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HomeMy WebLinkAboutStaff Report 2306-17293.Approval of an Extraterritorial Utility Service and Offsite Infrastructure Agreement between City of Palo Alto and City of Mountain View in relation to Palo Alto Homekey project at 1237 San Antonio Road for connection to City of Mountain View Water and Sewer Utility Services. Q&A City Council Staff Report From: City Manager Report Type: CONSENT CALENDAR Lead Department: City Manager Meeting Date: August 21, 2023 Report #:2306-1729 TITLE Approval of an Extraterritorial Utility Service and Offsite Infrastructure Agreement between City of Palo Alto and City of Mountain View in relation to Palo Alto Homekey project at 1237 San Antonio Road for connection to City of Mountain View Water and Sewer Utility Services. RECOMMENDATION Staff recommends that Council approve and authorize the City Manager or designee to enter this extraterritorial utility service and offsite infrastructure agreement with the City of Mountain View. BACKGROUND Council previously approved on June 12, 2023 a lease agreement and revenue agreement to allow construction to begin on the Palo Alto Homekey Project at 1237 San Antonio Road.1 The Project is a modular interim housing facility with on-site services. Located near the border of the City of Palo Alto and the City of Mountain View, while many of the utilities will be provided by Palo Alto, the site will need to connect to Mountain View water and sewer utility services. The Santa Clara Local Agency Formation Commission (LAFCO) has approved the City of Mountain View’s provision of these utility services to the Homekey site without a requirement that the property be annexed to the City of Mountain View. ANALYSIS The City of Mountain View has indicated a willingness and capacity to provide these utility services to the Project, provided that the property owner pays any and all costs associated with making the connections, obtaining permits, and paying fees. The utility service agreement is scheduled to go before the City of Mountain View Council in September 2023. Approving this agreement (see Attachment A) will allow the Project to proceed in a timely manner and receive 1 June 12, 2023 Council Action Item https://cityofpaloalto.primegov.com/meetings/ItemWithTemplateType?id=2481&meetingTemplateType=2 necessary services. The agreement allows the City of Palo Alto to connect the Homekey site to the City of Mountain View’s infrastructure to supply water and sewer service. FISCAL/RESOURCE IMPACT Given the lease agreement approved by Palo Alto Council on June 12, 2023, the operator (LifeMoves) would be responsible for all charges for utilities supplied to the premises during the lease term, from July 1, 2023 through June 30, 2032. Additionally, LifeMoves will be responsible for payment of permitting fees. STAKEHOLDER ENGAGEMENT Stakeholder engagement included multiple meetings and e-mail communications between City of Palo Alto staff and City of Mountain View staff. Additionally, the agreement is scheduled to appear before the City of Mountain View City Council in September. ENVIRONMENTAL REVIEW Projects funded by the Project Homekey program are exempt from the requirements of the California Environmental Quality Act through state laws, including but not limited to AB 140 (2021) and AB 2553 (2020). To the extent any of the actions contemplated by the City Council in relation to this Homekey site are not covered by these statutory exemptions, they are exempt pursuant to CEQA Guidelines Section 15269 as actions to mitigate an emergency related to the unhoused population in Palo Alto. ATTACHMENTS Attachment A: Extraterritorial Utility Service and Offsite Infrastructure Agreement between City of Palo Alto and City of Mountain View APPROVED BY: Ed Shikada, City Manager 1 of 14 Recording Requested by and Please Return to: City Clerk City of Mountain View 500 Castro Street, P.O. Box 7540 Mountain View, CA 94039-7540 This Instrument Benefits City Only. No Fee Required. Gov. C. 27383 SPACE ABOVE THIS LINE FOR RECORDER’S USE APN: 116-01-013 Address: 1237 N. San Antonio Rd. Palo Alto CA, 94303 EXTRA-TERRITORIAL UTILITY SERVICE AND OFFSITE INFRASTRUCTURE AGREEMENT BETWEEN THE CITY OF PALO ALTO AND THE CITY OF MOUNTAIN VIEW THIS AGREEMENT is made and entered into effective the _______day of _____, 2023, (“Effective Date”) by and between the City of Mountain View, a California charter city and municipal corporation (hereinafter referred to as “City”), and the City of Palo Alto, a California municipal corporation (hereinafter referred to as “Property Owner”). RECITIALS WHEREAS, PROPERTY OWNER owns property located at 1237 San Antonio Road, Palo Alto, Santa Clara County, California, commonly referred to as the former Los Altos Treatment Plant Site (“Subject Property” or “Property”), as more particularly depicted in Exhibit A attached hereto and incorporated by this reference; and WHEREAS, a portion of the Property, commonly known as Area C, is proposed to be developed as an 88-unit emergency shelter, on a site area of 57,917 square feet, to provide temporary housing for the unhoused, to be known as Homekey Palo Alto (“Project”), as depicted and described in Exhibit B attached hereto and incorporated by this reference; and 2 of 14 WHEREAS, the Property is in the City of