential Structures
C & E
Appendix A4 Residential Voluntary Measures C & E
Appendix A5 Non-Residential Voluntary Measures C & E
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Key to Justification for Amendments to Title 24 of the California Code of
Regulations
C This amendment is justified on the basis of a local climatic condition. The seasonal climatic conditions during
the late summer and fall create severe fire hazards to the public health and welfare in the City. The hot, dry
weather frequently results in wild land fires on the brush covered slopes west of Interstate 280. The
aforementioned conditions combined with the geological characteristics of the hills within the City create
hazardous conditions for which departure from California Building Standards Code is required.
Failure to address and significantly reduce greenhouse gas (GHG) emissions could result in rises in 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. Energy efficiency is a key component in reducing GHG emissions, and
construction of more energy efficient buildings can help Palo Alto reduce its share of the GHG emissions that
contribute to climate change. The burning of fossil fuels used in the generation of electric power and heating
of buildings contributes to climate change, which could result in rises in sea level, including in San Francisco
Bay, that could put at risk Palo Alto homes and businesses 1 public facilities, and Highway 101. Due to
decrease in annual rain fall, Palo Alto experiences the effect of drought and water saving more than some
other communities in California.
E Green building enhances the public health and welfare by promoting the environmental and economic health
of the City through the design, construction, maintenance, operation and deconstruction of buildings and sites
by incorporating green practices into all development. The green provisions in this Chapter are designed to
achieve the following goals:
(a) Increase energy efficiency in buildings;
(b) Increase water and resource conservation;
(c) Reduce waste generated by construction and demolition projects;
(d) Provide durable buildings that are efficient and economical to own and operate;
( e) Promote the health and productivity of residents, workers, and visitors to the city;
(f) Recognize and conserve the energy embodied in existing buildings;
(g) Encourage alternative transportation; and
(h) Reduce disturbance of natural ecosystems.
G This amendment 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 as a result of seismic activity and to establish criteria for repair of
damaged properties following a local emergency.
T The City of Palo Alto topography includes hillsides with narrow and winding access, which makes timely
response by fire suppression vehicles difficult. Palo Alto is contiguous with the San Francisco Bay, resulting in a
natural receptor for storm and waste water run-off. Also the City of Palo Alto is located in an area that is
potentially susceptible to liquefaction during a major earthquake. The surface condition consists mostly of stiff
to dense sandy clay, which is highly plastic and expansive in nature. The aforementioned conditions within the
City create hazardous conditions for which departure from California Building Standards Code is warranted.
24
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Ordinance No. _____
Ordinance of the Council of the City of Palo Alto Amending and
Restating Chapter 16.17 of the Palo Alto Municipal Code, California
Energy Code, 2013 Edition, and Local Amendments and Related Findings
The Council of the City of Palo Alto does ORDAIN as follows:
SECTION 1. Chapter 16.17 of the Palo Alto Municipal is hereby amended by
repealing in its entirety Chapter 16.17 and adopting a new Chapter 16.17 to read as follows:
16.17 CALIFORNIA ENERGY CODE
16.17.010 2013 California Energy Code adopted.
The California Energy Code, 2013 Edition, Title 24, Part 6 of the California Code of Regulations
together with those omissions, amendments, exceptions and additions thereto, is adopted and
hereby incorporated in this Chapter by reference and made a part hereof the same as if fully set
forth herein.
Unless superseded and expressly repealed, references in City of Palo Alto forms, documents and
regulations to the chapters and sections of the former California Code of Regulations, Title 24,
2008, shall be construed to apply to the corresponding provisions contained within the California
Code of Regulations, Title 24, 2013 Ordinance No. 5064 of the City of Palo Alto and all other
ordinances or parts of ordinances in conflict herewith are hereby suspended and expressly
repealed.
One copy of the California Energy Code, 2013 edition, has been filed for use and examination of
the public in the Office of the Building Official of the City of Palo Alto.
16.17.020 Violations ‐‐ Penalties.
Any person, firm or corporation violating any provision of this chapter is guilty of a
misdemeanor and upon conviction thereof shall be punished as provided in subsection (a) of
Section 1.08.010 of this code. Each separate day or any portion thereof during which any
violation of this chapter occurs or continues shall be deemed to constitute a separate offense,
and upon conviction thereof shall be punishable as provided in this section.
16.17.030 Enforcement ‐‐ Citation authority.
The employee positions designated in this section may enforce the provisions of this chapter by
the issuance of citations; persons employed in such positions are authorized to exercise the
authority provided in Penal Code section 836.5 and are authorized to issue citations for
violations of this chapter. The designated employee positions are: (1) chief building official; (2)
building inspection supervisor; and (3) code enforcement officer.
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16.17.040 Local Amendments.
The provisions of this Chapter shall constitute local amendments to the cross‐referenced
provisions of the California Energy Code, 2013 Edition, and shall be deemed to replace the
cross‐referenced sections of said Code with the respective provisions set forth in this Chapter.
16.17.050 Section 100.3 Local Energy Efficiency Reach Code.
Section 100.3 Local Energy Efficiency Reach Code is added to read:
(a) For all new single‐family residential, multi‐family residential, and non‐residential
construction: The performance approach specified within the 2013 California Energy
Code shall be used to demonstrate that the TDV Energy of the proposed building is at
least 15% less than the TDV Energy of the Standard Design.
(b) For all single‐family residential, multi‐family residential, and nonresidential tenant
improvements, renovations, or alterations, one of the following must be satisfied:
(1) Performance Path: The performance approach specified within the 2013
California Energy Code shall be used to demonstrate that the TDV Energy of
the proposed building exceeds the TDV Energy of the Standard Design by at
least 5% for single‐family residential, 10% for multi‐family residential, and
5% for nonresidential tenant improvements, renovations, or alterations.
a.Exceptions. The requirements in this section shall not apply to the
following projects:
(1) Multi‐family residential renovations or alterations of less
than 50% of the existing unit square footage that include
replacement or alteration of only one of the following:
HVAC system, building envelope, hot water system, or
lighting system.
(2) Single‐family or two‐family residential additions or rebuilds
of less than 1,000 square feet.
(3) Non‐residential tenant improvements, alterations, or
renovations less than 5,000 square feet that include
replacement or alteration of only one of the following
systems: HVAC system, building envelope, hot water
system, or lighting system.
(2) Prescriptive Path: Projects that involve any of the following building
components must use the prescriptive measures described below:
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Residential
Single‐Family
Cool Roofs
(Alterations Only)
Applies to complete roof
alterations that are not considered
repairs.
Aged Solar Reflectance of ≥ 0.28
Exterior Walls
(Additions Only)
High performance walls (u‐factor = 0.048 or lower)
Multi‐Family
Roofs
(Alterations Only)
Aged Solar Reflectance of ≥ 0.28
Non‐Residential
Cool Roofs
(Alterations Only)
Steep Slopes ≤ Aged Solar Reflectance of 0.34
Low Slopes ≤ Aged Solar Reflectance of 0.7
Indoor Lighting
(Additions and Alterations)
15% below Title 24 Standard Lighting Energy Usage
16.17.060 Section 110.10 Mandatory Requirements For Solar Ready Buildings.
Section 110.10 Mandatory Requirements for Solar Ready Buildings is amended as follows:
(a) Subsection 110.10(b)1A is amended to read:
A. Single Family Residences. The solar zone shall be located on the roof or
overhang of the building and have a total area no less than 500 square feet.
EXCEPTION 1 to Section 110.10(b)1A: Single family residences with a
permanently installed solar electric system having a nameplate DC power rating,
measured under Standard Test Conditions, of no less than 1000 watts.
EXCEPTION 2 to Section 110.10(b)1A: Single family residences with a
permanently installed domestic solar water‐heating system meeting the
installation criteria specified in the Reference Residential Appendix RA4 and
with a minimum solar savings fraction of 0.50.
EXCEPTION 3 to Section 110.10(b)1A: Single family residences with three stories
or more and with a total floor area less than or equal to 2000 square feet and
having a solar zone total area no less than 150 square feet.
EXCEPTION 4 to Section 110.10(b)1A: Single family residences located in
Climate zones 8‐14 and the Wildland‐Urban Interface Fire Area as defined in
Title 24, Part 2 and having a whole house fan and having a solar zone total area
no less than 150 square feet.
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EXCEPTION 5 to Section 110.10(b)1A: Buildings with a designated solar zone
area that is no less than 50 percent of the potential solar zone area. The
potential solar zone area is the total area of any low‐sloped roofs where the
annual solar access is 70 percent or greater and any steep‐sloped roofs oriented
between 110 degrees and 270 degrees of true north where the annual solar
access is 70 percent or greater. Solar access is the ratio of solar insolation
including shade to the solar insolation without shade. Shading from obstructions
located on the roof or any other part of the building shall not be included in the
determination of annual solar access.
EXCEPTION 6 to Section 110.10(b)1A: Single family residences having a solar
zone total area no less than 150 square feet and where all thermostats comply
with Reference Joint Appendix JA5 and are capable of receiving and responding
to Demand Response Signals prior to granting of an occupancy permit by the
enforcing agency.
EXCEPTION 7 to Section 110.10(b)1A: Single family residences meeting the
following conditions:
A. All thermostats comply with Reference Joint Appendix JA5 and are
capable of receiving and responding to Demand Response Signals prior
to granting of an occupancy permit by the enforcing agency.
B. All applicable requirements of Section 150.0(k), except as required
below:
i.All permanently installed indoor lighting is high efficacy as defined in
TABLE 150.0‐A or 150.0‐B and is installed in kitchens, bathrooms, utility
rooms, and garages at a minimum.
ii.All permanently installed lighting in bathrooms is controlled by a
vacancy sensor.
EXCEPTION to EXCEPTION 7Bii: One high efficacy luminaire as
defined in TABLE 150.0‐A or 150.0‐B with total lamp wattage
rated to consume no greater than 26 watts of power is not
required to be controlled by a vacancy sensor.
iii.Every room which does not have permanently installed lighting has at
least one switched receptacle installed.
iv.Permanently installed night lights complying with Section 150.0(k)1E
are allowed.
v.Lighting integral to exhaust fans complying with Section 150.0(k)1F is
allowed.
vi.All permanently installed outdoor lighting is high efficacy as defined in
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TABLE 150.0‐A or 150.0‐B and is controlled as required in Section
150.0(k)9Ai and iii.
(b) Subsection 110.10(c) is amended to read:
(c) Interconnection pathways.
1.The construction documents shall indicate a location for inverters and
metering equipment and a pathway for routing of conduit from the solar zone to
the point of interconnection with the electrical service. For single‐family
residences the point of interconnection will be the main service panel.
2.Residential buildings shall provide conduit to support the installation of future
solar requirements. The conduit shall be located adjacent to the solar ready area
and shall extend from the roofline and terminate at the main electrical panel.
3.The construction documents shall indicate a pathway for routing of plumbing
from the solar zone to the water‐heating system.
(c) Subsection 110.10(f) is added to read:
(f) Existing tree canopies. In the event of a conflict between the provisions of
this section, the Solar Shade Act of 2009, and the Palo Alto Tree Ordinance
(Chapter 8.10), the most protective of existing tree canopies shall prevail.
16.17.070 Infeasibility Exemption.
(a) Exemption. If an applicant for a Covered Project believes that circumstances exist that
makes it infeasible to meet the requirements of this Chapter, the applicant may request
an exemption as set forth below. In applying for an exemption, the burden is on the
Applicant to show infeasibility.
(b) Application. If an applicant for a Covered Project believes such circumstances exist, the
applicant may apply for an exemption at the time of application submittal in accordance
with the Development Services administrative guidelines. The applicant shall indicate
the maximum threshold of compliance he or she believes is feasible for the covered
project and the circumstances that make is infeasible to fully comply with this Chapter.
Circumstances that constitute infeasibility include, but are not limited to the following:
(1) There is conflict with the compatibility of the currently adopted green
building ordinance and/or California Building Standards Code;
(2) There is conflict with other City goals, such as those requiring historic
preservation or the Architectural Review criteria;
(3) There is a lack of commercially available materials and technologies to
comply with the requirements of this Chapter;
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(4) Applying the requirements of this Chapter would effectuate an
unconstitutional taking of property or otherwise have an unconstitutional
application to the property.
(c) Review by Architectural Review Board (ARB). For any covered project for which an
exemption is requested and Architectural Review is required by the ARB, the ARB shall
provide a recommendation to the Director or designee regarding whether the
exemption shall be granted or denied, along with its recommendation on the project.
(d) Granting of Exemption. If the Director, or designee, determines that it is infeasible for
the applicant to fully meet the requirements of this Chapter based on the information
provided, the Director, or designee, shall determine the maximum feasible threshold of
compliance reasonably achievable for the project. The decision of the Director, or
designee, shall be provided to the applicant in writing. If an exemption is granted, the
applicant shall be required to comply with this Chapter in all other respects and shall be
required to achieve, in accordance with this Chapter, the threshold of compliance
determined to be achievable by the Director or designee.
(e) Denial of Exemption. If the Director determines that it is reasonably possible for the
applicant to fully meet the requirements of this Chapter, the request shall be denied
and the Director or designee shall so notify the applicant in writing. The project and
compliance documentation shall be modified to comply with this Chapter prior to
further review of any pending planning or building application.
(f) Council Review of Exemption. For any covered project that requires review and action
by the City Council, the Council shall act to grant or deny the exemption, based on the
criteria outlined above, after recommendation by the Director.
16.17.080 Appeal.
(a) Any aggrieved Applicant may appeal the determination of the Director regarding the
granting or denial of an exemption pursuant to 16.17.070.
(b) Any appeal must be filed in writing with the Development Services Department not later
than fourteen (14) days after the date of the determination by the Director. The appeal
shall state the alleged error or reason for the appeal.
(c) The appeal shall be processed and considered by the City Council in accordance with the
provisions of Section 18.77.070(f) of the City of Palo Alto Municipal Code.
SECTION 2. Chapter 16.18 of the Palo Alto Municipal Code is hereby repealed in
its entirety.
SECTION 3. The Council adopts the findings for local amendments to the
California Energy Code, 2013 Edition, attached hereto as Exhibit “A” and incorporated herein by
reference.
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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 held 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
amendments herein adopted will have a significant effect on the environment.
