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Home My WebLink About2025-12-08 City Council Agenda PacketCITY COUNCIL Regular Meeting Monday, December 08, 2025 Council Chambers & Hybrid 5:30 PM Amended Agenda Amended agenda items appear below in RED Councilmember Keith Reckdahl Remote Call In Teleconference Location: Huntsville Marriott NASA Space Center 5 Tranquility Base Huntsville, Alabama 35805 Palo Alto City Council meetings will be held as “hybrid” meetings with the option to attend by teleconference or in person. Information on how the public may observe and participate in the meeting is located at the end of the agenda. The meeting will be broadcast on Cable TV Channel 26, live on YouTube https://www.youtube.com/c/cityofpaloalto, and streamed to Midpen Media Center https://midpenmedia.org. VIRTUAL PARTICIPATION CLICK HERE TO JOIN (https://cityofpaloalto.zoom.us/j/362027238) Meeting ID: 362 027 238 Phone:1(669)900-6833 PUBLIC COMMENTS General Public Comment for items not on the agenda will be accepted in person for up to three minutes or an amount of time determined by the Chair. General public comment will be heard for 30 minutes. Additional public comments, if any, will be heard at the end of the agenda. Public comments for agendized items will be accepted both in person and via Zoom for up to three minutes or an amount of time determined by the Chair. Requests to speak will be taken until 5 minutes after the staff’s presentation or as determined by the Chair. Written public comments can be submitted in advance to city.council@PaloAlto.gov and will be provided to the Council and available for inspection on the City’s website. Please clearly indicate which agenda item you are referencing in your subject line. PowerPoints, videos, or other media to be presented during public comment are accepted only by email to city.clerk@PaloAlto.gov at least 24 hours prior to the meeting. Once received, the Clerk will have them shared at public comment for the specified item. To uphold strong cybersecurity management practices, USB’s or other physical electronic storage devices are not accepted. Signs and symbolic materials less than 2 feet by 3 feet are permitted provided that: (1) sticks, posts, poles or similar/other type of handle objects are strictly prohibited; (2) the items do not create a facility, fire, or safety hazard; and (3) persons with such items remain seated when displaying them and must not raise the items above shoulder level, obstruct the view or passage of other attendees, or otherwise disturb the business of the meeting. 1 December 08, 2025 Materials submitted after distribution of the agenda packet are available for public inspection at www.paloalto.gov/agendas. TIME ESTIMATES Listed times are estimates only and are subject to change at any time, including while the meeting is in progress. The Council reserves the right to use more or less time on any item, to change the order of items and/or to continue items to another meeting. Particular items may be heard before or after the time estimated on the agenda. This may occur in order to best manage the time at a meeting or to adapt to the participation of the public. CALL TO ORDER CLOSED SESSION (5:35 - 7:20 PM) 1.CONFERENCE WITH CITY ATTORNEY-POTENTIAL LITIGATION Subject: Initiation of litigation in one case Authority: Potential Exposure to Litigation Under Government Code Section 54956.9(d) (4) Number of potential cases: 1, as Plaintiff. 2.CONFERENCE WITH CITY ATTORNEY - EXISTING LITIGATION Swinerton v. City of Palo Alto (JAMS Reference #:5100003409) Authority: Government Code Section 54956.9(d)(1) 3.CONFERENCE WITH CITY ATTORNEY-POTENTIAL LITIGATION Subject: Potential litigation regarding 156 North California Avenue, as set forth in letter(s) from Holland & Knight LLP dated September 3, 2025 Authority: Government Code Section 54956.9(d)(2) Number of potential cases: 1, as Defendant. AGENDA CHANGES, ADDITIONS AND DELETIONS PUBLIC COMMENT (7:20 - 7:50 PM) Members of the public may speak in-person ONLY to any item NOT on the agenda. 1-3 minutes depending on number of speakers. Public Comment is limited to 30 minutes. Additional public comments, if any, will be heard at the end of the agenda. COUNCIL MEMBER QUESTIONS, COMMENTS, ANNOUNCEMENTS (7:50 - 8:05 PM) Members of the public may not speak to the item(s). 2 December 08, 2025 Materials submitted after distribution of the agenda packet are available for public inspection at www.paloalto.gov/agendas. CONSENT CALENDAR (8:05 - 8:10 PM) Items will be voted in one motion unless removed from the calendar by three Council Members. 4.Adoption of Emergency and Regular Ordinances Prohibiting Unattached Trailer Parking and Vanlording and a Resolution Amending the Administrative Penalty Schedule Imposing Penalties; CEQA status – not a project. 5.QUASI-JUDICIAL. 2451 Cowper Street [25PLN-00102]: Appeal of Director's Decision to Approve an Individual Review Application to Allow Deconstruction of an Existing Single- Family Residence and Detached Garage and to Construct a 2,380-Square-Foot Two-Story Residence. Zoning District: R-1 (Single-family Residential). CEQA Status: Exempt in Accordance with CEQA Guidelines 15303. 6.Adopt a resolution authorizing execution of the Professional Services Agreement between the Northern California Power Agency and the Cities of Palo Alto and Santa Clara for Electric Transmission, Generation and Regulatory Consulting Services in a Not to Exceed Amount of $657,500 over a five-year contract term ending December 31, 2030; CEQA Status: Not a Project. 7.Approval of Contract Amendment No. 1 to Contract No. C25192924 with Concordia, LLC in the amount of $65,000, for a total contract amount not to exceed $696,966 for additional services associated with development of the Cubberley Master Plan; CEQA Status – CEQA will be completed as part of this project. 8.Approval of Contract Amendment Number 5 to Contract Number C14151181 with SAP Public Services in the Amount of $334,355 for SAP Maintenance and Support for One Year, ending December 2026; CEQA Status – Not a Project. 9.FIRST READ: Adoption of an Ordinance Renewing the Police Department's Military Equipment Use Policy Under AB 481; CEQA status – not a project. 10.FIRST READING: Adoption of an Interim Ordinance to Extend Interim Ordinance 5645 of the Council of the City of Palo Alto Amending Various Chapters of Title 16 (Building Regulations) and Title 18 (Zoning) and Title 21 (subdivisions and other Divisions of Land) of the Palo Alto Municipal Code to Implement SB 9 and Other State Housing Laws. CEQA Status: Exempt Pursuant to CEQA Guidelines Section 15061(b)(3). 11.Acceptance of Annual Report on Development Impact Fees for Fiscal Year 2025 and Adoption of a Resolution Making Statutory Findings for all Development Impact and In- Lieu Fee Funds; CEQA status - Not a Project. 3 December 08, 2025 Materials submitted after distribution of the agenda packet are available for public inspection at www.paloalto.gov/agendas. 12.Adoption of a Resolution Declaring Weeds to be a Public Nuisance and Setting February 9, 2026 for a Public Hearing for Objections to the Proposed Weed Abatement; CEQA status: exempt, CEQA Guidelines Section 15308. 13.Approval of General Services Contract Number C26195709 with Corodata Records Management, Inc in an Amount Not to Exceed $120,000 for Off-Site Records Storage and Management Services for a Period of Five Years, CEQA Status- Not a Project. 14.Recommend City Council Approval of the CSD Equipment & Materials Inventory Management and Building Permit & Inspection Fees Audits as recommended by the Policy & Services Committee and Extension of the Deadline for several FY2025 Task Orders CITY MANAGER COMMENTS (8:10 - 8:25 PM) BREAK (15 MINUTES) ACTION ITEMS (8:40 - 9:40 PM) Include: Report of Committees/Commissions, Ordinances and Resolutions, Public Hearings, Report of Officials, Unfinished Business and Council Matters. 15.REINTRODUCED FIRST READING: Adoption of an Ordinance Updating Palo Alto Municipal Code (PAMC) Section 18.40.250 (Lighting) of Chapter 18.40 (General Standards and Exceptions) and Amending Chapters 18.10, 18.12, 18.28, and Section 18.40.230 of Title 18 (Zoning) to Adopt New Outdoor Lighting Regulations; CEQA Status — Exempt pursuant to CEQA Guidelines Section 15308 (Actions for Protection of the Environment) ADJOURNMENT INFORMATION REPORTS Information reports are provided for informational purposes only to the Council and the public but are not listed for action or discussion during this meeting’s agenda. A.City of Palo Alto Organizational Values Refresh OTHER INFORMATION 4 December 08, 2025 Materials submitted after distribution of the agenda packet are available for public inspection at www.paloalto.gov/agendas. Standing Committee Meetings this week Policy & Services Committee December 9, 2025 Council Appointed Officers Committee December 10, 2025 City Schools Liaison Committee December 11, 2025 Climate Action & Sustainability Committee December 12, 2025 Climate Action & Sustainability Committee December 13, 2025 Public Comment Letters Schedule of Meetings 5 December 08, 2025 Materials submitted after distribution of the agenda packet are available for public inspection at www.paloalto.gov/agendas. PUBLIC COMMENT INSTRUCTIONS Members of the Public may provide public comments to teleconference meetings via email, teleconference, or by phone. 1.Written public comments may be submitted by email to city.council@PaloAlto.gov. 2.For in person public comments please complete a speaker request card located on the table at the entrance to the Council Chambers and deliver it to the Clerk prior to discussion of the item. 3.Spoken public comments for agendized items using a computer or smart phone will be accepted through the teleconference meeting. To address the Council, click on the link below to access a Zoom-based meeting. Please read the following instructions carefully. ◦You may download the Zoom client or connect to the meeting in- browser. If using your browser, make sure you are using a current, up-to-date browser: Chrome 30 , Firefox 27 , Microsoft Edge 12 , Safari 7 . Certain functionality may be disabled in older browsers including Internet Explorer. Or download the Zoom application onto your smart phone from the Apple App Store or Google Play Store and enter in the Meeting ID below. ◦You may be asked to enter an email address and name. We request that you identify yourself by name as this will be visible online and will be used to notify you that it is your turn to speak. ◦When you wish to speak on an Agenda Item, click on “raise hand.” The Clerk will activate and unmute speakers in turn. Speakers will be notified shortly before they are called to speak. ◦When called, please limit your remarks to the time limit allotted. A timer will be shown on the computer to help keep track of your comments. 4.Spoken public comments for agendized items using a phone use the telephone number listed below. When you wish to speak on an agenda item hit *9 on your phone so we know that you wish to speak. You will be asked to provide your first and last name before addressing the Council. You will be advised how long you have to speak. When called please limit your remarks to the agenda item and time limit allotted. CLICK HERE TO JOIN Meeting ID: 362-027-238 Phone: 1-669-900-6833 Americans with Disability Act (ADA) It is the policy of the City of Palo Alto to offer its public programs, services and meetings in a manner that is readily accessible to all. Persons with disabilities who require materials in an appropriate alternative format or who require auxiliary aids to access City meetings, programs, or services may contact the City’s ADA Coordinator at (650) 329-2550 (voice) or by emailing ada@PaloAlto.gov. Requests for assistance or accommodations must be submitted at least 24 hours in advance of the meeting, program, or service. 6 December 08, 2025 Materials submitted after distribution of the agenda packet are available for public inspection at www.paloalto.gov/agendas. California Government Code §84308, commonly referred to as the "Levine Act," prohibits an elected official of a local government agency from participating in a proceeding involving a license, permit, or other entitlement for use if the official received a campaign contribution exceeding $500 from a party or participant, including their agents, to the proceeding within the last 12 months. A “license, permit, or other entitlement for use” includes most land use and planning approvals and the approval of contracts that are not subject to lowest responsible bid procedures and have a value over $50,000. A “party” is a person who files an application for, or is the subject of, a proceeding involving a license, permit, or other entitlement for use. A “participant” is a person who actively supports or opposes a particular decision in a proceeding involving a license, permit, or other entitlement for use, and has a financial interest in the decision. The Levine Act incorporates the definition of “financial interest” in the Political Reform Act, which encompasses interests in business entities, real property, sources of income, sources of gifts, and personal finances that may be affected by the Council’s actions. If you qualify as a “party” or “participant” to a proceeding, and you have made a campaign contribution to a Council Member exceeding $500 made within the last 12 months, you must disclose the campaign contribution before making your comments. 7 December 08, 2025 Materials submitted after distribution of the agenda packet are available for public inspection at www.paloalto.gov/agendas. 8 4 4 2 City Council Staff Report From: City Manager Report Type: CONSENT CALENDAR Lead Department: City Attorney Meeting Date: December 8, 2025 Report #:2510-5346 TITLE Adoption of Emergency and Regular Ordinances Prohibiting Unattached Trailer Parking and Vanlording and a Resolution Amending the Administrative Penalty Schedule Imposing Penalties; CEQA status – not a project. RECOMMENDATION As directed by the City Council on October 20, 2025, staff recommends Council adopt the following legislation to prohibit unattached trailer parking and vanlording throughout Palo Alto: 1. An emergency ordinance and regular ordinance amending PAMC section 10.44.020 to prohibit unattached trailer parking, with limited exceptions (Attachments A and D); 2. An emergency ordinance and regular ordinance prohibiting vanlording (Attachments B and E); and 3. A resolution amending the Administrative Penalty Schedule to add penalties for the ordinances above (Attachment C). EXECUTIVE SUMMARY On October 20, 2025, the City Council directed staff to return with two emergency ordinances to address parking of certain oversized vehicles (OSVs) on City streets: an ordinance to prohibit parking unattached trailers throughout the City and an ordinance to prohibit vanlording, the practice of renting out OSVs for human habitation on public streets. The attached emergency ordinances, which require 4/5 approval for adoption (6 votes), will go into effect immediately upon adoption. The regular ordinances are substantively identical, and are included as a standard practice to ensure enactment of the Council’s policy direction in the event that the emergency ordinances are not adopted or are challenged. Enforcement of the ordinance prohibiting the parking of unattached trailers includes citations and towing, and can begin once signs are posted.1 Enforcement of the vanlording ordinance includes citations and fines, as this ordinance targets landlords and not vehicle dwellers. 1 Additionally, the ordinance addressing unattached trailer parking also includes a clean-up provision authorizing the City to tow where OSVs are prohibited from parking between 2 a.m. and 6 a.m., when appropriately signed. Item 4 Item 4 Staff Report Item 4: Staff Report Pg. 1 Packet Pg. 8 of 312 8 4 4 2 These ordinances are part of Phase 1 strategies to address concerns relating to OSVs. Other elements of Phase 1 are also underway. These include: increasing street cleanups and sweeping of impacted streets, considering a buyback and/or storage option to accept OSV residents quickly at housing, recruiting new safe parking on privately-owned and congregation-based parking lots, and working with an Ad Hoc Committee to recommend details on increased enforcement and other related items (e.g., evaluating ”Phase 2” activities such as considering limiting OSVs to certain streets, creating permits, and developing an enhanced services pilot). Street cleanups and sweeping will begin on initial impacted street segments in December, with additional streets anticipated each week, excepting Christmas and New Year’s, until all currently impacted streets are covered by spring 2026. The remaining issues are being worked on by the Ad Hoc with staff support and an expected February report back to Council. BACKGROUND Safe Parking Capacity: The total countywide capacity is 332 spots (104 car spaces, 228 OSV spaces). Towing Practice: While enforcement via towing and citation had been occurring previously, in June of 2025, the Police Department assigned a dedicated supervisor to its Item 4 Item 4 Staff Report Item 4: Staff Report Pg. 2 Packet Pg. 9 of 312 8 4 4 2 special enforcement detail and prioritized OSV-related issues. As a result, staff has increased OSV-related enforcement activity in the form of more citations issued for parking and nuisance violations and more tows. The dedicated staff have also assumed responsibility for addressing Palo Alto 311 and other citizen inquiries on OSV issues. In parallel, the Police Department has enhanced its collaboration with the City’s Homeless Outreach Team, in the interest of connecting those cited with resources that can obviate the need for towing in some cases. Estimated Budget for Services and Enforcement: Table 1: Estimated Budget for Services and Enforcement TOTAL ENFORCEMENT TOTAL SERVICE TOTAL ADMINISTRATION $157,000 $157,000 $314,000 STREET SWEEPING $245,000 $- $245,000 CLEANING $60,000 $- $60,000 ENGINEERING $419,000 $- $419,000 ENFORCEMENT/ TOWING $975,000 $- $975,000 EXPANDED SAFE PARKING* $- $405,000 $405,000 SIGNAGE FOR PARKING RESTRICTIONS** $4,200,000 $- $4,200,000 BUYBACK STORAGE $- $150,000 $150,000 ENHANCED SERVICES $- $400,000 $400,000 TOTAL $6,056,000 $1,112,000 $7,168,000 * Note that the safe parking estimates assume adding 22 RV spaces. **The $4.2 million for signage is the estimated maximum cost to sign Citywide. The cost will ultimately vary depending on factors including the number of new parking regulations adopted (and therefore the number of new signs), the geographic scope of a new parking restriction, and the availability of existing poles/infrastructure for new signs. ANALYSIS Unattached Trailer Parking Prohibited Unattached trailers will no longer be able to park on City streets under the attached emergency and regular ordinances. There are very limited exceptions, including for trailers that have City- issued construction permits. State law requires that the City post signs giving notice of this new restriction before enforcing it. The penalties for violation are citation (including fine) and towing of the trailer. Towing results in additional fees for the owner to retrieve the trailer. Item 4 Item 4 Staff Report Item 4: Staff Report Pg. 3 Packet Pg. 10 of 312 8 4 4 2 This ordinance also conforms the existing parking restriction that prohibits OSVs from parking from 2 a.m. to 6 a.m. in certain residential or public facility zones to state law requirements. First, California courts have clarified that state law requires signs to be posted for this parking restriction to be enforceable. Accordingly, a provision in the City‘s current ordinance specifying that no signs are necessary has been deleted. Second, state law requires that local law authorize towing as an enforcement measure for this parking restriction, and this ordinance makes towing authorization explicit. Towing enforcement may begin when signs are updated to give notice that violators are subject to tow. Staff anticipates updating signage beginning in December, with anticipated completion for currently impacted street segments by spring 2026. The Police Department will begin enforcement two weeks after the signs are installed. This allows the Police Department to conduct direct outreach to ensure those affected are aware of the code update and are subject to tow. Vanlording Prohibited FISCAL/RESOURCE IMPACT 3 STAKEHOLDER ENGAGEMENT 4 ahead of the new ordinances and to help them understand the new ordinances, timeline, and the accompanying enforcement. Additionally, staff has updated the broader community through 3 See Minutes from the October 20, 2025 Council Meeting, available at https://cityofpaloalto.primegov.com/Public/CompiledDocument?meetingTemplateId=16271&compileOutputType =1 4 LifeMoves, the City’s contracted outreach provider, has a focused outreach plan related to the pending opening of the Homekey interim housing shelter. A high level overview of this plan is included as Attachment F. Item 4 Item 4 Staff Report Item 4: Staff Report Pg. 4 Packet Pg. 11 of 312 8 4 4 2 community updates via City communications channels and individual responses to residents and business owners who have written or called with concerns or queries relating to the impacts of OSVs. ENVIRONMENTAL REVIEW ATTACHMENTS APPROVED BY: Item 4 Item 4 Staff Report Item 4: Staff Report Pg. 5 Packet Pg. 12 of 312 *NOT YET APPROVED* 1 0290188_20251119_ms29 Ordinance No. _____ Emergency Ordinance of the Council of the City of Palo Alto Prohibi ng Parking of Detached Trailers and Other Non-Motorized Vehicles on Public Streets The Council of the City of Palo Alto does ORDAIN as follows: SECTION 1. Findings and Declara ons. The City Council ﬁnds and declares as follows: A. Sec on 22507 of the California Vehicle Code authorizes the City to regulate the parking of vehicles on City streets. B. The City has experienced a prolifera on of detached trailers and other non-motorized vehicles parked on public streets and an associated increase in reports of public health, safety and aesthe c concerns. C. Street parking is a limited resource within the City. Storage of detached trailers and other non-motorized vehicles on public streets consumes limited parking supply and impedes the use of the public streets for temporary parking. D. Detached non-motorized vehicles that cannot be moved on a regular basis impede street sweeping and other clean-up opera ons and restrict views of motorists, cyclists and pedestrians. E. Inhabited non-motorized vehicles can lead to unauthorized gray and black water disposal with the poten al for illegal discharges of sep c waste, wastewater, fuels, or trash from such vehicles into City streets, gu ers, or storm drains due to their inability to move to access authorized disposal sites. This is par cularly hazardous to the public health because Palo Alto’s storm drain system ﬂows directly into the San Francisco Bay. The City has an obliga on under federal, state, and regional regula ons to keep pollutants out of the storm drain system. F. Detached trailers and other non-motorized vehicles cannot be easily or quickly moved in an emergency and may therefore cause safety hazards. G. This ordinance is necessary as an emergency measure to preserve the public peace, health, and safety by mi ga ng the public health concerns associated with unauthorized waste disposal and impeded street cleaning and the public safety concerns associated with detached nonmotorized vehicles. SECTION 2. Sec on 10.44.020 of the Palo Alto Municipal Code is amended to read as follows (addi ons underlined, dele ons struck through): 10.44.020 Standing or parking, two a.m. to six a.m. Item 4 Attachment A - Emergency Ordinance Amending PAMC 10.44.020 to Prohibit Unattached Trailer Parking Item 4: Staff Report Pg. 6 Packet Pg. 13 of 312 *NOT YET APPROVED* 2 0290188_20251119_ms29 (a) No person shall, between the hours of two a.m. and six a.m. of any day, unless authorized by a hardship permit issued pursuant to Sec on 10.44.021 or a construc on or maintenance permit issued pursuant to Sec on 10.40.045, park upon streets or alleys located within a residen al zone or public facility zone any of the following vehicles: (1) Oversized vehicles; (2) Trailers; (3) Camper shells; (4) Tow trucks as deﬁned by California Vehicle Code Sec on 615; (5) Special construc on equipment as deﬁned by California Vehicle Code Sec on 565. (b) Notwithstanding the provisions of this sec on, no signs or markings are necessary to give eﬀect to the restric ons and prohibi ons contained in this sec on. No person shall park or leave standing a non-motorized vehicle upon any public street or highway. (1) For the purposes of this subsec on, “non-motorized vehicle” means any trailer, camp trailer, semitrailer or trailer coach as deﬁned by the California Vehicle Code. “Non-motorized vehicle” does not include any bicycle, scooter, or micromobility device. (2) This subsec on shall not apply to a nonmotorized vehicle that is a ached to a vehicle capable of moving the nonmotorized vehicle in a lawful manner upon the street, carries a hardship permit issued pursuant to Sec on 10.44.021 or a construc on or maintenance permit issued pursuant to Sec on 10.40.045, is ac vely being loaded or unloaded, or is undergoing emergency repairs. (c) Where not inconsistent with the U.S. Cons tu on or other applicable law, vehicles parked in viola on of this sec on are subject to tow. SECTION 3. Severability. If any provision, clause, sentence or paragraph of this ordinance, or the applica on to any person or circumstances, shall be held invalid, such invalidity shall not aﬀect the other provisions of this Ordinance which can be given eﬀect without the invalid provision or applica on and, to this end, the provisions of this Ordinance are hereby declared to be severable. SECTION 4. Eﬀec ve Date. This ordinance shall be eﬀec ve immediately upon adop on by four-ﬁ hs of the council members present. // // // Item 4 Attachment A - Emergency Ordinance Amending PAMC 10.44.020 to Prohibit Unattached Trailer Parking Item 4: Staff Report Pg. 7 Packet Pg. 14 of 312 *NOT YET APPROVED* 3 0290188_20251119_ms29 SECTION 5. CEQA. The City Council ﬁnds and determines that this Ordinance is not a project within the meaning of sec on 15378 of the California Environmental Quality Act (“CEQA”) because it has no poten al for resul ng in physical change in the environment, either directly or ul mately. Alterna vely, it is exempt from CEQA under CEQA Guidelines sec on 15308 as a regulatory ac on for the protec on of the environment. INTRODUCED: PASSED: AYES: NOES: ABSTENTIONS: ABSENT: ATTEST: ____________________________ ____________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: ____________________________ ____________________________ Assistant City A orney City Manager ____________________________ Chief Transporta on Oﬃcial ____________________________ Chief of Police Item 4 Attachment A - Emergency Ordinance Amending PAMC 10.44.020 to Prohibit Unattached Trailer Parking Item 4: Staff Report Pg. 8 Packet Pg. 15 of 312 *NOT YET APPROVED* 1 0290190_20251119_ms29 Ordinance No. _____ Emergency Ordinance of the Council of the City of Palo Alto Prohibi ng Rental of Vehicles for Human Habita on The Council of the City of Palo Alto does ORDAIN as follows: SECTION 1. Findings and Declara ons. The City Council ﬁnds and declares as follows: A. The prac ce of ren ng out recrea onal vehicles or other oversized vehicles for use as living or sleeping quarters, known as “vanlording,” is a growing concern in many ci es, including the City of Palo Alto. B. Recrea onal vehicles used for vanlording are parked on public streets, occupying valuable and limited street parking spaces. C. Allowing vanlords to rent out vehicles in the public right of way facilitates private proﬁt- taking from the use of a public resource. D. The prac ce of vanlording is unlicensed and unregulated and therefore o en associated with unregistered, poorly maintained, and inadequately insured vehicles. E. Vanlords oﬀer renters a place to stay without responsibly addressing health and safety issues that can arise when inhabited vehicles are parked on public streets. These issues include improper waste disposal, unsanitary condi ons, illegal parking, tapping into or blocking ﬁre hydrants or other u lity infrastructure, and the crea on of ﬁres. F. The ren ng out of vehicles for human habita on is not currently regulated. Unlike tradi onal landlords and property management en es, vanlords are not explicitly subject to laws that require the upkeep and maintenance of rental housing. Accordingly, those who rent from them are not protected by laws that secure tenants’ rights or even basic habitability standards. G. With this ordinance, the City Council intends to prohibit vanlording within the City of Palo Alto. H. This ordinance is necessary as an emergency measure to preserve the public peace, health, and safety by addressing the public health and safety impacts of vanlording, including ﬁre safety and sanita on impacts to nearby residents, businesses, and pedestrians. SECTION 2. Chapter 9.06 Rental of Vehicles for Human Habita on is hereby added to Title 9 of the Palo Alto Municipal Code, to read as follows: 9.06.010 Rental of recrea onal vehicles for living or sleeping quarters – Prohibi on. Item 4 Attachment B - Emergency Ordinance Amending PAMC Chapter 9.06 to Prohibit Vanlording Item 4: Staff Report Pg. 9 Packet Pg. 16 of 312 *NOT YET APPROVED* 2 0290190_20251119_ms29 No person shall rent, lease, let out, or otherwise loan any oversized vehicle which is subsequently u lized for living or use as sleeping quarters on any street, alley, or city-owned or city-controlled premises in exchange for money, goods, or services. For the purposes of this Chapter, “oversized vehicle” means any vehicle exceeding seven feet in height or exceeding twenty feet in overall length or exceeding seven feet in width (including any load or accessory thereon other than antennas), provided that this deﬁni on shall not apply to vehicles which exceed these dimensions solely because of modiﬁca ons required to accommodate a disability and the vehicle is lawfully displaying a disabled placard or license. It shall not be necessary to prove that the person who rented, leased, let out, or otherwise loaned any vehicle which was subsequently u lized for living or sleeping quarters intended or knew that the vehicle would be used for living or use as sleeping quarters on any street, alley, or city-owned premises. 9.06.020 Rental of recrea onal vehicles for living or sleeping quarters – Adver sements prohibited. No person shall adver se for rent, lease, let out, or loan in any newspaper, or through any other medium including online, social media, or other pla orms, any oversized vehicle available for the purpose of u lizing the vehicle for living or use as sleeping quarters on any street, alley, or city-owned or city-controlled premises. 9.06.030 Rental of Vehicles in the Public Right of Way It shall be unlawful for any person who deals in or whose business involves the rental or leasing of vehicles, including recrea onal vehicles (RVs) or other oversized vehicles, to park, store, or leave standing any such vehicles, whether occupied or vacant, on any street, alley, or other public right-of-way during the conduct of such business. This prohibi on does not apply to a vehicle owned only for personal use and not involved in the business of rental or leasing of vehicles, if otherwise legally parked. 9.06.050 Rental of Space in the Public Right of Way No person or en ty other than the City of Palo Alto and any of its departments or designees or other appropriate public en ty shall have the authority to sell, lease, license, permit, reserve or facilitate the reserving of any street, way, alley, highway, road, parkway, parking space or other public right of way or City-controlled parking lot in the City of Palo Alto without wri en Item 4 Attachment B - Emergency Ordinance Amending PAMC Chapter 9.06 to Prohibit Vanlording Item 4: Staff Report Pg. 10 Packet Pg. 17 of 312 *NOT YET APPROVED* 3 0290190_20251119_ms29 authoriza on from the City. Any person who purports to sell, lease, license, permit, reserve or facilitate reserving of space in the public right of way via a wri en or oral agreement of any kind, with or without compensa on, is in viola on of this sec on. 9.06.060 Enforcement Each day in which a viola on of this Chapter occurs shall cons tute a separate viola on of this Chapter. Each vehicle in viola on of this Chapter shall cons tute a separate viola on of this Chapter. Viola ons are enforceable through any penalty available by law, including those speciﬁed in Title 1 of this Code. SECTION 3. Severability. If any provision, clause, sentence or paragraph of this ordinance, or the applica on to any person or circumstances, shall be held invalid, such invalidity shall not aﬀect the other provisions of this Ordinance which can be given eﬀect without the invalid provision or applica on and, to this end, the provisions of this Ordinance are hereby declared to be severable. SECTION 4. Eﬀec ve Date. This ordinance shall be eﬀec ve immediately upon adop on by four-ﬁ hs of the council members present. // // // // // // // // // Item 4 Attachment B - Emergency Ordinance Amending PAMC Chapter 9.06 to Prohibit Vanlording Item 4: Staff Report Pg. 11 Packet Pg. 18 of 312 *NOT YET APPROVED* 4 0290190_20251119_ms29 SECTION 5. CEQA. The City Council ﬁnds and determines that this Ordinance is not a project within the meaning of sec on 15378 of the California Environmental Quality Act (“CEQA”) because it has no poten al for resul ng in physical change in the environment, either directly or ul mately. INTRODUCED: PASSED: AYES: NOES: ABSTENTIONS: ABSENT: ATTEST: APPROVED: ______________________________ ____________________________ City Clerk Mayor APPROVED AS TO FORM: ____________________________ City Manager ______________________________ Assistant City A orney ____________________________ Chief of Police Item 4 Attachment B - Emergency Ordinance Amending PAMC Chapter 9.06 to Prohibit Vanlording Item 4: Staff Report Pg. 12 Packet Pg. 19 of 312 *NOT YET APPROVED* 148_20251124_ts24 1 Resolution No. _____ Resolution of the Council of the City of Palo Alto Amending and Restating the Administrative Penalty Schedule and Civil Penalty Schedules for Certain Violations of the Palo Alto Municipal Code The Council of the City of Palo Alto RESOLVES as follows: SECTION 1. Administrative Penalties. The administrative penalty schedule for violations of the Palo Alto Municipal Code established by Resolution No. 10260 is hereby amended and restated to read as follows (edited sections underlined, deleted sections in strikethrough): Standard penalty unless otherwise indicated below. $50 Second violation within 36 month period 150% of listed penalty (unless otherwise specified) Third & subsequent violations within 36 month period. 200% of listed penalty (unless otherwise specified) Delinquency penalty. 10% per month, simple interest, on delinquent amount 4.04.020 License or permit required. 300 4.04.100 Display of license or permit. 300 4.10.045 License fees for pushcart vendors. 300 4.10.050 Regulations for solicitors and peddlers. 350 4.10.055 Identification cards for solicitors. 250 4.10.057 Regulations for pushcart vendors. 300 4.10.070 License required - circus etc. 300 4.10.120 Arcade prohibited. 250 4.10.200 Pawn brokers prohibited. 250 4.10.230 Daily report of second hand dealers. 250 4.10.240 Maintaining reports - second hand dealers. 250 4.10.260 Failure to make report - second hand dealers. 250 4.10.270 Second hand goods held for inspection. 250 4.18.040 Unlawful dog or cat kennel. 250 4.30.010 Soliciting without a permit. 250 4.30.100 Conduct of solicitations. 250 4.32.020 Soliciting without a permit. 250 4.32.060 Investigation of records of solicitor. 250 4.32.090 Acts required during solicitation. 250 4.32.100 Restriction of solicitation. 250 4.32.110 Hours of solicitation. 250 4.34.020 Permit required - closing out sale. 250 4.39.030 Audible alarms. 250 4.39.040 Limitation on automatic dialing devices. 250 4.39.060 Registration of alarm. 250 4.39.110 Alarm violations. 100 4.42.020 Certificate of public convenience. 1000 Item 4 Attachment C - Resolution Amending the Administrative Penalty Schedule to Establish Penalties for Violations of the Ordinances Above Item 4: Staff Report Pg. 13 Packet Pg. 20 of 312 *NOT YET APPROVED* 148_20251124_ts24 2 4.42.085 Controlled substance and alcohol testing. 500 4.42.090 Taxi owners permit. 5000 4.42.100 Taxi drivers permit expired. 250 4.42.130(b) Taxi drivers permit not displayed. 250 4.42.190 Taximeters. 500 4.42.200 Taxi cab operating regulations. 250 4.42.210(a) Interference with inspection. 500 4.42.210(b) Inspection of vehicles. 500 4.42.220 Operating regulations. 500 4.42.230 Maintenance of vehicles. 500 4.51.030 License required - bingo. 250 4.51.050 Minors restricted - bingo. 50 4.51.080 Staffing and operations - bingo. 250 4.51.110 Physical presence required - bingo. 250 4.52.020 License required - billiards and bowling. 1000 4.52.040 Minors restricted - billiards and bowling. 250 4.52.060 Offensive conduct - billiards and bowling. 250 4.52.070 Interference w/emerg. Access -billiards/bowling. 250 4.54.060 CAMTC cert. required - massage tech. 250 4.54.080(a) Permit required - massage establishment. 1000 4.54.080(b)-(d) Prohibited conduct – massage establishment 250 4.54.130 Failure to amend massage estab. permit 100 4.54.140 Massage establishment facilities. 250 4.55.030 License required - adult entertainment. 1000 4.56.030 License required - hot tub and sauna. 1000 4.56.120 Business name - hot tub and sauna. 250 4.57.020 Permit required - firearms sales. 1000 4.57.095 Firearms dealers – business and security. 500 4.58.020 Minors restricted - narcotics paraphernalia shop. 750 4.58.030 Regulations - narcotics paraphernalia shop. 750 4.59.010 Pet shop requirements. 250 4.59.020 Pet shop sanitation. 250 4.59.030 Pet shop food. 250 4.59.040 Pet shop notification. 250 4.59.050 Pet shop - sale of dangerous or wild animals. 250 4.59.070 Dead animals. 250 4.59.080 Permit required - pet shop and kennel. 250 4.59.090 Permit required - grooming shop. 250 4.59.095 Sales of kittens and puppies. 250 4.59.100 Sales of raccoons. 250 4.59.105 Sales of rabbits, chicks, ducklings. 250 4.60.030 Business registration required 250 4.60.060 Business registry application required 250 4.60.120(a) Business registry fee delinquency 50% of registry fee if 1-30 days late 100% of fee or 31+ days late 5.12.010 Permit required - refreshment stand. 250 5.20.030 Discarding solid waste. 250 5.20.040 Accumulation of garbage. 250 5.20.050 Unauthorized bins, boxes, containers-first violation. 500 Second and subsequent violations. 1000 5.20.080 Number of containers required. 250 5.20.090 Collection of recyclable materials. 250 for Commercial Premises 50 for Residential Premises Item 4 Attachment C - Resolution Amending the Administrative Penalty Schedule to Establish Penalties for Violations of the Ordinances Above Item 4: Staff Report Pg. 14 Packet Pg. 21 of 312 *NOT YET APPROVED* 148_20251124_ts24 3 5.20.100 Collection of compostable materials. 250 for Commercial Premises 50 for Residential Premises 5.20.105 Contamination of containers. 250 for Commercial Premises 50 for Residential Premises 5.20.108 Multifamily properties/Commercial premises. 250 5.20.109 Requirements for special events. 100 5.20.111 Self-haul in violation of code 100 5.20.120 Improper container condition. 250 5.20.130 Maintenance of bins and boxes- first violation. 250 Second and subsequent violations. 500 5.20.160 Spillage or leakage of solid waste. 250 5.20.180 No accumulation of solid waste. 250 5.20.190 No burning, burial, or dumping of solid waste. 250 5.20.200 Hazardous waste. 500 5.20.220 Scavenging prohibited. 100 5.30.020 Polystyrene & Non-Recyclable Plastic. 500 5.30.025(a)-(d) Limitation on use of Disposable Foodware items 100 and other Disposable products. 5.30.025(e) Prohibition of third-party vendors providing utensils 350 or condiments unless requested by customer. 5.35.020 Bags at retail establishments. 500 5.35.030 Bags at supermarkets. 500 6.08.020(b) Interference with animal control officer. 250 6.16.010 No dog license. 50 6.16.080 Number of dogs allowed. 100 6.16.100 Leash Law. 100 6.20.010 Animals at large. 100 6.20.020 Animals on unenclosed premises. 100 6.20.030 Animals kept in enclosures. 100 6.20.035 Tying animals to bicycle racks or trees. 100 6.20.040 Nuisance on sidewalk. 100 6.20.045 Animal waste removal - first offense. 25 6.20.045 Animal waste removal - second offense. 50 6.20.045 Animal waste removal - third offense. 125 6.20.055 Animals in vehicles. 250 6.20.060 Bees close to property line. 100 6.20.080 Permit required - livestock. 100 6.20.090 Maintaining birds, goats, pigs and rabbits. 100 6.20.110 Number of cats kept. 100 6.20.120 Permit required - breeding animals. 100 6.20.130 Cat or dog in heat. 100 6.20.140 Barking dogs. 100 6.20.150 Vaccination required - animals. 100 6.20.160 Sanitary enclosures. 100 6.20.170 Slaughter of animals. 500 6.24.020 Permit required - construction of stable. 250 6.24.050 Maintenance of stable. 250 6.28.040 Possession of dangerous or wild animals. 500 6.32.010 Keeping diseased animals. 500 6.32.020 Confining animals with rabies. 500 6.32.050 Dead animals in public. 500 6.36.010 Sales of certain animals. 250 Item 4 Attachment C - Resolution Amending the Administrative Penalty Schedule to Establish Penalties for Violations of the Ordinances Above Item 4: Staff Report Pg. 15 Packet Pg. 22 of 312 *NOT YET APPROVED* 148_20251124_ts24 4 8.04.020 Unauthorized removal of public trees 5000 per tree or reproduction cost up to 10,000, whichever is greater 8.04.020(a) Failure to comply with permit 500 per tree for work on public trees. 8.04.020(a) Damage to public trees 150 per inch diameter of damaged tree part 8.04.020(b) Fasten a sign, wire, or injurious material 250 per tree to any public tree. 8.04.020(c) Excavate or pave near public trees 500 per tree 8.04.080 Interference with tree enforcement. 500 8.08.010 Weeds as public nuisance. 250 8.10.040 Failure to disclose protected tree 500 per tree 8.10.050 Unauthorized removal of protected tree 5000 per tree or reproduction cost up to 10,000, whichever is greater 8.10.055 Failure to comply with tree replacement. 750 per tree 8.10.070 Failure to care for protected trees. 500 per tree 8.10.080(b) Failure to comply with development conditions. 500 per condition 9.04.010 Open container in business district. 100 9.04.020 Open container in City parking lot. 100 9.04.030 Open container near liquor store. 100 9.04.040 Social host. First violation 250 Second violation 500 Third & subsequent violation 1000 9.06 (All sections) Vanlording prohibited 500 9.07.020 Safe Storage of Firearms 1000 9.08.010 Discharge of firearms/fireworks. 1000 9.09.010(a) Urinating/defecating on street or public place. 250 9.09.010(b) Igniting or maintaining outdoor fire. 250 9.10.030 Residential property noise limits. 100 9.10.040 Commercial property noise limits. 100 9.10.050 Public property noise limits. 100 9.10.060(b) Construction noise signs. 250 9.10.060(c) Construction noise. 250 9.10.060(d) Construction equipment noise. 100 9.10.060(e) Residential power equipment noise. 100 9.10.060(f) Leaf blower noise- first violation. 250 Leaf blower noise- second violation 500 Leaf blower noise- third and subsequent violation 1000 9.10.060(g) Street sweeping noise. 100 9.10.060(h) Refuse collection noise. 100 9.10.060(i) Safety device noise. 100 9.10.060(k) Public parking lot cleaning noise. 100 9.10.060(l) Business district street cleaning noise. 100 9.12.010 Loudspeakers. 150 9.14.020 Smoking prohibited - enclosed places. 250 (2nd violation in 1 year: $300; 3rd and subsequent violations in 1 year: $500) 9.14.025 Smoking prohibited – unenclosed areas. 250 (2nd violation in 1 year: $300; 3rd and subsequent violations in 1 year: $500) 9.14.030 Smoking prohibited - city cars. 250 (2nd violation in 1 year: $300; 3rd and subsequent violations in 1 year: $500) Item 4 Attachment C - Resolution Amending the Administrative Penalty Schedule to Establish Penalties for Violations of the Ordinances Above Item 4: Staff Report Pg. 16 Packet Pg. 23 of 312 *NOT YET APPROVED* 148_20251124_ts24 5 9.14.035 Smoking prohibited – public parks and public events 250 (2nd violation in 1 year: $300; 3rd and subsequent violations in 1 year: $500) 9.14.040 Smoking prohibited - child care facilities. 250 (2nd violation in 1 year: $300; 3rd and subsequent violations in 1 year: $500) 9.14.050 Smoking prohibited – commercial areas and public events. 250 (2nd violation in 1 year: $300; 3rd and subsequent violations in 1 year: $500) 9.14.080 Location of tobacco vending machines. 1000 9.14.090 Display of tobacco products. 500 9.14.100 Failure to post “No Smoking” signs. 50 9.22.010 Impersonating public officials. 500 9.26.020 False representation as police officer. 250 9.28.010 Hotel guest register required. 250 9.28.020 Use of false name by hotel guest. 50 9.40.020 Landing aircraft at other than airport. 1000 9.44.010 Solicitation prohibited - public parking lot. 100 9.48.010 Displaying goods on sidewalk. 50 9.48.025 Sitting or lying on University Avenue sidewalks. 100 9.48.030 Operation of sidewalk elevator. 500 9.48.040 Throwing rubbish on streets. 250 9.48.050 Obligation to clean sidewalk. 200 9.50.010 Graffiti prohibited on public property. 500 9.56.030 Abatement of public nuisance. 500 unless otherwise specified 9.56.030(a)(5) Thirty-five foot site triangle. 200 9.56.030(a)(8) Foliage/branch obstruction. 200 9.56.030(a)(10) Excessive planting strip vegetation height. 150 9.60.030 Blocking entrances to City Hall. 500 9.60.050 Placing signs or climbing on City Hall. 500 9.60.060 Bicycles and skateboards at City Hall. 50 9.60.070 Alcoholic beverages prohibited - City Hall. 100 9.64.010 Overnight use of community facilities 250 9.74.030 Discrimination in housing. 250 9.78.020 Mosquito breeding places. 500 9.79.100 News rack violations. 100 12.08.010 Permit required - public right of way. 500 12.08.100 Removal of City Engineer monuments. 500 12.11.010 Building parklet on public right-of-way without 1000 permit 12.11.060 Violation of Chapter 12.11, permit, or regulations 500 12.12.010 Building on public easement without or in violation 1000 of encroachment permit 12.12.020 Failure to obtain or violation of commercial 500 sidewalk encroachment permit 12.16.030 Overhead wires in underground districts. 500 12.16.090 Property owner responsibility. 500 12.20.010 Utility rules and regulations 500 unless otherwise specified 12.20.010 Emergency water conservation regulations 100 (2nd violation in 1 year: $250; (Reso. Nos. 9509, 9460, 9449) 3rd and subsequent violations in 1 year: $500) 12.20.020 Providing false information to City Utilities. 500 Item 4 Attachment C - Resolution Amending the Administrative Penalty Schedule to Establish Penalties for Violations of the Ordinances Above Item 4: Staff Report Pg. 17 Packet Pg. 24 of 312 *NOT YET APPROVED* 148_20251124_ts24 6 12.32.010 Water use regulation. 100 15.04.070 Violations of Uniform Fire Code. 500 unless otherwise specified 16.04.050 Violations of California Building Code as amended. 500 unless otherwise specified 16.05.040 Violations of California Mechanical Code as amended500 16.06.050 Violations of California Residential Code as amended.500 16.08.040 Violations of California Plumbing Code as amended. 500 16.09.200 Violations of Sewer Use Ordinance 1000 16.10.020 Construction of private sewer system. 750 16.10.050 Permit required - private sewage system. 500 16.11 (All Sections) Violations of the Stormwater Pollution Prevention Ordinance 1000 16.13 (All Sections) Violations of the Food Facilities Ordinance 1000 16.14.040 Violations of California Green Building 500 Standards Code as amended 16.14.260 Failure to meet diversion requirements. $150 per ton of waste not diverted or $3000, whichever is greater 16.14.370 Failure to meet diversion requirements. $150 per ton of waste not diverted or $3000, whichever is greater 16.16.060 Violations of California Electrical Code as amended. 500 16.17.020 Violations of California Energy Code as amended. 500 16.18.020 Violations of International Pool and Spa Code as 500 amended 16.20.020 Design review required - signs. 500 16.20.090 Prohibited signs. 250 16.20.100 Prohibited locations - signs. 250 16.20.110 Fuel price signs required. 250 16.20.210 Non-compliance with sign ordinance. 250 16.20.230 Abandoned signs. 250 16.20.250 Parking of advertising vehicles. 250 16.24.080 Fence violation. 250 16.28.060 Permit required - excavation and grading. 500 16.28.330 Protection of adjacent property. 500 16.28.340 Deposits of earth, rock, etc. 500 16.32.010 Permit required - moving a building. 250 16.36.050 Curb painting without a permit. 100 16.36.060 House numbering required. 100 16.38.020 Certificate of occupancy – community housing. 500 16.40.040 Dangerous and substandard buildings. 500 16.40.090 Non-compliance with order of building official. 500 16.40.180 Interference with repair or demolition work. 500 16.42.090 Failure to submit seismic report. 250 16.45.070 Failure to pay fee - Stanford Research Park. 250 16.46.060 Failure to pay fee - San Antonio - West Bayshore. 250 16.47.050 Failure to pay housing impact fee. 250 16.49.050 Exterior alteration of downtown historic structures 10000 or a significant structure outside the downtown without or in violation of permit 16.49.060 Demolition of a significant downtown building 10000 without or in violation of permit 16.49.070 Demolition of a contributing downtown structure 10000 or significant structure outside the downtown Item 4 Attachment C - Resolution Amending the Administrative Penalty Schedule to Establish Penalties for Violations of the Ordinances Above Item 4: Staff Report Pg. 18 Packet Pg. 25 of 312 *NOT YET APPROVED* 148_20251124_ts24 7 without or in violation of permit 16.49.080 Maintenance of downtown historic structure. 10000 16.49.090 Demolition of downtown historic structure. 10000 16.52.070 Construction - flood hazards. 500 16.59.090 Failure to pay fee- Citywide Transportation Impact. 250 16.60.090 Failure to pay fee- Charleston/Arastradero. 250 16.62.020 Maintenance of expired building permit 200 for 31st through 60th day 400 for 61st through 120th day 800 for 121st day and thereafter 16.66 (All Sections) Violations of Hauled Liquid Waste 1000 Ordinance 17.04.020 Violations of hazardous materials storage. 500, unless otherwise specified 17.04.030 Specific obligation - hazardous materials. 500 17.10.010 General obligation - underground storage tanks. 750 unless otherwise specified 17.10.040 Permit required - underground storage. 500 17.10.140 Financial responsibility - underground storage. 500 17.10.150 Monitoring underground storage tanks. 1000 17.10.170 Unlawful abandonment - underground storage tanks.1000 17.12.010 Permit required - hazardous materials storage. 750 17.12.020 New hazardous materials storage facilities. 750 17.12.060 Hazardous materials storage facilities. 750 17.16.010 Hazardous materials management plan. 250 17.20.010 Hazardous materials inventory statement. 250 17.24.010 Hazardous materials discharge report. 750 17.32.010 Permit required - storage of hazardous materials. 1000 18.01.080 Violation of zoning laws. 500 18.16.060(d)Hotel stay in excess of 30 days. 200 18.38.020 Planned Community zoning (unless otherwise 500 specified in PC ordinance) 2500 beginning the 181st day following notice of violation Violations of Ordinance 5069 shall be subject to the penalties listed above except that the penalty for violations of Sections 4(b)(1), (2), (6), and (7) of Ordinance 5069 shall not be subject to the penalties above or to the escalators for second, third and subsequent violations, but shall be $2157 per day, for each and every day that a grocery store is not in operation within College Terrace Centre in accordance with the terms of Ordinance 5069. (The City Council intends to adjust this penalty amount periodically in future updates to this administrative penalty schedule to account for periodic increases in the Consumer Price Index for All Urban Consumers.) In calculating the penalties for such violations, the City will allow for a grace period for any daily violations that Item 4 Attachment C - Resolution Amending the Administrative Penalty Schedule to Establish Penalties for Violations of the Ordinances Above Item 4: Staff Report Pg. 19 Packet Pg. 26 of 312 *NOT YET APPROVED* 148_20251124_ts24 8 do not exceed six (6) cumulative months in any five (5) year period. However, this grace period was previously applied to violations from 1/10/18 through 7/10/18, so there is no entitlement to any further grace period prior to 1/10/23. 18.42.060(a)Incompatibility of home occupations. 200 18.42.060(b) Employees of home occupation. 200 18.42.060(c) On site advertising of home occupation. 200 18.42.060(d) Floor area of home occupation. 200 18.42.060(e) Traffic related to home occupation. 200 18.42.060(f) Home occupation as nuisance. 200 18.42.060(g) Outdoor storage related to home occupation. 200 18.42.070 Servicing vehicles in residential zone. 250 18.52.050 Transportation demand management conditions 1000 4000 beginning the 181st day following notice of violation 18.84.200 Temporary uses. 250 22.04.030 Compliance with park regulations. 46 for violation of regulation R1-6 requiring payment of Foothills Park entry fee; 250 for violation of all other Park & Open Space Regulations. 22.04.040 Failure to obtain use permit. 300 22.04.150(b) Entry at unapproved location - Foothills Park 50 22.04.150(c) Person in park after hours - Foothills Park. 250 22.04.150(d) Speed limit 20MPH - Foothills Park. 250 22.04.150(e) Vehicles in Foothills Park after hours. 100 22.04.150(f) Skateboards and motorcycles - Foothills Park. 250 22.04.150(g) Smoking on trails - Foothills Park. 1000 22.04.150(h) Fires in Foothills Park. 1000 22.04.150(i) Use of trails - Foothills Park. 100 22.04.150(l) Unleashed dog - Foothills Park. 250 22.04.155 Restraint of dogs in City parks. 250 22.04.160 Permit required - sales in parks. 250 22.04.170 Violation of park use permit. 250 22.04.180 Sound in parks. 250 22.04.190 Unauthorized golf and other games in parks. 250 22.04.200 Unauthorized models and kites in parks. 100 22.04.210 Parking in parks. 100 22.04.215 Launch and takeout from ramp or dock. 250 22.04.220 Bicycle not permitted on trails. 250 22.04.230 Dumping in park. 1000 22.04.240 Interference with park use permit. 250 22.04.250 Park regulations . 250 unless otherwise specified 22.04.260 Discharge of weapons in park. 500 22.04.270 Removal of flora or fauna. 500 22.04.280 Removal of turf or soil. 500 22.04.290(a) Damaging, defacing, etc., property. 1000 22.04.290(b) Marking, writing or printing on property. 1000 22.04.290(c) Attaching sign, etc., without permit. 500 Item 4 Attachment C - Resolution Amending the Administrative Penalty Schedule to Establish Penalties for Violations of the Ordinances Above Item 4: Staff Report Pg. 20 Packet Pg. 27 of 312 *NOT YET APPROVED* 148_20251124_ts24 9 22.04.290(d) Entering, etc., structure after posted hours. 250 22.04.290(e) Bringing portable tables without a permit. 100 22.04.300 Unlawful fire in city park. 1000 22.04.310 Enid Pearson Arastradero, Esther Park closure. 250 22.04.315 Byxbee Park and Baylands closed. 250 22.04.320 Parks closed. 250 22.04.321(a)Skateboarding in park after hours. 50 22.04.322 Trespass at Rinconada Park pool. 50 22.04.330 Alcohol in Cogswell Park. 250 22.04.331 Alcohol in Lytton Plaza. 250 22.04.332 Alcohol in Johnson Park. 250 22.04.333 Alcohol in Boulware Park. 250 22.04.334 Alcohol in Scott St. Minipark. 250 22.04.335 Alcohol in Greer Park. 250 22.04.336(a)Alcohol in Rinconada Park. 250 22.04.337 Alcohol in Mitchell Park. 250 22.04.338 Alcohol in Robles Park. 250 22.04.339 Alcohol in Hopkins Park. 250 22.04.340 Vehicles in park. 250 22.04.341 Alcohol in El Palo Alto Park. 250 22.04.342 Alcohol in Heritage Park. 250 22.04.343 Alcohol in Pardee Park. 250 22.04.350 Consumption of alcoholic beverage in vehicles. 250 22.04.360 Open container in park - alcoholic beverage. 250 22.04.370 Reckless driving in park. 250 22.04.380 Unlawful riding and towing in parks. 250 22.04.390 Duck pond. 100 SECTION 2. Municipal Code Civil Penalties. The civil penalty schedule for violations of the Palo Alto Municipal Code established by Resolution No. 10260 is hereby restated to read as follows*: Standard penalty unless otherwise indicated below. $46 10.36.020 No parking in parkways. 46 10.36.030(a)Storage on the street (72 hours). 86 10.36.040(a)(1)Vehicle for sale on street. 46 10.36.040(a)(2)Repairing vehicle on street. 46 10.36.050 Not w/in 18” of left curb--One-way street. 46 10.36.090 Removal of chalk markings. 111 10.40.020(a)(1)Parking violation – red curb. 46 10.40.020(a)(4)Parking violation – green curb. 46 10.40.020(a)(5)Parking violation – blue curb. 308 10.40.020(b)Parking in violation of sign (except blue curb). 46 10.40.020(b)Unlawful disabled parking - signs (blue curb). 308 10.40.040(b)Commercial vehicle double parking. 46 10.40.050 Unlawful parking in yellow loading zone. 46 10.40.060 Unlawful parking in passenger loading zone. 46 10.40.070 Unlawful alley parking. 46 10.40.100(g)Parking in a bus zone. 46 10.44.010(b)Overtime parking (limited time zone). 41 10.44.010(c)Additional violation of time limited or no 44 parking zones. 10.44.020(a)Oversized vehicle parking in residential or 46 Item 4 Attachment C - Resolution Amending the Administrative Penalty Schedule to Establish Penalties for Violations of the Ordinances Above Item 4: Staff Report Pg. 21 Packet Pg. 28 of 312 *NOT YET APPROVED* 148_20251124_ts24 10 public facilities zones 2am-6am. 10.44.040(b)Not in space marking. 46 10.44.050(b)Parking violation--temporary sign. 46 10.44.060 Dealers--parking for sale or repair. 46 10.44.070(b)Parking in violation of posted sign. 46 10.44.080 Vehicle obstruction of roadway or lot. 46 10.44.090 Unattended vehicle, engine running. 111 10.45.110 Parking in on-street valet parking space. 46 10.46.110 Overtime residential parking permit (CT) 53 10.48.030 Truck route violation. 211 10.50.100(a)Violation of posted RPP permit sign 53 10.60.070(c)Permit not properly displayed. 41 10.60.070(d)Overtime permit parking in City lot. 41 10.60.070(e)Parking without permit in permit area. 46 22.04.150(e)In Foothills Park after hours. 111 22.04.210 Parking in parks. 111 Late payment penalty. 35 Collection cost penalty. 35% of listed penalty *All penalties include state-mandated assessments pursuant to Gov’t. Code 76000, S.B 1407(2008), and Government Code 76000.3 (S.B. 857, 2008) totaling $12.50. SECTION 3. Vehicle Code Civil Penalties. The civil penalty schedule for violations of the California Vehicle Code established by Resolution No. 10260 is hereby restated to read as follows*: 5200 No front license plate. $78 (If corrected within 31 days) 10 (state mandated) 5204(a) No registration tabs on license plate. 78 (If corrected within 31 days) 10 (state mandated) 21113(a) Parking on public grounds. 46 22500(a) Parking in an intersection. 46 22500(b) Parking in a crosswalk. 46 22500(d) Parking w/in 15 feet--fire station driveway. 46 22500(e) Blocking driveway. 46 22500(f) Parking on sidewalk. 46 22500(g) Parking or stopping--excavation site, etc. 46 22500(h) Double parking on roadway. 46 22500(i) Parking in a bus zone. 261 22500(l) Parking in front of accessible curb. 303 22500.1 Parking in a fire lane (public or private). 46 22502 Right hand wheels not w/in 18” of rt. curb. 46 22505(b) Parking on state highway violation. 46 22507.8(a-b)Unlawful parking in handicapped space. 303 22507.8(c)(1-2)Straddling Lines/Cross hatched, disabled. 303 22511.57(a) Parking/standing of vehicle in disabled parking $753 stall or space with invalid license/placard. 22511.57(b) Unauthorized use of license/placard for vehicle $753 parking/standing in disabled parking stall or space. 22511.57(c) Parking/standing of vehicle in disabled parking $753 stall or space with counterfeit, forged, altered or mutilated license/placard for disabled. Item 4 Attachment C - Resolution Amending the Administrative Penalty Schedule to Establish Penalties for Violations of the Ordinances Above Item 4: Staff Report Pg. 22 Packet Pg. 29 of 312 *NOT YET APPROVED* 148_20251124_ts24 11 22514 Parking within 15 feet of fire hydrant. 46 22515 Unattended vehicle, engine running. 111 22516 Person locked in vehicle. 111 22521 Parking within 7 1/2 feet of railroad tracks. 46 22522 Parking near sidewalk access ramp. 303 22523(a) Unlawful abandonment of vehicle on highway. 131 22523(b) Abandoned vehicle--public/private property. 131 22526 Entering/blocking intersection – anti-gridlock. 131 22951 No street, alley parking--patron vehicles. 46 *All penalties include state-mandated assessments pursuant to Gov’t. Code 76000, S.B 1407(2008), and Government Code 76000.3 (S.B. 857, 2008) totaling $12.50. SECTION 4. The Council finds that the adoption of this resolution does not meet the definition of a project under Public Resources Code Section 21065, thus, no environmental assessment under the California Environmental Quality Act is required. SECTION 5. The changes made in this Resolution shall be effective upon adoption. INTRODUCED AND PASSED: AYES: NOES: ABSTENTIONS: ABSENT: ATTEST: ________________________________ ________________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: _______________________________ ________________________________ City Attorney or Designee City Manager ________________________________ Chief of Police Item 4 Attachment C - Resolution Amending the Administrative Penalty Schedule to Establish Penalties for Violations of the Ordinances Above Item 4: Staff Report Pg. 23 Packet Pg. 30 of 312 *NOT YET APPROVED* 1 0290189_20251119_ms29 Ordinance No. ____ Ordinance of the Council of the City of Palo Alto Prohibiting Parking of Detached Trailers and Other Non-Motorized Vehicles on Public Streets The Council of the City of Palo Alto does ORDAIN as follows: SECTION 1. Findings and Declarations. The City Council finds and declares as follows: A. Section 22507 of the California Vehicle Code authorizes the City to regulate the parking of vehicles on City streets. B. The City has experienced a proliferation of detached trailers and other non-motorized vehicles parked on public streets and an associated increase in reports of public health, safety and aesthetic concerns. C. Street parking is a limited resource within the City. Storage of detached trailers and other non-motorized vehicles on public streets consumes limited parking supply and impedes the use of the public streets for temporary parking. D. Detached non-motorized vehicles that cannot be moved on a regular basis impede street sweeping and other clean-up operations and restrict views of motorists, cyclists and pedestrians. E. Inhabited non-motorized vehicles can lead to unauthorized gray and black water disposal with the potential for illegal discharges of septic waste, wastewater, fuels, or trash from such vehicles into City streets, gutters, or storm drains due to their inability to move to access authorized disposal sites. This is particularly hazardous to the public health because Palo Alto’s storm drain system flows directly into the San Francisco Bay. The City has an obligation under federal, state, and regional regulations to keep pollutants out of the storm drain system. F. Detached trailers and other non-motorized vehicles cannot be easily or quickly moved in an emergency and may therefore cause safety hazards. SECTION 2. Section 10.44.020 of the Palo Alto Municipal Code is amended to read as follows (additions underlined, deletions struck through): 10.44.020 Standing or parking, two a.m. to six a.m. (a) No person shall, between the hours of two a.m. and six a.m. of any day, unless authorized by a hardship permit issued pursuant to Section 10.44.021 or a construction or maintenance permit issued pursuant to Section 10.40.045, park upon streets or alleys located within a residential zone or public facility zone any of the following vehicles: (1) Oversized vehicles; (2) Trailers; (3) Camper shells; (4) Tow trucks as defined by California Vehicle Code Section 615; (5) Special construction equipment as defined by California Vehicle Code Section 565. Item 4 Attachment D - Ordinance Amending PAMC 10.44.020 to Prohibit Unattached Trailer Parking Item 4: Staff Report Pg. 24 Packet Pg. 31 of 312 *NOT YET APPROVED* 2 0290189_20251119_ms29 (b) Notwithstanding the provisions of this section, no signs or markings are necessary to give effect to the restrictions and prohibitions contained in this section. No person shall park or leave standing a non-motorized vehicle upon any public street or highway. (1) For the purposes of this subsection, “non-motorized vehicle” means any trailer, camp trailer, semitrailer or trailer coach as defined by the California Vehicle Code. “Non-motorized vehicle” does not include any bicycle, scooter, or micromobility device. (2) This subsection shall not apply to a nonmotorized vehicle that is attached to a vehicle capable of moving the nonmotorized vehicle in a lawful manner upon the street, carries a hardship permit issued pursuant to Section 10.44.021 or a construction or maintenance permit issued pursuant to Section 10.40.045, is actively being loaded or unloaded, or is undergoing emergency repairs. (c) Where not inconsistent with the U.S. Constitution or other applicable law, vehicles parked in violation of this section are subject to tow. SECTION 3. Severability. If any provision, clause, sentence or paragraph of this ordinance, or the application to any person or circumstances, shall be held invalid, such invalidity shall not affect the other provisions of this Ordinance which can be given effect without the invalid provision or application and, to this end, the provisions of this Ordinance are hereby declared to be severable. SECTION 4. Effective Date. This ordinance shall be effective on the thirty-first day after the date of its adoption. // // // // // // // // // // // Item 4 Attachment D - Ordinance Amending PAMC 10.44.020 to Prohibit Unattached Trailer Parking Item 4: Staff Report Pg. 25 Packet Pg. 32 of 312 *NOT YET APPROVED* 3 0290189_20251119_ms29 SECTION 5. CEQA. The City Council finds and determines that this Ordinance is not a project within the meaning of section 15378 of the California Environmental Quality Act (“CEQA”) because it has no potential for resulting in physical change in the environment, either directly or ultimately. Alternatively, it is exempt from CEQA under CEQA Guidelines section 15308 as a regulatory action for the protection of the environment. INTRODUCED: PASSED: AYES: NOES: ABSTENTIONS: ABSENT: ATTEST: ____________________________ ____________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: ____________________________ ____________________________ Assistant City Attorney City Manager ____________________________ Chief Transportation Official ____________________________ Chief of Police Item 4 Attachment D - Ordinance Amending PAMC 10.44.020 to Prohibit Unattached Trailer Parking Item 4: Staff Report Pg. 26 Packet Pg. 33 of 312 *NOT YET APPROVED* 1 0290191_20251119_ms29 Ordinance No. ____ Ordinance of the Council of the City of Palo Alto Prohibi ng Rental of Vehicles for Human Habita on The Council of the City of Palo Alto does ORDAIN as follows: SECTION 1. Findings and Declara ons. The City Council ﬁnds and declares as follows: A. The prac ce of ren ng out recrea onal vehicles or other oversized vehicles for use as living or sleeping quarters, known as “vanlording,” is a growing concern in many ci es, including the City of Palo Alto. B. Recrea onal vehicles used for vanlording are parked on public streets, occupying valuable and limited street parking spaces. C. Allowing vanlords to rent out vehicles in the public right of way facilitates private proﬁt- taking from the use of a public resource. D. The prac ce of vanlording is unlicensed and unregulated and therefore o en associated with unregistered, poorly maintained, and inadequately insured vehicles. E. Vanlords oﬀer renters a place to stay without responsibly addressing health and safety issues that can arise when inhabited vehicles are parked on public streets. These issues include improper waste disposal, unsanitary condi ons, illegal parking, tapping into or blocking ﬁre hydrants or other u lity infrastructure, and the crea on of ﬁres. F. The ren ng out of vehicles for human habita on is not currently regulated. Unlike tradi onal landlords and property management en es, vanlords are not explicitly subject to laws that require the upkeep and maintenance of rental housing. Accordingly, those who rent from them are not protected by laws that secure tenants’ rights or even basic habitability standards. G. With this ordinance, the City Council intends to prohibit vanlording within the City of Palo Alto. SECTION 2. Chapter 9.06 Rental of Vehicles for Human Habita on is hereby added to Title 9 of the Palo Alto Municipal Code, to read as follows: 9.06.010 Rental of recrea onal vehicles for living or sleeping quarters – Prohibi on. No person shall rent, lease, let out, or otherwise loan any oversized vehicle which is subsequently u lized for living or use as sleeping quarters on any street, alley, or city-owned or city-controlled premises in exchange for money, goods, or services. For the purposes of this Chapter, “oversized vehicle” means any vehicle exceeding seven feet in height or exceeding twenty feet in overall length or exceeding seven feet in width (including any Item 4 Attachment E - Ordinance Amending PAMC Chapter 9.06 to Prohibit Vanlording Item 4: Staff Report Pg. 27 Packet Pg. 34 of 312 *NOT YET APPROVED* 2 0290191_20251119_ms29 load or accessory thereon other than antennas), provided that this deﬁni on shall not apply to vehicles which exceed these dimensions solely because of modiﬁca ons required to accommodate a disability and the vehicle is lawfully displaying a disabled placard or license. It shall not be necessary to prove that the person who rented, leased, let out, or otherwise loaned any vehicle which was subsequently u lized for living or sleeping quarters intended or knew that the vehicle would be used for living or use as sleeping quarters on any street, alley, or city-owned premises. 9.06.020 Rental of recrea onal vehicles for living or sleeping quarters – Adver sements prohibited. No person shall adver se for rent, lease, let out, or loan in any newspaper, or through any other medium including online, social media, or other pla orms, any oversized vehicle available for the purpose of u lizing the vehicle for living or use as sleeping quarters on any street, alley, or city-owned or city-controlled premises. 9.06.030 Rental of Vehicles in the Public Right of Way It shall be unlawful for any person who deals in or whose business involves the rental or leasing of vehicles, including recrea onal vehicles (RVs) or other oversized vehicles, to park, store, or leave standing any such vehicles, whether occupied or vacant, on any street, alley, or other public right-of-way during the conduct of such business. This prohibi on does not apply to a vehicle owned only for personal use and not involved in the business of rental or leasing of vehicles, if otherwise legally parked. 9.06.050 Rental of Space in the Public Right of Way No person or en ty other than the City of Palo Alto and any of its departments or designees or other appropriate public en ty shall have the authority to sell, lease, license, permit, reserve or facilitate the reserving of any street, way, alley, highway, road, parkway, parking space or other public right of way or City-controlled parking lot in the City of Palo Alto without wri en authoriza on from the City. Any person who purports to sell, lease, license, permit, reserve or facilitate reserving of space in the public right of way via a wri en or oral agreement of any kind, with or without compensa on, is in viola on of this sec on. 9.06.060 Enforcement Item 4 Attachment E - Ordinance Amending PAMC Chapter 9.06 to Prohibit Vanlording Item 4: Staff Report Pg. 28 Packet Pg. 35 of 312 *NOT YET APPROVED* 3 0290191_20251119_ms29 Each day in which a viola on of this Chapter occurs shall cons tute a separate viola on of this Chapter. Each vehicle in viola on of this Chapter shall cons tute a separate viola on of this Chapter. Viola ons are enforceable through any penalty available by law, including those speciﬁed in Title 1 of this Code. SECTION 3. Severability. If any provision, clause, sentence or paragraph of this ordinance, or the applica on to any person or circumstances, shall be held invalid, such invalidity shall not aﬀect the other provisions of this Ordinance which can be given eﬀect without the invalid provision or applica on and, to this end, the provisions of this Ordinance are hereby declared to be severable. SECTION 4. Eﬀec ve Date. This ordinance shall be eﬀec ve on the thirty-ﬁrst day a er the date of its adop on. // // // // // // // // // // // // Item 4 Attachment E - Ordinance Amending PAMC Chapter 9.06 to Prohibit Vanlording Item 4: Staff Report Pg. 29 Packet Pg. 36 of 312 *NOT YET APPROVED* 4 0290191_20251119_ms29 SECTION 5. CEQA. The City Council ﬁnds and determines that this Ordinance is not a project within the meaning of sec on 15378 of the California Environmental Quality Act (“CEQA”) because it has no poten al for resul ng in physical change in the environment, either directly or ul mately. INTRODUCED: PASSED: AYES: NOES: ABSTENTIONS: ABSENT: ATTEST: APPROVED: ______________________________ ____________________________ City Clerk Mayor APPROVED AS TO FORM: ____________________________ City Manager ______________________________ Assistant City A orney ____________________________ Chief of Police Item 4 Attachment E - Ordinance Amending PAMC Chapter 9.06 to Prohibit Vanlording Item 4: Staff Report Pg. 30 Packet Pg. 37 of 312 November 24,2025 LifeMoves Palo Alto Outreach Plan LifeMoves, the City of Palo Alto’s contracted outreach provider and the region’s largest nonprofit addressing homelessness, delivers street-based engagement, shelter, and supportive services with the goal of helping as many Palo Altans as possible move toward housing stability and ensuring those most in need are prioritized and ready for HomeKey when it opens. LifeMoves’ Outreach focuses on engaging the highest-need individuals in Palo Alto, including those with high VI-SPDAT 1 scores, those known to service providers, and RV dwellers. Key strategies include: ● Targeted outreach to individuals with high vulnerability scores. ● Supporting clients to enroll in Here4You 2 if they are not already registered. ● Encouraging clients already enrolled to ensure that their Palo Alto connection was shared with the hotline. ● For Palo Altans historically resistant to services outside of Palo Alto, explore the HomeKey site as an option to increase engagement and enrollment. Focus Areas: ● Highest vulnerability individuals ● High-profile cases in the City ● RV dwellers What We’ve Done So Far ● Identified individuals who are willing to give up RVs once they receive placement at HomeKey. ● Connected individuals who identify as Palo Altans to Here4You. ● Conducted continuous outreach to RV dwellers, providing information on available services and supports. 2 Here4You is the 24-hour hotline and entry point for any shelter bed in Santa Clara County, including Palo Alto Homekey. 1 An assessment that measures vulnerability to prioritize housing and services. 2550 Great America Way, Suite 201 Santa Clara, CA 95054 650.685.5880 www.lifemoves.org Item 4 Attachment F - LifeMoves Palo Alto Outreach Plan Item 4: Staff Report Pg. 31 Packet Pg. 38 of 312 ● Focused engagement on individuals most visible to the City. ● Collaborated closely with the Palo Alto Police Department, particularly regarding RVs scheduled for towing and repeat public nuisance cases. ● Maintained strong partnerships with other service providers to ensure coordinated support for community members by coordinating closely with Abode Services, Peninsula Healthcare, and Bill Wilson Center to identify, engage, and support individuals for HomeKey. How Outreach is Currently Going Outreach is progressing with positive engagement from clients. Many individuals are responsive to support offers and enrollment opportunities. Continued coordination with City and partners is helping address challenges with engagement and documentation readiness. Next Steps ● Continue communication and coordination with the City and provider partners, and collaborate with the Santa Clara County Office of Supportive Housing to align on referral criteria, prioritization, and client readiness. ● Prepare clients for the HomeKey launch in early 2026, including enrollment, documentation, and service connection support. ● Increase targeted outreach efforts as the program launch approaches. Provider Partner Coordination LifeMoves is actively working with partners to align outreach, share information, and support clients: ● Partnering with Peninsula Healthcare Connection to identify individuals with significant health needs. ● Coordinating with Move Mountain View and The Karat School Project to identify families living in RVs and other potential program candidates. ● Ensuring that individuals affected by the Downtown Streets Team closure have been incorporated into OSC for continued engagement. 2550 Great America Way, Suite 201 Santa Clara, CA 95054 650.685.5880 www.lifemoves.org Item 4 Attachment F - LifeMoves Palo Alto Outreach Plan Item 4: Staff Report Pg. 32 Packet Pg. 39 of 312 City Council Staff Report From: City Manager Report Type: CONSENT CALENDAR Lead Department: Planning and Development Services Meeting Date: December 8, 2025 Report #:2511-5422 TITLE QUASI-JUDICIAL. 