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HomeMy WebLinkAboutStaff Report 2301-07862.Approval of Amendment Number One (1) with Insight Public Sector, C20177991 Extending the Term by Three Years and Compensation by $1,686,615 Utilizing a Riverside County Agreement for Citywide Microsoft Licensing and Approve a Contingency in the Amount of $100,000 Annually, for a new Total Not-to-Exceed Contract Amount to $3,628,317; CEQA Status—not a project CITY COUNCIL STAFF REPORT From: City Manager Report Type: CONSENT CALENDAR Lead Department: IT Department Meeting Date: January 30, 2023 TITLE Approval of Amendment Number One (1) with Insight Public Sector, C20177991 Extending the Term by Three Years and Compensation by $1,686,615 Utilizing a Riverside County Agreement for Citywide Microsoft Licensing and Approve a Contingency in the Amount of $100,000 Annually, for a new Total Not-to-Exceed Contract Amount to $3,628,317; CEQA Status—not a project RECOMMENDATION Staff recommends that Council approve and authorize the City Manager or designee to execute the following: 1. Amendment 1 to Contract C20177991 extending the contract by three years with Insight Public Sector for the City’s Microsoft infrastructure and cloud licensing and support in the amount of $1,686,615, (Attachment A). 2. Authorize a contingency in the amount of $100,000 annually ($300,000 total) for the purchase of additional Microsoft licensing for growing business requirements. EXECUTIVE SUMMARY The Microsoft products and services outlined in the agreement are required to operate the City’s email system, collaboration suite, and data centers. Microsoft solutions are critical to the daily operations and cybersecurity of the City. Microsoft requires all licenses governed by an Enterprise License Agreement (ELA) to be purchased through an authorized Licensing Solution Partner (LSP). Insight Public Sector is an LSP who entered into a Software Cooperative Purchasing Agreement with the County of Riverside, which extends guaranteed pricing for Microsoft products and services from a competitively bid master agreement to municipal governments. The County of Riverside Enterprise Licensing Agreement for Microsoft 365 provides the City the highest available discounts and is available to all local jurisdictions in California. This new contract with Insight Public Sector is exempt from competitive solicitation requirements under Palo Alto Municipal Code (PAMC) section 2.30.360(k) (exemption from competitive solicitation requirements by use of another governmental or public agency’s contract) as (1) the services are solicited using methods substantially similar to those used by the City; and (2) the contract is consistent with the requirements specified in this Municipal Code. BACKGROUND Microsoft creates the core technologies and software upon which the City’s information technology operations are built. These products are necessary to efficiently and cost effectively deliver City services to staff internally and to constituents. The most visible of these products are the Windows desktop, laptop, and the Office productivity applications such as Word, Excel, Teams and Outlook. In addition, Microsoft cloud-based technologies deliver on-demand technology and computing infrastructure to the City, including email, software as a service, application hosting and data storage solutions. On February 24, 20201 Council approved Microsoft G3 (Contract No. C2017799), data and server licensing with Insight Public Sector which expires on January 31, 2023. Amendment No. 1 will extend the term by three additional years, through January 31, 2026. The original terms and conditions for use of the County of Riverside’s contract remain unchanged. This contract, #PSA-0001526/RIVCO-2020-RFQ-0000048 and its Amendment No. 1 to the Licensing Solution Provider Agreement, are included in CMR 10946. DISCUSSION Demand