HomeMy WebLinkAbout2026-02-26 City Council Agenda PacketCITY COUNCIL
Special Meeting
Monday, February 23, 2026
Council Chambers & Hybrid
5:30 PM
Amended Agenda
Amended agenda items appear below in RED
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. Multiple individuals who wish to speak on
the same item may designate a spokesperson. Spokespersons must be representing five or more
verified individuals who are present either in person or via zoom. Spokespeople will be allowed
up to 10 minutes, at the discretion of the presiding officer. Speaking time may be reduced if the
presiding officer reduces the speaking time for individual speakers.
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.
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.
1 February 23, 2026
Materials submitted after distribution of the agenda packet are available for public inspection at www.paloalto.gov/agendas.
CALL TO ORDER
CLOSED SESSION (5:35 - 6:35 PM)
1.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 (6:35 - 7:05 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 (7:05 - 7:20 PM)
Members of the public may not speak to the item(s).
STUDY SESSION (7:20 - 8:20 PM)
2.Status Report from the Oversized Vehicles (OSV) Ad Hoc Committee CEQA Status: Not a
Project. Title Updated, Late Packet Report added
CONSENT CALENDAR (8:20 - 8:25 PM)
Items will be voted in one motion unless removed from the calendar by three Council Members.
3.Approval of Minutes from January 31, February 1, February 2, and February 9, 2026
Meeting
4.Approval of a Purchase Order with ABB Inc. for a Not-to-Exceed Amount of $389,862 to
Procure Equipment and Services to Retrofit Ten (10) Existing VHK, Circuit Breakers for the
Maybell Electric Substation. CEQA Status: Exempt Under CEQA Guideline 15302(c),
Reconstruction of Existing Utility Facilities.
5.Approval of Professional Services Contract Number C26194078 with M.E. Simpson Co.,
Inc. in the Amount Not-to-Exceed $642,609 Water System Leak Detection Survey Services
for a Period of Three Years. CEQA Status – Exempt under CEQA Guidelines Sections
2 February 23, 2026
Materials submitted after distribution of the agenda packet are available for public inspection at www.paloalto.gov/agendas.
15061(b)(2) and (b)(3).
6.Approval of Amendment No. 2 to Contract No. C25193187 with Universal Security
Company for Fire Watch Services at City Hall in the Amount of $80,915 for a New Total
Not-to-Exceed Amount of $301,667, and Approval of a Fiscal Year 2026 Operating Budget
Amendment in the General Fund; CEQA status - Categorically Exempt under Sections
15301 and 15302
7.Approval of a Contract to Patrol Four Railroad Grade Crossings (vendor, term, and cost
TBD); Approval Cost Sharing Agreement with Palo Alto Unified School District; and
Approve Related Budget Amendments; CEQA status – Not a project
Approval of Amendment No. 1 to Contract No. S26196996 for One Year with Yosh
Enterprises Inc. dba Orion Security for Track Watch Services at Four Grade Crossings in
the Amount of $1,623,314 for a New Total Not-to-Exceed Amount of $1,708,314;
Authorize the Negotiation and Execution of a Cost Sharing Agreement with Palo Alto
Unified School District for $854,157; and Approval of a Fiscal Year 2026 Operating Budget
Amendment in the General Fund; CEQA status - Not a project. Title Updated, Late Packet
Report added
CITY MANAGER COMMENTS (8:25 - 8:40 PM)
BREAK (15 MINUTES)
ACTION ITEMS (Item 8: 8:55 - 9:55 PM, Item 9: 9:55 - 10:55 PM)
Include: Report of Committees/Commissions, Ordinances and Resolutions, Public Hearings, Report of Officials, Unfinished
Business and Council Matters.
8.FY 2026 Mid-Year Budget Review and Approve 1) Budget Amendments in Various Funds,
and 2) a $10.0 Million Additional Discretionary Payment (ADP) from the PARS Pension
Trust
9.Approval of City Council Values (as Recommended by Policy & Services Committee), 2026
Objectives, Ad Hoc Purpose Statements, and Committee Workplans
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.
3 February 23, 2026
Materials submitted after distribution of the agenda packet are available for public inspection at www.paloalto.gov/agendas.
A.Monthly Investment Report - January 2026 (Unaudited)
B.Investment Activity Report for the Second Quarter (October - December), Fiscal Year
2026. CEQA Status – Not a Project
OTHER INFORMATION
Standing Committee Meetings this week
Public Comment Letters
Schedule of Meetings
AMENDED / SUPPLEMENTAL AGENDA ITEMS
2.Status Report from the Oversized Vehicles (OSV) Ad Hoc Committee CEQA Status: Not a
Project. Title Updated, Late Packet Report added
7.Approval of a Contract to Patrol Four Railroad Grade Crossings (vendor, term, and cost
TBD); Approval Cost Sharing Agreement with Palo Alto Unified School District; and
Approve Related Budget Amendments; CEQA status – Not a project
Approval of Amendment No. 1 to Contract No. S26196996 for One Year with Yosh
Enterprises Inc. dba Orion Security for Track Watch Services at Four Grade Crossings in
the Amount of $1,623,314 for a New Total Not-to-Exceed Amount of $1,708,314;
Authorize the Negotiation and Execution of a Cost Sharing Agreement with Palo Alto
Unified School District for $854,157; and Approval of a Fiscal Year 2026 Operating Budget
Amendment in the General Fund; CEQA status - Not a project. Title Updated, Late Packet
Report added
4 February 23, 2026
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.
5 February 23, 2026
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.
6 February 23, 2026
Materials submitted after distribution of the agenda packet are available for public inspection at www.paloalto.gov/agendas.
City Council
Staff Report
Report Type: STUDY SESSION
Lead Department: City Manager
Meeting Date: February 23, 2026
Report #:2602-5960
TITLE
Status Report from the Oversized Vehicles (OSV) Ad Hoc Committee
This will be a late packet report published on February 19, 2026.
Item 2
Item 2 Staff Report
Item 2: Staff Report Pg. 1 Packet Pg. 7 of 205
City Council
Staff Report
Report Type: ACTION ITEMS
Lead Department: City Clerk
Meeting Date: February 23, 2026
Report #:2602-5897
TITLE
Approval of Minutes from January 31, February 1, February 2, and February 9, 2026 Meeting
RECOMMENDATION
Staff recommends that the City Council review and approve the minutes.
ATTACHMENTS
Attachment A: January 31, 2026 Draft Action Minutes
Attachment B: February 1, 2026 Draft Action Minutes
Attachment C: February 2, 2026 Draft Action Minutes
Attachment D: February 9, 2026 Draft Action Minutes
APPROVED BY:
Mahealani Ah Yun, City Clerk
Item 3
Item 3 Staff Report
Item 3: Staff Report Pg. 1 Packet Pg. 8 of 205
CITY COUNCIL
DRAFT ACTION MINUTES
Page 1 of 2
Special Meeting
January 31, 2026
The City Council of the City of Palo Alto met on this date in the Community Meeting Room and
by virtual teleconference at 12:35 P.M.
Present In Person: Burt, Lauing, Lu, Reckdahl, Stone, Veenker
Veenker arrived at 12:39 P.M.
Present Remotely:
Absent: Lythcott-Haims
Call to Order
Closed Session
1. Public Employee Appointment
Title: City Attorney
Authority: Gov. Code Section 54957(b)
2. Conference with Labor Negotiators
Authority: Gov. Code section 54957.6;
Agency representative: Sandra Blanch and Nicholas Raisch, Teri Black, Teri Black & Co.
Unrepresented Employee: City Attorney
MOTION: Councilmember Reckdahl moved, seconded by Councilmember Lu to go into Closed
Session.
MOTION PASSED: 6-0-1, Lythcott-Haims absent
Council went into Closed Session at 12:45 P.M.
Council returned from Closed Session at 6:18 P.M.
Mayor Veenker announced no reportable action.
Item 3
Attachment A - January 31,
2026 Draft Action Minutes
Item 3: Staff Report Pg. 2 Packet Pg. 9 of 205
DRAFT ACTION MINUTES
Page 2 of 2
Sp. City Council Meeting
Draft Action Minutes: 01/31/2026
Agenda Changes, Additions and Deletions
Adjournment: The meeting was adjourned at 6:19 P.M.
ATTEST: APPROVED:
____________________ ____________________
City Clerk Mayor
NOTE: Action minutes are prepared in accordance with Palo Alto Municipal Code (PAMC)
2.04.160(a) and (b). Summary minutes (sense) are prepared in accordance with PAMC Section
2.04.160(c). Beginning in January 2018, in accordance with Ordinance No. 5423, the City Council
found action minutes and the video/audio recordings of Council proceedings to be the official
records of both Council and committee proceedings. These recordings are available on the
City’s website.
Item 3
Attachment A - January 31,
2026 Draft Action Minutes
Item 3: Staff Report Pg. 3 Packet Pg. 10 of 205
CITY COUNCIL
DRAFT ACTION MINUTES
Page 1 of 2
Special Meeting
February 1, 2026
The City Council of the City of Palo Alto met on this date in the Community Meeting Room and
by virtual teleconference at 12:31 P.M.
Present In Person: Burt, Lauing, Lu, Lythcott-Haims, Reckdahl, Stone, Veenker
Present Remotely:
Absent:
Call to Order
Closed Session
1. Public Employee Appointment
Title: City Attorney
Authority: Gov. Code Section 54957(b)
2. Conference with Labor Negotiators
Authority: Gov. Code section 54957.6;
Agency representative: Sandra Blanch and Nicholas Raisch, Teri Black, Teri Black & Co.
Unrepresented Employee: City Attorney
MOTION: Councilmember Reckdahl moved, seconded by Councilmember Lythcott-Haims to go
into Closed Session.
MOTION PASSED: 7-0
Council went into Closed Session at 12:33 P.M.
Council returned from Closed Session at 6:24 P.M.
Mayor Veenker announced no reportable action.
Agenda Changes, Additions and Deletions
Item 3
Attachment B - February 1,
2026 Draft Action Minutes
Item 3: Staff Report Pg. 4 Packet Pg. 11 of 205
DRAFT ACTION MINUTES
Page 2 of 2
Sp. City Council Meeting
Draft Action Minutes: 02/01/2026
Adjournment: The meeting was adjourned at 6:25 P.M.
ATTEST: APPROVED:
____________________ ____________________
City Clerk Mayor
NOTE: Action minutes are prepared in accordance with Palo Alto Municipal Code (PAMC)
2.04.160(a) and (b). Summary minutes (sense) are prepared in accordance with PAMC Section
2.04.160(c). Beginning in January 2018, in accordance with Ordinance No. 5423, the City Council
found action minutes and the video/audio recordings of Council proceedings to be the official
records of both Council and committee proceedings. These recordings are available on the
City’s website.
Item 3
Attachment B - February 1,
2026 Draft Action Minutes
Item 3: Staff Report Pg. 5 Packet Pg. 12 of 205
CITY COUNCIL
DRAFT ACTION MINUTES
Page 1 of 4
Regular Meeting
February 2, 2026
The City Council of the City of Palo Alto met on this date in the Council Chambers and by virtual
teleconference at 5:30 P.M.
Present In Person: Burt, Lauing, Lu, Lythcott-Haims, Reckdahl, Stone, Veenker
Present Remotely:
Absent:
Special Orders of the Day
1. Proclamation Honoring Christopher Fujimoto for 25 Years of Service to the City of Palo
Alto
NO ACTION
Closed Session
2. CONFERENCE WITH LEGAL COUNSEL—EXISTING LITIGATION
Subject: Sami Gerges vs Yolanda Franco Clausen, City of Palo Alto, Santa Clara County
Superior Court
Case No. 25CV473428
Authority: Government Code Section 54956.9(d)(1)
MOTION: Councilmember Lu moved, seconded by Councilmember Lauing to go into Closed
Session.
MOTION PASSED: 7-0
Council went into Closed Session at 5:39 P.M.
Council returned from Closed Session at 6:05 P.M.
Mayor Veenker announced no reportable action.
Item 3
Attachment C - February 2,
2026 Draft Action Minutes
Item 3: Staff Report Pg. 6 Packet Pg. 13 of 205
DRAFT ACTION MINUTES
Page 2 of 4
Sp. City Council Meeting
Draft Action Minutes: 02/02/2026
Agenda Changes, Additions and Deletions
Public Comment
Council Member Questions, Comments and Announcements
Study Session
3. 44 and 88 Encina Avenue [25PLN-00308]. Request for Council Prescreening to Rezone
the Subject Properties from Community Commercial (CC) to Planned
Community/Planned Home Zoning (PC/PHZ) and to Allow Construction of 158 Units and
315 Parking Spaces in Two Seven-Story Structures. The Formal Application Will be
Subject to California Environmental Quality Act (CEQA) Review. Zoning District: CC
(Community Commercial).
NO ACTION
Consent Calendar
MOTION: Vice Mayor Stone moved, seconded by Councilmember Reckdahl to approve Agenda
Item Numbers 4-6.
MOTION PASSED: 7-0
4. Approval of Minutes from January 12, January 15, and January 20, 2026 Meetings
5. Approve and Authorize the City Manager to Execute an MOU Between the City of Palo
Alto and the County of Santa Clara to Support the City's Psychiatric Emergency Response
Team (PERT) Program for a Term of Five Years and a Not-To-Exceed Amount of $1.4
Million and Approval of a Budget Amendment in the General Fund and Stanford
University Medical Center Fund; CEQA status - not a project.
6. SECOND READING: Ordinance of the Council of the City of Palo Alto Amending Chapter
4.54 (“Massage Establishments”) and Chapter 4.56 (Hot Tub/Sauna Establishments) of
Title 4 (Business Licenses and Regulations) (FIRST READING: January 12, 2025, PASSED 7-
0)
Item 3
Attachment C - February 2,
2026 Draft Action Minutes
Item 3: Staff Report Pg. 7 Packet Pg. 14 of 205
DRAFT ACTION MINUTES
Page 3 of 4
Sp. City Council Meeting
Draft Action Minutes: 02/02/2026
City Manager Comments
Ed Shikada, City Manager
Action Items
7. Approval of FY 2026 Architectural Review Board, Historic Resources Board, Planning and
Transportation Commission, and Utilities Advisory Commission Work Plans; CEQA
status– not a project
MOTION: Councilmember Burt moved, seconded by Councilmember Reckdahl to approve the
Architectural Review Board, Historic Resources Board, Planning and Transportation
Commission, and Utilities Advisory Commission Fiscal Year 2026 Work Plans with the following
amendments:
Planning and Transportation Commission:
• Add a reference to SB79 as a project.
Utilities Advisory Commission:
• Add project to propose specific goals for reliability.
Architectural Review Board:
• Add a reference to SB79 as a project.
• Endorse recommendation to expand the objective standards of residential to
townhomes.
• Endorse efforts to coordinate and streamline work between the Historic Resources
Board and Architectural Review Board, and Planning and Transportation
Commission.
MOTION PASSED: 7-0
8. Review the 2024 Greenhouse Gas Inventory and S/CAP Key Performance Indicators
Annual Progress Report, and Approve the 2026-2027 S/CAP Work Plan and Receive Six
S/CAP Studies Recommended by the Climate Action and Sustainability Committee; CEQA
Status: Review GHG Inventory and Key Performance Indicators: Not a Project; Potential
Environmental Impacts of the S/CAP Work Plan were Studied in the June 5, 2023 S/CAP
Item 3
Attachment C - February 2,
2026 Draft Action Minutes
Item 3: Staff Report Pg. 8 Packet Pg. 15 of 205
DRAFT ACTION MINUTES
Page 4 of 4
Sp. City Council Meeting
Draft Action Minutes: 02/02/2026
Addendum to the 2017-2031 Comprehensive Plan EIR; this Project is also Exempt
Pursuant to CEQA Guidelines Section 15183
Agenda Item Number 8 not heard and deferred to a future City Council Meeting date.