2451 Cowper Street [25PLN-00102]: Appeal of Director's Decision to Approve an Individual Review Application to Allow Deconstruction of an Existing Single-Family Residence and Detached Garage and to Construct a 2,380-Square-Foot Two-Story Residence. Zoning District: R-1 (Single-family Residential). CEQA Status: Exempt in Accordance with CEQA Guidelines 15303. RECOMMENDATION Staff recommends that the City Council decline to hear the appeal and uphold the Planning and Development Services Director’s approval of the Individual Review (IR) application for a new two-story home at 2451 Cowper Street. EXECUTIVE SUMMARY This request is an appeal of the Director’s approval of a Single-Family Individual Review (IR) application for a new two-story home. On July 3, 2025, staff, on behalf of the Director, tentatively approved the IR application for the new residence. An adjacent property owner at 2450 Tasso Street requested a Director’s Hearing, citing concerns about construction noise, timing, and related impacts. The Director of Planning and Development Services determined that these concerns are outside the scope of the IR application, which focuses on site planning, neighborhood compatibility, architectural form, streetscape character, and privacy. Accordingly, no substantive changes were made to the initial approval letter. The appellant subsequently filed a timely appeal to Council to review the Director’s decision. Three or more Council member votes would be required to remove this item from the consent calendar and schedule it for a future hearing. BACKGROUND The property owner, Zenshu Zhao, submitted the subject IR application on April 15, 2025. Following modifications to address department comments on the initial plans, the project was tentatively and conditionally approved on July 3, 2025. Staff’s decision was appealed to the Director of Planning and Development Services. Following a public hearing on September 10, Item 5 Item 5 Staff Report Item 5: Staff Report Pg. 1 Packet Pg. 40 of 312 2025, the Director upheld the approval on September 17, 2025. The Director’s decision has now been appealed to Council. Item 5 Item 5 Staff Report Item 5: Staff Report Pg. 2 Packet Pg. 41 of 312 Works requirements and Bay Area Air Quality Management District requirements. Following a tentative decision on the project issued July 3, 2025, the appellant requested a timely Director’s hearing on July 15, 2025 (Attachment B) to address concerns related to construction noise. Specifically, the appellant requested that construction of 2451 Cowper Street begin no earlier than March 2026 in order reduce the noise impact on his newborn and requested that the construction hours be limited to between 10am to 3pm with noon breaks to accommodate nap schedules. Item 5 Item 5 Staff Report Item 5: Staff Report Pg. 3 Packet Pg. 42 of 312 On September 30, 2025, the appellant appealed the Director’s approval of the IR application, based on concerns for the noise impact on his newborn baby. ANALYSIS Basic Site Planning. The project’s layout is appropriate for the lot, ensuring adequate setbacks, usable open space, and circulation. Neighborhood Compatibility (Height, Mass, Scale). The proposed two-story addition is consistent with surrounding residential development, minimizing visual impacts and maintaining the character of the neighborhood. Architectural Form, Massing, and Roof Lines. The design harmonizes with neighboring structures, employing roof lines and massing that reduce bulk and preserve the streetscape. Visual Character of Street-Facing Facades and Entries. Facade composition, materials, and entries are designed to enhance the public-facing appearance, consistent with the IR guidelines. Placement of Second-Story Windows and Decks for Privacy. Window and deck placement have been carefully considered to prevent intrusion on neighbors’ private spaces. FISCAL/RESOURCE IMPACT Item 5 Item 5 Staff Report Item 5: Staff Report Pg. 4 Packet Pg. 43 of 312 not to hold a public hearing to discuss the appeal, these fees would be returned to the appellant. STAKEHOLDER ENGAGEMENT Palo Alto Weekly on November 26, 2025, which is 12 days in advance of the meeting. ENVIRONMENTAL REVIEW ATTACHMENTS APPROVED BY: Item 5 Item 5 Staff Report Item 5: Staff Report Pg. 5 Packet Pg. 44 of 312 1 193.0' 13 15.0' 117.0' 50.0' 117.0' 50.0' 217.0' 60.0' 217.0' 0.0' 60.0' 139.4' 60.0' 139.4' 60.0' 139.4' 60.0' 139.4' 58.7' 100.3' 58.0' 91.7' 10.3' 48.7' 91.7' 59.0' 89.4' 73.5' 105.3' 47.3' 25.2' 93.0' 60.0' 117.0' .5' 58.5' 94.5' 58.8' 100.2' 98.5' 58.5' 100.2' 58.6' 23.2'158.5' 26.1' 54.4' 23.6' 50.0' 139.4' 139.4' 50.0' 139.4' 60.0' 90.6' 60.0' 90.6' 62.0' 71.6' 62.0' 71.6' 65.0' 71.6' 65.0' 71.6' 67.0' 119.0' 67.0' 119.0' 60.0' 100.0' 60.0' 100.0' 64.0' 100.0' 64.0' 100.0' 58.0' 100.0' 58.0' 100.0' 58.0' 100.0' 58.0' 100.0' 52.0' 100.0' 52.0' 100.0' 74.0' 100.0' 74.0' 100.0'50.0' 21.0' 130.0' 262.0' 97.2' 56.1' 2.0' 100.0' 58.0' 63.7'107.6' 10.3' 76.0' 117.0' 52.6' 117.0' 14.6'4.0' 38.0' 113.0'73.6' 113.0' 62.0' 113.8' 60.0' 90.6' 60.0' 90.6' 60.0' 119.0' 60.0' 119.0' 160.2' 124.0' 115.0' 62.0' 115.0' 62.0' 115.0' 62.0' 115.0' 62.0' 60.0' 107.6' 57.0' 105.3' 143.1' 160.2' 60.0' 114.7' 25.9' 31.1' 107.6' 60.0' 117.1' 14.1' 42.9' 114.7' 1 57.0' 117.1' 115.0' 62.0' 115.0' 62.0' 115.0' 62.0' 95.0' 65.0'95.0' 65.0' 95.0' 65.0'95.0' 65.0' 116.0' 50.0' 116.0' 50.0' 84.0' 83.5'83.5'111.0' 53.1' 87.3' 63.8' 97.2' 63.0' 576 580 242 0 578 244 0 245 1 244 1 242 9 245 0 246 6 246 5 245 1 243 5 242 5 247 9 249 9 521 249 4 247 1 244 0 2 530 510 252 1 253 9 256 3 257 9 455 485 475 246 8 245 0 249 0 248 0 250 1 478 585 60 6 249 5 251 2 252 0 540 570 550 575 581 76A 580AAVENUE OREGON EXPRESSWAY MANOR COWPER STREET MARION AVENUE TASSO STREET This map is a product of the City of Palo Alto GIS This document is a graphic representation only of best available sources. Legend Project Site 0'84' Attachment A: Location Map 2451 Cowper Street CITYOF PALOALTO INCORP O R ATED CALIFORNIA P a l o A l t oT h e C i t y o f APRIL 16 1894 The City of Palo Alto assumes no responsibility for any errors ©1989 to 2016 City of Palo Alto chodgki, 2025-08-13 10:21:33 (\\cc-maps\Encompass\Admin\Personal\Planning.mdb) R-1 Item 5 Attachment A - Location Map Item 5: Staff Report Pg. 6 Packet Pg. 45 of 312 1 Raybould, Claire To:Bhavani Potharaju Subject:RE: Construction Concerns for 2451 Cowper Sreet From: John XJ Zhang <xjzhang@gmail.com> Sent: 15 July 2025 21:08 To: Bhavani Potharaju <bpotharaju@m‐group.us> Cc: John XJ Zhang <xjzhang@gmail.com> Subject: Re: Construction Concerns for 2451 Cowper Sreet [EXTERNAL EMAIL] DO NOT CLICK links or attachments unless you know the content is safe. Be aware that the sending address can be faked or manipulated. Dear Bhavani, Thank you for your message. I respect the owner’s right to develop their property and the city’s approval process. My primary concern centers around the timing of the construction start. Scientific studies emphasize that the first 6 months after birth are particularly critical for an infant’s neurological and sensory development, especially in ensuring a quiet and stable environment for sleep, bonding, and growth. Given that we are expecting a newborn in September, I respectfully request that the project begin no earlier than March 2026 to support our child’s early development. Additionally, we currently have two other young children at home, one is 3 years old and the other just over 1 year old. Their daytime rest periods are already easily disrupted, and prolonged construction noise could significantly impact their health and well‐being. When the work commences, I kindly request that construction hours be limited to mid‐day (e.g., 10 AM–3 PM) with noon breaks to accommodate their nap schedules. I sincerely appreciate the owner’s willingness to be considerate and to limit activity near the rear fence. Lastly, I would appreciate the opportunity to speak with you directly. Would Wednesday, July 16 at 9:00 AM work for a brief zoom call? Best wishes, John X.J. Zhang From: Bhavani Potharaju <bpotharaju@m‐group.us> Date: Tuesday, July 15, 2025 at 2:28 AM Item 5 Attachment B - Appellant’s Request for a Director’s Hearing Item 5: Staff Report Pg. 7 Packet Pg. 46 of 312 2 To: John XJ Zhang <xjzhang@gmail.com> Subject: RE: Construction Concerns for 2451 Cowper Sreet Hi John, The architect let the owner know and looks like they have responded to your concerns. The project will start October or later depending on the building permit process time. Please let me know if the owner’s email addresses your concern or if you would like to set up a call to discuss with me. I am available the next three days 9‐11am. (Appeal period ends on 7/17/2025) Thanks & Regards, BHAVANI POTHARAJU Associate Planner 408.340.5642 x126 c 408.819.0452 Timings: Mon- Fri, 7-10am PST a new design on urban planning m-group.us | M-LAB From: John XJ Zhang <xjzhang@gmail.com> Sent: 07 July 2025 20:51 To: Bhavani Potharaju <bpotharaju@m‐group.us> Subject: FW: Construction Concerns for 2451 Cowper Sreet [EXTERNAL EMAIL] DO NOT CLICK links or attachments unless you know the content is safe. Be aware that the sending address can be faked or manipulated. Hi Bhavani, FYI. From: Zhenshu Zhao <zhaozhenshu@gmail.com> Date: Sunday, July 6, 2025 at 4:55 AM To: <xjzhang@gmail.com> Subject: Re: Construction Concerns for 2451 Cowper Sreet Hi John, My name is Zhenshu Zhao, and I'm the owner of 2451 Cowper Street. Thanks so much for reaching out and letting me know—congratulations on the upcoming arrival of your baby! I completely understand how important a calm environment is during that time. I want to reassure you that our project is still in the early stages of the approval process, and even the earliest possible start date for construction would be mid‐October to early Nov. So there won’t be any construction activity around September when your baby arrives. Once construction does begin, I’ll make sure the team is mindful of noise and will also speak with the architect and contractor about limiting activity near the rear fence as much as possible. Item 5 Attachment B - Appellant’s Request for a Director’s Hearing Item 5: Staff Report Pg. 8 Packet Pg. 47 of 312 3 Really appreciate your communication, and please don’t hesitate to reach out with any concerns along the way. I’ll do my best to make this process as smooth as possible for everyone. Warmly, Zhenshu Item 5 Attachment B - Appellant’s Request for a Director’s Hearing Item 5: Staff Report Pg. 9 Packet Pg. 48 of 312 cc: John XJ Zhang Attachment: Conditions of Approval Property Owner September 17, 2025 Mike Ma MArch Design 569 Clyde Avenue, Unit #520 Mountain View, CA 94043 SUBJECT: 2451 Cowper Street- Individual Review Application 25PLN-00102 On September 17, 2025, the Director of Planning and Development Services conditionally approved Single Family Individual Review application 25PLN-00102 for a new two-story residence at 2451 Cowper Street. This approval was granted pursuant to the Palo Alto Municipal Code (PAMC) Sections 18.12.110 and 18.77.075. The conditionally approved project plan set received April 15, 2025, meets the Palo Alto Single Family Individual Review Guidelines, and complies with the R-1 zone district regulations and other applicable City regulations for development as conditioned. Prior to the approval becoming effective, a timely request for Director’s Hearing was received and a Director’s Hearing was held on September 10, 2025. On September 15, 2025, the Director of Planning and Development Services upheld the conditionally approved project. PROJECT DESCRIPTION The proposal is a request by Mike Ma of MArch Design for Single Family Individual Review to allow deconstruction of an existing 1,286 square foot one-story residence and a detached garage, and to allow the construction of a new 2,380 square foot two story single-family residence with attached one car garage and 799 square foot attached Accessory Dwelling Unit in the R1 zoning district, as shown on the plans received on June 9, 2025. DIRECTOR’S HEARING John XJ Zhang, residing at 2450 Tasso Street, requested a hearing within the 14-day hearing request period. Mr. Zhang expressed concern regarding noise impacts during construction, noting that they have a newborn baby arriving this fall and that the construction noise will impact their baby. Mr. Zang requested that construction hours be limited to 10AM-3PM with noon breaks to accommodate his newborn child’s nap schedule and that construction begin no earlier than March 2026. At the hearing, the appellant’s representative expressed concern that the City’s tentative approval did not protect nearby residents, especially young children, from hazardous materials and excessive noise. They argued that demolition of the 1938 structure could release lead, asbestos, dust, and diesel emissions, and that no enforceable conditions had been imposed to mitigate these risks. They also disputed the City’s reliance on a CEQA exemption and noted the project did not fully meet Individual Review Guidelines on privacy and buffering, urging denial until stronger safeguards were required. DECISION AND FINDINGS Item 5 Attachment C - Letter from Appellant’s Attorney to the Director of PDS Item 5: Staff Report Pg. 10 Packet Pg. 49 of 312 2451 Cowper Street approval Individual Review 25PLN-00102 Page 2 of 9 The Director of Planning and Development Services finds that the project, as submitted on June 09, 2025 and as conditioned here, is in compliance with both the Municipal Code and the Individual Review Design Guidelines. The requirement to provide 24-inch box privacy screening trees on the rear and side yard property lines is already reflected in the approved plan set and reinforced in condition of approval #13 in the previously issued conditions of approval. Conditions related to hazardous material compliance, specifically asbestos and lead-based paint, are addressed at building permit in accordance with state and federal regulations. Standard measures for dust control are also applied during earthmoving activities in accordance with Bay Area Air Quality Management District requirements. Therefore, the addition of conditions of approval to address these requirements are not warranted. The project is required to comply with municipal code requirements for construction hours and noise levels. No new conditions of approval were added as a result of the Director’s Hearing. However, the Director modified three conditions below for clarity and accuracy, including removing a standard privacy related condition of approval for balconies (no balconies are proposed as part of this project), clarifying a condition relating to maintaining the ADU path of travel while also maintaining a planting area for the side yard screening trees, and revising the condition related to impact fees to remove references to public art fees, which are not required for accessory dwelling units. This approval will become effective 14 calendar days from the postmark date of this letter, unless an appeal is filed, as provided by Chapter 18.77.075 of the PAMC. An appeal may be filed by written request with the City Clerk before the date the Director’s decision becomes final. The written request shall be accompanied by a fee, as set forth in the municipal fee schedule. Only an applicant, or the owner or tenant of an adjacent property may appeal. As the plans may have been revised since the original submittal, interested parties may wish to review the tentatively approved plans online at the City’s Planning webpage bit.ly/PaloAltoProjects. If you need assistance reviewing the plans, you may visit the City’s Development Center at 285 Hamilton Avenue. A copy of this letter shall accompany all future requests for City permits relating to this approval. This approval expires in 12 months from the effective date. Should you have any questions regarding this approval, please feel free to contact Claire Raybould at claire.raybould@cityofpaloalto.org. Sincerely, Jonathan Lait, AICP Director of Planning and Development Services Attachment A: Conditions of Approval cc: John XJ Zhang, 2450 Tasso Street, Palo Alto, CA 94303 Item 5 Attachment C - Letter from Appellant’s Attorney to the Director of PDS Item 5: Staff Report Pg. 11 Packet Pg. 50 of 312 2451 Cowper Street approval Individual Review 25PLN-00102 Page 3 of 9 Attachment A INDIVIDUAL REVIEW CONDITIONS OF APPROVAL 2451 Cowper Street 25PLN-00102 September 12, 2025 1. CONFORMANCE WITH PLANS. Construction and development shall conform to the approved plans entitled, " ZHAO RESIDENCE, New Single Family Residence + Attached ADU, 2451 Cowper Street, Palo Alto,” uploaded to the Palo Alto Online Permitting Services Citizen Portal on June 09, 2025, as modified by these conditions of approval. 2. BUILDING PERMIT. Apply for a building permit and meet any and all conditions of the Planning, Fire, Public Works, and Building Departments. 3. BUILDING PERMIT PLAN SET. A copy of this cover letter and conditions of approval shall be printed on the second page of the plans submitted for building permit. Project plans submitted for Building permits shall incorporate the following changes: a. Privacy trees as described in COA #13 as shown on Sheet A1.4, shall be minimum 24- inch box trees and at least 8 feet tall at the time of planting. b. Minimum 18 inches of planter area shall be provided between the fence line and the concrete walkway along the right side easternmost property lot line. c. Clearly delineate a walkway leading to the ADU entry Show the edge of the walkway next to the ADU and paved parking area next to the garage on the site plan with dimensions and/or notes for the 18-inch planting area along the fence line. 4. PROJECT MODIFICATIONS. All modifications to the approved project shall be submitted for review and approval prior to construction. If during the Building Permit review and construction phase, the project is modified by the applicant, it is the responsibility of the applicant to contact the Planning Division/project planner directly to obtain approval of the project modification. It is the applicant’s responsibility to highlight any proposed changes to the project and to bring it to the project planner’s attention. 5. OBSCURED/TRANSLUCENT GLAZING. All obscure glazing, as shown on the plan set, shall be permanent in nature and shall remain for the life of the structure. Obscure glazing is either decorative glazing that does not allow views through placed into the window frame or acid etched or similar permanent alteration of the glass. Films or like additions to clear glass are not permitted where obscure glazing is shown. Obscure glazing shall not be altered in the future and shall be replaced with like materials if damaged. If operable, these windows shall open towards the public right-of-way. 6. PRIVACY SCREENING. All screening, as shown on the plan set, shall be permanent in nature and shall remain for the life of the structure. Screening shall be a maximum of 15 percent open. Screening shall not be altered and shall be replaced with like materials if damaged. Item 5 Attachment C - Letter from Appellant’s Attorney to the Director of PDS Item 5: Staff Report Pg. 12 Packet Pg. 51 of 312 2451 Cowper Street approval Individual Review 25PLN-00102 Page 4 of 9 7. REQUIRED PARKING. All single-family homes shall be provided with a minimum of one covered parking space (10-foot by 20-foot interior dimensions) and one uncovered parking space (8.5 feet by 17.5 feet). 8. UTILITY LOCATIONS. In no case shall utilities be placed in a location that requires equipment and/or bollards to encroach into a required parking space. In no case shall a pipeline be placed within 10 feet of a proposed tree and/or tree designated to remain. 9. BAY WINDOWS. The four proposed bay windows shall have an interior base at least 18 inches above the floor joists, have no exterior skirt wall, projecting no more than two feet, shall have an interior height of no more than 7.5 feet (measured from the window seat to the underside of the roof), and with more than 50% window surface. Bay windows that do not meet this definition will be counted towards the homes floor area ratio (FAR), which may cause the home to be out of compliance with required Zoning standards. Any changes to proposed bay windows must first be reviewed and approved by the Director of Planning and Community Environment. 10. NOISE PRODUCING EQUIPMENT. All noise producing equipment shall be located outside of required setbacks, except they may project 6 feet into the required street side setbacks. In accordance with Section 9.10.030, No person shall produce, suffer or allow to be produced by any machine, animal or device, or any combination of same, on residential property, a noise level more than six dB above the local ambient at any point outside of the property plane. 11. DAYLIGHT PLANE. The daylight plane must clear the point where the wall plane intersects the top of the roof material. 12. IMPERVIOUS SURFACE. A minimum of 60 % of the required front yard shall have a permeable surface that permits water absorption directly into the soil (Section 18.12.040 (h)). The building permit plan set shall include a diagram demonstrating compliance. 13. REQUIRED IRLANDSCAPING/CANOPY REPLACEMENT TREES. The following landscaping is required to ensure the project’s conformance with the City’s IR Guidelines and/or the City’s tree canopy replacement requirements and therefore must remain for the life of the structure. The required screening trees and shrubs shall be a minimum size of 24-inch box and measure at least eight (8) feet tall at planting. a. Four 24-inch box trees shown as 16 on sheet A1.4, shall be planted and maintained at left side of the rear yard of the property. b. Two 24-inch box trees shown as 5 on sheet A1.4, shall be planted and maintained at the rear yard of the property. c. Four 24-inch box trees shown as 17 on sheet A1.4, shall be planted and maintained at right side of the rear yard of the property. 14. LANDSCAPING. All existing landscaping shall remain unless approved for removal in the approved plan set. Show tree protection fencing to all trees and shrubs intended to remain on site and for the street trees. The tree protection shall be shown in the plans submitted for building permit, as Item 5 Attachment C - Letter from Appellant’s Attorney to the Director of PDS Item 5: Staff Report Pg. 13 Packet Pg. 52 of 312 2451 Cowper Street approval Individual Review 25PLN-00102 Page 5 of 9 shown on Sheet A1.4 and shall be installed at the beginning of construction. Landscape planting shall be installed as shown in the approved plans. Modifications to the landscaping plan shall be approved by Planning and Urban Forestry. 15. FENCES. Fences and walls shall comply with the applicable provisions of Chapter 16.24, Fences, of the Palo Alto Municipal Code (PAMC). Heights of all new and existing fencing must be shown on the Building Permit plans. a. Where an existing fence is non-compliant, a new Code compliant fence shall be constructed in its place. 16. ESTIMATED IMPACT FEE. Development Impact Fees, currently estimated in the amount of $18,004.02 plus the applicable public art fee, per PAMC 16.61.040, shall be paid prior to the issuance of the related building permit. 17. IMPACT FEE 90-DAY PROTEST PERIOD. California Government Code Section 66020 provides that a project applicant who desires to protest the fees, dedications, reservations, or other exactions imposed on a development project must initiate the protest at the time the development project is approved or conditionally approved or within ninety (90) days after the date that fees, dedications, reservations or exactions are imposed on the Project. Additionally, procedural requirements for protesting these development fees, dedications, reservations and exactions are set forth in Government Code Section 66020. IF YOU FAIL TO INITIATE A PROTEST WITHIN THE 90- DAY PERIOD OR FOLLOW THE PROTEST PROCEDURES DESCRIBED IN GOVERNMENT CODE SECTION 66020, YOU WILL BE BARRED FROM CHALLENGING THE VALIDITY OR REASONABLENESS OF THE FEES, DEDICATIONS, RESERVATIONS, AND EXACTIONS. If these requirements constitute fees, taxes, assessments, dedications, reservations, or other exactions as specified in Government Code Sections 66020(a) or 66021, this is to provide notification that, as of the date of this notice, the 90-day period has begun in which you may protest these requirements. This matter is subject to the California Code of Civil Procedures (CCP) Section 1094.5; the time by which judicial review must be sought is governed by CCP Section 1094.6. 18. PLANNING FINAL INSPECTION. A Planning Division Final inspection will be required to determine substantial compliance with the approved plans prior to the scheduling of a Building Division final. Any revisions during the building process must be approved by Planning, including but not limited to; materials, fenestration and hard surface locations. Contact the planning department at 650- 617-3117 or email Planner@CityofPaloAlto.org to schedule this inspection. 19. PERMIT EXPIRATION. The project approval shall be valid for a period of two years from the original date of approval. Application for a one year extension of this entitlement may be made prior to expiration, by emailing the Planning department at Planner@CityofPaloAlto.org. If a timely extension is not received, or the project has already received an extension and the applicant still wishes to pursue this project, they must first file for a new Planning application and pay the associated fees. This new application will be reviewed for conformance with the regulations in place at that time. Item 5 Attachment C - Letter from Appellant’s Attorney to the Director of PDS Item 5: Staff Report Pg. 14 Packet Pg. 53 of 312 2451 Cowper Street approval Individual Review 25PLN-00102 Page 6 of 9 20. INDEMNITY. To the extent permitted by law, the Applicant shall indemnify and hold harmless the City, its City Council, its officers, employees and agents (the “indemnified parties”) from and against any claim, action, or proceeding brought by a third party against the indemnified parties and the applicant to attack, set aside or void, any permit or approval authorized hereby for the Project, including (without limitation) reimbursing the City for its actual attorneys’ fees and costs incurred in defense of the litigation. The City may, in its sole discretion, elect to defend any such action with attorneys of its own choice. URBAN FORESTRY 21. Please add a column in the Arborist report for tree removal to identify which of the non- protected trees are proposed for removal so that a no-net-loss of tree canopy replacement quantity can be calculated by Urban Forestry. Insufficient space for all replacement trees may be replaced by in-lieu fees in the amount of $650 per unplanted 24" box tree. 22. URBAN FORESTRY GENERAL. The following general tree preservation measures apply to all trees to be retained: No storage of material, topsoil, vehicles or equipment shall be permitted within the Tree Protection Zone (TPZ). The ground under and around the tree canopy area shall not be altered. No waste material or construction byproducts are allowed within the TPZ. Trees to be retained shall be irrigated, aerated, and maintained as necessary to ensure survival. 23. TREE DAMAGE. Tree Damage, Injury Mitigation and Inspections apply to the Contractor. Reporting, injury mitigation measures and arborist inspection schedule apply pursuant to TLTM Contractor shall be responsible for the repair or replacement of any publicly owned or protected trees that are damaged during the course of construction, pursuant to Title 8 of the Palo Alto Municipal Code, and city Tree and Landscape Technical Manual, Section 3.02. 24. TPZ EXCAVATION RESTRICTIONS APPLY - TLTM, Sec. 3.03.6 - B5,6: Any approved grading, digging, potholing, or trenching within the TPZ of a protected tree shall be performed using ‘air-spade’ method as a preference, with manual hand shovel as a backup. (TPZ= 10x the tree diameter at 54" above grade) For utility trenching, including sewer line, roots exposed with a diameter of 2 inches and greater shall remain intact and not be damaged. If directional boring method is used to tunnel beneath roots, then CPA Standard Detail #504 shall be printed on the final plans and the buffer distances in TLTM Table 3-4, Trenching and Tunneling Distance, shall be implemented by Contractor. Contractor must notify the Urban Forestry Section at (650) 496-5953 in advance of conducting any approved excavation within 10-feet of any street trees (or for any protected tree on EVSE projects). Urban Forestry may choose to monitor or review the work for compliance with the City’s Tree Protection Zone (TPZ) excavation standards. 25. TREE PROTECTION COMPLIANCE: The owner and contractor shall implement all protection and inspection schedule measures, design recommendations and construction scheduling as stated in the Tree Preservation Report and/or Sheet T-1 and is subject to code compliance action pursuant to PAMC 8.10.080. The required protective fencing shall remain in place until final landscaping or Urban Forestry inspection of the project is completed. Item 5 Attachment C - Letter from Appellant’s Attorney to the Director of PDS Item 5: Staff Report Pg. 15 Packet Pg. 54 of 312 2451 Cowper Street approval Individual Review 25PLN-00102 Page 7 of 9 26. NO NET LOSS OF CANOPY. In order to comply with the City’s no net loss of canopy policy (PAMC 8.10.055; Urban Forest Master Plan Goals 6.A, 6.B, & 6.C; Comprehensive Plan, Natural Environment Chapter Goal N-2) all trees 4 inches DBH and larger are subject to replacement to avoid a loss of canopy at the neighborhood level. Replacement ratios are determined by table 3-1 in the Tree and Landscape Technical Manual, Section 3.02. New landscape tree plantings (24 inch box or larger) count towards the replacement total. Screening trees may also count toward the total depending on size and species selected. If unable to plant the required number of trees on site (our preferred solution) there is the option of paying in-lieu fees per each 24 inch box tree into the forestry fund. [Note: A replacement at ratio of 1:1 for trees listed as exempt species under PAMC 8.10.020 is recommended. Exempt trees may require full replacement on parcels zoned other than R1, RE, R-2, or RMD]. 27. PLAN CHANGES. Revisions and/or changes to plans before or during construction shall be reviewed and responded to by the (a) project site arborist, or (b) landscape architect with written letter of acceptance before submitting the revision to Planning and Development Services Department for review by Planning, Public Works, or Urban Forestry. ZERO WASTE 28. REQUIRED DECONSTRUCTION. In conformance with PAMC 5.24, deconstruction and source separation are required for all residential and commercial projects where structures (other than a garage or ADU) are being completely removed, demolition is no longer allowed. Deconstruction takes longer than traditional demolition, it is important to plan ahead. For more information, visit www.cityofpaloalto.org/deconstruction. 29. SALVAGE SURVEY FOR REUSE. A Salvage Survey is required for deconstruction permit applications. The survey shall be conducted by a City approved reuse vendor. The survey submittal shall include an itemized list of materials that are salvageable for reuse from the project. The applicant shall source separate and deliver materials for reuse. Certification is required indicating that all materials identified in the survey are properly salvaged. Contact The ReUse People to schedule this FREE survey by phone (888) 588-9490 or e-mail info@thereusepeople.org. More information can be found at www.TheReusePeople.org. Please upload a completed copy to the deconstruction permit. 30. SOURCE SEPARATION FOR RECYCLING. The applicant shall source separate deconstruction materials into specific categories for recycling. Additional staging areas for source separated materials will need to be considered. All materials shall be delivered to one of the City approved materials recovery facilities listed in Green Halo, all records shall be uploaded to www.greenhalosystems.com. For more information, refer to www.cityofpaloalto.org/deconstruction PUBLIC WORKS CONDITION OF APPROVAL Item 5 Attachment C - Letter from Appellant’s Attorney to the Director of PDS Item 5: Staff Report Pg. 16 Packet Pg. 55 of 312 2451 Cowper Street approval Individual Review 25PLN-00102 Page 8 of 9 The following shall be addressed prior to issuance of a Building Permit, Excavation and Grading Permit, Certificate of Compliance, Street Work Permit and/or Encroachment Permit. 31. PUBLIC WORKS STANDARD CONDITIONS SHEET: The Department of Public Work’s full-sized "Standard Conditions" sheet shall be included in the improvement plans and the applicant shall comply with all conditions listed in the sheet. The sheet can be obtained at the following link: https://www.cityofpaloalto.org/files/assets/public/v/1/public-works/engineering- services/webpages/forms-and-permits/pw-conditions-sheet-alternative-update-8.7.18.pdf 32. SIDEWALK, DRIVEWAY, CURB & GUTTER: The applicant shall meet with a Public Works inspector by calling 650-496-6929 to determine portions of sidewalk, curb, gutter, and driveway approaches that shall be replaced along the project frontage. These portions shall be indicated on the site improvement plans. In addition, a Site Inspection Directive sheet shall be completed, signed by the inspector, and scanned onto the plan set. The sheet can be obtained from a staff member of Public Works Engineering Services or at the following link: https://www.cityofpaloalto.org/files/assets/public/public-works/engineering- services/webpages/forms-and-permits/other-guidelines/pwe-site-inspection-directive_rev- 2021.pdf 33. DRIVEWAY APPROACHES: The applicant shall comply with all regulations in PAMC Chapter 12.08 for driveway approaches. A summary of those regulations can be obtained at the following link: https://www.cityofpaloalto.org/civicax/filebank/blobdload.aspx?t=69580.09&BlobID=66035 34. STORM WATER POLLUTION PREVENTION SHEET: The City's full-sized "Pollution Prevention - It's Part of the Plan" sheet shall be included in the improvement plans. The sheet can be obtained at the following link: https://www.cityofpaloalto.org/files/assets/public/v/1/publicworks/engineering- Services/webpages/forms-and-permits/rwq_stormwater_plansheet_final_bw.pdf 35. IMPERVIOUS SURFACE AREA WORKSHEET: The applicant shall fill out the Impervious Area Worksheet for Land Developments at the link below. The sheet shall be both emailed to pwecips@cityofpaloalto.org and included with the building permit submittal: https://www.cityofpaloalto.org/files/assets/public/v/1/public-works/engineering- services/webpages/forms-and-permits/impervious-area-worksheet-fillable.pdf 36. GRADING & DRAINAGE PLAN: The improvement plans shall be compliant with the “Grading & Drainage Guidelines for Residential Developments”. The sheet can be obtained at the following: https://www.cityofpaloalto.org/files/assets/public/v/1/public-works/engineering- services/webpages/forms-and-permits/grading-drainage-residential-guidelines.pdf 37. C.3 STORMWATER REGULATIONS: This project creates or replaces over 2,500 square feet of impervious surface area. The applicant shall implement one or more of the following site design measures on improvement plans: a. Direct roof runoff into cisterns or rain barrels for reuse. Item 5 Attachment C - Letter from Appellant’s Attorney to the Director of PDS Item 5: Staff Report Pg. 17 Packet Pg. 56 of 312 2451 Cowper Street approval Individual Review 25PLN-00102 Page 9 of 9 b. Direct roof runoff onto vegetated areas. c. Direct runoff from sidewalks, walkways, and/or patios onto vegetated areas. d. Direct runoff from driveways and/or uncovered parking lots onto vegetated areas. e. Construct sidewalks, walkways, and/or patios with permeable surfaces. f. Construct driveways, and/or uncovered parking lots with permeable surfaces. 38. STREETWORK PERMIT: All improvement plans shall include the following note adjacent to proposed work in the public right-of-way. “Any construction within the public right-of-way requires an approved Street work Permit from Public Works Engineering”. 39. DEMOLITION PLAN: The following note shall be placed adjacent to all affected trees on the Demolition Plan: “Excavation and trenching is restricted within the Tree Protection Zone (refer to T-1 Tree Protection Sheet) or as approved by the Urban Forestry Division at 650-496-5953. Any changes shall be approved by the same”. 40. CONSTRUCTION STAGING: All improvement plans shall include the following note on the Site Plan and the Grading & Drainage Plan. “All construction materials and equipment shall be staged, stored, and stockpiled onsite and not on any public street”. GREEN BUILDING & ENERGY REACH CODE REQUIREMENTS: 41. The proposed project shall conform with PAMC Section 16.14 (Green Building code) Information, ordinances and applications can be found at http://www.cityofpaloalto.org/gov/depts/ds/green_building/default.asp. If you have any questions regarding Green Building requirements, please call the Green Building Consultant at (650) 329-2179 or send an email to GreenBuilding@CityofPaloAlto.org. Item 5 Attachment C - Letter from Appellant’s Attorney to the Director of PDS Item 5: Staff Report Pg. 18 Packet Pg. 57 of 312 September 29, 2025 By Email Mahealani Ah Yun, City Clerk Claire Raybould, Planning Manager City of Palo Alto 250 Hamilton Avenue Palo Alto, CA 94301 Mahealani.AhYun@paloalto.gov Claire.Raybould@paloalto.gov Re: Appeal of Planning Directors’ Decision -2451 Cowper Street Individual Review Application (25PLN-00102) Dear Ms. Ah Yun and Ms. Raybould: This office represents John X. J. Zhang, the owner of the residence at 2450 Tasso Street, immediately adjacent and to the rear of 2451 Cowper Street. By way of the attached completed form, Mr. Zhang is appealing the September 17, 2025 decision of the Planning Director upholding the above-referenced approval of Individual Review Application No. 25PLN-00102. The reasons for the appeal are as stated in the attached letter submitted to Planning Director on September 9, 2025. Because the Director added no new conditions of approval, the letter’s points and reasoning still apply in their entirety. Item 5 Attachment D - Director’s Decision Letter Tentatively Approving the Application Item 5: Staff Report Pg. 19 Packet Pg. 58 of 312 Jodie Gerhardt Veronica Dao Vinhloc Nguyen September 29, 2025 Page 2 Thank you for your attention to this appeal, and please contact me with any questions or concerns. Most sincerely, M. R. WOLFE & ASSOCIATES, P.C. Mark R. Wolfe On behalf of John X. C. Zhang MRW: attachments Item 5 Attachment D - Director’s Decision Letter Tentatively Approving the Application Item 5: Staff Report Pg. 20 Packet Pg. 59 of 312 ATTACHMENT Item 5 Attachment D - Director’s Decision Letter Tentatively Approving the Application Item 5: Staff Report Pg. 21 Packet Pg. 60 of 312 September 9, 2025 By Email Jonathan Lait, Planning Director City of Palo Alto 250 Hamilton Avenue Palo Alto, CA 94301 pdsdirector@paloalto.gov Re: 2451 Cowper Street (25PLN-00102); Director’s Hearing on Individual Review Application Dear Mr. Lait: This office represents John X. J. Zhang, the owner of the residence at 2450 Tasso Street, immediately adjacent and to the rear of 2451 Cowper Street. Mr. Zhang requested a Director’s Hearing following the Planning Department’s July 3, 2025 tentative approval of the Individual Review application for the above-referenced development project (“Project”). As explained in the body of this letter, the tentative approval fails to impose enforceable conditions to protect nearby residents, including Mr. Zhang’s newborn infant and one- and three-year old children, from exposure to hazardous pollutant emissions and excessive noise during demolition and construction of the project. Furthermore, the Project appears not qualify for the Class 3 categorical exemption from the environmental review provisions of the California Environmental Quality Act (“CEQA”) due to the presence of unusual circumstances. We therefore respectfully request that you DENY the application at this time, and instead direct your staff to develop adequate, enforceable mitigation measures as set forth further below. In their current form, the proposed conditions of approval focus largely on landscaping, tree protection, parking, and design conformance. They do not require the applicant to implement standard measures for dust-control, asbestos and lead abatement, or diesel particulate matter (“DPM”) emissions reduction in accordance with guidance from the Bay Area Air Quality Management District (“BAAQMD”). Item 5 Attachment D - Director’s Decision Letter Tentatively Approving the Application Item 5: Staff Report Pg. 22 Packet Pg. 61 of 312 Jonathan Lait September 9, 2025 Page 2 The existing structure was built in 1938 and therefore is likely to contain both lead- based paint and asbestos-containing materials. In addition, the foreseeable use of diesel-powered construction equipment and trucks at the Project site will result in emissions of DPM, which the California Air Resources Board (“CARB”) has classified as a cancer-causing toxic air contaminant. As a result, in the absence of clearly defined and enforceable mitigation measures leaves Mr. Zhang’s family and other sensitive receptors1 in the vicinity vulnerable to exposure to: • Lead particles from disturbance of painted building surfaces during demolition. • Asbestos fibers from potential asbestos-containing materials in the existing home. • Fugitive dust/PM10 emissions from excavation, grading, and hauling activities. • Emissions of DPM a known carcinogen. • Construction noise at levels likely to exceed Palo Alto’s municipal code standard of no more than 6 dBA above ambient (PAMC § 9.10.030), adversely affecting the health and safety of nearby sensitive receptors, particularly infants. Please note that Palo Alto Municipal Code (“PAMC”) Section 18.40.270 requires that air contaminants such as smoke, dust, and odors be controlled and prevented from leaving the property, and authorizes the City to require applicants to demonstrate methods to minimize such contaminants. There is no indication that the City has required such a demonstration from the applicant here. Likewise, PAMC Section 9.10.010 declares that it is City policy to protect residents’ peace, health, and welfare from “excessive, unnecessary and unreasonable noises” from any source, and emphasizes control of noise under those conditions of use that most severely impact nearby persons. Allowing demolition and heavy 1 Sensitive receptors include “residences, schools, community resource centers, childcare facilities, parks, playgrounds, health care facilities, hospitals, nursing homes, live-in housing, and any building housing a business open to the public.” (CARB, SB 1137 Frequently Asked Questions, July 2025.) Item 5 Attachment D - Director’s Decision Letter Tentatively Approving the Application Item 5: Staff Report Pg. 23 Packet Pg. 62 of 312 Jonathan Lait September 9, 2025 Page 3 construction immediately adjacent to a home with small children and an infant, without imposing enforceable noise controls, violates both the spirit and the letter of this policy. The proposed conditions of approval further fail to require compliance with best management practices for handing standard hazardous materials when older structures are demolished or deconstructed. These include: • Inspect: Before demolition, a trained professional must inspect pre- 1980s structures for asbestos, lead, and other hazardous materials. The subject home was built in 1938, yet there is no evidence that such an inspection has been conducted. • Protect: During removal, hazardous wastes must be segregated from other construction debris, with precautions to protect residents, neighbors, and workers from contaminated dust. No conditions of approval require protective measures such as containment, labeling, or safe on-site storage. • Dispose: Hazardous wastes must be lawfully disposed of under state and federal requirements to avoid environmental releases and liability. The City’s approval is silent on disposal procedures, tracking, or manifests, leaving a significant enforcement gap. These omissions leave adjacent residents, including sensitive receptors, even further at risk. We would also dispute the City’s determination that the project is categorically exempt from CEQA based on the Class 3 categorical exemption established by Section 15303 of the CEQA Guidelines. The “unusual circumstances” exception of section 15300.2 likely applies here. Sensitive receptors live immediately adjacent to the demolition site; there is no documentation of the presence or absence of hazardous materials in the existing 1938 structure; and the City has imposed no enforceable conditions to prevent exposure to lead, asbestos, fugitive dust, DPM, or excessive noise. These circumstances create a reasonable possibility of significant adverse environmental impacts, rendering the categorical exemption inapplicable. Item 5 Attachment D - Director’s Decision Letter Tentatively Approving the Application Item 5: Staff Report Pg. 24 Packet Pg. 63 of 312 Jonathan Lait September 9, 2025 Page 4 Finally, while the July 3 tentative approval concludes that the Project meets all five of the City’s Individual Review (IR) Guidelines, staff’s own review flagged inadequate privacy screening (Guideline 5), and insufficient side/rear yard buffering under Guideline 1 (site planning). Unless these inconsistencies corrected with enforceable conditions, the project fails to satisfy the IR Guidelines. Moreover, staff’s IR comments explicitly recommended taller evergreen screening trees along the side and rear lot lines (e.g., Arbutus ‘Marina’ or Cherry Laurel) to protect privacy. Fortunately, the Planning Director has clear authority to impose additional mitigation requirements to rectify these omissions. PAMC Section 18.12.110(e) makes clear that in granting individual review approvals, “reasonable conditions or restrictions may be imposed if appropriate or necessary to protect the public health, safety, general welfare, or convenience.” Accordingly, to address the foregoing concerns and to establish an evidentiary record sufficient to support an overall finding of compliance with the PAMC, we respectfully request that the Planning Director deny the current application at this time, and subsequently impose the following enforceable mitigation measures in any future approval: 1. Pre-Construction Meeting with Neighbors: Require a meeting between the City inspector, contractor, and adjacent neighbor to review the schedule, high- noise activities, dust controls, construction management plan, haul routes, and complaint protocol. Deliverables should include a one-page contact sheet with a 24/7 site supervisor phone number and email. 2. Temporary Acoustic Barrier: Install a continuous sound wall along the shared property line prior to demolition and framing, at least 10 feet tall with a surface density ≥ 1.0 psf (or STC/NIC ≥ 25), with no gaps at seams or grade. Verified with dated photos and product specs submitted to Planning. 3. Best Practices for Noise Control: Use broadband backup alarms, prohibit unmuffled compressors or generators, and locate stationary equipment away from the shared property line. Limit high-noise activities such as demolition, saw- cutting, and hammering to 10:00 a.m.–1:00 p.m. where practicable, with 72-hour advance notice to neighbors. Prohibit construction activities on weekends and holidays. Item 5 Attachment D - Director’s Decision Letter Tentatively Approving the Application Item 5: Staff Report Pg. 25 Packet Pg. 64 of 312 Jonathan Lait September 9, 2025 Page 5 4. Dust, Lead, and Asbestos Compliance (Inspect / Protect / Dispose): a. Require licensed asbestos and lead surveys before permit issuance. b. Mandate licensed abatement contractors with third-party clearance reports filed with the City. c. Require BAAQMD demolition/renovation notifications and disposal manifests. d. Implement Dust Control Measures per BAAQMD guidelines (continuous wet methods, haul truck covers, track-out prevention, no visible dust crossing the property line). e. Conduct perimeter PM2.5 spot monitoring at the shared property line during demolition/major grading, with daily logs submitted to the City and neighbors. 5. Traffic, Staging, and Public Safety: Submit a Construction Management Plan identifying haul routes, staging, dumpster and concrete washout locations on- site, and protections to ensure the shared fence remains undamaged. 6. Communication, Complaints, and Enforcement: Post a 24/7 site supervisor phone number at the site, maintain a complaint/response log available to the City, and authorize the City to issue stop-work orders for material or repeated violations. 7. Privacy Screening and Landscaping: Require installation of 12–15 ft evergreen screening trees (minimum 24-inch box size, e.g., Arbutus ‘Marina’, Cherry Laurel, or equivalent) along the rear and side lot lines to provide lasting privacy protection, consistent with staff’s IR recommendations. Imposition of the foregoing conditions will ensure adequate compliance with CEQA, BAAQMD Guidance, and the City’s own municipal code. We therefore once again respectfully request that the Planning Director deny the application at this time, and impose the foregoing mitigation requirements as enforceable conditions in any future approval. Item 5 Attachment D - Director’s Decision Letter Tentatively Approving the Application Item 5: Staff Report Pg. 26 Packet Pg. 65 of 312 Jonathan Lait September 9, 2025 Page 6 Thank you for your consideration of these concerns. Most sincerely, M. R. WOLFE & ASSOCIATES, P.C Mark R. Wolfe On behalf of John X. C. Zhang MRW: cc: Claire Raybould, Manager of Current Planning (Claire.Raybould@paloalto.gov) Bhavani Potharaju, Project Planner (bpotharaju@m-group.us) Item 5 Attachment D - Director’s Decision Letter Tentatively Approving the Application Item 5: Staff Report Pg. 27 Packet Pg. 66 of 312 Attachment E Project Plans In order to reduce paper consumption plans are available to the public, at all hours of the day, via the following online resources. Directions to review Project plans online: 1. Go to: https://paloalto.buildingeye.com/planning 2. Search for planning application “2451 Cowper Street” and open record by clicking on the green dot 3. Review the record details on the left side and open the “more details” option 4. Use the “Records Info” drop down menu and select “Attachments” 5. Open the attachment named “Approved Plans_C2_2451 Cowper Street” uploaded 07- 04-2025 to review the tentatively approved plan set. The project website with a direct link to the project plans is also available at: https://www.paloalto.gov/Departments/Planning-Development-Services/Current- Planning/Projects/2451-Cowper-St Item 5 Attachment E - Project Plans Item 5: Staff Report Pg. 28 Packet Pg. 67 of 312 City Council Staff Report From: City Manager Report Type: CONSENT CALENDAR Lead Department: Utilities Meeting Date: December 8, 2025 Report #:2507-5002 TITLE Adopt a resolution authorizing execution of the Professional Services Agreement between the Northern California Power Agency and the Cities of Palo Alto and Santa Clara for Electric Transmission, Generation and Regulatory Consulting Services in a Not to Exceed Amount of $657,500 over a five-year contract term ending December 31, 2030; CEQA Status: Not a Project. RECOMMENDATION Staff recommends that Council adopt a resolution authorizing the City Manager, or their designee, to execute the professional services agreement between the Northern California Power Agency and the Cities of Palo Alto and Santa Clara for electric transmission, generation and regulatory consulting services for a five-year contract term ending December 31, 2030. The City’s share of the cost of the contract will not exceed $657,500 over the five-year term. EXECUTIVE SUMMARY Northern California Power Agency (NCPA) has a separate contract with Flynn Resource Consultants, Inc. (Flynn RCI) to provide electric transmission consulting services to Palo Alto and Santa Clara expiring December 31, 2025. Approval of this agreement will enable a five-year contract ending in December 2030 for these services after a public procurement selection process (RFP) in an amount not to exceed $657,500 over the five years for Palo Alto. NCPA provides contract management services to the Cities of Palo Alto and Santa Clara for consulting services related to electric transmission issues affecting them both. For consulting agreements executed by NCPA on behalf of one, or a subset of NCPA members, and to which the members are not a party, NCPA requires that those members enter into a professional services agreement with NCPA. The approval of this agreement with NCPA (Exhibit 2 to the Attachment A) is the subject of this report. In May 2025 NCPA issued an RFP and in June selected Flynn RCI for a five-year contract (the Flynn RCI contract) through December 2030 for a not-to-exceed total of $3,250,000 (attached for reference as Exhibit 1 to Attachment A). Palo Alto’s 20% cost share Item 6 Item 6 Staff Report Item 6: Staff Report Pg. 1 Packet Pg. 68 of 312 of the five-year Flynn RCI contract plus NCPA’s contract management fees is $657,500 over five years or $131,500 per year. BACKGROUND Improved reliability of electricity transmission service in and to the Bay Area, Influenced greater stakeholder engagement in CAISO’s electric transmission planning process Advocated CAISO to take on the responsibility of forecasting the rapidly increasing transmission access charges, and Participated in the transmission interconnection process, which helped to reduce the anticipated transmission access charge increases. Item 6 Item 6 Staff Report Item 6: Staff Report Pg. 2 Packet Pg. 69 of 312 Recent activities from the ongoing partnership of BAMx that will continue under the new contract include participation in proceedings reviewing the investor-owned utilities high-voltage and low- voltage projected projects and working with the CAISO to refine assumptions built into the planned transmission investments. A few specific examples include: Subscriber-Based Model: BAMx was instrumental in advocating for the subscriber-based model, resulting in $6B in savings across the CAISO transmission system. Now entities which contract with these remote wind resources in Wyoming and New Mexico will pay for the additional transmission required. This translates to roughly $30M in savings to Palo Alto via lower electricity transmission charges. Generator deliverability challenges: BAMx successfully advocated for changes to the interconnection queue, resulting in faster interconnection of resources of highest priority to utilities, as well as savings of $200M- $500M across CAISO, or roughly $1M- $2.5M in savings to Palo Alto. Transmission Planning Process of Renewable Portfolios and Busbar mapping: BAMx is very involved in the resource to the busbar mapping process during CY 2023. This would have far-reaching benefits in terms of transmission cost containment, perhaps $1B-$3B in investments, or roughly $5M- $15M in savings to Palo Alto (if achieved). ANALYSIS Table 1: Contract Cost Allocation per Year % Share Flynn Contract NCPA Admin Fee Total Total 100%$650,000 $7,500 $657,500 Item 6 Item 6 Staff Report Item 6: Staff Report Pg. 3 Packet Pg. 70 of 312 The value to the City of participating in BAMx is the continued advocacy for fair and equitable electric market rules, beneficial electric transmission solutions, and effective stakeholder participation in electric transmission planning processes. BAMx takes a lead role in advocating for rigorous analyses in the CAISO’s transmission planning proceedings to build new transmission. To put this in context, in 2011 the total transmission charge for Palo Alto was about $11.70/MWh, today it is $33.24/MWh, and it is projected to be about $48.70/MWh in 2030. This represents about 7.5% per year increase versus the average annual consumer price index of about 2.6% over the same time period. CAISO approves billions of dollars in capital upgrades each year, and since the transmission system is complex it requires sustained engagement, modeling and advocacy to identify oversights and prioritize the most cost-effective solutions. The City’s BAMx membership allows the City to engage effectively in this process of transmission cost-containment. FISCAL/RESOURCE IMPACT Item 6 Item 6 Staff Report Item 6: Staff Report Pg. 4 Packet Pg. 71 of 312 ENVIRONMENTAL REVIEW ATTACHMENTS APPROVED BY: Item 6 Item 6 Staff Report Item 6: Staff Report Pg. 5 Packet Pg. 72 of 312 NOT YET APPROVED Attachment A 6059703 1 Resolution No. _______ Resolution of the Council of the City of Palo Alto Approving and Authorizing the City Manager to Execute the Professional Services Agreement Between the Northern California Power Agency and the Cities of Palo Alto and Santa Clara For Electric Transmission, Generation and Regulatory Consulting Services, on Behalf of the City of Palo Alto in an Amount not to Exceed $657,500 through December 31, 2030 R E C I T A L S A. The City of Palo Alto (“City”), a municipal utility and a chartered city, is a member of the Northern California Power Agency (“NCPA”). B. In 2003, Palo Alto, along with two other NCPA members, the Cities of Alameda and Santa Clara, formed the Bay Area Municipal Transmission Group (“BAMx”) and requested that NCPA provide professional consulting services related to electric transmission, power generation, regulatory issues, and electric market design issues affecting the BAMx members. C. Since 2003, NCPA has contracted with Flynn Resource Consultants, Inc. (“Flynn RCI”) to provide these consulting services to the BAMx members. D. The current contract between NCPA and Flynn RCI expires on December 31, 2025, and NCPA is planning to execute a new contract with Flynn RCI (Attached for reference as Exhibit 1), following a competitive selection process, to continue to provide these consulting services through December 31, 2030. E. In 2016, the City of Alameda both withdrew from BAMx membership (hereinafter, references to “BAMx” include the Cities of Palo Alto and Santa Clara). F. For consulting agreements executed by NCPA on behalf of one, or a subset of, NCPA members, NCPA requires that those members enter into a Professional Services Agreement with NCPA. G. The Professional Services Agreement between the BAMx members and NCPA (Attached as Exhibit 2), specifies the terms and conditions under which NCPA will procure the requested professional consulting services from Flynn RCI and allocate charges between the BAMx members. The Council of the City of Palo Alto RESOLVES as follows: SECTION 1. The Council approves and authorizes the City Manager, or his designee, to execute on behalf of the City of Palo Alto the Professional Services Agreement between the Northern California Power Agency and the Cities of Palo Alto and Santa Clara for Electric Transmission, Generation, and Regulatory Consulting services, in an amount not to exceed Item 6 Attachment A - Resolution Authorizing Approval of NCPA-BAMx Professional Services Agreement Item 6: Staff Report Pg. 6 Packet Pg. 73 of 312 NOT YET APPROVED Attachment A 6059703 2 $657,500 for Palo Alto’s share for the five year contract term through December 31, 2030 (Exhibit 2). SECTION 2. The Council finds that funds to cover the City’s share of the Flynn RCI services under the BAMx contract with NCPA for the first year of the contract are allocated in the Electric Fund’s proposed budget for FY 2026. SECTION 3. The Council finds that the adoption of this resolution does not require review under the California Environmental Quality Act, because it does not meet the definition of a “project” under section 21065 of Public Resources Code and section 15378(b)(5) of the CEQA Guidelines, as an administrative governmental activity which will not cause a direct or indirect physical change in the environment. INTRODUCED AND PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: __________________________ City Clerk APPROVED AS TO FORM: ___________________________ Assistant City Attorney ___________________________ Mayor APPROVED: _____________________________ City Manager _____________________________ Director of Utilities Item 6 Attachment A - Resolution Authorizing Approval of NCPA-BAMx Professional Services Agreement Item 6: Staff Report Pg. 7 Packet Pg. 74 of 312 Consulting Services Agreement between PM-VEN-2025-004 NCPA and Flynn Resource Consultants, Inc. Rev’d 10/14/2020 Page 1 of 16 2650865.1 CONSULTING SERVICES AGREEMENT BETWEEN THE NORTHERN CALIFORNIA POWER AGENCY AND FLYNN RESOURCE CONSULTANTS INC. This agreement for consulting services (“Agreement’) is made by and between the Northern California Power Agency, a joint powers agency with its main office located at 651 Commerce Drive, Roseville, CA 95678-6420 (“Agency”) and Flynn Resource Consultants Inc., a California corporation, with its office located at 5440 Edgeview Drive, Discovery Bay, CA 94505 (“Consultant”) (together sometimes referred to as the “Parties”) as of January 1, 2026 (“Effective Date”) in Roseville, California. Section 1. SERVICES. Subject to the terms and conditions set forth in this Agreement, Consultant shall provide to Agency the services described in the Scope of Work attached hereto as Exhibit A and incorporated herein ("Services"), at the time and place and in the manner specified therein. 1.1 Term of Agreement. The term of this Agreement shall begin on the Effective Date and shall end when Consultant completes the Services, or no later than December 31, 2030 whichever is shorter. 1.2 Standard of Performance. Consultant shall perform the Services in the manner and according to the standards observed by a competent practitioner of the profession in which Consultant is engaged and for which Consultant is providing the Services. Consultant represents that it is licensed, qualified and experienced to provide the Services set forth herein. 1.3 Assignment of Personnel. Consultant shall assign only competent personnel to perform the Services. In the event that Agency, in its sole discretion, at any time during the term of this Agreement, requests the reassignment of any such personnel, Consultant shall, immediately upon receiving written notice from Agency of such request, work with Agency to address Agency’s concerns. 1.4 BAMx Members. Agency is entering into this Agreement with Consultant at the request of certain of its members, the cities of Palo Alto and Santa Clara (“the BAMx Members”), so that Agency may provide consulting services to the BAMx Members. Agency's provision of these services is further addressed in the Professional Services Agreement Between Northern California Power Agency and the Cities of Palo Alto and Santa Clara (the "Bay Area Municipal Transmission Services Agreement" or "BAMx Agreement") dated as of January 1, 2026, as such may be amended from time to time. Section 2. COMPENSATION. Agency hereby agrees to pay Consultant an amount NOT TO EXCEED Three Million Two Hundred Fifty Thousand Dollars ($3,250,000.00) during the Term of the Agreement, or Six Hundred Fifty Thousand Dollars ($650,000.00) plus any remaining unused funds from prior years of the Agreement during each annual period of the Term of the Agreement, for the Services, which shall include all fees, costs, expenses and other reimbursables, as set forth in Consultant’s fee schedule, attached hereto and incorporated herein as Exhibit B. (For example, if during the first year the Exhibit 1Item 6 Attachment A - Resolution Authorizing Approval of NCPA-BAMx Professional Services Agreement Item 6: Staff Report Pg. 8 Packet Pg. 75 of 312 Consulting Services Agreement between PM-VEN-2025-004 NCPA and Flynn Resource Consultants, Inc. Rev’d 10/14/2020 Page 2 of 16 2650865.1 total payment to Consultant is $600,000, the $50,000 not expended in the first year can be added to the second year for a total not to exceed amount of $700,000 for the second year.) The NOT TO EXCEED dollar amount is not a guarantee that Agency will pay the full amount to the Consultant, but is merely a limit of potential Agency expenditures under this Agreement. 2.1 Invoices. Consultant shall submit invoices, not more often than once a month during the term of this Agreement, based on the cost for Services performed and reimbursable costs incurred prior to the invoice date. Invoices shall contain the following information:  The beginning and ending dates of the billing period;  Services performed; and  The total number of hours of work performed under the Agreement by Consultant and each employee, agent, and subcontractor of Consultant performing services hereunder should be itemized by sub-tasks. Invoices shall be sent to: Northern California Power Agency 651 Commerce Drive Roseville, California 95678 Attn: Accounts Payable AcctsPayable@ncpa.com 2.2 Monthly Payment. Agency shall make monthly payments, based on invoices received, for Services satisfactorily performed, and for authorized reimbursable costs incurred. Agency shall have thirty (30) days from the receipt of an invoice that complies with all of the requirements above to pay Consultant. 2.3 Payment of Taxes. Consultant is solely responsible for the payment of all federal, state and local taxes, including employment taxes, incurred under this Agreement. 2.4 Authorization to Perform Services. The Consultant is not authorized to perform any Services or incur any costs whatsoever under the terms of this Agreement until the Effective Date, and upon receipt of written authorization from the BAMx Members. 2.5 Timing for Submittal of Final Invoice. Consultant shall have ninety (90) days after completion of its Services to submit its final invoice. In the event Consultant fails to submit an invoice to Agency for any amounts due within the ninety (90) day period, Consultant is deemed to have waived its right to collect its final payment from Agency. Section 3. FACILITIES AND EQUIPMENT. Except as set forth herein, Consultant shall, at its sole cost and expense, provide all facilities and equipment that may be necessary to perform the Services. Exhibit 1Item 6 Attachment A - Resolution Authorizing Approval of NCPA-BAMx Professional Services Agreement Item 6: Staff Report Pg. 9 Packet Pg. 76 of 312 Consulting Services Agreement between PM-VEN-2025-004 NCPA and Flynn Resource Consultants, Inc. Rev’d 10/14/2020 Page 3 of 16 2650865.1 Section 4. INSURANCE REQUIREMENTS. Before beginning any work under this Agreement, Consultant, at its own cost and expense, shall procure the types and amounts of insurance listed below and shall maintain the types and amounts of insurance listed below for the period covered by this Agreement. 4.1 Workers’ Compensation. If Consultant employs any person, Consultant shall maintain Statutory Workers’ Compensation Insurance and Employer’s Liability Insurance for any and all persons employed directly or indirectly by Consultant with limits of not less than one million dollars ($1,000,000.00) per accident. 4.2 Commercial General and Automobile Liability Insurance. 4.2.1 Commercial General Insurance. Consultant shall maintain commercial general liability insurance for the term of this Agreement, including products liability, covering any loss or liability, including the cost of defense of any action, for bodily injury, death, personal injury and broad form property damage which may arise out of the operations of Consultant. The policy shall provide a minimum limit of $1,000,000 per occurrence/$2,000,000 aggregate. Commercial general coverage shall be at least as broad as ISO Commercial General Liability form CG 0001 (current edition) on "an occurrence" basis covering comprehensive General Liability, with a self-insured retention or deductible of no more than $100,000. No endorsement shall be attached limiting the coverage. 4.2.2 Automobile Liability. If Consultant owns any automobiles, Consultant shall maintain automobile liability insurance form CA 0001 (current edition) for the term of this Agreement covering any loss or liability, including the cost of defense of any action, arising from the operation, maintenance or use of any vehicle (symbol 1), owned by the Consultant, on or off Agency premises. The policy shall provide a minimum limit of $1,000,000 per each accident, with a self-insured retention or deductible of no more than $100,000. This insurance shall provide contractual liability covering all motor vehicles and mobile equipment to the extent coverage may be excluded from general liability insurance. 4.2.3 General Liability/Umbrella Insurance. The coverage amounts set forth above may be met by a combination of underlying and umbrella policies as long as in combination the limits equal or exceed those stated. 4.4 All Policies Requirements. 4.4.1 Verification of coverage. Prior to beginning any work under this Agreement, Consultant shall provide Agency with (1) a Certificate of Insurance that demonstrates compliance with all applicable insurance provisions contained herein and (2) policy endorsements to the policies referenced in Section 4.2, adding the Exhibit 1Item 6 Attachment A - Resolution Authorizing Approval of NCPA-BAMx Professional Services Agreement Item 6: Staff Report Pg. 10 Packet Pg. 77 of 312 Consulting Services Agreement between PM-VEN-2025-004 NCPA and Flynn Resource Consultants, Inc. Rev’d 10/14/2020 Page 4 of 16 2650865.1 Agency and the BAMx Members as an additional insured and declaring such insurance primary in regard to work performed pursuant to this Agreement. 4.4.2 Notice of Reduction in or Cancellation of Coverage. Consultant shall provide at least thirty (30) days prior written notice to Agency of any reduction in scope or amount, cancellation, or modification adverse to Agency of the policies referenced in Section 4. 4.4.3 Higher Limits. If Consultant maintains higher limits than the minimums specified herein, the Agency shall be entitled to coverage for the higher limits maintained by the Consultant. 4.5 Waiver of Subrogation. Consultant agrees to waive subrogation which any insurer of Consultant may acquire from Consultant by virtue of the payment of any loss. Consultant agrees to obtain any endorsement that may be necessary to effect this waiver of subrogation. The Workers' Compensation policy shall be endorsed with a waiver of subrogation in favor of Agency for all work performed by Consultant, its employees, agents and subcontractors. 4.6 Consultant's Obligation. Consultant shall be solely responsible for ensuring that all equipment, vehicles and other items utilized in the performance of Services are operated, provided or otherwise utilized in a manner that ensues they are and remain covered by the policies referenced in Section 4 during this Agreement. Consultant shall also ensure that all workers involved in the provision of Services are properly classified as employees, agents or independent contractors and are and remain covered by any and all workers' compensation insurance required by applicable law during this Agreement. Section 5. INDEMNIFICATION AND CONSULTANT’S RESPONSIBILITIES. 5.1 Effect of Insurance. Agency's acceptance of insurance certificates and endorsements required under this Agreement does not relieve Consultant from liability under this indemnification and hold harmless clause. This indemnification and hold harmless clause shall apply to any damages or claims for damages whether or not such insurance policies shall have been determined to apply. By execution of this Agreement, Consultant acknowledges and agrees to the provisions of this Section and that it is a material element of consideration. 5.2 Scope. Consultant shall indemnify, defend with counsel reasonably acceptable to the Agency, and hold harmless the Agency, and its officials, commissioners, officers, employees, the BAMx Members, agents and volunteers from and against all losses, liabilities, claims, demands, suits, actions, damages, expenses, penalties, fines, costs (including without limitation costs and fees of litigation), judgments and causes of action of every nature arising out of or in connection with any acts or omissions by Consultant, its Exhibit 1Item 6 Attachment A - Resolution Authorizing Approval of NCPA-BAMx Professional Services Agreement Item 6: Staff Report Pg. 11 Packet Pg. 78 of 312 Consulting Services Agreement between PM-VEN-2025-004 NCPA and Flynn Resource Consultants, Inc. Rev’d 10/14/2020 Page 5 of 16 2650865.1 officers, officials, agents, and employees, except as caused by the sole or gross negligence of Agency. Notwithstanding, should this Agreement be construed as a construction agreement under Civil Code section 2783, then the exception referenced above shall also be for the active negligence of Agency. Section 6. STATUS OF CONSULTANT. 6.1 Independent Contractor. Consultant is an independent contractor and not an employee of Agency. Agency shall have the right to control Consultant only insofar as the results of Consultant's Services and assignment of personnel pursuant to Section 1; otherwise, Agency shall not have the right to control the means by which Consultant accomplishes Services rendered pursuant to this Agreement. Notwithstanding any other Agency, state, or federal policy, rule, regulation, law, or ordinance to the contrary, Consultant and any of its employees, agents, and subcontractors providing services under this Agreement shall not qualify for or become entitled to, and hereby agree to waive any and all claims to, any compensation, benefit, or any incident of employment by Agency, including but not limited to eligibility to enroll in the California Public Employees Retirement System (PERS) as an employee of Agency and entitlement to any contribution to be paid by Agency for employer contributions and/or employee contributions for PERS benefits. Consultant shall indemnify, defend, and hold harmless Agency for the payment of any employee and/or employer contributions for PERS benefits on behalf of Consultant or its employees, agents, or subcontractors, as well as for the payment of any penalties and interest on such contributions, which would otherwise be the responsibility of Agency. Consultant and Agency acknowledge and agree that compensation paid by Agency to Consultant under this Agreement is based upon Consultant’s estimated costs of providing the Services, including salaries and benefits of employees, agents and subcontractors of Consultant. Consultant shall indemnify, defend, and hold harmless Agency from any lawsuit, administrative action, or other claim for penalties, losses, costs, damages, expense and liability of every kind, nature and description that arise out of, pertain to, or relate to such claims, whether directly or indirectly, due to Consultant’s failure to secure workers’ compensation insurance for its employees, agents, or subcontractors. Consultant agrees that it is responsible for the provision of group healthcare benefits to its fulltime employees under 26 U.S.C. § 4980H of the Affordable Care Act. To the extent permitted by law, Consultant shall indemnify, defend and hold harmless Agency from any penalty issued to Agency under the Affordable Care Act resulting from the performance of the Services by any employee, agent, or subcontractor of Consultant. Exhibit 1Item 6 Attachment A - Resolution Authorizing Approval of NCPA-BAMx Professional Services Agreement Item 6: Staff Report Pg. 12 Packet Pg. 79 of 312 Consulting Services Agreement between PM-VEN-2025-004 NCPA and Flynn Resource Consultants, Inc. Rev’d 10/14/2020 Page 6 of 16 2650865.1 6.2 Consultant Not Agent. Except as Agency may specify in writing, Consultant shall have no authority, express or implied, to act on behalf of Agency in any capacity whatsoever as an agent. Consultant shall have no authority, express or implied, pursuant to this Agreement to bind Agency to any obligation whatsoever. 6.3 Assignment and Subcontracting. This Agreement contemplates personal performance by Consultant and is based upon a determination of Consultant’s unique professional competence, experience, and specialized professional knowledge. A substantial inducement to Agency for entering into this Agreement was and is the personal reputation and competence of Consultant. Consultant may not assign this Agreement or any interest therein without the prior written approval of the Agency. Consultant shall not subcontract any portion of the performance contemplated and provided for herein, other than to the subcontractors identified in Exhibit A, without prior written approval of the Agency. Where written approval is granted by the Agency, Consultant shall supervise all work subcontracted by Consultant in performing the services and shall be responsible for all work performed by a subcontractor as if Consultant itself had performed such work. The subcontracting of any work to subcontractors shall not relieve Consultant from any of its obligations under this Agreement with respect to the services and Consultant is obligated to ensure that any and all subcontractors performing any services shall be fully insured in all respects and to the same extent as set forth under Section 4, to Agency’s satisfaction. Section 7. LEGAL REQUIREMENTS. 7.1 Governing Law. The laws of the State of California shall govern this Agreement. 7.2 Compliance with Applicable Laws. Consultant and its subcontractors and agents, if any, shall comply with all laws applicable to the performance of the work hereunder. 7.3 Licenses and Permits. Consultant represents and warrants to Agency that Consultant and its employees, agents, and subcontractors (if any) have and will maintain at their sole expense during the term of this Agreement all licenses, permits, qualifications, and approvals of whatever nature that are legally required to practice their respective professions. Section 8. TERMINATION AND MODIFICATION. 8.1 Termination. Agency may cancel this Agreement at any time and without cause upon ten (10) days prior written notice to Consultant. In the event of termination, Consultant shall be entitled to compensation for Services satisfactorily completed as of the effective date of termination; Agency, however, may condition payment of such compensation upon Consultant delivering to Agency any or all records or documents, as referenced in Section 9.1 hereof. Exhibit 1Item 6 Attachment A - Resolution Authorizing Approval of NCPA-BAMx Professional Services Agreement Item 6: Staff Report Pg. 13 Packet Pg. 80 of 312 Consulting Services Agreement between PM-VEN-2025-004 NCPA and Flynn Resource Consultants, Inc. Rev’d 10/14/2020 Page 7 of 16 2650865.1 8.2 Amendments. 8.2.1 The Parties may amend this Agreement only by a writing signed by all the Parties. 8.3 Survival. All obligations arising prior to the termination of this Agreement and all provisions of this Agreement allocating liability between Agency and Consultant shall survive the termination of this Agreement. 8.4 Options upon Breach by Consultant. If Consultant materially breaches any of the terms of this Agreement, including but not limited to those set forth in Section 4, Agency’s remedies shall include, but not be limited to, the following: 8.4.1 Immediately terminate the Agreement; 8.4.2 Retain the plans, specifications, drawings, reports, design documents, and any other work product prepared by Consultant pursuant to this Agreement; and 8.4.3 Retain a different consultant to complete the Services not finished by Consultant. Section 9. KEEPING AND STATUS OF RECORDS. 9.1 Records Created as Part of Consultant’s Performance. All reports, data, maps, models, charts, studies, surveys, photographs, memoranda, plans, studies, specifications, records, files, or any other documents or materials, in electronic or any other form, that Consultant prepares or obtains pursuant to this Agreement and that relate to the matters covered hereunder shall be the property of the Agency. Consultant hereby agrees to deliver those documents to the Agency upon termination of the Agreement. Agency and Consultant agree that, unless approved by Agency in writing, Consultant shall not release to any non-parties to this Agreement any data, plans, specifications, reports and other documents. 9.2 Consultant’s Books and Records. Consultant shall maintain any and all records or other documents evidencing or relating to charges for Services or expenditures and disbursements charged to the Agency under this Agreement for a minimum of three (3) years, or for any longer period required by law, from the date of final payment to the Consultant to this Agreement. 9.3 Inspection and Audit of Records. Any records or documents that this Agreement requires Consultant to maintain shall be made available for inspection, audit, and/or copying at any time during regular business hours, upon oral or written request of the Agency. Under California Government Code Section 8546.7, if the amount of public funds expended under this Agreement exceeds ten thousand dollars ($10,000.00), the Exhibit 1Item 6 Attachment A - Resolution Authorizing Approval of NCPA-BAMx Professional Services Agreement Item 6: Staff Report Pg. 14 Packet Pg. 81 of 312 Consulting Services Agreement between PM-VEN-2025-004 NCPA and Flynn Resource Consultants, Inc. Rev’d 10/14/2020 Page 8 of 16 2650865.1 Agreement shall be subject to the examination and audit of the State Auditor, at the request of Agency or as part of any audit of the Agency, for a period of three (3) years after final payment under the Agreement. 