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HomeMy WebLinkAboutStaff Report 2507-4979CITY OF PALO ALTO CITY COUNCIL Special Meeting Monday, August 11, 2025 Council Chambers & Hybrid 5:30 PM     Agenda Item     A.City Council Summer Recess Report City Council Staff Report From: City Manager Report Type: INFORMATION REPORTS Lead Department: City Manager Meeting Date: August 11, 2025 Report #:2507-4979 TITLE City Council Summer Recess Report RECOMMENDATION Informational report only. EXECUTIVE SUMMARY This informational report provides a brief update on notable activities and work throughout the City Council’s July recess. BACKGROUND The annual Summer Recess Report shares updates, organized by department, on activities accomplished during the City Council recess. This report is not an exhaustive list of staff activities. The updates are to inform the City Council and public about items completed since the last City Council meeting of the fiscal year and other efforts underway. ANALYSIS Administrative Services Department End of Fiscal Year and New Fiscal Year Activities Staff focused on transitioning into the next fiscal year. Closing FY 2025 is underway. The annual inventory of both warehouses, the Municipal Services Center and Regional Water Quality Control Plant, are complete. The Office of Management and Budget published the FY 2026 Municipal Fee Schedule and both the FY 2026 Adopted Operating and Capital Budget books. Recruitment & Employee Recognition A key department recruitment for the role of Finance Manager was completed with new staff starting mid-July. An ASD Employee Recognition event was held, awarding six employees with 5- and 10-year service certificates. Procurement Staff closed year-end purchase orders and began encumbrances for FY26. The monthly purchasing and contracts training series continued with a focus on construction contract solicitation and administration. Real Estate Due diligence is underway as a precursor to finalizing purchase of the 2575 E. Bayshore Rd. property. We are in negotiations with La Comida for a license agreement. Staff continue the inter-departmental partnership to advance the Cubberley Project. Roth Building The official completion of the Roth Building construction was memorialized with the filing of the Notice of Completion (NOC) with the Santa Clara County Clerk-Recorder in July. The City issued a formal letter of acceptance for the project bringing the construction phase to a close. The City and museum are meeting to coordinate opening the community rooms and museum spaces in the coming months. CalPERS Update Staff anticipate transmitting the June 30, 2024, CalPERS valuations of the City's pension plans to the Finance Committee this fall. CalPERS completes valuations using member data two years in arrears and issues annual reporting each August. As of July 2025, CalPERS provided the following preliminary investment returns as compared to a 6.8% target: 5.8% for the period ending June 30, 2023 (impact in FY 2026) 9.3% for the period ending June 30, 2024 (impact in FY 2027) 11.6% for the period ending June 30, 2025 (impact in FY 2028) Consistent with past practice, staff will incorporate these results in financial planning, including the Long-Range Financial Forecast (LRFF) and annual budget development. Additionally, staff continue to use a lower discount rate than the 6.8% used by CalPERS to calculate the employer's normal cost and transmit the difference as an additional contribution to the City's Pension Trust. As part of the FY 2026 Adopted Budget, the City Council approved continuing to use a discount rate of 5.3% in FY 2026. CalPERS preliminary investment returns for the period ending June 30, 2025, were announced on July 14, 2025. City Manager’s Office Palo Alto Homekey Progress Homekey Palo Alto made steady progress with initial modular unit setting in late June, followed by other construction tasks such as stair and decking installation through the summer. The project team is estimating construction completion by early 2026, following impacts with construction delays, navigating unique challenges associated with modular construction. A strategic shift in modular production from a planned facility in Tracy, CA to subcontractor VBC’s main manufacturing factory in Berwick, PA was made to prioritize quality. This adjustment, while slowing progress, resulted in enhanced quality. Staff worked closely with the California Department of Housing and Community Development (HCD) to minimize impacts related to state timing regulations on funding. Point-in-Time (PIT) Count In late June, the County released preliminary data (City-specific data is expected later this summer) from the January 2025 point-in-time (PIT) count of people experiencing