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Home My WebLink AboutStaff Report 2506-4776CITY OF PALO ALTO CITY COUNCIL Monday, June 16, 2025 Council Chambers & Hybrid 5:30 PM Agenda Item 23.PUBLIC HEARING: Presentation on Status of Vacancies and Recruitment and Retention Efforts and Adoption of Budget Ordinance for Fiscal Year 2026, Including the Operating and Capital Budgets and Municipal Fee Schedule; Adoption of a Resolution determining the Appropriations Limit for Fiscal Year 2026; Vacancies and Recruitment Update (AB2561 Compliance); and Approval of FY 2026 Non-Profit Workplan Phase I Awards as Recommended by the Policy & Services Committee; and Adoption of a Resolution to Extend and Amend the Development Services Reserve Fund Policy; CEQA Status – Not a Project Title Updated, Supplemental Report added Item No. 23. Page 1 of 3 City Council Supplemental Report B From: Ed Shikada, City Manager’s Office Meeting Date: June 16, 2025 Item Number: 23 Report #:2506-4776 TITLE PUBLIC HEARING: Presentation on Status of Vacancies and Recruitment and Retention Efforts and Adoption of Budget Ordinance for Fiscal Year 2026, Including the Operating and Capital Budgets and Municipal Fee Schedule; Adoption of a Resolution determining the Appropriations Limit for Fiscal Year 2026; Vacancies and Recruitment Update (AB2561 Compliance); and Approval of FY 2026 Non-Profit Workplan Phase I Awards as Recommended by the Policy & Services Committee; and Adoption of a Resolution to Extend and Amend the Development Services Reserve Fund Policy; CEQA Status – Not a Project RECOMMENDATION The Policy and Services Committee and staff recommend that the City Council approve awards for the FY 2026 Nonprofit Partnership Workplan Phase I. BACKGROUND/ANALYSIS On June 4, 2025, the Policy and Services Committee (P&S) reviewed the Nonprofit Partnership Workplan Phase I proposals. A total of 22 proposals were considered, requesting a combined $819,089 in FY 2026 funding. In response to the Finance Committee’s request, the Policy and Services Committee gave particular consideration to previously funded nonprofits: UNAFF, Youth Community Service, Youth Connect (formerly known as Youth Connectedness Initiative (YCI)), Environmental Volunteers, Magical Bridge, and 3rd Thursday (via the Palo Alto Chamber of Commerce). A funding target budget of $396,000 was recommended for Phase I; however, the final funding amount would be determined be the full City Council. This memo transmits the results of the P&S Committee’s discussion and recommendations. Palo Alto Museum Proposal Subsequent to the Policy and Services Committee deliberations and recommendations, staff was contacted by the Palo Alto Museum (formerly Palo Alto History Museum) and realized that a proposal had been received from the Museum and inadvertently omitted from the evaluation. The organization submitted a proposal seeking $55,000 within the application Item No. 23. Page 2 of 3 timeframe. The proposal is included in Attachment B for the City Council’s review and consideration. However, staff is not recommending that the Palo Alto Museum be considered for FY 2026 funding at this time due to the significant City investments made to date and additional funding included in the FY 2026 Proposed Budget. Staff reviewed the Palo Alto Museum’s proposal using the City Council-recommended evaluation rubric. The proposal rated high across on the following criteria: Community Reach, Alignment with Goals, and Program Sustainability; and rated Medium in Equity Impact criteria. In line with the Committee’s request to include past City funding details, staff notes that the Palo Alto Museum received a total of $8.6 million in FY24 and FY25 for construction costs at the Roth Building, an amount not disclosed in the proposal. This includes $835,440 in Santa Clara County grants for windows, elevator, and roof improvements. Additionally, the Museum leases 17,784 sq. ft. at the Roth Building at a below-market rate of $1 per year for 40 years. The FY 2026 Proposed Budget also includes $0.5 million for interior buildout, including exhibits, a stated goal for the intended use of funds by the proposer. Policy & Services Committee Recommendations Attachment A includes the P&S Committee-proposed scenarios summary table for City Council consideration. The Attachment A summary table includes the following columns: Line #- Included for ease of reference and review; not intended to indicate rank. Organization- The proposer’s organization name and associated known acronym (if applicable). Proposal request- The organization’s funding FY 2026 request. P&S Initial Proposed Award- The Committee reviewed all 22 applications and this column reflects the general consensus of that initial review. The total base award amount is $433,646, which is $37,646 above the Finance Committee’s recommended target of $396,000. After its initial review the Committee then embarked in an