for technology use across City departments has increased year over year and Microsoft products are a key tool that the Information Technology Department has used to respond to this demand, leveraging the City's investments in Microsoft products and services to accelerate the pace at which it can deliver solutions to departments. Microsoft cloud-based technologies and services provide new and improved services, while minimizing capital investments, helping shift toward an operations expense model, and ensuring the City can expand or shrink services as needed without undue expense or sunk costs. During the term of the current Microsoft Enterprise License Agreement (ELA), lT staff leveraged Microsoft products and services to implement many new systems and services, including: 1 City Council, February 24, 2020 Item #7, CMR 10946: https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-reports/reports/city-manager-reports- cmrs/year-archive/2020/id-10946.pdf?t=53319.98 •Implemented Microsoft Teams for collaboration and communication that has integrated virtual conferencing and phone services, which were heavily utilized during the pandemic and continue to be a critical tool for the modern workforce. •Built out various online services to communicate COVID-19 and other emergency related information via dashboards, portals, and various online forms. •Utilized Microsoft's scheduling platform for virtual and on-premise customer appointments. •Implemented new cybersecurity controls and technologies to improve protections to the City's computing infrastructure and data; and •Implemented cloud-based data backup across all systems to increase resiliency, redundancy and disaster recovery of critical data. By entering into a new ELA with Microsoft the City will be eligible to leverage Microsoft products to meet various business needs while standardizing core sets of products across the organization for easier management, compatibility, and support. Benefits include: •Volume discounting and discounts on future licensing renewals. •Simplified management to track and manage centralized software licenses. •Priority support from Microsoft for quick resolution of technical issues raised by staff. •Compliance with Microsoft’s licensing requirements for City use of Microsoft products. •Guaranteed product upgrades to newer versions. The City anticipates continuing to increase its investment in Microsoft technologies for the City's technology needs. Examples of projects and initiatives that are expected to leverage the Microsoft platforms and utilize/expand the Microsoft ELA during the next 3-year term include: •Mobile device management to secure and manage devices used by remote workers and field staff. •Data loss prevention technologies to reduce the risks of exposing protected information and to remain compliant with Health Insurance Portability and Accountability Act (HIPAA) and Payment Card Industry Data Security Standard (PCI DSS) requirements. •Office365 and OneDrive expansion to enhance collaboration, data storage, and sharing capabilities enterprise wide. •Increase the resiliency and availability of core IT services in the event of a disaster. Staff recommends utilization of this agreement with Insight Public Sector for Microsoft software licensing and services. Foregoing the contract renewal would have a negative fiscal impact as future versions of Microsoft products will need to be purchased new. Additionally, without an ELA the City would not benefit from license entitlements it currently receives and which are only available to ELA customers. RESOURCE IMPACT The FY 2023 Adopted Operating Budget for the Information Technology Department has $0.5 million budgeted for Microsoft licensing. Staff anticipate reviewing funding needs for the $0.1 million to align the funding source with the needs determined for use of that contingency. In FY 2023, staff expect