HomeMy WebLinkAboutStaff Report 2508-5125CITY OF PALO ALTO
CITY COUNCIL
Monday, November 17, 2025
Council Chambers & Hybrid
5:30 PM
Agenda Item
7.Approval of Funding Agreements with Stanford University to Receive up to $600,000 and
VTA for up to $456,000 to Partially Fund Palo Alto Link through June 2026, and Related
Budget Amendments in the General Fund; CEQA status – not a project.
City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Transportation
Meeting Date: November 17, 2025
Report #:2508-5125
TITLE
Approval of Funding Agreements with Stanford University to Receive up to $600,000 and VTA for
up to $456,000 to Partially Fund Palo Alto Link through June 2026, and Related Budget
Amendments in the General Fund; CEQA status – not a project.
RECOMMENDATION
Staff recommends that the Council:
1. Approve and authorize the City Manager or their designee to execute a Cost Sharing
Agreement to receive funding from Stanford University to fund Palo Alto Link Services to
Stanford Research Park up to $600,000 through June 30, 2026 (Attachment A);
2. Approve and authorize the City Manager or their designee to approve a Funding
Agreement with VTA to Receive $456,500 from the Transportation Fund for Clean Air
(TFCA) grant program to Fund Palo Alto Link in FY26 (Attachment B);
3. Amend the Fiscal Year 2026 Budget Appropriation for the General Fund in the Office of
Transportation (requires 2/3 approval) by:
a. Increasing the revenue estimate from Stanford University by $340,000;
b. Increasing the revenue estimate for grants by $456,500;
c. Increasing the Office of Transportation contract services appropriation by
$796,500.
EXECUTIVE SUMMARY
The recommended action to approve funding agreements with Stanford University for $600,000,
along with confirmed additional grant funds awarded from the VTA’s Transportation Fund for
Clean Air (TFCA) program ($456,500), to support Palo Alto Link (PAL) services through June 2026,
while maintaining the service’s reliance upon the General Fund at $250,000 for FY 2026.
BACKGROUND
On December 12, 2022, City Council approved the contract for Palo Alto Link (PAL) service.1 This
service addresses first-/last-mile access in Palo Alto and provides a convenient and affordable
transportation option for residents, employees, and vulnerable or transit-dependent
populations. PAL currently provides on-demand service Monday-Friday for a 12-hour service
span 7:00 am-7:00 pm. The service operates within most of the City, except the areas of open
space in the Foothills and East Bayshore areas and very low-density housing at the urban-wildland
interface. With the help of a web application, PAL utilizes a ten (10) vehicle fleet to provide
virtually positioned pick-up and drop-off locations within an acceptable walking distance of
origins and destinations. Door-to-door service a booking agent available by phone is available for
riders who require extra assistance.
On April 10, 2023, Council approved a cost sharing agreement with Stanford University for service
to the Stanford Research Park, extending the program service area and providing full fare and
trip cost coverage for all riders‘ trips into and out of the Park, with Stanford reimbursing 30% of
the monthly operating costs of the total Palo Alto Link program.2 On October 28, 2024, the cost
sharing agreement was updated to a usage-based agreement, such that Stanford would cover
the portion of the total operating costs reflective of their monthly percentage of trips to/from
the Stanford Research Park.3 Since that agreement, Stanford’s cost sharing portion has ranged
between 35% and 50% per month, calculated as a percentage of each month’s total costs for the
service.
While the initial Measure B Innovative Transit Grant funds of $2,000,000 have been spent down,
staff have partnered with Via to pursue additional grant funds to extend the term of service of
Palo Alto Link and decrease reliance upon City funds. As a result of these grant writing efforts,
the City has successfully obtained two successive rounds of the Bay Area Air Quality District’s
(BAAQMD) Transportation for Clean Air (TFCA) fund, which is administered by VTA. The initial
$441,000 grant was utilized for services provided from January 1, 2025 through June 30, 2025. A
second award has been granted in the most recent round, and is available for services through
the current fiscal year.
As part of the annual budget process, City Council considers and approves PAL service levels and
funding. As part of the FY 2026 Adopted Operating Budget,4 the Council approved funding of
$550,000 in the General Fund for six months of PAL Services on June 16, 2025. On June 17, 2025
1 City Council meeting 12/12/2022, Item#8:
https://cityofpaloalto.primegov.com/portal/item/?meetingItemId=20f80994-de00-4d1a-aa0b-9e37365ba583
2 City Council meeting 4/10/2023, Item#7:
https://cityofpaloalto.primegov.com/Portal/Meeting?meetingTemplateId=1109
3 City Council meeting 10/28/2024, Item#10:
https://cityofpaloalto.primegov.com/Portal/Meeting?meetingTemplateId=14449
4 FY 2026 Adopted Operating Budget - Office of Transportation pages 347-358:
https://www.paloalto.gov/files/assets/public/v/1/administrative-services/city-budgets/fy-2026-city-
budget/adopted/fy-2026-adopted-operating-budget_final.pdf
an amendment to authorize $1.1 million in Palo Alto Link services for Fiscal Year 2026 pending
support from other sources9 was approved. This contract was expected to be partially offset by
revenue from Stanford (up to $600,000) and fare revenue from riders ($40,000) for a cost to the
General Fund of $250,000. The contract enables service through June 2026 were grants to be
received to fund services.
ANALYSIS
NEXT STEPS
FISCAL/RESOURCE IMPACT
9 City Council meeting 6/17/2025, Item#AA2:
https://cityofpaloalto.primegov.com/Portal/Meeting?meetingTemplateId=17567
only approved funding through June 202611, indicating that General Fund support may not be
provided in future years.
STAKEHOLDER ENGAGEMENT
ENVIRONMENTAL REVIEW
ATTACHMENTS
APPROVED BY:
Stanford Agreement No.
PURCHASING GUIDE – APPENDIX L PAGE 1 OF 7
Appendix L:
Short Form Agreement for
Revenue Contracts
Commented [TS1]: Stanford should put in their contract
number in the header
Stanford Agreement No.