SECTION 6. This ordinance shall be effective on the commencement of 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 Development Services
____________________________
Director of Administrative Services
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Exhibit A
FINDINGS FOR LOCAL AMENDMENTS TO
CALIFORNIA ENERGY CODE, 2013 EDITION
Section 17958 of the California Health and Safety Code provides that the City may
make changes to the provisions in the uniform codes that are published in the California
Building Standards Code. Sections 17958.5 and 17958.7 of the Health and Safety Code require
that for each proposed local change to those provisions in the uniform codes and published in
the California Building Standards Code which regulate buildings used for human habitation, the
City Council must make findings supporting its determination that each such local change is
reasonably necessary because of local climatic, geological, or topographical conditions.
Local building regulations having the effect of amending the uniform codes, which
were adopted by the City prior to November 23, 1970, were unaffected by the regulations of
Sections 17958, 17958.5 and 17958.7 of the Health and Safety Code. Therefore, amendments
to the uniform codes which were adopted by the City Council prior to November 23, 1970, and
have been carried through from year to year without significant change, need no required
findings. Also, amendments to provisions not regulating buildings used for human habitation,
including amendments made only for administrative consistency, do not require findings.
Code: Cal Green
Section Title Add Deleted Amended Justification (See
below for keys)
100.3 Local Energy Efficiency Reach
Code
C & E
110.10 Mandatory Requirements For
Solar Ready Buildings
C
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Key to Justification for Amendments to Title 24 of the California Code
of Regulations
C This amendment is justified on the basis of a local climatic condition. The seasonal climatic
conditions during the late summer and fall create severe fire hazards to the public health and
welfare in the City. The hot, dry weather frequently results in wild land fires on the brush
covered slopes west of Interstate 280. The aforementioned conditions combined with the
geological characteristics of the hills within the City create hazardous conditions for which
departure from California Energy Code is required.
Failure to address and significantly reduce greenhouse gas (GHG) emissions could result in
rises in 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. Energy efficiency is a key component in reducing GHG
emissions, and construction of more energy efficient buildings can help Palo Alto reduce its
share of the GHG emissions that contribute to climate change. The burning of fossil fuels
used in the generation of electric power and heating of buildings contributes to climate
change, which could result in rises in sea level, including in San Francisco Bay, that could put
at risk Palo Alto homes and businesses 1 public facilities, and Highway 101. Due to decrease
in annual rain fall, Palo Alto experiences the effect of drought and water saving more than
some other communities in California.
E Energy efficiency enhances the public health and welfare by promoting the environmental
and economic health of the City through the design, construction, maintenance, operation
and deconstruction of buildings and sites by incorporating green practices into all
development. The provisions in this Chapter are designed to achieve the following goals:
(a) Increase energy efficiency in buildings;
(b) Increase resource conservation;
(c) Provide durable buildings that are efficient and economical to own and operate;
(d) Promote the health and productivity of residents, workers, and visitors to the city;
(e) Recognize and conserve the energy embodied in existing buildings; and
(f) Reduce disturbance of natural ecosystems.
G
T
This amendment 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 as a result of seismic activity and to establish criteria for
repair of damaged properties following a local emergency.
The City of Palo Alto topography includes hillsides with narrow and winding access, which
makes timely response by fire suppression vehicles difficult. Palo Alto is contiguous with the
San Francisco Bay, resulting in a natural receptor for storm and waste water run‐off. Also the
City of Palo Alto is located in an area that is potentially susceptible to liquefaction during a At
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major earthquake. The surface condition consists mostly of stiff to dense sandy clay, which is
highly plastic and expansive in nature. The aforementioned conditions within the City create
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City of Palo Alto 2013 Building Energy
Efficiency Reach Code
Cost Effectiveness Study
Final Report (3/24/2015)
TRC Energy Services
11211 Gold Country Blvd. #103
Gold River, CA 95670
Phone: (916) 962-7001
Fax: (916) 962-0101
e-mail: FFarahmand@trcsolutions.com
website: www.trcsolutions.com
TRC Energy Services
Palo Alto Reach Code Cost Effectiveness Study
Palo Alto Contract# S15155961
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Contents
EXECUTIVE SUMMARY .........................................................................................4
1. INTRODUCTION ..........................................................................................6
2. METHODOLOGY .........................................................................................7
2.1 Life Cycle Cost and Time Dependent Valuation .......................................................... 7
2.2 Package Development ................................................................................................... 7
2.2.1 Residential Prototypes ..................................................................................... 8
2.2.2 Nonresidential Prototypes ............................................................................... 9
2.2.3 Energy Efficiency Measures .......................................................................... 10
2.3 Cost Effectiveness ....................................................................................................... 10
2.3.1 Energy Savings .............................................................................................. 10
2.3.2 Costs .............................................................................................................. 13
3. MEASURE DESCRIPTIONS AND COSTS ........................................................14
3.1 Residential Measures .................................................................................................. 14
3.1.1 High Performance Attics (HPA) .................................................................... 14
3.1.2 High Performance Walls (HPW) ................................................................... 16
3.1.3 Cool Roofs ..................................................................................................... 17
3.1.4 Instantaneous Water Heaters (IWH) ............................................................. 18
3.1.5 Solar Ready .................................................................................................... 19
3.2 Nonresidential Measures ............................................................................................. 20
3.2.1 Outdoor Lighting Power Allowance (LPA) ................................................... 21
3.2.2 Indoor Lighting .............................................................................................. 21
3.2.3 Cool Roofs ..................................................................................................... 24
3.2.4 Roof Insulation ............................................................................................... 25
3.2.5 HVAC Efficiency ............................................................................................ 26
4. ENERGY SAVINGS AND COST EFFECTIVENESS RESULTS ..............................28
4.1 Residential Packages ................................................................................................... 28
4.1.1 Single Family ................................................................................................. 28
4.1.2 Multifamily ..................................................................................................... 28
4.2 Nonresidential Packages ............................................................................................. 29
4.3 Reach Code Recommendation .................................................................................... 30
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4.4 Greenhouse Gas Savings ............................................................................................ 31
5. APPENDIX A – CURRENT REACH CODE LANGUAGE .....................................33
6. APPENDIX B – ADDITIONS AND ALTERATIONS ANALYSIS ............................36
6.1 Residential Measures .................................................................................................. 36
6.1.1 Relevance ....................................................................................................... 36
6.1.2 Cost Effectiveness .......................................................................................... 37
6.1.3 Recommendation ............................................................................................ 38
6.2 Nonresidential Measures ............................................................................................. 39
6.2.1 Relevance ....................................................................................................... 39
6.2.2 Cost Effectiveness .......................................................................................... 41
6.2.3 Recommendation ............................................................................................ 42
7. APPENDIX C – COST DETAILS ....................................................................43
8. APPENDIX D – SPREADSHEET ANALYSIS ENERGY SAVINGS ..........................47
8.1 Outdoor LPA ............................................................................................................... 47
8.2 Open Office Occupancy Sensors ................................................................................ 48
9. APPENDIX E – REACH CODE PRESCRIPTIVE WALLS PATH .............................50
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EXECUTIVE SUMMARY
The City of Palo Alto requires cost effectiveness analysis be completed to renew the Reach Code
in Section 16.18.050 of the Palo Alto Municipal Code. The Reach Code requires that residential
and nonresidential new construction use 15% less energy than a building minimally compliant
with Title 24 (T24) Building Energy Efficiency Standards. The California Energy Commission’s Life
Cycle Cost (LCC) Methodology and prototypes were used to analyze potential cost effective
energy efficiency measures. The LCC methodology involves estimating and quantifying the
energy savings associated with measures using a Time Dependent Valuation (TDV) of energy
savings.
TRC developed four residential cost effective packages (10% and 15% above T24 for single family
and multifamily buildings), as well as two cost effective nonresidential packages (10% and 15%
above T24). The measures in these packages represent one possible set of measures shown to
attain the Reach Code requirements cost effectively, rather than prescriptive measures adopted
into the Palo Alto Municipal Code.
TRC simulated residential prototypes in CBECC-Res, and nonresidential prototypes in CBECC-
Com, though some measures required spreadsheet analysis to determine savings. The first
measures investigated were those that had been studied for the 2016 Title 24 Codes and
Standards Enhancement (CASE) process. These studies contain energy savings, market research,
and cost estimates for measures that exceed 2013 T24.
Cost effectiveness for the packages of measures is indicated by the benefit to cost ratio. A ratio
greater than 1 indicates that the added cost of the measure is more than offset by the
discounted (present value) energy cost savings, and the measure is deemed to be cost effective.
The 10% and 15% packages are shown highlighted in yellow for all building types in Table 1. For
each package, measures are added sequentially, indicated by a ‘+’ sign, meaning that all energy
and costs impacts are cumulative. Because all of the packages proved cost effective for
prototypes in the City of Palo Alto, the Palo Alto Municipal Code should renew the Reach Code
ordinance requiring that single family, multifamily, and nonresidential buildings exceed the Title
24 Standards by at least 15%.
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Table 1. Summary of Cost Effective Packages
Single Family Residential 10% and 15% Packages
Measure TDV
kBTU/ft2
% Above
Title 24
Present Value of
Energy Savings Cost Benefit to
Cost Ratio
Code Compliant Building 31 0% $0 $0 -
+ High Performance Attic 27 12% $1,986 $1,477 1.3
+ Instantaneous Water Heaters 24 22% $3,438 $1,128 3.0
+ Solar Ready 24 22% $3,438 $2,120 1.6
Multifamily Residential 10% Package
Measure TDV
kBTU/ft2
% Above
Title 24
Present Value of
Energy Savings Cost Benefit to
Cost Ratio
Code Compliant Building 44 0% $0 $0 -
+ High Performance Attic 42 6% $3,311 $3,049 1.1
+ High Performance Walls 40 9% $4,804 $4,620 1.0
+ Cool Roofs 40 10% $5,491 $4,886 1.1
Multifamily Residential 15% Package
Measure TDV
kBTU/ft2
% Above
Title 24
Present Value of
Energy Savings Cost Benefit to
Cost Ratio
Code Compliant Building 44 0% $0 $0 -
+ Instantaneous Water Heaters 34 23% $12,053 -$2,792 No costs
Nonresidential 10% and 15% Packages
Measure TDV
kBTU/ft2
% Above
Title 24
Present Value of
Energy Savings Cost Benefit to
Cost Ratio
Code Compliant Building 152 0% $0 $0 -
+ Outdoor LPA 147 3% $13,007 $0 No costs
+ Indoor Lighting 139 9% $35,209 $3,832 9.2
+ Cool Roof + Roof Insulation 137 10% $38,017 $9,650 3.9
+ HVAC Efficiency Measures 128 16% $55,035 $34,463 1.6
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1. INTRODUCTION
The City of Palo Alto, California, plans to enact a Reach Code for the 2013 Title 24 Part 6 Building
Energy Efficiency Standards (T24 Standards). The T24 Standards are the minimum energy
efficiency requirements for building construction in California. Palo Alto’s Reach Code would
require that residential and nonresidential buildings be constructed to consume at least 15%
less energy than a building exactly compliant with the T24 Standards. Palo Alto has enacted this
Reach Code since the 2005 T24 Standards by investigating measures that allow a building to
perform 15% better than the Title 24 minimum requirements, while being cost effective over
the lifetime of the measures, as per the requirements in Section 10-106 of the California Code of
Regulations Title 24 Part 1.
The most recent Reach Code that was enforced by Palo Alto was with the 2008 T24 Standards,
located in Section 16.18.050 of the Palo Alto Municipal Code. This code is partially reproduced
below:
“In addition to the requirements of the 2008 California Building Energy Efficiency Standards,
the following general compliance requirements shall apply to all building permit applications subject to this chapter:
(a) Nonresidential construction.
(1) New construction greater than or equal to 5,000 square feet, including additions to existing buildings. The performance approach specified in Section 151 of the 2008 California Building Energy Efficiency Standards shall be used to demonstrate that the TDV energy of
the proposed design is at least 15.0% less than the TDV energy of the standard design.”
…
“(2) New construction between 500 square feet and 5,000 square feet, including additions to existing buildings. The performance approach specified in Section 151 of the 2008 California Building Energy Efficiency Standards shall be used to demonstrate that the TDV energy of the proposed building is at least 15.0% less than the TDV energy of the standard design.”
Similar requirements apply to low rise residential buildings, including single family and
multifamily buildings. The section of code is provided in full in Appendix A – Current Reach Code
Language. This code has not been enforced since the enactment of the 2013 T24 Standards on
July 1, 2014, because a cost effectiveness study has not been completed comparing the
requirements to the 2013 T24 Standards.
Palo Alto engaged TRC to provide a cost effectiveness study to support building Reach Code
requirements 10% and 15% above 2013 T24 Standards minimum requirements for single family
residential, multifamily residential, and nonresidential new construction. TRC has prepared
energy savings and cost effectiveness analyses for measures that support the proposed Reach
Code.
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2. METHODOLOGY
TRC assessed the cost effectiveness of Palo Alto’s 2013 Reach Code by analyzing specific
measures applied to building prototypes using the Life Cycle Cost (LCC) methodology approved
and used by the California Energy Commission (CEC) to establish cost effective building energy
standards (Title 24, Part 6).
2.1 Life Cycle Cost and Time Dependent Valuation
TRC used the CEC LCC Methodology to demonstrate cost effectiveness of the proposed Reach
code.1 The LCC methodology involves estimating and quantifying the energy savings associated
with measures using a Time Dependent Valuation (TDV) of energy savings.2
TDV is a normalized format for comparing electricity and natural gas savings that takes into
account the cost of electricity and natural gas consumed during different times of the day and
year. The TDV values are based on long term discounted costs (30 years for all residential
measures and nonresidential envelope measures and 15 years for all other nonresidential
measures). TDV energy estimates are based on present-valued cost savings but are presented in
terms of “TDV kBTUs” so that the savings are evaluated in terms of energy units and measures
with different periods of analysis can be combined into a single value.3 The CEC developed the
TDV values that were used in the analyses for this report.
2.2 Package Development
TRC developed four cost effective residential packages (10% and 15% above T24 for single family
and multifamily buildings), as well as two cost effective nonresidential packages (10% and 15%
above T24). The measures in these packages represent one possible set of measures shown to
attain the Reach Code requirements cost effectively, rather than prescriptive measures adopted
into the Palo Alto Municipal Code.