9.4 Confidential Information and Disclosure. 9.4.1 Confidential Information. The term "Confidential Information", as used herein, shall mean any and all confidential, proprietary, or trade secret information, whether written, recorded, electronic, oral or otherwise, where the Confidential Information is made available in a tangible medium of expression and marked in a prominent location as confidential, proprietary and/or trade secret information. Confidential Information shall not include information that: (a) was already known to the Receiving Party or is otherwise a matter of public knowledge, (b) was disclosed to Receiving Party by a third party without violating any confidentiality agreement, (c) was independently developed by Receiving Party without reverse engineering, as evidenced by written records thereof, or (d) was not marked as confidential Information in accordance with this section. 9.4.2 Non-Disclosure of Confidential Information. During the term of this Agreement, either party may disclose ("The Disclosing Party") confidential Information to the other party ("the Receiving Party"). The Receiving Party: (a) shall hold the Disclosing Party's Confidential Information in confident; and (b) shall take all reasonable steps to prevent any unauthorized possession, use, copying, transfer or disclosure of such Confidential Information. 9.4.3 Permitted Disclosure. Notwithstanding the foregoing, the following disclosures of Confidential Information are allowed. Receiving Party shall endeavor to provide prior written notice to Disclosing Party of any permitted disclosure made pursuant to Section 9.4.3.2 or 9.4.3.3. Disclosing Party may seek a protective order, including without limitation, a temporary restraining order to prevent or contest such permitted disclosure; provided, however, that Disclosing Party shall seek such remedies at its sole expense. Neither party shall have any liability for such permitted disclosures: 9.4.3.1 Disclosure to employees, agents, consultants, contractors, subcontractors or other representatives of Receiving Party that have a need to know in connection with this Agreement. 9.4.3.2 Disclosure in response to a valid order of a court, government or regulatory agency or as may otherwise be required by law; and 9.4.3.3 Disclosure by Agency in response to a request pursuant to the California Public Records Act. Exhibit 1Item 6 Attachment A - Resolution Authorizing Approval of NCPA-BAMx Professional Services Agreement Item 6: Staff Report Pg. 15 Packet Pg. 82 of 312 Consulting Services Agreement between PM-VEN-2025-004 NCPA and Flynn Resource Consultants, Inc. Rev’d 10/14/2020 Page 9 of 16 2650865.1 9.4.4 Handling of Confidential Information. Upon conclusion or termination of the Agreement, Receiving Party shall return to Disclosing Party or destroy Confidential Information (including all copies thereof) upon termination of this Agreement, if requested by Disclosing Party in writing. Notwithstanding the foregoing, the Receiving Party may retain copies of such Confidential Information, subject to the confidentiality provisions of this Agreement: (a) for archival purposes in its computer system; (b) in its legal department files; and (c) in files of Receiving Party's representatives where such copies are necessary to comply with applicable law. Party shall not disclose the Disclosing Party’s Information to any person other than those of the Receiving Party’s employees, agents, consultants, contractors and subcontractors who have a need to know in connection with this Agreement. Section 10. MISCELLANEOUS PROVISIONS. 10.1 Attorneys’ Fees. If a party to this Agreement brings any action, including an action for declaratory relief, to enforce or interpret the provision of this Agreement, the prevailing party shall be entitled to reasonable attorneys’ fees in addition to any other relief to which that party may be entitled. The court may set such fees in the same action or in a separate action brought for that purpose. 10.2 Venue. In the event that either party brings any action against the other under this Agreement, the Parties agree that trial of such action shall be vested exclusively in the state courts of California in the County of Placer or in the United States District Court for the Eastern District of California. 10.3 Severability. If a court of competent jurisdiction finds or rules that any provision of this Agreement is invalid, void, or unenforceable, the provisions of this Agreement not so adjudged shall remain in full force and effect. The invalidity in whole or in part of any provision of this Agreement shall not void or affect the validity of any other provision of this Agreement. 10.4 No Implied Waiver of Breach. The waiver of any breach of a specific provision of this Agreement does not constitute a waiver of any other breach of that term or any other term of this Agreement. 10.5 Successors and Assigns. The provisions of this Agreement shall inure to the benefit of and shall apply to and bind the successors and assigns of the Parties. 10.6 Conflict of Interest. Consultant may serve other clients, but none whose activities within the corporate limits of Agency or whose business, regardless of location, would place Exhibit 1Item 6 Attachment A - Resolution Authorizing Approval of NCPA-BAMx Professional Services Agreement Item 6: Staff Report Pg. 16 Packet Pg. 83 of 312 Consulting Services Agreement between PM-VEN-2025-004 NCPA and Flynn Resource Consultants, Inc. Rev’d 10/14/2020 Page 10 of 16 2650865.1 Consultant in a “conflict of interest,” as that term is defined in the Political Reform Act, codified at California Government Code Section 81000 et seq. Consultant shall not employ any Agency official in the work performed pursuant to this Agreement. No officer or employee of Agency shall have any financial interest in this Agreement that would violate California Government Code Sections 1090 et seq. 10.7 Contract Administrator. This Agreement shall be administered by Tony Zimmer, Assistant General Manager, or his/her designee, who shall act as the Agency’s representative. All correspondence shall be directed to or through the representative. 10.8 Notices. Any written notice to Consultant shall be sent to: Doug Boccignone Flynn Resource Consultants Inc. 5440 Edgeview Drive Discovery Bay, CA 94505 Any written notice to Agency shall be sent to: Randy S. Howard General Manager Northern California Power Agency 651 Commerce Drive Roseville, CA 95678 With a copy to: Jane Luckhardt General Counsel Northern California Power Agency 651 Commerce Drive Roseville, CA 95678 10.9 Professional Seal. Where applicable in the determination of the Agency, the first page of a technical report, first page of design specifications, and each page of construction drawings shall be stamped/sealed and signed by the licensed professional responsible for the report/design preparation. 10.10 Integration; Incorporation. This Agreement, including all the Exhibits attached hereto, represents the entire and integrated agreement between Agency and Consultant and Exhibit 1Item 6 Attachment A - Resolution Authorizing Approval of NCPA-BAMx Professional Services Agreement Item 6: Staff Report Pg. 17 Packet Pg. 84 of 312 Consulting Services Agreement between PM-VEN-2025-004 NCPA and Flynn Resource Consultants, Inc. Rev’d 10/14/2020 Page 11 of 16 2650865.1 supersedes all prior negotiations, representations, or agreements, either written or oral. All Exhibits attached hereto are incorporated by reference herein. 10.11 Alternative Dispute Resolution. If any dispute arises between the Parties that cannot be settled after engaging in good faith negotiations, Agency and Consultant agree to resolve the dispute in accordance with the following: 10.11.1 Each party shall designate a senior management or executive level representative to negotiate any dispute. 10.11.2 The representatives shall attempt, through good faith negotiations, to resolve the dispute by any means within their authority. 10.11.3 If the issue remains unresolved after fifteen (15) days of good faith negotiations, the Parties shall attempt to resolve the disagreement by negotiation between legal counsel. If the above process fails, the Parties shall resolve any remaining disputes through mediation to expedite the resolution of the dispute. 10.11.4 The mediation process shall provide for the selection within fifteen (15) days by both Parties of a disinterested third person as mediator, shall be commenced within thirty (30) days and shall be concluded within fifteen (15) days from the commencement of the mediation. 10.11.5 The Parties shall equally bear the costs of any third party in any alternative dispute resolution process. 10.11.6 The alternative dispute resolution process is a material condition to this Agreement and must be exhausted as an administrative remedy prior to either Party initiating legal action. This alternative dispute resolution process is not intended to nor shall be construed to change the time periods for filing a claim or action specified by Government Code §§ 900 et seq. 10.12 Controlling Provisions. In the case of any conflict between the terms of this Agreement and the Exhibits hereto, and Consultant's Proposal (if any), the Agreement shall control. In the case of any conflict between the Exhibits hereto and the Consultant's Proposal, the Exhibits shall control. 10.13 Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be an original and all of which together shall constitute one agreement. Exhibit 1Item 6 Attachment A - Resolution Authorizing Approval of NCPA-BAMx Professional Services Agreement Item 6: Staff Report Pg. 18 Packet Pg. 85 of 312 Consulting Services Agreement between PM-VEN-2025-004 NCPA and Flynn Resource Consultants, Inc. Rev’d 10/14/2020 Page 12 of 16 2650865.1 10.14 Construction of Agreement. Each party hereto has had an equivalent opportunity to participate in the drafting of the Agreement and/or to consult with legal counsel. Therefore, the usual construction of an agreement against the drafting party shall not apply hereto. 10.15 No Third Party Beneficiaries. This Agreement is made solely for the benefit of the parties hereto, with no intent to benefit any non-signator third parties. Exhibit 1Item 6 Attachment A - Resolution Authorizing Approval of NCPA-BAMx Professional Services Agreement Item 6: Staff Report Pg. 19 Packet Pg. 86 of 312 Consulting Services Agreement between PM-VEN-2025-004 NCPA and Flynn Resource Consultants, Inc. Rev’d 10/14/2020 Page 13 of 16 2650865.1 The Parties have executed this Agreement as of the date signed by the Agency. NORTHERN CALIFORNIA POWER AGENCY FLYNN RESOURCE CONSULTANTS INC. Date: _______________________ Date: _________________________ ____________________________ ______________________________ Randy S. Howard, General Manager Douglas A. Boccignone, President Attest: ____________________________ Assistant Secretary of the Commission Approved as to Form: ____________________________ Jane E. Luckhardt, General Counsel Exhibit 1Item 6 Attachment A - Resolution Authorizing Approval of NCPA-BAMx Professional Services Agreement Item 6: Staff Report Pg. 20 Packet Pg. 87 of 312 Consulting Services Agreement between PM-VEN-2025-004 NCPA and Flynn Resource Consultants, Inc. Rev’d 10/14/2020 Page 14 of 16 2650865.1 EXHIBIT A SCOPE OF WORK Agency is entering into this Agreement with Consultant at the request of the BAMx Members, so that the Agency may assist the BAMx Members in securing access to consulting services related to electric transmission, power generation, regulatory and electric market design issues affecting the BAMx Members. Agency's primary role as to the Services provided under this Agreement is to act as contract administrator and billing agent on behalf of the BAMx Members, as further described in the BAMx Agreement. For the purpose of administering this Agreement, each BAMx Member shall be represented by a designated representative (“Representative”). During the term of this Agreement, the BAMx Member Representatives are responsible for coordinating all requests for Services made to Consultant, and shall manage all related activities as further described herein. The BAMx Member Representatives are listed below: • Basil Wong, City of Santa Clara • Lena Perkins , City of Palo Alto At any time a BAMx Member may designate a new or alternative Representative by providing written notice of such designation to Agency and Consultant. The BAMx Members and Consultant intend to pursue the activities listed below during the term of this Agreement. Such activities will include monitoring, meeting participation, coordinating with affected or other participating parties, and, as necessary, preparing and submitting formal position submittals. The Services include, but are not limited to the following: 1. Grid Planning Activities: a. CAISO Regionalization Process, Transmission Access Charge, Governance and Resource Adequacy; i. Coordination with the California Municipal Utilities Association and Northern California Power Agency on these activities b. CAISO/PG&E annual transmission expansion planning process; c. Support or oppose specific transmission additions; d. Greater Bay Area long term studies; e. CAISO local capacity technical study process; f. Other regional and sub-regional transmission planning activities; g. CAISO Tariff and BPM Change Management Process; h. Generator Interconnection Procedure; i. Transmission cost minimization; j. Impacts due to potential generation retirements; k. Transmission for renewables deliverability issues; and l. Tracy to Bay development Exhibit 1Item 6 Attachment A - Resolution Authorizing Approval of NCPA-BAMx Professional Services Agreement Item 6: Staff Report Pg. 21 Packet Pg. 88 of 312 Consulting Services Agreement between PM-VEN-2025-004 NCPA and Flynn Resource Consultants, Inc. Rev’d 10/14/2020 Page 15 of 16 2650865.1 2. CPUC and CEC transmission matters: a. Integrated Energy Policy Report; b. IRP Proceeding c. IOU Transmission Review Process d. Resource adequacy issues; e. Renewable Portfolio Standard issues; f. Long Term Procurement issues; g. Approval of CPCNs and PTCs for new transmission lines; and h. Renewable Energy Transmission Initiative (RETI 2.0). 3. CAISO Market Issues: a. CAISO markets proceedings and implementation matters; b. Resource Adequacy / Local Capacity/ Flexible Capacity/ Deliverability; c. LMP congestion and losses incidence and impacts; and d. Regionalization and New Participating Transmission Owner Issues. 4. Communicate Regularly with BAMx Members: a. Client meetings, telephone conferences and written summaries of activities on key issues. Exhibit 1Item 6 Attachment A - Resolution Authorizing Approval of NCPA-BAMx Professional Services Agreement Item 6: Staff Report Pg. 22 Packet Pg. 89 of 312 Consulting Services Agreement between PM-VEN-2025-004 NCPA and Flynn Resource Consultants, Inc. Rev’d 10/14/2020 Page 16 of 16 2650865.1 EXHIBIT B COMPENSATION SCHEDULE AND HOURLY FEES Compensation for all Services performed pursuant to this Agreement, including hourly fees and expenses, shall not exceed the amount specified in Section 2 of this Agreement. The compensation schedule and hourly fees for Services are as follows: Labor Category Jan ’26- Dec ‘26 Jan ’27- Dec ‘27 Jan ’28- Dec ‘28 Jan ’29- Dec ‘29 Jan ’30- Dec ‘30 For any month during which Consultant’s provision of Services causes Consultant to use specialized modeling software and/or tools, the following charges shall apply: Specialized software costs that exceed the above amounts may be billed with the prior approval of the BAMx Member Representatives. Travel (at coach rates), food, and miscellaneous expenses, except automobile mileage, associated with the provision of Services hereunder shall be billed at cost. Automobile mileage shall be billed at the current rate as approved by the Internal Revenue Service. NOTE: Notwithstanding the foregoing, as a public agency, Agency shall not reimburse Consultant for travel, food and related costs in excess of those permitted by the Internal Revenue Service. Exhibit 1Item 6 Attachment A - Resolution Authorizing Approval of NCPA-BAMx Professional Services Agreement Item 6: Staff Report Pg. 23 Packet Pg. 90 of 312 1 BAMx PROFESSIONAL SERVICES AGREEMENT PM-AGY-2025-002 PROFESSIONAL SERVICES AGREEMENT BETWEEN NORTHERN CALIFORNIA POWER AGENCY AND THE CITIES OF PALO ALTO AND SANTA CLARA (THE "BAY AREA MUNICIPAL TRANSMISSION SERVICES AGREEMENT" OR "BAMx AGREEMENT") This Professional Services Agreement (“Agreement”) is made by and between the Northern California Power Agency (“NCPA”), a joint powers agency, and the Cities of Palo Alto and Santa Clara (each referred to as a "Contracting Member" and jointly referred to as “Contracting Members” or "BAMx Participants"). NCPA and the Contracting Members are together sometimes referred to herein individually as a “Party” and collectively as “the Parties.” This Agreement is made as of January 1, 2026 (the “Effective Date”) in Roseville, California. Section 1. RECITALS This Agreement is entered into based on the following facts, among others: 1.1 NCPA is a public agency created by a joint powers agreement established under California law for the purpose of assisting its members in the efficient use of their common powers. 1.2 Contracting Members are engaged in, among other things, transmitting and distributing electric power within their respective corporate limits. Contracting Members are also each a member of NCPA. Contracting Members jointly desire that NCPA provide Contracting Members with the Services described in this Agreement. 1.3 Article III, section 3 of the “Amended and Restated Northern California Power Agency Joint Powers Agreement” (as amended and effective January 1, 2008) (hereinafter “JPA”) entitled “Powers and Functions” provides that "none of the debts, liabilities or obligations of NCPA shall be the debts, liabilities or obligations of any of the members of NCPA unless assumed in a particular case by resolution of the governing body of the member to be charged." Notwithstanding the foregoing, Article V, section 2 of the JPA entitled “General Provisions” provides that “[t]he governing Commission of NCPA is authorized to procure public liability and other insurance as it deems advisable to protect NCPA and each of the parties hereto, charging the cost thereof to the operating costs of NCPA.” 1.4 Contracting Members desire to secure NCPA’s Services under this Agreement in a manner that balances their interests and the interests of other NCPA Members with the ongoing financial viability and professional responsibilities of NCPA. Accordingly, Contracting Members desire to secure NCPA’s Services under this Agreement by accepting a limited insurance based recourse against NCPA, with the option of procuring additional insurance at Contracting Members' sole expense. By so doing, the Parties thereby ensure that NCPA will substantially limit its risk for the provision of such Services and allocates risks back to the Contracting Members in the event NCPA is not adequately insured. Exhibit 2Item 6 Attachment A - Resolution Authorizing Approval of NCPA-BAMx Professional Services Agreement Item 6: Staff Report Pg. 24 Packet Pg. 91 of 312 2 BAMx PROFESSIONAL SERVICES AGREEMENT PM-AGY-2025-002 1.5 The Parties have previously entered into a professional services agreement for this same purpose dated as of January 1, 2021 (“the Prior Agreement”) the term of which ends on December 31, 2025. NOW THEREFORE, in consideration of the mutual covenants and promises set forth, NCPA and Contracting Members agree as follows: Section 2. DEFINITIONS Whenever used in this Agreement with initial capitalization, these terms shall have the following meanings as applicable, whether in the singular or plural: 2.1 “Consultant” shall mean Flynn Resource Consultants Inc. 2.2 “Consulting Services Agreement” shall mean the Consulting Services Agreement Between the Northern California Power Agency and Flynn Resource Consultants Inc., dated as of January 1, 2026, as such may be amended from time to time. 2.3 “Good Utility Practice” shall mean any of the practices, methods and acts engaged in or approved by a significant portion of the electric utility industry during the relevant time period, or any of the practices, methods and acts which, in the exercise of reasonable judgment in light of the facts known at the time the decision was made, could have been expected to accomplish the desired result of the lowest reasonable cost consistent with good business practices, reliability, safety and expedition and the requirements of the Northern American Electric Reliability Corporation ("NERC") or Western Electric Coordinating Council ("WECC") Good Utility Practice is not intended to be limited to the optimum practice, method, or act to the exclusion of all others, but rather to be acceptable practices, methods, or acts generally accepted in the region. 2.4 “NCPA Members” shall mean the signatories to the JPA or those agencies which have executed an Associate Member Agreement with NCPA. 2.5 “Stranded Costs” shall mean all costs incurred by NCPA in providing Services to Contracting Members under this Agreement that could not reasonably be avoided by NCPA from the date it receives a written Notice of Termination. Such costs may include, but not be limited to, salary and employment costs, rent, utilities, or contracts incurred to provide Services under this Agreement. In this regard, Contracting Members acknowledge that NCPA will be entering into professional services agreements with third persons under the terms of this Agreement, and that sums owing to such third persons may become Stranded Costs upon termination of this Agreement. 2.6 “Uncontrollable Forces” shall mean any act of God, labor disturbance, act of the public enemy, war, insurrection, riot, fire, storm, flood, earthquake, explosion, any curtailment, order, regulation or restriction imposed by governmental, military or lawfully established civilian authorities or any other cause beyond the reasonable control which could not be avoided through the exercise of Good Utility Practice. Exhibit 2Item 6 Attachment A - Resolution Authorizing Approval of NCPA-BAMx Professional Services Agreement Item 6: Staff Report Pg. 25 Packet Pg. 92 of 312 3 BAMx PROFESSIONAL SERVICES AGREEMENT PM-AGY-2025-002 Section 3. SERVICES TO BE PROVIDED; AUTHORIZED REPRESENTATIVES; STANDARD OF PERFORMANCE 3.1 This Agreement is entered into by the Parties in order for NCPA to provide services to Contracting Members for the services described in Exhibit A hereto (“Services”). The Services do not include supervision of the performance of any of the third persons with whom contracts are entered into; such supervision shall be provided by the Contracting Members. 3.2 The following are the authorized representatives of the Parties (“Authorized Representatives”) for contract administration purposes under this Agreement: NCPA: Tony Zimmer, Tony.Zimmer@ncpa.com Assistant General Manager Northern California Power Agency 651 Commerce Drive Roseville, CA 95678 916-781-4227 Fax 916-783-7693 PALO ALTO: Lena Perkins, Lena.Perkins@paloalto.gov Emerging Technologies Program Manager City of Palo Alto P.O. Box 10250 Palo Alto, CA 94303 650-329-2539 Fax: 650-326-1507 SANTA CLARA: Paulo Apolinario, papolinario@SantaClaraCA.gov Electric Division Manager 881 Martin Ave. Santa Clara, CA 95050 408-615-6630 No Authorized Representative is authorized to amend any provision of this Agreement except in accordance with Section 12.16. 3.3 Standard of Performance. NCPA will perform the Services using that level of skill and attention reasonably required to complete the Services in a competent and timely manner. 3.4 Assignment of Personnel. NCPA shall assign only competent personnel to perform Services pursuant to this Agreement. In the event that Contracting Members, in their sole discretion, at any time during the term of this Agreement, jointly desire the reassignment of any such persons, NCPA shall, immediately upon receiving notice from each Contracting Member of such desire of the Contracting Members, reassign such person or persons. Exhibit 2Item 6 Attachment A - Resolution Authorizing Approval of NCPA-BAMx Professional Services Agreement Item 6: Staff Report Pg. 26 Packet Pg. 93 of 312 4 BAMx PROFESSIONAL SERVICES AGREEMENT PM-AGY-2025-002 3.5 Time. NCPA shall devote such time to the performance of Services pursuant to this Agreement as may be reasonably necessary to meet the standard of performance provided in Section 3.3, above and to satisfy NCPA’s obligations hereunder. Section 4. TERM AND TERMINATION 4.1 Authorization to Perform Services. NCPA is not authorized to perform any Services or incur any costs whatsoever under the terms of this Agreement until its receipt of a written resolution and/or other appropriate/applicable authorization from each Contracting Member’s governing body confirming each Contracting Member’s authority to enter into this Agreement and confirming that each Contracting Member has allocated funds for and approved contract payments to NCPA under this Agreement. 4.2 Term. The term of this Agreement shall begin on the Effective Date and shall end on December 31, 2030. 4.3 Early Termination and Stranded Costs. This Agreement may be terminated by either NCPA or by the Contracting Members, upon 30 days written notice to all other Parties (“Notice of Termination”). Provided, however, that a Notice of Termination on behalf of the Contracting Members shall be executed by each Contracting Member to be effective. In the event of an early termination, Contracting Members shall pay NCPA for all fees and costs required under this Agreement through the effective date of their Notice of Termination plus all Stranded Costs. Upon payment of the above amounts, no Parties shall have any further obligations under this Agreement except as otherwise set forth in Section 5.7 regarding the survival of defense and indemnity obligations. Section 5. INDEMNITY AND INSURANCE 5.1 Limitation of NCPA’s Liability. 5.1.1 Except as provided in this section 5.1, NCPA shall not at any time be liable for any injury or damage occurring to Contracting Members or any other person or property from any cause whatsoever arising out of this Agreement. 5.1.2 The provisions of section 5.1.1 shall not apply where the injury or damage occurring to Contracting Members is caused by the negligence of NCPA or of any employee, agent or contractor of NCPA; provided that any liability under this subsection is limited to the extent of the actual coverage and coverage limits of the NCPA insurance policies described in this Section 5. 5.1.3 Notwithstanding Section 5.1.2 above, the Contracting Members agree to reimburse NCPA, in a timely manner, for all deductibles and/or self-insured retentions payable for any claim, liability or damage arising out of this Agreement. 5.2 Indemnification of NCPA. Except as specified in Section 5.1.2 above, Contracting Members shall, at their sole cost and expense, indemnify and hold harmless NCPA and all associated, affiliated, allied, member and subsidiary entities of NCPA, now existing or hereinafter Exhibit 2Item 6 Attachment A - Resolution Authorizing Approval of NCPA-BAMx Professional Services Agreement Item 6: Staff Report Pg. 27 Packet Pg. 94 of 312 5 BAMx PROFESSIONAL SERVICES AGREEMENT PM-AGY-2025-002 created, and their respective officers, boards, commissions, employees, agents, attorneys, and contractors (hereinafter referred to as “Indemnitees”), from and against any and all liability, obligation, damages, penalties, claims, liens, costs, charges, losses and expenses (including, without limitation, reasonable fees and expenses of attorneys, expert witnesses and consultants), which may be imposed upon, incurred by or be asserted against the Indemnitees arising out of this Agreement. 5.3 Defense of Indemnitees. In the event any action or proceeding shall be brought against the Indemnitees by reason of any matter for which the Indemnitees are indemnified hereunder, Contracting Members shall, upon reasonable prior written notice from any of the Indemnitees, at Contracting Members' sole cost and expense, resist and defend the same with legal counsel mutually selected by Indemnitee and the Contracting Members, unless mutual selection of counsel is expressly prohibited by an applicable insurance policy; provided however, that neither Indemnitee nor Contracting Members shall admit liability in any such matter or on behalf of the other without express written consent, which consent shall not be unreasonably withheld or delayed, nor enter into any compromise or settlement of any claim for which Indemnitees are indemnified hereunder without prior express written consent. The Contracting Members' duty to defend shall begin upon receipt of a written notice identifying with specificity the allegations that give rise to this duty to defend. 5.4 Notice. The Parties shall give each other prompt notice of the making of any claim or the commencement of any action, suit or other proceeding covered by the provisions of this Section 5. 5.5 Insurance. During the term of the Agreement and prior to beginning any work under this Agreement, NCPA shall maintain, or cause to be maintained, in full force and effect, and at its sole cost and expense, the types and limits of insurance as are annually approved by the governing Commission of NCPA. NCPA warrants and represents that the types of insurance and coverage limits that are approved by the governing Commission of NCPA are in full force and effect and shall remain so during the term of this Agreement unless NCPA gives prior written notification (of not less than 15 days) of modification, cancellation or rescission of such coverage. To the extent that NCPA uses a Consultant to perform the Services , NCPA shall cause the Consultant to name the Contracting Members as Additional Insured and ensure Contractor maintain its insurance in full force and effect through the term of this Agreement. 5.6 Contracting Members' Acknowledgment of Option to Secure Additional Insurance. The Contracting Members acknowledge that there are limitations on NCPA’s liability to the Contracting Members under this Section 5 and that the Contracting Members may need to purchase additional insurance of their own to cover the additional risks and the potential additional liabilities they are assuming under this Agreement. Contracting Members agree that they will, with respect to any additional insurance they obtain or which is otherwise available to Contracting Members, cause their insurers to issue an endorsement providing a waiver of subrogation rights as to Indemnitees. 5.7 Survival of Obligations. The defense and indemnity obligations of Section 5 shall survive the termination of this Agreement. Exhibit 2Item 6 Attachment A - Resolution Authorizing Approval of NCPA-BAMx Professional Services Agreement Item 6: Staff Report Pg. 28 Packet Pg. 95 of 312 6 BAMx PROFESSIONAL SERVICES AGREEMENT PM-AGY-2025-002 Section 6. COMPENSATION 6.1 Charges for Services. Charges for the Services and those services performed by Consultant shall be billed separately to each Contracting Member in accordance with Exhibit B of this Agreement. 6.2 Security Deposit. Contracting Members shall each maintain on deposit in its General Operating Reserve Account held at NCPA the sum of Zero Dollars ($0) as security to NCPA for liabilities NCPA could incur under this Agreement. Contracting Members hereby authorize NCPA to reserve and commit this sum in its General Operating Reserve Account for the payment of the aforementioned liabilities should same become necessary. Interest on monies held by NCPA pursuant to this section shall be credited in accordance with the then standard practices of NCPA relating to the General Operating Reserve Account. Section 7. BILLING AND PAYMENT 7.1 Invoices. NCPA shall submit invoices to Contracting Members, not more often than once a month during the term of this Agreement, for Services performed and reimbursable costs incurred prior to the invoice date. 7.2 Monthly Payment. Contracting Members shall make monthly payments, based on invoices received, for Services performed, and for authorized reimbursable costs incurred. Contracting Members shall have thirty (30) days from the receipt of an invoice that complies with all of the requirements above to pay NCPA. Any amount due on a day other than a business day, i.e., any day except a Saturday, Sunday, or a Federal Reserve Bank holiday, may be paid on the following business day. If all or any portion of a bill is disputed by Contracting Members, the entire amount of the bill shall be paid when due, and NCPA’s Authorized Representative shall be concurrently provided written notice of the disputed amount and the basis for the dispute. NCPA shall reimburse any amount determined to have been incorrectly billed, within ten (10) days after such determination. Amounts which are not paid when due shall bear interest computed on a daily basis until paid at the lesser of (i) the per annum prime rate (or reference rate) of the Bank of America NT & SA, or its successor, then in effect, plus two per cent (2%) or (ii) the maximum rate permitted by law. The provisions of this Section 7 shall survive expiration of this Agreement until satisfied. 7.3 Contracting Members shall pay for the Services and those services performed by Consultant pursuant to this Agreement. Contracting Members shall not pay any additional sum for any expense or cost whatsoever incurred by NCPA in rendering Services pursuant to this Agreement or for those services performed by Consultant. Contracting Members shall make no payment for any extra, further, or additional service pursuant to this Agreement. In no event shall NCPA submit any invoice for an amount in excess of the maximum amount of compensation provided above either for a task or for the entire Agreement, unless the Agreement is modified prior to the submission of such an invoice by a properly executed change order or amendment in accordance with this Agreement. Exhibit 2Item 6 Attachment A - Resolution Authorizing Approval of NCPA-BAMx Professional Services Agreement Item 6: Staff Report Pg. 29 Packet Pg. 96 of 312 7 BAMx PROFESSIONAL SERVICES AGREEMENT PM-AGY-2025-002 7.4 Hourly Fees. Fees for work performed by Consultant on an hourly basis shall not exceed the amounts shown on the following fee schedule attached hereto as Exhibit B. 7.5 Reimbursable Expenses. Reimbursable expenses are specified in Exhibit B. Expenses not listed in Exhibit B are not chargeable to Contracting Members. Reimbursable expenses are included in the total amount of compensation provided under this Agreement that shall not be exceeded. 7.6 Payment of Taxes. NCPA is solely responsible for the payment of employment taxes incurred under this Agreement and any similar federal or state taxes. 7.7 Payment upon Termination. In the event that Contracting Members or NCPA terminates this Agreement pursuant to Section 4, Contracting Members shall compensate the NCPA for all outstanding costs and reimbursable expenses incurred for work satisfactorily completed as of the date of written Notice of Termination. NCPA shall maintain adequate logs and timesheets in order to verify costs incurred to that date. 7.8 Authorization to Perform Services. NCPA is not authorized to perform any Services or incur any costs whatsoever under the terms of this Agreement until receipt of authorization from each of the Contracting Members’ Authorized Representative following receipt of the required approvals under the terms of this Agreement. 7.9 The addresses of Contracting Members to which invoices shall be sent is: Lena Perkins Emerging Technologies Program Manager City of Palo Alto P.O. Box 10250 Palo Alto, CA 94303 Lena.Perkins@paloalto.gov 650-329-2539 Fax: 650-326-1507 Paulo Apolinario City of Santa Clara Attn: Electric Department 1500 Warburton Ave Santa Clara, CA 95050 papolinario@SantaClaraCA.gov 408-615-6630 Section 8. STATUS OF NCPA; FACILITIES AND EQUIPMENT 8.1 Independent Contractor. At all times during the term of this Agreement, NCPA shall be an independent contractor and shall not be an employee of Contracting Members. Contracting Members shall have the right to control NCPA only insofar as the results of NCPA's Services Exhibit 2Item 6 Attachment A - Resolution Authorizing Approval of NCPA-BAMx Professional Services Agreement Item 6: Staff Report Pg. 30 Packet Pg. 97 of 312 8 BAMx PROFESSIONAL SERVICES AGREEMENT PM-AGY-2025-002 rendered pursuant to this Agreement and assignment of personnel pursuant to Section 3.4; however, otherwise Contracting Members shall not have the right to control the means by which NCPA accomplishes Services rendered pursuant to this Agreement. Notwithstanding any other agency, state, local or federal policy, rule, regulation, law, or ordinance to the contrary, NCPA and any of its employees, agents, and subcontractors providing Services under this Agreement shall not qualify for or become entitled to, and hereby agree to waive any and all claims to, any compensation, benefit, or any incident of employment by Contracting Members, including but not limited to eligibility to enroll in the California Public Employees Retirement System (PERS) as an employee of Contracting Member and entitlement to any contribution to be paid by Contracting Members for employer contributions and/or employee contributions for PERS benefits. 8.2 Facilities and Equipment. The facilities and equipment that may be necessary to perform the Services required by this Agreement shall be provided as follows: None. Section 9. UNCONTROLLABLE FORCES 9.1 Obligations of the Parties, other than those to pay money when due, shall be excused for so long as and to the extent that failure to perform such obligations is due to an Uncontrollable Force; provided, however, that if either Party is unable to perform due to an Uncontrollable Force, such Party shall exercise due diligence to remove such inability with reasonable dispatch. Nothing contained in this Agreement shall be construed as requiring a Party to settle any strike, lockout, or labor dispute in which it may be involved, or to accept any permit, certificate, contract, or any other service agreement or authorization necessary for the performance of this Agreement which contains terms and conditions which a Party determines in its good faith judgment are unduly burdensome or otherwise unacceptable. 9.2 Each Party shall notify the other promptly, by telephone to the other Party’s operating personnel and Authorized Representative identified in Section 3.2, upon becoming aware of any Uncontrollable Force which may adversely affect the performance under this Agreement. A Party shall additionally provide written notice in accordance with Section 12.8 to the other Party within 24 hours after providing. Each Party shall notify the other promptly, when an Uncontrollable Force has been remedied or no longer exists. Section 10. LEGAL REQUIREMENTS 10.1 Governing Law. The laws of the State of California shall govern this Agreement, without regard for the choice of law doctrine. 10.2 Compliance with Applicable Laws. NCPA and any subcontractors shall comply with all laws applicable to the performance of the Services hereunder. 10.3 Other Governmental Regulations. To the extent that this Agreement may be funded by fiscal assistance from another governmental entity, NCPA and any subcontractors shall comply with all applicable rules and regulations to which Contracting Member is bound by the terms of such fiscal assistance program. Exhibit 2Item 6 Attachment A - Resolution Authorizing Approval of NCPA-BAMx Professional Services Agreement Item 6: Staff Report Pg. 31 Packet Pg. 98 of 312 9 BAMx PROFESSIONAL SERVICES AGREEMENT PM-AGY-2025-002 10.4 Licenses and Permits. NCPA represents and warrants to Contracting Member that NCPA and its employees, agents, and any subcontractors have all licenses, permits, qualifications, and approvals of whatsoever nature that is legally required to practice their respective professions. NCPA represents and warrants to Contracting Member that NCPA and its employees, agents, any subcontractors shall, at their sole cost and expense, keep in effect at all times during the term of this Agreement any licenses, permits, and approvals that are legally required to practice their respective professions. 10.5 Nondiscrimination and Equal Opportunity. NCPA shall not discriminate, on the basis of a person’s race, religion, color, national origin, age, physical or mental handicap or disability, medical condition, marital status, sex, or sexual orientation, against any employee, applicant for employment, subcontractor, bidder for a subcontract, or participant in, recipient of, or applicant for any services or programs provided by NCPA under this Agreement. NCPA shall comply with all applicable federal, state, and local laws, policies, rules, and requirements related to equal opportunity and nondiscrimination in employment, contracting, and the provision of any services that are the subject of this Agreement, including but not limited to the satisfaction of any positive obligations required of NCPA thereby. Section 11. KEEPING AND STATUS OF RECORDS. 11.1 Records Created as Part of NCPA’s Performance. All reports, data, maps, models, charts, studies, surveys, photographs, memoranda, plans, studies, specifications, records, files, or any other documents or materials, in electronic or any other form, that NCPA prepares or obtains pursuant to this Agreement and that relate to the matters covered hereunder shall be the property of the Contracting Members. NCPA hereby agrees to deliver those documents to the Contracting Members upon termination of the Agreement. It is understood and agreed that the documents and other materials, including but not limited to those described above, prepared pursuant to this Agreement are prepared specifically for the Contracting Members and are not necessarily suitable for any future or other use. Contracting Members and NCPA agree that, until final approval by Contracting Members, all data, plans, specifications, reports and other documents are confidential and will not be released to third parties without prior written consent of both Parties, except as may otherwise be required by applicable law. 11.2 NCPA’s Books and Records. NCPA shall maintain any and all ledgers, books of account, invoices, vouchers, canceled checks, and other records or documents evidencing or relating to charges for services or expenditures and disbursements charged to the Contracting Members under this Agreement for a minimum of three (3) years, or for any longer period required by law, from the date of final payment to the NCPA to this Agreement. 11.3 Inspection and Audit of Records. Any records or documents that Section 11.2 of this Agreement requires NCPA to maintain shall be made available for inspection, audit, and/or copying at any time during regular business hours, upon oral or written request of the Contracting Member. Under California Government Code Section 8546.7, if the amount of public funds expended under this Agreement exceeds TEN THOUSAND DOLLARS ($10,000.00), the Agreement shall be subject to the examination and audit of the State Auditor, at the request of any Contracting Member or as part of any audit of any of the Contracting Members, for a period of three (3) years after final payment under the Agreement. Exhibit 2Item 6 Attachment A - Resolution Authorizing Approval of NCPA-BAMx Professional Services Agreement Item 6: Staff Report Pg. 32 Packet Pg. 99 of 312 10 BAMx PROFESSIONAL SERVICES AGREEMENT PM-AGY-2025-002 11.4 Confidential Information and Disclosure. During the term of this Agreement, any Party (“Disclosing Party”) may disclose confidential, proprietary or trade secret information (the “Information”), to another Party (“Receiving Party”). All such Information made available in a tangible medium of expression (such as, without limitation, on paper or by means of magnetic tapes, magnetic disks or other computer media) shall be marked in a prominent location to indicate that it is the confidential, proprietary and trade secret information of Disclosing Party at the time of disclosure to Receiving Party. Receiving Party shall hold Disclosing Party’s Information in confidence and shall take all reasonable steps to prevent any unauthorized possession, use, copying, transfer or disclosure of such Information. Receiving Party shall not attempt to reverse engineer or in any manner create any product or information which is similar in appearance to or based on the Information provided by Disclosing Party. Receiving Party shall not disclose Disclosing Party’s Information to any person other than Receiving Party’s employees, agents, contractors and subcontractors who have a need to know in connection with this Agreement. Receiving Party’s confidentiality obligations hereunder shall not apply to any portion of Disclosing Party’s Information which: (a) Has become a matter of public knowledge other than through an act or omission of Receiving Party; (b) Has been made known to Receiving Party by a third party in accordance with such third party’s legal rights without any restriction on disclosure; (c) Was in the possession of Receiving Party prior to the disclosure of such Information by Disclosing Party and was not acquired directly or indirectly from the other Party or any person or entity in a relationship of trust and confidence with the other Party with respect to such Information; (d) Receiving Party is required by law to disclose; or (e) Has been independently developed by Receiving Party from information not defined as "Information" in this Agreement, as evidenced by Receiving Party's written records. Receiving Party shall return or destroy Disclosing Party’s Information (including all copies thereof) to Disclosing Party promptly upon the earliest of any termination of this Agreement or the Disclosing Party’s written request. Notwithstanding the foregoing, Receiving Party may retain one copy of such Information solely for archival purposes, subject to the confidentiality provisions of this Agreement. The parties understand that each Party is a public entity and is subject to the laws that may compel either to disclose information about the other’s business. Section 12. MISCELLANEOUS PROVISIONS 12.1 Attorneys’ Fees. If a Party to this Agreement brings any action, including an action for declaratory relief, to enforce or interpret the provisions of this Agreement, the prevailing Party shall be entitled to reasonable attorneys’ fees in addition to any other relief to which that Party may be entitled. The court may set such fees in the same action or in a separate action brought for that purpose. 12.2 Venue. In the event that either Party brings any action against the other under this Exhibit 2Item 6 Attachment A - Resolution Authorizing Approval of NCPA-BAMx Professional Services Agreement Item 6: Staff Report Pg. 33 Packet Pg. 100 of 312 11 BAMx PROFESSIONAL SERVICES AGREEMENT PM-AGY-2025-002 Agreement, the Parties agree that trial of such action shall be vested exclusively in the state courts of California in the County of Placer or in the United States District Court for the Eastern District of California. 12.3 Severability. If any provision of this Agreement shall be determined by a court of competent jurisdiction to be invalid, void or unenforceable, or if any provision of this Agreement is rendered invalid or unenforceable by federal or state statute or regulation, but the remaining portions of the Agreement can be enforced without failure of material consideration to any Party, then the remaining provisions shall continue in full force and effect. To that end, this Agreement is declared to be severable. Provided, however, that in the event any provision is declared to be invalid, void or unenforceable, any Party may terminate this Agreement upon 10 days written notice given within five (5) days of receipt of notice of final entry of judgment. 12.4 No Implied Waiver of Breach. The waiver of any breach of a specific provision of this Agreement does not constitute a waiver of any other breach of that term or any other term of this Agreement. 12.5 Successors and Assigns. The provisions of this Agreement shall inure to the benefit of and shall apply to and bind the successors and assigns of the Parties. 12.6 Use of Recycled Products. NCPA shall endeavor to prepare and submit all reports, written studies and other printed material on recycled paper to the extent it is available at equal or less cost than virgin paper. 12.7 Conflict of Interest. NCPA shall not employ any Contracting Members' official or employee in the work performed pursuant to this Agreement. No officer or employee of Contracting Member shall have any financial interest in this Agreement that would violate California Government Code Sections 1090 et seq. 12.8 Notices. Unless this Agreement requires otherwise, any notice, demand or request provided for in this Agreement, or served, given or made shall become effective when delivered in person, or sent by registered or certified first class mail, to the persons specified below: NCPA: Tony Zimmer Assistant General Manager – Power Management Northern California Power Agency 651 Commerce Drive Roseville, CA 95678 With a copy to: Jane Luckhardt – General Counsel Northern California Power Agency 651 Commerce Drive, Roseville, CA 95678 Exhibit 2Item 6 Attachment A - Resolution Authorizing Approval of NCPA-BAMx Professional Services Agreement Item 6: Staff Report Pg. 34 Packet Pg. 101 of 312 12 BAMx PROFESSIONAL SERVICES AGREEMENT PM-AGY-2025-002 PALO ALTO: Alan Kurotori Director of Utilities City of Palo Alto P.O. Box 10250 Palo Alto, CA 94303 With a copy to: Amy Bartell, Assistant City Attorney City of Palo Alto c/o City Attorney’s office P.O. Box 10250 Palo Alto, CA 94303 SANTA CLARA: Nico Procos, Acting Chief Electric Utility Officer City of Santa Clara 1500 Warburton Ave Santa Clara, CA 95050 With a copy to: Glen Googins, City Attorney City of Santa Clara 1500 Warburton Ave Santa Clara, CA 95050 Whenever it is required, permitted, or desired in this Agreement that written notice or demand be given by any Party to any other Party, such notice or demand may be either personally served or sent by United States Mail, or facsimile. Notice shall be deemed to have been given when personally served, when deposited in the United States Mail, certified or registered with postage prepaid and properly addressed, or when transmitted by facsimile provided however, notices delivered by facsimile shall only be effective if delivered during regular business hours on a day that is considered a regular business day for NCPA by the involved Parties. 12.9 Integration; Incorporation. This Agreement, including all the Exhibits attached hereto, represents the entire and integrated agreement between Contracting Members and NCPA relating to the subject matter of this Agreement, and supersedes all prior negotiations, representations, or agreements, either written or oral. All Exhibits attached hereto are incorporated by reference herein. 12.10 Dispute Resolution. If any dispute arises between the Parties that cannot be settled after engaging in good faith negotiations, Contracting Members and NCPA agree to resolve the dispute in accordance with the following: 12.10.1 Each Party shall designate a senior management or executive level representative to negotiate any dispute; Exhibit 2Item 6 Attachment A - Resolution Authorizing Approval of NCPA-BAMx Professional Services Agreement Item 6: Staff Report Pg. 35 Packet Pg. 102 of 312 13 BAMx PROFESSIONAL SERVICES AGREEMENT PM-AGY-2025-002 12.10.2 The representatives shall attempt, through good faith negotiations, to resolve the dispute by any means within their authority. 12.10.3 If the issue remains unresolved after sixty (60) days of good faith negotiations, despite having used their best efforts to do so, either Party may pursue whatever other remedies may be available to it. 12.10.4 This informal resolution process is not intended to nor shall be construed to change the time periods for filing a claim or action specified by Government Code § 900, et seq. 12.11 Other Agreements. This Agreement is not intended to modify or change any other agreement between any of the Parties, individually or collectively. Without limiting the generality of the foregoing, this Agreement does not amend or extend the Prior Agreement. 12.12 Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be an original and all of which together shall constitute one agreement. 12.13 Obligations of Contracting Members Joint and Several; No Joint Venture. The duties, obligations and liabilities of the Contracting Members, including the obligations to make payments to NCPA, are intended to be joint and several. Provided that nothing contained in this Agreement shall be construed to create an association, trust, partnership or joint venture or to impose a trust or partnership duty, obligation or liability on or with regard to the Contracting Members. 12.14 Effect of Section Headings. Section headings and subheadings appearing in this Agreement are inserted for convenience only and shall not be construed as interpretation of text. 12.15 Authority of Signatories. The signatories hereby represent that they have been appropriately authorized to execute this Agreement on behalf of the Party for whom they sign. 12.16 Amendments. Unless otherwise provided for in this Agreement, the Parties may amend this Agreement only by a writing signed by all the Parties following each Party’s receipt of written resolution/authorization from their governing bodies, which resolutions/authorizations shall be condition precedents to any amendments of this Agreement and shall be attached as exhibits to this Agreement. Exhibit 2Item 6 Attachment A - Resolution Authorizing Approval of NCPA-BAMx Professional Services Agreement Item 6: Staff Report Pg. 36 Packet Pg. 103 of 312 14 BAMx PROFESSIONAL SERVICES AGREEMENT PM-AGY-2025-002 The Parties have executed this Agreement as of the Effective Date. NORTHERN CALIFORNIA POWER AGENCY ________________________________ RANDY S. HOWARD, General Manager Attest: ________________________________ Assistant Secretary of the Commission Approved as to Form: ________________________________ General Counsel CONTRACTING MEMBERS: CITY OF PALO ALTO Approved as to Form: By: ____________________________ By:_______________________________ City Attorney Its:_____________________________ CITY OF SANTA CLARA Approved as to Form By: ____________________________ By:_______________________________ City Attorney Its:_____________________________ Exhibit 2Item 6 Attachment A - Resolution Authorizing Approval of NCPA-BAMx Professional Services Agreement Item 6: Staff Report Pg. 37 Packet Pg. 104 of 312 15 BAMx PROFESSIONAL SERVICES AGREEMENT PM-AGY-2025-002 EXHIBIT A SERVICES NCPA will enter into the Consulting Services Agreement on behalf of the Contracting Members, so that NCPA may assist the Contracting Members in securing access to consulting services related to electric transmission, power generation, regulatory and electric market design issues affecting the Contracting Members. NCPA’s primary role as to the Services provided under this Agreement is to act as contract administrator and billing agent on behalf of the Contracting Members, as further described herein. For the purpose of administering Services provided under this Agreement, each Contracting Member shall be represented by its Authorized Representative. During the term of this Agreement, the Authorized Representative for each Contracting Member is responsible for coordinating all requests for Services made to Consultant, and shall manage all related activities as further described herein. A Contracting Member may designate a new or alternative Authorized Representative by providing written notice of such designation to NCPA; such action shall not be treated as an amendment to this Agreement. The Contracting Members and Consultant intend to pursue the activities listed below during the term of this Agreement, pursuant to the Consulting Services Agreement. Such activities will include monitoring, meeting participation, coordinating with affected or other participating parties, and, as necessary, preparing and submitting formal position submittals. The Services provided in accordance with this Agreement and the Consulting Services Agreement include but are not limited to the following: 1. Grid Planning Activities: a. CAISO Regionalization Process, Transmission Access Charge, Governance and Resource Adequacy; i. Coordination with the California Municipal Utilities Association and Northern California Power Agency on these activities b. CAISO/PG&E annual transmission expansion planning process; c. Support or oppose specific transmission additions; d. Greater Bay Area long term studies; e. CAISO local capacity technical study process; f. Other regional and sub-regional transmission planning activities; g. CAISO Tariff and BPM Change Management Process; h. Generator Interconnection Procedure; i. Transmission cost minimization; j. Impacts due to potential generation retirements; k. Transmission for renewables deliverability issues; and l. Tracy to Bay development activites; 2. CPUC and CEC transmission matters: a. Integrated Energy Policy Report; Exhibit 2Item 6 Attachment A - Resolution Authorizing Approval of NCPA-BAMx Professional Services Agreement Item 6: Staff Report Pg. 38 Packet Pg. 105 of 312 16 BAMx PROFESSIONAL SERVICES AGREEMENT PM-AGY-2025-002 b. IRP Proceeding; c. IOU Transmission Review Process; d. Resource adequacy issues; e. Renewable Portfolio Standard issues; f. Long Term Procurement issues; g. Approval of CPCNs and PTCs for new transmission lines; and h. Renewable Energy Transmission Initiative (RETI 2.0). 3. CAISO Market Issues: a. CAISO markets proceedings and implementation matters; b. Resource Adequacy / Local Capacity/ Flexible Capacity/ Deliverability; c. LMP congestion and losses incidence and impacts; and d. Regionalization and New Participating Transmission Owner Issues. 4. Communicate Regularly with Contracting Members: a. Client meetings, telephone conferences and written summaries of activities on key issues. NCPA will accept invoices from Consultant and transmit them to each Contracting Members’ Authorized Representative, or their designee, for their review, and if acceptable, the Contracting Members’ Authorized Representative will direct payment by NCPA. Such payment direction shall be provided by each Contracting Members’ Authorized Representative, in writing. NCPA will prepare invoices indicating the share of Consultant's costs to be paid by each Contracting Member along with the appropriate charges by NCPA for its services; however, as provided in the Agreement, each Contracting Member is jointly and severally liable for the entirety of any amounts billed under this Agreement. NCPA will then pay Consultant utilizing Contracting Members' funds. Contracting Members will be solely responsible for payment of the Consultant’s invoices, as well as determining whether or not the Services have been satisfactorily performed. The Services under this Agreement by NCPA to Contracting Members are limited to contract administration and billing/payment functions. Exhibit 2Item 6 Attachment A - Resolution Authorizing Approval of NCPA-BAMx Professional Services Agreement Item 6: Staff Report Pg. 39 Packet Pg. 106 of 312 17 BAMx PROFESSIONAL SERVICES AGREEMENT PM-AGY-2025-002 EXHIBIT B COMPENSATION SCHEDULE AND HOURLY FEES Compensation for all Services performed pursuant to this Agreement, including hourly fees and expenses, paid to Consultant for consulting services shall not exceed Three Million Two Hundred Fifty Thousand Dollars ($3,250,000.00) and all billing services fees paid to NCPA shall not exceed Thirty Seven Thousand Five Hundred Dollars ($37,500) during the Term of the Agreement, or Six Hundred Fifty Seven Thousand Five Hundred Dollars ($657,500.00) plus any remaining unused funds from prior years of the Agreement during each annual period of the Term of the Agreement. (For example, if during the first year the total payment to Consultant is $600,000, the $50,000 not expended in the first year can be added to the second year for a total not to exceed amount of $700,000 for the second year.) The compensation schedule for the Services are as follows: 1. Monthly charges for Services provided by NCPA for billing and contract preparation under this Agreement shall be Six Hundred Twenty Five Dollars ($625.00) per month. Such charges will be allocated to the Contracting Members in accordance with the allocation percentages listed in Table 1 of this Exhibit B. 2. Compensation paid to Consultant for all services as described in the Consulting Services Agreement , including hourly fees and expenses, shall not exceed the amounts set forth in Section 2 of that agreement. The compensation schedule and hourly fees for Services rendered by Consultant to Contracting Members are set forth in Exhibit B of the Consulting Services Agreement. Monthly Charges invoiced by Consultant to NCPA for services (described in the Consulting Services Agreement) provided to the Contracting Membersshall be allocated to the Contracting Members in accordance with the allocation percentages listed in Table 1 of this Exhibit B. TABLE 1 ALLOCATION PERCENTAGES Contracting Allocation City of Palo Alto 20.0% City of Santa Clara 80.0% Total 100.0% Exhibit 2Item 6 Attachment A - Resolution Authorizing Approval of NCPA-BAMx Professional Services Agreement Item 6: Staff Report Pg. 40 Packet Pg. 107 of 312 City Council Staff Report From: City Manager Report Type: CONSENT CALENDAR Lead Department: Community Services Meeting Date: December 8, 2025 Report #:2510-5388 TITLE Approval of Contract Amendment No. 1 to Contract No. C25192924 with Concordia, LLC in the amount of $65,000, for a total contract amount not to exceed $696,966 for additional services associated with development of the Cubberley Master Plan; CEQA Status – CEQA will be completed as part of this project. RECOMMENDATION Staff recommends the City Council approve and authorize the City Manager or their designee to execute Amendment No. 1 to Contract No. C23187298C with Concordia, LLC (Attachment A) for additional services in an amount of $65,000 for additional services associated with the development of the Cubberley Master Plan for a revised total not-to-exceed amount of $696,966. BACKGROUND The City Council approved a contract with Concordia, LLC on December 2, 20241 to reinitiate master planning for the Cubberley site, building on work Concordia completed in 2019. The original contract is for an amount not to exceed $631,966 over a 24-month term. Master planning work began in January 2025 and is expected to be completed in December 2025, with final adoption in March 2026. In a parallel process, staff are working with a ballot strategist and polling expert to prepare for a potential November 2026 ballot measure to fund the Cubberley project. To date, two of four polls have been completed, and results of those polls along with community, Commission, and Council feedback has informed iterations of the master plan. 1 City Council, December 2, 2024; Agenda Item #18; SR# 2410-3634, https://recordsportal.paloalto.gov/Weblink/DocView.aspx?id=83117 Item 7 Item 7 Staff Report Item 7: Staff Report Pg. 1 Packet Pg. 108 of 312 Additional background on the Cubberley site and master planning effort is included in previous staff reports, most recently October 20, 20253. Master plan work completed to date can be found on the City’s website at www.paloalto.gov/improvecubberley. ANALYSIS o Auditorium o Buildings S, T, U, V o Buildings C, D, E, F, FH, H. 3City Council, October 20, 2025; Agenda Item #1; SR#2503-4353, https://cityofpaloalto.primegov.com/viewer/preview?id=0&type=8&uid=71b7244b-dd63-4983-814f-fc85664f01cd Item 7 Item 7 Staff Report Item 7: Staff Report Pg. 2 Packet Pg. 109 of 312 FISCAL/RESOURCE IMPACT STAKEHOLDER ENGAGEMENT ENVIRONMENTAL REVIEW ATTACHMENTS APPROVED BY: Item 7 Item 7 Staff Report Item 7: Staff Report Pg. 3 Packet Pg. 110 of 312 Vers.: Aug. 5, 2019 Page 1 of 11 AMENDMENT NO. 1 TO CONTRACT NO. C25192924 BETWEEN THE CITY OF PALO ALTO AND CONCORDIA, LLC This Amendment No. 1 (this “Amendment”) to Contract No. C25192924 (the “Contract” as defined below) is entered into as of December 1, 2025, by and between the CITY OF PALO ALTO, a California chartered municipal corporation (“CITY”), and CONCORDIA, LLC, a Louisiana Limited Liability Company, located at 2016 Oretha Castle Haley Boulevard, New Orleans, LA 70113 (“CONSULTANT”). CITY and CONSULTANT are referred to collectively as the “Parties” in this Amendment. R E C I T A L S A. The Contract (as defined below) was entered into by and between the Parties hereto for the provision to re-engage the community and develop a master plan for the Cubberley site, as detailed therein. B. The Parties now wish to amend the Contract in order to (1) add to the Scope of Services, and (2) increase the total not-to-exceed compensation amount by Sixty-Five Thousand Dollars ($65,000) from Six Hundred Thirty-One Thousand Nine Hundred Sixty-Six Dollars ($631,966) to a new not-to-exceed compensation amount of Six Hundred Ninety Six Thousand Nine Hundred Sixty-Six Dollars ($696,966), as detailed herein. NOW, THEREFORE, in consideration of the covenants, terms, conditions, and provisions of this Amendment, the Parties agree: SECTION 1. Definitions. The following definitions shall apply to this Amendment: Contract. The term “Contract” shall mean Contract No. C25192924 between CONSULTANT and CITY, dated December 2, 2024. a. Other Terms. Capitalized terms used and not defined in this Amendment shall have the meanings assigned to such terms in the Contract. SECTION 2. Section 4 “NOT TO EXCEED COMPENSATION” of the Contract is hereby amended to read as follows: “The compensation to be paid to CONSULTANT for performance of the Services shall be based on the compensation structure detailed in Exhibit C, entitled “COMPENSATION,” including any reimbursable expenses specified therein, and the maximum total compensation shall not exceed Six Hundred Fifty Thousand Eight Hundred Sixty Dollars ($650,860). The hourly schedule of rates, if applicable, is set out in Exhibit C-1, entitled “SCHEDULE OF RATES.” Any work performed or expenses incurred for which payment would result in a total exceeding the maximum compensation set forth in this Section 4 shall be at no cost to the CITY. Docusign Envelope ID: 5C9884CD-4B47-47A4-9880-034EFBEF3652 Item 7 Attachment A - Concordia, LLC Contract C25192924, Amendment 1 Item 7: Staff Report Pg. 4 Packet Pg. 111 of 312 Vers.: Aug. 5, 2019 Page 2 of 11 Optional Additional Services Provision (This provision applies only if checked and a not-to-exceed compensation amount for Additional Services is allocated below under this Section 4.) In addition to the not-to-exceed compensation specified above, CITY has set aside the not-to-exceed compensation amount of Forty-Six Thousand One Hundred and Six Dollars ($46,106) for the performance of Additional Services (as defined below). The total compensation for performance of the Services, Additional Services and any reimbursable expenses specified in Exhibit C, shall not exceed Six Hundred Ninety-Six Thousand Nine Hundred Sixty-Six Dollars ($696,966), as detailed in Exhibit C. “Additional Services” means any work that is determined by CITY to be necessary for the proper completion of the Project, but which is not included within the Scope of Services described at Exhibit A. CITY may elect to, but is not required to, authorize Additional Services up to the maximum amount of compensation set forth for Additional Services in this Section 4. CONSULTANT shall provide Additional Services only by advanced, written authorization from CITY as detailed in this Section. Additional Services, if any, shall be authorized by CITY with a Task Order assigned and authorized by CITY’s Project Manager, as identified in Section 13 (Project Management). Each Task Order shall be in substantially the same form as Exhibit A-1, entitled “PROFESSIONAL SERVICES TASK ORDER”. Each Task Order shall contain a specific scope of services, schedule of performance and maximum compensation amount, in accordance with the provisions of this Agreement. Compensation for Additional Services shall be specified by CITY in the Task Order, based on whichever is lowest: the compensation structure set forth in Exhibit C, the hourly rates set forth in Exhibit C-1, or a negotiated lump sum. To accept a Task Order, CONSULTANT shall sign the Task Order and return it to CITY’s Project Manager within the time specified by the Project Manager, and upon authorization by CITY (defined as counter-signature by the CITY Project Manager), the fully executed Task Order shall become part of this Agreement. The cumulative total compensation to CONSULTANT for all Task Orders authorized under this Agreement shall not exceed the amount of compensation set forth for Additional Services in this Section 4. CONSULTANT shall only be compensated for Additional Services performed under an authorized Task Order and only up to the maximum amount of compensation set forth for Additional Services in this Section 4. Performance of and payment for any Additional Services are subject to all requirements and restrictions in this Agreement.” SECTION 3. The following exhibit(s) to the Contract is/are hereby amended or added, as indicated below, to read as set forth in the attachment(s) to this Amendment, which is/are hereby incorporated in full into this Amendment and into the Contract by this reference: a. Exhibit “A” entitled “SCOPES OF SERVICES, AMENDMENT NO. 1”, AMENDED, REPLACES PREVIOUS. b. Exhibit “C” entitled “COMPENSATION, AMENDMENT NO. 1”, AMENDED, REPLACES PREVIOUS. Docusign Envelope ID: 5C9884CD-4B47-47A4-9880-034EFBEF3652 Item 7 Attachment A - Concordia, LLC Contract C25192924, Amendment 1 Item 7: Staff Report Pg. 5 Packet Pg. 112 of 312 Vers.: Aug. 5, 2019 Page 3 of 11 SECTION 4. Legal Effect. Except as modified by this Amendment, all other provisions of the Contract, including any exhibits thereto, shall remain in full force and effect. SECTION 5. Incorporation of Recitals. The recitals set forth above are terms of this Amendment and are fully incorporated herein by this reference. (SIGNATURE BLOCK FOLLOWS ON THE NEXT PAGE.) Docusign Envelope ID: 5C9884CD-4B47-47A4-9880-034EFBEF3652 Item 7 Attachment A - Concordia, LLC Contract C25192924, Amendment 1 Item 7: Staff Report Pg. 6 Packet Pg. 113 of 312 Vers.: Aug. 5, 2019 Page 4 of 11 SIGNATURES OF THE PARTIES IN WITNESS WHEREOF, the Parties have by their duly authorized representatives executed this Amendment effective as of the date first above written. CITY OF PALO ALTO City Manager APPROVED AS TO FORM: City Attorney or designee Officer 1 By: Name: Title: Officer 2 By: Name: Attachments: Exhibit “A” entitled “SCOPES OF SERVICES, AMENDMENT NO. 1”, AMENDED, REPLACES PREVIOUS Exhibit “C” entitled “COMPENSATION, AMENDMENT NO. 1”, AMENDED, REPLACES PREVIOUS Docusign Envelope ID: 5C9884CD-4B47-47A4-9880-034EFBEF3652 Partner Bobbie Hill Steven Bingler CEO Item 7 Attachment A - Concordia, LLC Contract C25192924, Amendment 1 Item 7: Staff Report Pg. 7 Packet Pg. 114 of 312 Vers.: Aug. 5, 2019 Page 5 of 11 EXHIBIT A SCOPES OF SERVICES, AMENDMENT NO. 1 (AMENDED, REPLACES PREVIOUS) CONSULTANT shall provide the Services detailed in this Exhibit A, entitled “SCOPE OF SERVICES”. Notwithstanding any provision herein to the contrary, CONSULTANT’s duties and services described in this Scope of Services shall not include preparing or assisting CITY with any portion of CITY’s preparation of a request for proposals, request for qualifications, or any other solicitation regarding a subsequent or additional contract with CITY. CITY shall at all times retain responsibility for public contracting, including with respect to any subsequent phase of this project. CONSULTANT’s participation in the planning, discussions, or drawing of project plans or specifications shall be limited to conceptual, preliminary, or initial plans or specifications. CONSULTANT shall cooperate with CITY to ensure that all bidders for a subsequent contract on any subsequent phase of this project have access to the same information, including all conceptual, preliminary, or initial plans or specifications prepared by CONSULTANT pursuant to this Scope of Services. This Agreement reinitiates master planning for the Cubberley site, building on work completed in 2017 with Concordia (Consultant). For continuity and efficiency, the City is re-engaging with Concordia for this work as they has a keen understanding of the Cubberley facility, neighborhood, and community and are well-positioned to build upon their previous plan. Making the 2026 ballot will require an expedient process to identify which elements of the Cubberley Concept Plan remain relevant while re-engaging the community and completing the appropriate level of CEQA analysis. Concordia was awarded a contract in 2018 after a competitive bid process to complete a community engagement effort and master plan for Cubberley, in partnership with the Palo Alto Unified School District (PAUSD). For context, the Cubberley site is partially owned by the city (8 acres) and partially owned by the school district (27 acres). At that time, the concept was to build a community center on the City’s land and shared use buildings on the school district’s land. The master plan was completed in November 2019 but due to a change in priorities for PAUSD the master plan was never adopted by the City Council. Since that time, the City and PAUSD have negotiated a deal by which the City will purchase 7 acres of land at the Cubberley site from the school district. The City’s intent is to re-develop the property with a new community center. On October 7, 2024 the City Council approved a Memorandum of Understanding with PAUSD to purchase the land and complete a master development plan for the site. The master plan, including CEQA review must be completed by March 2026. Consultant should expect to complete the master plan by December 31, 2025 to ensure there is adequate time to complete CEQA and obtain City Council approval. Task 1: Project Administration Consultant will manage the project efficiently to meet project milestones and schedule. Consultant will work with City staff to finalize a detailed schedule of work including which tasks can be conducted in parallel, critical path tasks, key decision points and frequency of regular Docusign Envelope ID: 5C9884CD-4B47-47A4-9880-034EFBEF3652 Item 7 Attachment A - Concordia, LLC Contract C25192924, Amendment 1 Item 7: Staff Report Pg. 8 Packet Pg. 115 of 312 Vers.: Aug. 5, 2019 Page 6 of 11 project team meetings/conference calls. All existing information that will be provided by the City will be identified in this task. Meetings to Include: • Regular bi-weekly coordination calls with City staff (virtual) Deliverables: • Request for information Task 2: Review 2019 Cubberley Concept Plan (Concept Plan) and Identify Gaps Consultant will review the previous Concept Plan and related documents (program document, community asset evaluation, and needs assessment) and identify which elements need to be revisited with City staff and/or the community. Consultant will then review the community’s current recreational, educational, and cultural assets to identify opportunities for the community center that address community preferences and fill existing gaps in services and programs, while maximizing public resources. The gaps and opportunities identified here will be used to develop the community and stakeholder engagement plan. Meetings to Include: • None Deliverables: • Memo to City staff summarizing results of Task 2 Task 3: Develop Community and Stakeholder Engagement Plan Consultant will develop a community and stakeholder engagement plan that will guide community outreach during the Master Plan process, including timing, method of engagement, and the number and format of workshops and community meetings. This task will build upon the data and information collected during the previous community engagement process. Consultant will obtain approval from City staff on the Plan. Meetings to Include: • Consultant/City review of Draft Stakeholder and Community Engagement Plan Deliverables: • Draft Stakeholder and Community Engagement Plan • Final Stakeholder and Community Engagement Plan Task 4: Implement the Community and Stakeholder Engagement Plan Consultant will implement the approved plan developed in Task 3 and confirm or revise the following: a. Community Asset Evaluation and Needs Assessment b. Vision, Goals and Opportunities c. Type and placement of indoor and outdoor community center and recreation facilities and amenities d. Preferred programming and spatial needs Meetings to Include: • Workshops and community meetings identified in the Engagement Plan Docusign Envelope ID: 5C9884CD-4B47-47A4-9880-034EFBEF3652 Item 7 Attachment A - Concordia, LLC Contract C25192924, Amendment 1 Item 7: Staff Report Pg. 9 Packet Pg. 116 of 312 Vers.: Aug. 5, 2019 Page 7 of 11 Deliverables: • Consultant will document the results of workshops and meetings • Programming Document Task 5: Conceptual Designs Consultant will work collaboratively with the City and community to develop three conceptual designs for a community center at Cubberley to include facility layout detailing how the site will support programming. The designs will reflect input received from the community and will build upon the 2019 concept plan. Each conceptual design will illustrate the arrangement of different program elements such as recreation, and wellness and multi-purpose, and flexible spaces. These conceptual designs will include illustrative 3D design work communicating how the buildings would house the program and relate to one another and the surrounding area. This level of design will communicate the function, form, and major relationships between the site elements pursuant to the program. The scenarios will be presented to City staff, the community, commissions, and City Council for review. Meetings to Include: • Workshops and community meetings identified in the Engagement Plan Deliverables: • Three conceptual designs in electronic, print and display formats • Presentations to Parks and Recreation Commission, Planning and Transportation Commission, and City Council on facility and program concepts Task 6: Phase 1 site plan development Design for flexibility to complete or indefinitely pause after construction of Phase 1 and Site improvements. Include renovation for the remainder of the site. The Design Team will provide a plan for the following Phase 1 elements: • Phase 1 New Construction: o Recreation and Wellness o Education and Enrichment o Performing Arts o Site work • Phase 1 Renovations: o Theatre – Renovate for use by community groups o Pavilion – Renovate for use by theater companies and larger productions o Building I – Renovate for program uses • Site plan design for the remaining site which may include renovation and programming of the following buildings and surrounding site: o Auditorium o Buildings S, T, U, V o Buildings C, D, E, F, FH, H Design Option: New Construction vs Renovation and Parking Strategy: Extend duration of three design options past Meeting 2 for consideration and feedback from stakeholders. • Design Option 1: Renovate the existing three concrete frame structures on campus: Building I, Theatre and Pavilion. Docusign Envelope ID: 5C9884CD-4B47-47A4-9880-034EFBEF3652 Item 7 Attachment A - Concordia, LLC Contract C25192924, Amendment 1 Item 7: Staff Report Pg. 10 Packet Pg. 117 of 312 Vers.: Aug. 5, 2019 