PAGE 2 OF 7 APPENDIX L – SHORT FORM AGREEMENTS FOR REVENUE CONTRACTS
Short Form Agreement for Revenue Contracts
Cost-Sharing Agreement between the City of Palo Alto and
Stanford for On-Demand Transit Services (Sept. 2025-June 2026)Contract #:
BY THIS AGREEMENT MADE AND ENTERED INTO ON OCTOBER X, 2025 BY AND BETWEEN THE CITY OF
PALO ALTO (“CITY”) AND THE BOARD OF TRUSTEES OF THE LELAND STANFORD JUNIOR UNIVERSITY
(“STANFORD”), 3215 Porter Drive, Palo Alto, CA 94304-1286. IN CONSIDERATION OF THEIR MUTUAL
COVENANTS, THE PARTIES HERETO AGREE AS FOLLOWS:
CITY SHALL PROVIDE OR FURNISH THE FOLLOWING SPECIFIED 1) GOODS AND MATERIALS, 2) SERVICES
OR 3) A COMBINATION THEREOF AS SPECIFIED IN THE EXHIBITS NAMED BELOW AND ATTACHED HERETO
AND INCORPORATED HEREIN BY THIS REFERENCE: EXHIBIT A – SCOPE OF SERVICES.
EXHIBITS THE FOLLOWING ATTACHED EXHIBITS HEREBY ARE MADE PART OF THIS AGREEMENT:
CONTRACT IS NOT COMPLETE UNLESS ALL EXHIBITS ARE ATTACHED
Exhibit A - Scope of Services
Exhibt B- Payment Plan
Exhibit C- Insurance Requirements
TERM THE SERVICES AND/OR MATERIALS FURNISHED UNDER THIS AGREEMENT SHALL
COMMENCE ON SEPTEMBER 1, 2025 AND SHALL BE COMPLETED NO LATER THAN JUNE 30, 2026.
COMPENSATION FOR THE FULL PERFORMANCE OF THIS AGREEMENT: STANFORD SHALL PAY CITY AN
AMOUNT NOT TO EXCEED $600,000 IN ACCORDANCE WITH EXHIBIT B.
CITY ACCOUNT NUMBER:
COST CENTER GL ACCT PROJECT /INTERNAL ORDER PHASE NO.DOLLAR AMOUNT
GENERAL TERMS AND CONDITIONS ARE INCLUDED ON ALL PAGES OF THIS AGREEMENT.
.
HOLD HARMLESS. Each party shall indemnify, defend and hold harmless the other party, its Council Members, officers,
employees, and agents from any and all demands, claims or liability of any nature, including wrongful death, caused by or
arising out of the other party, its officers’, directors’, employees’ or agents’ negligent acts, errors, or omissions, or willful
misconduct.
ENTIRE AGREEMENT. This agreement and the terms and conditions on the following pages represent the entire
agreement between the parties with respect to the purchase and sale of the goods, equipment, materials or supplies or
payment for services which may be the subject of this agreement. All prior agreements, representations, statements,
negotiations and undertakings whether oral or written are superseded hereby.
Commented [TS2]: Remember to put City’s contract #
here
Stanford Agreement No.
PAGE 2 OF 7 APPENDIX L – SHORT FORM AGREEMENTS FOR REVENUE CONTRACTS
PURCHASING GUIDE – APPENDIX L PAGE 3 OF 7
IN WITNESS THEREOF, THE PARTIES HAVE EXECUTED THIS AGREEMENT THE DAY, MONTH, AND YEAR
FIRST WRITTEN ABOVE.
PROJECT MANAGER AND REPRESENTATIVE FOR STANFORD
FOR CITY
NAME: Nathan Baird BY: Patricia Moss
DEPT: Office of Transportation TITLE: Procurement Director
P.O, BOX 10250
PALO ALTO, CA 94303 Date:
Telephone 650-329-2520
INVOICING SEND ALL INVOICES TO THE CITY, ATTN: PROJECT MANAGER
CITY OF PALO ALTO APPROVALS: (ROUTE FOR SIGNATURES ACCORDING TO NUMBERS IN APPROVAL
BOXES BELOW)
APPROVAL OVER $25,000
CITY DEPARTMENT Funds Have Been
Budgeted
(1)
PURCHASING & CONTRACT
ADMINISTRATION INSURANCE
REVIEW
(2) (3) PURCHASING MANAGER
APPROVAL OVER $25,000 APPROVAL OVER $85,000
CITY OF PALO ALTO
BY:_____________________________________
CITY ATTORNEY
ATTEST:
BY:________________________ _______________________
MAYOR CITY CLERK
PURCHASING GUIDE – APPENDIX L PAGE 3 OF 7
Stanford Agreement No.
PAGE 4 OF 7 APPENDIX L – SHORT FORM AGREEMENTS FOR REVENUE CONTRACTS
CITY OF PALO ALTO
GENERAL TERMS AND CONDITIONS
A. ACCEPTANCE. This agreement is limited to the terms
and conditions on pages 1 through 4 inclusive and any exhibits
referenced.
B. GOVERNING LAW AND VENUE. This agreement
shall be governed by the laws of the state of California. The
courts of the State of California in the County of Santa Clara
and the federal court for the Northern District of California
have sole jurisdiction over any disputes that arise over this
agreement.
C. NO EMPLOYMENT; CONFLICTS. It is understood and
agreed that this agreement is not a contract of employment in
the sense that the relation of master and servant exists between
the CITY and undersigned. At all times CITY shall be deemed
to be an independent contractor and STANFORD is not
authorized to bind CITY to any contracts or other obligations.
In executing this agreement, STANFORD certifies that no one
who has or will have any financial interest under this
agreement is an officer or employee of CITY.