Adjournment: The meeting was adjourned at 8:41 P.M.
ATTEST: APPROVED:
____________________ ____________________
City Clerk Mayor
NOTE: Action minutes are prepared in accordance with Palo Alto Municipal Code (PAMC)
2.04.160(a) and (b). Summary minutes (sense) are prepared in accordance with PAMC Section
2.04.160(c). Beginning in January 2018, in accordance with Ordinance No. 5423, the City Council
found action minutes and the video/audio recordings of Council proceedings to be the official
records of both Council and committee proceedings. These recordings are available on the
City’s website.
Item 3
Attachment C - February 2,
2026 Draft Action Minutes
Item 3: Staff Report Pg. 9 Packet Pg. 16 of 205
CITY COUNCIL
DRAFT ACTION MINUTES
Page 1 of 7
Regular Meeting
February 9, 2026
The City Council of the City of Palo Alto met on this date in the Council Chambers and by virtual
teleconference at 5:30 P.M.
Present In Person: Burt, Lauing, Lu, Lythcott-Haims, Reckdahl, Stone, Veenker
Present Remotely:
Absent:
Call to Order
Agenda Changes, Additions and Deletions
Council Member Questions, Comments and Announcements
Public Comment
Consent Calendar
MOTION: Councilmember Reckdahl moved, seconded by Councilmember Lu, to approve
Agenda Item Numbers 1 – 8.
MOTION PASSED: 7-0
1. Approval of Minutes from January 20 and January 24, 2026 Meeting
2. Adoption of a Resolution Amending the El Camino Real Retail Node Map for Purposes of
Palo Alto Municipal Code Section 18.40.180: Retail Preservation. CEQA Status:
Item 3
Attachment D - February 9,
2026 Draft Action Minutes
Item 3: Staff Report Pg. 10 Packet Pg. 17 of 205
DRAFT ACTION MINUTES
Page 2 of 7
City Council Meeting
Draft Action Minutes: 02/09/2026
Addendum to the Comprehensive Plan Environmental Impact Report (EIR), adopted
November 17, 2023 (SCH #2014052101)
3. Adoption of Revisions to the Investment Policy as Recommended by the Finance
Committee. CEQA Status – Not a Project
4. Adoption of a Resolution Authorizing the City Manager to Negotiate and Execute
Purchase Orders with To-Be-Determined Vendor(s) to Procure Nine Vehicle/Equipment
Purchases for a Total Not-to-Exceed Amount of $1,430,000; Approval of a Fourth
Amended and Restated Purchase Order Number 4521000199 with Altec Industries, Inc.,
to Increase the Purchase Order Amount by $94,911 to a New Not-to Exceed Amount of
$1,167,986 for Two Vehicle/Equipment Purchases; and Amend the FY 2026 Budget in
the Vehicle Replacement and Maintenance Fund and Electric Funds; CEQA Status – Not
a Project
5. Approval of an Increase of Construction Contingency for Contract No. C24189237 with
SAK Construction, LLC in the Amount of $800,000 and Amend the FY 2026 Budget in the
Wastewater Treatment Fund for the Joint Intercepting Sewer Rehabilitation (Phase 1)
Project (WQ-24000); CEQA Status - Exempt under CEQA Guidelines Section 15301
(Repairs to Existing Facilities)
6. Approval of Amendment No. 1. of the Future Talent of Silicon Valley dba First Tee -
Silicon Valley (Contract S25192927) Facility Use Agreement to Extend the Term for
Three Years to February 2029; CEQA status – not a project.
7. Approval of Amendment No. 3 to Contract No. S23187281 with Urban Planning
Partners, Inc. in the Amount of $52,409, Increasing the Not-to-Exceed Amount to
$137,409 and Extending the Contract Term Through December 31, 2027 to Create
Standalone Pre-Approved Parklet Plans as Part of the California Avenue Streetscape
Update PL-23000; CEQA Status – Categorically Exempt under CEQA Guidelines Section
15301 and 15304(e)
8. Approval of Four Professional Services Contracts C26194180A-D, with Interwest
Consulting Group, Inc, TRB and Associates, Inc., Atlas Environmental and West Coast
Code Consultants, Inc. in the Aggregate Total Not-to-Exceed amount of $1,438,800 for
On-Call Fire Code, and Hazardous Material Related Services, Inspection, Plan Review and
Environmental Consultation over a three-year term; CEQA status: not a project.
City Manager Comments
Ed Shikada, City Manager
Item 3
Attachment D - February 9,
2026 Draft Action Minutes
Item 3: Staff Report Pg. 11 Packet Pg. 18 of 205
DRAFT ACTION MINUTES
Page 3 of 7
City Council Meeting
Draft Action Minutes: 02/09/2026
Action Items
9. Approve a resolution for an exception to the CalPERS 180-day waiting period to appoint
retired annuitant Aaron Miller; CEQA Status - Not a Project
MOTION: Councilmember Reckdahl moved, seconded by Councilmember Stone to adopt a
resolution, pursuant to Government Code sections 7522.56 and 21224, approving an exception
to the 180-day waiting period, set forth by the California Public Employee Retirement System
(CalPERS), to allow the appointment of retired annuitant Aaron Miller to a temporary, part-time
assignment to perform special-project work of limited duration at the Regional Water Quality
Control Plant, following completion of the required 60-day bona fide separation from service.
MOTION PASSED: 7-0
10. PUBLIC HEARING: Objections to Weed Abatement at Affected Properties and Approval
of Affected Property List for Commencing Weed Abatement in 2026; CEQA Status -
exempt
MOTION: Councilmember Stone moved, seconded by Councilmember Reckdahl to
a. Adopt a determination that weed abatement activities in 2026, as described in
Resolution 10268 (Attachment A) adopted by Council on December 8, 2025, are exempt
under Class 8 (CEQA Guidelines section 15308);
b. Hold a Public Hearing to hear and consider any objections to the proposed destruction
and removal of weeds in 2026 at the properties listed in Attachment B; and
c. Approve the final list of affected properties for weed abatement in 2026 (Attachment B)
excluding sites at 3460 Hillview Rd, 1072 Arastradero Rd, 3495 Deer Creek Rd, Deer
Creek, and direct weed abatement activities to commence at those properties in
accordance with Resolution 10268.
MOTION PASSED: 7-0
11. Cubberley Project: Receive update on Third Round Polling Results, Approve a Letter of
Intent with TheatreWorks Silicon Valley, and Direct Staff on Next Steps
MOTION: Mayor Veenker moved, seconded by Councilmember Lythcott-Haims to
1. Approve a Letter of Intent (LOI) with TheatreWorks Silicon Valley for collaboration on a
long-term public-private partnership for theatre space at the Cubberley site.
Item 3
Attachment D - February 9,
2026 Draft Action Minutes
Item 3: Staff Report Pg. 12 Packet Pg. 19 of 205
DRAFT ACTION MINUTES
Page 4 of 7
City Council Meeting
Draft Action Minutes: 02/09/2026
2. Direct the City Manager to talk to the Superintendent about contingency plans and
alternative terms for acquisition of 7 acres owned by the School District.
3. Direct staff to evaluate and return to Council with options to acquire the 7 acres other
than via a ballot measure.
MOTION PASSED: 7-0
12. Review and Approval of Suggested Changes to the City Council Procedures and Protocols
Handbook as Recommended by the Policy and Services Committee. CEQA Status – Not a
project.
MOTION: Councilmember Stone moved, seconded by Councilmember Lu to approve changes
to the City Council Procedures and Protocols Handbook as recommended by the Policy &
Services Committee with the following additions:
1. In Section 2.3(b)5E: Decrease the limit on remote participation for Finance Committee
from 5 meetings to 3 meetings.
2. In Section 3.8: Add that Councilmembers be allowed to speak for 1 minute on why they
are pulling an item. Councilmembers may speak to their no vote for a total of 3 minutes
for all no votes combined. The City Manager has the prerogative to clarify factual errors.
MOTION PASSED: 7-0
MOTION: Councilmember Burt moved, seconded by Councilmember XX to make the following
revisions to the Procedures & Protocols Handbook:
1. In Section 3.7: Allow for Study Sessions be agendized as Action Items to allow for the
possibility of clearer City Council direction than is provided by comments.
MOTION WITHDRAWN BY MAKER
MOTION: Councilmember Burt moved, seconded by Mayor Veenker to the direct staff to
review and return to the City Council regarding:
1. Providing Boards with training for making motions.
2. Use of verbatim transcripts for PTC and UAC Board minutes using AI.
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DRAFT ACTION MINUTES
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City Council Meeting
Draft Action Minutes: 02/09/2026
3.Return with language clarifying that U.S. citizenship is not a requirement for service on a
Board or Commission.
MOTION PASSED: 7-0
MOTION: Councilmember Burt moved, seconded by Councilmember Lauing to make the
following revisions to the Procedures & Protocols Handbook in Section 3.6:
1.Limit the amount of time to 5 minutes per Councilmember.
2.Provide guidance that comments should be limited to city government related matters.
3.Avoid personal or political comments.
MOTION PASSED: 5-2, Lu, Stone no
MOTION: Councilmember Burt moved, seconded by Councilmember Lu to make the following
revisions to the Procedures & Protocols Handbook in Procedures Section 3:
Items Considered After 10:00 p.m.: The Council makes every effort to end its meetings before
11 p.m. With that goal in mind, the Council generally does not start discussion of new matters
after 10:00 p.m. Before 10 p.m. the Council will decide and announce whether it will begin
consideration of any agenda items after 10:00 p.m. and, if so, which specific items will be taken
up.
MOTION PASSED: 6-1, Veenker no
MOTION: C ouncilmember Burt moved, seconded by Council member Reckdahl to refer to staff
and subsequently the Policy & Services Committee for a recommendation to the full City
Council on the permissible and recommended practices relating to an item going to more than
one standing committee when appropriate (Procedures Section 1.2(a)2).
MOTION PASSED: 7-0
MOTION: Councilmember Burt moved, seconded by Councilmember Reckdahl to refer to staff
to return with recommended language regarding if staff should provide briefings, respond to
Councilmember questions, collaborate with C ouncilmembers to support City Council
representatives on regional bodies.
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MOTION PASSED: 6-1, Veenker no
MOTION: Councilmember Burt moved, seconded by Councilmember Reckdahl to refer to staff
to clarify the role of the staff liaison to the committees to develop agendas in collaboration
with chairs.
MOTION WITHDRAWN BY MAKER
Closed Session
AA1. Conference with Labor Negotiators
Authority: Gov. Code section 54957.6
Agency representative: Sandra Blanch and Nicholas Raisch, Teri Black, Teri Black & Co.
Unrepresented Employee: City Attorney
MOTION: Councilmember Stone moved, seconded by Councilmember Reckdahl to go into
Closed Session.
MOTION PASSED: 7-0
Council went into Closed Session at 10:14 P.M.
Council returned from Closed Session at 10:56 P.M.
Mayor Veenker announced no reportable action.
Adjournment: The meeting was adjourned at 10:56 P.M.
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DRAFT ACTION MINUTES
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City Council Meeting
Draft Action Minutes: 02/09/2026
ATTEST: APPROVED:
____________________ ____________________
City Clerk Mayor
NOTE: Action minutes are prepared in accordance with Palo Alto Municipal Code (PAMC)
2.04.160(a) and (b). Summary minutes (sense) are prepared in accordance with PAMC Section
2.04.160(c). Beginning in January 2018, in accordance with Ordinance No. 5423, the City Council
found action minutes and the video/audio recordings of Council proceedings to be the official
records of both Council and committee proceedings. These recordings are available on the
City’s website.
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City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Utilities
Meeting Date: February 23, 2026
Report #:2510-5315
TITLE
Approval of a Purchase Order with ABB Inc. for a Not-to-Exceed Amount of $389,862 to Procure
Equipment and Services to Retrofit Ten (10) Existing VHK, Circuit Breakers for the Maybell
Electric Substation. CEQA Status: Exempt Under CEQA Guideline 15302(c), Reconstruction of
Existing Utility Facilities.
RECOMMENDATION
Staff Recommends that Council approve and authorize the City Manager or their designee to
execute a purchase order contract with ABB Inc. in the amount of $354,420 for the purchase and
installation of ten (10) 12kV, 1200Amp magnetic-actuator type power circuit breakers for
Maybell Substation with a 10% contingency of $35,442 for related but unforeseen work, for a
total not-to-exceed amount of $389,862.
BACKGROUND
A circuit breaker is a device that interrupts high voltages and currents during switching or fault
conditions to protect utility infrastructure. These devices require regular maintenance and
routine testing to ensure proper operation. The high-voltage circuit breakers in Maybell
Substation, originally installed in 1986, have exceeded their expected life of 30-35 years. Due to
end of life, replacement parts are no longer readily available, and there have been instances
where the breakers have failed to operate. Circuit breakers are an integral and critical part of an
electric distribution system for maintaining safe and reliable electric service. Staff recommend
that these selected breakers be replaced with modern circuit breakers equipped with magnetic
actuators that can fit into the existing switchgear. Operational speed and response time of these
replacement circuit breakers are faster due to their magnetic control of the mechanism.
Magnetically-actuated circuit breakers with modern technology have fewer moving parts, longer
in-service intervals between maintenance, and provide improved reliability over legacy spring-
actuated breakers.
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ANALYSIS
The City’s Utilities staff evaluate the distribution system on an ongoing basis, including inspection
and testing of existing facilities. Through routine inspection and testing of Maybell Substation’s
12kV circuit breakers, two breakers failed during testing. The failure of these breakers was
attributed to their age and wear of existing in-service parts. Staff has determined that the only
viable and cost-effective option for replacing the circuit breakers in Maybell Substation is to use
retrofitted breakers manufactured by ABB Inc., which is the successor company to the original
manufacturer. For this reason, Staff is recommending approval for the purchase of ten (10)
circuit breakers directly from ABB via a sole source exemption 2.30.360(d) approved by the City
Manager or their designee under the City’s standard procurement process.
City staff requested a quotation from ABB on October 13, 2025, for compatible replacement
breakers, and ABB quoted a price of $354,420 for ten breakers and installation support. ABB’s
quote includes installation, training and commissioning by ABB approved installers consistent
with the manufacturer’s warranty. The quoted onsite installation services include verification of
fit within the City’s existing switchgear, confirmation of mechanical and electrical connections,
and testing of functional operations. Staff is recommending ABB provide the installation of the
replacement breakers to ensure proper fit and operation of the replacement breakers.
Additionally, if ABB technicians install the replacement breakers, ABB will extend the
manufacturer’s warranty an additional four years.
Funding for the $354,420 to purchase the circuit breakers is available in the FY 2026 Electric CIP
Budget under Capital Improvement Project EL-17002 (Substation Breaker Replacement).
Outside of approval during a regularly scheduled Council meeting, no stakeholder engagement
was sought for the procurement of new 12kV circuit breakers for City’s substation.
This project is categorically exempt from the California Environmental Quality Act (CEQA)
pursuant to CEQA Guidelines 15302(c), replacement or reconstruction of existing facilities.
