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Home My WebLink About2016-03-28 City Council Agenda Packet City Council 1 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. March 28, 2016 Special Meeting Council Chambers 6:00 PM REVISED Agenda posted according to PAMC Section 2.04.070. Supporting materials are available in the Council Chambers on the Thursday 10 days preceding the meeting. 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 Public Comments: Members of the public may speak to the Closed Session item(s); three minutes per speaker. 1. CONFERENCE WITH REAL PROPERTY NEGOTIATORS THIS ITEM IS BEING CONTINUED TO A DATE UNCERTAIN 2 March 28, 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 6:00-6:10 PM Oral Communications 6:10-6:25 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 6:25-6:30 PM 2. Approval of Action Minutes for the March 14, 2016 Council Meeting Consent Calendar 6:30-6:35 PM Items will be voted on in one motion unless removed from the calendar by three Council Members. 3. Approval of Amendment Number Two to Contract Number C14151917 With Alta Planning + Design, Inc. to Extend the Term of the Contract for Planning, Community Outreach, Conceptual Design, Preliminary Environmental Assessment for Bicycle Boulevard Projects to March 8, 2017 4. Approval of Amendment Number One to Contract Number C14150007 With Alta Planning + Design, Inc. to Extend the Term of the Contract for the Feasibility Study and Preliminary Environmental Analysis for the Midtown Connector Project to September 9, 2016 5. Approval of Amendment Number Two to Contract Number C14153335 With Fehr and Peers to Extend the Term of the Contract for Planning, Community Outreach, Conceptual Design, Preliminary Environmental Assessment for Bicycle Boulevard Projects to March 8, 2017 Action Items Include: Reports of Committees/Commissions, Ordinances and Resolutions, Public Hearings, Reports of Officials, Unfinished Business and Council Matters. 6:35-6:45 PM 6. Approval of a Lease Agreement With the Palo Alto Lawn Bowls Club, Inc. for City-Owned Property Located at 474 Embarcadero Road for a Period of Up to 10 Years 6:45-8:30 PM 7. PUBLIC HEARING: Review and Adoption of a Resolution Increasing and Adjusting Department of Planning & Community Environment User Fees Based on a Cost of Services Study and Recommendations of the Finance Committee 3 March 28, 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. 8:30-9:15 PM 8.Finance Committee Recommendation to Adopt a Resolution Continuing the Palo Alto Clean Local Energy Accessible Now (CLEAN) Program and Decreasing the Contract Rate: (1) for Solar Resources to 8.9c/kWh to 9.0c/kWh, and (2) for Non-Solar Renewable Energy Resources to 8.1c/kWh to 8.2c/kWh; and Amending Associated Program Eligibility Rules and Power Purchase Agreement Accordingly (Continued From March 21, 2016) 9:15-9:45 PM 9.PUBLIC HEARING: Adoption of a Mitigated Negative Declaration and Approval of a Site and Design Review Application for a new Two-Story, 7,500 Square Foot, 50-Foot Tall Building Designed to Handle Sludge De-watering and Truck Load-outs, With Adjacent Stand-by Generator, and a new Outdoor Equipment Area Next to the Existing Incinerator, to be Placed Centrally on the Regional Water Quality Control Plant Site at 2501 Embarcadero Way (Continued From March 21, 2016) 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. 4 March 28, 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. 5 March 28, 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 Ad hoc/Standing Committee Local Transportation Funding Committee March 24, 2016 @ 8:30AM Schedule of Meetings Schedule of Meetings Tentative Agenda Tentative Agenda Informational Report Semiannual Update on the Status of Capital Improvement Program Projects Public Letters to Council Set 1 CITY OF PALO ALTO OFFICE OF THE CITY CLERK March 28, 2016 The Honorable City Council Attention: Finance Committee Palo Alto, California Approval of Action Minutes for the March 14, 2016 Council Meetings Staff is requesting Council review and approve the attached Action Minutes. ATTACHMENTS:  Attachement A: 03-14-16 DRAFT Action Minutes (DOC) Department Head: Beth Minor, City Clerk Page 2 CITY OF PALO ALTO CITY COUNCIL DRAFT ACTION MINUTES Page 1 of 6 Special Meeting March 14, 2016 The City Council of the City of Palo Alto met on this date in the Council Chambers at 5:03 P.M. Present: Berman, Burt, DuBois, Filseth, Holman, Kniss, Scharff, Schmid, Wolbach 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, 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). MOTION: Vice Mayor Scharff moved, seconded by Council Member Kniss to go into Closed Session. MOTION PASSED: 9-0 Council went into Closed Session at 5:11 P.M. Council returned from Closed Session at 6:04 P.M. Mayor Burt announced no reportable action. DRAFT ACTION MINUTES Page 2 of 6 City Council Meeting Draft Action Minutes: 3/14/16 Special Orders of the Day 2. Proclamation Welcoming Exchange Students and Chaperones From Tsuchiura, Ibaraki, Japan. Study Session 3. Stanford University Staff Presentation Regarding Transportation Demand Management for Stanford Research Park. 4. Update on the Formation of the Downtown Transportation Management Association (TMA). Agenda Changes, Additions and Deletions Staff requests Agenda Item Number 14- Fiscal Years 2017 to 2026 General Fund Long Range Financial Forecast be continued to April 4, 2016. Minutes Approval 5. Approval of Action Minutes for the February 22, 23, and 29, 2016 Council Meetings. MOTION: Council Member Berman moved, seconded by Vice Mayor Scharff to approve the Action Minutes for the February 22, 23, and 29, 2016 Council Meetings. MOTION PASSED: 6-0-1 Kniss abstaining, Holman, Wolbach not participating Consent Calendar MOTION: Council Member Schmid moved, seconded by Council Member Filseth, third by Council Member XX to pull Agenda Item Number 12- Policy and Services Committee Recommendation to Accept the Audit… MOTION FAILED DUE TO THE LACK OF A THIRD MOTION: Vice Mayor Scharff moved, seconded by Council Member Berman to approve Agenda Item Numbers 6-12. DRAFT ACTION MINUTES Page 3 of 6 City Council Meeting Draft Action Minutes: 3/14/16 Council Member Schmid registered a no vote on Agenda Item Number 12- Policy and Services Committee Recommendation to Accept the Audit… 6. Approval of Master Agreement to Sell Low Carbon Fuel Standards Credits and Utilize the Revenue for the Benefit of Current or Future Electric Vehicle Customers. 7. Approval of Utilities Enterprise Fund Contract With Casey Construction, Inc. in the Amount of $2,967,000 for Sewer Lateral Replacement and Other On-Call Sewer Services for Three Years, Under Capital Improvement Program Projects WC-99013 (Sewer Lateral Rehabilitation), WC-80020 (Wastewater System Customer Connections), and WC-15002 (Wastewater System Improvements). 8. Approval of a Construction Contract With Waterproofing Associates Inc. in the Amount Not-to-Exceed $309,980 to Provide Construction Services to Replace the Existing Roof at Fire Station Number 2 (PF-00006). 9. Approval for Renewal of the Agreement Between the City of Palo Alto and the Palo Alto Art Center Foundation for Mutual Cooperation and Support to Facilitate the Foundation's Financial and Administrative Support of the Art Center. 10. Authorize the City Attorney to Amend the Legal Services Agreement With Elisa Larson to Extend the Term of the Agreement to a Total Term of Approximately Three Years and Two Months, Formalize Temporary Changes to the Scope of Work and Applicable Rates and Increase the Not-to-Exceed Amount to a Total of $375,000. 11. Approval for the Consolidation of the Unscheduled Vacancy on the Utilities Advisory Commission With the Spring 2016 Board and Commission Recruitment. 12. Policy and Services Committee Recommendation to Accept the Audit of Parking Funds. MOTION FOR AGENDA ITEM NUMBERS 6-11 PASSED: 7-0 Holman, Wolbach not participating DRAFT ACTION MINUTES Page 4 of 6 City Council Meeting Draft Action Minutes: 3/14/16 MOTION FOR AGENDA ITEM NUMBER 12 PASSED: 6-1 Schmid no, Holman, Wolbach not participating Action Items 13. Local Funding Strategies for Transportation Demand Management and Other Transportation Programs. MOTION: Council Member Schmid moved, seconded by Council Member XX to recommend the Mayor appoint an ad hoc committee to explore a transportation tax and make recommendations to the City Council within four weeks, including the goals, timing, type, tiers, and key steps needed to move forward with such a tax. MOTION RESTATED: Council Member Schmid moved, seconded by Mayor Burt to refer funding strategies for Transportation Demand Management and other local transportation programs to a Mayor designated ad hoc committee for development of a recommended approach and report back to Council within four weeks. INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to add to the Motion, “and authorize the ad hoc committee, in conjunction with Staff, to conduct outreach on the content of polling and conduct a first round of polling” after “designated ad hoc committee.” INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to replace in the Motion, “within four weeks” with “as soon as possible.” INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to remove from the Motion, “for development of a recommended approach” and to replace in the Motion, “report back to Council” with “return to Council for development of a recommended approach.” INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to replace in the Motion, “a recommended approach” with “alternatives on approaches.” DRAFT ACTION MINUTES Page 5 of 6 City Council Meeting Draft Action Minutes: 3/14/16 INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to add to the Motion, “through a series of public meetings” after “authorize the ad hoc committee.” MOTION RESTATED: Council Member Schmid moved, seconded by Mayor Burt to refer funding strategies for Transportation Demand Management and other local transportation programs to a Mayor designated ad hoc committee and authorize the ad hoc committee, through a series of public meetings, in conjunction with Staff, to conduct outreach on the content of the polling and conduct a first round of polling, and return to Council with alternatives on approaches as soon as possible. MOTION AS AMENDED PASSED: 9-0 14. Fiscal Years 2017 to 2026 General Fund Long Range Financial Forecast. Inter-Governmental Legislative Affairs None. Council Member Questions, Comments and Announcements Mayor Burt reported his attendance along with the attendance of Vice Mayor Scharff and Council Member Kniss at the National League of Cities Congressional City Conference. They met with legislators and government agencies including the Federal Aviation Administration (FAA), the United States Army Corps of Engineers, and the United States Department of Transportation. Council Member Kniss reported her reelection to the Bay Area Air Quality Management District (BAAQMD) Board. Mayor Burt reported the creation of the FAA Select Committee on South Bay Arrivals. Vice Mayor Scharff was appointed as an Alternate on the Committee. Council Member Wolbach attended a San Francisco Bay Conservation and Development Commission (BDCD) meeting with Vice Mayor Scharff. He reported his attendance, along with the attendance of Council Members DRAFT ACTION MINUTES Page 6 of 6 City Council Meeting Draft Action Minutes: 3/14/16 Holman and Schmid at a joint FAA/Sky Posse meeting. He thanked the City Manager for signing the Cubberley Futures Compact. Vice Mayor Scharff reported his attendance at meetings relating to the Utilities Department, Northern California Power Agency (NCPA), and the American Public Power Association (APPA) while in Washington D.C. at the National League of Cities Congressional City Conference. Adjournment: The meeting was adjourned at 11:20 P.M. City of Palo Alto (ID # 6706) City Council Staff Report Report Type: Consent Calendar Meeting Date: 3/28/2016 Summary Title: Contract Amendment for Alta Planning + Design, Inc. for Bicycle Boulevard Concept Planning Title: Approval of Amendment Number Two to Contract Number C14151917 With Alta Planning + Design, Inc. to Extend the Term of the Contract for Planning, Community Outreach, Conceptual Design, Preliminary Environmental Assessment for Bicycle Boulevard Projects to March 8, 2017 From: City Manager Lead Department: Planning and Community Environment Recommendation Staff recommends that Council approve Amendment Two to Contract No. C14151917 with Alta Planning + Design, Inc. (Amendment 2) to extend the term of the contract for planning, community outreach, conceptual design, preliminary environmental assessment for bicycle boulevard projects through March 8, 2017, at no additional cost to the City. Executive Summary In March 2014, Council awarded an 18-month contract to Alta Planning + Design, Inc. for planning and preliminary environmental assessment of the Bryant Street bicycle boulevard update, Greer Road bicycle boulevard, Moreno Avenue-Amarillo Avenue bicycle boulevard, Ross Road bicycle boulevard, and Homer Avenue-Channing Avenue enhanced bikeway. In December 2015, Amendment One was executed, which extended the term of the contract until March 2016. Significant work has occurred under the contract since March 2014, and Staff anticipates advancing concept plans and environmental documentation for the Bryant Street bicycle boulevard update, Moreno Avenue-Amarillo Avenue bicycle boulevard, and Ross Road bicycle boulevard for approval by Council in April 2016. Due to challenges around community engagement, traffic circulation, and on-street parking, it is anticipated that concept plans and environmental documentation for the Greer Road bicycle boulevard and Homer Avenue- Channing Avenue enhanced bikeway will be brought to Council for approval in mid to late 2016. City of Palo Alto Page 1 The current contract expired on March 8, 2016 and will need to be extended to March 8, 2017 in order to complete the planning, community outreach, conceptual design, and preliminary environmental assessment for the bicycle boulevard projects. Background and Discussion The Bicycle + Pedestrian Transportation Plan was adopted by Council on July 9, 2012. The Plan includes a proposed bikeway network of off-street multi-use paths, bicycle boulevards, bicycle lanes, and enhanced bikeway facilities. The Plan has stated goals of increasing bicycle traffic for local and total work commutes by 100% by 2020 by providing improved facilities along the proposed bike network, which facilitates both north-south and east-west connectivity throughout the City. Implementation of the Plan started in 2013 with Council authorization of up to $1.2 million per year over five years as part of the Capital Improvement Program. With this commitment of funds, 18 projects are currently being planned and designed. The City released the Palo Alto Bicycle Boulevards RFP on October 1, 2013. The RFP scope included ten bicycle boulevards and enhanced bikeway projects. On March 17, 2014, Council awarded an 18-month contract to Alta Planning + Design, Inc. in the amount of $400,000 for planning and preliminary environmental assessment of the Bryant Street bicycle boulevard update (from Palo Alto Avenue to 100 feet north of East Meadow Drive); the Greer Road bicycle boulevard (from Edgewood Drive to Louis Road); the Moreno Avenue-Amarillo Avenue bicycle boulevard (from Middlefield Road to West Bayshore Road); the Ross Road bicycle boulevard (from North California Avenue to Louis Road); and the Homer Avenue-Channing Avenue enhanced bikeway (from Alma Street to Guinda Avenue). On December 28, 2015, Amendment One was executed, which extended the term of the contract until March 8, 2016. The amended contract expired on March 8, 2016 and will need to be extended to March 8, 2017 in order to complete the planning, community outreach, conceptual design, and preliminary environmental assessment for the bicycle boulevard projects. Brief updates on the status of the projects included in this contract are listed below. Bryant Street Bicycle Boulevard Update The Bryant Street Bicycle Boulevard Update project includes upgrades to the existing bicycle boulevard segment between Palo Alto Avenue and East Meadow Drive. The Bryant Street Bicycle Boulevard is the country’s first bicycle boulevard facility. Conditions have changed, especially downtown, and an update is needed. Based on extensive community input, Staff has rethought the proposed treatments for the Downtown section between Lytton Avenue and Addison Avenue and will return to Council in the future with a recommendation to advance improvements on this section of Bryant Street as part of a greater Downtown circulation plan. City of Palo Alto Page 2 North of Downtown, within the Old Palo Alto segment of Bryant Street, and south of Oregon Expressway to East Meadow Drive, final concept plans have been developed following the community workshop held in April 2015. Based on community input, the high-visibility green sharrow markings have been removed from the concept plans for Bryant Street and other corridors. Many residents requested that the City limit use of intensive green pavement markings due to their aesthetic impacts. Staff has also reduced the number of high-visibility white crosswalks proposed on Bryant Street, based on resident feedback. Crosswalks are still included on school commute routes. Based on community input and analysis of the current operation of the intersection, staff recommends a new traffic circle with all-way YIELD traffic control at the Bryant Street and North California Avenue. This intersection is currently controlled by an all-way STOP. Additional outreach to the neighboring church and others in the vicinity is required, as well as a parking utilization survey in order to identify and mitigate any potential on-street parking impacts. The final concept plan presentation to Council will include this information. Staff is conducting additional community and stakeholder outreach and hosting a neighborhood meeting on March 29, 2016 to finalize concept plans for this project and several others. Staff anticipates bringing Concept Plans for approval to the Planning and Transportation Commission and City Council in April 2016. Greer Road Bicycle Boulevard The current Concept Plan for the Greer Road Bicycle Boulevard project includes minor traffic calming measures including the installation of speed humps and shared-lane pavement markings to highlight bicycles path of travel on the street. Select intersections include traffic circle improvements with enhanced crosswalk markings or bulb-out improvements to reduce crossing distances including the intersections of North California Avenue, Amarillo Avenue, Moreno Avenue, Colorado Avenue, Maddux Drive, and Loma Verde Avenue. On Greer Road through the Midtown neighborhood the installation of short landscape median islands is also recommended to visually reduce the width of the roadway in efforts to encourage lower vehicle speeds. Beginning in summer 2016, Staff plans to conduct additional community and stakeholder outreach and host a neighborhood meeting to finalize concept plans for this project and several others. Staff anticipates bringing Concept Plans for approval to the Planning and Transportation Commission and City Council in mid to late 2016. Homer Avenue-Channing Avenue Enhanced Bikeway The Homer Avenue-Channing Avenue Enhanced Bikeway was conceived as a means of providing safe bicycle access between the Homer Tunnel at Alma Street and downtown. Currently, eastbound bicyclists exiting the tunnel who wish to travel to downtown and points east use an existing one-block-long contraflow bicycle lane along Homer Street, turn right onto High Street, which is one-way southbound, turn left onto Channing Avenue and then head City of Palo Alto Page 3 north via Emerson Street, Ramona Street or Bryant Street. This awkward diversion encourages many bicyclists to ride the wrong way down either High Street or Homer Avenue. The current Concept Plan for the Homer Avenue-Channing Avenue Enhanced Bikeway includes the extension of the contraflow bicycle lane east to Emerson Street and the conversion of the existing right lanes on Homer Avenue and Channing Avenue to right-turn only at intersections, with bicycles exempted. On-street parking would remain, but traffic operations may be negatively impacted. This would create a semi-dedicated east-west bikeway from the tunnel at Alma Street to Guinda Street. Based on the magnitude of the proposed changes and the lack of community input from residents and property owners along Homer Avenue and Channing Avenue, Staff is currently rethinking this project. Beginning in summer 2016, Staff plans to conduct additional community and stakeholder outreach and host a neighborhood meeting to finalize concept plans for this project and several others. Staff anticipates bringing Concept Plans for approval to the Planning and Transportation Commission and City Council in mid to late 2016. Moreno Avenue-Amarillo Avenue Bicycle Boulevard The Moreno Avenue-Amarillo Avenue Bicycle Boulevard provides an east-west connection route across the northern periphery of the Midtown neighborhood. The current Concept Plan starts at West Bayshore Road and includes traffic calming measures to moderate motor vehicle speeds entering the residential neighborhood. At Ohlone School the Concept Plan includes a new raised crosswalk and sidewalk widening from the school to Louis Road. At Louis Road, the Concept Plan includes a raised intersection treatment between Moreno Avenue and Amarillo Avenue. Shared lane pavement markings along the corridor are recommended to highlight the bicycle route with focused intersection improvements at Ross Road and Greer Road where intersecting Bicycle Boulevards meet. Staff is conducting additional community and stakeholder outreach and hosting a neighborhood meeting on March 29, 2016 to finalize concept plans for this project and several others. Staff anticipates bringing Concept Plans for approval to the Planning and Transportation Commission and City Council in April 2016. Ross Road Bicycle Boulevard Ross Road has some existing traffic calming measures, including speed humps between Oregon Expressway and Colorado Avenue. The current Concept Plan includes sharrows and new slotted speed humps south of Colorado Avenue. Pedestrian safety is a big concern for local residents so new crosswalk markings parallel to Ross Road are included in the current Concept Plan, along with curb extensions and focused intersection improvements at Colorado Avenue, Clara Drive, Loma Verde Avenue, Talisman Drive, East Meadow Drive, and Louis Road. The current Concept Plan includes traffic circles with yield controls and pedestrian crosswalks at both Moreno Avenue and East Meadow Drive. City of Palo Alto Page 4 Early implementation of this project started in 2014 with the construction of a new bicycle- priority traffic signal at Oregon Expressway. The traffic signal allows bicyclists to travel across Oregon Expressway while automobiles are forced to turn right. Staff is conducting additional community and stakeholder outreach and hosting a neighborhood meeting on March 29, 2016 to finalize concept plans for this project and several others. Staff anticipates bringing Concept Plans for approval to the Planning and Transportation Commission and City Council in April 2016. Resource Impact This is an extension of time only. No tasks are added to this contract. There are sufficient resources in CIP PL-04010 to fund this contract. There is no additional resource impact by extending the term of the contract through Amendment Two at no additional cost to the City. Policy Implications The approval of Amendment Two, extending the term of the contract through March 2017 is consistent with existing City policies, including the Council approved Bicycle + Pedestrian Transportation Plan goals and objectives. Environmental Review Approval of Amendment Two itself does not require review under the California Environmental Quality Act (CEQA) because it does not meet the definition of a “project” pursuant to California Public Resources Code Section 21065. The contract contemplates environmental review of those projects requiring review under CEQA. Attachments:  Attachment A: C14151917 Alta Planning Amendment 2 (PDF) City of Palo Alto Page 5 1 Revision April 28, 2014 AMENDMENT NO. 2 TO CONTRACT NO. C14151917 BETWEEN THE CITY OF PALO ALTO AND ALTA PLANNING + DESIGN This Amendment No. 2 to Contract No. C14151917 (“Contract”) is entered into March 28, 2016, by and between the CITY OF PALO ALTO, a California chartered municipal corporation (“CITY”), and ALTA PLANNING + DESIGN, a California corporation, located at 100 Webster Street, Suite 300, Oakland, California, 94607, Telephone Number (510)540-5008 ("CONSULTANT"). R E C I T A L S A. The Contract was entered into between the parties for the provision of the engagement of a consultant to provide planning, community outreach, conceptual design, and preliminary environmental assessment for the Bicycle Boulevards project. B. CITY intends to extend the TERM to March 8, 2017 C. The parties wish to amend the Contract. NOW, THEREFORE, in consideration of the covenants, terms, conditions, and provisions of this Amendment, the parties agree: SECTION 1. Section 2 TERM is hereby amended to read as follows: SECTION 2. TERM. The term of this Agreement shall be from March 10, 2014 through March 8, 2017 unless terminated earlier pursuant to Section 19 of this Agreement.” SECTION 2. Except as herein modified, all other provisions of the Contract, including any exhibits and subsequent amendments thereto, shall remain in full force and effect. IN WITNESS WHEREOF, the parties have by their duly authorized representatives executed this Amendment on the date first above written. CITY OF PALO ALTO APPROVED AS TO FORM: ALTA PLANNING + DESIGN DocuSign Envelope ID: E108E9B1-CD0C-477D-8283-4F0A11303F39 Principal ATTACHMENT A - “ City of Palo Alto (ID # 6702) City Council Staff Report Report Type: Consent Calendar Meeting Date: 3/28/2016 Summary Title: Contract Amendment for Alta Planning + Design, Inc. for Midtown Connector Title: Approval of Amendment Number One to Contract Number C14150007 With Alta Planning + Design, Inc. to Extend the Term of the Contract for the Feasibility Study and Preliminary Environmental Analysis for the Midtown Connector Project to September 9, 2016 From: City Manager Lead Department: Planning and Community Environment Recommendation Staff recommends that Council approve and authorize City Manager to execute Amendment One to Contract No. C14150007 with Alta Planning + Design, Inc. (Attachment A) to extend the term of the Contract for the Midtown Connector feasibility study and preliminary environmental assessment through September 9, 2016, at no additional cost to the City. Executive Summary In March 2014, the City Council approved an 18-month contract with Alta Planning + Design, Inc. to complete a feasibility study and preliminary environmental assessment for the Matadero Creek Trail – Phase 1 Midtown Project, now known as the Midtown Connector, with a not-to-exceed amount of $369,446. The feasibility study phase for the Midtown Connector is funded at $383,645 in the City’s FY15 Capital Improvement Plan budget through CIP PL- 14001 Midtown Connector. In November 2015, after several rounds of community engagement and preliminary feasibility analysis, staff presented three options for Council’s consideration. These options included: continue the study of the creek alignment with the understanding that design, permitting, construction, and maintenance City of Palo Alto Page 1 costs will be significantly greater than originally anticipated, end the feasibility study, or continue the study of alternative east-west alignments in lieu of the Matadero Creek channel. Council directed staff to continue with the feasibility study and preliminary environmental assessment for the Midtown Connector project, while also looking at two parallel corridors as options for east-west connectivity. Since November, staff and the consultant have been working to finish the feasibility study and preliminary environmental assessment and to begin the analysis of the parallel alignments. Staff anticipates returning to Council in June 2016 with a draft feasibility study and preliminary environmental assessment. The current contract expired on September 9, 2015 and will need to be extended to September 9, 2016 in order to continue to finalize the feasibility study and preliminary environmental assessment. Background and Discussion The adopted City of Palo Alto Bicycle + Pedestrian Transportation Plan (BPTP) identifies the Matadero Creek channel levees and a number of other on-street bicycle routes through the Midtown neighborhood of Palo Alto. The BPTP identifies bicycle and pedestrian connections across the barriers of Alma Street and the Caltrain tracks and US 101 freeway as key objectives. Residents of Midtown and of the Stanford University campus who may travel through Midtown for recreational access to parks and the Baylands are well aware of the challenges of crossing the many busy streets along the way, as well as the constraints of traffic and parking along the connecting streets. Providing safer and more comfortable connections for bicyclists and pedestrians is a key objective of the BPTP. In November 2012, the Santa Clara County Board of Supervisors unanimously approved $10.0 million in grants to fund pedestrian and bike path improvements proposed by Stanford University and the City of Palo Alto. The $10.0 million included $1.5 million for a proposed trail along the levees of the Matadero Creek. The grant application (http://bit.ly/1BroN5e) proposed the trail alignment along the Matadero Creek channel levees and estimated a total project cost of $2.0 million. This project is also identified in the Santa Clara County Trails Master Plan (http://bit.ly/11oO6oA), which was last updated in 1995. City of Palo Alto Page 2 In March 2014, the City Council approved an 18-month contract with Alta Planning + Design, Inc. to complete a feasibility study and preliminary environmental assessment for the Matadero Creek Trail – Phase 1 Midtown Project, with a not-to-exceed amount of $369,446. In early 2013, staff began community engagement for the proposed Matadero Creek Trail Project and met with resident stakeholders through the Midtown Residents Association. In response to community input, staff expanded the feasibility study to include alternative alignments, and later renamed the project the Midtown Connector to reflect a commitment to assess alternatives to the creek trail alignment. Staff began a feasibility study of the Matadero Creek alignment and alternative alignments in 2014, and held a study kick-off meeting in June 2014. In early 2015, staff convened a Citizens Advisory Committee to help define alternatives for further study, along with a suite of evaluation criteria that could be used to review the alternatives. A second public meeting was held to focus on these same issues. In mid-2015, a preliminary constructability review indicated that constraints along the Matadero Creek channel may limit the feasibility of a public access trail on large segments of the corridor. Constraints include seasonal access closure structures, steep grades and required maintenance access to the creek channel. Staff presented these preliminary findings to the Citizen Advisory Committee in September 2015 for discussion. In November 2015, staff presented three options for Council’s consideration. These options include: (1 )continue the study of the creek alignment with the understanding that design, permitting, construction, and maintenance costs will be significantly greater than originally anticipated, (2) end the feasibility study, or (3) continue the study of alternative east-west alignments in lieu of the Matadero Creek channel. Council directed staff to continue with the feasibility study and preliminary environmental assessment for the Midtown Connector project. Staff anticipates returning to Council in June 2016 with a draft feasibility study and preliminary environmental assessment. City of Palo Alto Page 3 Resource Impact This is an extension of time only. No tasks are added to this contract. There are sufficient resources in CIP PL-14001 to fund this contract. There is no additional resource impact by extending the term of the contract through Amendment One at no additional cost to the City. Some of the additional work requested by Council in November 2015 will be funded under a separate contract, and some will be performed in house by City staff as time permits. Policy Implications The approval, and delegation of authority to the City Manager or his designee to execute Amendment One extending the term of the contract through December 2016 and to execute any documents related thereto is consistent with existing City policies, including the Council approved Bicycle + Pedestrian Transportation Plan goals and objectives. Environmental Review Approval of Amendment One and delegation of authority to the City Manager to execute this amendment does not require review under the California Environmental Quality Act (CEQA) because they do not meet the definition of a “project” pursuant to California Public Resources Code Section 21065. Attachments:  Attachment A: Alta Planning Contract #C14150007 Amendment 1 (PDF) City of Palo Alto Page 4 1 Revision April 28, 2014 AMENDMENT NO. 1 TO CONTRACT NO. C14150007 BETWEEN THE CITY OF PALO ALTO AND ALTA PLANNING + DESIGN This Amendment No. 1 to Contract No. C14150007 (“Contract”) is entered into March 28, 2016, by and between the CITY OF PALO ALTO, a California chartered municipal corporation (“CITY”), and ALTA PLANNING + DESIGN, a California corporation, located at 100 Webster Street, Suite 300, Oakland, California, 94607, Telephone Number (510)540-5008 ("CONSULTANT"). R E C I T A L S A. The Contract was entered into between the parties for the provision of the development of the Matadero Creek Trail Phase 1 Midtown project to develop a Feasibility Study and Preliminary Environmental Assessment. B. CITY intends to extend the TERM to September 9, 2016 C. The parties wish to amend the Contract. NOW, THEREFORE, in consideration of the covenants, terms, conditions, and provisions of this Amendment, the parties agree: SECTION 1. Section 2 TERM is hereby amended to read as follows: SECTION 2. TERM. The term of this Agreement shall be from March 10, 2014 through September 9, 2016 unless terminated earlier pursuant to Section 19 of this Agreement.” SECTION 2. Except as herein modified, all other provisions of the Contract, including any exhibits and subsequent amendments thereto, shall remain in full force and effect. IN WITNESS WHEREOF, the parties have by their duly authorized representatives executed this Amendment on the date first above written. CITY OF PALO ALTO APPROVED AS TO FORM: ALTA PLANNING + DESIGN DocuSign Envelope ID: F2FB8143-8B0E-48FE-97E2-82F16DF697EC Principal ATTACHMENT A - – “ CONSUMER DISCLOSURE Electronic Record and Signature Disclosure created on: 10/1/2013 3:33:53 PM Parties agreed to: Robin Ellner From time to time, City of Palo Alto (we, us or Company) may be required by law to provide to you certain written notices or disclosures. Described below are the terms and conditions for providing to you such notices and disclosures electronically through your DocuSign, Inc. (DocuSign) Express user account. Please read the information below carefully and thoroughly, and if you can access this information electronically to your satisfaction and agree to these terms and conditions, please confirm your agreement by clicking the 'I agree' button at the bottom of this document. Getting paper copies At any time, you may request from us a paper copy of any record provided or made available electronically to you by us. 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City of Palo Alto (ID # 6714) City Council Staff Report Report Type: Consent Calendar Meeting Date: 3/28/2016 Summary Title: Contract Amendment for Fehr and Peers for Bicycle Boulevard Concept Planning Title: Approval of Amendment Number Two to Contract Number C14153335 With Fehr and Peers to Extend the Term of the Contract for Planning, Community Outreach, Conceptual Design, Preliminary Environmental Assessment for Bicycle Boulevard Projects to March 8, 2017 From: City Manager Lead Department: Planning and Community Environment Recommendation Staff recommends that Council approve and authorize the City Manager to execute Amendment Two to Contract No. C14153335 with Fehr and Peers (Attachment A) to extend the term of the contract for planning, community outreach, conceptual design, preliminary environmental assessment for bicycle boulevard projects through March 8, 2017, at no additional cost to the City. Executive Summary In March 2014, Council awarded an 18-month contract to Fehr and Peers for planning and preliminary environmental assessment of the Barron Park neighborhood Class III bikeways, Bryant Street bicycle boulevard extension, Maclane Street-Wilkie Way-Miller Avenue-Del Medio Avenue bicycle boulevard, Park Boulevard bicycle boulevard, and Stanford Avenue bicycle boulevard. In December 2015, Amendment One was executed, which extended the term of the contract until March 2016. Significant work has occurred under the contract since March 2014, and Council approved concept plans for the Bryant Street bicycle boulevard extension, Maclane Street-Wilkie Way- Miller Avenue-Del Medio Avenue bicycle boulevard, Park Boulevard bicycle boulevard, and Stanford Avenue bicycle boulevard in 2015. Due to challenges around community engagement, traffic circulation, and on-street parking, the concept plans Barron Park neighborhood Class III bikeways have been put on hold indefinitely. City of Palo Alto Page 1 The current contract expired on March 8, 2016 and will need to be extended to March 8, 2017 in order to complete the preliminary environmental assessment for the bicycle boulevard projects and further refine the concept plan for the Maclane Street-Wilkie Way-Miller Avenue- Del Medio Avenue bicycle boulevard. Background and Discussion The Bicycle + Pedestrian Transportation Plan was adopted by Council on July 9, 2012. The Plan includes a proposed bikeway network of off-street multi-use paths, bicycle boulevards, bicycle lanes, and enhanced bikeway facilities. The Plan has stated goals of increasing bicycle traffic for local and total work commutes by 100% by 2020 by providing improved facilities along the proposed bike network, which facilitates both north-south and east-west connectivity throughout the City. Implementation of the Plan started in 2013 with Council authorization of up to $1.2 million per year over five years as part of the Capital Improvement Program. With this commitment of funds, 18 projects are currently being planned and designed. The City released the Palo Alto Bicycle Boulevards RFP on October 1, 2013. The RFP scope included ten bicycle boulevards and enhanced bikeway projects. On March 17, 2014, Council awarded an 18-month contract to Fehr and Peers in the amount of $450,000 for planning and preliminary environmental assessment of the Barron Park neighborhood Class III bikeways, Bryant Street bicycle boulevard extension (from East Meadow Drive to San Antonio Road), Maclane Street-Wilkie Way-Miller Avenue-Del Medio Avenue Bicycle Boulevard (from Park Boulevard to San Antonio Road), Park Boulevard bicycle boulevard (from Castilleja Avenue to West Charleston Road), and Stanford Avenue bicycle boulevard (from El Camino Real to Park Boulevard). On December 11, 2015, Amendment One was executed, which extended the term of the contract until March 8, 2016. The amended contract expired on March 8, 2016 and will need to be extended to March 8, 2017 in order to complete the preliminary environmental assessment for the bicycle boulevard projects and further refine the concept plan for the Maclane Street-Wilkie Way-Miller Avenue-Del Medio Avenue bicycle boulevard. Brief updates on the status of the projects included in this contract are listed below. Barron Park Neighborhood Bicycle and Pedestrian Routes The Barron Park Neighborhood Bicycle and Pedestrian Route project includes concepts for “suggestion lanes” and shared-lane pavement markings on streets in Barron Park including: • Barron Avenue, Laguna Avenue to El Camino Real • Los Robles Avenue, Laguna Avenue to El Camino Real • La Donna Avenue, Barron Avenue to Los Robles Avenue • Amaranta Avenue, Los Robles Avenue to Maybell Avenue • Laguna Avenue, Matadero Avenue to Los Robles Avenue Resident input focused on pedestrian safety due to the lack of sidewalk facilities within the Barron Park Neighborhood. In response, the current Concept Plans include options for the use City of Palo Alto Page 2 of stamped asphalt treatments to delineate and highlight roadway space for bicycle and pedestrian use without construction of sidewalk facilities. The City has also considered options for the use of innovative “suggestion lane” pavement marking treatments. “Suggestion lanes” designate roadway space for bicycle/pedestrian use and leave the remaining width available for motor vehicle travel. Opposing motor vehicles may have to encroach into the bicycle/pedestrian space to pass each other, if no bicyclists or pedestrians are present. Based on community input, staff has refocused resources on improvements near Barron Park Elementary and on an upcoming resurfacing project on Laguna Avenue. Staff believes that more extensive corridor projects throughout Barron Park neighborhood should be placed on hold as the layout of Barron Park streets effectively discourages regional traffic on the local streets. Bryant Street Bicycle Boulevard Extension This project will extend the Bryant Street Bicycle Boulevard from East Meadow Drive to the city’s southern limits near San !ntonio Road and Nita Avenue. The project includes a new traffic signal at East Meadow Drive & ryant Street, traffic calming measures through the “ircles” neighborhood including bulb-outs and chicanes on Redwood Circle, along with sharrow roadway marking treatments and enhanced crosswalks. At Nelson Drive and the rear entrance to Cubberley Center, the project includes a raised intersection to calm traffic. In response to community input, Staff extended bikeway treatments on Nelson Drive to Charleston Road. Staff is continuing to work with Google on “The Rails” project in Mountain View to advance implementation of the Nita Avenue improvements in Palo Alto. The Concept Plan for the Bryant Street Bicycle Boulevard Extension was approved by Council in 2015. The preliminary environmental assessment will be submitted for approval by Council during the final design phase. Final design is anticipated to be completed in fall 2016, with construction beginning later in early 2017. Park Boulevard Bicycle Boulevard, including Stanford Avenue connection Park oulevard is the ity’s most traveled bicycle route. The project includes traffic calming such as traffic circles, median islands, and speed tables, wider bicycle lanes, crosswalk improvements, and stop sign removal. The project is being coordinated with the Charleston Road-Arastradero Road Corridor improvements for intersection treatments at Park Boulevard and Charleston Road. In response to comments received from the Planning and Transportation Commission and City Council, staff conducted an additional neighborhood meeting in October 2015 at the Escondido School to further refine the concept plan before advancing into final design. It is estimated that about 20 residents attended. There was widespread support for the proposed traffic calming along Park Boulevard and Stanford Avenue, however there was a great deal of concern surrounding the section of Park Boulevard between California Avenue and Lambert Avenue. Generally, attendees did not feel that the approved Concept Plan offered sufficient comfort and safety for cyclists in this stretch. As we move into final design, staff is considering some type of Class IV separated bikeway facility in this section, due to the heavy traffic and large number of turning conflicts in the vicinity of Page Mill Road. The Concept Plan for the Park Boulevard Bicycle Boulevard was approved by Council in 2015. The preliminary City of Palo Alto Page 3 environmental assessment will be submitted for approval by Council during the final design phase. Final design is anticipated to be completed in fall 2016, with construction beginning later in early 2017. Wilkie Way Bicycle Boulevard Wilkie Way connects to Park Boulevard via Maclane Street and provides a connection to Mountain View via Miller Avenue and Del Medio Avenue. The street currently provides wide motor vehicle travel lanes and residents have expressed concerns regarding motor vehicle speeds between Maclane Street and Charleston Road. The project includes intersection improvements, including bulb-out treatments and traffic circles. Similar improvements were initially considered south of Charleston Road but residents expressed concern regarding the benefit of larger improvements in this neighborhood given the existing end-of-street condition south of Whitclem Drive. South of the Wilkie Way Bridge, traffic calming with median islands in the Monroe neighborhood are included in the project. These will help to slow motor vehicle speeds. The Concept Plan for the Wilkie Way Bicycle Boulevard was approved by Council in 2015. The preliminary environmental assessment will be submitted for approval by Council during the final design phase. Final design is anticipated to be completed in fall 2016, with construction beginning later in early 2017. Resource Impact This is an extension of time only. No tasks are added to this contract. There are sufficient resources in CIP PL-04010 to fund this contract. There is no additional resource impact by extending the term of the contract through Amendment Two at no additional cost to the City. Policy Implications The approval of Amendment Two, extending the term of the contract through March 2017 is consistent with existing City policies, including the Council approved Bicycle + Pedestrian Transportation Plan goals and objectives. Environmental Review Approval of Amendment Two does not require review under the California Environmental Quality !ct (EQ!) because they do not meet the definition of a “project” pursuant to alifornia Public Resources Code Section 21065. Attachments:  Attachment A: Fehr & Peers Contract C14153335 Amendment 2 (PDF) City of Palo Alto Page 4 1of 1 Revision April 28, 2014 AMENDMENT NO. 2 TO CONTRACT NO. C14153335 BETWEEN THE CITY OF PALO ALTO AND FEHR & PEERS This Amendment No. 2 to Contract No. C14153335 (“Contract”) is entered into March 28, 2016, by and between the CITY OF PALO ALTO, a California chartered municipal corporation (“CITY”), and FEHR & PEERS, a California corporation, located at 160 W. Santa Clara Street, Suite 675, San Jose, CA. 95113, Telephone: (408) 278-1700 ("CONSULTANT"). R E C I T A L S A. The Contract was entered into between the parties for the provision of planning, community outreach, conceptual design, and preliminary environmental assessment of the implementation of the Bicycle Boulevards project. B. The City intends to increase the term to March 8, 2017. C. The parties wish to amend the Contract. NOW, THEREFORE, in consideration of the covenants, terms, conditions, and provisions of this Amendment, the parties agree: SECTION 1. Section 2 TERM is hereby amended to read as follows: “SECTION 2. TERM. The term of this Agreement shall be from March 10, 2014 through March 8, 2017 unless terminated earlier pursuant to Section 19 of this Agreement.” SECTION 2. Except as herein modified, all other provisions of the Contract, including any exhibits and subsequent amendments thereto, shall remain in full force and effect. IN WITNESS WHEREOF, the parties have by their duly authorized representatives executed this Amendment on the date first above written. CITY OF PALO ALTO APPROVED AS TO FORM: FEHR & PEERS DocuSign Envelope ID: DC941CD4-2BD9-435E-9B1E-52A22100F4AF President/CEO ATTACHMENT A - City of Palo Alto (ID # 6716) City Council Staff Report Report Type: Action Items Meeting Date: 3/28/2016 City of Palo Alto Page 1 Summary Title: Lease Agreement Between City of Palo Alto and Palo Alto Lawn Bowls Club Title: Approval of Lease Agreement with the Palo Alto Lawn Bowls Club, Inc. for City-Owned Property Located at 474 Embarcadero Road for a Period Up to 10 Years From: City Manager Lead Department: Administrative Services RECOMMENDATION Staff recommends that Council authorize the City Manager or designee to execute the attached four (4) year lease agreement between the Palo Alto Lawn Bowls Club, Inc. (Tenant) and the City of Palo Alto (City) for the Palo Alto Lawn Bowl facility at 474 Embarcadero Road with two (2) three (3) year extension terms for a total not to exceed ten (10) years. EXECUTIVE SUMMARY Constructed in 1933-34 by the Civil Works Administration, the Lawn Bowling Green sits on the site of the old Peninsula Hospital (built in 1910 and razed in 1931). On opening day, March 10, 1935, ceremonial bowls were rolled by Virginia Arnott, club president; Earl C. Thomas, mayor of Palo Alto; and John McLaren, superintendent of Golden Gate Park who aided in the planning of Palo Alto’s green. Since 1935, the Palo Alto Lawn Bowls Club has been a cherished local landmark. Today the immaculate and cozy green and clubhouse, located in the historic Professorville neighborhood, is maintained via a joint relationship with the City of Palo Alto Department of Parks and Recreation in cooperation with club volunteers. Though the Lawn Bowls Club (the Club), in existence since 1933, is membership based it is open to the public and has “Drop-In Sundays” in which free classes taught by volunteer coaches are offered to the public. Lawn bowling is easy to learn, very low cost, provides gentle, healthy exercise and, it provides a pleasant social setting for the participants. The Club has been a part of Palo Alto for over 80 years (see Club History Attachment A), and contributes to the community overall by enhancing Palo Alto’s reputation as a rich recreational destination. In addition to creating and implementing a successful volunteer program the Club also provides recreation, education and entertainment through a wide range of events. Furthermore, the Club’s partnership with the City’s Parks and Recreation department makes its City of Palo Alto Page 2 clubhouse available for City functions as well as to local community groups. The Club has consistently been self-sufficient raising its funding needs through donations, membership fees, and events. The current location of the Palo Alto Lawn Bowl is ideal in terms of its proximity to downtown, parking availability, and proximity to public transit. The existing lease between the City and the Club has ended and currently the occupancy is based on hold over tenancy. The Club has requested a lease extension to continue their operation. Staff has undertaken and completed the process required by the City’s Policy and Procedures (1-11/ASD), (Attachment B), for leased use of City land and facilities. The approval of the new four (4) year lease with two (2) three (3) year option periods will allow the Club to continue its operation and maintenance of the property. BACKGROUND On April 14, 1964, Council approved the first 10-year lease with the Palo Alto Lawn Bowls Club (Club) for the lawn bowl facility located at 474 Embarcadero Road. On January 14, 1974, Council approved a $30,000 expansion of the Bowling Green Clubhouse. The project was financed by three participating agencies: the City, Lucie Stern Foundation, and the Club, with each providing one-third of the project costs. On April 18, 1974, Council approved a new ten- year lease for the lawn bowl facility. Historically, the Club has leased only the Clubhouse, not the bowling green. Between 1984 and 1990, due to pending development of the adjacent Gamble property which might have affected the lawn bowl facility, the City and the Club entered into a series of one- year leases. On February 7, 1991, Council approved a ten-year lease agreement with an option to extend an additional five years for the lawn bowl facility. On March 1, 2000, the Club exercised its option for an additional five years. On March 1, 2005, the City and the Club agreed to a month-to-month holdover pending negotiation of a new lease. On November 25, 2008, the City and the Club executed a new lease for five years with an additional option to extend for another two (2) years. On September 9, 2012, the lease was amended for the first time to establish control over the bowling green area by the City, confirming that the use would be open to any residents of the City and the stated availability of the playable lawn bowling green unless the green is closed for renovation. The amendment also established a maintenance payment in the amount of $500 from the Club to the City. Since November of 2015, the Club has been in a month-to-month tenancy for the use of the property. DISCUSSION The terms of the proposed lease are summarized in Attachment C. The provisions of the lease are consistent with those of the current and previous leases with the exception of the term, monetary rent and some changes to the conditions of use. The term of the proposed lease is four (4) years with two (2) options to renew the term for an additional three years. The initial term of the lease, four (4) years plus the duration of the two options, will add up to ten (10) years. The proposed lease includes annual rent and maintenance for a total of $12,912. City of Palo Alto Page 3 Under the new lease agreement (Attachment D) with the City, the Club continues to be responsible for routine maintenance of the clubhouse, while the City is responsible for major building and infrastructure repairs. Historically the Club has invested and donated its own funds, in-kind contributions and provided volunteer help towards meeting its maintenance obligation. Last year, the Club provided nearly $13,000 of in-kind and volunteer driven improvements including the cleaning and maintenance of the clubhouse, replacement of carpeting and furnishings, and supplemental maintenance of the outdoor benches, plantings and edging. In addition, the Club has recently purchased a sign, funded via the aforementioned, which will be installed later this year per City specifications. In the new lease, the club will pay $1076 a month for rent of the property. The Club Board of Directors has recently implemented a marketing plan to increase its membership by providing increased outreach to Palo Alto residents and businesses. When the Club is not using the Clubhouse for normally scheduled activities, the lease requires the Club to make the Clubhouse available to the City or other community users. All rental fees from such use will be retained by the City. According to City’s Policy and Procedure 1-11/ASD pertaining to leased use of City land and facilities, new leases of City property may be awarded through the Request for Proposal (RFP) process or following a noticed public hearing. The notice of intent to award a lease to Palo Alto Lawn Bowls Club, Inc. was advertised in the Palo Alto Weekly on January 9th and February 5th 2016. Since the March 07, 2016 date of the Council meeting was cancelled, another ad was run in Palo Alto Weekly on Feb 26, 2016 to notify the public of the new Council meeting date, March 29, 2016. TIMELINE The new lease will go into effect following the approval by City Council and execution by all parties to the agreement. RESOURCE IMPACT The proposed lease will generate annual revenue to the City in the amount of $12,912 per year. That rent will partially offset some of the $40,000 in annual maintenance costs borne by the City to maintain the adjacent lawn bowl green. The Club also maintains and improves the interior section of the clubhouse at its own cost. POLICY IMPLICATIONS Entering into a new Lease Agreement is consistent with policies and programs in the Comprehensive Plan promoting City and non-profit collaboration and the effective provision of community services. City of Palo Alto Page 4 ENVIRONMENTAL REVIEW Extension or re-negotiation of an existing lease and agreement is exempt from the California Environmental Quality Act (CEQA) under 15061 of the CEQA Guidelines. Attachments:  Attachment A: Club History (PDF)  Attachment B: P&P 1-11 ASD (PDF)  Attachment C: General Terms of the Lease 2016 (DOCX)  Attachment D: Lease Agreement Palo Alto Lawn Bowl Club Draft 2016 (DOCX) ATTACHMENT A ATTACHMENT A ATTACHMENT A ATTACHMENT A ATTACHMENT A POLICY AND PROCEDURES 1-11/ASD Revised: October 2006 LEASED USE OF CITY LAND/FACILITIES POLICY STATEMENT The purpose of this policy is to ensure that decisions regarding use of City real property are made in the best interests of the citizens and taxpayers of Palo Alto. The development and operation of facilities by others (profit and/or non-profit entities) on City- owned property is appropriate only when such development and operation will further public use or provide a public benefit. Such facilities and operations must be consistent with existing City policies, plans, services and/or procedures. Open competitive and/or bid processes will be used to solicit proposals or provide opportunities to others prior to awarding an Option to Lease. This policy shall not apply to short-term interim leases where no significant change in use is proposed PROCEDURE A. Criteria for Permitting Leased Use of City Property by Others The proposed leased use must be compatible with, incidental to, and/or supportive of, the primary public use of the City-owned property, e.g. a snack stand in a district park, or the pro shop and coffee shop at the Golf Course. In the event of park dedicated land, the proposed use shall be consistent with the provisions set forth in the Charter of the City of Palo Alto, Article VIII, and the Palo Alto Municipal Code (PAMC), Sections 22.04 and 22.08 et. seq., which require that uses of park dedicated land be park, playground, recreation or conservation related uses. B. Option to Lease In all cases where there are significant approval requirements (significant tenant construction and/or rehabilitation), financing requirements (fundraising drives, obtaining financing from lending institutions, etc.), or other tenant pre-operation conditions, the Council shall award an Option to Lease setting forth all pre-construction/operation conditions as conditions to the tenant's obtaining the lease. The option term shall be for a reasonable period of time consistent with the nature of the conditions of the option. Prior to awarding an Option to Lease for a specific use, consideration shall be given to particular information. (Specific application and the relative importance of each of the following considerations will vary from site to site and by specific uses proposed.) Applications for leased use shall provide the following information: 1. The extent to which the proposed leased use satisfies a public need (e.g., by a significant number of Palo Alto residents and taxpayers) for the proposed services and/or uses. Page 1 of 4 ATTACHMENT B POLICY AND PROCEDURES 1-11/ASD Revised: October 2006 2. Consistency of the proposed use with existing City goals and objectives (set forth in the Comprehensive Plan, Zoning Ordinance, Municipal Code, and general municipal services objectives). 3. Consistency of the proposed use with existing plans for the property or facility (e.g., an approved Master Plan). 4. The impact of the proposed use (compatible services and uses, traffic impacts, noise impacts, energy conservation, etc.) upon: a. the immediate neighborhood; b. the community generally; and c. the environment (The proposed tenant shall, during the Option period, satisfy the City's environmental review process.) 5. The degree of public access, including City shared use of the facility or co- sponsorship of programs and/or services, i.e. the numbers of people, especially Palo Alto residents and taxpayers, that will be served by the proposed use and/or service. (It is the general intent of the City to maximize public access to its facilities and services, especially if park land is involved.) 6. The fees that will be charged to Palo Alto citizens. (It is the intent of the City to provide public access to its facilities at prices and/or fees that are fair and reasonable to the public. In the case of parklands, any fees and charges should be minimum and consistent with the fees and charges of comparable City-provided services.) 7. The monetary consideration to be provided to the City. 8. The history and assessment of the proposed group's ability to carry out the construction, if any, and operation of the facility and services as proposed. 9. A five-year pro-forma financial analysis of the proposed use, setting forth the project revenues and expenses for this period of time. Page 2 of 4 ATTACHMENT B POLICY AND PROCEDURES 1-11/ASD Revised: October 2006 C. Public Notification 1. Prior to awarding an Option to Lease (or Lease if there are no pre-construction or pre-operation conditions), the City shall provide a reasonable and appropriate opportunity to other groups or entities to respond to possible use of City facilities. Such reasonable and appropriate opportunities shall take one of the following forms: a. A Notice of Intent to Award an Option to Lease (or Lease if there are no pre-construction or pre-operation conditions) generally outlining the conditions of the Option and Lease, shall be published twice in a local newspaper of general circulation. The Notice shall provide at least 30 days notice to the public prior to a public hearing for Council action to award the Option to Lease. In addition, copies of the notice shall be mailed to property owners and tenants within 300 feet of the subject property in accordance with Section 18.77.080(d) of the Palo Alto Municipal Code (PAMC). b. A Request for Proposals will be sent to groups or entities likely to have an interest in submitting a proposal, subsequent to a public hearing and Notice of Intent to Request Proposals being published in the appropriate media. At a minimum, the Notice of Request for Proposals shall be announced in a local newspaper of general circulation and copies of the notice mailed to property owners and tenants within 300 feet of the subject property in accordance with PAMC Section 18.77.080(d). The Notice shall provide at least 30 days notice to the public prior to the public hearing. 2. The City’s Real Estate Division shall be responsible for the public notification by mail and newspaper in accordance with either C(1)(a) or (b) above. D. Tenant Improvements 1. Construction of tenant improvements shall take place only after Council approval (as well as Planning Commission and Architectural Review Board approval when otherwise required by City procedures) of plans for such tenant proposed construction is obtained. In the event of park dedicated lands, Council approval shall be obtained by ordinance subject to referendum (PAMC Sections 22.08.005 and 22.08.006). 2. Generally, improvements to the real property shall become the property of the City upon termination of the Lease. Tenant-provided fixtures shall remain the property of the tenant. Page 3 of 4 ATTACHMENT B POLICY AND PROCEDURES 1-11/ASD Revised: October 2006 E. Terms of the Lease 1. Tenant shall be required to provide the City with adequate compensation for the rights granted by the City to the Tenant. Determination of appropriate consideration shall begin with the estimated fair market rental value of the lease premises for the use proposed. Consideration shall, however, be given to non- monetary benefits to be provided by the tenant. These proposed non-monetary public benefits must be clearly articulated and must provide an actual benefit to a significant portion of the citizens and taxpayers of Palo Alto. 2. The lease term shall be the minimum period of the time required to: a. amortize tenant's investment in any permitted and approved tenant construction; and b. be consistent with the nature of the proposed tenant operation. NOTE: Questions and/or clarification of this policy should be directed to the Administrative Services Department Page 4 of 4 ATTACHMENT B ATTACHMENT C 1 EXHIBIT A Terms of the Lease LESSOR: City of Palo Alto LESEE: The Palo Alto Lawn Bowls Club, a non-profit benefit corporation. PREMISES:  Address: 474 Embarcadero Road, Palo Alto, CA 94301  Main Park Area: 70,000 square feet (the lawn bowl within the main yard is 14,400 square feet)  Club House: 2,022 square feet  Patio Area: 500 square feet  Shed on the Side: 96 square feet PURPOSE: The purpose of the lease is to allow the Palo Alto Lawn Bowl Club to continue operating a non- profit organization to offer memberships, classes, recreational activities to members and to the public, according to the terms and conditions of the lease. TERM: The term of the lease is four (4) years with two (2) options by mutual agreement of the City and the Lessee to extend for three (3) additional years for a total of ten (10) years. USES: A. REQUIRED: Throughout the term of the lease, the Lessee shall provide the following services and activities: 1. Attention, supervision, and care of the clubhouse, lawn bowl and preservation of the small garden, with the club house, lawn bowl and garden to be open to the public; 2. Workshops, classes, training and tournaments and lectures associated with the Palo Alto Lawn Bowl Club purposes; and 3. All required activities shall be open to the public. ATTACHMENT C 2 B. PERMITTED: In addition to the required uses, the following uses shall also be permitted, but only as incidental to the required uses: 1. Club house, patio and storage space to support the required services, activities and uses above; 2. Fund raising activities only to support the required services, activities and uses, including but not limited to sales of goods and gifts related to Palo Alto Lawn Bowl Club and the hosting of benefits and social activities; and 3. Periodic rental of rooms and other portions of the premises by community groups and individuals, but in no event shall such rental be for commercial purpose and in no event shall such rental interfere with or limit the required services, activities and uses as set forth above. C. OPTIONAL: Subject to the prior written approval of the City Manager, the Lessee may provide additional service and uses which are ancillary to and compatible with the required uses above. D. PROHIBITED: Any use not authorized in the Lease CONSIDERATION/RENT: A. MONETARY: A total of five thousand and seventy six ($1,076) dollars for rent per month payable upon execution of the lease. Rent and maintenance fee to be adjusted by 2.5 % annually starting in July 1, 2017. B. NON-MONETARY: Development and operation of the Palo Alto Lawn Bowl Club consistent with the purpose and causes of the Lease. SECURITY DEPOSIT: A $5,000 security deposit has been given to the City. CONSTRUCTION OR ALTERATION BY TENANT: Lessee may not make any changes to the property costing more than $5,000 without prior City review and approval. MAINTENANCE AND REPAIRS: CITY shall be responsible for the maintenance and repair of the structure located on the PREMISES and main support systems not exclusively serving the PREMISES, including roof repair, foundation, electrical system repair, exterior painting and structural support system repairs. ATTACHMENT C 3 The vast majority of the landscape and maintenance of the bowling green is done by the City via contractor. Typically the lawn bowlers perform minor supplemental weed removal on the green, and they maintain the park benches and the shade structures (adjacent to benches). Lessee expressly agrees to maintain the PREMISES in a safe, clean, wholesome, and sanitary condition and substantial repair, to the complete satisfaction of CITY and in compliance with all applicable laws. Lessee further agrees to provide approved containers for trash and garbage and to keep the PREMISES free and clear of rubbish and litter. ASSIGNMENT/SUBLETTING: Any assignment or encumbrance of the lease (with the exception of subletting in accordance with the proposal) must receive prior City approval. TAXES, ASSESSMENTS AND UTILITIES: Lessee shall be responsible for all costs for utilities and taxes and assessments for the property. City to pay for water furnished to the Premises. INSURANCE: The Lessee shall maintain insurance meeting the City’s standard requirements for insurance protection. ATTACHMENT D 0 LEASE AGREEMENT TEMPLATE-USER INSTRUCTIONS WHEN TO USE FORM: This form should only be used when the City is leasing City owned property to someone else. If the City is leasing property from a private party DO NOT USE this form. HOW TO COMPLETE FORM: To use this form, you will need to fill in the information requested in bold. Below is a summary of the major items of information and lease references that will need to be customized before completing the agreement: o Lessee: Palo Alto Lawn Bowls Club o Address & APN: 474 Embarcadero Road, Palo Alto, CA 94301, APN: 120-07-032 o Square Footage and Description of Property: Main Park Area: 70,000 square feet (the lawn bowl within the main yard is 14,400 square feet) Club House: 2,022 square feet Patio Area: 500 feet Shed on the side: 96 feet o Lease Term with Start and End: January 1, 2016 to December 31, 2020 o Length of Option Period: By mutual agreement of the City and Lessee - two (2) options to extend the term for an additional three (3) year period options o Monthly Rent: $1,076 with annual increase of 2.5% o Amount of Security Deposit: $5,000 o Required Uses of Property: Lawn Bowl Club membership activities o Who Will Pay Utilities: Lessee o Who Will Perform Maintenance: Refer to the lease section 9 o Who Will Maintain Common and other Areas: Refer to lease section 9 o What Construction Cost Requires City Approval: All types o Parcel Map of Property (Exhibit A) o General Map (Exhibit B) Insurance (Exhibit D) o Premise (Exhibit C) ATTACHMENT D 1 LEASE AGREEMENT BETWEEN CITY OF PALO ALTO AND Palo Alto Lawn Bowls Club TABLE OF CONTENTS LEASE PROVISIONS 1. PREMISES. 2. TERM. 3. RENT 4. SECURITY DEPOSIT 5. USE OF PROPERTY 6. HAZARDOUS MATERIALS 7. UTILITIES AND OPERATING EXPENSES 8. TAXES 9. MAINTENANCE 10. ALTERATIONS BY LESSEE 11. CONSTRUCTION BY LESSEE 12. HOLD HARMLESS/INDEMNIFICATION 13. DAMAGE, DESTRUCTION AND TERMINATION 14. SIGNS 15. ASSIGNMENT AND SUBLETTING 16. DEFAULTS; REMEDIES 17. INTEREST ON PAST-DUE OBLIGATIONS 18. HOLDING OVER 19. CITY’S ACCESS 20. INSURANCE 21. RESERVATION OF AVIGATIONAL EASEMENT ATTACHMENT D 2 22. EMINENT DOMAIN 23. POST-ACQUISITION TENANCY 24. DISPUTE RESOLUTION 25. NON-LIABILITY OF OFFICIALS AND EMPLOYEES OF THE CITY 26. NON-DISCRIMINATION 27. INDEPENDENT CONTRACTOR 28. CONFLICT OF INTEREST 29. MEMORANDUM OF LEASE 30. ESTOPPEL CERTIFICATE 31. LIENS 32. VACATING 33. ABANDONMENT 34. NOTICES 35. TIME 36. AMENDMENTS 37. SIGNING AUTHORITY 38. CAPTIONS 39. SURRENDER OF LEASE NOT MERGER 40. INTEGRATED DOCUMENT 41. WAIVER 42. INTERPRETATIONS 43. SEVERABILITY CLAUSE 44. GOVERNING LAW 45. VENUE 46. COMPLIANCE WITH LAWS 47. BROKERS 48 PARKING 49. AMENDMENTS 50. PRIOR LEASE SUPERSEDED ATTACHMENT D 3 51. PREVAILING WAGE 52. BOOKS & RECORDS 53. ATTACHMENTS TO LEASE (EXHIBITS) ATTACHMENT D 2 | P a g e LEASE AGREEMENT BETWEEN CITY OF PALO ALTO AND PALO ALTO LAWN BOWLS CLUB This lease agreement (herein "Lease") is made and entered into this 1st day of January, 2016, by and between the City of Palo Alto, a California chartered municipal corporation (herein "City") and Palo Alto Lawn Bowls Club, a non- profit, tax-exempt organization, (herein "Lessee"). City and Lessee may be referred to individually as a “Party” or collectively as the “Parties” or the “Parties to this Lease." The City Manager serves as Contract Administrator for this Lease on behalf of the City Council. RECITALS This Agreement is made with respect to the following facts: A. The City is the fee simple owner of the real property located at 474 Embarcadero Road, Palo Alto, CA 94301, situated County of Santa Clara, State of California, Assessor's Parcel Number 124-07-032 and site plan shown respectively on Exhibit “A” and Exhibit “B” of this Agreement (the “Property”) B. Palo Alto Lawn Bowls Club, a non-profit organization has been a Lessee of the City at the Property since April 14, 1964 and occupancy with the City is based on a hold over position. C. In order continue to provide quality services for the seniors in the area over a long term horizon, Palo Alto Lawn Bowls Club and the City have agreed to enter into 4 (four) years initial term with two (2) option to extend the term for three (3) years for a total of ten (10) years. D. Lessee desires to continue to occupy and use the Property which consists of a recreation clubhouse, lawn bowl and small garden area within a large park area of approximately 70,000 square feet, more particularly described and shown in Exhibit “C” of this Agreement (the “Premise”), for the general purpose of providing recreation services and activities for Silicon Valley residents. Now, therefore, in consideration of these recitals and the following covenants, terms, and conditions, Lessee and City mutually agree as follows: LEASE PROVISIONS ATTACHMENT D 3 | P a g e 1. PREMISES. City hereby leases to Lessee, certain real property located in the City of Palo Alto, County of Santa Clara, State of California, commonly known as Palo Alto Lawn Bowls Club and more particularly shown in Exhibit “C” attached hereto and incorporated herein by reference. The Property consists of an area of approximately 70,000 square feet of space. It contains lawn bowl green area consisting of 14,400 square feet, a club house plus a patio area and a shed for a total of approximately 2,522 square feet. Unless specifically provided, Lessee accepts the Premise “as-is” on the date of execution of this Lease. It is understood and agreed that supervision and control of the area outlined by a broken line on “Exhibit C” shall remain in the City and that the use thereof shall not be limited to members of Lessee, but shall be extend to any residents of the City in conformance with rules and regulations which may be instituted from time to time by City’s Director of Community Services Department. The Lease is contingent on availability of playable lawn bowling green unless the green is closed for renovation by mutual consent between Lessee and the City. 2. TERM & OPTIONS 2.1 Original Term. The term of this Lease shall be for four (4) years, commencing on January 1, 2016 and ending on December 31, 2020. Lessee shall, at the expiration of the term of this lease, or upon its earlier termination, surrender the Property in as good condition as it is now at the date of this lease. The Parties expect reasonable wear and tear. City and Lessee agree to have two (2) options by mutual agreement to extend the original term of the lease for three (3) year additional years. The original term and the option periods if executed will add up to ten (10) years. Lessee and the City shall have the right and option to extend the Term hereof for two (2) additional thirty six (36) month period (the “Extension Term”) upon written notice to City by Lessee given not less than three (3) months and not more than six (6) months prior to the Lease expiration date. 3. RENT. 3.1 Base Rent. The rent to be paid by Lessee shall be at $1,076.00 per month in advance on or before the first day of each month during the term of this lease. During the term of this lease the monthly rent and the maintenance fee will be adjusted each year by an increase of 2.5% starting on July 1, 2017. 4. SECURITY DEPOSIT. Not Applicable. 5. USE OF PROPERTY. ATTACHMENT D 4 | P a g e 5.1 Permitted Uses. Lessee shall with regularity publicly encourage and offer membership in the Palo Alto Lawn Bowling Club to residents of City during the term of this agreement. Lessee shall also offer membership to non-residents and provide lessons in lawn bowling to public at reasonable times and intervals as specified by the Director of Community Services. 5.2 Lessee shall, at its own cost and expense, conform in every respect to all laws, statutes, ordinances and regulations now in force and that may be enacted hereafter affecting the use or occupancy of the premises. Lessee shall use the premises as a general meeting place for its members, for games and recreational activities. Lessee is permitted to rent the facility at rates and in accordance with a schedule to be approved by the City to raise revenue to pay City lease costs. Lessee has the right to rent its space on an hourly basis. 5.3 Lessee agrees to maintain in its by-laws the provision that City’s Director of Community Services or his nominee shall be an ex-officio member of the Lessee’s Board of Directors, with full right to participate in the deliberations of the Board without the right to vote. 5.4 Lessee agrees that when the premises are not used for its normally scheduled activities, the premises may be made available to the City or other community users subject to rules and regulations established by City’s Director of Community Services. The City will manage reservations for the Clubhouse during hours not used by the club. The City will provide building attendants to ensure that the building is safe, secure and clean at the end of each rental. The fees collected by such rental shall be retained by the City, and will not be credited against the monthly rent. 5.5 Intent of the Use. It is the further intent of the City and Lessee that Lessee is primarily responsible for the identification of sources and for the securing of commitments for the funds necessary to bring together on the premises a broad range of recreation activities and services responsive to the interest and needs of members and users, and to simulate development of new programs for members and users. During the terms of this lease, Lessee agrees to use the premises to maintain and operate programs for members and users to carry out such purposes and for no other purpose. 5.6 Prohibited Uses. Lessee shall not use Premises for any purpose not expressly permitted hereunder. Lessee shall not create, cause, maintain or permit any nuisance or waste in, on, or about the Premises, or permit or allow the Premises to be used for any unlawful or immoral purpose. Lessee shall not do or permit to be done anything in any manner which unreasonably disturbs the users of the neighboring property. Specifically, and without limiting the above, Lessee agrees not to cause any unreasonable odor, noise, vibration, power emission, or other item to emanate from the Premises. No materials or articles of any nature shall be stored outside upon any portion of the Premises. Lessee will not use Property in a manner that increases the risk of fire, cost of fire insurance or improvements thereon. No unreasonable sign or placard shall be painted, inscribed or placed in or on said Property; and no tree or shrub thereon shall be destroyed or removed (except in connection with Lessee’s maintenance of, or ATTACHMENT D 5 | P a g e modification to, the landscaping) or other waste committed of said Property. No motorcycles, automobiles or other mechanical means of transportation shall be placed or stored anywhere on the Property, provided that the foregoing shall in no way limit Lessee’s rights to use the parking areas on the Property. No repair, overhaul or modification of any motor vehicle shall take place on the Property or the street in front of said Property. Lessee, at his/her expense, shall keep the Property in as good condition as it was at the beginning of the terms hereof, except damage occasioned by ordinary wear and tear, and except damage to the roof, the exterior walls, sidewalks and underground plumbing, which is not the fault of Lessee. 5.7 Condition, Use of Premises. City makes no warranty or representation of any kind concerning the condition of the Premises, or the fitness of the Premises for the use intended by Lessee, and hereby disclaims any personal knowledge with respect thereto, it being expressly understood by the parties that Lessee has personally inspected the Premises, knows its condition, finds it fit for Lessee’s intended use, accepts it as is, and has ascertained that it can be used exclusively for the limited purposes specified in Section 5.1. 6. HAZARDOUS MATERIALS. 6.1 Hazardous Materials Defined. The term “Hazardous Material(s)” shall mean any toxic or hazardous substance, material or waste or any pollutant or contaminant, or infectious or radioactive material, including but not limited to, those substances, materials, or wastes regulated now or in the future under any of the following statutes or regulations and any and all of those substances included within the definitions of “hazardous substances”, “hazardous waste”, “hazardous chemical substance or mixture”, “imminently hazardous chemical substance or mixture,” “toxic substances,” “hazardous air pollutant”, “toxic pollutant” or “solid waste” in the (a) CERCLA or Superfund as amended by SARA, 42 U.S.C. Sec. 9601 et seq., (b) RCRA, 42 U.S.C. Sec. 6901 et seq., (c) CWA., 33 U.S.C. Sec. 1251 et seq., (d) CAA, 42 U.S.C. 78401 et seq., (e) TSCA, 15 U.S.C. Sec. 2601 et seq., (f) The Refuse Act of 1899, 33 U.S.C. Sec. 407, (g) OSHA, 29 U.S.C. 651 et seq. (h) Hazardous Materials Transportation Act, 49 U.S.C. Sec. 1801 et seq., (i) USDOT Table (40 CFR Part 302 and amendments) or the EPA Table (40 CFR Part 302 and amendments), (j) California Superfund, Cal. Health & Safety Code Sec. 25300 et seq., (k) Cal. Hazardous Waste Control Act, Cal. Health & Safety Code Section 25100 et seq., (l) Porter- Cologne Act, Cal. Water Code Sec. 13000 et seq., (m) Hazardous Waste Disposal Land Use Law, Cal. Health & Safety Code Sec. 25220 et seq., (n) Proposition 65, Cal. Health and Safety Code Sec. 25249.5 et seq., (o) Hazardous Substances Underground Storage Tank Law, Cal. Health & Safety Code Sec. 25280 et seq., (p) California Hazardous Substance Act, Cal. Health & Safety Code Sec. 28740 et seq., (q) Air Resources Law, Cal. Health & Safety Code Sec. 39000 et seq., (r) Hazardous Materials Release Response Plans and Inventory, Cal. Health & Safety Code Secs. 25500-25541, (s) TCPA, Cal. Health and Safety Code Secs. 25208 et seq., and (t) regulations promulgated pursuant to said laws or any replacement thereof, or as similar terms are defined in the federal, state and local laws, statutes, regulations, orders or rules. Hazardous Materials shall also mean any and all other substances, materials, and wastes which are, or in the future become, regulated under applicable local, state or federal law for the protection of health or ATTACHMENT D 6 | P a g e the environment, or which are classified as hazardous or toxic substances, materials or wastes, pollutants or contaminants, as defined, listed or regulated by any federal, state or local law, regulation or order or by common law decision, including without limitation: (i) trichloroethylene, tetracholoethylene, perchloroethylene and other chlorinated solvents; (ii) any petroleum products or fractions thereof; (iii) asbestos, (iv) polychlorinated biphenyls; (v) flammable explosives; (vi) urea formaldehyde; and, (vii) radioactive materials and waste. 6.2. Compliance with Laws. Lessee shall not cause or permit any Hazardous Material (as defined below) to be brought upon, kept or used in or about the Premises or Project by Lessee, its agents, employees, contractors or invitees. 6.3 Termination of Lease. City shall have the right to terminate the Lease in City’s sole and absolute discretion in the event that: (i) any anticipated use of the Premises by Lessee involves the generation or storage, use, treatment, disposal, or release of Hazardous Material in a manner or for a purpose prohibited or regulated by any governmental agency, authority, or Hazardous Materials Laws; (ii) Lessee has been required by any lender or governmental authority to take remedial action in connection with Hazardous Material contaminating the Premises, if the contamination resulted from Lessee’s action or use of the Premises; or (iii) Lessee is subject to an enforcement order issued by any governmental authority in connection with the release, use, disposal, or storage of a Hazardous Material on the Premises, if the contamination resulted from Lessee’s action or use of the Premises. 6.4 Assignment and Subletting. It shall not be unreasonable for City to withhold its consent to an assignment or subletting to such proposed assignee or sublessee if: (i) any anticipated use of the Premises by any proposed assignee or sublessee involves the generation or storage, use, treatment, disposal, or release of Hazardous Material in a manner or for any purpose; (ii) the proposed assignee or sublessees has been required by any prior landlord, lender, or governmental authority to take remedial action in connection with Hazardous Material contaminating a property, if the contamination resulted from such party’s action or use of the property in question; or, (iii) the proposed assignee or sublessee is subject to an enforcement order issued by any governmental authority in connection with the release, use, disposal or storage of a Hazardous Material. 6.5 Hazardous Materials Indemnity. Lessee shall indemnify, defend (by counsel reasonably acceptable to City), protect, and hold City harmless from and against any and all claims, liabilities, penalties, forfeitures, losses, and/or expenses, including without limitation, diminution in value of the Premises, damages for the loss or restriction on use of the rentable or usable space or of any amenity of the Premises, damages arising from any adverse impact or marketing of the Premises and sums paid in settlement of claims, response costs, cleanup costs, site assessment costs, attorneys’ fees, consultant and expert fees, judgments, administrative rulings or orders, fines, costs of death of or injury to any person, or damage to any property whatsoever (including, without limitation, groundwater, sewer systems, and atmosphere), arising from, caused, or resulting, either prior to or during the Lease Term, in whole or in part, ATTACHMENT D 7 | P a g e directly or indirectly, by the presence or discharge in, on, under, or about the Premises by Lessee, Lessee’s agents, employees, licensees, or invitees or at Lessee’s direction, of Hazardous Material, or by Lessee’s failure to comply with any Hazardous Materials Law, whether knowingly or by strict liability. For purposes of the indemnity provided herein, any acts or omissions of Lessee or its employees, agents, customers, sublessees, assignees, contractors, or subcontractors of Lessee (whether or not they are negligent, intentional, willful or unlawful) shall be strictly attributable to Lessee. Lessee’s indemnification obligations shall include, without limitation, and whether foreseeable or unforeseeable, all costs of any required or necessary Hazardous Materials management plan, investigation, repairs, cleanup or detoxification or decontamination of the Premises, and the presence and implementation of any closure, remedial action or other required plans, and shall survive the expiration of or early termination of the Lease Term. 6.6 City’s Right to Perform Tests. At any time prior to the expiration of the Lease Term, City shall have the right to enter upon the Premises in order to conduct tests of water and soil. 7. UTILITIES AND OPERATING EXPENSES. 7.1. Operating Cost. City shall furnish to the Property reasonable quantities of gas, electricity, water, sewer and refuse collections services as required for Lessee’s use. The Lessee shall also be allowed use of internet access as exists within the Premises. However, if City is required to construct new or additional utility installations, including, without limitation, wiring, plumbing, conduits, and mains, resulting from Lessee’s special requirements, Lessee shall on demand pay to City the total cost of such items. Lessee agrees to pay for gas, heat, electricity, power, light, telephone service, garbage removal, or other public utility service used during the term of this lease; provided. City to pay for water furnished to the Premises. Lessee agrees to employ sound and innovative conservation practices in addition to abiding by all City conservation requirements. 8. TAXES. 8.1 Real Property Taxes Defined. The term “real property taxes” as used herein shall mean all taxes, assessments, levies and other charges, general and special, foreseen and unforeseen, now or hereafter imposed by any governmental or quasi-governmental authority or special district having the direct or indirect power to tax or levy assessments, which are levied or assessed against or with respect to: (i) value, occupancy, use or possession of the Premises and/or the Improvements; (ii) any improvements, fixtures, equipment and other real or personal property of Lessee that are an integral part of the Premises; or, (iii) use of the Premises, Improvements public utilities or energy within the Premises. The term “real property taxes” shall also mean all charges, levies or fees imposed by reason of environmental regulation or other governmental control of the premises and/or the Improvements, new or altered excise, transaction, sales, privilege, assessment, or other taxes or charges now or hereafter imposed upon City as a result of this Lease, and all costs and fees (including attorneys’ fees) ATTACHMENT D 8 | P a g e incurred by City in contesting any real property taxes and in negotiating with public authorities as to any real property taxes affecting the Premises. If any real property taxes are based upon property or rents unrelated to the Premises and/or the Improvements, then only that part of such tax that is fairly allocable to the Premises and/or the Improvements, as determined by City, on the basis of the assessor’s worksheets or other available information, shall be included within the meaning of the term “real property taxes.” 8.2 Payment of Real Property Taxes. Lessee shall pay Lessee’s share of all real property taxes (as defined in Section 8.1 above) which become due and payable to City on or before the later of ten (10) days prior to the delinquency thereof or fifteen (15) days after the date on which Lessee receives a copy of the tax bill and notice of City’s determination hereunder. Lessee’s liability to pay real property taxes shall be prorated on the basis of a three hundred sixty-five (365) day year to account for any fraction or portion of a tax year included in the Lease Term at the commencement or expiration of the Lease. 8.3 Revenue and Taxation Code. Lessee specifically acknowledges it is familiar with section 107.6 of the California Revenue and Taxation Code. Lessee realizes that a possessory interest subject to property taxes may be created, agrees to pay any such tax, and hereby waives any rights Lessee may have under said California Revenue and Taxation Code section 107.6. 8.4 Personal Property Taxes. Lessee shall pay before delinquent, or if requested by City, reimburse City for, any and all taxes, fees, and assessments associated with the Property, the personal property contained in the Premises and other taxes, fees, and assessments regarding any activities which take place at the Property. Lessee recognizes and understands in accepting this Lease that its interest therein may be subject to a possible possessory interest tax that City or County may impose on such interest and that such tax payment shall not reduce any rent due City hereunder and any such tax shall be the liability of and be paid by Lessee. 9. MAINTENANCE AND REPAIRS & CAPITAL IMPROVEMENT 9.1 City’s Responsibilities. CITY shall be responsible for the maintenance and repair of the structure located on the Premises and main support systems not exclusively serving the PREMISES, including roof repair, foundation, electrical system repair, exterior painting and structural support system repairs. 9.2 Lessee Responsibilities. Except as provided in the preceding sentence, Lessee expressly agrees to maintain the Premises in a safe, clean, wholesome, and sanitary condition and substantial repair, to the complete satisfaction of CITY and in compliance with all applicable laws. Lessee further agrees to provide approved containers for trash and garbage and to keep the Premises free and clear of rubbish and litter. CITY shall have the right to enter upon and inspect the Premises at any time for cleanliness and safety. Notwithstanding the above provisions, Lessee shall be responsible for damage or repair to the Premises or any of its ATTACHMENT D 9 | P a g e support systems resulting from Lessee’s use of the Premises and not occasioned by normal wear and tear, including plumbing and glass breakage. Lessee shall designate in writing to CITY an on-site representative who shall be responsible for the day-to-day operation and level of maintenance, cleanliness, and general order. If Lessee fails to make any repairs or perform any maintenance work for which Lessee is responsible within a reasonable time (as determined by the City Manager in the City Manager’s sole discretion) after demand by the CITY, CITY shall have the right, but not the obligation, to make the repairs at lessee’s expense; within ten (10) days of receipt of a bill therefor, Lessee shall reimburse CITY for the cost of such repairs, including a fifteen percent (15%) administrative overhead fee. The making of such repairs or performance of maintenance by CITY shall in no event be construed as a waiver of the duty of LESSEE to make repairs or perform maintenance as provided in this Section. 9.3 Waiver of Civil Code. Lessee expressly waives the benefit of any statute now or hereinafter in effect, including the provisions of sections 1941 and 1942 of the Civil Code of California, which would otherwise afford Lessee the right to make repairs at City’s expense or to terminate this Lease because of City’s failure to keep Premises in good order, condition and repair. Lessee further agrees that if and when any repairs, alterations, additions or betterments shall be made by Lessee as required by this paragraph, Lessee shall promptly pay for all labor done or materials furnished and shall keep the Premises free and clear of any lien or encumbrance of any kind whatsoever. If Lessee fails to make any repairs or perform any maintenance work for which Lessee is responsible within a reasonable time (as determined by the City Manager in the City Manager’s sole discretion) after demand by the City, City shall have the right, but not the obligation, to make the repairs at Lessee’s expense; within ten (10) days of receipt of a bill, Lessee shall reimburse City for the cost of such repairs, including a fifteen percent (15% administrative overhead fee. The making of such repairs or performance of maintenance by City shall in no event be construed as a waiver of the duty of Lessee to make repairs or perform maintenance as provided in this Section. 10. ALTERATIONS BY LESSEE Lessee shall not make any alterations or improvements to the Premises without obtaining the prior written consent of the City Manager, except for alterations or improvements that cost less than five Thousand Dollars ($5,000.00) and which do not affect the building systems or the structural integrity or structural components of the Premises. Lessee may, at any time and at its sole expense, install and place business fixtures and equipment within the Premises and make alteration less than $5,000 with permission from the Director of Community Service Department. 11. CONSTRUCTION BY LESSEE. ATTACHMENT D 10 | Page 11.1 Ownership of Improvements. All improvements constructed, erected, or installed upon the Premises must be free and clear of all liens, claims, or liability for labor or material and shall become the property of City, at its election, upon expiration or earlier termination of this lease and upon City's election, shall remain upon the Premises upon termination of this Lease. Title to all equipment, furniture, furnishings, and trade fixtures placed by Lessee upon the Premises shall remain in Lessee, and replacements, substitutions and modifications thereof may be made by Lessee throughout the term of this Lease. Lessee may remove such fixtures and furnishings upon termination of this Lease if Lessee is not then in default under this Lease, provided that Lessee shall repair to the satisfaction of City any damage to the Premises and improvements caused by such removal and provided that usual and customary lighting, plumbing and heating fixtures shall remain upon the Premises upon termination of this Lease. 11.2 Indemnity for Claims Arising Out of Construction. Lessee shall defend and indemnify City against all claims, liabilities, and losses of any type arising out of work performed on the Premises by Lessee, together with reasonable attorneys' fees and all costs and expenses reasonably incurred by City in negotiating, settling, defending or otherwise protecting against such claims. 11.3 Assurance of Completion. Prior to commencement of any construction or alteration expected to cost more than $5,000, Lessee shall furnish the City Manager evidence that assures City that sufficient funds will be available to complete the proposed work. The amount of such assurance shall be at least the total estimated construction cost. Evidence of such assurance shall take one of the forms set out below and shall guarantee Lessee’s full and faithful performance of all of the terms, covenants, and conditions of this Lease: A. Completion Bond; B. Performance, labor and material bonds, supplied by Lessee’s contractor or contractors, provided the bonds are issued jointly to Lessee and City; C. Irrevocable letter of credit from a financial institution; D. Proof of cash or other liquid assets; or E. Any combination of the above. All bonds and letters of credit must be issued by a company qualified to do business in the State of California and be acceptable to the City Manager. All bonds and letters of credit shall be in a form acceptable to the City Manager, and shall insure faithful and full observance and performance by Lessee of all of the terms, conditions, covenants, and agreements relating to the construction of improvements or alterations in accordance with this Lease. 11.4 Certificate of Inspection. Upon completion of construction of any building, Lessee shall submit to the City Manager a Certificate of Inspection, verifying that the construction was completed in conformance with Title 20 of the California Code of Regulations for residential construction, or in conformance with Title 24 of the California Code of Regulations for non- residential construction. ATTACHMENT D 11 | Page 11.5 As Built Plans. Lessee shall provide the City Manager with a complete set of reproducible “as built plans” reflecting actual construction within or upon the Premises upon completion of any: (i) new construction; (ii) structural alterations; or, (iii) non-structural alterations costing more than $25,000. 12. HOLD HARMLESS/INDEMNIFICATION. 12.1 Indemnification. To the extent permitted by law, Lessee agrees to protect, defend, hold harmless and indemnify City, its City Council, commissions, officers, agents, volunteers, and employees from and against any claim, injury, liability, loss, cost, and/or expense or damage, however same may be caused, including all costs and reasonable attorney's fees in providing a defense to any claim arising therefrom for which City shall become legally liable arising from Lessee's negligent, reckless, or wrongful acts, errors, or omissions with respect to or in any way connected with this Lease. Lessee shall give City immediate notice of any claim or liability hereby indemnified against. This indemnity shall be in addition to the Hazardous Materials indemnity contained in this Lease and shall survive shall survive the expiration of or early termination of the Lease Term. 12.2 Waiver of Claims. Lessee waives any claims against City for injury to Lessee’s business or any loss of income therefrom, for damage to Lessee’s property, or for injury or death of any person in or about the Premises, from any cause whatsoever, except to the extent caused by the active negligence or willful misconduct of City or City’s officers, agents, contractors, volunteers, and employees. 13. DAMAGE, DESTRUCTION AND TERMINATION. 13.1 Nontermination and Nonabatement. Except as provided herein, no destruction or damage to the Premises by fire, windstorm or other casualty, whether insured or uninsured, shall entitle Lessee to terminate this Lease. City and Lessee waive the provisions of any statutes which relate to termination of a lease when leased property is destroyed and agree that such event shall be governed by the terms of this Lease. 13.2 Force Majeure. Prevention, delay or stoppage due to strikes, lockouts, labor disputes, Acts of God, inability to obtain labor, inability to obtain materials or reasonable substitutes, governmental restrictions, governmental regulation, governmental controls, judicial orders, enemy or hostile governmental actions, civil commotion, fire or other casualty, and other causes beyond the reasonable control of Lessee (financial inability excepted), shall excuse the performance by Lessee for a period equal to the prevention, delay, or stoppage, except the obligations imposed with regard to rent to be paid by Lessee pursuant to this Lease. In the event any work performed by Lessee or Lessee’s contractors results in a strike, lockout, and/or labor dispute, the strike, lockout, and/or labor dispute shall not excuse the performance by Lessee of the provisions of this Lease. ATTACHMENT D 12 | Page 13.3 Restoration of Premises by Lessee. 13.3.1 Destruction Due to Risk Covered by Insurance. If, during the term, the Premises are totally or partially destroyed from a risk covered by the insurance described in Section 20 (Insurance), rendering the Premises totally or partially inaccessible or unusable, Lessee shall restore the Premises to substantially the same condition as it was in immediately before destruction, but only to the extent of insurance proceeds actually received. Such destruction shall not terminate this Lease. If the laws existing at that time do not permit the restoration, either party can terminate this Lease immediately by giving notice to the other party. A. Minor Loss. If, during the term of this Lease, the Premises are destroyed from a risk covered by the insurance described in Section 20 (Insurance), and the total amount of loss does not exceed one hundred thousand dollars ($100,000), Lessee shall make the loss adjustment with the insurance company insuring the loss. The proceeds shall be paid directly to Lessee for the sole purpose of making the restoration of the Premises in accordance with this Lease. B. Major Loss-Insurance Trustee. If, during the term of this Lease, the Premises are destroyed from a risk covered by the insurance described in Section 20 (Insurance), and the total amount of loss exceeds the amount set forth in paragraph (1), Lessee shall make the loss adjustment with the insurance company insuring the loss and on receipt of the proceeds shall immediately pay them to an institutional lender or title company as may be jointly selected by the parties ("the Insurance Trustee"), and funds shall be disbursed by the Insurance Trustee pursuant to the procedures set forth below in Section 13.3.2. 13.3.2 Destruction Due to Risk Not Covered by Insurance. If, during the term, the Premises are totally or partially destroyed from a risk not covered by the insurance described in Section 20 (Insurance), rendering the Premises totally or partially inaccessible or unusable, Lessee shall restore the Premises to substantially the same condition as it was in immediately before destruction, whether or not the insurance proceeds are sufficient to cover the actual cost of restoration. Such destruction shall not terminate this Lease. If the laws existing at that time do not permit the restoration, either party can terminate this Lease immediately by giving notice to the other party. If the cost of restoration exceeds ten percent (10%) of the then replacement value of the Premises totally or partially destroyed, Lessee can elect to terminate this Lease by giving notice to City within sixty (60) days after determining the restoration cost and replacement value. If Lessee elects to terminate this Lease, City, within thirty (30) days after receiving Lessee's notice to terminate, can elect ATTACHMENT D 13 | Page to pay to Lessee, at the time City notifies Lessee of its election, the difference between ten percent (10%) of the replacement value of the Premises and the actual cost of restoration, in which case Lessee shall restore the Premises. On City's making its election to contribute, each party shall deposit immediately the amount of its contribution with such institutional lender or Title Company as may be jointly selected by the parties ("the Insurance Trustee"). If the Destruction does not exceed ten percent (10%) of the then replacement value of the Premises but does exceed one hundred thousand dollars ($100,000), Lessee shall immediately deposit the cost of restoration with an Insurance Trustee. This Lease shall terminate if Lessee elects to terminate this Lease and City does not elect to contribute toward the cost of restoration as provided in this section. If the Premises are destroyed from a risk not covered by the insurance described in Section 20 (Insurance), and Lessee has the obligation to restore the Premises as provided in subsection (B), both parties shall deposit with the Insurance Trustee their respective contributions toward the cost of restoration. All sums deposited with the Insurance Trustee shall be held for the following purposes and the Insurance Trustee shall have the following powers and duties: The sums shall be paid in installments by the Insurance Trustee to the contractor retained by Lessee as construction progresses, for payment of the cost of Restoration. A 10% retention fund shall be established that will be paid to the contractor on completion of restoration, payment of all costs, expiration of all applicable lien periods, and proof that the Premises are free of all mechanics' liens and lienable claims. Payments shall be made on presentation of certificates or vouchers from the architect or engineer retained by Lessee showing the amount due. If the Insurance Trustee, in its reasonable discretion, determines that the certificates or vouchers are being improperly approved by the architect or engineer retained by Lessee, the Insurance Trustee shall have the right to appoint an architect or an engineer to supervise construction and to make payments on certificates or vouchers approved by the architect or engineer retained by the Insurance Trustee. The reasonable expenses and charges of the architect or engineer retained by the Insurance Trustee shall be paid by the insurance trustee out of the trust fund. Both parties shall promptly execute all documents and perform all acts reasonably required by the Insurance Trustee to perform its obligations under this section. If the sums held by the Insurance Trustee are not sufficient to pay the actual cost of restoration Lessee shall deposit the amount of the deficiency with the Insurance Trustee within fifteen (15) days after request by the Insurance Trustee indicating the amount of the deficiency. Any undisbursed funds after ATTACHMENT D 14 | Page compliance with the provisions of this section shall be delivered to City to the extent of City's contribution to the fund, and the balance, if any, shall be paid to Lessee. All actual costs and charges of the Insurance Trustee shall be paid by Lessee. If the Insurance Trustee resigns or for any reason is unwilling to act or continue to act, a new trustee shall be jointly selected by the parties and shall be substituted in the place of the designated Insurance Trustee. The new trustee must be an institutional lender or title company. 13.3.3 Procedure for Restoring Premises. When Lessee is obligated to restore the Premises, within ninety (90) days Lessee at its cost shall prepare final plans, specifications, and working drawings complying with applicable Laws that will be necessary for restoration of the Premises and shall deliver the same to City for approval. The plans, specifications, and working drawings must be approved by City, such approval not to be unreasonably withheld, conditioned or delayed. City shall have thirty (30) days after receipt of the plans and specifications and working drawings to either approve or disapprove the plans, specifications, and working drawings and return them to Lessee. If City disapproves the plans, specifications, and working drawings, City shall notify Lessee of its objections and City's proposed solution to each objection. Lessee acknowledges that the plans, specifications, and working drawings shall be subject to approval of the appropriate governmental bodies and that they will be prepared in such a manner as to obtain that approval. The restoration shall be accomplished as follows: A. Lessee shall make commercially reasonable efforts to complete the restoration within 180 working days after final plans and specifications and working drawings have been approved by the appropriate governmental bodies and all required permits have been obtained (subject to a reasonable extension for delays resulting from causes beyond Lessee's reasonable control). B. Lessee shall retain a licensed contractor that is bondable. The contractor shall be required to carry public liability and property damage insurance, standard fire and extended coverage insurance, with vandalism and malicious mischief endorsements, during the period of construction in accordance with Section 20 (Insurance). Such insurance shall contain waiver of subrogation clauses in favor of City and Lessee in accordance with the Provisions of Exhibit B. C. Lessee shall notify City of the date of commencement of the restoration at least ten (10) days before commencement of the restoration to enable City to post and record notices of nonresponsibility. The contractor retained by Lessee ATTACHMENT D 15 | Page shall not commence construction until a completion bond and a labor and materials bond have been delivered to City to insure completion of the construction. D. Lessee shall accomplish the restoration in a manner that will cause the least inconvenience, annoyance, and disruption at the Premises. E. On completion of the restoration Lessee shall immediately record a notice of completion in the county in which the Premises are located. F. If funds are required to be deposited with an Insurance Trustee as required by this Section 13, the restoration shall not be commenced until sums sufficient to cover the cost of restoration are placed with the Insurance Trustee as provided in this section. 14. SIGNS. Lessee shall not place, construct, maintain, or allow any signs upon the Premises without prior written consent of City, such consent not to be unreasonably withheld, conditioned or delayed. 15. ASSIGNMENT AND SUBLETTING. 15.1 City's Consent Required. Lessee shall not assign this lease, nor any interest therein, and shall not sublet or encumber the Property or any part thereof, nor any right or privilege appurtenant thereto, nor allow or permit any other person(s) to occupy or use the Property, or any portion thereof, without the prior written consent of City. This Lease shall be binding upon any permitted assignee or successor of Lessee. Consent by City to one assignment, subletting, occupation or use by another person shall not be deemed to be consent to any subsequent assignment, subletting, occupation or use by another person. No assignment, subletting, or encumbrance by Lessee shall release it from or in any way alter any of Lessee's obligations under this Lease. Lessee may, without the prior written consent of City, have the Property delivered to (i) a parent or subsidiary company of Lessee, (ii) an entity which purchases all of the assets of Lessee, or (iii) an entity into which Lessee is merged or consolidated, but such arrangement shall in no way alter Lessee's responsibilities hereunder with respect to the Property, and Lessee shall promptly notify City of such transfer. Any assignment, subletting, encumbrances, occupation, or use contrary to the provisions of this Lease shall be void and shall constitute breach of this Lease. City may assign any of its rights hereunder without notice to Lessee. 15.2 No Release of Lessee. No subletting or assignment as approved by City shall release Lessee of Lessee’s obligation or alter the primary liability of Lessee to pay the rent and to perform all other obligations by Lessee hereunder. The acceptance of rent by City from any other person shall not be deemed to be a waiver by City of any provision hereof. In the event ATTACHMENT D 16 | Page of default by any assignee of Lessee or any successor of Lessee in the performance of any of the terms hereof, City may proceed directly against Lessee without the necessity of exhausting remedies against said assignee. 16. DEFAULTS; REMEDIES. 16.1 Defaults. The occurrence of any one or more of the following events shall constitute a material default, or breach of this Lease, by Lessee: 16.1.1 Abandonment of the Premises by Lessee as defined by California Civil Code section 1951.3; 16.1.2 Failure by Lessee to make any payment of rent or any other payment required to be made by Lessee hereunder, as provided in this Lease, where such failure shall continue for a period of ten (10) business days after written notice thereof from City to Lessee. In the event City serves Lessee with a Notice to Pay Rent or Quit pursuant to applicable Unlawful Detainer statutes, such Notice to Pay Rent or Quit shall also constitute the notice required by this subparagraph; 16.1.3 Failure by Lessee to observe or perform any of the covenants, conditions or provisions of this Lease in any material respect where such failure shall continue for a period of thirty (30) days after written notice thereof from City to Lessee; provided, however, that if the nature of Lessee’s default is such that more than thirty (30) days are reasonably required for its cure, then Lessee shall not be deemed to be in default if Lessee commenced such cure within said thirty (30) day period and thereafter diligently prosecutes such cure to completion; 16.1.4 Making by Lessee of any general arrangement or assignment for the benefit of creditors; Lessee’s becoming a “debtor” as defined in 11 U.S.C. §101 or any successor statute thereto (unless, in the case of a petition filed against Lessee, the same is dismissed within sixty (60) days); the appointment of a bankruptcy trustee or receiver to take possession of all or substantially all of Lessee’s assets located at or on the Premises or of Lessee’s interest in this Lease where possession is not restored to Lessee within thirty (30) days; or the attachment, execution or other judicial seizure of all or substantially all of Lessee’s assets located at or on the Premises or of Lessee’s interest in this Lease, where such seizure is not discharged within thirty (30) days. 16.2 Remedies. In the event of any material default or breach by Lessee, City may at any time thereafter, following any notice required by statute, and without limiting City in the exercise of any right or remedy which City may have by reason of such default or breach: 16.2.1 Terminate Lessee’s right to possession of the Premises by any lawful means, in which case this Lease shall terminate and Lessee shall immediately surrender possession ATTACHMENT D 17 | Page of the Premises and Improvements to City. In such event, City shall be entitled to recover from Lessee all damages incurred by City by reason of Lessee’s default including but not limited to: the cost of recovering possession of the Premises and Improvements; expenses of reletting, including necessary renovation and alteration of the Premises and Improvements; reasonable attorneys’ fees; the worth at the time of the award of the unpaid rent that had been earned at the time of termination of this Lease and the worth at the time of award of the amount by which the unpaid rent for the balance of the term after the time of such award exceeds the amount of such rental loss for the same period that Lessee proves could be reasonably avoided. 16.2.2 Maintain Lessee’s right to possession, in which case this Lease shall continue in effect whether or not Lessee shall have abandoned the Premises. In such event, City shall be entitled to enforce all of City’s rights and remedies under this Lease, including the right to recover rent and other payments as they become due hereunder. 16.2.3 Pursue any other remedy now or hereafter available to City under the laws or judicial decisions of the State of California. City shall have all remedies provided by law and equity. 16.3 No Relief from Forfeiture After Default. Lessee waives all rights of redemption or relief from forfeiture under California Code of Civil Procedure sections 1174 and 1179, and any other present or future law, in the event Lessee is evicted or City otherwise lawfully takes possession of the Premises by reason of any default or breach of this Lease by Lessee. 16.4 Disposition of Abandoned Personal Property. If the Lessee fails to remove any personal property belonging to Lessee from the Premises after forty-five (45) days of the expiration or termination of this Lease, such property shall at the option of City be deemed to have been transferred to City. City shall have the right to remove and to dispose of such property without liability to Lessee or to any person claiming under Lessee, and the City shall have no need to account for such property. 17. INTEREST ON PAST-DUE OBLIGATIONS. Except as expressly provided herein, any amount due City when not paid when due shall bear interest at the lesser of ten percent (10%) per year or the maximum rate then allowable by law from the date due. 18. HOLDING OVER. If Lessee remains in possession of the Premises or any part thereof after the expiration of the term or option term hereof, such occupancy shall be a tenancy from month to month with all the obligations of this Lease applicable to Lessee and at a monthly rental obligation of ten ATTACHMENT D 18 | Page percent (10%) increase over the Base Rent in effect at the time of expiration. Nothing contained in this Lease shall give to Lessee the right to occupy the Property after the expiration of the term, or upon an earlier termination for breach. 19. CITY’S ACCESS. 19.1 Access for Inspection. City and City’s agents shall have the right to enter the Premises at reasonable times, upon not less than twenty-four (24) hours prior notice to Lessee, for the purpose of inspecting same, showing same to prospective purchasers, lenders or lessees, and making such alterations, repairs, improvements, or additions to the Premises as City may deem necessary. City may at any time place on or about the Premises any ordinary “For Sale” signs and City may at any time during the last one hundred twenty (120) days of the term hereof place on or about the Premises any ordinary “For Lease” signs, all without rebate of rent or liability to Lessee. 19.2 Security Measures. City shall have the right to require a reasonable security system, device, operation, or plan be installed and implemented to protect the Premises or the Improvements. Should City, in its sole discretion, require Lessee to install such a security system, Lessee agrees to bear the sole cost and expense of any security system, device, operation or plan and the installation and implementation thereof. Lessee shall obtain City’s prior approval before installing, implementing or changing any City approved security system, device, operation or plan. 19.3 New Locks. Lessee may install new locks on all exterior doors. Lessee shall advise City of such action and shall provide City with keys to said locks. Lessee shall also deliver to City the old locks with keys. Upon termination, all locks shall become the property of City. 20. INSURANCE. Lessee's responsibility for the Property begins immediately upon delivery and Lessee, at its sole cost and expense, and at no cost to City, shall purchase and maintain in full force and effect during the entire term of this Lease insurance coverage in amounts and in a form acceptable to City as set forth in Exhibit C attached hereto and incorporated herein by reference. Said policies shall be maintained with respect to Lessee’s employees, if any, and all vehicles operated on the Premises. The policies shall include the required endorsements, certificates of insurance and coverage verifications as described in Exhibit D. Lessee also agrees to secure renter's liability insurance. Lessee shall deposit with the City Manager, on or before the effective date of this Lease, certificates of insurance necessary to satisfy City that the insurance provisions of this Lease have been complied with, and to keep such insurance in effect and the certificates therefore on deposit with City during the entire term of this Lease. Should Lessee not provide evidence of such required coverage at least three (3) days prior to the expiration of any existing insurance ATTACHMENT D 19 | Page coverage, City may purchase such insurance, on behalf of and at the expense of Lessee to provide six months of coverage. City shall retain the right at any time to review the coverage, form, and amount of the insurance required hereby. If, in the opinion of the City’s Risk Manager (or comparable official), the insurance provisions in this Lease do not provide adequate protection for City and for members of the public using the Premises, the City Manager may require Lessee to obtain insurance sufficient in coverage, form, and amount to provide adequate protection as determined by the Risk Manager. City's requirements shall be reasonable and shall be designed to assure protection from and against the kind and extent of risk that exists at the time a change in insurance is required. The City Manager shall notify Lessee in writing of changes in the insurance requirements. If Lessee does not deposit copies of acceptable insurance policies with City incorporating such changes within sixty (60) days of receipt of such notice, or in the event Lessee fails to maintain in effect any required insurance coverage, Lessee shall be in default under this lease without further notice to Lessee. Such failure shall constitute a material breach and shall be grounds for immediate termination of this Lease at the option of City. The procuring of such required policy or policies of insurance shall not be construed to limit Lessee’s liability hereunder nor to fulfill the indemnification provision and requirements of this Lease. Notwithstanding the policy or policies of insurance, Lessee shall be obligated for the full and total amount of any damage, injury, or loss caused by or connected with this Lease or with use or occupancy of the Premises, except to the extent caused by the active negligence or willful misconduct of City or City’s officers, agents, contractors, volunteers, and employees. 21. RESERVATION OF AVIGATIONAL EASEMENT. City hereby reserves for the use and benefits of the public, a right of avigation over the Premises for the passage of aircraft landing at, taking off, or operating from the adjacent airport operated by the County of Santa Clara. Lessee releases the City from all liability for noise, vibration, and any other related nuisance. 22. EMINENT DOMAIN. 22.1 If all or any part of the Premises (or the building in which the Premises are located) is condemned by a public entity in the lawful exercise of its power of eminent domain, this Lease shall cease as to the part condemned. The date of such termination shall be the effective date of possession of the whole or part of the Premises by the condemning public entity. 22.2 If only a part is condemned and the condemnation of that part does not substantially impair the capacity of the remainder to be used for the purposes required by this Lease, Lessee shall continue to be bound by the terms, covenants, and conditions of this Lease. However, the then monthly rent shall be reduced in proportion to the diminution in value of the Premises. If ATTACHMENT D 20 | Page the condemnation of a part of the Premises substantially impairs the capacity of the remainder to be used for the purposes required by this Lease, Lessee may: A. Terminate this Lease and thereby be absolved of obligations under this Lease which have not accrued as of the date of possession by the condemning public entity; or B. Continue to occupy the remaining Premises and thereby continue to be bound by the terms, covenants and conditions of this Lease. If Lessee elects to continue in possession of the remainder of the Premises, the monthly rent shall be reduced in proportion to the diminution in value of the Premises. C. Lessee shall provide City with written notice advising City of Lessee’s choice within thirty (30) days of possession of the part condemned by the condemning public entity. 22.3 City shall be entitled to and shall receive all compensation related to the condemnation, except that Lessee shall be entitled to: (a) that portion of the compensation which represents the value for the remainder of the Lease term of any Lessee-constructed improvements taken by the condemning public entity, which amount shall not exceed the actual cost of such improvements reduced in proportion to the relationship of the remaining Lease term to the original Lease term, using a straight line approach; and (b) any amount specifically designated as a moving allowance or as compensation for Lessee’s personal property. Lessee shall have no claim against City for the value of any unexpired term of this Lease. 23. POST-ACQUISITION TENANCY. Except as otherwise set forth in Section 22.3 above, Lessee understands and agrees to waive all claims for relocation assistance and benefits under federal, state or local law. 24. DISPUTE RESOLUTION. 24.1 Unless otherwise mutually agreed to, any controversies between Lessee and City regarding the construction or application of this Lease, and claims arising out of this Lease or its breach shall be submitted to mediation within thirty (30) days of the written request of one Party after the service of that request on the other Party. 24.2 The Parties may agree on one mediator. If they cannot agree on one mediator, the Party demanding mediation shall request the Superior Court of Santa Clara County to appoint a mediator. The mediation meeting shall not exceed one day (eight (8) hours). The Parties may agree to extend the time allowed for mediation under this Lease. 24.3 The costs of mediation shall be borne by the Parties equally. ATTACHMENT D 21 | Page 24.4 Mediation under this section is a condition precedent to filing an action in any court. In the event of litigation arising out of any dispute related to this Lease, the prevailing party shall be entitled to recover their reasonable attorney's fees, expert witness costs and cost of suit. 25. NON-LIABILITY OF OFFICIALS AND EMPLOYEES OF THE CITY. No official or employee of City shall be personally liable for any default or liability under this agreement. 26. NON-DISCRIMINATION 26.1 Non-discrimination in Lease Activities. Lessee agrees that in the performance of this Lease and in connection with all of the activities Lessee conducts on the Premises, it shall not discriminate against any employee or person because of the race, skin color, gender, age, religion, disability, national origin, ancestry, sexual orientation, housing status, marital status, familial status, weight or height of such person. Lessee acknowledges that is familiar with the provisions set forth in Section 2.30.510 of the Palo Alto Municipal Code relating to nondiscrimination in employment and Section 9.73 of the Palo Alto Municipal Code relating to City policy against arbitrary discrimination. 26.2 Human Rights Policy. In connection with all activities that are conducted upon the Premises, Lessee agrees to accept and enforce the statements of policy set forth in Section 9.73.010 which provides: “It is the policy of the City of Palo Alto to affirm, support and protect the human rights of every person within its jurisdiction. These rights include, but are not limited to, equal economic, political, and educational opportunity; equal accommodations in all business establishments in the city; and equal service and protection by all public agencies of the city.” 27. INDEPENDENT CONTRACTOR. It is agreed that Lessee shall act and be an independent contractor and not an agent nor employee of City. 28. CONFLICT OF INTEREST. Lessee shall at all times avoid conflict of interest or appearance of conflict of interest in performance of this agreement. Lessee warrants and covenants that no official or employee of City nor any business entity in which any official or employee of City is interested: (1) has been employed or retained to solicit or aid in the procuring of this agreement; or (2) will be employed in the performance of this agreement without the divulgence of such fact to City. In the event that City determines that the employment of any such official, employee or business entity is not compatible with such official's or employee's duties as an official or employee of City, Lessee upon request of City shall immediately terminate such employment. Violation of ATTACHMENT D 22 | Page this provision constitutes a serious breach of this Lease and City may terminate this Lease as a result of such violation. 29. MEMORANDUM OF LEASE. Following execution of this Lease, either party, at its sole expense, shall be entitled to record a Memorandum of Lease in the official records of Santa Clara County. Upon termination or expiration of this Lease, Lessee shall execute and record a quitclaim deed as to its leasehold interest. 30. ESTOPPEL CERTIFICATE. Lessee shall, from time to time, upon at least thirty (30) days prior written notice from City, execute, acknowledge and deliver to City a statement in writing: (i) certifying this Lease is unmodified and in full force and effect, or, if modified, stating the nature of the modification and certifying that the Lease, as modified, is in full force and effect, and the date to which the rental and other charges, if any, have been paid; and, (ii) acknowledging that there are not to Lessee’s knowledge, any defaults, or stating if any defaults are claimed, any statement may be relied upon by any prospective purchaser or encumbrance of the Property. 31. LIENS. Lessee agrees at its sole cost and expense to keep the Property free and clear of any and all claims, levies, liens, encumbrances or attachments. 32. VACATING. Upon termination of the tenancy, Lessee shall completely vacate the Property, including the removal of any and all of its property. Before departure, Lessee shall return the Premises to a good, clean and sanitary condition, reasonable wear and tear excepted. Lessee shall allow City to inspect the Property and complete a walk-through to verify the condition of the Property and its contents. 33. ABANDONMENT. Lessee's absence from the Property for three (3) consecutive days, without prior notice, during which time rent or other charges are delinquent, shall be deemed abandonment of the Property. Such abandonment will be deemed cause for immediate termination without notice. City shall thereupon be authorized to enter and take possession and to remove and dispose of the property of Lessee or its guests without any liability whatsoever to City. 34. NOTICES. ATTACHMENT D 23 | Page All notices to the Parties shall, unless otherwise requested in writing, be sent to City addressed as follows: City of Palo Alto Real Estate Division Palo Alto Lawn Bowls Club Attention: President & CEO 250 Hamilton Avenue 450 Bryant Street Palo Alto, 94301 Palo Alto, CA 94063 Phone: 650-329-2264 Fax: 650-323-8356 Phone: 650-289-5400 Fax: 650-328-0366 Notices may be served upon Lessee in person, by first class mail, or by certified mail whether or not said mailing is accepted by Lessee. Notices sent via regular mail shall be deemed given 48 hours after the same is addressed as required herein and mailed with postage prepaid. If notice is sent via facsimile, a signed, hard copy of the material shall also be mailed. The workday the facsimile was sent shall control the date notice was deemed given if there is a facsimile machine generated document on the date of transmission. A facsimile transmitted after 1:00 p.m. on a Friday shall be deemed to have been transmitted on the following Monday. These addresses shall be used for service of process. 