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HomeMy WebLinkAbout2016-02-22 City Council Agenda PacketCITY OF PALO ALTO CITY COUNCIL February 22, 2016 Special Meeting Council Chambers 6:00 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 February 22, 2016 MATERIALS RELATED TO AN ITEM ON THIS AGENDA SUBMITTED TO THE CITY COUNCIL AFTER DISTRIBUTION OF THE AGENDA PACKET ARE AVAILABLE FOR PUBLIC INSPECTION IN THE CITY CLERK’S OFFICE AT PALO ALTO CITY HALL, 250 HAMILTON AVE. DURING NORMAL BUSINESS HOURS. PUBLIC COMMENT Members of the public may speak to agendized items; up to three minutes per speaker, to be determined by the presiding officer. If you wish to address the Council on any issue that is on this agenda, please complete a speaker request card located on the table at the entrance to the Council Chambers, and deliver it to the City Clerk prior to discussion of the item. You are not required to give your name on the speaker card in order to speak to the Council, but it is very helpful. 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 Applicants 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 6:00-7:00 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, Suzanne Mason, Rumi Portillo, Dania Torres Wong, Alison Hauk) Employee Organizations: Palo Alto Police Officers Association (PAPOA); Palo Alto Police Managers’ Association (PAPMA); Palo Alto Fire Chiefs’ Association (FCA); International Association of Fire Fighters (IAFF), Local 1319; Service Employees International Union, (SEIU) Local 521; Management, Professional and Confidential Employees; Utilities Management and Professional Association of Palo Alto (UMPAPA) Authority: Government Code Section 54957.6(a) 2 February 22, 2016 MATERIALS RELATED TO AN ITEM ON THIS AGENDA SUBMITTED TO THE CITY COUNCIL AFTER DISTRIBUTION OF THE AGENDA PACKET ARE AVAILABLE FOR PUBLIC INSPECTION IN THE CITY CLERK’S OFFICE AT PALO ALTO CITY HALL, 250 HAMILTON AVE. DURING NORMAL BUSINESS HOURS. Agenda Changes, Additions and Deletions City Manager Comments 7:00-7:10 PM Oral Communications 7:10-7:25 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 7:25-7:30 PM 2. Approval of Action Minutes for the January 30, February 1 and 8, 2016 Council Meetings Consent Calendar 7:30-7:35 PM Items will be voted on in one motion unless removed from the calendar by three Council Members. 3. Utilities Advisory Commission Recommendation That the City Council Adopt a Resolution Approving the City of Palo Alto Utilities Legislative Policy Guidelines Action Items 7:35-10:00 PM Include: Reports of Committees/Commissions, Ordinances and Resolutions, Public Hearings, Reports of Officials, Unfinished Business and Council Matters. 4. Comprehensive Plan Update: Discussion Regarding Development of a Fifth Scenario With an Improved Jobs / Housing Balance for Inclusion in the Environmental Impact Report and the Overall Project Schedule 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. 3 February 22, 2016 MATERIALS RELATED TO AN ITEM ON THIS AGENDA SUBMITTED TO THE CITY COUNCIL AFTER DISTRIBUTION OF THE AGENDA PACKET ARE AVAILABLE FOR PUBLIC INSPECTION IN THE CITY CLERK’S OFFICE AT PALO ALTO CITY HALL, 250 HAMILTON AVE. DURING NORMAL BUSINESS HOURS. Additional Information Standing Committee Meetings Sp. City Council Meeting February 23, 2016 Rail Committee Meeting Cancellation Notice February 24, 2016 Schedule of Meetings Schedule of Meetings Tentative Agenda Tentative Agenda Informational Report Update on Energy/Compost Technologies, Measure E, and Organics Processing Palo Alto Airport - 2015 Annual Aircraft Noise Complaints Report Mayor Patrick Burt State of the City Address Invitation Public Letters to Council Set 1 CITY OF PALO ALTO OFFICE OF THE CITY CLERK February 22, 2016 The Honorable City Council Palo Alto, California Approval of Action Minutes for the January 30, February 1 and 8, 2016 Council Meetings Staff is requesting Council review and approve the attached Action Minutes. ATTACHMENTS:  Attachment A: 01-30-16 DRAFT Action Minutes (DOC)  Attachment B: 02-01-16 DRAFT Action Minutes (DOC)  Attachment C: 02-08-16 DRAFT Action Minutes (DOC) Department Head: Beth Minor, City Clerk Page 2 CITY OF PALO ALTO CITY COUNCIL DRAFT ACTION MINUTES Page 1 of 4 Special Meeting January 30, 2016 The City Council of the City of Palo Alto met on this date in the El Palo Alto Room, Mitchell Park Community Center, 3700 Middlefield Road Palo Alto at 9:05 A.M. Present: Berman, Burt, DuBois, Filseth, Holman, Kniss, Scharff, Schmid, Wolbach Absent: Mayor’s Welcome and Overview of the Day Study Session 1. FY 2016 Performance Report and National Citizen Survey (Continued From January 25, 2016). Council took a break from 10:19 A.M. to 10:31 A.M. Action Items 2. Council Annual Priorities Settings. MOTION: Vice Mayor Scharff moved, seconded by Council Member Berman to adopt the following Council Priorities for 2016: A. The Built Environment: Infrastructure, Housing, Parking, and Livability; and B. Mobility; and C. Healthy City, Healthy Community; and DRAFT ACTION MINUTES Page 2 of 4 City Council Meeting Draft Action Minutes: 1/30/16 D. Completion of the Comprehensive Plan 2015-2030 Update with increased focus from Council. SUBSTITUTE MOTION: Council Member Schmid moved, seconded by Council Member Kniss to adopt the following Council Priorities for 2016: A. The Built Environment: Infrastructure, Housing, Mobility, Parking, and Livability; and B. Healthy City, Healthy Community; and C. Completion of the Comprehensive Plan 2015-2030 Update with increased focus from Council. INCORPORATED INTO THE SUBSTITUTE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to add at the end of Part 1 of the Motion, “Mobility, with a particular emphasis on Mobility” and add to the Motion, “Infrastructure.” (New Part B) SUBSTITUTE MOTION RESTATED: Council Member Schmid moved, seconded by Council Member Kniss to adopt the following Priorities for 2016: A. The Built Environment: Housing, Parking, Livability, Mobility, with a particular emphasis on Mobility; and B. Infrastructure; and C. Healthy City, Healthy Community; and D. Completion of the Comprehensive Plan 2015-2030 Update with increased focus from Council. SUBSTITUTE MOTION AS AMENDED PASSED: 5-4 DuBois, Filseth, Holman, Kniss, Schmid yes Council took a break from 12:22 P.M. to 12:53 P.M. 3. Priorities and Staff Work Plan: Getting the Work Done. DRAFT ACTION MINUTES Page 3 of 4 City Council Meeting Draft Action Minutes: 1/30/16 MOTION: Council Member Wolbach moved, seconded by Council Member Kniss to delegate further planning on the Work Plan and the topics for Committee of the Whole Meetings to the Mayor, Vice Mayor, and City Manager to generate proposals for Council approval. MOTION RESTATED: Council Member Wolbach moved, seconded by Council Member Kniss to schedule a Committee of the Whole Meeting, with preparatory work to be conducted by the Mayor, Vice Mayor, and City Manager. INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to add at the end of the Motion, “to address the Work Plan, and other areas of focus for the Council for the year.” INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to add to the Motion, “prior to the end of March” after “Whole Meeting.” INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to add to the Motion, “(to reconcile Council project priorities)” after “Work Plan.” INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to add to the Motion, “Council efficiency” after “project priorities.” MOTION RESTATED: Council Member Wolbach moved, seconded by Council Member Kniss to schedule a Committee of the Whole Meeting prior to the end of March, with preparatory work to be conducted by the Mayor, Vice Mayor, and City Manager, to address the Work Plan (to reconcile Council project priorities), Council efficiency, and other areas of focus for the Council for the year. MOTION AS AMENDED PASSED: 9-0 4. Resolution 9574 Entitled “Resolution of the Council of the City of Palo Alto Setting the Council’s Summer Break and Winter Closure.” MOTION: Vice Mayor Scharff moved, seconded by Council Member Kniss to schedule the Council’s Summer Break from July 5 to August 12. DRAFT ACTION MINUTES Page 4 of 4 City Council Meeting Draft Action Minutes: 1/30/16 AMENDMENT: Council Member Holman moved, seconded by Council Member XX to replace in the Motion, “July 5 to August 12” with “June 27 to August 5.” AMENDMENT FAILED DUE TO THE LACK OF A SECOND INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to replace in the Motion, “July 5” with “July 2.” MOTION RESTATED: Vice Mayor Scharff moved, seconded by Council Member Kniss to schedule the Council’s Summer Break from July 2 to August 12. MOTION AS AMENDED PASSED: 9-0 5. Wrap-Up and Next Steps. Council Member Kniss left the meeting at 2:38 P.M. Adjournment: The meeting was adjourned at 2:41 P.M. CITY OF PALO ALTO CITY COUNCIL DRAFT ACTION MINUTES Page 1 of 10 Regular Meeting February 1, 2016 The City Council of the City of Palo Alto met on this date in the Council Chambers at 6:04 P.M. Present: Berman, Burt, DuBois, Filseth, Holman, Kniss, Scharff, Schmid, Wolbach arrived at 6:25 P.M. Absent: Study Session 1. Study Session on National, State and Local Trends on the Impact of Arts and Culture. Special Orders of the Day 2. Community Partner Presentation: West Bay Opera at the Lucie Stern Community Theater. Agenda Changes, Additions and Deletions Staff requests Council hear Agenda Item Numbers 13- Approval of a Twenty Five (25) Year Lease… and 14- PUBLIC HEARING: Adoption of an Emergency Ordinance… before Agenda Item Number 12- Adoption of an Ordinance to add Section 10.50.085… Consent Calendar MOTION: Vice Mayor Scharff moved, seconded by Council Member DuBois, third by Council Member Holman to pull Agenda Item Number 10- Agreement with Empowerment Institute… to be moved to a date uncertain. DRAFT ACTION MINUTES Page 2 of 10 City Council Meeting Draft Action Minutes: 2/1/16 MOTION: Vice Mayor Scharff moved, seconded by Council Member DuBois to approve Agenda Item Numbers 3-9 including corrections contained in the At Places Memorandum for Agenda Item Number 3. 3. Budget Amendment Ordinance 5378 Entitled, “Budget Amendment Ordinance of the Council of the City of Palo Alto Closing the Fiscal Year 2015 Budget, Including Authorization of Transfers to Reserves, and Approval of the Fiscal Year 2015 Comprehensive Annual Financial Report (CAFR).” 4. Approval of the Fifth Amendment to Extend the Lease With Thoits Bros., Inc. at 285 Hamilton Avenue, Suite 100 for a Period of 14 Months and Approval of the Second Amendment to Extend the Sublease With Thoits Bros., Inc., 285 Hamilton Avenue, Suite 200 for a Period of 14 Months for use by the City Development Center. 5. Finance Committee Recommendation for Council to Review and Accept Information on the new Government Accounting Standards Board Pension Reporting Standards Known as GASB 68. 6. Approval of Police Department Purchase of Multi-Band Portable Radios for the Police and Fire Departments in an Amount not to Exceed $625,000. 7. Amend the Fiscal Year 2016 Adopted Municipal Fee Schedule to add a Secondhand Dealer Licensing Fee. 8. Adoption of Annual Amendments to the Employment Agreements Between the City of Palo Alto and Council Appointed Officers (City Manager, City Attorney, City Auditor and City Clerk). 9. Ordinance 5379 Entitled, “Ordinance of the Council of the City of Palo Alto Amending Palo Alto Municipal Code Chapter 4.60 (Business Registration Program) to Exempt Very Small Businesses, Very Small Non-Profits, and Religious Organizations With no Ancillary Business on Site From the Business Registration Program (FIRST READING: January 19, 2016 PASSED: 8-0 Kniss absent).” 10. Agreement with Empowerment Institute on Cool Block Small Pilot Program (Continued From January 25, 2016). MOTION PASSED: 9-0 DRAFT ACTION MINUTES Page 3 of 10 City Council Meeting Draft Action Minutes: 2/1/16 Action Items 11. Approval of 2016 Basement Construction Dewatering Program Changes and Other Related Issues. MOTION: Vice Mayor Scharff moved, seconded by Council Member Kniss to: A. Approve the five “Group 1” Basement Construction Dewatering Program changes for the 2016 construction season on a pilot basis; and B. Continue working with the Santa Clara Valley Water District (SCVWD) in an effort on developing a further understanding of the north county groundwater systems, impacts of groundwater pumping, and opportunities for enhanced groundwater recharge. Direct Staff to provide an update on the work plan for this effort to the Policy and Services Committee in the first quarter of 2016; and C. Direct Staff to prepare a report for the Policy and Services Committee in the first half of 2016 to discuss Group 3 matters and the development of a potential recommendation to Council to direct additional work in one or more of these areas. AMENDMENT: Council Member Schmid moved, seconded by Council Member XX to add to Part A of the Motion, “add a sixth change, ‘each site will be metered and there will be an excess charge for water not used over 3.5 million gallons at a rate of $.02 per gallon.’” AMENDMENT RESTATED AND INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to add to Part A of the Motion, “add a sixth change, ‘dewatering flow will be metered.’” AMENDMENT: Council Member Schmid moved, seconded by Council Member XX to add to the Motion, “replace in Draft Requirements for Submittal of a Determination… ‘avoidance measures are also to be employed to the extent practical’ with ‘above 6 million gallons per household avoidance measures will be employed in someway practical.’” AMENDMENT FAILED DUE TO THE LACK OF A SECOND DRAFT ACTION MINUTES Page 4 of 10 City Council Meeting Draft Action Minutes: 2/1/16 MOTION RESTATED: Vice Mayor Scharff moved, seconded by Council Member Kniss to: A. Approve the five “Group 1” Basement Construction Dewatering Program changes for the 2016 construction season on a pilot basis and add a sixth change, “dewatering flow will be metered”; and B. Continue working with the Santa Clara Valley Water District (SCVWD) in an effort on developing a further understanding of the north county groundwater systems, impacts of groundwater pumping, and opportunities for enhanced groundwater recharge. Direct Staff to provide an update on the work plan for this effort to the Policy and Services Committee in the first quarter of 2016; and C. Direct Staff to prepare a report for the Policy and Services Committee in the first half of 2016 to discuss Group 3 matters and the development of a potential recommendation to Council to direct additional work in one or more of these areas. MOTION AS AMENDED PASSED: 7-2 Holman, Schmid no At this time Council heard Agenda Item 13. 13. Approval of a Twenty Five (25) Year Lease Agreement Between the City of Palo Alto and the Museum of American Heritage (MOAH) for the City Owned Property at 351 Homer Avenue, Palo Alto. MOTION: Council Member Holman moved, seconded by Council Member Filseth to authorize the City Manager or his designee to negotiate and enter into a new twenty five (25) year lease agreement between the City of Palo Alto and Museum of American Heritage (MOAH) for the City owned property at 351 Homer Avenue, Palo Alto upon expiration of the current lease agreement in 2017. MOTION PASSED: 9-0 14. PUBLIC HEARING: Adoption of an Emergency Ordinance of the Council of the City of Palo Alto Adding Chapter 9.16 (Medical Marijuana Cultivation and Delivery) to Title 9 (Public Peace, Morals and Safety) of the Palo Alto Municipal Code to Prohibit Medical Marijuana Cultivation and Delivery in Palo Alto Pursuant to California Assembly Bills 243 and DRAFT ACTION MINUTES Page 5 of 10 City Council Meeting Draft Action Minutes: 2/1/16 266 and Senate Bill 643. This Action is Exempt Under Section 15061(b)(3) of the California Environmental Quality Act. Public Hearing opened at 10:00 P.M. Public Hearing closed at 10:06 P.M. MOTION: Council Member DuBois moved, seconded by Council Member Kniss to continue this Agenda Item to a February Council Meeting if necessary. MOTION PASSED: 9-0 12. Adoption of an Ordinance to add Section 10.50.085 (Eligibility Areas) and to Amend Section 10.50.090 (Modification or Termination of Districts) of the Palo Alto Municipal Code Relating to Residential Parking Programs; Adoption of a Resolution Amending Resolution 9473 to Implement Phase 2 of the Downtown Residential Preferential Parking (RPP) District Pilot Program; Approval of Contract Amendment to SP Plus for $94,000 for Additional Services for Parking Permits and On-Site Customer Service, Approval of Contract Amendment to SERCO for $60,000 for Enforcement of Expanded Area of Downtown RPP District, Approval of Contract Amendment to McGuire Pacific Constructors for $154,500 for Construction Services for Expanded Area of Downtown RPP District, Approval of Budget Amendments in the General Fund, Residential Parking Permit Fund, and Capital Improvement Fund, Approval of the RPP Administrative Guidelines. These Actions are Exempt From the California Environmental Quality Act (CEQA) Pursuant to Sections 15061(b)(3) and 15301 of the CEQA Guidelines. Molly Stump, City Attorney advised Council Members Filseth, Holman, and Kniss live within the Residential Preferential Parking Permit (RPP) District and Vice Mayor Scharff owns a business property within the RPP District, requiring their recusal from this Agenda Item. Mayor Burt advised he would not participate in this Agenda Item because he lives within 500 feet of the proposed RPP District expansion. Following random selection pursuant to California Code of Regulations Section 18705 (Legally Required Participation), Council Member Filseth will participate in this Agenda Item. DRAFT ACTION MINUTES Page 6 of 10 City Council Meeting Draft Action Minutes: 2/1/16 At this time Council heard Council Member Questions, Comments and Announcements. Council Member Questions, Comments and Announcements Vice Mayor Scharff announced the California State Assembly formed a committee titled Regional Planning in the San Francisco Bay Area that will address the planned merger of Association of Bay Area Governments (ABAG) and the Metropolitan Transit Commission (MTC), the lack of affordable housing, the environment, transportation, and other regional issues. He suggested this Committee may have some influence over local control regarding these issues. Council Member Holman announced four Council Members attended an event led by Lieutenant Governor Gavin Newson regarding a potential initiative relating to gun and ammunition safety. Council Member DuBois announced he will be working on a Colleagues Memorandum relating to parking permitting in the Evergreen Park neighborhood. Mayor Burt attended the 85th anniversary of the Palo Alto Players. He learned that the Lucie Stern Community Theater was built for the Palo Alto Players and the group was the first community theater group on the Peninsula. At this time Council returned to Agenda Item 12. 