:
Alan Kurotori, Director of Utilities
Staff: Terry Crowley, Utilities Chief Operating Officer
Staff: Mohammad Fattah, Electric Engineering Manager
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City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Utilities
Meeting Date: February 23, 2026
Report #:2504-4523
TITLE
Approval of Professional Services Contract Number C26194078 with M.E. Simpson Co., Inc. in
the Amount Not-to-Exceed $642,609 Water System Leak Detection Survey Services for a Period
of Three Years. CEQA Status – Exempt under CEQA Guidelines Sections 15061(b)(2) and (b)(3).
RECOMMENDATION
Staff recommends that the City Council approve and authorize the City Manager, or designee,
to execute Contract Number C26194078 (Attachment A) with M.E. Simpson Co., Inc. for water
system leak detection survey services for a term of three (3) years and a total not-to-exceed
amount of $642,609 including $584,190 for basic services and $58,419 for additional services.
EXECUTIVE SUMMARY
The City of Palo Alto’s Water Distribution System Improvements (WS-11003) projects provide
annual water system leakage surveys to identify water leaks in public water distribution mains
that would otherwise be too small to surface above ground. These small leaks can be detected
with specialized sound-based equipment. This contract engages M.E. Simpson Co., Inc., a
qualified leak detection service provider, to conduct annual leak detection work for three (3)
consecutive years. The survey will cover the entire water distribution system, identify sub-
surface leaks, and provide analysis regarding repairs and capital replacement to reduce water
loss.
BACKGROUND
The City owns and maintains 231 miles of public water distribution mains and over 23,000
water service lines throughout the City’s water service area. Most of the water distribution
mains were installed from the 1950s to the 1970s. As water pipes age, small leaks develop that
may not be visible from the ground surface. Since the late 1980s, the City has implemented
annual water main replacement projects to replace aging water pipes. Pipes with multiple
reported leaks are often prioritized and replaced; however, small leaks may not be identified
without the use of specialized leak detection equipment.
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California Senate Bill (“SB”) 555 requires water suppliers in California to perform annual water
loss audits and evaluate leak detection as a strategy for meeting water loss standards. The bill
required the State Water Resources Control Board (“SWRCB”) to adopt a performance standard
for a maximum allowable volume of water loss. While Palo Alto’s water loss from the public
water distribution has been below the State standard, in 2023, Utilities Department staff
completed an economic analysis of leak detection and concluded that a full water system
network leak detection project would be cost effective, with a projected return on investment
around 2.5 times the cost of survey. This proactive effort is anticipated to reduce non-revenue
water and anticipates repairing leaks earlier and reducing expensive emergency work and
enabling the utility to optimize capital investments
ANALYSIS
Table 1: Summary of Request for Proposal
Project Bid Name/Number 3-Year Water System Leak Detection Services
RFP194078
Proposed Length of Project 3-years
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Number of Vendors Notified 3572
Number of Proposal Packages Downloaded by Vendors 44
Total Days to Respond to Request for Proposals 56 Calendar Days
Pre-Proposal Meeting N/A
Pre-Proposal Meeting Date N/A
Number of Proposals Received 4
Proposal Price Range $478,092 - $15,788,355
Public Link to Solicitation https://procurement.opengov.com/portal/palo-alto-
ca/projects/155480/
Utilities Engineering staff reviewed the four proposals and rated the consultants in accordance
with factors defined in Palo Alto Municipal Code Section 2.30.410. M.E. Simpson Co., Inc. was
selected as the top-ranked proposer based on its demonstrated expertise, methodology, and
relevant project experience.
Three proposals were near the expected price for the work, and the fourth proposal price was
an outlier, with a much higher price that included unsolicited and unnecessary technology,
services, and consulting.
FISCAL/RESOURCE IMPACT
Funding for the first year of this contract is available in the Fiscal Year 2026 Adopted Capital
Improvement Program, Water Distribution System Improvements (WS-11003) project.
Subsequent years are subject to City Council’s approval of the annual budget process and
appropriation of funds.
STAKEHOLDER ENGAGEMENT
The key stakeholders for this project include the Utilities Department, Office of Transportation,
Fire Department, and the Public Works Department. Engagement strategies include Utilities
Department Division meetings, planning, coordination meetings, and work reviews with other
departments.
ENVIRONMENTAL REVIEW
Council action on this item is exempt from California Environmental Quality Act (CEQA) review
under sections 15061(b)(2) and (b)(3) because the proposed actions to assess conditions and
prepare a leak report have no potential to result in physical impacts on environment and
because any pipe repair work, which the proposed action may relate to, was previously
evaluated under CEQA prior to approval and was found to be categorically exempt under CEQA
Guidelines Section 15301 (repair, maintenance, or minor alteration of existing public facilities
involving negligible or no expansion of existing or former use).
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ATTACHMENTS
APPROVED BY:
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Professional Services
Rev. Oct 16,2024 Page 1 of 22
CITY OF PALO ALTO CONTRACT NO. C26194078
AGREEMENT FOR PROFESSIONAL SERVICES
BETWEEN THE CITY OF PALO ALTO AND M.E. SIMPSON COMPANY, INC.
This Agreement for Professional Services (this “Agreement”) is entered into as of the 23rd day of
February 2026 (the “Effective Date”), by and between the CITY OF PALO ALTO, a California
chartered municipal corporation (“CITY”), and M.E. SIMPSON COMPANY, INC., a
corporation, located at 3406 Enterprise Ave., Valparaiso, IN 46383 (“CONSULTANT”).
The following recitals are a substantive portion of this Agreement and are fully incorporated herein
by this reference:
RECITALS
A. CITY intends to analyze unreported water leaks for the development of economic models
and for regulatory compliance (the “Project”) and desires to engage a consultant to provide
following professional water system leak detection and analysis services for the City of Palo Alto’s
potable water distribution system, totaling approximately 231 miles of watermains in connection
with the Project (the “Services”, as detailed more fully in Exhibit A).
B. CONSULTANT represents that it, its employees and subconsultants, if any, possess the
necessary professional expertise, qualifications, and capability, and all required licenses and/or
certifications to provide the Services.
C. CITY, in reliance on these representations, desires to engage CONSULTANT to provide
the Services as more fully described in Exhibit A, entitled “SCOPE OF SERVICES”.
NOW, THEREFORE, in consideration of the recitals, covenants, terms, and conditions, in this
Agreement, the parties agree as follows:
SECTION 1. SCOPE OF SERVICES. CONSULTANT shall perform the Services described
in Exhibit A in accordance with the terms and conditions contained in this Agreement. The
performance of all Services shall be to the reasonable satisfaction of CITY.
Optional On-Call Provision (This provision only applies if checked and only applies to
on-call agreements.)
CITY may elect to, but is not required to, authorize on-call Services up to the maximum
compensation amount set forth in Section 4 (Not to Exceed Compensation).
CONSULTANT shall provide on-call Services only by advanced, written authorization
from CITY as detailed in this Section. On-call Services, if any, shall be authorized by
CITY, as needed, with a Task Order assigned and approved 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.
Docusign Envelope ID: 8A2D500C-E8A9-435F-8B0B-F3B52EAABDA5
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Compensation for on-call 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 due
to CONSULTANT for all Task Orders issued under this Agreement shall not exceed the
amount of compensation set forth in Section 4. CONSULTANT shall only be compensated
for on-call Services performed under an authorized Task Order and only up to the
maximum compensation amount set forth in Section 4. Performance of and payment for
any on-call Services are subject to all requirements and restrictions in this Agreement.
SECTION 2. TERM.
The term of this Agreement shall be from the effective date of this agreement through February
22, 2029, unless terminated earlier pursuant to Section 19 (Termination) of this Agreement.
SECTION 3. SCHEDULE OF PERFORMANCE. Time is of the essence in the performance
of Services under this Agreement. CONSULTANT shall complete the Services within the term of
this Agreement and in accordance with the schedule set forth in Exhibit B, entitled “SCHEDULE
OF PERFORMANCE”. Any Services for which times for performance are not specified in this
Agreement shall be commenced and completed by CONSULTANT in a reasonably prompt and
timely manner based upon the circumstances and direction communicated to the CONSULTANT.
CITY’s agreement to extend the term or the schedule for performance shall not preclude recovery
of damages for delay if the extension is required due to the fault of CONSULTANT.
SECTION 4. NOT TO EXCEED COMPENSATION. 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 Five Hundred Eighty-
Four Thousand One Hundred Ninety Dollars ($584,190.00). 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.
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 Fifty-Eight Thousand Four Hundred Nineteen
Dollars ($58,419.00) 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 Thirty-Eight
Thousand Six Hundred Nine Dollars ($638,609.00), as detailed in Exhibit C.
Docusign Envelope ID: 8A2D500C-E8A9-435F-8B0B-F3B52EAABDA5
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“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 5. INVOICES. In order to request payment, CONSULTANT shall submit monthly
invoices to the CITY describing the Services performed and the applicable charges (including, if
applicable, an identification of personnel who performed the Services, hours worked, hourly rates,
and reimbursable expenses), based upon Exhibit C or, as applicable, CONSULTANT’s schedule
of rates set forth in Exhibit C-1. If applicable, the invoice shall also describe the percentage of
completion of each task. The information in CONSULTANT’s invoices shall be subject to
verification by CITY. CONSULTANT shall send all invoices to CITY’s Project Manager at the
address specified in Section 13 (Project Management) below. CITY will generally process and
pay invoices within thirty (30) days of receipt of an acceptable invoice.
SECTION 6. QUALIFICATIONS/STANDARD OF CARE. All Services shall be performed
by CONSULTANT or under CONSULTANT’s supervision. CONSULTANT represents that it,
its employees and subcontractors, if any, possess the professional and technical personnel
necessary to perform the Services required by this Agreement and that the personnel have
sufficient skill and experience to perform the Services assigned to them. CONSULTANT
represents that it, its employees and subcontractors, if any, have and shall maintain during the term
of this Agreement all licenses, permits, qualifications, insurance and approvals of whatever nature
that are legally required to perform the Services. All Services to be furnished by CONSULTANT
under this Agreement shall meet the professional standard and quality that prevail among
professionals in the same discipline and of similar knowledge and skill engaged in related work
throughout California under the same or similar circumstances.
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SECTION 7. COMPLIANCE WITH LAWS. CONSULTANT shall keep itself informed of
and in compliance with all federal, state and local laws, ordinances, regulations, and orders that
may affect in any manner the Project or the performance of the Services or those engaged to
perform Services under this Agreement, as amended from time to time. CONSULTANT shall
procure all permits and licenses, pay all charges and fees, and give all notices required by law in
the performance of the Services.
SECTION 8. ERRORS/OMISSIONS. CONSULTANT is solely responsible for costs,
including, but not limited to, increases in the cost of Services, arising from or caused by
CONSULTANT’s errors and omissions, including, but not limited to, the costs of corrections such
errors and omissions, any change order markup costs, or costs arising from delay caused by the
errors and omissions or unreasonable delay in correcting the errors and omissions.
SECTION 9. COST ESTIMATES. If this Agreement pertains to the design of a public works
project, CONSULTANT shall submit estimates of probable construction costs at each phase of
design submittal. If the total estimated construction cost at any submittal exceeds the CITY’s
stated construction budget by ten percent (10%) or more, CONSULTANT shall make
recommendations to CITY for aligning the Project design with the budget, incorporate CITY
approved recommendations, and revise the design to meet the Project budget, at no additional cost
to CITY.
SECTION 10. INDEPENDENT CONTRACTOR. CONSULTANT acknowledges and agrees
that CONSULTANT and any agent or employee of CONSULTANT will act as and shall be
deemed at all times to be an independent contractor and shall be wholly responsible for the manner
in which CONSULTANT performs the Services requested by CITY under this Agreement.
CONSULTANT and any agent or employee of CONSULTANT will not have employee status
with CITY, nor be entitled to participate in any plans, arrangements, or distributions by CITY
pertaining to or in connection with any retirement, health or other benefits that CITY may offer its
employees. CONSULTANT will be responsible for all obligations and payments, whether
imposed by federal, state or local law, including, but not limited to, FICA, income tax
withholdings, workers’ compensation, unemployment compensation, insurance, and other similar
responsibilities related to CONSULTANT’s performance of the Services, or any agent or
employee of CONSULTANT providing same. Nothing in this Agreement shall be construed as
creating an employment or agency relationship between CITY and CONSULTANT or any agent
or employee of CONSULTANT. Any terms in this Agreement referring to direction from CITY
shall be construed as providing for direction as to policy and the result of CONSULTANT’s
provision of the Services only, and not as to the means by which such a result is obtained.
SECTION 11. ASSIGNMENT. The parties agree that the expertise and experience of
CONSULTANT are material considerations for this Agreement. CONSULTANT shall not assign
or transfer any interest in this Agreement nor the performance of any of CONSULTANT’s
obligations hereunder without the prior written approval of the City Manager. Any purported
assignment made without the prior written approval of the City Manager will be void and without
effect. Subject to the foregoing, the covenants, terms, conditions and provisions of this Agreement
will apply to, and will bind, the heirs, successors, executors, administrators and assignees of the
parties.
SECTION 12. SUBCONTRACTING.
Docusign Envelope ID: 8A2D500C-E8A9-435F-8B0B-F3B52EAABDA5
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Option A: No Subcontractor: CONSULTANT shall not subcontract any portion of the
Services to be performed under this Agreement without the prior written authorization of the City
Manager or designee. In the event CONSULTANT does subcontract any portion of the work to
be performed under this Agreement, CONSULTANT shall be fully responsible for all acts and
omissions of subcontractors.
Option B: Subcontracts Authorized: Notwithstanding Section 11 (Assignment) above, CITY
agrees that subcontractors may be used to complete the Services. The subcontractors authorized
by CITY to perform work on this Project are:
CONSULTANT shall be responsible for directing the work of any subcontractors and for any
compensation due to subcontractors. CITY assumes no responsibility whatsoever concerning
compensation of subcontractors. CONSULTANT shall be fully responsible to CITY for all acts
and omissions of subcontractors. CONSULTANT shall change or add subcontractors only with
the prior written approval of the City Manager or designee.
SECTION 13. PROJECT MANAGEMENT. CONSULTANT will assign Terrence Williams
as the CONSULTANT’s Project Manager to have supervisory responsibility for the performance,
progress, and execution of the Services and represent CONSULTANT during the day-to-day
performance of the Services. If circumstances cause the substitution of the CONSULTANT’s
Project Manager or any other of CONSULTANT’s key personnel for any reason, the appointment
of a substitute Project Manager and the assignment of any key new or replacement personnel will
be subject to the prior written approval of the CITY’s Project Manager. CONSULTANT, at
CITY’s request, shall promptly remove CONSULTANT personnel who CITY finds do not
perform the Services in an acceptable manner, are uncooperative, or present a threat to the adequate
or timely completion of the Services or a threat to the safety of persons or property.
CITY’s Project Manager is Patrick LaBruzzo, Utilities Department, WGW Division, 1007 Elwell
Ct., Palo Alto, CA, 94303, Telephone: 650-566-4527, Email: Patrick.LaBruzzo@PaloAlto.gov.
CITY’s Project Manager will be CONSULTANT’s point of contact with respect to performance,
progress and execution of the Services. CITY may designate an alternate Project Manager from
time to time.
