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HomeMy WebLinkAboutStaff Report 2312-2318CITY OF PALO ALTO CITY COUNCIL Special Meeting Monday, June 10, 2024 Council Chambers & Hybrid 4:00 PM     Agenda Item     10.Approval and Authorization for the City Manager or Their Designee to Execute the Following Five Utilities Contract Amendments for the Electric Grid Modernization Pilot: 1) Amendment Number 1 to VIP Powerline Corp C23185980 Increasing Compensation by $16,000,000 Through April 2028; 2) Amendment Number 1 to Davey Surgery Tree Company C20176920 Increasing Compensation by $3,103,484 Through May 2025; 3) Amendment Number 1 to Stella-Jones Blanket Purchase Order Increasing Compensation by $3,000,000 Through June 2026; 4) Amendment Number 1 to Oldcastle Infrastructure Blanket Purchase Order Increasing Compensation by $450,000 and Extending the Term to December 31, 2024; and 5) Amendment Number 1 to Statewide Traffic Safety and Signs S22183236 Increasing Compensation by $200,000 Through December 2024; CEQA Status: the Grid Modernization Project is Exempt Under CEQA Guidelines Sections 15302, 15303 and 15183. Consent Questions City Council Staff Report From: City Manager Report Type: CONSENT CALENDAR Lead Department: Utilities Meeting Date: June 10, 2024 Staff Report: 2312-2318 TITLE Approval and Authorization for the City Manager or Their Designee to Execute the Following Five Utilities Contract Amendments for the Electric Grid Modernization Pilot: 1) Amendment Number 1 to VIP Powerline Corp C23185980 Increasing Compensation by $16,000,000 Through April 2028; 2) Amendment Number 1 to Davey Surgery Tree Company C20176920 Increasing Compensation by $3,103,484 Through May 2025; 3) Amendment Number 1 to Stella-Jones Blanket Purchase Order Increasing Compensation by $3,000,000 Through June 2026; 4) Amendment Number 1 to Oldcastle Infrastructure Blanket Purchase Order Increasing Compensation by $450,000 and Extending the Term to December 31, 2024; and 5) Amendment Number 1 to Statewide Traffic Safety and Signs S22183236 Increasing Compensation by $200,000 Through December 2024; CEQA Status: the Grid Modernization Project is Exempt Under CEQA Guidelines Sections 15302, 15303 and 15183. RECOMMENDATION Staff recommends that the City Council approve and authorize the City Manager or their designee to execute the following first amendments to two blanket purchase orders and three contracts, for overhead and underground construction, pole replacement, vegetation management for line clearing, utility pole and underground equipment purchases, and traffic control services used for the electric grid modernization pilot project: (1) Amendment No. 1 to Contract No. C23185980 with VIP Powerline Corp increasing the contract limit by $16,000,000 for a total not-to-exceed amount of $36,000,000 for the remaining term of the contract through April 9,2028 (for a total term of five years), to provide pole replacement, 4/12kV overhead conversion and system improvement work on the electric distribution system (Attachment A); (2) Amendment No. 1 to Contract No. C20176920 with Davey Tree Surgery Company increasing the contract limit by $3,103,484 for a total not-to-exceed amount of $17,589,541 for the remaining term of the contract through May 31,2025 (for a total term of three years) to provide utility line clearing and vegetation management (Attachment B); (3) Amendment No. 1 to Blanket Purchase Order with Stella-Jones increasing the contract limit by $2,250,000 for a total not-to-exceed amount of $3,000,000 for the remaining term of the contract through June 30, 2026 to purchase new utility poles (for a total term of three years); (4) Amendment No. 1 to Blanket Purchase Order with Oldcastle Infrastructure increasing the contract limit by $450,000 for a total not-to-exceed amount of $2,050,00 and extending the term of the contract to December 31, 2024 (for a total term of five years) to purchase equipment for the electric underground system; (5) Amendment No. 1 to Contract No. S22183236 with Statewide Traffic Safety increasing the contract limit by $200,000 for a total not-to-exceed amount of $455,000 for the remaining term of the contract through December 31, 2024 (for a total term of three years) to provide traffic control services (Attachment C). EXECUTIVE SUMMARY On June 19, 2023, the City Council approved the FY 2024 CIP Budget with the new Grid Modernization for Electrification Project (EL-24000). Staff is deploying a pilot to determine how to align the grid modernization upgrades (Grid Mod) with fiber-to-the-premise (FTTP) program Phase 1 buildout, to help minimize utility engineering pole make-ready work, pole replacements, noise disruption, and construction activity in neighborhoods and these are necessary contract amendments to support this project. The purpose of the pilot is to determine the feasibility of engineering designs and construction methods and implement best practices to facilitate the most cost-effective deployment of resources. Given the anticipated increase in engineering design work, City of Palo Alto Utilities (CPAU) will need to add resources to manage and perform a high volume of pole make-ready work and replacements. In the meantime, staff recommends leveraging existing on-call construction and engineering contracts to perform the engineering design, overhead and underground construction including vegetation management, and installation for the pilot area (approximately 409 poles and 1,224 homes). Authorizing additional services within the scope of existing contracts will reduce the construction timeline by 6 – 9 months, which would otherwise be prolonged in the process of issuing multiple invitation for bids (IFBs) to perform the work for grid modernization. The pilot area will be treated as a testbed to design and construct both projects in parallel to minimize community disruption and reduce shared construction costs. The pilot will inform CPAU how to most effectively bid out the engineering, construction and installation services required for FTTP and grid modernization for the remaining Phase 1 area (an additional 1,241 poles and 5,560 customers). The City will issue public solicitations for each of these services for subsequent phases of the grid mod and FTTP projects. BACKGROUND One major initiative in the City’s Sustainability and Climate Action Plan (S/CAP) is to promote the transition to all-electric homes and electric vehicles (EVs) to reduce greenhouse gas emissions. In 2020, the City launched an update to reduce GHG emissions 80 percent below 1990 levels, i.e., reduce 624,095 metric tons of greenhouse gases by 2030 (the “80 x 30 goal"). This goal exceeds even the state of California's world-leading reduction goal of 80% by 2050; the California Global Warming Solutions Act of 2006 (AB32) requires the state to reduce its GHG emissions 40% below 1990 levels by 2030 and set an aspirational goal to reduce emissions 80% by 2050. A 2021 impact analysis showed that to meet the “80 x 30 goal”, the City must electrify all of its roughly 15,000 single-family homes, replacing natural gas equipment with efficient electric alternatives. Also, currently, one in six Palo Altans drive an electric car, and EVs now account for more than 30% of new car sales in Palo Alto – the highest adoption rate in the country. One of three newly registered vehicles in Palo Alto is an EV. This transition, or “electrification,” will require an extensive upgrade to the electric distribution network due to a large increase in electrical energy needed to replace gas heating equipment with electrical equipment and to support EVs. As a result, Grid Mod was developed to enhance the distribution system’s grid resiliency and reliability in a manner that will continue to accelerate the City’s clean energy and decarbonization goals. Palo Alto already supplies customers electricity from a 100% carbon