12. Adoption of an Ordinance to add Section 10.50.085 (Eligibility Areas) and to Amend Section 10.50.090 (Modification or Termination of Districts) of the Palo Alto Municipal Code Relating to Residential Parking Programs; Adoption of a Resolution Amending Resolution 9473 to Implement Phase 2 of the Downtown Residential Preferential Parking (RPP) District Pilot Program; Approval of Contract Amendment to SP Plus for $94,000 for Additional Services for Parking Permits and On-Site Customer Service, Approval of Contract Amendment to SERCO for $60,000 for Enforcement of Expanded Area of Downtown RPP District, Approval of Contract Amendment to McGuire Pacific Constructors for $154,500 for Construction Services for Expanded Area of Downtown RPP District, Approval of Budget Amendments in the General Fund, Residential Parking Permit Fund, and Capital Improvement Fund, Approval of the RPP Administrative Guidelines. DRAFT ACTION MINUTES Page 7 of 10 City Council Meeting Draft Action Minutes: 2/1/16 These Actions are Exempt From the California Environmental Quality Act (CEQA) Pursuant to Sections 15061(b)(3) and 15301 of the CEQA Guidelines. Mayor Burt, Vice Mayor Scharff, Council Member Berman, and Council Member Holman left the meeting at 10:15 P.M. MOTION: Council Member DuBois moved, seconded by Council Member Wolbach to: A. Adopt an Ordinance to add Section 10.50.085 (Eligibility Areas) and amend Section 10.50.090 (Modification or Termination of Districts) of Title 10 of the Palo Alto Municipal Code relating to Residential Parking Programs; and B. Adopt a Resolution amending Resolution 9473 to implement Phase 2 of the Downtown Residential Preferential Parking (RPP) District Pilot Program; and C. Adopt the RPP Administrative Guidelines; and D. Approve and authorize the City Manager or his designee to execute a Contract Amendment with SP Plus for $94,000 for Additional Services for Parking Permits and On-Site Customer Service; and E. Approve and authorize the City Manager or his designee to execute a Contract Amendment with SERCO for $60,000 for Enforcement of Expanded Area of Downtown RPP District; and F. Approve and authorize City Manager or his designee to execute a Contract Amendment with McGuire Pacific Constructors for $154,500 for Construction Services for Expanded Area of Downtown RPP District; and G. Amend the Fiscal Year 2016 Budget Appropriation Ordinance for: i. The Capital Fund by: a. Increasing the transfer from the General Fund by $64,329; and DRAFT ACTION MINUTES Page 8 of 10 City Council Meeting Draft Action Minutes: 2/1/16 b. Increasing the Residential Preferential Parking Project (PL-15003) in the amount of $64,329; and ii. The Residential Parking Permit Programs Fund by: a. Increasing the transfer from the General Fund by $94,000; and b. Increasing the Downtown Residential Preferential Parking Contractual Services budget by $94,000; and iii. The General Fund by: a. Increasing the transfer to the Capital Fund by $64,329; and b. Increasing the transfer to the Residential Parking Permit Programs Fund by $94,000; and c. Decreasing the Transportation Contingency fund by $158,329; and H. Decrease Employee permits by 200 per year for ten years; and I. Return to Council with a program to meter non-resident hang tags, daily scratchers, and five day scratchers distributed by zones both in streets and parking garages; and J. Sell no employee decals outside of the Phase 1 boundaries initially and return with a discussion of hangtags and scratchers. INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to add to the Motion Part G, “direct Staff to return with a Resolution to” and remove Part B. AMENDMENT: Council Member Schmid moved, seconded by Council Member XX to add to the Motion, “report back to Council quarterly.” AMENDMENT WITHDRAWN BY THE MAKER DRAFT ACTION MINUTES Page 9 of 10 City Council Meeting Draft Action Minutes: 2/1/16 SUBSTITUTE MOTION: Council Member Kniss moved, seconded by Council Member XX to continue this Agenda Item for two weeks. SUBSTITUTE MOTION FAILED DUE TO THE LACK OF A SECOND INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to replace in the Motion Part G, “with” with “within approximately two weeks with.” MOTION RESTATED: Council Member DuBois moved, seconded by Council Member Wolbach to: A. Adopt an Ordinance to add Section 10.50.085 (Eligibility Areas) and amend Section 10.50.090 (Modification or Termination of Districts) of Title 10 of the Palo Alto Municipal Code relating to Residential Parking Programs; and B. Adopt the RPP Administrative Guidelines; and C. Approve and authorize the City Manager or his designee to execute a Contract Amendment with SP Plus for $94,000 for Additional Services for Parking Permits and On-Site Customer Service; and D. Approve and authorize the City Manager or his designee to execute a Contract Amendment with SERCO for $60,000 for Enforcement of Expanded Area of Downtown RPP District; and E. Approve and authorize City Manager or his designee to execute a Contract Amendment with McGuire Pacific Constructors for $154,500 for Construction Services for Expanded Area of Downtown RPP District; and F. Amend the Fiscal Year 2016 Budget Appropriation Ordinance for: i. The Capital Fund by: a. Increasing the transfer from the General Fund by $64,329; and b. Increasing the Residential Preferential Parking Project (PL-15003) in the amount of $64,329; and DRAFT ACTION MINUTES Page 10 of 10 City Council Meeting Draft Action Minutes: 2/1/16 ii. The Residential Parking Permit Programs Fund by: c. Increasing the transfer from the General Fund by $94,000; and d. Increasing the Downtown Residential Preferential Parking Contractual Services budget by $94,000; and iii. The General Fund by: d. Increasing the transfer to the Capital Fund by $64,329; and e. Increasing the transfer to the Residential Parking Permit Programs Fund by $94,000; and f. Decreasing the Transportation Contingency fund by $158,329; and G. Direct Staff to return within approximately two weeks with a Resolution to: i. Decrease Employee permits by 200 per year for ten years; and ii. Return to Council with a program to meter non-resident hang tags, daily scratchers, and five day scratchers distributed by zones both in streets and parking garages; and iii. Sell no employee decals outside of the Phase 1 boundaries initially and return with a discussion of hangtags and scratchers. MOTION AS AMENDED PASSED: 5-0 Berman, Burt, Holman, Scharff not participating Inter-Governmental Legislative Affairs None. Adjournment: The meeting was adjourned at 12:38 P.M. CITY OF PALO ALTO CITY COUNCIL DRAFT ACTION MINUTES Page 1 of 6 Special Meeting February 8, 2016 The City Council of the City of Palo Alto met on this date in the Council Chambers at 4:34 P.M. Present: Berman arrived at 4:37 P.M., Burt, DuBois, Filseth, Holman arrived at 4:37 P.M., Kniss, Scharff, Schmid arrived at 4:36 P.M., Wolbach arrived at 4:40 P.M. Absent: Closed Session 1. CONFERENCE WITH LABOR NEGOTIATORS City Designated Representatives: City Manager and his Designees Pursuant to Merit System Rules and Regulations (James Keene, Molly Stump, Suzanne Mason, Dania Torres Wong, Alison Hauk) Employee Organizations: Palo Alto Police Officers Association (PAPOA); Palo Alto Police Managers’ Association (PAPMA); Palo Alto Fire Chiefs’ Association (FCA); International Association of Fire Fighters (IAFF), Local 1319; Service Employees International Union, (SEIU) Local 521; Management, Professional and Confidential Employees; Utilities Management and Professional Association of Palo Alto (UMPAPA) Authority: Government Code Section 54957.6(a). 2. CONFERENCE WITH REAL PROPERTY NEGOTIATORS Authority: Government Code Section 54956.8 Property: Palo Alto Post Office, 380 Hamilton Avenue, Palo Alto, CA 94301 Agency Negotiators: James Keene, Lalo Perez, Hamid Ghaemmaghami Negotiating Parties: United States Postal Service and City of Palo Alto Under Negotiation: Purchase and Leaseback – Price and Terms of Payment. DRAFT ACTION MINUTES Page 2 of 6 City Council Meeting Draft Action Minutes: 2/8/16 MOTION: Council Member Wolbach moved, seconded by Council Member Kniss to go into Closed Session. MOTION PASSED: 9-0 Council went into Closed Session at 4:46 P.M. Council returned from Closed Session at 7:26 P.M. Mayor Burt announced no reportable action. Agenda Changes, Additions and Deletions None. Minutes Approval 3. Approval of Action Minutes for the January 19 and 25, 2016 Council Meeting. MOTION: Council Member Holman moved, seconded by Vice Mayor Scharff to approve the Action Minutes for the January 19 and 25, 2016 Council Meetings with changes to the January 19 Action Minutes as outlined in the At Places Memorandum. MOTION PASSED: 8-0 Kniss not participating Consent Calendar MOTION: Vice Mayor Scharff moved, seconded by Mayor Burt, third by Council Member Filseth to pull Agenda Item Number 6- Approval of Amendment to Table of Organization… to be heard as Agenda Item Number 7b. MOTION: Vice Mayor Scharff moved, seconded by Council Member Holman to approve Agenda Item Numbers 4-5, 7, and 7a. DRAFT ACTION MINUTES Page 3 of 6 City Council Meeting Draft Action Minutes: 2/8/16 4. Resolution 9575 Entitled, “Resolution of the Council of the City of Palo Alto Approving the “2016 Procedures for Customer Identity and Credit Security.”” 5. Approval and Authorization for the City Manager to Execute a Contract With Celerity Integrated Services Inc. in an Amount Not-to-Exceed $122,500 for Fiber Optic System Review Services for a Term Through April 30, 2016 With a 15 Percent Contingency of $18,375 for Related Work, for a Total Authorized Amount Not-to-Exceed $140,875, Capital Improvement Program Project FO-16000. 6. Approval of Amendment to Table of Organization by Adding 1.0 Management Analyst in the Development Services Department. 7. Appointment of 2016 Emergency Standby Council. 7a. Approval of a Contract With Freytag & Associates in the Amount of $237,500 for Airplane Noise Assessment & Mitigation; and Approval of a Budget Amendment in the General Fund for Fiscal Year 2016, Offset by a Reduction of $237,500 from the General Fund Budget Stabilization Reserve. MOTION PASSED: 9-0 Action Items 7b. (Former Agenda Item 6) Approval of Amendment to Table of Organization by Adding 1.0 Management Analyst in the Development Services Department. MOTION: Vice Mayor Scharff moved, seconded by Council Member Holman to refer this Agenda Item to the Finance Committee. MOTION PASSED: 9-0 8. Review and Discussion Regarding the Draft Community Services and Facilities Element Recommended by the Comprehensive Plan Update Citizens Advisory Commission (CAC). DRAFT ACTION MINUTES Page 4 of 6 City Council Meeting Draft Action Minutes: 2/8/16 NO ACTION TAKEN 9. Adoption of Administrative Guideline for Implementation of the Interim Office/R&D Annual Limit in Fiscal Years 2016 and 2017. MOTION: Council Member DuBois moved, seconded by Vice Mayor Scharff to: A. Adopt the administrative guidelines proposed by the Director of Planning and Community Environment in conformance with Section 18.85.208 of the Ordinance establishing an interim annual limit on the amount of Office/R&D space that can be approved each fiscal year; and B. Direct Staff to add clarification to descriptions to allow for increased variation in scoring to highlight successful programs. INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to add to the Motion, “replace 1. Impacts (b) Considerations for Each Criterion with, ‘projects will receive up to 20 points if they result in the lowest traffic impacts.’” INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to add to the Motion, “replace 2. Design (c) Consideration for Each Criterion with, ‘receive up to 20 points for the highest quality design.’” INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to add to the Motion, “remove from 5. Uses (c) Consideration for Each Criterion, ‘than four.’” AMENDMENT: Council Member Schmid moved, seconded by Council Member XX to add to the Motion, “replace in 5. Uses (c) Consideration for Each Criterion, “10 points” with “20 points.” AMENDMENT FAILED DUE TO THE LACK OF A SECOND DRAFT ACTION MINUTES Page 5 of 6 City Council Meeting Draft Action Minutes: 2/8/16 AMENDMENT: Council Member Holman moved, seconded by Council Member XX to add the end of Part B of the Motion, “and code required parking without reductions.” AMENDMENT FAILED DUE TO THE LACK OF A SECOND MOTION RESTATED: Council Member DuBois moved, seconded by Vice Mayor Scharff to: A. Adopt the administrative guidelines proposed by the Director of Planning and Community Environment in conformance with Section 18.85.208 of the Ordinance establishing an interim annual limit on the amount of Office/R&D space that can be approved each fiscal year; and B. Direct Staff to add clarification to descriptions to allow for increased variation in scoring to highlight successful programs; and C. Replace 1. Impacts (b) Considerations for Each Criterion with, “projects will receive up to 20 Points if they result in the lowest traffic impacts;” and D. Replace 2. Design (c) Consideration for Each Criterion with, “receive up to 20 points for the highest quality design;” and E. Remove from 5. Uses (c) Consideration for Each Criterion, “than four.” MOTION AS AMENDED PASSED: 9-0 10. Envision Silicon Valley County Sales Tax Measure: North County and West Valley Cities Position Advocacy. MOTION: Vice Mayor Scharff moved, seconded by Council Member Kniss to: A. Approve advocacy direction to City representatives regarding the proposed Santa Clara County sales tax, including general funding levels within expenditure categories, as developed in coordination with other North County and West Valley cities; and DRAFT ACTION MINUTES Page 6 of 6 City Council Meeting Draft Action Minutes: 2/8/16 B. Authorize the Mayor and City Manager or their designees to engage with Valley Transportation Authority (VTA) and other stakeholders and refine the City’s position and maintain consensus with other cities while supporting maximum regional funding for rail grade separations and congestion relief. AMENDMENT: Council Member DuBois moved, seconded by Council Member XX to add to the Motion, “direct City representative to work towards increasing the percentage to at least 15 percent for Caltrain grade separation and cap Bay Area Rapid Transit (BART) to San Jose funding at 20 percent.” AMENDMENT FAILED DUE TO THE LACK OF A SECOND MOTION PASSED: 9-0 Inter-Governmental Legislative Affairs None. Council Member Questions, Comments and Announcements Council Member Schmid reported the Bay Area Water Supply and Conservation Agency (BAWSCA) Annual Report listed year end reservoir levels including Hetchy Dam at 70 percent and San Pedro Dam at 30 percent of capacity. Vice Mayor Scharff reported his involvement as an Executive Board Member of the Association of Bay Area Governments (ABAG) in how ABAG can successfully merge with the Metropolitan Transit Commission (MTC) or the transfer of planning staff from ABAG to MTC. He reported Santa Clara County Cities Association is considering the creation of a sub-region. Adjournment: The meeting was adjourned at 11:47 P.M. City of Palo Alto (ID # 6563) City Council Staff Report Report Type: Consent Calendar Meeting Date: 2/22/2016 City of Palo Alto Page 1 Summary Title: Utilities Legislative Guidelines Title: Utilities Advisory Commission Recommendation that the City Council Adopt a Resolution Approving the City of Palo Alto Utilities Legislative Policy Guidelines From: City Manager Lead Department: Utilities Recommendation Staff and the Utilities Advisory Commission (UAC) recommend that the City Council adopt a resolution (Attachment A) approving amendments to the Utilities Legislative Policy Guidelines. Executive Summary The Utilities Legislative Policy Guidelines (Exhibit A to Attachment A) include proposed updates to the guidelines last amended by Council on March 2, 2015 to respond to recent legislative and regulatory trends to: 1) provide direction to staff in evaluating and responding to legislative action involving Utilities issues, and 2) clarify approved policy and advocacy direction when active involvement of Palo Alto elected officials is required. At its January 13, 2016 meeting, the UAC reviewed and voted unanimously to recommend that Council approve the amended guidelines. The guidelines are grouped in six sections: the first addressing legislative policy guidelines that are common to all utilities (electric, fiber optics, gas, wastewater collection, and water), and the following five sections addressing those guidelines that are specific to electric, fiber optics, gas, wastewater collection, and water. Each section includes a set of goals for the utility and guidelines for Palo Alto staff and elected officials when taking action to achieve the goals. Background The utility industry is a high-profile and heavily regulated industry subject to continuous legislative action at both the state and federal levels. Such legislation can influence, among other things, the reliability and security of the supply and distribution infrastructure, commodity procurement practices, customer service and billing, program design, rate design, and activities and costs associated with climate protection. Representatives of the City (appointed and elected officials and staff) participate in Federal and State legislative forums to City of Palo Alto Page 2 advocate positions on issues facilitating the City’s current strategic objectives, as adopted in the Utilities Strategic Plan: ensuring a reliable and safe supply of utility resources, providing customer service excellence, managing costs, and ensuring environmental sustainability. The City also participates in joint action efforts to advocate for goals and objectives shared by other publicly-owned utilities. At the state level, hundreds of bills focused on the utility industry can be introduced each year. The number of bills introduced, the pace at which bills change and new language is negotiated, and the often surprising speed at which bills can be placed for a vote during the legislative year requires staff and elected officials to respond quickly if the City is to have any influence on the resulting legislation. Often, a response to an amended bill is required in a matter of a day or two. These timing constraints preclude a return to the UAC and Council for approval each time a response is required. Therefore, a set of policy guidelines is developed each year that identifies the goals and priorities for the City to be applied by staff when evaluating and responding to legislation. While the guidelines are used by staff for evaluating legislation, any advocacy positions taken in alignment with these guidelines will be subject to the approval of the Utilities Director or City Manager per the City’s legislative advocacy process. Although it is impractical to return for approval each time a letter is sent in response to a bill amendment, the issues under debate are known to the UAC and Council through their participation in legislative committee meetings, and updates from the City Manager, the Utilities Director and City staff. Formal letters responding to legislative bills or amendments will be distributed to the UAC and Council. Discussion The proposed Utilities Legislative Policy Guidelines have been updated to respond to recent legislative and regulatory trends. Exhibit A, attached to the resolution, shows the proposed revised guidelines, with the changes from the last approved set of guidelines highlighted in Attachment B. The priorities are grouped in six sections: the first listing goals, trends and priorities that are common to all utilities, and the following five sections identifying goals, trends and priorities that are specific to electric, fiber optic, natural gas, wastewater collection and water services. Attachment C provides a summary of key legislative action from 2015 and a look forward at anticipated issues that have a good chance of reappearing in the second year of California’s 2015/2016 legislative session. Some of these are bills that were held back in 2015 and may be taken up again this year, others are approved statutes that staff anticipates will have follow up legislation. Staff returns every year with an update to the guidelines and is proposing the guidelines, if adopted by Council, remain in effect from February 22, 2016 until the next approved update. City of Palo Alto Page 3 Commission Review and Recommendation The Utilities Legislative Policy Guidelines were presented to the UAC at its January 13, 2016 meeting. The Commission discussed public disclosure of customers’ utility usage data, and Commissioner Foster asked that staff acknowledge that there were different opinions on the issue of energy and water use disclosure. The UAC discussed the proposed changes to “All Utilities” Goals 1 and 3 and determined that the proposed changes to those goals be discarded and the original language retained. The UAC voted unanimously (6-0 with Commissioner Hall absent) to recommend that Council approve the guidelines, without the changes to the “All Utilities” Goals 1 and 3. Draft excerpted minutes from the UAC’s January 13, 2016 meeting are provided as Attachment D. Staff revised the “All Utilities” Goals 1 and 3 in the guidelines to revert to the original language such that the proposed guidelines, provided as Exhibit A to Attachment A, are consistent with the UAC’s recommendation. Resource Impact There is no direct resource impact associated with adoption of the proposed legislative policy guidelines. However, actions taken that support the efficient use of the City’s assets and resources will help control costs, implement the Council’s policies and goals, and protect utility customers. Policy Implications The recommendation is consistent with Council policy and supports the Utilities Strategic Plan’s objectives of: ensuring a reliable and safe supply of utility resources, providing customer service excellence, managing costs, and ensuring environmental sustainability. Environmental Review Approval of a resolution adopting the Utilities Legislative Policy Guidelines does not meet the definition of a project pursuant to Section 21065 of the California Environmental Quality Act (CEQA), thus, no environmental review is required. Attachments:  Attachment A: Resolution to Amend Utilities Legislative Policy Guidelines (PDF)  Attachment B: Utilities Legislative Policy Guidlines (in redline strikeout text) (PDF)  Attachment C: 2015 Legislative Activity Summary (PDF)  Attachment D: Excerpted Draft Minutes of January 13, 2016 (PDF) NOT YET APPROVED 160128 jb 6053661 Resolution No. _____ Resolution of the Council of the City of Palo Alto Approving the City of Palo Alto Utilities’ Legislative Policy Guidelines A. The City of Palo Alto Utilities Strategic Plan (“Strategic Plan”), approved by the Palo Alto City Council on July 18, 2011, [Staff Report #1880], and amended on August 5, 2013 (Staff Report #3950), provides a set of Strategic Objectives for the City of Palo Alto Utilities Department (CPAU) to follow in ensuring a reliable and safe supply of utility resources, providing customer service excellence, managing costs, and ensuring environmental sustainability. B. CPAU annually identifies Utilities’ Legislative Policy Guidelines that facilitate the Strategic Plan’s Strategic Objectives, and advocates for utility-related issues at Federal and State legislative forums in furtherance of those objectives. C. Action on some of these issues may require active involvement of Palo Alto elected and appointed officials. D. The Utilities’ Legislative Policy Guidelines were presented to the UAC at its January 13, 2016 meeting, and the UAC voted unanimously (6-0 with Commissioner Hall absent) to recommend that the City Council approve the Guidelines, without the changes to the “All Utilities” Goals 1 and 3. Staff revised the “All Utilities” Goals 1 and 3 in the Guidelines to revert to the original language, such that the proposed guidelines, provided as Exhibit A to this Resolution, are consistent with the UAC’s recommendation. The Council of the City of Palo Alto hereby RESOLVES as follows: SECTION 1. The Council hereby adopts the resolution approving the Utilities Legislative Policy Guidelines, effective February 22, 2016. All prior versions of the City of Palo Alto Utilities Legislative Policy Guidelines, including the Legislative Policy Guidelines adopted by Council on March 2, 2015 (Resolution No. 9498) are hereby repealed and replaced in their entirety by the Utilities Legislative Policy Guidelines, attached to this Resolution as Exhibit A. SECTION 2. Staff will review the Guidelines annually and any proposed changes will be approved by City Council. // // // // ATTACHMENT A SECTION 3. The Council finds that the adoption of this resolution does not constitute a project under Section 21065 of the California Environmental Quality Act (CEQA) and the CEQA Guidelines, and therefore, no environmental assessment is required. 