effort to reduce the total award to be in alignment with the $396,000 target or no greater than $25,000 over. The Committee also discussed use of the Council contingency to solve the remaining gap. In an attempt to maintain an award no greater than $421,000 the Committee discussed individual adjustments resulting in a recommendation that the City Council consider the Committee Notes and ranges for award under Scenario A and Scenario B. P&S Proposed Scenario A (Majority)- Reflects a combination of organization award adjustments recommended by a majority of the P&S Committee (2 of 3 members) to Item No. 23. Page 3 of 3 bring total funding recommendations closer to the $396,000 target set by the Finance Committee. Under this scenario, the total award funding amount is $426,646, which is $30,646 above the Finance Committee’s recommended target. P&S Proposed Scenario B (Minority)- Reflects a combination of organization award adjustments recommended by a minority of the P&S Committee (1 of 3 members) to bring total funding recommendations closer to the $396,000 target set by the Finance Committee. Under this scenario, the total award funding amount is $419,896, which is $23,896 above the Finance Committee’s recommended target. Committee Notes- Summarizes the Committee’s discussion on Scenarios A and B, and/or any restrictions placed on the funding awards. FISCAL/RESOURCE IMPACT The FY 2026 Proposed Budget recommended for City Council adoption includes $396,000 to be allocated for this process. Should the Council wish to allocate additional funding, options include use of the City Council Contingent account ($125,000 annually), use of the Budget Stabilization Reserve (BSR) or Uncertainty Reserve, and/or through direction to further increase the directed $6 million in reduced General Fund impact which staff expect to bring back service impacts in August 2025 to the Finance Committee and City Council. ATTACHMENTS Supplemental Attachment A: P&S FY 2026 Nonprofit Partnership Workplan Phase I Proposals Supplemental Attachment B: Palo Alto Museum Proposal APPROVED BY: Ed Shikada, City Manager’s Office Policy & Services FY26 Nonprofit Partnership Workplan Phase I Proposals Line# Organization Proposal Request P&S Initial Proposed Awards* P&S Proposed Scenario A (Majority)** P&S Proposed Scenario B (Minority)*** P&S Committee Notes 1 Ada's Café 25,000$ $ 10,000 10,000$ 10,000$ Restrict funding to events/programming, not furniture 2 Children's Health Council 50,000$ $ 12,000 10,000$ 12,000$ Amounts considered range from: $10,000‐12,000; 2 cmte members recommended 10,000 and 1 member recommended $12,000; the funding is only for first objective (not podcast) 3 Dance Action Inc 5,000$ $ ‐ ‐$ ‐$ 4 DreamCatchers 28,643$ $ 15,000 15,000$ 5,000$ Amounts considered range from: $5,000‐15,000; 2 cmte members recommended $15,000 and 1 member recommended $5,000 5 Environmental Volunteers 10,780$ $ 10,780 10,780$ 7,280$ Amounts considered range from: $7,280‐10,780; 2 cmte members recommended $10,780 and 1 member recommended $7,280 6 JobTrain 60,000$ $ 45,000 45,000$ 40,000$ Amounts considered range from: $40,000‐$45,000; 2 cmte members recommended $45,000 and 1 member recommended $40,000 7 Karat School Project 25,000$ $ 20,000 20,000$ 20,000$ 8 LifeMoves 66,366$ $ 48,366 48,366$ 48,366$ 9 Loaves & Fishes Family Kitchen 15,000$ $ ‐ ‐$ ‐$ 10 Magical Bridge Foundation 150,000$ $ 100,000 100,000$ 100,000$ 11 Midpen Media Center 50,000$ $ ‐ ‐$ ‐$ 12 Momentum for Health 15,000$ $ 15,000 15,000$ 15,000$ 13 Museum of American Heritage 10,000$ $ ‐ ‐$ ‐$ 14 Musical Memories Foundation, Inc 5,000$ $ 5,000 5,000$ 5,000$ 15 Neighbors Abroad 17,500$ $ 17,500 12,500$ 17,250$ Amounts considered range from: $12,500‐17,500; 2 cmte members recommended $12,500 and 1 cmte member recommended $17,500. Funding restricted to hosting, not staffing 16 Palo Alto Chamber Foundation: Third Thursday 46,800$ $ 40,000 40,000$ 40,000$ Amount intended to match the Finance Cmte recommended amount 17 Palo Alto Museum 55,000$ Not discussed Not Discussed Not Discussed See staff report for more details. 18 Palo Alto Special Education PTA 5,000$ $ 5,000 5,000$ 5,000$ 19 Partners & Advocates for Remarkable Children & Adults (PARCA)5,000$ $ ‐ ‐$ ‐$ 20 Peninsula Healthcare Connections Inc 35,000$ $ 20,000 20,000$ 20,000$ 21 UNAFF 45,000$ $ 20,000 20,000$ 20,000$ Funding restricted to film festival only 22 Vista Center for the Blind and Visually Impaired 99,000$ $ ‐ ‐$ ‐$ 23 Youth Community Services 50,000$ $ 50,000 50,000$ 50,000$ Subtotal 874,089$ $ 433,646 426,646$ 414,896$ Balance (of $396,000 recommended target budget) $ (37,646)(30,646)$ (18,896)$ *Initial Proposed relates to the P&S Committee discussion on June 4, 2025 where the Committee agreed on base amounts to be considered by Council in tandem with Scenario A & B adjustments. ** Majority relates to the dollar amounts by organization that at least 2 committee members recommended. *** Minority relates to the dollar amounts by organization that only one committee member recommended. 