35. TIME. Time shall be of the essence in this Lease. 36. AMENDMENTS. It is mutually agreed that no oral Leases have been entered into and that no alteration or variation of the terms of this Lease shall be valid unless made in writing and signed by the Parties to this Lease. 37. SIGNING AUTHORITY. If this Lease is not signed by all Lessees named herein, the person actually signing warrants that he/she has the authority to sign for the others. 38. CAPTIONS. The captions of the various sections, paragraphs and subparagraphs of this Lease are for convenience only and shall not be considered or referred to in resolving questions of interpretation. 39. SURRENDER OF LEASE NOT MERGER. ATTACHMENT D 24 | Page The voluntary or other surrender of this lease by Lessee, or a mutual cancellation thereof, shall not work a merger, and shall, at the option of City, terminate all or any existing subleases or subtenancies, or may, at the option of City, operate as an assignment of any and all such subleases or subtenancies. 40. INTEGRATED DOCUMENT. This Lease, including any exhibits attached hereto, embodies the entire agreement between City and Lessee. No other understanding, agreements, conversations or otherwise, with any officer, agent or employee of City prior to execution of this Lease shall affect or modify any of the terms or obligations contained in any documents comprising this Lease. Any such verbal agreement shall be considered as unofficial information and in no way binding upon City. All agreements with City are subject to approval of the City Council before City shall be bound thereby. 41. WAIVER. Waiver by City of one or more conditions of performance or any breach of a condition under this Lease shall not be construed as a waiver of any other condition of performance or subsequent breaches. The subsequent acceptance by a Party of the performance of any obligation or duty by another Party shall not be deemed to be a waiver of any term or condition of this Lease. The exercise of any remedy, right, option or privilege hereunder by City shall not preclude City from exercising the same or any and all other remedies, rights, options and privileges hereunder and City's failure to exercise any remedy, right, option or privilege at law or equity, or otherwise which City may have, shall not be construed as a waiver. 42. INTERPRETATIONS. In construing or interpreting this Lease, the word "or" shall not be construed as exclusive and the word "including" shall not be limiting. The Parties agree that this Lease shall be fairly interpreted in accordance with its terms without any strict construction in favor of or against any other Party. 43. SEVERABILITY CLAUSE. If any provision of this Lease is held to be illegal, invalid or unenforceable in full or in part, for any reason, then such provision shall be modified to the minimum extent necessary to make the provision legal, valid and enforceable, and the other provisions of this Lease shall not be affected thereby. 44. GOVERNING LAW. This Lease shall be governed and construed in accordance with the statutes and laws of the State of California. ATTACHMENT D 25 | Page 45. VENUE. In the event that suit shall be brought by any Party to this Lease, the Parties agree that venue shall be exclusively vested in the state courts of the County of Santa Clara. 46. COMPLIANCE WITH LAWS. The Parties hereto shall comply with all applicable laws, ordinances, codes and regulations of the federal, state and local governments in the performance of their rights, duties and obligations under this Lease. 47. BROKERS. Each party represents that is has not had dealings with any real estate broker, finder, or other person, with respect to this lease in any manner. Each Party shall hold harmless the other party from all damages resulting from any claims that may be asserted against the other party by any broker, finder, or other person with whom the Indemnifying Party has or purportedly has dealt. 48. PARKING City grants to Lessee a nonexclusive right to share the parking spaces with Gamble Garden along Churchill Avenue and Embarcadero Road as practical to the Premises, as specified by City Manager or designee for the accommodations and parking of automobiles by Lessee, any subtenants on the Premise and visitors to Palo Alto Lawn Bowls Club. Lessee agrees to abide by any and all rules and parking regulation of the City for the subject parking area and the manner and mode of Lessee’s use thereof. 49. AMENDMENTS. The parties acknowledge no oral agreements regarding this lease have been entered into by and that no alteration or variation of the provisions shall be valid unless made in writing, and signed by the parties. 50. PRIOR LEASE SUPERSEDED. The prior lease between the City and Palo Alto Lawn Bowls Club dated November 25, 2008 and amendment No1 dated September 9, 2012 thereto is hereby terminated and superseded by this Agreement. 51. PREVAILING WAGE. All contractors and subcontractors performing work on the Project are required by pay general prevailing wages as defined in Subchapter 3, Title 8 of the California Code of Regulations and section 16000 et seq. and Labor Code Section 1773.1. Before entering into a construction contract to perform work on the Project and at all times while performing work on the Project, all contractors and subcontractors must be registered with the California Department of Industrial Relations to perform public work under Labor Code Section 1725.5. Pursuant to Labor Code Section 1773, the general prevailing rate of per diem wages ATTACHMENT D 26 | Page and the general rate for holiday and overtime work in this locality for each craft, classification, or type of worker needed to perform the work for this Project may be obtained at the Purchasing Office of the City of Palo Alto. All contractors and subcontractors for the Project must comply with the provisions of Labor Code Sections 1775, 1776, 1777.5, 1810, and 1813. For purposes of this section only, pursuant to Labor Code Section 1782, a public works contract does not include contracts for projects of twenty-five thousand dollars ($25,000) or less when the project is for construction work, or projects of fifteen thousand dollars ($15,000) or less when the project is for alteration, demolition, repair, or maintenance work. 52. BOOKS & RECORDS. Lessee will permit the City to inspect and audit its books and record at any time during this lease and three years thereafter, pertaining to matters covered by this Lease, including but not limited to revenues collected for club membership and private rentals. Lessee further agrees to maintain and retain such records for at least three (3) years after the expiration or earlier termination of this Lease Agreement. 53. ATTACHMENTS TO LEASE (EXHIBITS). The following exhibits are attached to and made a part of this Agreement: “A” – Parcel Map of Subject Property “B” – Subject Property “C” - Premises “D” – Standard Insurance Requirements IN WITNESS WHEREOF, the parties have executed this Lease the day and year first above written. CITY: LESSEE: CITY OF PALO ALTO (LESSOR) Palo Alto Lawn Bowls Club By: _______________________ By: __________________________ City Manager or Designee Title: ATTEST: ____________________________ Type of Corporation: _________________________ City Clerk APPROVED AS TO FORM: By: ________________________ Senior Asst. City Attorney ATTACHMENT D 27 | Page Exhibit A ATTACHMENT D 28 | Page Exhibit B ATTACHMENT D 29 | Page ATTACHMENT D 30 | Page EXHIBIT D STANDARD INSURANCE REQUIREMENTS Insurance Requirements for Lessee: Lessee shall purchase and maintain the insurance policies set forth below on all of its operations under this Lease at its sole cost and expense. Such policies shall be maintained for the full term of this Lease and the related warranty period (if applicable). For purposes of the insurance policies required under this Lease, the term "City" shall include the duly elected or appointed council members, commissioners, officers, agents, employees and volunteers of the City of Palo Alto, California, individually or collectively. Coverages (RL 28.1A) S Minimum Scope of Insurance Coverage shall be at least as broad as: 1) Insurance Services Office Commercial General Liability coverage (occurrence form CG 0001). 2) Insurance Services Office form number CA 0001 (Ed. 1/87) covering Automobile Liability, code 1 (any auto). 3) Workers' Compensation insurance as required by the State of California and Employer's Liability Insurance (for lessees with employees). 4) Property insurance against all risks of loss to any Lessee improvements or betterments The policy or policies of insurance maintained by Lessee shall provide the following limits and coverages: POLICY MINIMUM LIMITS OF LIABILITY (1) Commercial General Liability $1,000,000 per each occurrence for bodily injury, personal injury and property damage (2) Automobile Liability $ 1,000,000 Combined Single Limit Including Owned, Hired and Non-Owned Automobiles ATTACHMENT D 31 | Page (3) Workers’ Compensation Statutory Employers Liability $1,000,000 per accident for bodily injury or disease (4) Lessee’s Property Insurance Lessee shall procure and maintain property insurance coverage for: (a) all office furniture, trade fixture, office equipment, merchandise, and all other items of Lessee’s property in, on, at, or about the Premises and the building, include property installed by, for, or at the expense of Lessee; (b) all other improvements, betterments, alterations, and additions to the premises. Lessee’s property insurance must fulfill the following requirements: (a) it must be written on the broadest available “all risk” policy form or an equivalent form acceptable City of Palo Alto, including earthquake sprinkler leakage. Up to the limit of $100,000. (b) for no less than ninety percent (90%) of the full replacement cost (new without deduction for depreciation) of the covered items and property; and (c) the amounts of coverage must meet any coinsurance requirements of the policy or policies. (RL 28.2) Deductibles and Self-Insured Retentions Any deductibles or self-insured retentions must be declared to and approved by the City. At the option of the City either: the insurer shall reduce or eliminate such deductibles or self- insured retentions as respects the City, its officers, officials, employees and volunteers; or the Lessee shall procure a bond guaranteeing payment of losses and related investigations, claim administration and defense expenses. Insurance shall be in full force and effect commencing on the first day of the term of this Lease. Each insurance policy required by this Lease shall: 1. Be endorsed to state that coverage shall not be suspended, voided, canceled by either party, reduced in coverage or in limits except after thirty (30) days' prior written notice by certified mail, return receipt requested, has been given to the City. ATTACHMENT D 32 | Page 2. Include a waiver of all rights of subrogation against the City and the members of the City Council and elective or appointive officers or employees, and each party shall indemnify the other against any loss or expense including reasonable attorney fees, resulting from the failure to obtain such waiver. 3. Name the City of Palo Alto as a loss payee on the property policy. 4. Provide that the City, its officers, officials, employees, agents and volunteers are to be covered as insureds as respects: liability arising out of activities performed by or on behalf of the Lessee; products and completed operations of the Lessee; premises owned, occupied or used by the Lessee; or automobiles owned, leased, hired or borrowed by the Lessee. The coverage shall contain no special limitations on the scope of protection afforded to the City, its officers, officials, employees, agents or volunteers. 5. Provide that for any claims related to this Lease, the Lessee's insurance coverage shall be primary insurance as respects the City, its officers, officials, employees, agents and volunteers. Any insurance or self-insurance maintained by the City, its officers, officials, employees, agents or volunteers shall be excess of the Lessee's insurance and shall not contribute with it. 6. Provide that any failure to comply with reporting or other provisions of the policies including breaches of warranties shall not affect coverage provided to the City, its officers, officials, employees, agents or volunteers. 7. Provide that Lessee's insurance shall apply separately to each insured against whom claim is made or suit is brought, except with respect to the limits of the insurer's liability. 8. Lessee agrees to promptly pay to City as Additional Rent, upon demand, the amount of any increase in the rate of insurance on the Premises or on any other part of Building that results by reason of Lessee’s act(s) or Lessee’s permitting certain activities to take place. Acceptability of Insurers All insurance policies shall be issued by California-admitted carriers having current A.M. Best's ratings of no lower than A-:VII. City of Palo Alto (ID # 6638) City Council Staff Report Report Type: Action Items Meeting Date: 3/28/2016 City of Palo Alto Page 1 Summary Title: Cost of Services Study Title: PUBLIC HEARING: Review and Adoption of a Resolution Increasing and Adjusting Department of Planning & Community Environment User Fees Based on a Cost of Services Study and Recommendations of the Finance Committee From: City Manager Lead Department: Planning and Community Environment Recommendation Staff recommends that the City Council adopt the resolution included as Attachment A approving the specified changes to Planning & Community Environment fees based on the Cost of Services Study (Attachment B) and the recommendation of the Finance Committee (Attachment C). Executive Summary The Department of Planning and Community Environment undertook a Cost of Services Study in 2015 to evaluate fees charged to developers and property owners seeking discretionary planning entitlements. These fees had not been reevaluated for many years, and the resulting recommendations -- if adopted -- would result in increased fee revenues and lower general fund subsidies for application processing in the Department consistent with the Cost Recovery Policy adopted by the City Council in May 2015. The proposal would change the fee schedule by eliminating some fees, consolidating others, and by adjusting fees that are collected as flat fees and fees that are billed on an hourly basis. The City Council has the discretion to charge less than the amount required for full cost recovery, but not more. The Finance Committee reviewed an initial draft of the fee schedule changes, and the proposed resolution has been crafted to incorporate the Committee’s recommendation. Background Fees for services (sometimes called user fees) are charged to recover some or all costs incurred in providing a special service from which one or more individuals obtain a special benefit. City of Palo Alto Page 2 Public agencies can establish fees to recover up to 100% of the estimated reasonable cost of providing such service. Any amount of a particular fee that is more than 100% of the cost is considered a special tax and, by law, requires approval by two-thirds of the electorate. Fines, rents, and certain other charges are not considered user fees and are not required to be based on actual costs. These types of charges are more typically governed by policy based on market rates, reasonableness, or public goals. The Department of Planning & Community Environment charges user fees to applicants requesting planning entitlements and related services. Planning entitlements include discretionary actions such as Architectural Reviews, Individual Reviews, Site and Design, Conditional Use Permits, Variances, Zoning and Comp Plan Amendments. Planning fees do not include building permits or permit fees for property maintenance, such as roof replacements or water heater replacements. Those activities fall within the Development Services department. While Planning fees have been annually adjusted across the board based on inflation factors, it’s been at least five years since they have been subject to a full evaluation based on the cost of providing services. Council adopted a User Fee Cost Recovery Level Policy (Staff Report 5735) on May 18, 2015 that suggests high, medium, and low levels of cost recovery based on policy considerations, such as the degree of public versus private benefit associated with the activity for which a fee is established. As shown below, services that are regulatory in nature (e.g. review for compliance with zoning regulations) and for which individual users receive most or all of the benefit (e.g. developers requesting approval of a planning approval), generally fall in the “high” cost recovery level group. Table 1. Cost Recovery Policy Summary Cost Recovery Level Group Cost Recovery Percentage Range Policy Considerations Low 0% - 30%  No intended relationship between the amount paid and the benefit received  Fee collection would not be cost effective and/or would discourage compliance with regulatory requirements  No intent to limit the use of the service  Public at large benefits even if they are not the direct users of the service  Affordability of service to low-income residents Medium 30.1% - 70%  Services which promote healthy activities and educational enrichment to the community  Services having factors associated with the low and high cost recovery levels High 70.1% - 100%  Individual users or participants receive most or all of the benefit of the service City of Palo Alto Page 3 Cost Recovery Level Group Cost Recovery Percentage Range Policy Considerations  Other private or public sector alternatives provide the service  The use of the service is specifically discouraged  The service is regulatory in nature Source: Palo Alto City Council Staff Report No. 5735, May 18, 2015 The cost of services study report, included as Attachment B, identifies the cost of providing planning services for which the City charges fees. Under State law, fees cannot be set above the cost of service for one fee to compensate for a lower cost recovery decision for another fee (sometimes referred to as cross-subsidization). Thus, while Council is not bound to set fees to match the cost of providing services, fees cannot be set that exceed the cost of delivering the service in question. As described in the adopted Cost Recovery Policy cited above, Council has the discretion to determine the level of cost recovery in which each of these fees fall and traditionally assigns lower levels of cost recovery to some fees, like appeal fees, where a higher cost might limit the use of appeals. The City retained the services of Capital Accounting Partners (CAP) to assist in the preparation of the cost of services study for planning fees in the Planning and Community Environment Department (PCE) and a limited number of Development Services (DS) fees. As the study progressed, the contract was amended to add Development Services fire prevention fees. These fees are not part of this report; instead they will be part of the Development Services study. Development Services is examining all their fees under a separate study, now underway. The operating budget for the Planning and Community Environment Department relies on two major sources: the General Fund and fees charged for services. The Department’s Fiscal Year 2016 Adopted Operating Budget is $8.9 million, and approximately $1.2 million in revenue is generated from user fees. Other sources of revenue account for approximately $0.6 million, so the department’s General Fund support currently comprises approximately $7.1 million, or approximately 80 percent of the Department’s budget. Chart 1 City of Palo Alto Page 4 Source: Planning & Community Environment Adopted Operating Budget, FY2016 It is important to note that the Department has many activities that are not related to fees, including many activities in the transportation, long range planning, and code enforcement divisions of the department. This means that a high level of General Fund support is not surprising; however the consultant’s analysis has confirmed that the current level of General Fund subsidy of fee-related services is not consistent with the adopted cost recovery policy and fee adjustments are warranted. When fees for services are below 100% cost recovery, a subsidy is being provided to fee payers, because the annual revenue collected for all fee-related services is less than the estimated citywide costs of providing those services. Discussion The methodology used in CAP’s study is fairly standard for analyzing the cost of providing fee- related services: 1. The costs of services that are not fee-related, including transportation and parking fees, are not included in the scope of this particular study. Most of those are set by City Council as a matter of policy, or by a State agency. 2. CAP identified all direct staff time spent on the fee-related activity or service. Direct staff costs are incurred by employees who perform tasks directly related to the service, for example the cost of staff time to review an Architectural Review application. CAP conducted a series of meetings with staff from PCE, DS, and the City Attorney’s office to identify every employee, by classification, who performs work directly in support of a fee related service. Through the meetings with staff, CAP gathered estimates of how much time each of those employees spends, on average, working on that particular service or program. 3. CAP calculated direct cost of the staff time for each fee using productive hourly rates. A full-time employee typically has 2,080 paid hours per year. In keeping with standard methodologies, CAP reduced that number to account for non-productive hours (sick leave, vacation, holidays, training, meetings, participation in non-core services, etc.). CAP calculated the productive hourly rate for each position, by person, based on the salary and benefit information provided by the City. Their report indicates that annual productive hours range from 1,400 to 1,600. 4. CAP identified other operational costs that are also considered direct costs. For instance, PCE relies heavily upon on-call consultants to provide expertise and address increased demand. These costs are directly attributable to certain services and are included in direct cost computations. 5. CAP then determined indirect (or overhead) costs. These costs include citywide and department overhead. Citywide overhead costs are allocated to each operating City of Palo Alto Page 5 department through the Cost Plan Allocation. Allocated costs include expenses incurred by central services departments; in other words, departments in the City that provide services to all departments. These include the offices of the City Manager, City Attorney, City Auditor, City Clerk, Administrative Services, People Strategy and Operations, Information Technology, and Facilities Maintenance. Department overhead costs include managers, supervisors and support staff as well as other operational costs that are incurred for a common purpose. For instance, customer service, reception, staff report preparation, support of the Architectural Review Board, Historic Resources Board, Planning and Transportation Commission, and overall management are part of these costs. They are not assigned to a particular service or program. Once these costs are determined, they are proportionally allocated to fees. Fees for services are structured in two ways: flat fees and time and materials fees, for which the Department collects and charges against deposits. Flat fees apply to those activities for which an average amount of processing time and effort can reasonably be determined. Deposits are taken when staff time to provide the service is expected to vary widely. Applications such as Site and Design or major projects requiring Architectural Review Board involvement may require 50 hours of work or up to 500 hours, depending on the project. In these cases, a deposit amount set at the minimum needed to complete staff work is identified in the Municipal Fee Schedule. Once a deposit is received, staff track the amount of effort involved in providing service and charges are made against the deposit using the appropriate hourly billing rate(s), including overhead. The applicant is kept informed of all charges against the deposit and if the deposit is exhausted and additional work is still required, the applicant is billed for additional charges. Similarly, the applicant is refunded if costs total less than the deposited amount. Staff involved in these activities generally span several departments. If consultants are required, consultant fees are also charged to the applicant. Council may want to assign lower levels of cost recovery to some or all fees. Council may wish to consider fees for major development projects involving the Architectural Review Board Council at a very high level of cost recovery whereas they may prefer to assign a lower level of cost recover to activities like Individual Review. As an example, the current fee for a Use Permit for a childcare facility is set at a significantly lower rate than the fee for a Regular Use Permit (about 4% of regular permit fee), based upon a past policy decision. Recommended Adjustments to Fees The Fiscal Year 2016 Municipal Fee Schedule includes 89 Planning fees for services. Of these, 18 are deposit-based fees and 71 are flat fees. In the attached recommendations, some fee structures have been changed to make them simpler, for better accuracy, or to make it easier to recapture full costs. Specifically: - 32 existing fees are recommended for deletion because they can be combined with another fee or are no longer appropriate. - 20 new fees are recommended to be established (16 flat fees, 4 deposit-based fee) City of Palo Alto Page 6 - Hourly billing rates which are charged against deposits are recommended to be increased an average of 57 percent to better capture direct and indirect costs. Although the attached report identifies the cost of delivering services, whether to set fees to full cost recovery and whether to adjust to full cost recovery immediately or phase in the changes are Council decisions. Staff’s recommendation to the Finance Committee was to increase all fees in two phases: the first phase would be effective in Fiscal Year 2017, updating fees to 50 percent of the increase toward full cost recovery; the second phase, effective Fiscal Year 2018 would increase fees to full cost recovery. The only exceptions were wireless fees, appeals fees, Child Care Facility Use fees, and fee reductions, wherein the final fees would be effective in Fiscal Year 2017. The Finance Committee recommended increasing deposit-based fees and staff hourly rates to 100 percent cost recovery effective Fiscal Year 2017. These fees generally apply to large, complex projects. The Committee also supported staff’s recommendation that fixed, flat fees be adjusted in two phases, as shown in Attachment A1. The first phase would close 50 percent of the gap between current fees and full cost recovery, beginning Fiscal Year 2017 (FY 17). The second phase would bring the fee to full cost recovery in Fiscal Year 2018 (FY 18), assuming no changes outside the standard cost of living increases to provide services in the interim. Phasing-in fee adjustments is a common practice, and staff feels it is appropriate here because of the magnitude of some of the changes proposed. Recommended fee adjustments include  Changes to legal fees: There are currently 23 legal review fees in the Planning Department section of the Fiscal Year 2016 Municipal Fee Schedule. Under this study, when only a few hours of legal time is involved in providing the service, that time has been incorporated in the planning fee and the separate legal fee has been eliminated. In coordination with the City Attorney’s office, five new legal fees are recommended to be established and 22 existing legal review fees are recommended to be deleted, since they have now been included in the appropriate planning fee.  Contract administration: Assess a 25 percent charge for the City to administer and manage cost recovery contracts for projects handled by consultants. In many instances, the City charges applicants for consultant time dedicated to a particular project. The costs of these contracts are deducted from deposits paid in accordance with the Municipal Fee Schedule. Customers are invoiced if contract costs exceed the deposit. This study institutes new fees which can be applied to recoup the cost of City overhead for contracts administration and project management given that even the best consultant work product needs to be reviewed by staff.  Tiered wireless fees: to reflect the full range of effort involved in wireless facilities. 1 For the three new tiers of wireless fees, the rates will not be phased. Also, where fees are decreasing, the new fee will be instituted without phasing. City of Palo Alto Page 7  Additional public noticing: This new fee covers the cost of noticing beyond a 600 foot radius and additional rounds of noticing.  A cost recoverable research fee which will be charged at the level of the staff position conducting the research.  A planning compliance fee for ensuring compliance with entitlements and zoning that go beyond the building permit review.  A full cost-recovery pre-screening fee: for applicants proposing rezoning, zoning text amendments, development agreements, Comp Plan amendments, or specific plans.  a fee, borne by the project applicant, to recover the full cost of appeals.  adjustment of hourly rates charged against deposits to include updated overhead (Attachment B). An example of how these rates compare to other cities is shown in Table 2, below. (It should be noted that only Beverly Hills reported recently completing a fee study to set or update fees.) Rates charged to public Sources: Contact with individual cities via email or phone, December, 2015 City Hourly top step Annual maximum With Performance Incentive: Hourly max * With Performance Incentive: Annual max * Hourly top step Annual maximum Palo Alto (proposed) 53.33$ 110,926.40$ N/A N/A $125.17/hr. Sr. Planner (current); $195/ hr. Sr. Planner (proposed) San Mateo +59.13$ 122,994.84$ 66.69$ 138,726.72$ $149/hr. regardless of position Los Gatos 55.87$ 116,209.60$ N/A N/A Not available Saratoga *58.01$ 120,660.80$ 63.96$ 133,036.80$ N/A N/A $112.04 Mountain View 64.13$ 133,390.40$ 76.22$ 158,537.60$ $181/hr Principal Planner; $138/hr. Sr. Planner Redwood City 58.71$ 122,116.80$ 62.71$ 130,436.80$ $143.15/hr. Principal Planner; $123.30/hr. Sr. Planner Beverly Hills 51.13$ 106,356.00$ 58.78$ 122,256.00$ $482/hr. Principal Planner; $383/hr. Sr. Planner * Saratoga has Performance Incentive Compensation for those at top step for 5 years with a cumulative performance rating of satisfactory + San Mateo charges a flat $149 for all planning positions. Senior Planner Salaries- September, 2015 Sources: City websites Principal Planner Salaries- September, 2015 Souces: City websites Table 2, Hourly Charges for Comparison Cities Finance Committee Recommendation The Finance Committee reviewed the Cost of Service study on February 2, 2016. The Committee recommended implementing the new fees but requested an estimate of the impact of fee increases on residential and non-residential development. Since many projects are mixed use, a precise estimate would require researching every project to determine impact. A City of Palo Alto Page 8 very rough estimate of the impact to residential development can be calculated by considering the increases to Individual Reviews (review of two story homes). Individual Review fees are the largest fees applying to residential development only. They apply to the addition, replacement, or construction of a two story residence. Proposed increases to Individual Reviews are estimated to result in increased revenue of $133,000 in FY 17 and an additional $120,000 in FY18. This equates to 22% of the projected total revenue increase in FY17 and 25% of the projected total revenue increase in FY18. Even if the application fees attributable to the residential component of mixed-use projects were added to these totals, substantially more of the fee increases would derive from non-residential development than residential development. This could change, of course, if the City starts to see more residential development and less non-residential development over time. Adjusting fees as recommended will result in some significant fee increases. Staff has provided a draft of proposed fee and hourly rate changes to members of the Development Customer Advisory Group (DCAG) for their input. If all fixed fees and deposits are increased to bring them to a 100 percent cost recovery level, the estimated revenue increase is $1 million: $.6 million in Fiscal Year 2017 and the full $1 million in Fiscal Year 2018. Chart 2, below, displays the impact on the General Fund subsidy if Council approves the fee changes in the attached study. Recommendations (shown as Fee Study revenue increases in the table below) will reduce the General Fund support in the department budget from 80 percent to 69 percent. As noted earlier, the Department has many activities that are not related to fees, including many activities in the transportation, long range planning, and code enforcement divisions of the department, and the suggested level of General Fund reflects this scope of activities. Chart 2 City of Palo Alto Page 9 Source: Planning & Community Environment, January 2016 Possible Adjustments Below Cost Recovery Staff recommends that Council identify any services to be subsidized and the level of subsidization. Among the fees staff recommends subsidizing are appeal fees and use permit fees for day care facilities. (Since the day care facility use permit fee has been subsidized in the past, the proposed final fee shown equals 50 percent of the cost of service.) The Council may also wish to consider subsidizing Individual Review (IR) fees, although the staff’s recommendation is based on the full cost of cost of services. Subsidizing these fees (perhaps for smaller homes) could be justified by the scale of the projects and the public benefit of the IR process, which ensures neighborhood compatibility of new single family homes. Timeline & Next Steps Staff recommends the increase of fees in two phases:  Phase 1 – Adjust flat fees by 50 percent of suggested increases concurrent with the FY17 budget. Adjust deposit-based fees by 100 percent of suggested increases concurrent with the FY17 budget. Estimated revenue impact = $.6 million or a 50 percent increase in fee based revenue.  Phase 2 – Adjust flat fees by the remaining 50 percent concurrent with the FY18 budget. Estimated revenue impact = $1 million ($.6 million in FY 17 and an additional $.4 million effective FY 18), or an 82 percent increase in fee based revenue. Based on State law, fee adjustments can become effective no less than 60 days after Council’s adoption of the resolution, which is proposing implementation in phases as noted above. Following adoption and implementation of the new fees, Staff will review procedures related to billing for cost recovery projects, with the goal of identifying necessary improvements and resources to achieve a level of cost recovery that is consistent with the City’s adopted policy. Resource Impact If Council approves the proposed fee adjustments, the result would be to eliminate the General Fund subsidy for processing of planning applications over a two year period, resulting in an estimated increase in revenue of $1 million in FY18. Attachments:  Attachment A: Resolution Amending Municipal Fee Schedule (PDF)  Attachment B: City of Palo Alto User Fee Study Report 1-20-16 (PDF)  Attachment C: February 2, 2016 Finance Committee Minutes (DOC) Not Yet Approved 160216 jb 0131507 1 February 2016 Resolution No. ____ Resolution of the Council of the City of Palo Alto Amending the Fiscal Year 2017 Municipal Fee Schedule for Cost of Services Fee Increases and Hourly Adjustments For Planning Entitlements and Related Services R E C I T A L S A. The Department of Planning & Community Environment charges user fees to applicants requesting planning entitlements and related services. B. While these fees have been annually adjusted across the board based on inflation factors, it has been at least five years since they have been subject to a full evaluation based on the cost of providing services. C. In 2015, the City performed a Cost of Service Study to evaluate whether the full cost of providing services. As a result of the Cost of Service Study the City desires to modify some of the PCE fees. D. In accordance with the provisions of Chapter 8 of Division 1, of Title 7, commencing with Section 66016 of the Government Code, as applicable, the Council did on March 28, 2016, hold a public hearing on the proposed amendments to the Municipal Fee Schedule, after publication of notice and after availability of the data supporting the amendments was made available to the public at least 10 days prior to the hearing. NOW, THEREFORE, the Council of the City of Palo Alto RESOLVES as follows: SECTION 1. The Council of the City of Palo Alto adopts the changes to the Municipal Fee Schedule as set forth in Exhibit "A" and “B” and incorporated here by reference. When effective, such fees shall supersede any prior inconsistent fees charged by the Planning and Community Environment Department. SECTION 2. The amount of the new or increased fees and charges is no more than necessary to cover the reasonable costs of the governmental activity, and the manner in which those costs are allocated to a payer bears a fair and reasonable relationship to the payer's burden on, or benefits received from, the governmental activity. SECTION 3. Fees in the Municipal Fee Schedule are for government services provided directly to the payor that are not provided to those not charged. The amount of this fee does not exceed the reasonable costs to the City of providing the services. Consequently, pursuant to Art. XIII C, Section l(e)(2), such fees are not a tax. SECTION 4. Effective Date. Pursuant to Government Code Section 66017, all Planning Department fees relating to a "development project" as defined in Government Code Section 66000 shall become effective no sooner than sixty (60) days from the date of adoption. The fee Not Yet Approved 160216 jb 0131507 2 February 2016 increases proposed for FY 2017 described in Exhibit A and the changes to the hourly billing rates described in Exhibit B shall go into effect on July 1, 2016. The fees increases proposed for FY 2018 described in Exhibit A shall go into effect on July 1, 2017. SECTION 5. CEQA. The Council of the City of Palo Alto hereby finds that this is not a project under the California Environmental Quality Act and, therefore, no environmental impact assessment is necessary. INTRODUCED and PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: ____________________________ ____________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: ____________________________ ____________________________ Senior Asst. City Attorney City Manager ____________________________ Director of Planning and Community Environment ____________________________ Director of Administrative Services *Reflects total estimated cost of providing the service uness noted with a + Fee Title Current Fee Fee Proposed for FY 2017 *Fee Proposed for FY 2018 * Architectural ReviewArchitectural Review Major Project Note: 100 percent of processing costs will be recovered plus any Environmental Impact Assessment and any other entitlements necessary to complete the project, whether indicated as 100 percent cost recovery in this schedule or not. $3,846 initial deposit plus Legal Review fees and applicable Other Application fees $10,264 initial deposit plus legal review fees and applicable Other Application fees --- Architectural Review - Minor Project (ARB Review)$3,000 plus applicable Other Application fees $4,982 plus applicable Other Application fees + $6,860 plus applicable Other Application fees Architectural Review - Minor Project (Staff Review)$1,500 plus applicable Other Application fees $2,112 plus applicable Other Application fees + $2,672 plus applicable Other Application fees Design Enhancement Exception $1,642 plus applicable Other Application fees $3,623 plus applicable Other Application fees + $5,544 plus applicable Other Application fees Preliminary Review $1,247 plus applicable Other Application fees $3,371 plus applicable Other Application fees + $5,451 plus applicable Other Application fees Signs - (ARB Review)$996 plus applicable Other Application fees $2,261 plus applicable Other Application fees + $3,491 plus applicable Other Application fees Signs - (Exceptions)$1,500 plus applicable Other Application fees $2,653 plus applicable Other Application fees + $3,753 plus applicable Other Application fees Signs Erected Without Approval $1,992 plus applicable Other Application fees DELETE - this is a code enforcement penalty DELETE - this is a code enforcement penaltySigns, Minor Facade Changes, Landscaping, Accessory Structures, or Similar Minor Changes to a Building Exterior - (Staff Review)/Master sign program $372 plus applicable Other Application fees $611 plus any applicable Other Application fees + $835 plus any applicable Other Application fees Temporary Sign Permit $63 per 15 days plus applicable Other Application fees $110 per 15 days plus any applicable Other Application fees + $154 per 15 days plus any applicable Other Application fees Comprehensive Plan Change Comprehensive Plan Change Note: 100 percent of processing costs will be recovered plus any Environmental Impact Assessment and any other entitlements necessary to complete the project, whether indicated as 100 percent cost recovery in this schedule or not $6,118 initial deposit plus Legal Review fees $6,118 initial deposit --- Comprehensive Plan Maintenance Fee Note: Collected at Building Permit issuance. $0.55 per $1,000 of construction valuation $0.55 per $1,000 of construction valuation --- Planning and Community Environment Exhibit A * Reflects total estimated cost of providing the service uness noted with a + Fee Title Current Fee Fee Proposed for FY 2017 *Fee Proposed for FY 2018 * Development Agreement Development Agreement Note: 100 percent of processing costs will be recovered plus any Environmental Impact Assessment and any other entitlements necessary to complete the project, whether indicated as 100 percent cost recovery in this schedule or not. $7,058 initial deposit plus Legal Review fees and applicable Other Application fees $7,058 initial deposit plus Legal Review fees and applicable Other Application fees --- Development Agreement - Annual Review Note: 100 percent of processing costs will be recovered. $2,471 initial deposit plus Legal Review fees and applicable Other Application fees $2,471 initial deposit plus Legal Review fees and applicable Other Application fees --- Development Projects Preliminary Review Development Projects - Prescreening (PTC & CC Review) Note: 100 percent of processing costs will be recovered plus any Environmental Impact Assessment and any other entitlements necessary to complete the project, whether indicated as 100 percent cost recovery in this schedule or not. $3,671 initial deposit plus Legal Review fees and applicable Other Application fees $3,671 initial deposit plus Legal Review fees and applicable Other Application fees --- Director's Approval Home Improvement Exception $996 plus applicable Other Application fees $2,070 +$3,109 Neighborhood Preservation Zone Exceptions $2,304 plus applicable Other Application fees plus Environmental Impact Assessment fees $3,861 +$5,337 Director's hearing requested - per hearing NEW $1,186 +$2,372 Documents and Photocopies Administrative Extensions and Zoning Letters $168 per hour/one-hour minimum Applicable hourly rate/1 hr. mininum --- Comprehensive Plan $90 plus $4 if mailed $90 plus $4 if mailed --- Copy from Optical Disk $28 minimum plus $0.50 per page $28 minimum plus $0.50 per page --- Tree Manual or Other Bounded Documents $33 plus $4 if mailed $33 plus $4 if mailed --- Zoning Map Booklet $98 plus $4 if mailed $98 plus $4 if mailed --- Property Research requiring more than 30 minutes NEW Applicable hourly rate/1 hr. mininum --- Environmental Impact Assessment CEQA Categorical Exemption $336 each $400 +$451 Environmental Impact Assessment - Mitigated Negative Declaration $3,428 plus Legal Review fees Initial deposit of 100 percent of estimated costs due upon application plus 25% for contract administration and applicable Legal Review and Other Application fees Environmental Impact Assessment - Negative Declaration $1,801 plus applicable Other Application fees Delete. Incorporated into Environmental Impact Negative Declaration fee * Reflects total estimated cost of providing the service uness noted with a + Fee Title Current Fee Fee Proposed for FY 2017 *Fee Proposed for FY 2018 * Environmental Document (Consultant Prepared) Note: If estimated costs eceed $100,000, alternative deposit and payment schedule arrangements may be made at the discretion of the Director of Planning and Community Environment. 100 percent of processing costs will be recovered. Initial deposit of 100 percent of estimated costs due upon application plus Legal Review fees and applicable Other Application fees Initial deposit of 100 percent of estimated costs due upon application plus 25% for contract administration and applicable Legal Review and Other Application fees Environmental Document: Note: 100 percent of processing costs will be recovered plus any other entitlements necessary to complete the project, whether indicated as 100 percent cost recovery in this schedule or not. NEW $5,000 initial deposit plus any applicable Other Application fees.--- Mitigation Monitoring - Environmental Impact Report Note: 100 percent of processing costs will be recovered, including any charges for specialized consultants. $3,671 initial deposit plus applicable Other Application fees $3,671 initial deposit plus applicable Legal Review and Other Application fees --- Mitigation Monitoring - Mitigated Negative Declaration Note: 100 percent of processing costs will be recovered, including any charges for specialized consultants. $1,224 initial deposit plus applicable Other Application fees $1,224 initial deposit plus applicable Legal Review and Other Application fees --- Historic Resource Demolition Application for Historic Buildings $2,472 plus applicable Other Application fees $1,001 --- Historic Resource Review - Major Project $3,241 plus applicable Other Application fees $1,502 plus any applicable Other Application fees --- Historic Resource Review - Minor Project (Staff Review) $684 plus applicable Other Application fees $855 plus any applicable Other Application fees + $1,001 plus any applicable Other Application fees Historic Resource Review of Individual Review Application $1,986 plus Individual Review fees and applicable Other Application fees $250 plus Individual Review fees and applicable Other Application fees --- Mills Act Contract - Establish or Withdraw Note: 100 percent of processing and legal costs will be recovered. $1,835 initial deposit plus Legal Review fees and applicable Other Application fees $1,835 initial deposit plus any applicable Other Application fees --- Transfer of Development Rights Projects Note: 100 percent of processing costs will be recovered plus any Environmental Impact Assessment and any other entitlements necessary to complete the project, whether indicated as 100 percent cost recovery in this schedule or not. $611 initial deposit plus Legal Review fees $611 initial deposit plus any applicable Other Application fees --- Williamson Act Contract - Establish or Withdraw Note: 100 percent of processing and legal costs will be recovered plus any Environmental Impact Assessment and any other entitlements necessary to complete the project, whether indicated as 100 percent cost recovery in this schedule or not. $1,929 initial deposit plus Legal Review fees and applicable Other Application fees $1,929 initial deposit plus any applicable Other Application fees --- * Reflects total estimated cost of providing the service uness noted with a + Fee Title Current Fee Fee Proposed for FY 2017 *Fee Proposed for FY 2018 * Individual Review Expansion of Existing Two-Story greater than 150 sq. ft. $2,878 plus applicable Other Application fees and any other entitlements necessary to complete the project, including historic review $4,310 plus applicable Other Application fees and any other entitlements necessary to complete the project, including historic review + $5,641 plus applicable Other Application fees and any other entitlements necessary to complete the project, including historic review Individual Review - Minor Revisions to Approved Projects $1,652 plus cost of notices $2,320 plus cost of notices +$2,931 plust cost of notices New Two-Story Addition or New Two-Story Home $4,166 plus applicable Other Application fees and any other entitlements necessary to complete the project, including historic review $5,679 plus applicable Other Application fees and any other entitlements necessary to complete the project, including historic review + $7,046 plus applicable Other Application fees and any other entitlements necessary to complete the project, including historic review Preliminary Individual Review with Architect $112 $245 +$375 Legal Review Fees Legal Review for Additional hearings Note: Legal review fees cover up to 3 public hearings. Additional hearings are charged at 1/3 of the applicable fee. NEW Additional hearings are charged at 1/3 of the applicable fee.--- Request for Hearing by Planning & Transportation Commission $280 $280 +--- Appeal costs exceeding appeals filing fee Note: Appeal costs exceeding appeals filing fee will be fully cost recovered from project applicant. NEW $3,000 initial deposit plus any applicable Other Application fees.--- Legal Review - Appeal to City Council NEW $3,457 +$6,914 Legal Review ARB Major NEW $2,606 +$5,211 Legal Review (legislative review, zone change, plan amendment, etc.) NEW $5,003 +$10,006 Legal Review Complex Projects over 50,000 sq. ft. Note: 100 percent of legal services and costs incurred relating to complex matters requiring specialized legal services or documents will be recovered. $1,680 initial deposit Delete. Incorporated in the specific Planning fee for the service.--- Legal Review Comprehensive Plan Change $1,121 Delete. Incorporated into Comprehensive Plan Change fee.--- Legal Review Demolition Application for Historic Buildings $1,680 Delete. Incorporated in Demolition Application for Historic Buildings fee.--- Legal Review Development Agreement Note: 100 percent of legal services and costs incurred will be recovered. $5,603 initial deposit Delete. Incorporated in Development Agreement fee --- Legal Review Development Agreement - Annual Review $840 Delete. Incorporated into Development Agreement - Annual Review fee.--- Legal Review Development Projects Preliminary Review $840 Delete. Incorporated into Development Project Preliminary Review fee.--- Legal Review Environmental NEW $4,720 +$9,439 * Reflects total estimated cost of providing the service uness noted with a + Fee Title Current Fee Fee Proposed for FY 2017 *Fee Proposed for FY 2018 * Legal Review Environmental Impact Report $2,241 Delete. Incorporated into Environmental Document fee.--- Legal Review Historic Resource - Major Project $1,121 Delete. Incorporated into Historic Resource Review - Major Project fee.--- Legal Review Major Subdivision - Tentative Map $2,241 Delete. Incorporated into Major Subdivision - Tentative Map fee.--- Legal Review Mills Act Contract - Establish or Withdraw $2,241 Delete. Incorporated in Mill Act Contract - Establish or Withdraw fee.--- Legal Review Minor Subdivision - Preliminary Parcel Map $560 Delete. Incorporated in Preliminary Parcel Map fees.--- Legal Review Minor Subdivision - Preliminary Parcel Map with Exception $1,121 Delete. Incorporated into Preliminary Parcel Map with Exception fee.--- Legal Review Mitigation Monitoring Report $1,121 $500 --- Legal Review Mitigation Monitoring - Mitigated Negative Declaration $560 Delete. Incorporated into Mitigation Monitoring Negative Declaration fee.--- Legal Review Non-conforming Use Exception $1,121 Delete. Incorporated into Use Permit fees.--- Legal Review Planned Community Zone Change $2,241 Delete. Incorporated in Planned Community Zone Change fee.--- Legal Review Planned Community Zone Change - Minor Change $840 Delete. Incorporated in Planned Community Zone Change - Minor Change fee. --- Legal Review Site and Design Fee $1,401 Delete. Incorporated into Site and Design fee.--- Legal Review Variance - Commercial & Manufacturing $840 Delete. Incorporated into other Variance fees.--- Legal Review Williamson Act Contract - Establish or Withdraw $1,680 Delete. Incorporated into Williamson Act Contract - Establish or Withdraw fee.--- Legal Review Zone Change - Regular $1,401 Delete. Incorporated into Zone Change - Regular fee.--- Legal Review Transfer of Development Rights Projects $1,121 Delete. Incorporated into Transfer of Development Rights fee.--- * Reflects total estimated cost of providing the service uness noted with a + Fee Title Current Fee Fee Proposed for FY 2017 *Fee Proposed for FY 2018 * Other Application Fees Public Noticing - 150 ft. Radius Note: If noticing is required. Covers cost of up to three rounds of noticing. $125 per occurrence $484 +$529 Public Noticing - 600 ft. Radius Note: If noticing is required. Covers cost of up to three rounds of noticing. $697 per occurrence $825 +$927 Public Noticing beyond 600 ft. Radius Note: If noticing is required NEW $931 +$1,236 Record Management Fee $26 per file $26 per file --- Recording Fee with County County cost of recording, if required County cost of recording, if required --- Records Retention $4.00 per plan sheet $4.00 per plan sheet --- Technology Enhancements $20 per application Delete. Replaced by Citywide Tech Fee --- Pre-screening fee Note: All costs will be recovered for the prescreening of applicants proposing rezoning, zoning text amendments, development agreements, Comp Plan amendments, or specific plans. NEW $3,000 initial deposit plus any applicable Legal Review and Other Application fees --- Planning Compliance Fee Note: 100 percent of processing costs will be recovered plus any Environmental Impact Assessment and any other entitlements necessary to complete the project, whether indicated as 100 percent cost recovery in this schedule or not. NEW Initial deposit equal to 3 hrs of applicable staff rate --- Contract Administration Note: 25% Contract Administration and project management costs are in addition to direct cost of consultant services and will be charged to deposit- based fees. NEW 25% of direct cost --- Site & Design Site and Design Major Note: 100 percent of processing and legal costs will be recovered plus any Environmental Impact Assessment and any other entitlements necessary to complete the project, whether indicated as 100 percent cost recovery in this schedule or not. $6,118 initial deposit plus any Legal Review fees and applicable Other Application fees $22,523 initial deposit plus any Legal Review fees and applicable Other Application Fees --- Subdivision - Five or More Parcels Subdivision Final Map $3,491 plus applicable Other Application fees $4,140 plus any applicable Other Application fees + $4,663 plus any applicable Other Application fees Tentative Map Note: 100 percent of processing costs will be recovered plus any Environmental Impact Assessment and any other entitlements necessary to complete the project, whether indicated as 100 percent cost recovery in this schedule or not. $6,118 initial deposit plus Legal Review fees and applicable Other Application fees $8,622 initial deposit plus any applicable Other Application fees --- Subdivision (Minor) * Reflects total estimated cost of providing the service uness noted with a + Fee Title Current Fee Fee Proposed for FY 2017 *Fee Proposed for FY 2018 * Parcel Map $1,116 plus applicable Other Application fees $2,527 plus any applicable Other Application fees + $3,899 plus any applicable Other Application fees Preliminary Parcel Map, Minor $2,711 plus Legal Review fees and applicable Other Application fees plus Environmental Impact Assessment fees $3,738 plus any applicable Other Application fees and Environmental Impact Assessment fees + $4,671 plus any applicable Other Application fees and Environmental Impact Assessment fees Subdivision (Minor) with Exceptions Parcel Map, Minor with Exception $1,296 plus applicable Other Application fees $2,098 plus any applicable Other Application fees + $2,855 plus any applicable Other Application fees Preliminary Parcel Map, Minor with Exception $5,351 plus Legal Review fees and applicable Other Application fees plus Environmental Impact Assessment fees $6,464 plus any applicable Other Application fees and Environmental Impact Assessment fees + $7,388 plus any applicable Other Application fees and Environmental Impact Assessment fees Subscriptions Board or Commission Agendas $112 annually per board or commission $112 annually per board or commission --- Board or Commission Minutes $224 annually per board or commission $224 annually per board or commission --- * Reflects total estimated cost of providing the service uness noted with a + Fee Title Current Fee Fee Proposed for FY 2017 *Fee Proposed for FY 2018 * Use Permit Day Care Center $186 plus applicable Other Application fees plus Environmental Impact Assessment fees $992 plus any applicable Other Application fees plus Environmental Document fees + $1,793 plus any applicable Other Application fees plus Environmental Document fees + Minor Change to Existing $996 plus applicable Other Application fees Delete. Captured in other use permit fees. --- Regular Use Permit $3,936 plus applicable Other Application fees plus Environmental Impact Assessment fees Delete. Captured in other use permit fees. --- Temporary Use Permit - Minor Note: Does not include hearing. $197 plus applicable Other Application fees $674 plus any applicable Other Application fees + $1,143 plus any applicable Other Application fees Conditional Use Permit - Director level NEW $4,914 plus any applicable Other Application fees + $5,754 plus any applicable Other Application fees Conditional Use Permit - additional upon hearing request NEW $4,650 plus any applicable Other Application fees + $9,645 plus any applicable Other Application fees Use Permit for Alcoholic Beverage Service Only $996 plus applicable Other Application fees Delete. Captured in other use permit fees. --- Wireless Facilities Note: 100 percent of costs will be recovered. $3,921 initial deposit plus Legal Review fees, Entitlement, and Other Application fees Delete. Tiered fees replace this fee.--- Wireless - Tier 1: Minor AR NEW $2,672 plus any applicable Other Application fees --- Wireless - Tier 2: Conditional Use Permit NEW $5,754 plus any applicable Other Application fees --- Wireless - Tier 3: Major ARB NEW $6,109 plus any applicable Other Application fees --- Variance Commercial & Manufacturing Variance $5,323 plus Legal Review fees and applicable Other Application fees plus Environmental Impact Assessment fees Delete. This is incorporated into other Variance fees --- Variance - Director's level NEW $3,144 plus any applicable Other Application fees + $3,675 plus any applicable Other Application fees Variance - additional upon hearing NEW $4,823 +$9,645 Fence Variance $1,236 plus applicable Other Application fees Delete. This is incorporated into other Variance fees --- Residential Variance $2,524 plus applicable Other Application fees Delete. This is incorporated into other Variance fees --- Zone Change Planned Community Zone Change Note: 100 percent of processing and legal costs will be recovered $7,341 initial deposit plus Legal Review fees $7,341 initial deposit --- Planned Community Zone Change - Minor Change Note: 100 percent of processing and legal costs will be recovered $1,500 plus Legal Review fees and applicable Other Application fees $1,500 initial deposit --- Zone Change Regular Note: 100 percent of processing and legal costs will be recovered $6,118 initial deposit plus Legal Review fees $6,118 initial deposit --- Staff Rates Current Hourly Rate Proposed for FY 2017 Administrative Assistant $90.93 $130.87 Administrative Associate I $84.72 $112.19 Administrative Associate II $88.91 $123.62 Administrative Associate III $92.70 $132.50 Assistant Director Planning & Community Environment $158.09 $292.56 Associate Engineer NEW $177.57 Associate Planner $108.26 $161.83 Building/Planning Technician $94.65 $130.12 Business Analyst NEW $188.78 Chief Planning Official $139.57 $260.15 Chief Transportation Official $139.57 $227.16 City Legal Counsel $206.77 $273.64 Code Enforcement Officer $104.35 $158.53 Code Enforcement Lead NEW $175.56 Coordinator Transit Management Systems NEW $160.38 Director of Planning and Community Environment $182.45 $316.95 Management Analyst NEW $168.48 Planning Manager $125.82 $205.91 Planner $113.23 $169.62 Project Engineer NEW $208.21 Senior Assistant City Attorney $171.78 DELETE. Replaced with one hourly Legal Counsel rate Senior Management Analyst NEW $195.46 Senior Planner $125.17 $195.61 Hourly cost recovery rates * Exhibit B City of Palo Alto, California January 2016 Capital Accounting Partners 1 The City of Palo Alto Report – User Fee Study Capital Accounting Partners, LLC January 2016 ATTACHMENT B City of Palo Alto, California January 2016 Capital Accounting Partners 2 CONTENTS Introduction And Scope ................................................................................................................................ 3 Summary of Costing Methodologies............................................................................................................. 3 Driver Based Costing Models ................................................................................................................ 3 Summary of Results ...................................................................................................................................... 7 Summary of Results .................................................................................................................................. 7 Actual Revenues vs. Projections of Revenues........................................................................................... 7 Calculating Productive Hourly Rates ............................................................................................................. 7 Results for the Planning and Community Environment Department ........................................................... 8 Summary ................................................................................................................................................... 8 General Observations of PCE ................................................................................................................ 9 Cost of Consultants ................................................................................................................................. 11 Appeals:................................................................................................................................................... 11 Services for Individual Homeowners: ..................................................................................................... 11 Comparison Review .................................................................................................................................... 12 Planning Fee Comparisons .................................................................................................................. 13 Observations and Recommendations ......................................................................................................... 14 General Observations ............................................................................................................................. 14 Adjusting the Fee Schedule ..................................................................................................................... 14 Section V: Planning Fee Table ..................................................................................................................... 15 City of Palo Alto, California January 2016 Capital Accounting Partners 3 INTRODUCTION AND SCOPE As part of its effort to manage its financial resources wisely, the City of Palo Alto engaged Capital Accounting Partners to prepare a detailed cost analysis of some Planning and Community Environment (PCE) Department and Development Services user fees. The City's objectives for the study were to ensure that the City is fully accounting for all of its costs and recovering adequate revenues to reimburse the City for its expenses. The scope of this study included the following:  Reviewing the Planning and Development Services current fee schedules;  Interviewing key City staff from relevant departments;  Calculating the total cost of fee generating services;  Analyzing cost recovery levels for fee generating services;  Developing costing models that reflect the most update organizational structure;  Reviewing the results with staff;  Surveying other cities;  Developing a fee schedule that fully accounts for the large range of services that Planning and Development Services provide; and  Providing recommendations or methodologies on how to adjust fees annually. The process used for collecting and analyzing the data required active participation by the City’s management and staff. We want to take this opportunity to recognize their participation, time, and effort to collect the data and discuss the analysis, results, and recommendations. Note: since the analytical phase of this study was completed, Development Services engaged Capital Accounting Partners to conduct a more thorough and detailed studies of its cost and revenues. The results of which will be addressed at a later time and in preparation to the department becoming an enterprise fund. SUMMARY OF COSTING METHODOLOGIES DRIVER BASED COSTING MODELS Developing driver based costing models is a detailed and robust method of calculating the cost of a specific service. It is based on the principles of activity based costing so it seeks to understand cost at an operational level. This means it relies on understanding the time staff invests in core business processes to provide fee and non-fee services. This provides the ability to understand staff time and cost as each staff position participates in providing fee services. Graphically, the following figure illustrates this methodology. City of Palo Alto, California January 2016 Capital Accounting Partners 4 Hypothetical Illustration of a Drive Based Costing Model Step 1: Collect Data – This first step involves discussions with staff to identify those positions within each department that provide and support direct services. It also involves collecting departmental budget and expenditure data, identifying the salary and benefits for each position, and identifying non- personnel expenditures, as well as any departmental and City wide overhead. Specifically, the steps involve the following:  Identifying staff positions – This includes identifying both position titles and names.  Calculating the number of productive hours – For each position, vacation time, sick leave, paid holidays, professional development (training), routine staff meetings, and daily work breaks are deducted from the standard 2,080 annual hours. The result is a range of hours available for each position on an annual basis. This range is typically 1,400 to 1,600 hours. Factors that influence this range are length of service with the jurisdiction and local policies for holiday and personal leave time.  Identifying and allocating non-personnel costs – Costs for materials and supplies are allocated to the salary and benefits for each position.  Assigning any other expenses that are budgeted in other areas – There are often expenses that should be included with the total cost of services. Examples of such costs might include amortized capital expenses for vehicles and technology. Contributing Staff Process Steps Fee Planning Tech Application Intake Initial Application Review Review Application for Conditions Approval Prepare Report for Planning Commission Planner I Planner II Planning Director Site Plan Review City of Palo Alto, California January 2016 Capital Accounting Partners 5  Identifying core business processes or activities – This step also involves discussions with staff to understand, at an operational level, the work of the operating unit. Core business processes used to provide services are identified and then defined by the tasks that are involved. Processes are also organized by direct and indirect categories:  Direct processes and activities – Those processes that directly contribute to the processing of an application or permit are first identified. Examples of a direct activity are electrical building inspection, application intake, and pre-application review.  Indirect processes and activities – Those processes that support, but do not directly apply to the processing of a specific application or permit. An example of an indirect activity is customer service or staff training to maintain certifications. Most jurisdictions highly value customer service, but it is difficult to assign a specific cost or unit of time to an individual service. Step 2: Building cost structures – This second step involves significant interaction with staff and the development of time estimates for both direct and indirect processes in each department. Specifically, this step is at the core of the analysis. There are four processes that comprise this step:  Gathering time estimates for direct processes – By interviewing staff in individual and group meetings, an estimate of time was assigned to each service by the process that is indicated. For example, in processing planning fees the following specific steps are involved in the processing of these fees:  Application intake;  Application completion review; and  Application processing which may include the activities of reviewing applications for code conformance, preparing CEQA documents and staff reports, attending public hearings, and developing conditions of approval. In this analysis, staff time is estimated and assigned to each step. The sum of all the process steps is the total time that is required to provide that specific service.  Assigning indirect and annual process time – An annual time estimate is gathered from staff for those indirect or support processes in which they are involved. These may include activities such as program administration, customer service, and department administration. These costs are allocated to all services proportionately to all services provided by the department.  Calculating fully loaded hourly rates and the cost of service – Once the total time for each direct and indirect service is estimated, the cost of service is calculated by using the fully loaded hourly rates for each staff member or position that is involved with the service. The fully loaded hourly rate for each employee is based on the employee's salary and benefit costs plus a share of non- personnel and City overhead costs divided by the employee's available work hours (i.e. 2,080 hours minus all leave hours). Thus, the direct and indirect cost by activity also includes departmental and citywide overhead as well as non-labor costs. The source of City indirect costs and non-personnel costs is from the annual budget or cost allocation that has been established by the City.  Gathering activity or volume data – A critical element in the analysis is the number of times a given service is provided on an annual basis. This is critical data for three reasons:  It allows a calculated projection of current revenue based on current prices. This is compared with actual revenue to see if there is a close match as the data should match.  It allows for a calculated projection of revenue at full cost. This is compared to actual expenditures to see if there is a close match as the data should match. City of Palo Alto, California January 2016 Capital Accounting Partners 6  It allows for a calculation of total hours consumed. Hours consumed must closely match actual hours available. If any of the three calculations do not approximate actual numbers, then time estimates and/or volume data need to be re-evaluated. These are critical quality checks for costing accuracy. Step 3: Calculating the full cost of services – This third step calculates the full cost of service for each direct service in a department. In the previous step, the cost of service was calculated for each direct and indirect service. In this step, the cost layers are brought together to establish the full cost of service for a specific direct service, program, or activity. As previously mentioned the cost of each direct service is calculated. To determine the full cost of service, the cost of indirect services is allocated to each direct service. The indirect services costs are allocated to each direct service based on each direct services proportion of labor spent processing each permit and application. By summing the direct and allocated indirect costs and multiplying that by the activity data, a total cost of service is calculated for both an individual service and the operating unit as a whole. The following figure illustrates an example of these calculations. Hypothetical Illustration of Calculating the Cost of a Single Fee (service) Step 4: Set fees Based on any new, existing, or revised cost recovery policies, the recommended fees can be established. The recommended fees will be established based on City staff recommendations and Council discussion in the future. The fee analyses in this report are based on full cost recovery. Application or Fee Title Signing Programs (Five or More Signs) Community Development Director Planning Manager Associate Planner Executive Assistant Totals Pre-submittal meeting 0.5 0.5 1 Land Use Application Intake 0.25 0.25 0.25 0.75 Application Review 1 6.5 7.5 Development Review Committee (DRC)0.5 2 2.5 Prepare for decision 0.5 1.25 5 1 7.75 Public hearing 0.33 0.33 2 0.33 2.99 Plan Check of accepted plans – post entitlement 1.25 0.5 1.75 Total Time by Position 0.83 3.83 17.50 2.08 24.24 Calculated Full Loaded Hourly Rate 203.67 183.96 152.38 128.66 Total Direct Cost by Position 169 705 2,667 268 3,808 Total support or indirect costs assigned 574$ Total Cost Assigned 4,382$ Assigning Staff Cost and Time City of Palo Alto, California January 2016 Capital Accounting Partners 7 SUMMARY OF RESULTS SUMMARY OF RESULTS In general, our results show significant opportunity for additional cost recovery. Given that this is the first formal review of fees in many years, we would expect this. Our general recommendation is that user fees be updated annually but then a robust review be completed every 3-5 years. We find that changes in regulations, operating procedures and staffing can change significantly during this time frame. ACTUAL REVENUES VS. PROJECTIONS OF REVENUES One of our checks for quality data is to compare our projections of revenues against actual revenues. Our projections of revenues are based on a simple formula: # of times a fee is processed X the current price of that fee. Since we were doing the analysis mid-way through the fiscal year we were using actual activity data based on the first six months and extrapolating out for twelve months. However, it should be noted that we use the projections of activity data for two reasons: 1. Predict annual revenue at the full cost of services; and 2. To make sure we fully account for staff time. CALCULATING PRODUCTIVE HOURLY RATES The calculation of productive hourly rates is central to our methodology. Costs incorporated in these rates include: 1. All salary costs; 2. All benefits costs; 3. Prorated non personnel costs such as services and supplies; 4. Department & division administration (includes cost to administer and manage the department and specific divisions such as current planning, long range planning, etc; 5. City overhead costs; and 6. Other services such as customer service that is specific to planning applications. The calculation of productive hours includes reduction in annual hours for: 7. Personnel leave such as vacation or personal leave time; 8. Sick leave; 9. Paid Holidays: and 10. Training and routine staff meetings. When productive hours are calculated in this way, we typically see 1400 – 1600 productive hours on an annual basis. City of Palo Alto, California January 2016 Capital Accounting Partners 8 RESULTS FOR THE PLANNING AND COMMUNITY ENVIRONMENT DEPARTMENT The Planning and Community Environment (PCE) Department provides a breadth of services for the City of Palo Alto. Among these are both current and long range planning, transportation planning and code enforcement. Many of these services are not fee supported nor are they intended to be. For example Transportation and Code Enforcement are not fee support although Transportation may contribute costs to a Current Planning fee. To the extent that a group such as Transportation contributes cost to a Planning fee, these costs were captured. In addition, there are Planning fees that are seldom fully recovered such as Appeal fees. It is highly unlikely that the Department can or should fully recover the cost of Appeals. The principle objectives for this phase of the project were: 1) Calculate the full cost of processing current planning applications; and 2) Compare selected fees and projects with designated benchmark cities in the area. SUMMARY Based on Fiscal 15 costs, the Current Planning Division is currently under recovering its costs by an estimated $851,653. These revenues are exclusive to the processing of Current Planning applications and does not represent any projected sources of revenues other than these. As the following chart illustrates, if fees were to be brought to full cost recovery the Division would generate approximately $1,899,741. This compares with our projection of current revenue of $1,048,089. As noted above, these projections are based on a simple formula: Total cost assigned to each fee X the number of times the fee is projected to be processes in a year. The results for each fee are then added to arrive at an annual projection of revenue. There are several reasons why the City is failing to fully recover its cost for processing current planning applications. Among these are: 1) Hourly rates that are charged to time & material fees are only sufficient to cover direct labor costs but largely insufficient for materials & services, City overhead, Department or Division overhead, or customer service functions; 2) Fees have not been revised for several years and therefore, they have just not kept pace with either regulatory changes or total PCE costs; 3) Charging time to deposit accounts by groups external to the basic planning function has not been as thorough as possible; and 4) It just takes longer to process applications than current fees reflect. Annual Revenue at Full Cost Recovery Annual Revenue at Current Fee Level Annual Difference $1,899,741 $1,048,089 ($851,653) FNOTE: THESE DATA HAVE BEEN UPDATED TO REFLECT FISCAL 2016 COSTS IN THE REPORT TABLE City of Palo Alto, California January 2016 Capital Accounting Partners 9 GENERAL OBSERVATIONS OF PCE We have observed the complex and demanding nature of the PCE Department. Its services are under high review by both the public and by regulatory authorities and the very nature of this creates challenges. Furthermore, the recent split of Development Services into its own department creates additional challenges as its budget and structure stabilizes. Furthermore, it provides a breadth of services including:  Current planning;  Advanced planning;  Transportation planning;  Code Enforcement; and  Building permit review. While it goes beyond the scope of this project to provide an assessment of the organization and its structure, we do find an opportunity to simplify some of the challenges. (These opportunities may even be minor in the overall challenges facing the PCE.) Our observation is that the split funding of PCE staff with Development Services may be adding to the challenges facing both organizations. While we understand the logic of split funding staff positions between the two organizations and we also observe continuing discussions on how to improve the split funding methodology. This appears to be the continuing and ongoing process off improving the workflow of the two organizations. In our view a simpler approach to the split funding of individuals and positions is to setup clear allocations of cost that are simple and verifiable. For example: Code Enforcement (CE). Instead of split funding CE staff between the two organizations, keep all of them in the PCE but then allocate costs to Development Services based on the number of cases. For example, if the total cost of the CE function is $500,000 and 10% of the CE cases is related to enforcement of building codes than allocate 10% ($50,000) to Development Services. This removes the debates over split funding. Code Compliance. Reviewing construction projects for code compliance and prior approval is an important function of any planning organization. While split funding planning staff between current planning and building & safety organizations is relatively common we have seen other models work that may reduce the challenges.  Allocate one person or positon to this function (at .30 of an FTE) rather than split three positions for this purpose (at .1 FTE each).  Establish separate fees within the planning fee schedule that captures code compliance costs. This will keep code compliance expenses within PCE as well as revenues. Customer Service (public counter). In our observation, debates over who pays for the public counter or for customer service are endless. Some agencies say that it is a public benefit so the general fund should pay for all or some of it. Others give it its own cost center and then charge the cost out to supported organizations like PCE and Development Services. When the location of the public counter is on city property the debate is somewhat simplified. The discussion is centered on labor cost. However, when the counter is in a commercial building and rent is paid, then additional costs are involved and how to allocate these costs. City of Palo Alto, California January 2016 Capital Accounting Partners 10 In our view, there is no right or wrong way, nor are there any perfect models for allocating these costs. However, the model that we have seen that creates the least debate is to allow building and safety to manage the function but then assign planning staff on a rotational basis to assist those customers with planning questions. The logic of this model is simple:  The majority of the customers that come to the counter have issues or concerns with building related functions;  Counter staff spend comparatively more time with building and safety customers while their support of planning customers is less on a comparative basis, (but not insignificant).  It is usually easier to pay for the counter from building and safety fees as these tend to keep up with inflation better than planning and/or engineer fees. In addition, we also observe a smoothness to the operation when counter staff are trained and certified as Permit Technicians and can provide basic plan review services. This speeds the process of plan review and permitting by allowing technicians to do simple plan review, thus freeing more experienced staff to focus on complex projects. Observations and Considerations in Calculating and Structuring Fee Schedules Fees are charged when the City provides services that benefit an individual person or organization. For example a commercial developer wants to develop a piece of property. The value of the City’s time effort and energy to review the application and issue the permits is primarily received by the developer. In addition, the State of California prohibits the City from charging more than full cost. While the State does not determine what is and is not cost, we take the view that full cost means all direct cost of the application review and/or permitting process, all support costs required to serve the customer (counter time for example), an allocated amount for Departmental administration, and an appropriate allocation of Citywide overhead. The City currently utilizes a fee structure that is fairly common in the San Francisco Bay area – a combination of both flat fees and time and material (or deposit based) fees that are calculated from billable hourly rates. Every city manages these differently. Some cities in the area utilize 100% time and material fees and others have a balance of both. Our bias is to push cities to adopt flat fees wherever reasonably possible. The reasons for this follow:  Flat fees are easier to administer. Since deposit accounts do not have to be monitored and adjusted there is far less administrative work involved;  Flat fees are easier to budget for developers; and  In our experience, cities that rely on time and material fees exclusively have very poor records of cost recovery. This are two primary reasons for this. 1) Hourly rates seldom capture the full cost (we do not anticipate this being an issue with Palo Alto) and 2) poor time tracking to deposit accounts. In our analysis of planning fees and modifying the current fee structure we took every opportunity to restructure deposit based fees to flat fees wherever reasonable. This was done in conjunction with staff and planning leadership. In our view of Palo Alto’s Planning fees, as we have structured them, is a reasonable balance of the two types. They use flat fees where it is reasonable to do so but still retains the use of deposit based fees for those project that are so complex that a flat fee does not work. In our view, setting deposits do not need to be in compliance with Prop 218 or AG Opinion 92-506 – which state that the final fee must aligned with actual cost. A deposit is just the starting point to establish cost. If cost is less than the deposit then the difference is returned. A deposit is an internal mechanism to City of Palo Alto, California January 2016 Capital Accounting Partners 11 capture an estimate of cost and then time will be charged to the deposit. Therefore, it is our view that the deposit should not be written into resolution, even though most cities do this. In our view, staff need the flexibility to collect a deposit that may be less than or more than what is listed. The City does however utilize billable or productive hourly rates. As part of our analysis we developed new rates that fully account for all labor costs and costs associated with services and supplies, City overhead, and PCE overhead. In addition, these rates also include costs associated with customer service and program specific administration such as administration of current planning. In summary, we treated each staff position just like an individual user fee and allocated all costs on the same basis. In setting user fees for planning services there is often more issues to consider than cost recovery. Many communities often struggle with two areas: 1) how to price appeals, and 2) how to price fees and services that are consumed primarily by individuals and individual homeowner. COST OF CONSULTANTS The City frequently hires outside consultants for specialty work or to augment staff. We understand that the practice in recovering consultant cost is to pass the direct cost of their time to the applicant. In our view. This under recovers cost to the City. We would recommend adding an overhead amount to the hourly rates charged by consultants, just like actual staff. APPEALS: Appeals are often discussed in fee studies and we make every effort to be sensitive to the requirements of the City. However, we have never seen a City intentionally recover full cost of these services. Our observations is the city legal counsel has clear opinions on appeals and this does not typically involve full cost recovery. Therefore, our standard recommendation is to set appeal fees reasonably but not spend significant project resources on calculating their full cost. SERVICES FOR INDIVIDUAL HOMEOWNERS: Services and fees that impact individual homeowners are often the source of concern for cities. The question usually comes down to this: should we reduce the price for the fee to something less than full cost? For the services of the City’s Current Planning Division these fees would center on the Individual review fees. In our view a city has a limited number of options in setting fees: 1. Charge full cost; 2. Subsidize the cost by lowering the price. It should be noted that the State of California does not allow subsidizing one fee and then raising another fee above cost to pay for the subsidy. In short, any fee can be priced up to full cost but no more than full cost. In our view, fees should be set at full cost unless there is a compelling interest to the City to do otherwise. These reasons usually include social and economic considerations. City of Palo Alto, California January 2016 Capital Accounting Partners 12 COMPARISON REVIEW As part of this analysis, a survey was conducted of comparative fees and projects. We caution the reader about these comparisons. Many communities do not routinely update their fees, and when they do, it might not be based on a thorough analysis of cost. This means the data that we are often comparing is the City’s cost compared to another city’s price. The challenges of fee comparison can be summarized by the following:  Communities have different policies regarding user fees. Some desire to subsidize their fees while others want to charge full cost.  Service levels can vary dramatically from one community to the next.  Service descriptions can be very different.  Multiple services will be included in one fee for one community but be separated in another community.  Pricing structures can vary. Some cities will use flat fees, while others will use a combination of deposit accounts with time and material charges. It is not unusual to find cities that publicize deposit fees but never collect anything less or more than the deposit. Nor is it unusual to see cities publicizing deposits but in reality a planner will estimate the deposit and then charge against it for full cost recovery.  One city can have one Conditional Use Permit (as an example) while another may have several types. Similarly, one city may have one Temporary Use Permit while another may have multiple types that cover a range of potential uses. In addition, some cities may subsidize use permits based on the occupant. Therefore, comparing one service that is provided by the City of Palo Alto with the same service for a neighboring city can be challenging – at best. We urge caution. We advise looking at trends. Do the trends show high fees, low fees, or fees that are within a reasonable range? In our view, the trends show about what we would expect - fees that are near the upper end of a range but are, on balance, reasonably aligned with its benchmark cities. The selection of benchmark municipalities was made in conjunction with staff. The selection criteria were primarily municipalities that the City of Palo Alto routinely uses for benchmark purposes. The following Cities were selected:  San Mateo;  Los Gatos;  Saratoga;  Mountain View;  Redwood City; and  Beverly Hills. City of Palo Alto, California January 2016 Capital Accounting Partners 13 PLANNING FEE COMPARISONS The following table provides the results of the comparison study. Planning Fees Calculated Cost / Deposit Current Fee/Deposit levels San Mateo Los Gatos Saratoga Mountain View Beverly Hills * AR- Minor Project (staff review only) $ 2,849 $ 1,448 $2,170 deposit plus actual cost $ 1,791 $2,000 initial deposit, actual cost $ 2,315 $ 561 Subdivision - Parcel Map $ 3,776 $ 1,077 $719 deposit plus plus actual cost $ 7,104 N/A $ 1,947 $ 14,232 Conditional Use Permit - Director level $ 5,272 $ 3,799 $2,710 deposit plus plus actual cost $ 5,074 $2,000 initial deposit, actual cost $ 3,858 $ 17,227 Temporary Use Permit (TUP) $ 999 $ 190 $576 deposit plus actual cost N/A $500 initial deposit, actual cost $ 368 $ 5,852 Variance - Directors Level $ 3,805 $ 2,436 $1,149 deposit plus actual cost $ 3,732 $2,500 initial deposit, actual cost $ 2,457 $ 17,227 Individual Review - New two story residence or addition to existing one story $ 7,866 $ 4,021 $2,934 deposit plus actual cost $ 4,982 $3,500 initial deposit, actual cost N/A $ 2,584 N/A - do not issue or nothing comparable. * Soon to be adopted fees City of Palo Alto, California January 2016 14 OBSERVATIONS AND RECOMMENDATIONS GENERAL OBSERVATIONS We note that the PCE is under recovering their costs. There are several reasons for this: 1) Hourly rates may recover the direct cost of individual staff but are not sufficient to recover the full costs associated with each work group; 2) Costs for outside consultants are not being marked up to recover department or City overhead; and 3) More time is required to process individual permits and applications than previously estimated. ADJUSTING THE FEE SCHEDULE We recommend annual adjustments to fees wherever possible. We also recommend a complete review of costs for fee services every three to five years. With the annual update of fees we recommend using a simple CPI type increase that is attached to the City’s labor cost. For example, if the labor cost for the City goes up by 2% then adjust each fee by 2%. This is the simplest and most common method of adjusting fees annually. It is our observation that the regulatory requirements change enough within a three to five year time frame that a comprehensive review of costs is then warranted. We understand that the City’s policy is to adjust fees annually based on changes to salaries and benefits. We would affirm this practice and find that those cities that do this, maintain better cost recovery levels over the long term. City of Palo Alto, California January 2016 Capital Accounting Partners, LLC 15 SECTION V: PLANNING FEE TABLE City of Palo Alto Planning Fees Fee Name Unit / Notes Actual Work Volume Direct Unit Cost Indirect Unit Allocated Costs External Costs Total Cost Assigned Update to Fiscal 15-16 Current Fee / Revenue / Deposit Unit Surcharge or (Subsidy) Based on fiscal 15-16 Annual Revenue at Full Cost Recovery Annual Revenue at Current Fee Level Annual Difference MISCELLANEOUS PROCESSING FEES 3.5% Public Notice: 600 foot radius If noticing is required, per occurance 490$ $406 $896 $927.31 $ 673 ($254)$0.00 -$ $0.00 Public Notice: 150 foot radius If noticing is required 279$ $231 $511 $528.63 $ 121 ($408)$0.00 -$ $0.00 Record Management Fee Delete -$ $0 $0 $0.00 $ 25 $25 $0.00 -$ $0.00 Records Retention (microfilming)Delete -$ $0 $0 $0.00 $ 4 $4 $0.00 -$ $0.00 Recording Fee with the County At cost -$ $0 $0 $0.00 $0 $0.00 -$ $0.00 Public Notice beyond 600 foot radius If noticing is required 653$ $541 $1,194 $1,235.86 ($1,236)$0.00 -$ $0.00 Additional noticing beyond 3 -$ $0 $0 $0.00 $0 $0.00 -$ $0.00 Pre-screening fee Deposit -$ $0 $0 $0.00 $ 2,500 $2,500 $0.00 -$ $0.00 ARCHITECTURAL REVIEW BOARD -$ $0 $0 $0.00 $0 $0.00 -$ $0.00 Preliminary Review 14 2,880$ $2,387 $5,267 $5,451.56 $ 1,204 ($4,248)$76,321.78 16,856.0$ ($59,465.78) Minor Project (staff review only) – sign and façade changes only, or similar minor changes.441$ $366 $807 $834.89 $ 359 ($476)$0.00 -$ $0.00 Minor Project (staff review only)114 1,412$ $1,170 $2,582 $2,671.97 $ 1,448 ($1,224)$304,604.51 165,072.0$ ($139,532.51) Minor Project - Board Review 10 3,624$ $3,004 $6,628 $6,859.60 $ 2,896 ($3,964)$68,596.04 28,960.0$ ($39,636.04) Major Project Deposit 16 5,422$ $4,495 $9,917 $10,264.37 $ 3,712 ($6,552)$164,229.93 59,392.0$ ($104,837.93) -$ $0 $0 $0.00 $0 $0.00 -$ $0.00 Master sign program 1,937$ $1,606 $3,543 $3,667.15 $ 359 ($3,308)$0.00 -$ $0.00 Signs (requiring Board review)1,844$ $1,529 $3,373 $3,491.17 $ 961 ($2,530)$0.00 -$ $0.00 Signs Erected without Approval Code Enf penalty -$ $0 $0 $0.00 $ 1,923 $1,923 $0.00 -$ $0.00 Sign Exception 1,983$ $1,644 $3,626 $3,753.05 $ 1,448 ($2,305)$0.00 -$ $0.00 Design Enhancement Exception (DEE)2,929$ $2,428 $5,357 $5,544.25 $ 1,585 ($3,959)$0.00 -$ $0.00 Temporary sign permit (15 days)81$ $67 $149 $154.04 $ 61 ($93)$0.00 -$ $0.00 -$ $0 $0 $0.00 $0 $0.00 -$ $0.00 -$ $0 $0 $0.00 $0 $0.00 -$ $0.00 -$ $0 $0 $0.00 $0 $0.00 -$ $0.00 ENVIRONMENTAL ASSESSMENT -$ $0 $0 $0.00 $0 $0.00 -$ $0.00 Environmental Impact Assessment (EIA) mitigated/negative declaration Consult cost plus mgt fee -$ $0 $0 $0.00 $ 1,738 $1,738 $0.00 -$ $0.00 Environmental Impact Assessment (EIA)Delete -$ $0 $0 $0.00 $ 3,309 $3,309 $0.00 -$ $0.00 CEQA Categorical Exemption 238$ $198 $436 $451.04 $ 324 ($127)$0.00 -$ $0.00 Environmental Impact Report (EIR) Deposit (100% of Estimated Costs) plus 25% for project mgt and overhead 1,322$ $1,096 2,418$ $2,502.43 ($2,502)$0.00 -$ $0.00 Environmental Impact Report (EIR) Legal Review Delete 264$ $219 $484 $500.49 $ 2,163 $1,663 $0.00 -$ $0.00 Mitigation Monitoring (MND) Deposit -$ $0 $0 $0.00 $ 1,181 $1,181 $0.00 -$ $0.00 -$ $0 $0 $0.00 $ 541 $541 $0.00 -$ $0.00 Mitigation Monitoring (EIR)Deposit -$ $0 $0 $0.00 $ 3,543 $3,543 $0.00 -$ $0.00 Mitigation Monitoring (EIR) Legal review 264$ $219 $484 $500.49 $ 1,082 $582 $0.00 -$ $0.00 Legal review - categorical exception class 32 and mitigated/negative declaration Delete 529$ $438 $967 $1,000.97 ($1,001)$0.00 -$ $0.00 -$ $0 $0 $0.00 $0 $0.00 -$ $0.00 -$ $0 $0 $0.00 $0 $0.00 -$ $0.00 HISTORIC -$ $0 $0 $0.00 $0 $0.00 -$ $0.00 Demolition of Historic Building 529$ $438 $967 $1,000.97 $ 2,386 $1,385 $0.00 -$ $0.00 Demolition of Historic Building Legal Review Delete -$ $0 $0 $0.00 $ 1,622 $1,622 $0.00 -$ $0.00 Major Project 2 793$ $658 $1,451 $1,501.46 $ 3,128 $1,627 $3,002.92 6,256.0$ $3,253.08 Major Project Legal Review Delete 6 -$ $0 $0 $0.00 $ 1,082 $1,082 $0.00 6,492.0$ $6,492.00 Minor Project requiring staff level review 8 529$ $438 $967 $1,000.97 $ 660 ($341)$8,007.79 5,280.0$ ($2,727.79) Historic Review of Individual Review Application 132$ $110 $242 $250.24 $ 1,917 $1,667 $0.00 -$ $0.00 Floor Area Bonus and/or Transfer of Development Rights (TDR)Deposit -$ $0 $0 $0.00 $ 590 $590 $0.00 -$ $0.00 Floor Area Bonus and/or Transfer of Development Rights (TDR) Legal ReviewDelete -$ $0 $0 $0.00 $ 1,082 $1,082 $0.00 -$ $0.00 Minor project requiring Historic Board review ???-$ $0 $0 $0.00 $0 $0.00 -$ $0.00 -$ $0 $0 $0.00 $0 $0.00 -$ $0.00 Annual Cost Calculations (Fiscal 15-16)Unit Cost Summary Capital Accounting Partners Page 1 of 5 Planning Unit Cost Calcs City of Palo Alto Planning Fees Fee Name Unit / Notes Actual Work Volume Direct Unit Cost Indirect Unit Allocated Costs External Costs Total Cost Assigned Update to Fiscal 15-16 Current Fee / Revenue / Deposit Unit Surcharge or (Subsidy) Based on fiscal 15-16 Annual Revenue at Full Cost Recovery Annual Revenue at Current Fee Level Annual Difference Annual Cost Calculations (Fiscal 15-16)Unit Cost Summary -$ $0 $0 $0.00 $0 $0.00 -$ $0.00 -$ $0 $0 $0.00 $0 $0.00 -$ $0.00 SITE AND DESIGN -$ $0 $0 $0.00 $0 $0.00 -$ $0.00 Site and Design - Major Deposit 6 11,898$ $9,863 $21,761 $22,522.91 $ 5,905 ($16,618)$135,137.44 35,430.0$ ($99,707.44) Site and Design - Major Legal Review Delete 529$ $438 $967 $1,000.97 $ 1,352 $351 $0.00 -$ $0.00 -$ $0 $0 $0.00 $0 $0.00 -$ $0.00 -$ $0 $0 $0.00 $0 $0.00 -$ $0.00SUBDIVISION-$ $0 $0 $0.00 $0 $0.00 -$ $0.00 Preliminary Parcel Map 2,468$ $2,046 $4,513 $4,671.01 $ 2,617 ($2,054)$0.00 -$ $0.00 Preliminary Parcel Map Legal Review Delete -$ $0 $0 $0.00 $ 541 $541 $0.00 -$ $0.00 Preliminary Parcel Map w/Exception 3,903$ $3,235 $7,138 $7,387.54 $ 5,165 ($2,223)$0.00 -$ $0.00 Preliminary Parcel Map w/Exception Legal Review Delete -$ $0 $0 $0.00 $ 1,082 $1,082 $0.00 -$ $0.00 Parcel Map 8 2,059$ $1,707 $3,767 $3,898.51 $ 1,077 ($2,822)$31,188.12 8,616.0$ ($22,572.12) Parcel Map w/ Exception 1,508$ $1,250 $2,758 $2,854.46 $ 1,251 ($1,603)$0.00 -$ $0.00 Tentative Map Deposit 2 4,555$ $3,776 $8,330 $8,621.90 $ 5,905 ($2,717)$0.00 11,810.0$ $11,810.00 Tentative Map Legal Review Delete 529$ $438 $967 $1,000.97 $ 2,163 $1,162 $0.00 -$ $0.00 Final Map of Five or More Parcels 2 2,464$ $2,042 $4,506 $4,663.52 $ 3,370 ($1,294)$0.00 6,740.0$ $6,740.00 -$ $0 $0 $0.00 $0 $0.00 -$ $0.00 -$ $0 $0 $0.00 $0 $0.00 -$ $0.00 ZONING ADMINISTRATOR -$ $0 $0 $0.00 $0 $0.00 -$ $0.00 Conditional Use Permit (CUP) - Director level 18 3,039$ $2,519 $5,559 $5,753.10 ($5,753)$103,555.80 -$ ($103,555.80) Conditional Use Permit (CUP) additional upon hearing request 5,095$ $4,224 $9,319 $9,644.84 $ 3,799 ($5,846)$0.00 -$ $0.00 CUP – Wireless Facilities Delete 4,239$ $3,514 $7,754 $8,025.09 $ 3,785 ($4,240)$0.00 -$ $0.00 CUP – Use Permit for alcoholic beverage service only Delete 1,702$ $1,411 $3,113 $3,221.81 $ 961 ($2,261)$0.00 -$ $0.00 CUP – Minor Change to Existing CUP Delete 1,438$ $1,192 $2,629 $2,721.33 $ 961 ($1,760)$0.00 -$ $0.00 CUP - Day Care Center (50% of CUP)1,894$ $1,570 $3,465 $3,586.05 $ 180 ($3,406)$0.00 -$ $0.00 Temporary Use Permit (TUP)No hearing option 10 604$ $501 $1,104 $1,143.04 $ 190 ($953)$11,430.37 1,900.0$ ($9,530.37) Variance - directors level 6 1,942$ $1,610 $3,551 $3,675.67 $ 2,436 ($1,240)$22,054.00 14,616.0$ ($7,438.00) Nonresidential Variance Delete 1,343$ $1,114 $2,457 $2,542.97 $ 5,138 $2,595 $0.00 -$ $0.00 Nonresidential Variance Legal Review Delete -$ $0 $0 $0.00 $ 811 $811 $0.00 -$ $0.00 Variance - additional for hearing 5,095$ $4,224 $9,319 $9,644.84 $ 1,193 ($8,452)$0.00 -$ $0.00 Home Improvement Exception (HIE)6 1,642$ $1,361 $3,004 $3,108.84 $ 961 ($2,148)$18,653.06 5,766.0$ ($12,887.06) Preliminary Review meeting with Architect 124 118$ $98 146.8 $362 $374.89 $ 108 ($267)$46,486.55 13,392.0$ ($33,094.55) Individual Review Minor Revisions to approved projects 44 1,548$ $1,284 $2,832 $2,931.13 $ 1,595 ($1,336)$128,969.91 70,180.0$ ($58,789.91) Individual Review - New Two Story Residence or addition to existing one story 44 3,723$ $3,086 $6,808 $7,046.66 $ 4,021 ($3,026)$310,052.92 176,924.0$ ($133,128.92) Individual Review - Second Story expansion >150 s.f.2,980$ $2,470 $5,450 $5,641.06 $ 2,778 ($2,863)$0.00 -$ $0.00 Neighborhood Preservation Zone Exception 2,820$ $2,338 $5,157 $5,337.79 $ 2,224 ($3,114)$0.00 -$ $0.00 If a directors hearing is requested (additional)Per hearing 1,253$ $1,039 $2,292 $2,372.39 ($2,372)$0.00 -$ $0.00 Wireless - Tier 1: Minor AR 1,412$ $1,170 $2,582 $2,671.97 ($2,672)$0.00 -$ $0.00 Wireless - Tier 2: Conditional Use Permit 3,039$ $2,519 $5,559 $5,753.10 ($5,753)$0.00 -$ $0.00 Wireless - Tier 3: Major ARB 3,227$ $2,675 $5,902 $6,108.87 ($6,109)$0.00 -$ $0.00 OTHER -$ $0 $0 $0.00 $0 $0.00 -$ $0.00 All Appeals (File with City Clerk)264$ $219 $484 $500.49 $ 136 ($364)$0.00 -$ $0.00 All Appeals (File with City Clerk) Legal Review Delete -$ $0 $0 $0.00 $ 270 $270 $0.00 -$ $0.00 Comprehensive Plan Change (not annual review)Deposit -$ $0 $0 $0.00 $ 5,905 $5,905 $0.00 -$ $0.00 Comprehensive Plan Change (not annual review) Legal Review Delete -$ $0 $0 $0.00 $ 1,082 $1,082 $0.00 -$ $0.00 Development Project Preliminary (pre-screening)Deposit -$ $0 $0 $0.00 $ 3,543 $3,543 $0.00 -$ $0.00 Development Project Preliminary (pre-screening) Legal Review Delete -$ $0 $0 $0.00 $ 811 $811 $0.00 -$ $0.00 Development Agreement Deposit -$ $0 $0 $0.00 $ 6,813 $6,813 $0.00 -$ $0.00 Development Agreement Legal Review Delete -$ $0 $0 $0.00 $ 5,408 $5,408 $0.00 -$ $0.00 Development Agreement Annual Review Deposit -$ $0 $0 $0.00 $ 2,385 $2,385 $0.00 -$ $0.00 Development Agreement Annual Review Legal Review Delete -$ $0 $0 $0.00 $ 811 $811 $0.00 -$ $0.00 Planned Community Zone Change Deposit -$ $0 $0 $0.00 $ 7,086 $7,086 $0.00 -$ $0.00 Planned Community Zone Change Legal Review Delete -$ $0 $0 $0.00 $ 2,163 $2,163 $0.00 -$ $0.00 Minor Change to Planned Community Zone Deposit -$ $0 $0 $0.00 $ 1,448 $1,448 $0.00 -$ $0.00 Minor Change to Planned Community Zone Legal Review Delete -$ $0 $0 $0.00 $ 811 $811 $0.00 -$ $0.00 Zone Change - Regular Deposit 2 -$ $0 $0 $0.00 $ 5,905 $5,905 $0.00 11,810.0$ $11,810.00 Zone Change - Regular Legal Review Delete -$ $0 $0 $0.00 $ 1,352 $1,352 $0.00 -$ $0.00 Williamson Act - Establish or Withdraw Deposit -$ $0 $0 $0.00 $ 1,862 $1,862 $0.00 -$ $0.00 Williamson Act - Establish or Withdraw Legal Review Delete -$ $0 $0 $0.00 $ 1,622 $1,622 $0.00 -$ $0.00 Mills Act – Establish or Withdraw Deposit -$ $0 $0 $0.00 $ 1,771 $1,771 $0.00 -$ $0.00 Mills Act – Establish or Withdraw Legal Review -$ $0 $0 $0.00 $ 2,163 $2,163 $0.00 -$ $0.00 Capital Accounting Partners Page 2 of 5 Planning Unit Cost Calcs City of Palo Alto Planning Fees Fee Name Unit / Notes Actual Work Volume Direct Unit Cost Indirect Unit Allocated Costs External Costs Total Cost Assigned Update to Fiscal 15-16 Current Fee / Revenue / Deposit Unit Surcharge or (Subsidy) Based on fiscal 15-16 Annual Revenue at Full Cost Recovery Annual Revenue at Current Fee Level Annual Difference Annual Cost Calculations (Fiscal 15-16)Unit Cost Summary Consult plus project mgt 25%plus direct cost 100$ $83 $183 $189.30 ($189)$0.00 -$ $0.00 -$ $0 $0 $0.00 $0 $0.00 -$ $0.00 DOCUMENTS & GENERAL FEES -$ $0 $0 $0.00 $0 $0.00 -$ $0.00 Administrative extensions and zoning letters Per hour, 1 hr min -$ $0 $0 $0.00 $ 162 $162 $0.00 -$ $0.00 Property research or research requiring more than 30 minutes Applicable hourly rate -$ $0 $0 $0.00 $ 123 $123 $0.00 -$ $0.00 Records Retention (microfilming)Per plan sheet -$ $0 $0 $0.00 $ 4 $4 $0.00 -$ $0.00 Comprehensive Plan Plus $4 if mailed -$ $0 $0 $0.00 $ 87 $87 $0.00 -$ $0.00 Zoning Map -$ $0 $0 $0.00 $ 95 $95 $0.00 -$ $0.00 Comprehensive Plan map (200-scale)Per page,plus $4 if mailed -$ $0 $0 $0.00 $ 13 $13 $0.00 -$ $0.00 Tree Manual or other bound documents Plus $4 if mailed -$ $0 $0 $0.00 $ 32 $32 $0.00 -$ $0.00 Subscription – Agendas ( annual) Per board or commission -$ $0 $0 $0.00 $ 108 $108 $0.00 -$ $0.00 Subscription – Minutes (annual)Per board or commission -$ $0 $0 $0.00 $ 216 $216 $0.00 -$ $0.00 Copies – Optical Disk Per page,$27. min -$ $0 $0 $0.00 $ 0.50 $1 $0.00 -$ $0.00 Photocopies Per page -$ $0 $0 $0.00 $ 0.13 $0 $0.00 -$ $0.00 Planning compliance fee Deposit -$ $0 $0 $0.00 $0 $0.00 -$ $0.00 -$ $0 $0 $0.00 $0 $0.00 -$ $0.00 Long range planning 1 1,573,500$ $857,569 $2,431,068 $2,516,155.83 ($2,516,156)$0.00 -$ $0.00 Comprehensive Plan Implementation 2 -$ $0 $0 $0.00 $ 201,298 $201,298 $0.00 402,596.6$ $402,596.56 -$ $0 $0 $0.00 $0 $0.00 -$ $0.00 Legal review (ARB major)6 3,259$ $1,776 $5,035 $5,211.54 ($5,212)$31,269.23 -$ ($31,269.23) legal review (legislative review, ie zone change, plan amendment, etc)16 6,258$ $3,411 $9,668 $10,006.67 ($10,007)$160,106.80 -$ ($160,106.80) Legal review (environmental)20 5,903$ $3,217 $9,120 $9,439.35 ($9,439)$188,787.05 -$ ($188,787.05) Note: Legal review fees cover up to 3 public hearings, additional hearings 1/3 of the applicable fee -$ $0 $0 $0.00 $0 $0.00 -$ $0.00 Legal review (appeal to City Council)4,323$ $2,356 $6,680 $6,913.51 ($6,914)$0.00 -$ $0.00 Productive Hourly Rates By Position -$ $0 $0 $0.00 $0 $0.00 -$ $0.00 Administrative Assistant 82$ $45 $126 $130.87 $ 91.96 ($39)$0.00 -$ $0.00 Administrative Associate I 70$ $38 $108 $112.19 $ 84.01 ($28)$0.00 -$ $0.00 Administrative Associate II 77$ $42 $119 $123.62 $ 88.14 ($35)$0.00 -$ $0.00 Administrative Associate III 83$ $45 $128 $132.50 $ 91.87 ($41)$0.00 -$ $0.00 Assistant Director Planning & Community Environment 183$ $100 $283 $292.56 $ 154.03 ($139)$0.00 -$ $0.00 Associate Engineer 111$ $61 $172 $177.57 ($178)$0.00 -$ $0.00 Associate Planner 101$ $55 $156 $161.83 $ 107.21 ($55)$0.00 -$ $0.00 Building/Planning Technician 81$ $44 $126 $130.12 $ 93.79 ($36)$0.00 -$ $0.00 Business Analyst 118$ $64 $182 $188.78 ($189)$0.00 -$ $0.00 Chief Planning Official 163$ $89 $251 $260.15 $ 136.13 ($124)$0.00 -$ $0.00 Chief Transportation Official 142$ $77 $219 $227.16 $ 136.13 ($91)$0.00 -$ $0.00 Code Enforcement Officer 99$ $54 $153 $158.53 $ 103.35 ($55)$0.00 -$ $0.00 Coordinator Transportation System Management 100$ $55 $155 $160.38 ($160)$0.00 -$ $0.00 Director Planning/Community Environment 198$ $108 $306 $316.95 $ 177.59 ($139)$0.00 -$ $0.00 Management Analyst 105$ $57 $163 $168.48 ($168)$0.00 -$ $0.00 Manager Planning 129$ $70 $199 $205.91 $ 122.84 ($83)$0.00 -$ $0.00 Planner 106$ $58 $164 $169.62 $ 112.10 ($58)$0.00 -$ $0.00 Project Engineer 130$ $71 $201 $208.21 $ 129.17 ($79)$0.00 -$ $0.00 Senior Management Analyst 122$ $67 $189 $195.46 ($195)$0.00 -$ $0.00 Senior Planner 122$ $67 $189 $195.61 $ 123.87 ($72)$0.00 -$ $0.00 Senior Project Engineer 130$ $71 $201 $208.28 ($208)$0.00 -$ $0.00 Outside Consultant adjustment 100$ $55 $155 $159.91 55%($159)$0.00 -$ $0.00 City Legal Counsel -$ $0 264.39 $264 $273.64 ($274)$0.00 -$ $0.00 -$ $0 $0 $0.00 $0 $0.00 -$ $0.00 Capital Accounting Partners Page 3 of 5 Planning Unit Cost Calcs City of Palo Alto Planning Fees Fee Name Unit / Notes Actual Work Volume Direct Unit Cost Indirect Unit Allocated Costs External Costs Total Cost Assigned Update to Fiscal 15-16 Current Fee / Revenue / Deposit Unit Surcharge or (Subsidy) Based on fiscal 15-16 Annual Revenue at Full Cost Recovery Annual Revenue at Current Fee Level Annual Difference Annual Cost Calculations (Fiscal 15-16)Unit Cost Summary Annual Revenue at Full Cost Recovery Annual Revenue at Current Fee Level Annual Difference $1,939,661 $1,048,089 ($891,573) Capital Accounting Partners Page 4 of 5 Planning Unit Cost Calcs FINANCE COMMITTEE TRANSCRIPT Page 1 of 45 Regular Meeting Tuesday, February 2, 2016 Chairperson Filseth called the meeting to order at 7:00 P.M. in the Community Meeting Room, 250 Hamilton Avenue, Palo Alto, California. Present: Filseth (Chair), Holman, Schmid, Wolbach Absent: Oral Communications Chair Filseth: Thank you very much. Welcome to the first meeting of the Finance Committee in 2016. The first Item on the Agenda is Oral Communications and members of the public may speak to any Item not on the Agenda. Jessica Brettle, Assistant City Clerk: (inaudible). Agenda Items 1. Recommendation to City Council to Accept the Cost of Services Study for Planning Fees and Adopt a Schedule for Implementation of Fee Increases and Adjustments. Chair Filseth: In that case we will proceed to Action Item 1, Recommendation to City Council to Accept the Cost of Services Study for Planning Fees and adopt a Schedule for Implementation of Fee Increases and Adjustments. The procedure is, if I will get this right, the Staff will present and then we will have Oral Communications from the public and then we will have questions and comments and Motions from the Committee (Finance Committee). Is that right? Very good. Hillary Gitelman, Director of Planning and Community Environment: I have the A Team here, Sherry, John, Kara from the City Attorney’s office. We are all here to answer questions on the proposal before you, which is to address the user fees that we charge for planning ATTACHMENT C FINAL MINUTES Page 2 of 45 Finance Committee Transcript February 2, 2016 activities. So Sherry has a brief presentation and then all the rest of us are available to answer questions. Sherry Nikzat, Senior Management Analyst for Planning and Community Environment: Chair Filseth, members of the Committee, my name is Sherry Nikzat. I am Senior Management Analyst for the Planning and Community Environment Department. Tonight we are coming to you with our Cost of Services Study. Staff is asking me to review the Cost of Services Study and recommend that the City Council adopt a schedule for Fee Increases and Adjustments. In 2013 the City undertook a comprehensive Cost of Services Study due to the complexity of Planning and Development Fees and the anticipated split at that time of the Planning Department into Planning and Development Services. Planning Fees were not part of that final Study. Fees for services or User Fees are charged when providing a service from which one or more individuals benefit. A key objective of this Study was to determine the cost of providing these services. It has been at least five years since the last user fee was done for Planning Fees. The department brought in a consultant to review our current fees and analyze the cost of providing these planning services. Another objective was to analyze fees consistent with City’s adopted Cost Recovery Policy. Council adopted a Cost Recovery Policy last year, establishing high, medium and low categories of recovery, and based on that policy, planning activities generally fall within the group or category for high level of cost recovery. The Study identified cost of providing service, but it is up to the Council to determine if they wish to set fees at full cost recovery or something less. Fees cannot be set to exceed the cost of services and one fee cannot be increased beyond the cost of service to make up for another one that you wish to set at a lower cost; however, whether or not the Council wishes to set the fees at a lower rate or whether to delay Cost Recovery is a Policy decision left to Council. The Study also looked at the department’s fee structure with an eye to recommend two types of fees consistent with current work load and to make them simpler where possible. The two types we currently have in place and I will talk about that in just a minute. Once costs were determined, Staff’s objective was to recommend any fee changes and suggest implementation approaches. The Study identified the amount of time it takes for Staff to perform directly-related tasks. For Staff time, productive time was computed for each position, removing unproductive hours, what are considered unproductive hours of sick leave, vacation, training and the like. The Study also identified operational costs like our on-call consultants. I think you are familiar with our on-call consultants, and identified indirect costs, such as the cost of managers and support Staff as well as City-wide overhead for the Central Servicing Departments like Administrative Services FINAL MINUTES Page 3 of 45 Finance Committee Transcript February 2, 2016 Department (ASD), City Manager and the like. The result is the suggested fee updates and updated hourly Staff rates. Fees for services in the Planning Department are structured in two ways: Flat Fees and Deposit- based Fees. Flat Fees cover the cost of providing services for those activities where the average amount of processing time and effort can be reasonably determined. Deposit-based Fees are taken when Staff time is expected to vary widely, as it does with some of the more complex activities. A deposit amount listed in the Municipal Fee Schedule is collected at the start of the activity and then costs to deliver those services are drawn down against the deposit. Staff recommends right sizing both Flat Fees and Deposit-based Fees and updating hourly Staff rates applied to deposits. Staff also recommends modifying the structure of some of the fees to streamline them and be consistent with the way services are delivered; in other words, the Flat Fees or Deposit-based Fees. For fees that are increasing, Staff recommends phasing in any increases over two years due to the magnitude of the changes. The first phase would be effective fiscal year (FY) 2017 and the second phase in fiscal year 2018, bringing fees to full cost recovery. Exceptions to the phasing are the wireless fees and any fees that may have gone down. Upon the Finance Committee’s recommendation, Staff will develop an Ordinance, provide notice to interested parties and notice of schedule of public meeting for approval of the changes. In accordance with State law, once Council has approved changes, they will go into effect no sooner than 60 days. In this case, Staff recommends that they become effective fiscal 2017, and that they are included in the fiscal year 2017 Municipal Fee Schedule. The consultants here with us tonight, Staff and the consultants will be happy to address any questions. Thank you. Chair Filseth: So we will now take comments, communications from the public. We have one speaker, Mr. McFall. Jim McFall: Yes. I’m Jim McFall, a practicing architect in Palo Alto. I have lived and worked here for over 30 years. I don’t think most of you know me. I have been out of circulation as far as the City goes for a while, but I have been both a member of the Architectural Review Board (ARB) and the Historic Resources Board (HRB). A few comments on the Cost of Services Study and proposed fee increases. As you know, the Study looked at Staff costs for various planning services then compared those to costs to the associated fees charged for these planning services, thus showing where shortfalls occur and suggesting where to increase fees to cover the costs of those services, in order to maximize cost recovery. It makes sense, but I think there is a step that has been left out of this process. It is a review of the Cost of Services. Has any review of those Staff time expenses been FINAL MINUTES Page 4 of 45 Finance Committee Transcript February 2, 2016 undertaken? Was there any analysis of Staff time spent on specific planning services? Before moving forward on increasing costs, excuse me, on increasing fees, shouldn’t we take a look at the Staff costs to make sure they are reasonable and appropriate? Doesn’t it make sense to consider ways to facilitate planning services in a more efficient manner before you go ahead and increase fees? Some of the proposed fee increases are significant, more than double the fee for a minor ARB review, increasing the Planning Fees for a second-story addition by 70 percent, that’s $3,000 of an increase. This is significant money and not everyone who does a project in Palo Alto works for Facebook or Google. The Development Center went through an extensive process of self-examination, review of processes and training in order to maximize efficiencies and better serve the public. I, and from others I have talked to, think that’s been a big success. Why hasn’t the Planning Department undertaken a similar process? When the City is considering raising Planning Fees considerably, shouldn’t we make certain that the costs upon which those proposed fees are based are justified and reasonable? Thanks very much. Chair Filseth: Thank you. With that we are open for questions and comments from the Committee. Council Member Holman: Can I ask a question, not a procedure question. Are these mics hot? Chair Filseth: I think so. They are always hot. Council Member Holman: They are live. And then, what are we doing about mics over here? I take it you are a consultant. Would it be reasonable to have a consultant sitting at the table? Chair Filseth: Unfortunately, there are only a couple of mics that are live at the table so the gentleman will have to go to that mic or we move out. Lalo Perez, Chief Financial Officer and Director of Administrative Services: And then we will share the mic between the three of us. Council Member Holman: Okay. Thank you. Maybe we can fix that. FINAL MINUTES Page 5 of 45 Finance Committee Transcript February 2, 2016 Council Member Schmid: Let’s see. Let me just get my bearings, asking a couple of general questions. These are Planning Department Fees we are talking about? Ms. Nikzat: Correct. Council Member Schmid: Although the activities that take place seem to include a lot from the general Staff, legal, buildings, the Development Center and so on, so there is a lot of bearing activities. These are Planning Fees, and then there are separate studies going on for the Development Center. Their fee, I assume are among these fees and would be the same. Alright, if you could just give me a sense of what we are doing tonight. Ms. Nikzat: Well the fees we are looking at tonight are definitely Planning Fees and as you mentioned, there are times when there is a planning activity that other departments need to participate in as well and review and look at plans. Council Member Schmid: Well, none of these activities are in the Development Center, are they? Ms. Nikzat: These are specifically planning activities. These are the activities that are conducted by … Council Member Schmid: If a resident wanted to do one of these they would walk into the Development Center, isn’t that right? Ms. Gitelman: The fees that we are talking about this evening are specific to the Planning Department and planning entitlements, so they are things like ARB reviews. You apply at the Planning Department. This does not include building permits, encroachment permits, things that you would apply for at the Development Center. That is going to be a separate Fee Study. Council Member Schmid: Initial Review (IR)? Ms. Gitelman: IR’s you apply for at the Planning Department. It is a planning entitlement. So the way the Development Center and the Planning Department are split, we think of the Development Center’s application processing as ministerial permits, so there is not a lot of discretion. By the time someone gets through everything we put them through in planning FINAL MINUTES Page 6 of 45 Finance Committee Transcript February 2, 2016 with the discretionary approvals that we do and they get over to the Development Center they are in the ministerial world and the processing happens, we are checking the Codes, checking the boxes and making sure everything works, but these fees that we are talking about this evening are the planning entitlements. These are all discretionary actions. You see there is a lot of legal time involved because we consult extensively with the City Attorney in processing these discretionary applications. Council Member Schmid: Okay, good. That is helpful. Again, to get my bearings, let me just ask some specific questions going through some of the proposals. The consultant’s Report was very accurate when they said, oh, the two things most questions are on are residents and permits, so let me start from individuals or residents. I look at types of these things that a resident might run into and, I guess, a resident runs in two different ways, don’t they? Either as a developer who is looking for change or as someone who sees change going on and says, what’s happening. Both of those would come to the Planning Department, or would they end up at the Development Center? Ms. Gitelman: Well, if a resident is an applicant, like they are applying for an IR, that would come through the Planning Department. If a neighbor notices something happening out there and wants to find out about it, it sort of depends on where it is in the process. If it is still going through the IR process, then their first stop would be with us and they would raise a red flag and potentially file an appeal. If the IR is already done or it didn’t need an IR, and it’s in the building permit process, then they would be going to the Development Center. Council Member Schmid: Okay. I’m struck, I guess, back on Page 13 by the scale of some of the changes. You have their home improvements exception going up by 300 percent. It sounds like a lot. On Page 15 you have Preliminary Individual Review going up 300 percent. On Page 17 public (inaudible) that’s going up 400 percent. Parcel map 350. Talk a little bit about why the scale if change is so high on things that residents would. Ms. Gitelman: Sure. Just kind of big picture, I’m relatively new to Palo Alto and my observation when I got here was that this is an old Fee Study. A lot of jurisdictions during the recession went through the process of updating their fees and increasing revenues by trying to better capture the costs of providing services. I don’t believe that Palo Alto did that during the recession and I think the fees that are currently in place are old. They have FINAL MINUTES Page 7 of 45 Finance Committee Transcript February 2, 2016 been addressed a little bit to account for the cost of living, but they really haven’t been reexamined holistically in quite some time. What we did in this Study is really to look at what it costs to deliver these services and give you my recommendation on that basis. But as Sherry indicated, it is entirely within your discretion to say, whoa, that proposed increase is entirely too high. For (Home Improvement Inspection) HIE’s we should do something less than you are recommending, and that would just mean that we would perpetuate the current General Fund subsidy of that application type. Council Member Schmid: (inaudible) the public up and said, gee, at the same time have we done a check on the let’s call it the efficiency of the Staff. Is there something we should be looking at there? Ms. Gitelman: That is a very good point. This analysis is based on the current processing time associated with these activities. To the extent that processing time could go down, some of the flat fees could potentially go down. I should point out, though, that a lot of the biggest fees we are talking about here are hourly fees, so we charge an hourly rate, and so if we achieve efficiencies on those projects, we just bill less hours. So that is a new onset I think is important. Council Member Schmid: I guess I see the difference in works go fairly dramatic. Big projects coming into the Council and you have volumes of consultants’ Reports and studies and details or potential details, but a lot of the work in terms of numbers must be residents making some minor changes or adaptations in their housing. Are some of the hourly fees more appropriate for the big detail commercial projects as opposed to the routine housing projects and are the residents getting bumped up 300 percent for something that is not relevant to their needs? Ms. Gitelman: Yes, as Jonathan said, it is set up so that the larger projects take more time, there is more variability. We are using an hourly rate in billing our time directly. The smaller fees where there is ability to add (inaudible), you know, we have a lot of consistency about what it takes to process this kind of a smaller application, that is where we are recommending a flat fee, and again, you could set a lower flat fee if you think it is called for. Just to clarify again, though, if someone is applying for a tenant improvement or a residential remodel that doesn’t have to come to the Planning Department, I mean, that is the vast majority of permitting that happens in the City. That happens at the Development Center and is not affected by this. This is only Planning. So we get about 70 plus IR FINAL MINUTES Page 8 of 45 Finance Committee Transcript February 2, 2016 applications in a year, but the City processes like 3,000 building permit applications in a year, so there is a real difference. What we do is more complicated, it takes longer and there are also fewer fee applications. Council Member Schmid: Oh, I see. So it is a small percentage that actually have to go through this process. I guess my last question, if you are reacting to something that all of a sudden you see in your backyard, appeal for question of what is going on, people say, oh, that’s why we are paying our property taxes. To be protected from something that is intrusive, (inaudible) why do we have to pay a fee (inaudible). Jonathan Lait, Assistant Director of Planning and Community Environment: So in a scenario where a resident is seeing another home, a two-story home being proposed, and there is some concern about that development, the way the process is set up in the Code, that is actually not an appeal. That is a Request for Assurance. Proposing any fee for a request for hearing, that is still the flat fee that the occupant pays. So you just request the hearing and you have the hearing and it goes on to the (inaudible) note to the applicant who might be concerned about that. For another type of project, say at a residential or commercial interphase, or a multi-family, something that went to the Architectural Review Board, there we do have an appeal fee. It is the same fee. I don’t believe there is any change proposed to the fee. So it is $280 now. No change is proposed to that and it is significantly subsidized, but we understand why we would want to subsidize that fee. We are introducing a new fee; however, as it relates to appeals, so that the applicant who is generating this project which is being reviewed by the City and perhaps the concern of a neighbor, we are requesting that we have the ability to charge the applicant for the additional time and resources that will be spent in processing that appeal fee, so that doesn’t go to the resident, that would go back to applicant if we have to do another 100 hours’ worth of work, the City is not paying another dime for that. We are charging the applicant who has the project they are processing through that has generated the controversy. Council Member Schmid: Okay, that is very interesting. Ms. Nikzat: (inaudible) Mr. Lait: That’s right, that’s (inaudible.) Ms. Nikzat: (inaudible) FINAL MINUTES Page 9 of 45 Finance Committee Transcript February 2, 2016 Council Member Schmid: Yeah, thank you. Chair Filseth: Are there questions? Council Member Holman. Council Member Holman: Thank you for doing this. Obviously it is long overdue, so thank you very much for doing it. I have some questions too. I think Mr. McFall raises a good question about how efficient are we. It is a different but related topic, certainly, so I have questions that don’t really address that but want to respect that, if that makes sense. One of the things that it has seemed to me for some time is that Code Compliance maybe isn’t done as early as it should be in the process or could be in the process, so you have projects that maybe go to the ARB or go to the HRB or whatever, but Code Compliance hasn’t been performed. This is what it seems like. We have preliminary Code Compliance that has been performed, but maybe not totally, so errors are found later and this is from scattered information picked up or watching my pieces of ARB meetings and that sort of thing, and you listen to the public meetings and such. So the ARB isn’t responsible for making sure the project is Code Compliant and so if, that’s at least the way I understand it and I have been told over time. It seems to me that what I have witnessed is that you have projects that go all the way through the ARB or maybe through the HRB to, and perhaps not so much Planning Commission, but things aren’t necessarily Code Compliant, so there is rework that needs to be done or reconsideration because some error is found or something that wasn’t checked is found, so it brings up how much time is spent that the applicant is being billed for and also it has to do with how much efficiency there is in what we are doing. So does that make sense? Ms. Gitelman: Yeah, I think I understand your comments. I am not sure that I fully agree with that. I mean, I think you have a professional Staff that is a little overwhelmed because we are understaffed at the moment. We do our best to review for Code Compliance early in the process. We have a 30-day period when we receive an application in which we are reviewing for completeness to make sure we have all the materials we need with which to do an evaluation, and then as the project is prepared for hearing at the ARB or whatever the other process is we are doing a review for Code Compliance. Clearly there are many sections of our Code as the Council knows, that involve interpretation. Sometimes we interpret it one way and then it gets appealed and it gets to the Council or wherever and then it’s reversed. These aren’t all black and white decisions, but we do our best to do a professional and adequate review and the projects, in large part the projects that we act on, you never hear about. I talked about 70 plus FINAL MINUTES Page 10 of 45 Finance Committee Transcript February 2, 2016 IR’s in a year, out of that two