1 Architectural Energy Corporation (January 2011) Life-Cycle Cost Methodology. California Energy Commission.
Available at:
http://www.energy.ca.gov/title24/2013standards/prerulemaking/documents/general_cec_documents/2011-01-
14_LCC_Methodology_2013.pdf
2 E3 (February 2011) Time Dependent Valuation of Energy for Developing Building Efficiency Standards. California
Energy Commission. Available at:
http://www.energy.ca.gov/title24/2013standards/prerulemaking/documents/general_cec_documents/Title24_20
13_TDV_Methodology_Report_23Feb2011.pdf
3 kBTUs = thousands of British Thermal Units.
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When applicable, residential prototypes were simulated in CBECC-Res version 3b and
nonresidential prototypes in CBECC-Com version 3a.4 TRC simulated all prototypes in Climate
Zone 4 (CZ4), and initialized them to be perfectly compliant with the minimum 2013 T24
requirements (0% compliance margin). The TDV of energy savings for the energy efficiency
measures were derived by revising default values in CBECC, as described in the Measure
Descriptions and Costs.
2.2.1 Residential Prototypes
The residential prototypes are fully defined by the CEC in the Residential Alternative Calculation
Method reference manual.5 TRC’s prototypes are slightly revised in order to have equal
geometry oriented facing north, east, south, and west. Three residential prototypes were
simulated:
2,100 ft2 single family single-story home
4,050 ft2 single family two-story home, including a basement
6,960 ft2 low-rise multifamily residential building, with two stories and eight dwelling
units
The single family two-story home represents the 2,700 ft2 prototype with the addition of a
basement, at the request of the City of Palo Alto. TRC determined the area of the basement
floor, 1,350 ft2, by using the same floor area as each of the two above-grade floors. TRC created
basement below-grade walls with the same geometry as the above grade walls, and with
prescriptive U-factors and construction assemblies. A Palo Alto building official described that
basements are typically provided with windows and light wells. Thus, TRC added windows to the
basement with the same window-to-floor area ratio as the other floors of the prototype.
Further prototype details are provided in Table 2. Detailed requirements for the compliant
building prototypes are provided in the CEC Residential Alternative Calculation Method
reference manual.
4 More information on CBECC-Res available at: http://www.bwilcox.com/BEES/BEES.html. More information on
CBECC-Com available at: http://bees.archenergy.com/software.html
5 2013 Residential Alternative Calculation Method, California Energy Commission. Available at:
http://www.energy.ca.gov/2013publications/CEC-400-2013-003/CEC-400-2013-003-CMF-REV.pdf
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Table 2. Residential Prototypes Summary
Building Type One-Story Two-Story Low-Rise Multifamily
Area 2,100 4,050 6,960
Roof Area 2,520 1,740 4,176
# of floors 1 3* 2
Window-to-Floor Area
Ratio 20% 20% 15%
Attic/Roof Assembly Tile Roof, Wood Sheathing, No Insulation, 0.40 U-factor, 2x4 @ 24” OC
SR = 0.10, TE = 0.85
Above Grade Wall
Assembly R-15 Cavity Insulation, R4 Synthetic Stucco, 0.065 U-factor
Cooling System Split Air Conditioner
Heating System Gas Furnace
HVAC Distribution
System Ducts in Attic Ducts in Attic Ducts in Conditioned Space
Thermal Zones 1 2 4
Water Heater Natural Gas, Small Storage, 50 Gallon Tank, EF = 0.6, 40 MBH Input Rating
*The two-story prototype actually has three stories because of the added basement.
2.2.2 Nonresidential Prototypes
The nonresidential prototypes were developed according to the Nonresidential Alternative
Calculation Method reference manual.6
5,502 ft2 one-story small office building
53,600 ft2 three-story medium office building
Results using these prototypes are intended to represent findings for all nonresidential
buildings. Further prototype details are provided in Table 3, and detailed requirements for the
compliant building prototypes are provided in the CEC Nonresidential Alternative Calculation
Method reference manual.
6 2013 Nonresidential Alternative Calculation Method, California Energy Commission. Available at:
http://www.energy.ca.gov/2013publications/CEC-400-2013-004/CEC-400-2013-004-CMF.pdf
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Table 3. Nonresidential Prototypes Summary
Building Type Medium Office Small Office
Floor Area 53,628 5,502
# of floors 3 1
Window-to-Floor Area Ratio 26% 23%
Roof Construction 1/16” Metal Standing Seam, R-25 Insulation
SR = 0.63, TE = 0.85
Cooling System Direct Expansion, 11 EER,
Economizer
Direct Expansion, 13 SEER,
No Economizer
Heating System Boiler, 90% Thermal Efficiency Furnace, 78% AFUE
HVAC Distribution System 3 Packaged VAVs (1 per story)
with Hot Water Reheat 5 Packaged Single Zone Systems
Thermal Zones 18 (3 unconditioned) 6 (1 unconditioned)
Regulated Lighting Power
Density 0.75 Watts/ft2
Daylighting Controls Continuous, 0.20 Dimming Light/Power Fraction
Occupancy Sensors Required in Private Offices, Conference Rooms, and Multipurpose
Rooms. Not Required in Open Offices
2.2.3 Energy Efficiency Measures
TRC investigated potential energy efficiency measures to apply to the prototype residential and
nonresidential buildings. The first measures investigated were those that had been studied for
the 2016 Title 24 Codes and Standards Enhancement (CASE) process. These studies contain
detailed energy savings, market research, and cost estimates for measures that exceed 2013
Title 24 and serve as comprehensive data sources for the Reach Code analysis.
2.3 Cost Effectiveness
Using the CEC’s LCC methodology, TRC determined cost effectiveness by assessing the
incremental costs of a measure and comparing them to the energy cost savings. Total
incremental costs represent the incremental initial construction and maintenance costs of the
proposed measure relative to the 2013 Title 24 Standards minimum requirements. The Benefit
to Cost (B/C) Ratio is the incremental TDV energy costs savings divided by the total incremental
costs. When the B/C ratio is greater than 1.0, the added cost of the measure is more than offset
by the discounted energy cost savings and the measure is deemed to be cost effective.
2.3.1 Energy Savings
For most measures, TRC used CBECC-Com and CBECC-Res to estimate the TDV savings and
percent improvement beyond the T24 Standards. CBECC is a free public domain software
developed by the CEC for use in complying with the 2013 T24 Standards. CBECC-Com uses
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EnergyPlus v8.1 as the simulation engine to perform the analysis. Measure specific modeling
parameters are described in Section 3.
TDV energy savings are calculated and presented in terms of per square foot of the building. The
present value of the energy savings is calculated by multiplying the TDV savings/ft2 by the
building area, and finally by the NPV factor.7 TRC used a straight average to blend the energy
savings of the two single family prototypes, as well as the two office prototypes.
TRC simulated multiple measures together to capture potential interactive or overlapping
effects of the measures. For example, adding insulation to the walls and roof may each
individually produce a 10% compliance margin, but both of these measures combined may only
produce a 15% compliance margin (rather than 20%). For measures that could not be simulated
in software, we calculated energy savings estimates through spreadsheet analysis as described
in Appendix D – Spreadsheet Analysis Energy Savings.
CBECC software calculates the compliance total using loads regulated by Title 24. These loads
include space heating, cooling, ventilation, water heating, and (for nonresidential only) pumps
and indoor lighting. In developing the Reach Code measures, TRC has focused on these
regulated loads so that building designers can show compliance easily. The CBECC-Res output,
shown in Figure 1, shows that the unregulated loads (including lighting, appliance and cooking,
plug, and exterior loads) are excluded from the compliance total.
Figure 1. CBECC-Res Output Screenshot
7 The NPV factor is 0.173 for residential measures and 0.089 for nonresidential measures.
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The CBECC-Com outputs, shown in Figure 2, shows that the unregulated receptacle, process,
and process lighting loads are excluded from the compliance total.
Figure 2. CBECC-Com Output Screenshot
CBECC-Com does not currently model exterior lighting even though it is a T24 regulated load.
TRC analyzed an outdoor lighting measure as part of the nonresidential package, thus requiring
that outdoor lighting energy usage be added to the Standard Design whole building energy
usage. The adjusted standard design TDV energy usage would serve as the point of comparison
when calculating compliance for all measures in the nonresidential package. The derivation of
the standard outdoor lighting energy usage is described in more detail in Appendix D –
Spreadsheet Analysis Energy Savings. The energy consumption of the nonresidential prototypes
is summarized in Table 4.
Table 4. Nonresidential Prototype TDV Energy Consumption
Prototypes Small Office Medium Office
Building Area (ft2) 5,502 53,628
Modeled Standard Design TDV (kBtu/ft2-yr) 179 106
Outdoor Lighting Only Standard TDV (kBtu/ft2-yr) 9.8
Adjusted Standard Design TDV (kBtu/ft2-yr) 188.9 115.8
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2.3.2 Costs
For the majority of measures, CASE studies provided relevant costs for the measures. TRC
conducted further cost research for the Cool Roofs and HVAC Efficiency measures. Building
material, equipment, and labor costs were localized when possible, and taxes and contractor
markups were added as appropriate, as described in Section 3. TRC used a straight average to
blend the costs for the measures in the two single family prototypes, as well as the two office
prototypes.
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3. MEASURE DESCRIPTIONS AND COSTS
This section provides a description, general modeling parameters, market overview, and
summarized costs for each measure.
3.1 Residential Measures
TRC investigated and included each of the following four measures into the residential packages:
High Performance Attics
High Performance Walls
Cool Roofs
Instantaneous Water Heaters
Solar Ready
3.1.1 High Performance Attics (HPA)
This measure draws from the findings of the 2016 Residential Ducts in Conditioned Space / High
Performance Attics CASE Report.8 The measure improves the building thermal envelope and
reduces heating, ventilation, and air-conditioning (HVAC) distribution losses in residential
buildings. Components of this measure defined in the single family prototypes include:
R-38 insulation at the ceiling below attic, from R-30 prescriptive insulation
R-13 below deck (cavity) insulation, from no prescriptive insulation
Duct lower leakage target of 5%, from 8% prescriptive leakage
R-8 duct insulation, from R-6 prescriptive insulation
Two additional building products are needed for the HPA measure. First, draped netting is
necessary for the below deck loose-fill insulation. Second, the prescriptive requirement for
radiant barrier is unnecessary with insulation below the roof deck because it not practical to
install a radiant barrier below the below-deck insulation.
The multifamily prototype is modeled with the same measures, except that the multifamily
prototype has ducts located entirely in conditioned space by default. Thus, the duct insulation
measure by itself does not save energy in the multifamily model, due to the assumption that all
ducts are already in conditioned space. Duct leakage however, does have an energy impact by
itself. To allow the user to change the duct leakage and duct insulation values, the duct location
8 TRC Energy Services (October 2014) Residential Ducts in Conditioned Space / High Performance Attics Codes and
Standards Enhancement Initiative. California Utilities Statewide Codes and Standards Team. Available at:
http://www.energy.ca.gov/title24/2016standards/prerulemaking/documents/2014-07-
21_workshop/final_case_reports/2016_Title_24_Final_CASE_Report_HPA-DCS-Oct2014.pdf
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in CBECC-Res must be changed to “multiple places,” and then ducts must be specified to be
located to the thermal zones.
The following excerpt from the CASE report provides a market overview HPA strategies:
“HPA strategies are not widely implemented in the California residential market which is
dominated by ducts installed above the ceiling insulation in vented attics. But the numbers are increasing in the high performance homes market due to tighter energy budgets and greater
difficulty in achieving the ‘above code targets’ for incentive programs. [HPA will require] adjustments to attic insulation placement and possibly insulation type. There are different options
and combinations of insulation that can be used which are widely available from manufacturers, distributors and retailers. […] If installed properly and according to best design guidelines, these
measures will be low maintenance and persist for the life of the measure.”
The incremental costs of going from the base case to the proposed HPA measure are derived
from the CASE report and summarized in Table 5. CASE authors determined the costs during the
CASE study development, from sources such as online retailers such as Home Depot and Lowes,
RSMeans, and quotes from builders participating in research projects. The costing methodology
was reviewed and revised by representatives of the California Building Industry Association
(CBIA). The average cost of the measure in single family prototypes for CZ4 is $1,477, which is
the value used in the cost effectiveness analysis.
Table 5. Residential HPA Incremental Costs Summary
Component/Material Base Case Proposed Update 1-story 2-story Multifamily
Below Deck Insulation none R-13 $806 $557 $1,336
Ceiling Insulation R-30 R-38 $294 $203 $487
Duct Insulation R-6 R-8 $143 $183 $474
Duct Leakage 8% 5% $0 $0 $0
Netting None Present $806 $557 $1,336
Radiant Barrier Present None -$353 -$244 -$585
Total Incremental Costs $1,697 $1,256 $3,049
Average Incremental Costs $1,477 -
Further details on costs for this measure are included in Appendix C – Cost Details.
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3.1.2 High Performance Walls (HPW)
This measure draws from the findings of the 2016 Residential High Performance Walls and QII
CASE Report.9,10 The measure reduces the amount of heat transfer through walls and thus
reduces HVAC loads. In the CASE report High Performance Walls are defined as having an overall
assembly U-factor of 0.048.11 While this U-factor may be achieved using a variety of cavity and
exterior insulation combinations, TRC assumed the following components based on the lowest
cost option presented in the CASE report:
R-19 wall cavity insulation, from R-15 prescriptive insulation
R-6 exterior sheathing insulation, from R-4 prescriptive insulation
2x6 at 16” on-center framing, from 2x4 at 16” on-center prescriptive framing
Another possible 2x6 assembly meeting a U-factor of 0.048 would be R-24 cavity insulation (2
inches of spray foam combined with R-13 batt) plus R-4 exterior sheathing insulation (this
assembly is more costly and was not studied). For a diagram of wall assemblies and associated
U-factors, please refer to the CEC’s 2013 Joint Appendices, section JA4.3 – Walls (reproduced in
Appendix E – Reach Code Prescriptive Walls Path).
Additional sill flashing at windows and doors is needed to accommodate the extra thickness of
the exterior insulation. The following excerpt from the CASE report provides a market overview
HPW strategies:
“There are several components involved in constructing a high performance wall, and each was investigated for market structure, availability and useful life, persistence and maintenance […]:
Exterior rigid and cavity insulations: a variety of insulation types are available that
provide varying levels of insulation per unit depth, and can meet the proposed requirement using either 2x4 or 2x6 studs. No additional maintenance is expected for
these products if installed properly.
Framing: The use of 2x6 studs in the California residential market has increased in
advanced homes since the 2013 CASE analysis, and is expected to further increase with the 2013 Standards going into effect. A market shift towards greater use of 2x6 studs will
only have a minor impact on the timber industry and negligible impact on lumber use due to optimal lumber sawing practices. Framing requirements are expected to have no
additional maintenance if installed properly.