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 Utilities Legislative Policy Guidelines February 2016 Update 6053662 Included as Exhibit A to Resolution Exhibit A Utilities’ Legislative Policy Guidelines Formal advocacy positions taken in alignment with these guidelines will be subject to the approval of the Utilities Director or City Manager as per the City’s Legislative Program Manual ALL UTILITES Goals 1. Preserve/enhance local accountability in the control and oversight of matters impacting utility programs and rates for our customers while balancing statewide climate protection goals. 2. Support efforts to maintain or improve the reliability and security of the supply, transmission, storage, distribution/collection, and data infrastructures. 3. Support legislation that makes bold progress in cost effectively reducing greenhouse gas (GHG) emissions, and recognizes early voluntary action. 4. Maintain the City of Palo Alto Utilities’ (CPAU’s) ability to provide safe, reliable, sustainable, and competitively-priced utility services. Goals Legislative Policy Guidelines Venue 1. Local Accountability 2. Reliability, Security & Infrastructure 3. Climate Protection 4. Service & Cost Control 1. Advocate goals through active participation in joint action efforts. Federal, State, and Regional     2. Support legislation that allows local evaluation and design of more efficient energy solutions, fuel switching, and demand control programs. Federal, State, and Regional    3. Promote utility legislation and regulations that support effective and consistent compliance and reporting requirements. Ensure such legislation and regulations have received stakeholder review and cost benefit analysis. Federal, State, and Regional Reliability Councils    4. Oppose unreasonable and inequitable financial burdens through active participation in CMUA and NCPA legislative activities. Federal, State, and CPUC   Utilities Legislative Policy Guidelines February 2016 Update 6053662 Goals Legislative Policy Guidelines Venue 1. Local Accountability 2. Reliability, Security & Infrastructure 3. Climate Protection 4. Service & Cost Control 5. Advocate for state and federal grants for local and regional energy efficiency and conservation measures, renewable resources, fiber optic, fuel switching, wastewater collection systems and recycled water projects. Federal and State    6. Maintain right of way access for utility infrastructure. Federal and State   7. Protect the financial and operational value of utility assets and contracts; preserve local regulatory control of both. Federal and State    8. Enhance utility customer protections for data security and confidentiality. Federal and State  9. Maintain existing low cost municipal financing options for infrastructure projects and advocate for new federal and state programs that recognize critical infrastructure needs. Federal and State    10. Promote legislation and regulations supporting reasonable and consistent requirements for utility notifications, , safety, services, public communications, billing, payments, and customer assistance. Federal and State   11. Support Proposition 26 reform efforts to provide ratemaking flexibility to balance conservation, revenue sustainability, and low income assistance programs. State   Utilities Legislative Policy Guidelines February 2016 Update 6053662 Goals Legislative Policy Guidelines Venue 1. Local Accountability 2. Reliability, Security & Infrastructure 3. Climate Protection 4. Service & Cost Control 12. Seek state and regional funding to enhance the efficiency, security, and reliability of infrastructure that maintains utility customer data security and confidentiality. Federal and State   Utilities Legislative Policy Guidelines February 2016 Update 6053662 ELECTRIC Goals 1. Preserve/enhance the ability of municipal utilities to exercise local accountability and oversight over matters impacting customer service, programs (such as demand side efficiency and conservation programs), and rate structure. 2. Preserve/enhance the reliability and security of infrastructure. 3. Support legislation that recognizes early voluntary action in reducing GHG emissions and specifically exempts a municipality from burdensome requirements that could result from the early action. 4. Preserve just and reasonable utility rates/bills established by local governing bodies. Goals Legislative Policy Guidelines Venue 1. Local Accountability 2. Reliability 3. GHG Reduction 4. Cost Contro l 1. Advocate goals through Northern California Power Agency (NCPA), California Municipal Utilities Association (CMUA), American Public Power Association (APPA), Transmission Agency of Northern California (TANC), and Bay Area Municipal Transmission Group (BAMx) with support from Palo Alto staff; strive to present the same or substantially the same message Federal and State     2. Support NCPA in its continued efforts to streamline the state regulatory reporting responsibilities, to eliminate duplicative data and report submittals to multiple state regulatory agencies, including the CEC, CARB, and the California Independent System Operator (CAISO). State   3. Advocate for legislation/regulations that provide local accountability and design of: • Net Energy Metering (NEM) successor programs designed to fit local conditions and priorities; • Electric Integrated Resource Plans • cost-effective renewable distributed generation and cogeneration projects, and standards and permitting requirements for connecting such resources to the local distribution system; • balancing state and local policy implementation and ratepayer Federal and State     Utilities Legislative Policy Guidelines February 2016 Update 6053662 Goals Legislative Policy Guidelines Venue 1. Local Accountability 2. Reliability 3. GHG Reduction 4. Cost Contro l equity; • equitable rate design and tariffs; • cost-effective electric efficiency programs; • implementation of renewable portfolio standards; • cost-effective storage integration; • direct access requirements; • smart meters and smart grid design and implementation; and • use of public benefit funds (as allowed in AB 1890 (1996) 4. Support cap-and-trade market designs that: • protect consumers from the exercise of market power; • allocate allowances that help mitigate impacts to Palo Alto customers while providing incentives for utilities to lower GHG emission portfolios; • provide flexible compliance mechanisms such as banking and borrowing of allowances; and • allocate funds generated from cap-and- trade markets to cost-effective GHG- reduction related activities, not as a revenue source for state or federal general funds. Federal and State    5. Support legislation for renewable portfolio standards that: • maintain local compliance authority; • avoid mandates for technology or source specific carve outs, and minimum term requirements; • allow utilities to pursue all cost- effective resources available to meet portfolio needs including use of Renewable Energy Certificates (RECs); • ensure uniform application of RPS standards, avoiding punitive and/or duplicative non-compliance penalties; • restrict new regulations expanding CEC jurisdiction over publicly owned utilities; Local and State    Utilities Legislative Policy Guidelines February 2016 Update 6053662 Goals Legislative Policy Guidelines Venue 1. Local Accountability 2. Reliability 3. GHG Reduction 4. Cost Contro l • allow local distributed generation to count in full towards RPS; and • prioritize the use of existing transmission system assets over building new transmission. 6. Support/encourage transmission, generation, and demand-reduction projects and solutions including advocating for financing or funding solutions/options for projects that: • enhance/ensure reliability; • ensure equitable cost allocation following beneficiary pays principles (including protection against imposition of state- owned electric contract costs on municipal utility customers); • improve procurement flexibility (e.g. resource adequacy rules that ensure reliability and provide flexibility in meeting operational requirements or flexibility in meeting State renewable portfolio standards); • support the continuation of federal and state financial incentives that promote increased renewable development; • improve market transparency (particularly transparency of IOU’s transmission and procurement planning and implementation activities); and • reduce negative environmental impacts on the Bay Area and the Peninsula. Local, State, and Federal     7. Advocate for Congressional, legislative, or administrative actions on matters impacting costs or operations of the Western Area Power Administration (Western) such as: • support of Congressional Field Hearings to explore modernizing flood control strategies, river regulation and Federal, State and Regional    Utilities Legislative Policy Guidelines February 2016 Update 6053662 Goals Legislative Policy Guidelines Venue 1. Local Accountability 2. Reliability 3. GHG Reduction 4. Cost Contro l generation strategies at Central Valley Project (CVP) plants to enhance generation, water delivery, flood control and fisheries; • protection of the status of Western Power Marketing Administration and cost-based rates; • provisions for preference customers’ first take at available land with economic potential for wind farms; • balancing efforts for competing environmental improvements in rivers and Delta conditions with water supply and hydropower impacts; • support grid modernization without compromising the primary mission of Western and recognizing the achievements already made in California without adding duplicate costly efforts; • monitoring and evaluating impacts of Delta conveyance proposals on Western Base Resource allocation; • advocating for an equitable distribution of costs between water and power customers of the Central Valley Project; and • advocating for clear product provisions, fair allocation of Base Resource Capacity and fair contract terms under Western’s 2025 Power Marketing Plan and new Western Base Resource contracts. 8. Advocate for Congressional or administrative actions on matters relating to overly burdensome reporting and compliance requirements established by the North American Reliability Corporation (NERC), the Federal Energy Regulatory Commission (FERC) or the Western Electricity Coordinating Council (WECC). Federal, State and Regional    9. Support fair and reasonable application of grid reliability requirements established by NERC, WECC, or FERC and seek appropriate remedies Federal and Regional    Utilities Legislative Policy Guidelines February 2016 Update 6053662 Goals Legislative Policy Guidelines Venue 1. Local Accountability 2. Reliability 3. GHG Reduction 4. Cost Contro l (if needed) for inequitable or punitive application of fees and fines. 10. Work with CAISO and/or FERC: • to give buyers of renewable intermittent resources relief from imbalance penalties; • to promote financial and operational changes that result in timely and accurate settlement and billing; and • to provide critical input on the need for various transmission projects in light of the escalating costs to the City to import power using the bulk transmission system. Federal and State    11. Work with NCPA, CMUA and NERC to ensure that: • Federal, state and regional designations of “critical cyber assets” are appropriately applied to only truly critical local distribution infrastructure; and • CPAU retains local control over implementation of utility industry cyber security standards, policies and procedures. Federal and Regional   Utilities Legislative Policy Guidelines February 2016 Update 6053662 FIBER OPTIC Goals 1. Preserve and enhance the authority of local government to (1) develop broadband solutions that align with community needs and (2) expand consumer choice for competitive Internet connectivity and other advanced services delivered over fiber-optic networks. 2. Encourage the competitive delivery of broadband services by permitting the use of public rights-of- way and Utilities infrastructure in a responsible manner, provided that local rights of way authority and management is preserved and contractual or other use does not compromise the City’s existing utility safety, service, and operational s obligations. 3. Support local government authority over zoning-related land use for communications infrastructure in accordance with reasonable and non-discriminatory regulations. 4. Support the Council’s Technology and the Connected City initiative of 2013, to fully leverage the City’s fiber-optic and infrastructure assets such as public rights-of-way, utility poles and conduit for the broadband expansion. Goals Legislative Policy Guidelines Venue 1. Support Municipal Delivery 2. Competitive Delivery 3. Local Authority over Land Use 4. Support Council Initiatives 1. Advocate for these goals through the American Public Power Association (APPA), California Municipal Utilities Association (CMUA), National Association of Telecommunications Officers and Advisors (NATOA), National League of Cities (NLC), and the Next Century Cities initiative (NCC), with support from City staff. Federal and State     2. Support legislation and regulations that preserve and enhance municipal delivery of conventional and advanced telecommunication services as prescribed by the Telecommunications Act of 1996. Federal and State    3. Support the goals of the Federal Communications Commission’s (FCC), National Broadband Plan to improve Internet access nationwide. Federal and State    4. Oppose legislation and regulations that benefit the incumbent cable TV, telephone, and telecommunications companies at the expense of community-owned fiber-optic and wireless networks. Federal and State    Utilities Legislative Policy Guidelines February 2016 Update 6053662 Goals Legislative Policy Guidelines Venue 1. Support Municipal Delivery 2. Competitive Delivery 3. Local Authority over Land Use 4. Support Council Initiatives 5. Support legislation and regulations that preserve and enhance utility customer data security and confidentiality protections by the providers of telecommunication services. Federal and State    6. Support the Council’s directive to concurrently pursue the findings and recommendations in the Fiber-to-the- Premises Master Plan and Wireless Network Plan and continue discussions and negotiations with third parties considering new service deployments in Palo Alto. Local   7. Support legislation and regulations that:: • Permit the contractual use of public right-of- way and Utilities infrastructure; • Preserve local rights-of-way authority and management; • Preserve local government zoning and siting authority for wireless and wireline communication facilities; • Support local “dig once” policies to ensure conduit and fiber are available for lease on reasonable terms; and • Oppose legislation and regulations that arbitrarily reduce compensation received by local governments from other entities for the economic use of the public rights-of-way and other public properties required for communication infrastructure (e.g., utility poles, streetlight poles, ducts and conduits). Federal, State and Local     Utilities Legislative Policy Guidelines February 2016 Update 6053662 NATURAL GAS Goals 1. Preserve/enhance the ability of municipal utilities to develop and implement demand side efficiency and conservation programs, alternative gas supplies, and rate structures. 2. Increase the security and reliability of the gas supply and transmission infrastructure. This includes retaining access to intra- and interstate gas transmission systems to reliably serve customers. 3. Support efforts to reduce greenhouse gas emissions and protect the environment. 4. Preserve just and reasonable utility rates/bills established by local governing bodies. Goals Legislative Policy Guidelines Venue 1. Local Accountability 2. Reliability of Infrastructure 3. Environ- ment 4. Cost Control 1. Advocate most of these goals mainly through the American Public Gas Association (APGA) with minor support from Palo Alto staff. Primarily Federal with minor advocacy at State level     2. Work with Northern California Power Agency (NCPA) and California Municipal Utilities Association (CMUA) to the extent that the City’s goals as a gas distributor align with generators’ use of natural gas. Federal and State     3. Support cost effective renewable gas supplies from in or out of state sources. In case of mandated renewable portfolio standards, advocate for controls and off- ramps similar to the electric RPS that minimize customer cost impact. Federal and State     4. Advocate for financing or funding for cost-effective natural gas efficiency and solar water heating end uses. Federal and State     5. Support market transparency and efforts to eliminate market manipulation through reasonable oversight. Federal  6. Support municipal utilities’ ability to enter into pre-pay transactions for gas supplies. Federal  7. Support efforts to improve pipeline safety. Federal and State    Utilities Legislative Policy Guidelines February 2016 Update 6053662 Goals Legislative Policy Guidelines Venue 1. Local Accountability 2. Reliability of Infrastructure 3. Environ- ment 4. Cost Control 8. Work with partners to discourage extension of CPUC regulatory authority over municipal gas operations. State    9. Support cap-and-trade market designs that: • protect consumers from the exercise of market power; • allocate allowances that mitigate impacts to Palo Alto customers while preserving City environmental goals; • advocate for an allowance allocation methodology that provides flexibility for Palo Alto to structure rates to align GHG costs and revenues; • provide flexible compliance mechanisms such as banking and borrowing of allowances; and • allocate funds generated from cap-and-trade markets to GHG related activities, not as a revenue source for state or federal general funds. Federal and State    10. Support legislation that aims to protect public health and encourages transparency regarding the practice of hydraulic fracturing or “fracking” for natural gas development, while opposing blanket moratoriums that aren’t supported by science. Federal and State   Utilities Legislative Policy Guidelines February 2016 Update 6053662 WASTEWATER COLLECTION Goals 1. Support ability of municipal utilities to develop and manage their own conservation and efficiency programs and retain authority over ratemaking, including the imposition of non-volumetric customer meter or infrastructure charges for wastewater collection service. 