of them got appealed last year. So the vast majority of what we do is review projects, complete the processing of them, and they just move on without further comment. Council Member Holman: And please don’t hear my comments as being criticisms, because there is a lot of work that goes through and it just seems like sometimes not all of the preliminary work is done beforehand, and this is from tuning in here and there. It’s not like a constant stream of watching and making notes. It’s checking in here and there on various meetings. Mr. Lait: I just want to comment on that. We have this process in place. It is kind of a little bit informal, the preliminary review for the Architectural Review Board, and that’s not an application that we charge money for because we want to encourage people to go through that process or if we do it’s a modest fee. We are not spending a lot of time doing a Code Compliance Check, so there could be some of that where you get some feedback (crosstalk). Council Member Holman: Okay, I’m clear. Did the consultant, and I don’t know your name sir, Dan, did you take a look at any of the projects to say, okay, here’s a project that was – and I don’t know how you would know really, Staff could inform you but on your own you wouldn’t know –- we’ve had some fairly large projects on Page Mill Road, some on Park Boulevard for instance, one on El Camino Real. Did you have an opportunity to take a look at any of those and see comparatively, just looking at the project as informed as you could be about them, just look at the scope and scale, were they comparatively in line with each other in terms of what was billed, or can some get more complex. Dan Edds, Consultant, Capital Accounting Partners, LLC: Again, my name is Dan. You can call me Dan if you want to. Last name is E-D-D-S. I go by Dan otherwise. Let me make sure I understand your question. You are thinking you have two projects. Council Member Holman: With relative similarity in terms of what the billing is based on, at least appearance of upscale project. Mr. Edds: So we have two projects relatively the same. It depends on what kind of project you are talking about, but I think more in terms of fees, so if you are doing an ARB you are doing a Lot Line Adjustment, something like that, so what we did was add some – the director pointed out where the fees FINAL MINUTES Page 11 of 45 Finance Committee Transcript February 2, 2016 are – we can establish a consistency that on the average the fee takes 20 hours. Those get a flat fee. If there is wide variation, between two hours and 200 hours, then those kinds of projects are going to be charged out on a deposit basis, time and materials, so in that case I think that is really what you are referring to in those larger, more complex projects, I do not look at individual projects because there is no need to because it is a Deposit-based Fee, someone makes a deposit and then the revenue stream is going to be dependent upon who charges to that particular project. So the fee really is just the hourly rate on those. Council Member Holman: Okay, thank you. Council Member Schmid mentioned that there are legal fees and all kinds of other fees that could be applied into this. Transportation and, help me if I have slipped a note here – but Transportation is a Department, but is it not still under planning? Okay, but I didn’t see any rate changes for the Transportation Fees. Ms. Gitelman: Yeah, that is a separate part of the Fee Schedule and in a separate part of the Municipal Code even, I think. Ms. Nikzat: We did not address Transportation Fees because most of those things are either things like parking and the costs of parking that are usually set by Council, or there are some fees like the wide load permit, that are set by State agency. We really don’t have a lot of Transportation Fees that we deal with on an hourly basis, except that we do peer review of (Environmental Impact Report)EIR’s and traffic analysis (crosstalk). Council Member Holman: Oh, those are printed into these fees. Ms. Nikzat: And any number of things like that. Ms. Gitelman: To the extent that our Transportation Staff works on these planning entitlements, those hourly rates, and those would be captured here, so we would bill our traffic engineer’s time against the environmental review project based on the Fee Schedule. Council Member Holman: Okay. All I noticed here was just Planning Fees. Ms. Gitelman: But if you look at the hourly rates in the back, you will see there is a project engineer listed and we will capture the time of anyone who works on these deposit projects. So we collect a big deposit, Cara works on FINAL MINUTES Page 12 of 45 Finance Committee Transcript February 2, 2016 it an hour, I work on it an hour, the traffic engineer works on it an hour. We are charging all that time to the project. Council Member Holman: Is the same thing true with Public Works, because you have trees and … Ms. Gitelman: Anyone who is working on that project we will collect from them. Council Member Holman: I think it would be helpful – I don’t know about other Council Members, I’ll see what they have to say – but it seem like it would be helpful to indicate that in here somewhere so that we know that we are being comprehensive in our approach. Another question is that early in this Staff Report it talks about Cost Recovery Percentage Rates, low, medium and high, and on a number of occasions it talks about 100 percent cost recovery, but in other occasions it wasn’t clear to me what percentage we were charging. It just didn’t say 100 percent, it just named a fee, so are those low or medium, or high but not 100 percent Cost Recovery? I can pick out any one here. Legal review of (inaudible) with the City Council. (Inaudible) I just opened it up here. Expansion of existing two-story greater than 100 square feet that is part of (inaudible) review that it says a fee and then a proposed fee for 2018. I don’t know if that’s low, medium, high. Ms. Gitelman: What we meant to communicate is that in the last column, so the last fee there in the right-hand column is what we think full cost recovery will be, and so what we are charging now is well below full cost recovery, and we are proposing to get to get to full cost recovery over two steps, just because it is such a big increase in some cases. Ms. Nikzat: I believe at the bottom of each Page there is a little plus sign that indicates if we did not reflect the full cost and in those cases I believe we missed one which was an appeal, but other than that I believe we also have daycare. (Crosstalk.) Council Member Holman: Right, that one was filled out. Ms. Nikzat: That was is 50 percent. I don’t see any others. I believe so. FINAL MINUTES Page 13 of 45 Finance Committee Transcript February 2, 2016 Council Member Holman: Yes, that one was filled out. So what you’re saying is everything in this Fee Schedule is full cost recovery except for filing for an appeal and daycare. Is that what you are saying? Ms. Nikzat: The rest of them, if it was a Deposit-based Fee, we would put in a minimal amount for a deposit, and if it was a flat fee it would be the full Cost Recovery Rate. Council Member Holman: Okay. So if that is the case, I went through every one of these, believe it or not, I went through every one of these and I saw, (inaudible) it was kind of like really. I’m not going to be able to find it quickly here, wherever it is, here it is. You know I wouldn’t be happy about this, demolition application for restored buildings. It has been $2,472 and it is going down to $1,001. Does that mean we have been overcharging all this time, and how in the world could it be that low, because I can’t imagine it can be that low because you would have to analyze whether the building was historic or not, if it’s on the inventory, if it’s retained its character. You would have to gather the HRB. I just can’t imagine why it would be so low. That is one that went down. Mr. Lait: Right, and the reason that went beyond is what we are capturing here is the Staff time in evaluating the request for that request and in some of those instances, we are likely going to require a Resources Inventory Report, which is a professional consultant’s Report, and so we have captured that under a new section here, environmental documents or research projects that are required, where we charge now an hourly rate to review that (Historic Resource Evaluation)HRE and to provide comments. We have a flat fee if it’s one that we can look at. We do our in-house analysis, we take it to the Board and we think it is pretty straightforward. That is the fee that is charged here. If it requires more review, a consultant’s Report, we are going to charge for the cost of that consultant’s Report plus 25 percent to account for Staff time in managing that contract. Council Member Holman: Thank you for that and since you mentioned it. I am gratified and a bit shocked that we haven’t been charging 25 percent over. I can’t imagine any business that hasn’t done that in the last umpteen years, so thank you for adding that now. The other thing was a lot of fees talk about deleted and moved someplace else, but there is no way to know where else it was moved to, so it is very hard to track what went where. FINAL MINUTES Page 14 of 45 Finance Committee Transcript February 2, 2016 Ms. Nikzat: I am very sorry about that, Council Member Holman. One of the things we were really trying to do was see that in the legal fees. I think that is particularly where you see it. In the past legal fees were separated. That is a separate piece and this gets to your question about when other people are involved besides Planning Staff, so we are looking at this as an activity and who is involved in the activity. It seemed to make more sense to simplify the fees by putting the legal activities when they weren’t extensive to actually fold them into the fee where we could quantify how much legal time would be involved pretty easily, we could fold that into the flat fee, which makes it easier for the person who is taking in the application, and makes it easier for the applicant to understand the true cost. Council Member Holman: I think some of that explanation, and again we will see what other people have to say, but I think some of that explanation when it goes to the full Council, would be really helpful, so we don’t get the same questions all over again. I think there are two more questions before I pass it off. So currently, and this was really like, wow, so current Operating Budget we are subsidizing 80 percent of Planning Department activities, understanding that certainly now we are doing the Comp. Plan (Comprehensive Plan) update and blah, blah, blah, but even after these increases, we are still subsidizing 69 percent and that is just stunning, and I think it would be helpful again, when this goes forward – there is a brief description in here to kind of what kinds of activities we do subsidize and many of them are reasonable and rational and logical, but the number is so large, the percentage is so large that I think it is a little bit hard to swallow, so if more meat could be put around that it would be helpful. I had one other question which had to do with Code Compliance, I believe. I’m glad also – I noticed, of course, that these are fully loaded costs, so thank you very much for that. I’m missing my question right now, it’s okay if you can pass it on and maybe come back. Thank you for your time. Chair Filseth: Very well. Council Member Wolbach. Council Member Wolbach: So first actually I would just want to say, speaking only for myself, I did not share some of the concerns about the clarity with the stuff about what was deleted and was somewhere else. More clarity there would probably be for full Council. The question of where the money is going, the General Fund and Fee Funding combining to subsidize or pay for the Planning Department, it didn’t bother me. We subsidize, you could say, most of our department. It is what we do. I was really interested in the first paragraph on Page eight of the Staff Report, which was Page ten of the Packet and Council Member Holman was trying to get to this a little FINAL MINUTES Page 15 of 45 Finance Committee Transcript February 2, 2016 bit, talking about daycares leads to the question are there things that we want to encourage or in some way support as a matter of equity or a matter of encouragement that we want to provide some subsidy to those kinds of activities when they are brought by members of the public, be they a big developer with the project or a homeowner making a change to their house. That is an interesting question. I am just going to share a couple of framing thoughts about this question, and also my question about how the process works. Before I get into this, what do we need to decide tonight regarding this? I mean, if there are any (inaudible) or changes or suggestions, would you need us to highlight each particular line or if we wanted to get into some kind of general guidance on something that we want to, say, encourage or provide some kind of subsidy for, Staff could maybe go back and figure out the details of where that all falls, and then bring that back. Is that how this would work tonight? I want to make sure that I am just following a smart process that is respectful to Colleagues and Staff. Ms. Gitelman: I guess we would be open to the Council Members input on this. We have to know this is a public hearing and the City Council will have an Ordinance, so our thought was any input you could give us tonight would help us draft Ordinance and prepare it for Council. If there are specific – you know, you can be as specific as you want to be – if there are specific things you want us to bring back before we go through that next step, we can do that too. Our goal though to get an Ordinance adopted by the Council in enough time that it can take effect at the first of the fiscal year. Council Member Wolbach: The first fiscal year date would be July 1, 2016. Ms. Gitelman: And it takes 60 days to take effect. Council Member Wolbach: And so what we might do, I’m just thinking if there are – I’m just brainstorming about this in a minute – but if there are things that we want to provide some kind of either incentive or, for equity sake, some kind of subsidy, we might want to have that take place the following fiscal year rather than the coming fiscal year, because we are looking at years ’17 and ’18 that you are proposing here, correct? Ms. Gitelman: Correct. I should say too, we do have, separate from our Fee Schedule that we instituted within the last couple of years a Fee Waiver Policy that lets the City Manager waive fees for nonprofits in certain circumstances. I don’t remember exactly what the policy says, but that’s FINAL MINUTES Page 16 of 45 Finance Committee Transcript February 2, 2016 the situation where if, for example we had a Nonprofit Affordable Housing Development that was proposing to develop affordable housing. Council Member Wolbach: How do you know where it’s going with this? Ms. Gitelman: But we do have the ability to offer incentives in terms of waived fees in cases like that, and that is not a dissection of the Fee Schedule, but it is in the City’s Fee Schedule. Council Member Schmid: Could I just add a comment to what Cory had brought up, daycare center was mentioned specifically and he only mentioned the day care and the fee is a 900 percent increase in fee for Use Permit. That stands out. Council Member Wolbach: What Page is that of the Packet? Council Member Schmid: Packet Page 19, first line. Council Member Wolbach: We had circled that. So I will just bring out a couple of thoughts for my Colleagues. Oh, is there something else you wanted to add. Ms. Nikzat: I just wanted to say I believe the reason daycare center was called out was because this institutional memory is that daycare had been subsidized in the past and that the amount that is in there you may note, that is one of them that is not at full cost recovery. That is actually at 50 percent of the full cost recovery. Council Member Wolbach: Okay, just a couple of framing thoughts for how we think about whether we want to push anything here or do it in the Fee Waiver Policy separately, first, obviously we are the Finance Committee, so of course, we want to be financially prudent, especially considering overburden of Staff and an overburden on this department in particular, so that is the first rule element to keep in mind for me. Another is fairness. The developers should be paying their fair share, but at the same time, residents, I don’t want to see us milking residents because they are doing something on their own property that is within our Code, that is within what we allow, but then there is also the policy considerations of what I was saying before, of discouraging or encouraging something. You know, to a degree not quite punitive, but say we are going to do full cost recovery on FINAL MINUTES Page 17 of 45 Finance Committee Transcript February 2, 2016 this, but cutting down for something else, whether it is daycare, senior center or a school, be it more housing or if it is multi-family housing that includes a substantial chunk or is completely below market rate. I know that, obviously, paying our Transportation Commission (Planning and Transportation Commission) to start conversations about accessory dwelling units which are called out in our Housing Element and to have our own Comp. Plan is somebody wanted to add or start a secondary dwelling unit and list it as a Below Market Rate (BMR) unit, which is one of the questions the Planning Commission brought up recently, would we want to reduce the fees for that or is that something we want to tackle later for future year discussion, Fee Waiver Policy. A lot of these questions I’m kind of putting out expecting that we are not going to act on them now, but I wanted to at least float the concepts and the consideration for us to think about on the Committee and also for Staff. My guess is that office developments we are probably not enthusiastic about, I’m just guessing we are not going to be enthusiastic about. Subsidizing the fees for something that is residential, especially with residential with Below Market Rate units or residential with a little bit of retail, we might be interested in exploring that at some point. Again, we don’t necessarily need to act on those tonight, but I just put those out there, I guess, as policy consideration for everyone to think about and I leave it open for thoughts on how we best proceed or whether we come back to that either at a later date or in a later year. Chair Filseth: Okay, is there more? Council Member Wolbach: That’s it. Why don’t I actually say one more thing about that which is, obviously, the Planning Commission is dealing with (inaudible), we are working on our Comprehensive Plan and so I guess part of the question is, how does our consideration of these fees as they relate and the policy implications of these fees relate to those other discussions about Ordinances and (inaudible) and maybe it is better to wait and see what comes out of the Comp. Plan of the Planning Commission, etcetera, and then use that to inform future discussions about fees. If the Comp. Plan says we really, really want to push X, we really want to (inaudible) that maybe the next time we have this discussion, we say okay we settled on our Comp. Plan and the Comp. Plan says we want to push this, let’s subsidize this a little bit more, and I do appreciate the call out in the Report that Staff would like to see us do this on a more regular basis. I think that is so that we can have a more agile system. Chair Filseth: Thank you. FINAL MINUTES Page 18 of 45 Finance Committee Transcript February 2, 2016 Cara Silver, Senior Assistant City Attorney: For the Chair, if I could just, on one issue there, this issue of the relationship between Comp. Plan and fee levels comes up a lot in connection with development in housing and in the Housing Element, and so there is actually an exercise that we go through with our Housing Element is to look at whether the fees that we charge for housing processing is actually serving as a constraint to the development of housing, so that is a very logical nexus and it is built into our process, and so if it is found that the fees are too high and serving as a constraint we will typically see Housing Element policies that say, look at the fees. Council Member Wolbach: Can I ask a follow-up question to that? Does this reflect consideration of the Housing Element discussion about that issue? Was that taken into consideration when putting this together? Ms. Silver: I don’t believe that the current fee levels, which are obviously very subsidized, served as a constraint in this Housing Element cycle, so it was not identified as a constraint. If we increase the fees, then we would go through that analysis again in the Housing Element and there might be a different finding. Council Member Wolbach: I guess what I would say at this point then is, if it needs to be included when we do Motion tonight, that if the Proposed Fee Schedule for 2017 and 2018 are likely to serve as a constraint on housing, then we would want to subsidize those fees. Chair Filseth: I have a few questions. First, let me ask a question. If I understand the process here, the protocol we are talking about is that there would be a major review of fee structure each three to five years, but then an annual adjustment where we estimate the change in wage and benefits to adjust the fees. Is that correct? Ms. Nikzat: Yes. Chair Filseth: Next question, if I read this correctly, essentially what we are saying is the current level of recovery is below 100 percent and if we increased the recovery, most of these to 100 percent, right, in this document, the gap is about $900,000. Is that right? And we would be doing that over two years. So if we did it all in the first year, the difference between doing it all in the first year versus doing it in two years costs the City about $450,000. Is that essentially right? Do you have an estimate for FINAL MINUTES Page 19 of 45 Finance Committee Transcript February 2, 2016 how much of the $900,000 is commercial versus residential fees? Have you looked at that? Ms. Gitelman: I don’t think we do. We would have to look at, I don’t even really know how we would do that. I guess we would have to go back and look at a sample year and see how many A or B applications we got that were mixed use versus commercial, wholly commercial, and how many IR’s we did. I mean it would be. Chair Filseth: Dan, have you got any impression of that? Mr. Edds: I think Hillary’s point is very accurate. Basically you would have to go back through all the documentation on every project, say okay, was this commercial, was it residential, was it multi-family. We could probably back into it. It would be an estimate. I’m thinking, Jonathan, correct me if I’m wrong, we could go through the list of fees and say, well this one is predominantly commercial, this one is predominantly residential, but that would probably be a pretty rough estimate, but it would be something. Chair Filseth: I understand. We show the stuff that goes to the ARB a few times tends to be commercial, right, as opposed to, not everything. Mr. Edds: And that’s what we would be looking at, does this one tend to be commercial or does it tend to be residential. I guess the inclination is to say, if it’s mostly commercial, then you feel one way about the time frame of phasing it in, because it is a business expense and the numbers or amount of money involved in these things is pretty much larger in all these fees, right, as opposed to residential you might look at it slightly differently. Ms. Gitelman: One thing I should say is that we are proposing this big increase in hourly rates and one thing that it would be possible to do is go right to the top on the hourly rates, the fees in the flat fees. Chair Filseth: What exactly does that mean? Ms. Gitelman: It just means that the bigger projects that we charge hourly would be paying 100 percent right away, whereas the smaller projects, the flat fees you would phase them in over two years. That is a possible compromise. FINAL MINUTES Page 20 of 45 Finance Committee Transcript February 2, 2016 Mr. Edds: From my perspective, that, I think, would be a very accurate way of getting to your point, because those Deposit-based Fees, Jonathan, correct me if I’m wrong, Deposit-based Fees more than likely are going to be commercial. Chair Filseth: Right. And what you would save would be, the (inaudible) that would say raise the hourly fees in year one, and the flat fee phase in over two years. Is that essentially what we are saying? Mr. Lait: The deposits. Chair Filseth: Of course, you would like that to be in that plus to the City versus just doing a 50/50, as written, but presumably it would be because you would be dealing with big projects. Mr. Perez: You could make it 75/25. Chair Filseth: Actually, you could take the flat fees and do them over, that’s what we said, take the flat fees and do them over two years and the hourly fees do them over one year, so that would be ahead. Ms. Nizkat: And I assume increase the corresponding deposits and the deposits would go up too. Ms. Gitelman: Yes. Chair Filseth: So that seems like something we should consider. Council Member Schmid: Could I ask the following? Chair Filseth: Yes, please. Council Member Schmid: We have an aging population and we have an aging housing stock. Will this dramatic increase in fees do anything to discourage the updating of that housing stock? Ms. Gitelman: We charge fees for IR’s, so if someone replaces an existing home or a two-story home and we charge Planning Fees for architectural FINAL MINUTES Page 21 of 45 Finance Committee Transcript February 2, 2016 review, but just remodel of existing homes or tearing down and replacing an existing home? I don’t think that is implicated here, is it? Mr. Lait: No. The IR fees, the Individual Review Fees are going up, as you can see and it is a big increase and when you look at the overall expense of demolishing a home and building a new home, it’s modest, I think, compared to the cost of building a new house. Council Member Schmid: I guess it is a little upsetting that you can’t answer that question of what share of your current fees or the new fees would be residential as opposed to commercial. I guess I would assume that the high-end share would be commercial. Mr. Lait: I think that is accurate, but as you know, we get a lot of A or B applications that are mixed use, some that are purely commercial. We would have to go in and dissect every application to determine what share is residential versus commercial. Council Member Schmid: I would just guess though that in this city City in the last few years, mixed use, it varies from city to city, but in Palo Alto mixed-use has been dominated by commercial space, right? I would assume. Ms. Gitelman: Yes. And I think it changes over time, but you’re right, in the last several years probably we have seen mostly the commercial. When you look at those big fees, they are commercial. Chair Filseth: That was actually my next question. What triggers the Individual Review? Does a kitchen remodel trigger an Individual Review or a two story? Mr. Lait: Adding a second story adding to a second story, more than 150 square feet. Chair Filseth: So if I add another bedroom on the ground floor of my house is fine, so adding a second story, or a tear-down, and we have 70 of those a year or something like that. FINAL MINUTES Page 22 of 45 Finance Committee Transcript February 2, 2016 Mr. Lait: So if you do the number on that, as I did, based on $2,500, goes to $2,800 as the fee, it is $150,000 roughly of that $900,000, so it is on the lower side of that. Council Member Wolbach: I’m sorry, which Page was the IR on? I just want to follow, I just want to get what Page we are on. Mr. Lait: The IR is, I don’t have the Packet Page number, but it’s the, it Packet Page 15, the top of the Page. Council Member Wolbach: Got it. Thank you very much. Chair Filseth: My next question I wanted to ask, when I look on Packet Page nine, they sort of compare us to other municipalities, and if you look at Beverly Hills, California, their hourly rates charged to the public are between $400 and $500 an hour, which is prime consulting, junior partner legal time wage, how do they do that and not run afoul of (inaudible) 18? Mr. Lait: If I could speak to that, Beverly Hills, I’ll give you one example of what is included in that hourly rate that is not included in this hourly rate: Code Enforcement. We had a conversation about how do we allocate the cost of Code Enforcement. Should it be allocated, should not be allocated, should all of it be allocated, should a portion of it be allocated or none of it. Beverly Hills took the, in my experience, the somewhat unusual approach of saying we are going to recover all of the cost of Code Enforcement, so part of that hourly rate that you see for Beverly Hills is, in fact, a small component piece for Code Enforcement. In this case, we did not include anything for Code Enforcement. That is just an example. There are several other examples of activities that go into those hourly rates for Beverly Hills. Chair Filseth: You know what I am about to ask. Should we? Ms. Gitelman: I’ll tell you our thought process and the Cara probably wants to weigh in. You really have to be able to make a good case that the activities related to this service are being provided for which the fee is being charged. I think it is possible to say there is some little bit of Code Enforcement that is related to, that an IR applicant benefits from, but our assessment was that to fully subsidize the whole program with fees and make the applicants pay for that was not appropriate. I don’t know if Cara wants to add. FINAL MINUTES Page 23 of 45 Finance Committee Transcript February 2, 2016 Ms. Silver: I agree with that. Council Member Holman: Can I just follow up to that? Chair Filseth: Yes please. Council Member Holman: So we tend to be rather loath though to charge penalties, so we are not capturing those, so is there another way we can do this, or should we be charging, is there another way we can do this? Do we need to enhance our interest and incentive within the City to charge fines for people who aren’t Code Compliant, or do something like this? I’m not suggesting we do that, and the public would be thrilled if we would do something that would actually incentivize people to bring whatever issues into compliance. Ms. Silver: Yes, thank you. Absolutely you can do that. What we do is we update our Administrative Penalty Schedule once a year and that is the time to examine that issue. Of course, if you wanted to bring it up at off cycles, we can also take a look at it. One of the things that we have clarified, I believe this year, with our Administrative Penalty Schedule is that the continuing enforcement problems are going to be charged on a daily basis. It was not the case a few years ago. It was just a single occurrence, one single fine of $200, but if that enforcement problem continues, then we do how under our new administrative schedule, have the ability to charge daily fines, so that’s a good thing. I know that Staff was also looking at enhancements to penalties in connection with the Planned Community (PC) process, so those efforts certainly are underway. Council Member Holman: So you are saying then, am I learning here that the PC’s that are out there that are noncompliant are going to start getting penalized on a daily basis if they don’t come into compliance in a number of days, and how is that – I’m sorry, this is a little bit of a digression here, but I venture there are a lot of people – how is it going to be assessed and collected? Ms. Silver: I didn’t mean to imply that we are making an active change to our PC Penalty Process right now. The existing schedule, though, does allow a daily penalty, so for instance with Edgewood – this is getting a little off topic – but with the Edgewood Plaza Grocery Store, which is under an obligation to provide a community benefit, that is being assessed now on a daily rate basis, so there is that ability to do that. What I was referring to is FINAL MINUTES Page 24 of 45 Finance Committee Transcript February 2, 2016 that I think there was some further discussion about how to asses PC penalties, such as creating an escrow account and charging for the enforcement costs in all of that, and that was going to be studied in connection with PC reform in general, and that process has sort of been put on hold now with our PC Moratorium. Council Member Holman: Non-PC Code Enforcement? Ms. Silver: Yes, you can evaluate that when our Annual Penalty Schedule comes up for review. Chair Filseth: I have to note, we are starting to get off topic here. (Crosstalk) I have a suggestion, I think we can bring it up later when we start talking about future Agenda Items, because that is one of the things that will be done later. So I made a note of it here. I had one more question which is, you said earlier that the Study accounted for wages and benefits, but not things like sick leave, vacation expense and other things like that, and why now, or where is the sense that would be (crosstalk) small, very small difference. Mr. Edds: Actually, it does account for sick leave. The way I do the calculations is at some point it comes down to what is the productive hourly rate and then what are the productive hours. So in calculating productive hours we start out with the standard 2080, we subtract out vacation time, paid holiday time, sick leave, the full account of sick leave, training, routine meetings, so all of that again gets built into the hourly rate. Chair Filseth: But I assume one thing it doesn’t cover is that we don’t recovery the costs for is the growth in the unfunded public pension and that liability which we have now which is $500 million, growing at 15 to 20 percent a year? Mr. Perez: The calculation we use, what we input in terms of the projected rate that we get from (inaudible) for the employer’s side, so it would only cover that portion of it. Chair Filseth: Right, which is the funded portion, no the unfunded portion. Mr. Perez: Yes. It assumes that they eventually will deal with the unfunded over a period of time, but just so you know, there are many variables. FINAL MINUTES Page 25 of 45 Finance Committee Transcript February 2, 2016 Chair Filseth: Maybe for the future Agenda Items, we could talk about that. So just in general I will make a comment here. We sort of had a discussion of subsidizing things and the cost of these kinds of services that there are a couple of components. One is the amount of time it takes and what that time costs us, and the other is there has been some discussion, and Mr. McFall brought up, what about the efficiency of our processes in doing this. I think it is not possible for us on the Finance Committee to dig into the efficiencies of our processes for doing things. I think we have to look at what our costs are, and that’s what they are. With regard subsidies and exemptions and so forth, the costs are what they are and so if the applicant doesn’t pay for them, then somebody else has to pay for them, and that is going to end up, because it comes from the General Fund, being basically the residents of the City who pay 72 or 73 percent to be refined in the Comp. Plan finance discussion of the costs of running the City. I think we should, in general, keep this process as simple as possible, shoot for 100 percent cost recovery on almost everything, rather than trying to build a patchwork smorgasbord of exemptions. We have a couple here that are worthy things, daycare centers and so forth. I think affordable housing potentially is one of them, right, although we don’t build a lot of Affordable Housing Projects per year in the City, and so if there are things that are very few, we are not doing lots and lots of them, maybe the fee waiver process is just much more efficient to do it, so I think we should consider that. That would be my hope is that we will do maintain the simplicity. I do like the idea of accelerating faster than two years going to 100 percent cost recovery for big commercial projects, the cost of doing business. Again, somebody has to pay for it, right, and if the applicant doesn’t pay for it, then people paying their mortgage have to pay for it. Motions? Council Member Holman: It sounded like you were just making one. Chair Filseth: If somebody else wants to make one, or maybe I will make one. MOTION: Chair Filseth moved, seconded by Council Member Holman to recommend the City Council adopt the schedule for Planning Fee Increases and Adjustments and hourly rates to better reflect the City’s User Fee Cost Recovery Level Policy with the addition that the hourly fees will go to 100 percent cost recovery in year one and flat fees will go to 100 percent cost recovery on a two-year schedule. FINAL MINUTES Page 26 of 45 Finance Committee Transcript February 2, 2016 Council Member Holman: That was on my list to actually ask, that was one of the questions I didn’t ask earlier, the tiering. I do support that I have a question about it and that is, there aren’t that many flat fees really. Do we have any notion, can anybody do a quick look back in the envelope like how much difference it is, one of you two accounting guys. Chair Filseth: I saw it in here somewhere, there is a list of the number of flat fees versus. Mr. Lait: Do you want the dollar amount? Council Member Holman: I want the dollar amount if that is reasonable to try to ascertain. Because as Eric said, (inaudible) somebody has to pay for it. Chair Filseth: It is appearing like 2016, for fiscal 2017 may be a lean year for the City. Council Member Holman: I do support the Motion. Again, there are some things that I asked for earlier that it would be great to have at the time this goes to Council. That would be one of those items, if you agree to that. It doesn’t need to be in the Motion, but if you can agree that is a (inaudible) that should be presented to the Council. Chair Filseth: Can you state again exactly what you are requesting? Council Member Holman: The Fee-based Projects tiered to mean how much we are capturing in the first year versus what we would be capturing if we did it all at once. Chair Filseth: Is that acceptable to Staff? Ms. Gitelman: So we would analyze the revenue that would come from the flat fees in year two. Okay, and compare that to what we would be getting in year one. Chair Filseth: I would be interested in that. I think that would be a useful number. I don’t want to burden the Staff with too much work. FINAL MINUTES Page 27 of 45 Finance Committee Transcript February 2, 2016 Council Member Holman: I support that and I have another comment but I think we should deal with the Motion first. Council Member Schmid: I would like to add an Amendment. The understanding from our discussion tonight was clearly that the dramatic increase in fees would not have a huge impact on residential, so I think that should be stated clearly in the Report going to Council that either show the estimated share of new fees that would be paid by residents, or have a clear statement that the maintenance and upgrading of existing housing units will not be affected. AMENDMENT: Council Member Schmid moved, seconded by Council Member Wolbach to include in the Staff Report to Council that the increase in fees will not have a dramatic negative impact on the maintenance of existing housing stock. Chair Filseth: So with respect to calculating the actual impact, I think what I heard was that would require a great deal of work to go back and track down all these numbers. Do I understand that right? Ms. Gitelman: Yes, although if Council Member Schmid is looking for something like in the whereases of the Ordinance, I think we can include a statement as you just implicated, which is the maintenance of existing residences (crosstalk) would not be affected by these fee changes. Council Member Schmid: I think that is the assumption we are making in approving this and just to have it clearly stated it would help all the Council. Council Member Holman: So what you are saying is that maintenance of existing residential, because it’s not going to be affected by this anyway. Council Member Schmid: It’s the rebuilding, it’s the updating of the existing residential housing stock. Council Member Holman: I wouldn’t support that, because I don’t think, housing stock is a large topic. I think Chair Filseth said it well, City Manager can use the Waiver Fee for Affordable Housing Projects, which I am certainly very supportive of. Council Member Schmid: I’m not asking for any Waiver Fee. (Crosstalk.) FINAL MINUTES Page 28 of 45 Finance Committee Transcript February 2, 2016 Chair Filseth: You’re talking about existing single-family homes that want to remodel their bathroom or something. Council Member Schmid: Or the need of rebuilding of the center structure or the outer walls. I mean, we have an aging housing stock that needs maintenance and they need to get approval of permitting. Chair Filseth: But if I understand what I heard here, most of those will not trigger an IR. Council Member Schmid: And that’s why I would like to have a clear statement. Council Member Holman: IR regulations are clearly stated already in the Code. IR is demolition and construction of a new two-story home. Council Member Schmid: I’m just a simple Council Member and I had lots of questions after reading this, and so it would be helpful to ask the full Council to have that statement clearly put. Council Member Holman: I am sorry, but I think the scope of the question, the topic is so broad that I am not quite sure what it would cover and what it wouldn’t cover. What your intention is. Council Member Schmid: Well, we had a statement that about 15 percent of the current activity of the department would be on the residential request as opposed to commercial. Council Member Wolbach: Is that single family or multi-family. Mr. Lait: IR is just a single family. Just doing the back of the Page, for somebody who is not even mathematically inclined, just running the numbers, $2,500 times 70 applications, that is about $150,000 and we are talking about a $900,000 increase over time, so each individual applicant who is coming in to, if they want to tear down their home and want to build a new home, the net increase that is going to be affected by these fees at most would be the difference between the $2,800 that we charge now up to the $5,600 that we will be charging in 2018, so yes, it is about a doubling almost of the fee. I don’t want to minimize that. It is a lot of money.(Crosstalk.) FINAL MINUTES Page 29 of 45 Finance Committee Transcript February 2, 2016 Chair Filseth: The majority of people aren’t tearing down a home and putting up (crosstalk.) Mr. Lait: We may have some people here who can speak to the overall costs of building a home, so it would certainly be a lot for me, but I think (crosstalk.) Council Member Holman: So here is why I wouldn’t support it. I don’t want to subsidize and I don’t want to ask other people to subsidize not that large an amount of money compared to the cost of a new house. If somebody is going to build a new house they can absolutely afford that very small increment of money. I don’t want to ask my neighbors to subsidize somebody down the block rebuilding a house and the consultant is nodding his head in agreement. Mr. Lait: As I am understanding the comment, it’s not that anything about this would be subsidizing redevelopment of a home, just that if you choose to redevelop your home, you’re not going to be negatively impacted by the fees that are being proposed to be introduced here. No subsidies, just (crosstalk.) Council Member Holman: No, except if we are not collecting it, somebody is paying it. (Crosstalk.) Mr. Lait: Well the occupant is paying for it, but it is a modest increase (crosstalk.) Council Member Schmid: It’s a small share of what we are approving. Council Member Holman: I won’t second. Sorry. Council Member Wolbach: (inaudible) Council Member Schmid: (inaudible) Council Member Wolbach: Do you want it restated to make sure I was really clear about it? FINAL MINUTES Page 30 of 45 Finance Committee Transcript February 2, 2016 Council Member Schmid: Just that the Report to Council clearly states that the share of the fee increase will not have negative impact on the maintenance of our existing housing stock. Council Member Wolbach: Will not have or is not expected to have? Council Member Schmid: Well, will not have a dramatic negative impact on the maintenance of our existing housing stock. Council Member Wolbach: But is it explanatory or is that pulsing direction, I guess is the question the Chair was trying to get to. Are we just trying to verify the Report or are we establishing (crosstalk.) Council Member Schmid: Well from my perspective, it is the assumption I am making in voting in favor of this. Council Member Wolbach: And does that include single family and multi- family, or just single family? Council Member Schmid: Well both, if you want to focus on single family that would be fine. It is dealing with an aging housing stock that when you need to put in new supports, new walls, new roof, whatever it is, that this vote will not have a negative impact. Council Member Wolbach: This is going to come to Council, right? Council Member Schmid: Yeah, this is just to help Council (crosstalk.) Ms. Gitelman: It’s going to be a public hearing. Ms. Nikzat: Yes, just as fees. Chair Filseth: I’m not going to second. Council Member Wolbach: I will. Chair Filseth: Care to speak? FINAL MINUTES Page 31 of 45 Finance Committee Transcript February 2, 2016 Council Member Schmid: Well, I think when we talk about housing in Palo Alto, we are talking about an aging housing stock where the average age has gone up dramatically over the last few decades, and that means a lot of rebuilding parts, central structural parts of the house or houses themselves and these fee increases we are voting on are quite dramatic and I think the understanding in our discussion was that the fees would primarily hit large new, commercial developments as opposed to maintenance of the existing housing stock, and just to put that assumption clearly in the Report to Council would be helpful. Chair Filseth: Care to speak to your second? Council Member Schmid: I think he said it well. Chair Filseth: I think I will not vote in favor of the Amendment. I think, given what we are talking about, I think an appropriate mechanism would be for you to bring it up at the Council meeting and the Staff to respond to Council, and I think, therefore, it is not necessary in the Motion itself and I would prefer simple Motions. Any comment? Vote on the Amendment. AMENDMENT FAILED: 2-2 Holman, Filseth no Chair Filseth: Any further discussion on the mainMotion? Council Member Wolbach: Yes. I have a question. Going back to some of the things I was discussing earlier, I want to get just a little bit more clarity about this Fee Waiver Policy. My central question about the Fee Waiver Policy, is this something where there are standing – I’m thinking about whether I want to offer an Amendment tonight or when it comes to Council or reserve my thoughts for the Fee Waiver Policy – is that something that is always case-by-case and up to the City Manager’s discretion, or is it something where Council has set standing orders so that we are telling the City Manager you should always grant a fee waiver for X? Ms. Gitelman: I’d be happy to read the Fee Waiver Policy to you. It was enacted as part of last year’s Budget, I think. It says that the recommendation of the Planning and Community Environment Director or the City Manager may waive all or a portion of a Planning Fee when the applicant is a nonprofit organization or another governmental entity, and the following findings can be made: one, the proposed project would advance a public purpose benefitting the residents of Palo Alto; and two, General Fund FINAL MINUTES Page 32 of 45 Finance Committee Transcript February 2, 2016 support is available to backfill the fees waived. City Manager will report annually to the City Council about fee waivers granted pursuant to this provision as part of the closing of the Budget. Council Member Wolbach: So that sounds like it is pretty limited in scope. I don’t think that is broad enough to address my core concern, which goes to this issue of whether our fees provide a disincentive to the housing stock, whether it is repair of existing stock, preservation of existing stock. This concern that we may lose stock at times, or the construction of new housing stock in accordance with our comprehensive plan or Housing Element and our City regulations, I guess I would actually offer an Amendment, which I don’t want to jinx it, but I think will probably be unsuccessful as the last one was. Again, my purpose is to at least put it out there for discussion. Perhaps it will come up again in front of the full Council or will find another way or another time to address it. I would like to offer a friendly Amendment that we direct Staff to study whether any fees provide a substantial disincentive to housing preservation or construction in our Housing Element of our comprehensive plan and if so, to subsidize such fees as relevant. AMENDMENT: Council Member Wolbach moved, seconded by Council Member xx to direct Staff to study any fees that may provide a substantial disincentive to housing preservation or construction as warned of in the Housing Element, and to provide Council with options for subsidies to prevent such disincentives. Chair Filseth: All housing, since we are talking about here is housing and commercial and that’s it. Council Member Wolbach: Right, that’s for housing. I can’t remember which section it is, but yes (inaudible) but before I speak to it I will see if there is a second. Council Member Schmid: Could you restate it? Council Member Wolbach: Yes, let me make sure I got it right, or did the City Clerk type it? Ms. Gitelman: I have some, direct Staff to study fees, provide a substantial disincentive to housing preservation or construction in the Housing Element, and if so, to subsidize it as relevant. FINAL MINUTES Page 33 of 45 Finance Committee Transcript February 2, 2016 Council Member Wolbach: As warned of in the Housing Element, and to recommend to Council or to provide for Council an optional subsidy to prevent such disincentive. Basically it would (crosstalk.) Council Member Schmid: Does that differ from the existing Housing Element? Chair Filseth: You are proposing to waive all fees on housing projects. Council Member Wolbach: Only if it identified as being substantial, so this is something we will leave to Staff to figure out, only if it provides a substantial disincentive. If it is modest, as values are modest and insignificant compared to the total cost of housing, in those cases there would be no waiver. This is something that our Housing Element warns of is that there may be things in our policy which provide a disincentive to producing the housing that we have to, and this Motion would stay Staff should look at if these fees have that kind of effect and if they do when this comes to Council, say here’s how you could subsidize these fees in order to prevent that disincentive. AMENDMENT RESTATED: Council Member Wolbach moved, seconded by Council Member xx to direct Staff to study any fees that may provide a substantial disincentive to housing preservation or construction as warned of in the Housing Element, and to provide Council with options for subsidies to prevent such disincentives. (Amendment Stated Above) Council Member Schmid: I guess my feeling is the Housing Element will be coming to the Council in a couple of weeks and there is a language in the Housing Element directed to this, is that correct? Ms. Gitelman: That Housing Element contains an analysis of this issue and the existing Fee Schedule as it relates to this issue, and I haven’t read that section in a long time, but I believe it concludes that the cost of land in Palo Alto is far and away the greatest constraint on new housing and the availability of land, so the fees that we charge pale by comparison to these other constraints that we really have nothing to do with. Council Member Wolbach: So essentially you think that it is not necessary to do an analysis because we have already done it and concluded that this is insignificant. FINAL MINUTES Page 34 of 45 Finance Committee Transcript February 2, 2016 Ms. Gitelman: I think so, but this Fee Waiver Policy kind of grew out of that Housing Element, because in the Housing Element we talked about the need to potentially waive fees for 100 percent affordable projects, and so we proposed this Fee Waiver Policy that the Council adopted and that gives us the ability where we have the affordable housing project that is being built as affordable housing. It is not a Market-rate Project that has a couple of affordable units in it, that we have the ability to waive fees for that particular housing. Council Member Wolbach: But that is only, as I heard you read it, that existing waiver policy only applies to something being built either by a nonprofit or by government, and which is fully affordable, so it would not apply to, let’s say a For-profit Developer said I want to build something and half of it’s going to be Below Market Rate housing, which is almost impossible and if they said they wanted to do that, the City Manager would not even be able to provide that fee waiver, in that special and very unlikely unicorn kind of case because it is so limited. Ms. Gitelman: A For-profit Developer presumably is making enough of a profit that they could pay our fees, again, a nominal part of the total cost of land and construction. Chair Filseth: Still looking for a second. Council Member Schmid: I guess I feel that the opportunity of bringing this up in the Housing Element to say let’s change the wording in the Housing Element. Council Member Wolbach: I’ll just respond to that. The Housing Element doesn’t have the legislative action. It warns of a problem and I am just trying to make sure we take action to prevent that problem. It sounds like the Director of Planning and Community Planning is fairly confident that this is not a problem. Chair Filseth: I think the Motion fails on account of a lack of a second. AMENDMENT FAILED DUE TO THE LACK OF A SECOND Chair Filseth: First of all I think we are talking about how many angels can dance on the head of a pin, because this is such a tiny fraction of the cost of FINAL MINUTES Page 35 of 45 Finance Committee Transcript February 2, 2016 doing this thing, but also, I think we should think very differently about affordable housing versus vast amounts of market-rate housing, so I think to try to put one thing that covers all those cases, that’s challenging. Council Member Holman: Can I say something similar to that, which is not all housing is created equally and if there was some way, and I appreciate your nod to that. Chair Filseth: Can I make sure this is on the Finance as opposed to (inaudible) we could talk about housing and affordable housing for a long time. Council Member Holman: I was just going to acknowledge what Cory said about, Catherine Robuck said about existing housing and retention of it. I just wanted to acknowledge that. Chair Filseth: So acknowledged. Can you ready back the Motion, second by Council Member Holman to recommend to the Council to adopt a schedule for Planning Fee Increases and Adjustments in hourly rates to better affect the City’s User Fee Cost Recovery Level Policy with the addition that the hourly fees would go to 100 perfect in year one and flat fees will go to 100 perfect on a two-year schedule. There was one Amendment which failed and one that did not proceed to second. MOTION PASSED: 4-0 Council Member Holman: Before you leave, I had a question about the Report. Can we do that? On the Report on Page nine it’s general observations of Planning Community Environment and it talks about, I just want to get Staff’s responses about the splitting off of Planning from Development Services and also about the splitting of Code Enforcement and Code Compliance and I just wanted to see if Staff had some comments it wanted to make about this because there were no kind of striking comments. Ms. Gitelman: Yes, I know (inaudible) and I hope it came through in our summary that Development Services is undertaking their own Fee Study this year, and I think they are going to be able to look at some of these issues and give the (inaudible) and others a recommendation on whether this restructuring is the right way to go or not. I can’t say anything further about it right now, but we will continue to look at this issue. FINAL MINUTES Page 36 of 45 Finance Committee Transcript February 2, 2016 Council Member Holman: Is it just the, and there is a question for Dan too, if it is, feel free to respond. It wasn’t clear to me quite if it is just a funding issue, or if it was also a structural issue. Mr. Edds: Could you ask that question again? Council Member Holman: The challenges that are spelled out in the Report again, on your Report on Page one. Mr. Edds: My Report, okay. Council Member Holman: Yes, are they challenges because of how the fees are charged and collected, or is it also a structural aspect of how development and planning have been split off of each other. Is it one or the other or both? Mr. Edds: That is a good question. Council Member Holman: That’s what I was trying to ascertain. Mr. Edds: The challenge that I see is that you have had a large organization that is now split into two, also which are very complex and so what I am seeing over in the Development Services side is just, and some of it is staffing and then split funding of staffing, and where people actually are working versus maybe where they thought they were working when the split was made. I would call that structural and what I am seeing is that is getting worked out. That makes it difficult, both on the management side but also looking at what an individual service should cost, so I see it more of a structural thing that is getting worked out in an evolutionary fashion. Ms. Gitelman: We, on an annual basis, as we prepare our Budget, we work with the Office of Management and Budget (OMB) and Development Services to make sure that the revenues and costs between Development Services and PC are split appropriately. Obviously, revenues and costs need to be in the same place so you can split them one way or split them the other, but every year we go through this process of making sure that they are matching up, and as Development Services undertakes their Fee Schedule Study, it will be an opportunity to relook at this issue of whether you split people or split fees, the revenues, so we can look at that. Okay. FINAL MINUTES Page 37 of 45 Finance Committee Transcript February 2, 2016 Council Member Holman: Great. And then one last question about the fees themselves, is, are the Council Members okay if I ask for something to be clarified when it comes to Council, like where some things have gone, and about, and it probably should have been asked before the Motion, but I was (crosstalk) about back at Page 19 for instance where the wireless for some of these, it just says delete and delete and it’s not clear where they went. So you don’t have to answer, just if you can clarify when it comes to Council. Mr. Lait: And just, in a nutshell, it’s consolidating the fees, instead of having a whole bunch of Use Permit fees identified. It is the same function, the same Staff work, whether it’s a Conditional Use Permit (CUP) for one thing or the other thing, so we are just collapsing all the fees into one general category. I will explain that in the Report. Chair Filseth: If we are done with this, I think we can thank the Planning Department Staff for joining us. Thank you again. Future Meetings and Agendas Chair Filseth: We have a meeting next on March 1, 2016. Just to remind the Committee (Finance Committee). I think most of you know it is the first and third Tuesday’s of the month. At the moment the (inaudible) states that your meeting starts at 7:00 P.M. We have to start again on the first because you have a Closed Session as I have been told, and so it is decided to have enough time for the Closed Session discussion so there is a request to keep it at 7:00 P.M. Staff would like to check with you, Chair and the rest of the Committee is if there would be an interest to start the meetings at 6:00 P.M., so let me as the question. My understanding is that several of us could do 6:00 P.M. but you have a conflict on the third Tuesday of each month. Are you 6:00 or 7:00 P.M., do you have a preference? Lalo Perez, Chief Financial Officer and Director of Administrative Services: I would defer to Staff’s preference. I would … Chair Filseth: I would prefer 6:00 P.M. after a long Monday. So let me ask this, given that Council Member Holman is not available at 6:00 P.M. on the third Tuesday, it seems to me we should either leave them all at 7:00 P.M., or we could have the first Tuesday at 6:00 P.M. and the second Tuesday at 7:00 P.M. Is that too complicated for people? FINAL MINUTES Page 38 of 45 Finance Committee Transcript February 2, 2016 Council Member Wolbach: Not for us. We will take half. So I take it that Staff has a preference for 6:00 P.M. where possible? Mr. Perez: It’s usually easier for us so that we can have a quick dinner and get ready (crosstalk.) Chair Filseth: The Motion? (Crosstalk) you and I set the Agenda, so why don’t we set it for 6:00 P.M. on the first Tuesday of the month and 7:00 P.M. on the third Tuesday of the month? Mr. Perez: If we are good with that discussion of the Agenda that we have tentatively for the first is the mid-year so we have (inaudible) to our Budget numbers in terms of our expenses and revenues and we will bring that to you. We also have the much-anticipated draft of the Comprehensive Plan update for the Fiscal Impact Study and then the beginning of the discussion for the preliminary financial forecast for all Utility Funds. Hillary, is there an update on the fiscal? Hillary Gitelman, Director of Planning and Community Environment: No, I was just wondering if there is a meeting before March 1, 2016, because we had Housing Impact Fee. Chair Filseth: I have one listed here for the 16th. Ms. Gitelman: We have (inaudible) fees coming on the 16th and the Fiscal Study on the first. Mr. Perez: Thank you for that. I skipped 2/16/16. My oversight. We have the, right now on the Tentative Agenda, the Power Purchase Agreements for the (inaudible) Palo Alto LLC, the Clean Program update and extension and the House and Commercial Linkage Fees Nexus Study, so we could flip those if you wanted. Ms. Gitelman: You thought User Fees were fine. (Crosstalk). Chair Filseth: Okay, so why don’t we leave that. Actually that is the 16th, so that needs to be at 7:00 P.M. The third Tuesday of the month and the, I’m sorry, can you repeat what was on the first. FINAL MINUTES Page 39 of 45 Finance Committee Transcript February 2, 2016 Mr. Perez: The Mid-year and then the Preliminary Financial Forecast for all Utility Funds, so this is when the discussion starts telling you what they are projecting for the funds and the Potential Rate Impacts. Chair Filseth: Got it, and that’s at 6:00 P.M., or is that at 7:00 P.M. as well. That’s a Closed Session. Mr. Perez: I’ll go check. (Crosstalk) I think that Closed Session was on the 16th, so I think we are fine, so the first can be at 6:00 P.M. Chair Filseth: Okay. And then on the 15th we are talking about the Public Works pool vehicles. Mr. Perez: That’s correct. The other thing I wanted to give you tonight, and I know we’re here really late, but it is mostly blank, it’s the May Budget Hearing calendars, so what we are looking for is for you to take a look at the schedule and if you don’t mind, Chair, coordinating any absence to those potential dates, so just to remind you we try to have a meeting on a Monday and Tuesday of the three week period, have a wrap-up meeting and then take it to the Council on two nights. Typically what is required is as long as we have a quorum and we try to have you all on the wrap-up so you can have a chance to participate if you happen to miss a meeting so you can go ahead and have a say on anything you miss. So if you can help us coordinate any dates that are in conflict for you, then the Chair and I can work on seeing what we can do to make other arrangements. Chair Filseth: And you would like that as soon as possible. Mr. Perez: That would be great. And what we do then is we fill in all of the departments and get the department heads aligned. Jessica Brettle, Assistant City Clerk: Do you have an extra copy of that? Thank you. Council Member Schmid: I think the Policy and Services Committee have a recommendation to move Committee to Wednesday rather than Tuesday. Mr. Perez: To my understanding, the Item is still outstanding. It did not get heard. (Crosstalk.) FINAL MINUTES Page 40 of 45 Finance Committee Transcript February 2, 2016 Council Member Wolbach: I think there might be some pull back from that as well, because Wednesday is the night of a lot of regional meetings and if we shift our, I was originally in favor until I realized this, that if we shift our Committee meetings to Wednesday nights, then Council Members would be (inaudible) to any region body becomes almost impossible or it becomes a conflict and given our interest in how things our neighbors affect us, that would probably not be good for Palo Alto. Mr. Perez: In addition, the Utilities Advisory Commission (UAC) meets on Wednesday nights. Council Member Schmid: So we should take these Tuesday/Thursdays as (crosstalk.) Chair Filseth: I believe so. You know there may be further discussion by the (inaudible), but at this point we are assuming we are going to (inaudible). Okay. Can I ask a couple of things then? So just generally one of the things that came up earlier, there was a discussion about the Administrative Penalty Schedule, which I guess gets reviewed once a year. Is that the kind of thing that comes to Finance? Mr. Perez: It does. It comes to you as part of the Budget process, which is the main schedule. So the Fee Schedule will be listed specifically. What we will do is bring you Staff-recommended changes, and at that point in time you as the Committee has the opportunity to ask for any updates or changes on anything else that Staff doesn’t recommend. You’re the one that brought that up. Council Member Holman: Yeah, so clarification on that is, so is that a time – I don’t want to slow down the Budget-hearing process – is that a time or an earlier time, we should be discussing how we do or don’t assess or collect the fees. Mr. Perez: I would say from a financial perspective, that would be the best time, because you have the whole picture with you. We try to put the Fee Schedule a little bit later in the Budget Hearings, but even so by then you are going to have an understanding of where we stand financially, so you will make an informed decision. And it may be irrelevant to the bottom line, but that was the thinking of how we structure those hearings. FINAL MINUTES Page 41 of 45 Finance Committee Transcript February 2, 2016 Council Member Holman: Can I make a comment, this may be a little bit counter to that, to me it doesn’t matter and I am not sure that it does to the community what the cumulative dollar amount is, it is our enforcement capability and proactive actions in that regard, so is that consistent with any of the Council Members? Chair Filseth: My recollection of this process was we did have a discussion about that about a year ago in May, right, from the perspective of when we talked about staffing and compliance. I think that was the only discussion we had on that. We didn’t go more broadly than that. Mr. Perez: We added a position. Council Member Holman: So I am a little concerned about slowing down the Budget process. We are going to have a discussion about collecting penalty assessments, assessing and collecting. I can see there is so much to go through during the Budget cycle that it could be not very favorably reviewed. Mr. Perez: Let me talk to the City Manager and to Hillary and see what can be done, because obviously the brunt of the analysis or any work that needs to be with them, so let me check that. I see some windows in April, so we will have to take a look at just a matter of checking it with Staff. Chair Filseth: I wanted to ask the Section 115 discussion, does that come back to Finance Committee, or is it just going to the 2017 Budget in process. Mr. Perez: The way we were looking at it, if it is going to be part of your March 7, 2016 Council meeting discussion, at that point I suppose the Council could send it back to Finance if there (crosstalk.) Council Member Schmid: What is the 117? Chair Filseth: That is the Pension Trust. I noticed on the earlier list there is a Police Services Utilization and Resources Study. Mr. Perez: Correct. Chair Filseth: That’s going to come, to be scheduled. FINAL MINUTES Page 42 of 45 Finance Committee Transcript February 2, 2016 Mr. Perez: That’s one where we are working on, there are a couple of items that are to be scheduled there that we are working on with the departments, and that’s been a challenging one, as you can tell from the date, and so let me continue to check in with the department. If you do not hear back from us, again we have the May Budget Hearings when the Police Budget comes. Chair Filseth: I understand. Once of the things that came up was in the National Citizens Survey, it showed that Palo Alto had the highest public safety expense of any city in the region and I assume that some of that would get some discussion and we wanted the topic covered. Mr. Perez: Unfortunately, I don’t have it in front of me, but if it is Public Safety and it is broad then it includes the Stanford coverage? Council Member Schmid: That’s because the worker numbers here are so much higher than the population. Mr. Perez: We can definitely, (crosstalk.) Chair Filseth: Per resident. Council Member Wolbach: It shows a very high per capita because they only count the residents, not Stanford. Mr. Perez: One thing that Council Member Schmid has done in the past, and I think it is appropriate is he correlates that with the long-range in the Budget discussions (crosstalk.) Chair Filseth: And then finally, I know you are tired of hearing about this, but at what point do we discuss a strategy to, right now the unfunded Actuarial Liability we assess once per year with John Bartel, which doesn’t enable us to consider that as we do budgeting and cost recovery and staffing decisions and things like that, but at what point do we look at a strategy to enable us to actually calculate that on the fly, so that we can use it in operating decisions. Mr. Perez: I think it would be appropriate when Mr. Bartel comes before you on March 7, 2016, to indicate some assignment to the Finance Committee that you want some further analysis and some template or methodology. FINAL MINUTES Page 43 of 45 Finance Committee Transcript February 2, 2016 Chair Filseth: Yeah, I think we need a good table or a template or a model or something like that. They can’t just send it because, he does fantastic work, but it takes two months and is expensive. Mr. Perez: I think that would be my suggestion or recommendation that would be brought up at that point that you as a Council decide how you want to handle that and direct it to the Committee or direct it to Staff at that point if there is agreement. Council Member Schmid: Yeah, it would have an impact on the Budget. Chair Filseth: And then, finally, we are through our mechanisms and the City has a great and appropriate focus on the UAL (Unfunded Actuarial Liability), but to the best of my knowledge we don’t have a plan to pay down Other Post Employee Benefit. Is that something that we discuss in Finance Committee? Mr. Perez: Absolutely and so we can have that discussion again when we go through the Budget Hearings, the retire/medical is a subject specific Item that we discuss the funding and current payment level and we can talk more about it at that point, but I will give you this much, we are one of the few cities, we are like top 20 in terms of largest cities in California in that group that is funding on a regular basis their annual required contribution, but I think your point is, is that enough, and so that is a discussion we can have. Chair Filseth: The fear is that it is growing faster. So you said that is during the budgeting? Mr. Perez: Right, because we will have a Budget recommendation to you which right now the current Council policy is to fund the annual required contribution even though it is not required. It’s one of those catchy things. Council Member Schmid: If I can put a word in, I guess number 10, is (inaudible) and I note that the School District has made a decision not to aggressively develop, so that should put the burden, I guess, back on the City. Mr. Perez: I think for that one we do need to come back. I do need to talk to the City Manager because there is a demand for the space and our largest FINAL MINUTES Page 44 of 45 Finance Committee Transcript February 2, 2016 tenant is moving out, so we should Agenda that so we can have a discussion and update with you. Council Member Holman: Can I ask a question? I had that one on my list too. I see it’s on here and I just wondered why it was on Finance. Mr. Perez: It just comes up as part of the Budget process because of the significant impact of Foothills moving out and so there are provisions in the agreement for a Rent Reduction, and so we can explain all of that to you and the desires of certain members of the community or groups, I’ll call it, for that space and so there are a lot of issues and so we do need to come to you and have an update and a discussion. Council Member Holman: Did that also include, I understand that some Request for Proposals (RFP) might be going out soon for some nonprofits to step down with Foothills moving out? Mr. Perez: It’s not for the Foothills’ space, but other space that is available, there will be some RFP’s coming up. Anybody that has made it known to us that they are looking for space, we are adding them to the list. Council Member Holman: Okay, so what is the timing of that? Mr. Perez: Let me double check, because there was an update and so it held up the process so I need to check and let you know. Council Member Holman: Okay, so there are some nonprofits. Thank you for that. An then, do I dare mention Zero Based Budgeting and if we could have a discussion about that and now how we might do it incrementally, meaning not all departments at once, what that would entail, what an approach might be, what the advantages and disadvantages are. Are the Council Members interested in that? Chair Filseth: This comes up from time to time, right? Council Member Holman: Yes. Mr. Perez: This is a significant undertaking that might be, if I may suggest, that the Chair have a discussion with the City Manager and take it from there. I don’t feel that I can provide you a response to that on my level. I FINAL MINUTES Page 45 of 45 Finance Committee Transcript February 2, 2016 think it needs to be a discussion because of the magnitude of the work and the implications on the work plans because it is a significant undertaking. I do note that you are saying phase it in and it is something that I think is a discussion that needs to be had with the City Manager. Council Member Holman: Pending that discussion we could Agendize it with the Finance Committee. There is no way to do it City-wide, it would just be an enormous undertaking. Chair Filseth: Let me discuss it with the City Manager and maybe we can Agendize it after that. Council Member Holman: You were saying it does come up. Mr. Perez: It has been asked before. Council Member Holman: I just wanted to check, this won’t be our last opportunity to talk about Future Agendas. We do it at the end of every meeting. We can, hopefully, hear back any thoughts following your discussion with the City Manager and maybe take it from there. Council Member Holman: I do have one other question, if I could. Business Registry, what is the status of the end of Phase Two and when that data might be coming forward? Mr. Perez: I can’t answer completely. I apologize, I am not up to date. I do know that I did see that there is a recommendation for staffing coming to you for Monday, the 8th, and so there is a discussion in there as to where they are at and some deadlines. I was working on some other projects and so I had other Staff look at it and read it and I didn’t get a chance to read it so I don’t know exactly all the details. Chair Filseth: With that we move to next, which I guess is adjournment. ADJOURNMENT: The meeting was adjourned at 8:57 P.M. City of Palo Alto (ID # 6641) City Council Staff Report Report Type: Consent Calendar Meeting Date: 3/21/2016 City of Palo Alto Page 1 Council Priority: Environmental Sustainability Summary Title: Palo Alto CLEAN Program Updates and Extension Title: Finance Committee Recommendation to Adopt a Resolution Continuing the Palo Alto Clean Local Energy Accessible Now (CLEAN) Program and Decreasing the Contract Rate (1) for Solar Resources to 8.9c/kWh to 9.0c/kWh, and (2) for Non-Solar Renewable Energy Resources to 8.1c/kWh to 8.2c/kWh; and Amending Associated Program Eligibility Rules and Power Purchase Agreement Accordingly From: City Manager Lead Department: Utilities Recommended Motion (Finance Committee Recommendation) I move that Council: 1. Adopt a resolution (Attachment A) to make the following changes and amend the Clean Local Energy Accessible Now (Palo Alto CLEAN) Program Eligibility Rules and Regulations accordingly: a. Continue the Palo Alto CLEAN Program for solar energy resources, reducing the contract price from 16.5 cents per kilowatt-hour (¢/kWh) to a contract price equal to the avoided cost of solar energy resources of 8.9¢/kWh for a 20-year contract, and 9.0¢/kWh for a 25-year contract term, and to continue with a CLEAN Program limit for solar energy resources of 3 megawatts (MW); b. Reduce the Palo Alto CLEAN program price for local non-solar eligible renewable energy resources to the updated avoided cost of such energy (8.1¢/kWh for a 20-year contract term, or 8.2¢/kWh for a 25-year contract term), from the prior avoided cost projection (9.3¢/kWh for a 20-year contract term, or 9.4¢/kWh for a 25-year contract term), and continue with a separate program limit of 3 MW specifically for local non-solar eligible renewable resources; and City of Palo Alto Page 2 2. Approve the attached amended CLEAN program Power Purchase Agreement (PPA) (Attachment B) to implement the recommended changes. Recommendation The Finance Committee unanimously (4-0) recommends that the City Council: 1. Adopt a resolution (Attachment A) to: a. Continue the Palo Alto CLEAN Program for solar energy resources, reducing the contract price from 16.5 cents per kilowatt-hour (¢/kWh) to a contract price equal to the avoided cost of solar energy resources of 8.9¢/kWh for a 20-year contract, and 9.0¢/kWh for a 25-year contract term, and to continue with a CLEAN Program limit for solar energy resources of 3 megawatts (MW); b. Reduce the Palo Alto CLEAN program price for local non-solar eligible renewable energy resources to the updated avoided cost of such energy (8.1¢/kWh for a 20-year contract term, or 8.2¢/kWh for a 25-year contract term), from the prior avoided cost projection (9.3¢/kWh for a 20-year contract term, or 9.4¢/kWh for a 25-year contract term), and continue with a separate program limit of 3 MW specifically for local non-solar eligible renewable resources; and 2. Approve the attached amended CLEAN program Power Purchase Agreement (PPA) (Attachment B) to implement the recommended changes. The attached resolution incorporates the above recommendations. The amended Palo Alto CLEAN Eligibility Rules and Requirements, which implement the above recommendations, are shown in Exhibit A-1 attached to the resolution. As noted above, staff also seeks approval of an amended PPA (Attachment B), which incorporates the above recommendations. Council has previously delegated authority to the City Manager to execute eligible agreements, and to make additional changes to the CLEAN Program PPA that are approved by the City Attorney’s office as may be otherwise necessary to implement the recommendations that are approved by Council. Staff requests the same authority be extended to recommendations approved by Council as part of this staff report. The recommendation from the Finance Committee differs from the recommendation made by the Utilities Advisory Committee (UAC). At its December 2015 meeting, the UAC voted unanimously (3-0, with one commissioner abstaining and two commissioners absent) to support staff’s initial recommendation to continue the Palo Alto CLEAN Program for solar resources at the current 16.5¢/kWh contract price, with a program limit of 3 MW for solar energy resources, while lowering the contract price for local non-solar eligible renewable energy resources to the updated avoided cost of such energy. City of Palo Alto Page 3 Executive Summary In March 2012 the Council adopted the Palo Alto CLEAN program (also commonly referred to as a feed-in tariff, or FIT, program). The program was designed to address the Long-term Electric Acquisition Plan (LEAP) objective to enhance supply reliability through the pursuit of local generation opportunities, and to complement the City of Palo Alto Utilities’ (CPAU’s) existing PV Partners solar rebate program. Palo Alto CLEAN created an additional alternative for property owners by enabling them to build a new solar system on their property and sell the energy to CPAU under a long-term, fixed-rate, standardized contract rather than use the energy on site. Though solar developers expressed interest in Palo Alto CLEAN in 2012, the initial contract price (14 cents per kilowatt-hour (¢/kWh) for a 20-year term) proved insufficient to facilitate the most common business model used by project developers, which involves a third-party investor leasing roof space from a property owner. Council increased the Palo Alto CLEAN price to 16.5¢/kWh in December 2012. In May 2015, Council added a 25-year contract term option, and expanded the program to include non-solar eligible renewable energy resources, setting their contract prices at the avoided cost level (9.3¢/kWh for a 20-year contract or 9.4¢/kWh for a 25- year contract). Since the last program update in May 2015, the first CLEAN project applications have been received. The Unitarian Universalist Church of Palo Alto submitted the program’s first application in December 2015, for a 113 kW solar canopy project to be installed over its parking lot. And in February 2016, Komuna Energy submitted four separate applications for projects that will cover the rooftops of four parking garages that the company is leasing from the City under a 25-year agreement approved in January 2016 (Staff Report 6535). Together, these five projects will account for 42% of the total 3 MW program capacity allocated to solar resources. Given that the avoided cost of local solar resources has continued to decline since Council’s May 2015 decision, and given that five CLEAN project applications have now been received, the Finance Committee recommends reducing the contract price for future local solar project applicants from 16.5¢/kWh to the avoided cost level (which is currently estimated at 8.9¢/kWh for a 20-year term, and 9.0¢/kWh for a 25-year term). The five projects that are already in the CLEAN program queue will still receive the 16.5¢/kWh rate, as that was the contract price in effect at the time they submitted their applications. The Finance Committee’s recommendation that Council reduce the CLEAN Program price for solar resources may have implications for a City program (the Community Solar Program) currently under development. Should Council elect to adopt the Finance Committee recommendation to reduce the contract price under the CLEAN Program for solar resources, it’s possible that this initiative will need to be significantly modified or will no longer be able to move forward. Staff, the UAC, and the Finance Committee also recommend continuing to offer non-solar eligible renewable energy resources a CLEAN price equal to the avoided cost of the energy City of Palo Alto Page 4 produced by those resources, which is currently estimated at 8.1¢/kWh for a 20-year term, and 8.2¢/kWh for a 25-year term. The City has not yet received any application for non-solar resources under the CLEAN Program. Committee Review and Recommendation The UAC considered staff’s recommendation at its December 2, 2015 meeting. After discussion, the UAC voted unanimously (3-0, with one commissioner abstaining and two commissioners absent) to support the staff recommendation to continue the CLEAN program while maintaining the 16.5¢/kWh price offered to local solar resources and adjusting the price offered to local non-solar eligible renewable energy resources as described above. The excerpted minutes from the UAC’s discussion at its December 2, 2015 meeting are provided as Attachment D. At its February 16, 2016, meeting, the Finance Committee discussed the UAC’s and staff’s recommendation. The Finance Committee staff report (Staff Report 6485), which contains a detailed discussion of the CLEAN program’s background and a review of the changes in the value of locally generated renewable energy, is provided as Attachment C. Staff described the program’s history, including previous annual updates made to the program since its inception. Staff also described how the value of local solar and non-solar renewable energy has declined significantly over the past few years, and reviewed the various cost components that make up these values. Finance Committee members commented on the annual excess cost associated with continuing to offer the 16.5¢/kWh rate to solar resources ($380,000 per year for 3 MW of solar resources), noting that it is roughly equivalent to the annual cost of financing approximately $6 million in infrastructure improvements through municipal bonds. Finance Committee members also remarked on the dramatic difference between the proposed 16.5¢/kWh price for local solar energy and the cost of purchasing solar energy from large-scale facilities outside the City. (At the same meeting, the Finance Committee unanimously recommended that Council approve a new long-term PPA for a 26 MW solar facility in Los Angeles County with a contract price of 3.676¢/kWh (Staff Report 6637); however, this price does not include the cost of transmission, distribution system losses, or local capacity.) After discussion, the Finance Committee voted unanimously (4-0) to recommend that the Council adopt a resolution reducing the CLEAN program price for local solar resources to the avoided cost of such energy (8.9¢/kWh for a 20-year contract term, or 9.0¢/kWh for a 25-year contract term) with a 3 MW participation cap; continuing the CLEAN program for local non- solar renewable energy resources at the updated avoided cost of such energy (8.1¢/kWh for a 20-year contract term, or 8.2¢/kWh for a 25-year contract term) and with a separate 3 MW participation cap; and approving the amended CLEAN program PPA. The excerpted action minutes from the Finance Committee’s discussion of the Palo Alto CLEAN program at its February 16, 2016 meeting are provided as Attachment E. City of Palo Alto Page 5 Resource Impact Staff estimates the current cost of buying energy from solar resources outside of Palo Alto is 8.9¢/kWh (including transmission and capacity) for a 20-year contract, or 9.0¢/kWh for a 25- year contract. Purchasing the energy generated by local solar projects at contract prices equal to these avoided cost values would not impact the cost to Utility customers. On the other hand, purchasing the output from 3 MW of local solar projects at a contract price of 16.5¢/kWh would cost about $380,000 per year more than buying the same energy outside of Palo Alto. This is equivalent to a 0.32% increase in the electric utility’s costs. If the program increased costs by $380,000 per year, staff has determined that the system average electric rate would have to increase by 0.04¢/kWh. This is equivalent to a bill impact of $1.85 per year for the median residential customer using 410 kWh/month, or $2.80 per year for a residential customer using 650 kWh/month. Changing the program price offered to local, non-solar renewable energy projects is not expected to impact the cost to the Utility since the recommended price for those projects is equal to the value of acquiring such projects outside the City. In addition to the energy costs described above, staff time is associated with marketing and project review. The project review can be absorbed with existing staff over the life of the program, and costs will be recovered through project review fees. The additional marketing will require about 0.1 FTE of staff time and may involve an additional budget for marketing materials, which would be requested through the annual budget process. The marketing work will be absorbed by existing staff, but will decrease time spent on other account management and efficiency program delivery activities. Policy Implications The recommendation to continue the CLEAN program supports the City’s carbon neutral electric supply portfolio policy as well as the Long-term Electric Acquisition Plan (LEAP) Objective to enhance supply reliability through the pursuit of local generation opportunities. However, the recommendation to reduce the Palo Alto CLEAN contract price for solar resources from 16.5¢/kWh to the avoided cost level of 8.9¢/kWh for a 20-year contract, or 9.0¢/kWh for a 25-year contract, represents a change in emphasis in adopted Council policy—which has previously prioritized the additional financial and environmental benefits to increasing local solar generation that are not captured in the avoided cost calculation. Environmental Review Adoption of the attached resolution is not subject to California Environmental Quality Act (CEQA) review under California Public Resources Code section 21080(b)(8), because the price adopted reflects the reasonable cost of the CLEAN Program’s operating expenses. Approval of the amended CLEAN program PPA is not a project under CEQA, and therefore, no environmental assessment is necessary. City of Palo Alto Page 6 Attachments:  Attachment A: Resolution Continuing the Palo Alto CLEAN Program (with Exhibit A-1 Revised Program Rules) (PDF)  Attachment B: Updated Palo Alto CLEAN Power Purchase Agreement (PDF)  Attachment C: Finance Committee Staff Report 6485, CLEAN Program Update (without attachments) (PDF)  Attachment D: Excerpted Final Minutes of the December 2, 2015 UAC Meeting (PDF)  Attachment E: Final Action Minutes of the February 16, 2016 Finance Committee Meeting (PDF) NOT YET APPROVED 160308 jb 6053695 Resolution No. _________ Resolution of the Council of the City of Palo Alto Decreasing the Palo Alto Clean Local Accessible Now Program Contract Rate for Solar Resources to 8.9 ¢/kWh to 9.0 ¢/kWh and Decreasing the Contract Rate for Non-solar Renewable Energy Resources to 8.1 ¢/kWh to 8.2 ¢/kWh Based on the Reduced Avoided Cost of Local Renewable Energy and Amending Associated Program Rules R E C I T A L S A. On March 5, 2012, the City approved the Palo Alto Clean Local Energy Accessible Now (CLEAN) Program (or feed-in tariff). Under the Palo Alto CLEAN Program, participants who build a new solar generating system in Palo Alto may obtain a long-term, fixed-price contract with the City to sell the energy from the system to the City’s electric utility. B. Council extended the program beyond its original termination date of December 31, 2012 and has periodically reviewed the contract price and program cap. C. On May 27, 2015, Council approved Resolution 9512, which continued Palo Alto CLEAN at the contract price of 16.5 cents per kilowatt-hour (¢/kWh) for local solar resources, added a 25-year contract term option, and expanded the program’s eligibility to local non-solar eligible renewable energy resources, establishing contract prices of 9.3 ¢/kWh for a 20-year term or 9.4 ¢/kWh for a 25-year term for such resources. These contract rates were set to be equal to the then current estimated avoided cost of the energy generated by these resources. The resolution further established separate program caps of 3 megawatts (MW) of generating capacity for both the solar and non-solar resources. D. In the past few months, the City has received five CLEAN Program project applications for local solar facilities, which together will total 1.26 MW of capacity, or 42% of the 3 MW program cap. E. In April 2015, the City released a Request for Proposals for projects that could deliver renewable energy to the City, and results indicate that the avoided cost of energy generated by renewable resources has dropped since Council adopted a CLEAN Program price for local non-solar resources in May 2015. F. The City therefore wants to continue the CLEAN program for solar resources, but at a reduced contract price equal to the avoided cost of the solar energy (8.9 ¢/kWh for a 20- year term or 9.0 ¢/kWh for a 25-year term) while program parameters (including the separate 3 megawatt (MW) caps applicable to the solar and non-solar portions of the program). Additionally, the City wants to reduce the contract prices available to local non-solar eligible renewable resources to 8.1 ¢/kWh for a 20-year term or 8.2 ¢/kWh for a 25-year term for such resources, which is equal to the current estimated avoided cost of energy generated by these resources. ATTACHMENT A NOT YET APPROVED 160308 jb 6053695 The Council of the City of Palo Alto RESOLVES as follows: SECTION 1. The Council adopts revised Palo Alto CLEAN Program Eligibility Rules Requirements, set forth in Exhibit 1 attached to this Resolution. SECTION 2. The Council authorizes the City Manager or his designee to sign contracts for the output of one or more solar, or other non-solar eligible renewable energy resource meeting the CLEAN Program Eligibility Rules and Requirements described in Section 1. SECTION 3. The Council finds that the adoption of this resolution is not subject to California Environmental Quality Act review under California Public Resources Code section 21080(b)(8), because the rate adopted reflects the reasonable cost of the CLEAN Program’s operating expenses. Approval of the amended CLEAN Program Eligibility Rules and Requirements attached to the Resolution as Exhibit 1 is not a project under CEQA, and therefore, no environmental review 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 PALO ALTO CLEAN (CLEAN LOCAL ENERGY ACCESSIBLE NOW) PROGRAM ELIGIBILITY RULES AND REQUIREMENTS Effective __________ A. PARTICIPATION ELIGIBILITY: The Palo Alto Clean Local Energy Accessible Now Program (the “CLEAN Program”) is open to participation by any Eligible Renewable Energy Resource, as defined in Section D.4, that satisfies these Program Eligibility Rules and Requirements. B. TERRITORIALITY REQUIREMENT: In order to be eligible to participate in the CLEAN Program, an Eligible Renewable Energy Resource must be located in and generating electricity from within the utility service area of the City of Palo Alto. C. PRICES AND TERM FOR ELIGIBLE RENEWABLE RESOURCES: The following purchase price shall apply to the electricity produced by an Eligible Renewable Energy Resource participating in the Program, except as provided in Section D.5. Solar Energy Resources: Contract Term Contract Price 20 years $0.089 / kWh 25 years $0.090 / kWh Other, Non-Solar Eligible Renewable Energy Resources: Contract Term Contract Price 20 years $0.081 / kWh 25 years $0.082 / kWh D. ADDITIONAL RULES AND REQUIREMENTS: 1.The owner of the Eligible Renewable Energy Resource shall enter into an Eligible Renewable Energy Resource Power Purchase Agreement (“PPA”) with the City of Palo Alto prior to delivering energy to the City. 2. The maximum, aggregate generation capacity from all solar facilities participating in the CLEAN Program is three (3) Megawatts (“MW”) (the “Program Capacity”, based on the generating facility’s California Energy Commission rating, CEC-AC). Generating capacity from non-solar, eligible renewable energy resources will not be counted towards this 3 MW cap for the solar program. Instead non-solar, local eligible renewable energy resources will be subject to a 3 MW cap of their own. 3.An application for participation in the CLEAN Program to sell output to the City (the “Application”) may be submitted at any time. Applications will be considered in the EXHIBIT I PALO ALTO CLEAN (CLEAN LOCAL ENERGY ACCESSIBLE NOW) PROGRAM ELIGIBILITY RULES AND REQUIREMENTS Effective __________ order received. 4.Eligible Renewable Energy Resource means an electric generating facility that: (a) is defined and qualifies as an “eligible renewable energy resource” under California Public Utilities Code Section 399.12(e) and California Public Resources Code Section 25471, respectively, as amended; and (b) meets the territoriality requirement set forth in Section B. 5.The California Energy Commission’s (“CEC”) certification of the Eligible Renewable Energy Resource shall be required within six (6) months of the commercial operation date of the generating facility; the facility’s owner shall provide written notice of the CEC’s certification to the City within ten (10) business days of receipt of said certification. If the City agrees, in its sole discretion, to take delivery of the generating facility’s electricity prior to the CEC’s certification, then, as the facility’s electricity cannot be considered in fulfillment of the City’s RPS requirements, the price that the City will pay for the generating facility’s electricity (the “Pre-Certification Price”) will be set to $0.076 per kWh (for a 20-year contract term) or $0.08 per kWh (for a 25-year contract term), based on the estimated levelized cost of brown power over a 20-year or 25-year period, respectively. Upon the CEC’s certification of the generating facility and the provision of notice of such certification to the City in accordance with this section, the City will pay the Price set forth in Section C of these CLEAN Program Rules and Requirements and the PPA (collectively referred to as the “Contract Price”) for the generating facility’s electricity delivered on and after the date of the CEC’s certification. The City will, in its sole discretion, “true-up”, as appropriate, the difference between the Contract Price and the Pre-Certification Price for any electricity received and paid for by the City, effective as of the date of certification of the Eligible Renewable Energy Resource. 6.If an Eligible Renewable Energy Resource is authorized to participate in the CLEAN Program, then that Resource shall not be entitled to receive any rebate or other incentive from the City’s Photovoltaic (PV) Partners Program or any other similar incentive program funded by the City’s ratepayers. To the extent any rebate or incentive is paid to the owner of the Resource, that rebate or incentive shall be disgorged and refunded to the City upon 30 days’ notice, if the Eligible Renewable Energy Resource continues to participate in the CLEAN Program. If a rebate or an incentive has been paid to the Eligible Renewable Energy Resource, then that Resource shall be ineligible to participate in the CLEAN Program. 7.All electricity generated by the Eligible Renewable Energy Resource shall be delivered only to the City. No portion of the electricity may be used to offset any load of the generating facility (other than incidental loads associated with operating the generating facility). 8.A metering and administration fee will be charged to each Eligible Renewable Energy PALO ALTO CLEAN (CLEAN LOCAL ENERGY ACCESSIBLE NOW) PROGRAM ELIGIBILITY RULES AND REQUIREMENTS Effective __________ Resource that participates in the CLEAN Program. See Utilities Rate Schedule E-15 (Electric Service Connection Fees). 040914 jrm 0180042 1 POWER PURCHASE AGREEMENT ELIGIBLE RENEWABLE ENERGY RESOURCE (Palo Alto Clean Local Energy Accessible Now Program) This Power Purchase Agreement - Eligible Renewable Energy Resource, dated, for convenience, , 20 (the “Effective Date”), is entered into by and between the CITY OF PALO ALTO, a California chartered municipal corporation, and , a corporation (individually, a “Party” and, collectively, the “Parties”). RECITALS 1.The Buyer has adopted and implemented its CLEAN Program, which allows an owner of a qualifying electric generation system to sell to the Buyer the power output of a small-scale distributed generation Eligible Renewable Energy Resource, subject to the CLEAN Program’s rules and requirements. 2.The Seller owns or operates and desires to interconnect its Facility in parallel with Buyer’s Distribution System and sell the Energy produced by its Facility, net of Station Service Load, directly to the Buyer in furtherance of the CLEAN Program. 3.The Parties do not intend this Agreement to constitute an agreement by the Buyer to provide retail electrical service to the Seller. 4.The Parties wish to enter into a power purchase agreement for the sale and purchase of the Output of the Facility. The Parties will enter into a separate “Interconnection Agreement” in connection with this Agreement. NOW THEREFORE, in consideration of the foregoing recitals and the following covenants, terms and conditions, the Parties agree, as follows: AGREEMENT 1.1 DEFINITIONS The initially capitalized terms, whenever used in this Agreement, have the meanings set forth below, unless they are otherwise herein defined. The terms “include,” “includes,” and “including,” when used in this Agreement, shall mean, respectively, “include, without limitation,“ “includes, without limitation” and “including, without limitation.” “Agreement” means this Power Purchase Agreement – Eligible Renewable Energy Resource between the Buyer and the Seller. “Business Day” means any day except a Saturday, Sunday, or a day that the City observes as a regular holiday under Palo Alto Municipal Code section 2.08.100(a). “Buyer” refers to the City of Palo Alto, California, with a principal place of business at 250 Hamilton Avenue, Palo Alto, California 94301. “Buyer’s Distribution System” means the wires, transformers, and related equipment used by the Buyer to deliver electric power to the Buyer’s retail customers, typically at sub-transmission level voltages or lower. “CAISO” means the California Independent System Operator Corporation, or successor entity. “CAISO Tariff” means the CAISO FERC Electric Tariff, as amended. “Capacity” means the ability of a generator at any given time to produce Energy at a specified rate, as ATTACHMENT B 040914 jrm 0180042 2 measured in megawatts (“MW”) or kilowatts (“kW”), and any reporting rights associated with it. “Capacity Attributes” means any current or future defined characteristic, certificate, tag, credit, or ancillary service attribute, whether general in nature or specific as to the location or any other attribute of the Facility, intended to value any aspect of the Contract Capacity of the Facility to produce Energy or ancillary services, including contributions towards Resource Adequacy (including those requirements defined in Section 40 of the CAISO Tariff) or reserve requirements (if any), and any other reliability or power attributes. “CEC” means the California Energy Resources Conservation and Development Commission, or successor agency. “Certificate of RPS Eligibility” means a certificate issued by the CEC as evidence of RPS Certification of the Facility. “City” means the government of the City of Palo Alto, California. “CLEAN Program” refers to the Palo Alto Clean Local Energy Accessible Now Program, a renewable energy program established by the City by adoption of resolution number , dated , of the Palo Alto City Council, whereby the Buyer will purchase from the Seller the Output of Eligible Renewable Energy Resources that meet specified criteria set forth in the City’s applicable ordinances and resolutions. “Commercial Operation” means the period of operation of the Facility, once the Commercial Operation Date has occurred. “Commercial Operation Date” means the date specified in the Commercial Operation Date Confirmation Letter, which the Parties execute and exchange in accordance with this Agreement. “Contract Capacity” means the installed electrical Capacity available upon the Commercial Operation Date of the Facility in an amount, as specified in Exhibit “PPA-A.” “Contract Capacity” is measured at the Buyer’s revenue meter at the Delivery Point and is net of any Station Service Loads, any applicable Facility step-up transformer losses, and distribution losses on Buyer’s Distribution System up to the Delivery Point. “Contract Price” means the price paid by the Buyer to the Seller for the Output generated at the Facility and received by the Buyer, as set forth in Exhibit “PPA-A.” “CPUC” means the California Public Utilities Commission, or successor agency. “Delivery Point” means the point of interconnection to Buyer’s Distribution System, where the Buyer accepts title to the Output. “Delivery Term” has the meaning set forth in Section 14.2 hereof. “Eligible Renewable Energy Resource” means an electric generating facility that is defined and qualified as an “eligible renewable energy resource” under California Public Utilities Code Section 399.12(e) and California Public Resources Code Section 25471, respectively, as amended. “Energy” means electrical energy generated from the Facility and delivered to Buyer’s Distribution System with the voltage and quality required by the Buyer, and measured in megawatt-hours (“MWh”) or kilowatt- hours (“kWh”), as metered at the Delivery Point. “Facility” means the qualifying renewable energy generation equipment and associated power conditioning and interconnection equipment that deliver the Output to the Buyer at the Delivery Point. “FERC” means the Federal Energy Regulatory Commission, or successor agency. 040914 jrm 0180042 3 “Forced Outage” means an unplanned outage of one or more of the Facility’s components that results in a reduction of the ability of the Facility to produce Capacity. “Force Majeure” means an event or circumstance, which prevents a Party from performing its obligations under this Agreement, and which is not in the reasonable control of, or the result of negligence of, the Party claiming Force Majeure, and which by the exercise of due diligence is unable to overcome or cause to be avoided. “Force Majeure” shall include: (a) An act of nature, riot, insurrection, war, explosion, labor dispute, fire, flood, earthquake, storm, lightning, tidal wave, backwater caused by flood, act of the public enemy, terrorism, or epidemic; (b) Interruption of transmission or generation services as a result of a physical emergency condition (and not congestion-related or economic curtailment) not caused by the fault or negligence of the Party claiming Force Majeure and reasonably relied upon and without a reasonable source of substitution to make or receive deliveries hereunder, civil disturbances, strike, labor disturbances, labor or material shortage, national emergency, restraint by court order or other public authority or governmental agency, actions taken to limit the extent of disturbances on the electrical grid; or (c) Other similar causes beyond the control of the Party affected, which causes such Party could not have avoided by the exercise of due diligence and reasonable care. A Party's financial incapacity, the Seller’s ability to sell the Output at a more favorable price or under more favorable conditions, or the Buyer’s ability to acquire the Output at a more favorable price or under more favorable conditions or other economic reasons shall not constitute an event of Force Majeure. “Force Majeure” does not include a Forced Outage to the extent such event is not caused or exacerbated by an event of Force Majeure, as described above, and does not include the Seller’s inability to obtain financing, permits, or other equipment and instruments necessary to plan for, construct, or operate the Facility. “Good Utility Practice” means those practices, methods and acts that would be implemented and followed by prudent operators of electric energy generating facilities in the western United States, similar to the Facility, during the relevant time period, which practices, methods and acts, in the exercise of prudent and responsible professional judgment in the light of the facts known at the time the decision was made, could reasonably have been expected to accomplish the desired result consistent with good business practices, reliability, and safety. The Seller acknowledges that its use of Good Utility Practice does not exempt it from performing any of its obligations arising under this Agreement. “Good Utility Practice” includes, at a minimum, those professionally responsible practices, methods and acts described in the preceding paragraph that comply with manufacturers’ warranties, restrictions in this Agreement, the interconnection requirements of Buyer, the requirements of governmental authorities, and WECC and NERC standards. “Good Utility Practice” also includes the taking of reasonable steps to ensure that: (a) Equipment, materials, resources, and supplies, including spare parts inventories, are available to meet the Facility’s needs; (b) Sufficient operating personnel are available at all times and are adequately experienced and trained and licensed as necessary to operate the Facility properly and efficiently, and are capable of responding to reasonably foreseeable emergency conditions at the Facility and emergencies whether caused by events on or off the Facility’s site; (c) Preventive, routine, and non-routine maintenance and repairs are performed on a basis that ensures reliable, long-term and safe operation of the Facility, and are performed by knowledgeable, trained, and experienced personnel utilizing proper equipment and tools; (d) Appropriate monitoring and testing are performed to ensure equipment is functioning as designed; and (e) Equipment is not operated in a reckless manner, in violation of manufacturer’s guidelines or in a manner unsafe to workers, the general public, or the connecting utility’s electric system or contrary to environmental laws, permits or regulations or without regard to defined limitations such as, flood conditions, safety inspection requirements, operating voltage, current, volt ampere reactive (VAR) loading, frequency, rotational speed, polarity, synchronization, and control system limits; and equipment and components are designed and manufactured to meet or exceed the standard of durability that is generally used for electric energy generating facilities operating in the western United States and will function properly over the full range of ambient temperature and weather conditions reasonably expected to occur at the Facility site and under both normal and emergency conditions. 040914 jrm 0180042 4 “Green Attributes” refers to the definition set forth in the Standard Terms and Conditions, Appendix A-2, as amended, Decision D.07-02-011, as modified by D.07-05-057, of the CPUC, which incorporates the definition of “Environmental Attributes” set forth in the Standard Terms and Conditions, Appendix A-1, as amended, D. 04-06-014. “Green Attributes” includes any and all credits, benefits, emissions reductions, environmental air quality credits, offsets, and allowances, howsoever entitled, attributable to the generation from the Facility, and its displacement of conventional energy generation, whether existing now or arising in the future. “Green Attributes” includes RECs, as well as (1) any avoided emissions of pollutants to the air, soil or water, such as sulfur oxides (“SOx”), nitrogen oxides (“NOx”), carbon monoxide (“CO”) and other pollutants; (2) any avoided emissions of carbon dioxide (“CO2”), methane (“CH4”), nitrous oxide, hydrofluorocarbons, perfluorocarbons, sulfur hexafluoride, and other greenhouse gases (“GHGs”) that have been determined by the United Nations Intergovernmental Panel on Climate Change, or otherwise by law, to contribute to the actual or potential threat of altering the Earth’s climate by trapping heat in the atmosphere; and (3) the reporting rights to these avoided emissions such as Green Tag Reporting Rights and RECs. “Green Tag Reporting Rights” are the right of a Green Tag Purchaser to report the ownership of accumulated Green Tags in compliance with federal or state law, if applicable, and to a federal or state agency or any other party at the Green Tag Purchaser’s discretion, and include those Green Tag Reporting Rights accruing under Section 1605(b) of the Energy Policy Act of 1992 and any present or future federal, state, or local law, regulation or bill, and international or foreign emissions trading program. Green Tags are accumulated on a kWh basis and one Green Tag represents the Green Attributes associated with one (1) MWh of Energy. “Green Attributes” do not include (i) any Energy, Capacity, reliability, or other power attributes of the Facility, (ii) production or investment tax credits associated with the construction or operation of the Facility and other financial incentives in the form of credits, grants, reductions, or allowances associated with the Facility that are applicable to a state or federal income taxation obligation, (iii) fuel-related subsidies or “tipping fees” that may be paid to Seller to accept certain fuels, or local subsidies received by the generator for the destruction of particular pre-existing pollutants or the promotion of local environmental benefits, or (iv) emission reduction credits encumbered, used or created by the Facility for compliance with or sale under local, state, or federal operating and/or air quality permits or programs. If the Facility is a biomass or landfill facility and the Seller receives any tradable Green Attributes based on the Facility’s greenhouse gas reduction benefits or other emission offsets attributed to its fuel usage, the Seller shall provide the Buyer with sufficient Green Attributes to ensure that there are zero net emissions associated with the production of electricity from the Facility. “Green Attributes” includes any other environmental credits or benefits recognized in the future and attributable to Energy generated by the Facility during the Term that may not be represented by Green Tag Reporting Rights or RECs, unless otherwise excluded herein. Any Green Attributes provided under this Agreement shall be documented by RECs, or any other representation of the environmental benefits of the Output, the monthly cumulative total of which shall be provided to the Buyer, as specified herein. “Interconnection Agreement” refers to the agreement between the Buyer and the Seller, specific to the interconnection of the Facility to Buyer’s Distribution System. “NERC” means the North American Electric Reliability Corporation, or successor organization. “NCPA” means Northern California Power Agency, a California joint action agency, or successor agency. “Output” means all Capacity associated with Contract Capacity and associated Energy made available from the Facility, as well as any Capacity Attributes, Green Attributes, or other attributes existing now or in the future associated with Contract Capacity and/or associated Energy. “Output” does not include production or investment tax credits associated with the construction or operation of the Facility and other financial incentives in the form of credits, grants, reductions, or allowances associated with the Facility that are applicable to a state or federal income taxation obligation. “Planned Outage” means an outage, scheduled in advance, of one or more of the Facility’s components that results in a reduction of the ability of the Facility to produce Capacity. 040914 jrm 0180042 5 “Pre-Certification Price” means the contract price to be paid for all Energy delivered to the Buyer prior to the RPS Certification Date, as specified in Exhibit “PPA-A”. “Renewable Energy Credit” or “REC” has the meaning set forth in Section 399.12(h)(1) and (2) of the California Public Utilities Code, and includes a certificate of proof that one unit of electricity was generated by an Eligible Renewable Energy Resource. Currently, RECs are used to convey all Green Attributes associated with electricity production by a renewable energy resource. RECs are accumulated on a kWh basis and one REC represents the Green Attributes associated with the generation of 1 MWh (1,000 kWhs) from the Facility. For purposes of this Agreement, the term REC shall be synonymous with the term Green Tag, green ticket, bundled or unbundled renewable energy credit, tradable renewable energy certificates, or any other term used to describe the documentation that evidences the renewable and Green Attributes associated with electricity production by an Eligible Renewable Energy Resource. “Renewables Portfolio Standard” or “RPS” means the standard adopted by the State of California pursuant to Senate Bill 2 1st Extraordinary Session (SBX1 2, Chapter 1, Statutes 2011-12), and California Public Utilities Code Sections 399.11through 399.31, inclusive, as may be amended, setting minimum renewable energy targets for local publicly owned electric utilities. “Reservation Deposit” means the monetary deposit submitted by the Seller (or the Facility sponsor on behalf of the Seller) to secure a reservation of the CLEAN Program’s prices. The Reservation Deposit is set forth in Exhibit “PPA-A.” “Resource Adequacy” means a requirement by a governmental authority or in accordance with its FERC- approved tariff, or a policy approved by a local regulatory authority, that is binding upon either Party and that requires that Party to procure a certain amount of electric generating capacity. “RPS Certification” means certification by the CEC that the Facility qualifies as an Eligible Renewable Energy Resource for RPS purposes, and that all Energy produced by the Facility qualifies as generation from an Eligible Renewable Energy Resource, as evidenced by a Certificate of RPS Eligibility. “RPS Certification Date” means the date on which the RPS Certification begins, as specified in the Certificate of RPS Eligibility. “Seller” means with a principal place of business at , , . “Station Service Load” means the electrical loads associated with the operation and maintenance of the Facility, which may at times be supplied from the Facility’s Energy. “Term” has the meaning set forth in Section 14.1 hereof. “WECC” means the Western Electricity Coordinating Council, the regional entity responsible for coordinating and promoting regional bulk electric system reliability in the Western Canada and the United States, or any successor organization. 2.0 SELLER’S GENERATING FACILITY, PURCHASE PRICE AND PAYMENT 2.1 Facility. This Agreement governs the Buyer’s purchase of the Output from the Facility, as described in Exhibit “PPA-A.” The Seller shall not modify the Facility to increase or decrease the Contract Capacity after the Commercial Operation Date. 2.2 Products Purchased. During the Delivery Term, the Seller shall sell and deliver, or cause to be delivered, and the Buyer shall purchase and receive, or cause to be received, the Output from the Facility. The Seller shall not have the right to procure the Output from sources other than the Facility for sale or delivery to the Buyer under this Agreement or to substitute the Output. 040914 jrm 0180042 6 2.3 Delivery Term. The Delivery Term shall commence on the Commercial Operation Date under this Agreement, and shall continue for an uninterrupted period of twenty (20) years. This period will commence on the first day of the calendar month immediately following the Commercial Operation Date. As evidence of the Commercial Operation Date, the Parties shall execute and exchange the “Commercial Operation Date Confirmation Letter,” attached hereto as Exhibit “PPA-B.” The Commercial Operation Date shall be the date on which the Parties acknowledge, in writing, that the Facility starts operating and is otherwise in compliance with applicable interconnection and system protection requirements, including the final approvals by the City’s building department official. 2.4 Payment for Products Purchased. 2.4.1 Deliveries Prior to RPS Certification Date. Once the Facility has achieved Commercial Operation, if the CEC has not issued a Certificate of RPS Eligibility for the Facility or the Facility has not been registered with the appropriate entity for the tracking of Green Attributes, the Buyer will pay the Seller for the Output by multiplying the Pre-Certification Price by the quantity of Energy. 2.4.2 Deliveries After RPS Certification Date. Once the Facility has achieved Commercial Operation, the CEC has issued a Certificate of RPS Eligibility for the Facility, and the Facility has been registered with the appropriate entity for the tracking of Green Attributes, the Buyer shall pay the Seller for all Output on or after the RPS Certification Date by multiplying the Contract Price by the quantity of Energy. 2.4.3 True-up Upon Issuance of Certificate of RPS Eligibility. Once the Facility has achieved Commercial Operation, the CEC has issued a Certificate of RPS Eligibility for the Facility, and the Facility has been registered with the appropriate entity for the tracking of Green Attributes, the Buyer will pay the Seller an amount equal to the difference between the Contract Price and the Pre-Certification Price for the Output (a) that was delivered on or after the RPS Certification Date and (b) for which the Seller has already received payment at the Pre- Certification Energy Price. 2.4.4 Energy in Excess of Contract Capacity. The Seller shall not receive payment for any Energy or Green Attributes delivered in any hour to the Buyer in excess of the following amount of energy (in kilowatt-hours): 110% of the Contract Capacity (in kilowatts) multiplied by one hour. Any payment in excess of this amount shall be refunded to the Buyer, on demand. 2.5 Billing. The Buyer shall pay the Seller by check or electronic funds transfer, on a monthly basis, within thirty (30) days of the meter reading date. 2.6 Title and Risk of Loss. Title to and risk of loss related to the Output shall be transferred from the Seller to the Buyer at the Delivery Point. The Seller warrants that it will deliver to the Buyer the Output free and clear of all liens, security interests, claims, encumbrances or any interest therein or thereto by any person, arising prior to the Delivery Point. 2.7 No Additional Incentives. The Seller warrants that it has not received any other incentives funded by the Buyer’s ratepayers and it further agrees that, during the Term, it shall not seek additional compensation or other benefits from the Buyer pursuant to the following programs of the Buyer: (a) Photovoltaic (PV) Partners Program; (b) Power from Local Ultra-Clean Generation Incentive (PLUG- In) Program; or (c) other similar programs that are or may be funded by the Buyer’s ratepayers. 040914 jrm 0180042 7 3.0 RPS CERTIFICATION; GREEN ATTRIBUTES 3.1 CEC Certification. The Seller, at its own cost and expense, shall obtain the RPS Certification within six (6) months of the Commercial Operation Date. The Seller shall maintain the RPS Certification at all times during the Delivery Term. The foregoing provision notwithstanding, the Seller shall not be in breach of this Agreement and the Buyer shall not have the right to terminate this Agreement, if the Seller’s failure to obtain or maintain the RPS Certification is due to a change in California law, occurring after the Commercial Operation Date, so long as the Seller has used commercially reasonable efforts to obtain and maintain the RPS Certification and the Seller’s actions or omissions did not contribute to its inability to obtain and maintain the RPS Certification. 3.2 Obligation to Deliver Green Attributes. The Seller shall sell and deliver to the Buyer, and the Buyer shall buy and receive from the Seller, all right, title, and interest in and to Green Attributes associated with Energy, produced by the Facility and delivered to the Buyer at the Delivery Point, whether now existing or that hereafter come into existence during the Term, except as otherwise excluded herein; provided, the Buyer shall not be obligated to purchase and pay the Seller for any Green Attributes associated with any amount of the Output, that is generated by any fuel which is not renewable and which cannot be counted for the purpose of the production of Green Attributes. The Seller agrees to sell and make all such Green Attributes available to the Buyer to the fullest extent allowed by applicable law, in accordance with the terms and conditions of this Agreement. The Seller warrants that the Green Attributes provided under this Agreement to the Buyer shall be free and clear of all liens, security interests, claims and encumbrances. 3.3 Conveyance of Green Attributes. The Seller shall provide Green Attributes associated with the Facility, which shall be documented and conveyed to the Buyer in accordance with the procedure described in Exhibit “PPA-D.” 3.4 Additional Evidence of Green Attributes Conveyance. At the Buyer’s request, the Seller shall provide additional reasonable evidence to the Buyer or to third parties of the Buyer’s right, title, and interest in the Green Attributes and any other information with respect to Green Attributes, as may be requested by the Buyer. 3.5 Modification of Green Attributes Conveyance Procedure. The Buyer may unilaterally modify Exhibit “PPA-D” in order to reflect changes necessary in the Green Attributes conveyance procedures, so that the Buyer may be able to receive and report the Green Attributes, purchased under this Agreement, as belonging to the Buyer. 3.6 Reporting of Ownership of Green Attributes. The Seller shall not report to any person or entity that the Green Attributes sold and conveyed to the Buyer belong to any person other than the Buyer. The Buyer may report under any applicable program that Green Attributes purchased by the Buyer hereunder belong to it. 3.7 Greenhouse Gas Emissions. The Seller shall comply with any laws and/or regulations regarding the need to offset emissions of GHGs by delivering to the Buyer the Energy from the Facility with a net zero GHG impact. 4.0 CONVEYANCE OF CAPACITY ATTRIBUTES 4.1 Conveyance of Resource Adequacy Capacity. The Seller shall not report to any person or entity that the Resource Adequacy Capacity, as defined in the CAISO Tariff) associated with the Facility, if any, belongs to a person other than the Buyer, which may report that Resource Adequacy Capacity purchased hereunder belongs to it to fulfill the Resource Adequacy requirements, as defined in Section 40 of the CAISO Tariff, as amended, or any successor program. The Seller shall take those actions described in Section 6.0 hereof, as applicable, to secure recognition of Resource Adequacy Capacity by the CAISO. 4.2 Conveyance of Other Capacity Attributes. In addition to the obligations imposed on the 040914 jrm 0180042 8 Seller under Section 4.1, the Seller will undertake any and all actions reasonably needed to enable the Buyer to effect the recognition and transfer of any Capacity Attributes in addition Resource Adequacy, to the extent that such Capacity Attributes exist now or will exist in the future; provided, if such actions require any actions beyond the giving of notice by the Seller, then the Buyer shall reimburse all out-of- pocket costs and charges of such actions. 4.3 Reporting of Ownership of Capacity Attributes. The Seller shall not report to any person or entity that the Capacity Attributes sold and conveyed to the Buyer belong to any person other than the Buyer. The Buyer may report under any such program that such Capacity Attributes purchased hereunder belong to it. 5.0 METERING AND OPERATIONS 5.1 Timing of Outages. The Seller may not schedule or take any Planned Outage from 12:00 p.m. through 7:00 p.m. Pacific Time during the months of June through October. 5.2 Outage Reporting. 5.2.1 Buyer Request. The Seller is not required to report any Planned Outage or Forced Outage, unless the Buyer first submits a written request to the Seller to commence Outage reporting. Upon receipt of such a request, the Seller shall report all subsequent Planned Outages and the Forced Outages according to the procedures described in subsections 5.2.2 and 5.2.3, and shall continue such reporting until (a) the termination of this Agreement for any reason, or (b) the Buyer subsequently provides written notice to the Seller that the Seller may cease such reporting in the future. 5.2.2 Planned Outage Notifications. The Seller shall notify the Buyer at least 72 hours in advance of any Planned Outage that would result in a reduction in the effective Output of the Facility during the period over which the Planned Outage is scheduled. Notification shall be provided by e-mail to the e-mail address (or addresses) set forth in Exhibit “PPA-F.” 5.2.3 Forced Outage Notifications. Within 24 hours of the occurrence of a Forced Outage of the Facility that impacts the ability of the Facility to produce Energy, the Seller shall notify the Buyer of the Forced Outage, including the Capacity of the Facility that is impacted, and the expected duration of the Forced Outage. Within 24 hours of the return of the Facility to service following the Forced Outage, the Seller shall notify the Buyer of the return-to-service details. Notification shall be made by e-mail to the address (or addresses) set forth in Exhibit “PPA-F.” 5.3 Metering. The Buyer shall furnish and install one or more standard watt-hour meters to read Energy generated by the Facility, and it will charge a meter fee to the Seller to cover the costs associated with the meter’s purchase and installation. As requested, the Seller shall provide and install a meter socket in accordance with the Buyer’s metering standards. The Buyer reserves the right to install additional metering equipment at its sole cost and expense. 6.0 PARTICIPATING GENERATORS 6.1 Applicability. This Section 6.0 shall apply if the Facility meets the definition of a “Participating Generator,” as may be defined by the CAISO Tariff. This Section 6.0 shall not apply if the definition applies to the Facility only upon the election by the Seller. For the purposes of this Section 6.0, all special terms not otherwise defined in Section 1.0 are defined in the CAISO Tariff. 6.2 Participating Generator Agreement. The Buyer will notify the CAISO of the Seller’s interconnection to Buyer’s Distribution System. If the CAISO requires it, the Seller, at its own expense, shall negotiate and enter in to two contracts, a “Participating Generator Agreement” and a “Meter Services Agreement for CAISO Metered Entities,” with the CAISO. 040914 jrm 0180042 9 6.3 Scheduling Coordination. If the CAISO requires the Seller to enter in to a Participating Generator Agreement, then the Seller shall designate NCPA as the Buyer’s scheduling coordinator. The Buyer, acting in its sole discretion, may replace NCPA as the scheduling coordinator for the Facility. If NCPA ceases to be the scheduling coordinator for the Facility and the Buyer has not, upon fourteen (14) days’ prior written notice of inquiry from the Seller, appointed a replacement scheduling coordinator, then the Seller shall have the right to appoint a replacement scheduling coordinator on the Buyer’s behalf. Thereafter, the Buyer shall enter into all reasonable and appropriate agreements with such replacement scheduling coordinator at its own costs. 6.4 Scheduling Procedure. The Buyer may require the Seller to provide the Buyer with Energy forecasts on a periodic basis, as may be necessary for the Buyer to account for expected Facility generation in its daily power scheduling process. The requirements are set forth in Exhibit “PPA-C.” 6.5 Modification of Scheduling and Outage Notification Procedure. The Buyer may unilaterally modify Exhibit “PPA-C” to reflect changes necessary in the scheduling and Outage notification procedures. The Buyer shall give the Seller reasonable notice of any such changes. 