9 TRC Energy Services (September 2014) Residential High Performance Walls and QII Codes and Standards
Enhancement Initiative. California Utilities Statewide Codes and Standards Team. Available at:
http://www.energy.ca.gov/title24/2016standards/prerulemaking/documents/2014-07-
21_workshop/final_case_reports/2016_T24_CASE_Report-High_Perf_Walls-Sep2014.pdf
10 Quality Insulation Installation, or QII, was found to be cost-effective as a standalone measure in the referenced
CASE report. Table 31, Cost-effectiveness Summary for QII, shows a BtC Ratio of 1.5 for Climate Zone 4. This
measure is not proposed for the Palo Alto Reach Code as it was not pursued for the 2016 Title 24.
11 While this U-factor is used to calculate cost effectiveness for the 15% compliance package, it is not used as a
prescriptive U-factor. Please see Appendix E – Reach Code Prescriptive Walls Path for details.
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External finish: Stucco is the predominant finishing for California residential new construction. It is expected that there will be labor and material increases when applying
stucco over rigid insulation at depths greater than 1” due to the need for longer nails and wider door and window frames.
Window frames and flashing: Window frames are directly affected by the thickness of
the external finish; meaning adjustments must be made in the installation of windows when using thicker rigid exterior insulation.”
The incremental costs of going from the base case to the proposed HPW measure are derived
from the CASE report and summarized in Table 6. CASE authors determined the costs during the
CASE study development, from sources including online retailers such as Home Depot and
Lowes, RSMeans, quotes from builders participating in research projects, and confirmed through
conversations with CBIA energy analysts. Based on this information, the average cost for the
single family prototypes in Palo Alto is approximately $661, which is the value used in the cost
effectiveness analysis.
Table 6. Residential HPW Incremental Costs Summary
Component/Material Base Case Proposed Update 1-story 2-story Multifamily
Batt Insulation R-15 R-19 -$245 -$413 -$715
Rigid Insulation R-4 R-6 $214 $399 $790
Wood Framing 2x4 2x6 $476 $752 $1,427
Sill Flashing (additional) 1" 1.5" $69 $69 $69
Total Incremental Costs $514 $808 $1,571
Average Incremental Costs $661 -
Further details on costs for this measure are included in Appendix C – Cost Details.
3.1.3 Cool Roofs
The T24 Standards currently do not have any cool roof requirements for new low rise residential
buildings in CZ4. For buildings without certified cool roofs, the modeling software assumes a
default 3-year aged solar reflectance (SR) of 0.10 and thermal emittance (TE) of 0.85. This
measure increases the cool roof characteristics to SR = 0.28 and maintains a TE = 0.85.
TRC conducted interviews regarding steep slope roof products with several roofers and roof
supply distributors in the San Francisco Bay Area. Multiple roofers stated that there is no
additional labor to install cool roof products. Additionally, several distributors reported that the
product prices are relatively constant for a given region (i.e. the Bay Area in general will have
consistent pricing for a particular product). Tile roofing products do not show any cost premium
for cool roof products. Roofing distributors, manufacturers, and roofers also stated that cool
roof designation does not affect the price of the tile and most tile products meet cool roof
standards. There are costs, however, for going from regular asphalt shingles to cool roof asphalt
shingles.
The incremental costs of going from the base case to a cool roof are summarized in Table 7. The
cost of a cool roof for a multifamily building constructed with asphalt shingles is $543, while
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there is no incremental cost for a multifamily building constructed with a tile roof. Assuming
that half of the construction in Palo Alto is asphalt, and the other half tile, the average cost of a
cool roof for a multifamily prototypes is $271. With the same assumptions, the average cost of a
single family cool roof is $138.
Table 7. Residential Cool Roof Incremental Costs Summary
Material Base Case Proposed
Update 1-Story 2-Story Multifamily
Steep Slope
Asphalt Shingles
ASR=0.10,
TE=0.85
ASR=0.28,
TE=0.85 $328 $226 $543
Steep Slope Tile ASR=0.10,
TE=0.85
ASR=0.28,
TE=0.85 $0 $0 $0
Average $138 $271
3.1.4 Instantaneous Water Heaters (IWH)
This measure draws from the findings of the 2016 Residential High Performance Walls and QII
CASE Report.12 The measure requires that if gas is available, an applicant can comply with the
prescriptive standards by installing a gas instantaneous water heater (IWH), a high efficiency gas
storage water heater, or a less efficient storage water heater in conjunction with a solar thermal
system. The IWH measure requires installing a water heater defined as follows, in accordance
with the CASE report:
Small instantaneous tank type
Tank volume of 0 gallons
Energy factor of 0.82
Input rating of 190,000 Btu/h
The following excerpts from the CASE report provides a market and cost analysis:
“The proposed code change is justified given the current and future residential water heating market, as high-efficiency water heaters (including gas IWHs) have widespread availability in
California. The incremental cost of high-efficiency water heaters relative to their less efficient counterparts are recovered over time by way of lower utility bills (i.e. higher energy efficiency
reduces energy use and thus lowers utility costs to homeowners) and because IWH have longer lifespans than storage water heaters and will need to be replaced less frequently.”
12 Energy Solutions (September 2014) Residential Instantaneous Water Heaters Codes and Standards Enhancement
Initiative. California Utilities Statewide Codes and Standards Team. Available at:
http://www.energy.ca.gov/title24/2016standards/prerulemaking/documents/2014-07-
21_workshop/final_case_reports/2016_Title_24_Final_CASE_Report_Res_IWH-Sep2014.pdf
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The CASE report describes that the incremental cost of an IWH is $494 more than the
prescriptive small storage water heater (including the drain kit and installation), but that the
maintenance cost of the IWH is $843 less than the maintenance cost for a storage water heater
over the 30-year period of analysis. Therefore there are actually cost savings for an IWH
compared to a small (50 gallon) storage tank water heater, as summarized in Table 8.
Table 8. Residential IWH Incremental Costs Summary
Single Family Multifamily
Component Base
Case
Proposed
Update
Initial
Cost
Maint.
Cost
Inc.
Cost
Units/
Bldg
Cost/
Bldg
Units/
Bldg
Cost/
Bldg
Water
Heater Storage Instant-
aneous $494 -$843 -$349 1 -$349 8 -$2,792
3.1.5 Solar Ready
This measure draws from the development of the 2013 Solar Ready Homes and Solar Oriented
Development CASE report.13 The CASE report proposed measures for new construction homes
that include:
Roof area be reserved for solar equipment
A pathway for piping and/or conduit be indicated on plans
Roof structural design loads be shown on plans
Adequate electrical capacity be provided
Spare electric breaker space be provided
In addition to the CASE proposed measures, the City of Palo Alto requested that TRC analyze
requiring conduit to be provided to support the installation of future solar requirements.
Costs obtained from the CASE development are summarized in Table 9 below. The costs for
reserving roof area, reserving a pathway for piping/conduit, and structural design load
calculations are entirely design costs, which are not included in the CEC’s LCC methodology
(though realizing these measures will require additional attention from architects and
designers). The costs for the electrical capacity and spare electrical breaker space are taken
from the CASE report.
13 California Utilities Statewide Codes and Standards Team. (September 2011) Solar Ready Homes and Solar Oriented
Development Codes and Standards Enhancement Initiative. Available at:
http://www.energy.ca.gov/title24/2013standards/prerulemaking/documents/current/Reports/Residential/Envelop
e/2013_CASE_R_Solar_Ready_Solar_Oriented_Developments_Sept_2011.pdf
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To determine costs for requiring conduit, TRC reviewed costs obtained by the CASE team and
stakeholder feedback provided during the CASE stakeholder engagement process in 2010-11.14
Cost values include material and labor costs for installing wiring and conduit, as well as stubbing
out the attic interior to the roof to allow future accessibility of these pre-installed wires and
conduit. The costs for providing conduit are unnecessarily conservative (high) because the costs
found were aggregated with wiring costs.
Table 9. Solar Ready Incremental Costs Summary
Component Costs/Home
Design requirements $0
Provide adequate electrical capacity $144
Provide adequate electrical breaker space $38
Conduit and Wiring $810
Total $992
Because the solar ready measure is an enabling measure, rather than a requirement to install a
solar system, there are no associated direct energy savings. The 2013 CASE Report researched
the magnitude of savings assuming that building owners would voluntarily install solar systems.
While there may be savings associated with voluntary installations, the rate of voluntary
installations is not well documented and are not applicable to calculating cost-effectiveness on a
per-home basis.
3.2 Nonresidential Measures
TRC investigated and included each of the following five measures into the nonresidential
packages:
Outdoor Lighting Power Allowance
Indoor Lighting, which is comprised of:
• Indoor Lighting Power Densities
• Partial-ON Occupancy Sensors
• Open Office Occupancy Sensors
• Daylight Dimming-Plus-Off
Cool Roofs
14 Pre-installing conduit in new construction homes was discussed and eliminated based on stakeholder feedback. The
primary concern with pre-installing conduit and wiring was compatibility with evolving technology and electrical
code requirements.
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Roof Insulation
HVAC Efficiency
3.2.1 Outdoor Lighting Power Allowance (LPA)
This measure draws from the findings of the 2016 Nonresidential Outdoor Lighting Power
Allowance CASE Report.15 This measure replaces Pulse Start Metal Halide (PSMH) light sources
with Light Emitting Diodes (LEDs) as the basis for the calculation of Lighting Power Allowances
(LPA) for all exterior applications where it is technically feasible to do so. The energy usage and
savings associated with outdoor lighting cannot be modeled effectively in CBECC-Com, and is
instead calculated in spreadsheet analysis and added to the results of the modeling analysis, as
detailed in Appendix D – Spreadsheet Analysis Energy Savings.
The following excerpt from the CASE report provides a market analysis:
“The industry as a whole is participating in the change to LED light sources. Manufacturers are
actively funding R&D efforts for the LED market, putting most of their R&D funds into LED product development. As a result, manufacturers are already supporting this change and are
working to be well positioned for this market shift.”
The following excerpt from the CASE report provides a cost analysis, which describes that there
are no costs associated with this measure because the initial cost and the maintenance cost of
LEDs are both lower than PSMHs:
“[B]y 2017, many of the proposed lighting systems are likely to cost less than the incumbent PSMH lighting systems. This is considering cost forecasts for LED products, which estimate an
approximate 30% reduction in luminaire costs by 2017. […] For the sake of the calculations, luminaire maintenance is not being considered in the comparative analysis. The incumbent
systems all have higher maintenance costs compared to LED, and the very long life of LED makes them effectively last for the full duration of the 15 year life cycle without requiring maintenance.”
3.2.2 Indoor Lighting
There are four components to this measure as described below.
Indoor LPDs
This measure draws from the findings of the 2016 Nonresidential Lighting: Indoor LPDs CASE
Report.16 The measure reduces the lighting power allowances, measured in Watts/ft2 of spaces
15 TRC Energy Services and Clanton & Associates (December 2014) Nonresidential Outdoor Lighting Power Allowance
Codes and Standards Enhancement Initiative. California Utilities Statewide Codes and Standards Team. Available at:
http://www.energy.ca.gov/title24/2016standards/prerulemaking/documents/2014-06-
24_workshop/final_case_reports/2016_T24_CASE_Report-Outdoor_LPA-Dec_2014-V3.pdf
16 TRC Energy Services and Clanton & Associates (October 2014) Nonresidential Lighting: Indoor LPDs Codes and
Standards Enhancement Initiative. California Utilities Statewide Codes and Standards Team. Available at:
http://www.energy.ca.gov/title24/2016standards/prerulemaking/documents/2014-06-
24_workshop/final_case_reports/2016_T24_CASE_Report-NonresLightingLPD-Oct2014-V2.pdf
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common to office buildings, such as conference rooms, mechanical rooms, lobbies, and other
areas. This measure does not challenge the quality or nature of the lighting equipment
employed to establish the allowances, thus there is no anticipation that the changes will trigger
any additional costs.
TRC assessed the energy performance of this measure in coordination with the Partial-ON
Occupancy Sensors measure, described in the next section.
Partial-ON Occupancy Sensors
This measures draws from the findings of the 2016 Nonresidential Lighting Controls: Partial-ON
Occupancy Sensors CASE Report.17 This measure is focused on spaces that are required to have
an occupancy sensor currently (for offices these spaces are private offices, conference rooms,
and multipurpose rooms), and meet the requirement to have multilevel lighting in the existing
code. The measure requires that these sensors operate as either a partial-ON sensor, or as a
vacancy sensor, saving approximately 20 percent of the baseline energy in those spaces. This
control strategy does not reduce connected load, but will reduce the hours of operation and the
actual load of the lighting when in a dimmed state, resulting in energy savings. This measure
does not incur any incremental costs because the baseline controls infrastructure requires the
same equipment with different programming. Therefore, there are no additional costs
associated with this measure.
Each of the Indoor LPDs and Partial-ON Occupancy Sensor CASE reports provide a weighted
average LPD reduction for various impacted building spaces. These weighted LPD reductions
represent the energy impacts of each measure. TRC input the LPD reductions for impacted office
spaces into CBECC-Com to model the two measures. However, the LPD reductions cannot simply
be summed, as part of the savings from each measure overlap. In coordination with the lead
author for both CASE reports, the default LPDs for the spaces were reduced from 0.75 W/ft2 in
each prototype to 0.682 W/ft2 in the medium office building and 0.685 W/ft2 for the small office
building. 18 These LPD reductions represent the energy impacts of both CASE measures, and
consider that the original Partial-ON savings were calculated using the baseline LPDs in the 2013
T24 Standards. TRC accounted for the overlap of savings between these measures by using the
LPDs proposed in the 2016 Indoor LPDs CASE report as the baseline LPD for the Partial-ON
savings calculation.
17 TRC Energy Services (September 2014) Nonresidential Lighting Controls: Partial-ON Occupancy Sensors Codes and
Standards Enhancement Initiative. California Utilities Statewide Codes and Standards Team. Available at:
http://www.energy.ca.gov/title24/2016standards/prerulemaking/documents/2014-06-
24_workshop/final_case_reports/2016_Title_24_Final_CASE_Report-Nonresidential_Lighting_Controls_Partial-
ON_Ocupancy_Sensors.pdf
18 Communication with Michael Mutmansky of TRC Energy Services, January 2015.
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Open Office Occupancy Sensors
This measure draws from the findings of the 2013 Indoor Lighting Controls CASE Report.19 This
CASE report investigates the use of occupancy controls in open office spaces at various control
group sizes. The measure proposed in this study is for one occupancy sensor for every four
workstations (approximately 500 ft2). The energy savings associated with occupancy sensors
cannot be modeled effectively in CBECC-Com, and is instead calculated in spreadsheet analysis
and added to the results of the modeling analysis, as detailed in Appendix D – Spreadsheet
Analysis Energy Savings.