2. Encourage efforts to increase the reliability of the local wastewater collection systems. 3. Maintain the provision of reliable and sustainable wastewater collection service at a fair price. 4. Support equal comparisons of wastewater collection systems by regulatory agencies in order to minimize and reduce onerous, costly, time-intensive reporting requirements and improve value and accuracy of information reported to the public. Goals Legislative Policy Guidelines Venue 1. Local Accountability 2. Reliable Infrastructure 3. Maintain service 4. Valuable reporting 1. Advocate goals through active participation in the Association of Bay Area Governments (ABAG). Local, Regional & State     2. Support regulations of wastewater collection systems that recognize: • local jurisdictions’ proactive efforts to replace and maintain wastewater collections systems; • the need to provide affordable and cost based collection service; and • the unique characteristics of each collection system. Local, Regional & State    3. Support regional agencies in their pursuit of: • environmentally sustainable, reliable wastewater collection service at a fair price; and • regional comparisons of wastewater collection projects for future state grant funding. Local and Regional    5. Advocate for funding and local regulations for wastewater collection system projects and requirements that reduce overflows and improve collection system efficiency. Regional, State and Federal   Utilities Legislative Policy Guidelines February 2016 Update 6053662 WATER Goals 1. Support the ability of public utilities and districts to develop and implement their own water efficiency and conservation programs while retaining authority over ratemaking, including the ability to optimize volumetric, fixed, and drought-related pricing and balance the goals of revenue certainty and water use efficiency. 2. Increase the security and reliability of the regional water system owned and operated by the San Francisco Public Utilities Commission (SFPUC). 3. Support efficiency and recycled water programs in order to minimize the use of imported supplies. 4. Provide environmentally sustainable and reliable supplies of high quality water. Goals Legislative Policy Guidelines Venue 1. Local Authority 2. Reliable Infrastructur 3. Minimize imports 4. Supplies at fair cost 1. Advocate goals through active participation in the Bay Area Water Supply and Conservation Agency (BAWSCA), California Urban Water Conservation Council (CUWCC), and California Municipal Utilities Association (CMUA), with support from Palo Alto staff for BAWSCA Local, Regional and State     2. Participate in CUWCC Best Management Practice (BMP) revisions and development to ensure that aggressive and cost- effective efficiency goals are incorporated and operating proposals are reasonable, achievable, and cost-effective. State     3. Advocate to ensure that legislative actions regarding the Hetch Hetchy Regional Water System include: • timely rebuilding of the regional water system; • maintenance of the quality of delivered water; • minimization of any increase in the cost of water; • no additional exposure to more frequent or severe water shortages; • increased real-time monitoring data availability to ensure water quality; • support for the existing water system and its operation; Local, Regional and State   Utilities Legislative Policy Guidelines February 2016 Update 6053662 Goals Legislative Policy Guidelines Venue 1. Local Authority 2. Reliable Infrastructur 3. Minimize imports 4. Supplies at fair cost • SWRCB responsiveness to SFPUC water quality issues; 4. Advocate for interpretations or implementation of Water Code provisions that maintain or reinforce the authorities and protections available to the City and BAWSCA members outside of San Francisco. Local, Regional and State    5. Support BAWSCA to enable it to advocate for: • an environmentally sustainable, reliable supply of high quality water at a fair price; • for Wholesale Customers’ rights under the Water Supply Agreement for water from SFPUC that meets quality standards; • a SFPUC rate structure that is consistent with the Water Supply Agreement and is based on water usage; • preservation of Palo Alto’s existing contractual water allocation and transportation rights on the SFPUC Hetch Hetchy system; and • regional planning for conservation, recycled water, and other water supply projects. Local and Regional     6. Advocate for actions that: • preserve Palo Alto’s existing contractual rights; and • preserve local control over water use and limit encroachment from outside jurisdictions. Local and Regional   7. Support infrastructure security and reliability including an interconnection between the SCVWD West Pipeline with the SFPUC’s Bay Division Pipelines 3 and 4. Regional and State  8. Support notification requirements that inform residents/customers but do not inflict undue or unobtainable requirements on the utility. State   Utilities Legislative Policy Guidelines February 2016 Update 6053662 Goals Legislative Policy Guidelines Venue 1. Local Authority 2. Reliable Infrastructur 3. Minimize imports 4. Supplies at fair cost 9. Support local control of public benefit funds, funding levels and program design. State   10. Support beneficiary pays methodologies to prevent taxes or fees imposed on SFPUC customers to fund infrastructure improvements and costs of water sources that do not serve Palo Alto customers. State and Regional    11. Advocate for financing or funding for water conservation programs and recycled water projects that meet end-use needs and conserve potable water and oppose legislation that would reduce such funding. State, Regional and Federal     12. Support infrastructure security and reliability that includes equitable allocation of funds for increasing the security of infrastructure and that protects the City from unnecessary regulations. Local, State and Federal    13. Support legislation that promotes responsible groundwater management while recognizing Palo Alto’s existing and historical groundwater extraction practices. State     14. Support Proposition 218 reform efforts to provide ratemaking flexibility to balance conservation, revenue sustainability, and low income assistance programs. State    15. Advocate for reasonable statewide water conservation efforts (both drought response and long term) that achieve required water savings while minimizing customer and commercial impact, protecting the City’s urban canopy and minimizing the City’s enforcement costs. State    16. Protect the City and County of San Francisco’s water rights as well as those of the co-grantees of the Raker Act. State    17. Support legislation that would protect the City’s infrastructure and treatment investments from future state-wide cuts in water use. State   Utilities Legislative Policy Guidelines February 2016 Update Page 1 of 19 Utilities’ Legislative Policy Guidelines Formal advocacy positions taken in alignment with these guidelines will be subject to the approval of the Utilities Director or City Manager as per the City’s Legislative Program Manual ALL UTILITES Goals 1.Preserve/enhance local accountability in the control and oversight of matters impacting utility programs and rates for our customers while balancing statewide climate protection goals. 2.Support efforts to maintain or improve the reliability and security of the supply, transmission, storage, and distribution/collection, and data infrastructures. 3.Support legislation that makes bold progress in cost effectively reducing greenhouse gas (GHG) emissions, and recognizes early voluntary action. 4.Maintain the City of Palo Alto Utilities’ (CPAU’s) ability to provide safe, reliable, sustainable, and competitively-priced utility services. Goals Legislative Policy Guidelines Venue 1.Local Accountability 2. Reliability, Security & Infrastructure 3. Climate Protection 4. Service & Cost Control 1. Advocate goals through active participation in joint action efforts. Federal, State, and Regional  2.Support legislation that allows local evaluation and design of more efficient energy solutions, fuel switching, and demand control programs.Support legislation that will result in the most cost-effective reduction of GHG emissions, recognition of early action, and inclusion of more efficient solutions, fuel switching, and demand control programs, in integrated resource plans. Federal, State, and Regional  3.Promote utility legislation and regulations that support effective and consistent compliance and reporting requirements. Ensure such legislation and regulations have received stakeholder review and cost benefit Federal, State, and Regional Reliability Councils  ATTACHMENT B Utilities Legislative Policy Guidelines February 2016 Update Page 2 of 19 Goals Legislative Policy Guidelines Venue 1. Local Accountability 2. Reliability, Security & Infrastructure 3. Climate Protection 4. Service & Cost Control analysis.Promote utility legislation and regulations that have undergone stakeholder review and applicable cost benefit analysis to support reasonable reliability standards and compliance requirements, and effective and consistent reporting requirements, customer communications, and goal-setting. 4. Oppose cost shifts from Federal or State budgets and California Public Utilities Commission (CPUC) jurisdictional utilities unreasonable and inequitable financial burdens through active participation in CMUA and NCPA legislative activities. Federal, State, and CPUC   5. Advocate for sState and fFederal grants for local and regional measures regarding energy efficiency and , conservation measures, renewable resources, fiber optic, fuel switching, wastewater collection systems and recycled water projects. Federal and State   6. Maintain right of way access for utility infrastructure. Federal and State   7. Protect the financial and operational value of existing utility assets and contracts; and localpreserve local regulatory approvals control of sameboth. Federal and State   8. Enhance utility customer protections for data security and confidentiality. Federal and State   89. Maintain existing low cost municipal financing options for infrastructure projects and advocate for new federal and Federal and State   Utilities Legislative Policy Guidelines February 2016 Update Page 3 of 19 Goals Legislative Policy Guidelines Venue 1. Local Accountability 2. Reliability, Security & Infrastructure 3. Climate Protection 4. Service & Cost Control state programs that recognize critical infrastructure needs. 910. Promote utility legislation and regulations that supporting reasonable and consistent requirements for utility notifications, compliance, and reporting requirements for safety, services, public communications, billing, and payments, and customer assistance. Federal and State   11. Support Proposition 26 reform efforts to provide ratemaking flexibility to balance conservation, revenue sustainability, and low income assistance programs. State   12. Seek state and regional funding to enhance the efficiency, security, and reliability of infrastructure that maintains utility customer data security and confidentiality. Federal and State   Utilities Legislative Policy Guidelines February 2016 Update Page 4 of 19 ELECTRIC Goals 1. Preserve/enhance the ability of municipal utilities to exercise local accountability and oversight over matters impacting customer service, programs (such as demand side efficiency and conservation programs), and rate structure. 2. Preserve/enhance the reliability and security of infrastructure. 3. Support legislation that makes bold progress in cost effectively reducing GHG emissions and encourages recognizes early voluntary action in reducing GHG emissions and specifically exempts a municipality from burdensome requirements that could result from the early action. 4. Preserve just and reasonable utility rates/bills established by local governing bodies. Goals Legislative Policy Guidelines Venue 1. Local Accountability 2. Reliability 3. GHG Reduction 4. Cost Contro l 1. Advocate goals through Northern California Power Agency (NCPA), California Municipal Utilities Association (CMUA), American Public Power Association (APPA), Transmission Agency of Northern California (TANC), and Bay Area Municipal Transmission Group (BAMx) with support from Palo Alto staff; strive to present the same or substantially the same message to speak with a coordinated voice. Federal and State  2. Support NCPA in its continued efforts to streamline the state regulatory reporting responsibilities, to eliminate duplicative data and report submittals to multiple state regulatory agencies, including the CEC, CARB, and the California Independent System Operator (CAISO). State   3. Advocate for legislation/regulations that provide local accountability and support fordesign of:  Net Energy Metering (NEM) successor programs designed to fit local conditions and priorities;  Electric Integrated Resource Plans  cost-effective cleanrenewable distributed generation and cogeneration projects, and standards and permitting requirements for connecting such resources to the local distribution system;  balancing state and local policy implementation and ratepayer equity; Federal and State  Utilities Legislative Policy Guidelines February 2016 Update Page 5 of 19 Goals Legislative Policy Guidelines Venue 1. Local Accountability 2. Reliability 3. GHG Reduction 4. Cost Contro l  equitable rate design and tariffs;  cost-effective electric efficiency programs;  implementation of renewable portfolio standards;  cost-effective storage integration;  direct access requirements;  smart meters and smart grid design and implementation; and  use of public benefit funds (as allowed in AB 1890 (1996) 4. Support cap-and-trade market designs that:  protect consumers from the exercise of market power;  allocate allowances that help mitigate impacts to Palo Alto customers while providing incentives for utilities to move to lower GHG emission portfolios;  provide flexible compliance mechanisms such as banking and borrowing of allowances; and  allocate funds generated from cap-and- trade markets to cost-effective GHG- reduction related activities, not as a revenue source for state or federal general funds. Federal and State   5. Support legislation for renewable portfolio standards that:  promote the 33% goal for the state;  maintain local compliance authority;  avoid mandates for technology or source specific carve outs, and minimum term requirements;  allow utilities to pursue all cost-effective resources available to meet portfolio needs low cost alternatives by utilizing the existing transmission system to access out-of-state resources, including use of Renewable Energy Certificates (RECs);  ensure fair uniform application of RPS standards, that avoiding punitive and/or duplicative non- compliance penalties;  restrict extension new regulations expanding of CEC jurisdiction over pPublicly oOwned uUtilities;  consolidate GHG reduction goals and Renewable Portfolio Standards under one Local and State   Utilities Legislative Policy Guidelines February 2016 Update Page 6 of 19 Goals Legislative Policy Guidelines Venue 1. Local Accountability 2. Reliability 3. GHG Reduction 4. Cost Contro l clean energy standard;  allow the counting of local distributed generation to count in full towards RPS; and  prioritize the use of the existing transmission system assets over building new transmission. 6. Support/encourage transmission, generation, and demand-reduction projects and solutions including advocating for financing or funding solutions/options for projects that:  enhance/ensure reliability;  ensure equitable cost allocation following beneficiary pays principles (including protection against imposition of state- owned electric contract costs on municipal utility customers);  improve procurement flexibility (e.g. resource adequacy rules that ensure reliability and provide flexibility in meeting operational requirements or flexibility in meeting State renewable portfolio standards);  support the continuation of federal and state financial incentives that promote increased renewable development;  improve market transparency (particularly transparency of IOU’s transmission and procurement planning and implementation activities); and  reduce the negative environmental impacts on the Bay Area and the Peninsula. Local, State, and Federal  7. Advocate for Congressional, legislative, or administrative actions on matters impacting costs or operations of the Western Area Power Administration (Western) such as:  support of Congressional Field Hearings to explore modernizing flood control strategies, river regulation and generation strategies at Central Valley Project (CVP) plants to enhance generation, water delivery, flood control and fisheries;  protection of the status of Western Power Marketing Administration and cost-based Federal, State and Regional  Utilities Legislative Policy Guidelines February 2016 Update Page 7 of 19 Goals Legislative Policy Guidelines Venue 1. Local Accountability 2. Reliability 3. GHG Reduction 4. Cost Contro l rates;  provisions for preference customers’ first take at available land available with economic potential for wind farms;  balancing efforts for competing environmental improvements in rivers and Delta conditions with water supply and hydropower impacts;  achieving the  support grid modernization goals of Secretary Chu’s March 16, 2012 memo without compromising the primary mission of Western and recognizing the achievements already made in California without adding duplicate costly efforts;  monitoring and evaluating impacts of Delta conveyance proposals on Western Base Resource allocation; and  advocating for an equitable distribution of costs between water and power customers of the Central Valley Project; and.  advocating for clear product provisions, fair allocation of Base Resource Capacity and fair contract terms under Western’s 2025 Power Marketing Plan and new Western Base Resource contracts. 8. Advocate for Congressional, legislative, or administrative actions on matters relating to overly burdensome reporting and compliance requirements established by the North American Reliability Corporation (NERC), the Federal Energy Regulatory Commission (FERC) or the Western Electricity Coordinating Council (WECC). Federal, State and Regional   9. Support fair and reasonable application of grid reliability requirements established by NERC, WECC, or FERC and seek Congressional appropriate remedies (if needed) for inequitable or punitive application of fees and fines. Federal and Regional   10. Work with CAISO and/or through FERC:  to give buyers of renewable intermittent resources relief from imbalance penalties;  to promote financial and operational changes that result in timely and accurate Federal and State   Utilities Legislative Policy Guidelines February 2016 Update Page 8 of 19 Goals Legislative Policy Guidelines Venue 1. Local Accountability 2. Reliability 3. GHG Reduction 4. Cost Contro l settlement and billing; and  to provide critical input on the need for various transmission projects in light of the escalating costs to the City to import power using the bulk transmission system. 11. Work with NCPA, CMUA and NERC to ensure that:  Federal, state and regional designations of “critical cyber assets” are appropriately applied to only truly critical local distribution infrastructure; and  CPAU retains local control over implementation of utility industry cyber security standards, policies and procedures. Monitor cyber security issues to ensure that CPAU, which currently does not have critical cyber assets, retains local control over its cyber security needs while remaining exempt from NERC cyber security standards. Support NCPA to protect it and its member agencies from unnecessary cyber security regulations. Federal and Regional    Utilities Legislative Policy Guidelines February 2016 Update Page 9 of 19 FIBER OPTIC Goals 1. Preserve and enhance the authority of local government to (1) develop broadband solutions that align with community needs and (2) expand consumer choice for competitive Internet connectivity and other advanced services delivered over fiber-optic networks. 