homelessness. The PIT count provides a snapshot of the number of people experiencing homelessness, as observed by volunteers, on a particular day. Preliminary numbers show an 8.2% overall increase of individuals experiencing homelessness in Santa Clara County, rising to approximately 10,711 people. The total number of unsheltered people experiencing homelessness remained relatively steady, with an increase of 71 people, about 1% change. In contrast, the sheltered population saw a notable rise, with over 700 more individuals counted in emergency shelters and temporary housing compared to the 2023 count. This preliminary data is not surprising--- although countywide advancement continues in both housing people and homelessness prevention1, more people are entering homelessness than exiting. Oversized Vehicles Discussion Planned for Policy and Services Committee in August. Staff are finalizing a staff report to support the August 25 Policy and Services Committee discussion on prioritizing options related to reducing the health and safety impacts of oversized vehicles in the community. Annual Community Survey Staff finalized the annual Community Survey to be conducted by Polco/National Research Center starting in August. Survey goals include gaining insight on resident perspectives about community services and existing programs and unmet service needs. Consistent with previous years, the survey will initially be mailed to a statistically significant population and offered in English, Spanish, and Chinese. The survey will then open for all residents in September, and results anticipated to be presented to Council this winter. Community Services Department Summer Camps 1 Between the January 2023 and January 2025 count, more than 8,000 people were housed. There was a net increase of 364 shelter beds, and 2,500 households were reached annually by the Homelessness Prevention System. This summer, Community Services offered a total of 323 camps. There are 3,889 campers enrolled out of 5,576 available spots, with 2,640 on waitlists for various camps. Total revenue as of July 21: $1,805,454. Summer Camp 2025 season ends August 8. The highest demand camps this year include Zoo Camp, The Art of European Baking & What's for Brunch?, Two- Week Theatre Academy, Ceramics for Kids, and a newly introduced Woodworking Outdoor Camp. Recreation The 4th of July Chili Cook Off was held showcasing community connection and chili tasting. Nine teams, four returning and five new, competed for several prizes including People’s Choice, Best Vegetarian Chili, Best Decorations, and Most Spirit; the Palo Alto Firefighters took the top prize. Judges voted for first, second, and third place awards. Staff and volunteers gave out about 2,000 chili stamp cards and over 1,000 attendees voted for their favorite chili in the People’s Choice category, a 50% increase of people who voted last year. Human Services Staff is working to finalize contracts with 21 organizations that were awarded two-year Human Services Resource Allocation Process (HSRAP) funding. These organizations will provide a range of essential programs and services for Palo Alto residents. Services include support for the unhoused, programs and services for children and adults with disabilities, mental health support, and health services for individuals and families. Public Art Program King Artist-in-Residence Aleo Landeta installed their sculpture, Toward the Then and There, on King Plaza. A community celebration was held on June 26 featuring a live DJ and drag performances. The sculpture features images and audio clips of community members who participated in the project. The sculpture is expected to remain in place into 2026. The next artist residency launched with Kiana Honarmand, who is focusing on Black, Indigenous, and People of Color (BIPOC) and immigrant members of the community. Staff received concept sketches from the three artist teams creating projection mapping artworks for the plaza facade of City Hall during Code:ART this October and are moving forward with their design development. Cubberley Artist Studio Program While the Council was on recess, artists-in-residence with the Cubberley Artist Studio Program were busy engaging the community by offering 10 free events, workshops, and art history talks hosted at Cubberley, local libraries, and the Art Center, drawing over 250 participants. Palo Alto Art Center The Art Center’s summer camps welcomed 638 campers, generating $226,645 in revenue, with 81 Counselors in Training and 14 Lead Counselors in Training. Forming Function: Ceramics with a Purpose is this year’s summer exhibition and launches the year-long Centering: Clay and Community initiative celebrating the Art Center’s role as a resource