Occupancy controls have been commercially available for several decades, and the technology
for this measure is readily available from a wide variety of manufacturers. Both passive infrared
and ultrasonic occupancy sensors are widely accepted in office buildings, have been
acknowledged to save energy successfully, and are frequently required by codes.
The incremental costs for this measure include only the costs of the sensors, according to the
CASE report, which is $116.13 per sensor. Costs summarized in Table 10 assume seven (7)
sensors for the small office, and 59 sensors for the medium office. Though the cost estimates
are from 2011, current costs for the equipment are likely to be similar or have decreased since
then due to increase market adoption.
Table 10. Nonresidential Indoor Lighting Incremental Costs Summary
Component Base
Case Proposed Update Small
Office
Medium
Office
Infrared Occupancy Sensor,
Equipment and Labor to Install, in
an Open Office
No
Sensor
One Sensor for
Every Four
Workstations
$813 $6,852
Average Incremental Cost $3,832
Daylight Dimming-Plus-Off
This measure revises the control settings for daylight sensors to be able to shut-off completely
when adequate daylight levels are provided to the space. There is no associated CASE report for
this measure, but there is a related report by the Pacific Northwest National Laboratory.20 The
measure is modeled by revising the daylight control type from Continuous (with a minimum
19 California Utilities Statewide Codes and Standards Team (October 2011) Nonresidential Indoor Lighting Controls
Codes and Standards Enhancement Initiative. Available at:
http://www.energy.ca.gov/title24/2013standards/prerulemaking/documents/current/Reports/Nonresidential/Ligh
ting_Controls_Bldg_Power/2013_CASE_NR_Indoor_Lighting_Controls_Oct_2011.pdf
20 Pacifica Northwest National Laboratory (August 2013) Analysis of Daylighting Requirements within ASHRAE 90.1.
Available at: http://www.pnnl.gov/main/publications/external/technical_reports/PNNL-22698.pdf
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dimming light and power fractions of 0.20), to Continuous Plus Off (which effectively reduces
the dimming light and power fractions to 0).
There is no associated cost with this measure, as the 2013 T24 Standards already require
multilevel lighting and daylight sensors in primary and secondary daylighted spaces. This
measure does not increase the number of sensors required, or labor to install and program a
sensor, but requires a revised control strategy.
3.2.3 Cool Roofs
The 2013 T24 Standards have prescriptive requirements for nonresidential buildings in CZ4,
proposed by the 2013 Case Report for Nonresidential Cool Roofs.21 This measure requires a
minimum 3-year aged solar reflectance (SR) based on roof pitch, where steep slope is defined as
a slope of > 2:12, and low slope is ≤ 2:12. Low slope cool roofs are typically constructed of field
applied coatings, modified bitumen, or single ply thermoplastic roofing. Steep slope roofs are
typically constructed of asphalt or tile shingles. This measure increases the SR of roofs as per the
following:
SR = 0.34 for steep slopes, compared to current SR = 0.20 prescriptive requirements
SR = 0.7 for low slopes, compared to current SR = 0.63 prescriptive requirements
The medium office prototype has a low slope roof, while the small office prototype has a steep
slope roof. Both roof slope types have modeling defaults of TE = 0.85, which was maintained for
both prototypes.
TRC conducted interviews regarding low slope and steep slope roof products with roofers and
roof supply distributors in the San Francisco Bay Area. Multiple roofers made the statement that
there is little or no additional labor to install cool roof products, and in some instances, there is
even cost savings associated with choosing a low slope cool roof. The cost of cool roof products
meeting the Reach Code can be cheaper than their darker, non-cool roof counterparts, as
evidenced by recent data collection and supported by the 2013 Case Report:
“Within the cool roof market, many of the products with [SR] values close to 0.55 are actually
tinted versions of the more conventional white versions of the same product. The products with the darker reflectance can, therefore, actually have a higher initial cost while also driving higher
energy costs.”
Tile roofing products do not show any cost premium for cool roof products. Roofing distributors,
manufacturers, and roofers also stated that cool roof designation does not affect the price of
the tile and most tile products meet cool roof standards. There are costs, however, for going
from regular asphalt shingles to cool roof asphalt shingles.
21 California Utilities Statewide Codes and Standards Team (October 2011) Nonresidential Cool Roofs Codes and
Standards Enhancement Initiative. Available at:
http://www.energy.ca.gov/title24/2013standards/prerulemaking/documents/current/Reports/Nonresidential/Env
elope/2013_CASE_NR_Cool_Roofs_Oct_2011.pdf
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The incremental costs of going from the base case to a cool roof are summarized in Table 11.
The cost of a steep slope cool roof for a building constructed with asphalt shingles is $1,869,
while there is no incremental cost for a building constructed with a tile roof. Assuming that half
of the steep slope roof construction in Palo Alto is asphalt, and the other half is tile, the average
cost of a steep slope cool roof for the small office prototype is $934. Then, assuming the half of
office roof construction is low slope, and the other half steep slope, the average cost becomes
$467.
Table 11. Nonresidential Cool Roof Incremental Costs Summary
Small Office Medium Office
Material Base Case Proposed
Update
Inc.
$/Unit Unit Units/
Bldg $/Bldg Units/
Bldg $/Bldg
Steep Slope
Asphalt
Shingles
ASR=0.20,
TE=0.75
ASR=0.34,
TE=0.85 $0.29 ft2
roof 6,444 $1,869 - -
Steep Slope
Tile
ASR=0.20,
TE=0.75
ASR=0.34,
TE=0.85 $0.00 ft2
roof 6,444 $0 - -
Low Slope
products
ASR=0.63,
TE=0.75
ASR=0.70,
TE=0.85 $0.00 ft2
roof - - 17,876 $0
Average - $934 $0
3.2.4 Roof Insulation
This measure draws from the findings of the 2016 Nonresidential Opaque Envelope CASE
Report.22 The measure improves the cavity insulation from R-25 to R-30 for nonresidential wood
framed roofs. The CASE report describes that this requirement does “not require any change in
construction techniques or practices, and can be readily achieved with insulation products
currently in use.” The incremental cost of going from R-25 to R-30 is $0.44/ft2 of roof area (from
Table 24 of the CASE report) and summarized in Table 12.
22 Noresco (December 2014) Nonresidential Opaque Envelope Codes and Standards Enhancement Initiative. California
Utilities Statewide Codes and Standards Team. Available at:
http://www.energy.ca.gov/title24/2016standards/prerulemaking/documents/2014-06-
12_workshop/final_case_reports/2016_Title_24_CASE_Report-NR_Opaque_Envelope-Dec2014-V3.pdf
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Table 12. Nonresidential Roof Insulation Incremental Costs Summary
Small Office Medium Office
Material Base
Case
Proposed
Update
Inc.
$/Unit Unit Units/
Bldg $/Bldg Units/
Bldg $/Bldg
Insulation for
Wood-Framed
Roof
R-25 R-30 $0.44 ft2
roof 6,444 $2,835 17,876 $7,865
Average Incremental Cost $5,350
3.2.5 HVAC Efficiency
This measure improves the efficiency of the heating and cooling systems. The two prototypes
have different HVAC systems: the small office has five single-zone packaged air conditioners
(SZACs) with direct expansion cooling and furnace heating; the medium office has three air
handling units (AHUs) serving variable air volume systems, with direct expansion cooling,
economizers, and two boilers supplying hot water. Thus, different improvements were defined
for each system.
The small office SZACs measures included:
• Economizers, with integrated controls using a fixed dry bulb control method, and
with high and low dry bulb temperature lockouts of 75°F and 50°F, respectively.
• 14 SEER cooling efficiency, from 13 SEER mandatory requirements
• 90% AFUE heating efficiency, from 78% AFUE mandatory requirements
The medium office measures included:
• 11 EER cooling efficiency, from 9.8 EER mandatory requirements
• 90% boiler thermal efficiency, from 80% thermal efficiency mandatory requirements
TRC contacted manufacturer representatives to attain incremental cost data for these systems,
using the average size of the systems in the CZ4 prototypes. These costs, summarized in Table
13, include an additional 10% for taxes and 25% contractor markup.
A variety of HVAC system combinations are possible depending on the size and function of a
given building. TRC attempted to capture the potential variability in costs and savings by
blending the results from the small office and medium office measures.
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Table 13. Nonresidential HVAC Measures Incremental Costs Summary
Component/ Material Base Case Proposed
Update
Small
Office
Medium
Office
Five SZACs
2.5 Tons Cooling Capacity
38 MBH Heating Capacity
No Economizer
13 SEER
78% AFUE
Economizer
14 SEER
90% AFUE
$7,219 -
Three AHUs
40 Tons Cooling Capacity 9.8 EER 11 EER - $27,500
Two Boilers
400 MBH Heating Capacity 80% TE 90% TE - $14,908
Total Incremental Cost $7,219 $42,408
Average Incremental Cost $24,813
Further details on costs for this measure are included in Appendix C – Cost Details.
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4. ENERGY SAVINGS AND COST EFFECTIVENESS RESULTS
The results for each of the six packages are presented below, including TDV energy savings,
percent compliance, the present value of energy savings, measure costs, and benefit to cost
(B/C) ratio.
4.1 Residential Packages
The measures described in Section 3 were combined to produce cost effective packages
presented below. When the B/C ratio is greater than 1.0, the added cost of the measure is more
than offset by the discounted energy cost savings and the measure is deemed to be cost
effective.
4.1.1 Single Family
The single family 10% package can be met with two individual measures: high performance
attics, or instantaneous water heaters, as shown in Table 14.
Table 14. Single Family 10% Package Cost Effectiveness
Single Family Residential 10% Package
Measure
TDV
kBTU/ft2
% Above
Title 24
Present Value of
Energy Savings Cost
Benefit to
Cost Ratio
Code Compliant Building 31 0% $0 $0 -
+ High Performance Attic 27 12% $1,986 $1,477 1.3
The single family 15% package adds the high performance walls measure to the instantaneous
water heater measure, as shown in Table 15.
Table 15. Single Family 15% Package Cost Effectiveness
Single Family Residential 15% Package
Measure
TDV
kBTU/ft2
% Above
Title 24
Present Value of
Energy Savings Cost
Benefit to
Cost Ratio
Single Family 10% Package 27 12% $1,986 $1,477 1.3
+ Instantaneous Water
Heaters 24 22% $3,438 $1,128 3.0
+ Solar Ready 24 22% $3,438 $2,120 1.6
4.1.2 Multifamily
The multifamily 10% package is a combination of the High Performance Attics, High
Performance Walls, and Cool Roofs measures, as shown in Table 16.
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Table 16. Multifamily 10% Package Cost Effectiveness
Multifamily Residential 10% Package
Measure
TDV
kBTU/ft2
% Above
Title 24
Present Value of
Energy Savings Cost
Benefit to
Cost Ratio
Code Compliant Building 44 0% $0 $0 -
+ High Performance Attic 42 6% $3,311 $3,049 1.1
+ High Performance Walls 40 9% $4,804 $4,620 1.0
+ Cool Roofs 40 10% $5,491 $4,886 1.1
Simulation results in Table 17 show that the Instantaneous Water Heater measure alone would
exceed Title 24 2013 by 23%. The reason that the IWH measure performs better in the
multifamily prototype than the single family prototypes is due to the multiple water heaters.
Water heating also represents about 60% of the energy usage in the multifamily prototype, as
opposed to about 36% in the single family prototype, therefore the IWH measure has a larger
energy savings impact.
Table 17. Multifamily 15% Package Cost Effectiveness
Multifamily Residential 15% Package
Measure TDV
kBTU/ft2
% Above
Title 24
Present Value of
Energy Savings Cost Benefit to
Cost Ratio
Code Compliant Building 44 0% $0 $0 -
+ Instantaneous Water
Heaters 34 23% $12,053 -$2,792 No costs
4.2 Nonresidential Packages
The nonresidential 10% package is achieved largely through low or no incremental cost lighting
measures, which by themselves show a B/C ratio of 9.2, as shown in Table 18. In combination
with the roof measures and HVAC efficiency measures, the B/C ratios reduce to 3.9 for the 10%
package and 1.9 for the 15% package, but remain cost effective.
Table 18. Nonresidential 10% Package Cost Effectiveness
Nonresidential 10% Package
Measure TDV
kBTU/ft2
% Above
Title 24
Present Value of
Energy Savings Cost Benefit to
Cost Ratio
Code Compliant Building 152 0% $0 $0 -
+ Outdoor LPA 147 3% $13,007 $0 No costs
+ Indoor Lighting 139 9% $35,209 $3,832 9.2
+ Cool Roof
+ Roof Insulation 137 10% $38,017 $9,650 3.9
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The nonresidential 15% package adds the HVAC efficiency measure to the nonresidential 10%
package, as shown in Table 19.
Table 19. Nonresidential 15% Package Cost Effectiveness
Nonresidential 15% Package
Measure TDV
kBTU/ft2
% Above
Title 24
Present Value of
Energy Savings Cost Benefit to
Cost Ratio
Nonresidential 10%
Package 137 10% $38,017 $9,650 3.9
+ HVAC Efficiency
Measures 128 16% $55,035 $34,463 1.6
4.3 Reach Code Recommendation
Because all of the packages proved cost effective for prototypes in the City of Palo Alto, the Palo
Alto Municipal Code should renew the Reach Code ordinance requiring that single family,
multifamily, and nonresidential buildings exceed the Title 24 Standards by at least 15%. The
single family and multifamily packages cost effectively exceeded T24 by 22% and 23%,
respectively, giving room for Palo Alto to extend the Reach Code requirements for these building
types beyond 15%. The single family 15% package can include solar ready requirements and
remain cost effective.
During plan check, Palo Alto building officials can confirm that building designs meet the Reach
Code by reviewing the compliance margin presented in the simulation software output reports.
However, for simulation software that cannot model the nonresidential Outdoor LPA and Open
Office Occupancy Sensors (like CBECC-Com), the lighting designer will show compliance on
ancillary CEC compliance forms.