D. INSURANCE. STANFORD agrees to provide the
insurance specified in the “Insurance Requirements” form
attached hereto as Exhibit C or self-insure to equivalent
standards. In the event STANFORD is unable to secure a
policy endorsement naming the City of Palo Alto as an
additional insured under any comprehensive general liability or
comprehensive automobile policy or policies, STANFORD
shall at a minimum, and only with the written approval of
City’s Risk Manager or designee, cause each such insurance
policy obtained by it to contain an endorsement providing that
the insurer waives all right of recovery by way of subrogation
against CITY, its officers, agents, and employees in connection
with any damage, claim, liability personal injury, or wrongful
death covered by any such policy. Each such policy obtained
by STANFORD shall contain an endorsement requiring thirty
(30) days' written notice from the insurer to CITY before
cancellation or reduction in the coverage or limits of such
policy. STANFORD shall provide certificates of such policies
or other evidence of coverage satisfactory to City's Risk
Manager, together with evidence of payment of premiums, to
CITY at the commencement of this agreement, and on renewal
of the policy, or policies, not later than twenty (20) days before
expiration of the terms of any such policy. CITY agrees to
maintain insurance of equivalent standards as STANFORD.
E. TERMINATION. This agreement may be terminated by
either party upon thirty (30) days written notice to the other
party. Monies then owing based upon work satisfactorily
accomplished shall be paid to CITY.
F. CHANGES. This agreement shall not be assigned or
transferred without the written consent of the either party. No
changes or variations of any kind are authorized without the
written consent of the both parties.
G. Reserved.
H. NO IMPLIED WAIVER. No payment, partial payment,
acceptance, or partial acceptance by either party shall operate
as a waiver on the part of such party of any of its rights under
this agreement.
I. Reserved.
J. Reserved.
K. Reserved.
L. Reserved.
M. PRICE TERMS. Extra charges, invoices and payment.
No extra charges of any kind will be allowed unless
specifically agreed to in writing by CITY. All state and federal
excise, sales and use taxes shall be stated separately on the
invoices. In event CITY reduces its price for such materials or
services during the term of this agreement, CITY agrees to
reduce the prices or rates hereof correspondingly.
N. Reserved.
O. Reserved.
P. NO THIRD PARTY BENEFICIARIES. Nothing in this
Agreement shall give any rights to any person other than the
Parties to this Agreement.
Q. USE OF STANFORD TRADEMARKS. CITY agrees not
to use Stanford's name or other Stanford trademarks (together
referred to herein as the "Marks"), or the name or trademarks of
any related organization, or to quote any of Stanford's faculty,
staff, students, volunteers or agents ("Quotes"), either in
writing or orally, without the prior written consent of
STANFORD’s Senior Director, University Brand
Management. This prohibition includes, but is not limited to,
use of the Marks or Quotes in press releases, advertising,
marketing materials, other promotional materials,
presentations, photographs for commercial use, case studies,
reports, websites, application or software interfaces, and other
electronic media.
Stanford Agreement No.
PURCHASING GUIDE – APPENDIX L PAGE 5 OF 7
Exhibit A – Scope of Services
In consideration for Stanford’s payment under this Agreement, City shall:
1. Expand the City’s On-Demand Transit program delivered under City contract C23184827 or its
successors with Nomad Transit LLC (“program”) to include the Stanford Research Park during all
regular hours of the program.
2. Provide free rides to and from the Stanford Research Park as part of the program in lieu of
charging riders the regular fee.
3. Provide Stanford with ride data on a periodic basis regarding rides to/from Stanford Research
Park. Such data will not include personal information of the riders.
Stanford Agreement No.
PAGE 2 OF 7 APPENDIX L – SHORT FORM AGREEMENTS FOR REVENUE CONTRACTS
Exhibit B – Payment Plan
Stanford shall pay City a pro-rata amount based upon the total monthly cost of the service and the percentage of trips to and
from the Standford Research Park (SRP), with a not-to-exceed amount of $600,000. For each month, the formula shall be the total
monthly cost invoiced, multiplied by the total percentage of completed trips to and from the SRP with the trip data being provided
by Nomad Transit LLC.
Month
Monthly
Invoice Total
SRP % of all
completed trips
Total Monthly
Cost to SRP
January $ 100,000.00 35%$35,000
PURCHASING GUIDE – APPENDIX L PAGE 3 OF 7
Exhibit C – Insurance Requirements
STANFORD WARRANTS THAT IT HAS INSURANCE TO SUPPORT THIS AGREEMENT AND THAT IT WILL MAINTAIN
COVERAGE FOR THE DURATION OF THIS AGREEMENT AS PROVIDED BELOW.
CONTRACT IS CONTINGENT ON COMPLIANCE WITH CITY’S INSURANCE REQUIREMENTS
AS SPECIFIED HEREIN.
MINIMUM LIMITS
REQUIRED TYPE OF COVERAGE REQUIREMENT EACH
OCCURRENCE AGGREGATE
YES
YES
WORKER’S COMPENSATION
EMPLOYER’S LIABILITY
STATUTORY
STATUTORY STATUTORY STATUTORY
YES 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
$1,000,000
$1,000,000
$1,000,000
YES AUTOMOBILE LIABILITY,
INCLUDING ALL OWNED, HIRED,
NON-OWNED
BODILY INJURY
- EACH PERSON
- EACH OCCURRENCE
PROPERTY DAMAGE
$250,000
$500,000
$100,000
$250,000
$500,000
$100,000
NO PROFESSIONAL LIABILITY,
INCLUDING, ERRORS AND
OMISSIONS, MALPRACTICE (WHEN
APPLICABLE), AND NEGLIGENT
PERFORMANCE
ALL DAMAGES $1,000,000
1
SANTA CLARA VALLEY TRANSPORTATION AUTHORITY
CONGESTION MANAGEMENT PROGRAM
TRANSPORTATION FUND FOR CLEAN AIR
AGREEMENT
FY 2025/26
This agreement (“Agreement”) is entered into between the Santa Clara Valley Transportation
Authority (“VTA”) and the City of Palo Alto (“Sponsor”) and shall be effective beginning on July
1, 2025 (“Effective Date”). Hereinafter, Sponsor and VTA may be individually referred to as a
“PARTY” or collectively referred to as the “PARTIES”.
RECITALS
This Agreement is made with reference to the following facts:
A. VTA has been designated, by resolutions of the County of Santa Clara and most of the cities
therein, as the Program Manager for Santa Clara County’s Transportation Fund for Clean Air
(“TFCA”) funds under the State of California Health and Safety Code Section 44241.