Page 8 of 11 • Design Option 2 is to demo these structures and replace these program spaces with new construction buildings. • Design Option 3: Study Underground vs Above Grade parking systems Design Option: Theatre District: Concordia will revise the Master Plan to accommodate plans to renovate the existing Pavilion and Theatre structures as Performing Arts spaces. Meetings to Include: • Up to two (2) Ad Hoc Committee meetings and preparation • Up to four (4) other Commission meetings and preparation Deliverables: Site Plan Design Options: • Phase 1 development • Site plan and programming revisions resulting from Theatre District plans • Renovation vs New construction studies for Building I, Theatre, Pavilion Task 7: Draft Cubberley Master Plan Report Consultant will develop a Draft Master Plan Report based on the preferred conceptual design from Task 5. The draft Master Plan will include phasing scenarios for site and facility reconstruction and cost estimates for each phase. The Draft Master Plan report will also address opportunities and constraints related to connectivity of the community center to nearby schools, neighborhoods, and other community facilities. Consultant will present the draft report to various commissions and the City Council. Consultant and City staff will determine if meetings should be attended in person or virtually. Meetings to Include: • City Staff (presentation) • Parks and Recreation Commission • Planning and Transportation Commission • City Council Deliverables: • City staff study sessions: presentation and summary • Presentation to Parks and Recreation Commission, Planning and Transportation Commission, and City Council • Administrative Draft Master Plan Report • Public Draft Master Plan Report Task 8: Community Master Plan Review Meeting After completing the Public Draft Master Plan report in Task 6, Consultant will design a community-wide review meeting to solicit feedback on the Draft Master Plan Report and the site’s conceptual design. Residents will have the opportunity to give feedback and make final recommendations on the plan development. Meetings to Include: Docusign Envelope ID: 5C9884CD-4B47-47A4-9880-034EFBEF3652 Item 7 Attachment A - Concordia, LLC Contract C25192924, Amendment 1 Item 7: Staff Report Pg. 11 Packet Pg. 118 of 312 Vers.: Aug. 5, 2019 Page 9 of 11 • Community Meeting Deliverables: • Community Meeting activities, presentations, facilitation, summary Task 9: California Environmental Quality Act (CEQA) Support Consultant will support the City’s consultant that will conduct the CEQA review process. Specifically, this includes coordination and support for CEQA consultant, including requested design narrative, drawings, diagrams, and other design-related materials. Meetings to Include: • None Deliverables: • None Task 10: Final Cubberley Master Plan Based on the combined input of City Boards, Commissions, City Council, District Board of Education and the community, consultant and the Staff Project Team will identify the necessary revisions and update the Draft Master Plan Report to reflect the input received. The site’s conceptual design will be revised in parallel as part of this effort. This revised document will be finalized as the Revised Draft Cubberley Master Plan. This version of the document will be presented to the City’s Commissions for their review and recommendations and to City Council for adoption. Meetings to Include: • Project Team Meeting • Parks and Recreation Commission Study Session • City Council Meeting • Additional City Commission meetings, if needed Deliverables: • Project Team meeting agenda, presentation, and summary • Attendance, activities, presentations, facilitation, and summaries at the following meetings: • Project Team Meeting (teleconference) • Parks and Recreation Commission Meeting • City Council Meeting • Additional City Commission meetings as needed (Architectural Review Board and/or Planning and Transportation Commission) • Final Cubberley Master Plan Additional Services: Additional Services for the Cubberley Master Plan may include: additional community meetings; commission, council, or other public meetings; any further work outside the work detailed in the project scope that is necessary to complete the project. Docusign Envelope ID: 5C9884CD-4B47-47A4-9880-034EFBEF3652 Item 7 Attachment A - Concordia, LLC Contract C25192924, Amendment 1 Item 7: Staff Report Pg. 12 Packet Pg. 119 of 312 Vers.: Aug. 5, 2019 Page 10 of 11 EXHIBIT C COMPENSATION, AMENDMENT NO. 1 (AMENDED, REPLACES PREVIOUS) CITY agrees to compensate CONSULTANT for Services performed in accordance with the terms and conditions of this Agreement, and as set forth in the budget schedule below. Compensation shall be calculated based on the rate schedule attached as Exhibit C-1 up to the not to exceed budget amount for each task set forth below. CITY’s Project Manager may approve in writing the transfer of budget amounts between any of the tasks or categories listed below, provided that the total compensation for the Services, including any specified reimbursable expenses, and the total compensation for Additional Services (if any, per Section 4 of the Agreement) do not exceed the amounts set forth in Section 4 of this Agreement. CONSULTANT agrees to complete all Services, any specified reimbursable expenses, and Additional Services (if any, per Section 4), within this/these amount(s). Any work performed or expenses incurred for which payment would result in a total exceeding the maximum amount of compensation set forth in this Agreement shall be at no cost to the CITY. BUDGET SCHEDULE TASK NOT TO EXCEED AMOUNT Task 1 (Project Administration) $41,325 Task 2 (Review 2019 Cubberley Concept Plan (Concept Plan) and (Implement Stakeholder and Community Engagement Docusign Envelope ID: 5C9884CD-4B47-47A4-9880-034EFBEF3652 Item 7 Attachment A - Concordia, LLC Contract C25192924, Amendment 1 Item 7: Staff Report Pg. 13 Packet Pg. 120 of 312 Vers.: Aug. 5, 2019 Page 11 of 11 Allowances (Transportation Study- Revised, Sustainability Report, Total for Services and Reimbursable Expenses $650,860 Maximum Total Compensation $696,966 INITIAL DEPOSIT Once the contract is fully executed an initial deposit of $5,000 will be due to as a minimum payment under this Agreement. This deposit shall be applied as a credit to the invoice(s) that follow it until it is depleted. ALLOWANCES CONSULTANT will solicit proposals for Services deemed necessary to the Work upon determination of the scope for such Services. CONSULTANT will coordinate with the CITY to manage the Allowances budget and will notify the CITY, and advise, in the event that the required Services exceed the maximum Allowance budget amounts. REIMBURSABLE EXPENSES CONSULTANT’S ordinary business expenses, such as administrative, overhead, administrative support time/overtime, information systems, software and hardware, photocopying, telecommunications (telephone, internet), in-house printing, insurance and other ordinary business expenses, are included within the scope of payment for Services and are not reimbursable expenses hereunder. Reimbursable expenses, if any are specified as reimbursable under this section, will be reimbursed at actual cost. The expenses (by type, e.g. travel) for which CONSULTANT will be reimbursed are: Travel Expenses and Printing & Materials, up to the not-to-exceed amount of: $29,140. A. Travel outside the San Francisco Bay Area, including transportation and meals, if specified as reimbursable, will be reimbursed at actual cost subject to the City of Palo Alto’s policy for reimbursement of travel and meal expenses. B. Long distance telephone service charges, cellular phone service charges, facsimile transmission and postage charges, if specified as reimbursable, will be reimbursed at actual cost. All requests for reimbursement of expenses, if any are specified as reimbursable under this section, shall be accompanied by appropriate backup documentation and information. Docusign Envelope ID: 5C9884CD-4B47-47A4-9880-034EFBEF3652 Item 7 Attachment A - Concordia, LLC Contract C25192924, Amendment 1 Item 7: Staff Report Pg. 14 Packet Pg. 121 of 312 Certificate Of Completion Envelope Id: 5C9884CD-4B47-47A4-9880-034EFBEF3652 Status: Completed Subject: Complete with Docusign: Final Amend No. 1 Concordia (C25192924).pdf Source Envelope: Document Pages: 11 Signatures: 2 Envelope Originator: Certificate Pages: 2 Initials: 0 Alice Harrison AutoNav: Enabled EnvelopeId Stamping: Enabled Time Zone: (UTC-08:00) Pacific Time (US & Canada) 250 Hamilton Ave Palo Alto , CA 94301 alice.harrison@paloalto.gov IP Address: 136.226.64.118 Record Tracking Status: Original 11/20/2025 1:42:33 PM Holder: Alice Harrison alice.harrison@paloalto.gov Location: DocuSign Security Appliance Status: Connected Pool: StateLocal Storage Appliance Status: Connected Pool: City of Palo Alto Location: Docusign Signer Events Signature Timestamp Bobbie Hill Bhill@Concordia.com Partner Concordia, LLC Security Level: Email, Account Authentication (None) Signature Adoption: Pre-selected Style Using IP Address: 65.37.97.97 Signed using mobile Sent: 11/20/2025 1:47:26 PM Viewed: 11/20/2025 6:34:41 PM Signed: 11/20/2025 6:35:21 PM Electronic Record and Signature Disclosure: Not Offered via Docusign Steven Bingler Sbingler@Concordia.com CEO Security Level: Email, Account Authentication (None)Signature Adoption: Drawn on Device Using IP Address: 2600:1700:8070:492f:95d:68bc:93bd:c03b Signed using mobile Sent: 11/20/2025 6:35:22 PM Viewed: 11/20/2025 6:50:47 PM Signed: 11/20/2025 6:51:43 PM Electronic Record and Signature Disclosure: Not Offered via Docusign In Person Signer Events Signature Timestamp Editor Delivery Events Status Timestamp Agent Delivery Events Status Timestamp Intermediary Delivery Events Status Timestamp Certified Delivery Events Status Timestamp Carbon Copy Events Status Timestamp Cayla Coga cayla.koga@paloalto.gov Administrative Assistant City of Palo Alto Security Level: Email, Account Authentication (None) Sent: 11/20/2025 6:51:44 PM Electronic Record and Signature Disclosure: Item 7 Attachment A - Concordia, LLC Contract C25192924, Amendment 1 Item 7: Staff Report Pg. 15 Packet Pg. 122 of 312 Carbon Copy Events Status Timestamp Not Offered via Docusign Witness Events Signature Timestamp Notary Events Signature Timestamp Envelope Summary Events Status Timestamps Envelope Sent Hashed/Encrypted 11/20/2025 1:47:26 PM Certified Delivered Security Checked 11/20/2025 6:50:47 PM Signing Complete Security Checked 11/20/2025 6:51:43 PM Completed Security Checked 11/20/2025 6:51:44 PM Payment Events Status Timestamps Item 7 Attachment A - Concordia, LLC Contract C25192924, Amendment 1 Item 7: Staff Report Pg. 16 Packet Pg. 123 of 312 City Council Staff Report From: City Manager Report Type: CONSENT CALENDAR Lead Department: IT Department Meeting Date: December 8, 2025 Report #:2511-5394 TITLE Approval of Contract Amendment Number 5 to Contract Number C14151181 with SAP Public Services in the Amount of $334,355 for SAP Maintenance and Support for One Year, ending December 2026; CEQA Status – Not a Project. RECOMMENDATION Staff recommends that the City Council approve and authorize the City Manager or designee to execute Amendment Number 5 to Contract C14151181 with SAP Public Services (Attachment A) for SAP Maintenance and Support for 2026 in an amount not to exceed $334,355. This amendment results in a revised total contract not-to-exceed amount of $1,920,867. BACKGROUND Over the past two decades, the City Council has approved multiple renewals and amendments to ensure continued maintenance, compliance, and modernization of the City’s Enterprise Resource Planning (ERP) environment. In July 2002, the City selected SAP Public Services through a competitive Request for Proposals (RFP) process as the enterprise-wide ERP platform. The SAP ERP system was implemented across all major departments to support Citywide financial, human resources, and utility operations in 2003. Since then, contracts have been approved in 2007, 2013, 20151, 20182, 20193, and 20214 for continued licensing and maintenance services for the ERP system. 1 November 2, 2015 City Council Staff Report # 5955: https://www.paloalto.gov/files/assets/public/v/1/agendas- minutes-reports/reports/city-manager-reports-cmrs/year-archive/2015/cmr-5955.pdf 2 December 17, 2018 City Council Staff Report # 9827: https://www.paloalto.gov/files/assets/public/v/1/agendas- minutes-reports/reports/city-manager-reports-cmrs/year-archive/2018/id-9827.pdf?t=53847.98 3 October 7, 2019 City Council Staff Report # 10033: https://www.paloalto.gov/files/assets/public/v/1/agendas- minutes-reports/reports/city-manager-reports-cmrs/year-archive/2019/id-10033.pdf 4 March 8, 2021 City Council Staff Report # 11810: https://www.cityofpaloalto.org/files/assets/public/v/1/agendas-minutes-reports/reports/city-manager-reports- cmrs/year-archive/2021/id-11810.pdf Item 8 Item 8 Staff Report Item 8: Staff Report Pg. 1 Packet Pg. 124 of 312 SAP has announced that support for the current SAP ERP platform will end on January 1, 2028. Running the system beyond this date would introduce increased risk, including the loss of vendor support, potential security vulnerabilities, and limited access to future enhancements. The Finance Committee heard staff’s recommendation at its meeting on September 16, 2025, and unanimously recommended City Council approval of the recommendation to migrate to SAP S/4HANA – SAP’s latest cloud-based ERP platform. City Council approved the upgraded licensing costs for five years of $6.6 million unanimously on September 29, 20259 and are scheduled to consider the implementation costs on December 1, 202510. The Committee review and Council approval acknowledged the total cost of $13.3 million once implementation, transition costs, and additional temporary staffing costs were included. ANALYSIS Delivery of legally mandated updates (e.g., payroll tax table and compliance changes); Security patches and critical system corrections; Ongoing functionality enhancements; and Access to SAP’s technical assistance center for issue resolution. 9 September 29, 2025 City Council Report: https://cityofpaloalto.primegov.com/Portal/Meeting?meetingTemplateId=16240 10 December 1, 2025 City Council Report: https://cityofpaloalto.primegov.com/Portal/Meeting?meetingTemplateId=16332 Item 8 Item 8 Staff Report Item 8: Staff Report Pg. 2 Packet Pg. 125 of 312 FISCAL/RESOURCE IMPACT STAKEHOLDER ENGAGEMENT ENVIRONMENTAL REVIEW Quality Act (CEQA) under CEQA Guidelines section 15061(c)(3).  ATTACHMENTS APPROVED BY: Item 8 Item 8 Staff Report Item 8: Staff Report Pg. 3 Packet Pg. 126 of 312 Amendment Issued January 1, 2026 to Amendment Issued January 1, 2021 to Appendix 1, as amended, effective July 22, 2002 Appendix 2, effective July 22, 2002 Appendix 7 effective July 25, 2007 Appendix 10 effective December 18, 2012 Amendment effective October 6, 2015 Amendment effective December 17, 2018 Order Form 11 effective October 12, 2019 (collectively “the Appendices”) to Software End-User License Agreement (the “Agreement”) C14151181 effective July 22, 2002 between CITY OF PALO ALTO ("Licensee") and SAP Public Services, Inc. ("SAP") As of the issuance date of January 1, 2026, this Amendment modifies the Agreement, as amended by the above-referenced Appendices, all of which are incorporated herein by reference, between the parties. In any instance in which a provision of this Amendment contradicts or is inconsistent with the provisions of the Agreement, as amended by the Appendices, the provisions of this Amendment shall prevail and govern and the contradicted or inconsistent provisions of the Agreement, as amended by the Appendices, which shall be deemed amended accordingly. SAP and Licensee agree that the Agreement, as amended by the Appendices, is hereby modified by this Amendment as follows: 1) The attached two-page document entitled “SAP 2026 Maintenance & Support Renewal” for January 1, 2026 – December 31, 2026, for SAP maintenance and enterprise support services is added to the Agreement, as amended by the Appendices. The maintenance and support fees and dates provided in the Agreement, as modified by the Appendices, are modified and/or extended as provided in the attached document entitled “SAP 2026 Maintenance & Support Renewal”, except, in event of a conflict, the following shall control over the attached document entitled “SAP 2026 Maintenance & Support Renewal” Contract Year * Provided Licensee does not acquire additional licenses in 2026 beyond what is contemplated in the attached document entitled “SAP 2026 Maintenance & Support Renewal.” Docusign Envelope ID: ADE2A4C6-12C4-4A9E-8C71-759E70C82A0B Item 8 Attachment A - SAP Contract C14151181 Amendment Dec 2025 Item 8: Staff Report Pg. 4 Packet Pg. 127 of 312 EXCEPT AS HEREIN PROVIDED, NONE OF THE PROVISIONS OF THE AGREEMENT, AS MODIFIED BY THE APPENDICES, SHALL BE AFFECTED BY THIS AMENDMENT. SAP Public Services, Inc. CITY OF PALO ALTO By: ____________________________ By: ____________________________ APPROVED AS TO FORM: By:_____________________________ City Attorney or Designee Attachment: “SAP 2026 Maintenance & Support Renewal” Docusign Envelope ID: ADE2A4C6-12C4-4A9E-8C71-759E70C82A0B Assistant General Counsel 11/19/2025 Cameron Loyal Item 8 Attachment A - SAP Contract C14151181 Amendment Dec 2025 Item 8: Staff Report Pg. 5 Packet Pg. 128 of 312 SAP 2026 Maintenance & Support Renewal October 30, 2025 SAP Public Services, Inc. Ronald Reagan Building International Trade Center 1300 Pennsylvania Ave., N.W., Suite 600 Washington, DC 20004 City of Palo Alto USA 250 Hamilton Ave PALO ALTO CA 94301 United States Dear Customer, The purpose of this letter is to provide you with a projection of estimated fees in advance of your 2026 support invoice(s) from SAP, to assist you when preparing new purchase orders for your next term of maintenance. The projection below estimates your fees to be invoiced under your support contracts with SAP. The net values include any CPI price increase, where applicable and consistent with terms of your contract(s). Order ID Settlement Settlement Base Start End USD MT%*Net Value USD Tax Amt USD Total Amt USD CMS ID Old PO No: New PO No: C14151181 CMS ID Old PO No: New PO No: C14151181 CMS ID Old PO No: New PO No: C14151181 CMS ID Old PO No: New PO No: C14151181 Docusign Envelope ID: ADE2A4C6-12C4-4A9E-8C71-759E70C82A0B Item 8 Attachment A - SAP Contract C14151181 Amendment Dec 2025 Item 8: Staff Report Pg. 6 Packet Pg. 129 of 312 13609096 01.01.2026 31.12.2026 227,503.39 24.761 56,332.11 0.00 56,332.11 CMS ID 3061175970 Order Form 11 - Eff. 12 Oct, 2019 Old PO No: New PO No: C14151181 TOTAL 334,354.95 0.00 334,354.95 Need a purchase order to appear in your next invoices? SAP now offers a new self-service portal called SAP for Me. In it you can find all the information you need to submit your PO number or select no PO number required*: Provide PO Information *Subject to 3 decimal rounding. **If you need to update your PO information and for any reason you cannot access SAP for Me, please reply to po.collection.na@sap.com, For the billing team to be able to add it in the system and match it with the correct contract, we would like to request the following basic data to be provided: CMS/Case ID (Contract Management System) 10-digit case number (information located in the Header/ Footer of your contract and/or in your previous invoice) Quote ID (information located in the footer of your contract) or attach a copy of the contract if you can’t find the CMS/Case ID or Quote ID or SAP Order number (you can find this reference in your previous invoice) If you require the help of our team, you can submit your question or supply an alternative contact for future PO Projections via the Get Assistance button in SAP for Me. This document and the attached projection are non-binding, are provided for your information only and do not alter or amend your agreements with SAP, including your duties to pay maintenance fees to SAP. This projection covers software maintenance/support details with regard to software licensed under your agreements in place with SAP at the time of this projection only. Any other license types such as subscription fees are excluded from this projection. SAP reserves all rights under its agreement(s) with you. This document is subject to all Confidentiality and/or Proprietary Information provisions of the Software End User License Agreement between Licensee and SAP. The projection may include applicable taxes that may be due, based on the tax rates and other information available to SAP at the time of the projection. With respect to your Tax/VAT ID, a valid direct pay permit or tax-exempt certificate must be provided to SAP no later than before invoicing. Your invoice(s) from SAP may vary from the projection due to a number of factors including but not limited to licensing of additional software from SAP, changes to taxes, CPI increase and correction of errors. In the event of any variance between the projection and your invoice(s) from SAP, the invoice(s) shall prevail. All fees are to be paid in accordance with your agreements with SAP. Kindest regards, SAP Finance Copied to: SAP Account executive - SAP AR Analyst: Mary Lou Gamba Docusign Envelope ID: ADE2A4C6-12C4-4A9E-8C71-759E70C82A0B Item 8 Attachment A - SAP Contract C14151181 Amendment Dec 2025 Item 8: Staff Report Pg. 7 Packet Pg. 130 of 312 City Council Staff Report From: City Manager Report Type: CONSENT CALENDAR Lead Department: Police Meeting Date: December 8, 2025 Report #:2509-5192 TITLE FIRST READ: Adoption of an Ordinance Renewing the Police Department's Military Equipment Use Policy Under AB 481; CEQA status – not a project. RECOMMENDATION Staff recommends that the City Council adopt an ordinance renewing and restating Ordinance No. 5562 (Attachment A), approving the Palo Alto Police Department Military Equipment Use Policy; and determining that, based on the PAPD 2025 AB 481 Annual Report (Attachment B), each type of military equipment has been used in compliance with Ordinance No. 5635. EXECUTIVE SUMMARY This report contains an annual report on the Police Department’s possession and use of certain types of specialized equipment, as required by statute. Also pursuant to statute, the Department’s continued use of this equipment requires re-authorization annually by the City Council, via the renewal of an existing City ordinance. BACKGROUND Assembly Bill 481 was adopted by the California Legislature and approved by Governor Gavin Newsom in September 2021.1 It went into effect on January 1, 2022. AB 481 is designed to increase community awareness and oversight over the possession and use by local police departments of certain types of equipment that AB 481 labels as “military” equipment. It requires the City Council to provide both authorization and oversight of the equipment used. The law, codified in California Government Code sections 7070 through 7075, requires law enforcement agencies to produce a military equipment use policy that identifies and describes: each type of military equipment; its authorized use; fiscal impact; rules/laws that govern use of such equipment; training required; and mechanisms to ensure compliance with the policy. (See 1 1 Assembly Bill 481 Law enforcement and state agencies: military equipment: funding, acquisition, and use; https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202120220AB481 Item 9 Item 9 Staff Report Item 9: Staff Report Pg. 1 Packet Pg. 131 of 312 Gov. Code section 7070(d)). On September 27, 2022, in accordance with AB 481, the Palo Alto City Council adopted Ordinance No. 5562, approving Palo Alto Police Department Policy 716: Military Equipment;3 the ordinance was last renewed on November 4, 2024 as Ordinance No. 5635. Additionally, AB 481 requires an annual report, community engagement meeting, and annual review by the governing body for continued use of the equipment. The Department’s 2025 AB 481 Annual Report describes its use of qualifying equipment over the past year, current inventory, related costs, and plans to replenish its supply of certain pieces of equipment in the coming year. DISCUSSION 3 2 Palo Alto Police Department Policy 716 Military Equipment; www.paloalto.gov/files/assets/public/v/1/police- department/public-information-portal/papd-policy-716.pdf Item 9 Item 9 Staff Report Item 9: Staff Report Pg. 2 Packet Pg. 132 of 312 statutes, and state and federal case law, in addition to AB 481. Personnel of the Palo Alto Police Department meet or exceed all California Peace Officer Standards & Training (POST) training requirements that apply to the qualifying equipment. The Department does not possess any equipment that is atypical for the region. Palo Alto possesses fewer types of this equipment than many other Bay Area agencies. Many of the pieces of qualifying equipment possessed by the Palo Alto Police Department are specifically designed for the safe resolution of critical incidents, as opposed to everyday routine patrol deployment; as such, some are used exclusively by members of the specially-trained PAPD Crisis Response Unit (which includes the Special Weapons & Tactics (SWAT) Team and the Crisis Negotiation Team), who receive additional specialized training in the use of the equipment. The proposed policy outlines all qualifying equipment possessed by the Department in Section “G” beginning on page 6 of the policy. Alternatives to the use of deadly force, such as less-lethal munitions and chemical agents available to properly certified and/or trained sworn officers to provide less-lethal force options to safely effectuate arrests of criminal suspects in limited situations. Means of de-escalation, such as the long-range acoustic device intended to send messages to facilitate communications with subjects from a safe distance. Means of gathering information without jeopardizing the safety of officers, bystanders, and criminal suspects, such as an unmanned aerial vehicle or robot, neither of which are possessed by the Palo Alto Police Department but that may be used by a partner law enforcement agency to safely resolve a critical incident during a mutual aid event. Command and control vehicle (the Mobile Emergency Operations Center, or MEOC) which serves as a mobile command post at critical incidents, disasters, or special events, as well as a backup 9–1–1 dispatch center in the event the City’s main dispatch center is compromised or unavailable. The MEOC is most typically operated by the City’s Office of Emergency Services. Diversionary devices, used exclusively by members of the Department’s SWAT team who have received specialized additional training; the equipment creates an auditory and visual diversion to facilitate the operation of tactical teams during a critical public safety incident. One sniper rifle with associated ammunition, used exclusively by members of the Department’s SWAT team who have received specialized additional training. While not covered by AB 481, all properly trained patrol officers carry standard-issue AR-15 patrol rifles that are carried locked in patrol vehicles. In both cases, rifles allow sworn officers to address threats with greater precision at a greater distance. Item 9 Item 9 Staff Report Item 9: Staff Report Pg. 3 Packet Pg. 133 of 312 Annual Reporting Requirements The Mobile Emergency Operations Center was deployed in support of the summer fire watch detail in July of 2024, two large concerts in May and June of 2025, as well as four community events. The less lethal launcher was deployed in August of 2024 during the detention of a subject armed with a knife. During the December 2024 search for fleeing stolen vehicle suspects, the operation was supported by a drone operated by a neighboring local law enforcement agency. During the December 2024 search for an elderly missing person, the operation was supported by a drone operated by a neighboring local law enforcement agency. During the March 2025 investigation of a fatal collision, the operation was supported by a drone operated by a neighboring local law enforcement agency. Item 9 Item 9 Staff Report Item 9: Staff Report Pg. 4 Packet Pg. 134 of 312 plans to replenish its inventory only as necessary to maintain an adequate supply for training and potential operational use over the next year. FISCAL/RESOURCE IMPACT There are no budget implications resulting from the adoption of this policy. Planned purchases articulated above are anticipated to be made using the Department’s FY 2026 Adopted General Fund Budget. STAKEHOLDER ENGAGEMENT 5 5 Palo Alto Police Department AB 481 Community Meeting, November 20, 2025; https://www.paloalto.gov/Departments/Police/Public-Information-Portal/Equipment-and-Assembly-Bill-481 Item 9 Item 9 Staff Report Item 9: Staff Report Pg. 5 Packet Pg. 135 of 312 POLICY IMPLICATIONS With Council renewal of the ordinance, the Police Department will continue to have access to each of its existing types of qualifying equipment (or analogous alternative), and the corresponding policies and procedures surrounding the use of the equipment will remain in effect. ENVIRONMENTAL REVIEW ATTACHMENTS APPROVED BY: Item 9 Item 9 Staff Report Item 9: Staff Report Pg. 6 Packet Pg. 136 of 312 *NOT YET APPROVED* 1 Ordinance No. _____ Ordinance of the Council of the City of Palo Alto Renewing the Military Equipment Use Policy in Compliance with Govt. Code Section 7070 et seq. (2025-2026) The Council of the City of Palo Alto ORDAINS as follows: SECTION 1. Findings and declarations. The City Council finds and declares as follows: 1. In 2021, the California Legislature and the Governor approved AB 481, which requires the City Council to approve a “Military Equipment Use Policy” in order to acquire, use, or seek funds for the use of certain equipment used by law enforcement. AB 481 is codified at Gov. Code section 7070 et seq. 2. The City Council adopted Ordinance 5562 in September 2022 to approve the City’s first Military Equipment Use Policy. The Ordinance was last renewed on November 4, 2024 as Ordinance 5636. 3. As required by Govt. Code section 7072, the Palo Alto Police Department submitted an annual military equipment report for each type of military equipment approved by the City Council. This report was posted publicly on the Department’s website in November 2025. The Department also held a community engagement meeting on November 20, 2025. 4. As required by Govt. Code section 7071, the City Council now intends to renew and restate Ordinance 5635 to implement the Military Equipment Use Policy for another year. SECTION 2. The City Council makes the following required findings in compliance with Gov. Code section 7071(d)(1) and (e) as to the attached Military Equipment Use Policy: (A) The military equipment is necessary because there is no reasonable alternative that can achieve the same objective of officer and civilian safety. (B) The proposed military equipment use policy will safeguard the public’s welfare, safety, civil rights, and civil liberties. (C) The equipment is reasonably cost effective compared to available alternatives that can achieve the same objective of officer and civilian safety. (D) Prior military equipment use complied with the military equipment use policy that was in effect at the time. SECTION 3. The City Council hereby approves the attached Military Equipment Use Policy incorporated as Exhibit A to this ordinance. SECTION 4. If any section, subsection, sentence, clause, or phrase of this Ordinance is for any reason held to be invalid or unconstitutional by a decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Ordinance. The City Council hereby declares that it would have passed this Ordinance and each and every section, subsection, sentence, clause, or phrase not declared invalid or unconstitutional without regard to whether any portion of the Ordinance would be subsequently declared invalid or unconstitutional. Item 9 Attachment A - Ordinance Renewing the City's Military Equipment Use Policy Item 9: Staff Report Pg. 7 Packet Pg. 137 of 312 *NOT YET APPROVED* 2 SECTION 5. The Council finds that adoption of this Ordinance is not a “project” within the meaning of CEQA. SECTION 6. This Ordinance shall be effective on the thirty-first date after the date of its adoption. This Ordinance shall supersede Ordinance 5635, and any conflict shall be resolved in favor of this Ordinance. SECTION 7. This Ordinance shall be uncodified. INTRODUCED: PASSED: AYES: NOES: ABSENT: ABSTENTIONS: NOT PARTICIPATING: ATTEST: ____________________________ ____________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: ____________________________ ____________________________ Assistant City Attorney City Manager ____________________________ Chief of Police Item 9 Attachment A - Ordinance Renewing the City's Military Equipment Use Policy Item 9: Staff Report Pg. 8 Packet Pg. 138 of 312 *NOT YET APPROVED* 3 Exhibit A Palo Alto Police Department Military Equipment Use Policy (Updated November 2025) I. PURPOSE This policy is provided to fulfill the obligations set forth in Assembly Bill No. 481 as codified at Govt. Code section 7070 et seq., and establishes guidelines for the acquisition, funding, use and reporting of “military equipment”, as the term is defined in Government Code section 7070. These obligations include but are not limited to seeking approval on specific items deemed, by statute, to be military equipment and requirements related to compliance, annual reporting, cataloging, and complaints regarding these items. II. PROCEDURE A. DEFINITIONS 1. Governing Body – The City Council of the City of Palo Alto. 2. Military Equipment – Shall have the same meaning as defined by California Government Code § 7070(c). B. GOVERNING BODY APPROVAL 1. The Department shall obtain approval of the governing body prior to engaging in any of the following activities: a. Requesting military equipment made available pursuant to Section 2576a of Title 10 of the United States Code. b. Seeking funds for military equipment including, but not limited to, applying for a grant, soliciting or accepting private, local, state, or federal funds, in-kind donations, or other donations or transfers. c. Acquiring military equipment either permanently or temporarily, including by borrowing or leasing. d. Collaborating with another law enforcement agency in the deployment or other use of military equipment within the territorial jurisdiction of the governing body. e. Using any new or existing military equipment for a purpose, in a manner, or by a person not previously approved by the governing body pursuant to general order f. Soliciting or responding to a proposal for, or entering into an agreement with, any other person or entity to seek funds for, apply to receive, acquire, use, or collaborate in the use of, military equipment. g. Acquiring military equipment through any means not provided in a. through f. 2. In seeking the approval of the governing body, the Department shall comply with Gov. Code § 7071, which requires that the Department submit a proposed military equipment use policy, or subsequent amendments, to the City Council and the public via the law enforcement agency’s internet website at least 30 days prior to any public hearing concerning the military equipment at issue. Item 9 Attachment A - Ordinance Renewing the City's Military Equipment Use Policy Item 9: Staff Report Pg. 9 Packet Pg. 139 of 312 *NOT YET APPROVED* 4 3. The governing body must be able to make the following findings in approving the Military Equipment Use Policy as required by Gov. Code § 7071(d)(1) in order to use military equipment: a. The military equipment is necessary because there is no reasonable alternative that can achieve the same objective of officer and civilian safety. b. The proposed military equipment use policy will safeguard the public’s welfare, safety, civil rights, and civil liberties. c. If purchasing the equipment, the equipment is reasonably cost effective compared to available alternatives that can achieve the same objective of officer and civilian safety. d. Prior military equipment use complied with the military equipment use policy that was in effect at the time, or if prior uses did not comply with the accompanying military equipment use policy, corrective action has been taken to remedy nonconforming uses and ensure future compliance. C. MILITARY EQUIPMENT ANNUAL REPORT The Department shall submit an annual military equipment report to the governing body that addresses each type of military equipment possessed by the Department in compliance with Gov. Code § 7072. 1. The Department shall also make each annual military equipment report publicly available on its internet website for as long as the military equipment is available for use. 2. The annual military equipment report shall, at a minimum, include the following information for the immediately preceding calendar year for each type of military equipment: a. A summary of how the military equipment was used and the purpose of its use. b. A summary of any complaints or concerns received concerning the military equipment. c. The results of any internal audits, any information about violations of the military equipment use policy, and any actions taken in response. d. The total annual cost for each type of military equipment, including acquisition, personnel, training, transportation, maintenance, storage, upgrade, and other ongoing costs, and from what source funds will be provided for the military equipment in the calendar year following submission of the annual military equipment report. e. The quantity possessed for each type of military equipment. f. If the Department intends to acquire additional military equipment in the next year, the quantity sought for each type of military equipment. The Department will document each use of military equipment and, via administrative review, ensure compliance with this policy. Any instances of non-compliance will be reported to the City Council via the annual military equipment report, and to the Independent Police Auditor where appropriate. Item 9 Attachment A - Ordinance Renewing the City's Military Equipment Use Policy Item 9: Staff Report Pg. 10 Packet Pg. 140 of 312 *NOT YET APPROVED* 5 D. MILITARY EQUIPMENT USE POLICY COMPLAINTS AND CONCERNS Pursuant to Gov. Code § 7070(d)(7), members of the public may register complaints or concerns or submit questions by any of the following means: 1. Via email to: militaryequipment@cityofpaloalto.org 2. Via phone call to: (650) 329-2406 3. Via mail sent to: Palo Alto Police Department Attn: Personnel and Training 275 Forest Avenue Palo Alto, CA 94301 The Department is committed to responding to complaints, concerns and/or questions received through any of the above methods in a timely manner. E. MILITARY EQUIPMENT TRAINING Military equipment shall only be used after applicable training, including any course required by the Commission on Peace Officer Standards and Training (P.O.S.T.), has been completed, unless exigent circumstances arise. F. MILITARY USE EQUIPMENT POLICY CONTENTS All military use equipment kept and maintained by the Department shall be cataloged in a way which addresses each of the following requirements in compliance with Gov. Code § 7070(d): 1. A description of each type of military equipment, the quantity sought, its capabilities, expected lifespan, and product descriptions from the manufacturer of the military equipment. 2. The purposes and authorized uses for which the law enforcement agency or the state agency proposes to use each type of military equipment. 3. The fiscal impact of each type of military equipment, including the initial costs of obtaining the equipment and estimated annual costs of maintaining the equipment. 4. The legal and procedural rules that govern each authorized use. 5. The training, including any course required by the Commission on Peace Officer Standards and Training, that must be completed before any officer, agent, or employee of the law enforcement agency or the state agency is allowed to use each specific type of military equipment to ensure the full protection of the public’s welfare, safety, civil rights, and civil liberties and full adherence to the military equipment use policy. 6. The mechanisms to ensure compliance with the military equipment use policy, including which independent persons or entities have oversight authority, and, if applicable, what legally enforceable sanctions are put in place for violations of the policy. Item 9 Attachment A - Ordinance Renewing the City's Military Equipment Use Policy Item 9: Staff Report Pg. 11 Packet Pg. 141 of 312 *NOT YET APPROVED* 6 G. USE POLICY FOR SPECIFIC EQUIPMENT Qualifying Equipment Owned/Utilized by the Department Equipment Type: 37mm Less Lethal Launchers and Kinetic Energy Munitions - CA Gov’t Code §7070(c)(14) Quantity Owned/Sought: 30 owned Lifespan: Approximately 15 years Equipment Capabilities: The 37MM Less Lethal Launcher is capable of firing 37MM Kinetic Energy and Chemical Agent Munitions. Palo Alto PD only possesses “KO1” impact baton rounds in its inventory. Manufacturer Product Description: Sage Control Ordinance 37MM launchers are rugged, reliable, and simple to operate less lethal launchers. These launchers are light weight, versatile and used worldwide by police officers. The 37MM launcher family of products is available in single-shot (“Ace”), double-shot (“Deuce”), or magazine fed configurations. Palo Alto PD possesses the “Ace” and “Deuce” models. Purpose/Authorized Uses: The 37MM Less Lethal Launchers and Kinetic Energy Munitions are intended for use as a less lethal use of force option. Kinetic energy projectiles, when used properly, are less likely to result in death or serious physical injury and can be used in an attempt to de-escalate a potentially deadly situation. Circumstances appropriate for deployment include, but are not limited to, situations in which: (a) The suspect is armed with a weapon and the tactical circumstances allow for the safe application of approved munitions. (b) The suspect has made credible threats to harm him/herself or others. (c) The suspect is engaged in riotous behavior or is throwing rocks, bottles or other dangerous projectiles at people and/or officers. (d) There is probable cause to believe that the suspect has already committed a crime of violence and is refusing to comply with lawful orders. Fiscal Impacts: The initial cost of this equipment was approximately $27,000. The ongoing costs for munitions will vary and maintenance is conducted by departmental staff. Legal/Procedural Rules Governing Use: Use governed by applicable State, Federal and Local law, and PAPD policy, including but not limited to PAPD policy §§ 300 (Use of Force) and 308 (Control Devices and Techniques). Use will continue to be subject to an administrative Use of Force review. Training Required: Officers must complete a department certified 37mm course as well as regular training and qualifications as required by law and policy. Other Notes: None. Equipment Type: Long Range Acoustic Device (LRAD) - CA Gov’t Code §7070(c)(13) Quantity Owned/Sought: 1 Lifespan: Unknown. Equipment Capabilities: LRAD systems are a type of Acoustic Hailing Device (AHD) used to send messages over long distances. LRAD systems produce much higher sound levels (volume) than normal loudspeakers or megaphones, and can be more narrowly directed. Manufacturer Product Description: LRAD systems are a type of Acoustic Hailing Device (AHD) used to send messages over long distances. LRAD systems produce much higher sound levels Item 9 Attachment A - Ordinance Renewing the City's Military Equipment Use Policy Item 9: Staff Report Pg. 12 Packet Pg. 142 of 312 *NOT YET APPROVED* 7 (volume) than normal loudspeakers or megaphones. Over shorter distances, LRAD signals are loud enough to cause pain in the ears of people in their path. Purpose/Authorized Uses: Primarily used to communicate, from a safe distance, with armed and/or barricaded subjects, for the purpose of negotiation. Can also be used in furtherance of search and rescue operations, and to communicate lawful dispersal orders. Fiscal Impacts: The initial cost of this equipment was approximately $10,000. The ongoing cost for maintenance will vary. Legal/Procedural Rules Governing Use: Use governed by applicable State, Federal and Local law, and PAPD policy, including but not limited to PAPD policy § 414 (Hostage and Barricade Incidents). Use will be subject to an administrative review. Training Required: The Palo Alto Police Department provides internal training for staff members prior to allowing them to use this equipment. Other Notes: This equipment is maintained and operated by members of the Department’s Crisis Negotiation Team (CNT). Equipment Type: Diversionary Devices and Chemical Agents (tear gas) and pepper balls - CA Gov’t Code §7070(c)(12) Quantity Owned/Sought: 108 Lifespan: 5 years Equipment Capabilities: Capable of creating auditory/visual distractions, and/or deploying tear gas or pepper chemical to distract potentially dangerous individuals. Manufacturer Product Description: The Palo Alto Police Department uses Diversionary Devices and Chemical Agents produced by Defense Technology (DT) and Combined Tactical Systems (CTS). All Chemical Agents utilized by PAPD contain CS (Orthochlorobenzalmalononitrile) or OC (Oleoresin Capsicum). Diversionary Devices: 1. Mini-Bang (CTS-7290M) a. The Model 7290M Flash-Bang exhibits all of the same attributes of its larger counterpart but in a smaller and lighter package. Weighing in at just 15 ounces the new 7290M is approximately 30% lighter than the 7290 but still has the same 180db output of the 7290 and produces 6-8 million candela of light. 2. 9-Bang (CTS-7290-9) a. The Model 7290- Aluminum Body Flash Bang's patented multi-bangs feature top and bottom non-fragmenting, minimal movement devices that perform with high reliability incorporating CTS Superior fuze components with the patented and US Army adopted Confidence Clip and pin shroud. Chemical Agents: 1. CS 37mm Liquid Ferret Barricade Round (CTS-3330) a. 3330 – Liquid CS filled projectile penetrates intermediate barriers and delivers irritant agents into an adjacent room. 2. CS 37mm Liquid Ferret Barricade Round (DT-1162) Item 9 Attachment A - Ordinance Renewing the City's Military Equipment Use Policy Item 9: Staff Report Pg. 13 Packet Pg. 143 of 312 *NOT YET APPROVED* 8 a. The Ferret® 37 mm CS Round is a frangible projectile filled with chemical agent. Upon impacting the barrier, the nose cone ruptures and instantaneously delivers the .16 oz. agent payload inside a structure. 3. CTS 5230b Baffled CS a. The design of the Baffled CS allows the contents to burn within an internal can and external baffling, and disperse the agent safely with reduced risk of fire. The grenade is designed primarily for indoor tactical situations to detect and/or dislodge a barricaded subject. This grenade can be hand thrown or launched from a fired delivery system. 4. CTS 5230 Riot CS a. The CTS Riot CS is specifically designed for outdoor use. It discharges a high volume of smoke and chemical agent through multiple emission ports. This grenade can be hand thrown or launched from a fired delivery system. Smoke: 1. CTS 5210 White Smoke a. The CTS 5210 White Smoke Grenade is designed specifically to conceal tactical movement or to route a crowd. The volume of non-irritant smoke and agent is vast and obtrusive. PepperBall: Less lethal launchers are designed for minimum time between launches and quick reload speed, so whether in a crowd control scenario, tactical or even Mobile Field Force situation, the PepperBall system offers flexibility, safety and security, all within one platform. Each launcher is air powered, with either carbon dioxide (CO2), nitrogen, or compressed air powering the launch of projectiles. Purpose/Authorized Uses: creating explosive distractions, and/or deploying chemical agents. Fiscal Impacts: The initial cost of the Pepperball equipment was approximately $7,920. The ongoing costs for munitions will vary and maintenance is conducted by departmental staff. The initial cost of the distraction devices and chemical agents was approximately $2,400. The ongoing costs for munitions will vary and (minimal, if any) maintenance is conducted by departmental staff. Legal/Procedural Rules Governing Use Use governed by applicable State, Federal and Local law, and PAPD policy, including but not limited to PAPD policy §§ 300 (Use of Force), 308 (Control Devices and Techniques), and 408 (Crisis Response Unit).Use of tear gas or pepper balls will continue to be subject to an administrative Use of Force review. Use of distraction devices will be subject to an administrative review to ensure policy compliance. Training Required: A P.O.S.T. certified Control Devices and Techniques Department chemical agent and distraction device instructor provides internal training for all members of the SWAT team prior to allowing them to use flashbang grenades or tear gas. The Department provides internal training for all members prior to allowing them to use pepper balls. Other Notes: Distraction devices and chemical agents are exclusively maintained and operated by members of the Department’s Special Weapons and Tactics Team (SWAT). Equipment Type: Bolt Action Rifle and Ammunition - CA Gov’t Code §7070(c)(10) Quantity Owned/Sought: 1 owned Lifespan: Approximately 15 years Item 9 Attachment A - Ordinance Renewing the City's Military Equipment Use Policy Item 9: Staff Report Pg. 14 Packet Pg. 144 of 312 *NOT YET APPROVED* 9 Equipment Capabilities: Accuracy International rifle is capable of firing a 7.62mm/.308 cal projectile bullet. Manufacturer Product Description: Accuracy International (AI) Accuracy Tactical bolt action rifle .308 Winchester/7.62mm NATO. 1. 20" barrel threaded 5/8x24 2. Nightforce:C622 Scope .250 MOA 3. AI Adjustable cheek piece 4. AI Two-stage trigger 5. AI 10-round .380 caliber magazine 6. AI Three-position safety Purpose/Authorized Uses: This rifle is authorized for use by a specially-trained, SWAT marksman only and may be deployed in any circumstance where the officer can articulate a reasonable expectation that the rifle may be needed. Examples of some general guidelines for deploying the rifle may include but are not limited to: 1. Situations where the officer reasonably anticipates an armed encounter. 2. When the officer is faced with a situation that may require accurate and effective fire at long range. 3. Situations where an officer reasonably expects the need to meet or exceed a suspect's firepower. 4. When an officer reasonably believes that there may be a need to fire on a barricaded person or a person with a hostage. 5. When an officer reasonably believes that a suspect may be wearing body armor. 6. When authorized or requested by a supervisor. Fiscal Impacts: This equipment was purchased by the Palo Alto Police Department at an initial cost of $6500.00. The ongoing costs for ammunition will vary and maintenance is conducted by departmental staff. Legal/Procedural Rules Governing Use: Use governed by applicable State, Federal and Local law, and PAPD policy, including but not limited to PAPD policy §§ 300 (Use of Force), 312 (Firearms), and 408 (Crisis Response Unit).Each use will continue to be subject to an administrative Use of Force review. Training Required: In addition to CA P.O.S.T. certified patrol rifle and CA P.O.S.T. certified standard SWAT Operator training, SWAT marksmen must successfully complete a CA P.O.S.T. certified course as well as regular SWAT marksmanship training and qualifications as required by law and policy. Other Notes: None. Qualifying Equipment Owned/Utilized by Palo Alto OES Equipment Type: Command and control vehicle – CA Gov’t Code §7070(c)(5) Quantity Owned/Sought: 1 Lifespan: Approximately 20 years Item 9 Attachment A - Ordinance Renewing the City's Military Equipment Use Policy Item 9: Staff Report Pg. 15 Packet Pg. 145 of 312 *NOT YET APPROVED* 10 Equipment Capabilities: The City of Palo Alto Office of Emergency Services (OES) has a Mobile Emergency Operations Center (MEOC) vehicle. Manufacturer Product Description: The MEOC is built on a 40’ Freightliner chassis, 2010 Model Year. Purpose/Authorized Uses: The MEOC serves as a resource for public safety and coordinates with other such vehicles operated by other agencies. It is deployed to “all hazards” ranging from natural disasters, wildfires, crime, special events, and planned and unplanned disruptions to 9-1-1 and Emergency Operations Center systems and facilities. Fiscal Impacts: The MEOC was acquired in approximately 2010 with grant funding of $300,000 and City funding of $375,000. The ongoing costs for maintenance and operation will vary and most maintenance is conducted by City staff. Legal/Procedural Rules Governing Use: It is the policy of OES to use the MEOC in accordance with California State law regarding the operation of motor vehicles. Furthermore, since the MEOC is grant-funded and since the MEOC is a rare resource, the City may support mutual aid with the MEOC (for example wildfire response). Use will be subject to an administrative review to ensure policy compliance. Training Required: The MEOC is a highly complex system. City staff are provided with requisite training and licensing, depending on their role in supporting the MEOC. Other Notes: The MEOC is not a “military vehicle” but could support coordination with the National Guard, FEMA, and other cooperating agencies after a major earthquake or other disaster. Qualifying Equipment known to be owned and/or utilized by law enforcement units with which the Palo Alto Police Department collaborates and/or participates for law enforcement purposes Equipment Type: Unmanned Aircraft Systems (UAS/Drones) – CA Gov’t Code §7070(c)(1) Quantity Owned/Sought: None (outside owned) Lifespan: Various Equipment Capabilities: Remotely piloted aerial vehicles capable of providing live and recorded video images captured from aerial positions, including images enhanced by Forward Looking Infrared (FLIR) and optical zoom lenses. Manufacturer Product Description: Various. Dependent upon the availability of mutual aid equipment and personnel at the time of need. Purpose/Authorized Uses: UAS/Drones may be utilized to enhance the Department’s mission of protecting lives and property when other means and resources are not available or are less effective. Uses may include but are not limited to: search and rescue; suspect apprehension; crime scene documentation; tactical operations; scene security; hazard monitoring, identification and mitigation; response to emergency calls; crisis communications; legally authorized surveillance. Fiscal Impacts: None. Equipment owned, maintained, and operated by another agency. Legal/Procedural Rules Governing Use: Use governed by applicable State, Federal and Local law, Federal Aviation Administration (FAA) regulations, and PAPD policy, including but not limited to PAPD policy §§ 322 (Search and Seizure) and 352 (Outside Agency Assistance).Federal Aviation Administration (FAA) regulations . Absent a warrant or exigent circumstances, operators and observers shall adhere to FAA altitude regulations and shall not intentionally record or transmit images of any location where a person would have a Item 9 Attachment A - Ordinance Renewing the City's Military Equipment Use Policy Item 9: Staff Report Pg. 16 Packet Pg. 146 of 312 *NOT YET APPROVED* 11 reasonable expectation of privacy (e.g., residence, yard, enclosure). Operators and observers shall take reasonable precautions to avoid inadvertently recording or transmitting images of areas where there is a reasonable expectation of privacy. Upon mutual aid or other request from PAPD, UAS/Drone will be operated by the deploying agency’s staff pursuant to their own policies and review. Training Required: Prior to piloting any UAS/Drone staff members must secure an FAA Remote Pilot License and complete all training required by our FAA COA. Other Notes: None. Equipment Type: Unmanned, remotely piloted, powered ground vehicles - CA Gov’t Code §7070(c)(1) Quantity Owned/Sought: None (outside owned) Lifespan: Various Equipment Capabilities: Robots are capable of being remotely navigated to provide scene information and intelligence in the form of video and still images transmitted to first responders. Manufacturer Product Description: Various. Dependent upon the availability of mutual aid equipment and personnel at the time of need. Purpose/Authorized Uses: To enhance the safety of potentially dangerous situations by providing first responders with the ability to capture video and still images of hazardous areas prior to, or in lieu of, sending in personnel. Fiscal Impacts: None. Equipment owned, maintained, and operated by another agency. Legal/Procedural Rules Governing Use: Absent a warrant or exigent circumstances, operators and observers shall adhere to all applicable privacy laws and shall not intentionally record or transmit images of any location where a person would have a reasonable expectation of privacy (e.g., residence, yard, enclosure). Use governed by applicable State, Federal and Local law, Federal Aviation Administration (FAA) regulations, and PAPD policy, including but not limited to PAPD policy §§ 322 (Search and Seizure) and 352 (Outside Agency Assistance). Upon mutual aid or other request from PAPD, vehicle will be operated by deploying agency’s staff pursuant to their own policies and review. Training Required: Subject to the policies of the deploying agency. Other Notes: While the Palo Alto Police Department does not own or operate this equipment, it could be deployed to an incident within city limits. Equipment Type: Wheeled vehicles that have a breaching apparatus attached - CA Gov’t Code §7070(c)(3) Quantity Owned/Sought: None (outside owned) Lifespan: Various Equipment Capabilities: Capable of breaching doors, gates, and other points of entry; facilitating the safe transport of officers or civilians facing an armed suspect. Manufacturer Product Description: Various. Dependent upon the availability of mutual aid equipment and personnel at the time of need. Purpose/Authorized Uses: Breaching doors, gates, and other points of entry. Safely transporting police personnel or evacuating civilians, when facing with an armed suspect. Fiscal Impacts: None. Equipment owned, maintained, and operated by another agency. Legal/Procedural Rules Governing Use: Use governed by applicable State, Federal and Local law, and PAPD policy, including but not limited to PAPD policy §§ 322 (Search and Seizure) and 352 (Outside Agency Assistance). Upon mutual aid or other request from PAPD, vehicle will be operated by deploying agency’s staff pursuant to their own policies and review. Item 9 Attachment A - Ordinance Renewing the City's Military Equipment Use Policy Item 9: Staff Report Pg. 17 Packet Pg. 147 of 312 *NOT YET APPROVED* 12 Training Required: Subject to the policies of the deploying agency. Other Notes: While the Palo Alto Police Department does not own or operate this equipment, it could be deployed to an incident within city limits. Item 9 Attachment A - Ordinance Renewing the City's Military Equipment Use Policy Item 9: Staff Report Pg. 18 Packet Pg. 148 of 312 2025 Annual Report AB 481 - Military Equipment Item 9Attachment B - PAPD 2025AB 481 Annual Report Item 9: Staff Report Pg. 19 Packet Pg. 149 of 312 Background On September 30, 2021, Governor Gavin Newsom signed a series of eight (8) policing reform bills including Assembly Bill 481 (AB 481), which regulated the acquisition and use of military equipment by local law enforcement agencies. On September 27, 2022, in accordance with AB 481, the Palo Alto City Council adopted Ordinance No. 5562, approving Palo Alto Police Department Policy 716: Military Equipment. The ordinance was most recently renewed by the Council on November 4, 2024. Summary The Palo Alto Police Department (PAPD) had equipment in 5 of the 15 categories requiring reporting by AB 481 in FY25. The equipment has been used minimally, largely related to training and certification. The City has not received any complaints, audits, or policy violations regarding the use or acquisition of the equipment. PAPD has diligently followed the established Department Policy (716), ensuring transparency and accountability in its operations. Plans for future equipment purchases meeting the reporting requirements of AB 481 are minimal and mostly focused on replacing or replenishing equipment used throughout the year. Planned purchased are anticipated to be made using the Department’s general fund budget. Introduction As required by AB 481, City Ordinance 5562, and PAPD Policy 716, PAPD must prepare an annual report on the use, over the last year, of each type of military equipment approved in the Policy. Subsequently, the City Council must review the Ordinance, Policy, and AB 481 Annual Report and determine whether PAPD's use of the defined military equipment in the past year complied with the Policy and whether to renew the Ordinance. Item 9Attachment B - PAPD 2025AB 481 Annual Report Item 9: Staff Report Pg. 20 Packet Pg. 150 of 312 AB 481 Categories PAPD has equipment meeting 5 of the 15 categories set forth in AB 481 and PAPD Policy 716, in bold. PAPD utilized equipment, owned by other agencies, meeting 1 other category*: 1. Unmanned, remotely piloted, powered aerial or ground vehicles* 2. Mine-resistant ambush-protected vehicles or armored personnel carriers 3. High mobility multipurpose wheeled vehicles (HMMWV), two-and-one-half-ton trucks, five-ton trucks, or wheeled vehicles that have a breaching or entry apparatus attached 4. Tracked armored vehicles that provide ballistic protection to their occupants 5. Command and control vehicles that are either built or modified to facilitate the operational control and direction of public safety units 6. Weaponized aircraft, vessels, or vehicles of any kind 7. Battering rams, slugs, and breaching apparatuses that are explosive in nature 8. Firearms and ammunition of .50 caliber or greater, excluding standard-issue shotguns 9. Ammunition of .50 caliber or greater, excluding standard-issue shotgun ammunition 10. Specialized firearms and ammunition of less than .50 caliber, including firearms and accessories identified as assault weapons in Penal Code § 30510 and Penal Code §30515, with the exception of standard-issue service weapons and ammunition of less than .50 caliber 11. Any firearm or firearm accessory that is designed to launch explosive projectiles 12. Noise-flash diversionary devices, explosive breaching tools or munitions containing tear gas or OC, excluding standard, service-issued handheld pepper spray 13. TASER® Shockwave, microwave weapons, water cannons, and long-range acoustic devices 14. Kinetic energy weapons and munitions 15. Any other equipment as determined by a governing body or a state agency to require additional oversight Item 9Attachment B - PAPD 2025AB 481 Annual Report Item 9: Staff Report Pg. 21 Packet Pg. 151 of 312 Annual Reporting Requirements AB 481 requires that police departments identify, at a minimum, six elements in their annual reports for each type of equipment: 1. Summary of how each type of equipment was used and the purpose of that use; 2. Quantity possessed of each type of equipment; 3. Annual costs for each type of equipment; 4. Summary of complaints or concerns received for each type of equipment; 5. Information disclosing violations of military equipment policies and actions taken in response, as well as the result of internal audits; and; 6. Plans to acquire additional military equipment in the coming year, and the quantity sought. The table on the following pages provide this information in the categories of Quantity, Costs, Summary Use and Purpose, Complaints, Policy Violations, and Future Purchases. The reporting period for this report is from July 1, 2024 thru June 30, 2025 (the end of Fiscal Year 2025). Item 9Attachment B - PAPD 2025AB 481 Annual Report Item 9: Staff Report Pg. 22 Packet Pg. 152 of 312 Equipment Name Qty Reporting Period Costs Summary of Use & Purpose Complaints Policy Violations Planned Future Purchases Category 5: Command and Control Vehicles MEOC 1 $16,949 in maintenance and equipment costs The MEOC serves as a resource for public safety. It is deployed to “all hazards” ranging from natural disasters, wildfires, crime, special events, and planned and unplanned disruptions to 9-1-1 and Emergency Operations Center systems and facilities. Beyond training uses, the MEOC was deployed, operationally, 6 times in FY25: - 07/04/24 Fire watch detail - 07/27/24 MSC Open House - 08/06/24 National Night Out - 09/29/24 Airport Day - 05/31-06/01/25 Concert - 06/27/25 Torch Run None None Maintenance and equipment costs not expected to exceed $45,000 Category 10: Specialized Firearms and Ammunition of less than .50 caliber Bolt Action Rifle 1 None This rifle is authorized for use by a specially-trained, SWAT marksman only and may be deployed in any circumstance where the officer can articulate a reasonable expectation that the rifle may be needed. Equipment was not deployed in FY25, other than for SWAT training purposes. None None Replacement ammunition as needed to support training and operational use, not expected to exceed $2500 Item 9Attachment B - PAPD 2025AB 481 Annual Report Item 9: Staff Report Pg. 23 Packet Pg. 153 of 312 Equipment Name Qty Reporting Period Costs Summary of Use & Purpose Complaints Policy Violations Planned Future Purchases Category 12: Noise Flash Diversionary Device and Chemical Munitions Mini-Bang (CTS-7290M) 39 (plus 5 expired for training) $1220.64 Capable of creating auditory/visual distractions to distract potentially dangerous individuals. Equipment was not deployed in FY25, other than for SWAT training purposes. None None 24 replacement units to support training and operational use ($1500) CS 37mm Liquid Ferret Barricade Round (CTS- 3330) 26 None Capable of deploying tear gas or pepper chemical to distract potentially dangerous individuals. Equipment was not deployed in FY25, other than for SWAT training purposes. None None None CS 37mm Liquid Ferret Barricade Round (DT- 1162) 1 None Capable of deploying tear gas or pepper chemical to distract potentially dangerous individuals. Equipment was not deployed in FY25, other than for SWAT training purposes. None None None CS Flameless Tri- Chamber (DT-1032) 14 None Capable of deploying tear gas or pepper chemical to distract potentially dangerous individuals. Retired. None None Retired Item 9Attachment B - PAPD 2025AB 481 Annual Report Item 9: Staff Report Pg. 24 Packet Pg. 154 of 312 Equipment Name Qty Reporting Period Costs Summary of Use & Purpose Complaints Policy Violations Planned Future Purchases CTS 5230b Baffled CS 15 None Capable of deploying tear gas or pepper chemical to distract potentially dangerous individuals. Equipment was not deployed in FY25, other than for SWAT training purposes. None None None CS Triple Chaser Separating Canister (DT-1026) 25 None Capable of deploying tear gas or pepper chemical to distract potentially dangerous individuals. Retired. None None Retired Pepperball Less Lethal Launcher 8 None Capable of deploying pepper chemical to distract potentially dangerous individuals. Equipment was not deployed in FY25, other than for SWAT/Department training purposes. None None None CTS 5230 Riot CS 15 None Capable of deploying tear gas or pepper chemical to distract potentially dangerous individuals. Equipment was not deployed in FY25, other than for SWAT training purposes. None None None Item 9Attachment B - PAPD 2025AB 481 Annual Report Item 9: Staff Report Pg. 25 Packet Pg. 155 of 312 Equipment Name Qty Reporting Period Costs Summary of Use & Purpose Complaints Policy Violations Planned Future Purchases CS Riot Control (DT- 1082) 2 None Capable of deploying tear gas or pepper chemical to distract potentially dangerous individuals. Retired. None None Retired Maximum HC (Hexachlorethane) Smoke (DT-1073) 6 None Capable of concealing tactical movement or to route a crowd via non- irritant smoke. Retired. None None Retired CTS 5210 White Smoke 5 None Capable of concealing tactical movement or to route a crowd via non- irritant smoke. Equipment was not deployed in FY25, other than for SWAT training purposes. None None None 9-Bang (CTS-7290-9) 10 $1876.92 Capable of creating multiple simultaneous auditory/visual distractions to distract potentially dangerous individuals. Equipment was not deployed in FY25, other than for SWAT testing and evaluation. None None None Item 9Attachment B - PAPD 2025AB 481 Annual Report Item 9: Staff Report Pg. 26 Packet Pg. 156 of 312 Equipment Name Qty Reporting Period Costs Summary of Use & Purpose Complaints Policy Violations Planned Future Purchases Category 13: Long-range Acoustic Devices Long Range Acoustic Device (LRAD) 1 None Primarily used to communicate, from a safe distance, with armed and/or barricaded subjects, for the purpose of negotiation. Can also be used in furtherance of search and rescue operations, and to communicate lawful dispersal orders. Equipment was not deployed in FY25, other than for CNT training purposes. None None None Category 14: Kinetic Energy Weapons and Specialty Munitions 37mm Less Lethal Launcher 30 None The 37mm Less Lethal Launcher and Kinetic Energy Munitions are intended as a less lethal use of force option. In addition to training use, the 37mm launcher was used once in FY25: - 08/23/24 detention of subject armed with a knife None None None Category 1: Unmanned, remotely piloted, powered aerial vehicles Drone 1 None Drones are intended to permit safe observation of concealed suspects or other hazards, or the location of missing persons. - Drones were used 3 times in FY25: None None None Item 9Attachment B - PAPD 2025AB 481 Annual Report Item 9: Staff Report Pg. 27 Packet Pg. 157 of 312 12/10/24 Search for suspects who fled from a crashed stolen vehicle (Sunnyvale DPS) - 12/29/24 Search for an elderly missing person (Sunnyvale DPS) - 03/01/25 Collision scene mapping (Mountain View PD) Item 9Attachment B - PAPD 2025AB 481 Annual Report Item 9: Staff Report Pg. 28 Packet Pg. 158 of 312 City Council Staff Report From: City Manager Report Type: CONSENT CALENDAR Lead Department: Planning and Development Services Meeting Date: December 8, 2025 Report #:2510-5368 TITLE FIRST READING: Adoption of an Interim Ordinance to Extend Interim Ordinance 5645 of the Council of the City of Palo Alto Amending Various Chapters of Title 16 (Building Regulations) and Title 18 (Zoning) and Title 21 (subdivisions and other Divisions of Land) of the Palo Alto Municipal Code to Implement SB 9 and Other State Housing Laws. CEQA Status: Exempt Pursuant to CEQA Guidelines Section 15061(b)(3). RECOMMENDATION Staff recommends the City Council adopt the attached Interim Ordinance extending the effective date of Ordinance 5645 from December 31, 2025, to December 31, 2026. BACKGROUND On January 13, 2025, City Council voted unanimously to approve the second reading of Ordinance 5645 adopting changes to Palo Alto Municipal Code Title 16 (Building Regulations), Title 18 (Zoning) and Title 21 (Subdivisions of Land) to implement California Senate Bill (SB) 450 (2024) and adopt Objective Design Standards for two-story houses. Council held public hearings on November 12, 2024,1 and December 16, 2024,2 to discuss and adopt Ordinance 5645. Ordinance 5645 is set to expire on December 31, 2025. The proposed interim ordinance would extend the effective date to December 31, 2026. ANALYSIS No changes are proposed to the ordinance. Extension of the ordinance is required to maintain compliance with multiple state laws including SB 937, AB 2694, AB 3116, SB 1211, and SB 450. 