6.6 Provision of Other Equipment. If the Seller is required to enter into a Participating Generator Agreement with the CAISO, then the Seller, at its own cost and expense, shall provide and maintain data transmission-grade phone line and telecommunications equipment at the meter location that complies with applicable requirements of the CAISO, the Buyer, and NCPA. Any meter installed by the Seller shall comply at all times with the CAISO’s metering requirements. If the Seller fails to provide or maintain any such required equipment or data connection, then the Buyer shall acquire, install and maintain the same at the Seller’s sole cost and expense. 6.7 Designation as Resource Adequacy Resource. The Buyer may submit a written request to the Seller to obtain the CAISO’s designation of the Facility as a Resource Adequacy Resource. Upon receipt of such request, the Seller shall provide such information and undertake such steps as may be required by the CAISO in order to complete such an assessment. If the Buyer makes such a request, then the Buyer shall be responsible for the following: (1) any costs charged to the Seller by the CAISO as a condition of applying for or receiving designation as a Resource Adequacy Resource, including any deposits required during the study process or the cost of any related studies or deliverability assessments performed by the CAISO; (2) the capital, installation, and maintenance costs of any additional equipment required by the CAISO as a condition of receiving designation as a Resource Adequacy Resource; (3) the costs of any Network Upgrades, as defined in the CAISO Tariff, as may be required by the CAISO, provided, the Buyer shall receive any subsequent repayments from the CAISO or the Participating Transmission Owner related to such upgrades; and (4) any charges or penalties assessed by the CAISO as a consequence of the Facility’s designation as a Resource Adequacy Resource. 6.8 CAISO Charges. The Buyer shall be solely responsible for paying all costs and charges associated with the receipt of Energy under this Agreement, at the Delivery Point, and for the transmission and delivery of Energy from the Delivery Point to any other point downstream of the Delivery Point, including transmission costs and charges, competition transition charges, applicable control area service charges, transmission congestion charges, inadvertent energy flows, any other CAISO charges related to the transmission of such Energy by the CAISO and any charge assessed or collected in the future pursuant to any utility tariff or rate schedule, however defined, for transmission or transmission-related service rendered by or for any transmission-owning or operating entity. The Seller will undertake any and all actions reasonably needed to allow the Buyer to comply with any obligations, and minimize any potential liability, under the CAISO tariff. If and to the extent that the Seller fails to comply with the notice provision in Exhibit “PPA-C,” concerning Outages, or with its obligations as outlined in the previous sentence, the Seller shall be wholly responsible for all imbalances, deviations, or any other CAISO charges or penalties associated with such Outage or other CAISO Tariff obligation. 6.9 Inclusion in Metered Subsystem. At the option of the Buyer, the Facility may be included within NCPA’s metered sub-system in connection with the scheduling of power over the CAISO grid and related functions; provided, however, that such inclusion shall have no adverse effect on the Facility’s operations or the Seller (or any such effect shall be fully mitigated by the Buyer). The Seller will undertake any and all actions reasonably needed to allow the Buyer to comply with any obligations, and 040914 jrm 0180042 10 minimize any potential liability, under the CAISO Tariff; provided, that if such actions require any actions beyond the giving of notice to be provided by the Buyer, then the Buyer shall reimburse the Seller for all out-of-pocket costs and charges of such actions. 7.0 COMMERCIAL OPERATION DATE; REFUND OF RESERVATION DEPOSIT 7.1 Commercial Operation Date. The Facility shall achieve Commercial Operation by the Commercial Operation Date deadline (the “Deadline”), which is one (1) year from the Effective Date. 7.2 Reservation Deposit. The Buyer acknowledges that, as of the Effective Date or other date established by the Buyer, the Seller has provided the Reservation Deposit to the Buyer. 7.2.1 If the Commercial Operation Date occurs on or prior to the Deadline, the Buyer shall refund to the Seller the Reservation Deposit without interest. 7.2.2 If the Commercial Operation Date commences within seventy (70) days of the Deadline, the Seller, as liquidated damages and not as a penalty, shall relinquish its claim to a ten percent (10%) portion of the amount of the Reservation Deposit for every full week transpiring between the Deadline and the Commercial Operation Date, but the total amount to be relinquished to the Buyer shall not exceed 100% of the Reservation Deposit. 7.2.3 If the Facility has not achieved Commercial Operation within seventy (70) days of the Deadline, then the Buyer may terminate this Agreement without liability of either Party to the other Party by giving written notice of termination to the Seller. 7.2.4 If the Seller gives notice of termination to terminate the Agreement before Commercial Operation occurs, then the Buyer shall refund a percentage of the Reservation Deposit equal to the following: the percentage to be refunded will equal A/B, where A equals the number of days between the date of the Seller’s notice of termination, received by the Buyer, and the Deadline, and B equals the number of days between the Effective Date and the Deadline. 7.3 Return of Reservation Deposit. The Buyer shall return to the Seller the Reservation Deposit, without interest, in the event that (a) the Buyer furnishes written notice of the costs of interconnection (defined in the Interconnection Agreement to include the costs related to the Interconnection Facilities and Distribution Upgrades) to the Seller and (b) within thirty (30) days of receipt of the notice regarding costs of interconnection, the Seller provides the Buyer with written notice that the Seller does not intend to sign the Interconnection Agreement and does intend to proceed with the project. 8.0 REPRESENTATION AND WARRANTIES; COVENANTS 8.1 Representations and Warranties. On the Effective Date, each Party represents and warrants to the other Party that: 040914 jrm 0180042 11 8.1.1 It is duly organized, validly existing and in good standing under the laws of the jurisdiction of its formation; 8.1.2 The execution, delivery and performance of this Agreement is within its powers, have been duly authorized by all necessary action and do not violate any of the terms and conditions in its governing documents, any contracts to which it is a party or any law, rule, regulation, order or the like applicable to it; 8.1.3 This Agreement and each other document executed and delivered in accordance with this Agreement constitutes its legally valid and binding obligation enforceable against it in accordance with its terms; 8.1.4 It is not bankrupt and there are no proceedings pending or being contemplated by it or, to its knowledge, threatened against it which would result in it being or becoming bankrupt; 8.1.5 There is not pending or, to its knowledge, threatened against it or any of its affiliates, if any, any legal proceedings that could materially adversely affect its ability to perform its obligations under this Agreement; and 8.1.6 It is acting for its own account, has made its own independent decision to enter into this Agreement and as to whether this Agreement is appropriate or proper for it based upon its own judgment, is not relying upon the advice or recommendations of the other Party in so doing, and is capable of assessing the merits of, and understands and accepts, the terms, conditions and risks of this Agreement. 8.2 General Covenants. Each Party covenants that, during the Term: 8.2.1 It shall continue to be duly organized, validly existing and in good standing under the laws of the jurisdiction of its formation; 8.2.2. It shall maintain (or obtain from time to time as required, including through renewal, as applicable) all regulatory authorizations necessary for it to legally perform its obligations under this Agreement; and 8.2.3 It shall perform its obligations under this Agreement in a manner that does not violate any of the terms and conditions in its governing documents, any contracts to which it is a party or any law, rule, regulation, order or the like applicable to it. 8.3 Covenant by Seller. The Seller covenants that, during the Term: 8.3.1 If the Eligible Renewal Energy Resource or the Facility is considered an ‘eligible qualifying facility’ under applicable law and has a net power production capacity of greater than one (1) megawatt, then the Seller covenants and agrees that, within thirty (30) days of the Effective Date or longer period allowed by law, it will complete and file Form No. 556 or other similar form with FERC as the same may be required by law.” 9.0 GENERAL CONDITIONS 9.1 Facility Care and Interconnection. During the Delivery Term, the Seller shall execute and maintain an “Interconnection Agreement” with the Buyer, whereby the Seller shall pay and be responsible for designing, installing, operating, and maintaining the Facility in accordance with all applicable laws and regulations and shall comply with all applicable Buyer, WECC, FERC, and NERC requirements, including applicable interconnection and metering requirements. The Seller shall also comply with any modifications, amendments or additions to the applicable tariff and protocols. The Seller also shall arrange and pay independently for any and all necessary costs under the Interconnection Agreement with the Buyer. 040914 jrm 0180042 12 9.2 Standard of Care. The Seller shall: (a) operate and maintain the Facility in a safe manner in accordance with its existing applicable interconnection agreements, manufacturer’s guidelines, warranty requirements, Good Utility Practice, industry norms (including standards of the National Electrical Code, Institute of Electrical and Electronic Engineers, American National Standards Institute, and the Underwriters Laboratories, and in accordance with the requirements of all applicable federal, state and local laws and the National Electric Safety Code, as such laws and code norms may be amended from time to time; (b) obtain any governmental authorizations and permits required for the construction and operation thereof. The Seller shall make any necessary and commercially reasonable repairs with the intent of optimizing the availability of electricity to the Buyer. The Seller shall reimburse the Buyer for any and all losses, damages, claims, penalties, or liability that the Buyer incurs as a result of the Seller’s failure to obtain or maintain any governmental authorizations and permits required for the construction and operation of the Facility throughout the Term. 9.3 Access Rights. The Buyer, its authorized agents, employees and inspectors shall have the right to inspect the Facility on reasonable advance notice during normal business hours and for any purposes reasonably connected with this Agreement or the exercise of any and all rights secured to the Buyer by law, including, without limitation, its ordinances, resolutions, tariffs, utility rate schedules or utilities rules and regulations. The Buyer shall make reasonable efforts to coordinate its emergency activities with the safety and security departments, if any, of the Facility’s operator. The Seller shall keep the Buyer advised of current procedures for communicating with the Facility operator’s safety and security departments. 9.4 Protection of Property. Each Party shall be responsible for protecting its own facilities from possible damage resulting from electrical disturbances or faults caused by the operation, faulty operation, or non-operation of the other Party’s facilities and such other Party shall not be liable for any such damages so caused. 9.5 Insurance. During the Term, the Seller shall obtain and maintain and otherwise comply with the insurance requirements, as set forth in Exhibit “PPA-E.” 9.6 Buyer’s Performance Excuse; Seller Curtailment. 9.6.1 Buyer Performance Excuse. The Buyer shall not be obligated to accept or pay for the Output during Force Majeure that affects the Buyer’s ability to accept Energy. 9.6.2 Seller Curtailment. The Buyer may require the Seller to interrupt or reduce deliveries of Energy: (a) whenever necessary to construct, install, maintain, repair, replace, remove, or investigate any of its equipment or part of the Buyer’s Distribution System or facilities; or (b) if the Buyer determines that curtailment, interruption, or reduction is necessary due to a System Emergency, as defined in the CAISO Tariff, an unplanned outage on Buyer’s Distribution System, Force Majeure, or compliance with Good Utility Practice. 9.7 Notices of Outages. Whenever possible, the Buyer shall give the Seller reasonable notice of the possibility that interruption or reduction of deliveries may be required. 9.8 No Additional Loads. The Seller shall not connect any loads not associated with Station Service Loads at the location of the Facility in a manner that would reduce Energy provided from the Facility to the Buyer hereunder. The Seller shall obtain separate retail electric service under the Buyer’s rate schedules for the service of such additional loads. 10.0 FORCE MAJEURE 10.1 Effect of Force Majeure. A Party shall be excused from its performance under this Agreement to the extent, but only to the extent, that its performance hereunder is prevented by Force Majeure. A Party claiming Force Majeure shall exercise due diligence to overcome or mitigate the effects 040914 jrm 0180042 13 of Force Majeure; provided, that nothing in this Agreement shall be deemed to obligate the Party affected by Force Majeure (a) to forestall or settle any strike, lock-out or other labor dispute against its will; or (b) for Force Majeure affecting the Seller only, to purchase electric power to cure Force Majeure. 10.2 Remedial Action. A Party shall not be liable to the other Party if the Party is prevented from performing its obligations hereunder due to Force Majeure. The Party rendered unable to fulfill an obligation by reason of Force Majeure shall take all action necessary to remove such inability with all due speed and diligence. The nonperforming Party shall be prompt and diligent in attempting to remove the cause of its failure to perform, and nothing herein shall be construed as permitting that Party to continue to fail to perform after that cause has been removed. Notwithstanding the foregoing, the existence of Force Majeure shall not excuse any Party from its obligations to make payment of amounts due hereunder. 10.3 Notice of Force Majeure. In the event of any delay or nonperformance resulting from Force Majeure, the Party directly impacted by Force Majeure shall, as soon as practicable under the circumstances, notify the other Party, in writing, of the nature, cause, date of commencement thereof and the anticipated extent of any delay or interruption in performance. 10.4 Termination Due to Force Majeure. If a Party will be prevented from performing its material obligations under this Agreement for an estimated period of twelve (12) consecutive months or longer due to Force Majeure, then the unaffected Party may terminate this Agreement, without liability of either Party to the other, upon thirty (30) Days’ prior written notice at any time during Force Majeure. 11.0 INDEMNITY 11.1 Indemnity by the Seller. The Seller shall indemnify, defend, and hold harmless the Buyer, its elected and appointed officials, directors, officers, employees, agents, and representatives against and from any and all losses, claims, demands, liabilities and expenses, actions or suits, including reasonable costs and attorney’s fees, resulting from, or arising out of or in any way connected with claims by third parties associated with (A) (i) Energy delivered at the Delivery Point; (ii) the Seller’s operation and/or maintenance of the Facility; or (iii) the Seller’s actions or inactions with respect to this Agreement, and (B) any loss, claim, action or suit, for or on account of injury, bodily or otherwise, to, or death of, persons, or for damage to or destruction of property belonging to the Buyer or other third party, excepting only such loss, claim, action or suit as may be caused solely by the willful misconduct or gross negligence of the Buyer, its agents, employees, directors or officers. 11.2 Indemnity by the Buyer. The Buyer shall indemnify, defend, and hold harmless the Seller, its directors, officers, employees, agents, and representatives against and from any and all losses, claims, demands, liabilities and expenses, actions or suits, including reasonable costs and attorney’s fees resulting from, or arising out of or in any way connected with claims by third parties associated with acts of the Buyer, its officers, employees, agents, and representatives, relating to: (A) Energy delivered by the Seller under this Agreement after the Delivery Point, and (B) any loss, claim, action or suit, for or on account of injury, bodily or otherwise, to, or death of, persons, or for damage to or destruction of property belonging to the Seller or other third party, excepting only such loss, claim, action or suit as may be caused solely by the willful misconduct or gross negligence of the Seller, its agents, employees, directors or officers. 12.0 LIMITATION OF DAMAGES EXCEPT AS OTHERWISE PROVIDED IN THIS AGREEMENT THERE IS NO WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, AND ANY AND ALL IMPLIED WARRANTIES ARE DISCLAIMED. LIABILITY SHALL BE LIMITED TO DIRECT ACTUAL DAMAGES ONLY, SUCH DIRECT ACTUAL DAMAGES SHALL BE THE SOLE AND EXCLUSIVE REMEDY AND ALL OTHER REMEDIES OR DAMAGES AT LAW OR IN EQUITY ARE WAIVED UNLESS EXPRESSLY HEREIN PROVIDED. NEITHER PARTY SHALL BE LIABLE FOR CONSEQUENTIAL, INCIDENTAL, PUNITIVE, EXEMPLARY OR INDIRECT DAMAGES, LOST PROFITS OR OTHER BUSINESS INTERRUPTION DAMAGES, BY STATUTE, IN TORT OR 040914 jrm 0180042 14 CONTRACT, UNDER ANY INDEMNITY PROVISION OR OTHERWISE. UNLESS EXPRESSLY HEREIN PROVIDED, AND SUBJECT TO THE PROVISIONS OF SECTION 11 (INDEMNITY), IT IS THE INTENT OF THE PARTIES THAT THE LIMITATIONS HEREIN IMPOSED ON REMEDIES AND THE MEASURE OF DAMAGES BE WITHOUT REGARD TO THE CAUSE OR CAUSES RELATED THERETO, INCLUDING THE NEGLIGENCE OF ANY PARTY, WHETHER SUCH NEGLIGENCE BE SOLE, JOINT OR CONCURRENT, OR ACTIVE OR PASSIVE. 13.0 NOTICES Notices shall, unless otherwise specified herein, be given, in writing, and may be delivered by hand delivery, United States mail, overnight courier service, facsimile or electronic messaging (e-mail) to the addresses set forth in Exhibit “PPA-F.”. Whenever this Agreement requires or permits delivery of a “notice” (or requires a Party to “notify”), the Party with such right or obligation shall provide a written communication in the manner specified below. A notice sent by facsimile transmission or electronic mail will be recognized and shall be deemed received on the Business Day on which such notice was transmitted if received before 5 p.m. Pacific Time (and if received after 5 p.m., on the next Business Day) and a notice by overnight mail or courier shall be deemed to have been received two (2) Business Days after it was sent or such earlier time as is confirmed by the receiving Party unless it confirms a prior oral communication, in which case any such notice shall be deemed received on the day sent. A Party may change its addresses by providing notice of same in accordance with this provision. A Party may request a change to Exhibit “PPA- F” as necessary to keep the information current. 14.0 TERM, TERMINATION EVENT AND TERMINATION 14.1 Term. The Term shall commence upon the execution by the duly authorized representatives of each of the Parties, and shall remain in effect until the conclusion of the Delivery Term, unless terminated sooner pursuant to the terms and conditions of this Agreement. All indemnity rights shall survive the termination of this Agreement for twelve (12) months. 14.2 Delivery Term. The Delivery Term of the Agreement is _______ years and is defined as the period of time from the Commercial Operation Date through the expiration or early termination of this Agreement. 14.3 Termination Event. 14.3.1 The Buyer shall have the right, but not the obligation, to terminate this Agreement upon the occurrence of any of the following, each of which is a “Termination Event”: (a) The Facility has not achieved Commercial Operation within seventy (70) days following the Deadline; (b) After the Commercial Operation Date, the Seller has not sold or delivered Energy from the Facility to the Buyer for a period of twelve (12) consecutive months; (c) If the Facility does not obtain RPS Certification within six (6) months of the Commercial Operation Date and maintain RPS Certification as required by Section 3.2; or (d) The Seller breaches any other material obligation of this Agreement. 14.3.2 The Seller shall have the right, but not the obligation, to terminate this Agreement upon the occurrence of any of the following, each of which is a “Termination Event”: (a) The Buyer fails to make a payment due and payable under this Agreement within thirty (30) days after written notice that such payment is due; or (b) The Buyer breaches any other material obligation of this Agreement. The preceding sentence notwithstanding, the Seller may terminate this Agreement without cause at any time prior to the Commercial Operation Date, subject to the provisions of Section 7 of this Agreement. 14.4 Time to Cure. None of the events described in Section 14.2.1 and 14.2.2 shall constitute a Termination Event if the Buyer or the Seller cures the event, failure, or circumstance within thirty (30) days after receipt of written notification sent by the other Party, seeking termination, or such longer period as may be necessary to cure so long as the Party subject to the Terminating Event is exercising diligent efforts to cure. 14.5 Termination. 040914 jrm 0180042 15 14.5.1 Declaration of a Termination Event. If a Termination Event has occurred and is continuing, the Party with the right to terminate shall have the right to: (a) send notice, designating a day, no earlier than thirty (30) days after such notice is deemed to be received (as provided in Section 13), as an early termination date of this Agreement (the “Early Termination Date”), unless the Seller has timely communicated with the Buyer and the Parties have agreed to resolve the circumstances giving rise to the Termination Event; (b) accelerate all amounts owing between the Parties; and (c) terminate this Agreement and end the Delivery Term effective as of the Early Termination Date. 14.5.2 Release of Liability for Termination Event. Upon termination of this Agreement pursuant to this section neither Party shall be under any further obligation or subject to liability hereunder, except with respect to the indemnity provision in Section 11 hereof, which shall remain in effect for a period of 12 months following the Early Termination Date. 14.6 No Limitation on Damages. Nothing in this Agreement shall be deemed or construed to limit a Party’s right to recover damages from the other Party, except as otherwise provided in this Agreement. 15.0 RELEASE OF DATA Except as may be exempt from disclosure under applicable law, the Seller authorizes the Buyer to release to any regulatory authority having jurisdiction over the Facility or a Party, or to any request made pursuant to the California Constitution or the California Public Records Act, information regarding the Facility, including the Seller’s name and location, operational characteristics, the Term of this Agreement, the Facility resource type, the scheduled Commercial Operation Date, the actual Commercial Operation Date, the Contract Capacity, payments made to the Seller and Energy production information. The Seller acknowledges that this information may be made publicly available. 16.0 ASSIGNMENT Neither Party shall assign this Agreement or its rights hereunder without the prior written consent of the other Party, which consent shall not be unreasonably withheld. 16.1 Upon the written request of the Seller, the Buyer will execute a “Lender Consent and Agreement” between the Seller and the Seller’s lender(s), if any, in the form acceptable to the Parties; provided, for illustration purposes only, an exemplar is attached hereto as Exhibit “PPA-G.” 16.2 Notwithstanding the foregoing, no Consent and Agreement shall be required for: 16.2.1 Any assignment or transfer of this Agreement by the Seller to an affiliate of the Seller, provided that such affiliate’s creditworthiness is equal to or better than that of Seller, as reasonably determined by the non-assigning or non-transferring Party; or 16.2.2 Any assignment or transfer of this Agreement by the Seller or the Buyer to a person succeeding to all or substantially all of the assets of such Party, provided that such person’s creditworthiness is equal to or greater than that of such Party, as reasonably determined by the non-assigning or non-transferring Party. 16.2.3 Notification of any assignment or transfer of this Agreement under Section 16.2.1 or 16.2.2 shall be given to the non-assigning or non-transferring Party in accordance with Exhibit “PPA-F.” 17.0 APPLICABLE LAW, VENUE, ATTORNEYS’ FEES, AND INTERPRETATION This Agreement will be governed by and construed in accordance with the laws of the State of California. The Parties will comply with applicable laws pertaining to their obligations arising under this 040914 jrm 0180042 16 Agreement. In the event that an action is brought, the Parties agree that trial of such action will be vested exclusively in the state courts of California or in the United States District Court for the Northern District of California in the County of Santa Clara, State of California. The prevailing party in any action brought to enforce the provisions of this Agreement may recover its reasonable costs and attorneys' fees expended in connection with that action. If a court of competent jurisdiction finds or rules that any provision of this Agreement, the Exhibits, or any amendment thereto is void or unenforceable, the unaffected provisions of this Agreement, the Exhibits, or any amendment thereto will remain in full force and effect. The Parties agree that the normal rule of construction to the effect that any ambiguity is to be resolved against the drafting party will not be employed in the interpretation of this Agreement or any Exhibit or any amendment thereof. 18.0 SEVERABILITY If any provision in this Agreement is determined to be invalid, void or unenforceable by any court having jurisdiction, such determination shall not invalidate, void, or make unenforceable any other provision, agreement or covenant of this Agreement and the Parties shall use their best efforts to modify this Agreement to give effect to the original intention of the Parties. 19.0 COUNTERPARTS; INTERPRETATION OF CONFLICTING PROVISIONS This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which shall be deemed one and the same Agreement. Delivery of an executed counterpart of this Agreement by facsimile or portable document format (“PDF”) transmission will be deemed as effective as delivery of an originally executed counterpart. Each Party delivering an executed counterpart of this Agreement by facsimile or PDF transmission will also deliver an originally executed counterpart, but the failure of any Party to deliver an originally executed counterpart of this Agreement will not affect the validity or effectiveness of this Agreement. In the event of a conflict between the Agreement and any, some or all of the Exhibits, the document imposing the more specific duty or obligation will prevail. 20.0 GENERAL No amendment to or modification of this Agreement shall be enforceable unless reduced to writing and executed by both Parties. This Agreement shall not impart any rights enforceable by any third party other than a permitted successor or assignee bound to this Agreement. Waiver by a Party of any default by the other Party shall not be construed as a waiver of any other default. The headings used herein are for convenience and reference purposes only. // // // // // // 040914 jrm 0180042 17 21. EXHIBITS The following exhibits shall be deemed incorporated in and made a part of this Agreement. Exhibit “PPA-A” - Facility Description, Prices, and Reservation Deposit Exhibit “PPA-B” - Commercial Operation Date Confirmation Letter Exhibit “PPA-C” - Scheduling and Outage Notification Procedure Exhibit “PPA-D” - Green Attributes Reporting and Conveyance Procedures Exhibit “PPA-E” - Insurance Requirements Exhibit “PPA-F” - Notices Exhibit “PPA-G” - Form of Lender Consent and Agreement IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed by their authorized representatives as of the Effective Date. CITY OF PALO ALTO SELLER APPROVED AS TO FORM Senior Deputy City Attorney APPROVED City Manager Director of Utilities 040914 jrm 0180042 18 EXHIBIT “PPA-A” Facility Description, Rates, and Reservation Deposit Program Rates Contract Term: Twenty (20) or twenty-five (25) years Contract rate: $0.089 per kWh for solar resources, 20 year contract term $0.090 per kWh for solar resources, 25 year contract term $0.081 per kWh for non-solar resources, 20 year contract term $0.082 per kWh for non-solar resources, 25 year contract term Pre-certification rate: $0.08 per kWh Reservation Deposit Reservation Deposit ($20/kW of Contract Capacity) $ Service address: Facility Description: Contract Capacity: kW (CEC-AC), based on solar array rating (Panel rated output at PV USA test conditions x inverter efficiency) Facility primary fuel/technology: 040914 jrm 0180042 19 EXHIBIT “PPA-B” Commercial Operation Date Confirmation Letter In accordance with the terms of the Power Purchase Agreement (Palo Alto CLEAN), dated (the “Agreement”) by and between the City of Palo Alto, as the Buyer, and , as the Seller, this Confirmation Letter serves to document the Parties’ agreement that (i) the conditions precedent to the occurrence of the Commercial Operation Date have been satisfied, and (ii) the Buyer has received Energy, as specified in the Agreement, as of , . The actual installed Contract Capacity is kW. This Confirmation Letter shall confirm the Commercial Operation Date, as defined in the Agreement, as of the date referenced in the preceding sentence. IN WITNESS WHEREOF, each Party has caused this letter to be duly executed by its authorized representative as of the date of last signature provided below: Buyer Seller By: By: Name: Name: Title: Director of Utilities Title: Date: Date: In recognition of the Commercial Operation Date relative to the Effective Date of the Agreement by and between the Buyer and the Seller, the Seller hereby calculates the amount to return, if any, of the Seller’s deposit, as follows: Original Reservation Deposit Amount: $ Commercial Operation Date Deadline: □ Commercial Operation Date is prior to Deadline □ Commercial Operation Date occurred weeks following the Deadline, meaning that % of the Reservation Deposit is relinquished by Seller per Section 7.2.2 of the Power Purchase Agreement. Amount (if any) of Reservation Deposit to return to the Seller is: $ 040914 jrm 0180042 20 EXHIBIT “PPA-C” Scheduling and Outage Notification Procedure C.1 Applicability. This Exhibit” PPA-C” shall apply if the Facility is subject to Section 6.0 of this Agreement. C.2 Annual Operations Forecast C.2.1 By the tenth (10th) day September of each calendar year, the Seller will provide NCPA with an annual operations forecast detailing hourly expected generation and all proposed planned Outages for the next calendar year. The annual operations forecast for the calendar year shall be provided by not later than ninety (90) days prior to the scheduled Commercial Operation Date of the Generating Facility. C.2.2 NCPA may request modifications to the annual operations forecast at any time, and the Seller shall use good faith efforts to accommodate the requested modifications. C.2.3 The Seller shall not conduct Planned Outages at times other than as set forth in its annual operations forecast, unless approved in advance by NCPA, which approval shall not be withheld or delayed unreasonably. C.2.4 The Seller shall not schedule or conduct Planned Outages from 12:00 p.m. through 7:00 p.m. Pacific Time during the months of June through October. C.3. Short Term Operations Forecasts C.3.1. Quarterly Operations Forecast C.3.1.1 By the fifth (5th) day of January, April and July of each Contract Year, the Seller shall provide a calendar quarter-operations forecast by hour of expected generation and all proposed Planned Outages for the next full calendar quarter and the twelve (12) months following that calendar quarter. As an example, by January 5, 2014, the Seller would provide a calendar quarter-operations forecast by hour of expected generation for the period, April 1, 2014 through June 30, 2014, and identify all proposed Planned Outages for the period, April 1, 2014 through June 30, 2015. C.3.1.2 NCPA will approve or require modifications to the proposed calendar quarter-operations forecast within ten (10) days of receipt of the forecast. C.3.1.3 If required by NCPA, the Seller will provide a modified calendar quarter-operations forecast within seven (7) days after receipt of required modifications from NCPA. C.3.2 Weekly Update C.3.2.1 By 14:00 of each Wednesday, the Seller shall provide an electronic update, in a format specified by NCPA, to the calendar quarter-operations forecast for the following seven (7) days (Thursday through the next Wednesday). C.3.2.2 The weekly update shall include hourly expected generation and all proposed planned Outages for the relevant seven (7) day period. C.4 Outage Detail for Annual and Short Term Operations Forecasts. Outage information provided by the Seller shall include, at a minimum, the start time and stop time of the Outage, capacity out of service (kW), the equipment that is or will be out of service, and the reason for the Outage. 040914 jrm 0180042 21 C.5 General Scheduling Protocols C.5.1 Daily Modifications to Forecasts. Unless otherwise mutually agreed, the Seller may make changes to the weekly update to the calendar quarter-operations forecast by providing such changes to NCPA prior to 08:00 of the day that is two (2) Business Days before the active scheduling day as determined by the WECC prescheduling calendar. Example: For power that is scheduled for generation or delivery on Friday, March 29, 2014, changes must be submitted to NCPA by 08:00 on Wednesday, March 27, 2014. C.5.2 Hourly Modifications to Active Schedules. Unless otherwise mutually agreed, the Seller may request changes to active schedules by providing such changes to NCPA with a minimum of four (4) hours’ notice prior to the applicable CAISO market deadline (e.g. Hour Ahead Scheduling Process (“HASP”) Scheduling deadline, as defined in the CAISO Tariff). Active day Schedule changes are not binding. Changes to active Schedules are limited to two (2) changes per day, excluding forced Outages, unless otherwise agreed to between the Parties. One request for a Schedule change, of one-hour or multiple-hours duration, constitutes one Schedule change. Example: For power that is scheduled for generation or delivery in hour ending 15:00 (for the period from 14:01 to 15:00), changes must be submitted to NCPA by 10:00. C.5.3. Unforeseen Circumstances. At the Seller’s request, NCPA may, but is not required to, modify the Schedules for the Generation Facility Output due to unforeseen circumstances in accordance with the above scheduling timeline constraints described in this Exhibit PPA-C. C.5.4. Absence of Forecasts. In the absence of forecasts and schedules as required by this Agreement or this Exhibit, NCPA shall utilize the most current information the Seller provides in the development and submission of Schedules. C.6 Outage Reporting Protocols C.6.1. Notification. The Seller shall notify NCPA of all planned or forced Outages of the Generating Facility to ensure compliance with the CAISO Outage Coordination and Enforcement Protocols. C.6.1.1 Outage information provided by the Seller shall include, at a minimum, the start time and stop time of the Outage, Capacity out of service (kW), equipment out of service, and the reason for the Outage. C. 6.1.2 Seller shall provide the Planned Outages not included in the annual operations forecast, the calendar quarter-operations forecast, or the weekly update, to NCPA at least four (4) Business Days prior to the start of the requested outage. C. 6.1.3 At any time prior to the start of a Planned Outage, the CAISO may deny the Outage due to a System Emergency (as defined in the CAISO Tariff) or as otherwise permitted under the CAISO Tariff. If NCPA receives notice that the CAISO has denied an Outage in accordance with the CAISO Tariff, NCPA will notify the Seller as soon as possible and the Seller shall modify the planned Outage as required by the CAISO. C.6.2 Commencement of an Outage. The Seller shall not begin any Planned Outage without the prior approval of NCPA and the CAISO. C.6.3 Forced Outages C.6.3.1 The Seller shall report the Forced Outages to NCPA within twenty (20) 040914 jrm 0180042 22 minutes of such Outages. C.6.3.2 The Seller’s notice of a Forced Outage sent to NCPA shall include the reason for the Outage (if known), expected duration of the Outage, and the Capacity reduction. C.6.3.3 By the end of the next Business Day following the day on which a Forced Outage has occurred, the Seller shall provide to NCPA a detailed written report, specifying the reason for the Outage, expected duration of such Outage, capacity reduction, and actions taken to mitigate such Outage. C.6.4 Return to Service. The Seller shall notify NCPA as soon as possible, but in any case before the Generating Facility is returned to service. C.7 Notices. All Scheduling notices and Schedules shall be submitted to NCPA by phone, fax or email, or other means as may be mutually agreed by the Parties, to the persons designated in Exhibit “PPA-F.” C.8 Changes in Scheduling and Outage Procedure. The Buyer shall revise Exhibit “PPA-C,” or, as appropriate, give written notice to the Seller regarding the revision, and issue a new Exhibit “PPA-C,” which shall then become part of the Agreement to reflect changes in the scheduling and outage notification procedure. 040914 jrm 0180042 23 EXHIBIT “PPA-D” Green Attributes Reporting and Conveyance Procedures D.1 Additional Definitions for the Conveyance of Green Attributes D.1.1 “Certificate Transfers” means the process, as described in the WREGIS Operating Rules, whereby a WREGIS account holder may request that WREGIS Certificates from a specific generating unit shall be directly deposited to another WREGIS account. D.1.2 “WREGIS Certificates” means a certificate created within the WREGIS system that represents all Renewable and Green Attributes from one MWh of electricity generation from an Eligible Renewable Energy Resource that is registered with WREGIS. D.1.3 “WREGIS Operating Rules” means the document published by WREGIS that governs the operation of the WREGIS system for registering, tracking, and conveying, among others, RECs produced from Eligible Renewable Energy Resources that shall be registered with WREGIS. D.1.4 “WREGIS” means Western Renewable Energy Generation Information System. D.2 RECs. Green Attributes shall be conveyed by the Seller to the Buyer through RECs, which shall be registered tracked and conveyed to the Buyer, using WREGIS. D.3 WREGIS Registration. Prior to the Commercial Operation Date, the Buyer will register the Facility in the Buyer’s WREGIS account on behalf of the Seller. The Buyer shall charge back to the Seller any costs of registering and maintaining the registration of the Facility with WREGIS. The Seller shall provide to the Buyer any documents required by WREGIS and assign the Seller’s rights to register the Facility in WREGIS, using agreements provided by WREGIS. D.4 B u yer ’s W REGI S Acco unt . The Buyer shall, at its sole expense, establish and maintain the Buyer’s WREGIS account sufficient to accommodate the WREGIS Certificates produced by the output of the Facility. The Buyer shall be responsible for all expenses associated with (A) establishing and maintaining the Buyer’s WREGIS Account, and (B) subsequently transferring or retiring WREGIS Certificates. D.5 Qualified Reporting Entity. The Buyer shall be the Qualified Reporting Entity (as such term is defined by WREGIS) for the Facility, and shall be responsible for providing the metered Output data to WREGIS. D.6 Reporting of Environmental Attributes. In lieu of the Seller’s transfer of the WREGIS Certificates using Certificate Transfers from the Seller’s WREGIS account to the Buyer’s WREGIS account, the Buyer shall report the Facility as being held directly in its WREGIS account, which will preclude the Seller from reporting the Facility in its own WREGIS account. D.6.1 By avoiding the use of Certificate Transfers, there will be no transaction costs to the Seller or the Buyer for the Certificate Transfers that would otherwise be used. D.6.2 WREGIS Certificates for the Facility will be created on a calendar month basis in accordance with the certification procedure established by the WREGIS Operating Rules in an amount equal to the Energy generated by the Project and delivered to the Buyer in the same calendar month. D.6.3 WREGIS Certificates will only be created for whole MWh amounts of energy generated. Any fractional MWh amounts (i.e., kWh) will be carried forward until sufficient generation is accumulated for the creation of a WREGIS Certificate and all such accumulated 040914 jrm 0180042 24 MWh of Environmental Attributes will then be available to Buyer. D.6.4 If a WREGIS Certificate Modification (as such term is defined by WREGIS) will be required to reflect any errors or omissions regarding the Green Attributes from the Facility, then the Buyer will manage the submission of the WREGIS Certificate Modification. D.6.5 Due to the expected delay in the creation of WREGIS Certificates relative to the timing of invoice payments under Section 2, the Buyer will normally be making an invoice payment for the Output for a given month in accordance with Section 2 before the WREGIS Certificates for such month may be created in the Buyer’s WREGIS account. Notwithstanding this delay, the Buyer shall have all right and title to all such WREGIS Certificates upon payment to the Seller in accordance with Section 2. D.7 Changes in Green Attributes Reporting and Conveyance Procedures. The Buyer shall revise this Exhibit “PPA-D,” as appropriate, give written notice to the Seller regarding the revision, and issue a new Exhibit “PPA-D,” which shall then become part of this Agreement in the event that: D.7.1 WREGIS changes the WREGIS Operating Rules (as defined by WREGIS) after the Effective Date or applies the WREGIS Operating Rules in a manner inconsistent with this Exhibit “PPA-D” after the Effective Date; or, D.7.2 WREGIS is replaced as the primary method that the Buyer uses for conveyance of Green Attributes, or additional methods to convey all Green Attributes, are required. 040914 jrm 0180042 25 EXHIBIT “PPA-E” Insurance Requirements CONTRACTORS TO THE CITY OF PALO ALTO (CITY), AT THEIR SOLE EXPENSE, WILL FOR THE TERM OF THE CONTRACT OBTAIN AND MAINTAIN INSURANCE IN THE AMOUNTS FOR THE COVERAGE SPECIFIED BELOW, AFFORDED BY COMPANIES WITH A BEST’S KEY RATING OF A-:VII, OR HIGHER, LICENSED OR AUTHORIZED TO TRANSACT INSURANCE BUSINESS IN THE STATE OF CALIFORNIA. AWARD IS CONTINGENT ON COMPLIANCE WITH CITY’S INSURANCE REQUIREMENTS, AS SPECIFIED, BELOW: REQUIRED TYPE OF COVERAGE REQUIREMENT MINIMUM LIMITS EACH OCCURRENCE AGGREGATE YES YES WORKER’S COMPENSATION AUTOMOBILE LIABILITY STATUTORY STATUTORY YES COMMERCIAL GENERAL LIABILITY, INCLUDING PERSONAL INJURY, BROAD FORM PROPERTY DAMAGE BLANKET CONTRACTUAL, AND FIRE LEGAL LIABILITY BODILY INJURY PROPERTY DAMAGE BODILY INJURY & PROPERTY DAMAGE COMBINED. $1,000,000 $1,000,000 $1,000,000 $2,000,000 $2,000,000 $2,000,000 YES COMPREHENSIVE AUTOMOBILE LIABILITY, INCLUDING, OWNED, HIRED, NON-OWNED BODILY INJURY - EACH PERSON - EACH OCCURRENCE PROPERTY DAMAGE BODILY INJURY AND PROPERTY DAMAGE, COMBINED $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 NO PROFESSIONAL LIABILITY, INCLUDING, ERRORS AND OMISSIONS, MALPRACTICE (WHEN APPLICABLE), AND NEGLIGENT PERFORMANCE ALL DAMAGES $1,000,000 YES THE CITY OF PALO ALTO IS TO BE NAMED AS AN ADDITIONAL INSURED: PROPOSER, AT ITS SOLE COST AND EXPENSE, SHALL OBTAIN AND MAINTAIN, IN FULL FORCE AND EFFECT THROUGHOUT THE ENTIRE TERM OF ANY RESULTANT AGREEMENT, THE INSURANCE COVERAGE HEREIN DESCRIBED, INSURING NOT ONLY PROPOSER AND ITS SUBCONSULTANS, IF ANY, BUT ALSO, WITH THE EXCEPTION OF WORKERS’ COMPENSATION, EMPLOYER’S LIABILITY AND PROFESSIONAL INSURANCE, NAMING AS ADDITIONAL INSURES CITY, ITS COUNCIL MEMBERS, OFFICERS, AGENTS, AND EMPLOYEES. I. INSURANCE COVERAGE MUST INCLUDE: A. A PROVISION FOR A WRITTEN THIRTY DAY ADVANCE NOTICE TO CITY OF CHANGE IN COVERAGE OR OF COVERAGE CANCELLATION; AND B. A CONTRACTUAL LIABILITY ENDORSEMENT PROVIDING INSURANCE COVERAGE FOR CONTRACTOR’S AGREEMENT TO INDEMNIFY CITY – SEE, SAMPLE AGREEMENT FOR SERVICES. II. SUBMIT CERTIFICATE(S) OF INSURANCE EVIDENCING REQUIRED COVERAGE, OR COMPLETE THIS SECTION AND IV THROUGH V, BELOW. A. NAME AND ADDRESS OF COMPANY AFFORDING COVERAGE (NOT AGENT OR BROKER): B. NAME, ADDRESS, AND PHONE NUMBER OF YOUR INSURANCE AGENT/BROKER: 040914 jrm 0180042 26 C. POLICY NUMBER(S): D. DEDUCTIBLE AMOUNT(S) (DEDUCTIBLE AMOUNTS IN EXCESS OF $5,000 REQUIRE CITY’S PRIOR APPROVAL): III. AWARD IS CONTINGENT ON COMPLIANCE WITH CITY’S INSURANCE REQUIREMENTS, AND PROPOSER’S SUBMITTAL OF CERTIFICATES OF INSURANCE EVIDENCING COMPLIANCE WITH THE REQUIREMENTS SPECIFIED HEREIN. IV. ENDORSEMENT PROVISIONS, WITH RESPECT TO THE INSURANCE AFFORDED TO “ADDITIONAL INSURES” A. PRIMARY COVERAGE WITH RESPECT TO CLAIMS ARISING OUT OF THE OPERATIONS OF THE NAMED INSURED, INSURANCE AS AFFORDED BY THIS POLICY IS PRIMARY AND IS NOT ADDITIONAL TO OR CONTRIBUTING WITH ANY OTHER INSURANCE CARRIED BY OR FOR THE BENEFIT OF THE ADDITIONAL INSURES. B. CROSS LIABILITY THE NAMING OF MORE THAN ONE PERSON, FIRM, OR CORPORATION AS INSURES UNDER THE POLICY SHALL NOT, FOR THAT REASON ALONE, EXTINGUISH ANY RIGHTS OF THE INSURED AGAINST ANOTHER, BUT THIS ENDORSEMENT, AND THE NAMING OF MULTIPLE INSUREDS, SHALL NOT INCREASE THE TOTAL LIABILITY OF THE COMPANY UNDER THIS POLICY. C. NOTICE OF CANCELLATION 1. IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR ANY REASON OTHER THAN THE NON-PAYMENT OF PREMIUM, THE ISSUING COMPANY SHALL PROVIDE CITY AT LEAST A THIRTY (30) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION. 2. IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR THE NON-PAYMENT OF PREMIUM, THE ISSUING COMPANY SHALL PROVIDE CITY AT LEAST A TEN (10) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION. V. PROPOSER CERTIFIES THAT PROPOSER’S INSURANCE COVERAGE MEETS THE ABOVE REQUIREMENTS: THE INFORMATION HEREIN IS CERTIFIED CORRECT BY SIGNATURE(S) BELOW. SIGNATURE(S) MUST BE SAME SIGNATURE(S) AS APPEAR(S) ON SECTION II, ATTACHMENT A, PROPOSER’S INFORMATION FORM. Firm: Signature: Name: (Print or type name) Signature: Name: (Print or type name) 040914 jrm 0180042 27 NOTICES SHALL BE MAILED TO: PURCHASING AND CONTRACT ADMINISTRATION CITY OF PALO ALTO P.O. BOX 10250 PALO ALTO, CA 94303. 040914 jrm 0180042 28 EXHIBIT “PPA-F” Notices Contract Administration BUYER: SELLER: City of Palo Alto Utilities Resource Management 250 Hamilton Avenue Palo Alto, CA 94301 Ph: 650-329-2689 Email: UtilityCommoditySettlements@CityofPaloAlto.Org Billing and Settlements BUYER: SELLER: City of Palo Alto Utilities Resource Management 250 Hamilton Avenue Palo Alto, CA 94301 Ph: 650-329-2689 Email: UtilityCommoditySettlements@CityofPaloAlto.Org Forecasting and Outage Reporting under Section 6 of this Agreement Planned Outages: BUYER: SELLER: Northern California Power Agency Real- Time Dispatch 651 Commerce Drive Roseville, CA 95678 Ph: 916-786-3518 Forced Outages BUYER: SELLER: Northern California Power Agency Real- Time Dispatch 651 Commerce Drive Roseville, CA 95678 Ph: 916-786-3518 Forecasting and Scheduling BUYER: SELLER: Northern California Power Agency Operations and Pre-Scheduling 651 Commerce Drive Roseville, CA 95678 Ph: 916-786-0123 040914 jrm 0180042 29 EXHIBIT “PPA-G” Form of Lender Consent and Agreement This CONSENT AND AGREEMENT (this “Consent”), dated as of , 20 , is entered into by and among the CITY OF PALO ALTO, a California chartered municipal corporation (the “City”), , a corporation (the “Lender),” by its agent, (the “Administrative Agent”), and , a corporation (the “Borrower”) (collectively, the “Parties”). Unless otherwise defined, all capitalized terms have the meaning given in the Contract (as hereinafter defined). RECITALS A. Borrower intends to develop, construct, install, test, own, operate and use an approximately MW electric generating facility located in the city of Palo Alto in the State of California, known as the Project (the “Project”). B. In order to partially finance the development, construction, installation, testing, operation and use of the Project, Borrower has entered into that certain financing agreement dated as of (as amended, amended and restated, supplemented or otherwise modified from time to time, the “Financing Agreement”), among Borrower, the financial institutions from time to time parties thereto (collectively, the “Lenders”) , and Administrative Agent for the Lenders, pursuant to which, among other things, Lenders have extended commitments to make loans and other financial accommodations to, and for the benefit of, Borrower. C. The City and Borrower have entered into that certain Power Purchase Agreement, dated as of (attached hereto and incorporated herein by reference, as amended, amended and restated, supplemented or otherwise modified from time to time in accordance with the terms thereof and hereof, the “Power Purchase Agreement”). D. The City and Borrower have entered into that certain Interconnection Agreement, dated as of _ (attached hereto and incorporated herein by reference, as amended, amended and restated, supplemented or otherwise modified from time to time in accordance with the terms thereof and hereof, the “Interconnection Agreement”). E. Pursuant to a security agreement executed by Borrower and Administrative Agent for the Lenders (as amended, amended and restated, supplemented or otherwise modified from time to time, the “Security Agreement”), Borrower has agreed, among other things, to assign, as collateral security for its obligations under the Financing Agreement and related documents (collectively, the “Financing Documents”), all of its right, title and interest in, to and under the Power Purchase Agreement and Interconnection Agreement to Administrative Agent for the benefit of itself, the Lenders and each other entity or person providing collateral security under the Financing Documents. F. It is a requirement under the Financing Agreement that the Parties hereto execute this Consent. AGREEMENT NOW THEREFORE, for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, and intending to be legally bound, the Parties agree, as follows: 1. CONSENT TO ASSIGNMENT. The City acknowledges the assignment referred to in Recital E above, consents to an assignment of the Power Purchase Agreement and Interconnection Agreement pursuant thereto, and agrees with Administrative Agent, as follows: (a) Administrative Agent shall be entitled (but not obligated) to exercise all rights and to cure any 040914 jrm 0180042 30 defaults of Borrower under the Power Purchase Agreement or Interconnection Agreement, as the case may be, subject to applicable notice and cure periods provided in the Power Purchase Agreement and Interconnection Agreement. Upon receipt of notice from Administrative Agent, the City agrees to accept such exercise and cure by Administrative Agent if timely made by Administrative Agent under the Power Purchase Agreement or Interconnection Agreement, as the case may be, and this Consent. Upon receipt of Administrative Agent's written instructions and to the extent allowed by law, the City agrees to make directly to such account as Administrative Agent may direct the City, in writing, from time to time, all payments to be made by the City to Borrower under the Power Purchase Agreement or Interconnection Agreement, as the case may be, from and after the City’s receipt of such instructions, and Borrower consents to any such action. The City shall not incur any liability to Borrower under the Power Purchase Agreement, Interconnection Agreement, or this Consent for directing such payments to Administrative Agent in accordance with this subsection (a). (b) The City will not, without the prior written consent of Administrative Agent (such consent not to be unreasonably withheld), (i) cancel or terminate the Power Purchase Agreement or Interconnection Agreement, or consent to or accept any cancellation, termination or suspension thereof by Borrower, except as provided in the Power Purchase Agreement or Interconnection Agreement and in accordance with subparagraph 1(c) hereof, (ii) sell, assign or otherwise dispose (by operation of law or otherwise) of any part of its interest in the Power Purchase Agreement or Interconnection Agreement, except as provided in the Power Purchase Agreement or Interconnection Agreement, or (iii) amend or modify the Power Purchase Agreement or Interconnection Agreement in any manner materially adverse to the interest of the Lenders in the Power Purchase Agreement and Interconnection Agreement as collateral security under the Security Agreement. (c) The City agrees to deliver duplicates or copies of all notices of default delivered by the City under or pursuant to the Power Purchase Agreement or Interconnection Agreement to Administrative Agent in accordance with the notice provisions of this Consent. The City shall deliver any such notices concurrently with delivery of the notice to Borrower under the Power Purchase Agreement or Interconnection Agreement. To the extent that a cure period is provided under the Power Purchase Agreement or Interconnection Agreement, Administrative Agent shall have the same period of time to cure the breach or default that Borrower is entitled to under the Power Purchase Agreement or Interconnection Agreement, except that if the City does not deliver the default notice to Administrative Agent concurrently with delivery of the notice to Borrower under the Power Purchase Agreement or Interconnection Agreement, then as to Administrative Agent, the applicable cure period under the Power Purchase Agreement or Interconnection Agreement shall begin on the date on which the notice is given to Administrative Agent. If possession of the Project is necessary to cure such breach or default, and Administrative Agent or its designee(s) or assignee(s) declare Borrower in default and commence foreclosure proceedings, Administrative Agent or its designee(s) or assignee(s) will be allowed a reasonable period to complete such proceedings so long as Administrative Agent or its designee(s) continue to perform any monetary obligations under the Power Purchase Agreement or Interconnection Agreement, as the case may be. The City consents to the transfer of Borrower's interest under the Power Purchase Agreement and Interconnection Agreement to the Lenders or Administrative Agent or their designee(s) or assignee(s) or any of them or a purchaser or grantee at a foreclosure sale by judicial or nonjudicial foreclosure and sale or by a conveyance by Borrower in lieu of foreclosure and agrees that upon such foreclosure, sale or conveyance, the City shall recognize the Lenders or Administrative Agent or their designee(s) or assignee(s) or any of them or other purchaser or grantee as the applicable party under the Power Purchase Agreement and Interconnection Agreement (provided that such Lenders or Administrative Agent or their designee(s) or assignee(s) or purchaser or grantee assume the obligations of Borrower under the Power Purchase Agreement and Interconnection Agreement, including, without limitation, satisfaction and compliance with all credit provisions of the Power Purchase Agreement and Interconnection Agreement, if any, and provided further that such Lenders or Administrative Agent or their designee(s) or assignee(s) or purchaser or grantee has a creditworthiness equal to or better than 040914 jrm 0180042 31 Borrower, as reasonably determined by City). (d) In the event that either the Power Purchase Agreement or Interconnection Agreement, or both is rejected by a trustee or debtor-in-possession in any bankruptcy or insolvency proceeding, and if, within forty-five (45) days after such rejection, Administrative Agent shall so request, the City will execute and deliver to Administrative Agent a new power purchase agreement or interconnection agreement, as the case may be, which power purchase agreement or interconnection agreement shall be on the same terms and conditions as the original Power Purchase Agreement or Interconnection Agreement for the remaining term of the original Power Purchase Agreement or Interconnection Agreement before giving effect to such rejection, and which shall require Administrative Agent to cure any defaults then existing under the original Power Purchase Agreement or Interconnection Agreement. Notwithstanding the foregoing, any new renewable power purchase agreement or interconnection agreement will be subject to all regulatory approvals required by law. The City will use good faith efforts to promptly obtain any necessary regulatory approvals. (e) In the event Administrative Agent, the Lenders or their designee(s) or assignee(s) elect to perform Borrower's obligations under the Power Purchase Agreement and Interconnection Agreement, succeed to Borrower’s interest under the Power Purchase Agreement and Interconnection Agreement, or enter into a new power purchase agreement or interconnection agreement as provided in subparagraph 1(d) above, the recourse of the City against Administrative Agent, Lenders or their designee(s) and assignee(s) shall be limited to such Parties’ interests in the Project, and the credit support required under the Power Purchase Agreement and Interconnection Agreement, if any. (f) In the event Administrative Agent, the Lenders or their designee(s) or assignee(s) succeed to Borrower's interest under the Power Purchase Agreement and Interconnection Agreement, Administrative Agent, the Lenders or their designee(s) or assignee(s) shall cure any then-existing payment and performance defaults under the Power Purchase Agreement or Interconnection Agreement, except any performance defaults of Borrower itself, which by their nature are not susceptible of being cured. Administrative Agent, the Lenders and their designee(s) or assignee(s) shall have the right to assign all or a pro rata interest in the Power Purchase Agreement and Interconnection Agreement to a person or entity to whom Borrower’s interest in the Project is transferred, provided such transferee assumes the obligations of Borrower under the Power Purchase Agreement and Interconnection Agreement and has a creditworthiness equal to or better than Borrower, as reasonably determined by the City. Upon such assignment, Administrative Agent and the Lenders and their designee(s) or assignee(s) (including their agents and employees) shall be released from any further liability thereunder accruing from and after the date of such assignment, to the extent of the interest assigned. 2. REPRESENTATIONS AND WARRANTIES. The City hereby represents and warrants that as of the date of this Consent: (a) It (i) is duly formed and validly existing under the laws of the State of California, and (ii) has all requisite power and authority to enter into and to perform its obligations hereunder and under the Power Purchase Agreement and Interconnection Agreement, and to carry out the terms hereof and thereof and the transactions contemplated hereby and thereby; (b) the execution, delivery and performance of this Consent, the Power Purchase Agreement and the Interconnection Agreement have been duly authorized by all necessary action on its part and do not require any approvals, material filings with, or consents of any entity or person which have not previously been obtained or made; (c) each of this Consent, the Power Purchase Agreement, and the Interconnection Agreement is in full force and effect; 040914 jrm 0180042 32 (d) each of this Consent, the Power Purchase Agreement, and the Interconnection Agreement has been duly executed and delivered on its behalf and constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms, except as the enforceability thereof may be limited by (i) bankruptcy, insolvency, reorganization or other similar laws affecting the enforcement of creditors’ rights generally and (ii) general equitable principles (whether considered in a proceeding in equity or at law); (e) there is no litigation, arbitration, investigation or other proceeding pending for which the City has received service of process or, to the City’s actual knowledge, threatened against the City relating solely to this Consent, the Power Purchase Agreement, or the Interconnection Agreement and the transactions contemplated hereby and thereby; (f) the execution, delivery and performance by it of this Consent, the Power Purchase Agreement, and the Interconnection Agreement, and the consummation of the transactions contemplated hereby, will not result in any violation of, breach of or default under any term of any material contract or material agreement to which it is a party or by which it or its property is bound, or of any material requirements of law presently in effect having applicability to it, the violation, breach or default of which could have a material adverse effect on its ability to perform its obligations under this Consent; (g) neither the City nor, to the City’s actual knowledge, any other party to the Power Purchase Agreement or Interconnection Agreement, is in default of any of its obligations thereunder; and (h) to the City’s actual knowledge, (i) no Force Majeure Event exists under, and as defined in, the Power Purchase Agreement or Interconnection Agreement and (ii) no event or condition exists which would either immediately or with the passage of any applicable grace period or giving of notice, or both, enable either the City or Borrower to terminate or suspend its obligations under the Power Purchase Agreement or the Interconnection Agreement. Each of the representations and warranties set forth herein shall survive the execution and delivery of this Consent and the consummation of the transactions contemplated hereby. 3. NOTICES. All notices required or permitted hereunder shall be given, in writing, and shall be effective (a) upon receipt if hand delivered, (b) upon telephonic verification of receipt if sent by facsimile and (c) if otherwise delivered, upon the earlier of receipt or three (3) Business Days after being sent registered or certified mail, return receipt requested, with proper postage affixed thereto, or by private courier or delivery service with charges prepaid, and addressed as specified below: If to the City: [ ] [ ] [ ] Telephone No.: [ ] Facsimile No.: [ ] Attn: [ ] If to Administrative Agent: [ ] [ ] [ ] Telephone No.: [ ] Facsimile No.: [ ] Attn: [ ] 040914 jrm 0180042 33 If to Borrower: [ ] [ ] [ ] Telephone No.: [ ] Facsimile No.: [ ] Attn: [ ] Any party shall have the right to change its address for notice hereunder to any other location within the United States by giving thirty (30) days written notice to the other parties in the manner set forth above. 4. ASSIGNMENT, TERMINATION, AMENDMENT. This Consent shall be binding upon and benefit the successors and assigns of the Parties hereto and their respective successors, transferees and assigns (including without limitation, any entity that refinances all or any portion of the obligations under the Financing Agreement). The City agrees (a) to confirm such continuing obligation, in writing, upon the reasonable request of (and at the expense of) Borrower, Administrative Agent, the Lenders or any of their respective successors, transferees or assigns, and (b) to cause any successor-in-interest to the City with respect to its interest in the Power Purchase Agreement or Interconnection Agreement to assume, in writing and in form and substance reasonably satisfactory to Administrative Agent, the obligations of City hereunder. Any purported assignment or transfer of the Power Purchase Agreement or Interconnection Agreement not in conjunction with the written instrument of assumption contemplated by the foregoing clause (b) shall be null and void. No termination, amendment, or variation of any provisions of this Consent shall be effective unless in writing and signed by the parties hereto. No waiver of any provisions of this Consent shall be effective unless in writing and signed by the party waiving any of its rights hereunder. 5. GOVERNING LAW. This Consent shall be governed by the laws of the State of California applicable to contracts made and to be performed in California. The federal courts or the state courts located in California shall have exclusive jurisdiction to resolve any disputes with respect to this Consent with the City, Assignor, and the Lender or Lenders irrevocably consenting to the jurisdiction thereof for any actions, suits, or proceedings arising out of or relating to this Consent. 6. COUNTERPARTS. This Consent may be executed in one or more duplicate counterparts, and when executed and delivered by all the parties listed below, shall constitute a single binding agreement. 7. SEVERABILITY. In case any provision of this Consent, or the obligations of any of the Parties hereto, shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions, or the obligations of the other Parties hereto, shall not in any way be affected or impaired thereby. 8. ACKNOWLEDGMENTS BY BORROWER. Borrower, by its execution hereof, acknowledges and agrees that neither the execution of this Consent, the performance by the City of any of the obligations of the City hereunder, the exercise of any of the rights of the City hereunder, or the acceptance by the City of performance of the Power Purchase Agreement by any party other than Borrower shall (1) release Borrower from any obligation of Borrower under the Power Purchase Agreement or Interconnection Agreement, (2) constitute a consent by the City to, or impute knowledge to the City of, any specific terms or conditions of the Financing Agreement, the Security Agreement or any of the other Financing Documents, or (3) except as expressly set forth in this Consent, constitute a waiver by the City of any of its rights under the Power Purchase Agreement or Interconnection Agreement. Borrower and Administrative Agent acknowledge hereby for the benefit of City that none of the Financing Agreement, the Security 040914 jrm 0180042 34 Agreement, the Financing Documents or any other documents executed in connection therewith alter, amend, modify or impair (or purport to alter, amend, modify or impair) any provisions of the Power Purchase Agreement. CITY OF PALO ALTO ADMINISTRATIVE AGENT APPROVED AS TO FORM Senior Deputy City Attorney BORROWER APPROVED City Manager Director of Utilities City of Palo Alto (ID # 6485) Finance Committee Staff Report Report Type: Action Items Meeting Date: 2/16/2016 City of Palo Alto Page 1 Council Priority: Environmental Sustainability Summary Title: Palo Alto CLEAN Program Updates and Extension Title: Utilities Advisory Commission Recommendation that the City Council Adopt a Resolution to Continue the Palo Alto Clean Local Energy Accessible Now (CLEAN) Program at the Current Contract Price of $0.165 per kilowatt- hour for Local Solar Resources and at the Avoided Cost Level ($0.081 to $0.082 per kilowatt-hour) for Local Non-solar Eligible Renewable Resources From: City Manager Lead Department: Utilities Recommendation Staff and the Utilities Advisory Commission (UAC) request that the Finance Committee recommend that the City Council: 1.Adopt a resolution (Attachment A) to: a.Maintain the Palo Alto CLEAN program price for local solar energy resources at the current price of 0.165 dollars per kilowatt-hour ($/kWh) for a 20-year or 25- year contract term, and continue with a program limit of 3 megawatts (MW); and b.Reduce the Palo Alto CLEAN program price for local non-solar eligible renewable energy resources to the updated avoided cost of such energy ($0.081/kWh for a 20-year contract term, or $0.082/kWh for a 25-year contract term), from the prior avoided cost projection ($0.093/kWh for a 20-year contract term, or $0.094/kWh for a 25-year contract term), and continue with a separate program limit of 3 MW specifically for local non-solar eligible renewable resources; and 2.Approve the attached amended CLEAN program Power Purchase Agreement (PPA) (Attachment B) to implement the recommended changes. The resolution (Attachment A) included as part of this Staff Report incorporates the above recommendations. The amended Palo Alto CLEAN Eligibility Rules and Requirements, which implement the above recommendations, are shown in Exhibit A-1 attached to the resolution. As noted above, staff also seeks approval of an amended PPA (Attachment B) included with this staff report, which incorporates the above recommendations. ATTACHMENT C City of Palo Alto Page 2 Council has previously delegated authority to the City Manager to make additional changes to the CLEAN Program PPA that are approved by the City Attorney’s office as may be otherwise necessary to implement the recommendations that are approved by Council. Executive Summary In March 2012 the Council adopted the Palo Alto CLEAN program (also commonly referred to as a feed-in tariff, or FIT, program). The program was designed to address the Long-term Electric Acquisition Plan (LEAP) objective to enhance supply reliability through the pursuit of local generation opportunities, and to complement the City of Palo Alto Utilities’ (CPAU’s) existing PV Partners solar rebate program. Palo Alto CLEAN created an additional alternative for property owners by enabling them to build a new solar system on their property and sell the energy to CPAU under a long-term, fixed-rate, standardized contract rather than use the energy on site. Though solar developers expressed interest in Palo Alto CLEAN in 2012, the initial contract price ($0.14 per kilowatt-hour (kWh) for a 20-year term) proved insufficient to facilitate the most common business model used by project developers, which involves a third-party investor leasing roof space from a property owner. Council increased the Palo Alto CLEAN price to $0.165/kWh in December 2012. In May 2015, Council added a 25-year contract term option, and expanded the program to include non-solar eligible renewable energy resources, setting their contract prices at the avoided cost level ($0.093/kWh for a 20-year contract or $0.094/kWh for a 25-year contract). Although the avoided cost of local solar resources has declined since Council’s May 2015 decision, the UAC and staff recommend continuing the contract of $0.165/kWh for local solar projects. The UAC and staff also recommend continuing to offer non-solar eligible renewable energy resources a CLEAN price equal to the avoided cost of the energy produced by those resources—which is currently estimated at $0.081/kWh for a 20-year term, and $0.082/kWh for a 25-year term. Background CPAU has a long history of supporting solar power. It initiated the PV Partners program in 1999 to provide rebates to residential and commercial customers who install solar for their own use, and in 2007 the program was expanded to meet the requirements of the State’s Million Solar Roofs Bill (Senate Bill 1 (SB1), 2006). CPAU is mandated by SB1 to offer rebates through the PV Partners until the total SB1 program budget of $13 million has been exhausted, which is expected to occur within a year. Currently, $585,000 in funds remain unreserved for commercial solar PV systems. All residential rebate funds were reserved as of August 2014. In March 2012, the City expanded its support for local distributed generation by launching Palo Alto CLEAN (Clean Local Energy Accessible Now) with a price of $0.14/kWh for a 20-year contract (Staff Report 2548, Resolution 9235). The program, which was set to expire in December 2012, expanded the options available to property owners by enabling them to sell City of Palo Alto Page 3 energy directly to CPAU under a standardized long-term contract instead of using the energy on site. After receiving no response to the program, in December 2012, Council extended the CLEAN program and increased the rate to $0.165/kWh for a 20-year contract (Staff Report 3316, Resolution 9308). In February 2014, Council extended the CLEAN program again at the rate to $0.165/kWh for a 20-year contract, and increased the program capacity limit to 3 MW (Staff Report 4378, Resolution 9393). On April 22, 2014, the City Council adopted the Local Solar Plan (Staff Report 4608, Resolution 9402), which set the overarching goal of meeting 4% of the City’s total energy needs from local solar by 2023 and unified the City’s approach toward local solar and described a set of diverse strategies for meeting the 4% target in a cost-effective manner that does not create a burden on non-solar customers. Prior programs, incentives, and policies involving solar installed in the City—including specifically PV Partners, net energy metering, and Palo Alto CLEAN—are integrated into the Local Solar Plan strategies. The CLEAN program plays an integral role in achieving the Local Solar Plan goal contributing about 0.5% of the City’s total energy needs once the program’s 3 MW cap on local solar projects is reached. In December 2014, staff presented a recommendation to the UAC to continue the CLEAN program for solar resources at the $0.165/kWh for a 20-year contract, while also adding a 25- year contract term option and expanding the program to non-solar renewable energy resources, setting the price for those resources at the avoided cost level ($0.093 /kWh for a 20- year contract, $0.094/kWh for a 20-year contract) (UAC report). The staff recommendation also included maintaining the 3 MW cap on solar resources, and not adopting a cap on the participation of eligible non-solar resources since they would be compensated at the avoided cost and did not cause any impact on rates. The UAC unanimously supported the recommendations concerning solar resources, but did not support the recommendation to expand the program to non-solar renewable energy resources, siting insufficient justification in the staff report for the addition of these resources. In March 2015, staff presented the same recommendation described above to the Finance Committee, with the addition of a 3 MW participation cap on eligible non-solar resources and an expanded discussion of the extension of the program to non-solar resources in the report (Staff Report 5428). The Finance Committee considered staff’s and the UAC’s recommendations, and committee members expressed no concerns with the proposals to add a 25-year contract term option or to expand the program to non-solar eligible renewable energy resources. However, Committee members expressed serious concern about the proposal to continue offering the contract price of $0.165/kWh for solar resources, rather than a lower rate closer to the current avoided cost of that solar energy. Ultimately the Finance Committee voted unanimously to recommend that Council expand the CLEAN program to non- solar resources, but to set the contract prices for both solar and non-solar resources equal to those resources’ avoided costs (for solar resources, $0.103/kWh for a 20-year contract and $0.104/kWh for a 25-year contract; for non-solar resources, $0.093 /kWh for a 20-year contract, $0.094/kWh for a 20-year contract). City of Palo Alto Page 4 In May 2015, Council considered the UAC and Finance Committee recommendations (Staff Report 5849) and were advised that reducing the CLEAN Program price for solar resources (from 16.5¢/kWh to 10.3¢/kWh or 10.4 ¢/kWh, depending on contract term length) also has implications for a City project (solar installations on City-owned parking garages) and a City program (the Community Solar Program) under design at the time. The Council voted to: extend the CLEAN program again at the rate of $0.165/kWh for a 20-year contract for solar resources; add a 25-year contract term option; and expand the program to include non-solar eligible renewable energy resources—setting contract prices for such resources at the level of their avoided cost, which at the time was $0.093/kWh for a 20-year contract or $0.094/kWh for a 25-year contract, and setting a separate 3 MW program capacity limit on such resources. One important consideration in Council’s decision to maintain the contract rate of $0.165/kWh for solar resources, rather than reducing it to the avoided cost level as the Finance Committee advocated, was the expectation that the Public Works Department would soon be executing a lease of rooftop space at several downtown parking garages with a company that would use that space to develop a group of solar facilities (totaling about 1.5 MW of capacity) that would participate in the CLEAN program. Although negotiations with that vendor later fell through, at the time staff anticipated that the City would receive about $155,000 per year in revenue from that lease, and Council specified that those revenues should be directed to the Electric Fund in order to mitigate the impact on electric ratepayers of maintaining a CLEAN program rate for solar resources that was greater than their avoided cost. On January 25, Council approved a lease agreement with a solar developer to construct solar PV systems (for a total of 1.3 MW) on four city-owned parking structures with an annual lease payment of $20,000 per year plus the installation of electric vehicle chargers (Staff Report 6535) with the expectation that the develop would submit an application to the CLEAN program. The City received its very first application to the Palo Alto CLEAN program on January 8 for a 113 kW solar carport installation at the Unitarian Universalist Church of Palo Alto for a 25-year contract term. When the application for the city-owned garages has been received and processed, approximately half of the total 3 MW program capacity will remain. The CLEAN program has prompted developers to take a serious look at the cost of developing solar projects in Palo Alto, and some of them shared that information with CPAU staff. At the same time, the solar project permitting processes at the development center have been improved based on input gathered from solar developers. In addition, in response to frequent requests from developers for detailed information about the City’s electrical distribution system, staff is in the process of developing a map showing the locations of likely low-cost interconnection points. In addition, several public utilities across the country have called CPAU to discuss how to follow Palo Alto’s lead and develop a CLEAN program in their own service areas. Discussion City of Palo Alto Page 5 Value of Local Solar Resources When establishing the CLEAN price of $0.165/kWh in December 2012, Council reviewed the market value of local solar energy and determined that, beyond the value of the energy itself, there were additional financial and environmental benefits to increasing local solar generation. In May 2015, when Council re-affirmed the $0.165/kWh price, staff estimated the cost of buying remote solar energy outside of Palo Alto and transmitting it to Palo Alto was $0.103/kWh (including renewable energy value, transmission and capacity) for a 20-year contract. Therefore, purchasing the energy generated from 3 MW of local solar projects at $0.165/kWh was expected to cost about $310,000 per year more than buying the same energy outside of Palo Alto (and having it transported to Palo Alto). This extra cost is equivalent to a 0.26% increase in the electric utility’s costs. However, at the time Council re-affirmed the $0.165/kWh price, Public Works staff was nearing the end of negotiations on a lease agreement of parking garage rooftop space to a solar developer—who intended to install solar systems on these rooftops totaling about 1.5 MW, and have those resources participate in the CLEAN program—that was expected to provide approximately $150,000 per year in lease payments to the City. In May 2015, when it re- affirmed the $0.165/kWh price for solar resources, Council also directed that the roughly $150,000 per year in lease payments under this arrangement be allocated to the Electric Fund to offset the additional cost to ratepayers of providing a contract price exceeding the avoided cost of the energy generated through the program. Council determined that this additional cost (after being offset by the $150,000 per year in lease payments) was acceptable as a means to encourage local solar installations and in light of additional benefits of encouraging local solar generation. Unfortunately, lease negotiations between the City and the solar developer foundered and the City ceased negotiations with the developer1. The City then began lease negotiations with another respondent to the RFP, which were successfully concluded when Council approved a lease agreement on January 25, 2016 (Staff Report 6535). The lease agreement includes lease payments of $20,000 per year to the City, which is significantly lower than the $150,000 per year that was being discussed with the first developer. However, the lease terms require installation of 18 new Level 2 electric vehicle chargers and electrical infrastructure to support an additional 80 future new Level 2 chargers. The electrical vehicle chargers and infrastructure have a significant value that is in addition to the rent. Additionally, the Council Policy and Services Committee is expected in the near future to discuss options for changing the City’s current policy of free use of electric vehicle chargers. Changes to the policy may result in the generation of revenue from the new electric vehicle chargers that could be used to offset the additional cost to ratepayers of the $0.165/kWh CLEAN program price, in addition to the $20,000 per year in rent payments. 1 See this staff report for an explanation of staff’s June 29, 2015 recommendation to reject the developer’s proposal: http://www.cityofpaloalto.org/civicax/filebank/documents/48009. City of Palo Alto Page 6 Updated Value of Renewable Energy In April 2015, the City released an RFP for renewable energy projects that could deliver energy to the City starting in 2021. Although the City has not yet approved a Power Purchase Agreement (PPA) resulting from this RFP, the responses that the City received to this solicitation can be used to estimate the current value of renewable energy in California. Of the 41 project proposals received in this RFP, staff placed the 10 highest-ranking proposals on a “shortlist”; the average proposed price of these shortlisted proposals was $0.055/kWh2. On a levelized basis over a 20-year term, the cost to deliver that energy to Palo Alto, combined with the capacity related benefits that local solar would provide, is projected to be an additional $0.034/kWh for a total value of local solar energy of $0.089/kWh. Over a 25-year term, the levelized delivery- and capacity-related cost is $0.035/kWh for a total value of local solar energy of $0.09/kWh. When Council re-affirmed the $0.165/kWh price in May 2015, the avoided cost for solar energy was estimated to be $0.103/kWh for a 20-year term, and $0.104/kWh for a 25-year term. The $0.014/kWh reduction in the estimated avoided cost of local solar energy from then to now is entirely due to a reduction in the estimated value of the renewable energy itself. Previously, the energy value was based on the last long-term renewable PPA that the City executed; this agreement, signed in June 2014, was to buy energy from a 25 MW solar energy project in central California at a cost of about $0.069/kWh (Staff Report 4791, Resolution 9416). The energy generated by 3 MW of local solar projects would supply about 0.5% of the City’s total electricity needs. Table 1 below shows the history of the Palo Alto CLEAN price since the program started as well as the proposed CLEAN price for solar resources for a 20-year contract term. 2 Note that the price for the proposed PPA under consideration by the Finance Committee (Staff Report 6517) is only $0.03676/kWh for a 25-year term. City of Palo Alto Page 7 Table 1 – Palo Alto CLEAN Program Prices for Local Solar Council Approval Avoided Cost of Local Solar Generation * ($/kWh) CLEAN Price ($/kWh) Annual Cost above Avoided Cost (Rate Impact) Total Excess Cost over 20- year Term March 2012 0.136 0.140 $15,000 (0.01%) for 2 MW cap $300,000 December 2012 0.116 0.165 $160,000 (0.10%) for 2 MW cap $3.2 million February 2014 0.099 0.165 $332,500 (0.27%) for 3 MW cap $6.45 million May 2015 0.103 0.165 $310,000 (0.26%) for 3 MW cap $6.2 million Current Proposal 0.089 0.165 $380,000 (0.32%) for 3 MW cap $7.6 million * The cost of buying remote solar energy outside of Palo Alto and transmitting it to Palo Alto. As shown in Table 1, based on the current total avoided cost estimates, the cost of continuing the $0.165/kWh CLEAN price for 3 MW of solar PV projects is about $380,000 per year more than buying the same energy outside of Palo Alto (and transporting it to Palo Alto). This is equivalent to a 0.32% increase in the electric utility’s costs. For non-solar local eligible renewable energy resources, the estimated avoided cost experienced a similar reduction based on the results of the City’s recent renewable energy RFP. The energy generated by 3 MW of local non-solar renewable energy projects would supply about 2.2% of the City’s total electricity needs (assuming that the projects are “baseload” resources that operate at a high capacity around-the-clock). For these resources, the current estimated avoided costs are $0.081/kWh for a 20-year term, and $0.082/kWh for a 25-year term – which are down from $0.093/kWh and $0.094/kWh, respectively, in May 2015. Table 2 compares the current proposal to the price offered since May 2015 when non-solar resources were first eligible for the Palo Alto CLEAN program. Note that the excess cost is zero since the price is set equal to the avoided cost. Table 2 – Palo Alto CLEAN Program Prices for Local Non-Solar Eligible Renewables Council Approval Avoided Cost of Local Non- Solar Renewable Generation * ($/kWh) CLEAN Price ($/kWh) Annual Cost above Avoided Cost (Rate Impact) Total Excess Cost over 20- year Term May 2015 0.093 0.093 $0 (0%) for 3 MW cap $0 Current Proposal 0.081 0.081 $0 (0%) for 3 MW cap $0 * The cost of buying remote baseload renewable energy and transmitting it to Palo Alto. City of Palo Alto Page 8 Figure 1 illustrates the make-up of the various components of the total value of local solar and non-solar renewable energy. When the Council approved increasing the CLEAN contract price for solar resources from $0.14/kWh to $0.165/kWh in December 2012, they found that the increase was justified because local solar resources provide some additional benefits to the community that would be extremely difficult to quantify. These additional benefits of solar resources include:  keeping a portion of the City’s electric expenditures within the community, which provides revenue for local economic development;  reducing the need for new transmission lines, thus reducing the environmental impacts of the electric system and improving reliability in transmission-constrained regions like the Greater Bay Area;  providing shade to local buildings and parking structures, which reduces the need for energy to provide cooling; and  the potential—if the solar facility is paired with an energy storage system or employs modern inverters—to provide resiliency to the City’s electric distribution system. These additional benefits are shown in Figure 1, making up the difference between the current quantifiable avoided cost of local solar energy ($0.089/kWh) and the current contract price ($0.165/kWh). City of Palo Alto Page 9 Figure 1 – Breakdown of the Total Value of Local Solar and Non-Solar Renewables Implications of CLEAN Price on City Programs and Projects The CLEAN Program price for solar resources has implications for a City project (Solar Installations on City-Owned Parking Garages), a City program (the Community Solar Program), and the Palo Alto CLEAN Program in general. Reducing the contract price under the CLEAN Program for solar resources may negatively impact these initiatives. Solar Installations on City-Owned Parking Garages Project In March 2014, the City released a Request for Proposals (RFP) for the installation and operation of a solar PV system at one or more of the five City-owned parking structures (Staff Report 4540). The RFP was structured to solicit projects that could be eligible to participate in the Palo Alto CLEAN Program providing an estimated 1.5 MW of local solar capacity. After negotiations ceased with one contractor, Public Works staff completed negotiations for a site lease for the project on four garages for a total of 1.3 MW with another contractor. The contactor is expecting that the rooftop solar installations will receive a CLEAN contract at a price of 16.5 ¢/kWh for a 25-year contract term3. The project may not be viable or significant changes to the lease may be required if the CLEAN Program price is reduced. 3 As of February 3, the CLEAN program for this project has not been submitted, but staff is in contact with the developer and expects the application to be submitted very shortly. City of Palo Alto Page 10 CLEAN Program Participation The Palo Alto CLEAN Program received the first application from a solar PV project in January 8, 2016 and expects to receive the second application for the City parking structures by mid- February. Staff expects that as the rebates from the PV Partners program get used up and with the end of the Net Energy Metering (NEM) on the horizon, interest in the CLEAN program will increase despite the comparatively high rates that property owners in Palo Alto charge for leasing their rooftop space, as well as the lack of space available to install ground-mounted or parking structure-based projects. Community Solar Program As part of the Local Solar Plan, staff is developing a voluntary community solar share program, which would be available to all electric ratepayers and would primarily benefit community members who do not have good solar access but want to participate in a local solar project. This program anticipates finding a host site (possibly a City facility) that would have a Power Purchase Agreement (PPA) with the City similar to the CLEAN PPA and at the CLEAN price. If the CLEAN contract price is reduced and a community solar PPA price is reduced to the same level, it may impact the feasibility of the community solar program. The City could decide to set a different contract price for the output from the community solar project, but may have difficulty explaining how it could offer a different contract price to the community solar project than to other local solar projects through the CLEAN Program. Recommendation The UAC and staff recommend that the current CLEAN price of $0.165/kWh for solar projects continue. As solar system costs have continued to decrease, it is anticipated that at the current contract price the CLEAN program may attract its first participants in 2016. In addition, the UAC and staff recommend continuing to offer non-solar eligible renewable energy resources a CLEAN price equal to the avoided cost of the energy produced by those resources, which is currently estimated at $0.081/kWh for a 20-year term, and $0.082/kWh for a 25-year term. Additionally, the UAC and staff recommend continuing with program caps of 3 MW each for the local solar and the non-solar local renewable resources. Commission Review and Recommendation The UAC considered staff’s recommendation at its December 2, 2015 meeting. Some commissioners had questions about how the avoided cost of renewable energy is calculated, and requested that staff enumerate the various non-monetary benefits that local solar resources provide. Commissioner Balantine noted that local generation resources cannot provide one of the benefits staff cited (grid resiliency in the event of an earthquake or other emergency situation) unless they use the most modern type of inverters available. But the commissioners was largely supportive of the staff recommendation. City of Palo Alto Page 11 After its discussion, the UAC voted 4-0 (with Vice Chair Cook and Commissioners Balantine, Eglash and Danaher voting yes, and Chair Foster and Commissioners Hall and Schwartz absent) to recommend that the City Council: 1. Maintain the Palo Alto CLEAN program price for local solar energy resources at the current price of 0.165 dollars per kilowatt-hour ($/kWh) for a 20-year or 25-year contract term, and continue with a program limit of 3 megawatts (MW); and 2. Reduce the Palo Alto CLEAN program price for local non-solar eligible renewable energy resources to the updated avoided cost of such energy ($0.081/kWh for a 20-year contract term, or $0.082/kWh for a 25-year contract term), from the prior avoided cost projection ($0.093/kWh for a 20-year contract term, or $0.094/kWh for a 25-year contract term), and continue with a separate program limit of 3 MW specifically for local non-solar eligible renewable resources. The draft notes from the UAC’s December 2, 2015 meeting are provided as Attachment C. In response to the UAC’s comments at its December 2, 2015 meeting, staff added Figure 1, which shows the breakdown of the value provided by local solar and non-solar renewable energy resources to this report. Resource Impact Staff estimates the current cost of buying energy from solar resources outside of Palo Alto is $0.089/kWh (including transmission and capacity) for a 20-year contract, or $0.09/kWh for a 25-year contract. Purchasing the energy generated from 3 MW of local solar projects at $0.165/kWh is expected to cost about $380,000 per year more than buying the same energy outside of Palo Alto. This is equivalent to a 0.32% increase in the electric utility’s costs. If the program increased costs by $380,000 per year, staff has determined that the system average electric rate would have to increase by $0.0004/kWh. This is equivalent to a bill impact of $1.85 per year for the median residential customer using 410 kWh/month, or $2.80 per year for a residential customer using 650 kWh/month. Changing the program price offered to local, non-solar renewable energy projects is not expected to impact the cost to the Utility since the recommended price for those projects is equal to the value of acquiring such projects outside the City. In addition to the energy costs described above, staff time is associated with marketing and project review. The project review can be absorbed with existing staff over the life of the program, and costs will be recovered through project review fees. The additional marketing will require about 0.1 FTE of staff time and may involve an additional budget for marketing materials, which would be requested through the annual budget process. The marketing work will be absorbed by existing staff, but will decrease time spent on other account management and efficiency program delivery activities. City of Palo Alto Page 12 Policy Implications The recommendation to continue the CLEAN program supports the City’s carbon neutral electric supply portfolio policy as well as the LEAP Objective to enhance supply reliability through the pursuit of local generation opportunities. Environmental Review Adoption of this resolution is not subject to California Environmental Quality Act (CEQA) review under California Public Resources Code section 21080(b)(8), because the price adopted reflects the reasonable cost of the CLEAN Program’s operating expenses, including the cost of purchasing renewable energy from local renewable energy generating systems and the value of local benefits to CPAU and its ratepayers. Approval of the amended CLEAN program PPA is not a project under CEQA, and therefore, no environmental assessment is necessary. Attachments:  Attachment A: Resolution Continuing the Palo Alto CLEAN Program (with Exhibit A-1 Revised Program Rules) (PDF)  Attachment B: Updated Palo Alto CLEAN Power Purchase Agreement (PDF)  Attachment C: Excerpted Minutes of the December 2 2015 UAC Meeting (PDF) Attachment A *NOT YET APPROVED* 151026 jjs 01-0024 1 Resolution No. _________ Resolution of the Council of the City of Palo Alto Continuing the Palo Alto Clean Local Accessible Now Program at the Same Contract Rate of 16.5¢/kWh for Solar Resources and Decreasing the Contract Rate for Non-Solar Renewable Energy Resources to 8.1¢/kWh to 8.2¢/kWh Based on the Reduced Avoided Cost of Local Renewable Energy R E C I T A L S A. On March 5, 2012, the City approved the Palo Alto Clean Local Energy Accessible Now (CLEAN) Program (or feed-in tariff). Under the Palo Alto CLEAN Program, participants who build a new solar generating system in Palo Alto may obtain a long-term, fixed-price contract with the City to sell the energy from the system to the City’s electric utility. B. Council extended the program beyond its original termination date of December 31, 2012 and has periodically reviewed the contract price and program cap. C. On May 27, 2015, Council approved Resolution 9512, which continued Palo Alto CLEAN at the contract price of $0.165 per kilowatt-hour (kWh) for local solar resources, added a 25-year contract term option, and expanded the program’s eligibility to local non-solar eligible renewable energy resources, establishing contract prices of $0.093 per kWh for a 20-year term or $0.094 per kWh for a 25-year term for such resources. These contract rates were set to be equal to the then current estimated avoided cost of the energy generated by these resources. The resolution further established separate program caps of 3 megawatts (MW) of generating capacity for both the solar and non-solar resources. D. As solar system costs have continued to decrease, and as the deadline for the steep reduction in the federal ITC approaches, it is anticipated that at the current contract price the CLEAN program may attract its first participants in 2016. E. In April 2015, the City released a Request for Proposals for projects that could deliver renewable energy to the City, and results indicate that the avoided cost of energy generated by renewable resources has dropped since Council adopted a CLEAN Program price for local non-solar resources in May 2015. F. The City therefore wants to continue the CLEAN program for solar resources at the same contract price and program parameters (including the separate 3 megawatt (MW) caps applicable to the solar and non-solar portions of the program), while reducing the contract prices available to local non-solar eligible renewable resources to $0.081 per kWh for a 20-year term or $0.082 per kWh for a 25-year term for such resources, which is equal to the current estimated avoided cost of energy generated by these resources. Attachment A *NOT YET APPROVED* 151026 jjs 01-0024 2 The Council of the City of Palo Alto (“City”) RESOLVES: SECTION 1. The Council adopts revised Palo Alto CLEAN Program Eligibility Rules Requirements, set forth in Exhibit 1 attached to this Resolution. SECTION 2. The Council authorizes the City Manager or his designee to sign contracts for the output of one or more solar, or other non-solar eligible renewable energy resource meeting the CLEAN Program Eligibility Rules and Requirements described in Section 1. The total CLEAN Program cost commitment made by the City during the life of the program shall not exceed $25,000,000, which is sufficient for a program cap of 3 MW of local solar generating capacity and 3 MW of local, non-solar generating capacity over a 25-year contract term. SECTION 3. The Council finds that the City of Palo Alto Utilities’ (CPAU’s) purchase of energy from local renewable sources provides additional local benefits to CPAU when compared to energy purchased outside Palo Alto, which in turn become benefits to CPAU ratepayers and the local community. These benefits include a reduction in CPAU’s costs and energy losses associated with energy transmission and distribution, and a reduction in CPAU’s capacity requirements. When the City purchases energy from local sources, a portion of the City’s electric expenditures remain within the community, which provides revenue for local economic development. Locating generation near load centers can also reduce the need for new transmission lines, thus reducing the environmental impacts of the electric system and improving reliability in transmission-constrained regions like the Greater Bay Area. When solar systems are installed on rooftops and parking facilities, the shade created reduces the energy required for cooling and creates value for vehicle owners. In addition, as new technology and energy storage systems are developed, the local renewable energy generation, in combination with storage systems, has the potential to provide resiliency to the City’s electric distribution system. Further, local renewable energy generation that participates in the CLEAN Program provides long-term certainty and value to the entire community—benefits that are not provided when such energy is sold to the City on a short-term basis or used on-site. The Council therefore finds that offering the Palo Alto CLEAN Program to participants is a reasonable cost of providing electric service to CPAU’s electric customers. SECTION 4. The Council finds that the adoption of this resolution is not subject to California Environmental Quality Act review under California Public Resources Code section 21080(b)(8), because the rate adopted reflects the reasonable cost of the CLEAN Program’s operating expenses, including the cost of purchasing renewable energy from local solar generating systems, and the value of local benefits to CPAU and its ratepayers as described in SECTION 3 of this resolution. Approval of the amended CLEAN Program Eligibility Rules and // // Attachment A *NOT YET APPROVED* 151026 jjs 01-0024 3 Requirements attached to the Resolution as Exhibit 1 is not a project under CEQA, and therefore, no environmental review 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 PALO ALTO CLEAN (CLEAN LOCAL ENERGY ACCESSIBLE NOW) PROGRAM ELIGIBILITY RULES AND REQUIREMENTS Effective __________ A. PARTICIPATION ELIGIBILITY: The Palo Alto Clean Local Energy Accessible Now Program (the “CLEAN Program”) is open to participation by any Eligible Renewable Energy Resource, as defined in Section D.4, that satisfies these Program Eligibility Rules and Requirements. B. TERRITORIALITY REQUIREMENT: In order to be eligible to participate in the CLEAN Program, an Eligible Renewable Energy Resource must be located in and generating electricity from within the utility service area of the City of Palo Alto. C. PRICES AND TERM FOR ELIGIBLE RENEWABLE RESOURCES: The following purchase price shall apply to the electricity produced by an Eligible Renewable Energy Resource participating in the Program, except as provided in Section D.5. Solar Energy Resources: Contract Term Contract Price 20 years $0.165 / kWh 25 years $0.165 / kWh Other, Non-Solar Eligible Renewable Energy Resources: Contract Term Contract Price 20 years $0.081 / kWh 25 years $0.082 / kWh D. ADDITIONAL RULES AND REQUIREMENTS: 1.The owner of the Eligible Renewable Energy Resource shall enter into an Eligible Renewable Energy Resource Power Purchase Agreement (“PPA”) with the City of Palo Alto prior to delivering energy to the City. 2.The maximum, aggregate generation capacity from all solar facilities participating in the CLEAN Program is three (3) Megawatts (“MW”) (the “Program Capacity”, based on the generating facility’s California Energy Commission rating, CEC-AC). Generating capacity from non-solar, eligible renewable energy resources will not be counted towards this 3 MW cap for the solar program. Instead non-solar, local eligible renewable energy resources will be subject to a 3 MW cap of their own. 3.An application for participation in the CLEAN Program to sell output to the City (the “Application”) may be submitted at any time. Applications will be considered in the EXHIBIT 1 to ATTACHMENT A PALO ALTO CLEAN (CLEAN LOCAL ENERGY ACCESSIBLE NOW) PROGRAM ELIGIBILITY RULES AND REQUIREMENTS Effective __________ order received. 4. Eligible Renewable Energy Resource means an electric generating facility that: (a) is defined and qualifies as an “eligible renewable energy resource” under California Public Utilities Code Section 399.12(e) and California Public Resources Code Section 25471, respectively, as amended; and (b) meets the territoriality requirement set forth in Section B. 5. The California Energy Commission’s (“CEC”) certification of the Eligible Renewable Energy Resource shall be required within six (6) months of the commercial operation date of the generating facility; the facility’s owner shall provide written notice of the CEC’s certification to the City within ten (10) business days of receipt of said certification. If the City agrees, in its sole discretion, to take delivery of the generating facility’s electricity prior to the CEC’s certification, then, as the facility’s electricity cannot be considered in fulfillment of the City’s RPS requirements, the price that the City will pay for the generating facility’s electricity (the “Pre-Certification Price”) will be set to $0.076 per kWh (for a 20-year contract term) or $0.08 per kWh (for a 25-year contract term), based on the estimated levelized cost of brown power over a 20-year or 25-year period, respectively. Upon the CEC’s certification of the generating facility and the provision of notice of such certification to the City in accordance with this section, the City will pay the Price set forth in Section C of these CLEAN Program Rules and Requirements and the PPA (collectively referred to as the “Contract Price”) for the generating facility’s electricity delivered on and after the date of the CEC’s certification. The City will, in its sole discretion, “true-up”, as appropriate, the difference between the Contract Price and the Pre-Certification Price for any electricity received and paid for by the City, effective as of the date of certification of the Eligible Renewable Energy Resource. 6. If an Eligible Renewable Energy Resource is authorized to participate in the CLEAN Program, then that Resource shall not be entitled to receive any rebate or other incentive from the City’s Photovoltaic (PV) Partners Program or any other similar incentive program funded by the City’s ratepayers. To the extent any rebate or incentive is paid to the owner of the Resource, that rebate or incentive shall be disgorged and refunded to the City upon 30 days’ notice, if the Eligible Renewable Energy Resource continues to participate in the CLEAN Program. If a rebate or an incentive has been paid to the Eligible Renewable Energy Resource, then that Resource shall be ineligible to participate in the CLEAN Program. 7. All electricity generated by the Eligible Renewable Energy Resource shall be delivered only to the City. No portion of the electricity may be used to offset any load of the generating facility (other than incidental loads associated with operating the generating facility). 8. A metering and administration fee will be charged to each Eligible Renewable Energy PALO ALTO CLEAN (CLEAN LOCAL ENERGY ACCESSIBLE NOW) PROGRAM ELIGIBILITY RULES AND REQUIREMENTS Effective __________ Resource that participates in the CLEAN Program. See Utilities Rate Schedule E-15 (Electric Service Connection Fees). 040914 jrm 0180042 1 POWER PURCHASE AGREEMENT ELIGIBLE RENEWABLE ENERGY RESOURCE (Palo Alto Clean Local Energy Accessible Now Program) This Power Purchase Agreement - Eligible Renewable Energy Resource, dated, for convenience, , 20 (the “Effective Date”), is entered into by and between the CITY OF PALO ALTO, a California chartered municipal corporation, and , a corporation (individually, a “Party” and, collectively, the “Parties”). RECITALS 1.The Buyer has adopted and implemented its CLEAN Program, which allows an owner of a qualifying electric generation system to sell to the Buyer the power output of a small-scale distributed generation Eligible Renewable Energy Resource, subject to the CLEAN Program’s rules and requirements. 2.The Seller owns or operates and desires to interconnect its Facility in parallel with Buyer’s Distribution System and sell the Energy produced by its Facility, net of Station Service Load, directly to the Buyer in furtherance of the CLEAN Program. 3.The Parties do not intend this Agreement to constitute an agreement by the Buyer to provide retail electrical service to the Seller. 4.The Parties wish to enter into a power purchase agreement for the sale and purchase of the Output of the Facility. The Parties will enter into a separate “Interconnection Agreement” in connection with this Agreement. NOW THEREFORE, in consideration of the foregoing recitals and the following covenants, terms and conditions, the Parties agree, as follows: AGREEMENT 1.1 DEFINITIONS The initially capitalized terms, whenever used in this Agreement, have the meanings set forth below, unless they are otherwise herein defined. The terms “include,” “includes,” and “including,” when used in this Agreement, shall mean, respectively, “include, without limitation,“ “includes, without limitation” and “including, without limitation.” “Agreement” means this Power Purchase Agreement – Eligible Renewable Energy Resource between the Buyer and the Seller. “Business Day” means any day except a Saturday, Sunday, or a day that the City observes as a regular holiday under Palo Alto Municipal Code section 2.08.100(a). “Buyer” refers to the City of Palo Alto, California, with a principal place of business at 250 Hamilton Avenue, Palo Alto, California 94301. “Buyer’s Distribution System” means the wires, transformers, and related equipment used by the Buyer to deliver electric power to the Buyer’s retail customers, typically at sub-transmission level voltages or lower. “CAISO” means the California Independent System Operator Corporation, or successor entity. “CAISO Tariff” means the CAISO FERC Electric Tariff, as amended. “Capacity” means the ability of a generator at any given time to produce Energy at a specified rate, as ATTACHMENT B 040914 jrm 0180042 2 measured in megawatts (“MW”) or kilowatts (“kW”), and any reporting rights associated with it. “Capacity Attributes” means any current or future defined characteristic, certificate, tag, credit, or ancillary service attribute, whether general in nature or specific as to the location or any other attribute of the Facility, intended to value any aspect of the Contract Capacity of the Facility to produce Energy or ancillary services, including contributions towards Resource Adequacy (including those requirements defined in Section 40 of the CAISO Tariff) or reserve requirements (if any), and any other reliability or power attributes. “CEC” means the California Energy Resources Conservation and Development Commission, or successor agency. “Certificate of RPS Eligibility” means a certificate issued by the CEC as evidence of RPS Certification of the Facility. “City” means the government of the City of Palo Alto, California. “CLEAN Program” refers to the Palo Alto Clean Local Energy Accessible Now Program, a renewable energy program established by the City by adoption of resolution number , dated , of the Palo Alto City Council, whereby the Buyer will purchase from the Seller the Output of Eligible Renewable Energy Resources that meet specified criteria set forth in the City’s applicable ordinances and resolutions. “Commercial Operation” means the period of operation of the Facility, once the Commercial Operation Date has occurred. “Commercial Operation Date” means the date specified in the Commercial Operation Date Confirmation Letter, which the Parties execute and exchange in accordance with this Agreement. “Contract Capacity” means the installed electrical Capacity available upon the Commercial Operation Date of the Facility in an amount, as specified in Exhibit “PPA-A.” “Contract Capacity” is measured at the Buyer’s revenue meter at the Delivery Point and is net of any Station Service Loads, any applicable Facility step-up transformer losses, and distribution losses on Buyer’s Distribution System up to the Delivery Point. “Contract Price” means the price paid by the Buyer to the Seller for the Output generated at the Facility and received by the Buyer, as set forth in Exhibit “PPA-A.” “CPUC” means the California Public Utilities Commission, or successor agency. “Delivery Point” means the point of interconnection to Buyer’s Distribution System, where the Buyer accepts title to the Output. “Delivery Term” has the meaning set forth in Section 14.2 hereof. “Eligible Renewable Energy Resource” means an electric generating facility that is defined and qualified as an “eligible renewable energy resource” under California Public Utilities Code Section 399.12(e) and California Public Resources Code Section 25471, respectively, as amended. “Energy” means electrical energy generated from the Facility and delivered to Buyer’s Distribution System with the voltage and quality required by the Buyer, and measured in megawatt-hours (“MWh”) or kilowatt- hours (“kWh”), as metered at the Delivery Point. “Facility” means the qualifying renewable energy generation equipment and associated power conditioning and interconnection equipment that deliver the Output to the Buyer at the Delivery Point. “FERC” means the Federal Energy Regulatory Commission, or successor agency. 040914 jrm 0180042 3 “Forced Outage” means an unplanned outage of one or more of the Facility’s components that results in a reduction of the ability of the Facility to produce Capacity. “Force Majeure” means an event or circumstance, which prevents a Party from performing its obligations under this Agreement, and which is not in the reasonable control of, or the result of negligence of, the Party claiming Force Majeure, and which by the exercise of due diligence is unable to overcome or cause to be avoided. “Force Majeure” shall include: (a) An act of nature, riot, insurrection, war, explosion, labor dispute, fire, flood, earthquake, storm, lightning, tidal wave, backwater caused by flood, act of the public enemy, terrorism, or epidemic; (b) Interruption of transmission or generation services as a result of a physical emergency condition (and not congestion-related or economic curtailment) not caused by the fault or negligence of the Party claiming Force Majeure and reasonably relied upon and without a reasonable source of substitution to make or receive deliveries hereunder, civil disturbances, strike, labor disturbances, labor or material shortage, national emergency, restraint by court order or other public authority or governmental agency, actions taken to limit the extent of disturbances on the electrical grid; or (c) Other similar causes beyond the control of the Party affected, which causes such Party could not have avoided by the exercise of due diligence and reasonable care. A Party's financial incapacity, the Seller’s ability to sell the Output at a more favorable price or under more favorable conditions, or the Buyer’s ability to acquire the Output at a more favorable price or under more favorable conditions or other economic reasons shall not constitute an event of Force Majeure. “Force Majeure” does not include a Forced Outage to the extent such event is not caused or exacerbated by an event of Force Majeure, as described above, and does not include the Seller’s inability to obtain financing, permits, or other equipment and instruments necessary to plan for, construct, or operate the Facility. “Good Utility Practice” means those practices, methods and acts that would be implemented and followed by prudent operators of electric energy generating facilities in the western United States, similar to the Facility, during the relevant time period, which practices, methods and acts, in the exercise of prudent and responsible professional judgment in the light of the facts known at the time the decision was made, could reasonably have been expected to accomplish the desired result consistent with good business practices, reliability, and safety. The Seller acknowledges that its use of Good Utility Practice does not exempt it from performing any of its obligations arising under this Agreement. “Good Utility Practice” includes, at a minimum, those professionally responsible practices, methods and acts described in the preceding paragraph that comply with manufacturers’ warranties, restrictions in this Agreement, the interconnection requirements of Buyer, the requirements of governmental authorities, and WECC and NERC standards. “Good Utility Practice” also includes the taking of reasonable steps to ensure that: (a) Equipment, materials, resources, and supplies, including spare parts inventories, are available to meet the Facility’s needs; (b) Sufficient operating personnel are available at all times and are adequately experienced and trained and licensed as necessary to operate the Facility properly and efficiently, and are capable of responding to reasonably foreseeable emergency conditions at the Facility and emergencies whether caused by events on or off the Facility’s site; (c) Preventive, routine, and non-routine maintenance and repairs are performed on a basis that ensures reliable, long-term and safe operation of the Facility, and are performed by knowledgeable, trained, and experienced personnel utilizing proper equipment and tools; (d) Appropriate monitoring and testing are performed to ensure equipment is functioning as designed; and (e) Equipment is not operated in a reckless manner, in violation of manufacturer’s guidelines or in a manner unsafe to workers, the general public, or the connecting utility’s electric system or contrary to environmental laws, permits or regulations or without regard to defined limitations such as, flood conditions, safety inspection requirements, operating voltage, current, volt ampere reactive (VAR) loading, frequency, rotational speed, polarity, synchronization, and control system limits; and equipment and components are designed and manufactured to meet or exceed the standard of durability that is generally used for electric energy generating facilities operating in the western United States and will function properly over the full range of ambient temperature and weather conditions reasonably expected to occur at the Facility site and under both normal and emergency conditions. 040914 jrm 0180042 4 “Green Attributes” refers to the definition set forth in the Standard Terms and Conditions, Appendix A-2, as amended, Decision D.07-02-011, as modified by D.07-05-057, of the CPUC, which incorporates the definition of “Environmental Attributes” set forth in the Standard Terms and Conditions, Appendix A-1, as amended, D. 04-06-014. “Green Attributes” includes any and all credits, benefits, emissions reductions, environmental air quality credits, offsets, and allowances, howsoever entitled, attributable to the generation from the Facility, and its displacement of conventional energy generation, whether existing now or arising in the future. “Green Attributes” includes RECs, as well as (1) any avoided emissions of pollutants to the air, soil or water, such as sulfur oxides (“SOx”), nitrogen oxides (“NOx”), carbon monoxide (“CO”) and other pollutants; (2) any avoided emissions of carbon dioxide (“CO2”), methane (“CH4”), nitrous oxide, hydrofluorocarbons, perfluorocarbons, sulfur hexafluoride, and other greenhouse gases (“GHGs”) that have been determined by the United Nations Intergovernmental Panel on Climate Change, or otherwise by law, to contribute to the actual or potential threat of altering the Earth’s climate by trapping heat in the atmosphere; and (3) the reporting rights to these avoided emissions such as Green Tag Reporting Rights and RECs. “Green Tag Reporting Rights” are the right of a Green Tag Purchaser to report the ownership of accumulated Green Tags in compliance with federal or state law, if applicable, and to a federal or state agency or any other party at the Green Tag Purchaser’s discretion, and include those Green Tag Reporting Rights accruing under Section 1605(b) of the Energy Policy Act of 1992 and any present or future federal, state, or local law, regulation or bill, and international or foreign emissions trading program. Green Tags are accumulated on a kWh basis and one Green Tag represents the Green Attributes associated with one (1) MWh of Energy. “Green Attributes” do not include (i) any Energy, Capacity, reliability, or other power attributes of the Facility, (ii) production or investment tax credits associated with the construction or operation of the Facility and other financial incentives in the form of credits, grants, reductions, or allowances associated with the Facility that are applicable to a state or federal income taxation obligation, (iii) fuel-related subsidies or “tipping fees” that may be paid to Seller to accept certain fuels, or local subsidies received by the generator for the destruction of particular pre-existing pollutants or the promotion of local environmental benefits, or (iv) emission reduction credits encumbered, used or created by the Facility for compliance with or sale under local, state, or federal operating and/or air quality permits or programs. If the Facility is a biomass or landfill facility and the Seller receives any tradable Green Attributes based on the Facility’s greenhouse gas reduction benefits or other emission offsets attributed to its fuel usage, the Seller shall provide the Buyer with sufficient Green Attributes to ensure that there are zero net emissions associated with the production of electricity from the Facility. “Green Attributes” includes any other environmental credits or benefits recognized in the future and attributable to Energy generated by the Facility during the Term that may not be represented by Green Tag Reporting Rights or RECs, unless otherwise excluded herein. Any Green Attributes provided under this Agreement shall be documented by RECs, or any other representation of the environmental benefits of the Output, the monthly cumulative total of which shall be provided to the Buyer, as specified herein. “Interconnection Agreement” refers to the agreement between the Buyer and the Seller, specific to the interconnection of the Facility to Buyer’s Distribution System. “NERC” means the North American Electric Reliability Corporation, or successor organization. “NCPA” means Northern California Power Agency, a California joint action agency, or successor agency. “Output” means all Capacity associated with Contract Capacity and associated Energy made available from the Facility, as well as any Capacity Attributes, Green Attributes, or other attributes existing now or in the future associated with Contract Capacity and/or associated Energy. “Output” does not include production or investment tax credits associated with the construction or operation of the Facility and other financial incentives in the form of credits, grants, reductions, or allowances associated with the Facility that are applicable to a state or federal income taxation obligation. “Planned Outage” means an outage, scheduled in advance, of one or more of the Facility’s components that results in a reduction of the ability of the Facility to produce Capacity. 040914 jrm 0180042 5 “Pre-Certification Price” means the contract price to be paid for all Energy delivered to the Buyer prior to the RPS Certification Date, as specified in Exhibit “PPA-A”. “Renewable Energy Credit” or “REC” has the meaning set forth in Section 399.12(h)(1) and (2) of the California Public Utilities Code, and includes a certificate of proof that one unit of electricity was generated by an Eligible Renewable Energy Resource. Currently, RECs are used to convey all Green Attributes associated with electricity production by a renewable energy resource. RECs are accumulated on a kWh basis and one REC represents the Green Attributes associated with the generation of 1 MWh (1,000 kWhs) from the Facility. For purposes of this Agreement, the term REC shall be synonymous with the term Green Tag, green ticket, bundled or unbundled renewable energy credit, tradable renewable energy certificates, or any other term used to describe the documentation that evidences the renewable and Green Attributes associated with electricity production by an Eligible Renewable Energy Resource. “Renewables Portfolio Standard” or “RPS” means the standard adopted by the State of California pursuant to Senate Bill 2 1st Extraordinary Session (SBX1 2, Chapter 1, Statutes 2011-12), and California Public Utilities Code Sections 399.11through 399.31, inclusive, as may be amended, setting minimum renewable energy targets for local publicly owned electric utilities. “Reservation Deposit” means the monetary deposit submitted by the Seller (or the Facility sponsor on behalf of the Seller) to secure a reservation of the CLEAN Program’s prices. The Reservation Deposit is set forth in Exhibit “PPA-A.” “Resource Adequacy” means a requirement by a governmental authority or in accordance with its FERC- approved tariff, or a policy approved by a local regulatory authority, that is binding upon either Party and that requires that Party to procure a certain amount of electric generating capacity. “RPS Certification” means certification by the CEC that the Facility qualifies as an Eligible Renewable Energy Resource for RPS purposes, and that all Energy produced by the Facility qualifies as generation from an Eligible Renewable Energy Resource, as evidenced by a Certificate of RPS Eligibility. “RPS Certification Date” means the date on which the RPS Certification begins, as specified in the Certificate of RPS Eligibility. “Seller” means with a principal place of business at , , . “Station Service Load” means the electrical loads associated with the operation and maintenance of the Facility, which may at times be supplied from the Facility’s Energy. “Term” has the meaning set forth in Section 14.1 hereof. “WECC” means the Western Electricity Coordinating Council, the regional entity responsible for coordinating and promoting regional bulk electric system reliability in the Western Canada and the United States, or any successor organization. 2.0 SELLER’S GENERATING FACILITY, PURCHASE PRICE AND PAYMENT 2.1 Facility. This Agreement governs the Buyer’s purchase of the Output from the Facility, as described in Exhibit “PPA-A.” The Seller shall not modify the Facility to increase or decrease the Contract Capacity after the Commercial Operation Date. 2.2 Products Purchased. During the Delivery Term, the Seller shall sell and deliver, or cause to be delivered, and the Buyer shall purchase and receive, or cause to be received, the Output from the Facility. The Seller shall not have the right to procure the Output from sources other than the Facility for sale or delivery to the Buyer under this Agreement or to substitute the Output. 040914 jrm 0180042 6 2.3 Delivery Term. The Delivery Term shall commence on the Commercial Operation Date under this Agreement, and shall continue for an uninterrupted period of twenty (20) years. This period will commence on the first day of the calendar month immediately following the Commercial Operation Date. As evidence of the Commercial Operation Date, the Parties shall execute and exchange the “Commercial Operation Date Confirmation Letter,” attached hereto as Exhibit “PPA-B.” The Commercial Operation Date shall be the date on which the Parties acknowledge, in writing, that the Facility starts operating and is otherwise in compliance with applicable interconnection and system protection requirements, including the final approvals by the City’s building department official. 2.4 Payment for Products Purchased. 2.4.1 Deliveries Prior to RPS Certification Date. Once the Facility has achieved Commercial Operation, if the CEC has not issued a Certificate of RPS Eligibility for the Facility or the Facility has not been registered with the appropriate entity for the tracking of Green Attributes, the Buyer will pay the Seller for the Output by multiplying the Pre-Certification Price by the quantity of Energy. 2.4.2 Deliveries After RPS Certification Date. Once the Facility has achieved Commercial Operation, the CEC has issued a Certificate of RPS Eligibility for the Facility, and the Facility has been registered with the appropriate entity for the tracking of Green Attributes, the Buyer shall pay the Seller for all Output on or after the RPS Certification Date by multiplying the Contract Price by the quantity of Energy. 2.4.3 True-up Upon Issuance of Certificate of RPS Eligibility. Once the Facility has achieved Commercial Operation, the CEC has issued a Certificate of RPS Eligibility for the Facility, and the Facility has been registered with the appropriate entity for the tracking of Green Attributes, the Buyer will pay the Seller an amount equal to the difference between the Contract Price and the Pre-Certification Price for the Output (a) that was delivered on or after the RPS Certification Date and (b) for which the Seller has already received payment at the Pre- Certification Energy Price. 2.4.4 Energy in Excess of Contract Capacity. The Seller shall not receive payment for any Energy or Green Attributes delivered in any hour to the Buyer in excess of the following amount of energy (in kilowatt-hours): 110% of the Contract Capacity (in kilowatts) multiplied by one hour. Any payment in excess of this amount shall be refunded to the Buyer, on demand. 2.5 Billing. The Buyer shall pay the Seller by check or electronic funds transfer, on a monthly basis, within thirty (30) days of the meter reading date. 2.6 Title and Risk of Loss. Title to and risk of loss related to the Output shall be transferred from the Seller to the Buyer at the Delivery Point. The Seller warrants that it will deliver to the Buyer the Output free and clear of all liens, security interests, claims, encumbrances or any interest therein or thereto by any person, arising prior to the Delivery Point. 2.7 No Additional Incentives. The Seller warrants that it has not received any other incentives funded by the Buyer’s ratepayers and it further agrees that, during the Term, it shall not seek additional compensation or other benefits from the Buyer pursuant to the following programs of the Buyer: (a) Photovoltaic (PV) Partners Program; (b) Power from Local Ultra-Clean Generation Incentive (PLUG- In) Program; or (c) other similar programs that are or may be funded by the Buyer’s ratepayers. 040914 jrm 0180042 7 3.0 RPS CERTIFICATION; GREEN ATTRIBUTES 3.1 CEC Certification. The Seller, at its own cost and expense, shall obtain the RPS Certification within six (6) months of the Commercial Operation Date. The Seller shall maintain the RPS Certification at all times during the Delivery Term. The foregoing provision notwithstanding, the Seller shall not be in breach of this Agreement and the Buyer shall not have the right to terminate this Agreement, if the Seller’s failure to obtain or maintain the RPS Certification is due to a change in California law, occurring after the Commercial Operation Date, so long as the Seller has used commercially reasonable efforts to obtain and maintain the RPS Certification and the Seller’s actions or omissions did not contribute to its inability to obtain and maintain the RPS Certification. 