for ceramic art and education. This juried exhibition features several Art Center teaching artists and current and former students. The Art Center also has eight interns and fellows supporting camps and other programs from colleges throughout the country. The Association of Clay and Glass Artists brought the Clay and Glass Festival to the Art Center for another successful celebration on July 12 and 13, drawing well over 10,000 people. The Capital Improvement Project to enhance the Center’s ceramic facility was completed, enhancing safety and access to kilns for both the adult studio program and the kids and teens program. This project involved the creation of newly accessible weatherproofing structures for the electric kilns along with equipment to support these programs. The Art Center’s Studio Program Director Fanny Retsek and Studio Technician Rick Stoner are both retiring after a collective 30-plus years of service to the City of Palo Alto. Fanny Retsek oversaw the Adult Studio Program for ten years, helping to expand class offerings (now every single day of the week) and staffing capacity for the studios. Rick Stoner contributed more than two decades to the Art Center in his role to support studio facilities, staffing evening classes and helping to keep our kilns running. Children’s Theater The Summer Hot Dog Series produced Dragons Love Tacos and the upcoming Hansel & Gretel. The sold-out productions served more than 6,000 community members, and each production included a Magical Series Spectrum Friendly and ASL-Interpreted performances. In July, the theatre started rehearsals for the third Summer Hot Dog production, Honk Jr., with performances beginning in September. The Children’s Theatre formed an agreement with the Palo Alto Unified School District to bring Joy of Singing and Joy of Musical Theatre classes to all twelve elementary schools during the 2025-2026 school year. This program will serve an estimated 2,717 students and will be part of a sequential performing arts education program. The Teen Arts Council closed out the school year with WaveFest, an outdoor music and art festival for teens, held in Mitchell Park on June 6. This year’s festival included teen bands, dance companies, student vendors and clubs, local community groups, plus Palo Alto’s Teen Library Advisory Board (TLAB) and Art Center Teen Leadership. More than 250 teens attended the event. The Twilight Concert Series kicked off in June. This year’s concerts include Heartless (June 21), Petty Theft (June 28) at Mitchell Park and The Sun Kings (July 5), Mads Tolling (July 12), Boys of Summer (July 19), Lydia Pense and Cold Blood (July 26) in Rinconada Park. Palo Alto Junior Museum & Zoo (JMZ) JMZ camps hosted 903 campers in nine science camps. Thanks to donations from the Friends of the Palo Alto Junior Museum & Zoo, 43 campers received a scholarship to cover the full cost of participation. Thirty-seven (37) middle and high school interns, three JFCS (Jewish Family and Children Services) high school interns, and one Palo Alto High School Intern support these camps through the JMZ Science Camp Assistant Program. A new flamingo chick was born on June 22 to parents Ruby and Sal. Flamingos hatch gray-white and gain their pink color over 2–3 years from their diet. The flock has been quieter during feedings, but activity is picking up as the chick grows. Staff are preparing to attend the annual Association of Zoos and Aquariums (AZA) Conference this September for the JMZ’s accreditation hearing. If approved, the JMZ will join 237 accredited facilities worldwide, gaining streamlined access to animals, easier permitting, and stronger connections to field experts. AZA accreditation, valid for five years, reflects the highest standards in animal care, safety, ethics, and education. The birthday party booking process was streamlined to allows guests to see availability in real time, reserve a date and time, and pay directly through Enjoy Online. Additionally, the design and fabrication of interpretive signage is complete and will be installed along two miles of foot trails and the boardwalk of the Lucy Evans Nature Interpretive Center in the Baylands Preserve in September. Deemed “the Friendship Trail,” this project will connect Cooley Landing in East Palo Alto to the Lucy Evans Baylands Interpretive Center and Sea Scout Building (Environmental Volunteers educational center) in the Palo Alto Baylands. Therapeutic Recreation & Accessibility The full-time Therapeutic Recreation & Accessibility Coordinator position recruitment began in late July. This full-time, dedicated role will allow the City to provide expanded accommodation support for program participants, implement department-wide inclusion trainings, and launch