1 FY 2026 Budget Nonprofit Funding Request- Application ORGANIZATION INFORMATION Are you a 501 (c)(3) nonprofit organization? yes xYes ☐No Organization Name The Palo Alto Museum Year Funded 2004 EIN (Tax ID#) 77-0634933 Contact Person, First and Last Name Karen Holman Title Museum Board Member Email Address kcholman1@gmail.com Phone Number 2627-(650) 224 Mailing Address 725 Homer Ave, Palo Alto, CA 94301 Website www.paloaltomuseum.org ABOUT YOUR ORGANIZATION What is the mission of your organization? The Palo Alto Museum brings to life the diverse stories, people, and values that define our community’s spirit—from bold ideas and cultural heritage to new ideas that changed the world. We celebrate our shared history, educate the public, and illuminate how Palo Alto’s past continues to inspire curiosity, context, and innovation for the future. Our museum is expected to be fully operational in Q1 of 2026. Number of Employees 1 employee and 29 volunteers and growing XFull-Time Staff ☐Part-Time Staff XVolunteers In the last two years, have you been awarded a grant or other direct funding by the City? If so, explain. The City and the Museum equally shared the $2M Covid-related inflation cost of construction to restore the City - owned Roth Building. The City split its share over two Fiscal years, 2025 and 2026. Thus, we will be receiving $1M over the next two years. Of the $1M received by the Museum, all applies to the construction of the museum and not operations. We received a HUD grant of $1,629,000 of which 17% of HUD grant ($280,265.66) as of March 31, 2025 was applied to operations. The rest went to construction. A County grant of $100,000 has been received to repair our historic elevator. Are you qualified to apply for the Human Services Resource Allocation Program (HSRAP), Community Development Block Grant (CDBG), or Emerging Needs grant programs? If so, did you apply? Explain why or why not. No, because it is not specific to our mission. PROGRAM & COMMUNITY IMPACT Name of Program: Palo Alto Museum Grant Request Amount: $ 55,000 Please provide a narrative describing your proposed program (no more than 200 words): The Palo Alto Museum is dedicated to preserving and sharing the rich history and diverse stories of Palo Alto and the surrounding region. Our mission is to engage the community through inclusive exhibits, educational programs, and accessible events that honor the past and inspire the future. The Museum will serve as a vibrant community hub, featuring rotating exhibitions, a welcoming café, and flexible community rooms. These spaces will promote connection, learning, and civic 2 engagement across all ages and backgrounds. We are committed to equity—offering free or subsidized access for underserved residents and elevating underrepresented voices in our storytelling. With strong community partnerships, sustainable planning, and deep roots in the region, the Palo Alto Museum will be a lasting resource for education, connection, and civic pride. Total Number of people estimated to be served by this program: In our first year of operations, we conservatively anticipate roughly 50,000-70,000 people per year Total number of Palo Alto residents estimated to be served by this program: 65,000 Total number of Palo Alto residents estimated to be served by your agency: 65,000 Total number of unduplicated Palo Alto residents estimated to be served by the requested funding amount: 65,00 EQUITY IMPACT Does your organization serve historically underrepresented or underserved populations? If yes, please describe. (ex. Number or percent of demographic populations) Yes. The Palo Alto Museum aspires to be a place where all communities see themselves reflected in the region’s history. We are committed to lifting up the stories of people often left out of local narratives—Indigenous communities, early Californios, African Americans, Hispanics, and Asian Americans. We also intend to partner with local organizations to serve low-income families and communities of color in the greater Palo Alto and East Palo Alto communities. In East Palo Alto alone, over 65% of residents are people of color, and approximately 15–20% of households are below the area median income. We also intend to have a wide-ranging school ( K-12 ) program that will allow kids in Palo Alto and all surrounding communities an opportunity to learn and be inspired by the Museum’s work. What measures does your organization take to promote services to underserved populations? XSocial Media XWebsite XLocation of program/services ☐Direct mail ☐Other: (Please describe) What fees will be charged for proposed services, if any? TBD, but we intend to look for opportunities to subsidize underserved groups Will subsidized or fee waivers be offered to clients? TBD, but we intend to look for opportunities to subsidize