2. Encourage the competitive delivery of broadband services by permitting the use of public rights-of- way and Utilities infrastructure in a responsible manner, provided that local rights of way authority and management is preserved and the contractual or other use does not compromise the City’s existing utility safety, and service, and operational s obligations. 3. Support local government authority over zoning-related land use for communications infrastructure in accordance with reasonable and non-discriminatory regulations. 4. Support the Council’s Technology and the Connected City initiative of 2013, to fully leverage the City’s fiber- optic and infrastructure assets such as public rights-of-way, utility poles and conduit for the broadband expansion. Goals Legislative Policy Guidelines Venue 1. Support Municipal Delivery 2. Competitive Delivery 3. Local Authority over Land Use 4. Support Council Initiatives 1. Advocate for these goals through the American Public Power Association (APPA), California Municipal Utilities Association (CMUA), National Association of Telecommunications Officers and Advisors (NATOA), National League of Cities (NLC), and the Next Century Cities initiative (NCC), with support from City staff. Federal and State  2. Support legislation and regulations that preserve and enhance municipal delivery of conventional and advanced telecommunication services as prescribed by the Telecommunications Act of 1996. Federal and State   3. Support the goals of the National Broadband Plan, issued in 2010 by the Federal Communications Commission’s (FCC), National Broadband Plan to improve Internet access in the United Statesnationwide. Federal and State   Utilities Legislative Policy Guidelines February 2016 Update Page 10 of 19 Goals Legislative Policy Guidelines Venue 1. Support Municipal Delivery 2. Competitive Delivery 3. Local Authority over Land Use 4. Support Council Initiatives 4. Oppose legislation and regulations that benefit the incumbent cable TV, and telephone, and telecommunications companies at the expense of community-owned fiber-optic and wireless networks. Federal and State   5. Support legislation and regulations that preserve and enhance consumer utility customer data security and confidentiality protections when dealing with by the incumbent providers. of telecommunication services. Federal and State   6. Support the Council’s directive to concurrently pursue the findings and recommendations in the Fiber-to-the- Premises Master Plan and Wireless Network Plan and continue discussions and negotiations with third parties considering new service deployments in Palo Alto. Local   Utilities Legislative Policy Guidelines February 2016 Update Page 11 of 19 Goals Legislative Policy Guidelines Venue 1. Support Municipal Delivery 2. Competitive Delivery 3. Local Authority over Land Use 4. Support Council Initiatives 6.7. Support legislation and regulations that: encourage the competitive delivery of broadband services by permitting the use of public right-of- way and Utilities infrastructure:  Permit the contractual use of public right-of- way and Utilities infrastructure;  Support legislation and regulations that Ppreserve local rights-of-way authority and management;  Support legislation and regulations that Ppreserve local government zoning and siting authority for wireless and wireline communication facilities;  andSupport local “dig once” policies to ensure conduit and fiber are available for lease on reasonable terms; and  Oppose legislation and regulations that arbitrarily reduce compensation received by local governments from other entities for the economic use of the public rights-of-way and other public properties that required for support communication infrastructure (e.g., utility poles, streetlight poles, ducts and conduits). Federal, State and Local  Utilities Legislative Policy Guidelines February 2016 Update Page 12 of 19 NATURAL GAS Goals 1. Preserve/enhance the ability of municipal utilities to develop and implement their own demand side efficiency and conservation programs, alternative gas supplies, and rate structures. 2. Increase the security and reliability of the gas supply and transmission infrastructure. This includes retaining access to intra- and interstate gas transmission systems to reliably serve customers. 3. Support efforts to reduce greenhouse gas emissions and protect the environment. 4. Preserve just and reasonable utility rates/bills established by local governing bodies. Goals Legislative Policy Guidelines Venue 1. Local Accountability 2. Reliability of Infrastructure 3. Environ- ment 4. Cost Control 1. Advocate most of these goals mainly through the American Public Gas Association (APGA) with minor support from Palo Alto staff. Primarily Federal with minor advocacy at State level  2. Work with Northern California Power Agency (NCPA) and California Municipal Utilities Association (CMUA) to the extent that the City’s goals as a gas distributor align with generators’ use of natural gas. Federal and State  3. Support cost effective renewable gas supplies from in or out of state sources. In case of mandated renewable portfolio standards, advocate for controls and off- ramps similar to the electric RPS that minimize customer cost impact. Federal and State  4. Advocate for financing or funding for cost-effective natural gas efficiency and solar water heating end uses. Federal and State  5. Support market transparency and efforts to eliminate market manipulation through reasonable oversight. Federal  6. Support municipal utilities’ ability to enter into pre-pay transactions for gas supplies. Federal  7. Support efforts to improve pipeline safety. Federal and State   Utilities Legislative Policy Guidelines February 2016 Update Page 13 of 19 Goals Legislative Policy Guidelines Venue 1. Local Accountability 2. Reliability of Infrastructure 3. Environ- ment 4. Cost Control 8. Work with partners to discourage extension of CPUC regulatory authority over municipal gas operations. State   89. Oppose legislative proposals resulting in unreasonable costs for Palo Alto’s customers. Federal and State   9. 9Support cap-and-trade market designs that:  protect consumers from the exercise of market power;  allocate allowances that help mitigate impacts to Palo Alto customers while providing incentives for natural gas utilities to move to lower GHG emission portfoliospreserving City environmental goals;  advocate for an allowance allocation methodology that provides flexibility for Palo Alto to structure rates to align GHG costs and revenues;  provide flexible compliance mechanisms such as banking and borrowing of allowances; and  allocate funds generated from cap-and-trade markets to GHG related activities, not as a revenue source for state or federal general funds. Federal and State   10. 11. Support legislation that aims to protect public health and encourages transparency regarding the practice of hydraulic fracturing or “fracking” for natural gas development, while but not blanketopposing blanket moratoriums that aren’t supported by science. Federal and State  Utilities Legislative Policy Guidelines February 2016 Update Page 14 of 19 WASTEWATER COLLECTION Goals 1. Support ability of municipal utilities to develop and manage their own conservation and efficiency programs and retain authority over ratemaking, including the imposition of non-volumetric customer meter or infrastructure charges for wastewater collection service. 2. Encourage efforts to iIncrease the reliability of the local wastewater collection systems. 3. Maintain the provision of reliable and sustainable wastewater collection service at a fair price. 4. Support equal comparisons of wastewater collection systems by regulatory agencies in order to minimize and reduce onerous, costly and, time-intensive reporting requirements and improve value and accuracy of information reported to the public. Goals Legislative Policy Guidelines Venue 1. Local Accountability 2. Reliable Infrastructure 3. Maintain service 4. Valuable reporting 1. Advocate goals through active participation in the Association of Bay Area Governments (ABAG). Local, Regional & State  2. Support future regulations of wastewater collection systems that recognize:  local jurisdictions’ proactive efforts to replace and maintain wastewater collections systems;  the need to provide affordable and cost based collection service; and  the unique characteristics of each collection system. Local, Regional & State  3. Support provision of sufficient resources for regional agencies to enable them to advocate forin their pursuit of:  environmentally sustainable, reliable wastewater collection service at a fair price; and  regional comparisons of wastewater collection projects for future state grant funding. Local and Regional  4. Support infrastructure security and reliability including equitable allocation of funds for increasing the security of infrastructure. Regional, and State  5. Advocate for funding and local regulations for wastewater Regional, State and Federal  Utilities Legislative Policy Guidelines February 2016 Update Page 15 of 19 Goals Legislative Policy Guidelines Venue 1. Local Accountability 2. Reliable Infrastructure 3. Maintain service 4. Valuable reporting collections system projects and requirements that reduce overflows and improve collection system efficiency. Utilities Legislative Policy Guidelines February 2016 Update Page 16 of 19 WATER Goals 1. Support the ability of municipal public utilities and districts to develop and manage implement their own conservation and water efficiency and conservation programs and while retaining authority over ratemaking, including the ability to optimize volumetric and, fixed, and drought- related pricing charges to and balance the goals of revenue certainty and water use efficiency. 2. Increase the security and reliability of the regional water system owned and operated by the San Francisco Public Utilities Commission (SFPUC). 3. Support efficiency and recycled water programs in order to minimize the use of imported supplies. 4. Provide Maintain the provision of an environmentally sustainable, and reliable supply supplies of high quality water at a fair price. Goals Legislative Policy Guidelines Venue 1. Local Authority 2. Reliable Infrastructur e 3. Minimize imports 4. Supplies at fair cost 1. Advocate goals through active participation in the Bay Area Water Supply and Conservation Agency (BAWSCA), California Urban Water Conservation Council (CUWCC), and California Municipal Utilities Association (CMUA), with support from Palo Alto staff for BAWSCA Local, Regional and State  2. Participate in California Urban Water Conservation Council (CUWCC) Best Management Practice (BMP) revisions and development to ensure that aggressive and cost-effective efficiency goals are incorporated and operating proposals are reasonable, achievable, and cost-effective. State  3. Advocate to ensure that legislative actions regarding the Hetch Hetchy Regional Water System include the following requirements:  timely rebuilding of the regional water system;  maintainmaintenance of s the quality of delivered water;  minimizminimization of es any increase in the cost of water;  creates no additional exposure to more frequent or severe water shortages;  increased real-time monitoring data availability to ensure water quality; Local, Regional and State   Utilities Legislative Policy Guidelines February 2016 Update Page 17 of 19 Goals Legislative Policy Guidelines Venue 1. Local Authority 2. Reliable Infrastructur e 3. Minimize imports 4. Supplies at fair cost  support fors the existing water system and its operation.;  SWRCB responsiveness to SFPUC water quality issues; 4. Advocate for interpretations or implementation of Water Code provisions (such as those enacted by AB 1823 (2002), AB 2058 (2002) and SB 1870 (2002)) that maintain or reinforce the authorities and protections available to the City and BAWSCA members outside of San Francisco. Local, Regional and State   5. Support provision of sufficient resources for BAWSCA to enable it to advocate for:  an environmentally sustainable, reliable supply of high quality water at a fair price;  for Wholesale Customers’ rights under the Water Supply Agreement for water from SFPUC that meets quality standards;  a SFPUC rate structure that is consistent with the Water Supply Agreement and is based on water usage;  a contract amendment to modify the drought time water allocation between the SFPUC and the BAWSCA agencies for a fairer allocation of the burden of water shortages;  preservation of Palo Alto’s existing contractual water allocation and transportation rights on the SFPUC Hetch Hetchy system; and  regional planning for conservation, recycled water, and other water supply projects. Local and Regional  6. Advocate for actions that:  preserve Palo Alto’s existing contractual rights; and  preserve local control over water use and limit encroachment from outside jurisdictions. Local and Regional   7. Support infrastructure security and reliability including an interconnection between the SCVWD West Pipeline with the SFPUC’s Bay Division Pipelines 3 and 4. Regional and State  Utilities Legislative Policy Guidelines February 2016 Update Page 18 of 19 Goals Legislative Policy Guidelines Venue 1. Local Authority 2. Reliable Infrastructur e 3. Minimize imports 4. Supplies at fair cost 8. Support notification requirements that inform residents/customers but do not inflict undue or unobtainable requirements on the utility. State   9. Support local control of public benefit funds, funding levels and program design. State   10. Support beneficiary pays methodologies to prevent taxes or fees, in particular those imposed on SFPUC customers, to fund infrastructure improvements and costs of other water sources such as the Deltawater sources that do not serve Palo Alto customers. State and Regional   11. Advocate for financing or funding for water conservation programs and recycled water projects that meet end-use needs and conserve potable water and oppose legislation that would reduce such funding. State, Regional and Federal  12. Support infrastructure security and reliability that includes equitable allocation of funds for increasing the security of infrastructure and that protects the City from unnecessary regulations. Local, State and Federal   13. Support legislation that promotes responsible groundwater management while recognizing Palo Alto’s existing and historical groundwater extraction practices. State  14. Support Proposition 218 reform efforts to provide ratemaking flexibility to balance conservation, revenue sustainability, and low income assistance programs. State   15. Advocate for reasonable statewide water conservation efforts (both drought response and long term) that achieve required water savings while minimizing customer and commercial impact, protecting the City’s urban canopy and minimizing the City’s enforcement costs. State   16. Protect the City and County of San Francisco’s water rights as well as those of the co-grantees of the Raker Act. State   17. Support legislation that would protect the City’s infrastructure and treatment investments from future state-wide cuts State   Utilities Legislative Policy Guidelines February 2016 Update Page 19 of 19 Goals Legislative Policy Guidelines Venue 1. Local Authority 2. Reliable Infrastructur e 3. Minimize imports 4. Supplies at fair cost in water use. ATTACHMENT C 1 Review of Legislative Activities in 2015 2015 was year one of California’s two-year 2015-2016 legislative session, and it was an active energy and water year. Much of the energy legislation targeted GHG emissions and renewables, while much of the water legislation focused on the drought and conservation efforts. Of the state bills City of Palo Alto (CPAU) staff tracked in 2015, ten were signed into law, sixteen never passed the legislature (ie: the bills “died”), and two passed the legislature, but were vetoed by the Governor. Of the bills that died, we expect at least four to return in 2016. Following is a summary of the state legislation and federal issues CPAU staff followed in 2015, along with any positions taken by the Northern California Power Agency (NCPA) and California Municipal Utilities Association (CMUA), two associations with active CPAU staff involvement. State Legislation Energy Related Bills AB 88 (Gomez) – Sales and use taxes: exemption: energy or water efficient home appliances: The bill would have established a sales and use tax exemption for any "energy or water efficient home appliance" purchased by a "public utility" that is provided at no cost to a "low-income participant" in a federal, state, or ratepayer-funded energy or water efficiency program. Status: Passed the legislature, vetoed due to the Governor’s concern about new tax exemptions during times of financial uncertainty AB 645 (Williams) – California Renewables Portfolio Standard: This bill mirrored SB 350 regarding changes to the Renewables Portfolio Standard (RPS) program to require the amount of electricity generated per year from eligible renewable energy resources be increased to at least 50% by December 31, 2030. While SB 350 was signed into law, the legislature did not pass AB 645. Status: Died in the Senate AB 802 (Williams) – Energy efficiency: (1) Requires the CPUC to authorize IOUs to provide incentives and assistance for measures that conform to the California Energy Commission’s (CEC) energy efficiency standards for existing buildings and allows IOUs to recover the reasonable associated costs through their rates. (2) Requires utilities to maintain records of the energy usage data of all buildings to which they provide service for at least the most recent 12 month period and, upon the request and authorization of the owner (or owner's agent), provide aggregated energy usage data to the owner or to the owner's account in the ENERGY STAR Portfolio Manager. AB 802 expands the scope of buildings covered under existing benchmark requirements, and removes some of the customer privacy requirements. Palo Alto does not have an automated system for providing energy use data so the expansion of the program requires more resources to ATTACHMENT C 2 either continue the manual process or automate. Staff are currently reviewing and working with NCPA on customer privacy issues. Status: Signed into law AB 1110 (Ting) – Greenhouse gases emissions intensity reporting: Current law requires electric utilities to disclose their electricity sources as a percentage of annual sales (the Power Content Label or PCL). This bill would have required electric utilities to also disclose the greenhouse gas (GHG) emissions intensity associated with their electricity sources. Palo Alto’s concern with this bill was that it would prohibit an adjustment in the calculation of GHG emissions through the application of renewable energy credits (RECs); i.e., the market purchases the City’s electric utility makes to cover shortfalls in the portfolio not met by hydro or renewable resources will have a GHG emission factor assigned to them that would not be “neutralized”, or netted out, by the REC purchases. While this bill was focused on certain Community Choice Aggregators who, according to bill proponents, were not fully disclosing the electrical sources, it had obvious impacts on the City’s messaging for its carbon neutral electricity portfolio. NCPA worked with the bill’s author to allow for the inclusion of additional information in the PCL, along with the emissions factor. Status: Died in the Senate AB 1236 (Chiu) – Electric vehicle charging stations: This statute requires cities and counties to adopt an ordinance, with certain specific elements, that creates an expedited permitting process for electric vehicle (EV) charging stations. For a local government with a population the size of Palo Alto’s (less than 200,000), the ordinance must be passed by September 30, 2017. Status: Signed into law AB 1330 (Bloom) – Demand Response: The bill would have CPUC establish annual goals for demand response and require POUs to achieve the goals. The language would have the unprecedented impact of having the CPUC dictate program requirements for POUs. Status: Died in Senate AB 1448 (Lopez) – Personal energy conservation/real property restrictions: This statute permits