neutral portfolio and has been in the forefront of efforts to design programs allowing customers to easily utilize clean energy through EVs and electric appliances. Palo Alto’s grid must be modernized to reach the capacity required to electrify all homes and cars. The modernized system will be designed to fully accommodate energy received from local generation such as rooftop solar and battery storage, an important element in decarbonization goals. There will be an upgrade to the distribution system to incorporate local generation, allow two-way power flow, meet projected capacity needs, enhance voltage regulation and system protection requirements, and provide a high level of resiliency and reliability. The City conducted an electrification study to evaluate the impacts of projected electrification loads on Palo Alto’s distribution and substation transformers, primary/secondary distribution circuits, and to propose upgrades needed to mitigate overloads. The estimated cost to construct the necessary electric system upgrades for a 100% electrification scenario is between $220 million to $306 million, depending on the approach. Of the nine substations in Palo Alto, the study recommends major design and equipment upgrades at two of the nine substations, and minor to moderate upgrades at four substations to meet projected loads to support 100% electrification. The Grid Mod Project requires bringing online more transformers, replacing aging infrastructure, upgrading, or replacing poles, and providing battery storage and solar energy system support to the interconnected grid. Specifically, the Project involves replacing the City’s current 1,413 single-phase pole-top transformers rated less than 50kVA with the same type of transformers rated 50kVA or larger. Additionally, there are currently 261 single-phase pad- mounted transformers and 231 single-phase underground transformers installed on the distribution system. Based on the projected average peak load of 6kVA per customer, 341 of these transformers (including all 231 underground transformers) will need to be replaced with 75kVA or larger transformers to mitigate overloads. In order to limit the maximum number of customers per transformer to 15 (90kVA), the City will need to install an additional 83 transformers. Furthermore, 296,300 circuit feet of open wire secondary conductors in the distribution system will be replaced with aluminum aerial cable. These design aspects will accommodate 100% residential electrification of end uses in the Palo Alto community, aligning with the City’s primary goal of decarbonization. For future housing development, the City will perform new analyses and make appropriate electric distribution network changes as needed for electrification. ANALYSIS As noted, staff routinely use a cohort of contract support to build, maintain, and invest in the City’s electric system infrastructure. To achieve efficiencies in timing for this pilot phase of electrification and fiber to the premise build, leveraging these existing resources is recommended. The recommended contract amendments reviewed below will enable current routine daily business to proceed while ensuring capacity to support this pilot phase one build. VIP Powerline Corp (VIP) – Electrical Construction - Contract No. C23185980 For more than 25 years, CPAU has routinely hired contractors to assist Electric Operations crews in offsetting the labor shortage of qualified electrical journey-level workers throughout the industry. Over the past 10 years, CPAU has not been able to successfully hire and retain qualified electrical journey-level staff, specifically in the line construction section, to perform the required work on the electric distribution system. Given the magnitude of work that is required to upgrade the electric distribution system and to meet the 2030 emissions reduction goal through electrification, staff recommends increasing the annual amount for VIP’s electrical contractors from $4 million to $8 million for the remaining four years of the contract and increasing the five-year not-to-exceed amount of the contract from $20 million to $36 million. This will enable VIP to bring in one or two additional crews to perform Grid Mod work on a regular basis. The estimated cost for a 5 day/5 person crew is approximately $72,000 weekly or $3,500,000 annually (Attachment A). The original contract was approved by Council on April 10, 2023 (Staff Report #2303-11191) 1 Staff Report 2303-1119 https://cityofpaloalto.primegov.com/meeting/document/1862.pdf?name=Item%2010%20Staff%20Report Davey Tree Surgery Company (Davey Tree) – Line Clearing - Contract No. C20176920 The City has contracted for utility vegetation management services since the mid-1980s to ensure the clearing of trees and other vegetation from electrical conductors, poles, substations, fiber optic lines, traffic signals, and streetlights throughout Palo Alto that meets or exceeds regulatory requirements. There is increased pressure on Investor-Owned Utilities such as PG&E to reduce the potential for fires around their electric infrastructure through enhanced vegetation management. This has contributed to a statewide shortage of qualified line clearance tree workers. In addition to this increased demand for qualified workers, a recent State Assembly Bill, SB 247, has mandated that these tree workers be “…paid a rate no less than the prevailing wage rate for a first period apprentice electrical utility lineman…”. This increased base pay rate is 36% higher than the 2019 prevailing wage document for this trade. Given the number of trees that will need to be pruned and the extra time it will take to fully clear heavily vegetated areas, CPAU requires a significant increase to the capacity of line clearance crews. Staff estimates needing a 100% increase of line clearance capacity to continue vegetation maintenance, hazard tree removal, and pruning for the primary, secondary, and electric service drop cables for Grid Mod. Of the 409 poles in the pilot area, staff estimates 25% or 100 poles will require significant pruning to achieve 1-3’ radial clearance along the path of the various cables. Staff recommends increasing the contract limit by $3,103,484 for the remaining term, which will increase the total not-to-exceed amount from $14,486,057 to $17,589,541 for the five year contract term through May 31, 2025 (Attachment B). The original contract was approved by Council on June 1, 2020 (Staff Report #108832). Stella-Jones – Utility Wood Poles – Blanket Purchase Order CPAU has a recurring capital improvement project Wood Pole Replacement (EL-19004) to replace between 50 to 100 wood poles on an annual basis because the poles have exceeded their average service life of 50 years and/or other weakening conditions. Wood poles are used to support overhead utility lines throughout the city. Though poles are inspected, tested, and treated to maintain their integrity, over time poles will degrade and require replacement for the safety of the community or utility workers. The City issued a formal solicitation (Request for Quotation # 188453) on June 13, 2023 for the purchase and delivery of treated wooden poles. Stella-Jones was one of two responsible bidders. Stella-Jones was awarded a blanket purchase order to purchase wood poles, in an annual amount of $250,000 for a total not-to-exceed amount of $750,000 over three years. For Grid Mod, staff estimates a replacement of 25% or 1500 of 6000 poles over the next several years to accommodate the weight of the new transformers and distribution cables while maintaining compliance with rules for overhead electric line construction (California Public Utilities Commission General Order 953) . Since CPAU 2 Staff Report 10883 https://www.cityofpaloalto.org/files/assets/public/v/1/agendas-minutes- reports/reports/city-manager-reports-cmrs/year-archive/2020/id-10883.pdf?t=62508.97 