Palo Alto and the Property Owner is interested in connecting to the City’s infrastructure to supply water and sewer service (“Utility Services”) to the Subject Property; and WHEREAS, the Property Owner is unable to provide utility services to support the Project; and WHEREAS, the subject property is outside of the City’s boundary limit (also commonly referred to as the “City Limit”); and WHEREAS, the Santa Clara Local Agency Formation Commission (“LAFCO”) has approved City’s provision of Utility Services to the Project without a requirement that the Property be annexed into the City; and WHEREAS, City does not desire to annex the Property to the City at this time but is willing to provide Property Owner with Utility Services provided that Property Owner pay any and all costs associated with making such connections, including associated capacity fees and current or future applicable utility rates, and obtaining all necessary permits and approvals; and WHEREAS, the necessity of this Agreement is to address immediate health and safety needs of the public; consistent with Government Code section 56133 (c); and WHEREAS, City has available Utility Services with sufficient capacity which may be extended to the Subject Property and is willing to provide Utility Services so long as Property Owner fully complies with, abides by, and performs all conditions precedent to such City performance, as specified in this Agreement. AGREEMENT 3 of 14 NOW, THEREFORE, in consideration of the WHEREAS provisions above which shall be considered contractual provisions, the mutual covenants set forth herein and for other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, the parties hereto, agree as follows: A. GENERAL PROVISIONS: Property Owner will fully complete all the following tasks, at Property Owner’s sole cost and expense, as a condition precedent to City’s obligation to provide Utility Services: 1. Submit a standard City Service Application for connection of the Utility Services to the City’s system and pay all standard fees and costs associated with such applications and pay any special costs as estimated by the City Public Works Director that will be incurred by the City in connection with connecting Utility Services outside the City Limits, including without limitation any and all City costs in connection with construction inspection and plan review for purposes of granting approvals and Water and Sewer Capacity Charges. The Service Application will have the following as attachments: a. Submit design and engineering plans prepared by Property Owner (or Property Owner’s duly licensed consultant) in a form satisfactory to the City Public Works Director showing how Utility Services will be connected and identifying the point of connection to City’s system. b. Submit an estimate of annual Utility Service consumption. 2. Obtain, at Property Owner’s sole cost and expense, all permits and approvals required for the Utility Service connection by any governmental or quasi- governmental or utility entity and complying with all (if any) environmental reviews including without limitation those pertaining to the California Environmental Quality Act (CEQA). B. PROVISIONS DURING THE TERM OF THIS AGREEMENT. During the term of this Agreement, Property Owner agrees to the following terms and conditions to the continuing receipt of City Utility Services: 4 of 14 a. Property Owner shall pay to City, consistent with when other City Utility Customers are required to make payment, all City delivery fees and charges, and any other applicable fees or charges required by City. Should there be any modification to the City’s adopted utility service fee calculation, including but not limited to changes to the reasonable cost recovery formula for capital improvements, Property Owner shall pay to the City the new prevailing rate, consistent with all other City utility customers. b. To grant City employees and contractors access to the Subject Property as necessary to effect repairs to the Utility Service facilities and to cooperate with the City in obtaining any permits or approvals needed to maintain the utility system. c. The terms of this Agreement shall apply so long as Property Owner remains the same AND there is no increase in size of services to the off-site utility services and appurtenances serving the Property. C. PROVISIONS RELATED TO CONNECTION TO UTILITY SERVICES: Connection to City’s municipal water and sewer system by Property Owner shall be subject to the following conditions: 1. Metered Water Service Connection. City will allow two metered water service connections for domestic use to an existing water main at a point specified in the service application (“Point of Service”). 2. Backflow Prevention. Property Owner shall construct and maintain a backflow prevention device complying with City standards and subject to the approval of the City Public Works Director on the Property Owner side of the metered service connection to protect the City water system from potential cross contamination. 3. Construction of New Water Services. Property Owner shall construct, in accordance with the designed and engineered system approved by City, at its sole responsibility and expense: a four-inch diameter fire water, two-inch diameter domestic water, and a one-inch diameter irrigation water services from the Point of Service to the Subject Property, including installation of 5 of 14 hydrants and water service lines to the water meter. The water services shall be operated and maintained by the City of Mountain View during the term of this Agreement. 