To comply with the Outdoor LPA measure, lighting designers will need show that the
outdoor lighting power densities are at least 40% below the 2013 T24 Standards
outdoor lighting power allowances. This installed wattage reduction would roughly
provide the TDV savings estimated by the Outdoor LPA CASE report.
To comply with the open office occupancy sensor measure, building designers will need
to apply for the Power Adjustment Factor (PAF) in T24 Standards Table 140.6-A,
Occupant Sensing Controls in Large Open Plan Offices, using compliance form NRCC-LTI-
02-E. This credit should not be used by the designer to increase installed wattage
elsewhere in the building. This can be confirmed by plan checkers when reviewing the
building model. The indoor lighting energy should not exceed the prescriptive T24
requirements without the PAF credit applied.
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4.4 Greenhouse Gas Savings
New construction complying with the 15% Reach Code will result in greenhouse gas (GHG)
savings. Because the City of Palo Alto Utilities have a carbon neutral electricity supply composed
of hydroelectric and renewable sources, avoided greenhouse gas emissions are solely due to
reduced natural gas usage.
The natural gas usage in therms are estimated in CBECC simulations for each prototype building.
These savings are multiplied by a factor of 11.7 lbs of CO2 equivalent (CO2e) per therm, as per
Environmental Protection Agency research.23 As shown in Table 21:
20% GHG savings are achieved for each newly constructed single family building
32% GHG savings are achieved for each newly constructed multifamily building
8% GHG savings are achieved for each newly constructed nonresidential building
These GHG reduction estimates are based on complying with the 15% compliance package using
the measures analyzed in this study. Compliance with the 15% Reach Code may be achieved
through a variety of measures, each of which will have varying natural gas and GHG savings.
An estimate of annual city-wide GHG savings is attained by multiplying the CO2e savings per
building against the number of new construction buildings permitted in Palo Alto during the
2013 Calendar year, provided by the Palo Alto planning department. GHG savings are expressed
in metric tons of carbon dioxide equivalent (MTCO2e).
23 United States Environmental Protection Agency. 2011. “Emission Factors for Greenhouse Gas Inventories.”
Available at: http://www.epa.gov/climateleadership/documents/emission-factors.pdf.
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Table 20. Greenhouse Gas Savings Summary
Single Family 15% Package
Measure
Gas
Therms
/ Home
lbs
CO2e
lbs CO2e
Avoided
GHG
Savings
Homes
Affected /
Year
MTCO2e
Avoided / Year
Code Compliant
Building 401 4,687 0 0%
117
0
Single Family
15% Package 320 3,744 943 20% 110,318
Multifamily 15% Package
Measure
Gas
Therms
/ Home
lbs
CO2e
lbs CO2e
Avoided
GHG
Savings
Buildings
Affected /
Year
MTCO2e
Avoided / Year
Code Compliant
Building 1356 15,848 0 0%
5
0
Multifamily 15%
Package 922 10,782 5,067 32% 25,335
Nonresidential 15% Package
Measure
Gas
Therms
/ Home
lbs
CO2e
lbs CO2e
Avoided
GHG
Savings
Buildings
Affected /
Year
MTCO2e
Avoided / Year
Code Compliant
Building 2259 26,410 0 0%
16
0
Nonresidential
15% Package 2067 24,166 2,245 8% 35,915
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5. APPENDIX A – CURRENT REACH CODE LANGUAGE
Below is the full section of the current Palo Alto Reach Code, contained under Title 16 – Building
Regulations, Section 18 – Local Energy Efficiency Standards Covered for Certain Buildings and
Improvements Covered by the California Energy Code, 2008 Edition.
“16.18.050 – General compliance requirements.
In addition to the requirements of the 2008 California Building Energy Efficiency Standards, the following general compliance requirements shall apply to all building permit applications subject to this
chapter:
(a) Nonresidential construction.
(1) New construction greater than or equal to 5,000 square feet, including additions to existing buildings. The performance approach specified in Section 151 of the 2008 California Building
Energy Efficiency Standards shall be used to demonstrate that the TDV energy of the proposed design is at least 15.0% less than the TDV energy of the standard design. Compliance with this
section shall constitute achievement of LEED's minimum energy prerequisite as described in Table A of the "City of Palo Alto Green Building Standards for Compliance for Private
Nonresidential Construction and Renovation."
(2) New construction between 500 square feet and 5,000 square feet, including additions to
existing buildings. The performance approach specified in Section 151 of the 2008 California Building Energy Efficiency Standards shall be used to demonstrate that the TDV energy of the
proposed building is at least 15.0% less than the TDV energy of the standard design. Compliance with this section shall constitute achievement of LEED's minimum energy LEED prerequisite as
described in Table A of the "City of Palo Alto Green Building Standards for Compliance for Private Nonresidential Construction and Renovation."
(3) Tenant improvements, renovation or alterations greater than or equal to 5,000 square feet that include replacement or alteration of at least two of the following: HVAC system, building
envelope, hot water system, or lighting system. Energy efficiency beyond 2008 California Building Energy Efficiency Standard minimums is not required for projects covered by this
section.
(4) Tenant improvements, renovations or alternations greater than or equal to 500 square feet
with greater than $100,000 in building permit valuation in a single unit, that are not otherwise covered under Section 3 of Table A of the "City of Palo Alto Green Building Standards for
Compliance for Private Nonresidential Construction." The applicant shall attain an Energy STAR Portfolio Manager Building Energy Performance Rating prior to the issuance of a building permit,
although achievement of a particular rating is not required. Compliance with this section shall constitute achievement of the building energy performance rating described in Table A of the
"City of Palo Alto Green Building Standards for Compliance for Private Nonresidential Construction and Renovation."
(b) Residential construction.
(1) Multi-family residential new construction of three or more attached units. The building
permit applicant must determine whether the building is low-rise or high-rise as defined by the 2008 California Building Energy Efficiency Standards, and then use the appropriate approach as
described below:
(A) Low rise (three stories or less). The performance approach specified in Section
151 of the 2008 California Building Energy Efficiency Standards shall be used to demonstrate that the TDV energy of the proposed building is at least 15.0% less than the
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TDV energy of the standard design. Compliance with this section shall constitute achievement of GreenPoint Rated's minimum energy prerequisite for new "multi-family residential" construction, as described in Table B of the "City of Palo Alto Green Building Standards for Compliance for Private Residential Construction and Renovation".
(B) High rise (four stories or more). The applicant shall model the building envelope and mechanical system of the proposed design consistent with the 2008 Title 24 performance method rules. The applicant shall demonstrate that the TDV energy of the proposed design is less than the TDV energy of the standard design by the percentage required for minimum energy performance specified in the 2009 GreenPoint Rated new "multi-family residential" construction guidelines. Compliance with this section shall constitute achievement of GreenPoint Rated's minimum energy prerequisite required for new "multi-family residential" construction as described in Table B of the "City of Palo Alto Green Building Standards for Compliance for Private Residential Construction and Renovation."
(2) Multi-family renovations or alterations greater than or equal to 50% of the existing unit square footage that include replacement or alteration of at least two of the following: HVAC system, building envelope, hot water system, or lighting system. The building permit applicant shall determine whether the building is low-rise or high-rise as defined by the 2008 California Building Energy Efficiency Standards, and then use the appropriate approach as described below:
(A) Low rise (three stories or less). The performance approach specified in Section 151 of the 2008 California Building Energy Efficiency Standards shall be used to demonstrate that the TDV energy of the proposed design is at least 15.0% less than the TDV energy of the standard design. Compliance with this section shall constitute achievement of GreenPoint Rated's minimum energy prerequisite for new "multi-family residential" construction, as described in Table B of the "City of Palo Alto Green Building Standards for Compliance for Private Residential Construction and Renovation".
(B) High rise (four stories or more). The applicant shall model the building envelope and mechanical system of the proposed design consistent with the 2008 Title 24 performance method rules. The applicant shall demonstrate that the TDV energy of the proposed design is less than the TDV energy of the standard design by the percentage required for minimum energy performance specified in the current GreenPoint Rated new "multi-family residential" construction guidelines. Compliance with this section shall constitute achievement of GreenPoint Rated's minimum energy prerequisite required for new "multi-family residential" construction as described in Table B of the "City of Palo Alto Green Building Standards for Compliance for Private Residential Construction and Renovation."
(3) Multi-family renovations, alterations, additions, and/or rebuilds to individual units greater than or equal to 250 square feet with a building permit valuation greater than or equal to $100,000 in a single unit. The applicant shall attain a HERS II rating prior to issuance of the building permit, although achievement of a particular rating is not required. Compliance with this section shall constitute achievement of the HERS rating requirement as described in Table B of the "City of Palo Alto Green Building Standards for Compliance for Private Residential Construction and Renovation". Compliance with this section is not required until January 1, 2011.
(4) Single-family or two-family residential new construction greater than or equal to 1,250 square feet. The performance approach specified in Section 151 of the 2008 Building Energy Efficiency Standards shall be used to demonstrate that the TDV energy of the proposed design is at least 15.0% less than the TDV energy of the standard design. Compliance with this section shall constitute achievement of GreenPoint Rated's minimum energy prerequisite for new "single-
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family and two-family residential" construction, as described in Table B of the "City of Palo Alto Green Building Standards for Compliance for Private Residential Construction and Renovation".
(5) Single-family or two-family residential additions or rebuilds greater than or equal to 1,250 square feet. The performance approach specified in Section 151 of the 2008 Building Energy Efficiency Standards shall be used to demonstrate that the TDV energy of the proposed design is at least 15.0% less than the TDV energy of the standard design. Compliance with this section shall constitute achievement of GreenPoint Rated's minimum energy prerequisite for new "single-family and two-family residential" construction, as described in Table B of the "City of Palo Alto Green Building Standards for Compliance for Private Residential Construction and Renovation".
(6) Single-family or two-family renovations, rebuilds and/or additions that are between 250 square feet and 1,250 square feet, and that have greater than $100,000 in building permit valuation in a single unit. The applicant shall attain a HERS II rating prior to issuance of the building permit, although achievement of a specific HERS II rating is not required. Compliance with this section shall constitute achievement of the minimum energy requirement as described in Table B of the "City of Palo Alto Green Building Standards for Compliance for Private Residential Construction and Renovation". This section has an effective date of January 1, 2011.
(Ord. 5070 § 2, 2010: Ord. 5024 § 2, 2008)”
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6. APPENDIX B – ADDITIONS AND ALTERATIONS ANALYSIS
Some of the energy efficiency measures that TRC analyzed for new construction may also be
applicable to additions and alterations of buildings. The City of Palo may also choose to require
Reach Codes for these types of permit applications. TRC assessed the relevance of each measure
to additions and alterations, followed by a Reach Code recommendation.
6.1 Residential Measures
The T24 Standards sections relevant to residential additions and alterations are:
150.0: Low Rise Residential Building – Mandatory Features and Devices
150.1: Low Rise Residential Buildings – Performance and Prescriptive Compliance
Approaches for Newly Constructed Residential Buildings
150.2: Low Rise Residential Buildings – Additions and Alterations in Existing Low Rise
Residential Buildings
6.1.1 Relevance
The current language in Section 16.18.050 of the Palo Alto Municipal Code requires the
following:
Low rise multifamily alterations ≥ 50% of the existing floor area that include
replacement or alteration of at least two systems (HVAC, envelope, domestic hot water,
or lighting), must use the performance approach to demonstrate that the TDV energy of
the proposed design is ≤ 15% the TDV energy of the standard design.
Single family additions or rebuilds ≥ 1,250 ft2 must use the performance approach to
demonstrate that the TDV energy of the proposed design is ≤ 15% the TDV energy of the
standard design.
Single family renovations, rebuilds, or additions ≥ 250 ft2 and ≤ 1,250 ft2 must achieve a
HERS II Rating.
The current Palo Alto Municipal Code require the use of the performance approach for low rise
multifamily alterations and single family additions that exceed a floor area threshold. Single
family alterations do not require a T24-based calculation.
Additions: The performance approach for additions and alterations uses the prescriptive
requirements in Section 150.1 to establish the performance budget for Section 150.2. TRC’s new
construction costs and energy savings analysis compared measures relative to the T24
prescriptive requirements, therefore the new construction findings hold true for all additions.
Alterations: For alterations, the relevance of the new construction analysis completed for each
residential measure is discussed below in Table 21.
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Table 21. Residential Measures Relevance to Alterations
Measure Relevant? Justification
High
Performance
Attics
No
TRC’s analysis included adding above-deck insulation and duct
improvements, which would not normally be triggered during
an insulation alteration. The cost of improving duct leakage and
adding duct insulation to existing ducts, and adding roof deck
insulation, is not included in TRC’s new construction analysis.
High
Performance
Walls
No
TRC’s analysis calculates cost effectiveness for installing 2x6
studs, while most wall insulation alterations likely contain 2x4
studs. The cost of wall insulation assemblies other than R19 +
R6, or replacing 2x4 studs with 2x6 studs, is not included in
TRC’s new construction analysis.
Cool Roofs Yes
TRC’s new construction analysis includes the cost of adding a
cool roof beyond the prescriptive minimum solar reflectance,
which are the only costs relevant to an alteration of a roof.
Instantaneous
Water Heaters Yes
TRC’s new construction analysis includes the cost of adding the
new instantaneous water heater compared to the prescriptive
storage tank water heater, but does not include alteration
costs. TRC reviewed the 2013 CASE Report “High-Efficiency
Water Heater Ready” for estimates on costs for alterations.24
The costs for a new venting system, electrical connection,
condensate disposal, and upgraded gas supply line (1/2” to 3/4"
diameter) are estimated to be $1,357 for retrofits in the CASE
report. These costs are added to the incremental cost of -$349
per dwelling, from Table 8, to result in a net cost of $1,008 per
dwelling.
Solar Ready No Palo Alto did not request TRC to apply this measure to
alterations.
The costs and savings related to the Cool Roof and Instantaneous Water Heaters measures are
relevant to single family and multifamily alterations.
6.1.2 Cost Effectiveness
As described earlier, TRC’s new construction cost effectiveness analysis is relevant to additions.
24 California Utilities Statewide Codes and Standards Team. (October 2011) High-efficiency Water Heater Ready Codes
and Standards Enhancement Initiative. Available at:
http://www.energy.ca.gov/title24/2013standards/prerulemaking/documents/current/Reports/Residential/Water_
Heating/2013_CASE_WH2.WH5_WaterHeaterReady-10.28.2011.pdf
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The single family alterations package is cost-effective by over 10% when applying the
instantaneous water heater and cool roof new construction analysis results, as shown in Table
22.