1 City Council Staff Report, November 12, 2024, Item 8: https://cityofpaloalto.primegov.com/Portal/Meeting?meetingTemplateId=15608 2 City Council Staff Report, December 16, 2024, Item 24: https://cityofpaloalto.primegov.com/Portal/Meeting?meetingTemplateId=14537 Item 10 Item 10 Staff Report Item 10: Staff Report Pg. 1 Packet Pg. 159 of 312 As anticipated, staff attention has been focused on other Council priorities, requiring that a more comprehensive analysis of this ordinance be deferred until next year. Accordingly, the proposed ordinance extension will maintain the existing rules through 2026, allowing the Planning and Transportation Commission (PTC) to review and recommend necessary amendments to Title 18 before the City Council takes action. FISCAL/RESOURCE IMPACT STAKEHOLDER ENGAGEMENT Daily Post on November 26, 2025 which is 12 days in advance of the meeting. ENVIRONMENTAL REVIEW ATTACHMENTS APPROVED BY: Item 10 Item 10 Staff Report Item 10: Staff Report Pg. 2 Packet Pg. 160 of 312 * NOT YET APPROVED * 1 0160178_20251114_ay16 Ordinance No. ____ Interim Ordinance of the Council of the City of Palo Alto Temporarily Extending Interim Ordinance 5645, Amending Various Chapters of Title 16 (Building Regulations) and Title 18 (Zoning) and Title 21 (Subdivisions and Other Divisions of Land) of the Palo Alto Municipal Code to Implement Recent State Housing Laws The Council of the City of Palo Alto ORDAINS as follows: SECTION 1. Findings and Declarations. The City Council finds and declares as follows: A. On January 13, 2025, the City Council adopted Ordinance No. 5645, Amending Various Chapters of Title 16 (Building Regulations) and Title 18 (Zoning) and Title 21 (Subdivisions and Other Divisions of Land) of the Palo Alto Municipal Code to Implement Recent State Housing Laws, with an expiration date of December 31, 2025. B. The City Council now desires to extend these sections of the ordinance until December 31, 2026. SECTION 2. The effective date of Ordinance No. 5645 is hereby extended to December 31, 2026, unless further extended by the City Council or superseded by replacement legislation. SECTION 3. If any section, subsection, clause or phrase of this Ordinance is for any reason held to be invalid, such decision shall not affect the validity of the remaining portion or sections of the Ordinance. The Council hereby declares that it should have adopted the Ordinance and each section, subsection, sentence, clause or phrase thereof irrespective of the fact that any one or more sections, subsections, sentences, clauses or phrases be declared invalid. SECTION 4. Environmental Review. The Council finds that the Ordinance is exempt from the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines Section 15061(b)(3) because it can be seen with certainty that there is no possibility that updating the municipal code to implement existing changes in preemptive state housing law will have a significant effect on the environment. // // Item 10 Attachment A - Draft Interim Ordinance Item 10: Staff Report Pg. 3 Packet Pg. 161 of 312 * NOT YET APPROVED * 2 0160178_20251114_ay16 SECTION 4. Effective Date. This ordinance shall be effective on the thirty-first day after the date of its adoption (second reading). INTRODUCED: PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: ____________________________ ____________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: ____________________________ ____________________________ Assistant City Attorney City Manager ____________________________ Director of Planning and Development Services Item 10 Attachment A - Draft Interim Ordinance Item 10: Staff Report Pg. 4 Packet Pg. 162 of 312 0160161_kb2_20241204_ay16 1 Ordinance No. 5645 Interim Ordinance of the Council of the City of Palo Alto Amending Various Chapters of Title 16 (Building Regulations) and Title 18 (Zoning) and Title 21 (Subdivisions and Other Divisions of Land) of the Palo Alto Municipal Code to Implement Recent State Housing Laws The Council of the City of Palo Alto ORDAINS as follows: SECTION 1. Findings and Declarations. The City Council finds and declares as follows: A.On September 19, 2024, the Governor of the State of California signed Senate Bill 937, effective January 1, 2025. SB 937 allows housing developers to defer payment of impact fees until issuance of a certificate of occupancy and freezes fees at the level in effect at the time of building permit issuance for certain “designated residential development projects,” as defined in the bill. B.On September 19, 2024, the Governor signed Assembly Bill 2694, effective January 1, 2025. AB 2694 expands the definition of a “senior citizen housing development” in the Density Bonus Law to include a residential care facility for the elderly, as defined. C.On September 22, 2024, the Governor signed Assembly Bill 3116, effective January 1, 2025. AB 3116 added a definition of “student housing development” to the Density Bonus Law and amended provisions of the Density Bonus Law related to the percentage density bonus and incentives or concessions certain student housing developments must receive. D.On September 19, 2024, the Governor signed Senate Bill 1211, effective January 1, 2025. SB 1211 allows up to 8 detached accessory dwelling units (ADUs) on parcels with existing multifamily development and provides that cities can no longer require replacement parking for uncovered parking spaces that are removed for an ADU. E.On September 19, 2024, the Governor signed Senate Bill 450, effective January 1, 2025. SB 450 amends SB 9 (codified at Sections 65852.21 and 66411.7 of the California Government Code) to create a 60-day timeframe for approval or denial of an SB 9 application and requires that SB 9 projects be subject to only those objective standards that apply uniformly in the underlying zone. F.There is insufficient time for consideration of and recommendation on the necessary amendments to Title 18 by the Planning and Transportation Commission (PTC) prior to action by the City Council. The Council therefore declares that an interim ordinance, pursuant to Palo Alto Municipal Code (PAMC) Section 18.80.090 is an appropriate measure, pending consideration of a permanent ordinance by the PTC. Docusign Envelope ID: E70BAA45-FF01-4D65-AA75-E40A6B9C4A06 Item 10 Attachment B - Ordinance 5645 Item 10: Staff Report Pg. 5 Packet Pg. 163 of 312 2 SECTION 2. Section 16.64.030 (Deferred Payment) of Chapter 16.64 (Development Fee and In-Lieu Payment Administration) of Title 16 (Building Regulations) of the Palo Alto Municipal Code is hereby amended as follows (additions underlined; deletions struck-through): 16.64.030 Deferred Payment For residential development only, payment of a fee may be deferred to the date of final building inspection approval of the development, the development is approved for occupancy. If the development contains more than one dwelling, the fee shall be paid on a pro rata basis for each dwelling when it is approved for occupancy. The fees may be deferred only if provided the owner of the real property for which the fees are required enters into a recordable agreement with the city prior to issuance of the building permit for the development, which from the date of recordation, shall constitute a lien on the property and shall be enforceable against successors in interest to the property owner. The agreement shall provide that final occupancy approval shall not be given until the fees are paid. The director of planning and development services may execute the agreement on behalf of the city in a form acceptable to the city attorney. SECTION 3. Section 16.64.040 (Calculation of Fee) of Chapter 16.64 (Development Fee and In-Lieu Payment Administration) of Title 16 (Building Regulations) of the Palo Alto Municipal Code is hereby amended as follows (additions underlined; deletions struck-through; unchanged text omitted by bracketed ellipses): 16.64.040 Calculation of Fee A fee shall be payable at the rate specified in the council-adopted municipal fee schedule in effect on the date the fees are paid, except: (1) an that the applicant for a vesting tentative map for a development project shall pay the fees in effect on the date the application for the vesting tentative map is deemed complete., and (2) an applicant that defers fees for a designated residential redevelopment project, as defined in California Government Code Section 66007, may elect to pay the fees in effect at the time of building permit issuance. SECTION 4. Section 18.15.020 (Definitions) of Chapter 18.15 (Density Bonus) of Title 18 (Zoning) of the Palo Alto Municipal Code is hereby amended as follows (additions underlined; deletions struck-through; unchanged text omitted by bracketed ellipses): 18.15.020 Definitions […] (w) “Senior citizen housing development” means a Development consistent with the California Fair Employment and Housing Act (Government Code Section 12900 et. seq., including 12955.9 in particular), which has been “designed to meet the physical and social needs of senior citizens,” and which otherwise qualifies as “housing for older persons” as that phrase is used in Docusign Envelope ID: E70BAA45-FF01-4D65-AA75-E40A6B9C4A06 Item 10 Attachment B - Ordinance 5645 Item 10: Staff Report Pg. 6 Packet Pg. 164 of 312 3 the federal Fair Housing Amendments Act of 1988 (P.L. 100-430) and implementing regulations (24 CFR, part 100, subpart E), and as these phrases are used in California Civil Code Sections 51.2, 51.3, and 51.12. For purposes of this Chapter, “senior citizen housing development” includes a shared housing building development and a residential care facility for the elderly, as defined in California Health and Safety Code Section 1569.2. […] (y) “Shared housing unit” means one or more habitable rooms, not within another dwelling unit, that includes a bathroom, sink, refrigerator, and microwave, is used for permanent residence, that meets the “minimum room area” specified in Section R304 of the California Residential Code (Part 2.5 of Title 24 of the California Code of Regulations), and complies with the definition of “guestroom” in Section R202 of the California Residential Code. If a local ordinance further restricts the attributes of a shared housing building beyond the requirements established in this section, the local definition shall apply to the extent that it does not conflict with the requirements of this section. “Shared housing unit” for purposes of a residential care facility for the elderly, as defined in California Health and Safety Code Section 1569.2, includes a unit without an individual kitchen where a unit may be shared by unrelated persons, and a unit where a room that may be shared by unrelated persons meets the “minimum room area” requirements specified in Section R304 of the California Residential Code. (z) “Student housing development” means a development that contains bedrooms containing two or more bedspaces that have a shared or private bathroom, access to a shared or private living room and laundry facilities, and access to a shared or private kitchen. (y)(aa) "Total units" or "total dwelling units" means a calculation of the number of units that: (1) Excludes a unit added by a density bonus awarded pursuant to this section or any local law granting a greater density bonus. (2) Includes a unit designated to satisfy an inclusionary zoning requirement of a city, county, or city and county. For purposes of calculating a density bonus granted pursuant to this section for a shared housing building, "unit" means one shared housing unit and its pro rata share of associated common area facilities. (z)(ab) "Very low vehicle travel area" means an urbanized area, as designated by the United States Census Bureau, where the existing residential development generates vehicle miles traveled per capita that is below 85 percent of either regional vehicle miles traveled per capita or city vehicle miles traveled per capita. For purposes of this paragraph, "area" may include a travel analysis zone, hexagon, or grid. For the purposes of determining "regional vehicle miles traveled per capita" pursuant to this paragraph, a "region" is the entirety of incorporated and unincorporated areas governed by a multi- county or single-county metropolitan planning organization, or the entirety of the incorporated and unincorporated areas of an individual county that is not part of a metropolitan planning organization. Docusign Envelope ID: E70BAA45-FF01-4D65-AA75-E40A6B9C4A06 Item 10 Attachment B - Ordinance 5645 Item 10: Staff Report Pg. 7 Packet Pg. 165 of 312 4 SECTION 5. Section 18.15.030 (Density Bonuses) of Chapter 18.15 (Density Bonus) of Title 18 (Zoning) of the Palo Alto Municipal Code is hereby amended as follows (additions underlined; deletions struck-through; unchanged text omitted by bracketed ellipses): 18.15.030 Density Bonuses This section describes the density bonuses that will be provided, at the request of an applicant, when that applicant provides restricted affordable units as described below. [...] (c) The city shall grant a thirty-five percent (35%) density bonus when an applicant for a student housing development of five (5) or more dwelling units seeks and agrees to construct in accordance with the requirements of this section and Government Code Section 65915: (1) At, in which at least twenty percent (20%) of the total dwelling units will be restricted and used for lower income students. For each one percent (1%) increase in the percentage of restricted lower income units between twenty and twenty-four percent (20-24%) of total units, a development will receive an additional three and three-quarters percent (3.75%) density bonus up to fifty percent (50%) of the maximum residential density. (2) (1) For purposes of calculating a density bonus granted pursuant to this subparagraph, the term “unit” as used in this subparagraph means one rental bed and its pro rata share of the associated common area facilities. The units described in this subparagraph shall be subject to an affordability restriction of 55 years, which shall not tie any rental bed reserved for lower income students to a specific bedroom. Notwithstanding any other law, an affordability restriction provision, state or county law or policy, or property management policy shall not prevent a lower income student from sharing a room or unit with a non-lower income student. Any attempted waiver of the requirements of this clause is void as against public policy. (3) (2) All units will be used exclusively for undergraduate, graduate, or professional students enrolled full time at an institution of higher education accredited by the Western Association of Schools and Colleges or the Accrediting Commission for Community and Junior Colleges. (4) (3) The applicant must submits evidence that the applicant entered into an operating agreement or master lease with one or more institutions of higher education for the institution(s) to occupy all units of the student housing development with students from that institution(s) or has established a system for confirming its renters’ status as students to ensure that all units of the student housing development are occupied with students from an institution of higher education. (5) (4) The rent provided in the applicable units of the development for lower income students shall be calculated at thirty percent (30%) of sixty-five percent (65%) of the area median income for Santa Clara County for a single-room occupancy unit type. (6) (5) The applicant will provide priority for the applicable affordable units for lower income students experiencing homelessness. A homeless service provider, as defined in paragraph (3) of subdivision (e) of Section 103577 of the Health and Safety Code, or institution of higher education that has knowledge of a person's homeless status may verify a person's status as homeless for purposes of this subclause. (6) The student housing development must not be located on a site that pursuant to Section 65915(c)(3) of the California Government Code would require replacement units for projects with Docusign Envelope ID: E70BAA45-FF01-4D65-AA75-E40A6B9C4A06 Item 10 Attachment B - Ordinance 5645 Item 10: Staff Report Pg. 8 Packet Pg. 166 of 312 5 greater than a 35 percent density bonus. […] (i) An Except as provided in subsection (c)(6) of this Section, an applicant (or project) shall be ineligible for a density bonus or any other incentives or concessions under this chapter if the housing development is proposed on any property that includes a parcel or parcels on which rental dwelling units are located or, if the dwelling units have been vacated or demolished in the five-year period preceding the application, have been subject to a recorded covenant, ordinance, or law that restricts rents to levels affordable to persons and families of lower or very low income; subject to any other form of rent or price control through the City’s valid exercise of its police power; or occupied by lower or very low income households, unless the proposed housing development replaces those units, and either of the following applies: (1) The proposed housing development, inclusive of the units replaced pursuant to this paragraph, contains affordable units at the percentages set forth in Section 18.15.030. (2) Each unit in the development, exclusive of a manager’s unit or units, is affordable to, and occupied by, either a lower or very low income household. […] SECTION 6. Section 18.15.050 (Development Concessions and Incentives) of Chapter 18.15 (Density Bonus) of Title 18 (Zoning) of the Palo Alto Municipal Code is hereby amended as follows (additions underlined; deletions struck-through; unchanged text omitted by bracketed ellipses): 18.15.050 Development Concessions and Incentives This section includes provisions for providing concessions or incentives pursuant to Government Code Section 65915. (a) By right parking incentives. Upon request by the applicant, a development that is eligible for a density bonus may provide parking as provided in this subsection (a), consistent with Government Code Section 65915(p), inclusive of parking for persons with a disability and guests: (1) Zero to one bedroom unit: one on-site parking space; (2) Two to three bedroom unit: one and one-half on-site parking spaces; (3) Four or more bedroom unit: two and one-half parking spaces.; (4) One bedspace in a student housing development: zero parking spaces. If the total number of spaces required results in a fractional number, it shall be rounded up to the next whole number. For purposes of this subsection, this parking may be provided through tandem parking or uncovered parking, but not through on-street parking. […] (c) Other incentives and concessions. A development is eligible for other concessions or incentives as follows: (1) One concession or incentive for a development that makes at least ten percent (10%) of the total dwelling units affordable to lower income households; or at least five percent (5%) of the Docusign Envelope ID: E70BAA45-FF01-4D65-AA75-E40A6B9C4A06 Item 10 Attachment B - Ordinance 5645 Item 10: Staff Report Pg. 9 Packet Pg. 167 of 312 6 total dwelling units affordable to very low income households; or at least ten percent (10%) of the total dwelling units affordable to moderate income households in a development in which the units are for sale; or at least twenty percent (20%) of the total units in a student housing development for low income students, as provided for in 18.15.030(c). (2) Two concessions or incentives for a development that makes at least seventeen percent (17%) of the total dwelling units affordable to lower income households; or at least ten percent (10%) of the total dwelling units affordable to very low income households; or at least twenty percent (20%) of the total dwelling units affordable to moderate income households in a development in which the units are for sale; or at least twenty-three percent (23%) of the total units in a student housing development for low income students, as provided for in 18.15.030(c). SECTION 7. Section 18.42.180 (Standards for Two Units on Single Family Zoned Lots Pursuant to Senate Bill 9) of Chapter 18.42 (Standards for Special Uses) of Title 18 (Zoning) of the Palo Alto Municipal Code is amended to read as follows (additions underlined; deletions struck-through; unchanged text omitted by bracketed ellipses): 18.42.180 Standards for Two Units on Single Family Zoned Lots Pursuant to Senate Bill 9. (a) Purpose. This section sets forth special regulations applicable to the construction of two dwelling units on single family lots in the R-1 (and R-1 subdistricts) and R-E zone districts, pursuant to California Government Code Sections 65852.21 and 66411.7 (SB 9, 2021). In the event of a conflict between the provisions of this section and the generally applicable regulations of Chapters 18.10, 18.12, and 18.52-18.80, inclusive, the provisions of this section the more permissive provision shall prevail. (b) Definitions. As used in this section: (1) “Specific, adverse impact” means a significant, quantifiable, direct, and unavoidable impact, based on objective, identified written public health or safety or physical environmental standards, policies, or conditions as they existed on the date the application was deemed complete. Inconsistency with the zoning ordinance or general plan land use designation shall not constitute a specific, adverse, impact. (2) “Sufficient to allow separate conveyance” means the two dwelling units constitute clearly defined, separate, and independent housekeeping units without interior access points to the other dwelling unit. (3) “Two dwelling units” means the development proposes two new units on a vacant lot or proposes to add one new unit to one existing unit on a lot. This does not include the development of a single dwelling unit on a vacant lot. (4) “Unit” means any dwelling unit, including, but not limited to a primary dwelling unit, an accessory dwelling unit, or a junior accessory dwelling unit. (c) Applicability. When an application is submitted that includes both (1) the construction of two dwelling units under this section and (2) other redevelopment work that is not integral to creation of a new dwelling unit and would generally require discretionary review, only the portions required for construction of dwelling units shall be reviewed ministerially. In addition, this section shall not apply in any of the following circumstances: Docusign Envelope ID: E70BAA45-FF01-4D65-AA75-E40A6B9C4A06 Item 10 Attachment B - Ordinance 5645 Item 10: Staff Report Pg. 10 Packet Pg. 168 of 312 7 (1) Parcels described California Government Code Section 65913.4, subdivisions (a)(6)(B) through (a)(6)(K) inclusive, as that section read on September 16, 2021. Such parcels include, for example, parcels located in wetlands, in very high fire severity zones (unless the site has adopted certain fire hazard mitigation measures), and in special flood hazard areas or regulatory floodways (unless the site meets certain federal requirements for development). (2) Parcels on which an owner of residential real property has exercised the owner’s rights under state law to withdraw accommodations from rent or lease within the past 15 years. (3) The development would require alteration or demolition of any of the following types of housing (A) Housing that is subject to a recorded covenant, ordinance, or law that restricts rents to levels affordable to persons and families of moderate, low, or very low income. (B) Housing that is subject to any form of rent or price control through a public entity’s valid exercise of its police power. (C) Housing that has been occupied by a tenant in the last three years. (4) The development would result in the demolition of more than 25 percent of the existing exterior structural walls of a site that has been occupied by a tenant in the last three years. (5) (4) The development is located within a historic district or property included on the State Historic Resources Inventory, as defined in California Public Resources Code Section 5020.1, or within a site that is designated or listed on the City’s historic inventory. (6) (5) The building official finds that the development would have a specific, adverse impact on public health and safety or the physical environment that cannot be feasibly mitigated or avoided. (d) Application Process. (1) The Director is authorized to promulgate regulations, forms, and/or checklists setting forth application requirements for the development of dwelling units under this section. (2) The City shall ministerially approve or disapprove an application pursuant to this section. (3) The director of planning shall consider and approve or deny an application for a proposed housing development pursuant to this section within 60 days from the date the City receives a completed application. If the director has not approved or denied the completed application within 60 days, the application shall be deemed approved. (4) If the director denies an application for a proposed housing development pursuant to this section, the director shall, within 60 days of receipt of the completed application, return in writing a full set of comments to the applicant with a list of items that are defective or deficient and a description of how the applicant can remedy the application. Docusign Envelope ID: E70BAA45-FF01-4D65-AA75-E40A6B9C4A06 Item 10 Attachment B - Ordinance 5645 Item 10: Staff Report Pg. 11 Packet Pg. 169 of 312 8 (e) Development Standards. (1) A project proposing two dwelling units on a parcel in the R-1 or RE districts shall be subject to the development standards set forth in Chapters 18.12 and 18.10, respectively except as provided herein. (2) All construction pursuant to this section shall comply with objective design standards adopted by the City Council for two-story development, except to the extent necessary to construct a unit of 800 square feet. However, an applicant seeking to deviate from the objective design standards (except to the extent necessary to construct a unit of 800 square feet) may elect to submit an application for under the base requirements of Chapters 18.10, or 18.12, including, if applicable, Single Family Individual Review. (3) If the application of any development standard or design standard would necessarily require that one or more proposed units be less than 800 square feet, such standard shall be relaxed to the minimum extent necessary to allow construction of a unit or units of at least 800 square feet. The Director may publish regulations governing the order in which objective standards shall be waived or relaxed in such circumstances. (4) Setbacks from side and rear property lines, including street-side property lines, shall be no less than four feet, except in the case of existing non-complying structures or structures reconstructed in the same location and to the same dimensions as an existing structure, in which case existing setbacks less than four feet may be maintained. No setback is required from an internal lot line newly created pursuant to Chapter 21.10, for adjacent or connected structures separated by the new lot line, provided that the structures meet building code safety standards and are sufficient to allow separate conveyance. (5) Off-street parking shall be provided pursuant to Chapters 18.52 and 18.54. (6) In the event that a project is proposed on a site that has been subject to an Urban Lot Split under Chapter 21.10, and the project would result in three or more detached units across the two parcels created by the urban lot split, any new units shall not exceed 800 square feet. (7) (6) Accessory structures, such as garages and shed are permitted consistent with the provisions of the zoning district; however, no accessory structure shall have a floor area exceeding 500 square feet. (8) (7) The Director of Public Works may promulgate standards for adjacent public improvements, such as curb cuts and sidewalks, in relation to development pursuant to this Section. (f) General Requirements. (1) A maximum of two units may be located on any parcel that is created by an Urban Lot Split under Chapter 21.10. Accessory dwelling units and junior accessory dwelling units shall not be permitted on any such parcel already containing two units. (2) On parcels that are not the result of an Urban Lot Split under Chapter 21.10, accessory dwelling units may be proposed in addition to the primary dwelling unit or units, consistent with Chapter 18.09, provided, however, that ADUs associated with projects proceeding under this Section shall not receive any exemption from Docusign Envelope ID: E70BAA45-FF01-4D65-AA75-E40A6B9C4A06 Item 10 Attachment B - Ordinance 5645 Item 10: Staff Report Pg. 12 Packet Pg. 170 of 312 9 Floor Area Ratio except to the minimum extent required by California Government Code Section 65852.2. (3) A rental of any unit created pursuant to this Section shall be for a term longer than 30 consecutive days. (4) For residential units connected to an onsite wastewater treatment system, a percolation test completed within the last 5 years, or, if the percolation test has been recertified, within the last 10 years. (5) Each unit shall have a permanent street address. (6) The owner and all successors in interest in the subject property shall agree to participate in any City survey of properties that have constructed dwelling units pursuant to this Section. (g) Effective Dates. This section shall remain in effect until such time as Government Code Section 65852.21 is repealed, or superseded, or invalidated by a court of competent jurisdiction, or its requirements for ministerial approval of no more than two units on a single family zoned lot are materially amended, whether by legislation or initiative, at which time this section shall become null and void. SECTION 8. Chapter 21.10 (Urban Lot Splits) of Title 21 (Subdivisions and Other Divisions of land) of the Palo Alto Municipal Code is amended to read as follows (additions underlined; deletions struck-through): Chapter 21.10 PARCEL MAPS FOR URBAN LOT SPLITS IN SINGLE-FAMILY ZONES Section 21.10.010 Purpose Section 21.10.020 Definitions Section 21.10.030 Applicability Section 21.10.040 General Requirements Section 21.10.050 Application and Review of an Urban Lot Split Section 21.10.060 Effective dates Section 21.10.010 Purpose This chapter sets forth special regulations applicable to the subdivision of a single family lot in the R-1 district (and R-1 subdistricts) or R-E district into two new lots, pursuant to California Government Code Section 66411.7 (SB 9, 2021). Section 21.10.020 Definitions As used in this chapter: (a) “Acting in concert” means pursuing a shared goal to split adjacent lots pursuant to an agreement or understanding, whether formal or informal. (b) “Specific, adverse impact” means a significant, quantifiable, direct, and unavoidable impact, based on objective, identified written public health or safety or physical environmental standards, policies, or conditions as they existed on the date the application was deemed Docusign Envelope ID: E70BAA45-FF01-4D65-AA75-E40A6B9C4A06 Item 10 Attachment B - Ordinance 5645 Item 10: Staff Report Pg. 13 Packet Pg. 171 of 312 10 complete. Inconsistency with the zoning ordinance or general plan land use designation shall not constitute a specific, adverse, impact. (c) “Unit” means any dwelling unit, including, but not limited to, a unit or units created pursuant to Section 18.42.180, a primary dwelling unit, an accessory dwelling unit, or a junior accessory dwelling unit. (d) “Urban Lot Split” means the subdivision of an existing legal parcel in the R-1 district (and R- 1 subdistricts) or R-E district to create no more than two new parcels of approximately equal area, pursuant to this Chapter and California Government Code Section 66411.7. Section 21.10.030 Applicability The provisions of this chapter shall apply only to lots in the R-1 district (and R-1 subdistricts) or R-E zone district. Except as modified by this Chapter, all provisions of Title 21 shall apply to an application for urban lot split. An Urban Lot Split is not available in any of the following circumstances: (a) A parcel described California Government Code Section 65913.4, subdivisions (a)(6)(B) through (a)(6)(K) inclusive, as that section read on September 16, 2021. Such parcels include, for example, parcels located in wetlands, in very high fire severity zones (unless the site has adopted certain fire hazard mitigation measures), and in special flood hazard areas or regulatory floodways (unless the site meets certain federal requirements for development). (b) A parcel on which an owner of residential real property has exercised the owner’s rights under state law to withdraw accommodations from rent or lease within the past 15 years. (c) A parcel that was created by prior exercise of an Urban Lot Split. (d) A parcel adjacent to a parcel that was created by prior exercise of an Urban Lot Split by the owner, or a person acting in concert with the owner of the parcel sought to be split. (e) The Urban Lot Split would require alteration or demolition of any of the following types of housing: (1) Housing that is subject to a recorded covenant, ordinance, or law that restricts rents to levels affordable to persons and families of moderate, low, or very low income. (2) Housing that is subject to any form of rent or price control through a public entity’s valid exercise of its police power. (3) Housing that has been occupied by a tenant in the last three years. (f) The Urban Lot Split is located within a historic district or property included on the State Historic Resources Inventory, as defined in California Public Resources Code Section 5020.1, or within a site that is designated or listed on the City’s historic inventory. (g) The building official finds that the development would have a specific, adverse impact on public health and safety or the physical environment that cannot be feasibly mitigated or avoided. Section 21.10.040 General Requirements (a) The minimum size for a parcel created by an Urban Lot Split is 1,200 square feet. (b) The lots created by an Urban Lot Split must be of approximately equal area, such that no resulting parcel shall be smaller than 40 percent of the lot area of the original parcel proposed for subdivision. Docusign Envelope ID: E70BAA45-FF01-4D65-AA75-E40A6B9C4A06 Item 10 Attachment B - Ordinance 5645 Item 10: Staff Report Pg. 14 Packet Pg. 172 of 312 11 (c) Where existing dwelling units on the property are to remain, no lot line may be created under this Chapter in a manner that would bisect any structure or that would result in more than two dwelling units on any resulting parcel. (d) Newly created lot lines shall not render an existing structure noncomplying in any respect (e.g. floor area ratio, lot coverage, parking), nor increase the degree of noncompliance of an existing noncompliant structure. (e) Each parcel shall comply with any objective lot design standards for Urban Lot Splits adopted by the City Council and consistent with Chapter 66411.7 of the Government Code. (f) Utility easements shall be shown on the parcel map, and recorded prior to, or concurrent with final parcel map recordation. (g) A covenant necessary for maintenance of stormwater treatment facilities shall be recorded prior to, or concurrent with final map recordation. (h) Existing driveways to be demolished shall follow the procedure(s) in 12.08.090 Elimination of abandoned driveway. (i) A maintenance agreement shall be recorded to ensure shared maintenance of any shared access easements, stormwater treatment, landscaping and private utilities, prior to final parcel map recordation. Section 21.10.050 Application and Review of an Urban Lot Split (a) The director of planning is authorized to promulgate regulations, forms, and/or checklists setting forth application requirements for a parcel map for an Urban Lot Split under this Chapter. An application shall include an affidavit from the property owner, signed under penalty of perjury under the laws of California, that: (1) The proposed urban lot split would not require or authorize demolition or alteration of any of the housing described in Section 21.10.030, subdivision (e). (2) The proposed urban lot split is not on a parcel described in Section 21.10.030. (3) The owner intends to occupy one of the housing units located on a lot created by the parcel map as their principal residence for a minimum of three years from the date of the recording of the parcel map. (4) The rental of any unit on the property shall be for a term longer than 30 consecutive days. (5) The resulting lots will be for residential uses only. (b) A parcel map for an Urban Lot Split must be prepared by a registered civil engineer or licensed land surveyor in accordance with Government Code sections 66444 – 66450 and this Chapter. Unless more specific regulations are adopted by the director of planning, the parcel map shall be in the form and include all of the information required of a Preliminary Parcel Map by Chapter 21.12, as well as any additional information required of a Parcel Map by Chapter 21.16. In addition, the face of the Parcel Map shall contain a declaration that: (1) Each lot created by the parcel map shall be used solely for residential dwellings. (2) That no more than two dwelling units may be permitted on each lot. (3) That rental of any dwelling unit on a lot created by the parcel map shall be for a term longer than 30 consecutive days. (4) A lot created by a parcel map under this Chapter shall not be further subdivided. Docusign Envelope ID: E70BAA45-FF01-4D65-AA75-E40A6B9C4A06 Item 10 Attachment B - Ordinance 5645 Item 10: Staff Report Pg. 15 Packet Pg. 173 of 312 12 (c) Upon receipt of a parcel map for an Urban Lot Split, the director of planning shall transmit copies to the city engineer, chief building official, director of utilities, chief of police, fire chief, director of transportation, and such other departments of the city, and any other agencies, as may be required by law or deemed appropriate. (d) The director of planning shall cause a notice of the pending application to be posted at the site of the proposed Urban Lot Split and for notice to be mailed to owners and residents of property within 600 feet of the property. (e) The director of planning shall ministerially review and approve a parcel map for Urban Lot Split if they determine that the parcel map application meets all requirements of this Chapter. The director of planning shall deny a parcel map application that does not meet any requirement of this Chapter. (f) The director of planning shall consider and approve or deny an application for an urban lot split within 60 days from the date the City receives a completed application. If the director has not approved or denied the completed application within 60 days, the application shall be deemed approved. (g) If the director denies an application for an urban lot split, the director shall, within 60 days of receipt of the completed application, return in writing a full set of comments to the applicant with a list of items that are defective or deficient and a description of how the applicant can remedy the application. (h) (f) The Director of Planning shall determine the appropriate fee required for an application for parcel map for an Urban Lot Split, which may be the fee currently established for a Preliminary Parcel Map or Parcel Map. Section 21.10.060 Effective Dates. This chapter shall remain in effect until such time as Government Code Section 66411.7 is repealed or superseded or its requirements for ministerial approval of an Urban Lot Split on a single family zoned lot are materially amended, whether by legislation or initiative, at which time this chapter shall become null and void. SECTION 9. Section 18.10.040 (Development Standards) of Chapter 18.10 (Low Density Residential (RE, R-2, and RMD) Districts) of Title 18 (Zoning) of the Palo Alto Municipal Code is hereby amended as follows (additions underlined; and unchanged text omitted by bracketed ellipses): 18.10.040 Development Standards […] (i) Individual Review The Individual Review provisions of Section 18.12.110 of the Zoning Ordinance shall be applied to any single-family or two-family residence in the R-2 or RMD districts to those sides of a site that share an interior side lot line with the interior side or rear lot line of a property zoned for or used for single-family or two-family dwellings. The individual review criteria shall be applied only to the project’s effects on adjacent single-family and two-family uses. A project that complies with the objective standards for two-story development adopted by the City Council shall not be subject Docusign Envelope ID: E70BAA45-FF01-4D65-AA75-E40A6B9C4A06 Item 10 Attachment B - Ordinance 5645 Item 10: Staff Report Pg. 16 Packet Pg. 174 of 312 13 to Individual Review. […] SECTION 10. Section 18.12.040 (Site Development Standards) of Chapter 18.12 (R-1 Single- Family Residential District) of Title 18 (Zoning) of the Palo Alto Municipal Code is hereby amended as follows (additions underlined; and unchanged text omitted by bracketed ellipses): 18.12.040 Site Development Standards […] (m) In addition to the standards contained in and referenced in this Chapter, single-family residential development, including the development of a primary residence and one or more accessory dwelling units and development pursuant to California Government Code Sections 65852.21 and 66411.7 shall comply with the objective standards for two-story development adopted by the City Council. However, an applicant seeking to deviate from the objective standards may submit an application for Single Family Individual Review pursuant to Section 18.12.110. SECTION 11. Section 18.12.110 (Single Family Individual Review) of Chapter 18.12 (R-1 Single- Family Residential District) of Title 18 (Zoning) of the Palo Alto Municipal Code is hereby amended as follows (additions underlined; and unchanged text omitted by bracketed ellipses): 18.12.110 Single Family Individual Review […] (b) Applicability The provisions of this Section 18.12.110 apply to the construction that does not comply with the objective standards for two-story development adopted by the City Council. Such projects include construction of a new singly developed two-story structure; the construction of a new second story; or the expansion of an existing second story by more than 150 square feet in the R-1 single family residential district. All second-story additions on a site after November 19, 2001 shall be included in calculating whether an addition is over 150 square feet. […] SECTION 12. If any section, subsection, clause or phrase of this Ordinance is for any reason held to be invalid, such decision shall not affect the validity of the remaining portion or sections of the Ordinance. The Council hereby declares that it should have adopted the Ordinance and each section, subsection, sentence, clause or phrase thereof irrespective of the fact that any one or more sections, subsections, sentences, clauses or phrases be declared invalid. SECTION 13. The Council finds that the Ordinance is exempt from the California Environmental Docusign Envelope ID: E70BAA45-FF01-4D65-AA75-E40A6B9C4A06 Item 10 Attachment B - Ordinance 5645 Item 10: Staff Report Pg. 17 Packet Pg. 175 of 312 14 Quality Act (CEQA) pursuant to CEQA Guidelines Section 15061(b)(3) because it can be seen with certainty that there is no possibility that updating the municipal code to implement existing changes in preemptive state housing law will have a significant effect on the environment. SECTION 14. This Ordinance shall be effective on the thirty-first day after the date of its adoption and shall expire on December 31, 2025, unless extended by the City Council or superseded by replacement legislation. INTRODUCED: DECEMBER 16, 2024 PASSED: JANUARY 13, 2025 AYES: BURT, LAUING, LYTHCOTT-HAIMS, LU, RECKDAHL, STONE, VEENKER NOES: ABSENT: ABSTENTIONS: ATTEST: City Clerk Mayor APPROVED AS TO FORM: APPROVED AS TO CONTENT: Assistant City Attorney City Manager Director of Planning and Development Services Docusign Envelope ID: E70BAA45-FF01-4D65-AA75-E40A6B9C4A06 Item 10 Attachment B - Ordinance 5645 Item 10: Staff Report Pg. 18 Packet Pg. 176 of 312 Certificate Of Completion Envelope Id: E70BAA45-FF01-4D65-AA75-E40A6B9C4A06 Status: Completed Subject: ORD 5645 - Temporary Ord Amending Sections of Titles 18 and 21 to Implement Laws from 2024 Source Envelope: Document Pages: 14 Signatures: 5 Envelope Originator: Certificate Pages: 2 Initials: 0 Christine Prior AutoNav: Enabled EnvelopeId Stamping: Enabled Time Zone: (UTC-08:00) Pacific Time (US & Canada) 250 Hamilton Ave Palo Alto , CA 94301 Christine.Prior@CityofPaloAlto.org IP Address: 199.33.32.254 Record Tracking Status: Original 1/16/2025 10:12:05 AM Holder: Christine Prior Christine.Prior@CityofPaloAlto.org Location: DocuSign Security Appliance Status: Connected Pool: StateLocal Storage Appliance Status: Connected Pool: City of Palo Alto Location: DocuSign Signer Events Signature Timestamp Albert Yang Albert.Yang@CityofPaloAlto.org Assistant City Attorney City of Palo Alto Security Level: Email, Account Authentication (None) Signature Adoption: Pre-selected Style Using IP Address: 174.21.185.204 Sent: 1/16/2025 10:17:59 AM Viewed: 1/16/2025 10:28:19 AM Signed: 1/16/2025 10:29:30 AM Electronic Record and Signature Disclosure: Not Offered via DocuSign Jonathan Lait Jonathan.Lait@CityofPaloAlto.org Director, Planning and Development Services City of Palo Alto Security Level: Email, Account Authentication (None) Signature Adoption: Uploaded Signature Image Using IP Address: 199.33.32.254 Sent: 1/16/2025 10:29:32 AM Viewed: 1/22/2025 3:00:17 PM Signed: 1/22/2025 3:00:27 PM Electronic Record and Signature Disclosure: Not Offered via DocuSign Ed Shikada Ed.Shikada@CityofPaloAlto.org Ed Shikada City of Palo Alto Security Level: Email, Account Authentication (None) Signature Adoption: Pre-selected Style Using IP Address: 76.220.33.154 Signed using mobile Sent: 1/22/2025 3:00:28 PM Viewed: 1/23/2025 7:55:59 AM Signed: 1/23/2025 7:56:20 AM Electronic Record and Signature Disclosure: Not Offered via DocuSign Ed Lauing Ed.Lauing@CityofPaloAlto.org Security Level: Email, Account Authentication (None) Signature Adoption: Pre-selected Style Using IP Address: 67.188.59.65 Sent: 1/23/2025 7:56:21 AM Viewed: 1/23/2025 8:12:19 AM Signed: 1/30/2025 7:33:54 AM Electronic Record and Signature Disclosure: Not Offered via DocuSign Item 10 Attachment B - Ordinance 5645 Item 10: Staff Report Pg. 19 Packet Pg. 177 of 312 Signer Events Signature Timestamp Mahealani Ah Yun Mahealani.AhYun@CityofPaloAlto.org City Clerk Security Level: Email, Account Authentication (None)Signature Adoption: Pre-selected Style Using IP Address: 75.104.111.246 Sent: 1/30/2025 7:33:56 AM Viewed: 2/1/2025 1:47:12 PM Signed: 2/1/2025 1:47:34 PM Electronic Record and Signature Disclosure: Not Offered via DocuSign In Person Signer Events Signature Timestamp Editor Delivery Events Status Timestamp Agent Delivery Events Status Timestamp Intermediary Delivery Events Status Timestamp Certified Delivery Events Status Timestamp Carbon Copy Events Status Timestamp Witness Events Signature Timestamp Notary Events Signature Timestamp Envelope Summary Events Status Timestamps Envelope Sent Hashed/Encrypted 1/16/2025 10:17:59 AM Certified Delivered Security Checked 2/1/2025 1:47:12 PM Signing Complete Security Checked 2/1/2025 1:47:34 PM Completed Security Checked 2/1/2025 1:47:34 PM Payment Events Status Timestamps Item 10 Attachment B - Ordinance 5645 Item 10: Staff Report Pg. 20 Packet Pg. 178 of 312 City Council Staff Report From: City Manager Report Type: CONSENT CALENDAR Lead Department: Administrative Services Meeting Date: December 8, 2025 Report #:2412-3919 TITLE Acceptance of Annual Report on Development Impact Fees for Fiscal Year 2025 and Adoption of a Resolution Making Statutory Findings for all Development Impact and In-Lieu Fee Funds; CEQA status - Not a Project. RECOMMENDATION Staff recommend that the City Council review and accept the Annual Report on Development Impact Fees for the period ending June 30, 2025, and adopt the resolution making statutory findings for all development impact and in-lieu fee funds (Attachment B). EXECUTIVE SUMMARY This report contains the annual report on the City of Palo Alto’s Development Impact Fees for the Fiscal Year (FY) 2025. This report meets the annual reporting requirements in Government Code sections 660066 and 66013. This report also contains a resolution making the findings required by Government Code section 66001. BACKGROUND Development Impact Fees Local agencies commonly impose on development projects to help offset the costs of funding the public facilities impacted by those developments. These fees are known as development impact fees. State law (Government Code section 66000 et seq. or “the Mitigation Fee Act”) requires local agencies that impose those development impact fees to prepare an annual report providing specific information about those fees. The City assesses 12 development impact fees. Within 180 days after the close of the fiscal year, the agency that collected the fees must make available to the public the following information regarding each fund or account: Brief description of the type of fee in the fund. Amount of the fee. Item 11 Item 11 Staff Report Item 11: Staff Report Pg. 1 Packet Pg. 179 of 312 Beginning and ending balance in the fund. Amount of fees collected, and interest earned, if applicable. Identification of each public improvement on which (Attachment): o Fees were expended o Amount of expenditure on each improvement o Total percentage of the cost of the public improvement that was funded with fees. Identification of an approximate date by which the construction of a public improvement will commence, if the local agency determines that sufficient funds have been collected to complete financing on an incomplete public improvement. Description of each interfund transfer or loan made from the account or fund, including the public improvement on which the loaned funds will be expended, and in the case of an interfund loan, the date on which the loan will be repaid and the rate of interest that the account or fund will receive on the loan. Amount of any refunds made due to inability to expend fees within the required time frame. The Mitigation Fee Act requires that the City Council review the annual report at its first regularly scheduled public meeting no less than 15 days after the information is made available to the public. Staff published the report on the City’s website on November 14, 20251. In addition to the annual reporting requirement, the Mitigation Fee Act requires, for the fifth fiscal year following the first deposit into the fund and every five years thereafter, that the City Council make findings with respect to any portion of the fee(s) remaining unexpended, whether committed or uncommitted. The findings must: Identify the purpose for which the fee is to be put. Demonstrate a nexus between the fee and the purpose for which it was originally charged; and Identify all sources and amounts of funding anticipated to complete financing of incomplete improvements Designate the approximate dates on which the anticipated funding is expected to be deposited into the fund. If the agency no longer needs the funds for the purposes for which they were collected, or if it fails to make required findings or perform certain prescribed administrative tasks, it may be required to initiate a refunding process as outlined in the statute. The City has chosen to make these findings on an annual basis. 1 https://www.paloalto.gov/Departments/Administrative-Services/Annual-Report-on-Developer-Impact-Fees Item 11 Item 11 Staff Report Item 11: Staff Report Pg. 2 Packet Pg. 180 of 312 In-Lieu and Other Development-Related Fees In-lieu fees provide developers with an alternative means of satisfying the City’s requirement to provide or construct certain improvements or amenities as part of their projects. While In-lieu fees do not have statutory reporting requirements, they are included in this report in the interest of transparency. These fees include the Parkland Dedication Fee/Quimby Act fee imposed under Government Code section 66477, the Residential Housing In-Lieu Fee, the Public Art In-Lieu Fee, and the water and wastewater connection and capacity fees imposed under Government Code section 66013. The annual report for FY 2025 is included as Attachment A. The Staff published the report on the City’s website on November 14, 2025. The report contains the statutorily required information for the following fees: Stanford Research Park/El Camino Real traffic impact fees (PAMC Ch. 16.45): Fee for new nonresidential development in the Stanford Research Park/El Camino Real Service Commercial zone, to fund capacity improvements at eight intersections. The City ceased collecting this fee effective FY 2020. San Antonio/West Bayshore Area traffic impact fees (PAMC Ch. 16.46): Fee for new nonresidential development in the San Antonio/West Bayshore area to fund capacity improvements at four intersections. The City ceased collecting this fee effective FY 2020. Housing impact fees imposed on commercial developments (PAMC Ch. 16.65): Fee on commercial and industrial development to offset the demand that new jobs create for low-income and moderate-income housing in the City by supporting below-market rate housing at various levels of affordability. General Government facilities: (PAMH Ch. 16.58) – Fee on residential and non- residential development to fund improvements to those facilities used by the City to provide basic governmental services and public facilities maintenance services, exclusive of public safety. Parks, Community Centers, and Libraries impact fees (PAMC Ch. 16.58): Fee on new residential and non-residential development to provide funds for improvements to community facilities, including parks, community centers, and libraries. Item 11 Item 11 Staff Report Item 11: Staff Report Pg. 3 Packet Pg. 181 of 312 Item 11 Item 11 Staff Report Item 11: Staff Report Pg. 4 Packet Pg. 182 of 312 Residential (Rental) impact fees (PAMC Ch. 16.65) Fee on rental residential developments (including mixed use with rental housing) to offset the demand that new market-rate rental housing creates for low and moderate-income housing in the City. Charleston-Arastradero Corridor pedestrian and bicyclist safety fees (PAMC Ch. 16.60): Fee on new development and redevelopment within the Charleston-Arastradero Corridor to provide for streetscape improvements designed to increase pedestrian and bicyclist safety in the corridor. Citywide Transportation impact fees (PAMC Ch 16.59): Fee on development in all parts of the City to fund transportation enhancements, or public facilities and programs to reduce congestion. New Public Safety facilities (PAMH Ch. 16.58): Fee on residential and non-residential development to fund the construction, acquisition, and/or upgrade of police and fire facilities, including fire apparatus and vehicles. University Avenue Parking In-Lieu Fund (PAMC Ch. 16.57): Fees collected from non- residential development within the University Avenue Parking Assessment District to fund the cost of public parking facilities to serve non-residential development projects that do not provide adequate new off-street parking spaces to satisfy the requirements of the zoning code. Development Impact Fee Five-Year Findings (Government Code section 66001) The City has elected to conduct an annual review of findings for all development impact fees. The proposed findings are presented in Attachment B, and the unexpended balances as of June 30, 2025, for each fund are outlined below: The Stanford Research Park/ El Camino Fund is $1,350,476. The San Antonio/West Bayshore Fund is $452,234. The Commercial Housing Impact Fee Fund is $4,673,857. The General Government Facilities Fund is $110,765. The Community Facilities-Park Development Fee Fund is $3,483,319. The Community Facilities- Community Center Development Fee Fund is $299,518. Item 11 Item 11 Staff Report Item 11: Staff Report Pg. 5 Packet Pg. 183 of 312 Item 11 Item 11 Staff Report Item 11: Staff Report Pg. 6 Packet Pg. 184 of 312 The Community Facilities- Library Development Fee Fund is $393,452. The Residential Housing Impact Fee Fund is $1,221,292. The Charleston-Arastradero Corridor Pedestrian & Bicyclist Safety Fee Fund is $41,270. The Citywide Transportation Fund is $1,721,417. The Public Safety Facility Fee Fund is $141,254. The University Avenue Parking In-Lieu Fund is $13,652,598. In addition to development fee funds that are required to be reported under AB 1600, the following funds are reported for information purposes only. They are not required to be reported under AB 1600: Residential housing in-lieu fees (PAMC Ch. 16.65): Fee on residential ownership developments in lieu of providing the required below-market rate to low-income households. Parkland Dedication (CA Government Code Section 66477-Quimby Act): Fees on parkland dedication imposed on new residential and non-residential development. Public Art Fund (PAMC Ch. 16.61): Fees imposed on new commercial developments (including mixed use projects), including new construction, remodels, additions and reconstruction that (i) have a floor area of 10,000 sq. ft. or more, and (ii) have a construction value of $200,000, or more, exclusive of costs for architecture, design, engineering, and required studies; and all new residential projects of five or more units to fund public art for private developments. Water and Wastewater Collection (California Government Code Section 66013): Connection and Capacity fees charged to developers that are adding load to the water and sewer systems, effective July 1, 2005. FISCAL/RESOURCE IMPACT There is no direct fiscal impact associated with the review and acceptance of the annual report. The various fee funds are reviewed annually for any unallocated or unexpended balances as part of the development of the City’s five-year capital improvement plan. If the council does not make the findings contained in Attachment B, the development fees described therein might be required to be refunded. This would have a potential fiscal impact of up to $27,541,452. Item 11 Item 11 Staff Report Item 11: Staff Report Pg. 7 Packet Pg. 185 of 312 STAKEHOLDER ENGAGEMENT This report has been prepared by the Accounting Division in Administrative Services and reviewed by partner departments, including the City Attorney’s Office, the Planning and Development Services Department, the Office of Transportation, Public Works, Library, and the Community Services Department. Council action on this item is not a project as defined by the California Environmental Quality Act (CEQA) in that the report and findings required by the Mitigation Fee Act are government fiscal activity, which does not involve any commitment to any specific project that may result in a potentially significant physical impact on the environment. CEQA Guidelines section 15378(b)(4). Attachment A: Development Impact Fees FY 2025 and Use of Fees Summary Attachment B: Resolution Making Findings Regarding the Continuing Need for Development Impact Fees Collected but Unexpended : Lauren Lai, Administrative Services Director Item 11 Item 11 Staff Report Item 11: Staff Report Pg. 8 Packet Pg. 186 of 312 Stanford Research Park/El Camino Real San Antonio/West Bayshore Area FUND Transportation Impact Fee Transportation Impact Fee Description of the Type of Fee Amount of the Fee $12.85/sq. ft.; City ceased collecting effective FY 2020 $2.65/sq. ft.; City ceased collecting effective FY 2020 Fund Balance July 1, 2024 $1,275,358 $427,120 FY 2025 Activity Revenues Interest Earnings 34,315 11,492 Unrealized Gain/(Loss) Investments 40,803 13,622 ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- Total Revenues $75,118 $25,114 Total Expenditures - - ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- Ending Balance June 30, 2025 $1,350,476 $452,234 Total Reserves - - -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------Net Funds Available $1,350,476 $452,234 Commercial Housing FUND Impact Fee General Government Facility Development Fee Description of the Type of Fee Fees imposed on commercial and industrial development to offset the demand that new jobs create for low and moderate-income housing in the City. (PAMC 16.65) Fees imposed on residential and non-residential development to fund facilities associated with municipal administration. (PAMC 16.58) Amount of the Fee Hotel / Retail / Other Residential: (ADUs under 750 sq. ft are exempt) Non-Residential: $27 per sq. ft. Single family $1,744.59 per unit Multi-family $1.394.64 per unit Office/R&D: $80 per sq. ft. Non-Residential: Commercial $973 per 1,000 sq. ft. or fraction thereof Industrial $324 per 1,000 sq. ft. or fraction thereof Office/Institutional $1,301 per 1,000 sq.ft. or fraction thereof Fund Balance July 1, 2024 $27,836,932 $191,972 FY 2025 Activity Revenues Fees Collected 55,680 98,585 Interest Earnings 327,963 4,656 Unrealized Gain/(Loss) Investments 110,723 5,551 -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------Total Revenues 494,365 108,792 Expenditures Salaries and Benefit (26,488) - Liability Insurance (1,390) - Operating Transfer to Capital Projects Fund - (190,000.00) ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- Total Expenditures (27,878) (190,000) ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- Ending Balance June 30, 2025 $28,303,420 $110,765 Reserves Notes Receivable, net of allowance (see detail below) (23,629,563) - ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- Total Reserves (23,629,563) - -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------Net Funds Available $4,673,857 $110,765 Notes Receivable Detail: $1,290,000 for 2811 Alma; $4,137,278 for 801 Alma; $2,221,976 Alma SRO; Barker Hotel $400,000; $7,834,000 Oak Courts Apt $7,700,000 for Buena Vista Mobile Home Park; $10,502,309 Wilton Court FUND Park Development Fee Community Centers Development Fee Description of the Type of Fee Amount of the Fee Residential: (ADUs under 750 sq ft are exempt)Residential: (ADUs under 750 sq ft are exempt) Traffic impact fees imposed on new non-residential development in the Stanford Research Park/El Camino Real Commercial Service zone to fund improvements at eight identified intersections. (PAMC 16.45) Traffic impact fees imposed on new non-residential development in the San Antonio/West Bayshore area to fund capacity improvements at four indentified intersections. (PAMC 16.46) Fees imposed on new residential and non-residential development approved after Jan 28, 2002 to fund acquisition of land and improvements for neighborhood and district parks. (PAMC 16.58) Fees imposed on new residential and non-residential development approved after Jan 28, 2002 to to fund development and improvements to community centers. (PAMC 16.58) Item 11 Attachment A - Development Impact Fees FY 2025 and Use of Fees Summary Item 11: Staff Report Pg. 9 Packet Pg. 187 of 312 Single family $67,650.36 per unit Single family $5,228.71 per unit. Multi-Family $50,034.40 per unit Multi-Family $3,867.92 per unit Non-residential: Non-residential: Commercial/Industrial $19,837 per net new 1,000 sq ft.Commercial/industrial $1,533 per 1,000 sq ft. Hotel/Motel $3,377 per 1,000 sq ft.Hotel/Motel $262 per 1,000 sq ft. Fund Balance July 1, 2024 $2,384,330 $970,142 FY 2025 Activity Revenues Fees Collected 1,251,833 205,875 Interest Earnings 82,200 16,397 Unrealized Gain/(Loss) Investments 40,756 37,355 ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- Total Revenues $1,374,789 $259,627 Expenditures - Operating Transfer to Capital Projects Fund (275,800) (930,250.00) ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- Total Expenditures ($275,800) (930,250.00)----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- Ending Balance June 30, 2025 $3,483,319 $299,518 Total Reserves - - ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- Net Funds Available $3,483,319 $299,518 Residential Housing FUND Library Development Fee Impact Fee Description of the Type of Fee Fees imposed on new residential and non-residentual development approved after January 28, 2002 to fund development and improvements to libraries. (PAMC 16.58) Fees imposed on all rental residential developments (including mixed-use with rental housing) to offset the demand that the new market-rate rental housing creates for low-income and moderate- income housing in the City. (PAMC 16.65) Amount of the Fee Residential: (ADUs under 750 sq ft are exempt)Single and Multi-Family: $26 per sq. ft. apartment (rentals) Single family $3,116.25 per unit Multi-family $2,304.49 per unit Non-residential: Commercial/industrial $914 per net new 1,000 sq ft. Hotel/Motel $156 per net new 1,000 sq ft. Fund Balance July 1, 2024 $617,837 $1,155,034 FY 2025 Activity Revenues Fees Collected 110,159 - Interest Earnings 13,047 31,082 Unrealized Gain/(Loss) Investments 35,392 35,176 ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- Total Revenues $158,598 $66,259 Expenditures Operating Transfer to Capital Projects Fund (382,983) - ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- Total Expenditures (382,983.00) - -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------Ending Balance June 30, 2025 $393,452 $1,221,292 Total Reserves - - -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------Net Funds Available $393,452 $1,221,292 Charleston-Arastradero Corridor Citywide Transportation FUND Pedestrian and Bicyclist Safety Impact Fee Impact fee Description of the Type of Fee Fees collected from new development and redevelopment Transportation impact fees imposed on new development in within the Charleston-Arastradero Corridor to provide for all parts of the City to fund congestion reduction projects. pedestrian and bicyclist safety improvements. (PAMC 16.60)(PAMC 16.59) Amount of the Fee Residential: $1,744 per residential unit Commercial: $0.51 per sq ft (ADUs exempt) $10,103.99 each; per net new PM peak hour trip Fund Balance July 1, 2024 $17,252 $1,883,519 FY 2025 Activity Revenues Fees Collected 23,359 127,504 Interest Earnings 978 46,825 Unrealized Gain/(Loss) Investments (319)58,570 -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------Total Revenues $24,018 $232,899 Expenditures Operating Transfer to Capital Projects Fund - (395,000)----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- Total Expenditures - ($395,000)----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- Ending Balance June 30, 2025 $41,270 $1,721,417 Item 11 Attachment A - Development Impact Fees FY 2025 and Use of Fees Summary Item 11: Staff Report Pg. 10 Packet Pg. 188 of 312 Total Reserves - - -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------Net Funds Available $41,270 $1,721,417 University Avenue Non-residential Development FUND Public Safety Facility Development Fee Parking In-Lieu Fee Description of the Type of Fee Fees imposed on residential and non-residential development to fund police and fire facilities, including fire apparatus and vehicles. (PAMC 16.58) Fees collected from non-residential development within the University Ave. Parking Assessment District area in lieu of providing the required off-street parking spaces. (PAMC 16.57) Amount of the Fee Residential:$135,514.06 per each parking space Single family $1,384.31 per unit Multi-family $1,107.96 per unit Non-residential: Commercial $773 per 1,000 sq ft. or fraction thereof Industrial $258 per 1,000 sq. ft. or fraction thereof Office/Institutional $1,103 per 1,000 sq ft or fraction thereof. Fund Balance July 1, 2024 $151,287 $15,189,653 FY 2025 Activity Revenues Fees Collected 77,389 Interest Earnings 4,158 291,788 Unrealized Gain/(Loss) Investments 3,512 562,799 ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- Total Revenues $85,060 $854,587 Expenditures General Expense - 0 Operating Transfer to Capital Projects Fund (95,093.00)(2,391,642) ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- Total Expenditures (95,093.00) (2,391,642.00) ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- Ending Balance June 30, 2025 $141,254 $13,652,598 Total Reserves - - -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------Net Funds Available $141,254 $13,652,598 Residential Housing In-Lieu Fee Parkland Dedication Fee FUND (INFORMATION ONLY)(INFORMATION ONLY) Description of the Type of Fee This fee is not subject to AB1600 reporting requirements and is included only for information purposes. Fees collected from ownership residential developments of three or more units(including mixed used with ownership in housing) in-lieu of providing the required below-market rate unit(s) to low and moderate income households. (PAMC 16.65) This fee is not subject to AB1600 reporting requirements and is inlcuded only for information purposes. Fees on parkland dedication imposed on new residential and non-residential development. (PAMC 21.50; Gov. Code Sec. 66477 and 66479) Amount of the Fee Single-family $100 per sq. ft. single-family detached; $66 per sq. ft. single-family attached. Multi-family $66 per sq. ft. condos. Single Family: $81,863.14 per unit; Multi-Family: $56,425.44 per unit. This applies only to residential projects that require a subdivision or parcel map. Land dedication is required for subdivisions resulting in more than 50 parcels. Parkland Dedication Fee -Land: Single Family: 531 sq. ft. per unit; Multi-Family: 366 sq. ft. per unit. When parkland dedication applies, park impact fees do not apply. Fund Balance July 1, 2024 $29,873,784 $3,601,005 FY 2025 Activity Revenues Fees Collected 2,722,519 1,970,457 Interest Earnings 723,124 107,678 Unrealized Gain/(Loss) Investments 142,973 60,213 ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- Total Revenues $3,588,616 $2,138,348 Expenditures Salaries and Benefit (26,488.28) - Liability Insurance (1,389.69) - Contract Service/General Expense (202,690.87) - Operating Transfer to Capital Projects Fund - (961,490) ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- Total Expenditures (230,569)($961,490) ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- Ending Balance June 30, 2025 $33,231,831 $4,777,863 Reserves Reserve for Encumbrances & Reappropriations (41,391) - Reserve for Notes Receivable (28,858,078) - -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------Total Reserves ($28,899,469) - -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------Net Funds Available $4,332,361 $4,777,863 Residential Housing In-Lieu Fund, Notes Receivable Detail: $375,000 for 3053 Emerson; $3,504,850 for Tree House Apts.; $3,000,000 Grant Ave; $747,734 for Sheridan Apts. Item 11 Attachment A - Development Impact Fees FY 2025 and Use of Fees Summary Item 11: Staff Report Pg. 11 Packet Pg. 189 of 312 Public Art In-Lieu Fee FUND (INFORMATION ONLY) Water Connection/Capacity Fees Description of the Type of Fee This fee is not subject to AB1600 reporting requirements and is included only for information purposes. The Public Art In-Lieu fee is used to fund public art for private developments that elect not to provide public art onsite. The fee is imposed on new commercial developments and mixed-use projects that (i) have a floor area of 10,000 sq. ft. or more, and (ii) have a construction value of $200,000, or more, exclusive of costs for architecture, design, engineering, and required studies, as well as all new residential projects of five or more units. (PAMC 16.61) Water connection and capacity fees are imposed on new development and redevelopment to buy into existing water distribution system and to recover the proportionate cost of system improvements required to serve the new customers of increased loads of existing customers. These are one-time fees paid before water services are upgraded or installed. Capacity fees recieved are used exclusively for water capital improvement projects. (Gov. Code Sec. 66013) Amount of the Fee 1% of first $132.67 million construction valuation and 0.9% of construction valuation for valuation in excess of $132.67 million Water Capacity Fees: 5/8 in., 3/4 in E-Meter. $3,750, 1 in. E-Meter $6,250, 1 1/2 in. E-Meter $18,850, 2 in. E-Meter $31,250, 4 in. Compound Meter by est. $125/FU (min. 5,000 FU) , 6 in. Compound Meter by est. $125/FU (min. 7,000 FU) Fire Service Capacity Fees: 2 in. $750, 4 in. $8,425, 6 in. $18,250, 8 in. $30,950, 10 in. $48,110 Fund Balance July 1, 2024 $2,249,946 - FY 2025 Activity Revenues Fees Collected 118,021 Connection Fees Collected 1,489,198 Capacity Fees Collected 333,490 Interest Earnings 59,151 - Unrealized Gain/(Loss) Investments 71,430 - Transfers in from other funds 187,800 - -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------Total Revenues $436,402 $1,822,688 Expenditures Salaries and benefits (294,479) - Contract Services/Other (152,513) (1,822,688) Liability Insurance (8,439) - ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- Total Expenditures ($455,431)($1,822,688) -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------Ending Balance June 30, 2025 $2,230,917 - Reserves Encumbrances & Reappropriations (139,356) - -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------Total Reserves (139,356) - -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------Net Funds Available $2,091,561 - FUND Wastewater Connection/Capacity Fees Description of the Type of Fee Wastewater connection and capacity fees are imposed on new development and redevlopment to buy into the existing wastewater collection systems and to recover the proportionate cost of system improvements required to serve the new customers of increased loads of existing customers. These are one-time fees paid before the wastewater services are upgraded or installed. Capacity fees recieved are used exclusively for sanitary sewer capital improvement projects. (Gov. Code Sec. 66013) Amount of the Fee Sewer Capacity Charges: 4 in. connection with 5/8 in Water Meter (WM) $5,250, 4 in connection. with 1-in WM $10,500, 4 or 6 in. connection with 1-1/2 in WM $31,668, 6 in. connection with 2 in. WM $52,500, 6 in. and larger connection with 4 in. or larger WM by est. at $210/FU Fund Balance July 1, 2024 - FY 2025 Activity Revenues Connection Fees Collected 320,608 Capacity Fees Collected 137,004 ----------------------------------------------------------------------------------------- Total Revenues $457,612 Expenditures Contract Services/Other (457,612) -----------------------------------------------------------------------------------------Total Expenditures ($457,612) ----------------------------------------------------------------------------------------- Ending Balance June 30, 2025 - Total Reserves - -----------------------------------------------------------------------------------------Net Funds Available $0 $203,561 for Colorado Park Housing; $149,968 for El Dorado Palace; $6,800,000 for Buena Vista Mobile Home Park; $8,249,601 for Wilton Ct.; $1,500,000 for 525 E. Charleston Rd.; $600,000 Fabian Way Housing $2,285,026 for 801 Alma; $842,338 for Palo Alto Housing Project; $600,000 for 2811-2825 Alma St.; Item 11 Attachment A - Development Impact Fees FY 2025 and Use of Fees Summary Item 11: Staff Report Pg. 12 Packet Pg. 190 of 312 City of Palo Alto FY 2025 Use of Fees Summary Fund Name Project FY 2025 Expenditures Total Project Cost % of Total Project Cost Construction Start Date Stanford Research Park/El Camino Real Transportation Impact Fee Page Mill Road/El Camino Real Intersection Improvements None N/A N/A 2026 San Antonio/West Bayshore Area Transportation Impact Fee PL-05030 Traffic Signal and ITS Upgrades None 4,091,083.00$ N/A 2026 Commercial Housing Impact Fee Affordable Housing Development Projects 27,878.00$ N/A N/A N/A General Government Facility Development Impact Fee PE-15001 New Public Safety Building 190,000.00$ 118,602,764.00$ 0.3%March 2021 Community Facilities Parks Development Impact Fee PG-19000 Park Restroom Installation 275,799.00$ 2,003,799.00$ 83.4%Recurring PG-18001- Dog Park Installation and Renovation None 338,904.00$ 88.5%Recurring Community Center Impact Fee PE-24001 Electrification of City Facilities 490,000.00$ 1,799,238.00$ 54.5%Recurring PF-02022 Facility Interior Finishes Replacement 440,250.00$ 1,069,488.00$ 82.3%Recurring Community Facilities Library Developers Impact Fee LB-21000 Library Automated Material Handling 382,983.00$ 1,898,292.00$ 45.6%February 2025 Residential Housing Impact Fee Affordable Housing Development Projects None N/A N/A N/A Charleston-Arastradero Corridor Pedestrian & Bicyclist Safety Impact Fee PL-05030 Traffic Signal and ITS Upgrades None 4,091,083.00$ 1.0%N/A Citywide Transportation Impact Fee PL-05030 Traffic Signal and ITS Upgrades 395,000.00$ 4,091,083.00$ 9.7%ongoing Public Safety Facility Development Impact Fee PE-18004 Fire Station 4 Replacement 95,093.00$ 18,255,946.00$ 0.5%Spring 2022 University Ave Non-Residential Development Parking In-Lieu Fee PE-15007 New Downtown Parking Garage 2,391,642.00$ 17,286,151.00$ 13.8%2025 Residential Housing In-Lieu Fee Affordable Housing Development Projects 230,569.00$ N/A, ongoing N/A N/A Parks Dedication Fund PG-26000 Stanford Palo Alto Community Playing Fields Turf Replacement 961,490.00$ 2,707,547.00$ 35.5% Spring 2025 PE- 18006 Byxbee Park Completion None 3,199,189.00$ 48.4%Fall 2024 PE-24004 Rinconada Pool Family Changing Room None 1,406,158.00$ 26.4% Winter 2024 Public Art In-Lieu Fee Public Art Program(acquisition of new artwork, repair and maintenance, project management and program administration) 455,431.00$ N/A, ongoing N/A N/A Water Fund Capacity Fees WS-80013 Customer Connections, Annual 1,432,833.00$ N/A, ongoing N/A ongoing WS-15002 Water Main Replacement Project #29 389,855.00$ N/A, ongoing N/A Winter 2022 Wastewater Connection Capacity Fees WC-80020 Sewer System, Customer Connections, Annual 457,612.00$ N/A, ongoing N/A ongoing Item 11 Attachment A - Development Impact Fees FY 2025 and Use of Fees Summary Item 11: Staff Report Pg. 13 Packet Pg. 191 of 312 *NOT YET APPROVED* Attachment B 1 0290010_20251114 Resolution No. _____ Resolution of the Council of the City of Palo Alto Accepting the Annual Report on Development Impact Fees for the Period Ending June 30, 2025 and Making Findings Regarding the Continuing Need for Development Impact Fees Collected but Not Expended R E C I T A L S A. Government Code Sections 66000 et seq., commonly known as the Mitigation Fee Act, regulates the imposition, collections, expenditure, and reporting of development impact fees; and B. Government Code Section 66006 requires that certain information be made available to the public regarding development impact fees on an annual basis; and C. Government Code Section 66001 requires the City Council to make findings describing the continuing need for impact fees every five years specifying the intended use of any unexpended impact fees; and D. The City of Palo Alto imposes various development impact fees, and has prepared the Development Impact Fee Report for the Period Ending June 30, 2025, which contains the information required by Government Code 66006 for these fees; and E. The City of Palo Alto also imposes in-lieu fees and dedication fees in connection with development projects and although the Mitigation Fee Act’s requirements do not apply to these fees, the Development Impact Fee Report for the Period Ending June 30, 2025 includes information regarding those fees in its annual report in the interest of transparency. F. The Development Impact Fee Report for the Period Ending June 30, 2025 was published on the City of Palo Alto website on November 14, 2025. G. The City Council has read and considered the Development Impact Fee Report for the Period Ending June 30, 2025. The Council of the City of Palo Alto RESOLVES as follows: Section 1. The City Council accepts the Annual Report on Development Impact Fees for the Period Ending June 30, 2025 as required by Government Code 66006. Section 2. Based on the Development Impact Fee Report for the Period Ending June 30, 2025, and the Schedule of Improvements and Expenditures attached as Exhibit 1 to this resolution, the City Council makes the following findings as required by Government Code Section 66001 with regard to fees collected but not expended for the following fees: Stanford Research Park/El Camino Real Traffic Impact Fee Item 11 Attachment B - Resolution Making Findings Regarding the Continuing Need for Development Impact Fees Collected but Unexpended Item 11: Staff Report Pg. 14 Packet Pg. 192 of 312 *NOT YET APPROVED* Attachment B 2 0290010_20251114 A. The purpose of this fee is to fund traffic-related improvements at eight designated intersections within the Stanford Research Park/El Camino Real CS zone. B. The fee is reasonably related to its purpose because the fee is imposed on new non- residential development, which is expected to generate an average of eighty percent of new commute period traffic at the designated intersections, and the amount of the fee is based upon the estimated cost of the capacity improvements at the designated intersections. C. The sources and amounts of funding anticipated for incomplete improvements are set forth in Exhibit 1 to this resolution. D. The approximate dates on which the funding is expected to be deposited into the appropriate account are set forth in Exhibit 1 to this resolution. San Antonio/West Bayshore Area Traffic Impact Fee A. The purpose of this fee is to fund the cost of capital expenditures needed to provide operational improvements at certain intersections in the San Antonio/West Bayshore Area. B. This fee is reasonably related to its purpose because the fee is imposed on new development in the San Antonio/West Bayshore Area, and the San Antonio/West Bayshore Environmental Impact Report (EIR) showed that these improvements are necessary to mitigate the demonstrated significant traffic impacts of such new development. C. The sources and amounts of funding anticipated for incomplete improvements are set forth in Exhibit 1 to this resolution. D. The approximate dates on which the funding is expected to be deposited into the appropriate account are set forth in Exhibit 1 to this resolution. Commercial Housing Impact Fee A. The purpose of this fee is to offset the demand that new jobs create for low and moderate-income housing in the city as a result of commercial and industrial development by supporting below-market rate housing at various levels of affordability. B. The fee is reasonably related to its purpose because the fees are expended exclusively to provide new and preserve existing housing affordable to very low income, lower income, and moderate income households in the city, consistent with the goals and policies contained in the City's housing element and for administration and compliance monitoring of the City’s affordable housing program. C. The Planning and Development Services Department released a Notice of Funding Availability (NOFA) for eligible facilities/services in September 2025. D. The unexpended fund balance should be allocated in FY 2026 and later years through the NOFA process, which awards grants to eligible projects on an annual basis; however, a minimum balance will be maintained to account for unrealized losses as these funds are invested until the time of disbursement. Item 11 Attachment B - Resolution Making Findings Regarding the Continuing Need for Development Impact Fees Collected but Unexpended Item 11: Staff Report Pg. 15 Packet Pg. 193 of 312 *NOT YET APPROVED* Attachment B 3 0290010_20251114 General Government Facilities Fee A. The purpose of this fee is to fund the cost of improvements to those facilities used by the City to provide basic governmental services and public facilities maintenance services, exclusive of public safety. B. The fee is reasonably related to its purpose because new residential and non-residential development in the city will generate additional residents and employees who will increase the demand for services, including municipal services and general government functions. Population and growth has a direct impact on the need for government services and facilities, thus a reasonable relationship exists between new development and government facilities, which will have to be acquired to meet the increased demand. A. The sources and amounts of funding anticipated for incomplete improvements are set forth in Exhibit 1 to this resolution. B. The approximate dates on which the funding is expected to be deposited into the appropriate account are set forth in Exhibit 1 to this resolution. Park Development Fee A. The purpose of this fee is to fund the cost to design, acquire, install, and construct park facilities. B. The fee is reasonably related to its purpose because the fees will be collected from new residential and non-residential development in the city for park facilities that will be necessary due to increased demand for such facilities resulting from new development. New development will generate additional residents and employees who will increase the demand for active and passive park facilities within the city. Land will have to be purchased and improved to meet this increased demand. C. The sources and amounts of funding anticipated for incomplete improvements/facilities is set forth in Exhibit A to this resolution. D. The approximate dates on which the funding is expected to be deposited into the appropriate account is set forth in Exhibit A to this resolution. Community Center Development Fee A. The purpose of this fee is to fund the cost to design, acquire, install, and construct community center facilities. B. The fee is reasonably related to its purpose because the fees will be collected from new residential and non-residential development in the city for community center facilities that will be necessary due to increased demand for such facilities resulting from new development. New development will generate additional residents and employees who will increase the demand for community center facilities within the city. Land will have to be purchased and improved to meet this increased demand. C. The sources and amounts of funding anticipated for incomplete improvements/facilities is set forth in Exhibit A to this resolution. D. The approximate dates on which the funding is expected to be deposited into the appropriate account is set forth in Exhibit A to this resolution. Item 11 Attachment B - Resolution Making Findings Regarding the Continuing Need for Development Impact Fees Collected but Unexpended Item 11: Staff Report Pg. 16 Packet Pg. 194 of 312 *NOT YET APPROVED* Attachment B 4 0290010_20251114 Library Development Fee A. The purpose of this fee is to fund the cost to design, acquire, install, and construct library facilities. B. The fee is reasonably related to its purpose because the fees will be collected from new residential and non-residential development in the city for library facilities that will be necessary due to increased demand for such facilities resulting from new development. New development will generate additional residents and employees who will increase the demand for library facilities within the city. Land will have to be purchased and improved to meet this increased demand. C. The sources and amounts of funding anticipated for incomplete improvements/facilities is set forth in Exhibit A to this resolution. D. The approximate dates on which the funding is expected to be deposited into the appropriate account is set forth in Exhibit A to this resolution. Residential Housing Impact Fee A. The purpose of this fee is to offset the demand for low and moderate-income housing in the city as a result of market rate residential development by supporting below-market rate housing at various levels of affordability. B. The fee