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HomeMy WebLinkAboutStaff Report 2505-4680CITY OF PALO ALTO CITY COUNCIL Tuesday, June 17, 2025 Council Chambers & Hybrid 5:30 PM     Agenda Item     14.Approval of Professional Services Contract No. C26193874 with Palo Alto Community Child Care in an Amount Not-to-Exceed $3,228,146 to Provide Management of the City’s Childcare Subsidy Program for a Term of Five Years. CEQA Status – Not A Project Supplemental Report added, Updated Consent Questions 7 3 3 8 City Council Staff Report From: City Manager Report Type: CONSENT CALENDAR Lead Department: Community Services Meeting Date: June 17, 2025 Report #:2505-4680 TITLE Approval of Professional Services Contract No. C26193874 with Palo Alto Community Child Care in an Amount Not-to-Exceed $3,228,146 to Provide Management of the City’s Childcare Subsidy Program for a Term of Five Years. CEQA Status – Not A Project RECOMMENDATION Staff recommends that the Council approve and authorize the City Manager or designee to execute Contract No. C261938741 with Palo Alto Community Child Care (PACCC), to provide management of the City’s Childcare Subsidy program for low-income children, for a term of five years and a total not to exceed $3,228,146. EXECUTIVE SUMMARY The scope of services in this contract covers the administration and management of a childcare subsidy program for up to 45 low-income children annually enrolled in PACCC’s childcare and afterschool programs. Services include all paperwork and processes related to eligibility certification, maintenance of an eligibility list, data tracking and compilation, program revenue and expenditure tracking, contract reporting, as well as other subsidy administration services as requested by the City. BACKGROUND The City of Palo Alto has had a long commitment to childcare in the community and PACCC as illustrated by the key historical points listed below: 1 Palo Alto Community Child Care, provide management of the City’s Childcare Subsidy program for low-income children, Contract # C26193874; https://www.paloalto.gov/ /files/assets/public/v/1/community-services/human- services/palo-alto-community-child-care-contract-c26193874.pdf 7 3 3 8 •In 1974, the Council established a Childcare Task Force to develop and implement priorities for childcare services. The Task Force recommended the City take an active role in childcare and that a nonprofit be created to coordinate these efforts. •As a result, Palo Alto Community Child Care (PACCC) was formed and incorporated as a 501(c)(3). On March 25, 1974, the Council approved a contract with PACCC to fund administrative support and implement components of the Task Force Plan. •In 1984, the City reduced administrative funding, retaining only a contract with PACCC to administer the City’s childcare subsidy program. PACCC’s funding continued through the Human Services Resource Allocation Process (HSRAP). •In 2014 (FY15), Council approved direct contracts with Avenidas and PACCC, removing them from the HSRAP review process, with 2015–2020 (FY16-FY21) being the first contract term. •The current contract (C21178948) term is July 1, 2020, to June 30, 2025, and was approved by the Council on November 9, 2020.2 PACCC was removed from the HSRAP process in May 2014, and separately contracts with the City for management of the City‘s Childcare Subsidy Program. These contracts have each had five-year terms with CPI increases applied when funding was available. The table below summarizes these contracts. Table #1: Contracts with PACCC since FY2016 FY2016-FY2020 $2,425,925 FY2021-FY2025 $2,775,614 PACCC is the only childcare provider in the community with sufficient organizational capacity and experience to perform the services requested, justifying award as a sole source contract and exempt from solicitation. An exemption from competitive solicitation per Palo Alto Municipal Code 2.230.360(d) was approved by the City Manager. PACCC is also the only local provider of financial aid support for families and children who qualify through the State of California, Child Development Division. PACCC can therefore combine City and State subsidy funds, when appropriate, to assist low-income families, therefore leveraging city funds to provide assistance to more children. Families also benefit from PACCC’s ability to manage both City and State funding because 2 City Council, November 9, 202; Summary Minutes, Item 9; https://recordsportal.paloalto.gov/Weblink/DocView.aspx?id=42696 7 3 3 8 parents need only work with one agency regardless of the funding stream. Since PACCC operates infant, preschool and afterschool childcare (TK-5th), children who remain eligible for a subsidy can receive continuity of care for several years, greatly reducing both the financial burden and stress placed on low-income families. If PACCC were no longer the administrator of the program, the currently enrolled 37 children of low-income families would most likely lose Staff prepared the proposed contract to align with the standards for nonprofit contracts identified3. These standards include defining specific service levels, goals and objectives, and reporting requirements. This contract will be closely monitored by staff in the Office of Human Services (OHS), including review of semi-annual reports and payments requests. Additionally, on a biennial basis, PACCC will submit a copy of an independent financial audit and OHS staff will conduct a status review of PACCC’s agreed upon performance indicators that may include a site visit. ANALYSIS Access to affordable and quality childcare