to bring forward a budget adjustment as part of the Mid-Year Budget Review. Funding for subsequent years of the contract will be subject to approval through the annual budget development process. The Information Technology Department is funded by an internal service fund2. Approximately 60% of the department is General Fund funded with the remaining 40% funded by enterprise and special revenue funds. Original Contract $ 1,641,702 Amended Contract $ 1,686,615 Subtotal:$ 3,328,317 Contingency $ 300,000 Total Contract Not-to-Exceed $ 3,628.317 STAKEHOLDER ENGAGEMENT The services were coordinated with internal stakeholders and the service provider. ENVIRONMENTAL REVIEW Council action on this item is not a project as defined by CEQA because the purchase of software licenses is a continuing administrative or maintenance activity. CEQA Guidelines section 15378(b)(2). ATTACHMENTS Attachment A: Contract with Insight Public Sector for Citywide Microsoft Licensing, C20177991 APPROVED BY: Darren Numoto, Chief Information Officer Report #: 2301-0786 2 A fund that primarily provides either benefits or goods or services and is used to track those goods or services shifted between departments on a cost reimbursement basis. Other funds, departments, or agencies of the government organization are charged on a cost-reimbursement basis, with the goal to ‘break-even.’ 1 of 5 1/19/2023 City of Palo Alto Quotation:0123-CityofPaloAlto_Preliminary_Renewal-MSEA-FA Insight Team Date:January 11, 2023 Robertson, Christopher Enrollment:68000857 (480) 409-6775 Contract:PSA-0001526/RIVCO-2020-RFQ-0000048 http://www.insight.com/azureterms Customer understands and acknowledges that it is obtaining the software Products directly from Microsoft Corporation and that Insight provides no warranty to Customer covering the Products purchased hereunder. All warranties relating to such Products are granted solely by Microsoft Corporation. Enrollment#: 68000857 Confidential.Cover Thank you for the opportunity to quote. 1/19/2023 Page 2 of 5 City of Palo Alto Quotation:0123-CityofPaloAlto_Preliminary_Renewal-MSEA-FA Date:January 11, 2023 Enrollment:68000857 Contract:PSA-0001526/RIVCO-2020-RFQ-0000048 Part Number Item Name Level Purchase Period Pool Product Type Quantity Unit Price Extended Price Additional Products 9GS-00135 CIS Suite Datacenter Core ALng SA 2L D Added at Signing Servers Software Assurance 24 165.39$ 3,969.36$ 9GA-00313 CIS Suite Standard Core ALng SA 2L D Added at Signing Servers Software Assurance 248 35.42$ 8,784.16$ 359-00961 SQL CAL ALng SA User CAL D Added at Signing Servers Software Assurance 1000 37.36$ 37,360.00$ 810-04760 SQL Server Enterprise ALng SA D Added at Signing Servers Software Assurance 15 1,537.73$ 23,065.95$ 228-04433 SQL Server Standard ALng SA D Added at Signing Servers Software Assurance 12 160.68$ 1,928.16$ 9EP-00208 System Center DC Core ALng SA 2L D Added at Signing Servers Software Assurance 56 48.84$ 2,735.04$ 9EN-00198 System Center Standard Core ALng SA 2L D Added at Signing Servers Software Assurance 304 17.89$ 5,438.56$ QEJ-00003 Visual Studio Ent with GitHub ALng SA D Added at Signing Applications Software Assurance 2 1,066.94$ 2,133.88$ QEK-00003 Visual Studio Pro with GitHub ALng SA D Added at Signing Applications Software Assurance 1 305.64$ 305.64$ 6VC-01254 Win Remote Desktop Services CAL ALng SA UCAL D Added at Signing Servers Software Assurance 20 23.58$ 471.60$ 9EA-00278 Win Server DC Core ALng SA 2L D Added at Signing Servers Software Assurance 140 125.25$ 17,535.00$ 9EM-00270 Win Server Standard Core ALng SA 2L D Added at Signing Servers Software Assurance 560 19.22$ 10,763.20$ Year 1 On-Premise Total:114,490.55$ Year 1 Subscriptions Total:447,714.22$ Year 1 Combined Total:562,204.77$ Additional Products 9GS-00135 CIS Suite Datacenter Core ALng SA 2L D Added at Signing Servers Software Assurance 24 165.39$ 3,969.36$ 9GA-00313 