3.2 Obligation to Deliver Green Attributes. The Seller shall sell and deliver to the Buyer, and the Buyer shall buy and receive from the Seller, all right, title, and interest in and to Green Attributes associated with Energy, produced by the Facility and delivered to the Buyer at the Delivery Point, whether now existing or that hereafter come into existence during the Term, except as otherwise excluded herein; provided, the Buyer shall not be obligated to purchase and pay the Seller for any Green Attributes associated with any amount of the Output, that is generated by any fuel which is not renewable and which cannot be counted for the purpose of the production of Green Attributes. The Seller agrees to sell and make all such Green Attributes available to the Buyer to the fullest extent allowed by applicable law, in accordance with the terms and conditions of this Agreement. The Seller warrants that the Green Attributes provided under this Agreement to the Buyer shall be free and clear of all liens, security interests, claims and encumbrances. 3.3 Conveyance of Green Attributes. The Seller shall provide Green Attributes associated with the Facility, which shall be documented and conveyed to the Buyer in accordance with the procedure described in Exhibit “PPA-D.” 3.4 Additional Evidence of Green Attributes Conveyance. At the Buyer’s request, the Seller shall provide additional reasonable evidence to the Buyer or to third parties of the Buyer’s right, title, and interest in the Green Attributes and any other information with respect to Green Attributes, as may be requested by the Buyer. 3.5 Modification of Green Attributes Conveyance Procedure. The Buyer may unilaterally modify Exhibit “PPA-D” in order to reflect changes necessary in the Green Attributes conveyance procedures, so that the Buyer may be able to receive and report the Green Attributes, purchased under this Agreement, as belonging to the Buyer. 3.6 Reporting of Ownership of Green Attributes. The Seller shall not report to any person or entity that the Green Attributes sold and conveyed to the Buyer belong to any person other than the Buyer. The Buyer may report under any applicable program that Green Attributes purchased by the Buyer hereunder belong to it. 3.7 Greenhouse Gas Emissions. The Seller shall comply with any laws and/or regulations regarding the need to offset emissions of GHGs by delivering to the Buyer the Energy from the Facility with a net zero GHG impact. 4.0 CONVEYANCE OF CAPACITY ATTRIBUTES 4.1 Conveyance of Resource Adequacy Capacity. The Seller shall not report to any person or entity that the Resource Adequacy Capacity, as defined in the CAISO Tariff) associated with the Facility, if any, belongs to a person other than the Buyer, which may report that Resource Adequacy Capacity purchased hereunder belongs to it to fulfill the Resource Adequacy requirements, as defined in Section 40 of the CAISO Tariff, as amended, or any successor program. The Seller shall take those actions described in Section 6.0 hereof, as applicable, to secure recognition of Resource Adequacy Capacity by the CAISO. 4.2 Conveyance of Other Capacity Attributes. In addition to the obligations imposed on the 040914 jrm 0180042 8 Seller under Section 4.1, the Seller will undertake any and all actions reasonably needed to enable the Buyer to effect the recognition and transfer of any Capacity Attributes in addition Resource Adequacy, to the extent that such Capacity Attributes exist now or will exist in the future; provided, if such actions require any actions beyond the giving of notice by the Seller, then the Buyer shall reimburse all out-of- pocket costs and charges of such actions. 4.3 Reporting of Ownership of Capacity Attributes. The Seller shall not report to any person or entity that the Capacity Attributes sold and conveyed to the Buyer belong to any person other than the Buyer. The Buyer may report under any such program that such Capacity Attributes purchased hereunder belong to it. 5.0 METERING AND OPERATIONS 5.1 Timing of Outages. The Seller may not schedule or take any Planned Outage from 12:00 p.m. through 7:00 p.m. Pacific Time during the months of June through October. 5.2 Outage Reporting. 5.2.1 Buyer Request. The Seller is not required to report any Planned Outage or Forced Outage, unless the Buyer first submits a written request to the Seller to commence Outage reporting. Upon receipt of such a request, the Seller shall report all subsequent Planned Outages and the Forced Outages according to the procedures described in subsections 5.2.2 and 5.2.3, and shall continue such reporting until (a) the termination of this Agreement for any reason, or (b) the Buyer subsequently provides written notice to the Seller that the Seller may cease such reporting in the future. 5.2.2 Planned Outage Notifications. The Seller shall notify the Buyer at least 72 hours in advance of any Planned Outage that would result in a reduction in the effective Output of the Facility during the period over which the Planned Outage is scheduled. Notification shall be provided by e-mail to the e-mail address (or addresses) set forth in Exhibit “PPA-F.” 5.2.3 Forced Outage Notifications. Within 24 hours of the occurrence of a Forced Outage of the Facility that impacts the ability of the Facility to produce Energy, the Seller shall notify the Buyer of the Forced Outage, including the Capacity of the Facility that is impacted, and the expected duration of the Forced Outage. Within 24 hours of the return of the Facility to service following the Forced Outage, the Seller shall notify the Buyer of the return-to-service details. Notification shall be made by e-mail to the address (or addresses) set forth in Exhibit “PPA-F.” 5.3 Metering. The Buyer shall furnish and install one or more standard watt-hour meters to read Energy generated by the Facility, and it will charge a meter fee to the Seller to cover the costs associated with the meter’s purchase and installation. As requested, the Seller shall provide and install a meter socket in accordance with the Buyer’s metering standards. The Buyer reserves the right to install additional metering equipment at its sole cost and expense. 6.0 PARTICIPATING GENERATORS 6.1 Applicability. This Section 6.0 shall apply if the Facility meets the definition of a “Participating Generator,” as may be defined by the CAISO Tariff. This Section 6.0 shall not apply if the definition applies to the Facility only upon the election by the Seller. For the purposes of this Section 6.0, all special terms not otherwise defined in Section 1.0 are defined in the CAISO Tariff. 6.2 Participating Generator Agreement. The Buyer will notify the CAISO of the Seller’s interconnection to Buyer’s Distribution System. If the CAISO requires it, the Seller, at its own expense, shall negotiate and enter in to two contracts, a “Participating Generator Agreement” and a “Meter Services Agreement for CAISO Metered Entities,” with the CAISO. 040914 jrm 0180042 9 6.3 Scheduling Coordination. If the CAISO requires the Seller to enter in to a Participating Generator Agreement, then the Seller shall designate NCPA as the Buyer’s scheduling coordinator. The Buyer, acting in its sole discretion, may replace NCPA as the scheduling coordinator for the Facility. If NCPA ceases to be the scheduling coordinator for the Facility and the Buyer has not, upon fourteen (14) days’ prior written notice of inquiry from the Seller, appointed a replacement scheduling coordinator, then the Seller shall have the right to appoint a replacement scheduling coordinator on the Buyer’s behalf. Thereafter, the Buyer shall enter into all reasonable and appropriate agreements with such replacement scheduling coordinator at its own costs. 6.4 Scheduling Procedure. The Buyer may require the Seller to provide the Buyer with Energy forecasts on a periodic basis, as may be necessary for the Buyer to account for expected Facility generation in its daily power scheduling process. The requirements are set forth in Exhibit “PPA-C.” 6.5 Modification of Scheduling and Outage Notification Procedure. The Buyer may unilaterally modify Exhibit “PPA-C” to reflect changes necessary in the scheduling and Outage notification procedures. The Buyer shall give the Seller reasonable notice of any such changes. 6.6 Provision of Other Equipment. If the Seller is required to enter into a Participating Generator Agreement with the CAISO, then the Seller, at its own cost and expense, shall provide and maintain data transmission-grade phone line and telecommunications equipment at the meter location that complies with applicable requirements of the CAISO, the Buyer, and NCPA. Any meter installed by the Seller shall comply at all times with the CAISO’s metering requirements. If the Seller fails to provide or maintain any such required equipment or data connection, then the Buyer shall acquire, install and maintain the same at the Seller’s sole cost and expense. 6.7 Designation as Resource Adequacy Resource. The Buyer may submit a written request to the Seller to obtain the CAISO’s designation of the Facility as a Resource Adequacy Resource. Upon receipt of such request, the Seller shall provide such information and undertake such steps as may be required by the CAISO in order to complete such an assessment. If the Buyer makes such a request, then the Buyer shall be responsible for the following: (1) any costs charged to the Seller by the CAISO as a condition of applying for or receiving designation as a Resource Adequacy Resource, including any deposits required during the study process or the cost of any related studies or deliverability assessments performed by the CAISO; (2) the capital, installation, and maintenance costs of any additional equipment required by the CAISO as a condition of receiving designation as a Resource Adequacy Resource; (3) the costs of any Network Upgrades, as defined in the CAISO Tariff, as may be required by the CAISO, provided, the Buyer shall receive any subsequent repayments from the CAISO or the Participating Transmission Owner related to such upgrades; and (4) any charges or penalties assessed by the CAISO as a consequence of the Facility’s designation as a Resource Adequacy Resource. 6.8 CAISO Charges. The Buyer shall be solely responsible for paying all costs and charges associated with the receipt of Energy under this Agreement, at the Delivery Point, and for the transmission and delivery of Energy from the Delivery Point to any other point downstream of the Delivery Point, including transmission costs and charges, competition transition charges, applicable control area service charges, transmission congestion charges, inadvertent energy flows, any other CAISO charges related to the transmission of such Energy by the CAISO and any charge assessed or collected in the future pursuant to any utility tariff or rate schedule, however defined, for transmission or transmission-related service rendered by or for any transmission-owning or operating entity. The Seller will undertake any and all actions reasonably needed to allow the Buyer to comply with any obligations, and minimize any potential liability, under the CAISO tariff. If and to the extent that the Seller fails to comply with the notice provision in Exhibit “PPA-C,” concerning Outages, or with its obligations as outlined in the previous sentence, the Seller shall be wholly responsible for all imbalances, deviations, or any other CAISO charges or penalties associated with such Outage or other CAISO Tariff obligation. 6.9 Inclusion in Metered Subsystem. At the option of the Buyer, the Facility may be included within NCPA’s metered sub-system in connection with the scheduling of power over the CAISO grid and related functions; provided, however, that such inclusion shall have no adverse effect on the Facility’s operations or the Seller (or any such effect shall be fully mitigated by the Buyer). The Seller will undertake any and all actions reasonably needed to allow the Buyer to comply with any obligations, and 040914 jrm 0180042 10 minimize any potential liability, under the CAISO Tariff; provided, that if such actions require any actions beyond the giving of notice to be provided by the Buyer, then the Buyer shall reimburse the Seller for all out-of-pocket costs and charges of such actions. 7.0 COMMERCIAL OPERATION DATE; REFUND OF RESERVATION DEPOSIT 7.1 Commercial Operation Date. The Facility shall achieve Commercial Operation by the Commercial Operation Date deadline (the “Deadline”), which is one (1) year from the Effective Date. 7.2 Reservation Deposit. The Buyer acknowledges that, as of the Effective Date or other date established by the Buyer, the Seller has provided the Reservation Deposit to the Buyer. 7.2.1 If the Commercial Operation Date occurs on or prior to the Deadline, the Buyer shall refund to the Seller the Reservation Deposit without interest. 7.2.2 If the Commercial Operation Date commences within seventy (70) days of the Deadline, the Seller, as liquidated damages and not as a penalty, shall relinquish its claim to a ten percent (10%) portion of the amount of the Reservation Deposit for every full week transpiring between the Deadline and the Commercial Operation Date, but the total amount to be relinquished to the Buyer shall not exceed 100% of the Reservation Deposit. 7.2.3 If the Facility has not achieved Commercial Operation within seventy (70) days of the Deadline, then the Buyer may terminate this Agreement without liability of either Party to the other Party by giving written notice of termination to the Seller. 7.2.4 If the Seller gives notice of termination to terminate the Agreement before Commercial Operation occurs, then the Buyer shall refund a percentage of the Reservation Deposit equal to the following: the percentage to be refunded will equal A/B, where A equals the number of days between the date of the Seller’s notice of termination, received by the Buyer, and the Deadline, and B equals the number of days between the Effective Date and the Deadline. 7.3 Return of Reservation Deposit. The Buyer shall return to the Seller the Reservation Deposit, without interest, in the event that (a) the Buyer furnishes written notice of the costs of interconnection (defined in the Interconnection Agreement to include the costs related to the Interconnection Facilities and Distribution Upgrades) to the Seller and (b) within thirty (30) days of receipt of the notice regarding costs of interconnection, the Seller provides the Buyer with written notice that the Seller does not intend to sign the Interconnection Agreement and does intend to proceed with the project. 8.0 REPRESENTATION AND WARRANTIES; COVENANTS 8.1 Representations and Warranties. On the Effective Date, each Party represents and warrants to the other Party that: 040914 jrm 0180042 11 8.1.1 It is duly organized, validly existing and in good standing under the laws of the jurisdiction of its formation; 8.1.2 The execution, delivery and performance of this Agreement is within its powers, have been duly authorized by all necessary action and do not violate any of the terms and conditions in its governing documents, any contracts to which it is a party or any law, rule, regulation, order or the like applicable to it; 8.1.3 This Agreement and each other document executed and delivered in accordance with this Agreement constitutes its legally valid and binding obligation enforceable against it in accordance with its terms; 8.1.4 It is not bankrupt and there are no proceedings pending or being contemplated by it or, to its knowledge, threatened against it which would result in it being or becoming bankrupt; 8.1.5 There is not pending or, to its knowledge, threatened against it or any of its affiliates, if any, any legal proceedings that could materially adversely affect its ability to perform its obligations under this Agreement; and 8.1.6 It is acting for its own account, has made its own independent decision to enter into this Agreement and as to whether this Agreement is appropriate or proper for it based upon its own judgment, is not relying upon the advice or recommendations of the other Party in so doing, and is capable of assessing the merits of, and understands and accepts, the terms, conditions and risks of this Agreement. 8.2 General Covenants. Each Party covenants that, during the Term: 8.2.1 It shall continue to be duly organized, validly existing and in good standing under the laws of the jurisdiction of its formation; 8.2.2. It shall maintain (or obtain from time to time as required, including through renewal, as applicable) all regulatory authorizations necessary for it to legally perform its obligations under this Agreement; and 8.2.3 It shall perform its obligations under this Agreement in a manner that does not violate any of the terms and conditions in its governing documents, any contracts to which it is a party or any law, rule, regulation, order or the like applicable to it. 8.3 Covenant by Seller. The Seller covenants that, during the Term: 8.3.1 If the Eligible Renewal Energy Resource or the Facility is considered an ‘eligible qualifying facility’ under applicable law and has a net power production capacity of greater than one (1) megawatt, then the Seller covenants and agrees that, within thirty (30) days of the Effective Date or longer period allowed by law, it will complete and file Form No. 556 or other similar form with FERC as the same may be required by law.” 9.0 GENERAL CONDITIONS 9.1 Facility Care and Interconnection. During the Delivery Term, the Seller shall execute and maintain an “Interconnection Agreement” with the Buyer, whereby the Seller shall pay and be responsible for designing, installing, operating, and maintaining the Facility in accordance with all applicable laws and regulations and shall comply with all applicable Buyer, WECC, FERC, and NERC requirements, including applicable interconnection and metering requirements. The Seller shall also comply with any modifications, amendments or additions to the applicable tariff and protocols. The Seller also shall arrange and pay independently for any and all necessary costs under the Interconnection Agreement with the Buyer. 040914 jrm 0180042 12 9.2 Standard of Care. The Seller shall: (a) operate and maintain the Facility in a safe manner in accordance with its existing applicable interconnection agreements, manufacturer’s guidelines, warranty requirements, Good Utility Practice, industry norms (including standards of the National Electrical Code, Institute of Electrical and Electronic Engineers, American National Standards Institute, and the Underwriters Laboratories, and in accordance with the requirements of all applicable federal, state and local laws and the National Electric Safety Code, as such laws and code norms may be amended from time to time; (b) obtain any governmental authorizations and permits required for the construction and operation thereof. The Seller shall make any necessary and commercially reasonable repairs with the intent of optimizing the availability of electricity to the Buyer. The Seller shall reimburse the Buyer for any and all losses, damages, claims, penalties, or liability that the Buyer incurs as a result of the Seller’s failure to obtain or maintain any governmental authorizations and permits required for the construction and operation of the Facility throughout the Term. 9.3 Access Rights. The Buyer, its authorized agents, employees and inspectors shall have the right to inspect the Facility on reasonable advance notice during normal business hours and for any purposes reasonably connected with this Agreement or the exercise of any and all rights secured to the Buyer by law, including, without limitation, its ordinances, resolutions, tariffs, utility rate schedules or utilities rules and regulations. The Buyer shall make reasonable efforts to coordinate its emergency activities with the safety and security departments, if any, of the Facility’s operator. The Seller shall keep the Buyer advised of current procedures for communicating with the Facility operator’s safety and security departments. 9.4 Protection of Property. Each Party shall be responsible for protecting its own facilities from possible damage resulting from electrical disturbances or faults caused by the operation, faulty operation, or non-operation of the other Party’s facilities and such other Party shall not be liable for any such damages so caused. 9.5 Insurance. During the Term, the Seller shall obtain and maintain and otherwise comply with the insurance requirements, as set forth in Exhibit “PPA-E.” 9.6 Buyer’s Performance Excuse; Seller Curtailment. 9.6.1 Buyer Performance Excuse. The Buyer shall not be obligated to accept or pay for the Output during Force Majeure that affects the Buyer’s ability to accept Energy. 9.6.2 Seller Curtailment. The Buyer may require the Seller to interrupt or reduce deliveries of Energy: (a) whenever necessary to construct, install, maintain, repair, replace, remove, or investigate any of its equipment or part of the Buyer’s Distribution System or facilities; or (b) if the Buyer determines that curtailment, interruption, or reduction is necessary due to a System Emergency, as defined in the CAISO Tariff, an unplanned outage on Buyer’s Distribution System, Force Majeure, or compliance with Good Utility Practice. 9.7 Notices of Outages. Whenever possible, the Buyer shall give the Seller reasonable notice of the possibility that interruption or reduction of deliveries may be required. 9.8 No Additional Loads. The Seller shall not connect any loads not associated with Station Service Loads at the location of the Facility in a manner that would reduce Energy provided from the Facility to the Buyer hereunder. The Seller shall obtain separate retail electric service under the Buyer’s rate schedules for the service of such additional loads. 10.0 FORCE MAJEURE 10.1 Effect of Force Majeure. A Party shall be excused from its performance under this Agreement to the extent, but only to the extent, that its performance hereunder is prevented by Force Majeure. A Party claiming Force Majeure shall exercise due diligence to overcome or mitigate the effects 040914 jrm 0180042 13 of Force Majeure; provided, that nothing in this Agreement shall be deemed to obligate the Party affected by Force Majeure (a) to forestall or settle any strike, lock-out or other labor dispute against its will; or (b) for Force Majeure affecting the Seller only, to purchase electric power to cure Force Majeure. 10.2 Remedial Action. A Party shall not be liable to the other Party if the Party is prevented from performing its obligations hereunder due to Force Majeure. The Party rendered unable to fulfill an obligation by reason of Force Majeure shall take all action necessary to remove such inability with all due speed and diligence. The nonperforming Party shall be prompt and diligent in attempting to remove the cause of its failure to perform, and nothing herein shall be construed as permitting that Party to continue to fail to perform after that cause has been removed. Notwithstanding the foregoing, the existence of Force Majeure shall not excuse any Party from its obligations to make payment of amounts due hereunder. 10.3 Notice of Force Majeure. In the event of any delay or nonperformance resulting from Force Majeure, the Party directly impacted by Force Majeure shall, as soon as practicable under the circumstances, notify the other Party, in writing, of the nature, cause, date of commencement thereof and the anticipated extent of any delay or interruption in performance. 10.4 Termination Due to Force Majeure. If a Party will be prevented from performing its material obligations under this Agreement for an estimated period of twelve (12) consecutive months or longer due to Force Majeure, then the unaffected Party may terminate this Agreement, without liability of either Party to the other, upon thirty (30) Days’ prior written notice at any time during Force Majeure. 11.0 INDEMNITY 11.1 Indemnity by the Seller. The Seller shall indemnify, defend, and hold harmless the Buyer, its elected and appointed officials, directors, officers, employees, agents, and representatives against and from any and all losses, claims, demands, liabilities and expenses, actions or suits, including reasonable costs and attorney’s fees, resulting from, or arising out of or in any way connected with claims by third parties associated with (A) (i) Energy delivered at the Delivery Point; (ii) the Seller’s operation and/or maintenance of the Facility; or (iii) the Seller’s actions or inactions with respect to this Agreement, and (B) any loss, claim, action or suit, for or on account of injury, bodily or otherwise, to, or death of, persons, or for damage to or destruction of property belonging to the Buyer or other third party, excepting only such loss, claim, action or suit as may be caused solely by the willful misconduct or gross negligence of the Buyer, its agents, employees, directors or officers. 11.2 Indemnity by the Buyer. The Buyer shall indemnify, defend, and hold harmless the Seller, its directors, officers, employees, agents, and representatives against and from any and all losses, claims, demands, liabilities and expenses, actions or suits, including reasonable costs and attorney’s fees resulting from, or arising out of or in any way connected with claims by third parties associated with acts of the Buyer, its officers, employees, agents, and representatives, relating to: (A) Energy delivered by the Seller under this Agreement after the Delivery Point, and (B) any loss, claim, action or suit, for or on account of injury, bodily or otherwise, to, or death of, persons, or for damage to or destruction of property belonging to the Seller or other third party, excepting only such loss, claim, action or suit as may be caused solely by the willful misconduct or gross negligence of the Seller, its agents, employees, directors or officers. 12.0 LIMITATION OF DAMAGES EXCEPT AS OTHERWISE PROVIDED IN THIS AGREEMENT THERE IS NO WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, AND ANY AND ALL IMPLIED WARRANTIES ARE DISCLAIMED. LIABILITY SHALL BE LIMITED TO DIRECT ACTUAL DAMAGES ONLY, SUCH DIRECT ACTUAL DAMAGES SHALL BE THE SOLE AND EXCLUSIVE REMEDY AND ALL OTHER REMEDIES OR DAMAGES AT LAW OR IN EQUITY ARE WAIVED UNLESS EXPRESSLY HEREIN PROVIDED. NEITHER PARTY SHALL BE LIABLE FOR CONSEQUENTIAL, INCIDENTAL, PUNITIVE, EXEMPLARY OR INDIRECT DAMAGES, LOST PROFITS OR OTHER BUSINESS INTERRUPTION DAMAGES, BY STATUTE, IN TORT OR 040914 jrm 0180042 14 CONTRACT, UNDER ANY INDEMNITY PROVISION OR OTHERWISE. UNLESS EXPRESSLY HEREIN PROVIDED, AND SUBJECT TO THE PROVISIONS OF SECTION 11 (INDEMNITY), IT IS THE INTENT OF THE PARTIES THAT THE LIMITATIONS HEREIN IMPOSED ON REMEDIES AND THE MEASURE OF DAMAGES BE WITHOUT REGARD TO THE CAUSE OR CAUSES RELATED THERETO, INCLUDING THE NEGLIGENCE OF ANY PARTY, WHETHER SUCH NEGLIGENCE BE SOLE, JOINT OR CONCURRENT, OR ACTIVE OR PASSIVE. 13.0 NOTICES Notices shall, unless otherwise specified herein, be given, in writing, and may be delivered by hand delivery, United States mail, overnight courier service, facsimile or electronic messaging (e-mail) to the addresses set forth in Exhibit “PPA-F.”. Whenever this Agreement requires or permits delivery of a “notice” (or requires a Party to “notify”), the Party with such right or obligation shall provide a written communication in the manner specified below. A notice sent by facsimile transmission or electronic mail will be recognized and shall be deemed received on the Business Day on which such notice was transmitted if received before 5 p.m. Pacific Time (and if received after 5 p.m., on the next Business Day) and a notice by overnight mail or courier shall be deemed to have been received two (2) Business Days after it was sent or such earlier time as is confirmed by the receiving Party unless it confirms a prior oral communication, in which case any such notice shall be deemed received on the day sent. A Party may change its addresses by providing notice of same in accordance with this provision. A Party may request a change to Exhibit “PPA- F” as necessary to keep the information current. 14.0 TERM, TERMINATION EVENT AND TERMINATION 14.1 Term. The Term shall commence upon the execution by the duly authorized representatives of each of the Parties, and shall remain in effect until the conclusion of the Delivery Term, unless terminated sooner pursuant to the terms and conditions of this Agreement. All indemnity rights shall survive the termination of this Agreement for twelve (12) months. 14.2 Delivery Term. The Delivery Term of the Agreement is _______ years and is defined as the period of time from the Commercial Operation Date through the expiration or early termination of this Agreement. 14.3 Termination Event. 14.3.1 The Buyer shall have the right, but not the obligation, to terminate this Agreement upon the occurrence of any of the following, each of which is a “Termination Event”: (a) The Facility has not achieved Commercial Operation within seventy (70) days following the Deadline; (b) After the Commercial Operation Date, the Seller has not sold or delivered Energy from the Facility to the Buyer for a period of twelve (12) consecutive months; (c) If the Facility does not obtain RPS Certification within six (6) months of the Commercial Operation Date and maintain RPS Certification as required by Section 3.2; or (d) The Seller breaches any other material obligation of this Agreement. 14.3.2 The Seller shall have the right, but not the obligation, to terminate this Agreement upon the occurrence of any of the following, each of which is a “Termination Event”: (a) The Buyer fails to make a payment due and payable under this Agreement within thirty (30) days after written notice that such payment is due; or (b) The Buyer breaches any other material obligation of this Agreement. The preceding sentence notwithstanding, the Seller may terminate this Agreement without cause at any time prior to the Commercial Operation Date, subject to the provisions of Section 7 of this Agreement. 14.4 Time to Cure. None of the events described in Section 14.2.1 and 14.2.2 shall constitute a Termination Event if the Buyer or the Seller cures the event, failure, or circumstance within thirty (30) days after receipt of written notification sent by the other Party, seeking termination, or such longer period as may be necessary to cure so long as the Party subject to the Terminating Event is exercising diligent efforts to cure. 14.5 Termination. 040914 jrm 0180042 15 14.5.1 Declaration of a Termination Event. If a Termination Event has occurred and is continuing, the Party with the right to terminate shall have the right to: (a) send notice, designating a day, no earlier than thirty (30) days after such notice is deemed to be received (as provided in Section 13), as an early termination date of this Agreement (the “Early Termination Date”), unless the Seller has timely communicated with the Buyer and the Parties have agreed to resolve the circumstances giving rise to the Termination Event; (b) accelerate all amounts owing between the Parties; and (c) terminate this Agreement and end the Delivery Term effective as of the Early Termination Date. 14.5.2 Release of Liability for Termination Event. Upon termination of this Agreement pursuant to this section neither Party shall be under any further obligation or subject to liability hereunder, except with respect to the indemnity provision in Section 11 hereof, which shall remain in effect for a period of 12 months following the Early Termination Date. 14.6 No Limitation on Damages. Nothing in this Agreement shall be deemed or construed to limit a Party’s right to recover damages from the other Party, except as otherwise provided in this Agreement. 15.0 RELEASE OF DATA Except as may be exempt from disclosure under applicable law, the Seller authorizes the Buyer to release to any regulatory authority having jurisdiction over the Facility or a Party, or to any request made pursuant to the California Constitution or the California Public Records Act, information regarding the Facility, including the Seller’s name and location, operational characteristics, the Term of this Agreement, the Facility resource type, the scheduled Commercial Operation Date, the actual Commercial Operation Date, the Contract Capacity, payments made to the Seller and Energy production information. The Seller acknowledges that this information may be made publicly available. 16.0 ASSIGNMENT Neither Party shall assign this Agreement or its rights hereunder without the prior written consent of the other Party, which consent shall not be unreasonably withheld. 16.1 Upon the written request of the Seller, the Buyer will execute a “Lender Consent and Agreement” between the Seller and the Seller’s lender(s), if any, in the form acceptable to the Parties; provided, for illustration purposes only, an exemplar is attached hereto as Exhibit “PPA-G.” 16.2 Notwithstanding the foregoing, no Consent and Agreement shall be required for: 16.2.1 Any assignment or transfer of this Agreement by the Seller to an affiliate of the Seller, provided that such affiliate’s creditworthiness is equal to or better than that of Seller, as reasonably determined by the non-assigning or non-transferring Party; or 16.2.2 Any assignment or transfer of this Agreement by the Seller or the Buyer to a person succeeding to all or substantially all of the assets of such Party, provided that such person’s creditworthiness is equal to or greater than that of such Party, as reasonably determined by the non-assigning or non-transferring Party. 16.2.3 Notification of any assignment or transfer of this Agreement under Section 16.2.1 or 16.2.2 shall be given to the non-assigning or non-transferring Party in accordance with Exhibit “PPA-F.” 17.0 APPLICABLE LAW, VENUE, ATTORNEYS’ FEES, AND INTERPRETATION This Agreement will be governed by and construed in accordance with the laws of the State of California. The Parties will comply with applicable laws pertaining to their obligations arising under this 040914 jrm 0180042 16 Agreement. In the event that an action is brought, the Parties agree that trial of such action will be vested exclusively in the state courts of California or in the United States District Court for the Northern District of California in the County of Santa Clara, State of California. The prevailing party in any action brought to enforce the provisions of this Agreement may recover its reasonable costs and attorneys' fees expended in connection with that action. If a court of competent jurisdiction finds or rules that any provision of this Agreement, the Exhibits, or any amendment thereto is void or unenforceable, the unaffected provisions of this Agreement, the Exhibits, or any amendment thereto will remain in full force and effect. The Parties agree that the normal rule of construction to the effect that any ambiguity is to be resolved against the drafting party will not be employed in the interpretation of this Agreement or any Exhibit or any amendment thereof. 18.0 SEVERABILITY If any provision in this Agreement is determined to be invalid, void or unenforceable by any court having jurisdiction, such determination shall not invalidate, void, or make unenforceable any other provision, agreement or covenant of this Agreement and the Parties shall use their best efforts to modify this Agreement to give effect to the original intention of the Parties. 19.0 COUNTERPARTS; INTERPRETATION OF CONFLICTING PROVISIONS This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which shall be deemed one and the same Agreement. Delivery of an executed counterpart of this Agreement by facsimile or portable document format (“PDF”) transmission will be deemed as effective as delivery of an originally executed counterpart. Each Party delivering an executed counterpart of this Agreement by facsimile or PDF transmission will also deliver an originally executed counterpart, but the failure of any Party to deliver an originally executed counterpart of this Agreement will not affect the validity or effectiveness of this Agreement. In the event of a conflict between the Agreement and any, some or all of the Exhibits, the document imposing the more specific duty or obligation will prevail. 20.0 GENERAL No amendment to or modification of this Agreement shall be enforceable unless reduced to writing and executed by both Parties. This Agreement shall not impart any rights enforceable by any third party other than a permitted successor or assignee bound to this Agreement. Waiver by a Party of any default by the other Party shall not be construed as a waiver of any other default. The headings used herein are for convenience and reference purposes only. // // // // // // 040914 jrm 0180042 17 21. EXHIBITS The following exhibits shall be deemed incorporated in and made a part of this Agreement. Exhibit “PPA-A” - Facility Description, Prices, and Reservation Deposit Exhibit “PPA-B” - Commercial Operation Date Confirmation Letter Exhibit “PPA-C” - Scheduling and Outage Notification Procedure Exhibit “PPA-D” - Green Attributes Reporting and Conveyance Procedures Exhibit “PPA-E” - Insurance Requirements Exhibit “PPA-F” - Notices Exhibit “PPA-G” - Form of Lender Consent and Agreement IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed by their authorized representatives as of the Effective Date. CITY OF PALO ALTO SELLER APPROVED AS TO FORM Senior Deputy City Attorney APPROVED City Manager Director of Utilities 040914 jrm 0180042 18 EXHIBIT “PPA-A” Facility Description, Rates, and Reservation Deposit Program Rates Contract Term: Twenty (20) or twenty-five (25) years Contract rate: $0.165 per kWh for solar resources $0.08193 per kWh for non-solar resources, 20 year contract term $0.08294 per kWh for non-solar resources, 25 year contract term Pre-certification rate: $0.08 per kWh Reservation Deposit Reservation Deposit ($20/kW of Contract Capacity) $ Service address: Facility Description: Contract Capacity: kW (CEC-AC), based on solar array rating (Panel rated output at PV USA test conditions x inverter efficiency) Facility primary fuel/technology: 040914 jrm 0180042 19 EXHIBIT “PPA-B” Commercial Operation Date Confirmation Letter In accordance with the terms of the Power Purchase Agreement (Palo Alto CLEAN), dated (the “Agreement”) by and between the City of Palo Alto, as the Buyer, and , as the Seller, this Confirmation Letter serves to document the Parties’ agreement that (i) the conditions precedent to the occurrence of the Commercial Operation Date have been satisfied, and (ii) the Buyer has received Energy, as specified in the Agreement, as of , . The actual installed Contract Capacity is kW. This Confirmation Letter shall confirm the Commercial Operation Date, as defined in the Agreement, as of the date referenced in the preceding sentence. IN WITNESS WHEREOF, each Party has caused this letter to be duly executed by its authorized representative as of the date of last signature provided below: Buyer Seller By: By: Name: Name: Title: Director of Utilities Title: Date: Date: In recognition of the Commercial Operation Date relative to the Effective Date of the Agreement by and between the Buyer and the Seller, the Seller hereby calculates the amount to return, if any, of the Seller’s deposit, as follows: Original Reservation Deposit Amount: $ Commercial Operation Date Deadline: □ Commercial Operation Date is prior to Deadline □ Commercial Operation Date occurred weeks following the Deadline, meaning that % of the Reservation Deposit is relinquished by Seller per Section 7.2.2 of the Power Purchase Agreement. Amount (if any) of Reservation Deposit to return to the Seller is: $ 040914 jrm 0180042 20 EXHIBIT “PPA-C” Scheduling and Outage Notification Procedure C.1 Applicability. This Exhibit” PPA-C” shall apply if the Facility is subject to Section 6.0 of this Agreement. C.2 Annual Operations Forecast C.2.1 By the tenth (10th) day September of each calendar year, the Seller will provide NCPA with an annual operations forecast detailing hourly expected generation and all proposed planned Outages for the next calendar year. The annual operations forecast for the calendar year shall be provided by not later than ninety (90) days prior to the scheduled Commercial Operation Date of the Generating Facility. C.2.2 NCPA may request modifications to the annual operations forecast at any time, and the Seller shall use good faith efforts to accommodate the requested modifications. C.2.3 The Seller shall not conduct Planned Outages at times other than as set forth in its annual operations forecast, unless approved in advance by NCPA, which approval shall not be withheld or delayed unreasonably. C.2.4 The Seller shall not schedule or conduct Planned Outages from 12:00 p.m. through 7:00 p.m. Pacific Time during the months of June through October. C.3. Short Term Operations Forecasts C.3.1. Quarterly Operations Forecast C.3.1.1 By the fifth (5th) day of January, April and July of each Contract Year, the Seller shall provide a calendar quarter-operations forecast by hour of expected generation and all proposed Planned Outages for the next full calendar quarter and the twelve (12) months following that calendar quarter. As an example, by January 5, 2014, the Seller would provide a calendar quarter-operations forecast by hour of expected generation for the period, April 1, 2014 through June 30, 2014, and identify all proposed Planned Outages for the period, April 1, 2014 through June 30, 2015. C.3.1.2 NCPA will approve or require modifications to the proposed calendar quarter-operations forecast within ten (10) days of receipt of the forecast. C.3.1.3 If required by NCPA, the Seller will provide a modified calendar quarter-operations forecast within seven (7) days after receipt of required modifications from NCPA. C.3.2 Weekly Update C.3.2.1 By 14:00 of each Wednesday, the Seller shall provide an electronic update, in a format specified by NCPA, to the calendar quarter-operations forecast for the following seven (7) days (Thursday through the next Wednesday). C.3.2.2 The weekly update shall include hourly expected generation and all proposed planned Outages for the relevant seven (7) day period. C.4 Outage Detail for Annual and Short Term Operations Forecasts. Outage information provided by the Seller shall include, at a minimum, the start time and stop time of the Outage, capacity out of service (kW), the equipment that is or will be out of service, and the reason for the Outage. 040914 jrm 0180042 21 C.5 General Scheduling Protocols C.5.1 Daily Modifications to Forecasts. Unless otherwise mutually agreed, the Seller may make changes to the weekly update to the calendar quarter-operations forecast by providing such changes to NCPA prior to 08:00 of the day that is two (2) Business Days before the active scheduling day as determined by the WECC prescheduling calendar. Example: For power that is scheduled for generation or delivery on Friday, March 29, 2014, changes must be submitted to NCPA by 08:00 on Wednesday, March 27, 2014. C.5.2 Hourly Modifications to Active Schedules. Unless otherwise mutually agreed, the Seller may request changes to active schedules by providing such changes to NCPA with a minimum of four (4) hours’ notice prior to the applicable CAISO market deadline (e.g. Hour Ahead Scheduling Process (“HASP”) Scheduling deadline, as defined in the CAISO Tariff). Active day Schedule changes are not binding. Changes to active Schedules are limited to two (2) changes per day, excluding forced Outages, unless otherwise agreed to between the Parties. One request for a Schedule change, of one-hour or multiple-hours duration, constitutes one Schedule change. Example: For power that is scheduled for generation or delivery in hour ending 15:00 (for the period from 14:01 to 15:00), changes must be submitted to NCPA by 10:00. C.5.3. Unforeseen Circumstances. At the Seller’s request, NCPA may, but is not required to, modify the Schedules for the Generation Facility Output due to unforeseen circumstances in accordance with the above scheduling timeline constraints described in this Exhibit PPA-C. C.5.4. Absence of Forecasts. In the absence of forecasts and schedules as required by this Agreement or this Exhibit, NCPA shall utilize the most current information the Seller provides in the development and submission of Schedules. C.6 Outage Reporting Protocols C.6.1. Notification. The Seller shall notify NCPA of all planned or forced Outages of the Generating Facility to ensure compliance with the CAISO Outage Coordination and Enforcement Protocols. C.6.1.1 Outage information provided by the Seller shall include, at a minimum, the start time and stop time of the Outage, Capacity out of service (kW), equipment out of service, and the reason for the Outage. C. 6.1.2 Seller shall provide the Planned Outages not included in the annual operations forecast, the calendar quarter-operations forecast, or the weekly update, to NCPA at least four (4) Business Days prior to the start of the requested outage. C. 6.1.3 At any time prior to the start of a Planned Outage, the CAISO may deny the Outage due to a System Emergency (as defined in the CAISO Tariff) or as otherwise permitted under the CAISO Tariff. If NCPA receives notice that the CAISO has denied an Outage in accordance with the CAISO Tariff, NCPA will notify the Seller as soon as possible and the Seller shall modify the planned Outage as required by the CAISO. C.6.2 Commencement of an Outage. The Seller shall not begin any Planned Outage without the prior approval of NCPA and the CAISO. C.6.3 Forced Outages C.6.3.1 The Seller shall report the Forced Outages to NCPA within twenty (20) 040914 jrm 0180042 22 minutes of such Outages. C.6.3.2 The Seller’s notice of a Forced Outage sent to NCPA shall include the reason for the Outage (if known), expected duration of the Outage, and the Capacity reduction. C.6.3.3 By the end of the next Business Day following the day on which a Forced Outage has occurred, the Seller shall provide to NCPA a detailed written report, specifying the reason for the Outage, expected duration of such Outage, capacity reduction, and actions taken to mitigate such Outage. C.6.4 Return to Service. The Seller shall notify NCPA as soon as possible, but in any case before the Generating Facility is returned to service. C.7 Notices. All Scheduling notices and Schedules shall be submitted to NCPA by phone, fax or email, or other means as may be mutually agreed by the Parties, to the persons designated in Exhibit “PPA-F.” C.8 Changes in Scheduling and Outage Procedure. The Buyer shall revise Exhibit “PPA-C,” or, as appropriate, give written notice to the Seller regarding the revision, and issue a new Exhibit “PPA-C,” which shall then become part of the Agreement to reflect changes in the scheduling and outage notification procedure. 040914 jrm 0180042 23 EXHIBIT “PPA-D” Green Attributes Reporting and Conveyance Procedures D.1 Additional Definitions for the Conveyance of Green Attributes D.1.1 “Certificate Transfers” means the process, as described in the WREGIS Operating Rules, whereby a WREGIS account holder may request that WREGIS Certificates from a specific generating unit shall be directly deposited to another WREGIS account. D.1.2 “WREGIS Certificates” means a certificate created within the WREGIS system that represents all Renewable and Green Attributes from one MWh of electricity generation from an Eligible Renewable Energy Resource that is registered with WREGIS. D.1.3 “WREGIS Operating Rules” means the document published by WREGIS that governs the operation of the WREGIS system for registering, tracking, and conveying, among others, RECs produced from Eligible Renewable Energy Resources that shall be registered with WREGIS. D.1.4 “WREGIS” means Western Renewable Energy Generation Information System. D.2 RECs. Green Attributes shall be conveyed by the Seller to the Buyer through RECs, which shall be registered tracked and conveyed to the Buyer, using WREGIS. D.3 WREGIS Registration. Prior to the Commercial Operation Date, the Buyer will register the Facility in the Buyer’s WREGIS account on behalf of the Seller. The Buyer shall charge back to the Seller any costs of registering and maintaining the registration of the Facility with WREGIS. The Seller shall provide to the Buyer any documents required by WREGIS and assign the Seller’s rights to register the Facility in WREGIS, using agreements provided by WREGIS. D.4 B u yer ’s W REGI S Acco unt . The Buyer shall, at its sole expense, establish and maintain the Buyer’s WREGIS account sufficient to accommodate the WREGIS Certificates produced by the output of the Facility. The Buyer shall be responsible for all expenses associated with (A) establishing and maintaining the Buyer’s WREGIS Account, and (B) subsequently transferring or retiring WREGIS Certificates. D.5 Qualified Reporting Entity. The Buyer shall be the Qualified Reporting Entity (as such term is defined by WREGIS) for the Facility, and shall be responsible for providing the metered Output data to WREGIS. D.6 Reporting of Environmental Attributes. In lieu of the Seller’s transfer of the WREGIS Certificates using Certificate Transfers from the Seller’s WREGIS account to the Buyer’s WREGIS account, the Buyer shall report the Facility as being held directly in its WREGIS account, which will preclude the Seller from reporting the Facility in its own WREGIS account. D.6.1 By avoiding the use of Certificate Transfers, there will be no transaction costs to the Seller or the Buyer for the Certificate Transfers that would otherwise be used. D.6.2 WREGIS Certificates for the Facility will be created on a calendar month basis in accordance with the certification procedure established by the WREGIS Operating Rules in an amount equal to the Energy generated by the Project and delivered to the Buyer in the same calendar month. D.6.3 WREGIS Certificates will only be created for whole MWh amounts of energy generated. Any fractional MWh amounts (i.e., kWh) will be carried forward until sufficient generation is accumulated for the creation of a WREGIS Certificate and all such accumulated 040914 jrm 0180042 24 MWh of Environmental Attributes will then be available to Buyer. D.6.4 If a WREGIS Certificate Modification (as such term is defined by WREGIS) will be required to reflect any errors or omissions regarding the Green Attributes from the Facility, then the Buyer will manage the submission of the WREGIS Certificate Modification. D.6.5 Due to the expected delay in the creation of WREGIS Certificates relative to the timing of invoice payments under Section 2, the Buyer will normally be making an invoice payment for the Output for a given month in accordance with Section 2 before the WREGIS Certificates for such month may be created in the Buyer’s WREGIS account. Notwithstanding this delay, the Buyer shall have all right and title to all such WREGIS Certificates upon payment to the Seller in accordance with Section 2. D.7 Changes in Green Attributes Reporting and Conveyance Procedures. The Buyer shall revise this Exhibit “PPA-D,” as appropriate, give written notice to the Seller regarding the revision, and issue a new Exhibit “PPA-D,” which shall then become part of this Agreement in the event that: D.7.1 WREGIS changes the WREGIS Operating Rules (as defined by WREGIS) after the Effective Date or applies the WREGIS Operating Rules in a manner inconsistent with this Exhibit “PPA-D” after the Effective Date; or, D.7.2 WREGIS is replaced as the primary method that the Buyer uses for conveyance of Green Attributes, or additional methods to convey all Green Attributes, are required. 040914 jrm 0180042 25 EXHIBIT “PPA-E” Insurance Requirements CONTRACTORS TO THE CITY OF PALO ALTO (CITY), AT THEIR SOLE EXPENSE, WILL FOR THE TERM OF THE CONTRACT OBTAIN AND MAINTAIN INSURANCE IN THE AMOUNTS FOR THE COVERAGE SPECIFIED BELOW, AFFORDED BY COMPANIES WITH A BEST’S KEY RATING OF A-:VII, OR HIGHER, LICENSED OR AUTHORIZED TO TRANSACT INSURANCE BUSINESS IN THE STATE OF CALIFORNIA. AWARD IS CONTINGENT ON COMPLIANCE WITH CITY’S INSURANCE REQUIREMENTS, AS SPECIFIED, BELOW: REQUIRED TYPE OF COVERAGE REQUIREMENT MINIMUM LIMITS EACH OCCURRENCE AGGREGATE YES YES WORKER’S COMPENSATION AUTOMOBILE LIABILITY STATUTORY STATUTORY YES COMMERCIAL GENERAL LIABILITY, INCLUDING PERSONAL INJURY, BROAD FORM PROPERTY DAMAGE BLANKET CONTRACTUAL, AND FIRE LEGAL LIABILITY BODILY INJURY PROPERTY DAMAGE BODILY INJURY & PROPERTY DAMAGE COMBINED. $1,000,000 $1,000,000 $1,000,000 $2,000,000 $2,000,000 $2,000,000 YES COMPREHENSIVE AUTOMOBILE LIABILITY, INCLUDING, OWNED, HIRED, NON-OWNED BODILY INJURY - EACH PERSON - EACH OCCURRENCE PROPERTY DAMAGE BODILY INJURY AND PROPERTY DAMAGE, COMBINED $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 NO PROFESSIONAL LIABILITY, INCLUDING, ERRORS AND OMISSIONS, MALPRACTICE (WHEN APPLICABLE), AND NEGLIGENT PERFORMANCE ALL DAMAGES $1,000,000 YES THE CITY OF PALO ALTO IS TO BE NAMED AS AN ADDITIONAL INSURED: PROPOSER, AT ITS SOLE COST AND EXPENSE, SHALL OBTAIN AND MAINTAIN, IN FULL FORCE AND EFFECT THROUGHOUT THE ENTIRE TERM OF ANY RESULTANT AGREEMENT, THE INSURANCE COVERAGE HEREIN DESCRIBED, INSURING NOT ONLY PROPOSER AND ITS SUBCONSULTANS, IF ANY, BUT ALSO, WITH THE EXCEPTION OF WORKERS’ COMPENSATION, EMPLOYER’S LIABILITY AND PROFESSIONAL INSURANCE, NAMING AS ADDITIONAL INSURES CITY, ITS COUNCIL MEMBERS, OFFICERS, AGENTS, AND EMPLOYEES. I. INSURANCE COVERAGE MUST INCLUDE: A. A PROVISION FOR A WRITTEN THIRTY DAY ADVANCE NOTICE TO CITY OF CHANGE IN COVERAGE OR OF COVERAGE CANCELLATION; AND B. A CONTRACTUAL LIABILITY ENDORSEMENT PROVIDING INSURANCE COVERAGE FOR CONTRACTOR’S AGREEMENT TO INDEMNIFY CITY – SEE, SAMPLE AGREEMENT FOR SERVICES. II. SUBMIT CERTIFICATE(S) OF INSURANCE EVIDENCING REQUIRED COVERAGE, OR COMPLETE THIS SECTION AND IV THROUGH V, BELOW. A. NAME AND ADDRESS OF COMPANY AFFORDING COVERAGE (NOT AGENT OR BROKER): B. NAME, ADDRESS, AND PHONE NUMBER OF YOUR INSURANCE AGENT/BROKER: 040914 jrm 0180042 26 C. POLICY NUMBER(S): D. DEDUCTIBLE AMOUNT(S) (DEDUCTIBLE AMOUNTS IN EXCESS OF $5,000 REQUIRE CITY’S PRIOR APPROVAL): III. AWARD IS CONTINGENT ON COMPLIANCE WITH CITY’S INSURANCE REQUIREMENTS, AND PROPOSER’S SUBMITTAL OF CERTIFICATES OF INSURANCE EVIDENCING COMPLIANCE WITH THE REQUIREMENTS SPECIFIED HEREIN. IV. ENDORSEMENT PROVISIONS, WITH RESPECT TO THE INSURANCE AFFORDED TO “ADDITIONAL INSURES” A. PRIMARY COVERAGE WITH RESPECT TO CLAIMS ARISING OUT OF THE OPERATIONS OF THE NAMED INSURED, INSURANCE AS AFFORDED BY THIS POLICY IS PRIMARY AND IS NOT ADDITIONAL TO OR CONTRIBUTING WITH ANY OTHER INSURANCE CARRIED BY OR FOR THE BENEFIT OF THE ADDITIONAL INSURES. B. CROSS LIABILITY THE NAMING OF MORE THAN ONE PERSON, FIRM, OR CORPORATION AS INSURES UNDER THE POLICY SHALL NOT, FOR THAT REASON ALONE, EXTINGUISH ANY RIGHTS OF THE INSURED AGAINST ANOTHER, BUT THIS ENDORSEMENT, AND THE NAMING OF MULTIPLE INSUREDS, SHALL NOT INCREASE THE TOTAL LIABILITY OF THE COMPANY UNDER THIS POLICY. C. NOTICE OF CANCELLATION 1. IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR ANY REASON OTHER THAN THE NON-PAYMENT OF PREMIUM, THE ISSUING COMPANY SHALL PROVIDE CITY AT LEAST A THIRTY (30) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION. 2. IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR THE NON-PAYMENT OF PREMIUM, THE ISSUING COMPANY SHALL PROVIDE CITY AT LEAST A TEN (10) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION. V. PROPOSER CERTIFIES THAT PROPOSER’S INSURANCE COVERAGE MEETS THE ABOVE REQUIREMENTS: THE INFORMATION HEREIN IS CERTIFIED CORRECT BY SIGNATURE(S) BELOW. SIGNATURE(S) MUST BE SAME SIGNATURE(S) AS APPEAR(S) ON SECTION II, ATTACHMENT A, PROPOSER’S INFORMATION FORM. Firm: Signature: Name: (Print or type name) Signature: Name: (Print or type name) 040914 jrm 0180042 27 NOTICES SHALL BE MAILED TO: PURCHASING AND CONTRACT ADMINISTRATION CITY OF PALO ALTO P.O. BOX 10250 PALO ALTO, CA 94303. 040914 jrm 0180042 28 EXHIBIT “PPA-F” Notices Contract Administration BUYER: SELLER: City of Palo Alto Utilities Resource Management 250 Hamilton Avenue Palo Alto, CA 94301 Ph: 650-329-2689 Email: UtilityCommoditySettlements@CityofPaloAlto.Org Billing and Settlements BUYER: SELLER: City of Palo Alto Utilities Resource Management 250 Hamilton Avenue Palo Alto, CA 94301 Ph: 650-329-2689 Email: UtilityCommoditySettlements@CityofPaloAlto.Org Forecasting and Outage Reporting under Section 6 of this Agreement Planned Outages: BUYER: SELLER: Northern California Power Agency Real- Time Dispatch 651 Commerce Drive Roseville, CA 95678 Ph: 916-786-3518 Forced Outages BUYER: SELLER: Northern California Power Agency Real- Time Dispatch 651 Commerce Drive Roseville, CA 95678 Ph: 916-786-3518 Forecasting and Scheduling BUYER: SELLER: Northern California Power Agency Operations and Pre-Scheduling 651 Commerce Drive Roseville, CA 95678 Ph: 916-786-0123 040914 jrm 0180042 29 EXHIBIT “PPA-G” Form of Lender Consent and Agreement This CONSENT AND AGREEMENT (this “Consent”), dated as of , 20 , is entered into by and among the CITY OF PALO ALTO, a California chartered municipal corporation (the “City”), , a corporation (the “Lender),” by its agent, (the “Administrative Agent”), and , a corporation (the “Borrower”) (collectively, the “Parties”). Unless otherwise defined, all capitalized terms have the meaning given in the Contract (as hereinafter defined). RECITALS A. Borrower intends to develop, construct, install, test, own, operate and use an approximately MW electric generating facility located in the city of Palo Alto in the State of California, known as the Project (the “Project”). B. In order to partially finance the development, construction, installation, testing, operation and use of the Project, Borrower has entered into that certain financing agreement dated as of (as amended, amended and restated, supplemented or otherwise modified from time to time, the “Financing Agreement”), among Borrower, the financial institutions from time to time parties thereto (collectively, the “Lenders”) , and Administrative Agent for the Lenders, pursuant to which, among other things, Lenders have extended commitments to make loans and other financial accommodations to, and for the benefit of, Borrower. C. The City and Borrower have entered into that certain Power Purchase Agreement, dated as of (attached hereto and incorporated herein by reference, as amended, amended and restated, supplemented or otherwise modified from time to time in accordance with the terms thereof and hereof, the “Power Purchase Agreement”). D. The City and Borrower have entered into that certain Interconnection Agreement, dated as of _ (attached hereto and incorporated herein by reference, as amended, amended and restated, supplemented or otherwise modified from time to time in accordance with the terms thereof and hereof, the “Interconnection Agreement”). E. Pursuant to a security agreement executed by Borrower and Administrative Agent for the Lenders (as amended, amended and restated, supplemented or otherwise modified from time to time, the “Security Agreement”), Borrower has agreed, among other things, to assign, as collateral security for its obligations under the Financing Agreement and related documents (collectively, the “Financing Documents”), all of its right, title and interest in, to and under the Power Purchase Agreement and Interconnection Agreement to Administrative Agent for the benefit of itself, the Lenders and each other entity or person providing collateral security under the Financing Documents. F. It is a requirement under the Financing Agreement that the Parties hereto execute this Consent. AGREEMENT NOW THEREFORE, for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, and intending to be legally bound, the Parties agree, as follows: 1. CONSENT TO ASSIGNMENT. The City acknowledges the assignment referred to in Recital E above, consents to an assignment of the Power Purchase Agreement and Interconnection Agreement pursuant thereto, and agrees with Administrative Agent, as follows: (a) Administrative Agent shall be entitled (but not obligated) to exercise all rights and to cure any 040914 jrm 0180042 30 defaults of Borrower under the Power Purchase Agreement or Interconnection Agreement, as the case may be, subject to applicable notice and cure periods provided in the Power Purchase Agreement and Interconnection Agreement. Upon receipt of notice from Administrative Agent, the City agrees to accept such exercise and cure by Administrative Agent if timely made by Administrative Agent under the Power Purchase Agreement or Interconnection Agreement, as the case may be, and this Consent. Upon receipt of Administrative Agent's written instructions and to the extent allowed by law, the City agrees to make directly to such account as Administrative Agent may direct the City, in writing, from time to time, all payments to be made by the City to Borrower under the Power Purchase Agreement or Interconnection Agreement, as the case may be, from and after the City’s receipt of such instructions, and Borrower consents to any such action. The City shall not incur any liability to Borrower under the Power Purchase Agreement, Interconnection Agreement, or this Consent for directing such payments to Administrative Agent in accordance with this subsection (a). (b) The City will not, without the prior written consent of Administrative Agent (such consent not to be unreasonably withheld), (i) cancel or terminate the Power Purchase Agreement or Interconnection Agreement, or consent to or accept any cancellation, termination or suspension thereof by Borrower, except as provided in the Power Purchase Agreement or Interconnection Agreement and in accordance with subparagraph 1(c) hereof, (ii) sell, assign or otherwise dispose (by operation of law or otherwise) of any part of its interest in the Power Purchase Agreement or Interconnection Agreement, except as provided in the Power Purchase Agreement or Interconnection Agreement, or (iii) amend or modify the Power Purchase Agreement or Interconnection Agreement in any manner materially adverse to the interest of the Lenders in the Power Purchase Agreement and Interconnection Agreement as collateral security under the Security Agreement. (c) The City agrees to deliver duplicates or copies of all notices of default delivered by the City under or pursuant to the Power Purchase Agreement or Interconnection Agreement to Administrative Agent in accordance with the notice provisions of this Consent. The City shall deliver any such notices concurrently with delivery of the notice to Borrower under the Power Purchase Agreement or Interconnection Agreement. To the extent that a cure period is provided under the Power Purchase Agreement or Interconnection Agreement, Administrative Agent shall have the same period of time to cure the breach or default that Borrower is entitled to under the Power Purchase Agreement or Interconnection Agreement, except that if the City does not deliver the default notice to Administrative Agent concurrently with delivery of the notice to Borrower under the Power Purchase Agreement or Interconnection Agreement, then as to Administrative Agent, the applicable cure period under the Power Purchase Agreement or Interconnection Agreement shall begin on the date on which the notice is given to Administrative Agent. If possession of the Project is necessary to cure such breach or default, and Administrative Agent or its designee(s) or assignee(s) declare Borrower in default and commence foreclosure proceedings, Administrative Agent or its designee(s) or assignee(s) will be allowed a reasonable period to complete such proceedings so long as Administrative Agent or its designee(s) continue to perform any monetary obligations under the Power Purchase Agreement or Interconnection Agreement, as the case may be. The City consents to the transfer of Borrower's interest under the Power Purchase Agreement and Interconnection Agreement to the Lenders or Administrative Agent or their designee(s) or assignee(s) or any of them or a purchaser or grantee at a foreclosure sale by judicial or nonjudicial foreclosure and sale or by a conveyance by Borrower in lieu of foreclosure and agrees that upon such foreclosure, sale or conveyance, the City shall recognize the Lenders or Administrative Agent or their designee(s) or assignee(s) or any of them or other purchaser or grantee as the applicable party under the Power Purchase Agreement and Interconnection Agreement (provided that such Lenders or Administrative Agent or their designee(s) or assignee(s) or purchaser or grantee assume the obligations of Borrower under the Power Purchase Agreement and Interconnection Agreement, including, without limitation, satisfaction and compliance with all credit provisions of the Power Purchase Agreement and Interconnection Agreement, if any, and provided further that such Lenders or Administrative Agent or their designee(s) or assignee(s) or purchaser or grantee has a creditworthiness equal to or better than 040914 jrm 0180042 31 Borrower, as reasonably determined by City). (d) In the event that either the Power Purchase Agreement or Interconnection Agreement, or both is rejected by a trustee or debtor-in-possession in any bankruptcy or insolvency proceeding, and if, within forty-five (45) days after such rejection, Administrative Agent shall so request, the City will execute and deliver to Administrative Agent a new power purchase agreement or interconnection agreement, as the case may be, which power purchase agreement or interconnection agreement shall be on the same terms and conditions as the original Power Purchase Agreement or Interconnection Agreement for the remaining term of the original Power Purchase Agreement or Interconnection Agreement before giving effect to such rejection, and which shall require Administrative Agent to cure any defaults then existing under the original Power Purchase Agreement or Interconnection Agreement. Notwithstanding the foregoing, any new renewable power purchase agreement or interconnection agreement will be subject to all regulatory approvals required by law. The City will use good faith efforts to promptly obtain any necessary regulatory approvals. (e) In the event Administrative Agent, the Lenders or their designee(s) or assignee(s) elect to perform Borrower's obligations under the Power Purchase Agreement and Interconnection Agreement, succeed to Borrower’s interest under the Power Purchase Agreement and Interconnection Agreement, or enter into a new power purchase agreement or interconnection agreement as provided in subparagraph 1(d) above, the recourse of the City against Administrative Agent, Lenders or their designee(s) and assignee(s) shall be limited to such Parties’ interests in the Project, and the credit support required under the Power Purchase Agreement and Interconnection Agreement, if any. (f) In the event Administrative Agent, the Lenders or their designee(s) or assignee(s) succeed to Borrower's interest under the Power Purchase Agreement and Interconnection Agreement, Administrative Agent, the Lenders or their designee(s) or assignee(s) shall cure any then-existing payment and performance defaults under the Power Purchase Agreement or Interconnection Agreement, except any performance defaults of Borrower itself, which by their nature are not susceptible of being cured. Administrative Agent, the Lenders and their designee(s) or assignee(s) shall have the right to assign all or a pro rata interest in the Power Purchase Agreement and Interconnection Agreement to a person or entity to whom Borrower’s interest in the Project is transferred, provided such transferee assumes the obligations of Borrower under the Power Purchase Agreement and Interconnection Agreement and has a creditworthiness equal to or better than Borrower, as reasonably determined by the City. Upon such assignment, Administrative Agent and the Lenders and their designee(s) or assignee(s) (including their agents and employees) shall be released from any further liability thereunder accruing from and after the date of such assignment, to the extent of the interest assigned. 2. REPRESENTATIONS AND WARRANTIES. The City hereby represents and warrants that as of the date of this Consent: (a) It (i) is duly formed and validly existing under the laws of the State of California, and (ii) has all requisite power and authority to enter into and to perform its obligations hereunder and under the Power Purchase Agreement and Interconnection Agreement, and to carry out the terms hereof and thereof and the transactions contemplated hereby and thereby; (b) the execution, delivery and performance of this Consent, the Power Purchase Agreement and the Interconnection Agreement have been duly authorized by all necessary action on its part and do not require any approvals, material filings with, or consents of any entity or person which have not previously been obtained or made; (c) each of this Consent, the Power Purchase Agreement, and the Interconnection Agreement is in full force and effect; 040914 jrm 0180042 32 (d) each of this Consent, the Power Purchase Agreement, and the Interconnection Agreement has been duly executed and delivered on its behalf and constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms, except as the enforceability thereof may be limited by (i) bankruptcy, insolvency, reorganization or other similar laws affecting the enforcement of creditors’ rights generally and (ii) general equitable principles (whether considered in a proceeding in equity or at law); (e) there is no litigation, arbitration, investigation or other proceeding pending for which the City has received service of process or, to the City’s actual knowledge, threatened against the City relating solely to this Consent, the Power Purchase Agreement, or the Interconnection Agreement and the transactions contemplated hereby and thereby; (f) the execution, delivery and performance by it of this Consent, the Power Purchase Agreement, and the Interconnection Agreement, and the consummation of the transactions contemplated hereby, will not result in any violation of, breach of or default under any term of any material contract or material agreement to which it is a party or by which it or its property is bound, or of any material requirements of law presently in effect having applicability to it, the violation, breach or default of which could have a material adverse effect on its ability to perform its obligations under this Consent; (g) neither the City nor, to the City’s actual knowledge, any other party to the Power Purchase Agreement or Interconnection Agreement, is in default of any of its obligations thereunder; and (h) to the City’s actual knowledge, (i) no Force Majeure Event exists under, and as defined in, the Power Purchase Agreement or Interconnection Agreement and (ii) no event or condition exists which would either immediately or with the passage of any applicable grace period or giving of notice, or both, enable either the City or Borrower to terminate or suspend its obligations under the Power Purchase Agreement or the Interconnection Agreement. Each of the representations and warranties set forth herein shall survive the execution and delivery of this Consent and the consummation of the transactions contemplated hereby. 3. NOTICES. All notices required or permitted hereunder shall be given, in writing, and shall be effective (a) upon receipt if hand delivered, (b) upon telephonic verification of receipt if sent by facsimile and (c) if otherwise delivered, upon the earlier of receipt or three (3) Business Days after being sent registered or certified mail, return receipt requested, with proper postage affixed thereto, or by private courier or delivery service with charges prepaid, and addressed as specified below: If to the City: [ ] [ ] [ ] Telephone No.: [ ] Facsimile No.: [ ] Attn: [ ] If to Administrative Agent: [ ] [ ] [ ] Telephone No.: [ ] Facsimile No.: [ ] Attn: [ ] 040914 jrm 0180042 33 If to Borrower: [ ] [ ] [ ] Telephone No.: [ ] Facsimile No.: [ ] Attn: [ ] Any party shall have the right to change its address for notice hereunder to any other location within the United States by giving thirty (30) days written notice to the other parties in the manner set forth above. 4. ASSIGNMENT, TERMINATION, AMENDMENT. This Consent shall be binding upon and benefit the successors and assigns of the Parties hereto and their respective successors, transferees and assigns (including without limitation, any entity that refinances all or any portion of the obligations under the Financing Agreement). The City agrees (a) to confirm such continuing obligation, in writing, upon the reasonable request of (and at the expense of) Borrower, Administrative Agent, the Lenders or any of their respective successors, transferees or assigns, and (b) to cause any successor-in-interest to the City with respect to its interest in the Power Purchase Agreement or Interconnection Agreement to assume, in writing and in form and substance reasonably satisfactory to Administrative Agent, the obligations of City hereunder. Any purported assignment or transfer of the Power Purchase Agreement or Interconnection Agreement not in conjunction with the written instrument of assumption contemplated by the foregoing clause (b) shall be null and void. No termination, amendment, or variation of any provisions of this Consent shall be effective unless in writing and signed by the parties hereto. No waiver of any provisions of this Consent shall be effective unless in writing and signed by the party waiving any of its rights hereunder. 5. GOVERNING LAW. This Consent shall be governed by the laws of the State of California applicable to contracts made and to be performed in California. The federal courts or the state courts located in California shall have exclusive jurisdiction to resolve any disputes with respect to this Consent with the City, Assignor, and the Lender or Lenders irrevocably consenting to the jurisdiction thereof for any actions, suits, or proceedings arising out of or relating to this Consent. 6. COUNTERPARTS. This Consent may be executed in one or more duplicate counterparts, and when executed and delivered by all the parties listed below, shall constitute a single binding agreement. 7. SEVERABILITY. In case any provision of this Consent, or the obligations of any of the Parties hereto, shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions, or the obligations of the other Parties hereto, shall not in any way be affected or impaired thereby. 8. ACKNOWLEDGMENTS BY BORROWER. Borrower, by its execution hereof, acknowledges and agrees that neither the execution of this Consent, the performance by the City of any of the obligations of the City hereunder, the exercise of any of the rights of the City hereunder, or the acceptance by the City of performance of the Power Purchase Agreement by any party other than Borrower shall (1) release Borrower from any obligation of Borrower under the Power Purchase Agreement or Interconnection Agreement, (2) constitute a consent by the City to, or impute knowledge to the City of, any specific terms or conditions of the Financing Agreement, the Security Agreement or any of the other Financing Documents, or (3) except as expressly set forth in this Consent, constitute a waiver by the City of any of its rights under the Power Purchase Agreement or Interconnection Agreement. Borrower and Administrative Agent acknowledge hereby for the benefit of City that none of the Financing Agreement, the Security 040914 jrm 0180042 34 Agreement, the Financing Documents or any other documents executed in connection therewith alter, amend, modify or impair (or purport to alter, amend, modify or impair) any provisions of the Power Purchase Agreement. CITY OF PALO ALTO ADMINISTRATIVE AGENT APPROVED AS TO FORM Senior Deputy City Attorney BORROWER APPROVED City Manager Director of Utilities Utilities Advisory Commission Minutes Approved on: Page 1 of 4 DRAFT EXCERPTED MINUTES OF THE DECEMBER 2, 2015 UTILITIES ADVISORY COMMISSION MEETING ITEM 2. ACTION: Staff Recommendation that the Utilities Advisory Commission Recommend that the City Council Adopt a Resolution to Continue the Palo Alto Clean Local Energy Accessible Now (CLEAN) Program at the Current Contract Price of $0.165 per kilowatt-hour for Local Solar Resources and at the Avoided Cost Level ($0.081 to $0.082 per kilowatt-hour) for Local Non- solar Eligible Renewable Resources Senior Resource Planner Jim Stack noted that staff returns every year near the end of the year to update the program and the value (or "avoided cost") of local renewable supplies. He discussed the history of the program as it changed from when the program was first adopted in March 2012. He noted that when the Finance Committee last reviewed the program, it voted to reduce the contract price for solar resources from 16.5 cents/kWh to the avoided cost at the time (9.3 cents/kWh), however the Council ultimately approved continuing the 16.5 cents/kWh price, but directed that the rent revenues from an impending project to put solar PV on City parking garage rooftops be allocated to the Electric Fund to offset the rate impact of paying a contract price that exceeds the avoided cost. Stack noted that despite the avoided cost being lowered based on the latest renewable energy request for proposals, staff recommends that the 16.5 cent/kWh price be continued. Commissioner Eglash asked why, given the direction from Council in May, this topic is coming back to the UAC now. Stack said that it is prudent to revisit the value of solar and the program annually. Assistant Director Jane Ratchye added that it has been a full year since this item was last discussed by the UAC. Commissioner Eglash said he expects as the cost of solar has fallen and continues to fall, that the CLEAN price should eventually be attractive to someone. Stack reminded that the federal Investment Tax Credit (ITC) is scheduled to fall significantly at the end of 2016, which will change the economics for projects. Commissioner Eglash noted that the value of solar has fallen and the excess cost (the amount by which the CLEAN contract price exceeds the local solar avoided cost) has grown, but it is still small compared to the impact to the electric utility from the drought so he is persuaded to agree with the staff recommendation to maintain the 16.5 cent/kWh price. DRAFT ATTACHMENT C Utilities Advisory Commission Minutes Approved on: Page 2 of 4 Commissioner Ballantine commented that additional equipment is required for local solar installations to provide local grid resiliency because if there is a power outage, solar systems employing standard inverters will all shut off as well and will not continue to provide power to the building or the grid. He said that supply reliability is an interesting issue and the City may want to think about encouraging or requiring systems to use new grid technology so that all the inverters for these systems don’t turn off when we really want them to be operating. He said that installations operating independent of the utility system may be considered too. He noted that there could be a technical situation with the inverters in the event of a voltage variation that could lead to reduced reliability. He suggested that the program should consider this problem in its design. He added that if the program does not have any takers, maybe there are other issues such as obtaining financing that could be solved. He said that perhaps a different incentive structure could be contemplated with a focus on the loading of the distribution system since there could be a location on the distribution system that would benefit more from the addition of distributed generation, but that as certain types of renewables come online, the City may see negative impacts on the system in some areas. Commissioner Danaher asked how the avoided cost of the non-solar renewable energy was calculated. Stack explained that the non-solar renewable energy is calculated by looking at the general cost of renewable energy based on results from the latest Request for Proposals (RFP) for baseload-type projects like a biomass generator, and adding in additional values provided by local generation, such as reduced transmission costs, resource adequacy capacity requirements, and distribution system losses. Commissioner Danaher asked why the avoided cost of solar was higher than for non-solar local renewables. Ratchye replied that it is because energy prices tend to be higher in the middle of the day, which coincides with when solar systems are generating energy. Commissioner Eglash suggested that the breakdown of the value of solar could be added to the report to clarify all the parts that make up the avoided cost, and noted that a prior staff report had provided that detail. Stack said that the breakdown of the components of the avoided cost could be added to the report as it goes to the Finance Committee and Council for consideration. Vice Chair Cook agreed that the Council would benefit from seeing this diagram of the makeup of the avoided costs. Commissioner Danaher said that he still doesn’t understand why local solar is more valuable than solar from Central Valley transmitted to the City. Stack summarized the aspects of the avoided costs including the losses and transmission costs. Ratchye noted that the difference between the avoided cost (about 8.9 cents/kWh) and the CLEAN price was part of the findings made by Council when it last approved the CLEAN price. She pointed to Attachment A of the report, the draft resolution, which lists the additional values of local solar in Section 3 including: “a portion of the City’s electric expenditures remain within the community, which provides revenue for local economic development”, reducing the need for new transmission lines, shading which can reduce the energy required for building cooling and create value for vehicle owners, and resiliency of the City’s distribution system in combination with other equipment such as electric storage systems (e.g. batteries). Utilities Advisory Commission Minutes Approved on: Page 3 of 4 Commissioner Ballantine suggested that with grid support capable inverters, the local resiliency value can be realized. Without that, it can't provide local resiliency. He said that there must be grid support capable inverters, or storage, or direct wiring to load to actually have a local resiliency benefit. Commissioner Danaher said that the goal is to have the cleanest possible resources at the lowest possible cost. He said that he would rather not subsidize local solar if it can be found outside the City for a better price. He would prefer one price for solar and a premium price for solar that can actually provide local reliability. He noted that the extra $380,000 per year for 25 years (the difference between the solar avoided cost and the CLEAN price of 16.5 cents/kWh) could pay for extra staff, which could be more valuable. Vice Chair Cook said that there is great interest in having solar locally and that Commissioner Danaher is a new commissioner without the benefit of those prior discussions. Commissioner Danaher said that if there were grid support capable inverters included, then the value would be increased and the price could be increased. Commissioner Ballantine said that factoring grid support capability into the proposal would take time and can't be done overnight. He said that this is what we have right now and he supports it. Commissioner Eglash recommends approval of continuing the CLEAN price at 16.5 cents/kWh, noting that the proposal is the same as Council action just 7 months ago. Ratchye explained that the situation is different from the Council action in May 2015 in some significant ways. She reminded that the Finance Committee voted unanimously to reduce the CLEAN price for local solar to the avoided cost, but that the Council ultimately decided to continue the 16.5 cents/kWh price after directing that the expected revenue from the expected lease for the City garage solar systems be allocated to the Electric Fund to cover the excess cost for the portion of the program cap that was planned to be used by that project. However, the lease negotiations are proceeding with a new vendor and the lease payments are significantly less than the original proposal. In addition, Ratchye reminded that the avoided cost of local solar has declined consistent with the latest renewable energy RFP results. Commissioner Eglash said that the Council and community recognize the value of local solar and that it has been consistent in its support for the extra costs above the market value. He noted that he opposed such a high CLEAN price when it was initially presented to the UAC, but supports the recommendation tonight because of the strong support for solar in the community. Commissioner Danaher recommended that the report that moves on to the Council explicitly enumerate the benefits of local solar. Utilities Advisory Commission Minutes Approved on: Page 4 of 4 ACTION: Commissioner Eglash made a motion that the UAC recommend that Council support the staff recommendation. Vice Chair Cook seconded the motion. The motion carried by a 3-0 vote with Vice Chair Cook and Commissioners Eglash and Ballantine voting yes, Commissioner Danaher abstaining and Chair Foster and Commissioners Hall and Schwartz absent. Utilities Advisory Commission Minutes Approved on: January 13, 2016 Page 1 of 4 FINAL EXCERPTED MINUTES OF THE DECEMBER 2, 2015 UTILITIES ADVISORY COMMISSION MEETING ITEM 2. ACTION: Staff Recommendation that the Utilities Advisory Commission Recommend that the City Council Adopt a Resolution to Continue the Palo Alto Clean Local Energy Accessible Now (CLEAN) Program at the Current Contract Price of $0.165 per kilowatt-hour for Local Solar Resources and at the Avoided Cost Level ($0.081 to $0.082 per kilowatt-hour) for Local Non- solar Eligible Renewable Resources Senior Resource Planner Jim Stack noted that staff returns every year near the end of the year to update the program and the value (or "avoided cost") of local renewable supplies. He discussed the history of the program as it changed from when the program was first adopted in March 2012. He noted that when the Finance Committee last reviewed the program, it voted to reduce the contract price for solar resources from 16.5 cents/kWh to the avoided cost at the time (9.3 cents/kWh), however the Council ultimately approved continuing the 16.5 cents/kWh price, but directed that the rent revenues from an impending project to put solar PV on City parking garage rooftops be allocated to the Electric Fund to offset the rate impact of paying a contract price that exceeds the avoided cost. Stack noted that despite the avoided cost being lowered based on the latest renewable energy request for proposals, staff recommends that the 16.5 cent/kWh price be continued. Commissioner Eglash asked why, given the direction from Council in May, this topic is coming back to the UAC now. Stack said that it is prudent to revisit the value of solar and the program annually. Assistant Director Jane Ratchye added that it has been a full year since this item was last discussed by the UAC. Commissioner Eglash said he expects as the cost of solar has fallen and continues to fall, that the CLEAN price should eventually be attractive to someone. Stack reminded that the federal Investment Tax Credit (ITC) is scheduled to fall significantly at the end of 2016, which will change the economics for projects. Commissioner Eglash noted that the value of solar has fallen and the excess cost (the amount by which the CLEAN contract price exceeds the local solar avoided cost) has grown, but it is still small compared to the impact to the electric utility from the drought so he is persuaded to agree with the staff recommendation to maintain the 16.5 cent/kWh price. ATTACHMENT D Utilities Advisory Commission Minutes Approved on: January 13, 2016 Page 2 of 4 Commissioner Ballantine commented that additional equipment is required for local solar installations to provide local grid resiliency because if there is a power outage, solar systems employing standard inverters will all shut off as well and will not continue to provide power to the building or the grid. He said that supply reliability is an interesting issue and the City may want to think about encouraging or requiring systems to use new grid technology so that all the inverters for these systems don’t turn off when we really want them to be operating. He said that installations operating independent of the utility system may be considered too. He noted that there could be a technical situation with the inverters in the event of a voltage variation that could lead to reduced reliability. He suggested that the program should consider this problem in its design. He added that if the program does not have any takers, maybe there are other issues such as obtaining financing that could be solved. He said that perhaps a different incentive structure could be contemplated with a focus on the loading of the distribution system since there could be a location on the distribution system that would benefit more from the addition of distributed generation, but that as certain types of renewables come online, the City may see negative impacts on the system in some areas. Commissioner Danaher asked how the avoided cost of the non-solar renewable energy was calculated. Stack explained that the non-solar renewable energy is calculated by looking at the general cost of renewable energy based on results from the latest Request for Proposals (RFP) for baseload-type projects like a biomass generator, and adding in additional values provided by local generation, such as reduced transmission costs, resource adequacy capacity requirements, and distribution system losses. Commissioner Danaher asked why the avoided cost of solar was higher than for non-solar local renewables. Ratchye replied that it is because energy prices tend to be higher in the middle of the day, which coincides with when solar systems are generating energy. Commissioner Eglash suggested that the breakdown of the value of solar could be added to the report to clarify all the parts that make up the avoided cost, and noted that a prior staff report had provided that detail. Stack said that the breakdown of the components of the avoided cost could be added to the report as it goes to the Finance Committee and Council for consideration. Vice Chair Cook agreed that the Council would benefit from seeing this diagram of the makeup of the avoided costs. Commissioner Danaher said that he still doesn’t understand why local solar is more valuable than solar from Central Valley transmitted to the City. Stack summarized the aspects of the avoided costs including the losses and transmission costs. Ratchye noted that the difference between the avoided cost (about 8.9 cents/kWh) and the CLEAN price was part of the findings made by Council when it last approved the CLEAN price. She pointed to Attachment A of the report, the draft resolution, which lists the additional values of local solar in Section 3 including: “a portion of the City’s electric expenditures remain within the community, which provides revenue for local economic development”, reducing the need for new transmission lines, shading which can reduce the energy required for building cooling and create value for vehicle owners, and resiliency of the City’s distribution system in combination with other equipment such as electric storage systems (e.g. batteries). Utilities Advisory Commission Minutes Approved on: January 13, 2016 Page 3 of 4 Commissioner Ballantine suggested that with grid support capable inverters, the local resiliency value can be realized. Without that, it can't provide local resiliency. He said that there must be grid support capable inverters, or storage, or direct wiring to load to actually have a local resiliency benefit. Commissioner Danaher said that the goal is to have the cleanest possible resources at the lowest possible cost. He said that he would rather not subsidize local solar if it can be found outside the City for a better price. He would prefer one price for solar and a premium price for solar that can actually provide local reliability. He noted that the extra $380,000 per year for 25 years (the difference between the solar avoided cost and the CLEAN price of 16.5 cents/kWh) could pay for extra staff, which could be more valuable. Vice Chair Cook said that there is great interest in having solar locally and that Commissioner Danaher is a new commissioner without the benefit of those prior discussions. Commissioner Danaher said that if there were grid support capable inverters included, then the value would be increased and the price could be increased. Commissioner Ballantine said that factoring grid support capability into the proposal would take time and can't be done overnight. He said that this is what we have right now and he supports it. Commissioner Eglash recommends approval of continuing the CLEAN price at 16.5 cents/kWh, noting that the proposal is the same as Council action just 7 months ago. Ratchye explained that the situation is different from the Council action in May 2015 in some significant ways. She reminded that the Finance Committee voted unanimously to reduce the CLEAN price for local solar to the avoided cost, but that the Council ultimately decided to continue the 16.5 cents/kWh price after directing that the expected revenue from the expected lease for the City garage solar systems be allocated to the Electric Fund to cover the excess cost for the portion of the program cap that was planned to be used by that project. However, the lease negotiations are proceeding with a new vendor and the lease payments are significantly less than the original proposal. In addition, Ratchye reminded that the avoided cost of local solar has declined consistent with the latest renewable energy RFP results. Commissioner Eglash said that the Council and community recognize the value of local solar and that it has been consistent in its support for the extra costs above the market value. He noted that he opposed such a high CLEAN price when it was initially presented to the UAC, but supports the recommendation tonight because of the strong support for solar in the community. Commissioner Danaher recommended that the report that moves on to the Council explicitly enumerate the benefits of local solar. Utilities Advisory Commission Minutes Approved on: January 13, 2016 Page 4 of 4 ACTION: Commissioner Eglash made a motion that the UAC recommend that Council support the staff recommendation. Vice Chair Cook seconded the motion. The motion carried by a 3-0 vote with Vice Chair Cook and Commissioners Eglash and Ballantine voting yes, Commissioner Danaher abstaining and Chair Foster and Commissioners Hall and Schwartz absent. FINANCE COMMITTEE ACTION MINUTES Page 1 of 3 Regular Meeting Tuesday, February 16, 2016 Chairperson Filseth called the meeting to order at 7:12 P.M. in the Community Meeting Room, 250 Hamilton Avenue, Palo Alto, California. Present: Filseth (Chair), Holman, Schmid, Wolbach Absent: Agenda Items 1.Utilities Advisory Commission Recommendation That the City Council Adopt a Resolution to Approve a Power Purchase Agreement With Hecate Energy Palo Alto LLC for up to 75,000 Megawatt-hours per Year of Energy Over a Maximum of 40 Years for a Total not to Exceed Amount of $101 Million. MOTION: Council Member Schmid moved, seconded by Council Member Holman to recommend the City Council adopt a Resolution to: 1.Approve a Power Purchase Agreement (PPA) with Hecate Energy Palo Alto LLC (Wilson Solar) for up to 75,000 Megawatt-hours (MWh) per year of energy for up to forty years at a total cost not to exceed $101 million; and 2.Delegate to the City Manager or his designee, the authority to execute on behalf of the City the PPA with HEPA, the three contract term extension options available to the City under the PPA, and any documents necessary to administer the agreements that are consistent with the Palo Alto Municipal Code and City Council approved policies; and 3.Waive the application of the investment-grade credit rating requirement of Section 2.30.340(d) of the Palo Alto Municipal Code; and ATTACHMENT E ACTION MINUTES Page 2 of 3 Finance Committee Action Minutes February 16, 2016 4. Waive the application of the anti-speculation requirement of Section D.1 of the City’s Energy Risk Management Policy as it may apply to this PPA. MOTION PASSED: 4-0 2. Utilities Advisory Commission Recommendation that the City Council Adopt a Resolution to Continue the Palo Alto Clean Local Energy Accessible Now (CLEAN) Program at the Current Contract Price of $0.165 per kilowatt-hour for Local Solar Resources and at the Avoided Cost Level ($0.081 to $0.082 per kilowatt-hour) for Local Non-solar Eligible Renewable Resources. MOTION: Chair Filseth moved, seconded by Council Member Schmid to recommend the City Council adopt a Resolution to: 1. Maintain the Palo Alto CLEAN contract price of 16.5 cents per kilowatt-hour (kWh) for local solar resources that have already submitted applications to the CLEAN program and reduce the CLEAN contract price for future local solar resources to their current avoided cost: 8.9 cents /kWh for a 20-year contract term and 9.0 cents/kWh for a 25-year contract term, and continue with a program limit of 3 megawatts (MW); and 2. Reduce the Palo Alto CLEAN contract price for local non-solar eligible renewable resources equal to their current avoided cost: 8.1 cents/kWh for a 20-year contract term and 8.2 cents/kWh for a 25- year contract term, and continue with a separate program limit of 3 MW. MOTION PASSED: 4-0 3. Commercial and Residential Impact Fee Nexus Studies and Recommend Affordable Housing Impact Fees. MOTION: Chair Filseth moved, seconded by Council Member Wolbach that the Finance Committee directs Staff to revise the recommendation and bring back an Ordinance with the objective of significantly increasing impact fees for commercial development in order to maximize affordable housing revenue. This includes the following considerations: ACTION MINUTES Page 3 of 3 Finance Committee Action Minutes February 16, 2016 1. Set the Impact Fee per square foot for office, medical and R&D at twice the amount as residential; and 2. Consider the extent to which the City can set the Impact Fee for office, medical and R&D somewhere between the maximum feasible fee and maximum justified fee. INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to add to the Motion, “to also include the option of either a fee or inclusionary housing, which will allow the developer to construct units instead of paying the fee.” MOTION PASSED: 4-0 4. Approval of Amendment to Table of Organization by Adding 1.0 FTE Management Analyst in the Development Services Department. MOTION: Council Member Wolbach moved, seconded by Council Member Holman to recommend the City Council amend the Table of Organization by adding 1.0 Full Time Employee (FTE) Management Analyst in the General Fund, Development Services Department. AMENDMENT: Chair Filseth moved, seconded by Council Member Schmid to add a comment to the Finance Committee recommendation that the target headcount for 2017 Management Professional positions remain at 217.4. AMENDMENT FAILED: 2-2 Holman, Wolbach no MOTION PASSED: 4-0 ADJOURNMENT: The meeting was adjourned at 10:30 P.M. City of Palo Alto (ID # 6424) City Council Staff Report Report Type: Action Items Meeting Date: 3/21/2016 City of Palo Alto Page 1 Summary Title: Council Site and Design Review of RWQCP Sludge Facility Title: PUBLIC HEARING: Adoption of a Mitigated Negative Declaration and Approval of a Site and Design Review Application for a new Two-Story, 7,500 Square Foot, 50-Foot tall Building Designed to Handle Sludge De-watering and Truck Load-outs, With Adjacent Stand-by Generator, and a new Outdoor Equipment Area Next to the Existing Incinerator, to be Placed Centrally on the Regional Water Quality Control Plant Site at 2501 Embarcadero Way From: City Manager Lead Department: Planning and Community Environment Recommendation Staff recommends that Council approve the Mitigated Negative Declaration (Attachment G), Mitigation and Monitoring Program (Attachment K) and the Record of Land Use (Attachment A) approving the Site and Design Review and Architectural Review application for the new dewatering facility at the Regional Water Quality Control Plant. Executive Summary The new two-story bio-solids dewatering facility, a 7,500 square foot (sf) building to be placed centrally and in an open area on the Regional Water Quality Control Plant (RWQCP) site, is part of a long term RWQCP plan to carry out the Biosolids Facility Plan (BFP) and the Organics Facilities Plan (ORP). A recent overall update on the ORP and the related Measure E can be found in Staff Report #6503 (Attachment E). The new facility will allow the RWQCP’s incinerators to be retired. The existing incinerator building will be repurposed for a time, and then demolished, as part of a future project. The Initial Study/Draft Mitigated Negative Declaration (MND) for the project was revised following two public hearings and submittal of public comments. The addendum provides additional explanatory statements in response to those comments. The plans and documents for this project, including the Draft Mitigated Negative Declaration, are viewable on the City’s website at https://www.cityofpaloalto.org/civicax/filebank/documents/51102 (Architectural Review Board webpages) and at http://www.cityofpaloalto.org/news/displaynews.asp?NewsID=3412 (Project webpage). City of Palo Alto Page 2 The Site and Design Review application and MND were recommended by the Planning and Transportation Commission (PTC) and Architectural Review Board (ARB). The project meets the Site and Design Review objectives set forth in Palo Alto Municipal Code (PAMC) Chapter 18.30(G).060, and Architectural Review (AR) findings as set forth in the Record of Land Use Action (Attachment A). The AR findings from PAMC Chapter 18.76, Section 18.76.020 were utilized for this review. Council has not yet adopted the revised AR findings recommended by the ARB and PTC, but is scheduled to review and adopt (or modify) these findings April 11, 2016. The dewatering project is at the 90% design level of development. The project plans are provided to Council as Attachment M and are viewable online via http://www.cityofpaloalto.org/civicax/filebank/documents/50224 The “100%” design documents will be issued to prospective construction contractors as part of the bid process. Staff is pursuing a low-interest loan from the State of California to cover project costs. Staff will return to Council for approval of resolutions needed for the loan, modifications to partner agreements to repay a proportionate share of the loan, the construction contract, and a construction management contract. Background RWQCP Site and Project Overview The dewatering facility is proposed on the 25-acre RWQCP site, zoned ‘Public Facilities’ (PF), designated ‘Major Institutions/Special Facilities’ on the City’s Comprehensive Plan land use map, and owned and operated by the City of Palo Alto. The non-City owned properties along Embarcadero Way, designated in the Comprehensive Plan as Research/Office Park, are all developed and zoned ROLM(E)-D-AD, which stands for ‘Research, Office, and Limited Manufacturing’ District Sub-Distrist ‘Embarcadero’ with ‘Automobile Dealership’ Combining District. The adjacent Baylands Nature Preserve, a major migratory bird stopover on the Pacific Flyway, supports trails used by cyclists, runners, hikers and bird watchers. The plant treats wastewater from the East Palo Alto Sanitary District, Los Altos, Los Altos Hills, Mountain View, Palo Alto and Stanford University. The site is subject to policies of the 2008 Palo Alto Baylands Master Plan, viewable at http://www.cityofpaloalto.org/civicax/filebank/documents/14882. The proposed sludge dewatering building would be located southeast of the Incinerator Building, and vehicle access would be provided from Embarcadero Way. All dewatering operations will occur within the new building, where continuous machinery operations will be isolated from the environment. No staff will permanently occupy the building; staff will perform routing operation and maintenance of the facility. The building will house belt filter presses, an interior truck loadout and other support areas, and will have a robust system for odor control. The project includes a stand-by deisel engine generator and fuel storage in a sub- base fuel tank. Simple site improvements are proposed to the landscaping, irrigation, paving City of Palo Alto Page 3 and drainage systems. Though the project site is within 500 feet of the Baylands preserve, it does not contain any native marshland or aquatic habitats, but it does contain significant mature vegetation. The project is also located within the Airport Influence Area (AIA). The project description (Attachment B), statement of landscape design intent (Attachment C), Initial Study/Mitigated Negative Declaration (Attachment G) and addendum providing responses to comments thereto (Attachment H) provide greater detail about existing conditions on the site and the proposed project. A set of images to illustrate views of the project from high point of the adjacent Byxbee Park are contained within Attachment D, a set of responses to questions received from a commissioner and from a member of the public prior to the PTC hearing. All three letters from Mr. Herb Borock are included within Attachment H, along with responses thereto. PTC and ARB Reviews Both the PTC and ARB reviewed this project. The ARB performs architectural review following PTC review and recommendation on the Site and Design Review application. The Site and Design Review process is intended to ensure that development in environmentally and ecologically sensitive areas will be harmonious with other uses in the general vicinity, compatible with environmental and ecological objectives, and in accord with the Palo Alto Comprehensive Plan. The staff reports for the December 17, 2015 ARB study session, January 27, 2016 PTC hearing and February 18, 2016 ARB hearing provided context and background information, including summaries of previous public hearings. The ARB study session report is viewable at https://www.cityofpaloalto.org/civicax/filebank/documents/50283. The PTC meeting minutes are attached (Attachment F) and the January 27, 2016 PTC staff report is viewable at http://www.cityofpaloalto.org/gov/boards/ptc/default.asp. The ARB meeting verbatim minutes are attached (Attachment I) and the February 18, 2016 ARB staff report is viewable at https://www.cityofpaloalto.org/civicax/filebank/documents/51102. Planning and Transportation Commission Hearing The PTC conducted a public hearing of the project and the associated MND, and recommended approval on a 6-1 vote. The dissenting commissioner didn’t want to vote for the project until the required clearance was received from the Federal Aviation Administration (FAA). The FAA clearance (Attachment J) was since received, on February 18, 2016. Condition of approval 3(e) in Attachment A requires placement of lights to address FAA requirements. There were two public speakers; one speaker expressed interest in the study with respect to the airport plan. The other speaker provided written comments on the MND regarding the topics of odor and green house gases and his written comments, submitted on January 27, 2016, were addressed in Attachment D. Public Works staff spoke to speakers’ concerns, which included the project’s relationship to the Palo Alto Airport; discussion about the City’s obligation with respect to review of this project for consistency with airport policies was provided within the ARB report, as follow up. This topic is discussed briefly later in this staff report. City of Palo Alto Page 4 Architectural Review Board Hearing The ARB conducted a public hearing of the project and associated MND, and recommended approval on a 4-1 vote, subject to removal of the green screens the applicant had proposed on two sides of the building in an attempt to address items cited by the ARB during an earlier study session. There was one speaker (Mr. Borock), who noted concerns regarding greenhouse gas explanatory text, vegetation at the southerly edge of the site, and space for storage. Public Works staff responded and further explanation is provided in the annotated, revised MND. The ARB noted appreciation of the photosimulations and existing, recently installed landscaping. Prior to the motion made to remove the green screens from the project, the dissenting ARB member noted that his only objection to the project was the green screen design, which he felt needed further work; though he did not state the reason why he then voted against the project, the removal of green screens from the project may have resulted in his vote against the project. Discussion Site and Project Visibility The RWQCP site can be viewed from surrounding properties west of the site (the business park), south of the site (the capped landfill that is undergoing a transition to parkland), north of the site (the Palo Alto Airport) and east and south of the site (Baylands Nature Preserve, approximately 500 feet to the east and 800 feet to the south). The tall, dense thicket of privet trees along the site’s eastern boundary creates a natural barrier between the site, the adjacent roadways (Embarcadero Road and Harbor Road), and the preserve lands to the east. The site’s southern edge is lined with trees. The plan set includes photo-simulations of the proposed building viewed from the expanding Byxbee Park and Baylands Preserve. The aerial below indicates the proposed location of the sludge dewatering and loadout facility just southeast of the incinerator building. The new building and truck access route will be placed on land that is currently open with no permanent structures. Other on-site functions and off-site views of the site are indicated on the aerials and in photos in the attached application materials, and found on the City’s website at the link provided earlier in this report. City of Palo Alto Page 5 View from Embarcadero Road The RWQCP site has frontage along Embarcadero Road, Embarcadero Way, and Harbor Road. The closest building to Embarcadero Road, identified as a scenic route in the Palo Alto Comprehensive Plan, is a one-story, Cor-Ten steel maintenance building seen as a rectangular building in the above aerial and in the photo below. The nearby circular, low profile, recycled water storage tank near Embarcadero Road is barely visible from Embarcadero. The tallest building on the plant site, the 45’9” tall Incinerator Building, is barely visible from Embarcadero Road due to existing mature and new vegetation along the site’s perimeter. The vegetation also screens the five-foot-tall rooftop equipment atop the incinerator building from Embarcadero Road, and other minor buildings and appurtenance on the site. The parapet of the new building would be 4’3” taller than the incinerator building. New Building and Support Facilities The new 7,500 sf building and support facilities would be located in the middle of the RWQCP site, where there are no existing buildings. The building will be a cast-in-place concrete structure, with painted structural steel, profiled Cor-Ten steel panels and removable skylights. The parapet would reach a height of 50 feet above grade. Above that, Cor-Ten steel guardrails would extend two feet and one ventilation stack would extend 15 feet. The floor of the buidling would be placed one foot above the 100-year base flood elevation of 10.5’. This will become the tallest building on the site. The design is intended to complement the existing architectural style at the treatment plant. The concrete walls will include horizontal reveals and exposed form ties. The proposed natural, weathered concrete will have exposed form imprints. Landscaping The landscape design intent is to blend the new building into the existing landscaped site. Plant material will be drought tolerant, native and non-native species selected to tolerate the facility’s recycled water. Plantings are intended to interrupt views of the new building from off- site locations. The intent statement (Attachment C) includes design objectives and plant materials to be used. The areas proposed for new planting treatments include the ‘sharps’ pharmaceutical drop-off area, truck bay loading drive, building perimeter, public tour gathering area, and Embarcadero Way exit driveway. Landscape plans show proposed screen landscaping to limit views of the building from the Baylands Nature Preserve. Below is a photo simulation that indicates screen landscaping at 10 years near Harbor Road. City of Palo Alto Page 6 New plantings associated with this project will be seen from Harbor Road (18 36”-box sized trees) as shown in the photo-simulation above, and from Embarcadero Way (three 24”-box and six 15-gallon sized trees) as shown on the landscape plan above. Trees and vines are proposed along the driveway from Embarcadero Way to the new building. The new trees on the west side of the building include three Strawberry trees, three Incense Cedars, three Australian Willows. New trees between the building and existing north soil bed filter include Strawberry trees, Bottle trees, Incense Cedars, Willow-leafed Peppermint Eucalyptus trees, Australian Willows and Canary Island Pines. Vegetation, public art and signage installed near the Embarcadero Way driveway entrance to the site in 2014 per the approved landscape plan are shown below. On the following page is an image of plantings installed in 2014 along the perimeter of the site; these plantings extended along a portion of Embarcadero Road, Harbor Road toward the southern portion of the plant, and near Embarcadero Way. The 2014 project also included interior landscaping intended to improve the aesthetics within the plant , create meeting areas and safer way finding for the public tours, showcase recycled water use, demonstrate sustainable landscape design. No additional vegetation is proposed along the southerly edge of the plant, due prior Council action related to Measure E. The vegetation “gap” a member of City of Palo Alto Page 7 the public cited, located on the south side of the plant, will not be filled in at this time; the 10- acre former landfill site is held as a potential composting facility until 2021 per Measure E. Compliance with Zoning Development Standards The PF Public Facilities zone district is designed to accommodate governmental, public utility, educational, and community service or recreational facilities. Public Facilities Development Standards contained in PAMC Chapter 18.28 limit buildings to a maximum height of 50 feet, lot coverage to 30% of the site’s area, and Floor Area Ratio (FAR) to 1:1. The project meets these maximums, and the building placement is such that setbacks from property lines are much greater than the minimum standards. The building parapet height of 50 feet meets the height standard. The ventilation stack is shown as reaching a height of 65 feet or 15 feet above the height limit in the PF zone district. PAMC Chapter 18.40 Section 18.40.090 ‘Height Exceptions’ allows exhaust fans to exceed the height limit of any zone district by 15 feet. There is no special process or findings for this exception beyond the Site and Design Review process and Architectural Review findings. Comprehensive Plan Compliance The following policies are relevant to the proposed project and are included in the RLUA:  POLICY L-5: Maintain the scale and character of the City. Avoid land uses that are overwhelming and unacceptable due to their size and scale.  POLICY L-48: Promote high quality, creative design and site planning that is compatible with surrounding development and public spaces.  POLICY N-29: All potential sources of odor and/or toxic air contaminants should be City of Palo Alto Page 8 adequately buffered, or mechanically or otherwise mitigated to avoid odor and toxic impacts that violate relevant human health standards.  POLICY N-37: Ensure the environmentally sound disposal of solid waste. As noted, the proposed building is of a similar scale and materials to the tallest and most visible structures on the project site, and the proposed central placement on the site and new vegetation (at maturity) will help mitigate views of the new building from off site. The building is designed with a “robust” odor control system to meet regional air quality standards. The facility’s purpose is to “de-water” and “load out” waste. 2008 Baylands Master Plan and 2005 Design Guidelines The 1998 Comprehensive Plan refers to the 1987 Baylands Master Plan (Plan), which was updated in 2008. The Plan addresses the RWQCP on pages 181-194 and provides policies that can be applied to the site (in “Overall” on page 65, “Flood Control” on page 257, and “Access & Circulation” on page 242). The 2005 Site Assessment and Design Guidelines, Palo Alto Baylands Nature Preserve document was prepared to help implement the Baylands Master Plan and the Baylands-related Comprehensive Plan policies and programs. The link to these guidelines is as follows: http://www.cityofpaloalto.org/civicax/filebank/documents/13318. The guidelines document is intended to be used when designing or reviewing projects located in any part of the Baylands. The Baylands Master Plan notes, “While the more specific guidelines are primarily applicable to the dedicated parkland, the design principles and concepts should also be applied in the service and commercial areas when designing or reviewing projects for compatibility with the special aesthetic qualities and environmental conditions unique to the Baylands.” Staff and the ARB looked at the project design with respect to the principles contained in the guidelines, as outlined in the ARB staff report. Comprehensive Plan Consistency with Respect to Palo Alto Airport City staff determined the project is consistent with the Comprehensive Plan for the Palo Alto Airport, because the project does not extend into the FAA Part 77 ‘imaginary surfaces.’ In late January 2016, City staff submitted the required documentation to the FAA. On February 18, 2016, the FAA determined the new structure would not be a hazard to air navigation provided the structure is marked and lighted in accordance with FAA Advisory circular 70/7460-1L. The Part 77 map was presented to the PTC and is also included as an attachment to this report. There are criteria for referring proposals (within the Airport Influence Area (AIA)) to the Airport Land Use Commission (ALUC) for review. The sludge facility project does not meet the criteria for either mandatory or voluntary referral to the ALUC; these criteria were provided in the ARB report. Palo Alto’s Transportation Element contains one goal with respect to the airport, and one policy (Policy T-57). Goal T-10 states ‘A local airport with minimal off site impacts’ with the following statement related to the goal: “The Palo Alto Airport is a “business and recreational facility for northern Santa Clara County, handling 250,000 landings and take-offs a year. Due to the short length of the City of Palo Alto Page 9 runway and Federal Aviation Administration-imposed noise restrictions, use of the Airport is limited to single-engine and light twin-engine aircraft.” Transportation Element Policy T-57, states “Support the continued vitality and effectiveness of the Palo Alto Airport without significantly increasing its intensity or intruding into open space areas. The Airport should remain limited to a single runway and two fixed base operators. Palo Alto will allow for improvement and only minor expansion of existing Airport facilities. In the sensitive Baylands area, and immediately adjacent to homes in East Palo Alto, traffic and aircraft noise should be minimized.” A PTC member had noted a concern with the vent pipe with respect to airspace needs. If significant changes occur at the airport requiring a new analysis of airspace needs, then the vent pipe could be moved to accommodate any changes. Timeline The timeframe for construction of the new dewatering facility is estimated to be 24 months. Policy Implications Council has responsibilities as to expenditure of capital funds and service to the member agencies using these facilities, in addition to taking action on the Site and Design Review application and MND. The PTC was tasked with ensuring the Site and Design Review findings were met, discussion of broad policy issues, review of the MND, and project compliance with the Comprehensive Plan. The ARB was tasked with ensuring the Architectural Review findings, Comprehensive Plan policies and programs, and Environmental Review issues related to Aesthetics have been met or addressed, prior to forwarding its recommendation to Council. Resource Impact The construction cost of the project is estimated to be approximately $25 Million. The City is applying for a loan from the State’s Revolving Fund for water quality improvement projects and anticipates being successful. These low interest loans are currently running below 2% for a 30 year loan. Repayent begins upon completion of construction, approxinately two years from now. The six Plant partners will pay their portion of the loan repayment costs. Palo Alto’s share will be approximately 35 % of the total. More exact figures will be provided when the project returns to Council for approval of the construction contract and related documents Environmental Review The attached Initial Study/Draft Mitigated Negative Declaration (MND, Attachment G) was prepared by the City’s consultant, ch2m. The MND Notice of Intent (Attachment L) was published and the Initial Study MND was made available for public review in City Hall and the Development Center and on the City’s website for an initial 30-day period, and circulated to state agencies by the State Clearinghouse. The only topic identified as having a potential impact unless mitigated and requiring a mitigation measure was biological resources; namely, City of Palo Alto Page 10 bird nesting (for which the mitigation measure is to address bird nesting concerns in compliance with the Migratory Bird Treaty Act (MBTA)). Report Attachment K provides the Mitigation Monitoring and Reporting Program related to this mitigation measure. The PTC and ARB reviewed the MND together with the public comments and recommended Council approval of both the MND and Site and Design Review application. The addendum to the MND (Attachment H) was prepared to address public comments submitted prior to and after the PTC review; no new impacts or mitigation measures have been identified. The MND concludes, “Because the project would be located on an existing RWQCP, would be similar in scale to existing features, and would meet the City’s approval findings, the visual character and quality of views from the Palo Alto Baylands would not be substantially degraded. Impacts would be less than significant.” Attachments:  Attachment A: RLUA (DOC)  Attachment B: Project Description (PDF)  Attachment C: Statement of Landscape Design Intent (PDF)  Attachment D: QA Waldfogel and Borock (PDF)  Attachment E: Energy Compost Facility CMR #6503 (PDF)  Attachment F: Draft PTC minutes of January 27, 2016 (DOC)  Attachment G: ISMND December2015 (PDF)  Attachment H: IS comments and responses (addendum) (PDF)  Attachment I: ARB 2 18 16 Verbatim Minutes (DOCX)  Attachment J: FAA Determination 2016 (PDF)  Attachment K: Mitigation Monitoring and Reporting Program (PDF)  Attachment L: NOI to adopt MND to S. C. County - filed 12-14-15 (PDF)  Attachment M: Project Plans (Council only) (PDF) ATTACHMENT A 1 ACTION NO. 2016- RECORD OF THE COUNCIL OF THE CITY OF PALO ALTO OF LAND USE ACTION FOR 2501 EMBARCADERO WAY: SITE AND DESIGN REVIEW AND MITIGATED NEGATIVE DECLARATION (CITY OF PALO ALTO, APPLICANT) On March 21, 2016, the Council approved the Mitigated Negative Declaration and the Site and Design Review application for the sludge dewatering and load out facility at the Regional Water Quality Control Plan in the PF(D) Public Facility with Site and Design Overlay Zone District, making the following findings, determination and declarations: SECTION 1. Background. The City Council of the City of Palo Alto (“City Council”) finds, determines, and declares as follows: A. On September 9, 2015, Palo Alto Public Works staff applied for Site and Design Review of the sludge dewatering and loadout facility at the Regional Water Quality Control Plant (RWQCP) in the PF(D) Public Facility with Site and Design Overlay zone district (“the Project”). B. Following staff review, ARB study session review and preparation and circulation of the draft Mitigated Negative Declaration (MND), the Planning and Transportation Commission (“Commission”) reviewed the Project on January 27, 2016 and voted 6-1 to recommend that Council approve the project and MND. The Commission’s actions are contained in the CMR ID #6424. C. Following Commission review, the Architectural Review Board (ARB) reviewed the Project on February 18, 2016 and voted (4-1) to recommend approval, subject to removal of green screens. The ARB’s actions are contained in the CMR ID #6424. SECTION 2. Environmental Review. The City as the lead agency for the Project has determined that the project is subject to environmental review under provisions of the California Environmental Quality Act (CEQA) under Guideline section 15070, Decision to Prepare a Negative or Mitigated Negative Declaration. An environmental impact assessment was prepared for the project and it has been determined that, with the implementation of mitigations, no potentially adverse impacts would result from the development and, therefore, the Project would have a less than significant impact on the environment. The Mitigated Negative Declaration was made available for public review beginning December 15, 2016 through January 13, 2016. The Initial Study and Draft Mitigated Negative Declaration, and addendum thereto, are contained in CMR ID #6424. SECTION 3. Site and Design Review Findings 1. The use will be constructed and operated in a manner that will be orderly, harmonious, and compatible with existing or potential uses of adjoining or nearby sites. ATTACHMENT A 2 The privately owned properties abutting and across the street from the Regional Water Quality Control Plant (Plant) include sites fronting Embarcadero Way zoned ROLM(E)(D)(AD) and a site at 2425 Embarcadero Way zoned “PC” (Planned Community PC 3020, a self storage facility approved in 1977 with a rooftop wireless communication facility approved in 2002.) The publicly owned properties abutting the site include the Palo Alto Recycling Center and Bixbee Park, and the Palo Alto Airport is located across Embarcadero Road from the Plant. These publicly owned properties are zoned Public Facilities with Site and Design Review (D) Overlay. The new sludge facility and ancillary facilities will be compatible with the existing functions of the Plant, which provides treatment and disposal of wastewater for the Cities of Palo Alto, Mountain View, and Los Altos; the Town of Los Altos Hills; the East Palo Alto Sanitary District; and Stanford University. The Plant is also the site for group tours of the facility, and City staff perform administrative and maintenance duties in several buildings on the site. The proposed sludge facility and ancillary facilities would be appropriately located in the center of the Plant site to enable greater visual harmony with the nearby Bixbee Park. The project allows easy and orderly truck access from Embarcadero Way, and the number of trucks accessing the site for operations will not be incompatible with the existing nearby land uses, nor would they further impact the existing and potential uses of adjoining or nearby sites. The new structures will be partially screened from offsite views by existing structures and vegetation, to maintain the existing relationship with the surrounding environment. 2. The project is consistent with the goal of ensuring the desirability of investment, or the conduct of business, research, or educational activities, or other authorized occupations, in the same or adjacent areas. The Project will be consistent with other authorized on-site occupations, including educational activities that take place during Plant tours, and authorized occupations in adjacent areas. The design and size of the project are generally consistent with the existing buildings at the facility, and the construction of all improvements will be governed by the regulations of the current Zoning Ordinance, the Uniform Building Code, and other applicable codes to assure safety and a high quality of development. 3. Sound principles of environmental design and ecological balance are observed in the project. The Project will implement appropriate sustainable building practices as deemed feasible. The design is compliant with the California Green Building Standards Code (CalGreen), including use of locally sourced and manufactured, reyclable cor-ten steel, energy-efficient and recyclable concrete, and use of operational elements such as energy efficient motors, recycled water, and eventual decommissioning of the incinerator building. Given the proposed Mitigation Measure, the Project will not have a significant environmental impact as indicated by the proposed Mitigated Negative Declaration for this Project. 4. The use will be in accord with the Palo Alto Comprehensive Plan. ATTACHMENT A 3 The Project, as conditioned, complies with the policies of the Land Use and Community Design and the Natural Environment elements of the Comprehensive Plan; specifically, with the following applicable policies:  POLICY L-5: Maintain the scale and character of the City. Avoid land uses that are overwhelming and unacceptable due to their size and scale.  POLICY L-48: Promote high quality, creative design and site planning that is compatible with surrounding development and public spaces.  POLICY N-29: All potential sources of odor and/or toxic air contaminants should be adequately buffered, or mechanically or otherwise mitigated to avoid odor and toxic impacts that violate relevant human health standards.  POLICY N-37: Ensure the environmentally sound disposal of solid waste. The proposed building is of a similar scale and materials as the tallest and most visible structures on the project site, and the proposed central placement on the site and existing and new vegetation (at maturity) will help mitigate views of the new building from off site. The building is designed with a “robust” odor control system to meet regional air quality standards. The facility’s purpose is to “de-water” and “load out” waste. The project incorporates quality design that recognizes the sensitive nature of the Baylands area as described in the Comprehensive Plan. SECTION 4. Site and Design Approval Granted. Site and Design Approval is granted for the project by the City Council under Palo Alto Municipal Code Section 18.30(G), subject to the conditions of approval in Section 7 of this Record. SECTION 5. Architectural Review Findings. The design and architecture of the proposed improvements, as conditioned, complies with the Findings for Architectural Review as required in Chapter 18.76 of the PAMC (grouped into six categories below). Comprehensive Plan and Purpose of ARB:  Finding #1: The design is consistent and compatible with applicable elements of the Palo Alto Comprehensive Plan.  Finding #16: The design is consistent and compatible with the purpose of architectural review, which is to: o Promote orderly and harmonious development in the city; o Enhance the desirability of residence or investment in the city; o Encourage the attainment of the most desirable use of land and o improvements; o Enhance the desirability of living conditions upon the immediate site or in o adjacent areas; and o Promote visual environments which are of high aesthetic quality and variety and which, at the same time, are considerate of each other. The project is consistent with Findings #1 and #16 because: ATTACHMENT A 4 As noted in Section 3 of this RLUA, Site and Design Review Finding #4, the project meets policies L-5, L-48, N-29 and N-37. The proposed building is of a similar scale and materials as the tallest and most visible structures on the project site, and the proposed central placement on the site and existing and new vegetation (at maturity) will help mitigate views of the new building from off site. The building is designed with a “robust” odor control system to meet regional air quality standards. The facility’s purpose is to “de- water” and “load out” waste. The project incorporates quality design of an aesthetic quality and variety appropriate to the RWQCP campus and the sensitive nature of the adjacent Baylands Nature Preserve. Compatibility and Character:  Finding #2: The design is compatible with the immediate environment of the site.  