is key to the ability of parents to work. The burden to pay for market rate childcare is out of reach financially for many low-income parents, therefore subsidized care is a lifeline. A 2023 study commissioned by the Santa Clara County Office of Education reports4 that the average annual cost for full-time infant care in the County is $33,456, while full-time preschool care averages $20,256. Staff analysis indicates that costs in Palo Alto are at least 20% higher, though often significantly more. Direct comparisons are challenging due to variations in how programs define age groups, services included in full-time care, and how fees are presented. Despite these variables, the cost of full-time childcare in Palo Alto is unaffordable for most low-income families. For currently enrolled families in the City funded childcare subsidy program, over 65% are headed by a single parent and the average family (one- or two- income earners) income is around $5,000/month or $60,000/year. This makes it extremely difficult to pay for childcare and other essential expenses such as housing in Palo Alto without assistance. The City’s childcare subsidy program allows parent(s) to work and provide for their families - often at multiple jobs - and/or go to school to increase their ability to earn higher wages. Access to high quality childcare at a young age can improve a child’s social and emotional well-being and help get children “kindergarten ready”. Childcare centers such as those operated by PACCC also help connect parents to vital services in the community such as social services, healthcare 3 Policy and Services Committee, June 14, 2022; Item 1; https://recordsportal.paloalto.gov/Weblink/DocView.aspx?id=34809 4 Santa Clara County Child Care Average Tuition Rate Survey 2023; https://www.sccoe.org/supoffice/lpc/Documents/Reports/Average_Rate_Survey_Brief_Digital.pdf 7 3 3 8 and mental health support, which further sustains the low-income families in the subsidy program. Eligibility in the program is based on meeting residency and income guidelines (Attachment A, Exhibit B) and a stated priority list governs the process as a space becomes available. Once in the program, participants are required to re-certify for continued eligibility on an annual basis. A co-payment is determined based on total family income and an established Family Fee Schedule (see contract, Exhibit B-25). Contract Specifics The following tasks currently performed by PACCC in the management of the City’s Childcare Subsidy Program will continue for the next five years, 2025 – 2030, if Council approves the staff recommendation. The work plan includes but is not limited to the following tasks: 5 Palo Alto Community Child Care, provide management of the City’s Childcare Subsidy program for low-income children, Contract # C26193874; https://www.paloalto.gov/ /files/assets/public/v/1/community-services/human- services/palo-alto-community-child-care-contract-c26193874.pdf 7 3 3 8 9.Provide referrals to local community service agencies and programs that offer resources that PACCC cannot for low-income families. For the full scope of services including program goals and objectives, see the Palo Alto Community Child Care Contract C26193874.6 FISCAL/RESOURCE IMPACT The FY 2026 Proposed Operating Budget includes $606,794 for this contract in the Community Services Department budget, which is sufficient to fund year one of the agreement. For Fiscal Years 2027 - 2030, the cost for the contract will be subject to the City Council review and annual appropriation of funds. STAKEHOLDER ENGAGEMENT The Human Relations Commission held a Listening Session on childcare issues on May 8, 2025.7 Human Services staff worked closely with PACCC leadership to review and develop the agreement. ENVIRONMENTAL REVIEW Council action on this item is exempt from review under the California Environmental Quality Act (CEQA) because it can be seen with certainty that there is no possibility that a contract to administer the City’s Childcare Subsidy Program will have a significant effect on the environment. CEQA Guidelines 15061(b)(3). ATTACHMENTS None. APPROVED BY: Kristen O'Kane, Community Services Director 6 Palo Alto Community Child Care, provide management of the City’s Childcare Subsidy program for low-income children, Contract # C26193874; https://www.paloalto.gov/ /files/assets/public/v/1/community-services/human- services/palo-alto-community-child-care-contract-c26193874.pdf 7 Human Relations Commission, May 8, 2025; Item 1; https://recordsportal.paloalto.gov/Weblink/DocView.aspx?id=34808 Item No. 14. Page 1 of 1 7 5 8 2 City Council Supplemental Report From: Kristen O'Kane, Community Services Director Meeting Date: June 17, 2025 Item Number: 14 Report #:2506-4847 TITLE Approval of Professional Services Contract No. C26193874 with Palo Alto Community Child Care in an Amount Not-to-Exceed $3,228,146 to Provide Management of the City’s Childcare Subsidy Program for a Term of Five Years. CEQA Status – Not A Project RECOMMENDATION The link to the Palo Alto Community Child Care contract #C26193874, as listed in footnotes 1, 5, and 6 of staff report #2505-4680 was incorrect. The correct link is as follows, https://www.paloalto.gov/files/assets/public/v/1/community-services/human-services/palo- alto-community-child-care-contract-c26193874.pdf. APPROVED BY: Kristen O'Kane, Community Services Director Dear Mayor and Council Members, On behalf of City Manager Ed Shikada, please see staff responses below for questions from Mayor Lauing and Council Member Lu on the June 16, 2025 and June 17, 2025 