SECTION 14. OWNERSHIP OF MATERIALS. All work product, including without
limitation, all writings, drawings, studies, sketches, photographs, plans, reports, specifications,
computations, models, recordings, data, documents, and other materials and copyright interests
developed under this Agreement, in any form or media, shall be and remain the exclusive property
of CITY without restriction or limitation upon their use. CONSULTANT agrees that all copyrights
which arise from creation of the work product pursuant to this Agreement are vested in CITY, and
CONSULTANT hereby waives and relinquishes all claims to copyright or other intellectual
property rights in favor of CITY. Neither CONSULTANT nor its subcontractors, if any, shall
make any of such work product available to any individual or organization without the prior written
approval of the City Manager or designee. CONSULTANT makes no representation of the
suitability of the work product for use in or application to circumstances not contemplated by the
Scope of Services.
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SECTION 15. AUDITS. CONSULTANT agrees to permit CITY and its authorized
representatives to audit, at any reasonable time during the term of this Agreement and for four (4)
years from the date of final payment, CONSULTANT’s records pertaining to matters covered by
this Agreement, including without limitation records demonstrating compliance with the
requirements of Section 10 (Independent Contractor). CONSULTANT further agrees to maintain
and retain accurate books and records in accordance with generally accepted accounting principles
for at least four (4) years after the expiration or earlier termination of this Agreement or the
completion of any audit hereunder, whichever is later.
SECTION 16. INDEMNITY.
16.1. To the fullest extent permitted by law, CONSULTANT shall indemnify,
defend and hold harmless CITY, its Council members, officers, employees and agents (each an
“Indemnified Party”) from and against any and all demands, claims, or liability of any nature,
including death or injury to any person, property damage or any other loss, including all costs and
expenses of whatever nature including attorney’s fees, experts fees, court costs and disbursements
(“Claims”) resulting from, arising out of or in any manner related to performance or
nonperformance by CONSULTANT, its officers, employees, agents or contractors under this
Agreement, regardless of whether or not it is caused in part by an Indemnified Party.
16.2. Notwithstanding the above, nothing in this Section 16 shall be construed to
require CONSULTANT to indemnify an Indemnified Party from a Claim arising from the active
negligence or willful misconduct of an Indemnified Party that is not contributed to by any act of,
or by any omission to perform a duty imposed by law or agreement by, CONSULTANT, its
officers, employees, agents or contractors under this Agreement.
16.3. The acceptance of CONSULTANT’s Services and duties by CITY shall not
operate as a waiver of the right of indemnification. The provisions of this Section 16 shall survive
the expiration or early termination of this Agreement.
SECTION 17. WAIVERS. No waiver of a condition or nonperformance of an obligation under
this Agreement is effective unless it is in writing in accordance with Section 29.4 of this
Agreement. No delay or failure to require performance of any provision of this Agreement shall
constitute a waiver of that provision as to that or any other instance. Any waiver granted shall
apply solely to the specific instance expressly stated. No single or partial exercise of any right or
remedy will preclude any other or further exercise of any right or remedy.
SECTION 18. INSURANCE.
18.1. CONSULTANT, at its sole cost and expense, shall obtain and maintain, in
full force and effect during the term of this Agreement, the insurance coverage described in Exhibit
D, entitled “INSURANCE REQUIREMENTS”. CONSULTANT and its contractors, if any, shall
obtain a policy endorsement naming CITY as an additional insured under any general liability or
automobile policy or policies.
18.2. All insurance coverage required hereunder shall be provided through
carriers with AM Best’s Key Rating Guide ratings of A-:VII or higher which are licensed or
authorized to transact insurance business in the State of California. Any and all contractors of
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CONSULTANT retained to perform Services under this Agreement will obtain and maintain, in
full force and effect during the term of this Agreement, identical insurance coverage, naming CITY
as an additional insured under such policies as required above.
18.3. Certificates evidencing such insurance shall be filed with CITY
concurrently with the execution of this Agreement. The certificates will be subject to the approval
of CITY’s Risk Manager and will contain an endorsement stating that the insurance is primary
coverage and will not be canceled, or materially reduced in coverage or limits, by the insurer except
after filing with the Purchasing Manager thirty (30) days’ prior written notice of the cancellation
or modification. If the insurer cancels or modifies the insurance and provides less than thirty (30)
days’ notice to CONSULTANT, CONSULTANT shall provide the Purchasing Manager written
notice of the cancellation or modification within two (2) business days of the CONSULTANT’s
receipt of such notice. CONSULTANT shall be responsible for ensuring that current certificates
evidencing the insurance are provided to CITY’s Chief Procurement Officer during the entire term
of this Agreement.
18.4. The procuring of such required policy or policies of insurance will not be
construed to limit CONSULTANT’s liability hereunder nor to fulfill the indemnification
provisions of this Agreement. Notwithstanding the policy or policies of insurance,
CONSULTANT will be obligated for the full and total amount of any damage, injury, or loss
caused by or directly arising as a result of the Services performed under this Agreement, including
such damage, injury, or loss arising after the Agreement is terminated or the term has expired.
SECTION 19. TERMINATION OR SUSPENSION OF AGREEMENT OR SERVICES.
19.1. The City Manager may suspend the performance of the Services, in whole
or in part, or terminate this Agreement, with or without cause, by giving ten (10) days prior written
notice thereof to CONSULTANT. If CONSULTANT fails to perform any of its material
obligations under this Agreement, in addition to all other remedies provided under this Agreement
or at law, the City Manager may terminate this Agreement sooner upon written notice of
termination. Upon receipt of any notice of suspension or termination, CONSULTANT will
discontinue its performance of the Services on the effective date in the notice of suspension or
termination.
19.2. In event of suspension or termination, CONSULTANT will deliver to the
City Manager on or before the effective date in the notice of suspension or termination, any and
all work product, as detailed in Section 14 (Ownership of Materials), whether or not completed,
prepared by CONSULTANT or its contractors, if any, in the performance of this Agreement. Such
work product is the property of CITY, as detailed in Section 14 (Ownership of Materials).
19.3. In event of suspension or termination, CONSULTANT will be paid for the
Services rendered and work products delivered to CITY in accordance with the Scope of Services
up to the effective date in the notice of suspension or termination; provided, however, if this
Agreement is suspended or terminated on account of a default by CONSULTANT, CITY will be
obligated to compensate CONSULTANT only for that portion of CONSULTANT’s Services
provided in material conformity with this Agreement as such determination is made by the City
Manager acting in the reasonable exercise of his/her discretion. The following Sections will
survive any expiration or termination of this Agreement: 14, 15, 16, 17, 19.2, 19.3, 19.4, 20, 25,
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27, 28, 29 and 30.
19.4. No payment, partial payment, acceptance, or partial acceptance by CITY
will operate as a waiver on the part of CITY of any of its rights under this Agreement, unless made
in accordance with Section 17 (Waivers).
SECTION 20. NOTICES.
All notices hereunder will be given in writing and mailed, postage prepaid, by
certified mail, addressed as follows:
To CITY: Office of the City Clerk
City of Palo Alto
Post Office Box 10250
Palo Alto, CA 94303
With a copy to the Purchasing Manager
To CONSULTANT: Attention of the Project Manager at the address of
CONSULTANT recited on the first page of this Agreement.
CONSULTANT shall provide written notice to CITY of any change of address.
SECTION 21. CONFLICT OF INTEREST.
21.1. In executing this Agreement, CONSULTANT 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 the Services.
21.2. CONSULTANT further covenants that, in the performance of this
Agreement, it will not employ subcontractors or other persons or parties having such an interest.
CONSULTANT certifies that no person who has or will have any financial interest under this
Agreement is an officer or employee of CITY; this provision will be interpreted in accordance
with the applicable provisions of the Palo Alto Municipal Code and the Government Code of the
State of California, as amended from time to time. CONSULTANT agrees to notify CITY if any
conflict arises.
21.3. If the CONSULTANT meets the definition of a “Consultant” as defined by
the Regulations of the Fair Political Practices Commission, CONSULTANT will file the
appropriate financial disclosure documents required by the Palo Alto Municipal Code and the
Political Reform Act of 1974, as amended from time to time.
SECTION 22. NONDISCRIMINATION; COMPLIANCE WITH ADA.
22.1. As set forth in Palo Alto Municipal Code Section 2.30.510, as amended
from time to time, CONSULTANT certifies that in the performance of this Agreement, it shall not
discriminate in the employment of any person due to that person’s race, skin color, gender, gender
identity, age, religion, disability, national origin, ancestry, sexual orientation, pregnancy, genetic
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information or condition, housing status, marital status, familial status, weight or height of such
person. CONSULTANT 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.
22.2. CONSULTANT understands and agrees that pursuant to the Americans
Disabilities Act (“ADA”), programs, services and other activities provided by a public entity to
the public, whether directly or through a contractor or subcontractor, are required to be accessible
to the disabled public. CONSULTANT will provide the Services specified in this Agreement in a
manner that complies with the ADA and any other applicable federal, state and local disability
rights laws and regulations, as amended from time to time. CONSULTANT will not discriminate
against persons with disabilities in the provision of services, benefits or activities provided under
this Agreement.
SECTION 23. ENVIRONMENTALLY PREFERRED PURCHASING AND ZERO
WASTE REQUIREMENTS. CONSULTANT shall comply with the CITY’s Environmentally
Preferred Purchasing policies which are available at CITY’s Purchasing Department, hereby
incorporated by reference and as amended from time to time. CONSULTANT 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, CONSULTANT shall comply with the
following Zero Waste requirements:
(a) All printed materials provided by CONSULTANT 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.
(b) Goods purchased by CONSULTANT 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 Department’s office.
(c) Reusable/returnable pallets shall be taken back by CONSULTANT, at no
additional cost to CITY, for reuse or recycling. CONSULTANT shall provide documentation from
the facility accepting the pallets to verify that pallets are not being disposed.
SECTION 24. COMPLIANCE WITH PALO ALTO MINIMUM WAGE ORDINANCE.
CONSULTANT shall comply with all requirements of the Palo Alto Municipal Code Chapter 4.62
(Citywide Minimum Wage), as 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, CONSULTANT 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,
CONSULTANT shall post notices regarding the Palo Alto Minimum Wage Ordinance in
accordance with Palo Alto Municipal Code Section 4.62.060.
SECTION 25. NON-APPROPRIATION. This Agreement is subject to the fiscal provisions of
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the Charter of the City of Palo Alto and the Palo Alto Municipal Code, as amended from time to
time. 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.
SECTION 26. PREVAILING WAGES AND DIR REGISTRATION FOR PUBLIC
WORKS CONTRACTS.
26.1. This Project is not subject to prevailing wages and related
requirements. CONSULTANT is not required to pay prevailing wages and meet related
requirements under the California Labor Code and California Code of Regulations in the
performance and implementation of the Project if the contract:
(1) is not a public works contract;
(2) is for a public works construction project of $25,000 or less, per California
Labor Code Sections 1782(d)(1), 1725.5(f) and 1773.3(j); or
(3) is for a public works alteration, demolition, repair, or maintenance project of
$15,000 or less, per California Labor Code Sections 1782(d)(1), 1725.5(f) and
1773.3(j).
SECTION 27. CLAIMS PROCEDURE FOR “9204 PUBLIC WORKS PROJECTS”. For
purposes of this Section 27, 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. (Cal. Pub. Cont. Code § 9204.) Per California Public Contract Code
Section 9204, for Public Works Projects, certain claims procedures shall apply, as set forth in
Exhibit F, entitled “Claims for Public Contract Code Section 9204 Public Works Projects”.
This Project is not a 9204 Public Works Project.
SECTION 28. CONFIDENTIAL INFORMATION.
28.1. In the performance of this Agreement, CONSULTANT may have access to
CITY’s Confidential Information (defined below). CONSULTANT will hold Confidential
Information in strict confidence, not disclose it to any third party, and will use it only for the
performance of its obligations to CITY under this Agreement and for no other purpose.
CONSULTANT will maintain reasonable and appropriate administrative, technical and physical
safeguards to ensure the security, confidentiality and integrity of the Confidential Information.
Notwithstanding the foregoing, CONSULTANT may disclose Confidential Information to its
employees, agents and subcontractors, if any, to the extent they have a need to know in order to
perform CONSULTANT’s obligations to CITY under this Agreement and for no other purpose,
provided that the CONSULTANT informs them of, and requires them to follow, the confidentiality
and security obligations of this Agreement.
28.2. “Confidential Information” means all data, information (including without
limitation “Personal Information” about a California resident as defined in Civil Code Section
1798 et seq., as amended from time to time) and materials, in any form or media, tangible or
intangible, provided or otherwise made available to CONSULTANT by CITY, directly or
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indirectly, pursuant to this Agreement. Confidential Information excludes information that
CONSULTANT can show by appropriate documentation: (i) was publicly known at the time it
was provided or has subsequently become publicly known other than by a breach of this
Agreement; (ii) was rightfully in CONSULTANT’s possession free of any obligation of
confidence prior to receipt of Confidential Information; (iii) is rightfully obtained by
CONSULTANT from a third party without breach of any confidentiality obligation; (iv) is
independently developed by employees of CONSULTANT without any use of or access to the
Confidential Information; or (v) CONSULTANT has written consent to disclose signed by an
authorized representative of CITY.
28.3. Notwithstanding the foregoing, CONSULTANT may disclose Confidential
Information to the extent required by order of a court of competent jurisdiction or governmental
body, provided that CONSULTANT will notify CITY in writing of such order immediately upon
receipt and prior to any such disclosure (unless CONSULTANT is prohibited by law from doing
so), to give CITY an opportunity to oppose or otherwise respond to such order.
28.4. CONSULTANT will notify City promptly upon learning of any breach in
the security of its systems or unauthorized disclosure of, or access to, Confidential Information in
its possession or control, and if such Confidential Information consists of Personal Information,
CONSULTANT will provide information to CITY sufficient to meet the notice requirements of
Civil Code Section 1798 et seq., as applicable, as amended from time to time.
28.5. Prior to or upon termination or expiration of this Agreement,
CONSULTANT will honor any request from the CITY to return or securely destroy all copies of
Confidential Information. All Confidential Information is and will remain the property of the CITY
and nothing contained in this Agreement grants or confers any rights to such Confidential
Information on CONSULTANT.
28.6. If selected in Section 30 (Exhibits), this Agreement is also subject to the
terms and conditions of the Information Privacy Policy and Cybersecurity Terms and Conditions.
SECTION 29. MISCELLANEOUS PROVISIONS.
29.1. This Agreement will be governed by California law, without regard to its
conflict of law provisions.
29.2. In the event that an action is brought, the parties agree that trial of such
action will be vested exclusively in the state courts of California in the County of Santa Clara,
State of California.
29.3. The prevailing party in any action brought to enforce the provisions of this
Agreement may recover its reasonable costs and attorneys’ fees expended in connection with that
action. The prevailing party shall be entitled to recover an amount equal to the fair market value
of legal services provided by attorneys employed by it as well as any attorneys’ fees paid to third
parties.
29.4. This Agreement, including all exhibits, constitutes the entire and integrated
agreement between the parties with respect to the subject matter of this Agreement, and supersedes
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all prior agreements, negotiations, representations, statements and undertakings, either oral or
written. This Agreement may be amended only by a written instrument, which is signed by the
authorized representatives of the parties and approved as required under Palo Alto Municipal
Code, as amended from time to time.
29.5. If a court of competent jurisdiction finds or rules that any provision of this
Agreement is void or unenforceable, the unaffected provisions of this Agreement will remain in
full force and effect.