B. Pursuant to that designation, VTA is responsible for allocating and administering the County of
Santa Clara’s TFCA County Program Manager (“CPM”) Fund to eligible project sponsors in
accordance with the State of California Health and Safety Code Sections 44241 and 44242 and
VTA’s current agreement with the Bay Area Air Quality Management District (“Air District”).
C. On October 2, 2025, the VTA Board approved the programming of Fiscal Year (“FY”) 2025/26
TFCA CPM funds for the Palo Alto Link project (“Project(s)”).
D. This Agreement specifies the conditions under which VTA will allocate and administer a
grant(s) from the TFCA CPM Fund to Sponsor for FY 2025/26.
Now, therefore the Parties agree as follows:
AGREEMENT
Section 1. Grant of TFCA Funds; Description of Projects
A. Subject to appropriation and receipt of TFCA funds (as further set forth in Section 10, below),
VTA hereby agrees to allocate to Sponsor a TFCA grant in an amount not to exceed $456,500
(the “Grant Funds”) in consideration for Sponsor’s agreement to implement and complete the
Project(s), as further set forth in the Project Summary(ies) attached hereto as Attachment A, in
accordance with the terms and conditions set forth in this Agreement.
B. In consideration of VTA providing Sponsor with the Grant Funds, Sponsor hereby agrees to
implement and complete the Project(s) in conformance with the terms of this Agreement. In
implementing the Project(s), Sponsor shall comply with reporting requirements as described in
Section 13.
2
Section 2. Proper Expenditure; Return of Funds
A. Sponsor must assure that all Grant Funds received under this Agreement are expended only in
accordance with all applicable provisions of federal, state, and local laws, and Sponsor shall
require any other sub-recipients of Grant Funds for the Project(s) to do the same.
B. Sponsor must comply with all TFCA program requirements, as set forth in the Air District’s
County Program Manager Fund Expenditure Plan Guidance Fiscal Year Ending (FYE) 2026
(“Guidance”) and the 26-SC Funding Agreement between VTA and the Air District. These
documents, including appendices and revisions, are incorporated herein and made a part hereof
by this reference as if fully set forth herein and will be provided by VTA to Sponsor upon
written request.
C. Since the Air District mandates that all TFCA Funds that are not expended in accordance with
applicable provisions of law must be returned, Sponsor must reimburse VTA all Grant Funds
that are not expended in accordance with the terms and conditions of this Agreement and/or
applicable provisions of law upon VTA's written notification to Sponsor.
D. Sponsor must also return the Grant Funds to VTA if the Project(s) are not maintained and/or
operated throughout and until the conclusion of the years of effectiveness (“Years of
Effectiveness”). This is the default value stated in the Air District’s Guidance for the applicable
project type, unless a different value was approved by the Air District and shown to yield a
project that meets the cost-effectiveness requirement specified in the TFCA Guidance document
cited above. The amount of Grant Funds returned to the Program Manager must be calculated
on a prorated basis based on the length of a project’s Years of Effectiveness.
Section 3. Administrative project costs
Grant Funds may not be expended on Administrative Project Costs. As explained in the Guidance,
these are costs associated with the administration of a TFCA project and include the costs to prepare
proposals and/or grant applications.
Section 4. Term
A. The term of this Agreement is retroactive beginning on July 1, 2025, through December 31,
2031, or terminated in accordance with Section 17 (Termination).
B. The Grant Funds must be expended within two (2) years of receipt of the first transfer of funds
from the Air District to the VTA in the applicable fiscal year, unless one of the following
applies:
a. Multi-Year Funded Project: If VTA requests multi-year funding in compliance with
the Guidance; and the Air District approves the request for multi-year funding.
b. Extensions of Expenditure Deadline: If VTA finds that a project will take a longer
period to implement or that significant progress has been made on a project, then
3
VTA can approve no more than two one‐year schedule extensions for a project, as
memorialized in writing by VTA. Any subsequent schedule extensions for projects
may be given on a case‐by‐case basis only by written amendment to this Agreement,
if the Air District finds that significant progress has been made on a project, and the
Funding Agreement is amended to reflect the revised schedule.
C. In addition to the specific term of this Agreement, Sponsor must maintain each Project for the
Years of Effectiveness prescribed in Section 2D herein.
Section 5. Work Product
Sponsor must place in the public domain any software, written document, or other product
developed with funds received through this Agreement, to the extent not otherwise prohibited by
law, and to the extent required by the California Public Records Act (California Government Code
Sections 7920.000 et seq.).
Section 6. Acknowledgement of Funding Sources
A. Sponsor must acknowledge both VTA and Air District as funding sources during the
implementation of the Project(s) and must use the VTA and the Air District approved logos as
specified below:
(1) The logos must be used on signs posted at the site of any project construction;
(2) The logos must be displayed on any vehicles or equipment operated with or obtained as part
of the Project(s);
(3) The logos must be used on any material intended for public consumption associated with the
Project(s), such as websites and printed materials, including transit schedules, brochures,
handbooks, maps created for public distribution, and promotional material; and
(4) Sponsor will demonstrate to VTA, through evidence such as photographs of vehicles,
equipment, construction signs, and copies of press releases, that the logos are used and
displayed as required by this Section.
B. VTA will provide a copy of Air District and VTA logos to Sponsor for use in fulfilling
Sponsor’s obligations under this Section.
C. Sponsor must acknowledge VTA and Air District as a funding source in any related articles,
news releases, or other publicity materials for the Project(s) that are produced or caused to be
produced by Sponsor.
Section 7. Indemnity and Insurance Requirements
A. Sponsor must indemnify, defend, and hold harmless VTA, the Air District, their respective
directors, officers, officials, agents, employees, representatives, and successors-in-interest from
any claim, liability, loss, expense, including reasonable attorneys’ fees, and/ or claims for injury
or damage arising out of, or in connection with, performance of this Agreement by Sponsor
4
and/or its agents, employees, representatives, and subcontractors, excepting only loss, injury or
damage caused by the gross negligence or willful misconduct of personnel employed by VTA.