underserved groups ALIGNMENT WITH CITY COUNCIL PRIORITIES Briefly describe how your request supports one or more of the City Council Priorities (2-3 sentences). If not relevant indicate with “N/A.” Climate Action and Adaptation & Natural Environment Protection: The Museum’s rehabilitation incorporates state-of-the-art, environmentally sustainable technologies to minimize greenhouse gas emissions and support the City’s climate action goals. In addition, the Museum will feature content highlighting Palo Alto’s legacy of environmental initiatives and stewardship, including its pioneering efforts in open space conservation. Our Education Lab will be a place of exhibit and speaker events, and our flexible community space is intended for educational purposes, which environmentally focused groups could benefit from. benefit from. Economic Development and Retail Vibrancy: Museums contribute both directly and indirectly to local economies, including being an attractive inducement to visitors to visit the area to shop, dine, and explore. The Museum is centrally located in the SOFA plan area, which is considered the model for planned community areas. The Museum, being the only Museum covering the stories of Palo Alto and Stanford, will have a wide appeal and be a significant draw locally and from outside the community. The Frescoes alone are already a big draw. 3 The cafe will provide retail vibrancy to Heritage Park and the surrounding area. Foot traffic to the Museum will also help surrounding organizations and retail, such as the Museum of American Heritage, Whole Foods, Cassis, and restaurants, and by extension increase visitorship to the Downtown. Implementing Housing Strategies for Social & Economic Balance: The Museum is located centrally in an area of the city that is the model for neighborhood economic diversity, and we believe it will be a place that supports neighborhood vibrancy. Public Safety, Wellness & Belonging: The Palo Alto Museum fosters belonging by reflecting our entire community's diverse voices and histories. With accessible gathering spaces, inclusive exhibits, and programs for all ages, it invites connection, learning, and shared pride. Our community rooms will host classes on various topics, while the outdoor area near the Museum café will provide a comfortable space for people to relax, connect, and enjoy one another’s company while enjoying a view of Heritage Park. Our building also provides the only public restroom available for users of Heritage Park. The Palo Alto Archives, located in our building, help people feel connected by preserving the personal, civic, and cultural stories that define our shared identity. By making this history accessible, the Archives empower individuals and communities to see themselves as part of Palo Alto’s ongoing story. PROGRAM GOALS Attachment 1: Please use the template below to list up to 3 goals related to the program(s) you are proposing with requested funding. In a separate Attachment 1, for each goal identify 1-3 strategies your organization will implement to achieve this goal. For each strategy, provide an objective and an outcome. Scroll to see Attachment 1 Describe your organization’s plan for evaluating the program’s effectiveness? Include any specific measurement tools to be used such as surveys or other tools. (no more than 200 words) We will use a combination of quantitative and qualitative tools, including attendance data, satisfaction surveys, and post-visit assessments. These tools will allow us to adjust programming and ensure we are meeting the needs of our diverse audiences. PROGRAM SUSTAINABILITY What amount $ and percent % of your organization’s budget is currently funded by the following: The below numbers are based on actual YTD expenditures through March 31, 2025 XGovernment Grants $380,265.66, which is 47% percent of Gross revenue XPrivate Donations $354,730.46, which is 44% of gross revenue XFundraising $69,606.27, which is 9% of gross revenue ☐Membership Fees $0, 0% ☐Fees for service $0, 0% ☐Other $0, 0% What percentage of your organization’s annual budget does the grant request represent? Our fiscal year begins in July and our board has not yet approved a budget. We plan to be a fully operational museum in Q1 of 2026, so these numbers are still being evaluated. ● Annual Budget $ TBD 4 ● Grant Request Amount $55,00 ● Percent of Budget: (Grant request/Annual Budget) x100 = TBD If awarded, will the contribution be used to leverage other funding opportunities? Explain (1-2 sentences). A grant from the City helps provide credibility and legitimacy that can inspire confidence in high-net- worth individuals and institutional investors, which we continue to actively pursue as part of our funding strategy. If awarded, the City’s grant would be highlighted in press releases, signage, and campaign materials, encouraging others to support a project that is visibly gaining traction. REQUIRED ATTACHMENTS