29.6. In the event of a conflict between the terms of this Agreement and the
exhibits hereto (per Section 30) or CONSULTANT’s proposal (if any), the Agreement shall
control. In the event of a conflict between the exhibits hereto and CONSULTANT’s proposal (if
any), the exhibits shall control.
29.7. The provisions of all checked boxes in this Agreement shall apply to this
Agreement; the provisions of any unchecked boxes shall not apply to this Agreement.
29.8. All section headings contained in this Agreement are for convenience and
reference only and are not intended to define or limit the scope of any provision of this Agreement.
29.9. This Agreement may be signed in multiple counterparts, which, when
executed by the authorized representatives of the parties, shall together constitute a single binding
agreement.
SECTION 30. EXHIBITS. Each of the following exhibits, if the check box for such exhibit is
selected below, is hereby attached and incorporated into this Agreement by reference as though
fully set forth herein:
EXHIBIT A: SCOPE OF SERVICES
EXHIBIT A-1 PROFESSIONAL SERVICES TASK ORDER
EXHIBIT B: SCHEDULE OF PERFORMANCE
EXHIBIT C: COMPENSATION
EXHIBIT C-1: SCHEDULE OF RATES
EXHIBIT D: INSURANCE REQUIREMENTS
THIS AGREEMENT IS NOT COMPLETE UNLESS ALL SELECTED EXHIBITS
ARE ATTACHED.
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CONTRACT NO. C26194078
SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have by their duly authorized representatives
executed this Agreement as of the date first above written.
CITY OF PALO ALTO
____________________________
City Manager
APPROVED AS TO FORM:
__________________________
City Attorney or designee
M.E. SIMPSON COMPANY, INC.
By: ________________________________
Name: ______________________________
Title: _______________________________
By: ________________________________
Name: ______________________________
Title: _______________________________
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MICHAEL D. SIMPSON
CEO
CFO
Cara Lance-Emerick
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EXHIBIT A
SCOPE OF SERVICES
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.
CONSULTANT shall provide following professional water system leak detection services for
the City of Palo Alto’s potable water distribution system, totaling approximately 231 miles of
watermains. The objective of this project is to analyze unreported water leaks for the
development of economic models and for regulatory compliance. The work shall include project
initiation, field acoustic survey, traffic control, reporting, geographic information system (“GIS”)
deliverables, analysis, and quality assurance.
Each Task shall be performed by CONSULTANT on an annual basis for a three (3) year
duration, for a total of six (6) total tasks.
Task 1: Project Initiation & Planning
A) Conduct a kickoff meeting with CITY staff.
B) Review CITY GIS maps, records, and system data.
C) Establish safety, reporting, and communication protocols.
Task 2: Field Leak Detection Survey and Reporting
A) Conduct all leak detection services covering the CITY’s entire potable water distribution
system in accordance with the industry manual of Practice American Water Works
Association (“AWWA”) Manual 36 and shall be carried out by trained two-person teams
to ensure accuracy and safety.
a. Perform hydrant/valve listening at intervals of ≤500 ft metallic, ≤300 ft
AC/Concrete, ≤150 ft PVC/HDPE.
b. Provide all required traffic control.
c. Use advanced leak detection equipment: Gutermann AquaScope, Echologics
LeakFinder-ST, FCS Touch Pro
d. Maintain a Suspected Leak Log; re-verify potential leaks after a minimum of 4
hours.
e. Mark verified leaks with blue paint and record sub-meter GPS coordinates
f. Address noise and mixed pipe conditions using nighttime survey methods and
filtering
g. All staff carrying out leak detection services shall be OSHA-certified, CPR/First
Aid trained, and ATSSA traffic-control certified.
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h. Provide daily progress updates and weekly logs.
i. Submit GIS shapefiles/ArcGIS deliverables with leak attributes each year.
B) Submit Progress Report on a monthly basis, summarizing leaks identified.
a. All reports shall be reviewed and approved by the Consultant’s QA/QC manager.
C) Incorporate CITY feedback and submit Final Report within 30 working days, including
leak summaries, estimated water loss, and economic analysis of potential costs of leak
persistence.
Deliverables:
A) Daily progress updates.
B) Weekly progress logs.
C) GIS shapefiles of all verified leak locations with attributes.
D) Draft Report summarizing methodology, leaks identified, and initial analysis.
E) Final Report including leak summaries, estimated water loss, and economic analysis.
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EXHIBIT A-1
PROFESSIONAL SERVICES TASK ORDER
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 are incorporated into this
Task Order by this reference. CONSULTANT shall furnish the necessary facilities, professional, technical
and supporting personnel required by this Task Order as described below.
CONTRACT NO.
OR PURCHASE ORDER REQUISITION NO. (AS APPLICABLE)
1A. MASTER AGREEMENT NO. (MAY BE SAME AS CONTRACT / P.O. NO. ABOVE):
1B. TASK ORDER NO.:
2. CONSULTANT NAME:
3. PERIOD OF PERFORMANCE: START: COMPLETION:
4 TOTAL TASK ORDER PRICE: $__________________
BALANCE REMAINING IN MASTER AGREEMENT/CONTRACT $_______________
5. BUDGET CODE_______________
COST CENTER________________
COST ELEMENT______________
WBS/CIP__________
PHASE__________
6. CITY PROJECT MANAGER’S NAME & DEPARTMENT:_____________________________________
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): _____________________________
I hereby authorize the performance of the
work described in this Task Order.
APPROVED:
CITY OF PALO ALTO
BY:____________________________________
Name __________________________________
Title___________________________________
Date ___________________________________
this Task Order and warrant that I have
authority to sign on behalf of Consultant.
APPROVED:
COMPANY NAME: ______________________
BY:____________________________________
Name __________________________________
Title___________________________________
Date ___________________________________
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EXHIBIT B
SCHEDULE OF PERFORMANCE
CONSULTANT shall perform the Services so as to complete each milestone within the number
of days/weeks specified below. The time to complete each milestone may be increased or
decreased by mutual written agreement of the Project Managers for CONSULTANT and CITY so
long as all work is completed within the term of the Agreement. CONSULTANT shall provide a
detailed schedule of work consistent with the schedule below within 2 weeks of receipt of the
notice to proceed (“NTP”) from the CITY.
Number of Days/Weeks (as
Optional Schedule of Performance Provision for On-Call or Additional Services Agreements.
(This provision only applies if checked and only applies to on-call agreements per Section 1 or
agreements with Additional Services per Section 4.)
The schedule of performance shall be as provided in the approved Task Order, as detailed in
Section 1 (Scope of Services) in the case of on-call Services, or as detailed in Section 4 in the case
of Additional Services, provided in all cases that the schedule of performance shall fall within the
term as provided in Section 2 (Term) of this Agreement.
Docusign Envelope ID: 8A2D500C-E8A9-435F-8B0B-F3B52EAABDA5
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EXHIBIT C
COMPENSATION
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 NOT TO EXCEED AMOUNT
TASK NOT TO EXCEED AMOUNT
Sub-total for Services $584,190.00
Total for Services and Reimbursable Expenses $584,190.00
Maximum Total Compensation $638,609.00
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.
Docusign Envelope ID: 8A2D500C-E8A9-435F-8B0B-F3B52EAABDA5
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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: NONE up to the not-to-exceed amount of: $0.00.
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: 8A2D500C-E8A9-435F-8B0B-F3B52EAABDA5
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EXHIBIT C-1
SCHEDULE OF RATES
CONSULTANT’s schedule of rates is as follows:
Compensation for additional services to the contract using task orders shall be charged on a daily
rate basis. Additional services will be performed on weekdays and will not extend over
weekends. Additional services will be performed while mobilized. Additional services involving
work near and around traffic shall be performed in pairs.
Two Technicians……………………………………………………. $3,250.00 / DAY
Docusign Envelope ID: 8A2D500C-E8A9-435F-8B0B-F3B52EAABDA5
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EXHIBIT D
INSURANCE REQUIREMENTS
CONSULTANTS 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 HEREIN.
REQUIRED TYPE OF COVERAGE REQUIREMENT
MINIMUM LIMITS
EACH
OCCURRENCE AGGREGATE
YES
YES
WORKER’S COMPENSATION
EMPLOYER’S LIABILITY
STATUTORY
STATUTORY STATUTORY STATUTORY
YES
GENERAL LIABILITY, INCLUDING
PERSONAL INJURY, BROAD FORM
PROPERTY DAMAGE BLANKET
CONTRACTUAL, AND FIRE LEGAL
LIABILITY
BODILY INJURY
PROPERTY DAMAGE
BODILY INJURY & PROPERTY
DAMAGE COMBINED.
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$1,000,000
YES
AUTOMOBILE LIABILITY,
INCLUDING ALL OWNED, HIRED,
NON-OWNED
BODILY INJURY
- EACH PERSON
- EACH OCCURRENCE
PROPERTY DAMAGE
BODILY INJURY AND PROPERTY
DAMAGE, COMBINED
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$1,000,000
YES
PROFESSIONAL LIABILITY,
INCLUDING, ERRORS AND
OMISSIONS, MALPRACTICE (WHEN
APPLICABLE), AND NEGLIGENT
PERFORMANCE
ALL DAMAGES $1,000,000
YES
THE CITY OF PALO ALTO IS TO BE NAMED AS AN ADDITIONAL INSURED: CONSULTANT, 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
CONSULTANT
COMPENSATION, EMPLOYER’S LIABILITY AND PROFESSIONAL INSURANCE, NAMING AS ADDITIONAL
INSUREDS CITY, ITS COUNCIL MEMBERS, OFFICERS, AGENTS, AND EMPLOYEES.
I. INSURANCE COVERAGE MUST INCLUDE:
A. A CONTRACTUAL LIABILITY ENDORSEMENT PROVIDING INSURANCE COVERAGE FOR
CONSULTANT’S AGREEMENT TO INDEMNIFY CITY.
II. THE CONSULTANT MUST SUBMIT CERTIFICATES(S) OF INSURANCE EVIDENCING REQUIRED COVERAGE
AT THE FOLLOWING EMAIL: PURCHASINGSUPPORT@CITYOFPALOALTO.ORG
III. ENDORSEMENT PROVISIONS WITH RESPECT TO THE INSURANCE AFFORDED TO ADDITIONAL
INSUREDS:
A. PRIMARY COVERAGE
WITH RESPECT TO CLAIMS ARISING OUT OF THE OPERATIONS OF THE NAMED INSURED,
INSURANCE AS AFFORDED BY THIS POLICY IS PRIMARY AND IS NOT ADDITIONAL TO OR
CONTRIBUTING WITH ANY OTHER INSURANCE CARRIED BY OR FOR THE BENEFIT OF THE
ADDITIONAL INSUREDS.
Docusign Envelope ID: 8A2D500C-E8A9-435F-8B0B-F3B52EAABDA5
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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 CONSULTANT 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 CONSULTANT SHALL PROVIDE CITY AT LEAST A TEN (10) DAY
WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION.
EVIDENCE OF INSURANCE AND OTHER RELATED NOTICES ARE REQUIRED TO BE
FILED WITH THE CITY OF PALO ALTO SENT TO THE FOLLOWING EMAIL:
PURCHASINGSUPPORT@CITYOFPALOALTO.ORG
Docusign Envelope ID: 8A2D500C-E8A9-435F-8B0B-F3B52EAABDA5
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City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Public Works
Meeting Date: February 23, 2026
Report #:2511-5432
TITLE
Approval of Amendment No. 2 to Contract No. C25193187 with Universal Security Company for
Fire Watch Services at City Hall in the Amount of $80,915 for a New Total Not-to-Exceed
Amount of $301,667, and Approval of a Fiscal Year 2026 Operating Budget Amendment in the
General Fund; CEQA status - Categorically Exempt under Sections 15301 and 15302
RECOMMENDATION
Staff recommends that the City Council:
1. Approve and authorize the City Manager or their designee to execute Amendment No. 2
to Contract No. C25193187 with Universal Security Company to provide fire watch
services at City Hall in the Amount of $80,915, for a new total not-to-exceed amount of
$301,667; and
2. Amend the Fiscal Year 2026 Operating Budget Appropriation for the General Fund
(requires a 2/3 vote) by:
a. Increasing the Public Works Department Public Services Division contract
expense appropriation by $80,915; and
b. Decreasing the Budget Stabilization Reserve by $80,915.
BACKGROUND
On Monday, August 18, 2025, it was discovered that the drive shaft connecting a diesel engine
to the City Hall fire pump was sheared in half, making the fire pump inoperable. The fire pump
provides water pressure to the fire sprinkler system on the upper floors of City Hall. Section
15.5.2 of the National Fire Protection Association 25 mandates the provision of a fire watch
whenever an automatic fire sprinkler system malfunctions for 10 hours in a 24-hour period. The
24 hours a day, 7 days per week fire watch service began on August 19, 2025, and ended on
November 10, 2025, when the repair to the fire pump was completed. The fire watch services
were performed by Universal Security Company.
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Universal Security Company provides security services at the Municipal Service Center and the
Regional Water Quality Control Plant under contract No. C251931871 and staff’s recommended
action amends the contract scope and compensation for these additional services.
ANALYSIS
FISCAL/RESOURCE IMPACT
STAKEHOLDER ENGAGEMENT
ENVIRONMENTAL REVIEW
ATTACHMENTS
APPROVED BY:
1 https://www.paloalto.gov/files/assets/public/v/1/public-works/public-
services/contracts/contract-with-universal-security-company-c25193187.pdf
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AMENDMENT NO. 2 TO CONTRACT NO. C25193187
BETWEEN THE CITY OF PALO ALTO AND
UNIVERSAL SEMICONDUCTOR, INC. dba UNIVERSAL SECURITY COMPANY
This Amendment No. 2 (this “Amendment”) to Contract No. C25193187 (the “Contract” as
defined below) is entered into as of December 16, 2025 by and between the CITY OF PALO ALTO, a
California chartered municipal corporation (“CITY”), and UNIVERSAL SEMICONDUCTOR, INC. dba
UNIVERSAL SECURITY COMPANY, a California corporation, located at 1925 Zanker Road, San Jose,
CA 95112, Telephone Number: 408-234-4797 (“CONTRACTOR”). CITY and CONTRACTOR 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 of security guard services, as detailed therein.
B. The Parties now wish to amend the Contract in order to increase the total
not-to-exceed amount of the Contract by Eighty Thousand Nine Hundred Fifteen Dollars
$80,915.00) from Two Hundred Twenty Thousand Seven Hundred Fifty-Two Dollars
($220,752,000) to a new total not-to-exceed amount of Three Hundred One Thousand Six
Hundred Sixty-Seven Dollars ($301,667.00) for city hall fire watch.
NOW, THEREFORE, in consideration of the covenants, terms, conditions, and provisions
of this Amendment, the Parties agree:
SECTION 1. Definitions. The following definitions shall apply to this Ame ndment:
a.Contract. The term “Contract” shall mean Contract No. C25193187
between CONSULTANT and CITY, dated February 1, 2025, as amended by:
Amendment No. 1, dated November 1, 2025
b.Other Terms. Capitalized terms used and not defined in this Amendment
shall have the meanings assigned to such terms in the Contract.
SECTION 2. Section 5 “COMPENSATION FOR ORIGINAL TERM” of the Contract is hereby
amended to read as follows:
“COMPENSATION FOR ORIGINAL TERM. CITY shall pay and CONTRACTOR agrees to accept
as not-to-exceed compensation for the full performance of the Services and reimbursable
expenses, if any:
The total maximum lump sum compensation of dollars ($ );
#(& "") #$
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No. 2 City Hall Fire Watch
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Vers.: Aug. 5, 2019
Page 2 of 5
OR
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 Three Hundred One
Thousand Six Hundred Sixty-Seven Dollars ($301,667.00).