B. Sponsor must adhere, throughout the term of this Agreement, to the insurance requirements
specified in Attachment B “Insurance Requirements”, which are hereby incorporated by
reference. In any agreement between Sponsor and a third party for purposes related in any way
to the subject matter of this Agreement (“Third Party Contract”), Sponsor must require that
VTA and Air District be named as (i) additional insured on all policies of insurance required by
Sponsor in the Third-Party Contract and (ii) indemnified party in any indemnity provision
contained in the Third-Party Contract. Such Third-Party Contracts must contain requirements
for General Liability, Automobile Liability, Workers’ Compensation and Employer’s Liability,
and Pollution Liability. The Insurance Requirements may be satisfied by self-insurance or
pooled risk plans that provide comparable coverage.
Section 8. Invoicing
Sponsor must submit invoices at quarterly intervals to VTA for reimbursement of costs incurred to
implement the Project(s). Sponsor must email requests for reimbursement to VTA Accounts
Payable at VTA.AccountsPayable@vta.org. Sponsor must include relevant, auditable back-up
documentation (time sheets, bills, etc.) with each invoice.
Section 9. Reimbursement
A. All funds allocated by VTA to Sponsor will be paid on a cost-reimbursement basis only. VTA
will pay no funds in advance.
B. Upon review and approval of invoices and documentation, VTA will, within fifteen (15) days of
receipt of an invoice that conforms to the requirements set forth in this Agreement, reimburse
Sponsor for all eligible expenditures up to the maximum amount described in Section 1 of this
Agreement. Only those expenses incurred by Sponsor on or after July 1, 2025, will be
considered reimbursable expenditures.
C. Funds for the Projects described in this Agreement, which are not spent by prior to June 30,
2028 and submitted for reimbursement within four months, will not be available to reimburse
Project costs unless a Project schedule, which extends the Project completion date beyond June
30, 2028, has been approved by either VTA or the Air District.
Section 10. Funds Subject to Appropriation/Allocation of Funds Contingent on
Appropriation
VTA’s obligations under the terms of this Agreement are contingent upon and subject to the
allocation of TFCA funds to VTA by the Air District under VTA’s “26-SC” agreement with the Air
District for approved projects during Fiscal Year 2025/26.
5
Section 11. Audit
This Agreement is subject to the examination and audit of the California State Auditor pursuant to
California Government Code Section 8546.7 for a period of five (5) years after each Project(s)
Years of Effectiveness. Audits may also be conducted by an auditor chosen by the Air District or
VTA.
Section 12. Sponsor’s Record Keeping
Sponsor must:
A. Allow VTA and Air District staff, authorized representatives, and independent auditors, during
the term of this Agreement and for five (5) years from the end of each Project(s) Years of
Effectiveness, to conduct performance and financial audits and to inspect the Project(s). During
audits, Sponsor must make available to the auditor, in a timely manner, all records relating to
Sponsor’s implementation of the Project(s). During inspections, Sponsor will provide, at the
request of VTA or the Air District, access to inspect the Project(s) and related records.
B. Maintain employee time sheets documenting those hourly labor costs incurred in the
implementation of the Project(s), including both administrative and implementation costs, or to
establish an alternative method to document staff costs charged to the Project(s). Sponsor must
keep such documents in a central location for a period of five (5) years from the end of each
Project’s Years of Effectiveness.
C. Keep all financial and implementation records necessary to demonstrate compliance with this
Agreement and the TFCA Program. Such records must include documentation that demonstrates
significant progress made for those Project(s) seeking extensions to the completion date.
Sponsor must keep such documents in a central location for a period of five (5) years from the
end of each Project’s Years of Effectiveness.
6
Section 13. Reporting Requirements.
A. Sponsor must submit an interim project report to VTA in each May and October until the
Project(s) is/are completed, and all closeout requirements have been fulfilled. The interim report
must utilize Air District-approved report forms. One form should be submitted for each Project
listed in Attachment A. VTA will supply the Interim Project Report form to Sponsor for this
requirement.
B. Sponsor must submit a Final Report for each completed Project on the Air District-approved
report form appropriate for the specific project type. Sponsor must also submit a post‐project
Cost-Effectiveness spreadsheet. Post‐project evaluations should be completed using the version
of the Cost‐Effectiveness worksheet for the year the purchased, installed, or constructed project
became available for use by the public. VTA will provide the Final Report Forms and
spreadsheets for this requirement.
Section 14. Review
VTA will review Sponsor’s progress in implementing the Project(s) at the end of the sixth (6th)
quarter following execution of this Agreement. If progress at the sixth (6th) quarter review is
insufficient to implement any Project or to expend the funds within the period described in
Section 4, VTA will develop an action plan with Sponsor to ensure that the Grant Funds are not
required to be repaid to VTA and/or the Air District. The action plan may include
reprogramming funds to other projects within Santa Clara County to ensure their expenditure
prior to the term expiration date described in Section 4.
Section 15. Non-Performance
If Sponsor causes all or part of these Grant Funds to be subject to repayment to the CPM Fund
because of failure to complete the Project(s) according to the work scope described in
Attachment A, Sponsor’s next grant allocation of any kind that is from or passes through VTA
may be reduced by the amount that VTA repaid to the CPM Fund.
Section 16. General Terms and Conditions
A. Notices. Any notice required to be given by either Party, or which either Party may wish to
give, must be in writing and served either by personal delivery or sent by certified or registered
mail, postage prepaid, addressed as follows:
To VTA: Santa Clara Valley Transportation Authority
Chief Planning & Programming Officer
3331 North 1st Street
San José, CA 95134-1906
To SPONSOR: City of Palo Alto
Office of Transportation
250 Hamilton Avenue
Palo Alto, CA 94301
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B. Program Liaison. Within thirty (30) days from the Effective Date of this Agreement, Sponsor
must notify VTA of Sponsor’s “Program Liaison” and provide the Program Liaison’s address,
telephone number, and email address. The Program Liaison must be the contact to VTA
pertaining to implementation of this Agreement and for information about the Project(s).