3 California Public Utilities Commission General Order https://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M338/K730/338730245.pdf will be replacing about 300 to 400 poles annually over the next five years, staff recommends increasing the annual purchase order amount from $250,000 to $1,000,000 with Stella-Jones for the remaining three years of the contract, increasing the total not-to-exceed amount from $750,000 to $3,000,000 over the three-year term. In addition, staff separately solicited for H- class poles in March 2024 and Stella-Jones was the lowest responsible bidder, so staff recommends adding H-class wood poles under the Stella-Jones contract. The H-class poles are larger in diameter and will support more equipment load, otherwise, the City would need to install additional poles. The City will issue new purchase orders on an as-needed basis as the quantity, size and type of pole replacements are determined for the Grid Mod project. Oldcastle Infrastructure – Underground Vaults and Pads - Blanket Purchase Order CPAU purchases large, pre-cast concrete pads, vaults, covers, and extensions for its underground infrastructure. The materials come in various sizes and styles to meet unique design requirements and field conditions. The vaults contain electric distribution system cables and equipment used to provide power to customers throughout the City. In December 2014, Council authorized Utilities to standardize with Oldcastle for this underground equipment (Staff Report #53094) because Oldcastle is one of two vendors on the West coast that manufacture concrete pads, vaults, extensions, and covers in the sizes and styles that meet Utilities’ standards for the construction of the utility underground electric system (Electric Service Requirements5). Oldcastle is the City’s preferred supplier because of lower costs and higher quality than the other West coast supplier. On February 24, 2020 Council approved a blanket purchase order with Oldcastle as the City’s standard supplier of certain equipment for the electric underground system, in an annual amount of $350,000 for a total not-to-exceed purchase amount of $1,600,000 over 4.5 years (Staff Report #109606). Staff recommends extending the contract term for an additional six months from June 30, 2024 to December 31, 2024, and staff is recommending increasing the annual amount from $350,000 to $800,000, for a total not-to-exceed amount of the contract from $1,600,000 to $2,050,000 over the five year term. The City will issue new purchase orders on an as-needed basis as the quantity, size and type of underground equipment are determined for the Grid Mod project. 4 Staff Report 5309 https://www.cityofpaloalto.org/files/assets/public/v/1/agendas-minutes-reports/reports/city- manager-reports-cmrs/year-archive/2014/final-staff-report-id-5309_utilities-substructure-standardization-with- oldcastle.pdf 5 Electric Service Requirements https://www.cityofpaloalto.org/Departments/Utilities/Utilities-Services- Safety/Engineering-and-Operations/Electric-Service-Requirements 6 Staff Report 10960 https://www.cityofpaloalto.org/files/assets/public/v/1/agendas-minutes- reports/reports/city-manager-reports-cmrs/year-archive/2020/id-10960-mini-packet-022420.pdf?t=53347.87 Statewide Traffic Safety and Signs – Traffic Control - Contract No. S22183236 A traffic control plan must be included in every permit application submitted to the Development Center and Transportation Department for projects that involve work within the public right-of-way. The traffic control plan must be approved prior to the start of work. The City may require additional measures of traffic control or time-of-work restrictions on a case- by-case basis. The City issued a formal solicitation (Request for Proposals # 183236) in 2021 for Utilities Construction On-Call Traffic Control Services, and Statewide was awarded the three- year contract. In the pilot area, CPAU will have to replace and upgrade about 90 wooden poles to accommodate the weight of the new transformers and distribution cables. Most of these poles are in the public right of way which will require traffic control services (i.e. flagging, traffic shifts, sign boards) when performing the construction work. Staff recommends increasing the annual amount of the Statewide contract from $85,000 to $285,000 per year for the remaining term through December 31, 2024, which increases the total not-to-exceed amount from $255,000 to $455,000 over the three-year term. (Attachment C). FISCAL/RESOURCE IMPACT Funding for the five contract amendments is available in the FY 2024 Electric capital budget under CIP Grid Modernization for Electrification (EL-24000). All the contract amendments are for on-call services or as-needed purchase orders. Any unspent funds from the contracts will be returned to the Electric Grid Modernization CIP. Funding in subsequent years is subject to Council’s approval of each fiscal year’s budget appropriation. STAKEHOLDER ENGAGEMENT The services are coordinated with internal stakeholders and the service providers. ENVIRONMENTAL REVIEW The grid modernization project will replace aging infrastructure and install modern network infrastructure to meet future needs related to home electrification. This project does not expand the existing footprint of the City’s network; there is sufficient capacity on the existing sub-transmission lines, substations, and primary feeders to serve the energy load that is being added to the system. Changes to the equipment on the network will include replacement and Vendor Contract No Original Not-to- Exceed Amount Original Term Date Amendment Amount* Years Remaining Revised Not- to-Exceed Amount Revised Term Date* VIP Powerline C23185980 20,000,000$ 4/9/2028 16,000,000 4 36,000,000$ 4/9/2028 Davey Tree C20176920 14,486,057$ 5/31/2025 3,103,484 1 17,589,541$ 5/31/2025 Stella-Jones Blanket PO 750,000$ 6/30/2026 2,250,000 3 3,000,000$ 6/30/2026 Oldcastle Infrastructure Blanket PO 1,600,000$ 6/30/2024 450,000 1 2,050,000$ 12/31/2024 Statewide Traffic Safety S22183236 255,000$ 12/31/2024 200,000 1 455,000$ 12/31/2024 Total 37,091,057$ 22,003,484$ 59,094,541$ * Changes in contract amounts and term date are bolded installation of pad-mounted transformers and new protective devices to improve reliability, and system controls to allow for the import and export of energy from homes on the network. This project is categorically exempt from California Environmental Quality Act (CEQA) review under CEQA Guidelines section 15303 (construction and location of limited numbers of new, small facilities or structures; installation of small new equipment and facilities in small structures) and section 15302 (replacement or reconstruction of existing structures and facilities). In addition, Council’s approval of the grid modernization project does not require additional environmental review under CEQA Guidelines section 15183, because the grid modernization project, an element of the Council-approved S/CAP, is consistent with the Environmental Impact Report (EIR) Addendum to the City of Palo Alto Comprehensive Plan Final Environmental Impact Report Council approved on June 5, 20237. ATTACHMENTS Attachment A: Contract With VIP Powerline; C23185980, Amendment 1 Attachment B: Contract With Davey Surgery Tree; C20176920, Amendment 1 Attachment C: Contract With Statewide Traffic Safety and Signs; S22183236, Amendment 1 APPROVED BY: Dean Batchelor, Director of Utilities Staff: Dave Yuan, Strategic Business Manager 7Environmental Impact Report https://cityofpaloalto.primegov.com/Portal/Meeting?meetingTemplateId=12530 CONTRACT CHANGE ORDER CITY OF PALO ALTO DEPARTMENT: ELECTRIC UTILITIES OPERATIONS Electric Utility Construction Services Project Contract Change Order # 1 Project Title: Grid Modernization Project No.: EL-24000 Contract Number: C23185980 Date: 4/16/2024 Contractor: VIP