is reasonably related to its purpose because the fees are expended exclusively to provide new and preserve existing housing affordable to very low income, lower income, and moderate income households in the city, consistent with the goals and policies contained in the City's housing element and for administration and compliance monitoring of the City’s affordable housing program. C. The Planning and Development Services Department released a Notice of Funding Availability (NOFA) for eligible facilities/services in September 2025. D. The unexpended fund balance should be allocated in FY 2026 and later years through the NOFA process, which awards grants to eligible projects on an annual basis; however, a minimum balance will be maintained to account for unrealized losses as these funds are invested until the time of disbursement. Charleston-Arastradero Corridor Pedestrian and Bicyclist Safety Impact Fee A. The purpose of this fee is to fund the cost to implement the Charleston-Arastradero Corridor Plan, a series of streetscape improvements designed to increase pedestrian and bicyclist safety in the corridor. B. The fee is reasonably related to its purpose because the fees will be collected on residential and non-residential development within the Charleston-Arastradero Corridor Plan area and used to construct improvements identified in the Charleston-Arastradero Corridor Plan. C. The sources and amounts of funding anticipated for incomplete improvements/facilities is set forth in Exhibit A to this resolution. D. The approximate dates on which the funding is expected to be deposited into the appropriate account is set forth in Exhibit A to this resolution. Item 11 Attachment B - Resolution Making Findings Regarding the Continuing Need for Development Impact Fees Collected but Unexpended Item 11: Staff Report Pg. 17 Packet Pg. 195 of 312 *NOT YET APPROVED* Attachment B 5 0290010_20251114 Citywide Transportation Impact Fee A. The purpose of this impact fee is to fund the cost of citywide transportation enhancements, or public facilities and services that relieve citywide traffic congestion caused by new development projects. B. The fee is reasonably related to its purpose because the fee is imposed on development projects that cause traffic congestion on a citywide basis, calculated based on the additional traffic impacts attributable to the project, and fee funds are used only on eligible citywide transportation enhancements. C. The sources and amounts of funding anticipated for incomplete improvements are set forth in Exhibit 1 to this resolution. D. The approximate dates on which the funding is expected to be deposited into the appropriate account are set forth in Exhibit 1 to this resolution. Public Safety Facilities Impact Fee A. The purpose of this fee is to fund the construction, acquisition and/or upgrade of Police and Fire Facilities and equipment. B. The fee is reasonably related to its purpose because new residential and non-residential development will generate additional residents and employees who will require additional service calls increasing the need for trained Police and Fire personnel. Buildings and vehicles used to provide these services will have to be expanded, constructed, or purchased to meet this increased demand. Thus a reasonable relationship exists between the need for Public Safety facilities and the impact of residential and non-residential development. C. The sources and amounts of funding anticipated for incomplete improvements/facilities is set forth in Exhibit A to this resolution. D. The approximate dates on which the funding is expected to be deposited into the appropriate account is set forth in Exhibit A to this resolution. University Avenue Parking In-Lieu Fee A. The purpose of this fee is to fund the cost of providing public parking facilities to serve nonresidential development within the University Avenue parking assessment district area that does not provide adequate new off-street parking spaces to satisfy the requirements of the zoning code. B. The fee is reasonably related to its purpose because the fees will be used for the construction of additional public parking spaces within the University Avenue parking assessment district area. C. The sources and amounts of funding anticipated for incomplete improvements are set forth in Exhibit 1 to this resolution. D. The approximate dates on which the funding is expected to be deposited into the appropriate account are set forth in Exhibit 1 to this resolution. Item 11 Attachment B - Resolution Making Findings Regarding the Continuing Need for Development Impact Fees Collected but Unexpended Item 11: Staff Report Pg. 18 Packet Pg. 196 of 312 *NOT YET APPROVED* Attachment B 6 0290010_20251114 Residential Housing In-Lieu Fee A. The purpose of this fee is to offset the demand for low and moderate-income housing in the city as a result of market rate residential development by supporting below-market rate housing at various levels of affordability. The fee allows developers of market-rate residential ownership projects to fulfill their obligation to provide affordable ownership units by paying an in-lieu fee after demonstrating that providing such units as part of the project would be infeasible. B. The fee is reasonably related to its purpose because the fees are expended exclusively to provide new and preserve existing housing affordable to very low income, lower income, and moderate income households in the city, consistent with the goals and policies contained in the City's housing element and for administration and compliance monitoring of the City’s affordable housing program. C. The Planning and Development Services Department released a Notice of Funding Availability (NOFA) for eligible facilities/services in September 2025. D. The unexpended fund balance should be allocated in FY 2026 and later years through the NOFA process, which awards grants to eligible projects on an annual basis; however, a minimum balance will be maintained to account for unrealized losses as these funds are invested until the time of disbursement. Public Art In-Lieu Fee A. The purpose of this fee is to fund the cost of providing publicly visible art displays that enhance the built environment in the city when private developers opt not to commission on-site art displays as part of their projects. B. The fee is reasonably related to its purpose because the fees will be collected from development projects that exceed a minimum size that do not include on-site art displays and used to acquire and install temporary or permanent works of art in public places, provide publicly accessible exhibitions of art, provide community-based public art events, and cover expenses associated with the Public Art Program. C. The Community Services Department, through the Public Art Commission, continually evaluates opportunities for public art displays, exhibitions, and community events using the Public Art Fund. The Public Art Fund also contributes to cost of administering the Public Art Program, however that contribution is limited to 20% of the project budget and for the repair, maintenance, conservation and insurance of those works. D. The sources and amounts of funding anticipated for incomplete improvements are set forth in Exhibit 1 to this resolution. E. The approximate dates on which the funding is expected to be deposited into the appropriate account are set forth in Exhibit 1 to this resolution. The unexpended fund balance is allocated on an ongoing basis as public art projects are considered and approved by the Public Art Commission. Parkland Dedication Fee This fee is under Government Code section 66477 and 66479 and therefore the requirement to make additional findings every five years does not apply. Item 11 Attachment B - Resolution Making Findings Regarding the Continuing Need for Development Impact Fees Collected but Unexpended Item 11: Staff Report Pg. 19 Packet Pg. 197 of 312 *NOT YET APPROVED* Attachment B 7 0290010_20251114 Water & Wastewater System Connection and Capacity Fees These fees are imposed under Government Code section 66013 and therefore the requirement to make additional findings every five years does not apply. Refer to the Development Impact Fee Report for the Period Ending June 30, 2025 for the information required by Government Code 66013(d). SECTION 3. The Council finds that adoption of this resolution is not a project as defined by the California Environmental Quality Act (CEQA) in that it is a fiscal activity which does not involve any commitment to any specific project which may result in a potentially significant physical impact on the environment. CEQA Guidelines section 15378(b)(4). INTRODUCED AND PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: __________________________ _____________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: __________________________ _____________________________ Chief Assistant City Attorney City Manager _____________________________ Director of Administrative Services Item 11 Attachment B - Resolution Making Findings Regarding the Continuing Need for Development Impact Fees Collected but Unexpended Item 11: Staff Report Pg. 20 Packet Pg. 198 of 312 Attachment B - Exhibit 1 City of Palo Alto Schedule of Improvements and Expenditures Fund/Project Name CIP Project Number Unexpended Balance FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 Notes; Other Funding Sources/Amounts Stanford Research Park/El Camino Real Transportation Impact Fee 1,350,476$ Page Mill Road/El Camino Real Intersection Improvements N/A 1,350,476$ Project to be constructed by County of Santa Clara; additional project funding from County 2016 Measure B Expressway Program; anticipated construction start in mid-2026 San Antonio/West Bayshore Area Transportation Impact Fee 452,234$ Traffic Signal and Intelligent Transportation System Upgrades PL-05030 452,234$ San Antonio/Charleston Road Intersection Improvement Project; anticipated construction start in 2026. See pp. 56 and 348 of the FY 2026 Capital Budget. Commercial Housing Impact Fee 4,673,857$ 3001 El Camino Real N/A 2,200,000$ Funding award for 3001 El Camino Real 100% affordable housing development approved November 5, 2025 FY 2027 Notice of Funding Availability N/A The City annually issues Notices of Funding Availability (NOFA) to provide funding support for eligible affordable housing projects. Funding awards vary by project and the available balance in this fund, and other funds managed throught City's affordable housing program. Additional NOFAs will be issued for FY 2027 and later years based on available funding. General Government Facility Development Fee 110,765$ Public Safety Building PE-15001 110,765$ Park Development Fee 3,483,719$ Dog Park Installation and Renovation PG-18001 150,000$ 150,000$ 150,000 See pp. 56 and 228-230 of the FY 2026 Capital Budget. Park Restroom Installation PG-19000 913,112$ 559,342$ 580,000 See pp. 56 and 266-268 of the FY 2026 Capital Budget. Community Center Development Fee 299,518$ Facility Interior Finishes Replacement PF-02022 299,518$ Rehabilitation of city-owned building at 445 Bryant for downtown teen center and La Comida senior nutrition program. Library Development Fee 393,452$ Library Automated Material Handling LB-21000 100,000$ See pp. 56, 87 and 146-148 of the FY 2026 Capital Budget. Residential Housing Impact Fee 1,221,292$ 3001 El Camino Real N/A 400,000$ Funding award for 100% affordable housing development approved November 5, 2025 Notice of Funding Availability The City annually issues Notices of Funding Availability (NOFA) to provide funding support for eligible affordable housing projects. Funding awards vary by project and the available balance in this fund, and other funds managed throught City's affordable housing program. Additional NOFAs will be issued for FY 2027 and later years based on available funding. Charleston-Arastradero Corridor Pedestrian & Bicyclist Safety 41,270$ Traffic Signal and ITS Upgrades PL-05030 41,270$ Traffic signal upgrades in Charleston-Arastradero Corridor. Citywide Transportation Impact Fee 1,721,417$ Traffic Signal and Intelligent Transportation System Upgrades PL-05030 395,000$ 395,000$ 395,000$ 395,000$ 395,000$ See pp. 56, 88, and 348-350 of the FY 2026 Capital Budget. Public Safety Facility Development Impact Fee 141,254$ Fire Station 4 Replacement PE-18004 95,093$ 46,161$ $95K carried forward FY 25 Capital Budget, construction start anticipated FY 2026. University Avenue Non-Residential Development Parking In-Lieu 13,652,598$ New Downtown Parking Garage PE-15007 13,106,958$ See pp. 56, 88, and 170-172 of the FY 2026 Capital Budget. Residential Housing In-Lieu 4,332,361$ 3001 El Camino Real N/A 500,000$ Funding award for 100% affordable housing development approved November 5, 2025 FY 2027 Notice of Funding Availability N/A The City annually issues Notices of Funding Availability (NOFA) to provide funding support for eligible affordable housing projects. Funding awards vary by project and the available balance in this fund, and other funds managed throught City's affordable housing program. Additional NOFAs will be issued for FY 2027 and later years based on available funding. Public Art In-Lieu 2,091,561$ Code: Art N/A 200,000$ 200,000$ 50,000$ 50,000$ 50,000$ Projection mapped art displays; annual temporary public art exhibits and/or community events. California Avenue and University Avenue Streetscape Projects 750,000$ 750,000$ Permanent public artwork to enhance downtown and California Avenue Item 11Attachment B - ResolutionMaking Findings Regardingthe Continuing Need forDevelopment Impact FeesCollected but Unexpended Item 11: Staff Report Pg. 21 Packet Pg. 199 of 312 City Council Staff Report From: City Manager Report Type: CONSENT CALENDAR Lead Department: Fire Meeting Date: December 8, 2025 Report #:2508-5140 TITLE Adoption of a Resolution Declaring Weeds to be a Public Nuisance and Setting February 9, 2026 for a Public Hearing for Objections to the Proposed Weed Abatement; CEQA status: exempt, CEQA Guidelines Section 15308. RECOMMENDATION Staff recommends that Council adopt the attached resolution: 1. Declaring weeds to be a public nuisance; 2. Setting February 9, 2026, for a public hearing on objections to proposed weed abatement; and 3. Directing staff to publish a notice of hearing in accordance with the provisions of the Palo Alto Municipal Code. BACKGROUND On April 18, 1977, the City Council approved an agreement with Santa Clara County for the administration of weed abatement within the City of Palo Alto. This agreement has reduced the City’s costs and staff time required for the administration of weed abatement. For the past seasons, the weed abatement program has been expeditiously carried out by the County Department of Agriculture and Resource Management. ANALYSIS Palo Alto Municipal Code Chapter 8.08 specifies weed abatement procedures. The chapter requires property owners or occupants to remove certain weeds or fire hazards, as defined in Section 8.08.010 that exist upon their premises, public sidewalks, streets, or alleys. It also specifies the procedures to be followed to abate weeds, in the event owners do not remove them. The procedures are as follows: • Resolution of the City Council declaring weeds to be a public nuisance. This resolution sets the time and place for hearing any objections to the proposed weed abatement. • Public Notice. This notice informs property owners of the passage of the nuisance abatement resolution and provides that property owners shall remove weeds from their Item 12 Item 12 Staff Report Item 12: Staff Report Pg. 1 Packet Pg. 200 of 312 property, or the abatement will be carried out by Santa Clara County. The City then publishes a legal advertisement in the local newspaper announcing the date of the public hearing. • Public Hearing. The Council must conduct a public hearing, at which time any property owner may appear and object to the proposed weed destruction or removal. After the City Council hearing and considering any objections, the Council may allow or overrule any or all objections. If objections are overruled, the County will be asked to perform the work of destruction and removal of weeds. Council adoption of the weed abatement resolution at the December 8, 2025, meeting will set this public hearing date for February 9, 2026. An overview of the program and annual calendar for the steps involving City Council action is provided in Attachment B. FISCAL/RESOURCE IMPACT There is no direct fiscal impact of this action on the City. The City of Palo Alto administers the weed abatement program with the County Department of Agriculture and Resource Management with a minimal amount of staff time. All charges for the weed abatement services are included as a special assessment on bills for taxes levied against the affected lots and parcels of land. Such charges are considered liens on these properties. STAKEHOLDER ENGAGEMENT Santa Clara Department of Agriculture and Environmental Management coordinates the weed abatement program. Coordination includes contracts, inspections, nuisance reports/lists and fees. Engagement with impacted property owners is outlined above in the Public Notice details; after this resolution is adopted, Santa Clara County will mail out a notice of hearing to all property owners on the 2026 Weed Abatement Commencement report. Staff will publish a legal advertisement in the local newspaper and post it on the City bulletin board. ENVIRONMENTAL REVIEW The Santa Clara County Counsel has determined the Weed Abatement Program be Categorically Exempt from CEQA pursuant to CEQA Guidelines Section 15308. ATTACHMENTS Attachment A: Resolution Declaring Weeds a Public Nuisance Attachment B: Weed Abatement Program Overview APPROVED BY: Stephen Lindsey, Fire Chief Item 12 Item 12 Staff Report Item 12: Staff Report Pg. 2 Packet Pg. 201 of 312 NOT YET APPROVED 027111725 1 Resolution No. Resolution of Intention of the Council of the City of Palo Alto Declaring Weeds to be a Nuisance and Setting February 9, 2026 for a Public Hearing for Objections to Proposed Weed Abatement R E C I T A L S A. Weeds, as defined in Section 8.08.010(b) of the Palo Alto Municipal Code, are anticipated to develop during calendar year 2026 upon streets, alleys, sidewalks, and parcels of private property within the City of Palo Alto sufficient to constitute a public nuisance as a fire menace when dry or are otherwise combustible, or otherwise to constitute a menace to the public health as noxious or dangerous. NOW, THEREFORE, the Council of the City of Palo Alto does RESOLVE as follows: SECTION 1. Weeds, as defined in Section 8.08.010(b) of the Palo Alto Municipal Code, which are anticipated to develop during calendar year 2026 upon streets, alleys, sidewalks, and parcels of private property within the City of Palo Alto, are hereby found and determined to constitute a public nuisance. Such nuisance is anticipated to exist upon some of the streets, alleys, sidewalks, and parcels of private property within the City, which are shown, described, and delineated on the several maps of the properties in said City which are recorded in the Office of the County Recorder of the County of Santa Clara, reference in each instance for the description of any particular street, alley, or parcel of private property being hereby made to the several maps aforesaid, and, in the event of there being several subdivision maps on which the same lots are shown, reference is hereby made to the latest subdivision map. SECTION 2. THEREFORE, IT IS ORDERED that the said public nuisance be abated in the manner provided by Chapter 8.08 of the Palo Alto Municipal Code: i. IT IS FURTHER ORDERED that a public hearing shall be held on the 9th day of February 2026, at the hour of 5 pm, or as soon thereafter as the matter may be heard, at the Council Chambers of the Civic Center of said City, at which the Council shall hear objections to the proposed weed abatement of such weeds and give any objections due consideration; ii. IT IS FURTHER ORDERED that the Fire Chief of the City of Palo Alto is directed to give notice of the public hearing in the time, manner and form provided in Chapter 8.08 of the Palo Alto Municipal Code. SECTION 3. Unless the nuisance is abated without delay by the destruction and removal of such weeds, the work of abating such nuisance will be done by the County of Santa Clara Department of Agriculture and Resource Management Office on behalf of the City of Palo Alto, Item 12 Attachment A - Resolution Declaring Weeds a Public Nuisance Item 12: Staff Report Pg. 3 Packet Pg. 202 of 312 NOT YET APPROVED 027111725 2 and the expenses thereof assessed upon the lots and lands from which, and/or in the front and rear of which, such weeds shall have been destroyed and removed. SECTION 4. The City Council of Palo Alto adopts the determination of Santa Clara County, as the lead agency, that the Weed Abatement Program is categorically exempt from the provisions of the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines section 15308. INTRODUCED AND PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: __________________________ _____________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: __________________________ _____________________________ Assistant City Attorney City Manager _____________________________ Fire Chief _____________________________ Director of Administrative Services Item 12 Attachment A - Resolution Declaring Weeds a Public Nuisance Item 12: Staff Report Pg. 4 Packet Pg. 203 of 312 Attachment B City of Palo Alto Weed Abatement The City of Palo Alto contracts with the Santa Clara County Department of Agriculture and Environmental Management (SCCDAEM) to remove and destroy weeds in its efforts to mitigate potential fire hazards (as defined in Palo Alto Municipal Code Chapter 8.08). The entire weed abatement program is coordinated by the SCCDAEM. Abatement proceedings must follow a legally established course. This is and annual process with weed abatement occurring in late Spring. City of Palo Alto involvement is limited to the following 3 steps for City Council: 1) (Nov-Dec) City of Palo Alto declares Weeds a Nuisance to allow for County abatement and sets a later date (Jan-Feb) for a public hearing to review the Annual Commencement Report (list of “nuisance” parcels). 2) (Jan-Feb) Public Hearing to review the Annual Commencement Report and approve the County abatement proceedings. At this public hearing, property owners may appear and object to the proposed weed destruction or removal. After the hearing and consideration of any objections, the Council may sustain or overrule any or all objections. Upon adoption of the resolution confirming the weed abatement commencement report and ordering weed nuisances abated, the County will be asked to perform the abatement work to destroy and remove any weeds. 3) (July/August) Public Hearing to approve the invoices for the abatement work performed by the SCCDAEM. The Santa Clara County Weed Abatement Program The Santa Clara County Department of Agriculture and Environmental Management and the City of Palo Alto work together to protect our community from fire. The purpose of the Weed Abatement Program is to prevent fire hazards posed by vegetative overgrowth and the accumulation of combustible materials. Typically, a property is placed on the program list by a County Weed Abatement Inspector who identifies a potential fire hazard on the property. The Palo Alto Fire Department (PAFD) & Code Enforcement also report addresses of concern and forward (verified) complaints from residents to the SCCDAEM. Residents can report addresses of concern to POAFD, code enforcement, or directly to the County Weed Abatement Program. Santa Clara County program staff annually inspect “nuisance” parcels at the beginning of the fire season, which is typically April 30th for CPA parcels. The Weed Abatement program is entirely funded from fees charged to residents. All parcels on the list will be charged a basic inspection fee. If the parcel is not in compliance at the time of inspection, the property owner will be charged an additional failed inspection fee, and they will receive a final courtesy notice as a reminder to abate their weeds within 2 weeks. If the weeds are not abated by the property owner, the work will be completed by the County contractor. The property owner will pay the contractor’s fees plus a County administrative fee. All fees will be included in their property tax bill. Properties that meet and maintain the minimum fire safety standards will only be charged for the annual fee. These properties will be removed from the list after three years of compliance. Item 12 Attachment B - Weed Abatement Program Overview Item 12: Staff Report Pg. 5 Packet Pg. 204 of 312 City Council Staff Report From: City Manager Report Type: CONSENT CALENDAR Lead Department: City Clerk Meeting Date: December 8, 2025 Report #:2509-5156 TITLE Approval of General Services Contract Number C26195709 with Corodata Records Management, Inc in an Amount Not to Exceed $120,000 for Off-Site Records Storage and Management Services for a Period of Five Years, CEQA Status- Not a Project. RECOMMENDATION Staff recommends that Council approve and authorize the City Manager or designee to execute Contract No. C26195709 (Attachment A) with Corodata Records Management, Inc. to provide records management services for a term of five years and a total amount not-to-exceed $120,000. BACKGROUND The City Clerk’s Office manages a citywide records management contract that multiple departments use for records related services. Each department manages their own records and pays the associated costs for services. The City currently contracts with Corodata Records Management for services relating to records management, including: Storage of physical records at a secure off-site location Digital inventory tracking system Certified destruction of records The City contracted with its previous vendor from 1999 – 2022. In 2022, the City Clerk’s Office opted to explore other options due to poor customer satisfaction and high costs. The Clerk’s office completed an informal solicitation process for a new vendor. The department contacted five firms and received five bids. Corodata was selected because it is more cost effective than other firms and located in closer proximity. The City entered into Contract No. S23186033 with Corodata for a term of three years and an amount not-to-exceed $85,000. Contract No. S23186033 expires in December of 2025. Item 13 Item 13 Staff Report Item 13: Staff Report Pg. 1 Packet Pg. 205 of 312 ANALYSIS Staff is seeking a new contract with the same vendor. An exemption to competitive solicitation pursuant to Palo Alto Municipal Code section 2.30.360(b) was approved by the City Manager. At this time, continued use of Corodata’s services will result in the greatest operational and economic efficiencies as the City would avoid a lengthy and expensive physical move of records. The City has 4,171 boxes from 11 City departments stored off-site, which would take significant time to transport to a new vendor, during which time records would be inaccessible. The City would also have to pay costs associated with pulling and transporting records. It cost the City a total of $72,284 to close out and transition its accounts from the prior records management vendor to Corodata. The estimated cost of transitioning the City’s records out of Corodata is $37,589. The City will require offsite record storage for at least the next five years. Certain records must be maintained in hard copy. While the City will continue working towards digitizing other records in a centralized records repository, it is not feasible to digitize the entirety of the City’s records stored off-site at this time. It would take hundreds of hours for City staff to digitize in-house and City staff do not have the capacity or equipment to complete high-volume scanning. Staff previously contacted a professional scanning service, which provided an estimate of $1,088,422 to scan the City’s 4,171 boxes. With the current annual price of approximately $24,000, it would take 45 years for the physical records storage cost to equal the scanning cost. After the new 5-year contract term, the Clerk’s Office will reassess and compare prices to evaluate if it’s in the City’s best interest to remain with Corodata or transition to a new vendor. Funds for records management are included in departments’ Fiscal Year 2026 budgets. Council action on this item is not a project as defined by CEQA because approval of this contract is a continuing administrative or maintenance activity. CEQA Guidelines section 15378(b)(2). Attachment A: Corodata Records Management, Contract C26195709 : Mahealani Ah Yun, City Clerk Item 13 Item 13 Staff Report Item 13: Staff Report Pg. 2 Packet Pg. 206 of 312 City of Palo Alto General Services Agreement 1 Rev. April 9, 2025 CITY OF PALO ALTO CONTRACT NO. C26195709 GENERAL SERVICES AGREEMENT THIS AGREEMENT made and entered into on the 10th day of November, 2025, by and between the CITY OF PALO ALTO, a California chartered municipal corporation (“CITY”), and CORODATA RECORDS MANAGEMENT, INC., a California Corporation, located at 12375 Kerran Street, Poway, CA 92064, Telephone Number: (408) 428-1100 x116 (“CONTRACTOR”). In consideration of their mutual covenants, the parties hereto agree as follows: 1. SERVICES. CONTRACTOR shall provide or furnish the services (the “Services”) described in the Scope of Services, attached at Exhibit A. 2. EXHIBITS. The following exhibits are attached to and made a part of this Agreement: “A” - Scope of Services “C” – Schedule of Fees “D” - Insurance Requirements “E” - Protected and Confidential Data Classification “F” – Corodata Agreement for Services Limitations of Liability Section 5 CONTRACT IS NOT COMPLETE UNLESS ALL INDICATED EXHIBITS ARE ATTACHED. 3. TERM. The term of this Agreement is from December 5, 2025 to December 31, 2030 inclusive, subject to the provisions of Sections R and W of the General Terms and Conditions. 4. SCHEDULE OF PERFORMANCE. CONTRACTOR shall complete the Services within the term of this Agreement in a reasonably prompt and timely manner based upon the circumstances and direction communicated to CONTRACTOR, and if applicable, in accordance with the schedule set forth in the Schedule of Performance, attached at Exhibit B. Time is of the essence in this Agreement. 5. COMPENSATION FOR ORIGINAL TERM. CITY shall pay and CONTRACTOR agrees to accept as not-to-exceed compensation for the full performance of the Services and reimbursable expenses, if any: The total maximum lump sum compensation of dollars ($ ); OR Docusign Envelope ID: A0B129E1-04A1-4766-A206-23A4FB04AD0B Item 13 Attachment A - Corodata Records Management, Contract C26195709 Item 13: Staff Report Pg. 3 Packet Pg. 207 of 312 City of Palo Alto General Services Agreement 2 Rev. April 9, 2025 The sum of dollars ($ ) per hour, not to exceed a total maximum compensation amount of dollars ($ ); OR A sum calculated in accordance with the fee schedule set forth at Exhibit C, not to exceed a total maximum compensation amount of One Hundred Twenty Thousand dollars ($120,000). CONTRACTOR agrees that it can perform the Services for an amount not to exceed the total maximum compensation set forth above. Any hours worked or services performed by CONTRACTOR for which payment would result in a total exceeding the maximum amount of compensation set forth above for performance of the Services shall be at no cost to CITY. CITY has set aside the sum of ZERO dollars ($0) for Additional Services. CONTRACTOR shall provide Additional Services only by advanced, written authorization from the City Manager or designee. CONTRACTOR, at the CITY’s request, shall submit a detailed written proposal including a description of the scope of services, schedule, level of effort, and CONTRACTOR’s proposed maximum compensation, including reimbursable expense, for such services. Compensation shall be based on the hourly rates set forth above or in Exhibit C (whichever is applicable), or if such rates are not applicable, a negotiated lump sum. CITY shall not authorize and CONTRACTOR shall not perform any Additional Services for which payment would exceed the amount set forth above for Additional Services. Payment for Additional Services is subject to all requirements and restrictions in this Agreement. 6. COMPENSATION DURING ADDITIONAL TERMS. CONTRACTOR’S compensation rates for each additional term shall be the same as the original term; OR CONTRACTOR’s compensation rates shall be adjusted effective on the commencement of each Additional Term. The lump sum compensation amount, hourly rates, or fees, whichever is applicable as set forth in section 5 above, shall be adjusted by a percentage equal to the change in the Consumer Price Index for Urban Wage Earners and Clerical Workers for the San Francisco-Oakland- San Jose area, published by the United States Department of Labor Statistics (CPI) which is published most immediately preceding the commencement of the applicable Additional Term, which shall be compared with the CPI published most immediately preceding the commencement date of the then expiring term. Notwithstanding the foregoing, in no event shall CONTRACTOR’s compensation rates be Docusign Envelope ID: A0B129E1-04A1-4766-A206-23A4FB04AD0B Item 13 Attachment A - Corodata Records Management, Contract C26195709 Item 13: Staff Report Pg. 4 Packet Pg. 208 of 312 City of Palo Alto General Services Agreement 3 Rev. April 9, 2025 increased by an amount exceeding five percent of the rates effective during the immediately preceding term. Any adjustment to CONTRACTOR’s compensation rates shall be reflected in a written amendment to this Agreement. 7. CLAIMS PROCEDURE FOR “9204 PUBLIC WORKS PROJECTS”. For purposes of this Section 7, a “9204 Public Works Project” means the erection, construction, alteration, repair, or improvement of any public structure, building, road, or other public improvement of any kind. Public Contract Code Section 9204 mandates certain claims procedures for Public Works Projects, which are set forth in “Appendix __ Claims for Public Contract Code Section 9204 Public Works Projects”. This project is not a 9204 Public Works Project. 8. INVOICING. Send all invoices to the department contact for each department subaccount as designated by the Project Manager. The Project Manager is: Christine Prior, Dept.: City Clerk’s Office, Telephone: (650) 329-2159. Invoices shall be submitted in arrears for Services performed. Invoices shall not be submitted more frequently than monthly. Invoices shall provide a detailed statement of Services performed during the invoice period and are subject to verification by CITY. CITY shall pay the undisputed amount of invoices within 30 days of receipt. GENERAL TERMS AND CONDITIONS A. ACCEPTANCE. CONTRACTOR accepts and agrees to all terms and conditions of this Agreement. This Agreement includes and is limited to the terms and conditions set forth in sections 1 through 8 above, these general terms and conditions and the attached exhibits. B. QUALIFICATIONS. CONTRACTOR represents and warrants that it has the expertise and qualifications to complete the services described in Section 1 of this Agreement, entitled “SERVICES,” and that every individual charged with the performance of the services under this Agreement has sufficient skill and experience and is duly licensed or certified, to the extent such licensing or certification is required by law, to perform the Services. CITY expressly relies on CONTRACTOR’s representations regarding its skills, knowledge, and certifications. CONTRACTOR shall perform all work in accordance with generally accepted business practices and performance standards of the industry, including all federal, state, and local operation and safety regulations. C. INDEPENDENT CONTRACTOR. It is understood and agreed that in the performance of this Agreement, CONTRACTOR and any person employed by Docusign Envelope ID: A0B129E1-04A1-4766-A206-23A4FB04AD0B Item 13 Attachment A - Corodata Records Management, Contract C26195709 Item 13: Staff Report Pg. 5 Packet Pg. 209 of 312 City of Palo Alto General Services Agreement 4 Rev. April 9, 2025 CONTRACTOR shall at all times be considered an independent CONTRACTOR and not an agent or employee of CITY. CONTRACTOR shall be responsible for employing or engaging all persons necessary to complete the work required under this Agreement. D. SUBCONTRACTORS. CONTRACTOR may not use subcontractors to perform any Services under this Agreement unless CONTRACTOR obtains prior written consent of CITY. CONTRACTOR shall be solely responsible for directing the work of approved subcontractors and for any compensation due to subcontractors. E. TAXES AND CHARGES. CONTRACTOR shall be responsible for payment of all taxes, fees, contributions or charges applicable to the conduct of CONTRACTOR’s business. F. COMPLIANCE WITH LAWS. CONTRACTOR shall in the performance of the Services comply with all applicable federal, state and local laws, ordinances, regulations, and orders. G. PALO ALTO MINIMUM WAGE ORDINANCE. CONTRACTOR shall comply with all requirements of the Palo Alto Municipal Code Chapter 4.62 (Citywide Minimum Wage), as it may be amended from time to time. In particular, for any employee otherwise entitled to the State minimum wage, who performs at least two (2) hours of work in a calendar week within the geographic boundaries of the City, CONTRACTOR shall pay such employees no less than the minimum wage set forth in Palo Alto Municipal Code section 4.62.030 for each hour worked within the geographic boundaries of the City of Palo Alto. In addition, CONTRACTOR shall post notices regarding the Palo Alto Minimum Wage Ordinance in accordance with Palo Alto Municipal Code section 4.62.060. H. DAMAGE TO PUBLIC OR PRIVATE PROPERTY. CONTRACTOR shall, at its sole expense, repair in kind, or as the City Manager or designee shall direct, any damage to public or private property that occurs in connection with CONTRACTOR’s performance of the Services. CITY may decline to approve and may withhold payment in whole or in part to such extent as may be necessary to protect CITY from loss because of defective work not remedied or other damage to the CITY occurring in connection with CONTRACTOR’s performance of the Services. CITY shall submit written documentation in support of such withholding upon CONTRACTOR’s request. When the grounds described above are removed, payment shall be made for amounts withheld because of them. I. WARRANTIES. CONTRACTOR expressly warrants that all services provided under this Agreement shall be performed in a professional and workmanlike manner in accordance with generally accepted business practices and performance standards of the industry and the requirements of this Agreement. CONTRACTOR Docusign Envelope ID: A0B129E1-04A1-4766-A206-23A4FB04AD0B Item 13 Attachment A - Corodata Records Management, Contract C26195709 Item 13: Staff Report Pg. 6 Packet Pg. 210 of 312 City of Palo Alto General Services Agreement 5 Rev. April 9, 2025 expressly warrants that all materials, goods and equipment provided by CONTRACTOR under this Agreement shall be fit for the particular purpose intended, shall be free from defects, and shall conform to the requirements of this Agreement. CONTRACTOR agrees to promptly replace or correct any material or service not in compliance with these warranties, including incomplete, inaccurate, or defective material or service, at no further cost to CITY. The warranties set forth in this section shall be in effect for a period of one year from completion of the Services and shall survive the completion of the Services or termination of this Agreement. J. MONITORING OF SERVICES. CITY may monitor the Services performed under this Agreement to determine whether CONTRACTOR’s work is completed in a satisfactory manner and complies with the provisions of this Agreement. K. CITY’S PROPERTY. Any reports, information, data or other material (including copyright interests) developed, collected, assembled, prepared, or caused to be prepared under this Agreement will become the property of CITY without restriction or limitation upon their use and will not be made available to any individual or organization by CONTRACTOR or its subcontractors, if any, without the prior written approval of the City Manager. L. AUDITS. CONTRACTOR agrees to permit CITY and its authorized representatives to audit, at any reasonable time during the term of this Agreement and for three (3) years from the date of final payment, CONTRACTOR’s records pertaining to matters covered by this Agreement. CONTRACTOR agrees to maintain accurate books and records in accordance with generally accepted accounting principles for at least three (3) following the terms of this Agreement. M. NO IMPLIED WAIVER. No payment, partial payment, acceptance, or partial acceptance by CITY shall operate as a waiver on the part of CITY of any of its rights under this Agreement. N. INSURANCE. CONTRACTOR, at its sole cost, shall purchase and maintain in full force during the term of this Agreement, the insurance coverage described at Exhibit D. Insurance must be provided by companies with a Best’s Key Rating of A- :VII or higher and which are otherwise acceptable to CITY’s Risk Manager. The Risk Manager must approve deductibles and self-insured retentions. In addition, all policies, endorsements, certificates and/or binders are subject to approval by the Risk Manager as to form and content. CONTRACTOR shall obtain a policy endorsement naming the City of Palo Alto as an additional insured under any general liability or automobile policy. CONTRACTOR shall obtain an endorsement stating that the insurance is primary coverage and will not be canceled or materially reduced in coverage or limits until after providing 30 days prior written notice of the cancellation or modification to the Risk Manager. CONTRACTOR shall Docusign Envelope ID: A0B129E1-04A1-4766-A206-23A4FB04AD0B Item 13 Attachment A - Corodata Records Management, Contract C26195709 Item 13: Staff Report Pg. 7 Packet Pg. 211 of 312 City of Palo Alto General Services Agreement 6 Rev. April 9, 2025 provide certificates of such policies or other evidence of coverage satisfactory to the Risk Manager, together with the required endorsements and evidence of payment of premiums, to CITY concurrently with the execution of this Agreement and shall throughout the term of this Agreement provide current certificates evidencing the required insurance coverages and endorsements to the Risk Manager. CONTRACTOR shall include all subcontractors as insured under its policies or shall obtain and provide to CITY separate certificates and endorsements for each subcontractor that meet all the requirements of this section. The procuring of such required policies of insurance shall not operate to limit CONTRACTOR’s liability or obligation to indemnify CITY under this Agreement. O. HOLD HARMLESS. To the fullest extent permitted by law and without limitation by the provisions of section N relating to insurance, CONTRACTOR shall indemnify, defend and hold harmless CITY, its Council members, officers, employees and agents from and against any and all demands, claims, injuries, losses, or liabilities of any nature, including death or injury to any person, property damage or any other loss and including without limitation all damages, penalties, fines and judgments, associated investigation and administrative expenses and defense costs, including, but not limited to reasonable attorney’s fees, courts costs and costs of alternative dispute resolution), arising out of, or resulting in any way from or in connection with the performance of this Agreement. CONTRACTOR’s obligations under this Section apply regardless of whether or not a liability is caused or contributed to by any negligent (passive or active) act or omission of CITY, except that CONTRACTOR shall not be obligated to indemnify for liability arising from the sole negligence or willful misconduct of CITY. The acceptance of the Services by CITY shall not operate as a waiver of the right of indemnification. The provisions of this Section survive the completion of the Services or termination of this Agreement. P. NON-DISCRIMINATION. As set forth in Palo Alto Municipal Code section 2.30.510, CONTRACTOR certifies that in the performance of this Agreement, it shall not discriminate in the employment of any person because of the race, skin color, gender, age, religion, disability, national origin, ancestry, sexual orientation, housing status, marital status, familial status, weight or height of such person. CONTRACTOR acknowledges that it has read and understands the provisions of Section 2.30.510 of the Palo Alto Municipal Code relating to Nondiscrimination Requirements and the penalties for violation thereof, and agrees to meet all requirements of Section 2.30.510 pertaining to nondiscrimination in employment. Q. WORKERS' COMPENSATION. CONTRACTOR, by executing this Agreement, certifies that it is aware of the provisions of the Labor Code of the State of Califor- nia which require every employer to be insured against liability for workers' compensation or to undertake self-insurance in accordance with the provisions of Docusign Envelope ID: A0B129E1-04A1-4766-A206-23A4FB04AD0B Item 13 Attachment A - Corodata Records Management, Contract C26195709 Item 13: Staff Report Pg. 8 Packet Pg. 212 of 312 City of Palo Alto General Services Agreement 7 Rev. April 9, 2025 that Code, and certifies that it will comply with such provisions, as applicable, before commencing and during the performance of the Services. R. TERMINATION. The City Manager may terminate this Agreement without cause by giving ten (10) days’ prior written notice thereof to CONTRACTOR. If CONTRACTOR fails to perform any of its material obligations under this Agreement, in addition to all other remedies provided by law, the City Manager may terminate this Agreement immediately upon written notice of termination. Upon receipt of such notice of termination, CONTRACTOR shall immediately discontinue performance. CITY shall pay CONTRACTOR for services satisfactorily performed up to the effective date of termination. If the termination is for cause, CITY may deduct from such payment the amount of actual damage, if any, sustained by CITY due to CONTRACTOR’s failure to perform its material obligations under this Agreement. Upon termination, CONTRACTOR shall immediately deliver to the City Manager any and all copies of studies, sketches, drawings, computations, and other material or products, whether or not completed, prepared by CONTRACTOR or given to CONTRACTOR, in connection with this Agreement. Such materials shall become the property of CITY. S. ASSIGNMENTS/CHANGES. This Agreement binds the parties and their successors and assigns to all covenants of this Agreement. This Agreement shall not be assigned or transferred without the prior written consent of CITY. No amendments, changes or variations of any kind are authorized without the written consent of CITY. T. CONFLICT OF INTEREST. In accepting this Agreement, CONTRACTOR covenants that it presently has no interest, and will not acquire any interest, direct or indirect, financial or otherwise, which would conflict in any manner or degree with the performance of this Agreement. CONTRACTOR further covenants that, in the performance of this Agreement, it will not employ any person having such an interest. CONTRACTOR certifies that no CITY officer, employee, or authorized representative has any financial interest in the business of CONTRACTOR and that no person associated with CONTRACTOR has any interest, direct or indirect, which could conflict with the faithful performance of this Agreement. CONTRACTOR agrees to advise CITY if any conflict arises. U. GOVERNING LAW. This Agreement shall be governed and interpreted by the laws of the State of California. V. ENTIRE AGREEMENT. This Agreement, including all exhibits, represents the entire agreement between the parties with respect to the services that may be the subject of this Agreement. Any variance in the exhibits does not affect the validity of the Agreement and the Agreement itself controls over any conflicting provisions Docusign Envelope ID: A0B129E1-04A1-4766-A206-23A4FB04AD0B Item 13 Attachment A - Corodata Records Management, Contract C26195709 Item 13: Staff Report Pg. 9 Packet Pg. 213 of 312 City of Palo Alto General Services Agreement 8 Rev. April 9, 2025 in the exhibits. This Agreement supersedes all prior agreements, representations, statements, negotiations and undertakings whether oral or written. W. NON-APPROPRIATION. This Agreement is subject to the fiscal provisions of the Charter of the City of Palo Alto and the Palo Alto Municipal Code. This Agreement will terminate without any penalty (a) at the end of any fiscal year in the event that funds are not appropriated for the following fiscal year, or (b) at any time within a fiscal year in the event that funds are only appropriated for a portion of the fiscal year and funds for this Agreement are no longer available. This Section shall take precedence in the event of a conflict with any other covenant, term, condition, or provision of this Agreement. X. ENVIRONMENTALLY PREFERRED PURCHASING AND ZERO WASTE REQUIREMENTS. CONTRACTOR shall comply with CITY’s Environmentally Preferred Purchasing policies which are available at CITY’s Purchasing Division, which are incorporated by reference and may be amended from time to time. CONTRACTOR shall comply with waste reduction, reuse, recycling and disposal requirements of CITY’s Zero Waste Program. Zero Waste best practices include first minimizing and reducing waste; second, reusing waste and third, recycling or composting waste. In particular, CONTRACTOR shall comply with the following zero waste requirements: • All printed materials provided by CONTRACTOR to CITY generated from a personal computer and printer including but not limited to, proposals, quotes, invoices, reports, and public education materials, shall be double- sided and printed on a minimum of 30% or greater post-consumer content paper, unless otherwise approved by CITY’s Project Manager. Any submitted materials printed by a professional printing company shall be a minimum of 30% or greater post-consumer material and printed with vegetable based inks. • Goods purchased by Contractor on behalf of CITY shall be purchased in accordance with CITY’s Environmental Purchasing Policy including, but not limited to, Extended Producer Responsibility requirements for products and packaging. A copy of this policy is on file at the Purchasing Division’s office. • Reusable/returnable pallets shall be taken back by CONTRCATOR, at no additional cost to CITY, for reuse or recycling. CONTRACTOR shall provide documentation from the facility accepting the pallets to verify that pallets are not being disposed. Y. AUTHORITY. The individual(s) executing this Agreement on behalf of the parties represent and warrant that they have the legal capacity and authority to do so on behalf of their respective legal entities. Z. PREVAILING WAGES Docusign Envelope ID: A0B129E1-04A1-4766-A206-23A4FB04AD0B Item 13 Attachment A - Corodata Records Management, Contract C26195709 Item 13: Staff Report Pg. 10 Packet Pg. 214 of 312 City of Palo Alto General Services Agreement 9 Rev. April 9, 2025 This Project is not subject to prevailing wages. CONTRACTOR is not required to pay prevailing wages in the performance and implementation of the Project in accordance with SB 7, if the Agreement is not a public works contract, if Agreement does not include a public works construction project of more than $25,000, or the Agreement does not include a public works alteration, demolition, repair, or maintenance (collectively, ‘improvement’) project of more than $15,000. AA. DIR REGISTRATION. In regard to any public work construction, alteration, demolition, repair or maintenance work, CITY will not accept a bid proposal from or enter into this Agreement with CONTRACTOR without proof that CONTRACTOR and its listed subcontractors are registered with the California Department of Industrial Relations (“DIR”) to perform public work, subject to limited exceptions. City requires CONTRACTOR and its listed subcontractors to comply with the requirements of SB 854. CITY provides notice to CONTRACTOR of the requirements of California Labor Code section 1771.1(a), which reads: “A contractor or subcontractor shall not be qualified to bid on, be listed in a bid proposal, subject to the requirements of Section 4104 of the Public Contract Code, or engage in the performance of any contract for public work, as defined in this chapter, unless currently registered and qualified to perform public work pursuant to Section 1725.5. It is not a violation of this section for an unregistered contractor to submit a bid that is authorized by Section 7029.1 of the Business and Professions Code or Section 10164 or 20103.5 of the Public Contract Code, provided the contractor is registered to perform public work pursuant to Section 1725.5 at the time the Agreement is awarded.” CITY gives notice to CONTRACTOR and its listed subcontractors that CONTRACTOR is required to post all job site notices prescribed by law or regulation and CONTRACTOR is subject to SB 854-compliance monitoring and enforcement by DIR. CITY requires CONTRACTOR and its listed subcontractors to comply with the requirements of Labor Code section 1776, including: Keep accurate payroll records, showing the name, address, social security number, work classification, straight time and overtime hours worked each day and week, and the actual per diem wages paid to each journeyman, apprentice, worker, or other employee employed by, respectively, CONTRACTOR and its listed subcontractors, in connection with the Project. Docusign Envelope ID: A0B129E1-04A1-4766-A206-23A4FB04AD0B Item 13 Attachment A - Corodata Records Management, Contract C26195709 Item 13: Staff Report Pg. 11 Packet Pg. 215 of 312 City of Palo Alto General Services Agreement 10 Rev. April 9, 2025 The payroll records shall be verified as true and correct and shall be certified and made available for inspection at all reasonable hours at the principal office of CONTRACTOR and its listed subcontractors, respectively. At the request of CITY, acting by its project manager, CONTRACTOR and its listed subcontractors shall make the certified payroll records available for inspection or furnished upon request to the project manager within ten (10) days of receipt of CITY’s request. [For state- and federally-funded projects] CITY requests CONTRACTOR and its listed subcontractors to submit the certified payroll records to the project manager at the end of each week during the Project. If the certified payroll records are not produced to the project manager within the 10-day period, then CONTRACTOR and its listed subcontractors shall be subject to a penalty of one hundred dollars ($100.00) per calendar day, or portion thereof, for each worker, and CITY shall withhold the sum total of penalties from the progress payment(s) then due and payable to CONTRACTOR. Inform the project manager of the location of CONTRACTOR’s and its listed subcontractors’ payroll records (street address, city and county) at the commencement of the Project, and also provide notice to the project manager within five (5) business days of any change of location of those payroll records. BB. CONTRACT TERMS. All unchecked boxes do not apply to this Agreement. In the case of any conflict between the terms of this Agreement and the exhibits hereto or CONTRACTOR’s proposal (if any), the Agreement shall control. In the case of any conflict between the exhibits hereto and CONTRACTOR’s proposal, the exhibits shall control. IN WITNESS WHEREOF, the parties hereto have by their duly authorized representatives executed this Agreement on the date first above written. Docusign Envelope ID: A0B129E1-04A1-4766-A206-23A4FB04AD0B Item 13 Attachment A - Corodata Records Management, Contract C26195709 Item 13: Staff Report Pg. 12 Packet Pg. 216 of 312 City of Palo Alto General Services Agreement 11 Rev. April 9, 2025 CITY OF PALO ALTO City Manager APPROVED AS TO FORM: City Attorney or designee Officer 1 By: Name: Title: Officer 2 By: Name: Docusign Envelope ID: A0B129E1-04A1-4766-A206-23A4FB04AD0B Kenneth Stender VP/GM Thom Morrison Director of Corporate Finance Administration Item 13 Attachment A - Corodata Records Management, Contract C26195709 Item 13: Staff Report Pg. 13 Packet Pg. 217 of 312 City of Palo Alto General Services Agreement 12 Rev. April 9, 2025 EXHIBIT A SCOPE OF SERVICES CONSULTANT shall provide the Services detailed in this Exhibit A, entitled “SCOPE OF SERVICES”. The CONSULTANT shall provide records storage, retrieval, and disposal services under the general direction of the City as set forth in the Contract Documents. Unless otherwise specified herein, the CONSULTANT shall perform all work identified in this Agreement. The parties agree that the scope of services is a description of CONSULTANT obligations and responsibilities, and is deemed to include preliminary considerations and prerequisites, and all labor, materials, equipment, and tasks which are such an inseparable part of the work described that exclusion would render performance by CONSULTANT impractical, illogical, or unconscionable. OFF-SITE RECORDS STORAGE AND MANAGEMENT SERVICES Records Management Services Facility – CONSULTANT is responsible for all the contents stored in any of its storage facilities. CONSULTANT’s storage facilities shall provide a level of protection consistent with industry standards. The storage facility or facilities must be properly shelved, fully secured, and equipped with motion, smoke and heat detectors/alarms to prevent loss from theft and fire. CONSULTANT must provide a written disaster and recovery plan for any catastrophic occurrences including but not limited to earthquake, flood, fire, etc. CONSULTANT is responsible for recovery from any catastrophic occurrences, including but not limited to fire, damage or theft, as well as any associated costs. CONSULTANT must carry the appropriate insurance and provide proof thereof. Storage facilities must be equipped with an intrusion alarm system that is monitored 24 hours per day, including weekends and holidays. At a minimum, CONSULTANT must have a digital inventory tracking system and client facing portal. This system must identify each stored box by department, cost center, description, and status (checked in/checked out). Essential data fields include: box number, bar code, box size, location, cost center, department, major description, status, and box history (dates of check out and check in). The inventory tracking process shall include appropriate logs and receipts for pick-up and delivery of the individual boxes for verification and audit purposes. Logs and receipts will be made available to the City upon request. The system must allow requests for pick-up, delivery, permanent removal, and destruction of boxes. At any time, the city will have the web access to the inventory Docusign Envelope ID: A0B129E1-04A1-4766-A206-23A4FB04AD0B Item 13 Attachment A - Corodata Records Management, Contract C26195709 Item 13: Staff Report Pg. 14 Packet Pg. 218 of 312 City of Palo Alto General Services Agreement 13 Rev. April 9, 2025 database to include at minimum the full list of containers and file level records housed by CONSULTANT, as listed above. Transportation and Pickup/Delivery CONSULTANT shall accept and respond to pickup and delivery requests from authorized City staff. CONSULTANT will deliver requested boxes and/or files during the City’s regular business hours. Retrieval orders placed before 3:00 p.m. will be delivered by the next business day. Pick-up of new or refile boxes and/or files will be accomplished within a schedule agreed upon by City and CONSULTANT. CONSULTANT shall combine delivery and pickup of boxes into one trip and shall meet the delivery required listed above. Additionally, CONSULTANT shall combine delivery requests from multiple City Departments together to reduce delivery charges and trips. Priority Rush Delivery – Allowances and schedules shall be made for orders for rush delivery (either Half-Day Rush or Same Business Day Rush). CONSULTANT must be able to deliver boxes to the City within 4 hours. This would include the time an order is received until delivered. Off-Site Storage Destruction Service CONSULTANT must have the ability to perform certified destruction of records stored at CONSULTANT’s facility. No records shall be destroyed without written approval from the administrator or authorized user of the City account with CONSULTANT. The certified destruction shall be performed by CONSULTANT in accordance with industry-accepted standards. CONSULTANT will provide a certificate of destruction to City for those records destroyed. The City may order destruction of their records at any time. The City can also assign destruction dates to records on our shelves. The City has the choice of postponing the destruction to a later date or “purge” their records, that is, order their destruction via shredding. File Level Service When the City requests a file to be delivered, a Corodata filer will affix a barcode and enter a description of its contents into the digital inventory. CONSULTANT will place the requested files in a secure pouch and deliver the files following the same process for containers. Scan-on-Demand Services The City can choose at any time to use Corodata Scan-on-Demand (“imaging”) services, which CONSULTANT will provide. This process includes conversion of Hard copy records into any of the common digital file formats, and can be put on most common media formats, such as CD, DVD, and flash and/or external drives provided by the City and indexed into the inventory system. Account and Invoicing CONSULTANT will provide a monthly invoice to the contact for each department subaccount, as designated by the Project Manager, showing a line item for the Docusign Envelope ID: A0B129E1-04A1-4766-A206-23A4FB04AD0B Item 13 Attachment A - Corodata Records Management, Contract C26195709 Item 13: Staff Report Pg. 15 Packet Pg. 219 of 312 City of Palo Alto General Services Agreement 14 Rev. April 9, 2025 department’s storage and activity costs. The invoice will include a detailed list of all transactions. The total monthly cost for each department will be billed to and paid by the department contact. Docusign Envelope ID: A0B129E1-04A1-4766-A206-23A4FB04AD0B Item 13 Attachment A - Corodata Records Management, Contract C26195709 Item 13: Staff Report Pg. 16 Packet Pg. 220 of 312 City of Palo Alto General Services Agreement 15 Rev. April 9, 2025 EXHIBIT C SCHEDULE OF FEES CHOOSE ONE OF THE FOLLOWING TYPES OF STANDARD COMPENSATION LANGUAGE AND MODIFY AS NECESSARY ALTERNATIVE 3. Compensation based upon fee schedule CITY shall pay CONTRACTOR according to the following rate schedule. The maximum amount of compensation to be paid to CONTRACTOR, including both payment for services and reimbursable expenses, shall not exceed the amounts set forth in Sections 5 and 6 of the Agreement. Any services provided or hours worked for which payment would result in a total exceeding the maximum amount of compensation set forth herein shall be at no cost to CITY. Docusign Envelope ID: A0B129E1-04A1-4766-A206-23A4FB04AD0B Item 13 Attachment A - Corodata Records Management, Contract C26195709 Item 13: Staff Report Pg. 17 Packet Pg. 221 of 312 City of Palo Alto General Services Agreement 16 Rev. April 9, 2025 INSERT DETAILED RATE SCHEDULE Docusign Envelope ID: A0B129E1-04A1-4766-A206-23A4FB04AD0B Item 13 Attachment A - Corodata Records Management, Contract C26195709 Item 13: Staff Report Pg. 18 Packet Pg. 222 of 312 City of Palo Alto General Services Agreement 17 Rev. April 9, 2025 EXHIBIT D INSURANCE REQUIREMENTS CONTRACTORS TO THE CITY OF PALO ALTO (CITY), AT THEIR SOLE EXPENSE, SHALL FOR THE TERM OF THE CONTRACT OBTAIN AND MAINTAIN INSURANCE IN THE AMOUNTS FOR THE COVERAGE SPECIFIED BELOW, AFFORDED BY COMPANIES WITH AM BEST’S KEY RATING OF A-:VII, OR HIGHER, LICENSED OR AUTHORIZED TO TRANSACT INSURANCE BUSINESS IN THE STATE OF CALIFORNIA. AWARD IS CONTINGENT ON COMPLIANCE WITH CITY’S INSURANCE REQUIREMENTS, AS SPECIFIED, BELOW: REQUIRED TYPE OF COVERAGE REQUIREMENT MINIMUM LIMITS AGGREGATE YES YES EMPLOYER’S LIABILITY STATUTORY YES GENERAL LIABILITY, INCLUDING PERSONAL INJURY, BROAD FORM PROPERTY DAMAGE BLANKET CONTRACTUAL, AND FIRE LEGAL LIABILITY PROPERTY DAMAGE BODILY INJURY & PROPERTY DAMAGE COMBINED. $1,000,000 $1,000,000 $1,000,000 $1,000,000 YES AUTOMOBILE LIABILITY, INCLUDING ALL OWNED, HIRED, NON-OWNED - EACH PERSON - EACH OCCURRENCE PROPERTY DAMAGE BODILY INJURY AND PROPERTY $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 NO INCLUDING, ERRORS AND OMISSIONS, MALPRACTICE (WHEN APPLICABLE), AND NEGLIGENT YES : CONTRACTOR, AT ITS SOLE COST AND EXPENSE, SHALL OBTAIN AND MAINTAIN, IN FULL FORCE AND EFFECT THROUGHOUT THE ENTIRE TERM OF ANY RESULTANT AGREEMENT, THE INSURANCE COVERAGE HEREIN DESCRIBED, INSURING NOT ONLY CONTRACTOR AND ITS SUBCONSULTANTS, IF ANY, BUT COMPENSATION, EMPLOYER’S LIABILITY AND PROFESSIONAL INSURANCE, NAMING AS I. INSURANCE COVERAGE MUST INCLUDE: A CONTRACTUAL LIABILITY ENDORSEMENT PROVIDING INSURANCE COVERAGE FOR CONTRACTOR’S AGREEMENT TO INDEMNIFY CITY. II. CONTACTOR MUST SUBMIT CERTIFICATES(S) OF INSURANCE EVIDENCING REQUIRED COVERAGE. III. ENDORSEMENT PROVISIONS, WITH RESPECT TO THE INSURANCE AFFORDED TO “ADDITIONAL INSUREDS” A. PRIMARY COVERAGE Docusign Envelope ID: A0B129E1-04A1-4766-A206-23A4FB04AD0B Item 13 Attachment A - Corodata Records Management, Contract C26195709 Item 13: Staff Report Pg. 19 Packet Pg. 223 of 312 City of Palo Alto General Services Agreement 18 Rev. April 9, 2025 WITH RESPECT TO CLAIMS ARISING OUT OF THE OPERATIONS OF THE NAMED INSURED, INSURANCE AS AFFORDED BY THIS POLICY IS PRIMARY AND IS NOT ADDITIONAL TO OR CONTRIBUTING WITH ANY OTHER INSURANCE CARRIED BY OR FOR THE BENEFIT OF THE ADDITIONAL INSUREDS. B. CROSS LIABILITY THE NAMING OF MORE THAN ONE PERSON, FIRM, OR CORPORATION AS INSUREDS UNDER THE POLICY SHALL NOT, FOR THAT REASON ALONE, EXTINGUISH ANY RIGHTS OF THE INSURED AGAINST ANOTHER, BUT THIS ENDORSEMENT, AND THE NAMING OF MULTIPLE INSUREDS, SHALL NOT INCREASE THE TOTAL LIABILITY OF THE COMPANY UNDER THIS POLICY. C. NOTICE OF CANCELLATION 1. IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR ANY REASON OTHER THAN THE NON-PAYMENT OF PREMIUM, THE ISSUING COMPANY SHALL PROVIDE CITY AT LEAST A THIRTY (30) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION. 2. IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR THE NON-PAYMENT OF PREMIUM, THE ISSUING COMPANY SHALL PROVIDE CITY AT LEAST A TEN (10) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION. NOTICES SHALL BE EMAILED TO: PurchasingSupport@PaloAlto.Gov Docusign Envelope ID: A0B129E1-04A1-4766-A206-23A4FB04AD0B Item 13 Attachment A - Corodata Records Management, Contract C26195709 Item 13: Staff Report Pg. 20 Packet Pg. 224 of 312 City of Palo Alto General Services Agreement 19 Rev. April 9, 2025 EXHIBIT E Docusign Envelope ID: A0B129E1-04A1-4766-A206-23A4FB04AD0B Item 13 Attachment A - Corodata Records Management, Contract C26195709 Item 13: Staff Report Pg. 21 Packet Pg. 225 of 312 City of Palo Alto General Services Agreement 20 Rev. April 9, 2025 Docusign Envelope ID: A0B129E1-04A1-4766-A206-23A4FB04AD0B Item 13 Attachment A - Corodata Records Management, Contract C26195709 Item 13: Staff Report Pg. 22 Packet Pg. 226 of 312 City of Palo Alto General Services Agreement 21 Rev. April 9, 2025 Docusign Envelope ID: A0B129E1-04A1-4766-A206-23A4FB04AD0B Item 13 Attachment A - Corodata Records Management, Contract C26195709 Item 13: Staff Report Pg. 23 Packet Pg. 227 of 312 City of Palo Alto General Services Agreement 22 Rev. April 9, 2025 EXHIBIT F CORDODATA AGREEMENT FOR SERVICES LIMITATIONS OF LIABILITY SECION 5 ADDITIONAL LIMITATIONS ON CONTRACTOR’S LIABILITY Notwithstanding any provisions in the Agreement to the contrary, the following provisions shall apply to this Agreement and shall control in the event of any conflict with the provisions in the main body of the Agreement. 5.1 Corodata shall not be liable to CLIENT or any other third party for any loss, damage or destruction to Material or unauthorized access, acquisition, use, or disclosure, including any Data Disclosure Incident (as defined below), however caused, unless such loss, damage, destruction or unauthorized access resulted from the failure by Corodata to exercise such care in regard thereto as a reasonably careful person would exercise in like circumstances. Corodata is not an escrow or fiduciary of the Material or to the CLIENT or any third party. 5.2 Corodata’s aggregate liability, if any, (a) for any and all claims related to Material shall not exceed $2.00 per unit of billed storage as set forth in the Schedule of Rates (“Unit of Storage”), which amount CLIENT declares to be the value of the total loss to CLIENT in the event of any such loss, damage, unauthorized access, acquisition, use, disclosure or destruction of Material, unless CLIENT declares an excess valuation and pays an additional monthly charge at an amount provided by Corodata for said excess valuation, in which case, Corodata’s liability shall be limited to the amount of the excess valuation per Unit of Storage; and (b) for all other claims shall not exceed the fees paid by CLIENT related to the services that are the subject of the claim during the six (6) months prior to the claim. Such limitations of liability shall apply regardless of the nature of the claim. Corodata shall not be charged with any knowledge of the content of the Material even if Corodata learned or obtained knowledge of the contents. 5.3 Corodata shall not be liable for any special, indirect, incidental, punitive, consequential or similar types of damages, including, without limitation, lost profits, loss of use, notification to third parties under federal, state and/or municipal law, regulation or ordinance, and/or reconstruction, repair, replacement or restoration, regardless of the form of the claim and regardless of whether any such damages were disclosed in advance or foreseeable. 5.4 Material is not insured by Corodata against loss or injury, however caused. CLIENT is advised to insure the Material with its own insurance carrier, to evaluate such policies including, without limitation, data privacy and liability policies, and confirm they contain terms satisfactory to CLIENT to cover the risks associated with this Agreement and to schedule Material and Corodata location(s) in its own insurance policies at declared values. CLIENT shall cause its insurers to waive any right of subrogation against Corodata. Docusign Envelope ID: A0B129E1-04A1-4766-A206-23A4FB04AD0B Item 13 Attachment A - Corodata Records Management, Contract C26195709 Item 13: Staff Report Pg. 24 Packet Pg. 228 of 312 City of Palo Alto General Services Agreement 23 Rev. April 9, 2025 5.5 CLIENT understands and acknowledges that normal deterioration and aging of all Material occurs with time. 5.6 All claims for loss, damage or liability by CLIENT against Corodata, its officers, employees, subcontractors, agents and assigns must be presented in writing to Corodata within a reasonable time and in no event longer than sixty (60) days after CLIENT has knowledge of the circumstances giving rise to these claims. 5.7 Corodata shall not be liable to CLIENT pursuant to this Agreement, unless (a) timely written notice of the claim has been given as provided in Section 5.6 of this Agreement, and (b) unless legal proceedings are commenced for the claim either within the shorter of (i) nine months after date of delivery or return by Corodata of the Material by Corodata to CLIENT, or (ii) nine (9) months after CLIENT has knowledge of the circumstances giving rise to the claim. 5.8 All limitations of liability in Section 5 apply to the entire Agreement and relationship between Corodata and Corodata Affiliates and CLIENT, regardless of whether any action is brought in tort, contract or otherwise. 5.9 Unless caused solely by the intentional misconduct of Corodata, CLIENT agrees to fully indemnify, defend and hold harmless Corodata, its officers, employees, subcontractors, agents and assigns for any liability, cost or expense, including reasonable attorney’s fees and costs, that Corodata its officers, employees, subcontractors, agents and assigns may incur as a result of any claims, demands, suits, costs or judgments against it arising out of Corodata’s services or its relations with CLIENT or third parties pursuant to this Agreement. 5.10 CLIENT shall bear all costs associated with the investigation and response to a Data Disclosure Incident relating to Material. Data Disclosure Incident is defined as the actual or attempted, unauthorized access to, or use, disclosure, acquisition, modification, exfiltration, theft, loss, or destruction of Material. Docusign Envelope ID: A0B129E1-04A1-4766-A206-23A4FB04AD0B Item 13 Attachment A - Corodata Records Management, Contract C26195709 Item 13: Staff Report Pg. 25 Packet Pg. 229 of 312 8 5 6 7 City Council Staff Report From: City Manager Report Type: CONSENT CALENDAR Lead Department: City Auditor Meeting Date: December 8, 2025 Report #:2511-5421 TITLE Recommend City Council Approval of the CSD Equipment & Materials Inventory Management and Building Permit & Inspection Fees Audits as recommended by the Policy & Services Committee and Extension of the Deadline for several FY2025 Task Orders RECOMMENDATION The Policy & Services Committee and the Office of the City Auditor recommend City Council approve the results of two audits: 1. Community Services Department Equipment & Materials Inventory Management Audit (Attachment A, P&S Committee recommended approval on October 29, 2025), and 2. Building Permit and Inspection Fees Audit (Attachment B, P&S Committee recommended approval on November 19, 2025) The City Auditor’s Office also seeks City Council approval to extend the deadlines for several FY2025 Task Orders through April 30, 2026 with a net zero impact, including: 1. Task 4.31: Junior Museum & Zoo 2. Task 4.33: Public Safety Staffing & Overtime 3. Task 4.34: Follow-Up Audit Activities BACKGROUND Baker Tilly Advisory, in its capacity serving as the Office of the City Auditor (OCA), performed a citywide risk assessment that evaluated a wide range of risk areas, including strategic, financial, operational, compliance, technological, and reputational risks. The purpose of the assessment was to identify and prioritize risks to develop the annual audit plan. During the FY2024 risk assessment, the OCA identified inventory management practices at CSD facilities and building permit and inspection fees assessed via the City’s Development Services Item 14 Item 14 Staff Report Item 14: Staff Report Pg. 1 Packet Pg. 230 of 312 8 5 6 7 Center as potential areas of risk and these audit topics were included in the FY2025 Annual Audit Plan approved by Council. ANALYSIS Item 14 Item 14 Staff Report Item 14: Staff Report Pg. 2 Packet Pg. 231 of 312 8 5 6 7 Building Permit & Inspection Fees Audit Determine if the City’s building permit and inspection fees are accurately and consistently applied. Evaluate the administration of the Development Services Program for adequate internal controls to safeguard the City from fraud, waste, and abuse. Overall, fee assessments for most major fees were accurately assessed, but some smaller fees were not applied consistently across all transactions. OCA recommends the city evaluate any areas identified by the audit where fees were inappropriately charged to customers and resolve any issues. In addition, OCA recommends the City: o reinstate periodic internal audits of the building permit function to ensure fees are consistently applied and training needs are identified and remediated, o explore the feasibility of simplifying fees and making improvements to the City’s permitting platform to facilitate consistent and more efficient application of fees, o evaluate current training process and consider updating and/or reimplementing the onboarding and training program for new employees, and o ensure staff retain all documentation related to financial processing transactions for greater transparency and accountability. Item 14 Item 14 Staff Report Item 14: Staff Report Pg. 3 Packet Pg. 232 of 312 8 5 6 7 Task Order Deadline Extension FISCAL/RESOURCE IMPACT STAKEHOLDER ENGAGEMENT ENVIRONMENTAL REVIEW ATTACHMENTS APPROVED BY: Item 14 Item 14 Staff Report Item 14: Staff Report Pg. 4 Packet Pg. 233 of 312 August 21, 2025 City of Palo Alto Office of the City Auditor Community Services Department (CSD) Equipment and Materials Inventory Management Audit Item 14 Attachment A - Community Services Department Equipment & Materials Inventory Management Audit Item 14: Staff Report Pg. 5 Packet Pg. 234 of 312 Contents Baker Tilly Advisory Group, LP and Baker Tilly US, LLP, trading as Baker Tilly, operate under an alternative practice structure and are members of the global network of Baker Tilly International Ltd., the members of which are separate and independent legal entities. Baker Tilly US, LLP is a licensed CPA firm that provides assurance services to its clients. Baker Tilly Advisory Group, LP and its subsidiary entities provide tax and consulting services to their clients and are not licensed CPA firms. Executive Summary ............................................................................................................................ 1 Introduction ........................................................................................................................................ 3 Detailed Analysis ................................................................................................................................. 5 Audit Results ....................................................................................................................................... 