new therapeutic recreation programming. Beginning August 1, a new pilot program launched in partnership with AbilityPath and Magical Bridge. The Magical Day Program Series will support adults with disabilities in meaningful weekly volunteer roles at City facilities through December 2025. Staff supported 17 accommodation requests for summer camp participants, helping ensure inclusive access and participation across CSD programs. Open Space Staff are in the process of filling the full-time Ranger position at the Baylands, with the other full-time position open for recruitment through July 27. Fire fuel mitigation efforts have been completed in our Open Space Preserves. Parks The Stanford Palo Alto Community Playing Fields Turf Replacement project is underway and scheduled to wrap up by the end of the calendar year. The parking lot will be closed throughout the duration of the project. Other project updates include Greer Park Basketball Court resurfacing project was completed in July and resurfacing of the Mitchell Park splash pad was completed on July 2. The Fred Eyerly Tower Well Park Ribbon Cutting was held on June 18, with impressive attendance from City Council, Parks and Recreation Commissioners, community partners and members, and dedicated City staff. At the event, a newly designed park sign was debuted. Community garden plots have reopened, and staff are working through contacting residents on the waitlist. In July, City staff completed focus groups with Parks and Recreation Commission Ad Hoc Playing Fields, El Camino Park user groups, and the Sierra Club. The draft Turf Study will be available for public comment from August 11-31 and will be presented to the Parks and Recreation Commission on August 26, prior to coming to the City Council in October. Our Summer Intern has been leading an initiative to catalog memorial benches across the City’s Parks and Open Space Preserves. This work will support the development of a public facing GIS mapping tool, launching soon, to enhance community access and streamline internal operations related to bench management and requests. Cubberley Community Center Project Following the second community meeting on June 12, staff conducted a summer outreach effort to share project updates, conceptual plans, and gather input from City boards and commissions. Plus, a community update was shared to recap the June meeting and provides a digital opportunity to participate in the activity conducted at the meeting. Public Art Commission – June 19 Parks and Recreation Commission – June 24 Planning and Transportation Commission – July 9 (with Concordia) Architectural Review Board – July 17 (with Concordia) Staff are actively collecting feedback from key stakeholders on the Strategic Activation Plan for the Cubberley site, which included a dedicated session with Cubberley tenants. The revised Activation Plan will be reviewed by the City Council Cubberley Ad Hoc Committee on August 5. Human Resources Department The City successfully negotiated successor bargaining agreements with the Palo Alto Peace Officers Association (PAPOA) and Police Management Association (PMA). These agreements were negotiated in alignment with the City's current fiscal conditions. All agreements are for the term of July 1, 2025-June 30, 2028. Library Department The Children’s Library underwent a successful renovation, with the branch closed from February to June to install a new Automated Materials Handling (AMH) system and to replace carpeting throughout the building. The interior was also repainted in bright new colors, with other new aesthetic design improvements. The Library launched its annual Summer Reading for a Cause program on June 1. This summer’s challenge is for all participants to read 2,000 hours, and the Library will donate $2,000 to Pupcycled, through the Friends of the Palo Alto Library. Under the theme "Book A Trip," the Library encourages all participants to read or listen daily, whether it's books, articles, audiobooks, or storytimes. The Library participated at the City’s annual Open House at the Municipal Service Center again this year. Activities included a plinko game and coloring craft, in addition to promoting library services and events. Plus, similar activities were provided at the July 3rdThursday on Cal Ave. A brand new library mobile app was launched. Now, patrons don’t have to worry about remembering their library cards – the mobile app includes an e-card that can be used to check out materials. Additionally, the app can be used to do all the things patrons can do from the library website. The Library hosted a delegation of 20 educators from Jeollanamdo Office of Education from the Republic of Korea exploring AI-based digital education and strategies for