Powerline Corp Change Order No.: 1 Description of Change Order Background Information: The Electric Grid Modernization project is to enhance the distribution system’s grid resiliency and reliability in a manner that will continue to accelerate the City’s clean energy and decarbonization goals. Palo Alto’s grid must be modernized to reach the capacity required to electrify all homes and cars. The original contract C23185980 was approved by City Council on April 10, 2023 under staff report 2303:1119. The original terms of the contract was an annual not-to-exceed amount of $4,000,000 per year, for a five-year contract not-to-exceed a total amount of 20,000,000 from April 10, 2023 through April 9, 2028. https://cityofpaloalto.primegov.com/meeting/document/1862.pdf?name=Item%2010%20Staff% 20Report Change Order Justification: To meet the expected increase in demands, Grid Mod will increase network capacity. Capacity increases will include the following work: converting 4kV systems to 12kV; installing more distribution transformers with greater capacity; and rebuilding secondary networks by increasing conductor size, replacing utility poles, and creating more secondary networks. Staff recommends increasing the annual amount from $4 million to $8 million for the remaining four years of the contract and increasing the five-year not-to-exceed amount of the contract from $20 million to $36 million. Description of Work to be Performed: Contractor will provide electric line construction crew(s) to be used on an ongoing basis to assist with construction and operating activities on the City’s 12kV and 4kV Electric Distribution System. The City proposes to utilize contract labor and equipment to supplement the City’s crews in the construction of necessary maintenance, pole replacements, and existing facilities upgrades on its Electric System. The project includes replacing 1,400 pole top transformers and 341 underground transformers. Furthermore, 296,300 circuit feet of open wire secondary conductors in the distribution system will be replaced with aluminum aerial cable. Approximately 1,500 or 25% of 6,000 poles will need to be replaced and increased in size to support the weight of the new transformers, wires, and equipment. Incorporates Field Order Number(s): Bid items 1 - 20 Cost Time DocuSign Envelope ID: 62DD72C0-4AF6-4490-BEC3-AA490040557D This Change Order will:  No cost change: N/A X Increase cost by $ 16,000,000.00  Decrease cost by $ N/A This Change Order will: X Not change time  Increase time by ____ days o ___ days Excusable Delay o ___ days Compensable Delay  Decrease time by ____ days The date of completion as of this Change Order is: Requesting this change for year 2 (current) through year 5 contract. G/L account number (s): 40029013 / 31650 Basis for change in cost:  Unit price(s)  Lump sum X Time and Materials  Compensation for Compensable Delay X Other: Time and Equipment Contract Change Order – continued CONTRACTOR CERTIFICATION: By signing below, Contractor agrees that this Change Order constitutes full resolution, settlement, accord and satisfaction with respect to any and all pending or future Claims for cost and extensions of time that were asserted, or that could have been asserted, in connection with the Work covered by this Change Order, as more fully set forth in Article 7 of the Contract General Conditions. FAILURE TO EXECUTE: If Contractor fails to promptly execute this Change Order after it has been submitted for Contractor’s signature, the City may unilaterally approve this Change Order as set forth in Article 7 of the Contract General Conditions. Contractor may dispute the terms of a unilaterally-approved Change Order, in whole or in part, by submitting a Claim in accordance with the Dispute Resolution Procedures set forth herein within fourteen (14) days after the Change Order is approved by the City. If Contractor fails to submit a Claim within that 14-day period, with respect to all or part of the unilaterally-approved Change Order, those portions of the Change Order which have not been disputed by timely submission of a Claim shall be deemed to have the same effect as if the Change Order was fully executed by both parties as set forth above. Accepted for Contractor: Accepted for City of Palo Alto: By: Ryan Tufnail By: Jose Ibarra Title: President Title: Utilities Supervisor Date: Date: PC O N o . AS I FO CO R CO Description Amount Reason for Change 1 Foreman/ Crew Leader (12 kV rubber glove certification required) $514,000 Electric Grid Modernization Project 2 Line Person/ Journeyman (12 kV rubber glove certification required) $892,000 Electric Grid Modernization Project 3 Line Person/Journeyman Apprentice (12 kV rubber glove certification required) $394,000 Electric Grid Modernization Project 4 Truck Driver/ Ground Person (12 kV rubber glove certification required) $314,000 Electric Grid Modernization Project Scope of Work DocuSign Envelope ID: 62DD72C0-4AF6-4490-BEC3-AA490040557D 4/25/20244/25/2024 5 Overtime Foreman/ Crew Leader (12 kV rubber glove certification required) $293,000 Electric Grid Modernization Project 6 Overtime Line Person/ Journeyman (12 kV rubber glove certification $247,000 Electric Grid Modernization Project 7 Overtime Line Person/ Journeyman Apprentice (12 kV rubber glove certification required) $214,000 Electric Grid Modernization Project 8 Overtime Truck Driver/ Ground Person (12 kV rubber glove certification required) $162,000 Electric Grid Modernization Project 9 Line Truck Capable of setting and removing poles up to 70’ $192,000 Electric Grid Modernization Project 10 Line Truck Capable of setting and removing poles up to 80’ $90,000 Electric Grid Modernization Project 11 Material Handler/ Bucket Truck capable of facilitating live line work at 55’ $192,000 Electric Grid Modernization Project 12 Material Handler/ Bucket Truck capable of facilitating live line work at 70’ $100,000 Electric Grid Modernization Project 13 Cargo Trailer capable of hauling material including poles up to 80’ $20,000 Electric Grid Modernization Project 14 Bucket Truck capable of working on electric secondary level (35’) $70,000 Electric Grid Modernization Project 15 18k LB Boom Truck (e.g. Small Crane) $70,000 Electric Grid Modernization Project 16 Single Reel Dolly Trailer $20,000 Electric Grid Modernization Project 17 3 Reel Dolly/Trailer or Truck $20,000 Electric Grid Modernization Project 18 40k LB Take up Dolly (e.g. 4k Hogg Davis Cable Puller) $70,000 Electric Grid Modernization Project 19 Underground Splicing Van $70,000 Electric Grid Modernization Project 20 Traffic Control Services $56,000 Electric Grid Modernization Project Total for this Change Order $4,000,000 Annual incremental percentage increases in bid prices shall be listed for each additional year of the contract. YEAR 2 - 1st Optional 12-month extension (Items 001 – 0020) 3.90% YEAR 3 - 2nd Optional 12-month extension (Items 001 – 0020) 3.70% YEAR 4 - 3rd Optional 12-month extension (Items 001 – 0020) 3.50% YEAR 5 - 4th Optional 12-month extension (Items 001 – 0020) 3.30% DocuSign Envelope ID: 62DD72C0-4AF6-4490-BEC3-AA490040557D Document Preparation By: Dave Yuan Title: Utilities Strategic Business Manager Date: April 16, 2024 City Approval – Division Head Signature required on all Change Orders By : Title : Tomm Marshall Assistant Director, Electric Engineering and Operations Date: City Approval – Department Head Signature required when any individual Change Order exceeds $10,000. By: Title: Dean Batchelor Director of Utilities Date: Contract Change Order – continued Summary of Amounts Payable Under Contract (For Internal Purposes Only) Original Contract Sum: $ 20,000,000.00 Previous Change Orders $ 0.00 This Change Order $ 16,000,000.00 Revised Contract Sum: $ 36,000,000.00 Compare to: Original Contract Authorization: $ 20,000,000.00 Contingency: 0.00 Contract Amendment Authorizations $ 0.00 Contingency added: 0.00 Contingency Authorizations: $ 0.00 Used to date (0.00) Total Authorized Funding: $ 20,000,000.00 Balance remaining 0.00 Change Orders shall not be initiated for Council-approved contracts if the revised Contract Sum exceeds the total authorized funding amount. DocuSign Envelope ID: 62DD72C0-4AF6-4490-BEC3-AA490040557D 4/30/2024 4/30/2024 Vers.: Aug. 5, 2019 Page 1 of 6 AMENDMENT NO. 1 TO CONTRACT NO. C20176920 BETWEEN THE CITY OF PALO ALTO AND DAVEY TREE SURGERY COMPANY This Amendment No. 1 (this “Amendment”) to Contract No. C20176920 (the “Contract” as defined below) is entered into as of June 17, 2024 by and between the CITY OF PALO ALTO, a California chartered municipal corporation (“CITY”), and DAVEY TREE SURGERY COMPANY, a Delaware corporation, located at 2617 South Vasco Road, Livermore, CA 94550 (“CONTRACTOR ”). CITY and CONTRACTOR are referred to collectively as the “Parties” in this Amendment. R E C I T A L S A. The Contract (as defined below) was entered into by and between the Parties hereto for the provision of utility line and pole tree clearing services, as detailed therein. B. The Parties now wish to amend the Contract in order to add more hourly line clearing and contingency funding for the electric grid modernization pilot project, increasing compensation by Three Million One Hundred Three Thousand Four Hundred Eighty-Four Dollars ($3,103,484.00) from Fourteen Million Four Hundred Eighty-Six Thousand Fifty-Six Dollars and Eighty-Eight Cents ($14,486,056.88) to a new total not to exceed amount of Seventeen Million Five Hundred Eighty-Nine Thousand Five Hundred Forty Dollars and Eighty- Eight Cents ($17,589,540.88). NOW, THEREFORE, in consideration of the covenants, terms, conditions, and provisions of this Amendment, the Parties agree: SECTION 1. Definitions. The following definitions shall apply to this Amendment: a. Contract. The term “Contract” shall mean Contract No. C20176920 between CONSULTANT and CITY, dated June 1, 2020. b. Other Terms. Capitalized terms used and not defined in this Amendment shall have the meanings assigned to such terms in the Contract. SECTION 2. Section 5 “COMPENSATION FOR ORIGINAL TERM” of the Contract is hereby amended to read as follows: “COMPENSATION FOR ORIGINAL TERM. CITY shall pay and CONTRACTOR agrees to accept as not-to- exceed compensation for the full performance of the Services and reimbursable expenses, if any: A sum calculated in accordance with the fee schedule set forth at Exhibit C, not to exceed a total maximum compensation amount of Seventeen Million Five Hundred Eighty-Nine Thousand Five Hundred Forty Dollars and Eighty-Eight Cents ($17,589,540.88). CONTRACTOR agrees that it can perform the Services for an amount not to exceed the total maximum compensation set forth above. Any hours worked or services performed by CONTRACTOR for which payment would result in a total exceeding the maximum amount of compensation set forth above for performance of the Services shall be at no cost to CITY. DocuSign Envelope ID: 50FB16F1-F3CC-4D3F-9A1E-70288021EB07 Vers.: Aug. 5, 2019 Page 2 of 6 Included in the maximum compensation amount set forth above, CITY has set aside the sum of Three Million One Hundred Eighty-Four Thousand Ten dollars and Sixty cents ($3,184,010.60) for Additional Services. If requested by CITY, CONTRACTOR shall provide Additional Services only by advanced, written authorization from the City Manager or designee. CONTRACTOR, at the CITY’s request, shall submit a detailed written proposal including a description of the scope of services, schedule, level of effort, and CONTRACTOR’s proposed maximum compensation, including reimbursable expense, for such services. Compensation shall be based on the rates set forth in Exhibit C-1 (whichever is applicable), or if such rates are not applicable, a negotiated lump sum. CITY shall not authorize and CONTRACTOR shall not perform any Additional Services for which payment would exceed the amount set forth above for Additional Services. Performance of and payment for Additional Services is subject to all requirements and restrictions in this Agreement.” SECTION 3. The following exhibit(s) to the Contract is/are hereby amended or added, as indicated below, to read as set forth in the attachment(s) to this Amendment, which is/are hereby incorporated in full into this Amendment and into the Contract by this reference: a. Exhibit “C” entitled “SCHEDULE OF FEES”, AMENDED, REPLACES PREVIOUS. b. The portion of Exhibit C-1 entitled “RATE SCHEDULE YEAR 5 (6/1/2024- 5/31/2025)”, AMENDED, REPLACES PREVIOUS. SECTION 4. Legal Effect. Except as modified by this Amendment, all other provisions of the Contract, including any exhibits thereto, shall remain in full force and effect. SECTION 5. Incorporation of Recitals. The recitals set forth above are terms of this Amendment and are fully incorporated herein by this reference. (SIGNATURE BLOCK FOLLOWS ON THE NEXT PAGE.) DocuSign Envelope ID: 50FB16F1-F3CC-4D3F-9A1E-70288021EB07 Vers.: Aug. 5, 2019 Page 3 of 6 SIGNATURES OF THE PARTIES IN WITNESS WHEREOF, the Parties have by their duly authorized representatives executed this Amendment effective as of the date first above written. CITY OF PALO ALTO _____________________________ City Manager APPROVED AS TO FORM: _____________________________ City Attorney or designee DAVEY TREE SURGERY COMPANY By:______________________________ Name:___________________________ Title:____________________________ By:______________________________ Name:___________________________ Title:____________________________ DocuSign Envelope ID: 50FB16F1-F3CC-4D3F-9A1E-70288021EB07 President & General Manager Larry Evans Erika Schoenberger General Counsel, Secretary Vers.: Aug. 5, 2019 Page 4 of 6 EXHIBIT C SCHEDULE OF FEES Compensation based upon fee schedule CITY shall pay CONTRACTOR for Services rendered as assigned by the City according to the contract year fee schedule table below and the detailed rate schedule provided in Exhibit C-1 for the applicable contract year. The maximum amount of compensation to be paid to CONTRACTOR, including both payment for Services and any specified reimbursable expenses, shall not exceed the amounts set forth in Section 5 of the Agreement. Any Services provided or hours worked for which payment would result in a total exceeding the maximum amount of compensation set forth herein shall be at no cost to CITY. Unless a different timeframe is agreed upon by CITY and CONTRACTOR, the CONTRACTOR will invoice completed work to the CITY monthly. Hourly Basis and Per-Unit Basis The parties understand and agree that the CITY may assign work to the CONTRACTOR on an hourly basis or a per-unit basis, in the CITY’s sole discretion, based on the nature of the work and the CITY’s needs. Hourly pricing and per-unit pricing are set forth in Exhibit C-1. 