Sponsor must notify VTA of the change of Program Liaison or of the Program Liaison’s contact
information in writing no later than thirty (30) days from the date of any change.
C. Non-Waiver. The failure of either party to insist upon the strict performance of any of the
terms, covenants, and conditions of this Agreement will not be deemed a waiver of any right or
remedy that either party may have and will not be deemed a waiver of their right to require strict
performance of all of the terms, covenants, and conditions thereafter.
D. Assignment: Sponsor must not assign, sell, license, or otherwise transfer any rights or
obligations under this Agreement without the prior written consent of VTA.
E. Integration. This Agreement, including all attachments and references, constitutes the entire
Agreement between the Parties pertaining to the subject matter contained herein and supersedes
all prior or contemporaneous agreements, representations, and understandings of the Parties
relative thereto.
F. Amendments. Future amendments and modifications to this Agreement must be made in
writing and signed by both parties.
G. Independent Contractor: Sponsor is an independent contractor and shall not be considered
employees or agents of VTA or the Air District.
H. Governing Law: Any dispute that arises under or relates to this Agreement shall be governed
by California law, excluding any laws that direct the application of another jurisdiction’s laws.
Venue for resolution of any dispute that arises under or relates to this Agreement shall be San
Jose, California.
I. Attachments. Each attachment hereto is incorporated into this Agreement as if fully set forth
herein.
J. Severability. If any term, covenant, condition, or provision of this Agreement, or the
application thereof to any person or circumstance, shall to any extent be held by a court of
competent jurisdiction to be invalid, void, or unenforceable, the remainder of the terms,
covenants, conditions, and provisions of this Agreement, or the application thereof to any
person or circumstance, must remain in full force and effect and shall in no way be affected,
impaired or invalidated thereby.
K. Warranty of Authority to Execute Agreement. Each Party to this Agreement represents and
warrants that each person whose signature appears hereon has been duly authorized and has the
full authority to execute this Agreement on behalf of the entity that is a Party to this Agreement.
L. Survival. Any provision that, by its nature, extends beyond the term or termination of this
Agreement, including but not limited to Sections 2D and Section 7, will survive the expiration
or termination of this Agreement.
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Section 17. Termination.
A. Voluntary. Either Party may terminate this Agreement and/or a Project at any time by giving
written notice of termination to the other Party which must specify the effective date thereof.
Notice of termination under this paragraph must be given at least ninety (90) days before the
effective date of such termination unless the Parties mutually agree to an earlier termination
date. This Agreement will also terminate at the end of the fiscal year during which VTA loses
its designation as County Program Manager for Santa Clara County.
If VTA terminates this Agreement and/or a Project pursuant to this provision, the Sponsor must
cease all work under this Agreement and cease further expenditures of Grant Funds received
under this Agreement for the terminated Project immediately upon receipt of the notice of
termination, excepting any work permitted to continue that is specified in the notice of
termination. VTA will review the project to determine if it will still reduce emissions, and if it
does, VTA may reimburse Sponsor for eligible funds and no further Grant Funds will be
provided for that Project.
If Sponsor terminates this Agreement and/or a Project pursuant to this provision, the Sponsor
must return all Grant Funds provided by VTA for the specific Project up to and including the
date of termination.
B. After Breach. VTA may terminate this Agreement and/or a Project for breach. Upon any
breach, VTA will deliver a written notice of termination for breach to Sponsor that specifies the
date of termination, which will be no less than ten (10) business days from delivery of such
notice and will provide the Sponsor an opportunity to contest such breach within that period of
time. If Sponsor contests the notice of termination for breach, VTA will provide written notice
of VTA’s determination of Sponsor’s contestation. If VTA upholds the termination for breach,
the written notice will specify the effective date of termination and Sponsor will have ten (10)
business days to cure. If the breach is not cured within the allotted time, the Agreement will
automatically terminate. The notice of termination will specify the Total Grant Funds VTA has
paid to the Sponsor, which Sponsor must reimburse to the VTA within thirty (30) days of the
effective date of termination.
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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date shown below.
City of Palo Alto Santa Clara Valley Transportation Authority
(Sponsor) (VTA)
Dated: ____________________________ Dated: _____________________________
__________________________________ ___________________________________
Ed Shikada Carolyn Gonot
City Manager General Manager and CEO
City of Palo Alto VTA
Approved as to Form: Approved as to Form:
_________________________________ _________________________________
Tim Shimizu Judith Propp
Assistant City Attorney VTA Counsel
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ATTACHMENT A – PROJECT INFORMATION SHEET
A. Project Number: 26SC04
B. Project Title: Palo Alto Link
C. Project Category (project will be evaluated under this category): 5e
D. TFCA County Program Manager Funds Allocated: $456,500
E. TFCA Regional Funds Awarded (if applicable): $0
F. Total TFCA Funds Allocated (sum of C and D): $456,500
G. Total Project Cost: $1,800,000
H. Project Description:
With $456,500 in support from the BAAQMD Transportation Fund for Clean Air (TFCA), the City
of Palo Alto seeks to continue operating its microtransit program (Palo Alto Link or PAL) through
June 2026. This project is aligned with TFCA’s directive to reduce greenhouse gas emissions,
improve transportation options for riders, reduce traffic congestion in the region, and reduce air
pollution. The service will address multiple high-priority needs for the community including:
1. Reduce reliance on the single-occupancy vehicle and decrease overall greenhouse gas
emissions
2. Facilitate east-west service and connections across the city
3. Increase accessibility for Palo Alto’s priority populations including low-income individuals
and older adults
Project History and Need
Beginning in December 1999, the City of Palo Alto ran two free shuttle bus services on weekdays
between the Palo Alto Caltrain station and destinations throughout the city limits. In addition, on
both routes, the City ran a special school commute shuttle service on school days. The shuttle
programs serviced numerous vulnerable and transit-dependent populations including students and
seniors, with an estimated 550 riders per day and 140,000 riders per year.1 On July 1, 2020, both
shuttle bus services were discontinued due to a temporary lack of riders during the COVID-19
pandemic and constraints on the City budget. Additionally in 2019, VTA implemented reductions in
bus service in Palo Alto, making it much more difficult for those who work and live in Palo Alto to
reach medical appointments, run errands, and get to work and school. VTA has rejected the idea of
providing funds to backfill bus service reductions with local shuttle service.