building sustainable digital learning environments on July 29. Office of Transportation Staff launched a public awareness effort in July in response to the State’s daylighting law which went into effect on January 1, 2025, making it illegal to park a vehicle within 20 feet of a crosswalk (marked or unmarked) or within 15 feet of a crosswalk with a curb extension or bulb- out. Parking in these areas is illegal statewide regardless of whether the curb is painted red. The law aims to enhance safety by improving visibility at intersections. Safety improvements at specific intersections will be evaluated throughout the year. Office of Transportation staff are prioritizing crossing locations for potential changes and enforcement emphasis, with evaluation based on locations with injury collision history along pedestrian and bicycle corridors included in the newly adopted Safe Streets for All Action Plan. The Palo Alto Police Department is handling enforcement as community reports are shared with education as the primary focus and warning citations issued initially. Drivers can play a major role by yielding to pedestrians and parking at least 20 feet from the approach side of an intersection. Learn more and report issues here. Caltrans El Camino Real Pavement Rehabilitation & ADA Improvements Caltrans continues to make progress on its El Camino Real Pavement Rehabilitation & ADA Improvements project. Striping is 95% complete, with August completion anticipated, along with the ramp between Encina and Wells. Delineators were installed. Permanent No Parking signs are 85% complete with the remaining anticipated for completion in August. Raising/adjusting manholes and valves will be complete in September. For project questions, contact Caltrans Public Information Officer, Victor Gauthier or email: sr82pave@dot.ca.gov. Quiet Zones Palo Alto Avenue Crossing The City’s Public Works Department awarded a construction contract to install necessary improvements for implementing a Quiet Zone at the Palo Alto Avenue crossing. Once construction is complete, staff will coordinate with Caltrain and the Federal Railroad Administration to issue the notice of implementation and officially activate the Quiet Zone. The construction schedule is being finalized. Churchill Avenue, Meadow Drive, and Charleston Road Crossings Staff will present the study findings and proposed Quiet Zone alternatives to the Rail Committee for review and to receive directions on next steps in September. Rail Grade Separation City and Caltrain staff are collaborating on developing refined conceptual plans for the Churchill Avenue, Meadow Drive, and Charleston Road crossings to move the Preliminary Engineering and Environmental Documentation phase forward. Staff will present to the Rail Committee in September 2025 and host two community meetings tentatively for October to gain feedback on conceptual plans. Plus, the City launched a new website for the Rail Grade Separation project for the community to track progress updates, upcoming engagement opportunities, and project resources and documents. Bookmark: www.paloalto.gov/GradeSeparation. Office of Emergency Services Wildfire Table-Top Exercise OES staff co-hosted a wildfire table-top exercise with Utilities on June 25 focused on water services. Participants included members of the water, gas, wastewater, electric, and administrative divisions who discussed their response in a wildfire scenario. This event also included an overview of the LA fires by Pasadena Water executive manager. Support at Stanford Events The Mobile Emergency Operation Center (MEOC) command vehicle was deployed to support the Stanford Department of Public Safety for the Major League Soccer game on June 28 held at Stanford Stadium. This was the third MEOC deployment in support of stadium events in June 2025. 2025 Community Wildfire Protection Plan/Foothills Fire Management Plan In June, the 2025 Community Wildfire Protection Plan / Foothills Fire Management Plan was published to the City’s website. The Plan identifies risks, assesses vulnerabilities, and in the long-term is key to breaking the cycle of disaster damage, reconstruction, and repeated damage. 