Finding #4: This finding of compatibility with unified or historic character is not applicable to the project.  Finding #5: The design promotes harmonious transitions in scale and character in areas between different designated land uses.  Finding #6: The design is compatible with approved improvements both on and off the site. The project is consistent with Findings #2, #4, #5 and #6 because: There is no unified design or historic character along this portion of Embarcadero Road/Embarcadero Way. The design and layout of the project takes into consideration the existing conditions on site and adjacency to the surrounding industrial and natural environments. The project includes mature tree preservation and new landscaping to improve screening of the proposed, centrally located building; this will reduce potential impacts on public views from the Baylands Nature Preserve. The building materials and design will be compatible with the palette and design of industrial architectural style of buildings on the site (cast-in-place concrete, painted structural steel, and profiled Cor-Ten steel panels). The project is not located in a transitional area on the site and the building location far from the edge of the site which abuts the Baylands Nature Preserve. The improvements are compatible with the existing plant use and the siting of the building is compatible with future plans for improvements at the plant. Functionality and Open Space:  Finding #3: The design is appropriate to the function of the project.  Finding #7: The planning and siting of the building on the site creates an internal sense of order and provides a desirable environment for occupants, visitors and the general community.  Finding #8: The amount and arrangement of open space are appropriate to the design and the function of the structures. The project is consistent with Findings #3, #7, and #8 because: The new facility serves a utilitarian purpose and the structure’s simple design reflects this use. The new building is centrally located on the site and ancillary facilities are nearby, including parking for visitors, in an orderly and accessible manner for users of the facility. The building’s entry points are clearly defined to promote safety, security, and wayfinding. The architectural design includes ATTACHMENT A 5 skylights to allow daylight into the space and access for the maintenance or replacement of equipment. Circulation and Traffic:  Finding #9: Sufficient ancillary functions are provided to support the main functions of the project and the same are compatible with the project’s design concept.  Finding #10: Access to the property and circulation thereon are safe and convenient for pedestrians, cyclists and vehicles. The project is consistent with Findings #9 and #10 because: The project does not include nor require any changes to the vehicular site access from Embarcadero Way; a new service drive (load-out entrance road) will be created off the main driveway for trucks to access the Sludge Dewatering and Loadout facility, and adjustments will be made to the existing internal vehicular driveway. No adjustments are proposed to the existing parking spaces on the site. Concrete pedestrian ways are proposed to allow for adequate circulation around the proposed facilities. Landscaping and Plant Materials:  Finding #11: Natural features are appropriately preserved and integrated with the project.  Finding #12: The materials, textures and colors and details of construction and plant material are an appropriate expression to the design and function and compatible with the adjacent and neighboring structures, landscape elements and functions.  Finding #13: The landscape design concept for the site, as shown by the relationship of plant masses, open space, scale, plant forms and foliage textures and colors create a desirable and functional environment on the site and the landscape concept depicts an appropriate unit with the various buildings on the site.  Finding #14: Plant material is suitable and adaptable to the site, capable of being properly maintained on the site, and is of a variety that would tend to be drought- resistant and to reduce consumption of water in its installation and maintenance. The project is consistent with Findings #11- #14 because: The Project incorporates the minimal removal of vegetation and the installation of new native trees to supplement screen trees planted in 2014. Along with heavy screen trees existing around the property perimeter, the new screen trees will help further interrupt views of the new building from Embarcadero Way (3 24”-box sized trees and 6 15-gallon sized trees), and from Harbor Road (18 36”-box sized trees). New trees in front of the new building include three Strawberry trees, three Incense Cedars, three Australian Willows; new trees between the building and existing north soil bed filter include Strawberry trees, Bottle trees, Incense Cedars, Willow-leafed Peppermint Eucalyptus trees, Australian Willows and Canary Island Pines. The selection of construction materials, finishes and plantings is appropriate for this facility and the Baylands; they are simple in form and use natural color tones and materials. The proposed native landscape design will maintain the site’s character and provide visual screening for the new building. Two sides of the new building will be partially screened with new vine plantings using a free standing mesh fence. ATTACHMENT A 6 Sustainability:  Finding #15: The design is energy efficient and incorporates renewable energy design elements including, but not limited to: a. Careful building orientation to optimize daylight to interiors b. High performance, low-emissivity glazing c. Cool roof and roof insulation beyond Code minimum d. Solar ready roof e. Use of energy efficient LED lighting f. Low-flow plumbing and shower fixtures g. Below grade parking to allow for increased landscape and storm-water treatment areas The project is consistent with Finding #15 because: The proposed materials are durable. Cor-Ten steel has resistance to atmospheric corrosion, negates the need for painting, is local sourced and manufactured, has a high proportion of recycled content and is 100% recyclable. The concrete is resource efficient, durable, energy efficient, creates minimal waste during construction, and is recyclable. The electrical design includes the use of intelligent motor control centers which are energy efficient. Recycled water will be used for all process water needs. The plant’s air emissions footprint will be reduce following decommissioning of the incinerator building. In accordance with the City’s Green Building Regulations, the building will satisfy the requirements for CALGreen Mandatory + Tier 2. SECTION 6. Plan Approval. The plans submitted for Building Permit shall be in substantial conformance with those plans prepared by ch2m, consisting of 58 pages, dated February 2016 and received February 10, 2016, except as modified to incorporate the conditions of approval in Section 7. A copy of these plans is on file in the Department of Planning and Community Development. SECTION 7. Conditions of Approval. The following conditions shall be addressed prior to any other permit application submittal. This includes Building Permit, Excavation and Grading Permit, Certificate of Compliance, Street Work Permit and Encroachment Permit but after the Planning entitlement approval. 1. Development Services: The following comment is required to be addressed prior to any future related permit application such as a Building Permit, Excavation and Grading Permit, Certificate of Compliance, Street Work Permit, Encroachment Permit, etc, and is not required to be addressed prior to the Planning entitlement approval:  The new facility will include an accessible path to and within the structure that meets current accessibility standards of the CBC. 2. Utilities Electrical All work must be done to CPA and NEC code. Customer is responsible for the ATTACHMENT A 7 cost for changes to the existing electric system. 3. Planning and Community Environment a. The plans submitted for Building Permit shall be in substantial conformance with plans received on February 9, 2016, except green screen trellises shall be deleted and except as modified to incorporate relevant conditions of approval and any additional conditions placed on the project by the City Council. A complete copy of this Record of Land Use Action shall be printed on the plans submitted for the Building Permit. b. For the life of the project, all landscape and trees shall be reasonably well-maintained, watered, fertilized, and pruned according to Nursery and American National Standards for Tree, Shrub and Other Woody Plant Maintenance- Standard Practices (ANSI A300-1995) as outlined in the Palo Alto Tree Technical Manual. c. Any exterior changes to the building such as size, location, materials or signage are subject to ARB review and approval prior to final issuance of occupancy/installation. d. A Planning Division Final inspection will be required to determine substantial compliance with the approved plans prior to the scheduling of a Building Division final. Any revisions during the building process must be approved by Planning, including but not limited to; materials, landscaping and hard surface locations e. Plans submitted for building permit shall include the lights at the top of the stack in accordance with FAA Advisory circular (70/7460-1 L, Obstruction Marking and Lighting, red lights - Chapters 4,5(Red),&12). f. During construction, any crane or similar equipment that requires FAA part 77 temporary approval shall be the minimum height needed to complete construction. 4. Public Works Engineering a. Provide the following note on the Site Plan and Structural plans to indicate, “The proposed project is a Substantial Improvement and shall comply with Palo Alto Municipal Code Chapter 16.52 Flood Hazard Regulations and FEMA’s requirements.” b. FLOOD ZONE: Add a note on the plans shall indicate that the Assessor’s Parcel 008-05-005 is located within FEMA’s Special Flood Hazard Area Zone AE where the base flood elevation (BFE) was determined to be 10.5 as shown on the FIRM Panel Number 06085C0030H dated May 18, 2009. c. FLOOD ZONE CONSTRUCTION MATERIALS AND METHODS: Add a note on the Structural, Architectural and Mechanical plans to indicate that all new construction and substantial improved structures shall be constructed with flood-resistant materials and utility equipment shall be resistant to flood damage as specified in FEMA’s technical bulletins and Palo Alto Municipal Code Section 16.52.130. b ATTACHMENT A 8 d. FLOOD ZONE CERTIFICATION: An Elevation Certification shall be provided for all structure(s) and shall be prepared by a registered professional engineer or surveyor, and verified by a community official to be properly elevated. Such certification and verification shall be provided to the floodplain administrator based on PAMC section 16.52.130, and shall be prepared at 3 stages of construction: with the construction documents, during construction, and prior to building permit final. The elevation certificate prepared based on the existing structure and the proposed construction, shall be scanned and attached with the building permit construction documents. Certificates shall be prepared on the NAVD e. The “Survey Requirements for Construction in the Special Flood Hazard Area” shall be added to the plan set. A pdf copy of the documents titled Plan Insert for Elevation Certification Requirements) is available on the City’s website http://www.cityofpaloalto.org/gov/depts/pwd/forms_and_permits.asp under Flood Zone Issues. FLOOD ZONE VENTS: All new construction and substantially improved structures, with fully enclosed areas below the lowest floor are useable solely for the parking of vehicles, building access or storage, and which are subject to flooding shall be designed to automatically equalize hydrostatic flood forces on exterior walls by allowing for the entry and exit of floodwaters. This requirement shall comply with the guidelines set on FEMA’s technical bulletins, including but not limited to TB1-08, TB6-93 and TB7-93. See PAMC 16.52.130.c.3 for minimum criteria. Plot and label the vent openings on the structural details. There must be at least two openings for each enclosed area with 1 sq in of opening for each 1 sq ft of enclosed area. These openings must be placed no more than 12 inches above lowest adjacent grade. Provide on the drawings the following: a schedule showing the areas enclosed; the area of each opening; the number of openings required; a detail showing the location of the vent relative to adjacent grade; and the location of the openings on the foundation plan. These should also be incorporated into the structural drawings, since flood openings in the foundation affect the structural engineer’s design. Guidelines for flood openings can be found in FEMA Technical Bulletin 1-08, “Openings in Foundation Walls.” f. DEMOLITION PLAN: Place the following note adjacent to an affected tree on the Site Plan and Demolition Plan: “Excavation activities associated with the proposed scope of work shall occur no closer than 10-feet from the existing street tree, or as approved by the Urban Forestry Division contact 650-496-5953. Any changes shall be approved by the same”. g. GRADING PERMIT: The site plan must include a table that shows the earthwork (cut and fill) volumes. If the total is more than 100 cubic yards, a grading permit will be required. An application and plans including Rough Grading and Shoring Plans are submitted to Public Works separately from the building permit plan set. The application and guidelines are ATTACHMENT A 9 available on our Public Works website. http://www.cityofpaloalto.org/gov/depts/pwd/forms_and_permits.asp h. ROUGH GRADING: provide a Rough Grading Plan for the work proposed as part of the Grading and Excavation Permit application. The Rough Grading Plans shall including the following: pad elevation, elevator pit elevation, ground monitoring wells, limits of over excavation, stockpile area of material, overall earthwork volumes (cut and fill), temporary shoring for any existing facilities, ramps for access, crane locations (if any), tree protection measures, etc. i. LOGISTICS PLAN: The applicant and contractor shall prepare a construction logistics plan for the work associated with the Excavation and Grading permit. Plan shall be submitted to Public Works Engineering and shall address all impacts to the City’s right-of-way, including, but not limited to: pedestrian control, traffic control, truck routes, material deliveries, contractor’s parking, on-site staging and storage areas, concrete pours, crane lifts, work hours, noise control, dust control, storm water pollution prevention, contractor’s contact. The plan shall be prepared and submitted along the Grading and Excavation Permit. It shall include notes as indicated on the approved Truck Route Map for construction traffic to and from the site. Plan shall also indicate if the bus stop will need to be relocated. j. SHORING PLAN: Provide a shoring plan for the existing utilities (if needed), to clearly indicate how the new structures will be constructed while protecting the existing utilities. If tiebacks are proposed they shall not extend onto adjacent private property, existing easements or into the City’s right-of-way without having first obtained written permission from the private property owners and/or an encroachment permit from Public Works. Plot and label the tree protection measures on the shoring plans. k. GEOTECHNICAL REPORT: Shall clearly identify the highest projected groundwater level to be encountered will be ______ feet below existing grade. l. DEWATERING: Due to proximity to the bay any excavation may require dewatering during construction. Public Works only allows groundwater drawdown well dewatering. Open pit groundwater dewatering is not allowed. Dewatering is only allowed from April through October due to inadequate capacity in our storm drain system. The geotechnical report for this site must list the highest anticipated groundwater level. We recommend that a piezometer be installed in the soil boring. The contractor shall determine the depth to groundwater immediately prior to excavation by using a piezometer or by drilling an exploratory hole if the deepest excavation will be within 3 feet of the highest anticipated groundwater level. If groundwater is found within 2 feet of the deepest excavation, a drawdown well dewatering system must be used, or alternatively, the contractor can excavate for the basement and hope not to hit groundwater, but if he does, he must immediately stop all work and install a drawdown well system before he continues to excavate. Based on the determined groundwater depth and season the contractor may be required to dewater the site or stop all grading and excavation work. In addition Public Works may require that all groundwater be tested for contaminants prior to initial ATTACHMENT A 10 discharge and at intervals during dewatering. If testing is required, the contractor must retain an independent testing firm to test the discharge water for contaminants Public Works specifies and submit the results to Public Works. Public Works reviews and approves dewatering plans as part of a Street Work Permit. The applicant can include a dewatering plan in the building permit plan set in order to obtain approval of the plan during the building permit review, but the contractor will still be required to obtain a street work permit prior to dewatering. Alternatively, the applicant must include the above dewatering requirements in a note on the site plan. Public Works has a sample dewatering plan sheet and dewatering guidelines available on our website. http://www.cityofpaloalto.org/gov/depts/pwd/forms_and_permits.asp m. GRADING AND DRAINAGE PLAN: The plan set must include a grading & drainage plan prepared by a licensed professional that includes existing and proposed spot elevations, earthwork volumes, finished floor elevations, pad elevation, area drain and bubbler locations, drainage flow arrows to demonstrate proper drainage of the site. See Palo Alto Municipal Code Section 16.28 and Grading & Drainage Guidelines for Residential Development form for guidelines. http://www.cityofpaloalto.org/civicax/filebank/documents/2717 n. STORM WATER TREATMENT: This project shall comply with the storm water regulations contained in provision C.3 of the NPDES municipal storm water discharge permit issued by the San Francisco Bay Regional Water Quality Control Board (and incorporated into Palo Alto Municipal Code Chapter 16.11). These regulations apply to land development projects that create or replace 10,000 square feet or more of impervious surface, and restaurants, retail gasoline outlets, auto service facilities, and uncovered parking lots that create and/or replace 5,000 square feet or more of impervious surface. In order to address the potential permanent impacts of the project on storm water quality, the applicant shall incorporate into the project a set of permanent site design measures, source controls, and treatment controls that serve to protect storm water quality, subject to the approval of the Public Works Department. The applicant shall identify, size, design and incorporate permanent storm water pollution prevention measures (preferably landscape-based treatment controls such as bioswales, filter strips, and permeable pavement rather than mechanical devices that require long-term maintenance) to treat the runoff from a “water quality storm” specified in PAMC Chapter 16.11 prior to discharge to the municipal storm drain system. Effective February 10, 2011, regulated projects, must contract with a qualified third-party reviewer during the building permit review process to certify that the proposed permanent storm water pollution prevention measures comply with the requirements of Palo Alto Municipal Code Chapter 16.11. The certification form, 2 copies of approved storm water treatment plan, and a description of Maintenance Task and Schedule must be received by the City from the third-party reviewer prior to approval of the building permit by the Public Works department. Within 45 days of the installation of the required storm water treatment measures and prior to the issuance of an occupancy ATTACHMENT A 11 permit for the building, third-party reviewer shall also submit to the City a certification for approval If pumps are required, plot and label where the pumps will be located, storm water runoff from pumped system shall daylight onto onsite landscaped areas and be allowed to infiltrate and flow by gravity to the public storm drain line. Storm water runoff that is pumped shall not be directly piped into the public storm drain line. o. Applicant shall be aware that the project may trigger water line and meter upgrades or relocation, if upgrades or relocation are required, the building permit plan set shall plot and label utility changes. If a backflow preventer is required, it shall be located within private property and plotted on the plans. Similarly if a transformer upgrade or a grease interceptor is required it shall also be located within the private property. Plot and label these on the Utility plan. p. The following note shall be shown on the plans adjacent to the area on the Site Plan: “Any construction within the city right-of-way must have an approved Permit for Construction in the Public Street prior to commencement of this work. THE PERFORMANCE OF THIS WORK IS NOT AUTHORIZED BY THE BUILDING PERMIT ISSUANCE BUT SHOWN ON THE BUILDING PERMIT FOR INFORMATION ONLY.” q. Provide the following note on the Site Plan and Grading and Drainage Plan: “Contractor shall not stage, store, or stockpile any material or equipment within the public road right- of-way.” Construction phasing shall be coordinate to keep materials and equipment onsite or within private property. r. IMPERVIOUS SURFACE AREA: The project will be creating or replacing 500 square feet or more of impervious surface. Accordingly, the applicant shall provide calculations of the existing and proposed impervious surface areas with the building permit application. The Impervious Area Worksheet for Land Developments form and instructions are available at the Development Center or on our website. To determine the impervious surface area that is being disturbed, provide the quantity on the site plan. STORMWATER POLLUTION PREVENTION – The plan set shall include the “Pollution Prevention – It’s Part of the Plan” An electronic copy of this plan is available on the City’s website. http://www.cityofpaloalto.org/civicax/filebank/documents/2732 5. Fire Install a NFPA 13 fire sprinkler, NFPA 24 underground fire service and NFPA 72 fire alarm monitoring system. ATTACHMENT A 12 SECTION 8. Term of Approval. 1. Site and Design Approval. In the event actual construction of the project is not commenced within two years of the date of council approval, and if such approval is received prior to March 21, 2018, the approval shall expire and be of no further force or effect, pursuant to Palo Alto Municipal Code Section 18.30(G).080, unless extended for an additional year by the Director of Planning and Community Environment. PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: APPROVED: _________________________ ____________________________ City Clerk Director of Planning and Community Environment APPROVED AS TO FORM: ___________________________ Senior Asst. City Attorney PLANS AND DRAWINGS REFERENCED: 1. Those plans prepared plans prepared by CH2mHill, consisting of 3 pages, dated and received February 10, 2016. ARB Submittal for Major Project Component 1 Sludge Dewatering and Loadout Facility for the Regional Water Quality Control Plant Site and Design Review Prepared for City of Palo Alto September 2015 ATTACHMENT B Component 1 Sludge Dewatering and Loadout Facility for the Regional Water Quality Control Plant Project Description PREPARED FOR: Architectural Review Board/City of Palo Alto COPY TO: Padmakar M. Chaobal/Regional Water Quality Control Plant PREPARED BY: CH2M DATE: September 2015 This project description summary is prepared for the City of Palo Alto (City) Architectural Review Board (ARB) site and design review of the Sludge Dewatering and Loadout Facility project (proposed project) at the Regional Water Quality Control Plant (RWQCP), Palo Alto, California. The proposed project would include the construction and operation of a sludge dewatering and loadout facility at the City’s RWQCP. Introduction and Background of the Project The City of Palo Alto has operated the RWQCP for more than 80 years. Originally constructed in 1934, the RWQCP is an advanced treatment facility that provides treatment and disposal of wastewater for the cities of Palo Alto, Mountain View, and Los Altos; the Town of Los Altos Hills; the East Palo Alto Sanitary District; and Stanford University. The RWQCP has undergone several expansions and upgrades throughout the years and currently has a designed average dry weather flow capacity of 39 million gallons per day (MGD) and a current average flow of about 18 MGD. The RWQCP effluent is partly discharged to the San Francisco Bay, and partly diverted to the RWQCP recycled water facility for reuse. The City’s vision for future biosolids management encompasses the need to address the RWQCP’s aging solids handling infrastructure, to proactively comply with changing and uncertain regulations affecting biosolids, and to respond to community goals to increase the beneficial use of recovered organic resources city-wide. Pursuant to this vision, Palo Alto’s City Council has prioritized the decommissioning of the RWQCP multiple-hearth furnaces (MHFs) by the year 2019. The MHFs currently incinerate the RWQCP wastewater residuals, but the MHFs are at the end of their useful life; therefore, the City evaluated options for wastewater residuals management. Hence, the City developed a Biosolids Facility Plan (BFP) that provides a long-term roadmap to enable the City to reliably and sustainably manage and beneficially reuse the wastewater solids produced at the RWQCP through year 2045. The BFP was developed as a companion document to the City of Palo Alto Long Range Facilities Plan for the Regional Water Quality Control Plant Final Report (LRFP) (Carollo Engineers, 2012). The BFP builds on the LRFP, allowing solids processing recommendations in the BFP to move forward in concert with other planned improvements at the RWQCP (as defined in the LRFP). Together, the two documents provide a comprehensive long-term plan for the RWQCP. The proposed project being submitted for site and design review is the dewatering and loadout facility, also known as Component 1 of the BFP. The dewatering and loadout facility would have independent utility as a backup sludge dewatering and haul off facility that can be used long-term even if additional BFP components are not built. Scope of the Project The proposed project includes the construction of a new building to accommodate the installation of four belt filter presses. The project also includes mechanisms to convey the resulting dewatered cake from the belt filter presses to three storage bins, and to load the cake from the bins into trucks. These operations 1 PROJECT DESCRIPTION would occur within the new sludge dewatering and loadout facility building. The new building would be a two story, cast-in-place concrete structure that would contain space for the belt filter presses, truck loadout, and other miscellaneous support areas. The facility would have a building footprint of approximately 7,500 square feet and a building height of 50 feet. The roof would include removable skylights over the belt filter presses for the purpose of facilitating future removal/ replacement. These skylights would also provide light into the room, reducing the need for electric lights during the daytime. Various minor modifications to the yard piping system would be needed in order to accommodate the new facility. The location of the new sludge dewatering and loadout facility is approximately in the middle of the existing RWQCP. The three existing belt filter press feed pumps will be replaced with new but larger pumps and used to feed the sludge from the existing sludge blend tank to the new belt filter presses. The facility would also include a robust system for odor control. Both the new feed pumps and the new odor control equipment would be installed outdoors on the existing feed pumps area adjacent to the existing sludge blend tank (located immediately North of the new sludge dewatering and loadout facility). In addition to the sludge dewatering and loadout facility itself, a standby diesel engine generator will be installed to provide backup power. The generator is sized to handle the load for the facility as well as other nearby facilities. Fuel storage will be provided by means of a sub-base fuel tank. Existing and Proposed Uses The sludge dewatering and loadout facility would be located on currently undeveloped land approximately in the middle of the existing RWQCP. Therefore, there are no existing uses of the proposed site. The proposed sludge dewatering and loadout facility would be part of the RWQCP solids processing system. The belt filter presses are large machines that use physical pressure to separate solids from the liquid waste stream (i.e., dewatering). All dewatering operations will occur within the new building, effectively isolating the continuous machinery operations from the environment. Dewatered solids produced by the belt filter presses – the “cake” – would be conveyed to the bins for offsite reuse. Trucks would enter the building through a roll-up door on the northwest side, and would receive the cake load from the overhead storage bins. Up to five trucks per day (counted as ten trips per day) are expected to fully haul the load generated by the dewatering operations. The BFP provides several options for beneficial reuse within the Bay Area and surrounding counties. The project does not require specialized maintenance, and all facilities would undergo routine maintenance as part of overall RWQCP operations. Also, the facility will not be permanently occupied; approximately 3 staff will access the facility as-needed for routine operations and maintenance. Architectural Design Concept The primary goal of this project is to deliver a high quality, cost effective process structure that integrates seamlessly with existing plant operations and maintains flexibility for future growth. The new facility will be designed for optimum functionality while complementing the existing plant architecture and surrounding natural environment. Relationship to Existing Conditions The project is located on a vacant site within the existing RWQCP. The RWQCP is flanked by an industrial business park and capped landfill to the south, in the process of being converted into parkland, the Palo Alto Airport to the north, and the Baylands Nature Preserve to the east. The preserve is considered as one of the best bird watching areas on the west coast and a major migratory stopover on the Pacific Flyway. There are numerous hiking, running, and cycling trails around the plant. The existing process structures within the plant share a similar industrial architectural style, utilizing a material palette of cast-in-place concrete, painted structural steel, and profiled Cor-Ten steel panels. 2 PROJECT DESCRIPTION Concrete walls are articulated with vertical flutes, horizontal reveals, and exposed form ties. Structures are surrounded by simple landscaping, pavement, and drainage systems. The vehicular approach to the proposed Sludge Dewatering and Loadout Facility is from the main plant entrance, bypassing the existing Operations Building to the south and the Administration Building to the north. The proposed facility will be situated between the Solids Incineration Building to the north and the Primary Sedimentation Tanks to the south. Design Criteria The proposed architectural design addresses the City’s desire for a visually attractive facility which blends in to the existing campus and the surrounding natural environment. A modern reinterpretation of the existing material palette provides visual consistency and sets a precedent for future campus improvements. Existing Baylands view sheds will be maintained by respecting local height limitations. Architectural Design Objectives • Emphasize functional and operational requirements, particularly pedestrian and vehicular access • Provide safe, healthy, and comfortable workspaces for operations and maintenance staff • Blend into natural surroundings of Baylands Nature Preserve • Complement existing plant architecture and landscaping • Respect public views from outside the plant perimeter • Use consistent and practical forms, materials, finishes, and colors • Design for durability, longevity, and low maintenance • Provide educational opportunities for visitors and tour groups • Establish architectural vocabulary for future facility improvements Design Concepts Key elements of the architectural design include clearly defined entries and circulation elements and controlled views into process area from the building exterior. Various Cor-Ten steel cladding panels, storefront glazing, and articulated vertical concrete surfaces will be utilized to express these concepts. 3 PROJECT DESCRIPTION Figure (a) View from Northeast Figure (b) View from Southeast Figure (c) View from Northwest Figure (d) View from Southwest Panel Lift Doors Building entry points are clearly defined to promote safety, security, and wayfinding. Panel lift doors are proposed in lieu of coiling steel doors at several locations around the building exterior. They provide a low maintenance entry system which operates via a series of lift straps controlled by a retraction motor to fold the door in half. By acting as canopies when in the open position, they also allow for some protection from the elements. At the building’s main staff entrance, the panel lift door will be held in the open position to serve as a formal entry canopy. In keeping with the primary material palette, the folding door panels will be clad in Cor-Ten steel. The truck loadout bay will have coiling doors at each end to meet the requirement for impact and corrosion resistance. Views into Facility In order to provide educational and interpretive opportunities for visitors while restricting access to operational spaces, several design features will allow views of activities and equipment from outside the building. These features will also allow natural daylighting into various spaces to improve operator comfort and safety. A perforated Cor-Ten screen wall will allow views into the rooftop cake storage bin area while obscuring visibility from more distant views outside the plant. To allow visibility of the belt filter press room from the adjacent sedimentation tanks, a large storefront window will be provided on the east wall. Narrow windows at each landing of the building’s interior stairwell will allow views of people moving within the facility. Finally, removable skylights will be located above each belt filer press, allowing daylight into the space and access for the maintenance or replacement. 4 PROJECT DESCRIPTION Materials and Color Palette Cast-in-place Concrete The structural concrete exterior will incorporate a uniform pattern of expressed plywood formwork with a complementary configuration of exposed form ties. The expressed joint pattern will continue through to adjacent cladding materials. Cor-Ten Steel Panels Also known as weathered or weathering steel, this material oxidizes over time to form an attractive protective coating over the steel. The use of Cor-Ten provides continuity of materials with existing buildings at the plant and the Baylands Preserve. Due to its 50+ year lifespan, the sustainable approach to the campus is continued. Cor-Ten Steel is proposed in several locations: • Wall Cladding A solid panel system will be post installed into the portions of the structural concrete walls, flush with the exterior face. Panel sizes and locations will correspond with the concrete joints as well as standard supplied panel dimensions. This will minimize the need for excess cutting and thus reduce waste. • Perforated Screen Wall Perforated panels will be attached to a steel screen wall structure around the outdoor cake storage area, providing views into the space and allowing the space to remain unclassified. 5 PROJECT DESCRIPTION • Exterior Stair Guardrail The steel stair running along the east façade will incorporate solid panels to serve as a balustrade. • Roof Guardrail Perforated panels will be provided around the upper roof parapet to serve as a balustrade. It will be fixed to the inside face of the parapet to prevent runoff on the concrete facade. Sustainable Design Elements The architectural design of the facility is compliant with the California Green Building Standards Code (CALGreen Code). Some key sustainable features of the proposed materials are summarized below. Cor-Ten Steel • The steel is allowed to rust and that rust forms a protective coating which provides increased resistance to atmospheric corrosion • Negates need for painting • Locally sourced and manufactured (USA) • High proportion of recycled content • 100% recyclable Concrete • resource efficient (predominant raw material is limestone, the most abundant mineral on earth) • durable • energy efficient (absorbs and retains heat) • minimal waste during construction • recyclable (can be crushed and made into aggregate) In addition to sustainable materials selection, the design of the facility includes operational elements that will further enhance the RWQCP’s environmental impact. For example, the electrical design includes the use of intelligent motor control centers (MCCs) which are energy efficient motors; and the use of recycled water for all process water needs. The decommissioning of the multiple hearth furnaces (incinerator building) after the new facility is operational for solids management will significantly reduce the plant’s air emissions footprint. Project Construction The sludge dewatering and loadout facility would be constructed over a period of approximately 24 months, beginning in April 2016 and continuing through Spring 2018. Project construction would consist of site preparation and minor demolition activities; building construction; and equipment installation, startup, and testing. Most of the construction activities would occur during building construction, which would include modifications to nearby yard piping. Construction access would be from Embarcadero Way, and is expected to average 10 vehicles per day (counted as 20 trips per day) over the construction period. 6 General Zoning Compliance Analysis for PF (D) REQUIRED/ALLOWED PROPOSED COMPLIANCE ADDRESS 2501 Embarcadero Way, Palo Alto, CA 94303 -- -- ACCESSOR’S PARCEL NUMBER 008-03-029 -- -- TOTAL SITE AREA 24.87 acres same yes ZONING DISTRICT PF (D) same yes HISTORIC CATEGORY NONE same yes FLOOD ZONE AE10.5 same yes FRONT (EMBARCADERO WAY) SETBACK 20 ft. same yes REAR YARD SETBACK 20 ft. same yes SIDE YARD SETBACK 20 ft. same yes MAXIMUM HEIGHT 50 ft. 50 ft. to parapet, with 10 ft. ventilation system on top yes SITE COVERAGE 30% (existing 29.15%) 29.84% MAXIMUM F.A.R. 1:1 TREE DISCLOSURE STATEMENT CITY OF PALO ALTO Planning Division, 250 Hamilton Avenue Palo Alto, CA 94301 (650) 329-2441 http://www.cityofpaloalto.org Palo Alto Municipal Code, Chapter 8.10.040, requires disclosure and protection of certain trees located on private and public property, and that they be shown on submitted and approved site plans. A completed tree disclosure statement must accompany all permit applications that include exterior work, all demolition or grading permit applications, or other development activity. PROPERTY ADDRESS: ______________________________________________________________________ Are there Regulated1 trees on or adjacent to the property? YES NO (If no, proceed to Section 4) [Sections 1- 4 MUST be completed by the applicant. Please circle and/or check where applicable.] 1. Where are the trees? Check those that apply. (Plans must be submitted showing all trees over 4” diameter) On the property On adjacent property overhanging the project site In the City planter strip or right-of-way easement within 30’ of property line (Street Trees)* *Street trees1 require special protection by a fenced enclosure, per the attached instructions. Prior to receiving any permit, you must provide an authorized Street Tree Protection Verification form. Contact Public Works Operations at (650) 496-5953 for inspection of type I, II or III fencing (see attached Detail #605) required for all street trees. 2. Are there any Protected 1 or Designated1 Trees? YES (Check where applicable)NO Protected Tree (s) Designated Tree (s) On or overhanging the property 3. Is there activity or grading within the dripline? (radius 10 times the trunk diameter) of these trees?YES NO If Yes, a Tree Preservation Report must be prepared by an ISA certified arborist and submitted for staff review (see TTM 2, Section 6.25). Attach this report to Sheet T-1,:Tree Protection, its Part of the Plan!”, per Site Plan Requirements. 4. Are the Site Plan Requirements** completed?YES NO **Plans. Protection of Regulated trees during development require the following: (1) Plans must show the measured trunk diameter and canopy dripline; (2) Plans must denote, as a bold dashed line, a fenced enclosure area out to the dripline, per Sheet T-1 and Detail #605 - http://www.cityofpaloalto.org/trees/forms.htm (See also TTM2, Section 2.15 for area to be fenced) I, the undersigned, agree to the conditions of this disclosure. I understand that knowingly or negligently providing false or misleading information in response to this disclosure requirement constitutes a violation of the Palo Alto Municipal Code Section 8.10.040, which can lead to criminal and/or civil legal action. Signature: __________________________ Print: ______________________________ Date: ____________ (Prop. Owner or Agent) FOR STAFF USE: Protective Fencing Sections 5-6 must be completed by staff for the issuance of any development permit (demolition, grading or building permit). 5.Protected Trees. The specified tree fencing is in place. A written statement is attached verifying that protective fencing is correctly in place around protected and/or designated trees. YES NO (N/A if there are no protected trees, check here ) 6.Street Trees. A signed Public Works Street Tree Protection Verification form is attached.YES NO (N/A if there are no street trees, check here ). _____________________________ 1 Regulated Trees – a) Street trees – trees on public property; b) Protected trees – Coast Live Oaks or Valley Oaks which are 11.5” in diameter or larger, Coast Redwoods which are 18” in diameter or larger, when measured 54” above natural grade; and Heritage trees are trees designated by City Council; and c) Designated Trees – commercial or non-residential property trees, which are part of an approved landscape plan. 2 Palo Alto Tree Technical Manual (TTM) contains instructions for all requirements on this form, available at www.cityofpaloalto.org/trees/technical-manual.html S:\PLAN\PLADIV\Advance Planning\Arborist\Tree Program Information\Tree Disclosure Statement(TDS)\Tree Disclosure StatementFinal_3'07.doc Revised 03/04/07 Regional Water Quality Control Plant, 2501 Embarcadero Way, Palo Alto, CA 94303 Hamid Ghaemmaghami DocuSign Envelope ID: D7F87601-4FB7-492E-A20D-22F19893CF8C 9/2/2015 AERIAL PHOTO – EXISTING CONDITIONS AND LOCATION OF NEW SLUDGE DEWATERING & LOADOUT FACILITY PALO ALTO REGIONAL WATER QUALITY CONTROL PLANT SEPTEMBER 3, 2015 SLUDGE DEWATERING & LOADOUT FACILITY PALO ALTO REGIONAL WATER QUALITY CONTROL PLANT Proposed Site - existing conditions – NORTHWEST VIEW Proposed Site - existing conditions – SOUTHWEST VIEW (from Admin Building) Proposed Site - existing conditions – SOUTHWEST VIEW (from Primary Sedimentation Tanks) Proposed Site - existing conditions – NORTHEAST VIEW Incinerator Building Primary Sedimentation Tanks Trickling Filter Incinerator Building ATTACHMENT C January 27, 2016 Commissioner Waldfogel questions related to FAA Height Restrictions and staff responses Q1: Is there a map or analysis that the 65 foot RWQCP stack height complies with the Palo Alto Airport height restriction map? Page 3‐9 of the attached report shows the obstruction height contours but I can’t tell exactly where the plant is in relation to the FAA FAR part 77 obstruction standards map (http://www.countyairports.org/docs/CLUP_PAO/PAOClupAdopted11‐19‐ 08.pdf) Staff Response Q1: The ventilation stack is at elevation 76.5 above mean sea level (MSL) (65 feet above finish floor). Based on Staff review of Figure 6 and the FAR Part 77 Surfaces, the obstruction height limits for the Plant lie between 129 MSL and 154 MSL in the vicinity of the new sludge dewatering building and 79 MSL at the northern corner of the Plant nearest the airport. All of these obstruction heights are above the stack elevation of 76.5 MSL. To illustrate this, staff will provide at Commissioners’ places the enlarged FAA height restrictions map with the building site marked on the map (the FAA map, without the building site marked, is provided below). Q2: Even if the 65 foot stack is in the 79 foot contour it would be nice to get a readout from the airport manager and/or the FAA FSDO and generally some analysis if this has any effect on the airport business plan. Staff Response Q2: The FAA’s review process is underway (the required form has been filed). Staff’s interpretation of the height map (Figure 6, at places) is likely to be confirmed. The ATTACHMENT D process includes a review of the existing approach surfaces. The process will be completed before issuance of building permits/commencement of construction. While the FAA does not provide “readouts”, no problems are anticipated. Herb Borock’s comments (paraphrased) on CEQA topic sections: Aesthetics, AQ (odors), and GGH Comment 1 – The MND should analyze views of the project from HIGH POINTS in the future parkland (former landfill). Staff Response C1: The photo below is taken from the high point (Designated as “ B” in the attached schematic – first email attachment). The new building has been “photo shopped” in; and becomes the highest building at the Plant, by a few feet. The third attachment to this email is a view from “point B” to the Plant with existing conditions (no sludge facility photo‐ shopped in). Comment 2 ‐ There is no substantial evidence to support the statements about odors (May 2015 tech memo about odor referenced). Staff Response C2, Odor Control: The potential for odor impacts was fully assessed in the Initial Study, with the conclusion that odor levels would be “substantially less” than the Bay Area AQMD’s dilution‐to‐threshold (D/T) ratio of 5. The exact D/T ratio was unquantified in the Initial Study because of some potential variations in the exact control technology to be used. Notwithstanding this unquantified conclusion in the Initial Study text, appropriate calculations were prepared as part of our record, and further refined in an updated version of the odor control memo referenced by the commenter (dated August 4, 2015). As reported in the memo, and in calculations performed at the time the Initial Study was prepared, the proposed odor control technology would result in an expected D/T ratio of approximately 0.9 at the property line. In addition, a more conservative model run was performed to assess a potential worst case, which showed a maximum D/T ratio of approximately 1.5 at the property line. All calculations were performed using the AERMOD dispersion model. These numbers support the Initial Study conclusion that impacts would be less than significant. Comment 3 ‐ The MND erroneously omits the emissions from project operations in the GHG section. Staff Response C3, Greenhouse Gas Emissions: The Initial Study discusses impacts from both project construction and operation in Section 3.7.2. Given the extent of construction activities, impacts are quantified and compared to regional greenhouse gas reduction strategies. Impacts from operation are negligible, and potential emission sources – periodic testing of the backup generator and a nominal five truck trips per day – are addressed qualitatively. Because the new facility would be powered by electricity, there is limited onsite potential for greenhouse gas generation from equipment operations. In response to the comment, we further examined the potential for impacts from equipment operations, focusing on the potential for methane emissions from the new sludge handling process, and determined that the bio‐solids residence time is so short that generation of biogenic methane is not expected. No changes to the Initial Study are required. Also, it should be noted that this project is a significant step in replacing the existing multiple hearth incinerators, which will substantially reduce overall greenhouse gas emission from wastewater treatment operations. The second attachment, the Green House Gas factsheet, may help provide the “big picture” on this topic. GREENHOUSE GAS EMISSIONS FACTSHEET August 2015 *GHG emissions are calculated using the Local Government Operations Protocol, version 1.1 & include both anthropogenic and biogenic emissions. GHG emissions associated with electrical usage and the switch to green electricity are included in the above totals. Excluding the purchase of green electricity, the RWQCP decreased its GHG emissions by 20% between 2005 and 2014. The Regional Water Quality Control Plant (RWQCP) is one of the City of Palo Alto’s major greenhouse gas (GHG) emitting facilities. Since 2005, the RWQCP has undertaken numerous initiaves to decrease GHG emissions. These initiatives include purchasing green electricity, routinely tuning the sewage sludge incinerators to decrease natural gas consumption, and utilizing landfill gas to further decrease natural gas used in the sewage sludge incinerators. Since 2005, the RWQCP has reduced its GHG emissions by 43 percent. The RWQCP is dedicated to reducing it’s GHG footprint and has incorporated GHG emissions as a key decision‐making factor as it plans for a new biosolids treatment process and anticipated nutrient removal requirements. 9% 16% 75% 2014 RWQCP Sewage Sludge Incinerator GHG Emissions by Fuel Type Landfill Gas Natural Gas Biosolids 1.7% 13% 0% 83% 2.3% 2014 RWQCP GHG Emissions by Source Biological Treatment Baylands Conversion Electrical Sewage Sludge Incinerator Office Comfort Heating ENERGY USE FACTSHEET August 2015 The Regional Water Quality Control Plant (RWQCP) is the City of Palo Alto’s major energy consuming facility. Since 2005, the RWQCP has undertaken numerous initiaves to decrease and switch to greener energy options. These initiatives include purchasing green electricity, routinely tuning the sewage sludge incinerators to decrease natural gas consumption, and utilizing landfill gas to further decrease natural gas used in the sewage sludge incinerators. The RWQCP is dedicated to reducing it’s energy footprint and is planning numerous projects and evaluations to do so (Table 1). The RWQCP has incorporated energy usage as a key decision‐ making factor as it prepares for expanded recycled water demand and anticipated nutrient removal requirements. Table 1: Summary of Future Energy Projects &Evaluations Anticipated to Occur Between 2015 &2020 Energy Reduction Projects Energy Reduction Evaluations Future Energy Increase Projects  Decommission sewage sludge incinerator  Replace aeration basin diffuser  Install new controls (VFD) on motors  Trickling filter rehabilitation  New Pumping Plant rehabilitation  Install electrical meters and load evaluations by process area  Emerging technologies for trickling filter and nitrification optimization  New nutrient removal treatment processes  Increased recycled water production  Increased incoming wastewater strength 0 5,000,000 10,000,000 15,000,000 20,000,000 25,000,000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 El e c t r i c i t y (k W h ) RWQCP Electrical Usage Brown Electricity Green Electricity 0 10,000,000 20,000,000 30,000,000 40,000,000 50,000,000 60,000,000 70,000,000 80,000,000 0 200,000 400,000 600,000 800,000 1,000,000 1,200,000 1,400,000 2009 2010 2011 2012 2013 2014 Fu e l Vo l u m e (s c f ) Fu e l He a t En e r g y (t h e r m s ) Sewage Sludge Incinerator Auxiliary Fuel Usage LFG ‐ Heat Energy NG ‐ Heat Energy LFG ‐ Volume NG ‐ Volume 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 ATTACHMENT E 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 Page 1 Planning and Transportation Commission 1 Draft Verbatim Minutes 2 January 27, 2016 3 4 EXCERPT 5 6 Public Hearing 7 8 2501 Embarcadero Way [File 15-PLN-00371]: Request by Public Works for Site and Design Review 9 of a new two-story, 7,500 square foot, 50-foot tall building designed to handle sludge de-watering and 10 truck load-outs, with adjacent stand-by diesel generator, to be placed centrally on the Regional Water 11 Quality Control Plant site, and a new outdoor equipment area next to the existing incinerator. The 12 proposed project is the construction and operation of the facility which would be a cast‐in‐place concrete 13 structure with skylights and containing belt filter presses, truck loadout, and other miscellaneous support 14 areas. The project includes minor modifications to the yard piping system and fuel storage in a sub‐base 15 fuel tank. Environmental Assessment: An initial study and a Draft Mitigated Negative Declaration have 16 been prepared in accordance with the California Environmental Quality Act (CEQA). Zone District: Public 17 Facilities (PF) Site and Design Combining District (D). For more information, contact Amy French at 18 Amy.french@cityofpaloalto.org 19 20 [The Commission took up this item after Item Number 2.] 21 Chair Fine: On our final item for tonight. Let me get my bearings. So this is 2501 Embarcadero Way. 22 Request by Public Works for a site and design review of a new two-story 7,500 square foot, 50-foot tall 23 building designed to handle sludge dewatering and truck load-outs, you'll have to describe to us what 24 that all is, with adjacent standby diesel generator to be placed centrally on the Regional Water Control 25 Plant site and a new outdoor equipment area next to the existing incinerator. You all can read the rest. 26 Just give me one moment. So this is our chance to evaluate the Mitigated Negative Declarations in the 27 attached report and to judge the four findings necessary for the Record of Land Use Action. We can 28 recommend approve and/or changes to accomplish the objectives of the Comp Plan or the Municipal 29 Code in this. With that, I believe we have Amy French to kick off our staff report. 30 31 Amy French Chief Planning Official: Thank you, yes. Amy French, Chief Planning Official. This process 32 is, as you know, a Site and Design Review. It begins with the Planning and Transportation Commission. 33 It is followed by Architectural Review, and finally ends up with the Council. And all along the way, we 34 have a Mitigated Negative Declaration that has been prepared, circulated through the State clearinghouse 35 for comments. We've received several comments, and we are in the process of addressing those. Some 36 of the comments were attached to your staff report. We also received comments today at the close of 37 business from the same gentleman who commented prior to that. We did receive comments from one of 38 the Planning Commissioners, and we shared responses to those comments via an at-places memo. 39 40 I might just direct you to the PowerPoint. This gives, sets out the dates and the process that we're in. 41 So next step, again, we're hoping to get to the ARB on February 18th and, as we go, we're developing. 42 The applicant is here, Phil Bobel from the Public Works Department. They're getting further along with 43 their plans, with the details that the ARB had asked for. 44 45 Again, the State clearinghouse routing of the Mitigated Negative Declarations was a 30-day review 46 process. It was sent out to a number of State agencies, as you can see here. One of those is the 47 Caltrans Aeronautics Division. The first I'd heard of that. It's an oversight commission, division of 48 Caltrans for aeronautics, and we are within close proximity to the airport, within a 10,000-foot radius 49 there. You can see the map up on the screen is the Federal Aviation Administration's height restrictions 50 map. In the location, and I'll just bring the little arrow down here where the Regional Water Quality 51 Control Plant, specifically the center of the site where the proposed sludge facility is to be located. The 52 height restriction is between 129 feet and 154 feet, I believe, and the proposed stack, ventilation stack 53 ATTACHMENT F City of Palo Alto Page 2 for the building is to reach a height of 65 feet. We do allow in our Code ventilation stacks to be upwards 1 of 15 feet above the height limit. In this case, the height limit is 50 feet, and the public facilities here is 2 just basically a summary of that. We have filed with the Federal Aviation Administration group their 45-3 day review form that we are going to be hearing back about, to confirm our analysis of the height with 4 respect to the proposed height. This also goes to the County's Airport Land Use Commission 5 representative to, for dialog there. Some issues that have come up on the Mitigated Negative Dec have 6 been about odor and noise. More recently, again, yesterday, today we received some email from an 7 interested party who can't be here tonight. 8 9 And the applicant's here from Public Works and their consultants have looked at these and have answers 10 for some of these things. I put them up on the screen here. Finally, the Public Works folks have 11 prepared some really good illustrations. One of them is at places showing a view of this, the proposed 12 sludge facility before and after. On the left, I'll hold this up, is an image of what you can see today from 13 the Byxbee Park, kind of the new area of Byxbee Park that's been hydro-seeded of late, and then to the 14 right you'll see the Cor-Ten steel, the kind of rust-colored building that is the proposed sludge facility, 15 dewatering facility on the right image. I'm going to go ahead and let Phil Bobel take over. He has quite 16 a presentation to give. So I'm going to load that up. 17 18 Phil Bobel, Public Works Assistant Director: Jamie Allen is our Plant Manager. Kathy from CH2M Hill is 19 here, our designer, and Padam, our Senior Engineer at the plant is here. So our staff is part of the Public 20 Works Department, and I'm going to ask Jamie just to, in the interest of time, I know you probably don't 21 want to go into a lot of detail here, so he's going to give you an overview of the project, then I'm going 22 to take back over and in a little more detail address the comments that we've had so far from, really the 23 comments that we've had are just from three folks, but they were good comments, and I think they're 24 worth spending most of the time on those. So Jamie. 25 26 James Allen, Water Quality Control Plant Manager: Jamie Allen, Plant Manager, Public Works. The 27 treatment plant treats about 18 million gallons a day for six communities, Palo Alto, Los Altos, Los Altos 28 Hills, Stanford, Mountain View and the East Palo Alto Sanitary District. It's located at the end of 29 Embarcadero Road. There's the picture. It's got the airport and the golf course to the north, the Byxbee 30 Park and the old landfill to the south, and the Baylands to the east and a saltwater marsh we helped 31 convert to the west. It's 25 acres, industrial complex full of tanks, pumps. About 70 people work at the 32 facility to keep it running 24/7. We create recycled water as well. 33 34 We've had the incinerators in this building right here since 1972. By the time we retire them in about 35 2018, 2019, they'll be 46, 47 years old, and the main reason we're replacing them is that they're at the 36 end of their life, and they're also the largest City facility greenhouse gas contributor because of the 37 natural gas that we need to burn the sludge and run the air pollution control equipment. So we're happy 38 to get rid of them, and this project is the key piece to do that. This is a schematic. I'm not going to go 39 into this. Phil's going to take over here. 40 41 Mr. Bobel: I just wanted to quickly make sure, thanks Jamie, that everybody realized that, and we 42 admitted to you, that the sewage treatment plant is kind of the big power user among the City facilities 43 currently, and there you can see it's 27 percent of municipal operations. And the incinerator is the lion's 44 share of the emissions from the sewage treatment plant. Not surprising to most of you, I'm sure. So 45 that's what our incinerator looks like. Like Jamie says, we are all going to be glad when it goes away. A 46 major greenhouse gas savings is going to be that we won't have to use natural gas any longer. And 47 here's our projection of what this is going to do for greenhouse gases. So you can see the red bars 48 marching toward 2014, that's the latest data point on this graph, actual data point, and we've, we think 49 we've done some good things, and we've managed to reduce, but it'll be phasing out this incinerator 50 that'll really give us the real jump here and get us down to that extreme right-hand small bar where 51 we've minimizing our greenhouse gases from the facility. So we're all very excited about that. I want to, 52 we just wanted to make sure we made the connection. That's why we're doing this thing, is to be able to 53 phase out the incinerator. 54 55 City of Palo Alto Page 3 So here's our long-term facility plan footprint. It shows that brown area as the replacement area where 1 we build the facilities that will ultimately completely replace the incinerator. The project before you 2 tonight is just the dewatering facility and the truck off-haul facility. So it's an interim step that we'll be 3 utilizing for several years, where we do away with the incinerator, we dewater the solids and we take 4 them to most likely another sewage treatment plant where they'd be digested, because it's going to take 5 us a long time to build the very expensive digesters that most sewage treatment plants have. So this is 6 step one, is our dewatering facility that you're considering tonight, and it'll be along with the digesters 7 themselves in that brown area. So you can see it's sort of central to the plant. I'm not going to go into 8 that. 9 10 So here's our new facility. It's that yellow-colored thing. It's a subset of that brown area I showed you 11 in that last slide. And it's, if you recall that earlier photo, aerial, it's in an open space now, so we don't 12 need to demolish anything to build this dewatering facility, and that's good because demolishing is major 13 cost, major delay and also has environmental impacts. So we're essentially building in an area where 14 there hasn't been anything. Now immediately to the left of that is our incinerator which will eventually 15 get demolished, but that's not part of this project, to demolish that building. We're going to discontinue 16 use of the incinerator, but it's a big building with a lot of equipment in it, and we'll figure out the best 17 way to take it down over time. So that's where this building is, and this is what it looks like. 18 19 And we did have a study session with the ARB. Some of them said, gosh, this is a handsome building 20 quote/unquote, from two of them, handsome building. And another one had a different view, and I'll get 21 to that in a second when we look at the specific angles. But there's Cor-Ten steel, that's the kind of rust-22 colored stuff, and then there's concrete which is what most of our buildings are currently. So those are 23 essentially the two finishes that you see there, concrete and Cor-Ten steel. 24 25 And here is the west elevation that you see when you come into the plant, you will see when you come 26 into the plant. The doorway on the extreme left is where the trucks will come through while we're still 27 having to take this to another sewage treatment plant until we get our own digesters built. That's where 28 the trucks will come through. And this is our best depiction of what the concrete will look like. You'll see 29 the 4x8 panels, so it'll give it some grid, some definition, and then you see the pieces of Cor-Ten steel as 30 well. And this is what it looks photo-shopped into our, if you were at the front gate of the building, of 31 our plant looking essentially eastward from the front gate, this is what it looks like. And we're still, and 32 this is when I said one of the ARB members had some other ideas and used the word missed 33 opportunity, so we're taking another look at this western exposure to see if there's, is there something 34 more interesting we can do with respect to that angle, and I don't know if you want to get into that 35 tonight. It's, I suppose, mostly an ARB thing, but know that that is a thing that we are looking at, 36 possibly another window, possibly deeper scores in the concrete to give it more interest, possibly the 37 planting of more material. 38 39 I'll just show you right next to this, this is one of our tanks where we just did public art and planted these 40 vines, and so actually my favorite thing to do differently with our new building is get some vines growing 41 up next to it. We've had some success there, and I, it's actually really pretty right there. We have a 42 planting plan. You're looking down on the building in the center, and again I suppose it's mostly an ARB 43 thing, so I wouldn't go over the details of that, but that's one of our existing buildings. Shows that we 44 already have this kind of look to the concrete and this is probably what we're going to try to recreate, is 45 something that looks like our existing concrete at the other buildings. So the east elevation is the thing 46 that points toward the old yacht harbor, if you can sort of get your bearings, the opposite side from that 47 west elevation I was just showing you. This is what it would look like, and if we didn't do any successful 48 planting, this is how it would like with the current planting that that's there. So there's quite a bit of 49 planting, but this is a 50-foot building, so you can see it sticking above the existing vegetation. And with 50 that planting plan that I just showed you, well I'm showing it to you again, the architect's depiction of 51 what it would look like in, I believe it's 20 years is that, that basically we'd get the growth up, essentially 52 hiding it. So the north elevation doesn't get seen really from off the site at all, so I won't focus on that, 53 but the architect has some interesting ideas there which we liked because we'd probably use the same 54 plant I just showed you because we have it in other places, but I personally like the idea of trying to get 55 more vines growing up against the building. There that is again. 56 City of Palo Alto Page 4 1 So here's the fourth elevation, the south elevation. And it points toward the Byxbee Park, the closed 2 landfill part of Byxbee Park, and it has a combination of Cor-Ten steel and concrete. So we were asked, 3 of course, everybody wants to know well what it’s going to look like from Byxbee Park. So Byxbee Park, 4 this is an old picture, but it's the gray area. That's our old landfill, the new Byxbee Park, and we showed 5 some different exposures looking toward the sewage treatment plant. One commenter, I think Herb is 6 still here. Herb said you didn't go to the highest point in the landfill. Why don't you do that and see 7 what it looks like? Good idea, and our attorney said yeah, that was a good idea, and in fact why don't 8 you show it with and without the building, so we've done that, not in time for this slide show, but that's 9 the thing that Amy was talking about here. So we went up to the top of the hill, re-took the picture, 10 photo-shopped in our new building, and this is what it looks like. You might say this looks like a very far 11 distance away. Why did you do that? Well, we, if you go up the hill, you get further and further from 12 the thing, and these are very small slopes, so the maximum elevation at Byxbee Park is only 60 feet, but 13 you have to go quite a ways, another 1,000 feet to get there. So it looks a good bit smaller, but from 14 that closer elevation, this is what it looks like, and so our building is the one to the left, the tall thing to 15 the left. The tall thing to the right is an existing building. And here it was photo-shopped in with, 16 showing the Cor-Ten steel and so that is one of the two that you, views that you see here. 17 18 And I would just come back and show you this, because we had the comment from one of your own that 19 it was hard to read the figures here. And as Amy just said, if you blow this up and look at it carefully, 20 you find that our new building is right about here. So it's kind of between this 154-foot level and the 21 129-foot level, so that's the maximum elevation that the FAA would allow us to build. Of course, we're 22 way under that, but just Amy did misspeak a little bit. This is all in terms of mean sea level, so the mean 23 sea level value for our stack is 75, 76 ... 24 25 Male: 76.5. 26 27 Mr. Bobel: ... 76.5 whereas the drawings in other places you'll see us referring to that stack as 65 feet. 28 That's the height from the ground level, from our first-floor level. 29 30 So those are all the slides we had, but let me just sum up the other major comments that we've gotten 31 and some thoughtful ones from Herb Borock that I wanted to addressed. He asks, well wait a minute, 32 what about hydrogen sulfide gas, ammonia, odors? We know these things come from sewage sludge as 33 it sort of anaerobically decays sitting there. So remember this isn't a new feature really. It's replacing 34 the dewatering facility that we already have. Currently we have belt presses dewatering, and then go to 35 the incinerator. What we're going to be doing in the future, these, this belt press facility is 45 years old, 36 so it needs to be replaced, but we still need a dewatering belt press operation because we need to 37 reduce that weight of the material before we try to truck it anywhere. So this is a replacement of our 38 existing dewatering facility is the way to think of it. And CH2M Hill, our consultant, has tried to estimate 39 what are those kind of odor and health-related pollutants that you would be concerned about. And the 40 main ones are the ones that Herb mentioned. It's hydrogen sulfide, ammonia and just odors in general. 41 So our best estimate, engineering estimate is that those will not be any different than our current 42 situation. I won’t go into a lot of details, because it's kind of complicated. Our current situation and then 43 this new situation are a little bit different, but the bottom line is that our best engineering estimate is 44 there's not going to be an increase. There may even be a decrease, I hope, but certainly not an 45 increase. So from a CEQA perspective, there's no increase in any of those emissions or odor. So we 46 misstep, we took a, made a misstatement in part of the MND which we'll correct so that it's clear that 47 there isn't an increase there. 48 49 The other thing that came up was greenhouse gases that I already addressed, and I won't go back 50 through that, but you saw that dramatic decrease in greenhouse gases and so several people raised 51 greenhouse gases. I think we have a tremendous story there that's really one of the major reasons we're 52 doing this project in addition to the incinerator being 45 years old. So greenhouse gases, great story. 53 And I think those are the major comments. I just wanted to make sure to mention them. 54 55 City of Palo Alto Page 5 Chair Fine: Thank you. Is that all from the staff presentation? Excellent. Thanks so much. I think we 1 have two speaker cards. Let's go for those. 2 3 Vice-Chair Gardias: So we have two speaker cards. We have Herb Borock, followed by Ken Gottfredson. 4 Please take five minutes. 5 6 Herb Borock: Thank you, Chair Fine and Commissioners. Staff has said that people are going to be very 7 happy when we get rid of the incinerators, and the plan is to replace it with anaerobic digester. In 8 October 1972 everyone was happy that we put in incinerators that replaced anaerobic digesters, and it 9 was the memory of those that are summarized in (inaudible) Long Range Facilities Plan for the plant that 10 indicated the odor problems and also the fact that there was a much larger volume of sludge that needed 11 to be trucked away compared to the volume of ash that is being trucked. Phil Bobel, I had a 12 conversation with him which he essentially summarized regarding the sludge loader, dewatering and 13 load-out facility, and then the dewatering part of it replacing the existing belt filter presses. And so I 14 would think that it would be worthwhile in the MND to write that instead of just treating the new sludge 15 dewatering as if it's being compared to an existing condition where there isn't anything else going on 16 which is the way it seems to go, and that would then lead to the conclusion that he stated. 17 18 In regard to the greenhouse gases, if you look at the planned components of each of them taking place 19 for the project, then you would be saying that the greenhouse gases, as I understand it, would be a big 20 reduction because of the incinerator going away, but it's possible that component 2 will never happen, 21 and that we would continue doing either trucking out as we would in the interim or having a different 22 process. And in that case, you would have going from a state where you would have had the reduction 23 due to the incinerators being removed, and then you would be making a choice as to what will be the 24 new process and that would then be having an increase in greenhouse gases. It wouldn't be anything 25 like we have now, as I understand it, but when the idea of putting in anaerobic digester or doing 26 something else, I believe, we would have to consider that, and that would get into the comments that I 27 had about the cumulative effect. 28 29 My only other comment at this point relates to the Record of Land Use Action at the last item which was 30 the term of approval. And it says that the site and design review is good for three years, and I thought 31 that section of the Code said it was two years, and that's easily checked in the Code. Thank you. 32 33 Vice-Chair Gardias: Thank you. Next speaker is Mr. Ken Gottfredson. 34 35 Ken Gottfredson: Hi. I'll try and make this real quick. I'm from the airport, and I have a flying club 36 there. I have about 500 members, and a couple dozen flight instructors. And our concern is when they 37 do the 45-day review, I know you're underneath the plane, but there are other things that affect the 38 airport. There's, there could be a TERPS review which would possibly change the approach that goes in 39 there for IFR traffic. There's just recently an increase on the minimums because of the tower that went 40 in over Shoreline, and that wasn't, had anything to do with any height restrictions, but it did change the 41 approach, and it raised it 100 feet. And so during this FAA review, I just wondered if a TERPS study was 42 going to be included in that. Secondly, I know, from the smokestack, I don't know if it, if there's, when 43 air rises and small planes are flying over the rising air, if that's going to create some kind of turbulence 44 that might affect especially for a student pilot, it might create some kind of turbulence or something like 45 that. So I was hoping those two things would be addressed in the study. That's it. 46 47 Vice-Chair Gardias: Thank you. 48 49 Chair Fine: Thank you very much to both our speakers. Those were helpful. I'd like to turn it over to 50 the Commission for a round of questions. The first light I see is Commissioner Downing. 51 52 Commissioner Downing: If I could ask a question. What is the expected lifespan of this facility, of this 53 particular building that you're building right now? 54 55 Ms. French: Fifty years. 56 City of Palo Alto Page 6 1 Mr. Bobel: The equipment inside the building will all (inaudible) 50 years, but this concrete thing 2 (inaudible). 3 4 Commissioner Downing: So the reason why I'm asking is because it does seem clear that you guys are 5 taking account for the floodplains, (inaudible) at the 100-year flood rise built into this building. But 6 where I am getting concerned is, I mean there's studies out there saying that in the next 50 years we 7 can expect the 10-foot sea level rise, and that it seems like the flood rising, the height you've added for 8 that wouldn't account for the sea level rise as well. So what's the plan for that? How is that addressed 9 or what's the approach to that today? 10 11 Mr. Bobel: That's a great question, and it's larger than our sewage treatment plant, as you probably 12 know. So we're also working on a sea level rise staff report that's going to address in a general way that 13 question of should we be doing more at our City facilities and private-sector facilities for that matter than 14 raising the levees. Should we be changing our Building Code requirements to make say electrical stuff be 15 at a higher elevation or certain kinds of rooms be higher than our current 10.5 number? We're not taking 16 a different approach for this building than the rest of the City is taking or the rest of the City facilities are 17 taking, but it's a good question. We know we need to address it in all of the Baylands. 18 19 Commissioner Downing: You know, I think my concern is that for a lot of other buildings in Palo Alto, if 20 they don't get hit with it, I mean the worst thing that's going to happen is they're going to flood, they're 21 not going to be useful. My concern is that with this particular facility, if you guys flood, that, all of that 22 sludge ends up in the Bay, and that's a contamination that isn't present with the rest of the buildings that 23 we could be concerned about. And so that's why I'm asking about that, because I find that concerning, 24 because that's 50 years of 10-foot rise. You guys are 6 feet up, so less than 50 years you will be facing 25 that problem, so that's why I'm kind of pushing on that issue. 26 27 Mr. Bobel: It's a bigger question, though, than this particular building, I understand, but we've got 25 28 acres of buildings, and we know we need to address Citywide, you may be particularly worried about the 29 sewage sludge. Other people are more worried about our communications operations at the Municipal 30 Service Center or our airport or, everybody has their own pet facility or operation. Probably the cheapest 31 thing for the sewage treatment, if the City doesn't end up taking action that applies to facilities in 32 general, the sewage treatment plant would probably come back in and put in large pumps that would 33 keep the Bay at bay. 34 35 Commissioner Downing: If I could. How would that work? Where would these pumps go? 36 37 Mr. Bobel: Well, first you need a dike. You need a containment facility which we're working on now. 38 We're working through the safer project, the JPA project to increase the size and the heft of the levees 39 and the so-called shoreline study which is the Corps' project to tie it into the rest of our partners. So 40 between those two studies, step one is to increase the height of the levees, and then if nothing else 41 changes, the best double protection for us would be to have a different pumping system internal to the 42 plant. 43 44 Chair Fine: Vice-Chair Gardias. 45 46 Vice-Chair Gardias: Thank you. We actually talk with Chairman about the public participation, and we 47 always find valuable comments of the public that attends our meeting, and we want them to come and 48 attend our meetings frequently. And Mr. Borock is one of the frequent participants, and we value his 49 questions, and we would like to ask you just to answer the or provide the comments to the questions or 50 to the comments that they provided. So I don't know if I need to just go through this, but Mr. Borock 51 was talking about, what I understand was pretty much the carbon footprint in terms of this, how the 52 operations were restructured. And then also there was a comment about the land use that was for three 53 years. It should have been two years. And then Mr. Gottfredson was talking about FAA review and also 54 potential turbulence. So if you could just please address their comments. 55 56 City of Palo Alto Page 7 Mr. Bobel: Now? 1 2 Vice-Chair Gardias: Yes, please. 3 4 Mr. Bobel: So to start with the airport-related comments. We've, we're in a dual process with yours that 5 the FAA runs, and they will decide whether, what's the name of that? TERPS, thank you. They will 6 decide whether to do a TERPS review or not. And so that's sort of out of our hands, but the FAA process, 7 they're, they've received what they need from us, and they're running that through their system now. 8 And so we'll know that before we start construction or approve construction contracts on that. 9 10 And then the second comment also good, is what about a heated air release. So currently we have an 11 incinerator. So currently we have a lot more heated air than we will under, with this facility. This facility 12 will actually be a dramatic decrease in heated air rising above the, this treatment plant. So this stack 13 that looks so ominous there is the, a way to just protect our employees mostly and get the inside air from 14 that building up and out. It's not heated. It's just the air inside the building being exhausted. There're 15 actually two stacks. One is much lower that, where there's actually are more contaminated air that goes 16 through a two-step treatment process and then is, is then discharged. But again, that's not heated air, 17 and it's a dramatic reduction in the temperature of the Air. So the FAA can look at that if they choose to, 18 but they'll very quickly realize that this is a big plus. If there was any problem with the current situation, 19 this will reduce it. 20 21 And then Herb's comments; so Herb talked about the carbon footprint, and I was trying to address that 22 with this greenhouse gas factsheet, because all of the things one could ask about the carbon footprint 23 are all rolled up into these two data points, the current and then the 2019. So we took into account the 24 truck traffic, the amount of trips that we currently make with ash, and the amount that we make in 2019 25 with the raw sludge. We took into account the actual emissions from this process, and this is the net 26 result. So like I say, we think we have a extremely good carbon footprint story to tell, and it's one of the 27 biggest reasons we're doing this project. 28 29 Now, Herb had some other comments too that you didn't, which I tried to address and you didn't just 30 restate them. So I won't go back through them, but he had some other pollutants that he was 31 concerned about, and I tried to address those as we were going through the slides. 32 33 Vice-Chair Gardias: And that's a error, I think it was just an error of three years as opposed two years. 34 Is this ... 35 36 Mr. Bobel: I don't know. What the three year versus two year? 37 38 Cara Silver, Senior Assistant City Attorney: The Code does specify a two-year term for this permit, so 39 construction needs to start within two years of issuance of the Council's approval. 40 41 Mr. Bobel: Okay. We want to kill that dead. We want to start within a few months. 42 43 Vice-Chair Gardias: So it's going to be corrected. Very good. Thank you. If you don't mind. Thanks 44 very much for all this. 45 46 Mr. Bobel: Yeah, we'll change those things. And Herb also, one of the reasons that he went down a 47 certain path with his comments is that he was triggered by a statement in our MND which needs to be 48 changed. So I agree with you wholeheartedly. It definitely helps to have Herb going through this stuff. 49 So we'll make the changes that he helped us realize need to be changed. 50 51 Vice-Chair Gardias: Thank you very much. We appreciate you just making these changes and 52 responding to his comments. So if you don't mind, just I am going to have couple of questions from my 53 side. So in terms of the truck traffic; so there is, currently there are no trucks, so there is going to be, 54 could you tell us how many, how, what, how frequent would be the traffic, how large, what are the risks, 55 City of Palo Alto Page 8 and some other issues related with these trucking operations, the hours of the, of moving the sludge and 1 so forth? 2 3 Mr. Allen: At build out, it's up to five trucks a day. We'll probably start out with three, maybe four. And 4 that hauling contract which we'll bring to Council, we're going to look for a lot of operational flexibility so 5 that we have options to take it to various different treatment plants, but we'll be working that out in the 6 future. Right now we do one truck a week, the ash. So it's a 20:1 volume reduction using an incinerator, 7 so we do currently one ash haul-out a week. This will be for starters about 20 haul-outs a week let's say. 8 9 Mr. Bobel: The thing to know is the, one reason I'm personally excited about this project is we're 10 currently hauling the ash, sorry. We're currently hauling the ash to Beatty, Nevada, right Jamie? 11 12 Mr. Allen: We take it to a hazardous waste landfill because it's hazardous waste. 13 14 Mr. Bobel: And I forget how many miles that is, 300 approximately, I think. And so we're talking about 15 although three to five truck trips a day, I hope it can be to our neighboring Redwood City sewage 16 treatment plant which is only 20, 25 miles a day. So that's why when you do all the math on these truck 17 trips, you don't see a increase from this. 18 19 Vice-Chair Gardias: And then those trucks, I mean what's, I mean they will be loaded and leaving at 20 different, various times, because probably loading is going to take a while. 21 22 Mr. Allen: Loading is 10 to 15 minutes. 23 24 Vice-Chair Gardias: So but they will be ... 25 26 Mr. Allen: They might prefer off rush hour times, but they may, based on where they're taking it, they 27 may prefer daytime hours. So we're looking for maintaining flexibility when we set up that contract. 28 29 Vice-Chair Gardias: And what sort of trucks those are? Those are like lorries with open beds or what's ... 30 31 Mr. Allen: They're 40-foot long semis with roll, the bins that, the truck goes up so the sludge can slide 32 out the back, wherever they're going. 33 34 Vice-Chair Gardias: It's like gravel, right? 35 36 Mr. Allen: Right. 37 38 Vice-Chair Gardias: So I hope there is no risk of spilling the sludge or, because there is sometimes, and 39 gravel can spill on the motorway and puncture people's windshields. I don't think this would puncture 40 anybody's windshield, but the effect may be not pleasant. 41 42 Mr. Bobel: We haven't lost any ash yet, which is what we're currently hauling. 43 44 Vice-Chair Gardias: Thank you. So I have different comment about the structure itself which goes 45 beyond the purview, but out of curiosity. So there is, on the second floor, there is this perforated 46 weathering steel screen wall, and you provided sample of this. What is the purpose of this wall besides 47 screening? Does this have any physical use or is it just a decoration? 48 49 Mr. Allen: Yeah, it's just screening, an aesthetic value in screening of the equipment. 50 51 Vice-Chair Gardias: And the last comment is maybe from a different angle. So are you planning to open 52 this facility to public, to schools for I'll say educational facility? 53 54 Mr. Bobel: Jamie and I always disagree on this one. Go ahead, Jamie. 55 56 City of Palo Alto Page 9 Mr. Allen: Due to the industrial nature, it's not, it's only for authorized personnel, but people will be able 1 to walk around the outside of the building. 2 3 Mr. Bobel: We currently have school groups that tour the facility. We won't take them in this particular 4 building. It won't be too interesting to them anyway. 5 6 Vice-Chair Gardias: But they can see our (inaudible), they can see the basis, how this ... 7 8 Mr. Bobel: Yeah. They can see this building from the outside, and we'll have, we'll enhance and redo 9 our outreach materials so that they can see what is going on inside. 10 11 Vice-Chair Gardias: And the last question that's also not related. It's just a, there was on the edges of 12 the lot, there seem to be some unused land. Are you planning maybe just release this land for the public 13 in the future? It's like on the north end. 14 15 Mr. Allen: A lot of the perimeter areas are trees that screen the plant, screen the treatment plant so that 16 when people are using the Baylands or Byxbee Park, we are not intruding upon the visual space of the 17 Baylands. So we, if we were to lease it, we'd pretty much have to clear it and then it becomes an issue 18 of aesthetics in the park. 19 20 Mr. Bobel: Were you thinking of some of these areas where ... 21 22 Vice-Chair Gardias: That's right, on the left side. 23 24 Mr. Bobel: The left side? 25 26 Vice-Chair Gardias: Yeah. 27 28 Mr. Bobel: We'd have a lot of disappointed people if we tried to take some of those trees down, but that 29 is an option for some of our facilities, is to thin out or make that buffer smaller on Embarcadero Road 30 side. So we're considering that, but we're trying as hard as we can to keep stuff in the center of the 31 plant and keep all the vegetation that we can. 32 33 Vice-Chair Gardias: Because it's just, I know this is a different story. But there is a, for Greg Schmid and 34 myself, that we run 5 kilometers, 5,000, so there is this nice waving path that goes along your fence, and 35 then when you hit the road, then pretty much there is just a straight sidewalk, so it would be nice to 36 continue this farther along. 37 38 Mr. Bobel: Along Embarcadero Way? 39 40 Vice-Chair Gardias: That's right, Embarcadero Road. 41 42 Mr. Allen: That's the new landscaping project, Phil, where we put in a wavy path in the northern end of 43 the property. It ties in with the bike path. 44 45 Mr. Bobel: Have we done something that's prevented you from, I'm not following you exactly. 46 47 Vice-Chair Gardias: That's, the first part of this pathway is very welcoming. 48 49 Mr. Bobel: I see. 50 51 Vice-Chair Gardias: The second path, it's not, it looks like this, it's just a straight path, so it's not as nice 52 as the first portion. 53 54 Mr. Allen: Are you talking about that commercial building at the northwest corner? 55 56 City of Palo Alto Page 10 Vice-Chair Gardias: I'm talking about that portion from the incinerator building to the lower left corner. 1 2 Mr. Bobel: Maybe you can show us after ... 3 4 Vice-Chair Gardias: I will show you later. It's out of scope. 5 6 Mr. Bobel: We want to enhance all those trails around there. The current area where we're sort of 7 challenged is on the right-hand side of this. We have a complication of it being the so-called Measure E 8 site, and we're still finishing the capping on the landfill over on the right side of that drawing. So you'll 9 see an improvement there, and you'll be able to jog more successfully around that side soon. 10 11 Vice-Chair Gardias: Great. Thank you. 12 13 Chair Fine: Commissioner Tanaka. 14 15 Commissioner Tanaka: One quick question, and then I'd like to make a motion. So the quick question is, 16 so I guess in 1970 we had an aerobic digester, right? 17 18 Mr. Bobel: Nineteen what? 19 20 Commissioner Tanaka: Around 1970, a long time ago. 21 22 Mr. Bobel: Yeah. 23 24 Mr. Allen: We had an aerobic digester from 1934 to 1972. In the 1960s, the EPA said you cannot use 25 digesters anymore, because the electronics industry, heavy metals were disrupting the biological process, 26 and so the, that's what Herb mentioned. We had odors in the sludge that was being dewatered out 27 where the current landfill is. And so the digester didn't work, so we put in incinerators. Of course, since 28 then the metals have been removed from the sewage, and it would work if we put in digesters now. But 29 that's why we went with incineration at that time. 30 31 Commissioner Tanaka: So all the problems have been solved then. It will actually work now. 32 33 Mr. Bobel: Yeah, we're going full circle here. 34 35 MOTION 36 37 Commissioner Tanaka: I'd like to make recommendation, I'm sorry, a motion that, yeah, that we 38 recommend approval to the City Council. Here it is. We recommend approval of the Mitigated Negative 39 Declaration and the site and design review application for the sludge dewatering and load-out facility at 40 the Regional Water Quality Control Plant. 41 42 SECOND 43 44 Commissioner Alcheck: Second. 45 46 Chair Fine: Thank you, Commissioner Tanaka and Commissioner Alcheck. We have a motion on the 47 floor. I'll restate it in a little bit. I still have a few lights that I want to go through. I think next was 48 Commissioner Rosenblum. 49 50 Commissioner Rosenblum: My question was about the truck traffic, which was just addressed by 51 Commissioner Gardias. I have no other questions. 52 53 Chair Fine: My next light is Commissioner Alcheck. 54 55 Commissioner Alcheck: I yield (inaudible). 56 City of Palo Alto Page 11 1 Chair Fine: Commissioner Waldfogel. 2 3 Commissioner Waldfogel: Thank you. I think this is an important project, and we need to get it done. 4 I've been watching this for several years, and it's kind of, it's exciting to see the progress. But I think the 5 thing we, one thing we have to keep in mind is that now the airport is our City facility, and we don't want 6 to do anything that affects the evolving business plan for the airport. And in fact we have the option 7 under State law to, and Federal law, to set lower height limits or even to provide what's called a 8 navigation easement over the treatment plant to ensure aviation uses in that area. And as we know, 9 even the landscaping is a potential issue. The problem I have right now is that we didn't start the FAA 10 work until this week literally. And we know, we heard from of Mr. Gottfredson that obstructions that are 11 even under this FAR Part 77 surface can affect the instrument approach. They can affect aviation 12 operations. We haven't heard any analysis about whether construction will affect airport operations, 13 whether the approach will be taken out of service for certain days during construction because of crane 14 obstructions or other issues. And all these things affect the airport's business model, and so it's really 15 hard for me to support this today until we finish that work. So I guess one question is how long is it until 16 we finish that work, 'til we do a business model, a business impact analysis on the airport, 'til we 17 understand whether or not just if this meets the, this basic FAR Part 77, but if there are additional 18 impacts on air space. You know, that's not a question that I think anybody in this room can answer as of 19 this second, so when do we, when will we know the answers? 20 21 Mr. Bobel: As you probably know, the FAA says that their timeframe is a minimum of 45 days. And 22 you're right, we didn't start the process as soon as we should have. However, as a practical matter, 23 we're not anticipating any problems. We've talked to our Airport Manager, Andy Swanson. I've asked 24 him your question about the business plan. He doesn't envision modifying the business plan or, I'm just 25 not seeing how it would impact the business plan of the airport. So ... 26 27 Commissioner Waldfogel: But have we analyzed that? 28 29 Mr. Bobel: Huh? 30 31 Commissioner Waldfogel: Do we have any analysis? 32 33 Mr. Bobel: Of the business plan for the airport? 34 35 Commissioner Waldfogel: Do we have any analysis whether this, I mean since we don't know the impact 36 on airspace, do we know whether there's any impact on the airport or can we just commit that if there is 37 impact that we'll modify this project? 38 39 Mr. Bobel: I think we could commit to that, because there's so little likelihood. I mean, you've seen the 40 photographs. This is, just becomes one of many buildings at our sewage treatment plant that are of that 41 same ilk. As far as the cranes go, we submit the FAA form when we bring a new crane onsite already. 42 We had a 120-foot crane out there earlier this year, as you may know, and that's far taller than any of 43 our buildings. And so we're used to working with the airport on cranes. And will there be tall cranes out 44 there during construction? Yes. Have we had them out there many months out of the year? Yes, we 45 have cranes out there all the time, and we work with the FAA to alert them of that. So I just don't 46 foresee a problem. I mean, we, they didn't have a problem with our 120-foot crane. I can't imagine 47 they're going to have a problem with ... 48 49 Commissioner Waldfogel: You're actually, you're, I think that's a misleading response, because what the 50 FAA does with that filing is they will shut down a piece of airspace. I mean, if you say I'm putting a 51 temporary crane into an airspace, they issue a notice that says I'm shutting down something. So that is 52 a slightly misleading response. Until we talk, the tower manager isn't here, the Airport Manager isn't 53 here. We don't really know what we're talking about. 54 55 Mr. Bobel: The Airport Manager has said he doesn't anticipate any problems. I can tell you that. 56 City of Palo Alto Page 12 1 Male: Could I just say one thing (inaudible)? The Airport Manager isn't an expert on TERPS, and so he 2 isn't qualified to make (crosstalk). 3 4 Chair Fine: Let's keep public comment to public comments please. Thank you. 5 6 Mr. Allen: One thing the airport staff said is that the local staff do not make the determination of air 7 traffic safety. So asking us to make the determination of air safety isn't something that we do. But from 8 our analysis, we are below the obstruction height by 50 feet for our stack. And so we had to notify the 9 FAA because we were within a one-to-fifty surface within 10,000 feet of the end of the runway. That 10 triggers a notification requirement. Just because we notified the FAA doesn't mean that we created an 11 unsafe condition. So they, we had to submit this within 45 days before the start of construction which is, 12 it was submitted in time. We were not going to start construction within 45 days, and their review takes 13 30 to 90 days, but we're, like we said we're not anticipating any issues with the FAA. And Caltrans 14 Aeronautics has already reviewed the CEQA through the State clearinghouse, and they had no comment. 15 16 VOTE 17 18 Chair Fine: Thank you very much. I think we can all acknowledge the FAA will overrule any of us. With 19 that, I don't see any other lights. Shall we put this to a vote? So the motion as it stands is that we are 20 moving to recommend approval of the draft Mitigated Negative Declaration and approve the site and 21 design review application necessary for the Record of Land Use Action. Does that state (inaudible)? All 22 those in favor. All those against. One against. Thank you all so much. This item is closed. 23 24 MOTION PASSED 25 26 Commission Action: Commissioner Tanaka moved to approve staff recommendations, second by 27 Commissioner Alcheck. Passed 6-1 with Commissioner Waldfogel dissenting. 28 I. DESCRIPTION OF PROJECT Date: December 15, 2015 Project Name: Palo Alto Regional Water Quality Control Plant Sludge Dewatering and Loadout Facility Application Nos.: Not Applicable Address of Project: 2501 Embarcadero Way Assessor’s Parcel Numbers: 008-03-029 Applicant: City of Palo Alto Regional Water Quality Control Plant Owner: City of Palo Alto 250 Hamilton Avenue, 5th Floor Palo Alto, CA 94301 Project Description and Location: The proposed project would include the construction and operation of a sludge dewatering and truck loadout facility at the Palo Alto Regional Water Quality Control Plant (RWQCP). The City’s vision for future biosolids management encompasses the need to address the RWQCP’s aging solids handling infrastructure, to proactively comply with changing and uncertain regulations affecting biosolids, and to respond to community goals to increase the beneficial use of recovered organic resources city-wide. To respond to this, the City developed a Biosolids Facility Plan (BFP) that provides a long-term roadmap to enable the City to reliably and sustainably manage and beneficially reuse the wastewater solids produced at the RWQCP through year 2045. The BFP was developed as a companion document to the City of Palo Alto Long Range Facilities Plan for the Regional Water Quality Control Plant Final Report (LRFP). The BFP builds on the LRFP, allowing solids processing recommendations in the BFP to move forward in concert with other planned improvements at the RWQCP (as defined in the LRFP). Together, the two documents provide a comprehensive long-term plan for the RWQCP. The proposed project analyzed in this document is the dewatering and loadout facility, also known as Component 1 of the BFP. The dewatering and loadout facility would have independent utility as a backup sludge dewatering and haul off facility that can be used long-term even if additional BFP components are not built. The proposed project includes the construction of a new building to accommodate the installation of four belt filter presses. The project also includes mechanisms to convey the resulting cake from the belt filter presses to three storage bins, and to load the cake from the bins into trucks. These activities would occur within the new ATTACHMENT G dewatering and truck loadout facility building. The new building would be a two story, cast‐in‐place concrete structure that would contain space for the belt filter presses, truck loadout, and other miscellaneous support areas. The facility would have a building footprint of approximately 7,500 square feet and a building height of 50 feet. The facility would include a robust system for odor control. The roof would include removable skylights over the BFPs for the purpose of facilitating future removal/replacement. These skylights would also provide light into the room, reducing the need for electric lights during the daytime. Various minor modifications to the yard piping system would be needed in order to accommodate the new facility. In addition to the dewatering and truck loadout facility itself, a standby diesel engine generator will be installed to provide backup. The generator is sized to handle the load for the facility as well as other nearby facilities. Fuel storage will be provided by means of a sub‐base fuel tank. II. DETERMINATION In accordance with the City of Palo Alto’s procedures for compliance with the California Environmental Quality Act (CEQA), the City has conducted an Initial Study to determine whether the proposed project could have a significant effect on the environment. On the basis of that study, the City makes the following determination: ________ The proposed project COULD NOT have a significant effect on the environment, and a NEGATIVE DECLARATION is hereby adopted. ___X____ Although the project, as proposed, could have a significant effect on the environment, there will not be a significant effect on the environment in this case because mitigation measures have been added to the project and, therefore, a MITIGATED NEGATIVE DECLARATION is hereby adopted. The initial study prepared for this project described above incorporates all relevant information regarding the potential environmental effects of the project and confirms the determination that an EIR is not required for the project. The following describes the areas of analysis and any mitigation measures incorporated into the proposed project in accordance with CEQA: A. AESTHETICS. The project will not have a significant impact on aesthetics or visual resources, therefore no mitigation is required. B. AGRICULTURAL RESOURCES. The project will not have a significant impact on agricultural resources, therefore no mitigation is required. C. AIR QUALITY. The project will not have a significant impact on air quality, therefore no mitigation is required. D. BIOLOGICAL RESOURCES. Impact BIO (a): The proposed project may have a substantial adverse effect, either directly or through habitat modifications, on any species identified as candidate, sensitive, or special-status species. Avoidance Measures for Special-Status Wildlife Species. The proposed project includes the following avoidance and minimization measures to reduce impacts on species covered by the MBTA during construction to a less-than-significant level:  Pre-construction nesting surveys will be conducted before undertaking work during the nesting season (February through August). Any nest found within 50 feet for songbirds and 300 feet for raptors will be avoided, and a designated construction-free buffer zone will be established until the nests are no longer active.  Biological monitoring of work activities for active bird nests found during the nesting season will be conducted by a qualified biologist.  A qualified biologist will conduct onsite informational meetings with all construction personnel before construction begins. The purpose of these training sessions will be to familiarize construction personnel with the procedures regarding nesting birds they are to follow if they are encountered. E. CULTURAL RESOURCES. The project will not have a significant impact on cultural resources, therefore no mitigation is required. F. GEOLOGY, SOILS, AND SEISMICITY. The project will not have a significant impact on geology, soils, and seismicity, therefore no mitigation is required. G. GREENHOUSE GAS EMISSIONS. The project will not have a significant impact on greenhouse gas emissions, therefore no mitigation is required. H. HAZARDS AND HAZARDOUS MATERIALS. The project will not have a significant impact on hazards and hazardous materials, therefore no mitigation is required. I. HYDROLOGY AND WATER QUALITY. The project will not have a significant impact on hydrology and water quality, therefore no mitigation is required. J. LAND USE AND PLANNING. The project will not have a significant impact on land use and planning, therefore no mitigation is required. K. MINERAL RESOURCES. The project will not have a significant impact on mineral resources, therefore no mitigation is required. L. NOISE. The project will not have a significant impact on noise, therefore no mitigation is required. M. POPULATION AND HOUSING. The project will not have a significant impact on population and housing, therefore no mitigation is required. N. PUBLIC SERVICES. The project will not have a significant impact on public services, therefore no mitigation is required. O. RECREATION. The project will not have a significant impact on recreation, therefore no mitigation is required. P. TRANSPORTATION AND TRAFFIC. The project will not have a significant impact on transportation and traffic, therefore no mitigation is required. Q. UTILITIES AND SERVICE SYSTEMS. The project will not have a significant impact on utilities and service systems, therefore no mitigation is required. R. MANDATORY FINDINGS OF SIGNIFICANCE. As indicated throughout this Initial Study, impacts on all environmental resources were deemed to result in either ‘no impact,’ a ‘less-than-significant impact,’ or ‘less than significant with mitigation incorporation.’ As a result, the project with proposed mitigation measures would not create environmental effects that would degrade the quality of the environment, substantially reduce the habitat of a fish or wildlife species, cause a fish or wildlife population to drop below self-sustaining levels, threaten to eliminate a plant or animal community, reduce the number or restrict the range of a rare or endangered plant or animal community, or eliminate important examples of major periods of California history or prehistory. PUBLIC REVIEW PERIOD The public review period begins on December 15, 2015 and ends on January 13, 2016. Comments on the Draft Mitigated Negative Declaration may be submitted to: Amy French, Chief Planning Official City of Palo Alto 250 Hamilton Avenue, 5th Floor Palo Alto, CA 94301 _______________________________ _________________________ Project Planner Date INITIAL STUDY Palo Alto Regional Water Quality Control Plant Sludge Dewatering and Loadout Facility Project Prepared for City of Palo Alto 250 Hamilton Ave, 5th Floor Palo Alto, CA 94301 December 2015 2485 Natomas Park Drive Suite 600 Sacramento, CA 95833 Contents Section Page Acronyms and Abbreviations .............................................................................................................. v 1. Background Information ..................................................................................................... 1-1 1.1 Project Title ...................................................................................................................... 1-1 1.2 Lead Agency Name and Address ...................................................................................... 1-1 1.3 Lead Agency Contact Person and Phone Number ........................................................... 1-1 1.4 Project Location ............................................................................................................... 1-1 1.5 Project Sponsor’s Name and Address .............................................................................. 1-1 1.6 General Plan Designation ................................................................................................. 1-1 1.7 Zoning .............................................................................................................................. 1-1 1.8 Background and Description of the Project ..................................................................... 1-1 1.8.1 Project Features .................................................................................................. 1-2 1.8.2 Project Construction ........................................................................................... 1-2 1.8.3 Operations and Maintenance ............................................................................. 1-3 1.8.4 Permits and Approvals ........................................................................................ 1-3 2. Environmental Determination ............................................................................................. 2-1 2.1 Environmental Factors Potentially Affected .................................................................... 2-1 2.2 Determination .................................................................................................................. 2-1 3. Evaluation of Environmental Impacts .................................................................................. 3-1 3.1 Aesthetics ......................................................................................................................... 3-1 3.1.1 Setting ................................................................................................................. 3-1 3.1.2 Impact Analysis ................................................................................................... 3-1 3.2 Agriculture and Forest Resources .................................................................................... 3-2 3.2.1 Setting ................................................................................................................. 3-2 3.2.2 Impact Analysis ................................................................................................... 3-3 3.3 Air Quality ........................................................................................................................ 3-3 3.3.1 Setting ................................................................................................................. 3-4 3.3.2 Impact Analysis ................................................................................................... 3-4 3.4 Biological Resources ........................................................................................................ 3-7 3.4.1 Setting ................................................................................................................. 3-8 3.4.2 Impact Analysis ................................................................................................... 3-9 3.5 Cultural Resources ......................................................................................................... 3-11 3.5.1 Setting ............................................................................................................... 3-11 3.5.2 Impact Analysis ................................................................................................. 3-12 3.6 Geology and Soils ........................................................................................................... 3-13 3.6.1 Setting ............................................................................................................... 3-13 3.6.2 Impact Analysis ................................................................................................. 3-13 3.7 Greenhouse Gas Emissions ............................................................................................ 3-15 3.7.1 Setting ............................................................................................................... 3-15 3.7.2 Impact Analysis ................................................................................................. 3-16 3.8 Hazards and Hazardous Materials ................................................................................. 3-17 3.8.1 Setting ............................................................................................................... 3-17 3.8.2 Impact Analysis ................................................................................................. 3-18 3.9 Hydrology and Water Quality ........................................................................................ 3-19 3.9.1 Setting ............................................................................................................... 3-20 EN0717151040SAC/658394 (ISMND_ADMINDRAFT) iii CONTENTS Section Page 3.9.2 Impact Analysis ................................................................................................. 3-20 3.10 Land Use and Planning ................................................................................................... 3-22 3.10.1 Setting ............................................................................................................... 3-22 3.10.2 Impact Analysis ................................................................................................. 3-22 3.11 Mineral Resources ......................................................................................................... 3-23 3.11.1 Setting ............................................................................................................... 3-23 3.11.2 Impact Analysis ................................................................................................. 3-23 3.12 Noise .............................................................................................................................. 3-24 3.12.1 Setting ............................................................................................................... 3-24 3.12.2 Impact Analysis ................................................................................................. 3-24 3.13 Population and Housing ................................................................................................. 3-25 3.13.1 Setting ............................................................................................................... 3-26 3.13.2 Impact Analysis ................................................................................................. 3-26 3.14 Public Services................................................................................................................ 3-26 3.14.1 Setting ............................................................................................................... 3-26 3.14.2 Impact Analysis ................................................................................................. 3-27 3.15 Recreation ...................................................................................................................... 3-27 3.15.1 Setting ............................................................................................................... 3-27 3.15.2 Impact Analysis ................................................................................................. 3-28 3.16 Transportation/Traffic ................................................................................................... 3-28 3.16.1 Setting ............................................................................................................... 3-28 3.16.2 Impact Analysis ................................................................................................. 3-29 3.17 Utilities and Service Systems ......................................................................................... 3-30 3.17.1 Setting ............................................................................................................... 3-30 3.17.2 Impact Analysis ................................................................................................. 3-30 3.18 Mandatory Findings of Significance ............................................................................... 3-32 4. List of Preparers .................................................................................................................. 4-1 4.1 CH2M HILL ........................................................................................................................ 4-1 5. References .......................................................................................................................... 5-1 Appendix A Air Quality and Greenhouse Gas Emissions Output Files Tables 1 Project Construction Emissions and Comparisons to 2010 Baaqmd CEQA Thresholds 2 Project Construction Greenhouse Gas Emissions Figure 1 Project Location 2 Site Plan 3 Architectural Elevations iv EN0717151040SAC/658394 (ISMND_ADMINDRAFT) Acronyms and Abbreviations ADC alternative daily cover BAAQMD Bay Area Air Quality Management District BFP Biosolids Facility Plan BMP best management practice CalEEMod California Emissions Estimator Model CalRecycle California Department of Resources Recycling and Recovery CAPCOA California Air Pollution Control Officers Association CDFW California Department of Fish and Wildlife CEQA California Environmental Quality Act CFC California Fire Code CFR Code of Federal Regulations CGP Construction General Permit CH4 methane City City of Palo Alto CO carbon monoxide CO2 carbon dioxide CWA Clean Water Act dBA a-weighted decibels DMG Division of Mines and Geology DOC California Department of Conservation FEMA Federal Emergency Management Agency GHG greenhouse gas IS Initial Study LRFP City of Palo Alto Long Range Facilities Plan for the Regional Water Quality Control Plant Final Report MGD million gallons per day MBTA Migratory Bird Treaty Act N2O nitrous oxide NOx oxides of nitrogen NPDES National Pollutant Discharge Elimination System O3 ozone OHWM ordinary high water mark PC Planned Community EN0717151040SAC/658394 (ISMND_ADMINDRAFT) v ACRONYMS AND ABBREVIATIONS PF Public Facilities PM2.5 particulate matter with aerodynamic diameter equal to or less than 2.5 microns PM10 particulate matter with aerodynamic diameter equal to or less than 10 microns proposed project sludge dewatering and loadout facility project PRC Public Resources Code ROG reactive organic gases ROLM(E) Research, Office and Limited Manufacturing Subdistrict - Embarcadero RWQCP Regional Water Quality Control Plant SFBRWQCB San Francisco Bay Regional Water Quality Control Board SOx sulfur oxide SRA Shaded Riverine Aquatic (type of habitat) SWPPP stormwater pollution prevention plan USACE U.S. Army Corps of Engineers USEPA U.S. Environmental Protection Agency USFWS U.S. Fish and Wildlife Service WDR waste discharge requirements vi EN0717151040SAC/658394 (ISMND_ADMINDRAFT) SECTION 1 Background Information 1.1 Project Title Palo Alto Regional Water Quality Control Plant Sludge Dewatering and Loadout Facility Project 1.2 Lead Agency Name and Address City of Palo Alto 250 Hamilton Avenue, 5th Floor Palo Alto, CA 94301 1.3 Lead Agency Contact Person and Phone Number Amy French, AICP Chief Planning Official City of Palo Alto (650) 329-2336 1.4 Project Location The project is located within the existing Regional Water Quality Control Plant (RWQCP), which is located in Palo Alto at the southern end of the San Francisco Bay in Santa Clara County, California. Access to the site is via U.S. Highway 101, and Embarcadero Rd, approximate latitude/longitude 37°27’8.39”N/ 122° 6’40.47”W. See Figure 1. 1.5 Project Sponsor’s Name and Address Mr. Padmakar M. Chaobal, P.E. City of Palo Alto Regional Water Quality Control Plant 2501 Embarcadero Way Palo Alto, CA 94303 1.6 General Plan Designation The Palo Alto Comprehensive Plan 1998-2010 (updated June 2014) designates the project site as Major Institution/Special Facilities. This land use designation allows for institutional, academic, governmental, and community service uses and lands that are either publicly owned or operated as non-profit organizations. 1.7 Zoning The project site is zoned as Public Facilities with a site and design review overlay, PF (D). 1.8 Background and Description of the Project This Initial Study (IS) is being prepared by the City of Palo Alto (City) to identify and analyze the anticipated environmental impacts of the proposed sludge dewatering and loadout facility project (proposed project) in Palo Alto, California. The proposed project would include the construction and EN0717151040SAC/658394 (ISMND_ADMINDRAFT) 1-1 SECTION 1 – BACKGROUND INFORMATION operation of a sludge dewatering and truck loadout facility at the Palo Alto Regional Water Quality Control Plant (RWQCP). The City has prepared this IS as lead agency to comply with the California Environmental Quality Act (CEQA). This document also identifies Standard Project Conditions and mitigation measures that would be implemented to reduce project impacts to a less than significant level. The City of Palo Alto has operated the RWQCP for more than 80 years. Originally constructed in 1934, the RWQCP is an advanced treatment facility that provides treatment and disposal of wastewater for the cities of Palo Alto, Mountain View, and Los Altos; the Town of Los Altos Hills; the East Palo Alto Sanitary District; and Stanford University. The RWQCP has undergone several expansions and upgrades throughout the years and currently has a designed average dry weather flow capacity of 39 million gallons per day (MGD) and a current average flow of about 18 MGD. The RWQCP effluent is partly discharged to the San Francisco Bay, and partly diverted to the RWQCP recycled water facility for reuse. The City’s vision for future biosolids management encompasses the need to address the RWQCP’s aging solids handling infrastructure, to proactively comply with changing and uncertain regulations affecting biosolids, and to respond to community goals to increase the beneficial use of recovered organic resources city-wide. To respond to this, the City developed a Biosolids Facility Plan (BFP) that provides a long-term roadmap to enable the City to reliably and sustainably manage and beneficially reuse the wastewater solids produced at the RWQCP through year 2045. The BFP was developed as a companion document to the City of Palo Alto Long Range Facilities Plan for the Regional Water Quality Control Plant Final Report (LRFP) (Carollo Engineers, 2012). The BFP builds on the LRFP, allowing solids processing recommendations in the BFP to move forward in concert with other planned improvements at the RWQCP (as defined in the LRFP). Together, the two documents provide a comprehensive long-term plan for the RWQCP. The project analyzed in this is the dewatering and loadout facility, also known as Component 1 of the BFP. The dewatering and loadout facility would have independent utility as a backup sludge dewatering and haul off facility that can be used long-term even if additional BFP components are not built. 1.8.1 Project Features The proposed project includes the construction of a new building to accommodate the installation of four belt filter presses. The project also includes mechanisms to convey the resulting cake from the belt filter presses to three storage bins, and to load the cake from the bins into trucks. These activities would occur within the new dewatering and truck loadout facility building. The new building would be a two story, cast-in-place concrete structure that would contain space for the belt filter presses, truck loadout, and other miscellaneous support areas. The facility would have a building footprint of approximately 7,500 square feet and a building height of 50 feet. The facility would include a robust system for odor control. The roof would include removable skylights over the belt filter presses for the purpose of facilitating future removal/ replacement. These skylights would also provide light into the room, reducing the need for electric lights during the daytime. Various minor modifications to the yard piping system would be needed in order to accommodate the new facility. The location of the new dewatering and loadout facility within the existing RWQCP is shown on Figure 2. Building elevation drawings are shown on Figure 3. In addition to the dewatering and truck loadout facility itself, a standby diesel engine generator will be installed to provide backup. The generator is sized to handle the load for the facility as well as other nearby facilities. Fuel storage will be provided by means of a sub-base fuel tank. 1.8.2 Project Construction The sludge dewatering and loadout facility would be constructed over a period of approximately 24 months, beginning in April 2016 and continuing through Spring 2018. Project construction would 1-2 EN0717151040SAC/658394 (ISMND_ADMINDRAFT) SECTION 1 – BACKGROUND INFORMATION consist of site preparation and minor demolition activities; building construction; and equipment installation, startup, and testing. Most of the construction activities would occur during building construction, which would include modifications to nearby yard piping. Construction access would be from Embarcadero Way, and is expected to average 10 vehicles per day (counted as 20 trips per day) over the construction period. 1.8.3 Operations and Maintenance The dewatering and truck loadout facility is part of the RWQCP solids processing system. The belt filter presses are large machines that use physical pressure to separate solids from the liquid waste stream (i.e., dewatering). All dewatering activities will occur within the new building, effectively isolating the continuous machinery operations from the environment. Compressed solids produced by the belt filter presses – the “cake” – would be conveyed to the bins for offsite disposal. Trucks would enter the building through a roll-up door on the southwest side, and would receive the waste load from the overhead bins. Up to five trucks per day (counted as ten trips per day) are expected to fully meet the waste load generated by the dewatering operations. The BFP provides several options for beneficial reuse within the Bay Area and surrounding counties. The project does not require specialized maintenance, and all facilities would undergo routine maintenance as part of overall RWQCP operations. 1.8.4 Permits and Approvals Construction of the proposed project would require permits and approvals from the following agencies. • Bay Area Air Quality Management District (BAAQMD) – Authority to Construct/Permit to Operate • State Water Resources Control Board (SWRCB) – Clean Water State Revolving Fund grant funding EN0717151040SAC/658394 (ISMND_ADMINDRAFT) 1-3 WT0508151059SAC Figure_1_V2.ai tdaus 07.15.2015 FIGURE 1Project Location Sludge Dewatering and Loadout FacilityCity of Palo AltoPalo Alto, CA North 0 1,000500 Approximate scale in feet LEGEND Project Location 101 Project Location San Jose Palo Alto San Francisco Hayward Emba r c a d e r o R o a d Palo Alto WWTPPalo Alto WWTP WT0508151059SAC Figure_2.ai tdaus 05.26.2015 FIGURE 2Site PlanSludge Dewatering and Loadout FacilityCity of Palo AltoPalo Alto, CA WT0508151059SAC Figure_3.ai tdaus 05.26.2015 FIGURE 3aArchitectural Elevations Sludge Dewatering and Loadout FacilityCity of Palo AltoPalo Alto, CA WT0508151059SAC Figure_3.ai tdaus 05.26.2015 FIGURE 3bArchitectural Elevations Sludge Dewatering and Loadout FacilityCity of Palo AltoPalo Alto, CA SECTION 2 Environmental Determination 2.1 Environmental Factors Potentially Affected The environmental factors checked below would be potentially affected by this project, i.e. involve at least one impact that is a “Potentially Significant Impact” as indicated by the checklist on the following pages. Aesthetics Agriculture Resources Air Quality Biological Resources Cultural Resources Geology/Soils Greenhouse Gas Emissions Hazards & Hazardous Materials Hydrology/Water Quality Land Use/Planning Mineral Resources Noise Population/Housing Public Services Recreation Transportation/Traffic Utilities/Service Systems Mandatory Findings of Significance 2.2 Determination Determination: (To be completed by the Lead Agency) On the basis of this initial evaluation: I find that the proposed project COULD NOT have a significant effect on the environment, and a NEGATIVE DECLARATION will be prepared. I find that although the proposed project could have a significant effect on the environment, there will not be a significant effect in this case because revisions in the project have been made by or agreed to by the project proponent. A MITIGATED NEGATIVE DECLARATION will be prepared. I find that the proposed project MAY have a significant effect on the environment, and an ENVIRONMENTAL IMPACT REPORT is required. I find that the proposed project MAY have a “potentially significant impact” or “potentially significant unless mitigated” impact on the environment, but at least one effect 1) has been adequately analyzed in an earlier document pursuant to applicable legal standards, and 2) has been addressed by mitigation measures based on the earlier analysis as described on attached sheets. An ENVIRONMENTAL IMPACT REPORT is required, but it must analyze only the effects that remain to be addressed. I find that although the proposed project could have a significant effect on the environment, because all potentially significant effects (a) have been analyzed adequately in an earlier ENVIRONMENTAL IMPACT REPORT or NEGATIVE DECLARATION pursuant to applicable standards, and (b) have been avoided or mitigated pursuant to that earlier ENVIRONMENTAL IMPACT REPORT or NEGATIVE DECLARATION, including revisions or mitigation measures that are imposed upon the proposed project, nothing further is required. Signature Date Title Agency EN0717151040SAC/658394 (ISMND_ADMINDRAFT) 2-1 SECTION 3 Evaluation of Environmental Impacts 3.1 Aesthetics Would the project: Potentially Significant Impact Less-Than- Significant with Mitigation Incorporation Less-Than-Si gnificant Impact No Impact a. Have a substantial adverse effect on a scenic vista? b. Substantially damage scenic resources, including, but not limited to, trees, rock outcroppings, and historic buildings within a state scenic highway? c. Substantially degrade the existing visual character or quality of the site and its surroundings? d. Create a new source of substantial light or glare which would adversely affect day or nighttime views in the area? 3.1.1 Setting The RWQCP is within an urbanized area of the City of Palo Alto, and the sludge dewatering and loadout facility would be located approximately in the middle of the existing plant. Adjacent land uses are a commercial/light industrial business park to the west, the Palo Alto Airport to the north, and Baylands and park uses to the east and south. Distances from the closest edge of the sludge dewatering and loadout facility site are as follows: • California Self Storage adjacent to RWQCP, at nearest building – 195 feet. • Business park office building across from RWQCP entrance, at building frontage – 475 feet. • Palo Alto Airport, at entrance road – 850 feet. • Palo Alto Baylands east of the site, at closest point of the trail – 500 feet. • Palo Alto Baylands/Byxbee Park south of the site, at Embarcadero road entrance – 600 feet. 3.1.2 Impact Analysis a. Would the project have a substantial adverse effect on a scenic vista? NO IMPACT. The project is not located in an area that contains scenic vistas. b. Would the project substantially damage scenic resources, including, but not limited to, trees, rock outcroppings, and historic buildings within a state scenic highway? NO IMPACT. The proposed project is not located within a state scenic highway and does not contain scenic resources. c. Would the project substantially degrade the existing visual character or quality of the site and its surroundings? LESS-THAN-SIGNIFICANT IMPACT. The project site is located on RWQCP site. Views toward the site from most nearby uses (e.g., mini-storage, office buildings, airport) have low visual character and quality consistent with the low-density urban setting. High-quality views from the adjacent Palo Alto EN0717151040SAC/658394 (ISMND_ADMINDRAFT) 3-1 SECTION 3 – EVALUATION OF ENVIRONMENTAL IMPACTS Baylands, including an unpaved trail, are toward the bay itself. Inland views from the Baylands are dominated by Embarcadero Road, and by two prominent tank features on the RWQCP site – the north and south fixed film reactors. The new sludge dewatering and loadout facility may be visible from portions of the Baylands, most likely from due north at the trail access from Embarcadero Road. However, the scale of the building would be consistent with other visible RWQCP features such as the solids incineration building. Additionally, the project is required to obtain site and design review approval from the City of Palo Alto. Meeting the City’s approval findings would ensure the project’s aesthetic compatibility with the surrounding area. Because the project would be located on an existing RWQCP, would be similar in scale to existing features, and would meet the City’s approval findings, the visual character and quality of views from the Palo Alto Baylands would not be substantially degraded. Impacts would be less than significant. d. Would the project create a new source of substantial light or glare which would adversely affect day or nighttime views in the area? NO IMPACT. The project is located within the existing RWQCP site, and does not include any additional lighting other than incidental, downward-facing safety lighting. Therefore there would be no impact. 