Table 22. Single Family Alterations Cost Effective Package
Single Family Residential Alterations
Measure TDV
kBTU/ft2
% Above
Title 24
Present Value of
Energy Savings Cost Benefit to
Cost Ratio
Code Compliant Building 30.9 0% $0 $0 -
+ Instantaneous Water
Heaters 27.9 9.6% $1,452 $1,008 1.4
+ Cool Roof 27.5 11.0% $1,738 $1,146 1.5
The multifamily alterations package is cost-effective by over 20% when applying only the
instantaneous water heater analysis, as shown in Table 23.
Table 23. Multifamily Alterations Cost Effective Package
Multifamily Residential Alterations
Measure TDV
kBTU/ft2
% Above
Title 24
Present Value of
Energy Savings Cost Benefit to
Cost Ratio
Code Compliant Building 44 0% $0 $0 -
+ Instantaneous Water
Heaters 34 23% $12,041 $10,856 1.1
6.1.3 Recommendation
When considering these recommendations for alterations, please note the analysis findings are
derived from a specific set of measures that do not apply to all alterations. Applying these
findings to all alteration scenarios is an aggressive Reach Code requirement. Furthermore, not
all alterations building permit applicants would be completing a performance approach, and
requiring them to do so may be unnecessarily burdensome. This is a contrast to new
construction, where all building systems are designed and built as one unit and the performance
approach is used by the majority of applicants.
With this in consideration, TRC recommends that Palo Alto require the following Reach Code
measures for residential additions and alterations. The underlined sections emphasize the
changes from the original language.
Low rise multifamily alterations, additions, or rebuilds ≥ 50% of the existing floor area
that include replacement or alteration of at least two systems (HVAC, envelope,
domestic hot water, or lighting), must use the performance approach to demonstrate
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that the TDV energy of the proposed design is 15% below the TDV energy of the
standard design.
Single family additions, or rebuilds ≥ 1,250 ft2 must use the performance approach to
demonstrate that the TDV energy of the proposed design is 15% below the TDV energy
of the standard design.
Single family alterations or renovations ≥ 1,250 ft2 that include alteration, replacement,
or installation of at least two systems (HVAC, envelope, domestic hot water, or lighting)
must use the performance approach to demonstrate that the TDV energy of the
proposed design is 10% below the TDV energy of the standard design.
Water heater change-outs present a unique situation for residential alterations and
renovations. Our analysis showed that instantaneous water heaters (IWH) (or the solar-
assist equivalent) were cost effective for both multi-family and single family new
construction, saving 23% and almost 10% (9.6%) of the whole building energy use,
respectively.25 However, the new construction analysis allows the applicant to use the
performance approach to model other DHW systems, such as “standard” tank-style gas
water heaters. In the case of water heater change-out only alterations it is unlikely that
the applicant would use the whole building performance approach, and less likely that
the otherwise unaltered existing building would meet the current Title 24 code
requirements. The City may want to include IWH, or the solar-assist equivalent, to the
residential Reach Code requirements, but should recognize that this requirement would
limit home-owner choices, with few alternatives. An exception to this requirement is an
existing permanently installed domestic solar water-heating system.
6.2 Nonresidential Measures
The T24 Standards sections relevant to nonresidential additions and alterations are:
120.0 – 130.5: Nonresidential Mandatory Requirements
140.0 – 140.9: Nonresidential Performance and Prescriptive Compliance Approaches for
Achieving Energy Efficiency
141.0: Additions, Alterations, and Repairs to Existing Buildings that Will be
Nonresidential Occupancies and to Existing Outdoor Lighting for these Occupancies
6.2.1 Relevance
The current language in Section 16.18.050 of the Palo Alto Municipal Code requires the
following:
Nonresidential additions meet the new construction Reach Code.
25 The solar fraction proposed in the Instantaneous Water Heating CASE report is 0.55.
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Nonresidential tenant improvements, alterations, or renovations ≥ 5,000 ft2 that include
replacement or alteration of at least two systems (HVAC, envelope, hot water, or
lighting) meet the T24 Standards. (There is no Reach Code).
TRC assumes that building permit applicants will use the performance approach for additions or
alterations ≥ 5,000 ft2 that include multiple systems. The performance approach for additions
and alterations of nonresidential buildings, as defined in T24 Section 141.0(a)2 and 141.0(b)3,
requires the added and altered components meet the mandatory requirements in T24 Sections
120.0-130.5, as well as the energy budget for a prescriptive building defined in Sections 140.2-
140.9.
Additions: Because the standard energy budget for additions is the same as for prescriptive
buildings, and TRC’s analysis compared costs and energy savings compared to the T24
prescriptive requirements, the costs and energy savings in TRC’s analysis remain relevant to
additions.
Alterations: For alterations, the relevance of the new construction analysis completed for each
nonresidential measure is described below in Table 24.
Table 24. Nonresidential Measures Relevance to Alterations
Measure Relevant? Justification
Outdoor LPA No
The lighting power allowance required by this measure may not
be achievable without major renovations to existing outdoor
lighting systems (e.g., digging into hardscape and moving wiring).
TRC’s new construction analysis does not include the costs of
these renovations.
Indoor Lighting
– Indoor LPDs Yes
The lighting power density required by this measure is achievable
for renovations to existing indoor lighting systems. Generally for
large lighting renovations, T24 would require contractors to
install multilevel dimming ballasts and efficient fixtures, which are
capable of achieving the LPDs required in this measure. TRC’s
new construction analysis does not anticipate costs for going
beyond the T24 minimum, which are relevant alterations.
Indoor Lighting
– Partial-ON
Occupancy
Sensors
Yes
This measure may be achieved through simple control changes in
equipment. Generally, large lighting renovations to achieve the
2013 T24 minimum would require contractors to install and/or
reconfigure occupancy sensor controls where needed. Thus, this
measure does not result in costs beyond what is required in the
T24 minimum for alterations, which was also the assumption for
TRC’s new construction analysis.
Indoor Lighting
– Open Office
Occupancy
Sensors
Yes
This measure requires additional occupancy sensors. The costs of
the materials and labor beyond the current T24 minimum
requirement were included in TRC’s new construction analysis for
this measure.
Indoor Lighting Yes
This measure may be achieved through simple control changes in
existing equipment. Generally, large lighting renovations to
achieve the 2013 T24 minimum would require contractors to
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– Daylight
Dimming-Plus-
Off
install or reconfigure daylight sensor controls where needed.
Thus, this measure does not result in costs beyond what is
required in the T24 minimum for alterations, which was also the
assumption for TRC’s new construction analysis.
Cool Roof Yes
TRC’s analysis includes the cost of adding a cool roof beyond the
prescriptive T24 minimum aged solar reflectance (SR=0.63),
which is the same solar reflectance required for roofing
alterations.
Roof Insulation No
TRC’s analysis calculates the incremental cost of going from R-25
insulation to R-30 insulation. R-values lower than R-25 are
required for roof insulation alterations, and would result in
different incremental costs than those provided in TRC’s analysis.
HVAC Efficiency No
TRC’s analysis calculates the incremental cost of replacing HVAC
equipment with higher efficiency units. HVAC systems have
varying lifetimes, and alterations of existing HVAC systems may
not happen simultaneously. Many owners choose to alter
components of systems rather than replacing systems to improve
efficiency. TRC’s analysis does not include the variation in
alteration scenarios for the types of HVAC systems studied.
6.2.2 Cost Effectiveness
As described earlier, TRC’s new construction cost effectiveness analysis is relevant to additions.
The nonresidential alterations package is cost-effective by over 5% when applying the Indoor
Lighting and Cool Roof measures, as shown in Table 25.
Table 25. Nonresidential Alterations Cost Effective Package
Nonresidential Alterations
Measure TDV
kBTU/ft2
% Above
Title 24
Present Value of
Energy Savings Cost Benefit to
Cost Ratio
Code Compliant Building 152.3 0% $0 $0 -
+ Indoor Lighting 144.1 5% $22,201 $3,832 5.8
+ Cool Roof 143.5 6% $22,709 $4,299 5.3
Additionally, the energy impact of the lighting improvements alone exceed the standard lighting
design TDV budget by 21%, as shown in Table 26.
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Table 26. Nonresidential Lighting Alterations Cost Effective Package
Nonresidential Indoor Lighting Alterations
Measure TDV
kBTU/ft2
% Above
Title 24
Present Value of
Energy Savings Cost Benefit to
Cost Ratio
Lighting for Code Compliant
Building 35 0% $0 $0 -
+ Indoor Lighting 27 22% $20,170 $3,832 5.3
6.2.3 Recommendation
When considering these recommendations for alterations, please note the analysis findings are
derived from a specific set of measures applied to an office building prototype model that do
not apply to all alterations. Applying these findings to all alteration scenarios is an aggressive
Reach Code requirement. Furthermore, not all alterations building permit applicants would be
completing a performance approach, and requiring them to do so may be unnecessarily
burdensome.
With this in consideration, TRC recommends that Palo Alto require the following for
nonresidential additions and alterations. The underlined sections emphasize the changes from
the original language.
Nonresidential additions meet the new construction Reach Code.
Tenant improvements, alterations, or renovations ≥ 5,000 ft2 that include replacement
or alteration of at least two systems (HVAC, envelope, hot water, or lighting) must use
the performance approach to demonstrate that the TDV energy of the proposed design
is ≤ 5% the TDV energy of the standard design.
Nonresidential lighting alterations alone must demonstrate that the proposed lighting
design is 15% below the standard lighting energy allowance.
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7. APPENDIX C – COST DETAILS
Table 27. Residential HPA Detailed Costs
1-story 2-story Multifamily
Component/
Material
Base
Case
Proposed
Update
Incremental
$/Unit Unit Units/
Home $/Home Units/
Home $/Home Units/
Building $/Building
Below Deck
Insulation none R-13 $0.32 ft2 roof area 2520 $806 1740 $557 4176 $1,336
Ceiling
Insulation R-30 R-38 $0.14 ft2 ceiling
area 2100 $294 1450 $203 3480 $487
Duct
Insulation R-6 R-8 $0.66 Linear ft
ducts 217 $143 278 $183 718 $474
Duct Leakage 8% 5% (Proper care during field installation can achieve 5% duct leakage without adding a low
leakage air handler or other additional costs)
Netting None Present $0.32 ft2 roof area 2520 $806 1740 $557 4176 $1,336
Radiant
Barrier Present None -$0.14 ft2 ceiling
area 2100 -$353 1450 -$244 3480 -$585
Totals - $1,697 - $1,256 - $3,049
TRC Energy Services
Palo Alto Reach Code Cost Effectiveness Study
Palo Alto Contract# S15155961
44
Table 28. Residential HPW Detailed Costs
1-story 2-story Multifamily
Component/
Material
Base
Case
Proposed
Update
Incremental
$/Unit Unit Units/
Home $/Home Units/
Home $/Home Units/
Building $/Building
Batt Insulation R-15 R-19 -$0.19 ft2 wall area 1288 -$245 2172 -$413 3762 -$715
Rigid
Insulation R-4 R-6 $0.21
ft2 exterior
wall area 1018 $214 1902 $399 3762 $790
Wood
Framing 2x4 2x6 $0.29
linear board
ft of framing 1642 $476 2594 $752 4919 $1,427
Sill Flashing
(additional) 1" 1.5" $2.16
ft2 sill
flashing area 32 $69 32 $69 32 $69
Totals - $514 - $808 - $1,571
Table 29. Residential Cool Roof Detailed Costs
Single Story Two Story Multifamily
Material Base Case Proposed
Update
Incremental
$/Unit Unit Units/
Home $/Home Units/
Home $/Home Units/
Building $/ Building
Steep Slope
Asphalt Shingles
ASR=0.10,
TE=0.85
ASR=0.28,
TE=0.85 $0.13 ft2 roof
area 2520 $328 1740 $226 4176 $543
Steep Slope Tile ASR=0.10,
TE=0.85
ASR=0.28,
TE=0.85 $0.00 ft2 roof
area 2520 $0 1740 $0 4176 $0
Average - $164 - $113 - $271
TRC Energy Services
Palo Alto Reach Code Cost Effectiveness Study
Palo Alto Contract# S15155961
45
Table 30. Nonresidential HVAC Efficiency – 2.5-Ton, 38 MBH SZAC Costs
Source
Cost for 13 SEER, 78%
AFUE, No Economizer
Cost for 14 SEER, 90%
AFUE, Economizer Incremental $/unit
Average Inc.
$/unit
+ 25% Contractor Markup
and 10% Taxes
Trane $4,500 $5,500 $1,000 $1,050 $1,444 Atlas Trillo $3,500 $4,600 $1,100
Table 31. Nonresidential HVAC Efficiency - 40-Ton AHU Costs
Source Cost for 9.8 EER Cost for 11 EER Incremental $/unit
Average Inc.
$/unit
+ 25% Contractor Markup
and 10% Taxes
Trane #1 $38,000 $48,000 $10,000
$6,667 $9,167 Trane #2 $48,000 $53,000 $5,000
Norman S Wright $38,000 $43,000 $5,000
Table 32. Nonresidential HVAC Efficiency – 400 MBH Boiler Costs
Source Efficiency Price Average $/unit
Online - Burnham Series 8H steam boiler
80-84%
$4,678
$5,407 Online - Burnham 5007B Nonresidential Atmospheric Gas-Fired Steam Boiler $6,309
Online - AO Smith HW-399 Conservationist Burkay $5,531
Online - AO Smith HW-399 Conservationist Burkay $5,110
Online - Lochinvar Knight XL Boiler
> 90%
$10,819
$10,828 Online - Lochinvar Knight Kbn400 High Efficiency $9,665
Clyde Equipment - MLX EXT 481 $12,000
Incremental $/unit $5,421
+ 25% Contractor Markup and 10% Taxes $7,454
TRC Energy Services
Palo Alto Reach Code Cost Effectiveness Study
Palo Alto Contract# S15155961
46
Table 33. Nonresidential HVAC Efficiency Detailed Costs
Small Office Medium Office
Component Base Case Proposed
Update
Incremental
$/Unit Units Units/
Building
$/
Building
Units/
Building
$/
Building
Five SZACs
2.5 Tons Cooling Capacity
38 MBH Heating Capacity
No Economizer
13 SEER
78% AFUE
Economizer
14 SEER
90% AFUE
$1,444 SZAC 5 $7,219 - -
Three AHUs
40 Tons Cooling Capacity 9.8 EER 11 EER $9,167 AHU - - 3 $27,500
Two Boilers
400 MBH Heating Capacity 80% TE 90% TE $7,454 Boiler - - 2 $14,908
Totals - $7,219 - $42,408
TRC Energy Services
Palo Alto Reach Code Cost Effectiveness Study
Palo Alto Contract# S15155961
47
8. APPENDIX D – SPREADSHEET ANALYSIS ENERGY SAVINGS
The energy impact of the Outdoor LPA measure, described in Section 3.2.1, and the Proximity
Sensors measure, described in Section 3.2.2, could not be calculated using CBECC-Com. TRC
estimated the energy impact using spreadsheet analysis using information from the respective
CASE reports.