Attachment 1: Program Goals Attachment 3: IRS Determination Letter (501 (c)(3) Attachment 2: Proposed Budget Attachment 4: IRS Form 990* REPORTING REQUIREMENTS *Requests of up to $5,000- brief annual report (1-2 pages) summarizing key activities and community impact highlights. -Financial reporting will consist of a self-certification of compliance with grant terms. Requests $5,000-$25,000- -Annual report on service outcomes and performance metrics. -IRS Form 990 Requests $25,000-$100,000- -Semi-annual reports on service outcomes and performance metrics. - IRS Form 990 Requests $100,000+ -Quarterly service outcomes and performance metrics, and a year-end community impact report. - IRS Form 990 5 ATTACHMENT 1: Program Goals Please use the template below to list up to 3 goals related to the program(s) you are proposing with requested funding. In a separate Attachment 1, for each goal identify 1-3 strategies your organization will implement to achieve this goal. For each strategy, provide an objective and an outcome. Goal 1: Preserve our cultural heritage Strategy 1: Create rotating exhibitions highlighting Palo Alto’s civic, cultural, and environmental milestones. ● Objective: Launch 2–3 original exhibitions annually, with themes reflecting key historical developments and community movements. ● Outcome: Increased public understanding and appreciation of local heritage, measured through attendance and post-visit surveys. Strategy 2: Engage cultural and historical advisors from the community in exhibition development. Collaborate with other museums including those with which Palo Alto Museum already has developed working relationships. ● Objective: Collaborate with at least 6 local historians, elders, and cultural leaders per year. ● Outcome: Community-informed exhibits that reflect a broader and more accurate narrative of Palo Alto’s past. Goal 2: Provide education Strategy 1: Offer K–12 school programs aligned with curriculum standards. ● Objective: Host field trips and in-class presentations for at least 750 students annually from Palo Alto, East Palo Alto, and surrounding areas. ● Outcome: Increased historical literacy and student civic engagement, measured through teacher feedback and student reflections. Strategy 2: Host public lectures and adult learning workshops. ● Objective: Provide 6-9 public education events annually on topics such as urban planning, environmental history, and local innovation. ● Outcome: Enhanced community learning opportunities with increased attendance and post-event engagement. 6 ATTACHMENT 2: FY 2026 (July 1, 2025-June 30, 2026) Proposed Budget FY2026 Total Program Expense Budget Total Program Expense Budget for Requested Funding Program Name: Palo Alto Museum Exhibits/Education Notes Salaries $15,000 $10,000 Partial funding for part-time educator or contractor to lead student field trips and classroom outreach aligned with curriculum standards. Insurance Audit Rent & Utilities Maintenance/Repair Phone Consultants Staff Development & Training Travel & Meetings Information Technology $3,000 $2,000 Costs for digital survey tools, feedback forms, data analysis, and reporting of program impact. Equipment $10,000 $5,000 Stanchions, display cases, other museum technology Office Supplies & Materials $2,000 $1,000 General supplies (e.g., markers, clipboards, signage, A/V rentals, etc.) for exhibitions and education programs. Printing & Publishing $10,000 $5,000 Advertising, signage, educational materials Direct Services Direct Subsidy $5,000 $5,000 Subsidize low-income student fees or similar to cover the cost of the program Other - Exhibition Design & Production $20,000 $20,000 Covers materials, fabrication, graphic design, and installation of 2–3 original exhibitions focused on local civic, cultural, and environmental history. Other - Community Advisor Honoraria $6,000 $4,000 Speaker fees, promotion, and event support for 10–12 community education events Other-Contingency & Administrative Support $5,000 $3,000 Administrative support, unexpected expenses, and operational backup related to program execution. Total $76,000 $55,000 7 ATTACHMENT 3: IRS Determination Letter 501(c)(3) Please attach determination letter to application email, clearly labeled Attachment 3. 8 ATTACHMENT 4: IRS Form 990* Please attach to the application email, your organization’s 2024 IRS Form 990, or 2023 IRS Form 990 if 2024 has not yet been filed. *Funding requests < $5,000 do not need to submit an IRS Form 990. 9 Signature(s) The undersigned certifies the information contained in this proposal is true and accurate to the best of their knowledge and belief. The undersigned warrants that they have authority on behalf of the organization they represent to enter into this proposal, warrant its accuracy, and bind the organization to the applicable terms and conditions. Name of Authorized Signer: Karen Holman Title: Museum Board Member Sign Here: Date: Friday May 9 2025