CIS Suite Standard Core ALng SA 2L D Added at Signing Servers Software Assurance 248 35.42$ 8,784.16$ 359-00961 SQL CAL ALng SA User CAL D Added at Signing Servers Software Assurance 1000 37.36$ 37,360.00$ 810-04760 SQL Server Enterprise ALng SA D Added at Signing Servers Software Assurance 15 1,537.73$ 23,065.95$ 228-04433 SQL Server Standard ALng SA D Added at Signing Servers Software Assurance 12 160.68$ 1,928.16$ 9EP-00208 System Center DC Core ALng SA 2L D Added at Signing Servers Software Assurance 56 48.84$ 2,735.04$ 9EN-00198 System Center Standard Core ALng SA 2L D Added at Signing Servers Software Assurance 304 17.89$ 5,438.56$ QEJ-00003 Visual Studio Ent with GitHub ALng SA D Added at Signing Applications Software Assurance 2 1,066.94$ 2,133.88$ QEK-00003 Visual Studio Pro with GitHub ALng SA D Added at Signing Applications Software Assurance 1 305.64$ 305.64$ 6VC-01254 Win Remote Desktop Services CAL ALng SA UCAL D Added at Signing Servers Software Assurance 20 23.58$ 471.60$ 9EA-00278 Win Server DC Core ALng SA 2L D Added at Signing Servers Software Assurance 140 125.25$ 17,535.00$ 9EM-00270 Win Server Standard Core ALng SA 2L D Added at Signing Servers Software Assurance 560 19.22$ 10,763.20$ Year 2 On-Premise Total:114,490.55$ Year 2 Subscriptions Total:447,714.22$ Year 2 Combined Total:562,204.77$ Additional Products 9GS-00135 CIS Suite Datacenter Core ALng SA 2L D Added at Signing Servers Software Assurance 24 165.39$ 3,969.36$ 9GA-00313 CIS Suite Standard Core ALng SA 2L D Added at Signing Servers Software Assurance 248 35.42$ 8,784.16$ 359-00961 SQL CAL ALng SA User CAL D Added at Signing Servers Software Assurance 1000 37.36$ 37,360.00$ 810-04760 SQL Server Enterprise ALng SA D Added at Signing Servers Software Assurance 15 1,537.73$ 23,065.95$ 228-04433 SQL Server Standard ALng SA D Added at Signing Servers Software Assurance 12 160.68$ 1,928.16$ 9EP-00208 System Center DC Core ALng SA 2L D Added at Signing Servers Software Assurance 56 48.84$ 2,735.04$ 9EN-00198 System Center Standard Core ALng SA 2L D Added at Signing Servers Software Assurance 304 17.89$ 5,438.56$ QEJ-00003 Visual Studio Ent with GitHub ALng SA D Added at Signing Applications Software Assurance 2 1,066.94$ 2,133.88$ QEK-00003 Visual Studio Pro with GitHub ALng SA D Added at Signing Applications Software Assurance 1 305.64$ 305.64$ 6VC-01254 Win Remote Desktop Services CAL ALng SA UCAL D Added at Signing Servers Software Assurance 20 23.58$ 471.60$ Confidential.EA At Signing Thank you for the opportunity to quote. 1/19/2023 Page 3 of 59EA-00278 Win Server DC Core ALng SA 2L D Added at Signing Servers Software Assurance 140 125.25$ 17,535.00$ 9EM-00270 Win Server Standard Core ALng SA 2L D Added at Signing Servers Software Assurance 560 19.22$ 10,763.20$ Year 3 On-Premise Total:114,490.55$ Year 3 Subscriptions Total:447,714.22$ Year 3 Combined Total:562,204.77$ 3 Year On-Premise Total:343,471.65$ 3 Year Subscriptions Total:1,343,142.66$ 3 Year Combined Total:1,686,614.31$ Confidential.EA At Signing Thank you for the opportunity to quote. 1/19/2023 Page 4 of 5 City of Palo Alto Quotation:0123-CityofPaloAlto_Preliminary_Renewal-MSEA-FA Subscription Start Date:2/1/2023 Date:January 11, 2023 Subscription End Date:1/31/2026 Enrollment:68000857 Contract:PSA-0001526/RIVCO-2020-RFQ-0000048 Year One:12 Months 12 Part Number Item Name Level Purchase Period Pool Product Type Quantity Term Price Extended Price Enterprise Products AAD-34700 M365 G3 Unified FSA GCC Sub Per User D Non-Specific Servers Monthly Subscriptions-VolumeLicense 1100 $319.42 351,362.00$ AAD-34704 M365 G3 Unified FUSL GCC Sub Per User D Non-Specific Servers Monthly Subscriptions-VolumeLicense 100 $374.43 37,443.00$ AAL-45735 M365 G5 GCC Sub Per User D Non-Specific Servers Monthly Subscriptions-VolumeLicense 5 $606.43 3,032.15$ Additional Products - Commercial Azure AAA-35418 Azure Monetary