tenants, as well as owners in a homeowners association, to use clotheslines and drying racks if certain conditions are met, including that the clothesline or drying rack will not interfere with the maintenance of the property. CMUA supported this bill. Status: Signed into law AB 1453 (Rendon) – Electrical corporations: underground electrical facilities: worker safety: This bill sought to prohibit work directly on energized underground electrical equipment and required a qualified electrical worker to determine that underground electrical equipment has been de- energized and is in a mode that would make the equipment safe to be worked on. Status: Died in Senate ATTACHMENT C 3 SB 32 (Pavley) – California Global Warming Solutions Act of 2006: emissions limit: This bill would have required the California Air Resources Board (CARB) to approve statewide GHG emissions limits equivalent to 40% below the 1990 level by 2030 and 80% below the 1990 level by 2050. It would also prohibit CARB from implementing the next update of the California Global Warming Solutions Act of 2006 (AB 32) Scoping Plan until it had taken specified actions, including submitting the Scoping Plan to the Legislature for review. CMUA supported this bill. Status: Died in the Assembly SB 119 (Hill) – Protection of subsurface installations: The Dig Safe Act of 2015 would have modified the laws relating to excavations near substation instillations. SB 119 was supported by CMUA. Status: Vetoed as the bill created a new enforcement committee within the State Licensing Board and the Governor believed excavation safety authority rests with the CPUC. SB 180 (Jackson) – Emissions of greenhouse gases: This bill would have replaced the GHG emission performance standards for base-load generation with standards for both non-peaking and peaking generation. Both NCPA and CMUA took opposing positions on the bill over concern that the very low emission standards proposed would effectively block further investment in natural gas generation and impact grid reliability. Status: Died in the Senate SB 272 (Hertzberg) – The California Public Records Act: local agencies: inventory: In implementing the California Public Records Act, this statute requires most local agencies to create a catalog of enterprise systems, make the catalog publicly available upon request, and to post the catalog on the local agency's Internet Web site. CMUA opposed the bill on the grounds of cost impact to local agencies and cybersecurity concerns with making information available about utility control systems. The bill explicitly exempts infrastructure and mechanical control systems that control or manage street lights, electrical, natural gas, or water or sewer functions. However, general cost impacts and security concerns remain. Status: Signed into law SB 350 (De León) – Clean Energy and Pollution Reduction Act of 2015: By December 31, 2030, 50 percent of energy must come from renewables and the energy efficiency of existing buildings must double. Palo Alto successfully negotiated accommodations for our hydro portfolio during high hydro years (when hydro exceeds 50% of our portfolio, CPAU’s RPS requirement will be reduced). The bill also mandates the preparation and submission of integrated resource plans (IRPs). While preparing an IRP per se is not a burden for Palo Alto, the language is very prescriptive, hastily constructed, introduces redundant reporting requirements and requires the IRP to be submitted to, and reviewed by, the CEC. Despite a coordinated attempt to remove or fix the IRP language, the momentum to pass SB 350 was unstoppable. There will be a concerted effort by NCPA and CMUA in 2016 to pass legislation to fix the more erroneous sections of the IRP requirements, as well as to modify language holding POUs responsible for IOU duties. ATTACHMENT C 4 Status: Signed into law SB 550 (Hertzberg) – Net energy metering: This bill would, for POUs such as Palo Alto, redefine “aggregate customer peak demand,” for the purposes of calculating the 5% net energy metering (NEM) program limit as the highest sum of the non-coincident peak demands of all the customers of that utility in any calendar year, potentially doubling the MW cap. Status: Died in the Senate SB 687 (Allen) – Renewable gas standard: This bill would have required CARB, by June 2016, to adopt a renewable gas standard (RGS) requiring all gas sellers to provide specified percentages of renewable gas to retail end-use customers for use in California. Status: Died in the Senate Water Legislation AB 349 (Gonzalez) – Common interest developments: property use and maintenance: This statute voids any attempt by a common interest development to prohibit use of artificial turf or any other synthetic surface that resembles grass. CMUA supported. Status: Signed into law AB 585 (Melendez), AB 603 (Salas) and AB 1139 (Campos) – Personal income tax credits: outdoor water efficiency and turf removal: Three similar bills providing tax credits for outdoor water efficiency. AB 585, for taxable years 2016-2020, would allow a credit equal to 25% of the amount paid by a qualified taxpayer for water-efficiency improvements made to outdoor landscapes, up to $2,500 per taxable year. AB 603 and AB 1139 would have allowed a credit to a taxpayer participating in a lawn replacement program, in an amount equal to $2 per square foot of conventional lawn removed from the taxpayer's property. CMUA supported the three bills. Status: All died in the Assembly AB 606 (Levine) – Water conservation: This statute requires, when feasible, state agencies to reduce water consumption and increase water efficiencies when building on state-owned property, purchasing property, or replacing landscaping or irrigation. State property leased to a private party for agricultural purposes is exempted. CMUA supported. Status: Signed into law AB 723 (Rendon) – Plumbing fixtures: WaterSense standards: This bill was gutted and amended to require property owner disclosure of their responsibility to replace all noncompliant plumbing fixtures in newly or renewed leased properties by a certain date. Status: Died in the Senate ATTACHMENT C 5 AB 786 (Levine) – Common interest developments: property use and maintenance: This statute clarifies that during drought conditions, when a homeowner in an HOA receives recycled water from a retail water supplier to use in watering lawns or vegetation, the HOA may levy a fine or assessment if that homeowner does not use the recycled water for landscape irrigation. CMUA supported. Status: Signed into law AB 1164 (Gatto) – Water conservation: drought tolerant landscaping: This statue prohibits cities and counties from enacting or enforcing any ordinance or regulation prohibiting the installation of drought tolerant landscaping, synthetic grass, or artificial turf on residential property. CMUA supported. Status: Signed into law AB 1173 (Williams) – Water equipment: backflow prevention devices testing: certification: This bill attempted to mandate the hiring of a certified individual to test backflow prevention devices if a local health officer did not already have such a backflow device testing program. CMUA’s position was “oppose unless amended”. Status: Died in the Senate AB 1315 (Alejo) – Public contracts: water pollution prevention plans: delegation: This bill would have prohibited a charter city from delegating to a contractor the development of a plan used to prevent or reduce water pollution or runoff on a public works contract, with certain exceptions. While not limited to water utilities, CMUA does not favor this bill. Status: Died in the Assembly AB 1531 (Committee on Environmental Safety and Toxic Materials) – State Water Resources Control Board: The statute makes technical changes to provisions of the Water Code and the Health and Safety Code. Specifically, among other things, it eliminates outdated legal provisions, corrects mistaken cross references, and provides authority to conform drinking water and water quality requirements to federal requirements. It also makes several statutory changes to improve the efficiency and effectiveness of the Safe Drinking Water Regulatory Program. Status: Signed into law SB 7 (Wolk) – Housing: water meters: multiunit structures: This bill would have mandated the instillation of individual water meters (ie: submeters), on all new multifamily residential units or mixed commercial and multifamily units built on or after January 1, 2017. It also required landlords to bill residents for the increment of water used by unit residents. Status: Died in the Assembly ATTACHMENT C 6 SB 471 (Pavley) – Water, energy, and reduction of greenhouse gas emissions: planning: This bill attempted to allow reductions of GHG emissions associated with the water sector, including water use, supply, and treatment, to be eligible for AB 32 cap and trade revenue. Status: Died in the Assembly Looking forward In 2016, we expect to see new state legislation addressing stormwater funding and short-term GHG emissions as well as continued legislation addressing Power Content Label reporting (AB 1110), demand response goals (AB 1330), water conservation (SB 7), and GHG emission limits (SB 32). We will also work with NCPA and CMUA on cleaning up SB 350 language. Federal Issues Following their August recess, Congress returned with a short amount of time before the November elections and a number of priority issues to contend with. Narrowly avoiding a government shutdown, Congress passed its financial package on December 18th. At one point, this financial “omnibus” bill contained language from a California Representative regarding the drought, but that language was dropped in final negotiations. EPA Emission Standard The Environmental Protection Agency’s (EPA) has proposed rules intended to significantly reduce the amount of greenhouse gas emissions across the nation, under section 111(d) of the Clean Air Act. These rules apply to electric generating units as well as other sources of GHG emissions. Preliminary analysis indicates the new rules will likely have minimal impact in California, though the treatment of hydropower remains uncertain and questions remain how the EPA’s proposal will be incorporated into the State’s existing GHG policies and regulations. California’s regulatory agencies believe that the emissions reductions can be achieved through the cap-and-trade program, the existing renewable portfolio standard mandates, and the additional measures addressed in the scoping plan update currently underway at the Air Resources Board. Grid Reliability In 2015, the Federal Energy Regulatory Commission (FERC) approved the North American Electric Reliability Corporation (NERC) Risk-based Registration Initiative. This initiative uses a consistent approach to risk assessment and registration to implement changes aimed at ensuring the right entities are subject to the right set of reliability standards. Palo Alto supports efforts to rationalize the registration process so that resources, at all levels, can be focused on those issues that have a material impact on grid reliability. Palo Alto’s distribution system, in particular, does not impact the bulk grid reliability. ATTACHMENT C 7 Drought Two key measures, one in the House carried by a Republican and the other in the Senate authored by a Democrat, failed to pass in 2015. Senator Feinstein intends to push her bill in 2016. CFTC swap dealer definition On September 24, the Commodity Futures Trading Commission (CFTC) granted the relief sought by public power systems, and exempted utility operations-related swaps from the $25 million “special entity” swap dealer threshold. With approval of this rule, public power systems will be on equal footing with private utilities and should regain access to counterparties for swap transactions. ATTACHMENT D EXCERPTED DRAFT MINUTES OF THE JANUARY 13, 2016 UTILITIES ADVISORY COMMISSION MEETING ITEM 6. ACTION: Staff Recommendation that the Utilities Advisory Commission Recommend that the City Council Adopt a Resolution Approving the Amended City of Palo Alto Utilities Legislative Policy Guidelines Compliance Manager Debbie Lloyd introduced Senior Resource Planner Heather Dauler who is taking over the management of the Utilities’ legislative and regulatory program. Lloyd and Dauler presented a summary of the written report including a brief review of legislative activity in 2015, expected legislative activities in 2016, and the proposed changes to the Utilities legislative policy guidelines. Chair Foster asked why the City would advocate for privacy concerns with respect to AB 802, the building benchmarking bill, and that he was in favor of energy use disclosure, Commissioner Schwartz agreed. Commissioner Danaher stated that he may have a different opinion since he was aware that certain commercial customers, such as server farms, were sensitive that their energy profile could provide competitors with insight on their operations. Commissioner Schwartz said that aggregated customer information would not disclose any useful/sensitive information. Commissioner Eglash said he understood customer privacy concerns. Chair Foster asked that staff acknowledge that there were different opinions on the issue of energy and water use disclosure. Commissioner Eglash asked what we are advocating for with respect to a Net Energy Metering (NEM) successor program. Lloyd replied that the goal is for local agencies such as Palo Alto to have the ability to develop and design their own programs that make sense for their customers. The commissioners discussed the proposed changes to “All Utilities” Goals 1 and 3and recommended the original language be retained as the reference to environmental goals carried more weight in goal #1. Chair Foster said that the new overall guideline #8 with respect to customer data security should still allow that anonymized customer data. He said that there is a balance and that there are companies that can use usage data for good reasons, including those that lead to energy efficiency and climate protective improvements. Lloyd stated that guideline #8 addresses security of data such as personal credit card info, etc. Commissioner Eglash noted that there is clearly a diversity of opinions on the matter of customer use data. Commissioner Schwartz noted that the issue of privacy is being worked by many bodies and no one is advocating releasing personal customer data. She suggested that the City’s legislative guidelines will not influence this debate. ACTION: Vice Chair Cook made a motion that the UAC recommend that the City Council approve the revised guidelines after discarding the proposed changes to “All Utilities” Goals 1 and 3. Commissioner Danaher seconded the motion. The motion carried unanimously (6-0) with Chair Foster, Vice Chair Cook, and Commissioners Ballantine, Danaher, Eglash, and Schwartz voting yes and Commissioner Hall absent. City of Palo Alto (ID # 6592) City Council Staff Report Report Type: Action Items Meeting Date: 2/22/2016 Summary Title: Comp Plan Draft EIR and Scenario 5 Title: Comprehensive Plan Update: Discussion Regarding Development of a Fifth Scenario With an Improved Jobs Housing Balance for Inclusion in the Environmental Impact Report and the Overall Project Schedule From: City Manager Lead Department: Planning and Community Environment Recommendation Staff recommends that Council provide guidance on the following aspects of the Comprehensive Plan Update: a) potential development of a “fifth scenario” for analysis in a supplement to the Draft Environmental Impact Report, including potential mechanisms to address the ratio of jobs to employed residents; and (b) the schedule and topics of Citizen Advisory Committee and City Council meetings. Executive Summary On January 18th, 2015, the City Council and the Citizens Advisory Committee (CAC) held a joint meeting to review the upcoming release of the Draft Environmental Impact Report (DEIR or Draft EIR) for the Comprehensive Plan Update. The DEIR, which is available for public review at http://www.paloaltocompplan.org/eir/ , analyzes four planning scenarios at an equal level of detail, describing a range of potential land use and transportation policy decisions, and assessing the impacts they would have on traffic, greenhouse gas emissions, and other environmental resources. At the conclusion of this meeting, the Council adopted a motion (Attachment A) asking staff to return with a fifth scenario aimed at improving the ity’s ratio of jobs to housing, which is commonly expressed as the ratio between jobs and employed residents. At a high level, this goal can be addressed by increasing the amount of housing, decreasing the amount of jobs projected between now and 2030 or some combination of the two. Tonight’s discussion is an opportunity to discuss how the policies and regulatory changes assumed in each of the four planning scenarios could be supplemented or modified to stimulate housing growth or to decrease job growth (or to do both things), and to talk about the next City of Palo Alto Page 1 steps/schedule for development of a fifth scenario and completion of the Comprehensive Plan Update. Background Palo Alto has long had an imbalance between jobs and housing, with almost three times as many jobs and employed residents in 2014, as shown in Table 1. Table 1. Existing Jobs and Employed Residents (2014) Jobs Employed Residents Ratio City of Palo Alto 95,460 31,1651 3.06 City + SOI2 100,830 36,004 2.80 Santa Clara County 988,278 865,822 1.14 Bay Area 3,613,052 3,491,584 1.03 Notes: (1) US Census Bureau, American Community Survey, Demographic and Housing Estimates 2011-2013 3-Year Estimates, Table DP03, Selected Economic Characteristics (2) SOI = Sphere of Influence (includes a portion of Stanford lands) Sources: Data extrapolated from ABAG Projections 2013 except where noted. The ity’s imbalance between jobs and employed residents contributes to local and regional traffic, greenhouse gas emissions, and other impacts, as some workers travel long distances between their residence and workplace. The imbalance is projected to grow if the City does not take affirmative steps to address the issue. Scenario 1 in the Draft EIR depicts what is expected under a “business as usual” scenario if there are no policy changes and the current Comprehensive Plan and implementing regulations remain in place, as shown in Table 2. Table 2. ity of Palo !lto Projected Jobs & Employed Residents in 2030 “usiness as Usual” City of Palo Alto 2030 “usiness as Usual” (Draft EIR Scenario 1) Jobs Employed Residents Ratio 110,9401 34,6972 3.20 Notes: (1) ABAG Projections 2013 for the year 2030. ABAG forecasts jobs based on their understanding of the ay !rea economy as well as adopted general plans and zoning. While planning staff believes !!G’s projection is high, we do not have a basis for our own projection of future job growth, particularly because job growth is not solely dependent on the addition of new non-residential square footage. (2) 48% of total population projected based on the number of new dwelling units expected by 2030. (Palo !lto relies on its own projection of housing growth rather than !!G’s, and bases that projection on the long term average of new dwelling units produced per year. The percentage of 48% is derived from ABAG Projections 2013 for the year 2030.) The other three planning scenarios in the Draft EIR test potential policy changes that are projected to result in incremental changes as summarized below in Table 3 below. The assumed policy changes are not meant to be directive or exclusive of other possible policy changes and scenarios, but illustrate some affirmative steps that could be taken to encourage housing, slow job growth, or both. Table 4 in Attachment B contains a further comparison of City of Palo Alto Page 2 the quantitative characteristics and impacts of the four scenarios as presented in the Draft EIR. It’s expected that the preferred scenario that is ultimately selected for adoption in the form of the Comprehensive Plan Update will not be identical to any one of these scenarios, but will draw from them and the data/analysis provided in the Draft EIR. As noted during the staff presentation on January 19th, development of the DEIR began in June of 2014 with the notice of preparation and initial “scoping” of the document and the scenarios were developed using input from public workshops in the summer of 2014. In December of 2014, the City Council authorized preparation of an impacts study in the form of a Draft EIR to assess the potential impacts and trade-offs associated with the policy choices that will