SECTION 3. The following exhibit(s) to the Contract is/are hereby amended or added, as
indicated below, to read as set forth in the attachment(s) to this Amendment, which is/are hereby
incorporated in full into this Amendment and into the Contract by this reference:
a. Exhibit “A” entitled “SCOPE OF SERVICES”, ADDED, AMENDED.
SECTION 4. Legal Effect. Except as modified by this Amendment, all other provisions of the
Contract, including any exhibits thereto, shall remain in full force and effect.
SECTION 5. Incorporation of Recitals. The recitals set forth above are terms of this
Amendment and are fully incorporated herein by this reference.
(SIGNATURE BLOCK FOLLOWS ON THE NEXT PAGE.)
#(& "") #$
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No. 2 City Hall Fire Watch
Final; C25193187
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Vers.: Aug. 5, 2019
Page 3 of 5
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
UNIVERSAL SEMICONDUCTOR, INC.
dba UNIVERSAL SECURITY COMPANY
By:______________________________
Name:___________________________
Title:____________________________
By:______________________________
Name:___________________________
Title:____________________________
Attachments:
Exhibit “A” entitled “SCOPE OF SERVICES”, ADDED, AMENDED
#(& "") #$
% & "'
!#%&( #*& +
#% "
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Attachment A - Amendment
No. 2 City Hall Fire Watch
Final; C25193187
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Vers.: Aug. 5, 2019
Page 4 of 5
EXHIBIT A
SCOPE OF SERVICES
Scope of Work for City Hall
CONTRACTOR shall supply all labor, materials, equipment and incidentals necessary to
provide unarmed security guard services at City Hall for fire watch while the fire alarm is
repaired.
The general performance criteria shall include but not be limited to providing unarmed
security guard services to:
1.CONTRACTOR shall provide a security sweep and inspection of City Hall.
2.Security sweeps and inspections shall be continuous Twenty-Four (24) hours a day,
seven (7) days a week until the city’s fire department confirms the emergency is
over.
3.Security sweeps will include but are not limited to: building exterior doors, internal
doors, all floors, parking garage and both stairwells.
4.The 1st guard shall work from 6:00 am to 2:30 pm and will open front vehicle gate at
7am.
5.The 2nd guard shall work from 8:30 am to 5:00 pm and will close front vehicle gate at
4:30 pm.
6.Respond promptly and appropriately to all security-related emergencies.
7.Notify the appropriate law enforcement agency and Project Manager of any smoke
or fire.
Personnel Requirements:
1.Officer Uniforms
a.All security officers must always wear a security uniform when performing
services under this Contract.
b.The uniform must have the word “Security” on the front and back of the
uniform, in conformance with the State of California requirements.
c.The name of the individual officer shall be on the front of the uniform.
#(& "") #$
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No. 2 City Hall Fire Watch
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Vers.: Aug. 5, 2019
Page 5 of 5
d.All uniforms (collar shirts and pants) shall be cleaned and pressed regularly.
e.All collar shirts shall be tucked in neatly with dark color slacks and shoes.
f.High visibility apparel and/or reflective vest is recommended due to the
requirement of working in vehicle traffic situations.
g.All uniforms shall be approved by the City’s Project Manager prior to wearing
them onsite.
2.Officer Qualifications:
a.Be able to communicate effectively in both written and oral English.
b.Possess a valid California Driver’s License or Identification.
c.Be a legal resident of the United States of America.
d.Have successfully completed the educational requirements and
successfully passed the examinations required by the State of California,
Department of Consumer Affairs.
e.Be capable of performing the assigned tasks.
f.Passed background check and have no disqualifying criminal conviction
record as determined by City.
g.Must ensure that at least one person every day has a working knowledge of
the City Hall.
h.Possess a current security guard card from the state.
3.Equipment:
a.Contractor shall furnish all equipment necessary to perform the work as
described herein.
b.All equipment shall be kept in good condition. Required equipment shall
include but not be limited to:
i.Flashlights and two-way radios/smart phones.
ii.Appropriate winter and summer wear for staff meeting guidelines in
the “Personnel” section above.
Officer Wages
1.Contractor must follow the federal, state, and local minimum wage law each year of
the Contract.
#(& "") #$
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Attachment A - Amendment
No. 2 City Hall Fire Watch
Final; C25193187
Item 6: Staff Report Pg. 7 Packet Pg. 58 of 205
City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Police
Meeting Date: February 23, 2026
Report #:2602-5961
TITLE
Approval of a Contract to Patrol Four Railroad Grade Crossings (vendor, term, and cost TBD);
Approval Cost Sharing Agreement with Palo Alto Unified School District; and Approve Related
Budget Amendments; CEQA status – Not a project
This will be a late packet report published on February 19, 2026.
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City Council
Staff Report
From: City Manager
Report Type: ACTION ITEMS
Lead Department: Administrative Services
Meeting Date: February 23, 2026
Report #:2512-5662
TITLE
FY 2026 Mid-Year Budget Review; and Approve 1) Budget Amendments in Various Funds, and 2)
a $10.0 Million Additional Discretionary Payment (ADP) from the PARS Pension Trust
RECOMMENDATION
Staff recommends that the City Council receive the FY 2026 mid-year budget review and:
1. Approve amendments to the Fiscal Year 2026 Budget Appropriation for the funds and
capital projects identified in Attachment A, Exhibits 1 and 2 (requires 2/3 approval);
2. Consolidate the remaining $6.0 million in the Uncertainty Reserve with the Budget
Stabilization Reserve (BSR) to streamline reserve administration, closing the Uncertainty
Reserve; and
3. Authorize the City Manager or their designee to transmit $10.0 million from the City’s
PARS Pension Trust to CalPERS as an Additional Discretionary Payment (ADP)
EXECUTIVE SUMMARY
This report provides the financial status of major City funds as of December 31, 2025, and
presents strategic actions to manage immediate revenue fluctuations while addressing long-
term structural liabilities. Overall, the General Fund is tracking below adopted revenues and
within expenditure levels. Significant revenue realignments are necessary to reflect a $9.0
million decline in sales tax and $1.3 million downward revision of property tax. Consistent with
data reviewed by the Finance Committee in November 20252. Total General Fund revenue
estimates are recommended for reduction by $10.3 million to align with updated county and
market forecasts ($6.3 million ongoing, and $4 million one-time). While revenues for charges
for services, permits & license, transient occupancy tax and document transfer tax revenue
receipts through Q2 are stronger than prior year trends, these sources are less predictable and
conservatively these FY 2026 budget estimates are not revised upwards at this time. This
hopefully provides revenue opportunities in FY 2027 budget development and staff will closely
monitor Q3 and Q4.
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To streamline reserve administration and prepare for a General Fund projected $14.9 million
structural deficit in FY 20271, staff and the Finance Committee recommends consolidating the
Uncertainty Reserve ($6.0 million balance) with the Budget Stabilization Reserve via a technical
adjustment. Combined, the BSR balance is projected to end FY 2026 at $54.7 million (17.8%),
which is $2.1 million below the Council’s 18.5% target ($56.8 million). This conservatively
assumes the consolidation of the reserves offset by the $10.3 million reduction in estimated tax
revenues. If the reserve is offset by the ongoing $6.3 million reduction in estimated tax
revenues, excluding the contingent one-time sales tax reduction (of $4 million), then the
projected BSR would be $58.7 million or 19.1%. There is a lower probability of using $2.0
million BSR previously identified in LRFF for FY 2027 budget balancing with the current
projection falling below target levels.
2, this proactive step
implements the City Retiree Benefit Funding Policy (Policy) and is integral to the FY 2027 budget
balancing strategy.
BACKGROUND
3. These reports provide the technical baseline for the City’s current operations
1 City Council, January 13, 2026; Report #2511-5473,
https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=84151&dbid=0&repo=PaloAlto&searchid=87b8885
8-9fbd-4c06-82ac-9564f9076e1b
2 Finance Committee, November 18, 2025; #2511-5392,
https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=83886&dbid=0&repo=PaloAlto&searchid=643b9fb0
-0e06-4d6d-9fee-6c01ce0f9094
3 City Council, January 20, 2026; #2512-5601: FY 2027-FY 2036 Long Range Financial Forecast,
https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=85271&dbid=0&repo=PaloAlto&searchid=a0926757
-5af0-466d-b59c-ae4de17e166d
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and serve as the "starting point" for developing a structurally balanced budget for the
upcoming fiscal years7.
8.
9.
ANALYSIS
7 City Council Staff Report, January 13, 2025; #2412-3846,
https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=83197&dbid=0&repo=PaloAlto&searchid=d5f2eb36
-85a1-47b6-91e4-e6ebf0093346&cr=1
8 Finance Committee, November 18, 2025; #2511-
5392https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=83886&dbid=0&repo=PaloAlto&searchid=5f89
f3e9-39ff-4f54-b84c-1bdb84a084ff
9 City Council, January 20, 2026; Report #2510-5352,
https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=85264&dbid=0&repo=PaloAlto&searchid=51ce8927
-a6eb-4f27-966a-aecc716263c4
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I. General Fund Mid-Year Budget Adjustments
The Fiscal Year 2026 General Fund Mid-Year Budget Review aligns the City’s budget with
updated financial information while preserving the long-term stability established in the
January 2026 Long-Range Financial Forecast (LRFF). While General Fund expenditures are
tracking within adopted levels, significant adjustments are required on the revenue side to
account for a projected $10.3 million reduction in sales tax ($9.0 million reduction) and
property tax ($1.3 million reduction). This sales tax realignment results from State (CDTFA)
regulation changes impacting the leasing and auto sectors and updated property tax
projections. The conservative $9.0 million reduction in sales tax reflects both an estimated
ongoing loss of $5 million in annual receipts as well as a contingent one-time loss estimated at
$4 million for prior year adjustments. Depending upon CDTFA determination, the prior year
adjustment could range between $0 and $4 million. Consolidating the General Fund reserves is
a technical adjustment yielding a projected combined BSR balance of $54.7 million or 17.8%,
which excludes the full revenue reduction $10.3 million in FY 2026. If the $4 million prior year
sales tax adjustment does not occur, then the revenue reduction may be $6.3 million in FY
2026, resulting in projected BSR of $58.7 million or 19.1%.
The recommended adjustments for the General Fund include a combination of additional
funding for operational needs and technical alignments to reflect actual fiscal activity.
Additional funding is proposed for the Public Works Department (PWD) to address critical
equipment needs for the Urban Forestry section. Realignment of the grant award to the
Chamber of Commerce as the fiscal sponsor of the former 3rd Thursday event series to the Palo
Alto Recreation Foundation which is now coordinating an event series on California Ave.
Technical adjustments include the prior revenue adjustments mentioned for major taxes and
the consolidation of the Uncertainty Reserve with the BSR. Additionally, the Utilities
Department (UTL) requires a true-up of the Electric Equity Transfer, while the Fire Department
(FIR) recognizes revenue related to strike team deployments and the annual funding
reconciliation with Stanford University. These technical actions also include an expenditure
realignment for Fire to offset strike team costs and a bank fee adjustment in the Planning and
Development Services Department (PDS) to align with current volume. These items are
summarized in the Table 1.
Summary of General Fund Adjustments Net $ Impact
(Cost)/Benefit
Technical Adjustments:
Sales Tax Projection Update - Revenue Reduction $(9.0) M
Property Tax Projection Update - Revenue Reduction $(1.3) M
Uncertainty Reserve Consolidation w/BSR $6.0 M
UTL: Electric Equity Transfer (Technical adjustment)$0.2 M
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FIR: Stanford University FY 2025 Reconciliation Revenue $0.1 M
PDS: Gas Water Heater Subsidy - Revenue Reduction $(0.1) M
Subtotal Technical Adjustments:$(4.1) M
Use of Budget Stabilization Reserve $4.1 M*
(BSR at 17.8% and $2.1 M below the 18.5% target level)
Total Net Impact General Fund Mid-Year Adjustments $0.0 M
II. Pension Liability Management
As part of implementing the City Retiree Benefit Policy and managing pension liability, staff
recommends authorizing a $10.0 million Additional Discretionary Payment (ADP) from the
Section 115 Pension Trust to CalPERS. The remaining Section 115 Trust and planned future
contributions and earnings are projected to achieve the Policy outcome of reaching 90% funded
status within 15 years of the approved Policy. This proactive measure, reviewed and
recommended by the Finance Committee on November 18, 2025, aligns with the Policy and is
integral to the multi-year financial plan.
The Section 115 Pension Trust was established to provide the City with a dedicated vehicle to
manage pension volatility and reduce the Unfunded Accrued Liability (UAL). By transferring
these funds to CalPERS as an ADP, the City effectively reduces the principal balance of its
pension debt, leading to long-term interest savings and lower annual required contributions in
future years. This action is particularly critical given the projected $14.9 million structural deficit
beginning in FY 2027, as it helps flatten the trajectory of rising benefit costs.
III. Enterprise and Other Fund Adjustments
Beyond the General Fund, the Mid-Year Budget Review includes a series of technical and
operational adjustments across the City’s Enterprise, Internal Service, Special Revenue, and
Capital funds. These actions are required to align appropriations with updated revenue sources,
ensure compliance with grant timelines, and accurately reflect Council-directed changes to
capital projects. A summary are included in Table 2.
Within the Enterprise Funds, the most significant financial adjustment occurs in the Fund 526
Wastewater Treatment Fund, where staff recommends recognizing $17.0 million in revenue
from the City of Mountain View. This revenue reflects Mountain View’s proportional share of
the Advanced Water Purification System (AWPS) capital project, based on a funding agreement
executed following the adoption of the FY 2026 budget. Additionally, this fund requires an
increase in operating appropriations to address higher-than-anticipated chemical costs for
treatment and laboratory operations, driven by rising vendor prices. In the Fund 530 Airport
Fund, a minor adjustment is proposed to resource the Unleaded Fuel Transition Plan, providing
necessary consultant services to monitor aircraft lead emissions and track the transition to
unleaded fuel in alignment with City Council priorities.
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Internal Service Funds require adjustments to address rising fixed costs and technical carry-
forward corrections. The Fund 689 General Liabilities Insurance Fund requires a $0.9 million
increase in appropriation to cover a significant 30 percent rise in excess liability insurance
premiums, a trend consistent with the broader municipal insurance market. In the Fund 682
Information Technology Fund, staff recommends a technical re-appropriation of $230,000 to
complete public safety radio infrastructure upgrades. These funds were not correctly carried
forward from the previous fiscal year, and this action ensures the department has the authority
to satisfy active purchase orders for critical public safety communication equipment.
Additionally, the Fund 687 General Benefits Fund includes a technical true-up to align PARS
supplemental pension contributions with actual departmental allocations, resulting in a
$83,000 reduction to the fund balance.