4th of July Safety Watch The City lead the 4th of July Safety Watch, an annual event involving public safety agencies such as CAL FIRE, California Highway Patrol, open space rangers, and Emergency Services Volunteers. The goals of the event are to coordinate resources and facilitate readiness in case of a wildland fire, major crime, or other significant safety event during the Independence Day holiday. Palo Alto OES is the lead agency for the Safety Watch. Planning & Development Services Department Lehigh Permanente Quarry Reclamation Plan Amendment On June 12, Santa Clara County released a Notice of Preparation (NOP) for a Subsequent Environmental Impact Report (SEIR) for Lehigh Permanente Quarry’s proposed 2023 Reclamation Plan Amendment. After the public comment period ended on July 14, the County proceeded to prepare the SEIR. City staff is in communication with the County regarding the environmental review and the 2023 Major Reclamation Plan Amendment entitlement processing, given that the two western parcels of the quarry lie within City limits and are zoned as Open Space (OS). Downtown Housing Plan Workshop and Citizen’s Advisory Committee meeting The City held a second Community Workshop for the Downtown Housing Plan on June 18. Approximately 25 attendees participated in the interactive group exercise and provided valuable input on areas to consider for greater or lesser change within the project area. The project’s Citizen’s Advisory Committee also held a meeting on July 1 to discuss feedback received at the workshops and next steps. The project team is refining the feasibility analysis prepared as a part of the assessment. The findings will be presented to the City Council with preliminary recommendations anticipated in fall 2025. 400 Mitchell Lane review by Planning & Transportation Commission (PTC) On June 17, the City received a request for hearing on a Conditional Use Permit (CUP) tentative approval at 400 Mitchell Lane. The CUP request would allow Stanford University to use the existing building for private educational purposes, including field education services and storage for a portion of the Geoscience Specimen Collection. The hearing request did not specify any concerns with the project other than requesting a public hearing. The PTC considered the request at its July 30 meeting. Mountain View Multi-Family Development Standards As part of coordination with adjacent agencies, staff received an update from the City of Mountain View on new development standards that affect future development adjacent to Palo Alto. On June 24, the Mountain View City Council directed its staff to proceed with new development standards, including an increase to the density in many of the City’s multi-family residential districts. Currently proposed is an increase to densities of 50-110 dwelling units per acre in the Del Medio area, which is west of Alma Street and north of San Antonio Road, directly adjacent to the Palo Alto neighborhood of Monroe Park. Other density increases are proposed throughout the city. Mountain View Planning staff is currently studying additional density in two areas (California/Ortega and California/Latham/Rengstorff) per direction from its City Council. 3150 El Camino Real Major ARB Application Approved In July, based on the recommendation of the Architectural Review Board (ARB), staff approved the Major ARB application for a 368-unit apartment building at 3150 El Camino Real the former site of the old Fish Market and McDonalds buildings. 74 units will be deed restricted to tenants who qualify at a low-income AMI. The Vesting Tentative Map for the project is on the August 11 Council Consent calendar. The applicant is interested in breaking ground for deconstruction and site/grading work by this October. San Antonio Road Area Plan Community Advisory Group (CAG) Formation On June 25, the City Manager selected the 14 members of the San Antonio Road Area Plan CAG. The CAG represents various sectors of the community, including residents, commercial property owners, businesses, services, and advocacy groups. The CAG will have its first meeting on August 19. 762 San Antonio Road Going to the Architectural Review Board On August 7, the ARB is scheduled to conduct their first review of a Builder’s Remedy proposal for 197 housing units (20% deed restricted to below-market rates) in a seven-story building. 20% of the units will be deed restricted to below-market rates. Police Department Recruitment Over the summer, three new police officer trainees graduated the basic police academy and began the field training program. National Night Out The Police Department has been planning the annual National Night Out at Bol Park, occurring on Tuesday, August 5. There are games, emergency vehicles on display, and public safety staff to chat with residents. Consistent with prior years, staff are visiting resident-hosted block parties around town. Coffee with A Cop On Monday, July 1, the Police Department hosted a Coffee with Cop event, in conjunction with Gregorys Coffee at Stanford Shopping Center. Dozens of community members stopped in to chat with officers and enjoy the warm weather. Rivian Patrol Vehicle The nation’s first ever marked Rivian patrol vehicle has now been fully outfitted and will be hitting the streets in August, with a sneak preview