3.2 Agriculture and Forest Resources Would the project: Potentially Significant Impact Less-Than- Significant with Mitigation Incorporation Less-Than- Significant Impact No Impact a. Convert Prime Farmland, Unique Farmland, or Farmland of Statewide Importance (Farmland), as shown on the maps prepared pursuant to the Farmland Mapping and Monitoring Program of the California Resources Agency, to non-agricultural use? b. Conflict with existing zoning for agricultural use, or a Williamson Act contract? c. Conflict with existing zoning for, or cause rezoning of, forest land (as defined in Public Resources Code (PRC) Section 12220(g) or timberland (as defined in PRC Section 4526), or timberland zoned Timberland Production (as defined by Government Code section 51104(g))? d. Result in the loss of forest land or conversion of forest land to non-forest use? e. Involve other changes in the existing environment which, due to their location or nature, could result in conversion of Farmland, to non-agricultural use or conversion of forest land to non-forest use? 3.2.1 Setting The dewatering and loadout facility would be constructed on the already existing Palo Alto RWQCP. The RWQCP location is designated as Major Institution/Special Facilities by the City of Palo Alto. 3-2 EN0717151040SAC/658394 (ISMND_ADMINDRAFT) SECTION 3 – EVALUATION OF ENVIRONMENTAL IMPACTS 3.2.2 Impact Analysis a. Would the project convert Prime Farmland, Unique Farmland, or Farmland of Statewide Importance, as shown on the maps prepared pursuant to the Farmland Mapping and Monitoring Program of the California Resources Agency, to non-agricultural use? NO IMPACT. The project is not located on or near land designated for agricultural use as defined by the Farmland Mapping and Monitoring Program or the Williamson Act. The project is located on an existing wastewater treatment plant site in a commercial/industrial zoned area. No farmlands are present nor would any agricultural lands be converted to non-agricultural use; therefore there would be no impact. b. Would the project conflict with existing zoning for agricultural use, or a Williamson Act contract? NO IMPACT. The proposed project is not located on land zoned for agriculture or under a Williamson Act contract. c. Would the project conflict with existing zoning for, or cause rezoning of, forest land (as defined in PRC section 1220(g)) or timberland (as defined in PRC section 4526)? NO IMPACT. No forest or timber land is present at the project site or in the project vicinity nor would be affected by the project. d. Would the project result in the loss of forest land or conversion of forest land to non-forest use? NO IMPACT. No forest land is present at the project site or in the project vicinity nor would be affected by the project. e. Would the project involve other changes in the existing environment which, due to their location or nature, could result in the conversion of Farmland, to non-agricultural use? NO IMPACT. The project would not involve other changes that could result in the conversion of farmland to non-agricultural use. 3.3 Air Quality Would the project: Potentially Significant Impact Less-Than- Significant with Mitigation Incorporation Less-Than- Significant Impact No Impact a. Conflict with or obstruct implementation of the applicable air quality plan? b. Violate any air quality standard or contribute substantially to an existing or projected air quality violation? c. Result in a cumulatively considerable net increase of any criteria pollutant for which the project region is non- attainment under an applicable federal or state ambient air quality standard (including releasing emissions which exceed quantitative thresholds for ozone (O3) precursors)? d. Expose sensitive receptors to substantial pollutant concentrations? e. Create objectionable odors affecting a substantial number of people? EN0717151040SAC/658394 (ISMND_ADMINDRAFT) 3-3 SECTION 3 – EVALUATION OF ENVIRONMENTAL IMPACTS 3.3.1 Setting The proposed project is located in Santa Clara County within the San Francisco Bay Area air basin. Santa Clara County is currently designated as nonattainment for the federal standards for ozone and particulate matter with aerodynamic diameter equal to or less than 2.5 microns (PM 2.5,), and maintenance for carbon monoxide (CO). Under state standards, the project area is designated as nonattainment for ozone, particulate matter with aerodynamic diameter equal to or less than 10 microns (PM10), and PM2.5. The project area is designated as attainment/unclassified for all other pollutants. Construction activities have the potential to generate air pollutants that degrade air quality and increase local human exposure to air contaminants. The Bay Area Air Quality Management District (BAAQMD) has published guidelines for evaluating, measuring, and mitigating a project’s air quality impacts, including impacts associated with criteria air pollutants (such as ozone and particulate matter) and toxic air contaminants (BAAQMD, 2012). 3.3.2 Impact Analysis a. Would the project conflict with or obstruct implementation of the applicable air quality plan? NO IMPACT. The most recent air quality plan prepared by BAAQMD in response to federal planning requirements is the San Francisco Bay Area 2001 Ozone Attainment Plan for the 1-hour National Ozone Standard (BAAQMD, 2001). BAAQMD also adopted the Bay Area 2010 Clean Air Plan in September 2010, which provides an integrated, multi-pollutant control strategy to reduce emissions of ozone, particulates, air toxics, and greenhouse gases (GHGs) (BAAQMD, 2010a). The project would be constructed in compliance with the applicable BAAQMD regulations and policies and best management practices (BMPs), and would be implemented to reduce criteria pollutant emissions. Therefore, project activities would be consistent with the regional and local air quality planning strategy, with no impact to air quality. b. Would the project violate any air quality standard or contribute substantially to an existing or projected air quality violation? LESS-THAN-SIGNIFICANT IMPACT. Construction of the proposed project would cause temporary minor increases in ambient air pollutant concentrations. BAAQMD adopted new CEQA thresholds of significance in June 2010 (BAAQMD, 2010b). Although the adoption of the new thresholds are the subject of recent judicial actions (BAAQMD, 2012), the Lead Agency concluded that Appendix D of the BAAQMD CEQA Air Quality Guidelines (BAAQMD, 2010b), in combination with BAAQMD’s Revised Draft Options and Justification Report (BAAQMD, 2009), provide substantial evidence to support the BAAQMD-recommended thresholds. Therefore, the BAAQMD 2010 thresholds were used in this analysis to evaluate the significance of the project’s impacts. Short-term construction emissions of ozone precursors (oxides of nitrogen [NOx] and reactive organic gases [ROG]), CO, oxides of sulfur (SOx), PM10, and PM2.5 were evaluated. Construction emissions were estimated using methodology consistent with the California Emissions Estimator Model (CalEEMod) (California Air Pollution Control Officers’ Association [CAPCOA], 2013). Emissions from onroad vehicles (delivery trucks, material haul trucks, pickup trucks, and worker commute vehicles) and offroad vehicles (fuel and water trucks) were calculated using emission factors from EMFAC2014 for the year 2016 vehicle fleet in Santa Clara County and default trip distances from the CalEEMod User’s Guide (ENVIRON, 2013). Fugitive dust emissions (PM10 and PM2.5) from on- and offroad vehicle travel were estimated using methodology from AP-42 (U.S. Environmental Protection Agency [EPA], 2011; EPA, 2006). Emissions from construction equipment were calculated using default horsepower ratings, load factors, and emission factors from the CalEEMod User’s Guide (ENVIRON, 2013). Fugitive dust emissions (PM10 and PM2.5) from disturbed surfaces and 3-4 EN0717151040SAC/658394 (ISMND_ADMINDRAFT) SECTION 3 – EVALUATION OF ENVIRONMENTAL IMPACTS material handling, as either cut/fill or aggregates, were estimated using methodology from the Software User’s Guide: URBEMIS2007 for Windows (Jones & Stokes Associates, 2007) and/or the CalEEMod User’s Guide (ENVIRON, 2013). Off-gassing emissions (ROG) from paving activities were estimated using emission factors from the CalEEMod User’s Guide (ENVIRON, 2013). Project-specific construction schedules and equipment/vehicle usage were used to determine the sequence of activities and potential overlap in resulting construction emissions. Appendix A contains the complete construction emission calculations and assumptions used. Estimated construction emissions would be below BAAQMD thresholds, as shown in Table 1. table 1 Project Construction Emissions and Comparisons to 2010 BAAQMD CEQA Thresholds ROG (lb/day) CO (lb/day) NOx (lb/day) SOx (lb/day) PM10 Exhaust (lb/day) PM2.5 Exhaust (lb/day) PM10 Fugitive Dust (lb/day) PM2.5 Fugitive Dust (lb/day) 2016 (Average Daily) 4 25 47 0.1 2 2 80 15 BAAQMD 2010 Threshold (Daily Average Emissions, lb/day) 54 N/A 54 N/A 82 54 N/A N/A Exceed BAAQMD CEQA Threshold? No N/A No N/A No No N/A N/A Notes: Thresholds are from BAAQMD CEQA Guidelines (BAAQMD, 2010b) N/A = not applicable Construction emissions would be below the BAAQMD CEQA thresholds. During construction, the project would not violate any air quality standard or contribute substantially to an existing or projected air quality violation. In addition, the proposed project would implement applicable criteria pollutant control measures identified by the BAAQMD in its latest CEQA guidelines (BAAQMD, 2012). Applicable construction emission control measures may include, but are not limited to, the following: • All exposed surfaces (for example, parking areas, staging areas, soil piles, graded areas, and unpaved access roads) shall be watered twice per day. • All haul trucks transporting soil, sand, or other loose material offsite shall be covered. • All visible mud or dirt track-out onto adjacent public roads shall be removed using wet power vacuum street sweepers at least once a day. The use of dry power sweeping is prohibited. • All vehicle speeds on unpaved roads shall be limited to 15 miles per hour. • All roadways, driveways, and sidewalks to be paved shall be completed as soon as possible. Building pads shall be laid as soon as possible after grading unless seeding or soil binders are used. • Idling times shall be minimized either by shutting equipment off when not in use or reducing the maximum idling time to 5 minutes (as required by the California airborne toxics control measure Title 13, Section 2485 of California Code of Regulations). Clear signage shall be provided for construction workers at all access points. EN0717151040SAC/658394 (ISMND_ADMINDRAFT) 3-5 SECTION 3 – EVALUATION OF ENVIRONMENTAL IMPACTS • All construction equipment shall be maintained and properly tuned in accordance with manufacturer’s specifications. All equipment shall be checked by a certified visible emissions evaluator. • A publicly visible sign shall be posted with the telephone number and person to contact at the Lead Agency regarding dust complaints. This person shall respond and take corrective action within 48 hours. The BAAQMD’s phone number shall also be visible to ensure compliance with applicable regulations. Once the few facility is operational, all equipment would be powered by electricity with the exception of the diesel-powered emergency backup generator. The generator would be permitted by the BAAQMD to operate on an emergency basis, with limited periodic testing, consistent with Air Resources Board emissions standards. In addition, there would be negligible emissions from the five trucks per day used to haul the dewatered solids for offsite reuse. Construction and operation of the project would not violate any air quality standard or contribute substantially to an existing or projected air quality violation and therefore would have less-than-significant impacts. c. Would the project result in a cumulatively considerable net increase of any criteria pollutant for which the project region is non-attainment under an applicable federal or state ambient air quality standard (including releasing emissions which exceed quantitative thresholds for ozone precursors)? LESS-THAN-SIGNIFICANT IMPACT. In developing thresholds of significance for air pollutants, BAAQMD considered the emission levels for which a project’s individual emissions would be cumulatively considerable (BAAQMD, 2010c). Projects that do not exceed the significance thresholds are not considered to be cumulatively significant. As described above, project construction emissions would be lower than the BAAQMD significance thresholds. Additionally, the construction emissions would be temporary, and the maximum daily emissions would occur for only a portion of the construction period. Because the project would emit pollutants below the thresholds of significance for an individual project, it would not result in a cumulative considerable emission increase of nonattainment pollutants (PM10, PM2.5, and the ozone precursors NOx and ROG), and the air quality impact on nonattainment criteria pollutants would be less than significant. d. Would the project expose sensitive receptors to substantial pollutant concentrations? LESS-THAN-SIGNIFICANT IMPACT. As discussed in previous sections, project construction emissions would be temporary and below the BAAQMD CEQA thresholds and therefore would not expose nearby receptors to a substantial amount of criteria pollutants. Exhaust emissions from construction equipment contain toxic air contaminants, such as diesel particulate matter, that have potential cancer and non-cancer chronic health effects. The project site is bounded by office/commercial land use on the west side, and otherwise by open space. The closest residential receptor is approximately 3,275 feet to the northwest, and the closest school is more than 1 mile from the site. Given the distance, short-term construction emissions would not expose sensitive receptors to substantial pollutant concentrations. In addition, the project construction is required to implement the BMPs and follow emission control measures, including minimizing idling times and maintaining equipment in good condition. These measures will help minimize any potential exposure to construction-related pollutants. Therefore, impacts would be less than significant. 3-6 EN0717151040SAC/658394 (ISMND_ADMINDRAFT) SECTION 3 – EVALUATION OF ENVIRONMENTAL IMPACTS e. Would the project create objectionable odors affecting a substantial number of people? LESS-THAN-SIGNIFICANT IMPACT. The sludge dewatering and loadout facility would be a new source of odor at the RWQCP. In addition, changes to overall RWQCP sludge handling processes may affect odor generation from other units that feed sludge to the new dewatering facility. Existing RWQCP operations include odor-control treatments such as adding sodium hypochlorite to sludge prior to storage. These practices would continue under the proposed project. The project also includes the addition of an odor-control system, likely a two-stage system consisting of a biotrickling filter followed by a mixed media adsorber. This type of system is proven to be effective in sharply reducing the concentration of odorous substances in wastewater treatment facilities. Odor is regulated by the BAAQMD (Regulation 7 – Odorous Substances) as a two-part process. First, thresholds are triggered only if the BAAQMD receives odor complaints from at least 10 individuals in a 90-day period. If sufficient complaints are received, then the generator must demonstrate that odors at the property line are not odorous after dilution with four parts of odor-free air. In other words, a dilution-to-threshold ratio (D/T) of no greater than 5 must be met. Air dispersion modeling conducted for the project indicates that odors at the property line would be substantially less than the 5 D/T threshold. Based on the expected performance of the odor-control system and the results of dispersion modeling, odor impacts would be less than significant. 3.4 Biological Resources Would the project: Potentially Significant Impact Less-Than- Significant with Mitigation Incorporation Less-Than- Significant Impact No Impact a. Have a substantial adverse effect, either directly or through habitat modifications, on any species identified as a candidate, sensitive, or special status species in local or regional plans, policies, or regulations, or by the California Department of Fish and Game or U.S. Fish and Wildlife Service? b. Have a substantial adverse effect on any riparian habitat or other sensitive natural community identified in local or regional plans, policies, regulations or by the California Department of Fish and Game or U.S. Fish and Wildlife Service? c. Have a substantial adverse effect on federally protected wetlands as defined by Section 404 of the Clean Water Act (CWA) (including, but not limited to, marsh, vernal pool, coastal, etc.) through direct removal, filling, hydrological interruption, or other means? d. Interfere substantially with the movement of any native resident or migratory fish or wildlife species or with established native resident or migratory wildlife corridors, or impede the use of native wildlife nursery sites? e. Conflict with any local policies or ordinances protecting biological resources, such as a tree preservation policy or ordinance? f. Conflict with the provisions of an adopted Habitat Conservation Plan, Natural Community Conservation Plan, or other approved local or regional habitat conservation plan? EN0717151040SAC/658394 (ISMND_ADMINDRAFT) 3-7 SECTION 3 – EVALUATION OF ENVIRONMENTAL IMPACTS 3.4.1 Setting The project site is within a highly developed area in Palo Alto, within the middle of the existing RWQCP. One biotic habitat was identified within the project area: developed/ruderal lands. Vegetation. The lands within the RWQCP including the project footprint are developed and accented by patches of ornamental shrubs and trees such as privet (Ligustrum vulgare), myoporum (Myoporum laetum), and blue gum (Eucalyptus globulus). Ruderal vegetation includes invasive forbs and nonnative annual grasses including Italian thistle (Carduus pycnocephalus), black mustard (Brassica nigra) and wild oats (Avena fatua). Native natural communities do not occur on the site. The boundaries of the Palo Alto Baylands nature preserve occur approximately 500 feet to the east and 800 feet to the south of the site. A tall, dense thicket of privet trees line the eastern boundary of the site creating a natural barrier between the site, the adjacent roadway (Embarcadero Road), and the preserve lands to the east. The southern portion of the RWQCP developed lands is lined with coast live oak trees (Quercus agrifolia) and Embarcadero Road separate the project site and the preserve lands to the south. To the north and northwest is the Palo Alto Airport of Santa Clara County and the Palo Alto Golf Course. Additional commercial properties occur to the west. Wildlife. Developed areas can support certain wildlife species adapted to the unique nesting and foraging opportunities found there, but wildlife abundance and diversity is generally low in these areas. Striped skunk (Mephitis mephitis), raccoon (Procyon lotor), and Virginia opossum (Didelphis virginiana) occur regularly in urban habitats. Bird species adapted to urban landscapes include house finch (Carpodacus mexicanus), northern mockingbird (Mimus polyglottos), mourning dove (Zenaida macroura), house sparrow (Passer domesticus), and rock dove (Columba livia). The Palo Alto Baylands preserve is home to a variety of native resident wildlife species. Common birds include great and snowy egrets (Ardea alba and Egretta thula), great blue heron (Ardea herodias), black- crowned night heron (Nycticorax nycticorax), green-winged teal (Anas crecca), mallard (Anas platyrhnchos), northern pintail (Anas acuta), American coot (Fulica americana), killdeer (Charadrius vociferus), black-necked stilt (Himantopus mexicanus), and American avocet (Recurvirostra americana). Small mammals such as red fox (Vulpes vulpes), deer mouse, and California vole are also known to occur. Populations of two federally-and state endangered wildlife species, the California clapper rail (Rallus longirostris obsoletus) and saltmarsh harvest mouse (Reithrodontomys raviventris), occur in the tidal salt marsh habitats within the region. The aquatic habitat is also known to be nursery grounds for several special-status salmonid species including Central California Coast steelhead (Oncorhynchus mykiss). Although the project site is within 500 feet of the preserve, native marshland and aquatic habitats are absent from the site. Special-Status Species. The developed/ruderal lands identified on the project site are limited in size and generally disturbed characterized by compact gravel surfaces, thereby precluding occurrence of most special-status species in the region, which typically occur in open grassland, marshlands, and woodlands. Furthermore, the sparely vegetated areas onsite are dominated by nonnative and invasive plant species, which significantly reduces their capacity to support special-status wildlife species. Therefore, special- status species known from the region including the California clapper rail and saltmarsh harvest mouse, are not expected to occur at the project site. Special-status bird species known from the region may fly over the site when migrating from the southern end to the north end of the preserve. However, these sensitive birds are not expected to stop and forage within the project site due to the lack of suitable foraging habitat and increased human activity. The California Natural Diversity Database was queried for special-status species records within a 5-mile radius of the project site (CDFW, 2015). None of the plant species known from the region are expected to occur as suitable habitat conditions including alkaline and clay soils within the project site do not 3-8 EN0717151040SAC/658394 (ISMND_ADMINDRAFT) SECTION 3 – EVALUATION OF ENVIRONMENTAL IMPACTS exist. In addition, special-status wildlife species, including the federally- and state-endangered California clapper rail and saltmarsh harvest mouse, are not expected to occur onsite as suitable native habitats including coastal salt marshlands, are not present. The closest known occurrences for both the California clapper rail and saltmarsh harvest mouse are approximately 1 mile northeast of the project site within salt marsh habitats just south of the Dumbarton Bridge. Common bird species adapted to urban lands may nest in the ornamental vegetation onsite during the nesting season (February to August). Nesting birds are covered under the Migratory Bird Treaty Act (MBTA) and would be considered a sensitive resource if active nests occur onsite during construction. Ordinance-Size Trees. The City of Palo Alto Tree Ordinance defines trees in three categories according to the Palo Alto Municipal Code, Title 8, Trees and Vegetation: 1) protected trees; 2) street trees; and 3) designated trees. Each category is defined below. • Category 1: All coast live oak, valley oak (Quercus lobata) trees that are 11.5-inches or greater in diameter (36-inches in circumference measured at 54-inches above natural grade) and coast redwood (Sequoia sempervirens) trees that are 18-inches or greater in diameter (57-inches in circumference measured at 54-inches above natural grade) and Heritage Trees, individual trees of any size or species designated as such by City Council. • Category 2: All trees growing within the street right-of-way (publicly-owned), outside of private property. • Category 3: All trees, when associated with a development project, that are specifically designated by the City to be saved and protected on a public or private property which is subject to a discretionary development review (such as a variance, home improvement exception, architectural review, site and design, subdivision, etc.). Tree removal is considered a minor change to the existing site plan—and requires review approval from the Planning Division. Three blue gum trees ranging from 30-35 inches in circumference and six coast redwood plantings ranging from 15 to 18 inches in circumference measured at 54-inches above natural grade were observed onsite. The six coast redwood trees were planted by the RQWCP as part of a tree experiment using recycled water. The nine trees onsite would not fall under Categories 1 or 2 of the tree ordinance, and would not likely fall under Category 3. 3.4.2 Impact Analysis a. Would the project have a substantial adverse effect, either directly or through habitat modifications, on any species identified as candidate, sensitive, or special-status species in local or regional plans, policies, or regulations, or by the California Department of Fish and Game or U.S. Fish and Wildlife Service? LESS-THAN-SIGNIFICANT IMPACT WITH MITIGATION INCORPORATED. Impacts on Special-Status Plant Species. The project area does not contain suitable habitat for special-status plants as suitable habitat conditions including alkaline and clay soils do not exist onsite. The reconnaissance survey was conducted during the blooming periods for most species, and none were observed within or adjacent to the project site. In addition, none of these species are known from past occurrences to be within or adjacent to the project site (CDFW, 2015). Therefore, special-status plant species are presumed to be absent and no further surveys are warranted. Impacts on these species are considered to be negligible. Impacts on Wildlife, Including Special-Status Species. Several special-status wildlife species have the potential to occur in the eastern and southern areas of the project region within the Palo Alto Baylands preserve; however none of these species are expected to occur onsite due to the developed nature of the site, lack of suitable marshland habitat, and the increased human activity EN0717151040SAC/658394 (ISMND_ADMINDRAFT) 3-9 SECTION 3 – EVALUATION OF ENVIRONMENTAL IMPACTS associated with the existing RWQCP operations. Special-status birds may occur as occasional flyovers during the spring and fall migration periods, but because these special-status bird species are not likely to forage or nest in the project area, the project construction activities would not result in significant impacts. In addition, avoidance measures, including preconstruction nesting surveys, biological monitoring, and establishing construction-free buffer zones as described below would be implemented during the nesting season (February through August) to protect birds covered under the MBTA that may nest within the project area. Therefore, impacts on resident and migratory birds in the area would be reduced to a less-than-significant level. Wildlife currently found in and around the project site is likely tolerant to levels of disturbance typically associated with ongoing operations of the RWQCP, air traffic from the existing airport to the north, and surrounding industrial and commercial development. The visual and acoustic disturbance to wildlife associated with the proposed project is not expected to be significantly higher than what currently exists, and wildlife in the adjacent areas are expected to habituate to these new levels of disturbance. The RWQCP is closed at 5pm; therefore, impacts on nocturnal wildlife would not be expected. Avoidance Measures for Special-Status Wildlife Species. The proposed project includes the following avoidance and minimization measures to reduce impacts on species covered by the MBTA during construction to a less-than-significant level: • Pre-construction nesting surveys will be conducted before undertaking work during the nesting season (February through August). Any nest found within 50 feet for songbirds and 300 feet for raptors will be avoided, and a designated construction-free buffer zone will be established until the nests are no longer active. • Biological monitoring of work activities for active bird nests found during the nesting season will be conducted by a qualified biologist. • A qualified biologist will conduct onsite informational meetings with all construction personnel before construction begins. The purpose of these training sessions will be to familiarize construction personnel with the procedures regarding nesting birds they are to follow if they are encountered. b. Would the project have a substantial adverse effect on any riparian habitat or other sensitive natural community identified in local or regional plans, policies, or regulations, or by the California Department of Fish and Game or U.S. Fish and Wildlife Service? NO IMPACT. Because all construction activities associated with the proposed project would occur within graveled surfaces, paved roads, and other previously disturbed areas, no temporary or permanent construction impacts or ongoing operations impacts are anticipated to sensitive habitats identified by CDFW or USFWS. c. Would the project have a substantial adverse effect on federally protected wetlands as defined by Section 404 of the CWA (including, but not limited to, marsh, vernal pool, coastal, etc.) through direct removal, filling, hydrological interruption, or other means? NO IMPACT. Federally protected wetlands, as defined by Section 404 of the Clean Water Act, do not occur within the project area; therefore, no permanent or temporary impacts would occur as a result of construction. In addition, natural water features do not occur within the project area. Therefore, no permanent or temporary impacts on wetland or other aquatic resources are expected. 3-10 EN0717151040SAC/658394 (ISMND_ADMINDRAFT) SECTION 3 – EVALUATION OF ENVIRONMENTAL IMPACTS d. Would the project interfere substantially with the movement of any native resident or migratory fish or wildlife species or with established native resident or migratory wildlife corridors, or impede the use of native wildlife nursery sites? NO IMPACT. Because all construction activities associated with the proposed project would occur within the existing developed RWQCP site, the project would not disturb any natural habitats including riparian, wetland, or aquatic habitats used by local wildlife species. Therefore, the proposed construction and operation activities would not interfere with the movement of native resident or migratory fish, wildlife species, native resident or migratory wildlife corridors, or impede the use of native wildlife nursery sites because these are not currently onsite. Changes in vegetation from removal of nonnative, invasive herbaceous species would not present significant barriers to movement of fish or wildlife. e. Would the project conflict with any local policies or ordinances protecting biological resources, such as a tree preservation policy or ordinance? LESS-THAN-SIGNIFICANT IMPACT. The project would not conflict with any local policies or ordinances protecting biological resources. Tree pruning may be required for construction access and up to nine non-ordinance-sized trees may be removed including three blue gum trees and six coast redwood plantings previously planted as part of a recycled water use experiment conducted by the RWQCP. Tree removal would not conflict with the City of Palo Alto Tree Ordinance. f. Would the project conflict with the provisions of an adopted Habitat Conservation Plan, Natural Community Conservation Plan, or other approved local, regional, or state habitat conservation plan? NO IMPACT. The project would not conflict with the provisions of a Habitat Conservation Plan or Natural Community Conservation Plan, or other governmental habitat conservation plan. The site is outside of the boundaries of the nearest Habitat Conservation Plan (Santa Clara Valley Habitat Plan); therefore, there would be no impact. 3.5 Cultural Resources Would the project: Potentially Significant Impact Less-Than- Significant with Mitigation Incorporation Less-Than- Significant Impact No Impact a. Cause a substantial adverse change in the significance of a historical resource as defined in §15064.5? b. Cause a substantial adverse change in the significance of an archaeological resource pursuant to §15064.5? c. Directly or indirectly destroy a unique paleontological resource or site or unique geologic feature? d. Disturb any human remains, including those interred outside of formal cemeteries? 3.5.1 Setting The proposed project site is within the existing City of Palo Alto RWQCP, which is completely developed and paved. The original ground surface is not visible. Prior to human settlement, the project area consisted of coastal littoral land cover characterized by a series of microenvironments including estuaries, bays, marshes, and grassy terraces. Although it was originally salt marsh, the RWQCP property EN0717151040SAC/658394 (ISMND_ADMINDRAFT) 3-11 SECTION 3 – EVALUATION OF ENVIRONMENTAL IMPACTS is situated entirely on imported fill that was placed from the early 1930s to the 1950s for the development of the RWQCP and other nearby uses including the airport and golf course (William Self Associates, 2007). Although the site has been used for wastewater treatment purposes since 1934, no pre-1950s buildings remain on the site. 3.5.2 Impact Analysis a. Would the project cause a substantial adverse change in the significance of a historical resource as defined in §15064.5? NO IMPACT. A records and information search was conducted at the Northwest Information Center at Sonoma State University. The results from this search indicated that there were no recorded historical sites within the project area or within 0.25 mile of the project. Additionally, the record search showed that three cultural resources were conducted within 0.25 mile of the project area; however, no cultural materials were identified in any of the three studies (William Self Associates, 2007). Additionally, a field study of the project area did not identify any historical resources within or around the project site. There would be no impact to historical resources as a result of this project. b. Would the project cause a substantial adverse change in the significance of an archaeological resource pursuant to §15064.5? LESS THAN SIGNIFICANT IMPACT. The project site and its surrounding area was prehistorically open marshland, but is now completely paved and developed. Given the location of the project area and its relation to its original (native) context along the marshy bank of the Palo Alto Baylands, it is possible that the prehistoric people utilized the project area for hunting and raw material procurement, but it’s less likely that it would have been a suitable location for permanent habitation (William Self Associates, 2007). A records and information search conducted at the Northwest Information Center at Sonoma State University indicated that no previously recorded archaeological resources have been identified in the project area or within 0.25 mile of the surrounding area (William Self Associates, 2007). As such, there is a low potential for exposing significant archaeological resources during construction. Additionally, the record search showed that three cultural resources were conducted within 0.25 mile of the project area; however, no cultural materials were identified in any of the three studies (William Self Associates, 2007). If archeological resources are exposed during construction, work would stop in accordance with applicable local, state, and federal regulations until such time that the resources can be evaluated by a qualified archaeologist and appropriate mitigation actions can be implemented. Based on these standard requirements, impacts would be less than significant. c. Would the project directly or indirectly destroy a unique paleontological resource or site or unique geologic feature? NO IMPACT. No impacts to paleontological resources are expected because the project site is already highly disturbed as a result of past activities. Work would be done either in an existing roadway or in areas previously disturbed. Since the project site and much of the surrounding area has been previously graded and developed, these deposits are likely to have a low potential to contain fossil resources, and are thus, considered to have little to no paleontological sensitivity. d. Would the project disturb any human remains, including those interred outside of formal cemeteries? LESS THAN SIGNIFICANT IMPACT. No recorded instances of prehistoric or historic human remains are known to be within or adjacent to the project area. In the event of an unexpected discovery of human remains, California Health and Safety Code (Section 7050.5[b]) would be followed and the County 3-12 EN0717151040SAC/658394 (ISMND_ADMINDRAFT) SECTION 3 – EVALUATION OF ENVIRONMENTAL IMPACTS Coroner would be notified. Based on these standard requirements, impacts would be less than significant. 3.6 Geology and Soils Would the project: Potentially Significant Impact Less-Than- Significant with Mitigation Incorporation Less-Than- Significant Impact No Impact a. Expose people or structures to potential substantial adverse effects, including the risk of loss, injury, or death involving: i) Rupture of a known earthquake fault, as delineated on the most recent Alquist-Priolo Earthquake Fault Zoning Map issued by the State Geologist for the area or based on other substantial evidence of a known fault? Refer to Division of Mines and Geology Special Publication 42. ii) Strong seismic ground shaking? iii) Seismic-related ground failure, including liquefaction? iv) Landslides? b. Result in substantial soil erosion or the loss of topsoil? c. Be located on a geologic unit or soil that is unstable, or that would become unstable as a result of the project, and potentially result in onsite or offsite landslide, lateral spreading, subsidence, liquefaction, or collapse? d. Be located on expansive soil, as defined in Table 18-1-B of the Uniform Building Code (1994), creating substantial risks to life or property? e. Have soils incapable of adequately supporting the use of septic tanks or alternative wastewater disposal systems where sewers are not available for the disposal of wastewater? 3.6.1 Setting A geotechnical analysis was conducted for the project area (CH2M HILL, 2015). The project site is located in Palo Alto, which is a relatively flat portion of the Santa Clara Valley. The project site has an elevation of approximately 10 feet. The geotechnical analysis described the subsurface conditions as consisting of medium dense to very dense sand and soft to stiff lean clay. While the entire state is a seismically active area, the project site is not located within any California-designated Alquist-Priolo Zone. 3.6.2 Impact Analysis a. Would the project expose people or structures to potential substantial adverse effects, including the risk of loss, injury, or death involving: i) Rupture of a known earthquake fault, as delineated on the most recent Alquist-Priolo Earthquake Fault Zoning Map issued by the State Geologist for the area or based on other EN0717151040SAC/658394 (ISMND_ADMINDRAFT) 3-13 SECTION 3 – EVALUATION OF ENVIRONMENTAL IMPACTS 3‐14 EN0717151040SAC/658394 (ISMND_ADMINDRAFT) substantial evidence of a known fault? Refer to Division of Mines and Geology Special Publication 42. NO IMPACT. There are no Alquist‐Priolo Earthquake Fault Zones that have been designated at the Palo Alto RWQCP. Additionally, the project site is not identified by the County of Santa Clara as being in a County Fault Rupture Hazard Zone. Therefore there would be no impact as a result of this project. ii) Strong seismic ground shaking? LESS‐THAN‐SIGNIFICANT IMPACT. It is expected that the site would be subject to seismic events over the life of the project. The project is designed to incorporate standard construction specifications and recommendations consistent with the 2013 California Building Code (CBC, 2013) and as recommended by the American Society of Civil Engineers’ ASCE‐7 – Minimum Design Loads for Buildings and Other Structures (ASCE, 2010). Compliance with these standards would ensure that the project could withstand these types of events; therefore, impacts resulting from seismic events would be less than significant. iii) Seismic‐related ground failure, including liquefaction? LESS‐THAN‐SIGNIFICANT IMPACT. The project location consists of subsurface soils that are not susceptible to liquefaction (CH2M HILL, 2015). While it is possible that some of the soils identified in the geotechnical memorandum have the possibility to liquefy during an earthquake, the overall potential for liquefaction is low. Additionally, the project is designed to incorporate standard construction specifications and recommendations consistent with the 2013 California Building Code (CBC, 2013) and as recommended by the American Society of Civil Engineers’ ASCE‐7 – Minimum Design Loads for Buildings and Other Structures (ASCE, 2010). Therefore, there would be a less‐than‐significant impact as a result of this project. iv) Landslides? NO IMPACT. The project location is flat with no potential for landslides or mudflows. b. Would the project result in substantial soil erosion or the loss of topsoil? LESS‐THAN‐SIGNIFICANT IMPACT. The project site is flat, with little potential for soil erosion. As described in Section 3.9.2(a), erosion and water quality impacts would be minimized during construction by following standard practices for erosion control. Therefore, impacts would be less than significant. c. Would the project be located on a geologic unit or soils that is unstable, or that would become unstable as a result of the project, and potentially result in an onsite or offsite landslide, lateral spreading, subsidence, liquefaction, or collapse? LESS‐THAN‐SIGNIFICANT IMPACT. The project would not be located on a geologic unit or soils that are unstable or that would become unstable as a result of the project, potentially resulting in an onsite or offsite landslide, lateral spreading, subsidence, liquefaction, or collapse. The project is designed to incorporate standard construction specifications and recommendations consistent with the 2013 California Building Code (CBC, 2013) and as recommended by the American Society of Civil Engineers’ ASCE‐7 – Minimum Design Loads for Buildings and Other Structures (ASCE, 2010). Additionally, the project would be completed using the most up‐to‐date construction and engineering techniques to ensure safe construction; therefore, there would be a less‐than‐ significant impact. SECTION 3 – EVALUATION OF ENVIRONMENTAL IMPACTS d. Would the project be located on expansive soil, as defined in Table 18-1-B of the Uniform Building Code (1994), creating substantial risks to life or property? LESS-THAN-SIGNIFICANT IMPACT. The project would be designed and constructed to avoid or minimize potential damage from expansive soils. As stated in the geotechnical analysis (CH2MHILL, 2015), the project would incorporate standard construction specifications and recommendations consistent with the 2013 California Building Code (CBC, 2013) and as recommended by the American Society of Civil Engineers’ ASCE-7 – Minimum Design Loads for Buildings and Other Structures (ASCE, 2010). Based on complying with these requirements, impacts would be less-than-significant. e. Would the project have soils incapable of adequately supporting the use of septic tanks or alternative wastewater disposal systems where sewers are not available for the disposal of wastewater? NO IMPACT. The project does not include the use of septic tanks for alternative wastewater disposal systems. Therefore, there would be no impact. 3.7 Greenhouse Gas Emissions Would the project: Potentially Significant Impact Less-Than- Significant with Mitigation Incorporation Less-Than- Significant Impact No Impact a. Generate greenhouse gas (GHG) emissions, either directly or indirectly, that may have a significant impact on the environment? b. Conflict with any applicable plan, policy, or regulation of an agency adopted for the purpose of reducing the emissions of GHGs? 3.7.1 Setting Various gases in the earth’s atmosphere play an important role in moderating the earth’s surface temperature. Solar radiation enters earth’s atmosphere from space and a portion of the radiation is absorbed by the earth’s surface. The earth emits this radiation back toward space, but the properties of the radiation change from high-frequency solar radiation to lower-frequency infrared radiation. GHGs are transparent to solar radiation, but are effective in absorbing infrared radiation. Consequently, radiation that would otherwise escape back into space is retained, resulting in a warming of the earth’s atmosphere. This phenomenon is known as the greenhouse effect. GHGs include both naturally occurring and anthropogenic gases that trap heat in the earth’s atmosphere. GHGs include, but are not limited to, carbon dioxide (CO2), methane, nitrous oxide, hydrochlorofluorocarbons, perfluorocarbons, and sulfur hexafluoride. Although there is disagreement as to the speed of global warming and the extent of the impacts attributable to human activities, the majority of the scientific community now agrees that there is a direct link between increased emission of GHGs and long-term global temperature. In the United States, the main source of GHG emissions is electricity generation, followed by transportation. In California, however, transportation sources (passenger cars, light-duty trucks, other trucks, buses, and motorcycles) make up the largest category of GHG-emitting sources (CARB, 2013). In 2011, the annual California statewide GHG emissions were 448.11 million metric tons of CO2-equivalent (CARB, 2013). The transportation sector accounts for about 38 percent of the statewide GHG emissions EN0717151040SAC/658394 (ISMND_ADMINDRAFT) 3-15 SECTION 3 – EVALUATION OF ENVIRONMENTAL IMPACTS inventory. The electric power sector accounts for about 19 percent of the total statewide GHG emissions inventory. The dominant GHG emitted is CO2, primarily from fossil fuel combustion. 3.7.2 Impact Analysis a. Would the project generate GHG emissions, either directly or indirectly, that may have a significant impact on the environment? LESS-THAN-SIGNIFICANT IMPACT. There are no GHG emission thresholds for construction activities in BAAQMD’s 2010 thresholds of significance. Rather, the guidelines suggest evaluating impact significance in relation to meeting GHG reduction strategies. The operational threshold for GHGs from stationary source operations is 10,000 metric tons per year. The threshold for other non- stationary source projects is 1,100 metric tons per year (BAAQMD, 2010c). GHG impacts from the proposed project were based on the GHG emissions from offroad construction equipment and on- and offroad vehicle usage during the construction period. CO2 emissions from offroad construction equipment and on- and offroad vehicles were estimated using methodology described in Section 3.3.2. The project is not expected to result in measurable emissions of other GHGs. Appendix A contains the complete construction calculations used to assess GHG impacts. Table 2 Project Construction Greenhouse Gas Emissions CO2 (Million Metric Tons/Year) 2016 through 2018 Emissions 0.001 2007 BAAQMD Inventory 95.8 2010 State Inventory 448.11 State GHG Goal 2020 (Assembly Bill 32) 427 The GHG emissions from project construction would be temporary and would occur only during the approximately 24 months of construction from April 2016 through Spring 2018. GHG emissions from construction would be temporary and negligible compared to the local and State GHG inventory. Once the few facility is operational, all equipment would be powered by electricity with the exception of the diesel-powered emergency backup generator. The generator would be permitted by the BAAQMD to operate on an emergency basis, with limited periodic testing, consistent with Air Resources Board emissions standards. In addition, there would be negligible emissions from the five trucks per day used to haul the dewatered solids for offsite reuse. The minimal GHG emissions during construction and operation are not expected to contribute substantially to the regional GHG emissions inventory, or contribute to global climate change. Therefore, the project would result in a less-than-significant impact from GHG emissions. b. Would the project conflict with any applicable plan, policy, or regulation of an agency adopted for the purpose of reducing the emissions of GHGs? NO IMPACT. The BAAQMD established a climate protection program in 2005 to explicitly acknowledge the link between climate change and air quality, and has prepared a GHG emissions inventory to support its climate protection activities. Based on the BAAQMD inventory, total GHG emissions within the San Francisco Bay Area air basin were 95.8 million metric tons in 2007 (BAAQMD, 2010d). 3-16 EN0717151040SAC/658394 (ISMND_ADMINDRAFT) SECTION 3 – EVALUATION OF ENVIRONMENTAL IMPACTS As shown in Table 2, the short-term construction GHG emissions would be negligible compared to the State or BAAQMD GHG inventories and GHG emissions goal for 2020. The project would not interfere with the Assembly Bill 32 Scoping Plan and the long-term goal of Assembly Bill 32 to reduce GHG emissions to 1990 levels by 2020. The proposed project would not conflict with applicable plans, policies, or regulations intended to reduce GHG emissions and would, therefore, have no impact on climate change. 3.8 Hazards and Hazardous Materials Would the project: Potentially Significant Impact Less-Than- Significant with Mitigation Incorporation Less-Than- Significant Impact No Impact a. Create a significant hazard to the public or the environment through the routine transport, use, or disposal of hazardous materials? b. Create a significant hazard to the public or the environment through reasonably foreseeable upset and accident conditions involving the release of hazardous materials into the environment? c. Emit hazardous emissions or handle hazardous or acutely hazardous materials, substances, or waste within one-quarter mile of an existing or proposed school? d. Be located on a site, which is included on a list of hazardous materials sites compiled pursuant to Government Code Section 65962.5 and, as a result, would it create a significant hazard to the public or the environment? e. For a project located within an airport land use plan, or where such a plan has not been adopted, within two miles of a public airport or public use airport, would the project result in a safety hazard for people residing or working in the project area? f. For a project within the vicinity of a private airstrip, would the project result in a safety hazard for people residing or working in the project area? g. Impair implementation of or physically interfere with an adopted emergency response plan or emergency evacuation plan? h. Expose people or structures to a significant risk of loss, injury, or death involving wildland fires, including where wildlands are adjacent to urbanized areas or where residences are intermixed with wildlands? 3.8.1 Setting The project is located at the existing RWQCP, a publicly owned treatment works managed by the City of Palo Alto. The RWQCP uses various chemicals as part of its normal operations. The project involves changes in the solids dewatering and handling processes, and would not affect other wastewater treatment operations including most of the existing chemical uses. EN0717151040SAC/658394 (ISMND_ADMINDRAFT) 3-17 SECTION 3 – EVALUATION OF ENVIRONMENTAL IMPACTS 3.8.2 Impact Analysis a. Create a significant hazard to the public or the environment through the routine transport, use, or disposal of hazardous materials? LESS-THAN-SIGNIFICANT IMPACT. Project construction will involve the use of construction equipment at the site for approximately 17 months. The type of equipment used would be typical for industrial building construction, and could result in some potential for release of hazardous materials such as fuel, oil, and similar pollutants derived from vehicle use. Given the small size of the construction project and the limited number of vehicles expected to be required for construction, the potential for impacts is small. In addition, the job site would be maintained consistent with standard construction requirements for pollution and water quality control. For these reasons, impacts would be less than significant. Any residual pollution from construction equipment could be transported by stormwater runoff, but all onsite drainage is captured and treated as part of the wastewater treatment system - this would be effective for pollutant removal. Project operations would involve the transport of biosolids from the project site for offsite beneficial reuse. Potential impact would be limited as biosolids would be treated consistent with applicable federal regulations. California’s biosolids program is regulated by USEPA Region IX pursuant to 40 Code of Federal Regulations (CFR) 503, “Standards for the Use and Disposal of Sewage Sludge” (i.e., the 503 Rule). The 503 Rule establishes standards such as pollutant limits, pathogen reduction requirements, and vector attraction reduction requirements. Therefore, impacts would be less than significant. b. Create a significant hazard to the public or the environment through reasonably foreseeable upset and accident conditions involving the release of hazardous materials into the environment? LESS-THAN-SIGNIFICANT IMPACT. See response to “a” above. c. Would the project emit hazardous emissions or handle hazardous or acutely hazardous materials, substances, or waste within one-quarter mile of an existing or proposed school? NO IMPACT. The proposed project is not within one-quarter mile of any existing or proposed school, therefore, there would be no impacts. d. Would the project be located on a site which is included on a list of hazardous materials sites compiled pursuant to Government Code Section 65962.5 and, as a result, would it create a significant hazard to the public or the environment? NO IMPACT. The project is not located on a site that is included on a list of hazardous materials sites compiled pursuant to Government Code Section 65962.5, and is not expected to create a significant hazard to the public or environment. An investigation of the Envirostor database, also known as the Cortese List, did not identify any contaminated sites within the project area (California Department of Toxic Substances Control, 2015). e. For a project located within an airport land use plan or, where such a plan has not been adopted, within two miles of a public airport or public use airport, would the project result in a safety hazard for people residing or working in the project area? LESS-THAN-SIGNIFICANT IMPACT. The RWQCP is 750 feet south of the Palo Alto Airport. Based on Santa Clara County General Plan requirements for land uses adjacent to the airport, all structures on the RWQCP are restricted to heights of less than 150 feet. Because the new sludge dewatering and loadout facility would be less than 150 feet in height, impacts would be less than significant. 3-18 EN0717151040SAC/658394 (ISMND_ADMINDRAFT) SECTION 3 – EVALUATION OF ENVIRONMENTAL IMPACTS f. For a project within the vicinity of a private airstrip, would the project result in a safety hazard for people residing or working in the project area? NO IMPACT. The project is not located near a private airstrip; therefore, impacts would be less than significant. g. Would the project impair implementation of or physically interfere with an adopted emergency response plan or emergency evacuation plan? NO IMPACT. The project would be constructed within the existing RWQCP, and does not include design features that would impede emergency access. City of Palo Alto Ordinance 1111 was passed in November 2007 and lists adoption of the California Fire Code (CFC) and changes required for the City. In Sections 15.04.150 and 15.04.160, the ordinance states that the fire access road should be 20 feet wide, comply with the requirements of Section 503.1.1 of the CFC, and extend within 150 feet of all portions of the facility and all portions of the exterior walls of the first story of the building. The existing access road along the north side of the new building is 25 feet wide and the furthest point on the building is approximately 143 feet away. Therefore, the existing road meets the requirements for fire access and additional roads are not required. There would be no impacts as a result of this project. h. Would the project expose people or structures to a significant risk of loss, injury, or death involving wildland fires, including where wildlands are adjacent to urbanized areas or where residences are intermixed with wildlands? NO IMPACT. The project would be constructed within the property of the existing RWQCP, and is 500 feet away from the nearest open space region. Therefore, there would be no impact to wildlands as a result of this project. 3.9 Hydrology and Water Quality Would the project: Potentially Significant Impact Less-Than- Significant with Mitigation Incorporation Less-Than- Significant Impact No Impact a. Violate any water quality standards or waste discharge requirements (WDR)? b. Substantially deplete groundwater supplies or interfere substantially with groundwater recharge such that there would be a net deficit in aquifer volume or a lowering of the local groundwater table level (e.g., the production rate of pre-existing nearby wells would drop to a level which would not support existing land uses or planned uses for which permits have been granted)? c. Substantially alter the existing drainage pattern of the site or area, including through the alteration of the course of a stream or river, in a manner which would result in substantial erosion or siltation onsite or offsite? d. Substantially alter the existing drainage pattern of the site or area, including through the alteration of the course of a stream or river, or substantially increase the rate or amount of surface runoff in a manner which would result in flooding onsite or offsite? EN0717151040SAC/658394 (ISMND_ADMINDRAFT) 3-19 SECTION 3 – EVALUATION OF ENVIRONMENTAL IMPACTS e. Create or contribute runoff water, which would exceed the capacity of existing or planned storm water drainage systems, or provide substantial additional sources of polluted runoff? f. Otherwise substantially degrade water quality? g. Place housing within a 100-year flood hazard area as mapped on a federal Flood Hazard Boundary or Flood Insurance Rate Map or other flood hazard delineation map? h. Place within a 100-year flood hazard area structures, which would impede or redirect flood flows? i. Expose people or structures to a significant risk of loss, injury, or death involving flooding, including flooding as a result of the failure of a levee or dam? j. Inundation by seiche, tsunami, or mudflow? 3.9.1 Setting The project is located at the existing RWQCP site near the Palo Alto Baylands and the Mayfield Slough, which both connect to the San Francisco Bay. 3.9.2 Impact Analysis a. Would the project violate any water quality standards or waste discharge requirements, or otherwise substantially degrade water quality? LESS-THAN-SIGNIFICANT IMPACT. The RWQCP is heavily regulated by the San Francisco Bay Regional Water Quality Control Board (RWQCB) under Order No. R2-2014-0024 (NPDES Permit No. CA0037834), which establishes waste discharge requirements for disposal of treated wastewater into San Francisco Bay. The onsite storm drainage system discharges into the wastewater treatment system, and therefore site stormwater also is regulated under Order No. R2-2014-0024. The proposed project would add a minor amount of impervious surface to the overall RWQCP with the addition of the new building and the loss of the undeveloped land. Because stormwater is included in Order No. R2-2014-0024, the proposed project would be consistent with applicable water quality standards and waste discharge requirements. Under both the construction and operation phases, the proposed project would not substantially degrade water quality due to the plant’s available capacity to handle the small increase in stormwater runoff. All stormwater runoff at the site is directed into the wastewater treatment system, which is highly effective in removing pollutants from onsite storm drainage. Therefore, impacts to water quality would be less than significant. b. Would the project substantially deplete groundwater supplies or interfere substantially with groundwater recharge such that there would be a net deficit in aquifer volume or a lowering of the local groundwater table level (e.g., the production rate of pre-existing nearby wells would drop to a level which would not support existing land uses or planned uses for which permits have been granted? NO IMPACT. The project would not deplete groundwater supplies or interfere with recharge. Groundwater in this area is not beneficially used; therefore, there would be no impacts as a result of this project. 3-20 EN0717151040SAC/658394 (ISMND_ADMINDRAFT) SECTION 3 – EVALUATION OF ENVIRONMENTAL IMPACTS c. Would the project substantially alter the existing drainage pattern of the site or area, including through the alteration of the course of a stream or river, in a manner which would result in substantial erosion or siltation onsite or offsite? LESS-THAN-SIGNIFICANT IMPACT. The project site consists of several solar panels on undeveloped land, where stormwater permeates into the ground. Under the proposed project, the site would become impervious due to the new dewatering and truck loadout facility. The facility has designed to direct rain water away from buildings in the direction of the existing stormwater collection system, which conveys storm runoff to the 72-inch joint sewer that ultimately discharges to the plant pump station. Roof drainage will discharge to ground on splash blocks or will be hard piped to an existing storm drain. Where storm drainage is required, all components of the system will be designed to convey the 10-year storm, and 100-year storm runoff will be conveyed away from the building without creating or contributing to the downstream or upstream flooding conditions per the Santa Clara County, California, Drainage Manual. Because surface flow is treated in the plant, none is leaving the site requiring detention/ retention. No streams or rivers would be affected by project construction or operation, nor would alterations of existing drainage patterns on the site area be affected, other than the minor change in impervious surfaces. The RWQCP has adequate capacity to handle the additional inflow of stormwater runoff from the project site; therefore, these minimal changes would result in less-than-significant impacts. d. Would the project substantially alter the existing drainage pattern of the site or area, including through the alteration of the course of a stream or river, or substantially increase the rate or amount of surface runoff in a manner which would result in flooding onsite or offsite? LESS-THAN-SIGNIFICANT IMPACT. The proposed project would not alter the existing drainage pattern of the site or area and would result in less-than-significant impacts; see answer (c) for more information, above. e. Would the project create or contribute runoff water which would exceed the capacity of existing or planned storm water drainage systems or provide substantial additional sources of polluted runoff? LESS-THAN-SIGNIFICANT IMPACT. The proposed project would not create or contribute runoff water and would result in less-than-significant impacts; see answers (a) and (c) for more information, above. f. Would the project otherwise substantially degrade water quality? LESS-THAN-SIGNIFICANT IMPACT. The proposed project would not substantially degrade water quality; all potential water quality impacts are discussed in (a), (c), and (d) above. g. Would the project place housing within a 100-year flood hazard area as mapped on a federal Flood Hazard Boundary or Flood Insurance Rate Map or other flood hazard delineation map? NO IMPACT. No housing construction is proposed as a part of the project. Therefore, construction and operation of the project would result in no flood hazard impacts to housing. h. Would the project place within a 100-year flood hazard area structures which would impede or redirect flood flows? LESS-THAN-SIGNIFICANT IMPACT. The RQWCP is located in an area designated a high risk flood zone (Zone AE) with a base flood elevation of 11 feet by the Federal Emergency Management Agency (FEMA). While the proposed project would be within a 100-year floodplain, the facility will have a finished floor elevation of 11.5 feet. Because the finished floor would be above the base flood elevation, project impacts would be less than significant. EN0717151040SAC/658394 (ISMND_ADMINDRAFT) 3-21 SECTION 3 – EVALUATION OF ENVIRONMENTAL IMPACTS i. Would the project expose people or structures to a significant risk of loss, injury, or death involving flooding, including flooding as a result of the failure of a levee or dam? LESS-THAN-SIGNIFICANT IMPACT. While the proposed project is located in an area that is designated a high risk food zone (Zone AE), the proposed building will be above the base flood elevation of 11 feet and would not expose people or structures to a significant risk of loss, injury, or death as a result of flooding. Additionally, there are no levees or dams near the project area; therefore, impacts would be less than significant. j. Would the project result in inundation by seiche, tsunami, or mudflow? NO IMPACT. The project area is not subject to inundation by seiche, tsunami, or mudflow, therefore there are no impacts anticipated as a result of the proposed project. 3.10 Land Use and Planning Would the project: Potentially Significant Impact Less-Than- Significant with Mitigation Incorporation Less-Than- Significant Impact No Impact a. Physically divide an established community? b. Conflict with any applicable land use plan, policy, or regulation of an agency with jurisdiction over the project (including, but not limited to the general plan, specific plan, local coastal program, or zoning ordinance) adopted for the purpose of avoiding or mitigating an environmental effect? c. Conflict with any applicable habitat conservation plan or natural community conservation plan? 3.10.1 Setting The project is within the existing RWQCP property in the City of Palo Alto in Santa Clara County, CA. Land use designation at the project site is Public Facilities, with a site and design review overlay, PF (D). Surrounding zoning districts and land uses include Public Facilities (PF), Planned Community (PC), and Research, Office and Limited Manufacturing Subdistrict – Embarcadero [ROLM(E)]. 3.10.2 Impact Analysis a. Would the project physically divide an established community? NO IMPACT. The project is located within the existing RWQCP and would involve the installation of three BFPs with room to install a future unit for filtration purposes. Construction and operation would occur on site, with trucks transporting waste away from the facility via City roads. It would not divide an established community. b. Would the project conflict with any applicable land use plan, policy, or regulation of an agency with jurisdiction over the project (including, but not limited to, the general plan, specific plan, local coastal program, or zoning ordinance) adopted for the purpose of avoiding or mitigating an environmental effect? NO IMPACT. The project would not conflict with any applicable land use plan, policy, or regulation, it is consistent with its general plan and zoning designations. 3-22 EN0717151040SAC/658394 (ISMND_ADMINDRAFT) SECTION 3 – EVALUATION OF ENVIRONMENTAL IMPACTS c. Would the project conflict with any applicable habitat conservation plan or natural community conservation plan? NO IMPACT. The project area is not located within a Habitat Conservation Plan or Natural Community Conservation Plan. 3.11 Mineral Resources Would the project: Potentially Significant Impact Less-Than- Significant with Mitigation Incorporation Less-Than- Significant Impact No Impact a. Result in the loss of availability of a known mineral resource that would be of value to the region and the residents of the state? b. Result in the loss of availability of a locally-important mineral resource recovery site delineated on a local general plan, specific plan or other land use plan? 3.11.1 Setting The project is not located in an area of known mineral resources. According to the Natural Environment Element of the City of Palo Alto’s Comprehensive Plan, the City of Palo Alto does not contain any mineral deposits of regional significance and therefore does not include any policies relating to mineral resources (City of Palo Alto, 2007). 3.11.2 Impact Analysis a. Would the project result in the loss of availability of a known mineral resource that would be of value to the region and the residents of the state or result in the loss of availability of a locally-important mineral resource recovery site delineated on a local general plan, specific plan, or other land use plan? NO IMPACT. The project area is within Mineral Resource Zone MRZ-1, as classified by the California Department of Conservation (DOC), Division of Mines and Geology (DMG). MRZ-1 is defined as “Areas where available geologic information indicates that little likelihood exists for the presence of significant mineral resources.” (DMG, 1996). Additionally, the City of Palo Alto’s Comprehensive Plan has noted that it does not contain any mineral deposits of regional significance (City of Palo Alto, 2007). Therefore, there would be no change associated with the proposed project. b. Would the project result in the loss of availability of a locally-important mineral resource recovery site delineated on a local general plan, specific plan, or other land use plan? NO IMPACT. The proposed project would not result in the loss of availability of a mineral resource recovery site as described in “a.” above. EN0717151040SAC/658394 (ISMND_ADMINDRAFT) 3-23 SECTION 3 – EVALUATION OF ENVIRONMENTAL IMPACTS 3.12 Noise Would the project: Potentially Significant Impact Less-Than- Significant with Mitigation Incorporation Less-Than- Significant Impact No Impact a. Exposure of persons to or generation of noise levels in excess of standards established in the local general plan or noise ordinance, or applicable standards of other agencies? b. Exposure of persons to or generation of excessive groundborne vibration or groundborne noise levels? c. A substantial permanent increase in ambient noise levels in the project vicinity above levels existing without the project? d. A substantial temporary or periodic increase in ambient noise levels in the project vicinity above levels existing without the project? e. For a project located within an airport land use plan or, where such a plan has not been adopted, within two miles of a public airport or public use airport, would the project expose people residing or working in the project area to excessive noise levels? f. For a project within the vicinity of a private airstrip, would the project expose people residing or working in the project area to excessive noise levels? 3.12.1 Setting The project site is located east of U.S. Highway 101, near the Palo Alto Baylands and commercial/office uses. The nearest residence is located approximately 0.7 mile from the project site. 3.12.2 Impact Analysis a. Exposure of persons to or generation of noise levels in excess of standards established in the local general plan or noise ordinance, or applicable standards of other agencies? LESS-THAN-SIGNIFICANT IMPACT. Noise generated by project construction is expected to vary depending on construction activities. Project construction would occur on weekdays, typically from 8:00 a.m. to 6:00 p.m., Monday through Friday, and from 9:00 a.m. to 6:00 p.m. on Saturdays in accordance with the City of Palo Alto municipal code. Project construction would generate noise from the heavy equipment used. Individual pieces of construction equipment are likely to generate noise levels of 80 to 85 a-weighted decibels (dBA) at 50 feet from the source. Pilings would be installed to support the sludge dewatering building; however, the piles would be installed using an auger and no pile driving would occur. The nearest sensitive receptors would be users of the recreational trails on the adjacent Palo Alto Baylands, approximately 500 feet away. Given the lack of nearby sensitive receptors, and by following City of Palo Alto noise standards, construction noise impacts would be less than significant. Project operations would generate noise from equipment (e.g., belt filter presses and conveyor) and from haul truck trips. Equipment noise would be contained within the building, and would not contribute to an increase in exterior ambient noise levels. Truck trips would be limited to 3-24 EN0717151040SAC/658394 (ISMND_ADMINDRAFT) SECTION 3 – EVALUATION OF ENVIRONMENTAL IMPACTS approximately five truckloads per day. Trucks would enter the RWQCP via Embarcadero Way and would exit via Embarcadero Road. These roads run through a commercial and industrial area, and would not drive near sensitive land uses like the Palo Alto Baylands. For these reasons, truck trips would not contribute to a substantial increase in noise levels that would affect sensitive receptors; impacts, therefore, would be less than significant. b. Exposure of persons to or generation of excessive groundborne vibration or groundborne noise levels? LESS-THAN-SIGNIFICANT IMPACT. The project construction may temporarily expose persons to ground vibrations above ambient levels but due to the short duration of the construction project they would remain less than significant. c. A substantial permanent increase in ambient noise levels in the project vicinity above levels existing without the project? LESS-THAN-SIGNIFICANT IMPACT. See the response to “a” above. d. A substantial temporary or periodic increase in ambient noise levels in the project vicinity above levels existing without the project? LESS-THAN-SIGNIFICANT IMPACT. See the response to “a” above. e. For a project located within an airport land use plan or, where such a plan has not been adopted, within two miles of a public airport or public use airport, would the project expose people residing or working in the project area to excessive noise levels? NO IMPACT. While the project is 0.5 miles away from the Palo Alto Airport, the project would not expose people to excessive noise levels from the airport. No impact would occur as a result of the project. f. For a project within the vicinity of a private airstrip, would the project expose people residing or working in the project area to excessive noise levels? NO IMPACT. The project is not within the vicinity of a private airstrip. 3.13 Population and Housing Would the project: Potentially Significant Impact Less-Than- Significant with Mitigation Incorporation Less-Than- Significant Impact No Impact a. Induce substantial population growth in an area, either directly (for example, by proposing new homes and businesses) or indirectly (for example, through extension of roads or other infrastructure)? b. Displace substantial numbers of existing housing, necessitating the construction of replacement housing elsewhere? c. Displace substantial numbers of people, necessitating the construction of replacement housing elsewhere? EN0717151040SAC/658394 (ISMND_ADMINDRAFT) 3-25 SECTION 3 – EVALUATION OF ENVIRONMENTAL IMPACTS 3.13.1 Setting The proposed project would be constructed within the existing RWQCP, is surrounded by office/commercial and public facilities land uses, and would not conflict with populations or housing resources. 3.13.2 Impact Analysis a. Would the project induce substantial population growth in an area, either directly (for example, by proposing new homes and businesses) or indirectly (for example, through extension of roads or other infrastructure)? NO IMPACT. The proposed project does not expand the capacity of the RWQCP. For this reason, the project is not expected to induce population growth; therefore there would be no growth inducing impacts. b. Would the project displace substantial numbers of existing housing, necessitating the construction of replacement housing elsewhere? NO IMPACT. The project would be constructed at the existing RWQCP along developed city streets, within already developed areas of the City of Palo Alto. Therefore, the project would not displace any existing housing. c. Would the project displace substantial numbers of people, necessitating the construction of replacement housing elsewhere? NO IMPACT. The project would be constructed at the existing RWQCP along developed city streets, within already developed areas of the City of Palo Alto. Therefore, the project would not displace any people and would not necessitate the construction of replacement housing elsewhere. 3.14 Public Services Would the project result in substantial adverse physical impacts associated with the provision of new or physically altered governmental facilities, need for new or physically altered governmental facilities, the construction of which could cause significant environmental impacts, in order to maintain acceptable service ratios, response times, or other performance objectives for any of the public services: Potentially Significant Impact Less-Than- Significant with Mitigation Incorporation Less-Than- Significant Impact No Impact a. Fire protection? b. Police protection? c. Schools? d. Parks? e. Other public facilities? 3.14.1 Setting Public services and facilities are provided and maintained by local municipalities, including fire, police, and public works. 3-26 EN0717151040SAC/658394 (ISMND_ADMINDRAFT) SECTION 3 – EVALUATION OF ENVIRONMENTAL IMPACTS 3.14.2 Impact Analysis a. Fire protection? LESS-THAN-SIGNIFICANT IMPACT. Construction and operation of the project is not expected to increase the demand for fire protection services in the project area. During construction of the project, emergencies could occur at the project site; however, appropriate notification to local emergency service providers prior to construction would address impacts that could affect emergency response times such as lane closures. b. Police protection? NO IMPACT. The project would not increase population and is not anticipated to affect crime rates in the vicinity. Therefore, additional police protection is not needed. c. Schools? NO IMPACT. This is a non-residential project, therefore there would not be a secondary impact associated with increased demand for schools. The project would not generate additional population or students during construction or operation. d. Parks? NO IMPACT. This is a non-residential project, therefore there would not be a secondary impact associated with increased demand for parks. The project would not increase the use of existing neighborhood and regional parks or other recreational facilities. e. Other public facilities? NO IMPACT. This is a non-residential project, therefore there would not be a secondary impact associated with increased demand for public facilities. The project would not result in an increase in population during project construction or operation; therefore, the project would not affect other government services or public facilities. 3.15 Recreation Potentially Significant Impact Less-Than- Significant with Mitigation Incorporation Less-Than- Significant Impact No Impact a. Would the project increase the use of existing neighborhood and regional parks or other recreational facilities such that substantial physical deterioration of the facility would occur or be accelerated? b. Does the project include recreational facilities or require the construction or expansion of recreational facilities which might have an adverse physical effect on the environment? 3.15.1 Setting The proposed project is located in a non-residential area of the City of Palo Alto, north of the Palo Alto Baylands and less than 0.5 miles away from the Palo Alto Golf Course. EN0717151040SAC/658394 (ISMND_ADMINDRAFT) 3-27 SECTION 3 – EVALUATION OF ENVIRONMENTAL IMPACTS 3.15.2 Impact Analysis a. Would the project increase the use of existing neighborhood and regional parks or other recreational facilities such that substantial physical deterioration of the facility would occur or be accelerated? NO IMPACT. This is a non-residential project, therefore there would not be a secondary impact associated with increased demand for recreational facilities. Therefore, there would be no impacts as a result of this project. b. Does the project include recreational facilities or require the construction or expansion of recreational facilities which might have an adverse physical effect on the environment? NO IMPACT. The project would not increase population, and therefore does not include or require the construction or expansion of recreational facilities. 3.16 Transportation/Traffic Would the Project: Potentially Significant Impact Less-Than- Significant with Mitigation Incorporation Less-Than- Significant Impact No Impact a. Conflict with an applicable plan, ordinance or policy establishing measures of effectiveness for the performance of the circulation system, taking into account all modes of transportation including mass transit and non-motorized travel and relevant components of the circulation system, including but not limited to intersections, streets, highways and freeways, pedestrian and bicycle paths, and mass transit? b. Conflict with an applicable congestion management program, including, but not limited to level of service standards and travel demand measures, or other standards established by the county congestion management agency for designated roads or highways? c. Result in a change in air traffic patterns, including either an increase in traffic levels or a change in location that results in substantial safety risks? d. Substantially increase hazards due to a design feature (e.g., sharp curves or dangerous intersections) or incompatible uses (e.g., farm equipment)? e. Result in inadequate emergency access? f. Conflict with adopted policies, plans, or programs regarding public transit, bicycle, or pedestrian facilities, or otherwise decrease the performance or safety of such facilities? 3.16.1 Setting The project area is located east of U.S. Highway 101, off of Embarcadero Road and Embarcadero Way in the City of Palo Alto. The project would involve the use of existing public and private roadways by construction equipment and crews, and for the operation of transporting the waste load generated by 3-28 EN0717151040SAC/658394 (ISMND_ADMINDRAFT) SECTION 3 – EVALUATION OF ENVIRONMENTAL IMPACTS the dewatering operations. During construction, approximately 10 vehicles per day are expected to access the job site. When the facility is operational, an estimated five trucks per day are expected to access the site for sludge loadout and hauling. All traffic would use Embarcadero Road and Embarcadero Way to access the truck loadout facility building. 3.16.2 Impact Analysis a. Conflict with an applicable plan, ordinance or policy establishing measures of effectiveness for the performance of the circulation system, taking into account all modes of transportation including mass transit and non-motorized travel and relevant components of the circulation system, including but not limited to intersections, streets, highways and freeways, pedestrian and bicycle paths, and mass transit? LESS-THAN-SIGNIFICANT IMPACT. Project operations would require the use of Embarcadero Road and Embarcadero Way for waste hauling. As identified in the City of Palo Alto Comprehensive Plan, Embarcadero Road is classified as an arterial roadway that connects business parks and other uses and channels traffic to U.S. Highway 101. Embarcadero Road is a four-lane arterial with a designated bike lane and street parking traffic. This portion of Embarcadero Road is not used for public transit. Applicable plans include Plan Bay Area: Strategy for a Sustainable Region, but nothing in the applicable plans address the low levels of traffic generated by the project. Therefore, impacts would be less than significant. As described in Section 1.8.2, up to 10 trucks would use Embarcadero Road and Embarcadero Way to access the site during the construction period. Construction activities would temporarily generate a negligible amount of additional traffic, and local street capacity would not be affected. Therefore, impacts would be less than significant. b. Conflict with an applicable congestion management program, including, but not limited to level of service standards and travel demand measures, or other standards established by the county congestion management agency for designated roads or highways? LESS THAN SIGNIFICANT IMPACT. See response to “a” above. c. Result in a change in air traffic patterns, including either an increase in traffic levels or a change in location that results in substantial safety risks? NO IMPACT. The project would have no impact on air traffic patterns. d. Substantially increase hazards due to a design feature (e.g., sharp curves or dangerous intersections) or incompatible uses (e.g., farm equipment)? NO IMPACT. The project would be constructed within the existing RWQCP, and does not include design features that would affect local roadways. e. Result in inadequate emergency access? NO IMPACT. The project would be constructed within the existing RWQCP, and does not include design features that would impede emergency access. Internal circulation around the new building would exceed the minimum requirements of the California Fire Code. f. Conflict with adopted policies, plans, or programs regarding public transit, bicycle, or pedestrian facilities, or otherwise decrease the performance or safety of such facilities? NO IMPACT. The project would be constructed within the existing RWQCP, and does not include design features that would impede public transit, bicycle, or pedestrian facilities. EN0717151040SAC/658394 (ISMND_ADMINDRAFT) 3-29 SECTION 3 – EVALUATION OF ENVIRONMENTAL IMPACTS 3.17 Utilities and Service Systems Would the Project: Potentially Significant Impact Less-Than- Significant with Mitigation Incorporation Less-Than- Significant Impact No Impact a. Exceed wastewater treatment requirements of the applicable RWQCB? b. Require or result in the construction of new water or wastewater treatment facilities or expansion of existing facilities, the construction of which could cause significant environmental effects? c. Require or result in the construction of new storm water drainage facilities or expansion of existing facilities, the construction of which could cause significant environmental effects? d. Have sufficient water supplies available to serve the project from existing entitlements and resources, or are new or expanded entitlements needed? e. Result in a determination by the wastewater treatment provider which serves or may serve the project that it has adequate capacity to serve the project’s projected demand in addition to the provider’s existing commitments? f. Be served by a landfill with sufficient permitted capacity to accommodate the project’s solid waste disposal needs? g. Comply with federal, state, and local statutes and regulations related to solid waste? 3.17.1 Setting The proposed project is located within an urbanized environment within the City of Palo Alto where utility infrastructure is in place. The proposed project would not include any elements that would expand or adversely affect most utility services, but would require the offsite disposal of the biosolids generated by the sludge dewatering facility. The project is being designed based on a need to handle approximately 32 dry tons per day of biosolids, which is expected to require five trucks (i.e. ten truck trips) per day to haul offsite for beneficial reuse. At this time, the City may choose one of several options for disposal. 3.17.2 Impact Analysis a. Exceed wastewater treatment requirements of the applicable RWQCB? NO IMPACT. The proposed project site is within an existing RWQCP. The project would introduce a change in the solids handling process at the plant, but the liquids processing facilities would not be changed. Therefore, there would be no change in discharges to the San Francisco Bay. 3-30 EN0717151040SAC/658394 (ISMND_ADMINDRAFT) SECTION 3 – EVALUATION OF ENVIRONMENTAL IMPACTS b. Require or result in the construction of new water or wastewater treatment facilities or expansion of existing facilities, the construction of which could cause significant environmental effects? NO IMPACT. The proposed project includes the construction of a new dewatering and truck loadout facility building, a two story cast-in-place concrete structure that would contain space for the belt filter presses, truck loadout, and other support areas. These features are new components of an existing wastewater treatment plant, and would not result in the need for new water or wastewater treatment services. c. Require or result in the construction of new storm water drainage facilities or expansion of existing facilities, the construction of which could cause significant environmental effects? NO IMPACT. The proposed project would construct the new dewatering and truck loadout facility building on an existing water quality control plant on property that is already paved with existing drainage infrastructure. The project would not result or require the construction of new stormwater drainage facilities or expand an existing one; therefore there would be no impact. d. Have sufficient water supplies available to serve the project from existing entitlements and resources, or are new or expanded entitlements needed? NO IMPACT. There would be no water use from the proposed project, other than minor dust control during site preparation. e. Result in a determination by the wastewater treatment provider which serves or may serve the project that it has adequate capacity to serve the project’s projected demand in addition to the provider’s existing commitments? NO IMPACT. The project features are new components of an existing wastewater treatment plant, and would not result in the need new wastewater treatment services. f. Be served by a landfill with sufficient permitted capacity to accommodate the project’s solid waste disposal needs? LESS-THAN-SIGNIFICANT IMPACT. The proposed project would generate up to approximately 32 dry tons per day of material for offsite beneficial reuse, requiring up to five haul trucks (ten trips total) per day. Although the final destination is not known, one option is for biosolids reuse as alternative daily cover (ADC) at the Potrero Hills or Hay Road landfills in Solano County.1 Both facilities accept biosolids for beneficial use. Capacity at landfills located closer to Palo Alto where biosolids are accepted for ADC is unlikely; for example, ADC needs at the Newby Island Landfill are already being fully met by biosolids from the San José-Santa Clara Regional Wastewater Facility. Because of the willingness of the Solano County landfills to accept biosolids as ADC, impacts would be less than significant. g. Comply with federal, state, and local statutes and regulations related to solid waste? LESS-THAN-SIGNIFICANT IMPACT. The project includes beneficial reuse of biosolids, consistent with state regulations. The regulation of biosolids in California involves multiple agencies at the federal, state, and local levels. The extent to which biosolids are regulated is greatly dependent on the treatment technology used, as well as the end use of the biosolids. California’s biosolids program is regulated by USEPA Region IX pursuant to 40 Code of Federal Regulations (CFR) 503, “Standards for the Use and Disposal of Sewage Sludge” (i.e., the 503 Rule). The 503 Rule establishes standards such as pollutant limits, pathogen reduction requirements, and vector attraction reduction requirements. 1 Alternative daily cover means cover material other than earthen material placed on the surface of the active face of a municipal solid waste landfill at the end of each operating day to control vectors, fires, odors, blowing litter, and scavenging. Federal regulations require landfill operators to use six inches of earth material as daily cover unless other materials are allowed as alternatives. CalRecycle has approved 11 ADC material types, including biosolids from municipal wastewater treatment plants. EN0717151040SAC/658394 (ISMND_ADMINDRAFT) 3-31 SECTION 3 – EVALUATION OF ENVIRONMENTAL IMPACTS In addition, the California Department of Resources Recycling and Recovery (CalRecycle) has approved the use of biosolids from municipal wastewater treatment facilities as ADC. ADC is not considered landfill disposal because it provides beneficial use as landfill cover. With compliance with existing regulations for biosolids reuse, impacts would be less than significant. 3.18 Mandatory Findings of Significance Potentially Significant Impact Less-Than- Significant with Mitigation Incorporation Less-Than- Significant Impact No Impact a. Does the project have the potential to degrade the quality of the environment, substantially reduce the habitat of a fish or wildlife species, cause a fish or wildlife population to drop below self-sustaining levels, threaten to eliminate a plant or animal community, reduce the number or restrict the range of a rare or endangered plant or animal or eliminate important examples of the major periods of California history or prehistory? b. Does the project have impacts that are individually limited, but cumulatively considerable? (“Cumulatively considerable” means that the incremental effects of a project are considerable when viewed in connection with the effects of past projects, the effects of other current projects, and the effects of probable future projects? c. Does the project have environmental effects which will cause substantial adverse effects on human beings, either directly or indirectly? a. Does the project have the potential to degrade the quality of the environment, substantially reduce the habitat of a fish or wildlife species, cause a fish or wildlife population to drop below self-sustaining levels, threaten to eliminate a plant or animal community, reduce the number or restrict the range of a rare or endangered plant or animal or eliminate important examples of the major periods of California history or prehistory? LESS-THAN-SIGNIFICANT IMPACT WITH MITIGATION INCORPORATED. As indicated throughout this Initial Study, impacts on all environmental resources were deemed to result in either ‘no impact,’ a ‘less-than-significant impact,’ or ‘less than significant with mitigation incorporation.’ As a result, the project with proposed mitigation measures would not create environmental effects that would degrade the quality of the environment, substantially reduce the habitat of a fish or wildlife species, cause a fish or wildlife population to drop below self-sustaining levels, threaten to eliminate a plant or animal community, reduce the number or restrict the range of a rare or endangered plant or animal community, or eliminate important examples of major periods of California history or prehistory. b. Does the project have impacts that are individually limited, but cumulatively considerable? “Cumulatively considerable” means that the incremental effects of a project are considerable when viewed in connection with the effects of past projects, the effects of other current projects, and the effects of probable future projects? LESS-THAN-SIGNIFICANT IMPACT. As indicated throughout this Initial Study, impacts on all environmental resources were deemed to result in either ‘no impact,’ a ‘less-than-significant 3-32 EN0717151040SAC/658394 (ISMND_ADMINDRAFT) SECTION 3 – EVALUATION OF ENVIRONMENTAL IMPACTS impact,’ or ‘less than significant with mitigation incorporation.’ As a result, the project with proposed mitigation measures would not create environmental effects that would have impacts that are individually limited but cumulatively considerable. c. Does the project have environmental effects which will cause substantial adverse effects on human beings, either directly or indirectly? LESS-THAN-SIGNIFICANT IMPACT. As indicated throughout this Initial Study, impacts on all environmental resources were deemed to result in either ‘no impact,’ a ‘less-than-significant impact,’ or ‘less than significant with mitigation incorporation.’ As a result, the project with proposed mitigation measures would not create environmental effects that would cause substantial adverse effects on human beings, either directly or indirectly. EN0717151040SAC/658394 (ISMND_ADMINDRAFT) 3-33 SECTION 4 List of Preparers 4.1 CH2M HILL Danielle Tannourji, Biologist Elyse Engel, Environmental Engineer Matt Franck, Environmental Planner – Task Manager Yassaman Sarvian, Environmental Planner Heather Waldrop, Environmental Planner EN0717151040SAC/658394 (ISMND_ADMINDRAFT) 4-1 SECTION 5 References American Society of Civil Engineers (ASCE). 2010. Minimum Design Loads for Buildings and Other Structures. ASCE/SEI 07-10. Bay Area Air Quality Management District (BAAQMD). 2012. California Environmental Quality Act Air Quality Guidelines. http://www.baaqmd.gov/Divisions/Planning-and-Research/CEQA- GUIDELINES/Updated-CEQA-Guidelines.aspx. Updated May 2012. Bay Area Air Quality Management District (BAAQMD). 2010a. Bay Area 2010 Clean Air Plan. September. Bay Area Air Quality Management District (BAAQMD). 2010b. California Environmental Quality Act (CEQA) Air Quality Guidelines. http://www.baaqmd.gov/~/media/Files/Planning%20and%20Research/CEQA/Draft_BAAQMD_CEQA_G uidelines_May_2010_Final.ashx?la=en. May. Accessed August 30, 2013. Bay Area Air Quality Management District (BAAQMD). 2010c. Source Inventory of Bay Area Greenhouse Gas Emissions. February. Bay Area Air Quality Management District (BAAQMD). 2010d. Source Inventory of Bay Area Greenhouse Gas Emissions. February. Bay Area Air Quality Management District (BAAQMD). 2009. Revised Draft Options and Justification Report. October. Bay Area Air Quality Management District (BAAQMD). 2001. San Francisco Bay Area 2001 Ozone Attainment Plan for the 1-hour National Ozone Standard. October. California Air Pollution Control Officers Association (CAPCOA). 2013. California Emission Estimator Model User’s Guide Version 2013.2. July. California Air Resources Board (CARB). 2013. http://www.arb.ca.gov/cc/inventory/data/tables/ghg_inventory_scopingplan_00-11_2013-08-01.pdf. Accessed September 6, 2013. California Air Resources Board (CARB). 2011. EMFAC2011. http://www.arb.ca.gov/msei/modeling.htm/. California Building Standards Commission (CBC). 2013. 2013 California Building Code (CBC). California Department of Fish and Wildlife (CDFW). 2015. Rarefind. California Natural Diversity Database (CNDDB). Accessed on May 5, 2015. California Department of Toxic Substances Control. 2013. EnviroStor Database. http://www.envirostor.dtsc.ca.gov/public/. Accessed May 2015. Carollo Engineers. 2012. Long Range Facilities Plan Final Report. October. CH2M HILL. 2015. Technical Memorandum 3 – Geotechnical Draft. May. City of Palo Alto. 2007. City of Palo Alto Comprehensive Plan. July. California Department of Conservation, Division of Mines and Geology. 1996. Update of Mineral Land Classification: Aggregate Materials in the South San Francisco Bay Production-Consumption Region. Accessed on May 12, 2015. ENVIRON. 2013. CalEEMod User’s Guide. September. Jones & Stokes Associates. 2007. Software User’s Guide: URBEMIS2007 for Windows. November. EN0717151040SAC/658394 (ISMND_ADMINDRAFT) 5-1 SECTION 5 – REFERENCES U.S. Environmental Protection Agency. 2006. AP-42, Fifth Edition, Volume I. Chapter 13: Miscellaneous Sources. Section 13.2.2, Unpaved Roads. November. U.S. Environmental Protection Agency. 2011. AP-42, Fifth Edition, Volume I. Chapter 13: Miscellaneous Sources. Section 13.2.1, Paved Roads. January. William Self Associates, INC. 2007. Cultural Resource Assessment Palo Alto Regional Water Quality Control Plant UV Disinfection Project. October. 5-2 EN0717151040SAC/658394 (ISMND_ADMINDRAFT) Appendix A Air Quality and Greenhouse Gas Emissions Output Files TABLE A‐1 Construction Emissions Summary Palo Alto Dewatering Building Project Construction Emissions VOC CO NOx SOx PM10_Exhaust PM2.5_Exhaust PM10_Fugitive PM2.5_Fugitive Max Daily Emissions (lbs/day) 3.96 25.27 47.41 0.07 2.14 1.94 80.14 14.83 Project Emissions (tons/project) 0.31 1.94 3.67 0.01 0.16 0.14 0.30 0.06 BAAQMD Thresholds of Significance (lbs/day) b 54 N/A 54 N/A 82 54 N/A N/A Exceeds Threshold (Y/N)? N N N N N N N N CO2 CO2e c Max Daily Emissions (lbs/day) 6,921 7,267 Project Emissions (metric tons/project) 554 581.95 CARB Thresholds of Significance (metric tons/year) d N/A 7,000 Exceeds Threshold (Y/N)? N N Notes: b BAAQMD Thresholds of Significance taken from Table 2‐1 of the Draft CEQA Air Quality Guidelines (BAAQMD, 2010). d CARB Thresholds of Significance taken as the statewide interim thresholds of significance for GHGs (CARB, 2008). Construction Activities Construction Activities GHG Emissions a Criteria Pollutant Emissions a c Only CO2 emission factors were available for all types of construction equipment utilized for this project. According to the EPA, emissions of CH4 and N2O from passenger vehicles are expected to be much lower than emissions of CO2, contributing in the range of 5 to 6 percent of the total CO2e emissions (EPA, 2005). Therefore, assuming the passenger vehicle research is applicable to all mobile emission sources, the CO2 emissions were conservatively increased by 5 percent to calculate CO2e emissions, accounting for the potential CH4 and N2O emissions associated with construction activities. a It was assumed that the four construction phases would occur sequentially and that, within each phase, some equipment/vehicles may operate concurrently but that sub‐tasks would largely occur sequentially. Refer to Table 1.A‐1 for clarification on what sub‐tasks may occur concurrently. EN0717151040SAC Page 1 of 1 TABLE A‐2 Construction Emissions Palo Alto Dewatering Building Project VOC CO NOx SOx PM10_Exhaust PM2.5_Exhaust PM10_Fugitive PM2.5_Fugitive CO2 Sitework Earthwork (Test Pits and Survey) Cat 420 E Construction Equipment 1 ‐‐210‐‐0.430 3.047 4.111 0.004 0.316 0.291 ‐‐ ‐‐408.761 Pickup e Offsite Light‐duty Truck 4 ‐‐2 ‐‐14.6 0.005 0.198 0.020 0.000 0.005 0.002 0.034 0.008 37.958 Worker Commute f Offsite Light‐duty Auto/Truck 20 ‐‐2 ‐‐24.8 0.035 1.477 0.140 0.003 0.051 0.021 0.329 0.082 330.961 Earthwork (Rough Grading and Survey) Cat D 6 Construction Equipment 1 ‐‐210‐‐0.885 3.555 11.924 0.010 0.460 0.423 ‐‐ ‐‐1,000.393 Pickup e Offsite Light‐duty Truck 4 ‐‐2 ‐‐14.6 0.005 0.198 0.020 0.000 0.005 0.002 0.034 0.008 37.958 Grader Cat 140M 17 Construction Equipment 1 ‐‐210‐‐1.281 6.195 13.049 0.008 0.733 0.674 ‐‐ ‐‐816.410 Fugitive Dust g Disturbed Surface 0.70 acres 2 ‐‐ ‐‐ ‐‐ ‐‐ ‐‐ ‐‐ ‐‐ ‐‐3.512 0.731 ‐‐ Worker Commute f Offsite Light‐duty Auto/Truck 20 ‐‐2 ‐‐24.8 0.035 1.477 0.140 0.003 0.051 0.021 0.329 0.082 330.961 Earthwork (Mass Excavation and Survey) Cat D 6 Construction Equipment 1 ‐‐110‐‐0.885 3.555 11.924 0.010 0.460 0.423 ‐‐ ‐‐1,000.393 Pickup e Offsite Light‐duty Truck 3 ‐‐1 ‐‐14.6 0.004 0.170 0.017 0.000 0.005 0.002 0.029 0.007 32.536 Water Truck Onsite Heavy‐duty Diesel 1 ‐‐1 ‐‐5 0.022 0.055 0.228 0.000 0.003 0.003 9.961 0.996 37.572 Grader Cat 140M 17 Construction Equipment 1 ‐‐110‐‐1.281 6.195 13.049 0.008 0.733 0.674 ‐‐ ‐‐816.410 Scraper Cat 621 G Construction Equipment 1 ‐‐110‐‐1.733 13.815 22.055 0.019 0.889 0.818 ‐‐ ‐‐1,939.670 Fugitive Dust h Onsite Cut/Fill 560 yd3 1 ‐‐ ‐‐ ‐‐ ‐‐ ‐‐ ‐‐ ‐‐ ‐‐66.080 13.745 ‐‐ Worker Commute f Offsite Light‐duty Auto/Truck 20 ‐‐1 ‐‐24.8 0.035 1.477 0.140 0.003 0.051 0.021 0.329 0.082 330.961 AC Paving (Fine Grade Roadway) and Concrete Paving Grader 30000 lbs Construction Equipment 1 ‐‐110‐‐1.281 6.195 13.049 0.008 0.733 0.674 ‐‐ ‐‐816.410 2 Ton Flatbed Crew Truck e Offsite Heavy‐duty Diesel 4 ‐‐1 ‐‐14.6 0.025 0.100 0.759 0.002 0.020 0.012 0.039 0.010 218.619 Concrete Material Loads e Offsite Heavy‐duty Diesel 1 ‐‐1 ‐‐40 0.017 0.068 0.520 0.001 0.014 0.008 0.026 0.007 149.739 Fugitive Dust g Disturbed Surface 0.17 acres 1 ‐‐ ‐‐ ‐‐ ‐‐ ‐‐ ‐‐ ‐‐ ‐‐0.000 0.000 ‐‐ Worker Commute f Offsite Light‐duty Auto/Truck 20 ‐‐1 ‐‐24.8 0.035 1.477 0.140 0.003 0.051 0.021 0.329 0.082 330.961 AC Paving (Sidewalk/Drive Concrete) and Concrete Paving Vibraplate Construction Equipment 1 ‐‐110‐‐0.050 0.263 0.314 0.001 0.012 0.012 ‐‐ ‐‐43.099 2 Ton Flatbed Crew Truck e Offsite Heavy‐duty Diesel 4 ‐‐1 ‐‐14.6 0.025 0.100 0.759 0.002 0.020 0.012 0.039 0.010 218.619 Concrete Material Loads e Offsite Heavy‐duty Diesel 1 ‐‐1 ‐‐40 0.017 0.068 0.520 0.001 0.014 0.008 0.026 0.007 149.739 Worker Commute f Offsite Light‐duty Auto/Truck 20 ‐‐1 ‐‐24.8 0.035 1.477 0.140 0.003 0.051 0.021 0.329 0.082 330.961 AC Paving (Base Course) and Concrete Paving Grader 30000 lbs Construction Equipment 1 ‐‐110‐‐1.281 6.195 13.049 0.008 0.733 0.674 ‐‐ ‐‐816.410 25 Ton Vibrating Roller Construction Equipment 1 ‐‐110‐‐0.426 2.548 3.940 0.003 0.290 0.267 ‐‐ ‐‐344.849 Dozer 300 hp Construction Equipment 1 ‐‐110‐‐1.132 7.804 15.013 0.014 0.582 0.535 ‐‐ ‐‐1,451.359 1.5 CY Loader Construction Equipment 1 ‐‐110‐‐0.624 2.305 8.119 0.008 0.277 0.255 ‐‐ ‐‐799.451 Water Truck Onsite Heavy‐duty Diesel 1 ‐‐1 ‐‐5 0.022 0.055 0.228 0.000 0.003 0.003 9.961 0.996 37.572 2 Ton Flatbed Crew Truck e Offsite Heavy‐duty Diesel 4 ‐‐1 ‐‐14.6 0.025 0.100 0.759 0.002 0.020 0.012 0.039 0.010 218.619 Concrete Material Loads e Offsite Heavy‐duty Diesel 3 ‐‐1 ‐‐40 0.051 0.204 1.559 0.004 0.042 0.025 0.079 0.020 449.218 Worker Commute f Offsite Light‐duty Auto/Truck 20 ‐‐1 ‐‐24.8 0.035 1.477 0.140 0.003 0.051 0.021 0.329 0.082 330.961 AC Paving (Sub Base) and Concrete Paving Grader 30000 lbs Construction Equipment 1 ‐‐110‐‐1.281 6.195 13.049 0.008 0.733 0.674 ‐‐ ‐‐816.410 25 Ton Vibrating Roller Construction Equipment 1 ‐‐110‐‐0.426 2.548 3.940 0.003 0.290 0.267 ‐‐ ‐‐344.849 2 Ton Flatbed Crew Truck e Offsite Heavy‐duty Diesel 4 ‐‐1 ‐‐14.6 0.025 0.100 0.759 0.002 0.020 0.012 0.039 0.010 218.619 Concrete Material Loads e Offsite Heavy‐duty Diesel 3 ‐‐1 ‐‐40 0.051 0.204 1.559 0.004 0.042 0.025 0.079 0.020 449.218 Fugitive Dust i Aggregates 146 tons 1 ‐‐ ‐‐ ‐‐ ‐‐ ‐‐ ‐‐ ‐‐ ‐‐2.958 0.448 ‐‐ Worker Commute f Offsite Light‐duty Auto/Truck 20 ‐‐1 ‐‐24.8 0.035 1.477 0.140 0.003 0.051 0.021 0.329 0.082 330.961 AC Paving (Bituminous Stabilizer) and Concrete Paving 3000 Gal Tanker Onsite Heavy‐duty Diesel 1 ‐‐1 ‐‐40 0.179 0.441 1.826 0.003 0.028 0.021 79.685 7.968 300.573 Tractor Truck 380 hp Offsite Heavy‐duty Diesel 1 ‐‐1 ‐‐14.6 0.006 0.025 0.190 0.001 0.005 0.003 0.010 0.002 54.655 2 Ton Flatbed Crew Truck e Offsite Heavy‐duty Diesel 4 ‐‐1 ‐‐14.6 0.025 0.100 0.759 0.002 0.020 0.012 0.039 0.010 218.619 Concrete Material Loads e Offsite Heavy‐duty Diesel 3 ‐‐1 ‐‐40 0.051 0.204 1.559 0.004 0.042 0.025 0.079 0.020 449.218 Worker Commute f Offsite Light‐duty Auto/Truck 20 ‐‐1 ‐‐24.8 0.035 1.477 0.140 0.003 0.051 0.021 0.329 0.082 330.961 AC Paving (Plant Mix AC Paving) and Concrete Paving Paving Machine 130 hp Construction Equipment 1 ‐‐110‐‐0.387 3.203 4.493 0.005 0.223 0.205 ‐‐ ‐‐524.853 10 Ton Steel Roller Construction Equipment 1 ‐‐110‐‐0.426 2.548 3.940 0.003 0.290 0.267 ‐‐ ‐‐344.849 12 Ton Pneumatic Roller Construction Equipment 1 ‐‐110‐‐0.426 2.548 3.940 0.003 0.290 0.267 ‐‐ ‐‐344.849 2 Ton Flatbed Crew Truck e Offsite Heavy‐duty Diesel 4 ‐‐1 ‐‐14.6 0.025 0.100 0.759 0.002 0.020 0.012 0.039 0.010 218.619 Concrete Material Loads e Offsite Heavy‐duty Diesel 1 ‐‐1 ‐‐40 0.017 0.068 0.520 0.001 0.014 0.008 0.026 0.007 149.739 Fugitive Dust i Aggregates 61 tons 1 ‐‐ ‐‐ ‐‐ ‐‐ ‐‐ ‐‐ ‐‐ ‐‐0.000 0.000 ‐‐ Worker Commute f Offsite Light‐duty Auto/Truck 20 ‐‐1 ‐‐24.8 0.035 1.477 0.140 0.003 0.051 0.021 0.329 0.082 330.961 AC Paving (Place Concrete) and Concrete Paving 2 Ton Flatbed Crew Truck e Offsite Heavy‐duty Diesel 5 ‐‐1 ‐‐14.6 0.031 0.124 0.949 0.003 0.025 0.015 0.048 0.012 273.274 Concrete Material Loads e Offsite Heavy‐duty Diesel 1 ‐‐1 ‐‐40 0.017 0.068 0.520 0.001 0.014 0.008 0.026 0.007 149.739 Fugitive Dust j Paving 0.0376 acres 1 ‐‐ ‐‐0.099 ‐‐ ‐‐ ‐‐ ‐‐ ‐‐ ‐‐ ‐‐ ‐‐ Worker Commute f Offsite Light‐duty Auto/Truck 20 ‐‐1 ‐‐24.8 0.035 1.477 0.140 0.003 0.051 0.021 0.329 0.082 330.961 Miles per Day c Emissions (lbs/day) d Equipment / Vehicle List a Quantity a Hours per Day b Number of Days Used aEquipment / Vehicle Type Quantity Units EN0717151040SAC Page 1 of 7 TABLE A‐2 Construction Emissions Palo Alto Dewatering Building Project Sitework Earthwork (Test Pits and Survey) Cat 420 E Pickup e Worker Commute f Earthwork (Rough Grading and Survey) Cat D 6 Pickup e Grader Cat 140M 17 Fugitive Dust g Worker Commute f Earthwork (Mass Excavation and Survey) Cat D 6 Pickup e Water Truck Grader Cat 140M 17 Scraper Cat 621 G Fugitive Dust h Worker Commute f AC Paving (Fine Grade Roadway) and Concrete Paving Grader 30000 lbs 2 Ton Flatbed Crew Truck e Concrete Material Loads e Fugitive Dust g Worker Commute f AC Paving (Sidewalk/Drive Concrete) and Concrete Paving Vibraplate 2 Ton Flatbed Crew Truck e Concrete Material Loads e Worker Commute f AC Paving (Base Course) and Concrete Paving Grader 30000 lbs 25 Ton Vibrating Roller Dozer 300 hp 1.5 CY Loader Water Truck 2 Ton Flatbed Crew Truck e Concrete Material Loads e Worker Commute f AC Paving (Sub Base) and Concrete Paving Grader 30000 lbs 25 Ton Vibrating Roller 2 Ton Flatbed Crew Truck e Concrete Material Loads e Fugitive Dust i Worker Commute f AC Paving (Bituminous Stabilizer) and Concrete Paving 3000 Gal Tanker Tractor Truck 380 hp 2 Ton Flatbed Crew Truck e Concrete Material Loads e Worker Commute f AC Paving (Plant Mix AC Paving) and Concrete Paving Paving Machine 130 hp 10 Ton Steel Roller 12 Ton Pneumatic Roller 2 Ton Flatbed Crew Truck e Concrete Material Loads e Fugitive Dust i Worker Commute f AC Paving (Place Concrete) and Concrete Paving 2 Ton Flatbed Crew Truck e Concrete Material Loads e Fugitive Dust j Worker Commute f Equipment / Vehicle List a VOC CO NOx SOx PM10_Exhaust PM2.5_Exhaust PM10_Fugitive PM2.5_Fugitive 0.000 0.003 0.004 0.000 0.000 0.000 ‐‐ ‐‐0.371 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.034 0.000 0.001 0.000 0.000 0.000 0.000 0.000 0.000 0.300 0.001 0.004 0.012 0.000 0.000 0.000 ‐‐ ‐‐0.908 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.034 0.001 0.006 0.013 0.000 0.001 0.001 ‐‐ ‐‐0.741 ‐‐ ‐‐ ‐‐ ‐‐ ‐‐ ‐‐0.004 0.001 ‐‐ 0.000 0.001 0.000 0.000 0.000 0.000 0.000 0.000 0.300 0.000 0.002 0.006 0.000 0.000 0.000 ‐‐ ‐‐0.454 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.015 0.000 0.000 0.000 0.000 0.000 0.000 0.005 0.000 0.017 0.001 0.003 0.007 0.000 0.000 0.000 ‐‐ ‐‐0.370 0.001 0.007 0.011 0.000 0.000 0.000 ‐‐ ‐‐0.880 ‐‐ ‐‐ ‐‐ ‐‐ ‐‐ ‐‐0.033 0.007 ‐‐ 0.000 0.001 0.000 0.000 0.000 0.000 0.000 0.000 0.150 0.001 0.003 0.007 0.000 0.000 0.000 ‐‐ ‐‐0.370 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.099 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.068 ‐‐ ‐‐ ‐‐ ‐‐ ‐‐ ‐‐0.000 0.000 ‐‐ 0.000 0.001 0.000 0.000 0.000 0.000 0.000 0.000 0.150 0.000 0.000 0.000 0.000 0.000 0.000 ‐‐ ‐‐0.020 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.099 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.068 0.000 0.001 0.000 0.000 0.000 0.000 0.000 0.000 0.150 0.001 0.003 0.007 0.000 0.000 0.000 ‐‐ ‐‐0.370 0.000 0.001 0.002 0.000 0.000 0.000 ‐‐ ‐‐0.156 0.001 0.004 0.008 0.000 0.000 0.000 ‐‐ ‐‐0.658 0.000 0.001 0.004 0.000 0.000 0.000 ‐‐ ‐‐0.363 0.000 0.000 0.000 0.000 0.000 0.000 0.005 0.000 0.017 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.099 0.000 0.000 0.001 0.000 0.000 0.000 0.000 0.000 0.204 0.000 0.001 0.000 0.000 0.000 0.000 0.000 0.000 0.150 0.001 0.003 0.007 0.000 0.000 0.000 ‐‐ ‐‐0.370 0.000 0.001 0.002 0.000 0.000 0.000 ‐‐ ‐‐0.156 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.099 0.000 0.000 0.001 0.000 0.000 0.000 0.000 0.000 0.204 ‐‐ ‐‐ ‐‐ ‐‐ ‐‐ ‐‐0.001 0.000 ‐‐ 0.000 0.001 0.000 0.000 0.000 0.000 0.000 0.000 0.150 0.000 0.000 0.001 0.000 0.000 0.000 0.040 0.004 0.136 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.025 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.099 0.000 0.000 0.001 0.000 0.000 0.000 0.000 0.000 0.204 0.000 0.001 0.000 0.000 0.000 0.000 0.000 0.000 0.150 0.000 0.002 0.002 0.000 0.000 0.000 ‐‐ ‐‐0.238 0.000 0.001 0.002 0.000 0.000 0.000 ‐‐ ‐‐0.156 0.000 0.001 0.002 0.000 0.000 0.000 ‐‐ ‐‐0.156 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.099 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.068 ‐‐ ‐‐ ‐‐ ‐‐ ‐‐ ‐‐0.000 0.000 ‐‐ 0.000 0.001 0.000 0.000 0.000 0.000 0.000 0.000 0.150 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.124 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.068 0.000 ‐‐ ‐‐ ‐‐ ‐‐ ‐‐ ‐‐ ‐‐ ‐‐ 0.000 0.001 0.000 0.000 0.000 0.000 0.000 0.000 0.150 Emissions (tons/project) d CO2 Emissions (metric tons/project) d EN0717151040SAC Page 2 of 7 TABLE A‐2 Construction Emissions Palo Alto Dewatering Building Project VOC CO NOx SOx PM10_Exhaust PM2.5_Exhaust PM10_Fugitive PM2.5_Fugitive CO2Miles per Day c Emissions (lbs/day) d Equipment / Vehicle List a Quantity a Hours per Day b Number of Days Used aEquipment / Vehicle Type Quantity Units Buried 4" DIP (Excavation), Buried 6" DIP (Excavation), Buried 6" PVC (Excavation), Copper Pipe (Excavation), and Buried HDPE 2" (Excavation) Cat 320 DL Construction Equipment 1 ‐‐310‐‐0.488 4.312 5.573 0.007 0.274 0.252 ‐‐ ‐‐691.629 Cat 416E Construction Equipment 1 ‐‐210‐‐0.430 3.047 4.111 0.004 0.316 0.291 ‐‐ ‐‐408.761 Fugitive Dust h Onsite Cut/Fill 930 yd3 3 ‐‐ ‐‐ ‐‐ ‐‐ ‐‐ ‐‐ ‐‐ ‐‐36.584 7.609 ‐‐ Worker Commute f Offsite Light‐duty Auto/Truck 20 ‐‐3 ‐‐24.8 0.035 1.477 0.140 0.003 0.051 0.021 0.329 0.082 330.961 Buried 4" DIP (Backfill Pipe Zone), Buried 6" DIP (Backfill Pipe Zone), Buried 6" PVC (Backfill Pipe Zone), Copper Pipe (Backfill Pipe Zone), and Buried HDPE 2" (Backfill Pipe Zone) Cat 320 DL Construction Equipment 1 ‐‐310‐‐0.488 4.312 5.573 0.007 0.274 0.252 ‐‐ ‐‐691.629 Loader Cat 938 H Construction Equipment 1 ‐‐310‐‐0.624 2.305 8.119 0.008 0.277 0.255 ‐‐ ‐‐799.451 Roller Bomag BW65H e Construction Equipment 2 ‐‐310‐‐0.710 4.247 6.566 0.006 0.483 0.445 ‐‐ ‐‐574.749 Pipe Bedding Material Loads e Offsite Heavy‐duty Diesel 2 ‐‐2 ‐‐40 0.034 0.136 1.040 0.003 0.028 0.016 0.053 0.013 299.478 Offhaul Loads Offsite Heavy‐duty Diesel 1 ‐‐1 ‐‐40 0.017 0.068 0.520 0.001 0.014 0.008 0.026 0.007 149.739 Cat 416E Construction Equipment 1 ‐‐210‐‐0.430 3.047 4.111 0.004 0.316 0.291 ‐‐ ‐‐408.761 Fugitive Dust h Offsite Cut/Fill 88 yd3 3 ‐‐ ‐‐ ‐‐ ‐‐ ‐‐ ‐‐ ‐‐ ‐‐12.962 2.696 ‐‐ Worker Commute f Offsite Light‐duty Auto/Truck 20 ‐‐3 ‐‐24.8 0.035 1.477 0.140 0.003 0.051 0.021 0.329 0.082 330.961 Buried 4" DIP (Backfill Above Pipe Zone) and Buried 6" DIP (Backfill Above Pipe Zone) Loader 950H Construction Equipment 1 ‐‐210‐‐0.624 2.305 8.119 0.008 0.277 0.255 ‐‐ ‐‐799.451 Water Truck Onsite Heavy‐duty Diesel 1 ‐‐2 ‐‐5 0.022 0.055 0.228 0.000 0.003 0.003 9.961 0.996 37.572 50" Vibratory Roller Construction Equipment 1 ‐‐210‐‐0.426 2.548 3.940 0.003 0.290 0.267 ‐‐ ‐‐344.849 Pipe Bedding Material Loads e Offsite Heavy‐duty Diesel 15 ‐‐2 ‐‐40 0.255 1.022 7.797 0.021 0.209 0.123 0.397 0.099 2,246.089 Offhaul Loads e Offsite Heavy‐duty Diesel 6 ‐‐2 ‐‐40 0.094 0.375 2.859 0.008 0.077 0.045 0.146 0.036 823.566 Fugitive Dust h Offsite Cut/Fill 41 yd3 2 ‐‐ ‐‐ ‐‐ ‐‐ ‐‐ ‐‐ ‐‐ ‐‐0.000 0.000 ‐‐ Worker Commute f Offsite Light‐duty Auto/Truck 20 ‐‐2 ‐‐24.8 0.035 1.477 0.140 0.003 0.051 0.021 0.329 0.082 330.961 Buried 4" DIP (Pipe Installations), Buried 6" DIP (Pipe Installations), Buried 6" PVC (Pipe Installations), Copper Pipe (Pipe Installations), and Buried HDPE 2" (Pipe Installations) Cat 416E Construction Equipment 1 ‐‐810‐‐0.430 3.047 4.111 0.004 0.316 0.291 ‐‐ ‐‐408.761 2 Ton Flatbed Crew Truck e Offsite Heavy‐duty Diesel 2 ‐‐13 ‐‐14.6 0.011 0.042 0.321 0.001 0.009 0.005 0.016 0.004 92.493 Rammax Construction Equipment 1 ‐‐810‐‐0.426 2.548 3.940 0.003 0.290 0.267 ‐‐ ‐‐344.849 Cat 320 DL Construction Equipment 1 ‐‐13 10 ‐‐0.488 4.312 5.573 0.007 0.274 0.252 ‐‐ ‐‐691.629 Loader Cat 938 H Construction Equipment 1 ‐‐13 10 ‐‐0.624 2.305 8.119 0.008 0.277 0.255 ‐‐ ‐‐799.451 Pickup e Offsite Light‐duty Truck 1 ‐‐13 ‐‐14.6 0.002 0.061 0.006 0.000 0.002 0.001 0.010 0.003 11.679 66" Vibratory Roller e Construction Equipment 1 ‐‐13 10 ‐‐0.459 2.744 4.243 0.004 0.312 0.287 ‐‐ ‐‐371.376 Worker Commute f Offsite Light‐duty Auto/Truck 20 ‐‐13 ‐‐24.8 0.035 1.477 0.140 0.003 0.051 0.021 0.329 0.082 330.961 Buried 4" DIP (Tie in Existing) and 48" Manholes Cat 416E Construction Equipment 1 ‐‐110‐‐0.430 3.047 4.111 0.004 0.316 0.291 ‐‐ ‐‐408.761 2 Ton Flatbed Crew Truck e Offsite Heavy‐duty Diesel 2 ‐‐1 ‐‐14.6 0.012 0.050 0.379 0.001 0.010 0.006 0.019 0.005 109.310 Rammax Construction Equipment 1 ‐‐110‐‐0.426 2.548 3.940 0.003 0.290 0.267 ‐‐ ‐‐344.849 Crane 30 Ton Construction Equipment 1 ‐‐110‐‐0.900 3.731 10.664 0.007 0.484 0.445 ‐‐ ‐‐732.781 Cat 320 DL Construction Equipment 1 ‐‐110‐‐0.488 4.312 5.573 0.007 0.274 0.252 ‐‐ ‐‐691.629 Loader Cat 938 H Construction Equipment 1 ‐‐110‐‐0.624 2.305 8.119 0.008 0.277 0.255 ‐‐ ‐‐799.451 Pickup Offsite Light‐duty Truck 1 ‐‐1 ‐‐14.6 0.001 0.057 0.006 0.000 0.002 0.001 0.010 0.002 10.845 66" Vibratory Roller Construction Equipment 1 ‐‐110‐‐0.426 2.548 3.940 0.003 0.290 0.267 ‐‐ ‐‐344.849 Worker Commute f Offsite Light‐duty Auto/Truck 20 ‐‐1 ‐‐24.8 0.035 1.477 0.140 0.003 0.051 0.021 0.329 0.082 330.961 Sitework Maximum 3.960 25.267 47.414 0.044 2.141 1.941 80.141 14.830 4,582.487 Dewatering Building Crane and 24" Thick Slab 150 Ton Crane e Construction Equipment 1 ‐‐40 10 ‐‐0.900 3.731 10.664 0.007 0.484 0.445 ‐‐ ‐‐732.781 2 Ton Flatbed Crew Truck e Offsite Heavy‐duty Diesel 3 ‐‐67 ‐‐14.6 0.021 0.083 0.634 0.002 0.017 0.010 0.032 0.008 182.727 Concrete Pump Construction Equipment 1 ‐‐510‐‐0.836 4.828 6.137 0.008 0.445 0.445 ‐‐ ‐‐778.780 Concrete Material Loads Offsite Heavy‐duty Diesel 1 ‐‐67 ‐‐40 0.017 0.068 0.520 0.001 0.014 0.008 0.026 0.007 149.739 Fugitive Dust g Disturbed Surface 0.18 acres 67 ‐‐ ‐‐ ‐‐ ‐‐ ‐‐ ‐‐ ‐‐ ‐‐0.026 0.005 ‐‐ Fugitive Dust i Aggregates 513 tons 67 ‐‐ ‐‐ ‐‐ ‐‐ ‐‐ ‐‐ ‐‐ ‐‐0.156 0.024 ‐‐ Worker Commute f Offsite Light‐duty Auto/Truck 20 ‐‐67 ‐‐24.8 0.035 1.477 0.140 0.003 0.051 0.021 0.329 0.082 330.961 Crane, 12" Straight Walls, 24" Straight Walls, Concrete Stairs, and Masonry 8" Walls 150 Ton Crane e Construction Equipment 1 ‐‐30 10 ‐‐0.900 3.731 10.664 0.007 0.484 0.445 ‐‐ ‐‐732.781 2 Ton Flatbed Crew Truck e Offsite Heavy‐duty Diesel 18 ‐‐46 ‐‐14.6 0.109 0.436 3.328 0.009 0.089 0.053 0.170 0.042 958.836 Concrete Pump e Construction Equipment 2 ‐‐610‐‐1.533 8.851 11.250 0.015 0.817 0.817 ‐‐ ‐‐1,427.764 Concrete Material Loads e Offsite Heavy‐duty Diesel 2 ‐‐46 ‐‐40 0.034 0.136 1.040 0.003 0.028 0.016 0.053 0.013 299.478 Fugitive Dust i Aggregates 421 tons 46 ‐‐ ‐‐ ‐‐ ‐‐ ‐‐ ‐‐ ‐‐ ‐‐0.186 0.028 ‐‐ Worker Commute f Offsite Light‐duty Auto/Truck 20 ‐‐46 ‐‐24.8 0.035 1.477 0.140 0.003 0.051 0.021 0.329 0.082 330.961 Crane and 12" Elevated Slab 150 Ton Crane e Construction Equipment 1 ‐‐30 10 ‐‐0.900 3.731 10.664 0.007 0.484 0.445 ‐‐ ‐‐732.781 EN0717151040SAC Page 3 of 7 TABLE A‐2 Construction Emissions Palo Alto Dewatering Building Project Equipment / Vehicle List a Buried 4" DIP (Excavation), Buried 6" DIP (Excavation), Buried 6" PVC (Excavation), Copper Pipe (Excavation), and Buried HDPE 2" (Excavation) Cat 320 DL Cat 416E Fugitive Dust h Worker Commute f Buried 4" DIP (Backfill Pipe Zone), Buried 6" DIP (Backfill Pipe Zone), Buried 6" PVC (Backfill Pipe Zone), Copper Pipe (Backfill Pipe Zone), and Buried HDPE 2" (Backfill Pipe Zone) Cat 320 DL Loader Cat 938 H Roller Bomag BW65H e Pipe Bedding Material Loads e Offhaul Loads Cat 416E Fugitive Dust h Worker Commute f Buried 4" DIP (Backfill Above Pipe Zone) and Buried 6" DIP (Backfill Above Pipe Zone) Loader 950H Water Truck 50" Vibratory Roller Pipe Bedding Material Loads e Offhaul Loads e Fugitive Dust h Worker Commute f Buried 4" DIP (Pipe Installations), Buried 6" DIP (Pipe Installations), Buried 6" PVC (Pipe Installations), Copper Pipe (Pipe Installations), and Buried HDPE 2" (Pipe Installations) Cat 416E 2 Ton Flatbed Crew Truck e Rammax Cat 320 DL Loader Cat 938 H Pickup e 66" Vibratory Roller e Worker Commute f Buried 4" DIP (Tie in Existing) and 48" Manholes Cat 416E 2 Ton Flatbed Crew Truck e Rammax Crane 30 Ton Cat 320 DL Loader Cat 938 H Pickup 66" Vibratory Roller Worker Commute f Sitework Maximum Dewatering Building Crane and 24" Thick Slab 150 Ton Crane e 2 Ton Flatbed Crew Truck e Concrete Pump Concrete Material Loads Fugitive Dust g Fugitive Dust i Worker Commute f Crane, 12" Straight Walls, 24" Straight Walls, Concrete Stairs, and Masonry 8" Walls 150 Ton Crane e 2 Ton Flatbed Crew Truck e Concrete Pump e Concrete Material Loads e Fugitive Dust i Worker Commute f Crane and 12" Elevated Slab 150 Ton Crane e VOC CO NOx SOx PM10_Exhaust PM2.5_Exhaust PM10_Fugitive PM2.5_Fugitive Emissions (tons/project) d CO2 Emissions (metric tons/project) d 0.001 0.006 0.008 0.000 0.000 0.000 ‐‐ ‐‐0.941 0.000 0.003 0.004 0.000 0.000 0.000 ‐‐ ‐‐0.371 ‐‐ ‐‐ ‐‐ ‐‐ ‐‐ ‐‐0.055 0.011 ‐‐ 0.000 0.002 0.000 0.000 0.000 0.000 0.000 0.000 0.450 0.001 0.006 0.008 0.000 0.000 0.000 ‐‐ ‐‐0.941 0.001 0.003 0.012 0.000 0.000 0.000 ‐‐ ‐‐1.088 0.001 0.006 0.010 0.000 0.001 0.001 ‐‐ ‐‐0.782 0.000 0.000 0.001 0.000 0.000 0.000 0.000 0.000 0.272 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.068 0.000 0.003 0.004 0.000 0.000 0.000 ‐‐ ‐‐0.371 ‐‐ ‐‐ ‐‐ ‐‐ ‐‐ ‐‐0.019 0.004 ‐‐ 0.000 0.002 0.000 0.000 0.000 0.000 0.000 0.000 0.450 0.001 0.002 0.008 0.000 0.000 0.000 ‐‐ ‐‐0.725 0.000 0.000 0.000 0.000 0.000 0.000 0.010 0.001 0.034 0.000 0.003 0.004 0.000 0.000 0.000 ‐‐ ‐‐0.313 0.000 0.001 0.008 0.000 0.000 0.000 0.000 0.000 2.038 0.000 0.000 0.003 0.000 0.000 0.000 0.000 0.000 0.747 ‐‐ ‐‐ ‐‐ ‐‐ ‐‐ ‐‐0.000 0.000 ‐‐ 0.000 0.001 0.000 0.000 0.000 0.000 0.000 0.000 0.300 0.002 0.012 0.016 0.000 0.001 0.001 ‐‐ ‐‐1.483 0.000 0.000 0.002 0.000 0.000 0.000 0.000 0.000 0.545 0.002 0.010 0.016 0.000 0.001 0.001 ‐‐ ‐‐1.251 0.003 0.028 0.036 0.000 0.002 0.002 ‐‐ ‐‐4.078 0.004 0.015 0.053 0.000 0.002 0.002 ‐‐ ‐‐4.714 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.069 0.003 0.018 0.028 0.000 0.002 0.002 ‐‐ ‐‐2.190 0.000 0.010 0.001 0.000 0.000 0.000 0.002 0.001 1.952 0.000 0.002 0.002 0.000 0.000 0.000 ‐‐ ‐‐0.185 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.050 0.000 0.001 0.002 0.000 0.000 0.000 ‐‐ ‐‐0.156 0.000 0.002 0.005 0.000 0.000 0.000 ‐‐ ‐‐0.332 0.000 0.002 0.003 0.000 0.000 0.000 ‐‐ ‐‐0.314 0.000 0.001 0.004 0.000 0.000 0.000 ‐‐ ‐‐0.363 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.005 0.000 0.001 0.002 0.000 0.000 0.000 ‐‐ ‐‐0.156 0.000 0.001 0.000 0.000 0.000 0.000 0.000 0.000 0.150 0.031 0.201 0.344 0.000 0.018 0.016 0.179 0.031 38.306 0.018 0.075 0.213 0.000 0.010 0.009 ‐‐ ‐‐13.295 0.001 0.003 0.021 0.000 0.001 0.000 0.001 0.000 5.553 0.002 0.012 0.015 0.000 0.001 0.001 ‐‐ ‐‐1.766 0.001 0.002 0.017 0.000 0.000 0.000 0.001 0.000 4.551 ‐‐ ‐‐ ‐‐ ‐‐ ‐‐ ‐‐0.001 0.000 ‐‐ ‐‐ ‐‐ ‐‐ ‐‐ ‐‐ ‐‐0.005 0.001 ‐‐ 0.001 0.049 0.005 0.000 0.002 0.001 0.011 0.003 10.058 0.014 0.056 0.160 0.000 0.007 0.007 ‐‐ ‐‐9.972 0.003 0.010 0.077 0.000 0.002 0.001 0.004 0.001 20.006 0.005 0.027 0.034 0.000 0.002 0.002 ‐‐ ‐‐3.886 0.001 0.003 0.024 0.000 0.001 0.000 0.001 0.000 6.249 ‐‐ ‐‐ ‐‐ ‐‐ ‐‐ ‐‐0.004 0.001 ‐‐ 0.001 0.034 0.003 0.000 0.001 0.000 0.008 0.002 6.906 0.014 0.056 0.160 0.000 0.007 0.007 ‐‐ ‐‐9.972 EN0717151040SAC Page 4 of 7 TABLE A‐2 Construction Emissions Palo Alto Dewatering Building Project VOC CO NOx SOx PM10_Exhaust PM2.5_Exhaust PM10_Fugitive PM2.5_Fugitive CO2Miles per Day c Emissions (lbs/day) d Equipment / Vehicle List a Quantity a Hours per Day b Number of Days Used aEquipment / Vehicle Type Quantity Units 2 Ton Flatbed Crew Truck e Offsite Heavy‐duty Diesel 14 ‐‐45 ‐‐14.6 0.086 0.344 2.627 0.007 0.071 0.042 0.134 0.033 756.666 Concrete Pump Construction Equipment 1 ‐‐510‐‐0.836 4.828 6.137 0.008 0.445 0.445 ‐‐ ‐‐778.780 Concrete Material Loads Offsite Heavy‐duty Diesel 1 ‐‐45 ‐‐40 0.017 0.068 0.520 0.001 0.014 0.008 0.026 0.007 149.739 Fugitive Dust i Aggregates 203 tons 45 ‐‐ ‐‐ ‐‐ ‐‐ ‐‐ ‐‐ ‐‐ ‐‐0.092 0.014 ‐‐ Worker Commute f Offsite Light‐duty Auto/Truck 20 ‐‐45 ‐‐24.8 0.035 1.477 0.140 0.003 0.051 0.021 0.329 0.082 330.961 Crane and Elevated 12" Walls 150 Ton Crane e Construction Equipment 1 ‐‐12 10 ‐‐0.900 3.731 10.664 0.007 0.484 0.445 ‐‐ ‐‐732.781 2 Ton Flatbed Crew Truck e Offsite Heavy‐duty Diesel 15 ‐‐22 ‐‐14.6 0.095 0.380 2.898 0.008 0.078 0.046 0.148 0.037 834.728 Concrete Pump Construction Equipment 1 ‐‐310‐‐0.836 4.828 6.137 0.008 0.445 0.445 ‐‐ ‐‐778.780 Concrete Material Loads Offsite Heavy‐duty Diesel 1 ‐‐22 ‐‐40 0.017 0.068 0.520 0.001 0.014 0.008 0.026 0.007 149.739 Fugitive Dust i Aggregates 98 tons 22 ‐‐ ‐‐ ‐‐ ‐‐ ‐‐ ‐‐ ‐‐ ‐‐0.090 0.014 ‐‐ Worker Commute f Offsite Light‐duty Auto/Truck 20 ‐‐22 ‐‐24.8 0.035 1.477 0.140 0.003 0.051 0.021 0.329 0.082 330.961 Structural Steel, Metal Decking, Metal Screens, and Metal Stairs 2 Ton Flatbed Crew Truck e Offsite Heavy‐duty Diesel 2 ‐‐52 ‐‐14.6 0.014 0.057 0.434 0.001 0.012 0.007 0.022 0.006 125.075 Welder e Construction Equipment 1 ‐‐52 10 ‐‐1.000 3.504 3.206 0.005 0.253 0.253 ‐‐ ‐‐369.065 90 Ton Crane Construction Equipment 1 ‐‐710‐‐0.900 3.731 10.664 0.007 0.484 0.445 ‐‐ ‐‐732.781 Worker Commute f Offsite Light‐duty Auto/Truck 20 ‐‐52 ‐‐24.8 0.035 1.477 0.140 0.003 0.051 0.021 0.329 0.082 330.961 Steel Trusses 90 Ton Crane Construction Equipment 1 ‐‐53 10 ‐‐0.900 3.731 10.664 0.007 0.484 0.445 ‐‐ ‐‐732.781 Welder Construction Equipment 1 ‐‐53 10 ‐‐0.703 2.462 2.253 0.003 0.178 0.178 ‐‐ ‐‐259.343 2 Ton Flatbed Crew Truck e Offsite Heavy‐duty Diesel 1 ‐‐53 ‐‐14.6 0.007 0.026 0.200 0.001 0.005 0.003 0.010 0.003 57.748 Worker Commute f Offsite Light‐duty Auto/Truck 20 ‐‐53 ‐‐24.8 0.035 1.477 0.140 0.003 0.051 0.021 0.329 0.082 330.961 Waterproofing 2 Ton Flatbed Crew Truck Offsite Heavy‐duty Diesel 1 ‐‐14 ‐‐14.6 0.006 0.025 0.190 0.001 0.005 0.003 0.010 0.002 54.655 Worker Commute f Offsite Light‐duty Auto/Truck 20 ‐‐14 ‐‐24.8 0.035 1.477 0.140 0.003 0.051 0.021 0.329 0.082 330.961 BUR Roofing and Skylights 2 Ton Flatbed Crew Truck e Offsite Heavy‐duty Diesel 2 ‐‐5 ‐‐14.6 0.011 0.045 0.342 0.001 0.009 0.005 0.017 0.004 98.379 Worker Commute f Offsite Light‐duty Auto/Truck 20 ‐‐5 ‐‐24.8 0.035 1.477 0.140 0.003 0.051 0.021 0.329 0.082 330.961 Doors and Windows 2 Ton Flatbed Crew Truck Offsite Heavy‐duty Diesel 1 ‐‐45 ‐‐14.6 0.006 0.025 0.190 0.001 0.005 0.003 0.010 0.002 54.655 Worker Commute f Offsite Light‐duty Auto/Truck 20 ‐‐45 ‐‐24.8 0.035 1.477 0.140 0.003 0.051 0.021 0.329 0.082 330.961 Finishes Painting Pickup Offsite Light‐duty Truck 1 ‐‐10 ‐‐14.6 0.001 0.057 0.006 0.000 0.002 0.001 0.010 0.002 10.845 Worker Commute f Offsite Light‐duty Auto/Truck 20 ‐‐10 ‐‐24.8 0.035 1.477 0.140 0.003 0.051 0.021 0.329 0.082 330.961 Bridge Cranes 2 Ton Flatbed Crew Truck Offsite Heavy‐duty Diesel 1 ‐‐10 ‐‐14.6 0.006 0.025 0.190 0.001 0.005 0.003 0.010 0.002 54.655 Forklift Construction Equipment 1 ‐‐10 10 ‐‐0.286 1.579 2.442 0.002 0.204 0.188 ‐‐ ‐‐198.399 Worker Commute f Offsite Light‐duty Auto/Truck 20 ‐‐10 ‐‐24.8 0.035 1.477 0.140 0.003 0.051 0.021 0.329 0.082 330.961 HVAC 2 Ton Flatbed Crew Truck e Offsite Heavy‐duty Diesel 6 ‐‐10 ‐‐14.6 0.035 0.142 1.081 0.003 0.029 0.017 0.055 0.014 311.532 Boom Truck Construction Equipment 1 ‐‐10 10 ‐‐0.900 3.731 10.664 0.007 0.484 0.445 ‐‐ ‐‐732.781 Worker Commute f Offsite Light‐duty Auto/Truck 20 ‐‐10 ‐‐24.8 0.035 1.477 0.140 0.003 0.051 0.021 0.329 0.082 330.961 Cassions 40 Ton Crane Construction Equipment 1 ‐‐10 10 ‐‐0.900 3.731 10.664 0.007 0.484 0.445 ‐‐ ‐‐732.781 Hammer 22k ft‐lb Construction Equipment 1 ‐‐10 10 ‐‐0.472 2.668 4.053 0.003 0.342 0.314 ‐‐ ‐‐332.408 Drill Rig Truck Mount e Construction Equipment 5 ‐‐98 10 ‐‐2.061 12.128 31.067 0.051 0.912 0.839 ‐‐ ‐‐5,375.199 Offhaul Loads Offsite Heavy‐duty Diesel 1 ‐‐49 ‐‐40 0.017 0.068 0.520 0.001 0.014 0.008 0.026 0.007 149.739 Worker Commute f Offsite Light‐duty Auto/Truck 20 ‐‐98 ‐‐24.8 0.035 1.477 0.140 0.003 0.051 0.021 0.329 0.082 330.961 Dewatering Building Maximum 3.484 20.073 46.443 0.066 1.802 1.628 0.737 0.166 6,921.087 Process Equipment Elevated Platform, Piping, Belt Conveyor, Cake Bins, Polymer Pumps and Equipment, Belt Filter Press, Scum Concentrator, and Hot Water Systems 2 Ton Flatbed Crew Truck e Offsite Heavy‐duty Diesel 7 ‐‐60 ‐‐14.6 0.041 0.165 1.259 0.003 0.034 0.020 0.064 0.016 362.544 Forklift Construction Equipment 1 ‐‐60 10 ‐‐0.286 1.579 2.442 0.002 0.204 0.188 ‐‐ ‐‐198.399 Worker Commute f Offsite Light‐duty Auto/Truck 20 ‐‐60 ‐‐24.8 0.035 1.477 0.140 0.003 0.051 0.021 0.329 0.082 330.961 Process Equipment