4. Construction of New Sewer laterals. Property Owner shall construct, in accordance with the designed and engineered system approved by City, at its sole responsibility and expense: a six-inch diameter sewer lateral from the City Main to the Subject Property, including installation of sewer laterals to its clean out. The sewer laterals shall be operated and maintained by the Property Owner during the term of this Agreement. 5. City to Provide Utility Service. Upon City determining the Utility Services are operational and upon Property Owner’s full and complete performance of all obligations and responsibilities under this Agreement, City agrees to provide Property Owner with water and sewer service from City’s municipal utility system or as determined by the Public Works Director. 6. Maintenance and Repair of Utility Services. Property Owner shall, at its sole cost and expense, maintain, repair, and replace any portion of the utility lines which run through the Subject Property premises. The owner shall maintain water services after water meter and sewer laterals from the point of the connection at the City main. Under no circumstances shall the City be required or be accountable to maintain, repair or replace the private portion of the utility lines within Subject Property. 7. Property Owner shall not permit any additional connections to either the Utility Services or to any portion of the private facilities from the point of service to the Project connection. 8. Property Owner shall not increase the intensification of land uses on the Subject Property that would substantially increase the current water and sewer demands uses contemplated at the time of signing this Agreement without written approval of the City. The definition of “substantially increase” as used within this section would be an amount in excess of 10% usage over the average monthly usage of Property Owner over a six month period of time after entering into this Agreement and City begins to supply water. 6 of 14 D. ADDITIONAL PROVISIONS: 1. Continuing Obligations and Responsibilities of Property Owner. Property Owner agrees to maintain its Utility Service accounts with City in a current status. Property Owner acknowledges and agrees that should its Utility Services account with City become delinquent, City shall have the right, within fifteen (15) days written notice of delinquency, to discontinue Utility Services to Property Owner’s Subject Property. 2. Covenants Running with the Land. Property Owner acknowledges and agrees that all of Property Owner’s covenants, agreements, promises, representations and warranties as set forth in this Agreement are covenants running with Property Owner’s Subject Property as defined in the applicable provisions of Section 1457 et seq. of the California Civil Code. Property Owner’s covenants, agreements, promises, representations and warranties as contained in this Agreement, shall run with Property Owner’s Subject Property and shall be binding on Property Owner. Within thirty (30) days of execution by the last party to sign, City will record a copy of this Agreement as a covenant running with the land. 3. Successors and Assigns. . Property Owner may not assign its rights and/or obligations under this Agreement without the prior written consent of City, which consent shall not be unreasonably withheld. Any such consent by City shall not, in any way, relieve Property Owner of its obligations and responsibilities under this Agreement. 4. Notices. Any notice required or intended to be given to either party under the terms of this Agreement shall be in writing and shall be deemed to be duly given if delivered personally, followed by telephone confirmation of receipt or sent by United States registered or certified mail, with postage prepaid, return receipt requested, addressed to the party to which notice is to be given at the party’s address set forth below or at such other address as the parties may from time to time designate by written notice. Notices served by United States mail in the manner above described shall be deemed sufficiently served or given at the time of the mailing thereof. 7 of 14 Public Works Director City of Mountain View 500 Castro Street – P.O. Box 7540 Mountain View, CA 94041 5. Waiver. The waiver by either party of a breach by the other of any provision of this Agreement shall not constitute a continuing waiver or a waiver of any subsequent breach of either the same or a different provision of this Agreement. No provisions of this Agreement may be waived unless in writing and signed by all parties to this Agreement. Waiver of any one provision herein shall not be deemed to be a waiver of any other provision herein. 