during National Night Out. Public Works Services Department Newell Road Bridge, Fire Station #4 and Hamilton Avenue System Upgrade Project Updates The contracts have been signed for Newell Road Bridge and staff issued the notice to proceed to the contractor to start pre-construction activities on September 1 including surveying, preparing submittals, and tree trimming and removal. The remaining concrete sitework, paving, and striping was completed for the Churchill Avenue/Alma Street Railroad Crossing Safety Improvements in July. Both Fire Station #4 and Hamilton Avenue System Upgrade Projects Invitation for Bids were issued and are due in mid-August and early September, respectively. Upon review of the bids, staff will bring these contracts to Council for approval. 445 Bryant HVAC Replacement and Space Renovation The renovation of the former Form Fitness site located at 445 Bryant has commenced. The project involves replacing seven gas package HVAC units with seven electric heat pump units, with an expected completion date in mid-August 2025. An architect is currently working on the Use & Occupancy permit application for the new space use and designing plans for the initial Phase 1 interior space renovations. The construction contract for Phase 1 is being finalized, with construction anticipated to be completed by the end of October 2025. Palo Alto Airport Hosts Fully Electric Aircraft in Partnership with H55 In June, the Palo Alto Airport had the unique opportunity to host a fully electric aircraft in collaboration with H55, a leading developer of electric propulsion systems for aviation. As part of a nationwide tour, the aircraft made a special stop in Palo Alto to showcase the future of sustainable aviation. Over the course of two weeks, the airport facilitated a series of small outreach events for local flight schools, pilots, and aviation enthusiasts. These sessions provided attendees with an up-close look at the aircraft’s electric systems, performance capabilities, and the environmental benefits of electric-powered flight. The visit highlighted Palo Alto Airport’s ongoing commitment to innovation and sustainability, while giving the local aviation community a glimpse into the next generation of aircraft technology. Regional Water Quality Control Plant (RWQCP) Joint Interceptor Sewer Rehabilitation Project The Joint Interceptor Sewer Rehabilitation (Phase 1) Project addresses 2,364 feet of the 9,000- foot Joint Intercepting Sewer, built in 1972, which conveys over half of the influent flow to the RWQCP. Over the summer, major pipelining work was completed. Additional bypass rerouting and evaluation of a critical junction structure are expected to be completed in the coming months. Construction of the project is anticipated to be complete by fall 2025. Local Advanced Water Purification System This project improves the quality of recycled water by membrane filtration followed by reverse osmosis to reduce the level of total dissolved solids. Following Council’s approval of the construction contract with Anderson Pacific Engineering Construction, Inc. on May 19, construction began this summer, focusing on installing a new odor control system and relocating an existing sewer main—two key preliminary components before main construction. Site preparation and grading will follow. Construction is anticipated to be completed by spring 2028. Zero Waste City Facility Audit Project A comprehensive review of 43 City facilities occurred in July to support the City’s Zero Waste requirements and enhance staff awareness of responsible waste practices. The facilities inspections were conducted by a Zero Waste summer intern who reviewed all common areas (break rooms, lobbies, conference rooms, shared office spaces) to ensure each location had properly color-coded complete waste stations with containers and signage for recycling, compost, and landfill. The audit also included verifying correct material sorting inside each container and use of approved liners. All facilities and work areas received educational materials, fliers, stickers, posters, and information including photos, missing requirements, and what needed to be updated. The project was set up as a friendly competition between workgroups, with a trophy to be presented to the winning workgroup in August. Utilities Department Electric Grid Modernization Project Update The electric grid modernization project pilot phase is complete. Now, 908 homes are served with upgraded facilities that include the replacement of 70 wood utility poles, 106 new transformers, and 22,650 feet of new low-voltage wire. The cost to complete the pilot area was just over $10 million with contracted labor being the largest cost. Based on lessons learned from the