Table 2: Enterprise and Other Fund Mid-Year Adjustments
Fund Name Net $ Impact
(Cost)/Benefit
Enterprise Funds:
Fund 513 Electric Supply Fund (Equity Transfer)$(157) K
Fund 523 Electric Fund (Cap and Invest Transfer to CIP)$(258) K
Fund 526 Wastewater Treatment Fund (AWPS Revenue & Chemical Costs)$16,843 K
Fund 530 Airport Fund (Unleaded Fuel Transition Plan)$(20) K
Internal Service Funds:
Fund 681 Vehicle Replacement & Maintenance Fund (Bucket Truck Rental)$(72) K
Fund 682 Information Technology Fund (Radio Infrastructure)$(230) K
Fund 687 General Benefits Fund (115 Trust Transfer/PARS True-Up)$(83) K
Fund 689 General Liabilities Insurance Fund (Excess Liability Costs)$(900) K
Special Revenue & Capital Funds:
Fund 231 Gas Tax Fund (Revenue/Transfer True-Up)$10 K
Fund 232 Community Development Block Grant (Return to Fund Balance)$63 K
Fund 233 Housing In Lieu / Residential (Housing Program)$(114) K
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Fund 236 University Ave Parking Fund (Parking Services)$0 K
Fund 248 Law Enforcement Services (ALPR Grant Cleanup)$(36) K
Fund 253 Local Housing Allocation (Grant Re-appropriation)$(244) K
Fund 471 General Fund Capital Improvement Fund (Project Savings &
Transfers)$200 K
Total Net Impact Enterprise and Other Funds $15,002 K
IV. Future Outlook and Governmental Efficiency
The FY 2026 Mid-Year Budget Review balances the General Fund, closing the projected revenue
gap through the limited use of the reserves and technical realignments. During FY 2026, budget
reductions were made by Council on September 8, 202513 to improve the structural deficit by
reducing FY 2026 budget spending by approximately $6 million with $3.4 million on-going for 3
years (reduce $2.4 million General Fund and $1 million CIP) and $2.8 million one-time (reduce
$0.6 million General Fund and $2.2 million CIP). This fiscal discipline and more solutions are
required to balance the additional forecasted FY 2027 structural deficit of $14.9 million, which
continues through FY 2032.
Increased government efficiency will be a greater focus in FY 2027 budget development,
transparency and management in alignment with the 2026 City Council priority. Staff are
working to identify, develop, and implement governmental efficiencies including but not limited
to: streamlining operations, reducing professional service costs and improving contract
management, increasing revenues, and improving facility utilization. Priority initiatives will be
reported in the Council Priorities and Objective updates, City Manager budget transmittal, and
budget presentations.
Staff will return to the Finance Committee and City Council in May 2026 with a balanced
Proposed Budget with solutions ensuring that Palo Alto maintains its fiscal health while
delivering high-quality services to the community.
FISCAL/RESOURCE IMPACT
Approval of the attached transactions is required to amend the FY 2026 budget appropriation.
With the approval of these amendments, the projected ending balance of the General Fund
Budget Stabilization Reserve (BSR) is $54.7M, or 17.8% of expenditures. While this is within the
15% to 20% policy range, it is $2.1 million below the City Council’s 18.5% target of $56.8M.
Notably, if the $4M one-time sales tax adjustment does not occur, the ending BSR balance is
projected to reach $58.7M, or 19.1%.
13 City Council, September 8, 2025; Agenda Item#18; 2506-
4818,https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=83564&dbid=0&repo=PaloAlto&searchid=0cb
9ea95-968d-4d59-8d45-249d0c4401e3
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The projected changes to the fund balance for all other funds including Capital Funds,
Enterprise Funds, Internal Services Funds, and Special Revenue Funds are outlined in
Attachment A and accompanying exhibits and impacts to fund balances in these fund types are
summarized in the table below.
Table 3: Summary of Impacts to Fund Balances (Non-General Fund)
Fund Type / Fund Name Net Impact to Fund
Balance
Enterprise Funds
Fund 513 Electric Supply Fund $(0.16) M
Fund 523 Electric Fund $(0.26) M
Fund 526 Wastewater Treatment Fund $16.84 M
Fund 530 Airport Fund $(0.02) M
Enterprise Funds Subtotal $16.40 M
Internal Service Funds
Fund 681 Vehicle Replacement & Maintenance Fund $(0.07) M
Fund 682 Information Technology Fund $(0.23) M
Fund 687 General Benefits Fund $(0.83) M
Fund 689 General Liabilities Insurance Fund $(0.90) M
Internal Service Funds Subtotal $(1.20) M
Special Revenue Funds
Fund 231 Gas Tax Fund $(0.01) M
Fund 232 Community Development Block Grant Fund $0.06 M
Fund 233 Housing In Lieu / Residential $(0.11) M
Fund 236 University Ave Parking Fund $(0.00) M
Fund 248 Law Enforcement Services Fund $(0.04) M
Fund 253 Local Housing Allocation Fund $(0.24) M
Special Revenue Funds Subtotal $(0.34) M
Capital Funds
Fund 471 Capital Improvement Fund $0.20 M
Capital Funds Subtotal $0.20 M
Total Net Impact to All Other Funds $14.98 M
STAKEHOLDER ENGAGEMENT
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on the Long Range Financial Forecast. During those sessions, staff provided detailed updates on
tax revenue trends and the long-term forecast, allowing for a collaborative review of the
challenges we face and the maneuvers proposed to keep the City’s finances in balance.
ENVIRONMENTAL REVIEW
ATTACHMENTS
APPROVED BY:
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Revenues
Department FTE Adjustment Adjustment
GENERAL FUND (102)
Non-Departmental Technical Adjust: Projected Sales Tax Revenue Update
This action reduces General Fund revenue by $9 million to align with updated sales
tax forecast for $5 million ongoing reduction and $4 million contingent one-time prior
year adjustment. Primarily due to leasing and auto sales sector.
- (9,000,000)$ -$
Non-Departmental Technical Adjust: Projected Property Tax Revenue Update
This action reduces General Fund revenue to align with updated county and market
forecasts for property ($1.3 million reduction) taxes. Property tax growth is expected
to be lower than the original 6.1% projection, and sales tax estimates have been
adjusted down based on recent quarterly reports.
- (1,300,000)$ -$
Non-Departmental Technical Adjust: Eliminate Uncertainty Reserve
This action eliminates $6.0 million from the Uncertainty Reserve and returns these
funds to the Budget Stabilization Reserve (BSR). This serves as a strategic bridge to
mitigate projected revenue declines anticipated in Fiscal Years 2026 and 2027.
- -$ (6,000,000)$
Non-Departmental Technical Adjust: California Ave. Event Series (formerly Third Thursday Series)
This action formalizes the grant award of $40,000 in FY 2026 to the Palo Alto
Recreation Foundation, previously awarded to the Chamber of Commerce as the
fiscal sponsor of the former Third Thursday event series. As previously announced,
the grant previously awarded through the Non-Profit Phase I grant process, is being
evaluated for rebranding to better support the future vision of California Avenue
activations with PARF.
- -$ -$
Utilities Technical Adjust: FY 2025 Year-End Cleanup for the Electric Equity Transfer
This action adjusts the electric transfer to the General Fund following the release of
the FY 2025 ACFR. This update accounts for changes to PG&E’s return on equity rates
effective January 1, 2026, ensuring accurate financial alignment.
- 157,000$ -$
Fire Technical Adjust: Revenue from Stanford/Fire Response Services Agreement
This action recognizes $109,665 in the estimate for Charges for Services revenue
from the FY 2025 reconciliation process with Stanford University, which showed a
1.1% variance above the adopted budget. These funds have been billed per the terms
of the agreement.
- 109,665$ -$
Fire Technical Adjust: Salaries and Overtime Adjustment
This net-neutral action reallocates $1.25 million in projected salary savings to the
overtime budget. The department carried ten vacancies during the first half of the
fiscal year, necessitating overtime to maintain minimum staffing levels.
- -$ -$
Fire Technical Adjust: Revenue from Other Agencies/Overtime for Strike Teams
This action recognizes $489,382 in reimbursement revenue for participation in eight
strike teams. The request increases overtime and equipment budgets to align with
state-reimbursed costs for personnel and essential tools.
- 489,382$ 489,382$
CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2026 BUDGET
Expenses
ATTACHMENT A, EXHIBIT 1
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Revenues
Department FTE Adjustment Adjustment
GENERAL FUND (102)
CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2026 BUDGET
Expenses
ATTACHMENT A, EXHIBIT 1
Fire Technical Adjust: Revenue from Other Agencies/Overtime for Fire Station 8
This action recognizes $229,660 in revenue under an agreement to staff Fire Station
8. An offsetting overtime expense is included to account for personnel costs
associated with this service contract.
- 229,660$ 229,660$
Library Technical Adjust: Grant Revenue/Library Programs
This action recognizes $13,195 in grant revenue from the Pacific Library Partnership
and the Howard Hughes Medical Institute. Funds support the Vintage Media Lab and
participation in the Northern California Digital Library Consortium.
- 13,195$ 13,195$
Planning & Dev.
Services
Technical Adjust: Development Services Bank Card Fees/Permits and Licenses
This action increases the budget for bank card fees by $120,000 due to increased
credit card usage by applicants. The expense is offset by revenue from plan check and
permit fees.
120,000$ 120,000$
Planning & Dev.
Services
Technical Adjust: Permits and Licenses Revenue/Gas Water Heater Subsidy
This action reflects a $50,000 reduction in anticipated revenue from Permits and
Licenses to incorporate the gas water heater permit fee subsidy, authorized by
Council resolution to support environmental goals.
(50,000)$
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance as a result of actions recommended in this report
and decreases the Budget Stabilization Reserve (BSR) projected for June 30, 2026 to
$54.7 million or 17.8%. **If the $4
million prior year sales tax adjustment does not occur, then the revenue reduction may be $6.3 million in FY 2026,
resulting in projected BSR of $58.7 million or 19.1% at FY 2026 year-end.
- -$ (4,083,335)$
GENERAL FUND (102) SUBTOTAL - (9,231,098)$ (9,231,098)$
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Year Budget Amendments
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Attachment B
B
Attachment B – Page 1 of 7
Preliminary FY 2026 2nd Quarter Financial Status
General Fund
Overall, the General Fund is tracking below the adopted revenue estimates and within the adopted
expenditure levels. Actual FY 2026 total revenues and expenditures increased by 9.0% and 2.9%
respectively compared to the same period in FY 2025. General Fund revenues increased overall
compared to the prior year, with growth observed in property tax, charges for services, transient
occupancy tax, utility user tax, permits and licenses, documentary transfer tax, and business tax.
Sales tax remained relatively flat. The adopted FY 2026 revenue budget expected even higher
revenue trends, and so a budget amendment is recommended to adjust the budget estimates to a
lower level. As previously discussed with Finance Committee and Council in the long range
financial forecast (LRFF), this FY 2026 Mid-Year recommend adjustments that are measured and
aligned with the City’s overall financial outlook.
Revenues
The FY 2026 Adjusted revenue budget, prior to changes recommended in the Mid-Year Review,
totals $270.3 million (excluding Operating Transfers‐in), of which $107.0 million or 39.6% of the
budget, has been collected as of the end of the 2nd quarter compared to 37.8% collected in prior
year. Revenue receipt is seasonal with non-linear collection. Business Tax is included in totals and
used for specific programs related to public safety, affordable housing and homeless services, and
transportation and grade separation projects, per Council direction. A Reserve for Business Tax
Revenue is used to ensure that business tax revenue is accounted separately from the Budget
Stabilization Reserve (BSR) to be used in accordance with approved programs in the previously
mentioned areas.
Adjustments to align revenue estimates based on current experience through the first half of FY 2026
and forecasted through year-end are recommended in this Mid‐Year Budget Review, including
adjustments to reduce revenues by $10.3 million for Sales Tax ($9.0 million decrease) and
Property Tax ($1.3 million decrease).
Table 1 below outlines General Fund revenue performance, as of the end of the 2nd quarter,
December 31, 2025, compared to the adjusted budget. The adjusted budget does not assume
staff’s recommended adjustments presented in this Mid‐Year report as these changes have not
been approved by the City Council.
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Second Quarter Financial
Status Report
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B
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Table 1
Property Tax
The FY 2026 Budget is $73.6 million, a $4.2 million or 6.1% increase from the FY 2025 actual
receipts of $69.4 million. Property Tax revenues are collected and allocated by the County and are
received by the City in two periods during the fiscal year, generally beginning in late November
and again in the Spring. The County’s November forecast is consistent with assumptions included
in the Long Range Financial Forecast, which was developed using County data available as of
September. At this stage, the County has published the tax roll and Staff recommends aligning the
City budget revenues accordingly thereby reducing FY 2026 Property Tax estimates by $1.3 million,
from $73.6 million to $72.3 million. With this adjustment, Property Tax revenues are still projected
to increase year over year, though at a more moderate level than the adopted budget.
Educational Revenue Augmentation Fund (ERAF) - The City has set aside $7.1 million in reserves to
address ongoing uncertainty related to the calculation of ERAF distributions. This includes pending
litigation between Marin County and the California State Controller regarding the methodology
used to calculate excess ERAF, which could have broader implications for counties statewide. A
court hearing on this matter is expected to continue in March 2026. Staff will continue to monitor
developments and update assumptions as additional information becomes available.
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Second Quarter Financial
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Sales Tax
The FY 2026 Adopted Budget is $36.4 million, an increase of 3.29% compared to the actual Sales
Tax receipts of $35.2 million in FY 2025. As of the 2nd quarter, actual receipts are 30.7%
compared to 28.2% of budget; however, this Midyear report includes a decrease of $9.0 million
in Sales Tax revenue, consistent with the assumptions previously presented to the Finance
Committee on November 18, 20251, and incorporated into the FY 2027-36 Long Range Financial
Forecast.
The adjustment reflects updated sales tax projections indicating a decline of approximately $9.0
million in FY 2026, or more than 20%, driven by potential one-time adjustments and lower
ongoing allocations to the City. Beginning in FY 2027, sales tax revenue is projected to remain
approximately $5.0 million lower annually, or over 10%, compared to prior estimates. These
changes are primarily due to revised regulations used by the California Department of Tax and
Fee Administration (CDTFA) in apportioning sales tax revenue from the leasing and new auto
sectors. Sales Tax performance continues to evolve based on consumer activity and state
allocation methodology, and staff continues to coordinate with the State and business
community to better understand these impacts.
Transient Occupancy Tax (TOT)
The FY 2026 Budget is $29.1 million in TOT revenue, consistent with FY 2025 actual receipts of
$29.0 million and above pre‐pandemic collections of $25.7 million in FY 2019. TOT performance is
primarily driven by hotel operating metrics, including average daily room rates and occupancy.
December TOT revenue is not included in the Mid-Year report due to timing of collections. From
July to November, the average occupancy rate is 85.5% (compared to 71.4% the prior fiscal year),
and the average room rate is $274 (down from $290 the prior fiscal year). Year-to-date collections
represent approximately 43% of the annual budget compared to prior year of 41%, given current
trends TOT is projected to meet or exceed current FY 2026 budget estimate. This is an
improvement from the current long-range financial forecast estimate.
Utility User Tax (UUT)
The FY 2026 Budget is $21.4 million, a $1.0 million or 5.11% increase compared to $20.4 million in
FY 2025 actual receipts. UUT is calculated as a percentage of utility charges billed to customers for
services and is primarily driven by customer usage and utility rates. As of the 2nd quarter, actual
receipts are $10.0 million, which is $0.6 million or 6.2% higher than the same period of the prior
year at $9.4 million. This increase reflects FY 2026 adopted utility rate increases, normal
fluctuation in utility consumption and billing cycles. Based on current trends, staff does not
recommend adjustments to the adopted budget and will continue to monitor collections
throughout the remainder of the fiscal year.