have to be made as the Comprehensive Plan Update planning process moves forward this year. The DEIR was introduced to the Council on January 19th and was released on February 5th. Members of the public are encouraged to review and comment on the Draft EIR, and it’s hoped that the information contained in the document and the companion fiscal study will inform the ity ouncil’s discussion of key policy issues like the jobs/housing balance, growth management strategies, the location and density of housing sites, prioritization of transportation investments, and desired sustainability measures for inclusion in the Comprehensive Plan. The public review period for the Draft EIR will last 90 days (twice the required period), or until the close of business on May 5, 2016. All substantive comments received on the Draft EIR will be responded to in a Final EIR, which must be certified before a final decision can be made to adopt an updated Comprehensive Plan. Table 3. City of Palo Alto Projected Jobs & Employed Residents in 2030 with Comprehensive Plan Draft EIR Planning Scenarios 2-4 Policy Changes Assumed Jobs Employed Residents Ratio Sc e n a r i o 2 Sl o w i n g G r o w t h To encourage housing:  Housing Element implementation  Policies to encourage smaller units To slow job growth:  Citywide annual limit on new office/R&D square footage  Reduce Commercial FAR in the CC-2 zoning district by 25%  Possible adjustments in zoning to reduce commercial FAR downtown  Require CUP for new office/R&D to regulate employment densities 105,310 34,697 3.04 City of Palo Alto Page 3 Policy Changes Assumed Jobs Employed Residents Ratio Sc e n a r i o 3 Ho u s i n g T e s t e d To encourage housing:  Housing Element implementation  Policies to encourage smaller units  Eliminate housing sites on San Antonio/South El Camino in exchange for increased densities near Cal Ave and downtown, possibly based on PTOD zoning “by right’  Heights of 55 or 60 feet allowed downtown for residential units. To slow job growth:  Continue current interim annual limit on new office/R&D square footage in a portion of the City 108,215 35,578 3.03  Reduce Commercial FAR in the CC-2 zoning district by 25%  Possible adjustments in zoning to reduce commercial FAR downtown  Require CUP for new office/R&D to regulate employment densities Sc e n a r i o 4 S u s t a i n a b i l i t y T e s t e d To encourage housing:  Housing Element implementation  Policies to encourage smaller units  Eliminate housing sites on San Antonio/South El Camino in exchange for increased densities near Cal Ave and downtown, and add new housing sites along the El Camino Real frontage of the Stanford Research Park and Stanford Shopping Center  Heights of 55 or 60 feet allowed downtown for residential units. To slow job growth:  Require CUP for new office/R&D to regulate employment densities 110,940 36,547 3.041 Notes: (1) Projected jobs, housing, and employed residents in the City of Palo Alto under Scenario 4 are derived from ABAG Projections 2013. Source: Comprehensive Plan Update Draft EIR, February 2016 (Section 4.11). Discussion The term “jobs/housing balance” relates to the ratio between the number of jobs and housing opportunities in a given geographic area. Because there may be more than one job holder in any given household, this ratio is best examined using employed residents rather than housing units. The existing number of jobs and employed residents in a given area are derived from US Census data. Projections of future employed residents are based on the number of housing units expected at a given point in time, and the expected number of job holders per household, which may change over time due to changes in demographics, housing costs, etc. As noted in the Background section above, the City of Palo Alto has an existing ratio of jobs to employed residents of around 3.06 and this ratio is expected to increase to 3.20 by 2030 unless City of Palo Alto Page 4 affirmative policy changes are made to address the issue.1 Typically there are three ways to improve the ratio of jobs to employed residents (assuming that there are more jobs than employed residents as in Palo Alto):  Increase the rate of housing production  Decrease the rate of job growth  A combination of the two Any decisions made to increase the rate of housing production or decrease the rate of job growth can be highly contentious because of fears they will affect a community’s character, its place in the larger region, and/or other economic and social concerns. As a result, Scenarios 2- 4 in the Draft EIR were crafted to illustrate the potential outcomes and impacts associated with possible policy changes, and inform policy discussions like this evening’s. As shown in Table 3, above, some of the possible policy changes were assumed to generate more housing (and therefore employed residents) than the “business as usual” projection for 2030, and some were assumed to slow the rate of job growth, resulting in fewer jobs than ABAG projected for 2030. The potential policy changes included in the scenarios were derived from public workshops in mid-2014 and City Council discussions over the course of 2014 and early 2015 and include those listed in Table 5, below. Table 5. Potential Policy Changes Tested in Draft EIR Scenarios 2-4 To encourage housing To slow job growth  Housing Element implementation  Adopt a citywide annual limit on new  Policies to encourage smaller units office/R&D square footage -or -continue  Eliminate housing sites on San current interim annual limit on new Antonio/South El Camino in exchange for office/R&D square footage in a portion of increased densities near Cal Ave and the City downtown (may include PTOD zoning “by  Reduce Commercial FAR in the CC-2 zoning right”) district by 25%  Possible new housing sites along the El  Possible adjustments in zoning to reduce Camino Real frontage of the Stanford commercial FAR downtown and replace Research Park and Stanford Shopping with residential FAR Center  Require CUP for new office/R&D to regulate  Heights of 55 or 60 feet allowed downtown employment densities for residential units. Source: Comprehensive Plan Update Draft EIR, February 2016 1 Because the number of employed residents in 2030 is derived from the projection of housing units in 2030, the fact that Palo Alto has developed and uses its own lower projection of housing growth than ABAG, means that the ity’s projection of the ratio between jobs and employed residents for 2030 (3.20) is worse than !!G’s (3.04). The City does not have its own projection of job growth, but may be able to develop one in the future based on data collected through the new Business Registry. City of Palo Alto Page 5 The idea of perpetuating the ity’s limit on non-residential development in “monitored areas” of the City (Comprehensive Plan Policy L-8) does not appear on this list, but is inherent in Scenarios 1 & 2. The ity’s recent history has shown that job growth is not solely dependent on new square footage. Nonetheless, the Council will be discussing this policy in upcoming meetings, and in both that discussion and tonight’s could choose to perpetuate the limit and/or consider implementing regulatory (zoning)changes. Tonight’s policy discussion is an opportunity for the Council to provide direction on other potential policy changes that should be considered. In addition, Council may wish to articulate a particular ratio of jobs to employed residents they would like to incorporate into the Comprehensive Plan Update as an objective for 2030. As described in the DEIR orientation booklet and the January 19th Council meeting, the DEIR scenarios are not intended to be static or stand alone- instead, it was staff’s expectation that a preferred scenario would take ideas from each and incorporate new ideas. As such, the preferred scenario that is ultimately crafted for adoption in the form of the Comprehensive Plan Update may have a somewhat different jobs/housing ratio than the DEIR scenarios. Also, the Comprehensive Plan Update may articulate a more aspirational objective than is conservatively projected in the EIR. For example, choosing the “slow job growth” tools in Scenario 2, and combining them with “encourage housing” tools in Scenario 4, would result in a lower ratio of jobs to employed residents (2.88) than any of the scenarios, as shown in Table 6, below. Table 6. City of Palo Alto Jobs & Employed Residents in 2030 with a Hybrid of Draft EIR Scenario 2 & 4 City of Palo Alto 2030 “Hybrid Scenario” Jobs Employed Residents Ratio 105,311 36,547 2.88 Source: Comprehensive Plan Update Draft EIR, February 2016 Staff’s analysis has confirmed the difficulty in reducing the ratio in a much more significant way, because so much of the ratio is determined by existing land use patterns (the base of existing jobs and housing), rather than by changes (new jobs and housing) that may occur over the next 15 years. To illustrate this point, staff took the average number of employed residents for each of the four Draft EIR scenarios, and assumed that there would be no job growth in the City over the life of the updated Comprehensive Plan. The result was a jobs to employed residents ratio of 2.66. City of Palo Alto Page 6 A discussion of the desired ratio of jobs to employed residents should not lose sight of the fact that making more dramatic changes over the next 15 years than illustrated in Table 6 would require significant commercial downzoning2 and/or more and denser housing opportunities. As described at the start of this section, potential policy changes necessary to meaningfully affect the projected ratio of jobs to employed residents is a difficult conversation. Potentially controversial concepts necessary to improve beyond the ratio of 2.88 in 2030 (as shown in Table 6) include the following:  Increased housing densities -The ity’s zoning provides for a maximum of 40 units/acre in its R-40 zones (not including density bonuses, the use of PTOD zoning, or other tools). Council could consider creating new zoning districts with higher units per acre, change allowable density increases under the bonus or in PTOD overlays, or other tools to allow much higher densities.  Increased areas under existing maximum zoning rules – The Council could expand those parts of the City under the R-15, R-30 and R-40 zones, to expand increases in housing units.  Additional regulation of employment densities – Councilmembers have asked if there is a way to regulate the number of employees per square foot. Scenarios 2-4 suggest requiring a conditional use permit for new uses, which would allow the City to place conditions on projects regarding the number of jobs. The City Attorney is reviewing whether there are other mechanisms that could be used to regulate employment in new (or even existing) uses.  Additional commercial downzoning – As noted above, Scenario 2 and 3 contemplate limited changes in commercial FAR in addition to annual limits on new office/R&D development. Council could consider downzoning to reduce allowable non-residential densities more broadly in the City of Palo Alto. If this is something that the Council would like to consider, staff will have to conduct an analysis of possible adjustments, including the parcels potentially affected, quantitative reductions in development potential, and likely impacts on job growth. Timeline Per the request of Council, staff has prepared an updated master schedule for the Comprehensive Plan update (Attachment C). This updated schedule incorporates ouncil’s desire for additional meetings to discuss broader issue areas, a reflection of the need to move certain items to better accommodate those discussions, and other changes. Staff would welcome the ouncil’s input on this schedule and would like to pass on the ommunity !dvisory ommittee’s desire for more joint meetings with the Council, particularly as it relates to the topic of housing. 2 As noted in Table 3 and 5, Draft EIR Scenarios 2 and 3 include modest adjustments in the CC-2 zoning district (25% reduction in FAR) and suggest that some (unspecified) commercial FAR in Downtown could be converted to residential F!R. Other than these examples, the scenarios do not propose “downzoning” per se, but rely on growth control measures like an annual limit on new office/R&D to slow job growth. City of Palo Alto Page 7 Also, staff has tentatively identified April 11 for a public hearing on the Draft EIR, and the public comment period is scheduled to end on May 5, 2016. Assuming that the Council would like to consider public comments prior to deciding on their preferred scenario, one or more additional meetings will be needed to refine the fifth scenario and/or an alternative preferred scenario. The ity’s consultant, Placeworks, has indicated that an estimated six to eight months will be necessary to provide a level of analysis for any additional scenario(s) that is similar to that provided in the Draft EIR. This analysis can be completed concurrent with review and finalization of the elements of Comprehensive Plan Update and circulated for a 45 day public comment period prior to preparation of the Final EIR. Based on the current schedule, the Final EIR and the Final Comprehensive Plan Update would be considered for adoption by the Council around May of 2017. Resource Impact Analysis of an additional scenario(s) in the form of a supplement to the Draft EIR will require additional resources. Placeworks, the consultant working with the City on the Comprehensive Plan Update and the DEIR, estimates the need for an amendment to their contract for at least $150,000 to cover the cost of analyzing a new scenario at the same level of detail as other scenarios in the Draft EIR. Also, approximately $50,000 would be required for each additional scenario after that. ased on ouncil’s direction this evening, staff will bring forward an amendment to the Placeworks contract including additional funds for the required anaysis and for increased staff support needed due to Jeremy Dennis’ impending departure. If the Council would like to make changes to the project schedule and add meetings of the Council and/or CAC, these will require a further assessment of staff and consultant resources. Also, if the Council requests an analysis of potential zoning changes beyond those currently being considered, staff will have to assess the time and cost to prepare this analysis. Policy Implications The ity’s current omprehensive Plan contains policies that support measured non-residential growth appropriate to the scale and character of the City (Policies L-8 and L-5), new housing (Policy H-2.1), and Palo !lto’s image as a business-friendly community (Policy B-10). One question before the City Council this evening, is whether they wish to consider an aspirational goal or objective related to the ratio between jobs and employed residents in the Comprehensive Plan Udpate, and how such a goal could be supported through policy changes and implementing programs (i.e. changes in zoning regulations). Environmental Review This agenda item seeks ouncil’s direction on potential policy changes for future analysis and ouncil’s direction does not constitute a project requiring review under the alifornia City of Palo Alto Page 8 Environmental Quality Act (CEQA). The Comprehensive Plan Update is the subject of a Draft Environmental Impact Report (EIR), which can be found at http://www.paloaltocompplan.org/eir/. Public comments are welcome until the end of the comment period on May 5, 2016. Attachments:  Attachment A: City Council Action Minutes for January 19, 2016 (PDF)  Attachment B: Summary of DEIR Key Characteristics & Impacts (PDF)  Attachment C: New Comprehensive Plan Update Timeline/Schedule (DOCX) City of Palo Alto Page 9 ACTION MINUTES 6. Joint Session With the Citizens Advisory Committee for the Comprehensive Plan Update: Introduction to the Comprehensive Plan Update Draft Environmental Impact Report & Review of Next Steps in the Planning Process. Council Member Kniss left the meeting at 10:54 P.M. MOTION: Council Member DuBois moved, seconded by Council Member Holman to: A. Direct Staff to present an updated schedule of Citizens Advisory Committee for the Comprehensive Plan Update (CAC) and Council meetings relating to the Comprehensive Plan Update, as soon as possible with check ins in April, May and September with a goal of delving into key decision areas on job and population growth assumptions, growth management, traffic, and a final Draft Environmental Impact Report (DEIR); and ACTION MINUTES B. Direct Staff to move forward with a Draft Environmental Impact Report (DEIR) of various scenarios, replacing Scenario Four “Sustainability Tested” with a scenario which shifts the jobs/housing balance by limiting office expansion and replacing some commercial use with housing. INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to replace Part B of the Motion with, “direct Staff to move forward with a Draft Environmental Impact Report (DEIR) of various scenarios, adding a fifth scenario which shifts the jobs/housing balance by limiting office expansion and replacing some commercial use with housing.” INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to add to the Motion Part A, “as Action Items” after “May and September.” INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to replace Part A of the Motion with, “direct Staff to come to the City Council Retreat with a more definitive schedule of when the variety of issues discussed this evening will be scheduled for Council consideration.” INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to replace Part B of the Motion with, “direct Staff to return to Council with the DEIR as well as a possible fifth scenario which lowers the jobs/housing ratio and the implications that will have on the timing and process of completing the Comprehensive Plan Update.” AMENDMENT: Council Member Wolbach moved, seconded by Council Member XX to add to the Motion, “Council empowers the Citizens Advisory Committee for the Comprehensive Plan Update (CAC) if it so chooses to establish small sub-committee meetings that do not require Staff support.” AMENDMENT WITHDRAWN BY THE MAKER MOTION AS AMENDED PASSED: 8-0 Kniss absent MOTION: Council Member Wolbach moved, seconded by Council Member XX to add to the Motion, “council empowers the Citizens Advisory Committee for the Comprehensive Plan Update (CAC) if it so chooses to establish small sub-committee meetings that do not require Staff support.” City of Palo Alto (ID # 6503) City Council Staff Report Report Type: Informational Report Meeting Date: 2/22/2016 City of Palo Alto Page 1 Council Priority: Environmental Sustainability Summary Title: Update on Energy/Compost Technologies Title: Update on Energy/Compost Technologies, Measure E, and Organics Processing From: City Manager Lead Department: Public Works Recommendation This report is provided for information only and requires no Council action. Executive Summary Programs developed and implemented in 2015 as part of Council’s direction to extract energy and compost from the City’s organic residuals (wastewater solids, food scraps and soiled paper, and yard trimmings) include: 1) 90% design level reached on the sludge dewatering facility needed to phase out the wastewater solids incinerators; 2) the July 2015 establishment of a new residential food scraps collection program; and 3) the diversion of commercial and residential food scraps, food-soiled paper and yard trimmings to a new dry anaerobic digester (DAD) facility in north San Jose where energy and compost are recovered. All of the City’s collected food and yard residuals are now sent to the type of facility contemplated by Measure E. As part of the annual update to Council, staff has continued to track emerging technologies for consideration on the Measure E site. While no fundamentally new type of technology has emerged, staff will monitor the development of gasification and pyrolysis type processes. Background City of Palo Alto Page 2 In May 2014, Council approved a four component Organics Facilities Plan (OFP) (Staff Report #4744) to direct the processing of wastewater biosolids, food scraps, and yard trimmings. Component One: Biosolids Dewatering and Truck Haul-Out Facility. Component Two: Wet Anaerobic Digestion Facility utilizing the thermal hydrolysis process. Component Three: Food Preprocessing Facility; preprocessed food scraps would be fed into the anaerobic digester (component two above). Component Four: The pursuit of technologies to harness the energy and resource potential of yard trimmings. Council directed staff to look first