Commitment Provision D Non-Specific Applications Monthly Subscriptions-VolumeLicense 1 $0.00 -$ Additional Products J5U-00004 AzureprepaymentG ShrdSvr ALNG SubsVL MVL Commit Provision D Non-Specific Applications Monthly Subscriptions-VolumeLicense 1 $0.00 -$ 3GU-00001 Defender O365 P1 GCC Sub Per User D Non-Specific Applications Monthly Subscriptions-VolumeLicense 30 $18.14 544.20$ 3NS-00003 Exchange Online P2 GCC Sub Per User D Non-Specific Servers Monthly Subscriptions-VolumeLicense 150 $72.30 10,845.00$ PEY-00002 GitHub Enterprise Sub Per User D Non-Specific Applications Monthly Subscriptions-VolumeLicense 15 $189.93 2,848.95$ HJR-00002 Power BI Premium EM1 GCC Sub D Non-Specific Servers Monthly Subscriptions-VolumeLicense 1 $5,652.08 5,652.08$ 6U1-00004 Power BI Premium USL GCC Sub Per User D Non-Specific Servers Monthly Subscriptions-VolumeLicense 6 $180.87 1,085.22$ DDJ-00001 Power BI Pro GCC Sub Per User D Non-Specific Servers Monthly Subscriptions-VolumeLicense 17 $90.31 1,535.27$ 7E7-00001 Project P3 FSA GCC Sub Per User D Non-Specific Servers Monthly Subscriptions-VolumeLicense 100 $230.68 23,068.00$ 7VX-00001 Project P5 GCC Sub Per User D Non-Specific Servers Monthly Subscriptions-VolumeLicense 2 $497.38 994.76$ NYH-00001 Teams AC with Dial Out US/CA GCC Sub Add-on D Non-Specific Servers Monthly Subscriptions-VolumeLicense 1200 $0.00 -$ LM9-00001 Teams Domestic Calling Plan GCC Sub Per User D Non-Specific Servers Monthly Subscriptions-VolumeLicense 2 $127.67 255.34$ VA1-00001 Teams Rooms Pro GCC Sub Per Device D Non-Specific Servers Monthly Subscriptions-VolumeLicense 5 $425.57 2,127.85$ 9K4-00003 Visio P2 FSA GCC Sub Per User D Non-Specific Applications Monthly Subscriptions-VolumeLicense 60 $115.34 6,920.40$ 12 Month Total:447,714.22$ Year Two:12 Months 12 Enterprise Products AAD-34700 M365 G3 Unified FSA GCC Sub Per User D Non-Specific Servers Monthly Subscriptions-VolumeLicense 1100 $319.42 351,362.00$ AAD-34704 M365 G3 Unified FUSL GCC Sub Per User D Non-Specific Servers Monthly Subscriptions-VolumeLicense 100 $374.43 37,443.00$ AAL-45735 M365 G5 GCC Sub Per User D Non-Specific Servers Monthly Subscriptions-VolumeLicense 5 $606.43 3,032.15$ Additional Products - Commercial Azure AAA-35418 Azure Monetary Commitment Provision D Non-Specific Applications Monthly Subscriptions-VolumeLicense 1 $0.00 -$ Additional Products J5U-00004 AzureprepaymentG ShrdSvr ALNG SubsVL MVL Commit Provision D Non-Specific Applications Monthly Subscriptions-VolumeLicense 1 $0.00 -$ 3GU-00001 Defender O365 P1 GCC Sub Per User D Non-Specific Applications Monthly Subscriptions-VolumeLicense 30 $18.14 544.20$ 3NS-00003 Exchange Online P2 GCC Sub Per User D Non-Specific Servers Monthly Subscriptions-VolumeLicense 150 $72.30 10,845.00$ PEY-00002 GitHub Enterprise Sub Per User D Non-Specific Applications Monthly Subscriptions-VolumeLicense 15 $189.93 2,848.95$ HJR-00002 Power BI Premium EM1 GCC Sub D Non-Specific Servers Monthly Subscriptions-VolumeLicense 1 $5,652.08 5,652.08$ 6U1-00004 Power BI Premium USL GCC Sub Per User D Non-Specific Servers Monthly Subscriptions-VolumeLicense 6 $180.87 1,085.22$ DDJ-00001 Power BI Pro GCC Sub Per User D Non-Specific Servers Monthly Subscriptions-VolumeLicense 17 $90.31 1,535.27$ 7E7-00001 Project P3 FSA GCC Sub Per User D Non-Specific Servers Monthly Subscriptions-VolumeLicense 100 $230.68 23,068.00$ 7VX-00001 Project P5 GCC Sub Per User D Non-Specific Servers Monthly Subscriptions-VolumeLicense 2 $497.38 994.76$ NYH-00001 Teams AC with Dial Out US/CA GCC Sub Add-on D Non-Specific Servers Monthly Subscriptions-VolumeLicense 1200 $0.00 -$ LM9-00001 Teams Domestic Calling Plan GCC Sub Per User D Non-Specific Servers Monthly Subscriptions-VolumeLicense 2 $127.67 255.34$ VA1-00001 Teams Rooms Pro GCC Sub Per Device D Non-Specific Servers Monthly Subscriptions-VolumeLicense 5 $425.57 2,127.85$ 9K4-00003 Visio P2 FSA GCC