90-day Per-Unit Pricing Review The CITY’s assignment of per-unit work to the CONTRACTOR depends in part on the CONTRACTOR’s per-unit pricing. Within 90 calendar days of the start of this Agreement, after having completed work for the CITY hereunder and having gained greater familiarity with the CITY’s trees and work assignments, CONTRACTOR will assess whether its perunit pricing can be decreased, and CONTRACTOR will notify the CITY of the results of its assessment in writing to the CITY’s Project Manager. If CONTRACTOR does find that it can lower its per-unit pricing, it will include its revised, lower per-unit price in the aforementioned notice to the CITY’s Project Manager. This 90-day per-unit pricing review will benefit the CONTRACTOR by providing the potential to be assigned more work by the CITY on a per-unit basis, and will benefit the CITY by providing the potential of greater affordability for per-unit work. During the initial 90-day period, CONTRACTOR will be paid at the hourly rate. If production results during the 90-day period are mutually favorable to the CITY and the CONTRACTOR, and the CONTRACTOR provides a lower per-unit rate, as detailed above, the parties will execute an amendment to this Agreement as provided for in Section 27.4 herein, memorializing the lower per-unit rate, and the line clearance trimming work will be shifted to per-unit cost pricing. If unfavorable, CONTRACTOR will be assigned and paid at the hourly rate unless and until a re-proposed, lower per-unit price is mutually agreed to via an amendment to this Agreement. Notwithstanding the forgoing two DocuSign Envelope ID: 50FB16F1-F3CC-4D3F-9A1E-70288021EB07 Vers.: Aug. 5, 2019 Page 5 of 6 sentences, the assignment and payment of work on an hourly basis or a per-unit basis will remain a determination made by the City in its sole discretion, based on the CITY’s needs. Additional Services (if any, per Section 5) Services Subtotals / Totals Contract Year 1 $2,598,989.60 $129,949.48 $2,728,939.08 Contract Year 2 $2,676,563.39 $133,828.17 $2,810,391.56 Contract Year 3 $2,756,827.12 $137,841.36 $2,894,668.48 Contract Year 4 $2,839,500.77 $141,975.04 $2,981,475.81 Contract Year 5 $3,533,649.40 $2,640,416.55 $6,174,065.95 Subtotals / Totals $14,405,530.28 $3,184,010.60 $17,589,540.88 DocuSign Envelope ID: 50FB16F1-F3CC-4D3F-9A1E-70288021EB07 Vers.: Aug. 5, 2019 Page 6 of 6 EXHIBIT C-1 RATE SCHEDULE - YEAR 5 (6/1/2024 to 5/31/2025) EXHIBIT C-1 RATE SCHEDULE - YEAR 5 (6/1/2024 to 5/31/2025) ITEM ESTIMATED QUANTITIES PER YEAR UNITS DESCRIPTION & PROPOSALITEM RATE TOTALPRICE 01 3100 EA UNIT COST LINE CLEARING(PER TREE UNIT) $306.60 $950,460.00 02 20 EA UNIT COST POLE CLEARING(PER POLE) $168.83 $3,376.60 03 10 EA UNIT COST POLE CLEARING& SPRAYING(PER POLE) $196.96 $1,969.60 04 7453 HR HOURLYCOST LINECLEARING- 2 PERSON CREW + EQUIPMENT & TOOLS $296.67 $2,211,081.51 05 80 HR HOURLYCOST LINECLEARING (AS NEEDED) 2 PERSON CREW OVERTIME $430.36 $34,428.80 06 525 HR 3 PERSON CREW + EQUIP & TOOLS $401.12 $210,588.00 07 10 HR 3 PERSON CREW OVERTIME $581.69 $5,816.90 08 475 HR 1 PERSON CREW + EQUIP & TOOLS $153.17 $72,755.75 09 10 HR 1 PERSON CREW OVERTIME $222.12 $2,221.20 10 16 HR EMERGENCY RESPONSERATES (AS NEEDED) 2 PERSON CREW M-F AFTER HOURS AND ALL DAY ON WEEKENDS/HOLIDAYS $430.36 $6,885.76 11 16 HR 3 PERSON CREW M-F AFTER HOURS AND ALL DAY ON WEEKENDS/HOLIDAYS $581.64 $9,306.24 12 17 HR 1 PERSON CREW M-F AFTER HOURS AND ALL DAY ON WEEKENDS/HOLIDAYS $222.12 $3,776.04 13 200 HR SPECIAL EQUIPMENT (AS NEEDED) 70 FT AERIAL LIFT TRUCK $44.14 $8,828.00 14 100 HR 100 FT AERIAL LIFT TRUCK $121.55 $12,155.00 TOTAL, ITEMS 01-14 $3,533,649.40 TOTAL IN WORDS: Three Million Five Hundred Thirty-Three Thousand Six Hundred Forty-Nine Dollars and Forty Cents DocuSign Envelope ID: 50FB16F1-F3CC-4D3F-9A1E-70288021EB07 Vers.: Aug. 5, 2019 Page 1 of 3 AMENDMENT NO. 1 TO CONTRACT NO. S22183236 BETWEEN THE CITY OF PALO ALTO AND STATEWIDE TRAFFIC SAFETY AND SIGNS INC. This Amendment No. 1 (this “Amendment”) to Contract No. S22183236 (the “Contract” as defined below) is entered into as of April 15, 2024, by and between the CITY OF PALO ALTO, a California chartered municipal corporation (“CITY”), and STATEWIDE TRAFFIC SAFETY AND SIGNS INC., a Delaware corporation, located at PO Box 31001-2620, Pasadena, CA 91110-2620 (“CONSULTANT”). CITY and CONSULTANT are referred to collectively as the “Parties” in this Amendment. R E C I T A L S A. The Contract (as defined below) was entered into by and between the Parties hereto for the provision of providing on-call traffic control services, as detailed therein. B. The Parties now wish to amend the Contract in order to increase the total not-to- exceed amount of the Contract by Two Hundred Thousand Dollars ($200,000) from Two Hundred Fifty-Five Thousand Dollars ($255,000) to a new total not-to-exceed amount of Four Hundred Fifty- Five Thousand Dollars ($455,000) over the three-year term. NOW, THEREFORE, in consideration of the covenants, terms, conditions, and provisions of this Amendment, the Parties agree: SECTION 1. Definitions. The following definitions shall apply to this Amendment: a.Contract. The term “Contract” shall mean Contract No. S22183236 between CONSULTANT and CITY, dated December 23, 2021. b.Other Terms. Capitalized terms used and not defined in this Amendment shall have the meanings assigned to such terms in the Contract. SECTION 2. Section 4 “NOT TO EXCEED COMPENSATION” of the Contract is hereby amended to read as follows: “SECTION 4. NOT TO EXCEED COMPENSATION. The compensation to be paid to CONSULTANT for performance of the Services shall be based on the compensation structure detailed in Exhibit C, entitled “COMPENSATION,” including any reimbursable expenses specified therein, and the maximum total compensation Not to Exceed Compensation of Four Hundred Fifty-Five Thousand Dollars ($455,000). The hourly schedule of rates, if applicable, is set out in Exhibit C-1, entitled “SCHEDULE OF RATES.” Any work performed or expenses incurred for which payment would result in a total exceeding the maximum compensation set forth in this Section 4 shall be at no cost to the CITY.” DocuSign Envelope ID: AB08A23C-A5E7-44AD-842C-A0F5FA2F5C77 Vers.: Aug. 5, 2019 Page 2 of 3 SECTION 4. Legal Effect. Except as modified by this Amendment, all other provisions of the Contract, including any exhibits thereto, shall remain in full force and effect. SECTION 5. Incorporation of Recitals. The recitals set forth above are terms of this Amendment and are fully incorporated herein by this reference. (SIGNATURE BLOCK FOLLOWS ON THE NEXT PAGE.) DocuSign Envelope ID: AB08A23C-A5E7-44AD-842C-A0F5FA2F5C77 Vers.: Aug. 5, 2019 Page 3 of 3 SIGNATURES OF THE PARTIES IN WITNESS WHEREOF, the Parties have by their duly authorized representatives executed this Amendment effective as of the date first above written. CITY OF PALO ALTO _____________________________ City Manager APPROVED AS TO FORM: _____________________________ City Attorney or designee STATEWIDE TRAFFIC SAFETY AND SIGNS INC. Officer 1 By:______________________________ Name:___________________________ Title:____________________________ Officer 2 By:______________________________ Name:___________________________ Title:____________________________ DocuSign Envelope ID: AB08A23C-A5E7-44AD-842C-A0F5FA2F5C77 Director of Contracts Anthony Amato Chief Legal Officer Matthew Hunt Dear Mayor and Council Members, On behalf of City Manager Ed Shikada, please see staff responses below for questions from Council Member Tanaka on the Monday, June 10 Council Meeting. Item 6: Approval of Contract for Long-Range Facilities Plan Update at RWQCP 1. Given the substantial investment of $2,742,774 for the Long Range Facilities Plan update, what specific, detailed contingency plans and risk mitigation strategies have been put in place to address potential implementation challenges? What metrics or historical data demonstrate the effectiveness of similar contingency plans in past projects of this scale and complexity? Additionally, how can we ensure that these plans are robust enough to handle unforeseen delays or cost overruns, and what are the projected impacts on the project timeline and budget if such issues arise? Staff response: Contingency planning for an advanced planning consultant contract was unnecessary, as significant implementation challenges are not anticipated. There was no need for contingency planning on the prior Long Range Facilities Plan completed in 2012. Standard tools for addressing implementation issues include the use of additional services funding, amendments to the contract for time extensions or additional fees, and so forth. 