at component four as a composting option for yard trimmings on the 10-acre Measure E site. Council approved using existing facilities to process food scraps and yard trimmings (Staff Report #5182) and directed staff to return to Council annually with an update on new organics processing technologies and opportunities. This report is that annual update. Discussion No New Technologies Staff regularly review new organics processing technologies and opportunities and receive information from technology providers. The main constraint that prevented the development of a cost-effective facility on the Measure E site is still the key factor – the site is too small to provide an economy of scale to process enough material. Other factors that limit the development of new cost-effective processing technologies include the low price of energy, high cost of construction and permitting challenges. Staff will continue to investigate new technologies and will prepare a long-term recommendation as part of a future update to the Zero Waste Operational Plan in preparation for a new solid waste hauling and processing contract in 2021. Anaerobic Digestion at ZWED All residential and commercial organics (food scraps and yard trimmings) collected in green containers are now processed at the Zero Waste Energy City of Palo Alto Page 3 Development (ZWED) Facility in north San Jose. These compostables are first placed in large bunkers as part of a dry anaerobic digestion process where methane is created and then combusted in engines to generate renewable energy. The material from the digester is then cured and composted and ultimately used as a soil amendment. The residential curbside food scrap collection program started on July 1, 2015, allowing residents to place food scraps and soiled paper in the green cart with yard trimmings. Residents are using the program. Preliminary hauler data show that the amount of material collected from July through October 2015 in the green cart increased by 10 percent as compared to the same four months in 2014. Additionally, GreenWaste of Palo Alto, the City’s contract solid waste hauler, continues to add new commercial customer participants to the compost program. On January 25, 2016, Council amended the Municipal Code, Chapter 5.20 (Staff Report #6340), to require all businesses to subscribe to recycle and compost services and comply with refuse sorting requirements. This “Recycling and Composting Ordinance” could increase the commercial tons processed at ZWED by 33%, diverting an additional 15,000 tons per year. Dewatering and Anaerobic Digestion of Wastewater Biosolids Staff continues to move forward with components one and two of the OFP at the Palo Alto Regional Water Quality Control Plant (RWQCP). The 90% design documents have been completed for the sludge dewatering and truck loadout facility (i.e., Component One). This facility will allow the incinerators to be decommissioned and the dewatered solids to be hauled to other facilities for energy recovery and/or compost creation. An application for the Site and Design Review process has been submitted to the Planning Department. A study session and first meeting with the Architectural Review Board (ARB) has been held; the project was also presented to the Planning and Transportation Commission. The project is scheduled to go out to bid in the spring of 2016, with construction completed in 2018. The preliminary design of the anaerobic digesters at the RWQCP (i.e., Component Two) has been prepared, resulting in the estimated cost rising from around $57.4 million to approximately $75 million plus. The next step is to re-evaluate the planning and preliminary design and identify opportunities to lower costs, City of Palo Alto Page 4 including continued evaluation of gasification and pyrolysis type processes. Currently, staff is fully engaged in completing Component One. City of Palo Alto (ID # 6571) City Council Staff Report Report Type: Informational Report Meeting Date: 2/22/2016 City of Palo Alto Page 1 Council Priority: Land Use and Transportation Planning Summary Title: 2015 Airport Annual Noise Report Title: Palo Alto Airport - 2015 Annual Aircraft Noise Complaints Report From: City Manager Lead Department: Public Works Recommendation This is an informational report only and no Council action is required. Discussion The purpose of the Palo Alto Airport Annual Aircraft Noise Complaints Report is to identify noise trends in the surrounding areas and determine compliance with established voluntary noise abatement procedures. Attachment A is the first report prepared by Public Works Department’s Airport Division staff on the aircraft noise complaints received during its first year of operation and includes the last quarter of 2014. The Palo Alto Airport (PAO) receives noise complaints via e-mail at pao@cityofpaloalto.org and a designated hotline, 650-329-2405. Staff review and respond timely to all complaints ascertaining from complainants their contact information and the date, time and description of the offending occurrence. Staff review and compile the data to determine flying activity trends. Staff contact pilots when violations are observed or reported, advising them of established procedures, requesting compliance and reminding them about our neighborly commitment to the community. This report will be generated in January on an annual basis and posted to the airport’s webpage: www.cityofpaloalto.org/PAO. City of Palo Alto Page 2 Courtesy copies to: Palo Alto Airport Association Attachments:  Palo Alto Airport - 2015 Annual Aircraft Noise Complaints Report (DOCX) PALO ALTO AIRPORT PUBLIC WORKS DEPARTMENT 2015 ANNUAL NOISE COMPLAINTS REPORT (*August 2014 to December 2015) AUG 2014 – SEPT 2015 (Q4 2014 – Q3 2015)* Vision: Palo Alto Airport strives to balance the rights of pilots to fly with the rights of neighbors to a peaceful living environment. This document is a report of the noise complaints received by the airport during its first year of operation. Airport staff uses this information to identify trends in neighboring communities. These trends inform communications between airport staff and pilots on the issue of noise. This report will be generated annually in January. *This report includes the last quarter of 2014. Introduction: The following is a report of noise complaints received by Palo Alto Airport (PAO) during the first year of operation by the City of Palo Alto. The Federal Aviation Administration (FAA) defines air travel routes and procedures, including defining separation distances between aircraft, determining hazards to aviation and all other safety criteria for aircraft, and is responsible for directing and enforcing the movement of aircraft in flight. Although organizations can petition the FAA regarding flight procedures, the FAA has the final say in what is safe and acceptable. The Airport Noise and Capacity Act (ANCA) of 1990 federally prohibits public-use airports from restricting airspace in anyway. The FAA measures noise based on the Yearly Day and Night Average Sound Level (DNL) and the Community Noise Equivalent Level (CNEL). While both are essentially the same, airports in California use the CNEL method to measure noise. CNEL is a method of averaging single event aircraft noise into a weighted 24-hour average. The system adds penalties to all events occurring during the evening (7pm – 10pm) and the night (10pm – 7am). The Santa Clara County Airport Land Use Commission (SCC ALUC) performed a noise study for the Palo Alto Airport using the CNEL to determine the noise contours for 55, 60, 65, and 70 decibels. The contour map is included as Attachment A. Regarding safety and altitude, the FAA has in place Federal Aviation Regulations (FARs) that establishes Minimum Safe Altitudes (MSAs) for aircraft. For fixed wing aircraft, the minimum is 1000 feet above ground when over congested areas and 500 feet when not over congested areas. These minimum altitudes apply to all fixed wing aircraft except when necessary for landing and takeoff operations. Helicopters are exempt from these altitude restrictions due to the nature of their flight. These minimum altitudes are enforced by the FAA Flight Standards District Office in San Jose and not Palo Alto Airport. Although, Palo Alto Airport cannot tell pilots when or where to fly; the airport, however, does have voluntary noise abatement procedures that Palo Alto Airport recommends that pilots follow. (See the Noise Abatement Procedures section below.) The airport receives noise complaints via email at pao@cityofpaloalto.org and a noise complaint hotline 650-329-2405. Airport staff review and timely respond to all complaints ascertaining as much information from complainants, including contact information, date, time and description of the occurrence. Various flight trackers can be used in an attempt to help identify the aircraft involved and verify if FAA regulations or Palo Alto Airport procedures were violated. The airport staff reviews and compiles all data to determine trends with flying activities. Purpose: The purpose of the Palo Alto Airport Annual Noise Report is to identify noise trends in the surrounding areas and determine compliance with established voluntary noise abatement procedures. Airspace: The Palo Alto Airport airspace is unique. The congested Bay Area airspace is dominated by SFO Class Bravo airspace, which encompasses a 30 nautical mile radius around SFO. Palo Alto Airport Sectional Map Palo Alto Airport in Green PAO Airspace highlighted in Red Source: http://vfrmap.com/?type=vfrc&lat=37.461&lon=-122.115&zoom=10 Underneath the Class Bravo airspace lays the Class Charlie airspace of Oakland and San Jose international airports. Finally, Moffett Airfield lies approximately 4 nautical miles to the southeast of Palo Alto Airport. As a result, Palo Alto Airport airspace ends only 1.5 nautical miles southeast of Runway 31’s final approach. To land at Palo Alto Airport, aircraft must turn before entering Moffett’s airspace, resulting in aircraft having to space themselves in traffic patterns over the peninsula when take-off/landing volumes peak. The FAA’s Air Traffic Control Tower (ATCT) at Palo Alto Airport has a letter of agreement with Moffett’s ATCT providing Palo Alto Airport aircraft with extensions into Moffett airspace when Moffett airfield is not in use. The additional airspace is a useful mitigation tool during busy times. Further restrictions in Palo Alto Airport airspace come from San Jose Class C airspace, starting at 1500 feet Mean Sea Level, just southeast of Palo Alto Airport and SFO Class B airspace, starting at 2500 feet Mean Sea Level, just northeast of the Palo Alto Airport. Both are identified on the Palo Alto Airport Sectional Map: San Jose Class C is shown with thick magenta lines and SFO Class B is shown with thick blue lines. These restrictions play a vital role in aircraft departures, in turn influencing noise abatement procedures for the Palo Alto Airport. Noise Abatement Procedures: Noise abatement procedures are voluntary procedures that the airport asks pilots to follow. The airport is prohibited from restricting airspace. Palo Alto Airport staff will speak with individual pilots and educate them about the voluntary noise abatement procedures. The Palo Alto Airport cannot levy fines on pilots that violate the voluntary noise procedures. For illustrated noise abatement procedures reference Palo Alto Airport Pilots Handout included as Attachment B. Pilots are asked to fly over the bay whenever possible. If pilots must fly over the peninsula, they are asked to reduce power and fly at or above 1500 feet above ground before crossing Highway 101. Staff also asks that aircraft not make a left crosswind departure, but instead make a “Left Dumbarton Departure” (fly to the Dumbarton Auto Bridge before making a left turn and flying over East Palo Alto) or a right 270 degree turn whenever departing to the south or west from Runway 31. When aircraft are using Runway 13, pilots are asked to make a left 270 departure before flying west over Palo Alto. For arrivals, it is standard practice and necessary for pilots to descend to pattern altitude before entering the traffic pattern around PAO, sometimes requiring aircraft to descend below the 1500 feet minimum over Palo Alto. As these aircraft are descending to land the engines are generally powered back and quieter than ascending aircraft. Airport staff continuously engages with tenants and pilots about the voluntary noise abatement procedures, always noting that safety always supersedes noise. Findings: The Palo Alto Airport remains the third busiest airport in the bay area with an average of 172,000 operations per year since 2010, significantly less than the average of 198,000 operations per year between 1990 and 2009 (Table 1). An operation is defined as either a takeoff or a landing and a touch- and-go procedure will account for two operations. Table 1. Airport Operations Air Taxi Military Total Air Taxi Military Total 1990 8 18 183635 2003 17 1 212981 1991 0 0 230526 2004 619 12 199453 1992 0 0 232789 2005 2397 28 184821 1993 243 38 212303 2006 1932 17 176570 1994 313 0 207404 2007 1440 318 181883 1995 261 16 187650 2008 1697 280 174332 1996 60 0 197582 2009 1650 301 155556 1997 1 0 205311 2010 2077 6 158217 1998 8 12 192093 2011 1572 8 170389 1999 13 8 205436 2012 1700 16 176564 2000 2 0 197283 2013 1628 14 172653 2001 29 370 216483 2014 1518 22 179900 2002 62 1 208755 2015 1082 118 172132 Since the City of Palo Alto assumed operational control of the airport, 179 noise complaints from 53 households have been logged. Table 2 shows the number of complaints by quarter. In 2015, forty three complaints involving non-PAO associated aircraft were logged. This means the aircraft were neither based at nor landing/taking off from PAO. These flights were simply passing through PAO airspace and have included CHP, Coast Guard, Air Taxi’s, survey and/or banner towing operations. Charter operations, angel flights, and life flights are considered Air Taxi’s. Table 3 shows aircraft noise association by quarter. In the cases of the two unknown aircraft operations, airport staff were not able to identify the aircraft from the information provided and attempts to learn more went unanswered. Table 2. Total Complaints Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Total Complaints 17 62 24 39 37 179 Households 10 12 9 26 12 53 Table 3. Aircraft Association Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Total PAO 15 51 21 21 26 134 Non-PAO 2 10 3 17 11 43 Unknown 1 1 2 Total 17 62 24 39 37 179 City C H C H C H C H C H C H Atherton 1 1 1 1 Burlingame 1 1 1 1 East Palo Alto 10 3 27 2 7 2 4 2 1 1 49 4 Fremont 4 1 4 1 Los Altos 2 2 2 2 Los Altos Hills 1 1 1 1 Los Gatos 16 2 16 2 Menlo Park 1 1 3 1 3 3 1 1 8 4 Mountain View 2 2 2 2 Newark 1 1 1 1 Palo Alto 4 4 34 9 12 4 16 8 11 4 77 22 Pleasanton 1 1 1 1 Portolla Valley 3 2 3 2 Redwood Shores 3 1 2 1 5 1 San Jose 1 1 1 1 Stanfod 1 1 1 1 Sunnyvale 1 1 1 1 Watsonville 1 1 1 1 Unknown 1 1 3 3 4 4 * C is number of Complaints / H is number of households Total Table 4. Palo Alto Airport Noise Complaints by City Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Table 4 provides a detailed breakdown of complaints by city. Most complaints came from Palo Alto, with 77 complaints logged from 22 households and more than half of those received in the first quarter of 2015. East Palo Alto was the second most impacted city, with 49 from four households. Together the two cities accounted for 80% of all noise complaints. The high rate of winter 2015 complaints could be due to the dense air caused by colder weather amplifying sound levels. Alternately, the third quarter of 2015 was the second highest quarter for complaints, which may be attributable to households being more open in the warm evening hours of summer. While airport staff attempts to collect all information possible, some residents choose to remain anonymous. The majority of all complaints emanated from the Midtown neighborhood, with 49 logged from four households (Table 5). Attachment C is the map Palo Alto Airport staff used to identify Palo Alto neighborhoods. Eighteen of the aircraft associated with Palo Alto city complaints were not associated with the Palo Alto Airport. Neighborhood C H C H C H C H C H C H Baron Park 1 1 1 1 Community Center 2 1 2 1 4 1 Cresent Park 2 1 2 1 Greenmeadow 2 1 1 1 3 1 Leland Maner 1 1 1 1 2 1 4 3 Midtown 1 1 26 3 7 1 7 2 8 2 49 4 Old Palo Alto 1 1 1 1 Palo Verde 3 2 1 1 4 3 St Francis 1 1 2 1 5 3 Ventura 1 1 1 1 Unknown 2 2 1 1 3 3 Table 5. Palo Alto Complaints by Neighborhood * C is number of Complaints / H is number of households Q4 2014 Q1 2015 Q2 2015 Q3 2015 Total Q4 2015 Following is a noise contour map for PAO, adopted by the Santa Clara County Airport Land Use Commission (SCC ALUC) in their 2008 Comprehensive Land Use Plan, reflecting the forecasted noise contours for Palo Alto Airport in 2022. SCC ALUC used the Integrated Noise Model which considers airport altitude, mean temperature, runway configuration, aircraft flight track definition, aircraft departure and approach profiles, aircraft traffic volume and fleet mix, and flight track utilization by aircraft types. All data is entered into the CNEL formula to prepare the noise contours for Palo Alto Airport. Refer to https://www.sccgov.org/sites/dpd/DocsForms/Documents/ALUC_20081119_PAO_CLUP.pdf, for a more detailed description of how the SCC ALUC prepared this map. The 65 decibel (db) noise level of the airport extends beyond the airport boundaries, but is only over Palo Alto Golf Course, Palo Alto Baylands Nature Preserve, and the salt marshes in San Mateo County and is the threshold at which FAA requires noise mitigation programs. Attachment A PAO Noise Contour Map 2022 Forecasted Palo Alto Airport Noise Contour Map Attachment B PAO Pilot Handout Santa Clara County created a Pilot Handout for Palo Alto Airport that described the noise abatement procedures. When the City of Palo Alto assumed control of the airport, the existing noise abatement procedures were adopted, with one exception, “pilots must maintain 1500 feet or above across Highway 101” was replaced with “Aircraft are asked to climb to and maintain at least 1500 feet before crossing Highway 101.” The change is consistent with the voluntary nature of noise abatement procedures as airports are federally prohibited from instructing pilots how to fly. Bayside Pattern Left 270 Right 270 Peninsula Side Pattern Left Dumbarton Departure Not to be used for navigation Safety First Be Aware Palo Alto Airport Lies under SFO Class B Airspace Key Pattern Noise Abatement Departures RWY 31 RWY 13 Noise Abatement Procedures Please fly neighborly and be aware of the surrounding communities. There are noise sensitive areas to the west and south of the Airport. Aircraft are asked to climb to and maintain at least 1500 feet before crossing Highway 101. Fly over the bay whenever possible. Please use reduced power setting whenever possible to reduce noise impacts. Even a reduction in a 200 RPM can significantly reduce noise. Safety Always Supersedes Noise Abatement Palo Alto Airport General Information Bayside Pattern Alt - 800 feet Peninsula Side Pattern Alt – 1000 feet MSL ATCT hours of operation – 0700 – 2100 hrs ATC / CTA Frequency – 118.600 ATC Ground Frequency – 125.000 Airport Office Phone # – (650) 329-2444 320 Preferred Departures Runway 31 Left Dumbarton Departure When departing runway 31 turn right 10 on takeoff and climb over the bay. Fly straight to Dumbarton Auto Bridge before making a left turn to fly over the peninsula or to the south. Cross Highway 101 at or above 1500 feet. Left 270 Departure After takeoff climb over the bay while making a 270 turn and heading west or south over the peninsula. Cross Highway 101 at or above 1500 feet. Runway 13 Right 270 Departure After takeoff turn right over and climb over the bay while making a 270 turn and heading west or south over peninsula. Cross Highway 101 at or above 1500 feet. Palo Alto Airport asks for your cooperation in reducing the noise impact of aircraft on the neighboring communities. Attachment C Map of Palo Alto Households 4 38 Note: There were 18 calls from Palo Alto that did not involve aircraft from the Palo Alto Airport and are not included on this map. The number in each circle represents the number of calls or emails from a single household. MAYOR PATRICK BURT Cordially Invites You to His State of the City Address Wednesday, February 24, 2016 7:00 PM Mitchell Park Community Center 
 3700 Middlefield Road Palo Alto Reception Immediately Following