pilot, staff are reassessing the next phase of the project to determine how to reduce construction costs, increase capacity at substations, and build in areas where there is higher interest in home electrification. Advanced Metering Infrastructure (AMI) Utilities, Office of Emergency Services, and Police staff are coordinating to add a new AMI base station on the rooftop of City Hall to enhance connectivity and transmission of AMI meter data for downtown businesses, Stanford campus, and the Oak Creek apartments. After the new base station is installed, Utilities can convert approximately 3,000 electric meters. Staff are finalizing the voluntary residential electric time-of-use rate and developing the January 1, 2026 implementation plan. The time-of-use rate can reduce demand on the electrical grid during peak times and lead to lower electric bills if customers shift usage to off-peak hours. H.R. 1 Bill Cuts to Clean Energy Incentives H.R. 1 was signed into law on July 4, bringing with it significant cuts to clean energy and decarbonization incentives. Staff are working with the American Public Power Association (APPA), Northern California Power Agency (NCPA) and the California Municipal Utilities Association (CMUA) to understand its impacts as it relates to customer support for clean energy programs and utility-scale implications of increased costs for energy procurement and energy production development. H.R. 1 rapidly phases out or ends federal tax credits for residential and commercial energy efficiency, renewable energy projects, home improvements, and electric vehicles. The City will likely see increased energy prices within the next few years as less generation is slated to come online, and new energy projects will be more expensive. In July, staff began public outreach to utilities customers sharing incentives details before they are set to expire. Upcoming Residential Customer Satisfaction Surveys The California Municipal Utilities Association (CMUA) is conducting a statewide utility customer satisfaction survey in July and August. The survey fields responses from municipal and investor- owned utilities customers across the state, followed by an “oversample” survey of Palo Alto residents to gain greater insight into specific areas of interest for Palo Alto. This semi-annual survey allows the utilities department to measure satisfaction with and perspectives on customer service, reliability, safety, rates, communication, and customer programs. Results will be provided to the Utilities Advisory Commission and City Council in fall 2025. Municipal Service Center (MSC) Open House The City hosted its annual open house at the Municipal Service Center (MSC) on Saturday, July 26 to showcase some of the “behind the scenes” work that we do for the community with nearly 1,000 people attending. Several City department’s staffed booths with demonstrations and displays, with attending food trucks, free ice cream, and other activities. Annual Consumer Confidence Report As required by the state, the annual consumer confidence report on water quality conditions for calendar year 2024 was posted online in English, Spanish and Chinese. FISCAL/RESOURCE IMPACT This report is informational only and items will be brought to the City Council independently, should they need additional fiscal or policy considerations. STAKEHOLDER ENGAGEMENT Community engagement continues. Work is underway planning for the next Neighborhood Town Hall meeting set for August 20 for the neighborhoods of Downtown North, University South/Professorville and Sand Hill Corridor and upcoming surveys to gain input on key topic areas. Website statistics for January – June 2025 include: - 1,598,022 total page views and470,040 users - Top 10 Visited Web Pages o Home page o Content search landing page o Utilities Department o Careers o Register for Activities & Classes o Meeting Agendas & Minutes o Palo Alto Children’s Theatre o Creek Monitor & Camera o Enjoy! Online o Palo Alto Art Center Other communications shared during the Council recess include: -Climate Action Blog: Stay Chill & Save the Planet this Summer -Joyful July Events -Celebrate Safely, Leave the Fireworks to the Professionals -Act Fast to Save on a Heat Pump Water Heater -Fire Preparedness in Palo Alto: Safety Tips for You & Your Pets -Improving Cubberley Together: What We Heard & What’s Next -Climate Action Blog: Be Cool this Summer & Switch from Gas to Electric -Progress on Key Community Projects – July 2025 -Summer Adventures Continue in August ENVIRONMENTAL REVIEW This report is for informational purposes only with no action required by the Council and is therefore not a project subject to CEQA review. ATTACHMENTS No attachments. APPROVED BY: Ed Shikada, City Manager