7 Item 14 Attachment A - Community Services Department Equipment & Materials Inventory Management Audit Item 14: Staff Report Pg. 6 Packet Pg. 235 of 312 Executive Summary Purpose of the Audit Baker Tilly Advisory Group, LP (Baker Tilly), in its capacity serving as the Office of the City Auditor (OCA) for the City of Palo Alto (the City), conducted an Equipment and Materials Inventory Management Audit based on approved Task Order 4.32 as part of the City’s FY25 Audit Plan. The objective of this audit was to determine if the Community Services Department Equipment and Materials Inventory Management system is operating effectively and efficiently. Report Highlights (Page 7) While most tested items were accounted for, management of materials and equipment at CSD facilities needs improvement. OCA was able to locate almost all items selected for inventory testing. However, CSD lacks a comprehensive, regularly updated inventory list, which may increase the risk of fraud, waste, and abuse, as it becomes harder to confirm purchases and ensure items remain in use. Through the course of testing, OCA also noted that the City’s process for disposing of goods was not followed in some instances. Adhering to disposal procedures ensures accountability, prevents unauthorized removal of City property, addresses security concerns such as properly wiping electronics, and protects against fraud, waste, abuse, and reputational harm. OCA’s testing and staff interviews identified issues that could be addressed through improved inventorying, organization, and inter-facility sharing of materials and equipment. While certain facilities had organized storage systems with labels and locked cabinets, others lacked clear labeling and designated storage spaces. Additionally, materials and equipment are not currently shared between facilities, though staff suggested that a shared-drive inventory could allow borrowing of seldom-used, high-cost items, potentially minimizing unnecessary purchases and generating cost savings. Finally, OCA observed that some items at various locations were not properly stored or secured, creating potential risks of theft, damage, or premature wear. Key Recommendations We recommend management implement a centralized inventory management system to track and update assets regularly and consistently across all facilities. Establishing a standard operating procedure (SOP) for conducting periodic inventory audits, such as quarterly or annually, will ensure that inventory records remain accurate. Designating staff members responsible for inventory tracking and providing them with training on best practices will improve accountability and ensure that City policies related to the procurement and disposal of City materials and equipment are followed. Additionally, adopting a digital system for real-time updates can enhance efficiency and transparency. Item 14 Attachment A - Community Services Department Equipment & Materials Inventory Management Audit Item 14: Staff Report Pg. 7 Packet Pg. 236 of 312 EXECUTIVE SUMMARY Finding 2: (Page 10) and equipment which can help prevent fraud, waste, and abuse. Best practices recommend that when entities procure goods, the individual who orders the item is not the same individual that approves the purchase of the item. The City has clear guidelines through its Purchasing Card Guidebook that addresses this issue and ensures that items purchased go through a clear approval process. However, it does not appear that the City has formal guidance on how goods should be received and inventoried. Similar to the segregating of activities above, the person ordering an item should not be the same person to receive and inventory the item as it presents an opportunity for fraud to occur. According to the City’s Municipal Code, 2.08.075, care of city-owned property, each department director is responsible for safeguarding their department’s equipment and materials. As each CSD facility is not maintaining a current and/or comprehensive list of materials, there are also no procedures in place to ensure segregation of duties when receiving and inventorying items. While the City has guidance related to purchasing items and the municipal code has provisions for the City to donate obsolete and surplus items to nonprofits, there does not appear to be comprehensive guidance related to the receipt and inventorying of City items. Such policies and procedures (P&P) help ensure that appropriate controls are in place to prevent fraud, waste and abuse and ensure that items are effectively and efficiently stored and managed. Key Recommendations We recommend that the City establish clear guidelines for the receipt and inventory of goods and equipment to ensure accountability, accuracy and efficiency in managing physical assets. Additional Observation: (Page 11) The current practice of using the City’s Capital Improvement Process (CIP) to replace equipment is burdensome. The current process for replacing equipment at CSD is to go through the City’s Capital Improvement Process (CIP). This process can take months. Several staff at CSD noted that each time a substantial piece of equipment fails, they are often without use of that item for an extended period of time due to having to go through the City’s CIP process. Staff stated that it would be helpful if the Department had funds that could be applied for such purchases. Item 14 Attachment A - Community Services Department Equipment & Materials Inventory Management Audit Item 14: Staff Report Pg. 8 Packet Pg. 237 of 312 Introduction Objective The objective of this audit was to determine if the CSD Equipment and Materials Inventory Management system is operating effectively and efficiently. residents through a wide array of programs, services, and facilities. Established to foster community engagement and well-being, the department oversees numerous urban and neighborhood parks, recreational facilities, and cultural institutions. Among its notable offerings are the Palo Alto Junior Museum & Zoo, the Palo Alto Art Center, and the Children's Theatre, which collectively serve thousands of community members annually. Historically, the CSD has been instrumental in shaping Palo Alto's community landscape. The department's roots can be traced back to the early development of the City, with significant growth over the decades leading to the establishment of many of the parks and recreational facilities that residents enjoy today. Over the years, the CSD has continually evolved to meet the changing needs of the community, emphasizing sustainability, inclusivity, and innovation in its programs and services. According to the 2024 Palo Alto Community Survey, approximately 95% of residents surveyed have visited a neighborhood park or City Park in the past year, and 50% have used Palo Alto recreation centers or their services. The department's efforts to engage residents of all ages and backgrounds have resulted in high levels of satisfaction, with 91% of survey respondents rating the quality of Open Spaces as excellent or good and 81% rating the quality records from July 2023 through February 2025 and selected inventory items to verify their existence, confirm they could be located, and assess their procedures: • Interviewed the appropriate individuals to gain an understanding of the organizational structure, processes, and controls related to equipment and materials inventory management. • Analyzed P&P to identify the criteria to be used for evaluation of control design and effectiveness. • Judgmentally selected a sample of recent P-Card purchases over $500 within the CSD as well as selecting items on the inventory Item 14 Attachment A - Community Services Department Equipment & Materials Inventory Management Audit Item 14: Staff Report Pg. 9 Packet Pg. 238 of 312 INTRODUCTION 1 Recreation includes the following locations: Lucie Stern Community Center (Lucie Stern), Mitchell Park Community Center (MPCC), and Cubberley Community Center (Cubberley) 2 Open Space Parks & Golf include the following locations: Municipal Service Center (MSC), Baylands Nature Preserve (Baylands), and Foothills Nature Preserve (FHP) 3 Government auditing standards require an external peer review at least once every three (3) years. The last peer review of the Palo Alto Office of the City Auditor was conducted in 2017. The Palo Alto City Council approved a contract with Baker Tilly U.S, LLP for internal audit services for October 2020 through June 2022 with an extension through June 2025. City Council appointed Kate Murdock, Audit Manager in Baker Tilly’s Risk Advisory practice, as City Auditor in May 2024. As a result of transitions in the Audit Office and peer review delays due to the COVID pandemic, an external peer review is targeted for 2025. It should be noted that Baker Tilly’s most recent firmwide peer review was completed in November 2024 with a rating of “Pass”. The scope of that peer review includes projects completed under government auditing standards. Space Parks & Golf2 during the audit period, July 1, 2023 through February 5, 2025, to determine whether inventory exists, can be located, and is in good condition as well as observe inventory systems and storage practices in place. • The OCA selected a minimum of 15 items per location from either recent P-Card purchases or inventory listings and performed onsite inspections at the above-mentioned locations to confirm the item’s existence and condition. • Completed audit report of findings, conclusions, and recommendations based on the supporting evidence gathered. Statement This audit activity was conducted from January 2025 to August 2025 in accordance with generally accepted government auditing standards, except for the requirement of an external peer review3. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings, observations, and conclusions based on our audit objectives. We believe that the evidence obtained provides a reasonable basis for our findings, observations, and conclusions based on our audit objectives. Strengths During this audit activity, we noted the professionalism and responsiveness of CSD management and staff. We appreciate CSD’s participation in interviews, providing tours of City facilities and inventory documentation, as well as responding to follow-up requests. The OCA greatly appreciates the support of CSD in conducting this audit activity. Thank you! Item 14 Attachment A - Community Services Department Equipment & Materials Inventory Management Audit Item 14: Staff Report Pg. 10 Packet Pg. 239 of 312 Detailed Analysis Inventory Management Best Practices This audit evaluated the CSD Equipment and Materials Inventory processes against recognized best practices. Reputable sources such as the Institute of Internal Auditors (IIA), Government Finance Officers Association (GFOA), and Government Accountability Office (GAO) emphasize strong internal controls, accurate record-keeping, and efficient processes for managing public sector inventories. Key best practices include: Comprehensive Policies and Recordkeeping • Establish and regularly update written inventory management policies and procedures. • Create clear guidelines for purchasing, usage, and disposal of assets to ensure consistency and support employee training. • Track all equipment and materials in an official inventory system or register. • Require each department maintain and periodically certify the completeness of its asset list. • Keep detailed inventory records (e.g., item descriptions, serial numbers, location, purchase date, condition) to ensure transparency and safeguard assets. Regular Physical Counts and Reconciliation • Conduct periodic physical inventories to verify recorded balances match actual quantities. • Adopt best practice of performing a complete count at least annually by staff independent from daily custody of items. • Promptly reconcile discrepancies between physical counts and inventory records. • Research and resolve differences to correct records and identify root causes for corrective action. • Maintain a cycle of counting and reconciliation to ensure inventory data accuracy and reliability. Segregation of Duties and Security Controls • Segregate key inventory tasks so no single person handles ordering, receiving/issuing, and record-keeping. (e.g., one inputs purchase orders, another logs received items, a third conducts physical counts). • In smaller organizations, apply mitigating controls such as supervisory review or dual-count teams. • Maintain secure storage and access controls for inventory, especially valuable or easily stolen items. • Store sensitive items in locked rooms or cabinets with limited key/card access. • Require sign-outs or manager approval before removing items. Item 14 Attachment A - Community Services Department Equipment & Materials Inventory Management Audit Item 14: Staff Report Pg. 11 Packet Pg. 240 of 312 DETAILED ANALYSIS • Label all equipment with asset tags or identifiers to deter theft and ensure accountability. Clear Accountability and Management Oversight • Assign specific responsibility for inventory control within each department. • Have departments take ownership of “controlled capital-type items,” with designated individuals accountable for safeguarding and tracking assets. • Appoint an inventory custodian in each department to maintain records and coordinate counts. • Require custodians to report inventory status periodically to management. • Ensure management actively oversees inventory by reviewing audit results, approving significant adjustments/write-offs, and monitoring key metrics. • Maintain a clear “paper trail” documenting purchases, transfers, counts, and disposals for management or auditor review. • Reinforce inventory as a priority through consistent oversight and tone at the top, holding staff accountable for following procedures. Training Personnel and Continuous Improvement • Train all employees involved in inventory tasks on policies, procedures, and inventory systems. • Promote regular training to reduce errors and promote consistent practices across the organization. • Ensure counters and custodians are knowledgeable about items and counting processes to improve accuracy. • Foster a culture of continuous improvement by periodically reviewing and updating inventory control procedures. • Analyze discrepancies or theft incidents for lessons learned and corrective actions. • Gather employee feedback to identify process pain points and improvement opportunities. • Stay informed on industry best practices to adapt and strengthen inventory management over time. Item 14 Attachment A - Community Services Department Equipment & Materials Inventory Management Audit Item 14: Staff Report Pg. 12 Packet Pg. 241 of 312 AUDIT RESULTS Audit Results Finding 1: While most tested items were accounted for, management of materials and equipment at CSD facilities needs improvement. As mentioned in the previous section of this report, CSD has several facilities that provide a wide array of services to Palo Alto’s population. In turn, various types of equipment, materials and supplies are needed and stored by CSD in the provision of these services. While OCA was able to locate most items selected for testing, we identified several areas of concern. These issues do not apply to each CSD facility but across the department’s facilities we noted the following: a lack of comprehensive and regularly updated inventories, a lack of documentation for disposed items, a general lack of organization, and few areas where equipment is not properly stored and/or secured. CSD does not maintain comprehensive or regularly updated inventory lists. CSD was unable to provide OCA with an up-to-date, comprehensive list of items for each facility. Each facility had varying types of lists and degrees of items inventoried. • Art Center – The Art Center had various inventories for different spaces and items but several of these were outdated or not dated. For example, the “Equipment Inventory” list was last updated in 2019 and the “Equipment Log” had no date but listed estimated replacement dates for items. While these two documents appeared to have some of the same items, one was in a word document and the other in excel. A “Pedestal Inventory” had not been updated since 2013. • Children’s Theatre – The Children’s Theatre had several inventory lists, but they had not been updated since 2014. • Cubberley Theatre – The theatre has a “Theatre Technician Equipment” list but it appeared this list had not been updated since 2022 with one item entered that year making it difficult to determine if the list was accurate or complete. • Junior Museum & Zoo (JMZ) – The JMZ had an updated list of animals and various undated materials and dry goods lists. They did not appear to have inventory lists for equipment used in their workshop or of veterinary supplies. • Parks & Open Space -The Parks & Open Space division appears to have updated inventory listings of vehicles. However, their tool and equipment lists were undated making it difficult to determine if they were accurate or complete. • Recreation – It did not appear that the Recreation division has an inventory tracking system for their equipment and materials. OCA used a combination of the documentation listed above, as well as P-card statements from July 2023 through February 2025 to take a sample of inventory items to check for the item’s presence, condition and appropriate use. OCA was able to locate all items selected for testing, except for a few Item 14 Attachment A - Community Services Department Equipment & Materials Inventory Management Audit Item 14: Staff Report Pg. 13 Packet Pg. 242 of 312 AUDIT RESULTS 4 The Art Center management staff specified that they have third-party insurance for artwork and art installations displayed in City facilities. comprehensive and regularly updated list can present several risks to the organization including fraud, waste, and abuse. Without a comprehensive and regularly updated list of equipment, materials and supplies, it is difficult to determine what has been purchased and if those items are present. This creates conditions where it is much easier for fraud to occur. We noted that the City does not have insurance for inventoried materials or equipment as the City is self-insured.4 Another purpose of having a comprehensive and regularly updated inventory of materials and equipment is in case of theft or damage. Without a comprehensive list of items, it might be difficult to establish and/or identify when items have gone missing or been stolen. Should there be flooding or fire damage, an inventory can also help with replacing items and help to minimize any time that might be lost trying to create a list after an emergency. The City’s process for disposing of goods was not followed in some instances. The City has a Surplus Property Disposal and Destruction Policy and Procedure which provides guidelines for the sale and disposal of items with and without commercial value. For items determined to have no commercial value, the department is “expected to make surplus property available to other departments for City use by posting the item on the City’s Intranet”. If the item generates no interest, is broken or unusable, the department is responsible for completing a Surplus Property Disposal Form. This form is supposed to be signed by the department head and then forwarded to the Administrative Services Department (ASD) Warehouse Supervisor. ASD then notifies the Department if the form has been approved and the resulting action – disposal, donation, or inclusion in the City’s warehouse. OCA sampled a list of materials and equipment for inventory and found a few items were not present at the Art Center. While staff were able to provide an explanation for the absence of these items, they were not able to provide supporting documentation in each case nor was it clear if the City’s process had been followed for some items. For example, there were 15 iPads that staff determined were obsolete and past their useful life. Staff stated that these items were sent to the City’s stores but were not able to provide documentation to support this occurred. In addition, OCA found a kiln and one polishing machine were missing. Staff stated these items were disposed of as they were no longer working properly. It did not appear that staff had filled out the required forms for disposing of these items and could not provide documentation to support the items had been approved for disposal. Item 14 Attachment A - Community Services Department Equipment & Materials Inventory Management Audit Item 14: Staff Report Pg. 14 Packet Pg. 243 of 312 AUDIT RESULTS Following established processes for disposing of aging or obsolete items helps streamline decision-making and provides clear criteria for how and when to redistribute an item to another department, donate it to a non-profit, or dispose of it and helps ensure items do not go home with City employees which is prohibited by the City’s policy. In addition, any items disposed of should be considered for possible data security issues. For example, when disposing of electronic items, they should be properly wiped of any sensitive information. Following established City P&P not only protect against fraud, waste and abuse but help protect the City’s reputation as well. Items could be better organized to facilitate shared and easier use. Through the course of our testing and interviews with staff OCA found a few issues that may be at resolved by better inventorying and organizing of materials and equipment. In addition, staff stated it would be helpful to have inventories from the different facilities on a shared drive to facilitate the sharing of equipment and materials. One issue we noted was the significant amount of time it took for staff to locate some items and in a couple of instances staff could not locate the item until after our site visit. While some CSD facilities had organizational systems in place such as specific storage spaces for items, locked cabinets and labels showing where certain items should be stored, other facilities lacked clear labels and storage spaces. We also noted two instances where sampled equipment items were still in original packaging and had not been used. In both instances these items had been purchased more than six months earlier. While of relatively low dollar amount, it was unclear why this equipment was not in use and if it might be the result of ordering an item and then realizing there was already useable equipment on site. OCA also noted that it does not appear materials and equipment are shared between facilities, which could be beneficial. Staff stated that if each facility had an inventory list on a shared drive where staff could search for a needed item to see if it could be borrowed from a neighboring facility would be helpful. While sharing equipment and materials may not make sense in many cases due to heavy/regular use at the primary facility, for larger and more expensive equipment that is only needed sporadically or one-time, having a shared inventory could provide greater flexibility and may result in cost savings. Some items were not properly stored or secured. OCA noted that some items at various locations were not properly stored or secured. For example, at the Children’s Theatre wooden sets are stored in an open, outdoor shed in the alley behind the building. OCA noted that this area was not secure and there was nothing to prevent theft or damage of the sets. However, the cost of securing these items may be more than they are worth and it may not make sense for the City to invest in a security system for these items. At the JMZ, OCA noted that an electronic Item 14 Attachment A - Community Services Department Equipment & Materials Inventory Management Audit Item 14: Staff Report Pg. 15 Packet Pg. 244 of 312 AUDIT RESULTS tarp, keeping this item indoors may prolong its life. At the Baylands Ranger Station, OCA noted that there was lawn equipment with rust present as it was unprotected from the elements. • Implementing a centralized inventory management system to track and update assets regularly and consistently across all facilities. A centralized system could be as simple as a shared excel file with product and location information as well as sign in and sign out capabilities for items shared across facilities. More sophisticated digital systems can provide real-time updates and map items to specific a location but the cost of such a system may be prohibitive and unnecessary. • Establishing a standard operating procedure (SOP) for conducting periodic inventory audits, such as quarterly or annually, which will ensure that inventory records remain accurate. • Designating specific staff members responsible for inventory monitoring and providing them with training on best practices will improve accountability and ensure that City policies related to the procurement and disposal of City materials and equipment are followed. Response Concurrence: Agree Target Date: March 31, 2026 Corrective Action Plan: CSD will develop an inventory management system and related standard operating procedure for conducting periodic inventory audits. CSD will establish criteria on the types of equipment and materials that should be included in the inventory management system. This could be based on items of a certain value or type (e.g., electronics and tools). CSD anticipates using a simple format as the department does not have funds budgeted to develop a complex system with mapping tools. For parks and open-space related equipment, CSD will explore the possibility of combining with another department’s inventory management system. Item 14 Attachment A - Community Services Department Equipment & Materials Inventory Management Audit Item 14: Staff Report Pg. 16 Packet Pg. 245 of 312 AUDIT RESULTS 5 2.08.075 Care of city-owned property. CSD lacks formal processes for receiving and inventorying materials and equipment which can help prevent fraud, waste and abuse. Best practices recommend that when entities procure goods, the individual who orders the item is not the same individual that approves purchase of the item. The City has clear guidelines through its Purchasing Card Guidebook that addresses this issue and ensures that items purchased go through a clear approval process. However, it does not appear that the City has formal guidance on how goods should be received and inventoried. Similar to the segregating of activities above, the person ordering an item should not be the same person to receive and inventory the item as it presents an opportunity for fraud to occur. The City’s Municipal Code, 2.08.0755, care of city-owned property, states: Each department head and council-appointed officer shall be responsible for care and safekeeping of all city-owned property used by or in the custody of the department and shall take steps as necessary to ensure that the use or condition of said property does not incur legal liability or loss for the city or its officers and employees. Items included in the definition of property, per the code, include equipment, tools, supply, and furniture. The code does not provide any additional guidance on how city property should be received or stored. As each CSD facility is not maintaining a current and/or comprehensive list of materials, there are also no procedures in place to ensure segregation of duties when receiving items. While the City has guidance related to purchasing items and, as mentioned in Finding 1, the municipal code has provisions for the City to donate obsolete and surplus items to nonprofits, there does not appear to be comprehensive guidance related to the receipt and inventorying of City items. With multiple facilities and a wide array of materials and equipment in use at each facility, segregating the responsibilities for ordering, receiving, and inventorying materials and goods may prove overly burdensome. Many organizations establish a threshold for when items need to be inventoried and/or categories of goods that should be inventoried versus those that don’t. For example, CSD may determine that office supplies do not need to be inventoried as the cost of undertaking such an effort could exceed the value of the items in question. However, we noted in our observations that CSD appropriately tracks and inventories art supplies used in classes and sold to the public. Items that are often inventoried due to higher risk of theft include electronics and power tools. Once CSD determines which categories or items should be inventoried and/or a dollar threshold for items to inventory, certain responsibilities should be segregated. For example, segregating the responsibilities of ordering, receiving, and inventorying materials and goods helps ensure that appropriate controls are in place to prevent fraud, waste and abuse. Developing formal P&Ps related to these processes can also help to ensure items are effectively Item 14 Attachment A - Community Services Department Equipment & Materials Inventory Management Audit Item 14: Staff Report Pg. 17 Packet Pg. 246 of 312 AUDIT RESULTS Recommendation We recommend that CSD establish clear guidelines for the receipt and inventory of goods and equipment to ensure accountability, accuracy and efficiency in managing physical assets. Such guidelines should delineate either the types of goods and equipment that should be inventoried or establish a threshold for when items should be monitored and inventoried. This policy should have clear instructions related to the following areas: • Receiving Goods – delivery should be verified against purchase order, packing slip or contract • Inventory Entry and Documentation – items should be logged with the date, a description, quantity and location with relevant warranty information if applicable • Storage and Security – defined procedures for how items should be stored and secured • Discrepancy Procedures – steps for reporting and resolving issues such as missing or damaged items • Periodic Reconciliation – regular inventory audit or counts to resolve discrepancies Response Concurrence: Agree Target Date: March 31, 2026 Corrective Action Plan: CSD will develop a policy for receiving and storing certain equipment and materials. The policy will establish criteria on the types of equipment and materials that should be included in the inventory management system. This could be based on items of certain value or type (e.g., electronics and tools). Additional Observation: The current practice of using the Capital Improvement Process (CIP) to replace equipment is burdensome. Capital Improvement Process (CIP). This process can take months. Several staff at CSD noted that each time a substantial piece of equipment fails, they are often without use of that item for an extended period of time due to having to go through the City’s CIP process. Staff stated that it would be helpful if the Department had funds that could be applied for such purchases. Based on discussions with management, with implementation of a comprehensive equipment inventory that includes estimated replacement timelines and costs, funding for replacement of equipment could be planned during the annual budget development process. During this process, the department can appropriate funding for routine equipment replacement and a reasonable amount of unanticipated replacement costs, as the City monetary/fund balance permits. Planning, foresight, and funding may contribute to more efficient replacement and fewer extended periods of Item 14 Attachment A - Community Services Department Equipment & Materials Inventory Management Audit Item 14: Staff Report Pg. 18 Packet Pg. 247 of 312 Item 14 Attachment A - Community Services Department Equipment & Materials Inventory Management Audit Item 14: Staff Report Pg. 19 Packet Pg. 248 of 312 November 5, 2025 City of Palo Alto Office of the City Auditor Building Permit and Inspection Fees Audit Item 14 Attachment B - Building Permit & Inspection Fees Audit Item 14: Staff Report Pg. 20 Packet Pg. 249 of 312 Contents Baker Tilly Advisory Group, LP and Baker Tilly US, LLP, trading as Baker Tilly, operate under an alternative practice structure and are members of the global network of Baker Tilly International Ltd., the members of which are separate and independent legal entities. Baker Tilly US, LLP is a licensed CPA firm that provides assurance services to its clients. Baker Tilly Advisory Group, LP and its subsidiary entities provide tax and consulting services to their clients and are not licensed CPA firms. Executive Summary ............................................................................................................................ 1 Introduction ........................................................................................................................................ 4 Detailed Analysis ................................................................................................................................. 7 Audit Results ..................................................................................................................................... 10 Item 14 Attachment B - Building Permit & Inspection Fees Audit Item 14: Staff Report Pg. 21 Packet Pg. 250 of 312 Executive Summary Purpose of the Audit Baker Tilly Advisory Group, LP (Baker Tilly), in its capacity serving as the Office of the City Auditor (OCA) for the City of Palo Alto (the City), conducted a Building Permit and Inspection Fees Audit based on approved Task Order 4.30 as part of the City’s FY25 Audit Plan. The objectives of this audit were to: • Determine If the City’s building permit and inspection fees are accurately and consistently applied. • Evaluate the administration of the Development Services Program for adequate internal controls to safeguard the City from fraud, waste, and abuse. Report Highlights Finding 1: (Page 10) Overall, fee assessments for most major fees were accurately assessed, but some smaller fees were not applied consistently across all transactions. The City’s Planning and Development Services Department (PDS) provides building permit and inspection services for residential, commercial and mixed- use building projects. The City’s Municipal Fee Schedule establishes the annual fees that will be charged for these services. In FY23 and FY24, there were a total of 4,774 projects reviewed by the Development Services Center and 7,686 building permits issued. The Development Services Center collected approximately $15 million in revenue in FY23 and $17 million in FY24. OCA tested a sample of building permit types and inspection fees for accuracy and consistency. While most major fees were accurately assessed, OCA found several smaller fees were not consistently applied. In a few cases, fee errors resulted in overcharging customers, but most errors resulted in customers being undercharged. Building Permit Fees Out of 60 sampled projects, OCA identified two projects (3%) with inappropriately applied fees. One project was not charged a fire plan check fee resulting in this project not receiving a fire inspection. One project was not charged the New Single-Family fee resulting in $1,305.72 in lost revenue to the City. OCA found several different types of fees were not accurately assessed over the testing period. Some of these errors resulted in overcharging customers but most errors resulted in undercharging customers. SB 1473 – California Building Standards Administration Special Revolving Fund OCA identified that SB1473 fees were inappropriately assessed to demolition Item 14 Attachment B - Building Permit & Inspection Fees Audit Item 14: Staff Report Pg. 22 Packet Pg. 251 of 312 the projects were incorrectly assessed the fee. The fee ranged from $1 to $41 across the projects sampled. In total, OCA estimated potential overcharges of less than $1,300 over the course of FY23 and FY24. While this represents a small amount in overcharged fees, charging unauthorized fees can have financial, legal, operational and reputational consequences and the City should take steps to minimize such occurrences. Record Retention Fees The City’s fee schedule requires that all projects with plans pay a records retention fee. In FY23, the fee was $7.04 per plan sheet and in FY24 $7.88 per plan sheet. This fee helps cover the City’s costs in maintaining such records. Out of 60 sampled projects, OCA found that the City had not assessed record retention fees for 15 projects or 25% of sampled projects. For the 15 tested projects missing record retention fees, $184.41 in fees should have been assessed and collected but were not. This represents approximately $15,000 in uncollected record retention fees for FY23 and FY24 when applying this error rate to the entire population of permits. Reinspection Fees Built into the City’s fee structure is an initial and follow-up inspection. Reinspection fees are assessed beginning with the second failed inspection in order to cover the cost of the third inspection, with additional fees required for each subsequent failure. Only 84 re-inspection fees were charged in FY23 and FY24. In collaboration with PDS staff, OCA identified 164 permits during FY23 and FY24 out of 7,686 (approximately 2%) that might have missing re-inspection fees. OCA sampled 30 of the permits and found a total of 6 re-inspection fees that should have been charged but were not. Factors contributing to inconsistent fee assessment OCA identified three primary factors contributing to inconsistent fee assessment. First, OCA noted a general lack of internal controls and oversight of building permit and inspection assessments. Second, staff mentioned the complexity of the fee schedule and how the fees are organized in the City’s cloud-based building platform, Accela. Third, staff mentioned the lack of training available for new employees. Refunds All refunds evaluated were in alignment with the fee schedule, refunding 80% of the original fee amount unless there was a City error necessitating a full refund. However, out of the 10 refunds tested, 5 were missing finalized documentation showing that the refund was processed through accounting, a Item 14 Attachment B - Building Permit & Inspection Fees Audit Item 14: Staff Report Pg. 23 Packet Pg. 252 of 312 all final, accounting approved refund documents are included and saved in the appropriate records in Accela. 1. Evaluate any areas identified by the audit where fees were inappropriately charged to customers and resolve any issues. 2. Reinstate periodic internal audits of building permit and reinspection fees on either a monthly or quarterly basis. This should include: a. developing a documented quality control process with assigned responsibilities to ensure this activity is performed consistently moving forward, b. procedures for providing feedback, and if appropriate, additional training to staff when errors are identified, and c. ongoing tracking and monitoring of issues to identify patterns or trends that might require wider training or corrective actions for the department. 1. Explore the feasibility of simplifying fees and improving the Accela platform by: a. considering ways to simplify fee application processes and procedures including revisiting the fee structure itself and identifying opportunities to better communicate standards to customers, b. automating certain fees such as SB1743 as an internal control and to help streamline the assessment process, c. grouping fees by project type to ensure easier application by project coordinators, and d. configuring the software to allow coordinators to select multiple fees at one time. Performing an assessment to determine the time it takes for staff to individually select each permit versus being able to select them in one step might help to establish how much time could be saved by this enhancement and whether it is worth the investment. Such an assessment could also consider other fees for automation that are not specifically addressed through this audit. 3. We recommend the City evaluate the current training process and consider updating and/or reimplementing the onboarding and training program for new employees including comprehensive guidance on fee application, system use, as well as periodic, ongoing training. 4. Ensure staff retain all required documents when processing financial transactions such as permit fee refunds for greater transparency and accountability. Item 14 Attachment B - Building Permit & Inspection Fees Audit Item 14: Staff Report Pg. 24 Packet Pg. 253 of 312 Introduction Objective The objectives of this audit were to determine if the City’s building permit and inspection fees are accurately and consistently applied and evaluate the administration of the Development Services Program for adequate internal controls to safeguard the City from fraud, waste, and abuse. Background The City’s Planning and Development Services Department (PDS) is responsible for administering building permits and inspection services for residential, commercial, and mixed-use development projects. These services ensure that all construction activities within city limits comply with applicable building codes, zoning ordinances, and health and safety regulations. Fees associated with these services such as building permit fees, and re-inspection fees, are intended to support the City’s cost-recovery efforts, maintain efficient service delivery, and ensure fairness and consistency in how applicants are charged. Building permit and inspection fees are assessed on a cost-recovery basis within the development process and have a direct impact on residents, contractors, and businesses. The public expects these fees to be reasonable, consistently applied, and transparent. Inconsistencies or misapplications whether due to system limitations, staff discretion, or unclear guidance can lead to reputational risk, delays in construction timelines, or a perception of inequity among applicants. In Palo Alto, the permit issuance and fee calculation process is managed through Accela, the City’s electronic permitting system. This system allows for the intake of permit applications, automated fee calculations, scheduling of inspections, and documentation of changes, waivers, and/or refunds. Accela plays a key role in enforcing standardized fee schedules and recording valuation data, but it also allows staff to manually override certain values under specific circumstances. This flexibility can introduce control risks if not adequately monitored. During the audit period covering fiscal years 2023 through 2024, the City issued 7,686 building permits spanning residential remodels, new commercial construction, and other project types. The audit included a review of both plan check and inspection fee components, as well as related surcharges such as the SB 1473 state-mandated fee, technology fees, and record retention charges. In addition, the audit evaluated the processes and controls governing refunds, to ensure that all deviations from the standard fee schedule were properly documented, justified, and approved. The intention of this audit is to provide independent assurance that the Development Services Program is functioning effectively and with appropriate internal controls. Item 14 Attachment B - Building Permit & Inspection Fees Audit Item 14: Staff Report Pg. 25 Packet Pg. 254 of 312 1 Government auditing standards require an external peer review at least once every three (3) years. The last peer review of the Palo Alto Office of the City Auditor was conducted in 2017. The Palo Alto City Council approved a contract with Baker Tilly U.S, LLP for internal audit services for October 2020 through June 2022 with an extension through June 2025. City Council appointed Kate Murdock, Audit Manager in Baker Tilly’s Risk Advisory practice, as City Auditor in May 2024. As a result of transitions in the Audit Office and peer review delays due to the COVID pandemic, an external peer review is targeted for 2025. It should be noted that Baker Tilly’s most recent firmwide peer review was completed in November 2024 with a rating of “Pass”. The scope of that peer review includes projects completed under government auditing standards. A report on the next firmwide peer review should be available later in 2024. activities and internal controls that manage the permit lifecycle across all applicable departments. • Interviewed the appropriate individuals to gain an understanding of the organizational structure, processes, and controls related to building permit and inspection fees. • Analyzed policies and procedures as well as the legislative and regulatory requirements to identify the criteria to be used for evaluation of control design and effectiveness. • Conducted on-site walkthroughs to gain an understanding of the building permit process, from initial application through final inspection, to inform our assessment of internal controls and fee application. • Judgmentally selected a sample of 54 permits issued in FY23-24 for testing. The sample included the following permit types: Commercial Remodel or Addition, Demo, Minor, New Commercial Building, New Multi-Family, New Single Family, Residential Remodel or Addition, Use and Occupancy only, and other permits to determine if the City’s building permit and inspection fees are accurately and consistently applied. • Judgmentally selected a sample of 10 refunds for testing which were evaluated for supervisor approval, proper accounting, accuracy of the refund amount, and adequacy of supporting explanations. • Judgmentally selected a sample of Re-inspections for testing to determine if re-inspections were accurately and consistently applied in accordance with the City’s fee schedule and Palo Alto Municipal Code 16.04.110. • Completed audit report of findings, conclusions, and recommendations based on the supporting evidence gathered. Statement This audit activity was conducted from January 2025 to September 2025 in accordance with generally accepted government auditing standards, except for the requirement of an external peer review1. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings, observations, and conclusions based on our Item 14 Attachment B - Building Permit & Inspection Fees Audit Item 14: Staff Report Pg. 26 Packet Pg. 255 of 312 basis for our findings, observations, and conclusions based on our audit objectives. Strengths We noted the professionalism and responsiveness of the PDS throughout the audit. We appreciate the department’s participation in interviews, timely provision of building permit and inspection fee documentation for selected samples, and responsiveness to follow-up information requests. The OCA greatly appreciates the support of the Development Services Program staff involved in conducting this audit activity. Thank you! Item 14 Attachment B - Building Permit & Inspection Fees Audit Item 14: Staff Report Pg. 27 Packet Pg. 256 of 312 Detailed Analysis Best Practices: Building Permit and Inspection Fees Criteria that are transparent, efficient, and cost-effective. Leading practices endorsed by the Government Finance Officers Association (GFOA), International Code Council (ICC), California Building Officials (CALBO), and peer cities across the region support consistent fee application, sound internal controls, and public accountability. Benchmarking fee structures, processes, and outcomes against similar jurisdictions is a critical part of evaluating whether a city’s practices remain aligned with both regulatory and public service expectations. Key Best Practices Include: Fee Schedule Transparency and Accessibility Cities should maintain a clearly defined, publicly accessible fee schedule that is easy to interpret and reviewed at regular intervals ideally on an annual or biennial basis to ensure alignment with cost-of-service goals and regulatory changes. Palo Alto’s current fee schedule is easily accessible to the public and outlines multiple fee categories, including plan check fees, inspection fees, and state-mandated assessments such as SB 1473. Use of ICC Valuation Tables and Cost of Services Study Peer cities including Mountain View, Sunnyvale, and San Jose utilize the International Code Council’s (ICC) Building Valuation Data as a standardized basis for estimating construction costs, which informs the calculation of plan review and inspection fees. Industry best practices recommend updating these valuation tables annually and applying them consistently across all permit types. Palo Alto annually updated valuation tables aligning with industry best practices until FY2026. Since the timeframe of the audit, the Planning and Development Services Department has completed and implemented a cost of services study and developed an alternative fee methodology after determining the ICC valuation tables were too complex to accurately apply to commercial construction projects. The new hybrid model uses square footage for residential fees and an expanded valuation tier system for commercial projects, creating a more equitable structure that more accurately reflects project complexity and the associated costs of plan review and inspection services. This update also aligns with industry best practices of updating fees through a cost of services study every five to eight years. Benchmarking Against Peer Jurisdictions Benchmarking against peer cities helps assess whether Palo Alto’s fees are competitively positioned and cost-recovery goals are reasonable. For example, plan check fees for typical residential remodels in Palo Alto were found to be within 5–15% of those charged by Mountain View and Sunnyvale. Inspection fees per permit were slightly higher than those in San Jose. Item 14 Attachment B - Building Permit & Inspection Fees Audit Item 14: Staff Report Pg. 28 Packet Pg. 257 of 312 2 Significant changes were made to the Palo Alto FY2026 Fee Schedule and some of the benchmarked fees above may no longer apply. Table 1: FY2024 Development Services Fees Benchmarked2 = Fee/fee structure similar to Palo Alto = Fee/fee structure differs from Palo Alto Fee Category Palo Alto Mountain View Sunnyvale San Jose Plan Check Fee • Based on ICC valuation • Sliding scale of permit fee • Based on ICC valuation • ~70% of permit fee • Based on ICC valuation • 65–75% of permit fee • Based on ICC valuation • Sliding scale of permit fee Building Permit Fee • Based on ICC • Tiered structure as project value increases • Based on ICC • Based on ICC • Based on ICC • Residential adjusted lower Inspection Fee • Typically included in permit fee • Typically included in permit fee • Separate line item, based on inspection hours • Flat fee for typical inspections Technology Surcharge • Incorporated into the fee schedule • 4–6% surcharge applied to all permits • 5% surcharge with cap • 3% surcharge • Waived for low-income or ADA retrofits SB 1473 Fee • Charged per CA BSC standard • Charged per CA BSC standard • Charged per CA BSC standard •BSC standard • Auto calculated Record Retention Fee • FY24 $7.56 Per Plan Sheet • Flat rate ($5–$20) • Often bundled into tech surcharge • Sometimes included in admin fee Permit Valuation Basis • ICC tables • Exceptions with approval • ICC tables • Exceptions with approval • ICC tables • Exceptions with approval • ICC tables • Exceptions with approval Refund Policy • Standard form & supervisor approval required • Standard form & supervisor approval required • Standard form & supervisor approval required • Standard form & supervisor approval required • Online request Public Fee Calculator Not available Not available Not available • Yes, robust estimator with plan set details Item 14 Attachment B - Building Permit & Inspection Fees Audit Item 14: Staff Report Pg. 29 Packet Pg. 258 of 312 3 https://statescoop.com/san-jose-ai-permitting/ 4 https://sunnyvaleca.legistar.com/LegislationDetail.aspx?FullText=1&G=FA76FAAA-7A&GUID=8BB4D40E-185A-4BC3-B6EA-9CC97BE43861&ID=7419969&Options=&Search= 5 https://developmentpermits.mountainview.gov/about-permits/fees/planning-permit-fees/planning-cost-recovery-fees 6 https://permits.sanjoseca.gov/fee-estimator/building Automated Fee Enforcement Through Permit Systems Accela and other e-permitting systems should be configured to calculate fees automatically based on input valuation and permit type. Manual overrides should be limited to authorized personnel and logged with justification and supervisory approval. Some peer cities, such as San Jose, have implemented audit flags within their permitting software3 to detect inconsistencies in valuation entries or fee waivers. Standardized Refund and Adjustment Workflows Cities should have formal, written policies for granting refunds or fee adjustments, with clear documentation standards. Benchmark cities typically require a refund request form, written justification, and supervisor sign-off before processing. In contrast, inconsistent practices can lead to errors or public perception of favoritism. The City of Palo Alto currently follows the practices of benchmark cities. Peer Comparison of Staffing and Cost Recovery Cities like Sunnyvale4 and Mountain View5 regularly assess whether their Development Services programs are meeting cost-recovery targets and whether staffing levels align with workload demands. Palo Alto conducts similar assessments through its annual fee review and budget process. These evaluations are used to inform fee increases or process improvements. Public-Facing Permit Calculators and Estimators To improve transparency and reduce disputes, San Jose offers an online permit fee estimator6. This tool allows applicants to enter basic project information and receive a preliminary estimate of fees owed enhancing trust and reducing back-and-forth with staff. Item 14 Attachment B - Building Permit & Inspection Fees Audit Item 14: Staff Report Pg. 30 Packet Pg. 259 of 312 Audit Results Finding 1: Overall, fee assessments for most major fees were accurately assessed, but some smaller fees were not applied consistently across all transactions. As discussed in the Background section of this report, the City’s Planning and Development Services Department (PDS) provides building permit and inspection services for residential, commercial and mixed-use building projects. The City’s Municipal Fee Schedule establishes the annual fees that will be charged for these services. The PDS is responsible for ensuring these fees are accurately and consistently applied. Building permit applications are typically submitted through the City’s online platform, Accela. Project coordinators review applications and determine which fees should be assessed based on the scope of the work being performed. OCA tested a sample of building permit types and inspection fees for accuracy and consistency. In FY23 and FY24, there were a total of 4,774 projects reviewed by the Development Services Center and 7,686 building permits issued. The Development Services Center collected approximately $15 million in revenue in FY23 and $17 million in revenue in FY24. Most major fees were accurately assessed, but some smaller fees were not consistently applied. OCA sampled 60 building permits from several different project types including: Commercial Remodel or Addition, Demolition, New Commercial Building, New Multi-Family, New Single Family, Residential Remodel or Addition, Use and Occupancy, and Minor. OCA judgmentally selected projects that had similar descriptions in order to determine if the same types of projects were assessed the same fees. While most major fees were accurately assessed, OCA found several smaller fees were not consistently applied. Some of these errors resulted in overcharging customers but most errors resulted in undercharging customers. Building Permit Fees Aside from SB1473 and Record Retention fee errors, OCA identified 2 projects out of 60 or 3% with missing fees. For one “Minor” building project, PDS staff confirmed that the project was not assessed a fire plan check fee. As a result, it appears this project did not receive a fire inspection. OCA found one error in the “New Single Family” home projects we evaluated. This project was not assessed the “New Single Family” fee of $1,305.72 as listed in the FY24 Fee Schedule. Staff confirmed that this was in error, and the project should have been charged this fee. Due to how Item 14 Attachment B - Building Permit & Inspection Fees Audit Item 14: Staff Report Pg. 31 Packet Pg. 260 of 312 could not provide an accurate estimate of uncollected building permit fees. SB 1473 – California Building Standards Administration Special Revolving Fund SB 1473 took effect in January 2009 and was established as a surcharge on both residential and non-residential building permits by the California Building Standards Commission. This surcharge fee has a rate of four dollars ($4) per one hundred thousand ($100,000) building valuation and is applied in increments of $25,000 with $1 being the minimum fee charged. The state requires that fees are submitted quarterly to the California Building Standards Commission. The bill also provides that a city may retain up to ten percent of the collected fees for administrative costs and code enforcement education. The PDS management confirmed that SB1473 fees are only applied to building permits and do not apply to standalone permits such as electrical, fire, or demolition. OCA’s testing found that some demolition permits were wrongly assessed the SB1473 fee. In FY23 and FY24 there were 224 demolition permits issued. OCA tested a sample of 13 permits. Out of the 13 demolition permits sampled, OCA found that 5 of the 13 or 38% had been charged the fee. On these permits, the SB1473 permit fee ranged from $1 to $41 with an average fee charge of $14.80 . If this error rate was found in the larger population of demolition permits, potentially 86 permits were erroneously charged the fee. Using the average amount of over- assessed fees, the City may have overcharged approximately $1,272.80. While this represents a small amount in overcharged fees, charging unauthorized fees can have financial, legal, operational and reputational consequences and the City should take steps to minimize such occurrences. Record Retention Fees The City’s fee schedule requires that all projects with plans pay a records retention fee. In FY23, the fee was $7.04 per plan sheet and in FY24 $7.88 per plan sheet. This fee helps cover the City’s costs in maintaining such records. Out of 60 samples, OCA found that the City had not assessed record retention fees for 15 projects or 25% of sampled projects. For the 15 projects where record retention fees were not assessed, $184.41 in fees (an average of $12.29 per project) should have been assessed and collected but were not. If we assume an error rate of 25% for the entire population of 4,774 projects in FY23 and FY24, 1,194 projects may not have been correctly assessed record Item 14 Attachment B - Building Permit & Inspection Fees Audit Item 14: Staff Report Pg. 32 Packet Pg. 261 of 312 the projects OCA sampled, OCA estimates the City may have underassessed $14,674.26 in record retention fees. While this represents less than a tenth of a percent of the total revenue collected by the Development Center each year, it is important to ensure fees are consistently and fairly assessed. OCA did note that based on the updated FY2026 fee model, record retention costs have been incorporated into the technology costs and therefore, the City no longer collects a separate record retention fee. Reinspection Fees Built into the City’s fee structure for residential projects are initial and follow-up inspections. Reinspection fees are assessed beginning with the second failed inspection in order to cover the cost of the third inspection, with additional fees required for each subsequent failure. Re-inspection fees not only cover the additional cost of the work performed by the City but also serve to disincentivize the customer from using City services in a way not intended. While these fees are an important tool for the Program to ensure efficient and timely review, it is important to note that there is flexibility in how they are applied and staff judgement in applying these fees is key to their administration. These fees do not apply to commercial and multi-family construction projects which have re- inspection fees built into the permit fees. Based on reports provided by staff, OCA found the City only charged 84 reinspection fees during FY23 and FY24. OCA sampled 10 of these projects where re-inspection fees were charged to see if the fees had been applied accurately and found no errors. In collaboration with PDS staff, OCA identified 164 permits during FY23 and FY24 out of 7,686 (approximately 2%) that might have missing re-inspection fees. OCA sampled 30 of these permits and found a total of 6 re-inspection fees that should have been charged but were not. It is difficult to put these numbers in context given that each permit is different and might have a different likelihood of needing a reinspection. However, assuming that for every 30 permits, one would find 6 re-inspections that were not charged a fee, this results in a rate of 1 re-inspection per every 5 permits. Assuming a population of 164 permits (as noted above), this results in potentially 33 re-inspection fees that were not collected during FY23 and FY24. In the FY2023 Fee Schedule, each “primary” re-inspection costs $172.95 and each “secondary” re-inspection costs $93.03. Assuming FY23 fees, at the low end, this represents approximately $3,070 in uncollected fees and at the high end approximately $5,707. OCA was unable to determine how many re-inspections should have been assessed a fee as there is currently no definitive labeling Item 14 Attachment B - Building Permit & Inspection Fees Audit Item 14: Staff Report Pg. 33 Packet Pg. 262 of 312 inspection and a fee should be applied. PDS management agreed that additional guidance would help ensure that these fees are more consistently and accurately applied. When a customer is informed of issues at the initial inspection, it is up to the customer to identify if they need additional resources to work to fix the problem and ensure they meet building codes. Re-inspections result in additional use of staff time and the more re-inspections the City is forced to perform, the more staff time is consumed with less available time to move other projects forward. Failing to apply fees consistently can present financial, legal and operational risks including lost revenue and possible exposure to lawsuits due to unfair treatment. Factors contributing to inconsistent fee assessment Through interviews with staff in PDS and observations of the building permit and inspection processes, OCA identified three primary factors contributing to inconsistent fee assessment. First, OCA noted a general lack of internal controls and oversight of building permit and inspection assessments. Second, staff mentioned the complexity of the fee schedule and how the fees are organized in the City’s cloud-based building platform, Accela. Third, staff mentioned the lack of training available for new employees. Lack of Oversight and Internal Controls According to PDS management and staff, the City discontinued regular internal audits of building permit and inspection fees during the COVID-19 pandemic and has not been able to resume these checks. According to management, this function was previously supported by the Development Center Manager and following the pandemic, the position’s priorities were realigned to focus on customer service initiatives. These efforts included expanding appointment availability to accommodate walk-in, virtual, and in- person customers. Additionally, management reported that the manger’s oversight was expanded to include both project coordination and planning staff located at the Development Center to enhance customer service and technical expertise at the counter. OCA noted that the Accela system has the capability to flag projects at random or to flag projects based on defined criteria established by the user agency. For example, San Jose reports that they have configured the system to flag projects with inconsistent valuations and when fees are waived. Staff also indicated that while they can consult with other project coordinators, the Development Center Manager, and the Chief Building Official on permitting questions, there is no formal, regular Item 14 Attachment B - Building Permit & Inspection Fees Audit Item 14: Staff Report Pg. 34 Packet Pg. 263 of 312 Development Center Manager provides ongoing informal training, which includes discussion on application processing questions form the project coordinators. In addition, these meetings occasionally include guest speakers from other partner departments to expand permitting knowledge during weekly program meetings. Without periodic review of staff work and building permit and inspection fee assessments, management is unable to determine if fees are being consistently and accurately assessed and misses the opportunity to correct staff errors early, making it more likely that mistakes are carried forward into future fee assessments. Complexity of the Fee Schedule and Accela Configuration According to PDS management, the City’s fee schedule has multiple components, and its application varies based on the specific requirements of each project. The schedule includes more than 18 different fee categories (e.g., Building Permit, Construction & Demolition, Electrical, Green Building, etc.) Within each fee category, there are numerous different fees that might apply to a project. The complexity of the fee schedule reflects the complexity of construction process itself. There are thousands of building projects constructed in Palo Alto each year and even two projects that may seem similar – for example, two new single-family homes, there will be many unique aspects of each project such as solar panels, a pool, a garage, etc. While the fee schedule was recently updated with a cost of services study, staff indicated that although some areas such as the residential square footage model were simplified, the schedule and process for assessing fees remains complex making it difficult to ensure consistency. In addition, staff concurred that developing standard operating procedures for fee applications will provide more transparency for customers and reduce potential frustrations. Future fee studies should explore ways to further simplify the schedule and alternate methods for communicating standards and requirements to customers, such as through a public facing fee calculator. Accela is designed to streamline and automate building application, permitting and inspection processes and the platform is used by many cities and counties in California. While staff indicated there are many positive aspects to the City’s use of the platform, one area that is challenging is how fees are configured in the system. Currently, fees are not grouped by project category and staff are forced to scroll through the entire system to locate fees. Many building projects that come through the City’s Development Services Center are complex and require multiple fee assessments. Item 14 Attachment B - Building Permit & Inspection Fees Audit Item 14: Staff Report Pg. 35 Packet Pg. 264 of 312 multiple screens and scroll down various permit lists to locate the appropriate fee and then repeat this process for each new fee. Staff stated that if fees were grouped, with a list of fees that are typically assessed for that type of project, it would save on time and also help with consistency as users would have a list to choose from rather than having to remember and look up each individual fee that might apply. In addition, staff stated that if the system could be configured to allow the project coordinator to select multiple fees at one time that would also save time rather than having to open the list for each fee selection. OCA spoke with the PDS Accela technical expert, and it appears that some, if not all, of the changes above could be implemented with support. The City contracts with a vendor that specializes in Accela configurations when changes need to be made to the system. The City will need to determine if the cost of making these changes is feasible. OCA also noted that some fees could be automated in the system. For example, record retention fees should be charged on every project. If there were a field prompting project coordinators to enter the number of plan pages when entering other essential project information, the system could automatically calculate this per page fee and not require any additional steps. In addition, the SB1473 fee applies to certain types of projects and could be automatically added to these project types. Training Staff reported that they attend training twice a year through CALBO, the California Building Officials. However, staff also reported that there isn’t a formal training process for new hires. According to staff, the City had a more formalized onboarding and training program for new project coordinators prior to the Covid 19 pandemic. According to management, changes to processes and procedures driven by new system requirements for application processing necessitated updates to formal training materials and standard operating procedures following the pandemic. Management asserted that development of these updated procedures and training programs is needed to align with current practices. Currently, new project coordinators are primarily trained by shadowing another project coordinator, however there are some downsides staff noted to this approach. The coordinator being shadowed may not be assigned the breadth of different project types during the shadow period leaving gaps in knowledge for the new individual. The coordinator is providing training in the moment but also tasked with performing their primary job function and Item 14 Attachment B - Building Permit & Inspection Fees Audit Item 14: Staff Report Pg. 36 Packet Pg. 265 of 312 for decisions being made. Staff indicated a more formal and dedicated training program would be helpful. According to the ICC Code of Ethics, code professionals have a duty to maintain and improve their competence. ICC training standards reinforce that jurisdictions should ensure staff are properly trained and supported to administer building codes and related fee structures. Sufficient, ongoing training can help minimize the risk of errors, inconsistent application of fees and strengthen compliance with building codes. Additional areas for improvement As part of this audit, OCA also evaluated the refund process. In FY23 and FY24 there were a total of 107 refunds issued. OCA randomly selected refunds for testing, as well as judgmentally selecting a few of the larger refunds. Refunds were tested for evidence of supervisor/manager approval, to ensure the amount aligns with the refund receipt and was appropriately processed through accounting, and that the amount refunded was in alignment with the fee schedule. All refunds evaluated were in alignment with the fee schedule, refunding 80% of the original fee amount unless there was a City error necessitating a full refund. However, out of the 10 refunds tested, 5 lacked the required documentation as outlined in the department procedure, which requires uploading the final refund documentation signed by a Senior Management Analyst. In these cases, staff had uploaded the refund documents initially sent to Accounting, but did not replace them with the finalized, signed versions once processing was complete. Staff should ensure that all final refund documents are included and saved in the appropriate files in Accela 1. Evaluate any areas identified by the audit where fees were inappropriately charged to customers and resolve any issues. 2. Reinstate periodic internal audits of building permit and reinspection fees on either a monthly or quarterly basis. This should include: a. developing a documented quality control process with assigned responsibilities to ensure this activity is performed consistently moving forward, b. procedures for providing feedback, and if appropriate, additional training to staff when errors Item 14 Attachment B - Building Permit & Inspection Fees Audit Item 14: Staff Report Pg. 37 Packet Pg. 266 of 312 c. ongoing tracking and monitoring of issues to identify patterns or trends that might require wider training or corrective actions for the department. 3. Explore the feasibility of simplifying fees and improving the Accela platform by: a. considering ways to simplify fee application processes and procedures including revisiting the fee structure itself and identifying opportunities to better communicate standards to customers, b. automating certain fees such as SB1743 as an internal control and to help streamline the assessment process, c. grouping fees by project type to ensure easier application by project coordinators, and d. configuring the software to allow coordinators to select multiple fees at one time. Performing an assessment to determine the time it takes for staff to individually select each permit versus being able to select them in one step might help to establish how much time could be saved by this enhancement and whether it is worth the investment. Such an assessment could also consider other fees for automation that are not specifically addressed through this audit. 4. We recommend the City evaluate the current training process and consider updating and/or reimplementing the onboarding and training program for new employees including comprehensive guidance on fee application, system use, as well as periodic, ongoing training. 5. Ensure staff retain all required documents when processing financial transactions such as permit fee refunds for greater transparency and accountability. Response Planning & Development Services Concurrence: Agree Target Date: 4th Quarter Fiscal Year 2026 Action Plan: 1. PDS is reviewing appropriate actions to address the areas identified by the audit where fees were inappropriately charged and will implement remediating actions as appropriate. (Target Date: Q2 FY 2026) Item 14 Attachment B - Building Permit & Inspection Fees Audit Item 14: Staff Report Pg. 38 Packet Pg. 267 of 312 2. PDS will develop a documented quality control process to ensure that periodic internal audits of building permit and reinspection fees take place. This will include exploring technical solutions with Accela to flag permits for review as well as quarterly review of a randomized sample of permits. Concurrently, PDS will provide feedback and additional training when errors are identified and will also longitudinally track errors to identify trends and patterns. (Target Date: Q4 FY 2026) 3. PDS will explore the following via a request for proposals (RFP) for the Permitting and Land Use Management system: a. standard operating procedures for fee application by project type; b. providing clear guidance to applicants on how to calculate project valuations to create further equity in fee application; c. conducting additional analysis with a fee consultant to refine how fees are applied to projects with multiple standalone components, such as exploring the use of a fee multiplier; d. adding a permit fee estimation tool for simple projects to help applicants better understand permitting fees and project costs early in the process, increasing transparency and accountability in staff application of fees; and e. Assess tradeoffs of implementing technical solutions within Accela and feasibility of those enhancements to enhance the internal controls of the platform, including automating certain fees, grouping other fees, and configuring the software to better reflect the standard ‘use cases’ by project coordinators to minimize errors. 