Additionally, the Caltrain rail corridor and State Highway 82/El Camino Real bifurcate the City
from north to south creating a lack of east-west transit connections. This makes it extremely
difficult for residents to live a car-lite (or car-free lifestyle). If an individual is without access to a
car entirely, their long-distance commute will require local bus service on both ends and local
services are often infrequent and slow.
To remedy these critical transportation cuts and address the lack of east-west connections, the City
of Palo Alto applied for the Innovative Transit Service Models Competitive Grant from the Measure
B Program to implement an on-demand transit service. The City received funds to begin and run the
microtransit service for 18 months and is now requesting funds through TFCA to fund continuation
of the service. PAL is a dynamically routed on-demand microtransit service that is designed to
reduce single-occupancy vehicle trips, improve mobility, and enable multimodal connections. PAL
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serves the entire city of Palo Alto and currently provides an average of 1,000 trips per week. The
service allows riders to request trips anywhere within the zone; riders are picked up shortly after
their trip is requested, and trips are grouped with others going in the same direction. There are 10
vehicles in the fleet, 3 of which are hybrid-electric and 7 that are electric. Funds through TFCA will
support operating costs for the service and facilitate the transition to electric vehicles.
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ATTACHMENT B – INSURANCE REQUIREMENTS
SPONSOR’S ATTENTION IS DIRECTED TO THE INSURANCE REQUIREMENTS
BELOW. IT IS HIGHLY RECOMMENDED THAT SPONSOR CONFER WITH THEIR
INSURANCE CARRIERS OR BROKERS IN ADVANCE OF PROPOSAL SUBMISSION
TO DETERMINE THE AVAILABILITY OF INSURANCE CERTIFICATES AND
ENDORSEMENTS REQUIRED BY THIS CONTRACT.
INSURANCE
Without limiting Sponsor’s obligation to indemnify and hold harmless VTA, Sponsor must
procure and maintain for the duration of the Contract insurance against claims for injuries to
persons or damages to property which may arise from or in connection with the performance of
the Work hereunder by Sponsor, its agents, representatives, or employees, or subcontractors. The
cost of such insurance must be included in Contract price. In the event of any material change in
the Contract Scope of Services, VTA reserves the right to change the insurance requirements set
forth herein. Sponsor must furnish complete copies of all insurance policies, within three (3)
business days of any request for such by VTA.
A. Liability and Workers’ Compensation Insurance
1. Minimum Scope of Coverage
Coverage must be at least as broad as:
a. Insurance Services Office General Liability coverage (“occurrence” form CG 0001).
General Liability insurance written on a “claims made” basis is not acceptable.
b. Insurance Services Office Business Auto Coverage, Insurance Services Office form
number CA 0001, covering Automobile Liability, code 1 “any auto.” Auto Liability
written on a “claims-made” basis is not acceptable.
c. Workers’ Compensation insurance as required by the Labor Code of the State of
California and Employer’s Liability insurance.
d. Professional Liability, including limited contractual liability coverage, covering
liability arising out of any negligent act, error, mistake or omission in the
performance of Sponsor’s services under this Agreement. This coverage must be
continuously maintained for a minimum of two (2) years following completion of this
Agreement. This coverage may be written on a claims made basis, if so, see special
provisions in Section B.
e. Sponsor’s Pollution/Environmental Impairment Liability: covering liability arising
out of the treatment, handling, storage, transportation, or accidental release of any
hazardous material.
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2. Minimum Limits of Insurance
Sponsor must maintain limits no less than:
a. General Liability (including umbrella/excess liability): $4,000,000 limit per
occurrence for bodily injury, personal injury, and property damage. If General
Liability Insurance or other form with a general aggregate limit is used either the
general aggregate limit must apply separately to this project/location or the general
aggregate limit must be twice the required occurrence limit. This requirement may be
satisfied by a combination of General Liability with Excess or Umbrella, but in no
event may the General Liability primary policy limit per occurrence be less than
$2,000,000, unless Umbrella/Excess policies feature inception and expiration dates
concurrent with the underlying General Liability policy, “Follow Form” coverage,
and a “Drop Down”.
b. Automobile Liability (including umbrella/excess liability): $4,000,000 limit per
accident for bodily injury and property damage. This requirement may be satisfied by
a combination of Auto Liability with Excess or Umbrella, but in no event may the
Automobile Liability primary policy limit per occurrence be less than $2,000,000,
unless Umbrella/Excess policies feature inception and expiration dates concurrent
with the underlying auto liability policy, “Follow Form” coverage, and a “Drop
Down”.
c. Workers’ Compensation and Employer’s Liability: Statutory Workers’ Compensation
limits and Employer’s Liability limits of $1,000,000 per accident.
d. Professional Liability: $2,000,000 each occurrence/aggregate minimum limit per
claim. This requirement may be satisfied by a combination of Professional Liability
insurance with Excess or Umbrella policies, but in no event may the Professional
Liability primary policy limit per occurrence be less than $2,000,000, unless
Umbrella/Excess policies feature inception and expiration dates concurrent with the
underlying policy, “Follow Form”, and a “Drop Down” provision.
e. Sponsor’s Pollution/Environmental Impairment Liability: $3,000,000 per occurrence.
This requirement may be satisfied by a combination of Pollution Liability insurance
with Excess or Umbrella policies, but in no event may the Pollution Liability primary
policy limit per occurrence be less than $2,000,000, unless Umbrella/Excess policies
feature inception and expiration dates concurrent with the underlying policy, “Follow
Form” coverage, and a “Drop Down” provision.