6. Indemnification of City. To the greatest extent allowed by law, Property Owner shall indemnify, hold harmless and defend City and each of its officers, officials, attorneys, employees, agents and volunteers from any and all loss, liability, fines, penalties, forfeitures, costs and damages incurred by City, Property Owner or any other person, and from any and all claims, demands, liabilities, damages and actions in law or equity (including attorney’s fees and litigation expenses), arising or alleged to have arisen directly or indirectly out of the performance of this Agreement, pursuant to this Agreement, or arising or alleged to have arisen directly or indirectly in any way related to the construction, installation and operation of the New Utility System. Property Owner’s obligations under the preceding sentence shall apply regardless of whether Property Owner is passively negligent, but shall not apply to any loss, liability, fines, penalties, forfeitures, costs or damages caused by the active or sole negligence, or willful misconduct, of City or any of its officers, officials, attorneys, employees, agents or volunteers. 7. Public Health, Safety and Welfare. Nothing contained in this Agreement shall limit City’s authority to exercise its police powers, governmental authority or take other appropriate actions to address threats to public health, safety and welfare, including temporarily suspending Utility Services as deemed appropriate by City in its sole determination. 8 of 14 8. Governing Law and Venue. This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of California. Venue for purposes of the filing of any action regarding the enforcement or interpretation of this Agreement and any rights and duties hereunder shall be Santa Clara County, California. 9. Headings. The section headings in this Agreement are for convenience and reference only and shall not be construed or held in any way to explain, modify or add to the interpretation or meaning of the provisions of this Agreement. 10.Severability. The provisions of this Agreement are severable. The invalidity or unenforceability of any of one provision in this Agreement shall not affect the other provisions. 11.Interpretation. The parties acknowledge this Agreement in its final form is the result of the combined efforts of the parties and that, should any provision of this Agreement be found to be ambiguous in any way, such ambiguity shall not be resolved by construing this Agreement in favor of or against either party, but rather by construing the terms in accordance with their generally accepted meaning. 12.Cumulative Remedies. No remedy or election hereunder shall be deemed exclusive but shall, wherever possible, be cumulative with all other remedies at law or in equity. 13.No third Party Beneficiaries. The rights, interest, duties and obligations defined within this Agreement are intended for the specific parties hereto as identified in the preamble of this Agreement. Notwithstanding anything stated to the contrary in this Agreement, it is not intended that any rights or interests in this Agreement benefit or flow to the interest of any third parties. 14.Extent of Agreement. Each party acknowledges they have read and fully understand the contents of this Agreement. This Agreement represents the entire and integrated agreement between the parties with respect to the subject matter hereof and supersedes all prior negotiations, representations or agreements, either written or oral. This Agreement may be modified only by written instrument duly authorized and executed by both City and Property Owner. 9 of 14 15. Wastewater flow adjustment. Pursuant to the Basic Agreement Between the City of Palo Alto, the City of Mountain View and the City of Los Altos for Acquisition, Construction and Maintenance of a Joint Sewer System (Basic Agreement), wastewater flows from the Subject Property shall be subtracted from the Mountain View wastewater flow totals to the Palo Alto Regional Water Quality Control Plant and added to the City of Palo Alto flows. No sewer capacity shall be transferred from Palo Alto to Mountain View. IN WITNESS WHEREOF, the parties have executed this Agreement on the day and year first above written. 10 of 14 “CITY”: CITY OF MOUNTAIN VIEW, a California charter city and municipal corporation By: Name: ______________________________ City Manager APPROVED AS TO CONTENT: Name: ______________________________ Public Works Director FINANCIAL APPROVAL Name: ______________________________ Finance and Administrative Services Director APPROVED AS TO FORM: Name: City Attorney “PROPERTY OWNER”: CITY OF PALO ALTO, a California municipal corporation By: Name: ______________________________ City Manager Attachment: Exhibit A – Legal Description and Plat Exhibit B – Depiction of Project Area 11 of 14 Exhibit A - 1237 N. San Antonio Rd- Subject Property 12 of 14 Exhibit B – Legal Description of Project Area Real property situate in the City of Palo Alto, County of Santa Clara, State of California, described as follows: Being a portion of Parcel B described in that certain Grant Deed recorded on January 4, 2008 as Document No. 19703209, Records of Santa Clara County said Parcel B also shown on that certain map Entitled, “Record of Survey Lands of City of Los Altos and City of Palo Alto” filed for record on December 3, 2007, in Book 820 of Maps, page 29, Records of Santa Clara County, being more particularly described as follows: COMMENCING at the southwesterly terminus of the monument line of San Antonio Road, labeled as “N 06 º53’03” E 499.91”, as shown on said map; Thence leaving said monument line, North 83º 06’00” West, 20.26 feet to a point on the easterly line of