Sub Per User D Non-Specific Applications Monthly Subscriptions-VolumeLicense 60 $115.34 6,920.40$ 12 Month Total:447,714.22$ Year Three:12 Months 12 Enterprise Products AAD-34700 M365 G3 Unified FSA GCC Sub Per User D Non-Specific Servers Monthly Subscriptions-VolumeLicense 1100 $319.42 351,362.00$ AAD-34704 M365 G3 Unified FUSL GCC Sub Per User D Non-Specific Servers Monthly Subscriptions-VolumeLicense 100 $374.43 37,443.00$ AAL-45735 M365 G5 GCC Sub Per User D Non-Specific Servers Monthly Subscriptions-VolumeLicense 5 $606.43 3,032.15$ Additional Products - Commercial Azure AAA-35418 Azure Monetary Commitment Provision D Non-Specific Applications Monthly Subscriptions-VolumeLicense 1 $0.00 -$ Additional Products J5U-00004 AzureprepaymentG ShrdSvr ALNG SubsVL MVL Commit Provision D Non-Specific Applications Monthly Subscriptions-VolumeLicense 1 $0.00 -$ Confidential.EA Monthly Subscriptions Thank you for the opportunity to quote. 1/19/2023 Page 5 of 53GU-00001 Defender O365 P1 GCC Sub Per User D Non-Specific Applications Monthly Subscriptions-VolumeLicense 30 $18.14 544.20$ 3NS-00003 Exchange Online P2 GCC Sub Per User D Non-Specific Servers Monthly Subscriptions-VolumeLicense 150 $72.30 10,845.00$ PEY-00002 GitHub Enterprise Sub Per User D Non-Specific Applications Monthly Subscriptions-VolumeLicense 15 $189.93 2,848.95$ HJR-00002 Power BI Premium EM1 GCC Sub D Non-Specific Servers Monthly Subscriptions-VolumeLicense 1 $5,652.08 5,652.08$ 6U1-00004 Power BI Premium USL GCC Sub Per User D Non-Specific Servers Monthly Subscriptions-VolumeLicense 6 $180.87 1,085.22$ DDJ-00001 Power BI Pro GCC Sub Per User D Non-Specific Servers Monthly Subscriptions-VolumeLicense 17 $90.31 1,535.27$ 7E7-00001 Project P3 FSA GCC Sub Per User D Non-Specific Servers Monthly Subscriptions-VolumeLicense 100 $230.68 23,068.00$ 7VX-00001 Project P5 GCC Sub Per User D Non-Specific Servers Monthly Subscriptions-VolumeLicense 2 $497.38 994.76$ NYH-00001 Teams AC with Dial Out US/CA GCC Sub Add-on D Non-Specific Servers Monthly Subscriptions-VolumeLicense 1200 $0.00 -$ LM9-00001 Teams Domestic Calling Plan GCC Sub Per User D Non-Specific Servers Monthly Subscriptions-VolumeLicense 2 $127.67 255.34$ VA1-00001 Teams Rooms Pro GCC Sub Per Device D Non-Specific Servers Monthly Subscriptions-VolumeLicense 5 $425.57 2,127.85$ 9K4-00003 Visio P2 FSA GCC Sub Per User D Non-Specific Applications Monthly Subscriptions-VolumeLicense 60 $115.34 6,920.40$ 12 Month Total:447,714.22$ 36 Month Total:1,343,142.66$ Confidential.EA Monthly Subscriptions Thank you for the opportunity to quote. Dear Mayor and Council Members: On behalf of City Manager Ed Shikada, please find below the staff responses to questions made by Councilmember Tanaka regarding the Monday, January 30 Council Meeting consent agenda item. Staff responses are below: Item 2, Approval of Amendment Number One (1) with Insight Public Sector, C20177991 Extending the Term by Three Years and Compensation by $1,686,615 Utilizing a Riverside County Agreement for Citywide Microsoft Licensing and Approve a Contingency in the Amount of $100,000 Annually, for a new Total Not-to-Exceed Contract Amount to $3,628,317; CEQA Status—not a project 1. How was the annual contingency fee of $100,000 derived? Staff response: IT estimated the cost to support growing business requirements and to utilize Microsoft Azure Cloud Services as required to support disaster recovery and adopt cloud storage and compute services. 2. According to the staff report, 40% of the funding will come from special enterprise and special revenue funds. Is there an example of such a fund? Staff response: An example of an enterprise fund is Waste Water, and a special fund is Printing and Mailing services. Thank you, Joanna Joanna Tran Executive Assistant to the City Manager Office of the City Manager (650) 329-2105 | joanna.tran@cityofpaloalto.org www.cityofpaloalto.org