Maximum 0.362 3.221 3.840 0.009 0.289 0.229 0.393 0.098 891.903 Electrical Electrical Allowances (Lighting and Power), Transformer, MCC 2500 A, Electrical Panels, Transformer 2000 kVA, Generator, and I & C Allowance 2 Ton Flatbed Crew Truck e Offsite Heavy‐duty Diesel 9 ‐‐30 ‐‐14.6 0.056 0.224 1.708 0.005 0.046 0.027 0.087 0.022 491.893 Wire and Conduit Construction Equipment 1 ‐‐30 10 ‐‐0.472 2.668 4.053 0.003 0.342 0.314 ‐‐ ‐‐332.408 Worker Commute f Offsite Light‐duty Auto/Truck 20 ‐‐30 ‐‐24.8 0.035 1.477 0.140 0.003 0.051 0.021 0.329 0.082 330.961 Electrical Maximum 0.563 4.369 5.900 0.011 0.438 0.362 0.416 0.104 1,155.262 EN0717151040SAC Page 5 of 7 TABLE A‐2 Construction Emissions Palo Alto Dewatering Building Project Equipment / Vehicle List a 2 Ton Flatbed Crew Truck e Concrete Pump Concrete Material Loads Fugitive Dust i Worker Commute f Crane and Elevated 12" Walls 150 Ton Crane e 2 Ton Flatbed Crew Truck e Concrete Pump Concrete Material Loads Fugitive Dust i Worker Commute f Structural Steel, Metal Decking, Metal Screens, and Metal Stairs 2 Ton Flatbed Crew Truck e Welder e 90 Ton Crane Worker Commute f Steel Trusses 90 Ton Crane Welder 2 Ton Flatbed Crew Truck e Worker Commute f Waterproofing 2 Ton Flatbed Crew Truck Worker Commute f BUR Roofing and Skylights 2 Ton Flatbed Crew Truck e Worker Commute f Doors and Windows 2 Ton Flatbed Crew Truck Worker Commute f Finishes Painting Pickup Worker Commute f Bridge Cranes 2 Ton Flatbed Crew Truck Forklift Worker Commute f HVAC 2 Ton Flatbed Crew Truck e Boom Truck Worker Commute f Cassions 40 Ton Crane Hammer 22k ft‐lb Drill Rig Truck Mount e Offhaul Loads Worker Commute f Dewatering Building Maximum Process Equipment Elevated Platform, Piping, Belt Conveyor, Cake Bins, Polymer Pumps and Equipment, Belt Filter Press, Scum Concentrator, and Hot Water Systems 2 Ton Flatbed Crew Truck e Forklift Worker Commute f Process Equipment Maximum Electrical Electrical Allowances (Lighting and Power), Transformer, MCC 2500 A, Electrical Panels, Transformer 2000 kVA, Generator, and I & C Allowance 2 Ton Flatbed Crew Truck e Wire and Conduit Worker Commute f Electrical Maximum VOC CO NOx SOx PM10_Exhaust PM2.5_Exhaust PM10_Fugitive PM2.5_Fugitive Emissions (tons/project) d CO2 Emissions (metric tons/project) d 0.002 0.008 0.059 0.000 0.002 0.001 0.003 0.001 15.445 0.002 0.012 0.015 0.000 0.001 0.001 ‐‐ ‐‐1.766 0.000 0.002 0.012 0.000 0.000 0.000 0.001 0.000 3.056 ‐‐ ‐‐ ‐‐ ‐‐ ‐‐ ‐‐0.002 0.000 ‐‐ 0.001 0.033 0.003 0.000 0.001 0.000 0.007 0.002 6.755 0.005 0.022 0.064 0.000 0.003 0.003 ‐‐ ‐‐3.989 0.001 0.004 0.032 0.000 0.001 0.001 0.002 0.000 8.330 0.001 0.007 0.009 0.000 0.001 0.001 ‐‐ ‐‐1.060 0.000 0.001 0.006 0.000 0.000 0.000 0.000 0.000 1.494 ‐‐ ‐‐ ‐‐ ‐‐ ‐‐ ‐‐0.001 0.000 ‐‐ 0.000 0.016 0.002 0.000 0.001 0.000 0.004 0.001 3.303 0.000 0.001 0.011 0.000 0.000 0.000 0.001 0.000 2.950 0.026 0.091 0.083 0.000 0.007 0.007 ‐‐ ‐‐8.705 0.003 0.013 0.037 0.000 0.002 0.002 ‐‐ ‐‐2.327 0.001 0.038 0.004 0.000 0.001 0.001 0.009 0.002 7.806 0.024 0.099 0.283 0.000 0.013 0.012 ‐‐ ‐‐17.616 0.019 0.065 0.060 0.000 0.005 0.005 ‐‐ ‐‐6.235 0.000 0.001 0.005 0.000 0.000 0.000 0.000 0.000 1.388 0.001 0.039 0.004 0.000 0.001 0.001 0.009 0.002 7.956 0.000 0.000 0.001 0.000 0.000 0.000 0.000 0.000 0.347 0.000 0.010 0.001 0.000 0.000 0.000 0.002 0.001 2.102 0.000 0.000 0.001 0.000 0.000 0.000 0.000 0.000 0.223 0.000 0.004 0.000 0.000 0.000 0.000 0.001 0.000 0.751 0.000 0.001 0.004 0.000 0.000 0.000 0.000 0.000 1.116 0.001 0.033 0.003 0.000 0.001 0.000 0.007 0.002 6.755 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.049 0.000 0.007 0.001 0.000 0.000 0.000 0.002 0.000 1.501 0.000 0.000 0.001 0.000 0.000 0.000 0.000 0.000 0.248 0.001 0.008 0.012 0.000 0.001 0.001 ‐‐ ‐‐0.900 0.000 0.007 0.001 0.000 0.000 0.000 0.002 0.000 1.501 0.000 0.001 0.005 0.000 0.000 0.000 0.000 0.000 1.413 0.005 0.019 0.053 0.000 0.002 0.002 ‐‐ ‐‐3.324 0.000 0.007 0.001 0.000 0.000 0.000 0.002 0.000 1.501 0.005 0.019 0.053 0.000 0.002 0.002 ‐‐ ‐‐3.324 0.002 0.013 0.020 0.000 0.002 0.002 ‐‐ ‐‐1.508 0.101 0.594 1.522 0.003 0.045 0.041 ‐‐ ‐‐238.939 0.000 0.002 0.013 0.000 0.000 0.000 0.001 0.000 3.328 0.002 0.072 0.007 0.000 0.002 0.001 0.016 0.004 14.712 0.264 1.579 3.118 0.005 0.130 0.113 0.107 0.025 475.937 0.001 0.005 0.038 0.000 0.001 0.001 0.002 0.000 9.867 0.009 0.047 0.073 0.000 0.006 0.006 ‐‐ ‐‐5.400 0.001 0.044 0.004 0.000 0.002 0.001 0.010 0.002 9.007 0.011 0.097 0.115 0.000 0.009 0.007 0.012 0.003 24.274 0.001 0.003 0.026 0.000 0.001 0.000 0.001 0.000 6.694 0.007 0.040 0.061 0.000 0.005 0.005 ‐‐ ‐‐4.523 0.001 0.022 0.002 0.000 0.001 0.000 0.005 0.001 4.504 0.008 0.066 0.089 0.000 0.007 0.005 0.006 0.002 15.721 EN0717151040SAC Page 6 of 7 TABLE A‐2 Construction Emissions Palo Alto Dewatering Building Project Notes: ‐‐ = Parameter not required for computing emissions. a Unless otherwise noted, Equipment / Vehicle List provided by J. DeWolf in 'Palo Alto Dewatering Building Equipment 6‐3‐15.xlsx' and it was conservatively assumed that one piece of each equipment / vehicle type would be used for multiple days during the subsequent phases of construction, as applicable. b The Hours per Day were assumed based on the anticipated construction schedule. c Miles per Day for vehicles were calculated as follows: ‐ For hauling type vehicles: 40 miles (20 x 2) per Section 4.5 of Appendix A of the CalEEMod User’s Guide (ENVIRON, 2013). ‐ For delivery type vehicles: 14.6 miles (7.3 x 2) per Table 4‐2 of Appendix D of the CalEEMod User’s Guide (ENVIRON, 2013); C‐NW value for an urban setting in the San Francisco Bay Area. ‐ For worker commutes: 24.8 miles (12.4 x 2) per Table 4‐2 of Appendix D of the CalEEMod User’s Guide (ENVIRON, 2013); H‐W value for an urban setting in the San Francisco Bay Area. ‐ For onsite vehicles: estimated to be 5 miles per day based on the size of the project site. d The following conversion factors were used to estimate emissions: e Quantities were adjusted to accommodate potential overlapping activities, using engineering judgment and the proposed schedule of construction activities. f The quantity of Worker Commutes assumes a maximum of 10 vehicles accessing the site per day (for 20 vehicle trips per day), as provided in Section 1.8.2 of the Initial Study. Number of Days Used generally set equal to the longest duration for other equipment or vehicles used during the same construction activity. g The areas disturbed were estimated based on data provided by J. DeWolf in '658394 Palo Alto Sludge Dewatering Detail 5‐21‐15.pdf', specifically looking at areas to be graded. Estimates were converted from ft2 and yd2 to acres using the above conversion factors. h The cut/fill quantities were estimated based on data provided by J. DeWolf in '658394 Palo Alto Sludge Dewatering Detail 5‐21‐15.pdf', specifically looking at materials associated with backfill/compact and excavation activities. Quantities were assumed to be offsite when associated with a 'Haul spoils, offsite' activity. i The aggregate quantities were estimated based on data provided by J. DeWolf in '658394 Palo Alto Sludge Dewatering Detail 5‐21‐15.pdf', specifically looking at materials associated with concrete and subbase activities. Estimates were converted from yd3 to tons using the above conversion factor. j The paving area was estimated based on data provided by J. DeWolf in '658394 Palo Alto Sludge Dewatering Detail 5‐21‐15.pdf'. Estimate was converted from ft2to acres using the above conversion factor. EN0717151040SAC Page 7 of 7 TABLE A‐3 Construction Equipment Emission Factors Palo Alto Dewatering Building Project Emission Factors from OFFROAD2011 VOC CO NOx SOx PM10 PM2.5 CO2 1.5 CY Loader Rubber Tired Loader 200 0.36 0.393 1.452 5.115 0.005 0.175 0.161 503.654 10 Ton Steel Roller Roller 81 0.38 0.628 3.755 5.806 0.005 0.428 0.393 508.199 12 Ton Pneumatic Roller Roller 81 0.38 0.628 3.755 5.806 0.005 0.428 0.393 508.199 25 Ton Vibrating Roller Roller 81 0.38 0.628 3.755 5.806 0.005 0.428 0.393 508.199 50" Vibratory Roller Roller 81 0.38 0.628 3.755 5.806 0.005 0.428 0.393 508.199 66" Vibratory Roller Roller 81 0.38 0.628 3.755 5.806 0.005 0.428 0.393 508.199 Cat 320 DL Excavator 163 0.38 0.358 3.158 4.081 0.005 0.201 0.185 506.495 Cat 416E Tractor/Loader/Backhoe 98 0.37 0.538 3.811 5.142 0.005 0.396 0.364 511.346 Cat 420 E Tractor/Loader/Backhoe 98 0.37 0.538 3.811 5.142 0.005 0.396 0.364 511.346 Cat D 6 Crawler Tractor 208 0.43 0.449 1.803 6.047 0.005 0.233 0.215 507.355 Crane 30 Ton Crane 226 0.29 0.623 2.582 7.381 0.005 0.335 0.308 507.155 Dozer 300 hp Crawler Tractor 300 0.43 0.398 2.744 5.279 0.005 0.205 0.188 510.339 Grader 30000 lbs Grader 175 0.41 0.810 3.916 8.250 0.005 0.464 0.426 516.131 Grader Cat 140M 17 Grader 175 0.41 0.810 3.916 8.250 0.005 0.464 0.426 516.131 Loader 950H Rubber Tired Loader 200 0.36 0.393 1.452 5.115 0.005 0.175 0.161 503.654 Loader Cat 938 H Rubber Tired Loader 200 0.36 0.393 1.452 5.115 0.005 0.175 0.161 503.654 Paving Machine 130 hp Paving Equipment 131 0.36 0.372 3.081 4.322 0.005 0.215 0.197 504.820 Rammax Roller 81 0.38 0.628 3.755 5.806 0.005 0.428 0.393 508.199 Roller Bomag BW65H Roller 81 0.38 0.628 3.755 5.806 0.005 0.428 0.393 508.199 Scraper Cat 621 G Scraper 362 0.48 0.452 3.606 5.757 0.005 0.232 0.214 506.350 Vibraplate Plate Compactor 8 0.43 0.661 3.469 4.142 0.008 0.161 0.161 568.299 150 Ton Crane Crane 226 0.29 0.623 2.582 7.381 0.005 0.335 0.308 507.155 40 Ton Crane Crane 226 0.29 0.623 2.582 7.381 0.005 0.335 0.308 507.155 90 Ton Crane Crane 226 0.29 0.623 2.582 7.381 0.005 0.335 0.308 507.155 Boom Truck Crane 226 0.29 0.623 2.582 7.381 0.005 0.335 0.308 507.155 Concrete Pump Pump 84 0.74 0.610 3.523 4.478 0.006 0.325 0.325 568.299 Drill Rig Truck Mount Bore/Drill Rig 206 0.50 0.193 1.133 2.902 0.005 0.085 0.078 502.128 Forklift Forklift 89 0.20 0.730 4.023 6.222 0.005 0.520 0.479 505.583 Hammer 22k ft‐lb Other General Industrial Equipment 88 0.34 0.716 4.045 6.144 0.005 0.518 0.476 503.944 Welder Welder 46 0.45 1.540 5.395 4.936 0.007 0.389 0.389 568.299 Wire and Conduit Other General Industrial Equipment 88 0.34 0.716 4.045 6.144 0.005 0.518 0.476 503.944 Notes: a Equipment List provided by J. DeWolf in 'Palo Alto Dewatering Building Equipment 6‐3‐15.xlsx'. b Equipment Categories selected to best align the CalEEMod default equipment types with the equipment expected for this project. d Emission Factors taken as the default values for the year 2016 provided in Table 3.4 of Appendix D of the CalEEMod User's Guide (ENVIRON, 2013). c Unless specifically noted in the Equipment List, Horsepower and Load Factors taken as the default, average values provided in Table 3.3 of Appendix D of the CalEEMod User's Guide (ENVIRON, 2013). Emission Factors (g/bhp‐hr) d Equipment List a Horsepower c Load Factor cEquipment Category b EN0717151040SAC Page 1 of 1 TABLE A‐4 Construction Vehicle Emission Factors Palo Alto Dewatering Building Project Emission Factors from EMFAC2014 and AP‐42 VOC CO NOx SOx PM10 d PM2.5 d CO2 PM10 PM2.5 2 Ton Flatbed Crew Truck Offsite Heavy‐duty Diesel 0.193 0.773 5.895 0.016 0.158 0.093 1,698.043 0.300 0.075 3000 Gal Tanker Onsite Heavy‐duty Diesel 2.028 4.999 20.707 0.033 0.313 0.241 3,408.501 903.622 90.362 Concrete Material Loads Offsite Heavy‐duty Diesel 0.193 0.773 5.895 0.016 0.158 0.093 1,698.043 0.300 0.075 Offhaul Loads Offsite Heavy‐duty Diesel 0.193 0.773 5.895 0.016 0.158 0.093 1,698.043 0.300 0.075 Pipe Bedding Material Loads Offsite Heavy‐duty Diesel 0.193 0.773 5.895 0.016 0.158 0.093 1,698.043 0.300 0.075 Water Truck Onsite Heavy‐duty Diesel 2.028 4.999 20.707 0.033 0.313 0.241 3,408.501 903.622 90.362 Tractor Truck 380 hp Offsite Heavy‐duty Diesel 0.193 0.773 5.895 0.016 0.158 0.093 1,698.043 0.300 0.075 Worker Commute Offsite Light‐duty Auto/Truck 0.032 1.351 0.128 0.003 0.046 0.019 302.669 0.300 0.075 Pickup Offsite Light‐duty Truck 0.045 1.762 0.175 0.003 0.047 0.020 336.945 0.300 0.075 Vehicle Vehicle Class a Exhaust Emission Factors (g/mile) b Road Emission Factors (g/mile) c EN0717151040SAC Page 1 of 2 TABLE A‐4 Construction Vehicle Emission Factors Palo Alto Dewatering Building Project Notes: a The vehicle classes are represented as follows: Heavy‐duty Diesel:Assumed to be 100% HHDT, DSL values, per Section 4.5 of Appendix A of the CalEEMod User's Guide (Environ, 2013). Light‐duty Truck:Assumed to be an average of LDT1, GAS and LDT2, GAS values. Light‐duty Auto/Truck:Assumed to be 50% LDA, GAS; 25% LDT1, GAS; and 25% LDT2, GAS values, per Section 4.5 of Appendix A of the CalEEMod User's Guide (ENVIRON, 2013). d The PM10 and PM2.5 emission factors include tire and brake wear. Derivation of Paved Road Emission Factors Parameter PM10 PM2.5 Average Weight a 2.4 2.4 k b 1 0.25 sL a 0.1 0.1 Emission Factor (g/mile) c 0.300 0.075 Notes: a Average Weight and sL taken as the default value from CalEEMod for Santa Clara County. b k taken from Table 13.2.1‐1 of Section 13.2.1 of AP‐42 (EPA, 2011). c Emission factor calculated using Equation 1 from Section 13.2.1 of AP‐42 (EPA, 2011): Emission Factor (g/mile) = k (g/mile) x [sL (g/m2)]0.91 x [Average Weight (tons)]1.02 Derivation of Unpaved Road Emission Factors Parameter PM10 PM2.5 Mean Vehicle Weight a 16.5 16.5 Silt Content b 8.5 8.5 k c 1.5 0.15 a c 0.9 0.9 b c 0.45 0.45 P d 58 58 Emission Factor (g/mile) e 903.62 90.36 Notes: a Mean vehicle weight assumes that heavy‐ and light‐duty trucks weigh an average of 16.5 tons. b Silt content taken from Table 13.2.2‐1 of Section 13.2.2 of AP‐42 (EPA, 2006) for a Construction Site, Scraper Route; this value is consistent with the CalEEMod defaults. c k, a, and b taken from Table 13.2.2‐2 of Section 13.2.2 of AP‐42 (EPA, 2006) for industrial roads. d P taken as the CalEEMod default for the climate region of Santa Clara County e Emission factor calculated using Equations 1a and 2 from Section 13.2.2 of AP‐42 (EPA, 2006): Emission Factor (g/mile) = {k (lbs/mile) x [Silt Content (%) / 12]a x [Mean Vehicle Weight (tons) / 3]b} x [(365‐P) / 365] x 453.6 (g/lb) c Paved and unpaved road emission factors were calculated using CalEEMod methodology, as described below. b Exhaust Emission Factors from EMFAC2014 for Santa Clara County, calendar year 2016. EMFAC2007 Vehicle Categories were used. A speed of 40 mph was assumed for offsite, onroad vehicles, which is consistent with the CalEEMod default. A speed of 5 mph was assumed for onsite, offroad vehicles. An average temperature of 64°F and humidity of 62% were used per Table B‐1 of CT‐EMFAC: A Computer Model to Estimate Transportation Project Emissions (UC Davis, 2007). EN0717151040SAC Page 2 of 2 TABLE A‐5 Fugitive Dust Emission Factors Palo Alto Dewatering Building Project Emission Factors from WRAP Fugitive Dust Handbook PM10 a PM2.5 b Units 0.110 0.023 ton/acre‐month 0.005 0.001 ton/acre‐day c Onsite Cut/Fill d 0.059 0.012 ton/1,000 yd3 Offsite Cut/Fill d 0.220 0.046 ton/1,000 yd3 Aggregates e 0.020 0.003 lbs/ton Notes: d All cut/fill quantities were assumed to be handled and remain onsite, except those specifically labeled as "Haul spoils, offsite" in '658394 Palo Alto Sludge Dewatering Detail 5‐21‐15.pdf', which was provided by J. DeWolf. c Emission factor converted to units of ton/acre‐day assuming 22 construction days per month. e Aggregate emission factors were calculated per the Debris Loading Equation of Section 4.4 of Appendix A of the CalEEMod User's Guide (ENVIRON, 2013). Disturbed Surface Activity Emission Factors a Unless otherwise noted, PM10 emission factors taken from Table A‐4 of Appendix A of the Software User's Guide: URBEMIS2007 for Windows (JSA, 2007). b Unless otherwise noted, PM2.5 emissions assumed to be 20.8% of the PM10 emissions for construction fugitive dust sources per the Final ‐ Methodology to Calculate Particulate Matter (PM) 2.5 and PM 2.5 Significance Thresholds (SCAQMD, 2006). EN0717151040SAC Page 1 of 1 TABLE A‐6 Paving Emission Factor Palo Alto Dewatering Building Project Emission Factors from CalEEMod VOC Units Paving a 2.620 lb/acre Notes: Emission Factor Activity a Emission factor from Section 4.8 of Appendix A of the CalEEMod User's Guide (ENVIRON, 2013). EN0717151040SAC Page 1 of 1 Addendum Addressing Comments on the Proposed Mitigated Negative Declaration for the Palo Alto Regional Water Quality Control Plant Sludge Dewatering and Loadout Facility This document has been prepared to address comments submitted on the proposed CEQA Mitigated Negative Declaration for the Palo Alto RWQCP Sludge Dewatering and Loadout Facility. The proposed Mitigated Negative Declaration and Initial Study were circulated for agency and public review for a 30-day period beginning December 15, 2015, and a public hearing was conducted by the City of Palo Alto Planning Commission on January 27, 2016, and the Mitigated Negative Declaration is being considered for adoption by the City Council on March 21, 2016. During this period, three comment letters were received (Attachment 1) •January 13, 2016 from Herb Borock •January 27, 2016 from Herb Borock •February 20, 2016 from Herb Borock Most of the comments provided in these three letters addressed similar topics, and for clarity the responses below are grouped by topic. In some cases, text changes to the Initial Study are proposed in response to the comments. Text changes are presented in this document using strikeout and underline format. The proposed text changes add clarity to the discussion, but do not add new information of substantial importance. Odors In his letter dated January 13, 2016, the commenter states that no objective information is provided in the proposed Mitigated Negative Declaration demonstrating that odor impacts would be less than significant. Additional detail is provided in both the January 27, 2016 and February 20, 2016 letters asking additional questions about regulatory compliance in terms of dilution-to-threshold ratios and meeting California Ambient Air Quality for hydrogen sulfide. These questions were partially addressed for the January 27, 2016 Planning Commission meeting, in which the following response was provided: The potential for odor impacts was fully assessed in the Initial Study, with the conclusion that odor levels would be “substantially less” than the Bay Area AQMD’s dilution-to-threshold (D/T) ratio of 5. The exact D/T ratio was unquantified in the Initial Study because of some potential variations in the exact control technology to be used. Notwithstanding this unquantified conclusion in the Initial Study text, appropriate calculations were prepared as part of our record, and further refined in an updated version of the odor control memo referenced by the commenter (dated August 4, 2015). As reported in the memo, and in calculations performed at the time the Initial Study was prepared, the proposed odor control technology would result in an expected D/T ratio of approximately 0.9 at the property line. In addition, a more conservative model run was performed to assess a potential worst case, which showed a maximum D/T ratio of approximately 1.5 at the property line. All calculations were performed using the AERMOD dispersion model. These numbers support the Initial Study conclusion that impacts would be less than significant. This response addressed odors in general, but did not specifically address individual odor-causing compounds such as hydrogen sulfide. Aggregate odors were determined to be below the applicable threshold as described above – in other words, including the contributions of all odorous compounds. The commenter requested information about the specific compounds that would generate odors – based on sampling, odorous compounds are expected to include hydrogen sulfide, methyl mercaptan, carbonyl ATTACHMENT H sulfide, and dimethyl sulfide. In addition, the commenter asked specifically about hydrogen sulfide emissions relative to the California Ambient Air Quality Standard of 0.03 parts per million. As part of the odor control analysis, hydrogen sulfide concentrations were measured at the existing belt filter presses in order to determine expected levels for the proposed project.1 Two samples were taken, with measurements of 0.024 ppm and 0.021 ppm. Additional samples were taken at the sludge blending tank to form the basis of the odor control system design. This odor control system is provided to treat high concentration odors (from cake storage and sludge blend tank). Dispersion of the exhaust from the odor control facility and the building exhaust (0.024 ppm) was modeled using AERMOD. The model results demonstrate that the hydrogen sulfide concentration at the property line would be below the 0.03 ppm threshold and that odor D/T would be below the 5 D/T requirement. In order to provide clarification in response to these comments, the following text changes are proposed for the Initial Study document in Section 3.3.2(e) – Would the project create objectionable odors affecting a substantial number of people? LESS-THAN-SIGNIFICANT IMPACT. The sludge dewatering and loadout facility would be a new source of odor at the RWQCP. Odors would be generated at the proposed sludge dewatering and loadout facility. Odorous compounds would include hydrogen sulfide, methyl mercaptan, carbonyl sulfide, and dimethyl sulfide. In addition, changes to overall RWQCP sludge handling processes may affect odor generation from other units that feed sludge to the new dewatering facility. Existing RWQCP operations include odor-control treatments such as adding sodium hypochlorite to sludge prior to storage. These practices would continue under the proposed project. The project also includes the addition of an odor-control system, likely a two-stage system consisting of a biotrickling filter followed by a mixed media adsorber. This type of system is proven to be effective in sharply reducing the concentration of odorous substances in wastewater treatment facilities. Odor is regulated by the BAAQMD (Regulation 7 – Odorous Substances) as a two-part process. First, thresholds are triggered only if the BAAQMD receives odor complaints from at least 10 individuals in a 90-day period. If sufficient complaints are received, then the generator must demonstrate that odors at the property line are not odorous after dilution with four parts of odor-free air. In other words, a dilution-to-threshold ratio (D/T) of no greater than 5 must be met. Air dispersion modeling conducted for the project indicates that odors at the property line would be 0.9 D/T, which is substantially less than the 5 D/T threshold. In addition, hydrogen sulfide concentrations at the property line would be less than the California Ambient Air Quality Standards for hydrogen sulfide of 0.03 parts per million. Based on the expected performance of the odor-control system and the results of dispersion modeling, odor impacts would be less than significant. Greenhouse Gases In his letters dated January 13, 2016, and January 27, 2016, the commenter states that the Mitigated Negative Declaration omits greenhouse gas emissions from project operations. This question was addressed for the January 27, 2016 Planning Commission meeting, in which the following response was provided: The Initial Study discusses impacts from both project construction and operation in Section 3.7.2. Given the extent of construction activities, impacts are quantified and compared to regional greenhouse gas reduction strategies. Impacts from operation are negligible, and potential emission sources – periodic testing of the backup generator and a nominal five truck trips per day – are addressed qualitatively. Because the new facility would be powered by electricity, there is limited onsite potential for greenhouse gas generation from equipment operations. In response to the comment, we further examined the potential for impacts from equipment operations, focusing on the potential for methane emissions from the new sludge handling process, and determined that 1 It should be noted that existing belt filter presses are in use at the Regional Water Quality Control Plant – in other words, the use of sludge watering is not a “new” process at the plant although the proposed dewatering and loadout facility itself would be a new plant feature. the biosolids residence time is so short that generation of biogenic methane is not expected. No changes to the Initial Study are required. Also, it should be noted that this project is a significant step in replacing the existing multiple hearth incinerators, which will substantially reduce overall greenhouse gas emission from wastewater treatment operations. This response also referenced a Greenhouse Gas Emissions Fact Sheet, dated August 2015, which described overall greenhouse gas emissions at the Regional Water Quality Control Plant and recent efforts to decrease emissions. In his letter dated February 20, 2016, the commenter asked several questions about the Fact Sheet including missing data and future estimates. In response to these comments, the Fact Sheet has been updated and is attached to this addendum (Attachment 2) for informational purposes. It should be noted that the Fact Sheet presents general background information about the City’s efforts to reduce greenhouse gas emissions at the plant, and was not used as reference material for the Mitigated Negative Declaration. Future Components of the Biosolids Facility Plan/Cumulative Impacts In all three of his comment letters, the commenter addresses future components of the City’s Biosolids Facility Plan, including the potential for the City to treat biosolids using technologies such as gasification and pyrolysis, and states that it is necessary to include a statement for each of these alternatives as to whether those processes produce odor-causing pollutants or emit greenhouse gases. In addition, the commenter discussed the Bay Area Biosolids-to-Energy (B2E) Coalition and its potential interests in a consolidated B2E facility in one location. The City is a member of the Bay Area B2E Coalition, and is actively exploring partnerships as well as onsite options. However, City staff are still in the process of developing future components of the Biosolids Facility Master Plan, and at this time no additional components are ready for detailed engineering or environmental consideration. Because future components of the Biosolids Facility Plan are speculative, they do not need to be considered in the Mitigated Negative Declaration. Landscaping and Visual Quality In his comment letter dated January 13, 2016, the commenter requested additional information about views from the adjacent former landfill site, southeast of the Regional Water Quality Control Plant. In response to this comment, the City prepared a new visual simulation from the location requested by the commenter – a high point in the adjacent landfill site – and shared this new simulation with the commenter and with the Planning Commission at its January 27, 2016 meeting. In his comment letter dated February 20, 2016, the commenter asked several additional questions about landscaping and visual screening. These questions referenced prior landscaping on both the south and east sides of the plant, and the potential for future landscaping to be successful consistent with the visual simulations. It is important to note that it is not the City’s goal to completely screen all aspects of the plant from all sides. In some cases, this would be undesirable. For example, area south of the plant, located next to the future Byxbee Park, is currently reserved for a compost facility consistent with Measure E (2011) – the City is not planning to augment landscaping to screening views from this area given the potential future use. In addition, it is important to note that the environmental analysis must focus on the project at hand – the proposed Sludge Dewatering and Loadout Facility. With regard to this project, the proposed new landscaping has been selected by a licensed landscape architect to provide screening using native and non- native plants that are known to thrive in the local climate. The proposed Mitigated Negative Declaration does not need to address unrelated questions about Regional Water Pollution Control Plant landscaping. Dewatered Sludge Storage Bins Capacity In his letter dated February 20, 2016, the commenter noted the potential for emergencies to disrupt the transport of solids for offsite disposal, and asked about the capacity of the proposed dewatered sludge storage bins. The bins have a capacity sufficient for 2 days of storage, based on the engineering design calculations. This comment on the design of the project does not affect the environmental impact assessment. Attachment 1 Attachment 2 GREENHOUSE GAS EMISSION PROJECTIONS February 2016 RWQCP GHG Emission Components:  RWQCP Partner Cities = Mountain View, East Palo Alto Sanitary District, Los Altos, Los Altos Hills, and Stanford  Calculated using the Local Government Operations Protocol, version 1.1 & include both anthropogenic & biogenic emissions  Sewage sludge incinerator auxiliary gas & sludge combustion  Gas usage for office building comfort heating  Electricity usage (green electricity has no GHG emissions)  Wastewater treatment process fugitive GHG emissions  Baylands conversion of effluent total nitrogen  Landfill flare and fleet are not included in RWQCP GHG emissions as they are reported by other City Divisions 2018 Assumptions 2019 ‐ 2024 Assumptions 2025a Assumptions 2025b Assumptions  Emissions are comparable to 2015  Comfort heating gas usage is approximately the same as 2014  Wastewater treatment process is the same as in 2014 o Projected increases in population & effluent nitrogen load  Sewage sludge incinerators decommissioned; hauling dewatered sewage sludge to Central Valley (closer locations will be evaluated) o Emissions from sludge transportation included o Emissions from disposal of sludge after transport not included o Emission estimates for sludge disposal taken from the Biosolids Facility Plan (CH2MHill, 2012)  Comfort heating gas usage is approximately the same as 2014  Sewage sludge treated onsite via mesophilic anaerobic digestion with thermal hydrolysis and biogas‐fueled combined heat & power with sidestream nutrient removal treatment o Emission estimates for sludge disposal taken from the Biosolids Facility Plan (CH2MHill, 2012)  Wastewater treatment process is the same as in 2015 o Projected increases in population & effluent nitrogen load  Wastewater treatment expanded to total nitrogen removal of 90% through the RWQCP o Projected increases in population & effluent nitrogen load GREENHOUSE GAS EMISSIONS FACTSHEET February 2016 *GHG emissions are calculated using the Local Government Operations Protocol, version 1.1 & include both anthropogenic and biogenic emissions. GHG emissions associated with electrical usage and the switch to green electricity are included in the above totals. Excluding the purchase of green electricity, the RWQCP decreased its GHG emissions by 16% between 2005 and 2015. The Regional Water Quality Control Plant (RWQCP) is one of the City of Palo Alto’s major greenhouse gas (GHG) emitting facilities. Since 2005, the RWQCP has undertaken numerous initiatives to decrease GHG emissions. These initiatives include purchasing green electricity, routinely tuning the sewage sludge incinerators to decrease natural gas consumption, and utilizing landfill gas to further decrease natural gas used in the sewage sludge incinerators. Since 2005, the RWQCP has reduced its GHG emissions by more than 40 percent. The RWQCP is dedicated to reducing its GHG footprint and has incorporated GHG emissions as a key decision‐making factor as it plans for a new biosolids treatment process and anticipated nutrient removal requirements. ENERGY USE FACTSHEET February 2016 The Regional Water Quality Control Plant (RWQCP) is the City of Palo Alto’s major energy consuming facility. Since 2005, the RWQCP has undertaken numerous initiatives to decrease and switch to greener energy options. These initiatives include purchasing green electricity, routinely tuning the sewage sludge incinerators to decrease natural gas consumption, and utilizing landfill gas to further decrease natural gas used in the sewage sludge incinerators. The RWQCP is dedicated to reducing its energy footprint and is planning numerous projects and evaluations to do so (Table 1). The RWQCP has incorporated energy usage as a key decision‐making factor as it prepares for expanded recycled water demand and anticipated nutrient removal requirements. Table 1: Summary of Future Energy Projects & Evaluations Anticipated to Occur Between 2016 & 2020 Energy Reduction Projects Energy Reduction Evaluations Future Energy Increase Projects  Decommission sewage sludge incinerator  Replace aeration basin diffuser  Install new controls (VFD) on motors  Trickling filter rehabilitation  New Pumping Plant rehabilitation  Install electrical meters and load evaluations by process area  Emerging technologies for trickling filter and nitrification optimization  New nutrient removal treatment processes  Increased recycled water production  Increased incoming wastewater strength ARCHITECTURAL REVIEW BOARD 1 February 18, 2016 2 3 VERBATIM MINUTES 4 5 6 DRAFT EXCERPT 7 8 9 Item No: 3: 2501 Embarcadero Way [File 15-PLN-00371]: Request by Public Works for Site 10 and Design Review of a New Two-Story, 7,500 Square Foot, 50-Foot Tall Building Designed to Handle 11 Sludge De-watering and Truck Load-outs, with Adjacent Stand-by Generator, Outdoor Equipment Area 12 and Landscaping Improvements to be Centrally Located on the Regional Water Quality Control Plant Site. 13 Environmental Assessment: A Draft Mitigated Negative Declaration Has Been Published and Circulated 14 for a 30-day Public Review and Comment Period. For more information contact, Project Planner Amy 15 French at amy.french@cityofpaloalto.org 16 17 Amy French: Good morning. Nice to be back. This application — I assume you already read the 18 description of it - this is the second public hearing on the project. It's proposed on a 25-acre site, the 19 Regional Water Quality Control Plant. I have on the screen an image that shows that it will be centrally 20 located. The Planning and Transportation Commission reviewed and recommended the project and the 21 Mitigated Negative Declaration on January 27th of this year. The ARB offered some guidance at a study 22 session in December and offered guidance on areas to focus on for the formal ARB. Here we are now. 23 Changes to the project since December are noted on the report on page 9, and they'll be covered by 24 Public Works staff in their presentation. This staff report provides draft architectural review approval 25 findings which are, of course, open to your review and edits. The ARB comments on the Mitigated 26 Negative Declaration, particularly the aesthetics section, are also welcome. Department approval 27 conditions are not yet finalized; they will be finalized prior to sending the report to the City Council. The 28 tentative date is March 21st. There is an error in the report that says February 22nd, and that is an 29 error. This report also outlines the Baylands Design Guidelines on report pages 10 and 11. The focus for 30 sites adjacent to the Baylands, which is the case for this site, is compatibility with Baylands aesthetics 31 and environment. Finally, this report contains sections on the project with respect to the Palo Alto 32 airport. This is on page 12, and this is mainly for the benefit of the public following concerns that were 33 brought up just prior to the Planning and Transportation Commission review. Also, there's a note about 34 the CEQA process regarding the adjustments that will be made to the Mitigated Negative Declaration, 35 clarifications basically for the Council review and action. I'll turn it over to Phil. 36 37 Phil Bobel: Thank you, Amy. Phil Bobel, Public Works Assistant Engineer. We've got some other people 38 with us today to answer questions and to help out. Jamie Allen is our Plant Manager. He's with us. 39 Padham [phonetic] is our Senior Engineer with us. Greg is our architect, and David is our design 40 engineer from CH2M. They're all here to help answer questions. Since we did have a study session on 41 this, I wasn't going to belabor sort of the project itself. Just a quick reminder, we need this dewatering 42 and truck off-haul facility so that we can phase out, eliminate the incinerator. That's the goal. For 43 several years, we'll be hauling this dewatered sludge probably to another sewage treatment plant while 44 we get our own digesters in place, which is the hoped for ultimate process for Palo Alto. I'll not go back 45 through what we did at the study session. A picture of our incinerator. This was the Long Term Facilities 46 Plan we did where we showed that brown area as the site for the replacement facilities for the 47 incinerator. That's exactly what we're doing now. You can see that there's kind of an open area right in 48 the upper center of the plant. That's where this facility is going. Here's the slide that Amy showed. It 49 has the building that we're talking about, our dewatering building, right with that big arrow as slightly 50 yellow. I'm going to just focus on the comments we got from you at the study session and how we've 51 responded to them, and then remind you of how it looks from the various sides. Some of those sides you 52 didn't have too comments on, but I'll go back through all of the looks, the four sides of the building. This 53 was our drawing showing the building from different perspectives. We didn't change that drawing. This 1 is in your packet. It points out where we did do new things in response to your comments. I'll go over 2 those, showing you the actual elevations now. First, I wanted to—we didn't do a good job, I don't think, 3 of explaining that just last year in 2015 we spent about $1 million on landscaping at the sewage 4 treatment plant. We didn't show you last time the outline of what was done there. Here's not a detailed 5 drawing obviously, but the work that we did and completed in 2015. A lot of new plantings, a new path 6 around the plant on the northeast side, and then a lot of internal work on the southwestern side. We'll 7 be talking more about that, because that's the entrance to our plant. That shows the details of the new 8 plants that were installed and the new features. There's the new sign that we put in front at the western 9 side of the facility, and the new artwork that's next to it on the right. That was part of the public art for 10 that project. There's some more of the public art that matched it with vines. We'll be talking more about 11 this vine. I personally like it and hope we incorporate some more of it, but we haven't chosen the plant 12 types. This is the elevation that you guys had most of the thoughts about last time. It's our west 13 elevation. As you enter the plant from the main entrance, this is the side of the building you see, the 14 western elevation. The main changes we've made since last time to try to add more interest to the 15 building are that second window, which is the upper window on the second story in the middle. That's 16 new, and it matches one that was in the original design on the right-hand side. That window is new. 17 These demarcation, those two lines, grooves in the concrete demarking the first and second stories is 18 new. The major new feature are the green screens. That's a product you've probably seen before that's 19 a green mesh and then vines. Whatever plants you choose can grow up that. I think that's a major 20 response to your concern that we do something more interesting with that side of the building. We're 21 excited about that. We agreed with you that something more was needed. Let's show you what—we 22 also had discussion about the concrete itself, what would that look like. This is what we'll be trying to 23 sort of match, because most of the existing concrete at the sewage treatment plant looks like this. This 24 is a shot of one of our existing buildings at the sewage treatment plant, and you can see we've used 25 those grooves. The 4 by 8 sheets weren't grooved, but they show an outline. The holes from the ties 26 are visible. They were filled but visible. This is kind of the look that the rest of the buildings have at the 27 sewage treatment plant and what we tried to achieve with the new building. Here's a shot looking from 28 the entrance. We're just inside the fence, looking east at the west elevation. There's some existing trees 29 which are in the middle and block part of the view of the building, so you don't see when you're this far 30 away quite as well those green screens. Of course, with actual plants on them, they'd be a darker green, 31 and they'd be more visible. That's what it looks like. The other thing last time when we were here, our 32 photos weren't as up-to-date as they should have been and didn't include our new landscaping in all 33 cases. This shows what it actually looks like now with the newer landscaping in front and some of our 34 new plantings. Again, this is new plantings that we would do, not the previous project but plants that we 35 would add with this project. You can see that there are three larger trees out in front, some other plants 36 on the western side, the down side of this building. Outside of our fence, there's another row of plants, 37 and we'll talk about that in a minute. Plants and trees that we'll be adding to the screening from the 38 eastern side of the plant. We'll see that in a minute. Here's the east elevation. That elevation didn't 39 change, and we didn't have any comments from you on the elevation itself. This shows, looking at that 40 east elevation from outside the plant, this shows photo shopped in what it would look like now. Where 41 that arrow points down and in front of the building is where these new plants would go that I showed 42 you on the other drawing. There they are again. It's that upper row of plants. They would be screening 43 better the building from the east side. Here's a picture on the right. This is a photo shopped rendering 44 of what we think it will look like in ten years after those plants achieve full height and grow up and would 45 hide the building sort of. This also shows—on the left-hand side, it's showing you the plants that we 46 added last year. On the right-hand side, the diagram is showing you the plants that we would add with 47 this project. It's been on three different slides, but those are those same plants on the right-hand side 48 that we would add this year. There's just a blown-up photo, again, photo shopped in showing after 10 49 years what we think that growth would look like and basically hide the east elevation of the building. The 50 north elevation changed. We had some vines shown, but we've now shown this green screen effect. 51 The west and the north elevation, it's the only place where you can kind of be in the plant and see two 52 elevations at once. You can be at that corner, and you can see the north and the west. We made an 53 effort here to tie those two together and to use that same green screen material and use the same either 1 vine or mixture of vines. We haven't chosen the plant types yet. Comments welcome on that. I didn't 2 show you from the north, from offsite the plant, because you can't see the north side from outside the 3 plant. There's another building blocking it. Our UV building blocks it. The south elevation we'll talk 4 about for a minute. Didn't get any comments from you on the elevation itself. I wanted to show you 5 what it looks like from the Baylands again. Here's looking from our Byxbee Park, the old landfill, which is 6 the open area on the eastern or right-hand side of this aerial. Those very small photos show you what it 7 would look like from those. Here they are blown up a bit. Our new building is visible; you see it best in 8 that central photo where the new building is photo shopped in the arrow on the left. These are shots 9 from various points at Byxbee Park. One of our commenters, Herb, raised—that's it again from that 10 lower elevation. Herb raised the point of what would it look like, though, from the very top of the park. 11 Those were taken down the hill closer to the building but not at a high elevation. Point E is the highest 12 point, 65 feet in elevation, at Byxbee Park. We went back and took a photo from there and photo 13 shopped our building in. On the left-hand side is the current look without our new building. On the 14 right-hand side, our new building is photo shopped in. Again, this is from 65 feet, and you're much 15 further from the sewage treatment plant now. You can see the Cor-Ten in the new building right here. 16 This is the new building here sticking up above our existing building. This is one of our existing buildings, 17 and then you see our new building sticking up where I've got the arrow right now. You get up higher, 18 and you do see more of the new building. That's all I was going to show you. We can come back to any 19 of those drawing needless to say as you have questions. 20 21 Chair Gooyer: I think we've got a pretty good handle on it. Thank you very much. I'll open it up to the 22 public. We have one card right at the moment, and that's for Herb Borock. Herb. 23 24 Herb Borock: How much time do I have, Chair? How much time do I have to speak? What's my—how 25 much time? 26 27 Chair Gooyer: That's fine. 28 29 Herb Borock: No, tell me. I don't have a number here. I need to know how much time I have to speak. 30 31 Chair Gooyer: Traditionally, you have 3 minutes. 32 33 Herb Borock: Okay, that's what I need to know. Thank you, Chair Gooyer. Just briefly on the 34 environmental in terms of greenhouse gases, the PowerPoint slide seemed to have gaps in years. I 35 would request that be filled in on missing years on 2006 and '07 and moving the explanatory text up in 36 years 2015 to 2018 so that you have a complete bar chart for the greenhouse gases. In terms of the 37 landscaping, even without the views that I requested, you can see from the south side views that that 38 landscaping that was installed a long time ago does not provide protection from existing parts of the 39 plant. Although we have nice simulations and a condition to maintain it, I don't know whether it's the 40 type of landscaping that's planted or the soil that it's in or what, but how can we get assurance that it will 41 do what we said it was going to do? I feel that recently there was an experiment planting some 42 evergreen, some eucalyptus and others, that didn't work out. Normally when you have a project just as 43 in the previous ones, you're willing to consider changing what it looks like in terms of bulk and mass to 44 meet your guidelines. Here, what's inside is really a given. You're looking at just a box to make look 45 better from the outside. When it goes to Council, I think that we need more explanation. Of course, this 46 is supposed to be the first component of a multi-component process. My first request in my mind was 47 why is the building so big. The existing filter presses I don't think are even labeled on the plans. I think 48 it's where the sludge dewatering and odor control equipment is, which would be next to where the public 49 will assemble for tours of the plant. Basically you're taking what's part of a continuous process and 50 making it a batch process for loading the trucks with the cake of the sludge. My question would be how 51 many truckloads of storage you would have on the roof considering possible disruptions either in the fact 52 that there's a movement away from having sludge being moved from one county to the other and that 53 the price of all the alternative places to use it keeps on going up. For the natural disaster like an 1 earthquake, if the transportation network isn't available, how much can you store in it? Right now it 2 would be two to three truckloads a day. At maximum capacity for the plant, it would be five truckloads a 3 day. How many truckloads can you put up there, and do you need more space? Thank you. 4 5 Chair Gooyer: Thank you. Could staff ... 6 7 Phil Bobel: I'll ask maybe Jamie to address how much storage we have. In the case of an emergency, 8 how long could we not truck the material? 9 10 Jamie Allen: Depending on if the bins were completely empty, we have 3 days of storage, and that 11 would get us through labor strikes, holidays when the hauler is not hauling and things like that. That 12 was the design we picked for how much storage. Three days of sludge storage. 13 14 Chair Gooyer: Any other questions? I'll bring it back to the Board. 15 16 Board Member Baltay: I do have a question, not about the sludge though. What is the proposed new 17 green screen? In more detail, what plant grows on it and how is it maintained? I see just the words 18 modular trellis system on the drawings, and it seems an important aesthetic feature. 19 20 Phil Bobel: I'm sorry. We were conferring. 21 22 Board Member Baltay: I'd like to know what the green screen feature is in more detail. What I see here 23 is the words trellis system, and I see a detail of the mechanical part of it, the green metal. What plant 24 grows on that? 25 26 Phil Bobel: One of the main ones that we're considering is that honeysuckle that I showed the picture of, 27 that we have on a different trellis. The plant folks want to consider this further. Here's the one that's 28 doing well right adjacent. It's this honeysuckle. It's got a red flower, really almost all of the year. 29 30 Chair Gooyer: Wynne, you had a comment or question? 31 32 Board Member Furth: I had a couple of questions. One was I read with interest the discussion about 33 odor control and ammonia formation and whatnot. I was looking at page 3-7 of the evaluation of 34 environmental impacts. It describes what the Air Quality Management District does, which is if you 35 complain enough times, it investigates. What's our own onsite protocol for dealing with possible error? I 36 realize people who work there, their noses become desensitized, but what's our process for making sure 37 this is not a source of objectionable odors? 38 39 Phil Bobel: We definitely test for H2S; that's the main thing you worry about, hydrogen sulfide gas. We 40 test to make sure it meets OSHA requirements regardless of the level of smell. There's two issues: 41 there's smell and there's actual harm. The OSHA requirement is based on harm. We test to make sure 42 that we're meeting the OSHA requirements for H2S onsite. We've been fortunate. We have sewage 43 sludge onsite that's undigested, that we're moving around currently. Having sewage sludge that's 44 undigested is not a new thing for us. We've been very fortunate we have very few complaints. I can't 45 even think when the last time we had a complaint was from the public, from somebody outside the 46 facility or our own people. Jamie, do you have any? 47 48 Jamie Allen: It's been years. 49 50 Phil Bobel: I shouldn't say we've been fortunate. I think we've done a good job. Therefore, we just 51 don't get complaints. 52 53 Board Member Furth: Do you have feasible options if odor problems do arise? The objection was you 1 can't just say it in an EIR or a Negative Dec rather that we'll figure that out if the time arises. Are you 2 confident there's adequate technology? 3 4 Phil Bobel: No, no. There's two systems that are designed to prevent an odor problem. Who's best to 5 describe that? Jamie, do you want to? 6 7 Jamie Allen: We have a bio-trickling filter to take the foul air and run it through like a wet media filter, 8 and the microorganisms break down, the hydrogen sulfide and any odorous compounds. Then it's 9 polished off with an activated carbon to bring down 99 percent in each unit to meet Air District 10 requirements. This is a tested design that the Air District will approve. 11 12 Board Member Furth: You're confident this isn't going to smell bad? 13 14 Jamie Allen: Right. 15 16 Board Member Furth: Thank you. 17 18 Chair Gooyer: Wynne, why don't you go ahead and start then? 19 20 Board Member Furth: Thank you for the new drawings and points of view. I wanted to talk about 21 landscaping. My colleagues are all trained to read drawings; I'm trained to read text. People who deal in 22 design often drive me berserk with their use of text. Just to start out, it says here that we're going to 23 have a use of drought-tolerant native and nonnative California plant materials. I didn't know if that 24 meant California plant materials that are native and not native to California or the more accurate 25 description would be you're going to use drought-tolerant materials. It has nothing to do with whether 26 they're native or nonnative. When I go on and read this, what you have is a little island of the South 27 Pacific here, or the big island. You've got New Zealand and Australia as your principal contributors, 28 generously assisted by South Africa and a little bit from the Mediterranean. Clearly this is not—we've just 29 had an interesting—which is lovely. I'm not arguing that you should undo the work you already did at 30 great expense, but it does seem to me that the way this is being presented to us is a little confusing. 31 Basically the plan here is what? It's not about California natives. As far as I can tell, it's not about great 32 habitat for local beetles and butterflies and moths. What is our philosophy here? Try and put it into the 33 Baylands plan. 34 35 Phil Bobel: I'd say there's a couple of main objectives. One main objective is to have something that's 36 going to be visually pleasing for a large percentage of the year, and it's going to be of a size that is going 37 to hide, frankly, as much of the facility as we can. That's a goal. To be drought-tolerant is a goal. When 38 you ... 39 40 Board Member Furth: To survive in the Baylands is a goal. 41 42 Phil Bobel: Yep. Those are our main objectives, and they don't always add up to—we don't always find 43 a native, that's why it says ... 44 45 Board Member Furth: I don't expect you to. I'm all in favor of that. Just I would prefer you didn't 46 reference it in the document as a goal. 47 48 Phil Bobel: I guess I'd call it a sub-goal. We want to try to maximize natives, but we've got these other 49 objectives, the size of the plant, looking good all year. We have to balance those objectives. 50 51 Board Member Furth: I think I understand that the landscape is described as open, serene and treeless, 52 clearly that's not going to do for screening of water treatment facilities. Clearly you have a well-53 established pattern there which involves the great California tradition of importing stuff from elsewhere. 1 I had two concerns. One was—I'm interested to hear from my colleagues on this—the shape of the 2 trellises or the screens that would hold up vines on the building itself didn't make a lot of sense to me. 3 When I was looking at the design, it seems to me that one of the more important views that's going to 4 be affected by this project is the one down the driveway. You've got a good picture of it; you showed it 5 to us. I forget which one it is. It focuses on rampant weeds in the front. Looking down the drive. 6 7 Phil Bobel: You mean the one looking down the driveway? 8 9 Board Member Furth: Yeah, exactly. That's identified in the description of the landscaping plan as one 10 of the areas of landscaping, but I didn't see any description of what was going to go there. It does seem 11 like an important—can you help me relate that picture to this drawing? 12 13 Phil Bobel: These are the new plants. 14 15 Jamie Allen: Phil, if you go back, those are not weeds. That's part of the $1 million landscaping. That's 16 a groundcover. That's all new groundcover. Those aren't weeds. 17 18 Board Member Furth: What is it? 19 20 Jamie Allen: I don't know the name of it. I'm not a plant person. It's not weeds; that's part of our new 21 landscaping. It's maintained by the city's ... 22 23 Phil Bobel: All of that is ... 24 25 Board Member Furth: Is this outside of the scope of this project, because your drawings start beyond 26 that? 27 28 Phil Bobel: Yes, they do. Our drawings start—I'll try to ... 29 30 Board Member Furth: What I'm getting at is it did not seem terribly well integrated. 31 32 Phil Bobel: The new ones are the ones that Amy's showing. They're right in front of the building. If you 33 want to go back, Amy, to the photo. All of that stuff is actually just beyond that very large, roundish tree 34 that's blocking the building, that tree. All that is ... 35 36 Board Member Furth: They won't be particularly visible from the street? 37 38 Phil Bobel: It won't be very visible from the street except for the green screen itself. You can see the 39 green screen is surrounding that one doorway. That'll be the most visible thing from the street. The 40 new plants won't be very visible at all from the street. Of course, remember this is a dead-end street. 41 The only people that will be here will be people coming into the sewage treatment plant. 42 43 Board Member Furth: This is the entry? 44 45 Phil Bobel: Yes. 46 47 Board Member Furth: You're planting Arbutus unedo, and you're planting a lot of other—I guess you're 48 planting ... 49 50 Phil Bobel: The planting that you see in front ... 51 52 Board Member Furth: That's picking up on the plants you already have on the site elsewhere. Is that 1 right? 2 3 Phil Bobel: Yes. It's integrated in. It's done by the same landscape architect, Siegfried. It was planned 4 in conjunction with one another. The green that you see here, except for the tall eucalyptus trees, is all 5 new. It was all part of the $1 million project that went through ARB about 2 years ago and was finished 6 last year. 7 8 Board Member Furth: My comment was going to be that it would be good if the new landscaping 9 integrated with this, and you had a sense of the whole thing fitting together. I can't tell that from the 10 plans that we have. It's hard ... 11 12 Phil Bobel: I don't know how to make you feel better about that, except ... 13 14 Board Member Furth: That's okay. It's the way it is. You're thinking of putting bright orange on the 15 building itself, right? 16 17 Phil Bobel: You mean the Cor-Ten? 18 19 Board Member Furth: Yeah. No, no, bright orange plants, the cape honeysuckle. 20 21 Phil Bobel: The flowers are, I would call it reddish. 22 23 Board Member Furth: It's a beautiful plant. It has pulled down more than one of my fences. My 24 comments, I have nothing to say that would recommend that we change this. It seems to be an 25 approach which isn't particularly anticipated by the Baylands documents, but clearly one that's already 26 well established on this site. 27 28 Chair Gooyer: Peter. 29 30 Board Member Baltay: Thank you. I can support the project as it is. I'd like to make a couple of quick 31 notes. One is that I had been concerned—I think several Board Members were—about the Cor-Ten steel 32 possibly staining the concrete. I appreciate your detail. I'm going to read the number of the detail, it's 33 tricky, so staff can be sure that that's incorporated in the future. It's Detail 1080024. It shows the Cor-34 Ten screening set back behind a small concrete parapet which would keep water from draining down the 35 face of the building. I'm just trying to emphasize to planners when they review the drawings it's very 36 important that it be kept that way. There was a similar detail not shown in the drawings, but I'll assume 37 it's going to be designed in the same way. That's 1080023. It's referenced on the plans, but I don't see 38 it in the plan set. I'll take it on faith that it will be done that way. The elevations show the Cor-Ten—39 that's the parapet at the very top of the building. Again, it's imperative that that be set back from the 40 edge of the concrete. We'll, otherwise, just have a very unattractive thing. 41 42 Phil Bobel: We're tuned into that principle. Greg can speak to that if you'd like. 43 44 Board Member Baltay: No, I think we've done plenty of talking. I just want to be sure it's in the record, 45 so Amy and her staff have a chance at just catching it. There's a lot of paper here, and it's hard to find 46 that detail. I'm not in favor of the green trellis. I think that in concept it's a good idea, but I'm afraid in 47 execution it may end up being a dead plant. I think the building is fine looking for what it is without that 48 additional feature. If I can just as a means of comment say, I think it was my comment originally that 49 you have an opportunity. You have this big truck gate down the end of this long road driving in. You 50 can architecturally do something with it like a trellis or a canopy over the door. You could be playful, 51 make a mouth out of it. Any number of things that will just sort of say what you're doing here, be fun 52 about it. It wasn't intended to be something that is in any way you have to do. I think the building is 53 cleaner without the green trellis on it, but I can support it either way. That's all my comments. Thank 1 you. 2 3 Chair Gooyer: Kyu. 4 5 Board Member Kim: My only comment would be regarding the green screen. It just looks too slapped 6 on. I think the way that it's drawn in the drawings, there doesn't seem to be a rhyme or reason for 7 things like the shape of the curve and the distances that they are from one another as well as the 8 amount that it's held off from the ground. I agree that the building would probably look a lot cleaner 9 without it or possibly reverting back to some of the cable vine systems. I think with the new landscaping, 10 I don't think we're going to see a lot of that. Maybe the building can do without it. Even with it, I would 11 be okay with it as far as the approval process. Just wanted to also reiterate the thanks for the details, 12 especially the Cor-Ten steel and some of the areas and components where there was a little bit of clarity 13 lacking, but I think it's been clarified now. Thank you. 14 15 Vice Chair Lew: Thank you for the revisions to the project. Also I did want to give you kudos for all the 16 photo simulations. Those were some of the best that I've seen in a long, long time. They're very high 17 quality, and it's very important out in the Baylands. I want to say too I do also like all the landscaping 18 improvements on the Bay side of the project. I do go running and stuff back there, and that all looks 19 great. I'm not so crazy about the entrance view of your landscaping. I think other Board Members have 20 mentioned that. Again, as Wynne was saying, it's missing a big design idea. I understand you've got 21 native plants, and that's fine. I think what I'm missing is the entry statement, the big idea for the 22 entrance, and it shows. At the end of the cul de sac there, when you look there, there's a mess of 23 different signs. There's the artwork. You've got two different gates. There's an old light fixture there. 24 There's just a lot of clutter. I think that was the point that we were trying to get at last time. My only 25 real main objection to the project is the green screen as you have it presented. I'm not opposed to 26 green screen. It can get really cluttered. It can get ugly really quickly. If you start doing it in all sorts of 27 funny shapes and different sizes, it's actually really ugly. The cleaner installations I've seen of it are not 28 the green or the black, just the silver color, no edge—what do they call it? There's some sort of like side 29 panels to work with the architecture of the building which is the 4-foot concrete panel, the 4-foot 30 concrete module. I can't support the green and the curves and all of that as it's proposed, but I'm not 31 opposed to it. It depends on the vine. Some vines are okay with wires, but other vines need more 32 support. Whether you go with wire or a green screen, it's going to vary depending on the plant. It 33 seems to me you're doing two different things here. Most of the time when we use a green screen it's to 34 push something in the background. Cover it with green and let it just sort of fade into the background. 35 If you put a plant that has orange or red-orange vines on it, then it's actually popping it into the 36 foreground. It seems like this is not resolved aesthetically. I'm sure it's workable, but the big idea is lost 37 on me at the moment. I would like that to come back to the Board or subcommittee at some point. I 38 don't have any other objections to the project. 39 40 Chair Gooyer: Can I make a suggestion then? Seeing as how I think we're all sort of in that same 41 agreement, I think the green screen was taken a little bit too literally. Can I suggest—I agree that the 42 arch really has no relationship to anything. I'd be willing to approve it without that, and put the money 43 towards landscaping that's already there. I mean, is everybody willing to ... 44 45 Vice Chair Lew: You're saying just on the west? It's also on the north. 46 47 Chair Gooyer: No, just get rid of the screens altogether. 48 49 Vice Chair Lew: On both sides? 50 51 Chair Gooyer: Yeah, on both sides. 52 53 Board Member Baltay: is the applicant okay with that? 1 2 Phil Bobel: Sure. We need to move forward with this. I'm shocked, frankly, and personally disappointed 3 as we were looking forward to it at the plant. We need to move forward. If that's what you're going to 4 do ... 5 6 Chair Gooyer: I agree basically the same sort of thing is that Alex's interpretation is exactly right. 7 Usually you do that to sort of make something disappear. You're making it punch out. 8 9 Phil Bobel: I'm sorry to interrupt. I said we hadn't selected the plant type. If that's the comment, we 10 can select the plant type without ... 11 12 Chair Gooyer: No, no, that's just—hang on. The gist of it being just that I think it's an interesting 13 approach, but the building I think looks cleaner with just the Cor-Ten and the concrete rather than just 14 trying to impose another element. Also because of the fact that it's somewhat random with the curve the 15 way you have it and the problem is that if this was out in the middle of nowhere as you have the fern, as 16 you said—I should say the planting—this is right up against the building where people are going to be 17 walking, everything else, that I have a feeling it's going to end up, at least the lower 10 feet of it or so, 18 being a mess pretty soon rather than anything else. If I could get a motion from someone, I think we'd 19 all like to approve the building. My approach would be just to remove the green screen on the two sides, 20 but I'll leave that up to someone. Can I get a motion from someone? 21 22 MOTION 23 24 Board Member Baltay: Sure. I'll move that we approve the building as submitted with the exception that 25 the entire green screen feature is removed. 26 27 Chair Gooyer: Can I get a second? 28 29 Board Member Kim: I'll second that. 30 31 Chair Gooyer: All those in favor. Opposed. 32 33 Amy French: Sorry. Could you make reference to the architectural review findings in your motion? 34 35 Board Member Baltay: I thought I did when I said that we'll—they're all in the staff report, and I support 36 the findings the way they're worded in the staff report. 37 38 Chair Gooyer: It's 3-2. 39 40 Vice Chair Lew: I'm opposed. 41 42 Chair Gooyer: 3-2 or 4-1? Wynne? 43 44 Board Member Furth: 4-1. 45 46 MOTION PASSED: 4-1-0-0 47 48 Mail Processing Center Federal Aviation Administration Southwest Regional Office Obstruction Evaluation Group 10101 Hillwood Parkway Fort Worth, TX 76177 Aeronautical Study No. 2016-AWP-456-OE Page 1 of 7 Issued Date: 02/18/2016 Tom Kapushinski City of Palo Alto Water Quality Control Plant 2501 Embarcadero Way Palo Alto, CA 94303 ** DETERMINATION OF NO HAZARD TO AIR NAVIGATION ** The Federal Aviation Administration has conducted an aeronautical study under the provisions of 49 U.S.C., Section 44718 and if applicable Title 14 of the Code of Federal Regulations, part 77, concerning: Structure:Building Sludge Dewatering Bld. Location:Palo Alto, CA Latitude:37-27-08.00N NAD 83 Longitude:122-06-39.00W Heights:12 feet site elevation (SE) 77 feet above ground level (AGL) 89 feet above mean sea level (AMSL) This aeronautical study revealed that the structure would have no substantial adverse effect on the safe and efficient utilization of the navigable airspace by aircraft or on the operation of air navigation facilities. Therefore, pursuant to the authority delegated to me, it is hereby determined that the structure would not be a hazard to air navigation provided the following condition(s) is(are) met: As a condition to this Determination, the structure is marked/lighted in accordance with FAA Advisory circular 70/7460-1 L, Obstruction Marking and Lighting, red lights - Chapters 4,5(Red),&12. It is required that FAA Form 7460-2, Notice of Actual Construction or Alteration, be e-filed any time the project is abandoned or: __X__ At least 10 days prior to start of construction (7460-2, Part 1) __X__ Within 5 days after the construction reaches its greatest height (7460-2, Part 2) See attachment for additional condition(s) or information. The structure considered under this study lies in proximity to an airport and occupants may be subjected to noise from aircraft operating to and from the airport. Any height exceeding 77 feet above ground level (89 feet above mean sea level), will result in a substantial adverse effect and would warrant a Determination of Hazard to Air Navigation. ATTACHMENT J Page 2 of 7 This determination expires on 08/18/2017 unless: (a)the construction is started (not necessarily completed) and FAA Form 7460-2, Notice of Actual Construction or Alteration, is received by this office. (b)extended, revised, or terminated by the issuing office. (c)the construction is subject to the licensing authority of the Federal Communications Commission (FCC) and an application for a construction permit has been filed, as required by the FCC, within 6 months of the date of this determination. In such case, the determination expires on the date prescribed by the FCC for completion of construction, or the date the FCC denies the application. NOTE: REQUEST FOR EXTENSION OF THE EFFECTIVE PERIOD OF THIS DETERMINATION MUST BE E-FILED AT LEAST 15 DAYS PRIOR TO THE EXPIRATION DATE. AFTER RE-EVALUATION OF CURRENT OPERATIONS IN THE AREA OF THE STRUCTURE TO DETERMINE THAT NO SIGNIFICANT AERONAUTICAL CHANGES HAVE OCCURRED, YOUR DETERMINATION MAY BE ELIGIBLE FOR ONE EXTENSION OF THE EFFECTIVE PERIOD. This determination is subject to review if an interested party files a petition that is received by the FAA on or before March 19, 2016. In the event a petition for review is filed, it must contain a full statement of the basis upon which it is made and be submitted to the Manager, Airspace Policy & Regulation, Federal Aviation Administration, 800 Independence Ave, SW, Room 423, Washington, DC 20591. This determination becomes final on March 29, 2016 unless a petition is timely filed. In which case, this determination will not become final pending disposition of the petition. Interested parties will be notified of the grant of any review. For any questions regarding your petition, please contact Airspace Regulations & ATC Procedures Group via telephone -- 202-267-8783 - or facsimile 202-267-9328. This determination is based, in part, on the foregoing description which includes specific coordinates, heights, frequency(ies) and power. Any changes in coordinates, heights, and frequencies or use of greater power will void this determination. Any future construction or alteration, including increase to heights, power, or the addition of other transmitters, requires separate notice to the FAA. This determination does include temporary construction equipment such as cranes, derricks, etc., which may be used during actual construction of the structure. However, this equipment shall not exceed the overall heights as indicated above. Equipment which has a height greater than the studied structure requires separate notice to the FAA. This determination concerns the effect of this structure on the safe and efficient use of navigable airspace by aircraft and does not relieve the sponsor of compliance responsibilities relating to any law, ordinance, or regulation of any Federal, State, or local government body. Any failure or malfunction that lasts more than thirty (30) minutes and affects a top light or flashing obstruction light, regardless of its position, should be reported immediately to (877) 487-6867 so a Notice to Airmen (NOTAM) can be issued. As soon as the normal operation is restored, notify the same number. This aeronautical study considered and analyzed the impact on existing and proposed arrival, departure, and en route procedures for aircraft operating under both visual flight rules and instrument flight rules; the impact on all existing and planned public-use airports, military airports and aeronautical facilities; and the cumulative impact resulting from the studied structure when combined with the impact of other existing or proposed Page 3 of 7 structures. The study disclosed that the described structure would have no substantial adverse effect on air navigation. An account of the study findings, aeronautical objections received by the FAA during the study (if any), and the basis for the FAA's decision in this matter can be found on the following page(s). If we can be of further assistance, please contact Karen McDonald, at (310) 725-6557. On any future correspondence concerning this matter, please refer to Aeronautical Study Number 2016-AWP-456-OE. Signature Control No: 278720416-282045534 ( DNH ) Mike Helvey Manager, Obstruction Evaluation Group Attachment(s) Additional Information Map(s) Page 4 of 7 Additional information for ASN 2016-AWP-456-OE The proposal, submitted by the City of Palo Alto, will construct a two-story building with stack to 77-ft above ground level (agl)/89-ft above mean sea level (amsl) at the Regional Water Quality Control Plant, in Palo Alto, California. This site point is approximately 0.57 nautical miles southeast of the Palo Alto (PAO) airport reference point; 2,328 feet direct distance from the Runway 31 physical approach end, at this closest civilian public-use landing area. The PAO Field Elevation (FE) is 6 feet above mean sea level (amsl); Runway 31 physical approach end elevation is 7 feet amsl. The site elevation of this proposed structure point is 12 feet amsl. The structure height exceeds the obstruction standards of Title 14 Code of Federal Regulations (CFR) Part 77, as follows: Section 77.17(a)(3) - (TERPS criteria); would penetrate the PAO RWY 13 40:1 departure obstacle clearance surface (OCS) in the Initial Climb Area (ICA) by 29 feet (less than 35 feet). Mitigation: The proposed structure height would not require an increase in the existing published departure climb gradient (cg), nor would it require an increase in departure weather minimums. It qualifies as a 'low close-in' obstacle penetration with climb gradient termination altitude 200 feet or less above DER, and upon receipt from the sponsor of the 7460-2 Part 1, a note will be added to the 'Take-off Minimums and (Obstacle) Departure Procedures in the U.S. Terminal Procedures publication. Details of this proposal were not distributed for public aeronautical comment because current internal FAA Obstruction Evaluation policy exempts structures that would exceed only the above-cited Section 77.17(a)(3) standard by 35 feet or less. FAA airspace evaluation has found that the adverse effect of this structure is known. The structure height does not require a change to any existing instrument published climb gradient or departure weather minimums and would not have a significant adverse effect on the TERPS criteria. FAA evaluation finds that the proposal would not create substantial adverse effect on visual aeronautical operations or lessen the utility of the navigable airspace overlying the site. Existing obstacles and terrain control the development of future approach and departure Terminal Instrument Procedures for PAO landing area. Therefore, no further attempt to negotiate the structure to a lower height was considered necessary. This does not affect the right to petition for review determinations regarding structures which exceed the subject obstruction standards. AERONAUTICAL STUDY FOR POSSIBLE EFFECT UPON THE OPERATION OF AN AIR NAVIGATION AID: - None. AERONAUTICAL STUDY FOR POSSIBLE INSTRUMENT FLIGHT RULES (IFR) EFFECT DISCLOSED THE FOLLOWING: Page 5 of 7 - The proposal would have no effect on any existing or proposed IFR arrival/departure routes, operations, or procedures. - The proposal would have no effect on any existing or proposed IFR en route routes, operations, or procedures. - The proposal would have no effect on any existing or proposed IFR minimum flight altitudes. AERONAUTICAL STUDY FOR POSSIBLE VISUAL FLIGHT RULES (VFR) EFFECT DISCLOSED THE FOLLOWING: - The proposal would have no effect on any existing or proposed VFR arrival or departure routes, operations or procedures. - The proposal would not conflict with airspace required to conduct normal VFR traffic pattern operations at any known civilian public use or military airports, including PAO. The proposal does not penetrate the maneuvering area associated with VFR Traffic Pattern operations at PAO. Aircraft at normal Traffic Pattern altitudes and standard rates of descent have reasonable clearance above this structure. - The proposal would not penetrate those altitudes normally considered available to airmen for VFR en route flight. The cumulative impact of the proposed structure, when combined with other existing structures is not considered significant. Study did not disclose any adverse effect on existing or proposed civilian public-use or military airports or navigational facilities. Nor would the proposal affect the capacity of any known existing or planned civilian public-use or military airport. Therefore, it is determined that the proposed construction would not have a substantial adverse effect on the safe and efficient utilization of the navigable airspace by aircraft or on any air navigation facility and would not be a hazard to air navigation. This determination, issued in accordance with Part 77, concerns the effect of the proposal on the safe and efficient use of the navigable airspace by aircraft and does not relieve the sponsor of any compliance responsibilities relating to laws, ordinances, or regulations of any Federal, state, or local governmental bodies. Determinations, which are issued in accordance with Part 77, do not supersede or override any state, county, or local laws, avigation easements, or ordinances, or local zoning maximum heights. Page 6 of 7 TOPO Map for ASN 2016-AWP-456-OE Page 7 of 7 Sectional Map for ASN 2016-AWP-456-OE ATTACHMENT K ATTACHMENT L Attachment M Project Plans (Hard copies for City Council Only) http://www.cityofpaloalto.org/civicax/filebank/documents/50224 City of Palo Alto (ID # 6758) City Council Staff Report Meeting Date: 3/28/2016 City of Palo Alto Page 1 Title: Semiannual Update on the Status of Capital Improvement Program Projects From: City Manager Lead Department: Public Works Recommendation This report is provided for information only and requires no Council action. Background The purpose of this report is to provide Council with an update on the status of capital improvement program (CIP) projects. In the past, year-end and mid-year financial reports have included very simplistic status updates on CIP projects. This is a new report intending to provide more useful information for Council. Staff expects to provide this report twice each year, with the next in September. This first report includes general fund and storm drain fund CIP projects. Future reports may include updates on other enterprise fund projects as well. Discussion Project Update Organization The City has a robust capital improvement program, and a large number of individual projects are in progress at any given time. The attached CIP project tables are intended to give Council a quick overview of each project, including budgetary information, the anticipated completion date, a brief description of the project scope, the current status of the project, and upcoming activities including Council actions. The following are some of the key considerations for the information presented in the project update tables: City of Palo Alto Page 2 • The status information is current as of the January/February 2016 timeframe • The individual project tables align with the Capital Improvement Fund categories in the FY 2016-2020 capital budget: Buildings and Facilities, Parks and Open Space, Streets and Sidewalks, and Traffic and Transportation. Storm Drainage Fund projects follow the Capital Improvement Fund categories • Additional project information is available in the FY 2016-2020 capital budget • Cubberley Property Infrastructure Fund projects are included in the Buildings and Facilities table • Each project table is divided into a section for one-time projects and a section for recurring projects that have annual ongoing funding • Budgetary figures include staff salaries and benefits for projects to which salaries and benefits have been allocated Completed Projects Projects completed to date in FY 2016 include the following: • Art Center Auditorium Audio, Visual, and Furnishings (AC-14000) • Park Maintenance Shop Remodel (PG-09003) • Rinconada Pool Locker Room (PF-15000) • El Camino Park Restoration (PE-13016) These completed projects do not include the significant amount of annual work completed under ongoing recurring projects, such as streets and sidewalks repairs, parking lot maintenance and roofing replacements. Projects Under Construction Projects that are currently under construction include the following: • Library & Community Center – Temporary Facilities (PE-09010) City of Palo Alto Page 3 • Bowden Park Improvements (PE-13008) • Palo Alto Community Gardens Irrigation System (PE-15022) • Traffic Circle Improvements (PE-16002) As described above for completed projects, the list of projects under construction does not include work currently being conducted under recurring CIP projects. Resource Impact This is an information report. Attachments: Attachment A: Buildings and Facilities projects Attachment B: Parks and Open Space projects Attachment C: Streets and Sidewalks projects Attachment D: Traffic and Transportation projects Attachment E: Storm Drainage Fund projects Attachments: • Attachment A - Buildings and Facilities Projects • Attachment B - Parks and Open Space Projects • Attachment C - Streets and Sidewalks Projects • Attachment D - Traffic and Transportation Projects • Attachment E - Storm Drain Projects Buildings and Facilities Projects – Page 1 of 9 Buildings and Facilities Projects One-Time Projects Art Center Auditorium Audio, Visual, and Furnishings (AC-14000) Prior Year Actuals Total Project Budget Implementing Department Project Phase Project Completion $44,785 $150,000 Community Services Completed Winter 2016 Project Status: This project replaces outdated audio visual equipment and furnishings following the auditorium’s use as a temporary library. New automatic window shades have been installed, and seating and chair dollies have been delivered to the auditorium. An Invitation for Bids (IFB) was advertised for new audio visual equipment and installation. The IFB resulted in a construction contract with PCD of Santa Rosa. Construction within the auditorium was completed in early March 2016. Baylands Boardwalk Improvements (PE-14018) Prior Year Actuals Total Project Budget Implementing Department Project Phase Project Completion $14,266 $96,468 Public Works Pre-design Fall 2015 (for feasibility study) Project Status: This project evaluates the feasibility of repairing, rehabilitating, and/or replacing the existing boardwalk. The consultant team recommended minor repairs for the first 200 feet of the boardwalk and more substantial repairs or complete replacement for the rest of the structure. Public input during a September 30 community meeting and the October 27 PRC meeting prompted Community Services and Public Works Department staff to make repairs to open the first 200 feet of the boardwalk in October 2015. Council is tentatively scheduled to consider a staff recommendation to approve a contract amendment for design of a replacement boardwalk, including the necessary funding on April 4, 2016. Baylands Nature Interpretive Center Exhibit Improvements (AC-14001) Prior Year Actuals Total Project Budget Implementing Department Project Phase Project Completion $0 $56,000 Community Services Pre-design Summer 2017 Project Status: This project will replace worn out or non-functioning exhibits at the Baylands Nature Interpretive Center, including signage and graphics to make the facility more usable for science programs, public use, and facility rentals. Replacement of exterior signage will be coordinated with the Baylands Nature Interpretive Attachment A Buildings and Facilities Projects – Page 2 of 9 Center Facility Improvements project in FY 2017 and with the Baylands Boardwalk Improvements in subsequent years. The replacement railing designs for the Center and Boardwalk will accommodate new signs and exhibits. Current funding allows reprinting the original exterior signs, but insufficient to address exhibits. Staff is seeking grant funds for new exhibits. Baylands Nature Interpretive Center Facility Improvements (PE-15029) Prior Year Actuals Total Project Budget Implementing Department Project Phase Project Completion $21,266 $582,485 Public Works Design Spring 2017 Project Status: This project will replace decking, railings, structural framing members, exterior wood flooring, and cabinetry, and provide Americans with Disabilities Act (ADA) improvements as required. A consultant team is working with staff to design the improvements. Public feedback on the improvements was received at a September 30 community meeting and the October 27 PRC meeting. Due to restroom upgrades that are needed to comply with ADA, CEQA review is now needed and is being initiated. Staff will provide an update and recommend a park improvement ordinance for community, PRC, and Council consideration this spring in coordination with the environmental assessment. Pending the necessary permits, the construction may begin as early as fall 2016. City Hall Parking Garage LED Parking (PF-16004) Prior Year Actuals Total Project Budget Implementing Department Project Phase Project Completion $0 $245,608 Public Works Pre-design Fall 2017 Project Status: This project will replace the existing fluorescent lighting in City Hall Parking Garage Levels A, B, and C with new LED lighting. Staff is currently field testing different types of lighting schemes and bulbs/fixtures. Civic Center Waterproofing Study and Repairs (PE-15020) Prior Year Actuals Total Project Budget Implementing Department Project Phase Project Completion $0 $360,653 Public Works Study Summer 2017 Project Status: This project includes a condition assessment of the Civic Center plaza deck structural system. The structural assessment will provide short, medium and long-term repair options to protect the structural system, and will include a cost/benefit analysis, conceptual drawings and recommendations for improvements. The start of the structural assessment has been delayed due to staff vacancies that have recently been filled. Release of an Buildings and Facilities Projects – Page 3 of 9 RFP in spring 2016 is now expected. Cubberley Community Center Master Plan (CB-16001) Prior Year Actuals Total Project Budget Implementing Department Project Phase Project Completion $0 $327,291 Public Works Study To be determined Project Status: This project supports the development of a Master Plan for future use of the Cubberley Community Center site by the City and Palo Alto Unified School District. The City and the School District, as described in the recent Cubberley Compact, are planning for a design workshop to develop the process for planning the immediate and long term future of Cubberley. Fire Ringdown System Replacement (FD-14002) Prior Year Actuals Total Project Budget Implementing Department Project Phase Project Completion $0 $157,500 Fire Design Summer 2016 Project Status: This project will replace the current ringdown system that provides an audible alert of calls for service in the fire stations. The project is in its preliminary stage and staff anticipates developing and releasing an RFP in summer or fall 2016. Fire Station 1 Improvements (PF-14002) Prior Year Actuals Total Project Budget Implementing Department Project Phase Project Completion $6,709 $321,592 Public Works Design Summer 2016 Project Status: The project will convert the existing open sleeping quarters into individual rooms to address gender issues and privacy concerns. The project will also update the ring down system and IT infrastructure. Designs were completed but are being modified to accommodate the Building Department’s request to meet residential housing sleeping quarter requirements. Fire Station 3 Replacement (PE-15003) Prior Year Actuals Total Project Budget Implementing Department Project Phase Project Completion $0 $7,219,814 Public Works Design Spring 2018 Project Status: This project will replace the existing Fire Station at Middlefield Road and Newell Road with a new structure that meets essential services standards and current program needs. The project is part of the Council Infrastructure Plan. On December 14, 2015, Council authorized a contract award to Shah Kawasaki Architects, Buildings and Facilities Projects – Page 4 of 9 Inc. (SKA). SKA has recently begun design of the new structure along with a temporary facility that may be located on two vacant City-owned residential lots at 1142 Middlefield Road. Foothills Fire Cameras (FD-13000) Prior Year Actuals Total Project Budget Implementing Department Project Phase Project Completion $0 $65,000 Fire Pre-design To be determined Project Status: This project will install thermal imaging infrared long range cameras for the detection of fires and heat signatures in the Palo Alto and Stanford foothills. The project is currently on hold while CalFire conducts a system demonstration in the Santa Cruz Mountains. The project will fund Palo Alto’s contribution to the regional project. The completion date is dependent on the progress of the CalFire study. Internal Alarm System Replacement (PD-14000) Prior Year Actuals Total Project Budget Implementing Department Project Phase Project Completion $0 $78,000 Police Design Winter 2017 Project Status: This project will replace the citywide system of panic alarms from various departments and the Council Chambers. Staff is currently evaluating potential solutions and plans to commence work in FY 2016. Library & Community Center – Temporary Facilities (PE-09010) Prior Year Actuals Total Project Budget Implementing Department Project Phase Project Completion $15,580 $645,000 Public Works Construction Spring 2016 Project Status: This project provided the temporary Mitchell Park Library and in the Cubberley Auditorium and is now completing the auditorium’s restoration. To date, library furniture has been removed, the stage has been refinished, fixtures installed for the temporary library have been removed, and the ceiling fans are being prepared for modification. The restoration work was initially delayed while critical roof repairs were completed. Lucie Stern Buildings Mechanical and Electrical Upgrades (PE-14015) Prior Year Actuals Total Project Budget Implementing Department Project Phase Project Completion $97,217 $3,220,507 Public Works Design Summer 2016 Project Status: This project will replace and upgrade the mechanical, electrical, and fire/life safety systems at Lucie Stern Children’s Theater, Lucie Stern Community Theater, and Lucie Stern Community Center. The upgrades include the addition of air conditioning for Lucie Stern Community Center. The plans are currently in Buildings and Facilities Projects – Page 5 of 9 review for building permit. Staff expects the project Invitation for Bids to be issued in March 2016, with a Council action to approve the construction contract in spring 2016. Construction will require careful coordination with Lucie Stern facility managers and user groups. To minimize impacts, staff will consider utilizing separate phasing, targeted facility downtime, and night work. Municipal Service Center Lighting, Mechanical, and Electrical Improvements (PF-16006) Prior Year Actuals Total Project Budget Implementing Department Project Phase Project Completion $0 $999,543 Public Works Design Spring 2018 Project Status: This project provides for the replacement of original mechanical and electrical systems and lighting installed in 1966. Design was scheduled to begin in FY 2016, but has been deferred due to staffing constraints. New Downtown Parking Garage (PE-15007) Prior Year Actuals Total Project Budget Implementing Department Project Phase Project Completion $0 $13,567,988 Public Works Pre-design To be determined Project Status: This project will provide a new public parking garage in the University Avenue commercial area. Staff brought a draft RFP scope of work to Council for approval on December 14, 2015, and was directed to bring the draft scope of work back to Council for a fuller discussion of downtown parking and a Council decision on whether to pursue the project at this time. New Public Safety Building (PE-15001) Prior Year Actuals Total Project Budget Implementing Department Project Phase Project Completion $0 $57,843,823 Public Works Pre-design Fall 2020 Project Status: This project will provide a new, modern public safety building that will meet essential services standards and the current and future needs of the public safety departments. On December 14, 2015, Council directed staff to pursue a new 3-story Public Safety Building (PSB) on existing parking lot C-6 and a proposed new public parking structure on parking lot C-7. The PSB and new garage in the California Avenue business district are part of the Council Infrastructure Plan. An RFP for Infrastructure Plan program management services to augment staff resources is currently being advertised. The procurement is directed at construction management firms. Staff anticipates bringing the program management services contract to Council for approval in April 2016. The Buildings and Facilities Projects – Page 6 of 9 selected consultant will then assist with additional procurements for project design services from architectural and engineering firms. Park Maintenance Shop Remodel (PG-09003) Prior Year Actuals Total Project Budget Implementing Department Project Phase Project Completion $0 $94,419 Community Services Completed Winter 2016 Project Status: This project renovates and remodels the Parks Maintenance Shop for safety, efficiency, and employee effectiveness. The project is completed. Parking Lot Q Elevator Modernization (PF-16003) Prior Year Actuals Total Project Budget Implementing Department Project Phase Project Completion $0 $170,608 Public Works Design Fall 2017 Project Status: This project will modernize the existing elevator at Parking Lot Q. The project was scheduled to be implemented in FY 2016, but has been deferred due to staffing constraints and is currently expected to begin in summer 2016. Rinconada Pool Locker Room (PF-15000) Prior Year Actuals Total Project Budget Implementing Department Project Phase Project Completion $265 $464,433 Public Works Completed Winter 2016 Project Status: This project is to renovate the Rinconada Pool locker room inclusive of the changing area, restrooms, and showers in the women's and men's locker rooms. The project was completed in January 2016. Structural Assessment of City Bridges (PE-13012) Prior Year Actuals Total Project Budget Implementing Department Project Phase Project Completion $848 $185,394 Public Works Study Spring 2016 Project Status: This project will develop an inventory of and inspect all city-owned bridge and culvert structures to develop a maintenance and repair schedule in accordance with the National Bridge Inspection Standards. A consultant team is working with staff to complete the bridge safety assessment report. Any necessary inspection, maintenance and repairs for city-owned bridges will be included in the five-year proposed CIP plan as necessary. Buildings and Facilities Projects – Page 7 of 9 Ventura Buildings Improvements (PE-15011) Prior Year Actuals Total Project Budget Implementing Department Project Phase Project Completion $0 $878,413 Public Works Design Spring 2017 Project Status: This project will replace or upgrade the mechanical and electrical systems and provide accessibility improvements for the Ventura facility. Staff is currently in the early stages of preparing an RFP for the project. The project will be carefully coordinated with the current tenant, Palo Alto Community Childcare (PACC) and will consider the addition of air conditioning. In late January, the facility was evaluated for barriers to accessibility by the consultant preparing the ADA Transition Plan Update. Identified accessibility upgrade needs may be included in the project. Recurring Projects Americans With Disabilities Act Compliance (PF-93009) Prior Year Actuals Current Year Budget Implementing Department Project Phase Project Completion $17,087 $299,766 Public Works NA Recurring Project Status: This project provides accessibility upgrades to City facilities and equipment. It includes continued funding for improvements such as path of travel, restrooms, drinking fountains, and counters. Work in FY 2016 includes the update to the citywide ADA Transition Plan that began in November 2015, and the accessibility ramp upgrade project for the airport terminal. Architectural design proposals are currently being solicited for the airport terminal project. Building Systems Improvements (PF-01003) Prior Year Actuals Current Year Budget Implementing Department Project Phase Project Completion $85,326 $283,469 Public Works NA Recurring Project Status: This project provides electrical, mechanical, plumbing, structural, and security upgrades for City facilities. Work planned for FY 2016 includes a new air conditioning unit for the City Hall Level 2 data center, new electrical service for the Golf Course cart charging area, and installation of new card access doors. Emergency boiler replacement for the Cubberley K wing has also been completed. Buildings and Facilities Projects – Page 8 of 9 California Avenue Parking District Improvements (PF-14004) Prior Year Actuals Current Year Budget Implementing Department Project Phase Project Completion $0 $204,933 Public Works NA Recurring Project Status: This project maintains parking lots in the California Avenue Business District. The FY 2016 plan includes resurfacing of parking lots 1, 2 and 8. These lots will be completed as part of the of the Street Maintenance CIP’s FY 2016 overlay project that is expected to begin in spring 2016. City Facility Parking Lot Maintenance (PE-09003) Prior Year Actuals Current Year Budget Implementing Department Project Phase Project Completion $330,703 $370,321 Public Works NA Recurring Project Status: This project maintains parking lots and walkways at City facilities. The FY 2016 plan includes parking lot resurfacing at the Animal Shelter, Palo Alto Airport and Fire Station #5. The Animal Shelter and Palo Alto Airport projects are on hold pending decisions about the future of the Animal Shelter and a future Council discussion of approval for Airport Fund funding, respectively. The Fire Station #5 project will be completed as part of the Street Maintenance CIP’s FY 2016 overlay project in spring 2016. Cubberley Roof Replacements (CB-16002) Prior Year Actuals Current Year Budget Implementing Department Project Phase Project Completion $0 $413,215 Public Works NA Recurring Project Status: This project replaces existing roofs at Cubberley Community Center that have outlived their useful lives. Cubberley Wings M and P are planned for FY 2016. Construction bids have been submitted, and construction is scheduled to commence in April 2016 following the execution of the contract. Facility Interior Finishes Replacement (PF-02002) Prior Year Actuals Current Year Budget Implementing Department Project Phase Project Completion $398,707 $839,549 Public Works NA Recurring Project Status: This project improves the interior finishes of City facilities, including flooring, walls, cabinets, paint, lighting, ceiling tiles, soundproofing, fixed office furniture, doors, windows, and associated fire /life safety, mechanical, electrical and plumbing code compliance requirements. Work in FY 16 includes renovations to the Police Department A level restrooms, showers and locker rooms, and the City Hall Level 3 remodel. Both projects are currently in the design phase. Buildings and Facilities Projects – Page 9 of 9 Roofing Replacement (PF-00006) Prior Year Actuals Current Year Budget Implementing Department Project Phase Project Completion $20,412 $726,654 Public Works NA Recurring Project Status: This project replaces existing roofs at City facilities that have outlived their useful lives. The Fire Station #2 roof is planned for FY 2016. Council is tentatively scheduled to approve the construction contract on March 14, 2016. University Avenue Parking Improvements (PF-14003) Prior Year Actuals Current Year Budget Implementing Department Project Phase Project Completion $19,211 $417,752 Public Works NA Recurring Project Status: This project maintains parking lots and parking structures within the University Avenue Downtown Business Parking District. The FY 2016 plan included resurfacing of parking lots N and T as part of the Street Maintenance CIP’s FY 2016 preventive maintenance project. This work was completed in October 2015. Parks and Open Space Projects – Page 1 of 6 Parks and Open Space Projects One-Time Projects Baylands Emergency Access Levee Repair (OS-09002) Prior Year Actuals Total Project Budget Implementing Department Project Phase Project Completion $300 $320,000 Community Services Design Fall 2017 Project Status: This project is to repair a small section of failed levee near the Baylands Nature Center. Progress depends on acquiring the required regulatory permits. Bowden Park Improvements (PE-13008) Prior Year Actuals Total Project Budget Implementing Department Project Phase Project Completion $72,434 $421,126 Public Works Construction Summer 2016 Project Status: This project improves the children’s playground and includes park amenities upgrades such as new play equipment, a new retaining wall, surfacing and pathways upgrades, planting restoration and irrigation renovations, and replacement of damaged wood benches and the playground perimeter fence. Community comments were received during the conceptual design phase in early 2015. The project was advertised for bids in December 2015 and Council approved the construction contract on February 29, 2016. Buckeye Creek Hydrology Study (PG-15000) Prior Year Actuals Total Project Budget Implementing Department Project Phase Project Completion $0 $190,382 Community Services Study Fall 2016 Project Status: This project which is newly added as part of the 2016-2020 CIP, will analyze flooding conditions, recommend flood control structures, and provide drainage and erosion control solutions for the creek located within Foothills Park. The study will also consider maintenance needs and land stewardship practices. Staff has issued an RFP and consultant proposals are currently being reviewed. The contract for the study will be brought to Council for approval in the spring. El Camino Park Restoration (PE-13016) Prior Year Actuals Total Project Budget Implementing Department Project Phase Project Completion $2,038,013 $5,611,122 Public Works Completed Fall 2015 Attachment B Parks and Open Space Projects – Page 2 of 6 Project Status: The El Camino Park Restoration Project began in January 2015. The work includes new athletic fields, synthetic turf, field lighting, fencing, a new restroom, scorekeeper booth and storage buildings, an expanded parking lot, new bike and pedestrian pathways, landscaping, benches, and other amenities. All improvements were constructed on time and within budget. El Camino Park was reopened to the public on November 20, 2015. Golf Reconfiguration & Baylands Athletic Center Improvements (PG-13003) Prior Year Actuals Total Project Budget Implementing Department Project Phase Project Completion $104,440 $11,233,862 Public Works Construction Fall 2017 Project Status: This project involves the complete rehabilitation of the Palo Alto Municipal Golf Course, including recontouring and a new layout for the course, new water-saving turf and irrigation system, and rebranding of the course as the Baylands Golf Links. The project is coordinated with the San Francisquito Creek Joint Powers Authority’s (JPA) Flood Reduction Project along San Francisquito Creek. The final design and environmental impact report for the project were completed in late 2013. Construction of the project will commence in late spring 2016, pending receipt of necessary state and federal regulatory permits. Palo Alto Community Gardens Irrigation System (PE-15022) Prior Year Actuals Total Project Budget Implementing Department Project Phase Project Completion $8,832 $281,426 Public Works Construction Spring 2016 Project Status: This project will provide new irrigation systems at Rinconada, Edith Johnson and Eleanor Pardee Park Community Gardens. Each of the three gardens will receive a new irrigation main line and components, isolation valves and hose bibs/faucets to improve water conservation efforts and reduce necessary repair work. A community meeting was held in the fall of 2015 to review the scope of work and project schedule. The bidding process began in November of 2015 and culminated in the selection of a contractor in December of 2015. Construction work is scheduled to begin in March 2016 and to be completed in April 2016. Parks, Trails, Open Space, & Recreation Master Plan (PE-13003) Prior Year Actuals Total Project Budget Implementing Department Project Phase Project Completion $354,084 $627,057 Public Works Study Fall 2016 Project Status: This master plan provides guidance on the recreation and improvement needs for Palo Alto’s parks, trails, open space and recreational programs. A needs assessment has been conducted. The plan includes Parks and Open Space Projects – Page 3 of 6 an analysis of this information and recommendations such as dog off-leash areas, field space requirements, and prioritizing capital improvements. Staff and the consultant team has met with the PRC monthly and provided Council updates in August 2015 and January 2016. The project team is proceeding to draft the plan and expects community, PRC and Council review of the plan to occur in spring and summer 2016. Ramos Park Improvements (PG-14000) Prior Year Actuals Total Project Budget Implementing Department Project Phase Project Completion $0 $232,628 Community Services Design Winter 2017 Project Status: This project provides safety and accessibility improvements at Ramos Park including replacing the existing park playground, benches, drinking fountain, and resurfacing the basketball court surface. The project was originally expected to be completed in the summer of 2016, however due to other competing capital projects and limited staff, the project will be completed in early 2017. Rinconada Park Master Plan and Design (PE-12003) Prior Year Actuals Total Project Budget Implementing Department Project Phase Project Completion $ 63,013 $473,323 Public Works Study Fall 2016 Project Status: This project includes development of a plan for short, medium and long range improvements to the regional park including the consideration of pathways, new restrooms and playgrounds, new landscaping, and revitalization of underutilized areas within the park. The project was delayed to include CEQA assessment, including the proposed new Junior Museum and Zoo location and reconfiguration of the Lucie Stern parking lot. The environmental assessment is scheduled for completion in summer 2016 assuming a mitigated negative declaration is prepared for these projects. The draft long range plan report is scheduled to be completed in fall 2016. Stanford/Palo Alto Playing Fields Netting (PG-12001) Prior Year Actuals Total Project Budget Implementing Department Project Phase Project Completion $0 $50,000 Community Services Construction Summer 2016 Project Status: This project provides will add additional netting to prevent soccer balls from going over the fence into the parking lot of the adjacent property at 650 Page Mill Road. Although there is netting behind the soccer goal areas, there is still a gap of approximately 160 feet without netting in the area between the two soccer fields. This project will be completed concurrently with the synthetic turf replacement project at Stanford Palo Parks and Open Space Projects – Page 4 of 6 Alto Playing Fields, which will take place in June and July 2016. Stanford/Palo Alto Playing Fields Soccer Turf Replacement (PG-13001) Prior Year Actuals Total Project Budget Implementing Department Project Phase Project Completion $7,238 $1,495,000 Community Services Construction Summer 2016 Project Status: This project is for the replacement of synthetic turf at the Stanford/Palo Alto Playing Fields. Construction is scheduled to begin in June 2016 and be completed in July. Recurring Projects Art In Public Spaces (AC-86017) Prior Year Actuals Current Year Budget Implementing Department Project Phase Project Completion $104,228 $359,716 Community Services NA Recurring Project Status: This project funds ongoing temporary and permanent artworks throughout the City as well as the current public art master planning efforts. The FY 2016 funds support temporary installations on King Plaza, such as Aurora and the upcoming Chime sculptures, as well as Mobile Arts Platform, the Susan Narduli artwork in City Hall lobby, and the current master planning process. Previous projects include the California Avenue fountain, the Hoover Park bear sculptures, and the Roger Stoller, Brad Oldham, and Mark Verlander artworks at Mitchell Park library and community center. The public art master plan will use the information gathered from the community outreach to identify and prioritize future projects. Benches, Signage, Walkways, Perimeter Landscaping (PG-06003) Prior Year Actuals Current Year Budget Implementing Department Project Phase Project Completion $94,783 $171,657 Community Services NA Recurring Project Status: This recurring project restores and replaces existing benches, signage, fencing, walkways, and landscaping at various City facilities. The FY 2016 plan includes site furnishings at El Camino Park, King Plaza and various locations throughout the City. Off-Road Prior Year Actuals Current Year Budget Implementing Project Phase Project Completion Parks and Open Space Projects – Page 5 of 6 Pathway Resurfacing And Repair (OS-09001) Department $159,545 $202,045 Community Services NA Recurring Project Status: This project resurfaces failing and broken pathways within the City. Pathways are chosen based on inspections and resident requests. The FY 2016 plan includes improvements at the entrance to Bol Park Pathway near Laguna Avenue. This work will be completed as part of the Street Maintenance CIP’s FY 2016 overlay project in spring 2016. Open Space Lakes And Pond Maintenance (OS-00002) Prior Year Actuals Current Year Budget Implementing Department Project Phase Project Completion $17,584 $45,000 Community Services NA Recurring Project Status: This project rehabilitates lakes and ponds in open space nature preserves to protect wildlife habitat and recreational safety and to meet State Division of Safety of Dams requirements. The FY 2016 plan included removal and off-haul of cattails from Boronda Lake. Open Space Trails and Amenities (OS-00001) Prior Year Actuals Current Year Budget Implementing Department Project Phase Project Completion $170,594 $190,000 Community Services NA Recurring Project Status: This project restores unpaved trails, fences, picnic areas, and campgrounds at Foothills Park, the Baylands, and the Pearson-Arastradero Nature Preserves. The FY 2016 plan includes the renovation of existing site amenities at Foothills Park, the Baylands and Pearson-Arastradero Preserves. FY2016 trail maintenance of all Open Space Preserves for the fall season is complete, and additional trail maintenance will resume in spring 2016. Parks and Open Space Emergency Repairs (PG-09002) Prior Year Actuals Current Year Budget Implementing Department Project Phase Project Completion $ 69,196 $75,000 Community Services NA Recurring Project Status: This project funds the replacement or extensive repair of playgrounds, play yard surfaces, wooden structures, park amenities and play equipment in the event of storms, fire, vandalism or structural failure. A portion of the FY2016 funding was used to repair damaged playgrounds at Briones and Johnson Parks. Tennis and Prior Year Actuals Current Year Budget Implementing Project Phase Project Completion Parks and Open Space Projects – Page 6 of 6 Basketball Court Resurfacing (PG-06001) Department $10,965 $233,050 Community Services NA Recurring Project Status: This project repairs and resurfaces tennis and basketball courts in various Palo Alto parks. The FY 2016 plan includes the reconstruction of the Mitchell Park tennis courts (1-4). This project is currently in design with construction estimated to take place in spring 2016. Streets and Sidewalks Projects – Page 1 of 4 Streets and Sidewalks Projects One-Time Projects Dinah Summerhill Pedestrian/Bicycle Path (PL-11001) Prior Year Actuals Total Project Budget Implementing Department Project Phase Project Completion $0 $116,052 Planning and Community Environment Construction Winter 2016 Project Status: This project establishes a new pathway to access the Summerhill community playground. The playground will be enhanced with drought-tolerant planting, native trees, security lighting and a seating area with benches. The Invitation for Bids for construction of the project was released in February 2016. Staff anticipates bringing the construction contract to Council for approval in April 2016. El Camino Median Landscape Improvements (PE-13017) Prior Year Actuals Total Project Budget Implementing Department Project Phase Project Completion $4,786 $1,156,937 Public Works Design Spring 2017 Project Status: This project improves the El Camino Medians from Cambridge to Grant Avenue, under the University Avenue overpass and between Page Mill and Arastradero Roads. The project includes landscaping installation or restoration, and irrigation renovations. Conceptual design is nearly complete. The project has been postponed since 2015 due to the drought, and its implementation will be reconsidered in summer 2016 in the context of the drought and the City’s actions to reduce water usage. Newell Road/ San Francisquito Creek Bridge Replacement (PE-12011) Prior Year Actuals Total Project Budget Implementing Department Project Phase Project Completion $57,415 $3,989,503 Public Works Design Fall 2017 Project Status: This project will remove and replace the Newell Road bridge over San Francisquito Creek with a clear span over the creek to allow the channel to convey up to the estimated 1% (100-year) San Francisquito Creek flow rate and will provide improved safety for vehicular, bicycle, and pedestrian traffic. The focus in calendar year 2016 is completion of the project environmental impact report, which will analyze potential traffic, aesthetic, and other environmental impacts and propose appropriate mitigation measures. The project Attachment C Streets and Sidewalks Projects – Page 2 of 4 is being closely coordinated with the City of East Palo Alto, Santa Clara Valley Water District, and the San Francisquito Creek Joint Powers Authority (JPA). Streetlights Condition Assessment (PE-13014) Prior Year Actuals Total Project Budget Implementing Department Project Phase Project Completion $1,686 $255,364 Public Works Design Fall 2015 Project Status: This project will assess the condition and maintenance needs of the City’s streetlight system. Staff has written a scope of work and will issue an RFP in March 2016. The contract for the assessment will be brought to Council for approval in the spring. Traffic Circle Improvements (PE-16002) Prior Year Actuals Total Project Budget Implementing Department Project Phase Project Completion $648 $100,000 Public Works Construction Spring 2016 Project Status: The traffic circle improvements include upgrading five existing traffic circles with new curbs, planting, paving and signage. The traffic circles are located at Everett Avenue and Emerson Street, Everett Avenue and Webster Street, Hawthorne Avenue and Cowper Street, Yale Street and College Avenue, and Yale Street and Cambridge Avenue. Construction will begin in March 2016 and is scheduled to be completed in May 2016. Recurring Projects Curb and Gutter Repairs (PO-12001) Prior Year Actuals Current Year Budget Implementing Department Project Phase Project Completion $367,695 $426,288 Public Works NA Recurring Project Status: This project repairs curbs and gutters uplifted by tree roots. The curb and gutter locations are selected from a list reported by the public and evaluated by Public Works staff. The work for FY 2016 is included in the FY 2016 Sidewalk Repair project and includes more than 21 curb and gutter locations throughout the City. Sidewalk Repairs Prior Year Actuals Current Year Budget Implementing Project Phase Project Completion Streets and Sidewalks Projects – Page 3 of 4 (PO-89003) Department $2,714,017 $2,512,886 Public Works NA Recurring Project Status: This project repairs and replaces broken and uplifted sidewalks. The FY 2016 project will address sidewalk deficiencies in Sidewalk Replacement Districts 23, 32 and 36. At the end of this year’s project, the entire cycle of 23 Sidewalk Replacement Districts will be complete, a 30 year (1986 – 2016) program completion. Staff will issue an RFP in March 2016 to evaluate the sidewalk program and assess potential improvements to the current district-based program. The contract for the evaluation will be brought to Council for approval in the spring. Sign Reflectivity Upgrade (PO-11000) Prior Year Actuals Current Year Budget Implementing Department Project Phase Project Completion $17,475 $174,953 Public Works NA Recurring Project Status: This project includes the annual inventorying, upgrading and maintaining of all traffic signs. A list of signs not meeting the minimum requirement is derived from MUTCD-approved Nighttime Visual Inspection surveys. A portion of the FY 2016 funding is being used to build improved storage for the replacement signage and related building materials. Street Lights Improvements (PO-05054) Prior Year Actuals Current Year Budget Implementing Department Project Phase Project Completion $61,434 $377,286 Public Works NA Recurring Project Status: This project funds replacement for street light poles, pole foundations, luminaires and wiring as needed to restore or improve street lighting. A portion of the FY 2016 funding is being used by the Utilities Department to do a preliminary design for the installation of additional street lights along a portion of San Antonio Road. Street Maintenance (PE-86070) Prior Year Actuals Current Year Budget Implementing Department Project Phase Project Completion $5,228,421 $9,075,227 Public Works NA Recurring Project Status: This project includes the annual resurfacing, slurry seal, crack seal and reconstruction of various city streets. Staff estimates there will be four construction contracts this fiscal year. The preventive maintenance project completed the slurry seal of 31 lane-miles of streets in October 2015. The other three Streets and Sidewalks Projects – Page 4 of 4 contracts are expected to start in spring 2016. This project funds the street maintenance work that supports Council’s adopted goal of achieving a citywide average pavement condition index (PCI) score of 85, representing very good or excellent conditions, by 2019. The anticipated citywide pavement condition index score (PCI) at the end of FY 2016 is 82. Thermoplastic Lane Marking and Striping (PO-11001) Prior Year Actuals Current Year Budget Implementing Department Project Phase Project Completion $75,696 $94,822 Public Works NA Recurring Project Status: This project maintains the thermoplastic markings on roadways. Work for FY 2016 was completed as part of the Street Maintenance Program’s FY 2016 preventive maintenance contract. Traffic and Transportation Projects – Page 1 Traffic and Transportation Projects One-Time Projects Charleston/Arastradero Corridor Project (PE-13011) Prior Year Actuals Total Project Budget Implementing Department Project Phase Project Completion $525,247 $11,277,308 Public Works Design Spring 2020 Project Status: This project will reconfigure the Charleston/Arastradero Corridor to provide new landscaped median islands, bulb outs, enhanced bike lanes, new street trees and lighting to complement the new lane configurations that were approved for permanent retention in 2008 and 2012. City Council approved the conceptual plan line for the corridor in September 2015. Staff will work with Caltrans to complete the NEPA review for the corridor and will hold a community meeting in March to develop landscaping palettes. A contract amendment will be brought to Council for approval in the spring to complete final design for the corridor. El Camino Real & Churchill Avenue Intersection Improvements (PL-14000) Prior Year Actuals Total Project Budget Implementing Department Project Phase Project Completion $39,108 $283,651 Planning and Community Environment Design Fall 2017 Project Status: The project includes widening Churchill Avenue to provide a new westbound right turn lane, traffic signal modification, and pedestrian pathway improvements as identified in the 2012 Bicycle & Pedestrian Transportation Plan. Plans for Phase 1 of the project are at 65% completion. Right-of-way discussions with PAUSD are beginning in March 2016. Staff anticipates bringing a contract amendment for final design for Council approval in April 2016. Embarcadero Road at El Camino Real Improvements (PL-15001) Prior Year Actuals Total Project Budget Implementing Department Project Phase Project Completion $4,750 $836,723 Planning and Community Environment Pre-design Fall 2019 Attachment D Traffic and Transportation Projects – Page 2 Project Status: This project includes traffic signal modifications at the Town & Country and Paly driveways (completed in summer 2015) and planning for longer term bicycle/pedestrian improvements and capacity improvements at the El Camino Real intersection. The design consultant for the improvements has developed project alternatives, and a public open house to review the alternatives will be scheduled for March 2016. Highway 101 Pedestrian/Bicycle Overpass Project (PE-11011) Prior Year Actuals Total Project Budget Implementing Department Project Phase Project Completion $640,516 $11,945,598 Public Works Design Summer 2018 Project Status: This project includes the design and construction of a new pedestrian bridge across Highway 101 at Adobe Creek. The project is part of the Council Infrastructure Plan. On December 14, 2015, Council directed staff to cease negotiations with M&N, the design team that was selected by Council following the design competition process, and to proceed with an RFP to select a design team with a new project budget of $13 million (excluding staff salaries and benefits). The RFP was issued on December 22, 2015 and design team proposals were received on February 9, 2016. Council is tentatively scheduled to approve the design contract on April 4, 2016. Midtown Connector (PL-14001) Prior Year Actuals Total Project Budget Implementing Department Project Phase Project Completion $114,667 $2,575,814 Planning and Community Environment Feasibility Fall 2018 Project Status: This project is intended to construct a new bicycle and pedestrian trail along the levees of Matadero Creek between Waverley Street and Greer Road, and to recommend improvements between Alma Street and Highway 101. Following Council direction received on November 9, 2015, staff anticipates convening two additional meetings of the Citizens Advisory Committee, hosting a neighborhood pop-up workshop, and facilitating a public meeting during the spring of 2016. The current project schedule anticipates the adoption of the feasibility study by City Council in June 2016. Staff will continue to work with the Santa Clara Valley Water District throughout this phase, in order to maintain support for the project from this partner agency. Traffic and Transportation Projects – Page 3 Parking Guidance, Access and Revenue Controls (PL-15002) Prior Year Actuals Total Project Budget Implementing Department Project Phase Project Completion $0 $383,520 Planning and Community Environment Design Summer 2017 Project Status: This project will provide an integrated parking facility management system, lane control equipment, pay-on-foot stations and parking guidance systems for the four city-owned garages in the downtown area. Discussion of parking guidance systems is tentatively scheduled for City Council discussion in April 2016. The system selected will depend on City Council direction and the funding amount programmed in the five-year capital improvement program. The parking access and revenue control component of the project is on hold pending completion of the Downtown Paid Parking Study. Parking Wayfinding (PL-15004) Prior Year Actuals Total Project Budget Implementing Department Project Phase Project Completion $18,365 $190,835 Planning and Community Environment Design Spring 2017 Project Status: This project will provide parking wayfinding and signage to serve the Downtown commercial core, and will develop a parking brand to be used on city notices, websites and information related to public parking. Council discussion of wayfinding design and approval of a wayfinding construction contract are tentatively scheduled for April 18, 2016. The construction contract includes a blue and a green option, to be selected based on Council direction. Residential Preferential Parking (PL-15003) Prior Year Actuals Total Project Budget Implementing Department Project Phase Project Completion $0 $368,500 Planning and Community Environment Construction Summer 2017 Project Status: This project implements the signage needs of the residential preferential parking program. Phase 1 of Downtown Residential Preferential Parking was implemented in October 2015, and Phase 2 is scheduled for April 2016. Traffic and Transportation Projects – Page 4 Recurring Projects Bicycle and Pedestrian Plan Implementation Project (PL-04010) Prior Year Actuals Current Year Budget Implementing Department Project Phase Project Completion $626,746 $2,594,429 Planning and Community Environment NA Recurring Project Status: This project designs and constructs bicycle boulevards, bicycle lanes, bicycle routes , bicycle parking projects and trails routes in accordance with the Bicycle & Pedestrian Transportation Plan 2012. The project has a number of individual projects in progress, as follows: • Concept plans for Bryant Street Bicycle Boulevard Extension, Churchill Ave Enhanced Bikeway, Maybell Avenue Bicycle Boulevard and Park Boulevard/Wilkie Way Bicycle Boulevard were adopted by City Council in 2015. • Concept plans for Amarillo Avenue/Moreno Avenue Bicycle Boulevard, Bryant Street Bicycle Boulevard Upgrade, Louis Road/Montrose Avenue Bicycle Boulevard and Ross Road Bicycle Boulevard are tentatively scheduled to be presented to Council for adoption on April 18. • Final design for Bryant Street Bicycle Boulevard Extension, Churchill Avenue Enhanced Bikeway, Maybell Avenue Bicycle Boulevard and Park Boulevard/Wilkie Way Bicycle Boulevard to be completed in mid-2016, with construction beginning in fiscal year 2017. • Final design for Amarillo Avenue/Moreno Avenue Bicycle Boulevard, Bryant Street Bicycle Boulevard Upgrade, Louis Road/Montrose Avenue Bicycle Boulevard and Ross Road Bicycle Boulevard to be completed in late 2016, with construction beginning in fiscal year 2017. Safe Routes To School (PL-00026) Prior Year Actuals Current Year Budget Implementing Department Project Phase Project Completion $92,728 $237,170 Planning and Community Environment NA Recurring Project Status: This project implements the City’s Safe Routes to School programmatic elements, including traffic calming devices along arterial streets, enhanced crosswalk facilities for pedestrians and Traffic and Transportation Projects – Page 5 improved signage for suggested routes to the school. The FY 2016 work includes ongoing installation of new signs, pavement markings, painted curb, flashing beacons and other traffic control devices along school walking and bicycling routes. Traffic Signal and Intelligent Transportation System Upgrades (PL-05030) Prior Year Actuals Current Year Budget Implementing Department Project Phase Project Completion $783,214 $340,961 Planning and Community Environment NA Recurring Project Status: This project designs and constructs traffic signals, traffic signals communication networks, and video surveillance projects for transportations uses. The FY 2016 construction work was completed in February 2016. Transportation and Parking Improvements (PL-12000) Prior Year Actuals Current Year Budget Implementing Department Project Phase Project Completion $369,366 $231,076 Planning and Community Environment NA Recurring Project Status: This project implements miscellaneous neighborhood traffic calming improvements, including neighborhood traffic studies and parking improvements. FY 2016 work includes ongoing installation of new signs, pavement markings, painted curbs, flashing beacons and other traffic control devices throughout the City. Storm Drain Projects – page 1 of 2 Storm Drain Projects One-Time Projects Channing Avenue/Lincoln Avenue Storm Drain Improvements (SD-11101) Prior Year Actuals Total Project Budget Implementing Department Project Phase Project Completion $48,068 $7,568,588 Public Works Design Fall 2015 Project Status: This project involves the installation of 5,800 linear feet of 36-inch to 60-inch diameter storm drain along Channing and Lincoln Avenues over three project phases to increase drainage system capacity. This project will improve drainage system performance in the Duveneck-St Francis, Walnut Grove, Community Center, SOFA and Professorville neighborhoods by conveying storm runoff more efficiently to the San Francisquito Creek pump station. The final project phase, along Lincoln Avenue between Middlefield Road and Alma Street, is currently being designed by staff and will be constructed in summer 2016. Matadero Creek Storm Water Pump Station and Trunk Line Improvements (SD-13003) Prior Year Actuals Total Project Budget Implementing Department Project Phase Project Completion $14,964 $6,368,822 Public Works Design Fall 2017 Project Status: This project includes capacity upgrades to the Matadero Creek Storm Water Pump Station, which serves a low-lying 1200-acre area of southeastern Palo Alto. Upgrades to the pump station will allow storm runoff to be pumped into Matadero Creek regardless of the creek level, improving drainage system performance in the Midtown and Palo Verde neighborhoods. The project is currently being designed by an engineering consultant and will be constructed starting in fall 2016. Recurring Projects Storm Drain System Replacement And Prior Year Actuals Current Year Budget Implementing Department Project Phase Project Completion $1,572 $1,737,343 Public Works NA Recurring Project Status: This recurring project consists of annual replacement and rehabilitation projects that maintain Attachment E Storm Drain Projects – page 2 of 2 Rehabilitation (SD-06101) the integrity of the storm drain system, including the replacement or rehabilitation of deteriorated storm drain pipes, manholes, and storm drain inlets. The scope for FY 2016 includes the design of trash capture devices at the Matadero Creek Storm Water Pump Station to prevent trash from entering Matadero Creek and the installation of fiber optic connections to all seven storm water pump stations to improve communications and monitoring capabilities between the stations and the centralized control center at the Water Quality Control Plant.