said Parcel B, said easterly line also being the westerly right of way line of said San Antonio Road as shown on said map; Thence along said westerly right of way line, South 06º 54’00” West, 78.11 feet to the southeasterly corner of said Parcel B, said point also being the northeasterly corner of the Lands conveyed to the City of Palo Alto by Instrument Recorded December 21, 1971 in Book 9636 of Official Records, Page 183 Records of Santa Clara County; Thence along the common line of said Parcel B and said Lands of the City of Palo Alto, North 83º06’00” West, 12.00 feet to the POINT OF BEGINNING; Thence continuing along said common line, North 83º 06’00” West, 113.00 feet to the northwest corner of said Lands of City of Palo Alto; Thence continuing along said common line, South 7°01'17" West, 57.64 feet; Thence along the southwesterly line of said Parcel B, North 38°56'36" West, 176.40 feet; Thence leaving said southwesterly line the following 3 (three) courses: 1) North 29°36'41" East. 268.48 feet; 2) South 77°43'52" East, 136.62 feet to a point being North 83°06'00" West, 12.00 feet from the easterly line of said Parcel B; 3) South 6°54'00" West, 300.13 feet to the POINT OF BEGINNING. 13 of 14 Containing an area of 60,815 square feet more or less. Basis of Bearings: North 6°53'03" East, being the monument line on San Antonio Road as shown on that said Record of Survey “Lands of City of Los Altos and City of Palo Alto” 820 M 29. 14 of 14 EXHIBIT B – Depiction of Project Area         Dear Mayor and Council Members:  On behalf of City Manager Ed Shikada, please find below the staff responses to questions from  Councilmembers Tanaka and Veenker regarding the Monday, August 21 Council Meeting consent  agenda item.     Item 3:  Approval of an Extraterritorial Utility Service and Offsite Infrastructure Agreement between  City of Palo Alto and City of Mountain View in relation to Palo Alto Homekey project at 1237 San  Antonio Road for connection to City of Mountain View Water and Sewer Utility Services.  1. What are the exact costs associated with the connection, permits, and fees are not specified.  Although it says LifeMoves will cover utility and permitting fees, what would the city of Palo  Alto cover? (Tanaka)   Staff response: The City is not responsible for any costs associated with this during the term of the  ground lease with LifeMoves. Upon termination of the ground lease, whomever takes over the future use  of the site would likely assume the related utility costs.  2. Are there any long‐term maintenance costs associated with this connection? (Tanaka)  Staff response: As this site will be a customer within the Mountain View system, it is Mountain View  Utilities’ responsibility for long‐term maintenance and we assume this is incorporated into utility rates.   3. I'm glad to see our City and Mountain View cooperating to support Project Homekey. The  agreement at attachment A recites that we are unable to provide water and sewer services to  the site. Why? Is it a physical limitation or a financial limitation? I see that we are paying  Mountain View for the cost of the infrastructure and connections. (Veenker)  Staff response: The Palo Alto Homekey site is located at a site at the border of Mountain View and Palo  Alto and it was originally an old treatment plant site for the City of Los Altos.  When the City acquired the  old Los Altos Treatment Plant site the City did not run utilities to this site.  The Palo Alto/Mountain View  city boundary is at the property line of the LATP site instead of in the middle of the road. As the project  team evaluated all the design details for this project, it was determined that connecting to the Mountain  View water and sewer utilities was easier and less costly in the project design than connecting to Palo  Alto for these specific utilities. The LifeMoves development team is paying the sewer and water  connection fees to Mountain View as any other developer would do to tie into their system.    4. What, if any, risks are there with not owning the utilities infrastructure necessary for Palo Alto  residents to live at the Homekey site? (Veenker)  Staff response: There are no known risks for using Mountain View utilities for this site. LAFCO approved  this inter‐jurisdictional utility service and Mountain View will treat the site as it would any customer for  these services.         Item 5: Approval of Office of City Auditor FY2024 Task Orders; CEQA Status ‐ Not a project  1. Have similar variations been made in previous years, and if so, what were the outcomes?  (Tanaka)  Staff response: Yes, an annual audit budget reallocation was also requested and approved in FY2023.  The outcome of the reallocation of the annual audit budget did not result in any increases in budget  dollars but provided for specific task order activities required during FY2023.  2. How do these changes align with industry standards or practices in other similar cities?  (Tanaka)  Staff response: This task order request pertains to reallocating the approved annual audit budget related  to an administrative project that has been designated for activity occurring during the entire FY2024. It is  within industry standards and a typical process for a multiyear audit plan to allow for this budget  reallocation as described in Baker Tilly’s contract.