3. Self-Insured Retention
The certificate of insurance must disclose the actual amount of any deductible or self-
insured retention, or lack thereof, for all coverages required herein. Any self-insured
retention or deductible in excess of $50,000 ($100,000 if Sponsor is a publicly-traded
3
company) must be declared to and approved by VTA. If Sponsor is a governmental
authority such as a state, municipality or special district, self-insurance is permitted. To
apply for approval for a level of retention or deductible in excess of $50,000, Sponsor
must provide a current financial report including balance sheets and income statements
for the past three years, so that VTA can assess Sponsor’s ability to pay claims falling
within the self-insured retention or deductible. Upon review of the financial report, if
deemed necessary by VTA in its sole discretion, VTA may elect one of the following
options: to accept the existing self-insured retention or deductible; require the insurer to
reduce or eliminate the self-insured retention or deductible as respects VTA, its directors,
officers, officials, employees and volunteers; or to require Sponsor to procure a bond
guaranteeing payment of losses and related investigations, claim administration and
defense expenses. Applicable costs resulting therefrom will be borne solely by Sponsor.
Sponsor may request execution of a nondisclosure agreement prior to submission of
financial reports.
B. Claims Made Provisions (not applicable to General Liability or Auto Liability)
Claims-made coverage is never acceptable for General Liability or Auto Liability. Claims-
made may be considered for Professional, Environmental/Pollution, or Cyber Liability. If
coverage is written on a claims-made basis, the Certificate of Insurance must clearly state so.
In addition to all other coverage requirements, such policy must provide that:
1. The policy must be in effect as of the date of this Agreement and the retroactive date
must be no later than the date of this Agreement.
2. If any policy is not renewed or the retroactive date of such policy is to be changed, the
Sponsor must obtain or cause to be obtained the broadest extended reporting period
coverage available in the commercial insurance market. This extended reporting
provision must cover at least two (2) years.
3. No prior acts exclusion may be added to the policy during the contract period.
4. The policy allows for reporting of circumstances or incidents that might give rise to
future claims.
C. Other Provisions
The policies must contain, or be endorsed to contain, the following provisions:
1. General Liability, Automobile Liability, and Sponsor’s Pollution Liability
a. VTA, its directors, officers, officials, employees and volunteers are to be named as
additional insureds as respects: liability arising out of activities performed by or on
behalf of the Sponsor, including VTA’s general supervision of the Sponsor; products
4
and completed operations of the Sponsor and its subcontractors; premises owned,
occupied or used by the Sponsor; or automobiles owned, leased, hired or borrowed by
the Sponsor. The coverage must contain no special limitations on the scope of
protection afforded to VTA, its directors, officers, officials, employees, or volunteers.
Additional Insured endorsements must provide coverage at least as broad as afforded
by the combination of ISO CG 20 10 10 01 and CG 20 37 10 01.
b. Any failure to comply with reporting provisions of the policies may not affect
coverage provided to VTA, its directors, officers, officials, employees, or volunteers.
c. Sponsor’s insurance must 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.
a. The General Liability General Aggregate limit must apply per project, not per policy.
b. The General Liability policy must be endorsed to remove the exclusion for railroad
liabilities, with coverage at least as broad as afforded by ISO CG 24 17.
2. All Coverages
a. Sponsor’s insurance coverage must be primary insurance as respects VTA, its
directors, officers, officials, employees, and volunteers. Self-insurance or insurance
that may be maintained by VTA, its directors, officers, officials, employees, or
volunteers may apply only as excess to the Sponsor’s insurance. Sponsor’s insurance
must not seek contribution from VTA’s insurance program.
b. The insurer must agree to waive all rights of subrogation against VTA, its directors,
officers, officials, employees, and volunteers for losses arising from work performed
by the Sponsor and its subcontractors for VTA
3. Other Insurance Provisions
a. The Certificate must disclose the actual amounts of all deductibles or self-insured
retentions.
b. If any coverage forms or endorsements required by this Contract are updated by their
publishers, whether they be the insurance carrier(s), the Insurance Services office, or
the American Association of Insurance Services, during the duration of this Contract,
VTA reserves the rights to require the Sponsor to procure said coverage forms or
endorsements using the updated versions upon the next renewal cycle.
D. Acceptability of Insurers
Insurance and bonds must be placed with insurers with an A.M. Best’s rating of no less than
A VII (financial strength rating of no less than A and financial size category of no less than
VII), unless specific prior written approval has been granted by VTA.
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E. Certificates of Insurance
Sponsor must furnish VTA with a Certificate of Insurance. The certificates for each
insurance policy are to be signed by an authorized representative of that insurer. The
certificates must be issued on a standard ACORD Form. The Sponsor must instruct their
insurance broker/agent to submit all insurance certificates and required notices electronically
in PDF format to Insurance.certificates@vta.org. All endorsements must be attached to the
ACORD certificate in a single PDF document.
The certificates must (1) identify the insurers, the types of insurance, the insurance limits, the
deductibles, and the policy term, (2) include copies of all the actual policy endorsements
required above, and (3) in the “Certificate Holder” box include:
Santa Clara Valley Transportation Authority (“VTA”)
3331 North First Street
San Jose, CA 95134-1906
In the Description of Operations/Locations/Vehicles/Special Items Box, the VTA Contract
number must appear, the list of policies scheduled as underlying on the Umbrella/Excess
policy must be listed, Certificate Holder must be named as additional insured, and Waiver of
Subrogation must be indicated as endorsed to all policies as stated in the Contract
Documents.
It is a condition precedent to award of this Contract that all insurance certificates and
endorsements be received and approved by VTA before Contract execution. No work may be
performed until insurance is in full compliance. VTA reserves the rights to require complete,
certified copies of all required insurance policies, at any time.
If the Sponsor receives notice that any of the insurance policies required by this Exhibit may
be cancelled or coverage reduced for any reason whatsoever, Sponsor must immediately
provide written notice to VTA that such insurance policy required by this Exhibit is canceled
or coverage is reduced.
F. Maintenance of Insurance
If Sponsor fails to maintain insurance as required herein, VTA, at its option, may suspend
payment for work performed and/or may order the Sponsor to suspend work at Sponsor’s
expense until a new policy of insurance is in effect.
Ed. Rev. 10-1-19