City Council Meeting. Monday June 16, 2025 Council Meeting Item 9. Approval of a Surveillance Use Policy for Security Cameras at Ada's Café at Mitchell Park Community Center and Library; CEQA Status - Not a Project 1.Have we considered expanding this policy to any private entity that leases city space? Or creating a director's approval process that allows this? Staff response: Surveillance use policies are required in situations enumerated by PAMC section 2.30.630. This includes approval of a use policy when approving "agreements with a non-City entity to acquire, share, or otherwise use surveillance technology or the information it provides." See PAMC 2.30.630(d). Once approved, the City is required to produce an annual report analyzing the use of each Council - approved technology, including its cost, any complaints received, and the number and nature of Public Record Act requests received. See PAMC 2.30.680(a). If the City wanted to consider allowing staff-level approvals of some or all surveillance use policies, the City Council could adopt an ordinance amending the Surveillance and Privacy Protection Ordinance at PAMC section 2.30.620 et seq. to allow that. Staff is considering expanding this policy to the Palo Alto History Museum at the Roth Building, as cameras were installed during renovation of the building. A director approval process is not in place, but will be considered. Item 12. Approval of a Director’s Interpretation Pursuant to PAMC Section 18.01.025 Concluding That Noncomplying Residential Gross Floor Area may not be Relocated Within a Structure; Denial of the Associated Appeal; Direction to Prepare a Future Code Amendment for Administrative De Minimis Exceptions to the Zoning Code; CEQA: Exempt Pursuant to CEQA Guidelines Section 15061(b)(3) 1.A Councilmember questioned why a formal text amendment was not being initiated now to address the minor adjustments recommended by staff in the council report. This approach could avoid setting an unclear precedent and ultimately resolve the applicant’s is sue. The Councilmember suggests rescheduling the item once the staff recommended amendment is ready. JUNE 17, 2025JUNE 16, 2025 Staff Response: Preparing the amendment is not currently part of the department’s workplan. If Council authorizes and prioritizes it, the ordinance could affect the timeline of other Council-directed efforts. While staff supports moving forward, the intent was to schedule it in a way that minimizes disrupting existing priorities, specifically related to bird safe glass and stream corridor protections. It typically takes 4–6 months to prepare an ordinance, which requires Planning & Transportation Commission and Council review. Alternatively, the appellant could submit their own text amendment application. This would not draw on policy planning resources but would require fees and still be resourced after processing housing development projects, though potentially faster overall. Regardless of the amendment, the decision to pull the item should focus on whether the interpretation was properly issued. If councilmembers believe it was not, the item should be removed from consent and set for hearing, anticipated for mid-August or early September; removing the item from consent would also delay any Council direction on a text amendment. If councilmembers find that the Director’s interpretation is correct, staff recommend approving the item on consent, which would also provide direction now regarding the text amendment. Item 17. Approval of Contract Amendment No. 4 to Contract Number C19171363 with Professional Account Management LLC, dba Duncan Solutions, to Extend the Contract for one year to June 30, 2026, and to Adjust Billing Rates, Without an Increase to Compensation, for a Not –to Exceed Amount of $767,000 for Parking Permitting and Citation Management Services; CEQA Status -- Not a Project. 1.Are there any more resources about how Duncan currently operates? Are there any areas or practices they use to prioritize where to look? (I understand they use automated license plate readers) Staff response: Duncan provides permit and citation management services, providing a website and personal staffing to permit purchases, primarily for RPP programs (all six) and to the California Ave. business district employee program. They also provide Citation processing services. Parking enforcement is provided by a different contractor. 2.Are there any metrics about traffic citations by year for the last 10 years? Staff response: Given Duncan’s limited role in RPP permit and parking citation processing, this information is not readily available for parking and traffic citations overall. Staff will review available information and transmit to the City Council at a later date. Tuesday, June 17, 2025 Council Meeting Item 14: Approval of Professional Services Contract No. C26193874 with Palo Alto Community Child Care in an Amount Not-to-Exceed $3,228,146 to Provide Management of the City’s Childcare Subsidy Program for a Term of Five Years. CEQA Status – Not A Project 1.To be clear, this is only for the administration of the subsidy, and there is no actual subsidy or childcare included in this funding, right? Staff response: The Fiscal Year funding allocated for this contract totals $606,793.73. Of this amount, approximately 10% ($58,565) supports the administration of the City’s Child Care Subsidy Program, while the remaining 90% ($538,138) is directed toward providing childcare subsidies for low -income families. This funding supports access to childcare services for up to 45 children annually.