4. Staff agree an assessment of the current process and development of a onboarding and training program for staff including updating standard operating procedures for fee application by permit type and system navigation. (Target Date: Q4 FY 2026) 5. PDS staff will review existing refund procedures with administrative staff and retain all required final documents when processing financial transactions. Currently, all refunds are processed through accounting and have the proper documentation and signature approvals. Accela records should also be updated to maintain final signed copies rather than drafts. Additionally, staff will seek to consolidate refund transactions and establish a process to periodically audit refunds; regular review of transactions such as refunds will enhance compliance and internal controls. (Target Date: Q4 FY 2026) Item 14 Attachment B - Building Permit & Inspection Fees Audit Item 14: Staff Report Pg. 39 Packet Pg. 268 of 312 Item 14 Attachment B - Building Permit & Inspection Fees Audit Item 14: Staff Report Pg. 40 Packet Pg. 269 of 312 13 PROFESSIONAL SERVICES TASK ORDER TASK ORDER FY25-4.31 Junior Museum and Zoo Consultant shall perform the Services detailed below in accordance with all the terms and conditions of the Agreement referenced in Item 1A below. All exhibits referenced in Item 8 below are incorporated into this Task Order by this reference. The Consultant shall furnish the necessary facilities, professional, technical and supporting personnel required by this Task Order as described below. CONTRACT NO. C21179340A OR PURCHASE ORDER REQUISITION NO. (AS APPLICABLE) 1A. MASTER AGREEMENT NO. (MAY BE SAME AS CONTRACT / P.O. NO. ABOVE): C21179340A 1B. TASK ORDER NO.: FY25-4.31 2. CONSULTANT NAME: Baker Tilly Advisory Group, LP 3. PERIOD OF PERFORMANCE: START: January 1, 2025 COMPLETION: June 30, 2025 4. TOTAL TASK ORDER PRICE: $89,900 BALANCE REMAINING IN MASTER AGREEMENT/CONTRACT TBD 5. BUDGET CODE_______________ COST CENTER________________ COST ELEMENT______________ WBS/CIP__________ PHASE__________ 6. CITY PROJECT MANAGER’S NAME & DEPARTMENT: Lydia Kou, Chair of the City Council’s Policy and Services Committee 7. DESCRIPTION OF SCOPE OF SERVICES (Attachment A) MUST INCLUDE: SERVICES AND DELIVERABLES TO BE PROVIDED SCHEDULE OF PERFORMANCE MAXIMUM COMPENSATION AMOUNT AND RATE SCHEDULE (as applicable) REIMBURSABLE EXPENSES, if any (with “not to exceed” amount) 8. ATTACHMENTS: A: Task Order Scope of Services B (if any): N/A Docusign Envelope ID: F60E09CC-400F-404E-8132-93318BE5ADE6 Kate Murdock Manager/ City Auditor 12/23/2024 Council Member Council Member Lydia Kou 12/25/2024 April 30, 2026 Item 14 Attachment C - FY25 Task Order Extension Amendments Item 14: Staff Report Pg. 41 Packet Pg. 270 of 312 14 Attachment A DESCRIPTION OF SCOPE OF SERVICES Introduction Attachment A, the Description of Scope of Services, contains the following four (4) elements: Services and Deliverables To Be Provided Schedule of Performance Maximum Compensation Amount and Rate Schedule (As Applicable) Reimbursable Expenses, if any (With “Not To Exceed” Amount) Services & Deliverables Baker Tilly’s approach to conducting an internal audit of the Junior Museum and Zoo involves three (3) primary steps: Step 1: Audit Planning Step 2: Fieldwork and Testing Step 3: Reporting Step 1 – Audit Planning This step consists of the tasks performed to adequately plan the work necessary to address the overall audit objective and to solidify mutual understanding of the audit scope, objectives, audit process, and timing between stakeholders and auditors. Tasks include: Gather information to understand the environment under review o Understand the environment under assessment o Assess the City code, regulations, and other standards and expectations o Assess prior audit results, as applicable o Assess additional documentation and conduct interviews as necessary Assess the audit risk Prepare an audit planning memo and audit program o Refine audit objectives and scope o Identify the audit procedures to be performed and the evidence to be obtained and examined Announce the initiation of the audit and kick-off meeting with key stakeholders o Discuss audit objectives, scope, audit process, timing, resources, and expectations o Discuss documentation and interview requests for the audit Step 2 – Fieldwork and Testing The step involves executing the procedures in the audit program to gather information, interview individuals, and analyze the data and information to obtain sufficient evidence to address the audit objectives The preliminary audit objective is to determine if the City’s Junior Museum and Zoo is operating effectively and efficiently to fulfill the program’s mission. Procedures include, but are not limited to: Interviewing the appropriate individuals to gain an understanding of the organizational structure, processes, and controls related to the Junior Museum and Zoo Analyze policies and procedures as well as the program mission and objectives to identify the criteria to be used for evaluation of control design and effectiveness Compare processes and controls against best practices Docusign Envelope ID: F60E09CC-400F-404E-8132-93318BE5ADE6 Item 14 Attachment C - FY25 Task Order Extension Amendments Item 14: Staff Report Pg. 42 Packet Pg. 271 of 312 15 Step 3 – Reporting In Step 3, the project team will perform tasks necessary to finalize audit working papers, prepare and review a draft report with stakeholders, and submit a final report for management response. Tasks include: Developing findings, conclusions, and recommendations based on the supporting evidence gathered Validating findings with appropriate individuals and discuss the root cause of the identified findings Complete supervisory review of working papers and a draft audit report Distribute a draft audit report and conduct a closing meeting with key stakeholders o Discuss the audit results, findings, conclusions, and recommendations o Discuss management responses Obtain written management responses and finalize a report Review report with members of City Council and/or the appropriate Council Committee Deliverables: The following deliverables will be prepared as part of this engagement: Audit Report Policy & Services Committee Audit Report Presentation Schedule of Performance Anticipated Start Date: January 1, 2025 Anticipated End Date: June 30, 2025 Maximum Compensation Amount and Rate Schedule The not-to-exceed maximum, inclusive of reimbursable expenses (as summarized below) for this Task is $89,900. The not-to-exceed budget is based on an estimate of 500 total project hours, of which a minimum of 40 are estimated to be completed by the City Auditor. Reimbursable Expenses We plan to complete all work remote including all interviews and documentation review. However, during the planning and fieldwork phases of this audit, the City and Baker Tilly may mutually determine it will be beneficial to perform a portion of the work on-site. Given this possibility, Baker Tilly could incur expenses for this Task. The not-to-exceed maximum for reimbursable expenses for this Task is $6,500. The following summarizes anticipated reimbursable expenses: Round-trip Airfare – $2,000 (1 round trip flight x 2 auditors) Ground transportation – $800 (car rental or Uber/taxi) Hotel accommodation – $3,000 (2 rooms x 4 nights) Food & Incidentals – $2,100 Docusign Envelope ID: F60E09CC-400F-404E-8132-93318BE5ADE6 Item 14 Attachment C - FY25 Task Order Extension Amendments Item 14: Staff Report Pg. 43 Packet Pg. 272 of 312 19 PROFESSIONAL SERVICES TASK ORDER TASK ORDER FY25-4.33 Public Safety Staffing Consultant shall perform the Services detailed below in accordance with all the terms and conditions of the Agreement referenced in Item 1A below. All exhibits referenced in Item 8 below are incorporated into this Task Order by this reference. The Consultant shall furnish the necessary facilities, professional, technical and supporting personnel required by this Task Order as described below. CONTRACT NO. C21179340A OR PURCHASE ORDER REQUISITION NO. (AS APPLICABLE) 1A. MASTER AGREEMENT NO. (MAY BE SAME AS CONTRACT / P.O. NO. ABOVE): C21179340A 1B. TASK ORDER NO.: FY25-4.33 2. CONSULTANT NAME: Baker Tilly Advisory Group, LP 3. PERIOD OF PERFORMANCE: START: January 1, 2025 COMPLETION: June 30, 2025 4. TOTAL TASK ORDER PRICE: $95,670 BALANCE REMAINING IN MASTER AGREEMENT/CONTRACT TBD 5. BUDGET CODE_______________ COST CENTER________________ COST ELEMENT______________ WBS/CIP__________ PHASE__________ 6. CITY PROJECT MANAGER’S NAME & DEPARTMENT: Lydia Kou, Chair of the City Council’s Policy and Services Committee 7. DESCRIPTION OF SCOPE OF SERVICES (Attachment A) MUST INCLUDE: SERVICES AND DELIVERABLES TO BE PROVIDED SCHEDULE OF PERFORMANCE MAXIMUM COMPENSATION AMOUNT AND RATE SCHEDULE (as applicable) REIMBURSABLE EXPENSES, if any (with “not to exceed” amount) 8. ATTACHMENTS: A: Task Order Scope of Services B (if any): N/A Docusign Envelope ID: F60E09CC-400F-404E-8132-93318BE5ADE6 Manager/ City Auditor Kate Murdock 12/23/2024 Council Member Council Member Lydia Kou 12/25/2024 April 30, 2026 Item 14 Attachment C - FY25 Task Order Extension Amendments Item 14: Staff Report Pg. 44 Packet Pg. 273 of 312 20 Attachment A DESCRIPTION OF SCOPE OF SERVICES Introduction Attachment A, the Description of Scope of Services, contains the following four (4) elements: Services and Deliverables To Be Provided Schedule of Performance Maximum Compensation Amount and Rate Schedule (As Applicable) Reimbursable Expenses, if any (With “Not To Exceed” Amount) Services & Deliverables Baker Tilly’s approach to conducting an internal audit of Public Safety Staffing including Overtime three (3) primary steps: Step 1: Audit Planning Step 2: Fieldwork and Testing Step 3: Reporting Step 1 – Audit Planning This step consists of the tasks performed to adequately plan the work necessary to address the overall audit objective and to solidify mutual understanding of the audit scope, objectives, audit process, and timing between stakeholders and auditors. Tasks include: Gather information to understand the environment under review o Understand the environment under assessment o Assess the City code, regulations, and other standards and expectations o Assess prior audit results, as applicable o Assess additional documentation and conduct interviews as necessary Assess the audit risk Prepare an audit planning memo and audit program o Refine audit objectives and scope o Identify the audit procedures to be performed and the evidence to be obtained and examined Announce the initiation of the audit and kick-off meeting with key stakeholders o Discuss audit objectives, scope, audit process, timing, resources, and expectations o Discuss documentation and interview requests for the audit Step 2 – Fieldwork and Testing The step involves executing the procedures in the audit program to gather information, interview individuals, and analyze the data and information to obtain sufficient evidence to address the audit objectives The preliminary audit objective is to determine if the Public Safety Departments (Fire and Police) are effectively and efficiently staffed including use of overtime: Interviewing the appropriate individuals to gain an understanding of the organizational structures, processes, and controls related to staffing and use of overtime including plans and systems used Analyze policies and procedures related to Public Safety staffing to identify the criteria to be used for evaluation of control design and effectiveness Docusign Envelope ID: F60E09CC-400F-404E-8132-93318BE5ADE6 Item 14 Attachment C - FY25 Task Order Extension Amendments Item 14: Staff Report Pg. 45 Packet Pg. 274 of 312 21 Analyze Public Safety performance metrics to determine if staffing levels enable desired performance outcomes Compare performance processes and controls against best practices Step 3 – Reporting In Step 3, the project team will perform tasks necessary to finalize audit working papers, prepare and review a draft report with stakeholders, and submit a final report for management response. Tasks include: Developing findings, conclusions, and recommendations based on the supporting evidence gathered Validating findings with appropriate individuals and discuss the root cause of the identified findings Complete supervisory review of working papers and a draft audit report Distribute a draft audit report and conduct a closing meeting with key stakeholders o Discuss the audit results, findings, conclusions, and recommendations o Discuss management responses Obtain written management responses and finalize a report Review report with members of City Council and/or the appropriate Council Committee Deliverables: The following deliverables will be prepared as part of this engagement: Audit Report Policy & Services Committee Audit Report Presentation Schedule of Performance Anticipated Start Date: January 1, 2025 Anticipated End Date: June 30, 2025 Maximum Compensation Amount and Rate Schedule The not-to-exceed maximum, inclusive of reimbursable expenses (as summarized below) for this Task is $95,670. The not-to-exceed budget is based on an estimate of 500 total project hours, of which a minimum of 50 are estimated to be completed by the City Auditor. Reimbursable Expenses We plan to complete all work remote including all interviews and documentation review. However, during the planning and fieldwork phases of this audit, the City and Baker Tilly may mutually determine it will be beneficial to perform a portion of the work on-site. Given this possibility, Baker Tilly could incur expenses for this Task. The not-to-exceed maximum for reimbursable expenses for this Task is $6,500. The following summarizes anticipated reimbursable expenses: •Round-trip Airfare – $2,000 (1 round trip flight x 2 auditors) •Ground transportation – $800 (car rental or Uber/taxi) •Hotel accommodation – $3,000 (2 rooms x 4 nights) •Food & Incidentals – $2,100 Docusign Envelope ID: F60E09CC-400F-404E-8132-93318BE5ADE6 Item 14 Attachment C - FY25 Task Order Extension Amendments Item 14: Staff Report Pg. 46 Packet Pg. 275 of 312 22 PROFESSIONAL SERVICES TASK ORDER TASK ORDER FY25-4.34 Follow-Up Audit Activities Consultant shall perform the Services detailed below in accordance with all the terms and conditions of the Agreement referenced in Item 1A below. All exhibits referenced in Item 8 below are incorporated into this Task Order by this reference. The Consultant shall furnish the necessary facilities, professional, technical and supporting personnel required by this Task Order as described below. CONTRACT NO. C21179340A OR PURCHASE ORDER REQUISITION NO. (AS APPLICABLE) 1A. MASTER AGREEMENT NO. (MAY BE SAME AS CONTRACT / P.O. NO. ABOVE): C21179340A 1B. TASK ORDER NO.: FY25-4.34 2. CONSULTANT NAME: Baker Tilly Advisory Group, LP 3. PERIOD OF PERFORMANCE: START: January 1, 2025 COMPLETION: June 30, 2025 4. TOTAL TASK ORDER PRICE: $59,390 BALANCE REMAINING IN MASTER AGREEMENT/CONTRACT TBD 5. BUDGET CODE_______________ COST CENTER________________ COST ELEMENT______________ WBS/CIP__________ PHASE__________ 6. CITY PROJECT MANAGER’S NAME & DEPARTMENT: Lydia Kou, Chair of the City Council’s Policy and Services Committee 7. DESCRIPTION OF SCOPE OF SERVICES (Attachment A) MUST INCLUDE: SERVICES AND DELIVERABLES TO BE PROVIDED SCHEDULE OF PERFORMANCE MAXIMUM COMPENSATION AMOUNT AND RATE SCHEDULE (as applicable) REIMBURSABLE EXPENSES, if any (with “not to exceed” amount) 8. ATTACHMENTS: A: Task Order Scope of Services B (if any): N/A Docusign Envelope ID: F60E09CC-400F-404E-8132-93318BE5ADE6 Kate Murdock Manager/ City Auditor12/23/2024 Council Member 12/25/2024 Council Member Lydia Kou April 30, 2026 Item 14 Attachment C - FY25 Task Order Extension Amendments Item 14: Staff Report Pg. 47 Packet Pg. 276 of 312 23 Attachment A DESCRIPTION OF SCOPE OF SERVICES Introduction Attachment A, the Description of Scope of Services, contains the following four (4) elements: Services and Deliverables To Be Provided Schedule of Performance Maximum Compensation Amount and Rate Schedule (As Applicable) Reimbursable Expenses, if any (With “Not To Exceed” Amount) Services & Deliverables Baker Tilly will provide the following services in conducting Follow-Up Audit Activities:: Track and monitor progress on all audit recommendations Obtain sufficient evidence to support conclusions regarding the status of audit recommendations Annually report on the status of recommendations Deliverables: The following deliverables will be prepared as part of this engagement: Annual Status of Audit Recommendations Report Policy & Services Committee Report Presentation Schedule of Performance Anticipated Start Date: January 1, 2025 Anticipated End Date: June 30, 2025 Maximum Compensation Amount and Rate Schedule The not-to-exceed maximum, inclusive of reimbursable expenses (as summarized below) for this Task is $59,390. The not-to-exceed budget is based on an estimate of 500 total project hours, of which a minimum of 40 are estimated to be completed by the City Auditor. Docusign Envelope ID: F60E09CC-400F-404E-8132-93318BE5ADE6 Item 14 Attachment C - FY25 Task Order Extension Amendments Item 14: Staff Report Pg. 48 Packet Pg. 277 of 312 City Council Staff Report From: City Manager Report Type: ACTION ITEMS Lead Department: Planning and Development Services Meeting Date: December 8, 2025 Report #:2511-5569 TITLE REINTRODUCED FIRST READING: Adoption of an Ordinance Updating Palo Alto Municipal Code (PAMC) Section 18.40.250 (Lighting) of Chapter 18.40 (General Standards and Exceptions) and Amending Chapters 18.10, 18.12, 18.28, and Section 18.40.230 of Title 18 (Zoning) to Adopt New Outdoor Lighting Regulations; CEQA Status — Exempt pursuant to CEQA Guidelines Section 15308 (Actions for Protection of the Environment) RECOMMENDATION Staff recommend the City Council adopt the Draft Ordinance updating Palo Alto Municipal Code (PAMC) Section 18.40.250 (Lighting) of Chapter 18.40 (General Standards and Exceptions) and Amending Chapters 18.10, 18.12, 18.28, and Section 18.40.230 of Title 18 (Zoning) to adopt new outdoor lighting regulations. EXECUTIVE SUMMARY Note: This report has been updated from its initial November 10, 2025, publication to incorporate a recent ordinance change that expressly exempts select public facilities, as discussed in the analysis section. The draft Lighting Ordinance (Attachment A) implements part of one of the City Council’s priorities (No. 18, Council consideration of an ordinance implementing Bird Safe Glass & Wildlife Light Pollution Protections standards) and is consistent with Comprehensive Plan policies (including Policies N-1.9, N-3.3, and N-7.5). The draft ordinance, which has been modified based on City Council direction on April 7, 2025, aims to reduce light pollution and align with Dark Sky principles in order to increase the health and well-being of Palo Alto residents, protect wildlife and natural ecosystems, and reduce light pollution. The City Council’s direction at the April hearing aligned with the Planning and Transportation Commission (PTC) recommendations from October 2024, including requiring that new standards apply to replacement of existing lighting; allowing additional exceptions; and increasing efforts to raise awareness, which may help reduce the number of complaints and reliance on code Item 15 Item 15 Staff Report Item 15: Staff Report Pg. 1 Packet Pg. 278 of 312 enforcement. In addition, the City Council requested that requirements be included for already- installed existing lighting to comply with the new lighting standards after a set time period. BACKGROUND 1 The organization publishes guidance for communities seeking to achieve a “dark sky” and decrease light pollution. The framework focuses on principles, which have been incorporated into the proposed ordinance: 1 Link to the DarkSky International Website: https://darksky.org/who-we-are/advocates Item 15 Item 15 Staff Report Item 15: Staff Report Pg. 2 Packet Pg. 279 of 312 3. Low Level: Light should be no brighter than necessary. Use the lowest light level required. Be mindful of surface conditions, as some surfaces may reflect more light into the night sky than intended. 4. Controlled: Use light only when it is needed. Use controls such as timers or motion detectors to ensure that light is available when it is needed, dimmed when possible, and turned off when not needed. 5. Warm-colored: Use warmer color lights where possible. Limit the amount of shorter wavelength (blue-violet) light to the least amount needed. Previous City Council Discussion On April 7, 2025,3 staff presented its recommendation for the Lighting Ordinance update, which differed from the Planning and Transportation Commission’s recommendation of October 30, 2024. Staff clarified that its recommendations primarily centered around concerns regarding impacts on enforcement and implementation once adopted. After deliberation, the City Council directed staff to return with several modifications, including requiring that new standards apply to replacement of existing lighting; allowing additional exceptions; and increasing efforts to raise awareness. These modifications aligned with most of the PTC recommendations and included requirements to be applied to all existing lighting, similar to the City of Brisbane. The City Council motion and staff analysis is provided below. ANALYSIS On April 7, 2025, the City Council directed staff to revise the draft ordinance for greater consistency with the recommendations made by the Planning and Transportation Commission in October 2024. The City Council’s motion items are italicized below, and staff descriptions on how each was incorporated into the draft ordinance follow each element of the motion: MOTION: A. Ensure protections in the existing code are not eroded for existing outdoor lighting in all zoning districts. a. Retain the Requirements and Guidelines that the current municipal code provides to riparian ecosystems section 18.40.140. No revisions needed as the updated ordinance provides equivalent or greater protection from light pollution compared to the existing outdoor lighting requirements. Additionally, the existing provisions and requirements in PAMC 18.40.140 will remain until the Stream Corridor Protection Ordinance Update is adopted. 3 Link to the City Council agenda for the public hearing on April 7, 2025 (Item #17): https://cityofpaloalto.primegov.com/Portal/Meeting?meetingTemplateId=16024 Item 15 Item 15 Staff Report Item 15: Staff Report Pg. 3 Packet Pg. 280 of 312 B. Require this ordinance apply to all new or replacement outdoor lighting consistent with the Planning and Transportation Commission (PTC) motion of October 30th to include: a. Installation of new outdoor lighting, replacement of existing outdoor lighting fixtures, or changing the lighting type or system; Incorporated in Section 18.40.250(c). The language from the motion was added to the applicability section. b. for replacement lighting fixtures on buildings and structures, develop a hardship exception provision that would consider technical feasibility or financial burden to only apply to replacements on existing buildings and structures; and Incorporated in Section 18.40.250(j)(2). An exception can be requested if implementation of the lighting requirements more than doubles the cost of the project. c. any existing nonconforming lighting after 10 years for residential and 5 years for nonresidential shall remain extinguished until brought into compliance with this ordinance. Incorporated in Section 18.40.250(l). The deadline for existing lighting to comply with the new requirements is five years from the effective date of the ordinance for nonresidential zoning districts, and 10 years for residential and mixed-use zoning districts. Any existing lighting that has not been brought into compliance with the Code by these deadlines must remain extinguished (off) until it meets the new lighting standards. C. Existing luminaires that have the technical capacity to be adjusted to comply with the ordinance without a need to change the fixture should comply within two (2) years of the effective date of the ordinance (i.e: fixtures that have existing dimmers, adjustable directionality, timers, Correlated Color Temperature adjusters, motion sensors, etc.). Incorporated in Section 18.40.250(l)(2). The deadline for existing lighting to comply through use of existing features is two years from the ordinance's effective date. That lighting will be required to meet the new standards, with the exception of the shielding requirements. D. Amend Section (4)(A) to include specific application of the curfew to all new, replacement, and existing outdoor luminaires. a. Citywide and Holiday lighting curfew of midnight. Item 15 Item 15 Staff Report Item 15: Staff Report Pg. 4 Packet Pg. 281 of 312 Incorporated in Sections 18.40.250(d)(4) and 18.40.250(e)(4). The lighting curfew provision was revised to extend the turn-off time of all outdoor lighting to 12:00 a.m. Additionally, the seasonal lighting exception language was revised to explicitly state when such lighting is subject to extinguishment. E. Implement the October 30th PTC motion regarding light trespass to change the light trespass from 0.5 to 0.1 foot candles at every reference throughout the ordinance. Incorporated throughout the ordinance. F. Incorporate into Section 1.B. Findings and Declarations, and Section 2 (a) Purpose, the Five Principles for Responsible Outdoor Lighting. One of the sections should include the full language of the principles. Incorporated (Section 1B of the ordinance, and Section 18.40.250(a)(1)). G. Develop an exception for special security concerns. An exemption has been incorporated in the draft ordinance (Section 18.40.250(d)(7)) to address this direction, however without use of “special security concerns.” See below for further discussion of the specific approach presented. H. Staff to return with recommendations on compliance mechanisms that would reduce the need for code enforcement – such as self-certification under business licenses, education through Utilities inserts, and potential adoption of a tool similar to Brisbane’s Good Neighbor Letter. Potential measures are explained below for the City Council consideration, along with the pros and cons for each measure. Exception for Special Security Concerns During the April hearing, the City Council heard concerns from a community member about how the proposed new lighting standards might impact security, especially in their neighborhood along Edgewood Drive. A speaker noted that less or limited lighting could worsen existing security concerns for property owners in the neighborhood. In response, the City Council asked staff to look into allowing an exception for properties with heightened security concerns. Staff worked with the City’s Police Department and reviewed crime information from the past year for areas near the San Francisquito Creek. While the information showed that crimes and calls for service do occur in this area, they were not significantly higher in the specific Item 15 Item 15 Staff Report Item 15: Staff Report Pg. 5 Packet Pg. 282 of 312 residential neighborhood mentioned compared to other areas of the City. The Police Department also confirmed that the City currently does not have any areas identified as having special concerns due to high crime rates, and there are not areas in Palo Alto that they would characterize as “high crime.” While crime data do not support the designation of specific areas as high security risk zones, staff recognize some residents may have heightened perceptions of safety concerns based on local conditions or experiences. Neighbor Letter Template: A letter template modeled on tools used by the City of Brisbane and DarkSky International could allow residents to inform neighbors about the ordinance and encourage voluntary compliance. While this may reduce initial complaints to the City, it relies on voluntary action and may lead to disputes or unprioritized reports. Educational Materials: Staff will develop outreach materials, including online content, printed handouts, and utility bill inserts, to raise awareness about the new requirements. This approach aims to reduce inadvertent non-compliance through public education but has no direct enforcement effect and depends on public engagement. Affidavit Letter: Staff considered requiring applicants and property owners to sign an affidavit acknowledging awareness of the lighting requirements during the permit Item 15 Item 15 Staff Report Item 15: Staff Report Pg. 6 Packet Pg. 283 of 312 process. However, this approach would duplicate information already reviewed as part of plan review and introduce additional regulatory steps to the permitting process, and is therefore not recommended. POLICY IMPLICATIONS Item 15 Item 15 Staff Report Item 15: Staff Report Pg. 7 Packet Pg. 284 of 312 doesn't change density, layout, or height. Minor cost or design modifications may be needed for compliance, but dark sky products and lighting technologies are available. FISCAL/RESOURCE IMPACT STAKEHOLDER ENGAGEMENT Item 15 Item 15 Staff Report Item 15: Staff Report Pg. 8 Packet Pg. 285 of 312 proposed Lighting ordinance update due to its overly restrictive nature, negative impact on safety, and lack of sufficient community input. ENVIRONMENTAL REVIEW ATTACHMENTS APPROVED BY: Item 15 Item 15 Staff Report Item 15: Staff Report Pg. 9 Packet Pg. 286 of 312 *** NOT YET APPROVED *** 1 0160151_20250821_ay16 Ordinance No. _____ Ordinance of the Council of the City of Palo Alto Repealing and Replacing Section 18.40.250 (Lighting) of Chapter 18.40 (General Standards and Exceptions) and Amending Chapters 18.10, 18.12, 18.28 and Section 18.40.230 of Title 18 (Zoning) of the Palo Alto Municipal Code to Adopt New Outdoor Lighting Regulations The Council of the City of Palo Alto ORDAINS as follows: SECTION 1. Findings and Declarations. The City Council finds and declares as follows: A. The term “dark sky” generally refers to achievement of signiﬁcant reduction in light pollution so that the sky returns or becomes closer to its natural nighttime darkness. B. Adhering to Dark Sky principles, which promote responsible outdoor lighting practices, can signiﬁcantly reduce light pollution and mitigate its harmful eﬀects. These principles emphasize using light only if it is needed, directing so that it falls only where it is needed, having lighting only when it is necessary and no brighter than necessary, and using warmer lights. C. On January 29, 2024, the City Council selected four City Council priorities, one of which is the Climate Change & Natural Environment – Protection & Adaptation, and included an objective to “approve a bird safe glass and wildlife light pollution protections ordinance.” D. On February 14, 2024, and July 18, 2024, the Architectural Review Board conducted study sessions and provided feedback on the concepts of the DarkSky regulations and draft ordinance. E. On August 14, 2024, the Planning and Transportation Commission reviewed the draft ordinance, provided feedback and recommended that staﬀ return with more information, continuing the hearing to a date uncertain. F. On October 30, 2024, the Planning and Transportation Commission recommended that City Council adopt the ordinance. G. The ordinance aligns with Dark Sky principles and is intended to reduce light pollution at night, protecting wildlife and supporting a sustainable and resilient community. / / / / / / Item 15 Attachment A - Draft Ordinance Updating Lighting Standards (PAMC Section 18.40.250) Item 15: Staff Report Pg. 10 Packet Pg. 287 of 312 *** NOT YET APPROVED *** 2 0160151_20250821_ay16 SECTION 2. Section 18.40.250 (Lighting) of Chapter 18.40 (General Standards and Exceptions) of Title 18 (Zoning) of the Palo Alto Municipal Code is repealed in its entirety and replaced with a new Section 18.40.250 (Lighting) to read as follows: 18.40.250 Lighting (a) Purpose. The intent of this section is to establish exterior lighting standards to reduce light pollution. Exterior lighting of parking areas, pathways, and common open spaces, including fixtures on building facades and free-standing lighting should aim to: (1) Reduce light pollution and its adverse effects on the environment, wildlife habitat, and human health through implementing Dark Sky Principles of responsible outdoor lighting that are useful, targeted, low level, controlled, and warm colored; (2) Minimize the visual impacts of lighting on abutting or nearby properties and from adjacent roadways; (3) Provide safe and secure access on a site and adjacent pedestrian routes; (4) Achieve maximum energy efficiency; and (5) Complement the architectural design of the project. (b) Definitions. For purposes of this chapter, the following words and phrases are defined as follows: (1) “Correlated Color Temperature” or “Color Temperature” means a specification of the color appearance of the light emitted by a light source, measured in Kelvin (K). Warmer color temperatures are a lower number, and cooler color temperatures are a higher number. (2) “Fully Shielded” means a luminaire constructed and installed in such a manner that all light emitted, either directly from the lamp or a diffusing element, or indirectly by reflection or refraction from any part of the luminaire, is projected below the horizontal plane extending from the bottom of the lamp. (3) “Glare” means light entering the eye directly from a luminaire or indirectly from reflective surfaces that causes visual discomfort or reduced visibility to a person. (4) “Lamp” means, in generic terms, a source light, often called a “bulb” or “tube.” Examples include incandescent, fluorescent, high-intensity discharge (HID) lamps, and low-pressure sodium (LPS) lamps, as well as light-emitting diode (LED) modules and arrays. (5) “Light pollution” means the material adverse effect of artificial light, including, but not limited to, glare, light trespass, sky glow, energy waste, compromised safety and security, and impacts on the nocturnal environment, including light sources that are left on when they no longer serve a useful function. Item 15 Attachment A - Draft Ordinance Updating Lighting Standards (PAMC Section 18.40.250) Item 15: Staff Report Pg. 11 Packet Pg. 288 of 312 *** NOT YET APPROVED *** 3 0160151_20250821_ay16 (6) “Lumen” means the common unit of measure used to quantify the amount of visible light produced by a lamp or emitted from a luminaire (as distinct from “Watt,” a measure of power consumption). (7) “Luminaire” means outdoor illuminating devices, lamps, and similar devices, including solar powered lights, and all parts used to distribute the light and/or protect the lamp, permanently installed or portable. (8) “Seasonal lighting” means lighting installed and operated in connection with holidays or traditions within the time period speciﬁed in Section 18.40.250(d)(4). String lighting used outside these periods is not considered seasonal lighting and shall be subject to requirements in Section 18.40.250(f)(6). (9) “String lighting” means light sources connected by free-strung wires or inside of tubing resulting in several or many points of light. (c) Applicability. Except as otherwise provided in subsections (d) and (e)(4)(A) below, the outdoor lighting standards and guidelines set forth in this Section shall apply to the following projects: (1) All newly constructed structures and buildings; or (2) Structures or buildings proposing a Substantial Remodel, as defined in Section 16.14.070; or (3) If a building permit is required: New installation of outdoor luminaires, replacement of existing outdoor luminaires, or modifications to the lighting type or system. (4) All existing outdoor light fixtures installed prior to the effective date of this ordinance shall conform to the provisions of this ordinance according to the compliance schedule set forth in Section 18.40.250(l). (d) Exemptions. The following types of lighting are exempt from the lighting requirements of the section: (1) Illuminated street numbers; (2) Temporary construction or lighting for emergency personnel; (3) Lighting authorized by a special event, special or temporary use permit; (4) Seasonal lighting, subject to extinguishment at 12:00 a.m., during the period of October 15 through January 15 of each year; (5) Lighting for Airport Operations. Nothing in this section shall be interpreted to restrict, limit, or otherwise regulate lighting that, in the reasonable judgment of the Airport Manager, is prudent or necessary for airport operations, airport safety, or air navigation in connection with operations at the Palo Alto Municipal Airport; or Item 15 Attachment A - Draft Ordinance Updating Lighting Standards (PAMC Section 18.40.250) Item 15: Staff Report Pg. 12 Packet Pg. 289 of 312 *** NOT YET APPROVED *** 4 0160151_20250821_ay16 (6) Lighting for Emergency Shelters. Lighting for emergency shelters shall be subject to PAMC 18.14.060. (7) Single family residential sites adjacent to San Francisquito Creek and fronting on Edgewood Drive if the portion of the site subject to a permanent easement in favor of the Santa Clara Valley Water District (or its successor in interest) for flood control purposes is reconfigured after January 1, 2002. These sites shall be subject to the requirements under Section 18.40.250(e)(4)(A). (8) Lighting for streets, roadways, and public walkways and bikeways. (9) Lighting for Public Facilities Operations. Nothing in this section shall be interpreted to restrict, limit, or otherwise regulate lighting that, in the reasonable judgment of the City Manager, is prudent or necessary for operations or safety of public facilities that operate on a 24 hours per day, 7 days a week basis. (e) Lighting Standards. (1) Shielding (A) All outdoor lighting shall be fully shielded and directed to avoid light trespass. No lighting shall trespass more than 0.1-foot candle as measured at the property line. (B) Exceptions for shielding requirements shall be applied to the following types of lighting: (i) Low voltage landscape uplighting used to illuminate fountains, shrubbery, trees, and walkways, outdoor art or public monuments provided that they use no more than a 10-watt incandescent bulb or LED equivalent or emit no more than 150 lumens. These luminaires may not direct light towards the public right-of-way; (ii) Sidewalk-facing lighting for zero lot line developments, provided the luminaires are motion-activated and automatically extinguish within five minutes without further activation; or (iii) String lighting pursuant to Section 18.40.250(f)(5). (2) Parking Lot Lighting Height. (A) Exterior lighting fixtures shall be mounted less than or equal to 15 feet from grade to top of fixture in parking lots in residential development and 20 feet in parking lots with commercial and mixed-use development. / / / / Item 15 Attachment A - Draft Ordinance Updating Lighting Standards (PAMC Section 18.40.250) Item 15: Staff Report Pg. 13 Packet Pg. 290 of 312 *** NOT YET APPROVED *** 5 0160151_20250821_ay16 (3) Illumination Level and Color Temperature (A) All light sources shall have a correlated color temperature of 2,700 Kelvin or less. (B) The maximum outdoor light intensity on a site shall not exceed an average value of 5 foot-candles. (4) Lighting Control. (A) Lighting Curfew. Unlike other provisions in this section, the Lighting Curfew shall apply to all outdoor luminaires for new and existing buildings and structures, unless otherwise approved. All outdoor lighting shall be fully extinguished or be motion sensor operated by 12:00 a.m., two hours after the close of business, or when people are no longer present in exterior areas, whichever is later. (B) All lighting activated by motion sensor shall be set up to extinguish after no more than five minutes without further activation. (C) All lighting shall be automatically extinguished using a control device or system when there is sufficient daylight available, except for lighting under canopies or lighting for tunnels, parking garages, or garage entrances. (D) Exceptions for Lighting Control. (i) Any lighting at building entrances, parking areas, walkways, and driveways area; (ii) Outdoor pathway lights that emit 25 lumens or less; or (iii) Lighting that illuminates a pedestrian pathway (examples include bollard, in-place step, or building mounted), provided that such lighting is a maximum height of four (4) feet above the pathway and fully shielded. (f) Special Purpose Lighting. The standards in this section shall prevail over any conflicting standard in subsection (e). (1) Low Density Residential Lighting. In addition to the lighting standards in the section, the following lighting requirements shall be applicable to projects in R-1, R-2, RE, RMD, NV- R1, or NV-R2. (A) When abutting any residential use, no spillover of lighting to adjacent properties shall be allowed. (B) A maximum of 1,260 lumens shall be allowed for each fully shielded outdoor lighting. No more than 420 lumens shall be allowed for permitted non-shielded outdoor lighting. (C) Skylights shall limit illuminance and glare during night hours. Glare shall be mitigated through the use of translucent glass, shading systems, and interior light placement. Skylights shall not use white glass. Item 15 Attachment A - Draft Ordinance Updating Lighting Standards (PAMC Section 18.40.250) Item 15: Staff Report Pg. 14 Packet Pg. 291 of 312 *** NOT YET APPROVED *** 6 0160151_20250821_ay16 (D) Height for Recreational and Security Lighting. Free-standing lighting shall be a maximum of twelve feet (12’) in height for those that were installed on or after March 11, 1991. (2) Athletic Facilities Lighting. Outdoor athletic facilities shall conform to the following standards: (A) Field lighting is provided exclusively for illumination of the surface of play and viewing stands, and adjacent proximity areas for public safety. (B) Illumination levels shall be adjustable based on the task (e.g., active play vs. field maintenance). (C) Off-site impacts of the lighting will be limited to the greatest practical extent possible. (D) Lights shall be extinguished by 10:30 p.m. except when the facilities are being used for active play and maintenance before or after permitted events, and the lights are equipped with a timer. (E) Timers that automatically extinguish lights shall be installed to prevent lights being left on accidentally overnight. (3) Automobile Service Station Lighting (A) Lighting fixtures in the ceiling of canopies shall be fully recessed or mounted directly to the underside of the canopy. All luminaires shall be located so that no lighting is directed towards the adjoining property or public rights-of-way. (B) Luminaires are not permitted on top of the canopy fascia. (C) The maximum light intensity under the canopy shall not exceed an average foot- candle of 12.5, when measured at finished grade. (D) No free-standing lighting shall be higher than 15 feet above finished grade. (E) The canopy fascia shall not be illuminated. (4) Outdoor Space Above Ground Floor. These requirements apply to all outdoor spaces located above ground level, including, but not limited to, rooftop gardens, rooftop restaurants or bars, balconies, and decks. (A) Any lighting shall be shielded from public views and any luminaires shall be fully shielded and no uplighting shall be permitted. (B) Lights shall be dimmable to control glare and placed on timers to turn off after 10:00 p.m. or as permitted pursuant to Section 18.40.250(e)(4)(D) (C) No light trespass shall be allowed more than 0.1 foot-candle as measured beyond the perimeter of the roof deck or other outdoor space above the ground floor. Item 15 Attachment A - Draft Ordinance Updating Lighting Standards (PAMC Section 18.40.250) Item 15: Staff Report Pg. 15 Packet Pg. 292 of 312 *** NOT YET APPROVED *** 7 0160151_20250821_ay16 (5) String Lighting. (A) String lighting color temperature shall not exceed 2,700 Kelvin and no individual lamp that is part of a string lighting installation shall exceed a rating of 42 lumens. No string lighting shall be blinking, flashing, or chasing. (B) For commercial and mixed-use areas, string lighting shall be limited to designated outside dining or display areas or common open space (i.e. courtyard or patio). (6) Parklets. Lighting for any parklets shall comply with the lighting standards established in the Permanent Parklet Program. (g) Prohibited Lighting. The following types of lighting are prohibited except when used by emergency service personnel during an emergency: (1) Outdoor lighting that blinks, flashes, or rotates; or (2) Searchlights, aerial lasers, or spotlights. (h) Lighting for Signs. See Chapter 16.20 for lighting requirements for signs. (i) Additional Provisions and Conflict Precedence. Lighting required by the Building Code, Fire Code, or state or federal law shall additionally comply with the requirements of this section, unless these requirements necessarily conflict with the aforementioned Codes and laws. In the event of a conflict, the standards in the applicable Codes and laws shall prevail. (j) Hardship Exceptions. The Director may grant an exception from the requirements in Section 18.40.250, if a project applicant provides evidence demonstrating one of the following hardships: (1) Implementation of the lighting requirements in this ordinance would impair the historical integrity and character-defining features of the building and create an adverse impact to the building’s historical, architectural, and cultural significance; or (2) Implementation of the lighting requirements in this ordinance would more than double the cost of the project. This exception shall apply only for replacement of existing outdoor luminaires or changing the lighting type or system that requires a building permit. (k) Public Facilities. Unless exempt under Section 18.40.250(d), Public Facilities, including City- owned and operated facilities, shall comply with the outdoor lighting standards of this Section to the extent feasible. The Director may grant adjustments to any applicable lighting standards for such facilities if the adjustment is necessary for the efficient operation, maintenance, or safety of the facility, or to ensure public safety and security; and is consistent with the overall intent and purpose of this Section. A written request for an adjustment, including supporting documentation, shall be submitted and shall be reviewed according to the applicable review procedures in PAMC Section 18.77 associated with the proposed development. Item 15 Attachment A - Draft Ordinance Updating Lighting Standards (PAMC Section 18.40.250) Item 15: Staff Report Pg. 16 Packet Pg. 293 of 312 *** NOT YET APPROVED *** 8 0160151_20250821_ay16 (l) Existing Nonconforming Lighting. (1) Within two years of [the effective date of this ordinance]: Where existing outdoor luminaires have the ability to adjust (through existing dimmers, directional adjustability, timers, etc.), the requirements under Section 18.40.140(e), except for the shielding requirements under the subsection 18.40.140(e)(1), shall apply. (2) For all existing outdoor luminaires, the requirements under Section 18.40.140(e) shall apply within the following timeframes from [the effective date of this ordinance]: (A) Residential and Mixed Use Zoning Districts: Within ten years. (B) Nonresidential Zoning Districts: Within five years. (3) Any nonconforming lighting still in place after the compliance deadline shall remain extinguished at all times until they are brought into compliance. SECTION 3. Subsection (e) of Section 18.40.230 (Rooftop Gardens) of Chapter 18.40 (General Standards and Exceptions) of Title 18 (Zoning) of the Palo Alto Municipal Code is amended to read as follows (additions underlined; deletions struck-through): (e) Any lighting shall be shielded from public views and have full cutoff fixtures that cast downward-facing light, or consist of low-level string lights; no up-lighting is permitted. Lights shall be dimmable to control glare and placed on timers to turn off after 10:00 p.m. Photometric diagrams must be submitted by the applicant to ensure there are no spillover impacts into windows or openings of adjacent properties.For lighting requirements, refer to Section 18.40.250. SECTION 4. Subsection (g) of Section 18.10.040 (Development Standards) of Chapter 18.10 (Low Density Residential (RE, R-2 and RMD) Districts) of Title 18 (Zoning) of the Palo Alto Municipal Code is amended to read as follows (additions underlined; deletions struck-through): (g) Lighting in R-2 District In the R-2 district, recreational and security lighting shall be permitted only so long as the lighting is shielded so that the direct light does not extend beyond the property where it is located. Free- standing recreational and security lighting installed on or later than March 11, 1991, shall be restricted to twelve feet (12') in height. For lighting requirements, refer to Section 18.40.250. SECTION 5. Subsection (k) of Section 18.12.040 (Site Development Standards) of Chapter 18.12 (R-1 Single-Family Residential District) of Title 18 (Zoning) of the Palo Alto Municipal Code is amended to read as follows (additions underlined; deletions struck-through): (k) Lighting Recreational and security lighting shall be permitted only so long as the lighting is shielded so that the direct light does not extend beyond the property where it is located. Free-standing recreational and security lighting installed on or later than March 11, 1991 shall be restricted to twelve feet (12') in height. Direct light from outdoor fixtures shall only fall on the walls, eaves, Item 15 Attachment A - Draft Ordinance Updating Lighting Standards (PAMC Section 18.40.250) Item 15: Staff Report Pg. 17 Packet Pg. 294 of 312 *** NOT YET APPROVED *** 9 0160151_20250821_ay16 and yard areas of the site on which it is located. Outdoor fixtures shall have lens covers or reflectors that direct the light away from the neighboring properties. For lighting requirements, refer to Section 18.40.250. SECTION 6. Subsection (n) of Section 18.28.270 (Additional OS District Regulations) of Chapter 18.28 (Special Purpose Districts) of Title 18 (Zoning) of the Palo Alto Municipal Code is amended to read as follows (additions underlined; deletions struck-through): (n) Light and Glare Exterior lighting should be low-intensity and shielded from view so it is not directly visible from off-site. The light emitted from skylights shall be minimal during the night hours. Utilizing treatments such as translucent glass, shading systems, and interior light placement can reduce the night glare. Skylights shall not use white glass. For lighting requirements, refer to Section 18.40.250. SECTION 7. If any section, subsection, clause or phrase of this Ordinance is for any reason held to be invalid, such decision shall not affect the validity of the remaining portion or sections of the Ordinance. The Council hereby declares that it should have adopted the Ordinance and each section, subsection, sentence, clause or phrase thereof irrespective of the fact that any one or more sections, subsections, sentences, clauses or phrases be declared invalid. SECTION 8. The Council finds that this project is exempt from the provisions of the California Environmental Quality Act (“CEQA”), pursuant to Section 15061 of the CEQA Guidelines, because it can be seen with certainty that there is no possibility that the ordinance will have a significant effect on the environment and Section 15308, as an action by a regulatory agency to protect the environment. SECTION 9. This ordinance shall be effective on the thirty-first day following its adoption. / / / / / / / / / / Item 15 Attachment A - Draft Ordinance Updating Lighting Standards (PAMC Section 18.40.250) Item 15: Staff Report Pg. 18 Packet Pg. 295 of 312 *** NOT YET APPROVED *** 10 0160151_20250821_ay16 SECTION 10. This Ordinance shall not apply to any project application deemed complete prior to the effective date of this Ordinance. INTRODUCED: PASSED: AYES: NOES: ABSENT: ABSTENTIONS: NOT PARTICIPATING: ATTEST: ____________________________                     ____________________________ City Clerk                                                             Mayor APPROVED AS TO FORM:                                    APPROVED: ____________________________                     ____________________________ Assistant City Attorney                                    City Manager                                                                             ____________________________                                                                    Director of Planning & Development Services Item 15 Attachment A - Draft Ordinance Updating Lighting Standards (PAMC Section 18.40.250) Item 15: Staff Report Pg. 19 Packet Pg. 296 of 312 Have you heard? The City of Brisbane passed a “Dark Sky Ordinance” that regulates outdoor lighting. You may not be aware of this, but your lights are: too bright shining in our window interfering with our sleep ________________ ________________ Please consider: directing your lights downward shielding the lamp using a lower wattage bulb using a “warmer” color temperature using motion sensor and/or timer ________________ I would be willing to help with the cost and/or implementation of changes. In addition to helping us out, these actions can help bring you into compliance with the City’s ordinance, reduce light pollution, and improve the environment. Thanks so much for your time and understanding! - your concerned neighbor Learn more at brisbaneca.org/darksky Adapted by OSEC from darksky.org/resources/what-is-light-pollution/light-pollution-solutions/lighting/my-neighbors-lighting/ Dear Neighbor... Shielding reduces glare that can be dangerous and unsafe. Glare can be blinding and create harsh shadows where “bad guys” can hide. Shielded lighting provides real security, not just the illusion of security, which I think we both want for our families and friends. There are several other ways to improve lighting, save money, and still be safe. One is using motion sensors, which alert you if someone is in your yard after dark and have the added benefit of reducing your electric bills by keeping the lights off when they’re not needed. Timers are another way to save money because these devices turn off your lights when they’re not needed, for example, when you retire for the night. Item 15 Attachment B - Examples of Educational Materials and Template Neighbor Letters Item 15: Staff Report Pg. 20 Packet Pg. 297 of 312 [Date] Dear [insert neighbor’s name], I’m your neighbor [insert your name] at [address], and I would love to talk with you about good outdoor lighting. I notice that you have installed outdoor lights on your property, and I applaud your desire to help improve our neighborhood. You may not have realized that some of your lights are a bit too bright and shine in [pick areas as they apply: our bedroom window, the backyard, into our house etc.] and interfere with our [sleep, hobbies, view of the sky, etc.]. I don’t wish to tell you what to do with your home, but I’m hoping we can openly discuss this and come to a compromise that fulfills and respects everyone’s needs. Please understand I’m not asking you to remove the lights, but perhaps make subtle changes that will work for everyone. One idea would be redirecting the light by shielding the fixtures so that they are even more effective. Unshielded lamps create dangerous glare — this glare causes harsh shadows which can blind you to real, hidden hazards such as unwanted visitors (see pictures below). On the other hand, shielded lighting provides real security (not just the illusion of security) which I think we both want for our homes. As an extra benefit, shielding a lamp usually involves a lower wattage bulb, which would be a money-saver on your electric bill. There are several other ways to improve lighting, save money, and still be safe. One is using motion sensors, which alert you if someone is in your yard after dark, and also reduce your electric bills by keeping the lights off when not needed. Timers are another way to save money, since they can automatically turn off your outdoor lights when you go to bed. Thank you so much for your time and understanding! I would love to talk with you about how I can help, and how lighting changes can benefit your safety, budget, and the night sky. Sincerely, [your name] [contact info] Item 15 Attachment B - Examples of Educational Materials and Template Neighbor Letters Item 15: Staff Report Pg. 21 Packet Pg. 298 of 312 Item 15 Attachment B - Examples of Educational Materials and Template Neighbor Letters Item 15: Staff Report Pg. 22 Packet Pg. 299 of 312 Shielded lights protect the night. Item 15 Attachment B - Examples of Educational Materials and Template Neighbor Letters Item 15: Staff Report Pg. 23 Packet Pg. 300 of 312 Protect the night Preserving and restoring the natural nighttime environment is more urgent than ever. Light pollution continues to grow at an alarming rate, harming our health, damaging the environment, and diminishing our view of the stars. DarkSky International has a plan to save the night, but we need your help. The stars are disappearing Join the movement and help save the night DarkSky is a global community working together to save the night. Sign-up today for DarkSky e-news updates to learn more. DarkSky International is a U.S.-based 501(c)(3) nonprofit that supports a global community and movement dedicated to preserving and protecting the natural nighttime environment. DarkSky International 5049 East Broadway Blvd #105 Tucson AZ 85711 USA www.DarkSky.org +1-520-293-3198 Light pollution isreversible! Unlike other forms of pollution, light pollution is a problem with solutions that are easy to implement. These solutions deliver immediate and lasting results. SUCCESS STORY In 2018, the City of Tucson, Arizona, U.S.A. (population 500,000) upgraded its streetlights. By doing so, it saved $2.2 million per year in energy costs and reduced light pollution by 7%. WE’RE MAKING AN IMPACT 1,000+ More than 1,000 DarkSky Approved lighting fixtures are available on the market. 2,000+ DarkSky supports more than 2,000 volunteer Advocates in 49 countries. 70+ DarkSky supports more than 70 chapters in 24 countries. 200+ More than 200 International Dark Sky Places have been certified, protecting over 160,000 sq km of dark places around the globe. Photo credit: Bin Chen Item 15 Attachment B - Examples of Educational Materials and Template Neighbor Letters Item 15: Staff Report Pg. 24 Packet Pg. 301 of 312 Light pollution... What is light pollution? Light pollution is the human-made alteration of outdoor light levels from those occurring naturally. When we over-light, fail to use timers and sensors, or use the wrong color of light, we negatively affect many parts of our world. Destroys critical wildlife habitat Plants and animals depend on Earth’s daily light and dark cycle to govern life-sustaining behaviors. Research shows that artificial light at night has adverse and even deadly effects on many species. Wastes energy and money Most outdoor lighting is wasted. This energy waste increases greenhouse gas emissions contributing to climate change and wastes billions of dollars each year. Harms human health Studies indicate that artificial light at night negatively affects human health by increasing our risks for obesity, sleep disorders, depression, diabetes, breast cancer, and more. Decreases safety and security There is no clear scientific evidence that increased outdoor lighting deters crime. In fact, glare from unshielded streetlights can decrease personal safety, contributing to both crime and accidents. Robs us of our night sky heritage Our ancestors experienced a night sky that inspired science, religion, philosophy, art, and literature. Now, millions of children across the globe will never know the wonder of seeing the Milky Way. Inhibits scientific research Satellites in low Earth orbit create visible trails in the night sky, inhibiting astronomical research and jeopardizing NASA’s early warning system for asteroid collisions. What can I do? DarkSky’s Five Principles for Responsible Outdoor Lighting can help you make smart choices to reduce light pollution. Do your lights protect the night? All light should have a clear purpose. Use lights only when and where they are needed. Shield and aim your light so it only falls downward and where it is useful. Lights should be no brighter than necessary to save money and reduce glare. Lights should only be on when needed. Use timers and motions sensors. Warm-colored light causes less skyglow. Use amber-toned lights whenever possible. Is it useful? Is it targeted? Is it low-level? Is it controlled? Is it warm-colored? Visit darksky.org to learn more about the importance of the night and what you can do to reduce light pollution around your home and community. Learn more Learn more about light pollution Item 15 Attachment B - Examples of Educational Materials and Template Neighbor Letters Item 15: Staff Report Pg. 25 Packet Pg. 302 of 312 1441 Edgewood Dr Palo Alto, CA 94301 April 26, 2025 Kelly Cha Senior Planner Planning and Development Services 250 Hamilton Avenue, Fifth Floor Palo Alto, CA 94301 RE: Outdoor Lighting Update (“Dark Sky”) Dear Ms. Cha: I shared in my prior letters to you and city staff (“Staff”), the Planning & Transportation Committee (“PTC”), and the City Council for the City of Palo Alto (“City Council”) my opposition to the proposed lighting ordinance currently under consideration. I watched with great sadness the City Council on April 7, 2025 pass a motion to incorporate even more egregious conditions into the poorly drafted outdoor lighting ordinance, particularly the expansion to cover any existing light after 10 years. As Staff prepares a new draft ordinance responsive to the City Council’s motion, I ask Staff to consider the following:  Deep security concerns. Residents of Edgewood Dr have a valid and deep concern about safety and security given the frequent and repeated crime we and our property face, the growing unhoused population living immediately adjacent in the San Francisquito Creek (“Creek”) combined with the City’s unwillingness or inability to address the growing issue, and our immediate proximity to East Palo and the spillover impact of frequent crime. The most obvious remedy is to exempt houses on this street from the ordinance or significant portions of the ordinance. While I appreciate Staff’s concern with defining a “high crime” neighborhood, it is vital that the City Council’s direction to address those with “special security concerns” provides adequate relief for homeowners abutting the Creek to install and operate sufficient lighting to protect ourselves. I am terrified of the safety issues my wife and young daughter will face returning to a dark house, trying to take out the trash through a dark backyard, as they are forced to navigate an unlit pool, or are unable to see criminals accessing our yard. Through expensive renovations we can mitigate some of the safety issues caused by this poor ordinance, some of the most severe will remain. Fear for our safety and security is heightened when combined with the other ordinances also under consideration – imagine being forced to no longer allowed have adequate outdoor lighting, no longer allowed to maintain a fence separating you from criminals and unhoused population, and then having to cover your windows in dots so you cannot even see the criminals concealed in the darkness with unfettered access to your backyard. These ordinances, individually and collectively, greatly compromise our safety and security. Please understand these fears are very real for us; we have even started to look at buying firearms and obtaining conceal and carry permits just so we can come home at night! Item 15 Attachment C - Public Comments received after the City Council hearing on April 7, 2025 Item 15: Staff Report Pg. 26 Packet Pg. 303 of 312 - 2 -  Cost to comply exception / legal challenges and taking claim. With the expansion to cover all existing fixtures, the City must add an exception for properties that would incur excess cost to comply. After years of planning and building, I recently completed construction of my brand new home which I previously expected to be our family’s “forever” home. The preliminary estimate to comply with the new draft code as written requires that I destroy approximately $90,000 of lighting (and fan) materials and spend approximately $210,000 in new materials and labor. (This is just for the fixtures and related costs. The systems upgrades described later add further to this loss.) In 10 years, this would represent approximately $350,000 or more of expense (based on forecasted inflation rates). I can only imagine how much worse that will get with most of these fixtures and luminaires manufactured overseas. Imposing such extraordinary costs on homeowners is patently unfair. Would you want to have to work for 1-2 years just to comply with a new ordinance passed by the city? While my costs may be greater than some others, the cost to completely replace exterior lights for homeowners across Palo Alto is likely to be extremely high and grossly underestimated by City Council. Do we really want to pass this cost to so many homeowners? Do we really want to produce this much waste? A hardship exemption for only a temporary period of time, or requiring proof of financial distress, is wholly insufficient to remedy this loss. A cost to comply exemption is needed. Absent such an exception, it is paramount Staff and the City Attorney advise the City Council that passing such an ordinance leaves the city liable for a takings claim. While it is not my preference, please understand that passing an ordinance with a present value cost to me of $210,000 leaves me with no recourse but to challenge of the ordinance’s validity in court and assert a takings claim against the City for the entirety of this loss.  Shielding standard for non-confirming lighting after 10 years. The overwhelming majority of the costs noted above arise from the shielding requirement applied to non-conforming lights after 10 years. One of the primary stated objectives of the ordinance is to reduce light pollution and minimize visual impact to neighbors. If the 10 year restriction is included in the next draft ordinance, I strongly recommend and beg to allow non-shielded lights so long as their lux output (as measured at the property border) satisfies the light trespass requirements (previously 0.5 lux but now proposed to be 0.1 lux). Like many homeowners, this would mean I would not be required to replace every fixture and could instead replace the luminaire and/or use dimming to bring existing fixtures into compliance. While this would not completely solve glare, this would meet the primary objectives of the ordinance with far reduced cost to homeowners. Moreover, this would further benefit the community since many fixtures would then have the “technical capacity” to comply under the 2 year window rather than waiting the full 10 years.  Lighting output measurement lumens vs lux. Most of the restrictions in the proposed ordinance 18.40.250 are written with regard to “lumens” of output. The original draft ordinance applied to new construction or new luminaires. As such, “lumens” was chosen presumably to make it easier for buyers to select luminaires with said rated lumens output (and for Staff to validate those specs during Planning). Now that the code will extend to existing luminaires, it is vital the code also express the limits in lux. It is my understanding that measuring lumen must be performed in a laboratory. I am told it is not practical to measure lumen output of an existing luminaire in the field. The could would therefore set a standard that could not be objectively measured by code enforcement either. Moreover, lumen is often the theoretical maximum which Item 15 Attachment C - Public Comments received after the City Council hearing on April 7, 2025 Item 15: Staff Report Pg. 27 Packet Pg. 304 of 312 - 3 - is reduced by the quality of the actual luminaire, the power system, distance, and other factors. One important benefit of expressing output in lux is that it will also allow lighting designers to construct systems with dimmed lights. Most lighting systems are better served running well below 100% of maximum output to extend the lifetime of transformers and luminaires, therefore reducing cost and waste. Most importantly, it will fixtures with luminaires that cannot comply by lumen to comply through dimming. For example, I have two outdoor fan with a down light, adjustable color that can be made to work at 2700K or less, but with lumen that is too high. The manufacturer does not make a down light that meets the lumen requirements. The light, however, is dimmable and could remain if a lux threshold were established.  Conflict in 18.40.250(f)(1)(B) with 18.40.250(e)(1). The draft ordinance 18.40.250(f)(1)(B) states that “No more than 420 lumens shall be allowed for permitted non-shielded outdoor lighting.” The drafting suggests the intent of this section is to allow non-shielded low voltage outdoor lights so long as the luminaire is less than or equal to 420 lumens. Section 18.250(f)(1) also states that low density outdoor residential lights are subject both to that constraint and all others. Section 18.40.250(e)(1)(B) states that all lights must be fully shielded unless it is low voltage up-lights with no more than 150 lumen. This presents a conflict that must be resolved. In the context of this ordinance, the 420 lumens output is most appropriate limit.  Exemptions for front porch. The draft ordinance 18.40.250(d) provides a list of exemptions, including for illuminated street numbers. This exemption presumably recognizes the legitimate public safety need for first responders to locate a property in the event of an emergency. I would contend that providing safety lighting at a property’s front door is a similar legitimate public safety need. Lighting at a home’s primary ingress and egress is of importance to guests, first responders, and others. For most properties, it is impractical to install motion sensors on a front porch. Given this ordinance is being applied to an urban center, lighting the front porch should be exempted, at least with regard to curfew.  Outdoor security light output. The outdoor security lighting output proposed in 18.40.250(f)(2)(D) is limited to 1,600 lumens. First, this is grossly inadequate for security light output over large areas. The result would force homeowners to install multiple security lights, which is both expensive and likely to be worse for light pollution (not to mention potentially more false positives). Instead, this section for outdoor security lights should be limited only to lux light trespass only as already provided in 18.40.250(f)(2)(C). Therefore, sub-paragraph (D) should be removed. It is worth nothing this change would greatly aid Edgewood residents with a legitimate safety need.  Outdoor security light programmability. The draft code 18.40.250(f)(2)(A) requires outdoor lights to be “fully programmable.” It is entirely unclear from the code, common knowledge, or from consulting experts as to what “fully programmable” means with respect to an outdoor security light. This statement should be removed. Item 15 Attachment C - Public Comments received after the City Council hearing on April 7, 2025 Item 15: Staff Report Pg. 28 Packet Pg. 305 of 312 - 4 -  Outdoor kitchen lighting. The draft code 18.40.250(e)(3)(A) requires all outdoor lights to be 2,700K or less. Lighting professionals routinely recommend 3,000K for kitchens for safety. As with others, my brand new construction followed the lighting professionals’ recommendation and installed 3,000K luminaires in down lights at the outdoor kitchen (with all other outdoor lights of 2,700K). To promote safety, and in consideration that these are not decorative lights but instead task lights for preparing food, it would be reasonable to allow 3,000K luminaires in such down lights when they illuminate an outdoor kitchen.  Control light sensor. The draft code 18.40.250(e)(4)(C) requires lighting control systems to have a light sensor. As noted elsewhere, I recently built a new home. The residence includes a whole-house lighting control system from a well-known manufacturer. The professional lighting designers hired for the project all systematically recommended against a light sensor on the roof for the whole house system given their poor sensitivity and likelihood of failure. They instead all universally recommended time-based automation. In fact, the most common light sensor from the manufacturer used was discontinued years ago because they are so infrequently installed in today’s lighting control systems. The draft code already provides for time-based extinguishing of lights. Therefore, the only practical purpose of this provision is with regard to when lights are allowed to turn on. I therefore recommend adding a time-based alternative to a light sensor. Again, as a practical example, it will cost me approximately $25,000 to add a light sensor to the lighting control system (if I am unable to find the discontinued part, otherwise the cost will likely be over $1m to replace the entire lighting system), whereas it is a simple program change to set the lights to not come on until after a specific time of morning. As noted at the start, I strongly oppose the current ordinance requested by the City Council. I am even more concerned about the cumulative impact of these ordinances: lighting update, bird design standard, and stream protection. Taken together, they effectively condemn my new home as unlivable while incurring massive costs. The foregoing analysis offers several areas where this specific proposed lighting code update could be made substantially less burdensome without materially impacting the stated objectives. Sincerely, Tom Fountain Item 15 Attachment C - Public Comments received after the City Council hearing on April 7, 2025 Item 15: Staff Report Pg. 29 Packet Pg. 306 of 312 1441 Edgewood Dr Palo Alto, CA 94301 May 4, 2025 Kelly Cha Senior Planner Planning and Development Services 250 Hamilton Avenue, Fifth Floor Palo Alto, CA 94301 RE: Outdoor Lighting Update (“Dark Sky”) Dear Ms. Cha: I am writing as a follow-up to my letter of April 26, 2025 regarding the City of Palo Alto’s (the “City”) proposed lighting update. As shared previously, I strongly oppose the proposed ordinance and was deeply disturbed by the direction of the City Council on April 7, 2025. I spent my weekend attempting to apply the proposed ordinance to each of the outdoor luminaires and lamps on my property. As Staff prepares a new draft ordinance responsive to the City Council’s motion, I ask Staff to consider the following recommendations in addition to those shared previously:  Measuring light output and promoting hex filters. The draft ordinance currently expresses lamp output limits in lumen. As noted in my prior letter, once extended to existing lamps, it is vital to instead measure the foot-candles (or lux) at the property border or express these limits as the maximum measured output in foot-candles at a specific distance. I also noted previously the importance of allowing field measurements to encourage dimming. This would significantly reduce the cost to property owners since existing lamping is often dimmable. With or without either of these improvements to the draft code, please also consider allowing lighting designers to account for hexagonal cell louver filters (sometimes called “honeycomb” filters). Such filters significantly reduce glare and typically reduced effective light output by 20- 25% even though, by definition, the lamp’s lumen output is unchanged. Limiting output to a measured foot-candle value would account for filters without further change. If limits remain only in the lamp’s manufacturer-specified lumen, consider instead limiting output to the product of the lamp’s lumen times the effective light output if filtered. Alternatively, the lumen could be expressed both with and without a filter. For example, the low-voltage lighting might be limited to 150 lumen without a filter and 200 lumen when a hexagonal cell louver filter is installed. As a result, some property owners could install filters in existing luminaires and lamps rather than having to replace the entire luminaire and/or lamp. Taking hex filters into account would reduce the cost to comply with this proposed ordinance while simultaneously reducing glare and better achieving the stated objectives of the ordinance.  Clarify low-voltage shield exception in 18.40.250(e)(1)(B)(i). The draft ordinance section 18.40.250(e)(1)(B)(i) is intended to provide an exception for unshielded low-voltage lighting. The current draft states this exception applies only to “low voltage landscape uplighting” (underlined for emphasis). Limiting this exception to only “uplighting” is confusing and Item 15 Attachment C - Public Comments received after the City Council hearing on April 7, 2025 Item 15: Staff Report Pg. 30 Packet Pg. 307 of 312 - 2 - unnecessary. Presumably “uplighting” means anything that is not “Fully Shielded” but that is ambiguous from the context. Moreover, lighting designers should be encouraged, not discouraged, from using low voltage downlights even if they fail to fully satisfy the “Fully Shielded” definition. Consider as an example the FX Luminaire LED Wall Light (h ps://www.fxl.com/product/wall-and-step-lights/designer/mo). Only one faceplate, the one identified as WW, qualifies as “Fully Shielded,” none would be easily identifiable as “uplighting,” yet all should be in the scope intended by the low-voltage shield exception. Striking the word “uplighting” resolves this drafting issue.  Correct fully shielded security lighting in 18.40.250(f)(2)(B). The draft ordinance 18.40.250(f)(2) is intended to allow outdoor security lighting that meets certain standards. Section 18.40.250(f)(2)(B) establishes a height standard. The statement also requires that luminaire be “fully shielded”. Based on the definition of “Fully Shielded” provided in this draft ordinance, effectively no security light could comply. Compliance would require the light be installed such that lamps point straight down. Any projection “forward” of the luminaire would result in the lamp breaking the required plane extending from the bottom of said lamp. The requirement that these lights be “fully shielded” should be removed from this ordinance. If the intent of this phrase is to encourage security lights be aimed in a downward direction, then it should say so rather than reference “fully shielded” which has a specific definition.  Address security perimeter lighting in 18.40.250(f)(2)(C). City Council directed Staff to replace all references to 0.5 foot-candle of spillover with 0.1 foot-candle of spillover. This change, even if applied elsewhere, should not be applied to this section. A limitation of 0.1 foot- candle effectively eliminates the use of security lighting near a fence. Even if aimed down, reflected light off other surfaces will exceed this threshold. It is untenable to have security lighting so limited where it is needed to illuminate an area near a fence.  Correct typo shielding exception in 18.40.250(e)(1)(iii). Section 18.40.250(e)(1)(iii) provides an exemption for string lights and erroneously refers to 18.40.250(f)(5). It should instead refer to 18.40.250(f)(6). Thank you for your continued work to craft an ordinance that does not create such negative impact to city residents. Sincerely, Tom Fountain Item 15 Attachment C - Public Comments received after the City Council hearing on April 7, 2025 Item 15: Staff Report Pg. 31 Packet Pg. 308 of 312 City Council Staff Report From: City Manager Report Type: INFORMATION REPORTS Lead Department: City Manager Meeting Date: December 8, 2025 Report #:2511-5462 TITLE City of Palo Alto Organizational Values Refresh RECOMMENDATION This is an informational item; no action is needed BACKGROUND More than twenty years ago, the City established the organizational values of Quality, Courtesy, Efficiency, Integrity, and Innovation. As would be expected, having this values statement in place for such an extended period has led to a loss of connection to the current workforce and its organizational culture as reflected in the manner through which our staff conduct themselves in providing services to the Palo Alto community. Much has shifted in recent years, especially since the pandemic changed the way we engage with each other, residents, businesses and other community members, and how we deliver services. As an agile and resilient organization, emerging from the pandemic provided a timely opportunity to revisit and refresh our core values, so they reflect our evolving culture, aspirations, and ways of working. Organizational values can provide a clear and unifying statement that reflects and reinforces a shared sense of purpose, and the culture we choose to uphold. This can present a unique challenge to cities, given the range of services and interactions involved with municipal services, particularly for a full-service city such as Palo Alto. Undertaking an effort to refresh an organizational values statement can also be a challenge, as commitment to both extensive employee engagement in the effort and ongoing reinforcement following the project are required for the result to be credible and sustainable. Item A Item A Staff Report Item A: Staff Report Pg. 1 Packet Pg. 309 of 312 Our approach to this undertaking was built on the foundation of the industry-leading “Special Projects Program” implemented as part of our Positive Work Environment initiative supporting organizational development coming out the pandemic. The Special Projects Program enabled staff from across the City to volunteer for projects that would help develop new skills on topics of interest. The Organizational Values Refresh project was undertaken during the second cycle of special projects. At this point the positive impact of the Special Projects Program had been established and broad workforce participation achieved. As an organizational development effort, this project is intended to complement and work in harmony with the Council Values reflected in the City Council Procedures and Protocols Handbook. PROCESS OVERVIEW & EMPLOYEE ENGAGEMENT Are the existing values (Quality, Courtesy, Efficiency, Integrity, Innovation) still relevant? What additional values are essential for our organization to succeed in the current and future environment? Which values help us serve our customers/clients and each other with integrity? What words or phrases represent the type of culture we want to create? Item A Item A Staff Report Item A: Staff Report Pg. 2 Packet Pg. 310 of 312 accompanying behavioral descriptions were brought back to departments for the second round of focus groups. These sessions asked for feedback on the proposed values: Do they resonate? Are the descriptions clear? How might they be lived in practice? Participants provided input on narrowing the list and refining language. Throughout the process, the Executive Leadership Team provided guidance, reviewed findings, encouraged department-level participation, and ensured alignment with our broader organizational goals. Noteworthy feedback from the engagement process included: Employees across the organization consistently affirmed the importance of integrity, respect, innovation, and service excellence, while also signaling a strong desire for a culture that is more collaborative, inclusive, and adaptive. Many noted that our traditional values are sound, but the definition and language feel dated and do not fully reflect, for example, our increasing digital service delivery, remote/hybrid work arrangements, and continued emphasis on community trust and employee well-being. Survey comments highlighted that “living our values” means not just words on the wall, but observable daily behaviors: how we treat colleagues, how we connect with residents, how we innovate responsibly and respectfully. A recurring theme was the importance of empowerment, both of employees and residents, to shape outcomes, solve problems, and deliver services in new, more responsive ways. Recommended Values The four values and descriptors that emerged from this review and engagement: Respect Exemplify integrity, courtesy, inclusion and professionalism Innovation Develop creative solutions for continuous improvement Service Demonstrate excellence through purpose driven, collaborative problem solving Empowerment Cultivate learning growth and shared success RISE, making it even more effective. Being able to Live our values means that the values are not only aspirational, but also relevant and reinforced in our everyday work. Item A Item A Staff Report Item A: Staff Report Pg. 3 Packet Pg. 311 of 312 To make this tangible, a guide, and accompanying communications toolkit, of ideas for embedding the values into new staff onboarding, performance conversations, recognition programs and service delivery standards will soon be developed. A citywide employee recognition program designed around recognizing exemplary examples of these City values in action is also being finalized. A periodic check-in to assess how well the values are being integrated and refocus efforts as needed is also anticipated. FISCAL/RESOURCE IMPACT STAKEHOLDER ENGAGEMENT ENVIRONMENTAL REVIEW ATTACHMENTS APPROVED BY: Item A Item A Staff Report Item A: Staff Report Pg. 4 Packet Pg. 312 of 312