2. How does the current Long Range Facilities Plan update ensure that the new technologies and infrastructure will remain effective and compliant with future regulatory requirements and environmental standards? What detailed projections and scenarios consider potential increases in wastewater flow, changes in pollutant loads, and emerging contaminants? What specific strategies and investments are planned to adapt to these future challenges and to ensure the plant’s operations are sustainable and resilient in the long term? Staff response: The Long Range Facilities Plan Update report will answer this question; the report will inform on the specific strategies and investments needed to meet future challenges. As part of advanced planning, the consulting firm, Carollo Engineers, will evaluate potential future regulatory requirements and advise the City with experienced engineering staff on the infrastructure options to meet those requirements. The Long Range Facilities Plan Update would be followed by additional planning and design analyses before committing to a particular pathway. The Long Range Facilities Plan Update is not the only planning and design study that will be used to ensure the City’s infrastructure will have a useful life beyond the investment. The main projection components will be for population, per capita flow assumptions, and pollutant loading projections. 3. Given the significant financial commitment required for this project, what is the detailed cost-benefit analysis that justifies the expenditure of $2,742,774, including specific metrics on the anticipated environmental, operational, and community benefits? How do these benefits compare to alternative, potentially less costly solutions? Additionally, what assurances can you provide that this investment will deliver the projected outcomes, and how will we measure and report on the project’s success to ensure accountability to our constituents? Staff response: The Wastewater Treatment Fund has a significant long-term capital program and is currently planning, designing, and constructing approximately $350 million in capital work. The level of financial commitment for this project is in line with the size of the capital program and the complex nature of a 24/7 industrial wastewater treatment facility. The project itself has many benefits. It answers Council questions about whether the Wastewater Treatment Fund has a need to use the Measure E site and it provides a technical basis for the evaluation of the fixed and operating flow shares between partner agencies. It also provides needed space planning analysis and prioritizes needed capital improvements going forward. These benefits are worth the expense required. Specific metrics for environmental, operational, and community benefits were not developed, and it is unclear how such a metric would be determined. Item 7: Approval of JJR Construction Contract for 2024 Sidewalk, Curb, and Gutter Repairs 1. Given the significant impact of the sidewalk repair project on local residents and businesses, what is the comprehensive breakdown of the methods used to solicit and incorporate stakeholder feedback? Specifically, what were the primary concerns raised by these stakeholders, and how have these concerns been addressed in the project plan? Without clear evidence of robust stakeholder engagement, how can we ensure that the community's needs and preferences are being adequately met? Staff response: The locations in this project were compiled through surveying, input from stakeholders via email and phone call, and 311 Requests submitted by the community. Primary concerns raised by stakeholders included tripping hazards, cracked sidewalks, and drainage issues. To address all these concerns, the project expanded its work area to go beyond sidewalk districts 1 and 2 (limits are from Palo Alto Avenue to Embarcadero Road and from Alma Street to Middlefield Road). The project also includes add-alternate bid items to support additional sidewalk repairs to address community requests received during construction that meet repair requirements, in addition to other locations that staff determine need to be repaired. 2. Given the scope of the sidewalk repair project, could you provide a detailed construction timeline that includes specific phases, key milestones, and expected completion dates? Additionally, what comprehensive measures are being implemented to minimize disruptions to residents and businesses, particularly in high-density areas? How will these measures be monitored and adjusted based on community feedback during the construction period? Staff response: The project is organized into two phases, differentiating between improvements that are funded by the Community Development Block Grant (CDBG) program and improvements funded through the Capital Improvement Fund. Due to grant invoice deadlines, the project will address all locations funded by the CDBG program first, before moving on to repair other locations. It is expected that all of the work will be completed in about seven months. Staff understands the impact construction has to the community, especially in high-density areas. Work adjacent to food businesses will be paused during lunch hours from 11 am to 2 pm to help minimize the inconvenience, and access to businesses will be provided at all times. Item 8: Approval of Funding Increase and Contract Extension for Local Advanced Water Purification System Project 1. In light of the proposed budget increase for the Local AWPS project, what detailed analysis has been conducted to ensure that this expenditure is prioritized over other critical infrastructure and service needs within the city? Could you elaborate on the criteria and metrics used to determine this project's precedence, and how this aligns with our long-term financial sustainability goals? Additionally, what are the potential opportunity costs associated with this allocation, and how will they impact other essential city services and projects? Staff response: The report does not propose an increase to the budget for the Local AWPS project. A financial plan for this project was approved unanimously by Council on October 16, 2023, including directions to proceed with securing the construction management services recommended in this report. This capital project’s funding sources are entirely funded from outside agencies and it was therefore not necessary to compare against the City’s long-term financial goals. Staff is working with Mountain View to provide adequate funding, including up-front cash, to ensure there are no cashflow impacts to the City of Palo Alto during construction. 2. The staff report mentions the current use of recycled water for irrigation and industrial purposes. What specific deficiencies were identified in these applications that necessitate the proposed quality improvements? What limitations are currently being faced with the 800 ppm TDS level, and how will reducing this to approximately 450 ppm address these issues? Please include detailed data or case studies illustrating these points. Staff response: The RWQCP recycled water TDS level of 800 mg/L significantly impacts salt sensitive plants. Mountain View has cut down many of their trees in the Shoreline area due to salt from the recycled water and has paused the expansion of their recycled water system while waiting for the outcome of this project. These impacts were described in more detail in the October 16, 2023 Council report. 