8.1 Outdoor LPA
To determine the potential energy savings associated with this measure, TRC calculated the area
of general hardscape relevant to each prototype. Using Figures 39 and 40 in the Outdoor LPA
CASE report, TRC determined that there is 1 ft2 of general hardscape for each 1 ft2 of office
conditioned floor area. 26 Since the measure applies to several lighting zones, all of which could
be included in the City of Palo Alto, Table 15 from the CASE report was used to estimate the
likely construction activity within the respective lighting zones. Tables 24 and 25 from the CASE
report provide the effective lighting power density impacts and energy impacts per square foot
of general hardscape. The 15-year factor of 0.089 was used to convert from TDV dollars to TDV
kBtu.
All of this information was used to arrive at the estimates provided in Table 34, and validated by
the lead author of the Outdoor LPA CASE report.27 For simplicity, not all of the steps necessary
to determine the standard and proposed TDV savings are presented. It is important to note the
highlighted cell containing the weighted average 9.8 TDV kBtu/ft2-yr is the value used in Table 4
to determine the TDV energy usage of the prototypes, including outdoor lighting.
26 TRC Energy Services and Clanton & Associates (December 2014) Nonresidential Outdoor Lighting Power Allowance
Codes and Standards Enhancement Initiative. California Utilities Statewide Codes and Standards Team. Available at:
http://www.energy.ca.gov/title24/2016standards/prerulemaking/documents/2014-06-
24_workshop/final_case_reports/2016_T24_CASE_Report-Outdoor_LPA-Dec_2014-V3.pdf
27 Communication with Michael Mutmansky (TRC Energy Services). January 2015.
TRC Energy Services
Palo Alto Reach Code Cost Effectiveness Study
Palo Alto Contract# S15155961
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Table 34. Nonresidential Outdoor Lighting TDV Energy Savings
Source Item 1 2 3 4 Total
Table 15 of
CASE report % Construction 0.1% 10% 90% 0.0%
Table 24 of
CASE report
2013 LPA (W/ft2) 0.056 0.080 0.139 0.183
2016 LPA (W/ft2) 0.037 0.053 0.068 0.089
Calculation
Power Reduction (W/ft2) 0.019 0.026 0.072 0.094
% Reduction 34% 33% 52% 51%
Weighted % Reduction 0% 3% 47% 0% 50%
Table 25 of
CASE report TDV $/ft2 Savings 0.130 0.170 0.470 0.620
Calculation
Weighted Standard TDV kBtu/ft2-yr 0.0043 0.5819 9.1759 0.0000 9.8
Weighted Proposed TDV kBtu/ft2-yr 0.0028 0.3928 4.4229 0.0000 4.8
Weighted Savings TDV kBtu/ft2-yr 0.0015 0.1891 4.7530 0.0000 4.9
8.2 Open Office Occupancy Sensors
To determine the potential energy savings associated with this measure, TRC estimated the
number of occupancy sensors using the floor plan provided in Figure 5 of the 2013 CASE report
was used. 28 This floor plan shows that open office workstations occupies approximately 53% of
the floor plan area, and each work station occupied about 120 ft2. Using the CASE savings for 4
workstations per occupancy sensor (or, one occupancy sensor per 480 ft2), TRC determined the
total number of occupancy sensors for each prototype, as well as the associated costs and TDV
savings. (The costs and TDV savings per sensor are provided in tables in the executive summary
of the CASE report, on page 9 and 14, respectively).
Since daylight sensors are required by the 2013 T24 Standards, overlapping savings were
estimated to be 20% of non-daylighted spaces when in primary daylight zones. Thus, the portion
of the open office spaces in the floor plan that were in primary daylight zones (approximately
21% of the workstation floor area) had savings reduced by 80%. The summary of findings is
provided in Table 35.
28 California Utilities Statewide Codes and Standards Team (October 2011) Nonresidential Indoor Lighting Controls
Codes and Standards Enhancement Initiative. Available at:
http://www.energy.ca.gov/title24/2013standards/prerulemaking/documents/current/Reports/Nonresidential/Ligh
ting_Controls_Bldg_Power/2013_CASE_NR_Indoor_Lighting_Controls_Oct_2011.pdf
TRC Energy Services
Palo Alto Reach Code Cost Effectiveness Study
Palo Alto Contract# S15155961
49
Table 35. Nonresidential Proximity Sensors TDV Energy Savings
Small Office Medium Office
Workstation Proportion 53% 53%
Workstation Area (ft2) 2,913 28,201
# Sensors 7 59
Building Cost $813 $6,852
TDV $ Savings* $1,732* $14,596*
TDV kBtu Savings* 19,458* 164,004*
Percent Savings 1.9% 2.6%
* Accounting for overlap with potential daylight sensor savings.
TRC Energy Services
Palo Alto Reach Code Cost Effectiveness Study
Palo Alto Contract# S15155961
50
9. APPENDIX E – REACH CODE PRESCRIPTIVE WALLS PATH
During the drafting of this study, the Reach Code ordinance included the residential walls
measure as a prescriptive path (as an alternative to the performance path). The CEC’s proposed
revisions to the 2016 Title 24 code, released in early March 2015, includes a wall U-factor of
0.051 in climate zone 4.29 TRC recommends that Palo Alto’s prescriptive U-factor requirement
for walls be 0.051 in order to align with the CEC’s revisions, rather than 0.048 as per the
measure included in the compliance packages. Aligning the 2013 Reach Code with the 2016
Standards will serve to better prepare the Palo Alto regional building industry of future
statewide changes. (This change would have no bearing on the results and recommendations
from the 15% residential package in the body of the report, as that package was shown to be
cost effective).
The primary difference between a U-0.051 wall assembly and a U-0.048 wall assembly described
in the body of the report is that the exterior insulation can be R-5 rather than R-6. R-5 insulation
is slightly less expensive than R-6 insulation, and is also manufactured in 1” thickness, which
negates the incremental costs necessary for additional sill flashing at wall openings. These two
changes are reflected in the incremental costs for a U-0.051 wall presented in Table 36.
Table 36. Incremental Costs of U-0.051 Residential Walls
Component/Material Base Case Proposed Update 1-story 2-story Multifamily
Batt Insulation R-15 R-19 -$245 -$413 -$715
Rigid Insulation R-4 R-5 $153 $285 $564
Wood Framing 2x4 2x6 $476 $752 $1,427
Sill Flashing 1" 1" $0 $0 $0
Total Incremental Costs $384 $625 $1,276
Average Incremental Costs $505 -
Table 37 shows that U-0.051 residential walls are cost effective as a standalone measure for
both single family and multifamily new construction buildings, and acceptable to pursue as a
prescriptive measure in the Reach Code.
Table 37. Cost Effectiveness of U-0.051 Residential Walls
Residential U-0.051 Walls
Measure
TDV
kBTU/ft2
% Above Title
24
Present Value of
Energy Savings Cost
Benefit to
Cost Ratio
Single Family 30 4.5% $726 $505 1.4
Multifamily 43 2.5% $1,349 $1,276 1.1
29 Proposed Revisions to the California Building Energy Efficiency Standards. 45-Day Language. Available at:
http://www.energy.ca.gov/title24/2016standards/rulemaking/documents/express_terms/01_2016%20T24%20Sta
ndards%20Parts%201%20and%206%20-%2045%20Day%20Language.pdf
TRC Energy Services
Palo Alto Reach Code Cost Effectiveness Study
Palo Alto Contract# S15155961
51
For a diagram of wall assemblies and associated U-factors, please refer to the CEC’s 2013 Joint
Appendices, section JA4.3 – Walls, reproduced in Figure 3.
Figure 3. JA4 – U-factors of Wood Framed Walls (courtesy of CEC)
Attachment D – Cost Estimate for “Laundry to Landscape-Ready”
Three-Way Diverter Valve
Labor: Plumbing Sub-Contractor $125 - $150
RS Means Construction Estimate (Approximately 1 hour)
Materials: Three-Way Diverter Valve* $75 - $125
Total Estimate** $200 - $325
*Diverter valves are available in a range of materials as reflected in the cost range.
** Since “laundry to landscape-ready” infrastructure is required on only new single-family construction,
the estimate on an actual project would likely be coupled with other plumbing labor for the project.
CITY OF PALO ALTO OFFICE OF THE CITY CLERK
April 20, 2015
The Honorable City Council
Palo Alto, California
Colleagues' Memo From Mayor Holman, Council Members Burt,
Schmid, and Wolbach Regarding Strengthening City Engagement with
Neighborhoods (Continued from March 16, 2015)
GOAL
Palo Alto residents are engaged and care deeply about proposals that enhance or may harm our
quality of life. To further support strong neighborhood participation in civic affairs, we propose
initiating several actions to better integrate the understanding, consideration, and actions of
our City government with neighborhoods’ interests and concerns.
BACKGROUND
The City has made great strides in making information available including the very informative
Development Services Construction Updates and the Open Data Portal. Use of various social
media channels such as Facebook, Twitter, and Next Door have enhanced City outreach and
communication with citizens and neighborhoods. This memo seeks to build on those
accomplishments with additional focus on communication with neighborhoods, adding much
more face-to-face contact.
Palo Alto is comprised of 37 neighborhoods, each impacted by decisions that are considered or
made by City government. Whether the event is led or supported by City planners, Public
Works, Utilities, the City Manager’s Office, outside agencies such as VTA, Caltrans, or even
developments in another community, it is incumbent on the City to make best efforts to inform
its citizens. Further, the neighborhoods often have very different characteristics and interests
from one another as acknowledged in our Comprehensive Plan Goal L-3: "Safe, attractive
residential neighborhoods, each with its own distinct character and within walking distance of
shopping, services, schools and/or other gathering places".
The current “Know Your Neighbors” Grant Program provides grants for promoting neighbors
getting to know one other. While this program has been very popular, frequent comments
about the program include that the grant money is spent on permits for use of public facilities
or street closure permits for block parties, leaving little funding for the event itself. The
proposed programs below would be the City’s first comprehensive neighborhood engagement
initiative.
RECOMMENDATION
Based on research of other cities’ programs and community members’ comments, we
recommend that the following proposed City actions be referred to the Policy and Services
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Committee:
1. Recognize neighborhood associations and provide placement on the City Community
Partners webpage, http://www.cityofpaloalto.org/partners with links to a map of the
general neighborhood area and to the association website or other contact information.
The City should review the process for recognition in consultation with neighborhoods and
explore agreement on some basic standards and requirements regarding governance and
association responsibilities for outreach and inclusion, as a recognized neighborhood
association.
2. For recognized neighborhood associations, the City should explore guidelines and costs for
providing periodic free use of available public facilities for public meetings and events as
well as insurance coverage under the City’s policy.
3. Provide small, one-time start-up grants for neighborhood associations to be used to attend
the United Neighborhoods of Santa Clara County’s Annual Conference and toward
neighborhood association initiation activities.
4. Support neighborhood associations in distributing relevant City information to members,
including information about upcoming community meetings or events, notification about
proposed projects in their neighborhoods, City initiatives, emergency preparation events,
County proposals, Public Works or Utilities projects, Caltrain, VTA or neighboring
communities’ plans.
5. Each neighborhood association will be encouraged to identify a designated
“Communications Officer” as information liaison with the City.
6. Hold annual town hall-style meetings with City Council representatives and appropriate
City staff and focused on different regions of Palo Alto. The meetings shall encourage both
individual and neighborhood association participation.
7. Evaluate creation of an Ombudsperson program with the neighborhoods to follow up on
neighborhood or resident issues and facilitate conflict resolution when needed.
DISCUSSION:
Certain of these proposals may be adopted and implemented ahead of others. It is
our intention that the town hall-style meetings would commence early this year, and the
Ombudsman program would likely take more time and possibly need to be considered in the
budget cycle.
STAFF IMPACT:
Staff impact and resources necessary to support this program may be significant, depending on
the scope of the program components ultimately adopted. Research and discussion regarding
impacts of the program will be necessary, including legal and risk implications along with
staffing and funding aspects. These need not be deterrents to proceeding, just
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acknowledgment that a more formal and interlinked relationship will also require some more
explicit standards and monitoring and reporting. The most effective city neighborhood
programs are formalized in this regard. Staff acknowledges that this discussion can first take
place during the Policy and Services referral and discussion.
Department Head: Beth Minor, Acting City Clerk
Page 4
CITY OF PALO ALTO OFFICE OF THE CITY CLERK
April 20, 2015
The Honorable City Council
Palo Alto, California
Discussion and Appointment of a Council Member to the Board of
Directors of the Bay Area Water Supply & Conservation Agency and
the Bay Area Regional Water System Financing Authority
The four-year term of Larry Klein on the Board of Directors of the Bay Area Water
Supply & Conservation Agency (BAWSCA) and the Bay Area Regional Water
System Financing Authority (RFA) will end on June 30, 2015.
Appointments to both agencies must be made by action of the full Council at a
public meeting. The term is for four years and will expire on June 30, 2019. The
next BAWSCA Board meeting is currently scheduled for May 21, 2015, and the
next RFA meeting is scheduled for July 16, 2015. In the event Director Klein
resigns before his term ends on June 30, 2015, Council’s action should be to
appoint a director to both agencies to complete Director Klein’s unfinished term
(through June 30, 2015) so as to enable the new Palo Alto Director’s participation
at the BAWSCA Board’s May 21 meeting, and to continue through the new four-
year term that will expire on June 30, 2019.
If Director Klein has not resigned his position, an appointment now would be
appropriate and allow the new appointee to attend the May meeting with
Director Klein.
Nominations and Council action (required) would be in order.
ATTACHMENTS:
Attachment A: Letter from BAWSCA (PDF)
Department Head: Beth Minor, Acting City Clerk
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