3. What empirical evidence supports the assertion that reducing TDS levels in recycled water will have a significant, positive impact on the daily lives of Palo Alto residents? What were the findings in projections on how these changes will enhance community well-being or provide economic benefits, particularly in areas currently relying on potable water for applications that could utilize improved recycled water? Staff report: The report does not make such a claim about the impact on the daily lives of Palo Alto residents. The October 16, 2023 Council report states that the project benefits Palo Alto by providing higher quality recycled water for the Golf Course and Greer Park, reducing conversion of marsh near the RWQCP outfall, and reducing discharge to the Bay. The project also furthers our collaborative efforts with treatment plant partner agencies and sets up potential for future recycled water customers within Palo Alto. 4. Have enhanced water conservation programs been considered as a more cost-effective alternative to the significant investment in the Local AWPS project? What detailed projections on the potential water savings and efficiency gains from these programs, supported by data from similar initiatives in other cities, can be provided? How do these projected benefits compare to the expected outcomes of the AWPS project, and what cost-benefit analysis has been conducted to evaluate these options? Staff report: Both Palo Alto and Mountain View have evaluated water conservation against other projects to reduce potable water consumption as part of citywide feasibility studies. Again, the October 16, 2023 Council report reviewed the history of the development of the project, and its recommendation to proceed with the project was approved unanimously by Council. Item 10: Palo Alto Electric Grid Modernization Project Approval 1. Considering the substantial investment of up to $350 million in the grid modernization project, what detailed analysis can be provided on how the benefits will be distributed across different neighborhoods, particularly those that have historically been underserved? Specifically, what criteria are being used to prioritize areas for upgrades, and how will the project ensure equitable service improvements for all residents, not just corporate areas like Stanford Research Park? Staff response: The pilot serves as a testbed to refine engineering designs and construction methods, ensuring efficient resource deployment and minimizing community disruption. The grid modernization project includes major upgrades of the citywide distribution infrastructure and improvements at multiple substations, ensuring that enhancements are spread across all residential areas of the city. Prioritization is based on factors such as current infrastructure conditions, projected load increases, and the need for enhanced reliability and resiliency. 2. Given the projected timeline of 2024 to 2032 for the grid modernization project, what specific technological advancements are anticipated during this period, and how does the project plan to integrate these advancements without causing significant disruptions or additional costs? Can you provide scenarios or case studies where similar long-term projects successfully adapted to technological changes? Staff response: Grid modernization allows the City to advance technological assets and improve grid functionality over time. Specifically, Palo Alto intends to utilize “smart grid” automation by installing two-way communication and enhanced control systems, allowing enhancements to demand reduction efforts. There will be new capabilities, such as providing nearly real time data on energy consumption and voltage information through advanced metering. Additional benefits from real time data includes improving fault detection and isolation, thus improving response time for restoration, and overall reliability. In future stages of the Grid Mod project Utilities will evaluate and implement viable tested technologies that are introduced to the market. The City will also be tracking the progress and technological advancements of the Grid Resilience and Innovation Partnerships (GRIP) Program recipients. 3. What specific contingency plans does the city have to ensure project continuity in the event of unforeseen external factors, such as economic downturns or changes in regulatory requirements? How will these plans be activated, and what metrics will be used to evaluate their effectiveness? Staff response: The project’s phased approach allows for adjustments in response to economic or regulatory changes. By issuing new solicitations for subsequent phases, the City can adapt to budget constraints or new compliance requirements. The City can also reallocate resources, adjust project scope, and modify timelines depending on the situation. The City has implemented contingency plans and risk mitigation strategies to navigate global supply chain challenges for the Grid Modernization Project. These include prequalifying and diversifying suppliers, adding new procurement resources, and leveraging local utilities if needed. In addition, strategic vendor partnerships and regular communication with suppliers help anticipate and address potential disruptions. Project success and effectiveness of contingency plans can be measured by adherence to project timeline and budget, successful integration of new technologies, and conversion rate to fully electrification. Item 11: Approval of Contract Amendment for Integrated Design 360, LLC: Additional $100,000 Funding and Six-Month Extension for Sustainability Services 1. Considering the proposed additional expenditure of $100,000 for the contract amendment with Integrated Design 360, LLC, provide a comprehensive financial breakdown detailing how these funds will be allocated across various activities and services? Specifically, what are the anticipated costs for each segment of their work, such as policy development, training, and program administration? Moreover, what safeguards are in place to ensure that this additional funding is utilized efficiently and without leading to cost overruns? Staff response: A significant portion of the associated contract capacity is associated with providing applicants and design professionals technical support on the enhanced green building and energy compliance standards. The secondary priority will be policy development, more specifically, the upcoming building code outreach and development cycle, expected to begin later this year. Funding for this program will be allocated as part of the FY2025 Operating Budget approved by Council, and no additional budget will be allocated without Council consideration and approval. 2. Regarding the performance metrics and key performance indicators (KPIs) for Integrated Design 360, LLC, detail the specific metrics used to assess their effectiveness in delivering sustainability services? How frequently are these metrics reviewed, and what have the evaluations revealed about their performance to date? Furthermore, are there any independent audit reports or comprehensive performance reviews available that could substantiate the contractor’s contributions towards our sustainability goals? Staff response: Integrated Design 360, LLC’s services augment in-house staff knowledge of green building services and the majority of the work is associated with policy development, code updates, and compliance. Due to the collaborative effort and type of service provided, there are no direct metrics associated solely with this firm. However, some of their contributions can be reflected in general permit activity, such as the increase in electrification permits over the last few years. 3. What contingency plans have been developed to address potential failures or underperformance by Integrated Design 360, LLC? Outline the specific risk management strategies that will be implemented to mitigate any adverse impacts arising from this contract extension? Additionally, could you provide historical examples of how similar risk management approaches have been effectively applied to past contracts? Staff response: The Department does not expect any adverse impacts arising from this minor contract extension. Staff will be pursuing a request for proposal (RFP) this summer associated with green building support at the Development Center, and the procurement process is one of the risk management approaches to evaluate and deploy the most appropriate and cost-effective consultant for ongoing services.