Documentary Transfer Tax (DTT)
1 Finance Committee, November 18, 2025, Item #2
https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=83883&dbid=0&repo=PaloAlto
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The FY 2026 Budget totals $8.5 million, representing a $0.1 million, or 1.8%, increase over FY 2025
actual receipts of $8.4 million. Through the second quarter, cash receipts total $5.0 million, which
is 58.8% of the FY 2026 adjusted budget and $1.0 millio n, or 24.2%, higher than receipts through
the second quarter of FY 2025. DTT revenues are highly variable, as collections depend on both the
number and value of property transactions. Staff continues to monitor these receipts closely due
to significant fluctuations that can occur from changing market conditions. Based on receipts
reported to date, staff recommends maintaining DTT revenue at the FY 2026 Adopted Budget level
and continue to monitor collections throughout the remainder of the fiscal year.
Return on Investments
The FY 2026 Budget is $3.7 million, a $0.2 million or 0.56% increase from FY 2025 actual receipts
which were also $3.7 million. As of the 2nd quarter, cash receipts total $1.98 million, or 53% of the
FY 2026 budget. Beginning in August 2025, the City transitioned from managing investments in-
house to Chandler Asset Management to provide active investment management2, cash flow
forecasting, and investment advisory services. While this transition is expected to increase the
City’s return on investments over time, the benefits will occur gradually as existing holdings
mature, and the portfolio is repositioned to the new strategy. Investment revenues in the current
year are tracking in line with the adopted budget, and no material change is expected in FY 2026.
Higher investment earnings are anticipated beginning in FY 2027 and will be incorporated into the
FY 2027 Proposed Budget. Staff will continue to monitor investment performance through
quarterly reporting.
Business Tax
The FY 2026 Adopted Budget includes $6.7 million for Business Tax revenue. As of the 2nd
quarter, collections total $1.8 million or 27.1% of the FY2026 budget. This is consistent with
historical collection patterns and reflects the timing of quarterly Business Tax payments, which
are received in arrears. Early fiscal year receipts are mostly attributable to prior-year activity, as
taxes due June 30 are payable beginning July 1 with a 30-day grace period through July 30. Based
on payments received to date and expected upcoming filings, staff anticipates revenues will align
with adopted budget levels and will continue to monitor collection trends.
Measure K (Business Tax) was approved by voters in November 2022 to provide additional funding
for critical public safety needs; transportation safety improvements and grade separations; and
affordable housing and unhoused services. The first Business Tax payment was due on January 1,
2024, for the calendar year of 2023, with quarterly payments thereafter. Measure K included a
multi-year phase-in of the tax rate, with incremental increases applied annually. FY 2026
represents the full fiscal year in which the Business Tax is fully phased in at the voter-approved
rate of $0.075 per square foot.
2 Finance Committee, October 21, 2025, Item #2:
https://cityofpaloalto.primegov.com/Portal/Meeting?meetingTemplateId=16276
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Charges for Services
The FY 2026 Budget assumes $44.2 million in Charges for Services, an increase of $5.0 million, or
12.8%, compared to FY 2025 actual receipts of $39.2 million. Current year-to-date receipt is 42%
compared to 39% in the prior year. The primary drivers for higher year-over-year increase include
zoning and plan check ($1.8 million), paramedic service fee ($1.4 million) reflecting new first
responder fee and increased number of transports, and recreation programming and drop-in
admissions ($0.6 million). Based on current receipt trends and due to unpredictable nature of
some revenues (i.e. permit and medical transport), revenues are projected to meet the FY 2026
budget estimate.
Permit & License
The FY 2026 Budget assumes an estimate of $11.1 million in permit and license revenue, which
aligns with the $10.6 million FY 2025 actual receipts. Permits and Licenses revenue totaled $5.65
million in Q2 FY 2026, an increase of $1.11 million (24%) compared to Q2 FY 2025. The increase is
driven almost entirely by Building New Construction Permit revenue, which rose by $1.13 million
due to the timing and scale of development activity. Several smaller permit categories declined
year over year, partially offsetting gains. Overall, growth reflects concentrated new construction
activity. Given current permits and license receipts and unpredictable nature of such revenues, it is
projected to meet current FY 2026 budget estimate.
Expenditures
Overall General Fund expenditures are currently expected to remain within the FY 2026 Adjusted
budget levels of $287.5 million (excluding transfers to infrastructure or other funds). General Fund
expenditures (excluding operating transfers) for second quarter are 2.9% higher than the prior
fiscal year and are tracking at 45.9% of the Adjusted Budget (excluding encumbrances). This trend
exceeds prior fiscal year expenditure levels which were at 44.8% at the end of the 2nd quarter in FY
2025. This is still below the 50% par level that is expected halfway through the fiscal year, and staff
will continue to monitor expense trends and inform Council regarding anticipated savings or
overages compared to budgeted levels.
Table 2
Salaries and Benefits
Expenditures FY 2026 FY 2025 Inc/(Dec)% change FY 2026 %FY 2025 %
Police 30,155$ 30,414$ (259)$ -0.9%59,899$ 50.3%56,388$ 53.9%
Fire 30,000 28,688 1,312 4.6%59,504 50.4%55,441 51.7%
Community Services 21,491 20,325 1,166 5.7%44,815 48.0%42,553 47.8%
Public Works 12,818 11,541 1,277 11.1%28,813 44.5%27,805 41.5%
Planning and Development Services 11,582 11,081 501 4.5%29,782 38.9%29,336 37.8%
Library 6,613 6,496 117 1.8%13,085 50.5%12,840 50.6%
Administrative Services 5,756 5,650 106 1.9%12,039 47.8%12,154 46.5%
All Other Departments 13,462 13,973 (511)-3.7%39,541 34.0%49,605 28.2%
Total Expenditures 131,877$ 128,168$ 3,709$ 2.9%287,478$ 45.9%286,122$ 44.8%
General Fund Expenditures
FY 2026 2nd Quarter YTD
(000's)
2nd Quarter Actuals Adjusted Budget
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Second Quarter Financial
Status Report
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As a service driven organization, the largest expenditure is salaries and benefits. Preliminary
salaries and benefits expenditures through December 2025 are approximately $95.8 million, or
50.7% of the $189.0 million FY 2026 Budget, compared to $99.0 million or 54.4% in the same
period in the prior fiscal year. As of February 2026, the citywide vacancy was 126 positions or
11.5% vacancy rate. See Table 3 below for more detailed information regarding citywide vacancies
by department and bargaining unit as of the beginning of February. Given the fiscal condition of
the City, all recruitments are subject to review and approval by the Hiring Review Committee and
further consideration of governmental efficiencies.
Table 3
Citywide Vacancies by Department
Public Safety Overtime
Table 4
Department General Fund Other Funds Grand Total
Administrative Services Department 6.00 1.50 7.50
City Attorney's Office 1.00 1.00
City Clerk's Office 1.00 1.00
Community Services Department 5.75 5.75
Fire Department 9.00 9.00
Human Resources Department 0.00 1.00 1.00
Information Technology Department 2.00 2.00
Library Services Department 5.00 5.00
Office of Transportation 3.00 3.00
Planning and Development Services 6.00 1.00 7.00
Police Department 15.00 15.00
Public Works Department 5.00 18.50 23.50
Utilities Department 46.00 46.00
Grand Total 56.75 70.00 126.75
Vacancy %9.4%14.2%11.5%
Vacancy % (w/o Public Safety)6.9%
Police and Fire
Salaries and Overtime Expense
FY 2026 2nd Quarter YTD
(000's)
FY 2026 FY 2025 % change FY 2026 %FY 2025 %
Inc (Dec)
Police - Salaries 10,536$ 10,562$ -0.2%23,037$ 46%22,548$ 46.8%
Police - Overtime 2,225 2,162 2.9%4,574 49%5,903 36.6%
Total Police 12,761 12,724 0.3%27,611 46%28,451 44.7%
Fire - Salaries 10,947 9,808 11.6%22,924 48%21,628 45.3%
Fire - Overtime 2,310 3,010 -23.3%3,080 75%2,721 110.6%
Total Fire 13,257 12,818 3.4%26,004 51%24,349 52.6%
Total Public Safety
Salaries & Overtime 26,018$ 25,542$ 1.9%53,615$ 48.5%52,800$ 48.4%
2nd Quarter YTD Actuals Adjusted Budget
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Second Quarter Financial
Status Report
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Attachment B
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Police Department overtime is 3% higher than prior fiscal year and represents 49% of the adjusted
budget. As of first quarter of FY 2026, the Department had 15 vacancies, or 11% of 139 FTE positions
(12 officers and 3 dispatchers). Overtime is used to cover vacancies, training, leave and major
incidents, with most costs driven by police officer staffing. For example, in January 2026 only 57
of 84 authorized non-management officers (68%) were available for duty; the remainder were
vacant, on long-term leave, in training, or at the academy. Additional information regarding
public safety overtime tracking is included in Attachment C.
Fire Department overtime is generated to backfill vacancies on shift. Each day, 25 positions are
required to keep Fire Engines and Ambulances operational. Any vacancy must be filled to keep
the unit in service. Vacancies result from open positions, injuries, employees in training, and
approved leave. In the second quarter of FY 2026, 10 new firefighters entered the Fire Academy;
overtime is required to cover their shifts until they graduate in February 2026. All Strike Team
deployments are paid at overtime and reimbursed by the State. There have been six
deployments in FY 2026 that are pending reimbursement. Additional information regarding
public safety overtime tracking is included in Attachment C.
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Attachment B - FY 2026
Second Quarter Financial
Status Report
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Attachment C
2024 2025 2026 Q2
POLICE DEPARTMEN
Overtime Expense
Adopted Budget (A)$1,028,988 $1,098,939 $1,173,110
Modified Budget (B)1,028,988 1,098,939 1,173,110
Net Overtime Cost - see below 1,160,290 1,868,684 364,829
Variance to Budget (131,303) (769,745) 808,281
Overtime Net Cost
Actual Expense $3,467,691 $3,181,061 $2,186,643
Less Reimbursements
Other Program Reimbursements 259,747 - 671,270
California OES/FEMA (Strike Teams) - - -
Stanford Communications 99,161 109,651 50,746
Utilities Communications Reimbursement 56,429 67,170 30,142
Local Agencies (C)6,574 6,813 5,291
Police Service Fees 117,433 138,141 48,080
Total Reimbursements 539,345 321,775 805,530
Less Department Vacancies (A)1,768,057 990,602 1,016,284
Net Overtime Cost $1,160,290 $1,868,684 $364,829
Department Vacancies (number of days)5,419 2,733 2,454
Workers' Compensation Cases 21 13 6
Department Disabilities (number of days)381 664 216
FIRE DEPARTMEN
Overtime Expense
Adopted Budget (D)$2,146,234 $2,721,066 $3,079,691
Modified Budget (E)2,146,234 5,216,682 4,939,387
Net Overtime Cost - see below 1,734,841 3,474,470 1,842,167
Variance to Budget 411,393 1,742,212 3,097,220
Overtime Net Cost
Actual Expense $4,099,233 $5,288,738 $2,278,922
Less Reimbursements
California OES/FEMA (Strike Teams) - 957,482 109,064
Fire Station 8 Fire Services 272,267 229,660
Total Reimbursements - 1,229,749 338,724
Less Department Vacancies (D)2,364,392 584,519 98,031
Net Overtime Cost $1,734,841 $3,474,470 $1,842,167
Department Vacancies (number of days)5,297 3,401 788
Workers' Compensation Cases 8 16 5
Department Disabilities (number of days)274 395 121
NOTES:
(A)The FY 2026 Police Department budget did not include any new positions.
(B)Police Department adopted budget has not been adjusted in FY 2026.
(C)Includes Animal Control Services contract with Los Altos and Los Altos Hills.
(D)The FY 2026 Fire Department budget was increased by 3.0 Fire Captains and 7.0 Single Role EMS Division positions.
(E)As part of the FY 2026 Mid-Year Review, staff is recommending actions that will result in a Fire Department overtime budget of $4.9 million.
Public Safety Department
Overtime Analysis for Fiscal Years 2024 through 2026
Item 8
Attachment C - Public Safety
Overtime Analysis Q2 2026
Item 8: Staff Report Pg. 19 Packet Pg. 78 of 205
City Council
Staff Report
From: City Manager
Report Type: ACTION ITEMS
Lead Department: City Manager
Meeting Date: February 23, 2026
Report #:2602-5887
TITLE
Approval of City Council Values (as Recommended by Policy & Services Committee), 2026
Objectives, Ad Hoc Purpose Statements, and Committee Workplans
RECOMMENDATION
Staff recommends that the City Council approve: (a) Revised Council Values, as recommended
by the Policy & Services Committee, (b) 2026 City Council Group 1 Objectives, and (c) Ad Hoc
Purpose Statements and Committee Workplans
EXECUTIVE SUMMARY
At its January 24, 2026 annual retreat, the City Council adopted a refined framework for
establishing priorities and objectives that emphasizes clarity, focus, and implementation. Under
this approach, City Council Values represent enduring policy commitments; Priorities identify a
limited number of areas requiring heightened focus; and Objectives define specific, measurable
actions to advance both values and priorities. This structure is intended to strengthen
accountability, align resources with Council direction, and ensure meaningful progress within
the year.
This report presents: (a) recommended revised City Council Values as recommended by the
Policy & Services Committee; (b) the proposed 2026 Group 1 Objectives aligned with the
adopted Priorities; and (c) Ad Hoc Purpose Statements and Committee Workplans for City
Council consideration and adoption. Objectives are organized into three categories: Group 1
(mission-critical and requiring City Council engagement), Group 2 (value-adding initiatives with
flexible timing), and Staff Not Recommended. While all Group 1 and Group 2 objectives will be
tracked for progress, quarterly reporting will focus on Group 1 objectives to align with City
Council’s highest priorities. The Policy & Services Committee reviewed and consolidated
proposed revisions to the City Council Values and unanimously recommends adoption of an
updated set of values.
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It should be noted that the objectives and timeframes described here were developed prior to
the identification of potential near-term changes being considered at railroad grade crossings.
The effort required to address this issue may impact timelines of other priority objectives.
BACKGROUND
1. City Council
distinguished between enduring Council Values, time-bound priorities, and actionable
objectives, noting that values should reflect long-standing policy commitments, while priorities
should represent a limited number of areas requiring heightened Council attention in the near
term. Several policy areas previously treated as annual priorities were recognized as ongoing in
nature and more appropriately reflected as values, allowing annual priorities to be more
targeted and strategic. This refined approach remains consistent with the Council’s Policies and
Protocols Handbook.
Achieve Near-Term Priority Housing Milestones
Cubberley Acquisition and Renovation Funding
Enhance Business Vibrancy
Government Efficiency
The Palo Alto City Council has universally shared values that help guide our decision and the
work we do. These values include:
1. We will make decisions that balance revenues and expenses, now and in the future.
2. We will make decisions that are environmentally sustainable, now and in the future.
3. We will integrate equity into our decisions, considering how decisions affect people
differently based on their identity or circumstances.
4. We will make decisions that create a healthy, safe and welcoming community for all.
5. We will safeguard public trust through transparent practices and open communication.
1 January 24, 2026 City Council Retreat:
https://cityofpaloalto.primegov.com/Portal/Meeting?meetingTemplateId=18520
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6. We embrace innovation.
This report outlines the reorganized proposed 2026 Objectives within the adopted Priorities
and City Council Values, incorporating City Council feedback and the refined priority
framework. It also includes ad hoc purpose statements and committee workplans for City
Council consideration and adoption, as well as the recommended City Council Values refined by
the Policy & Services Committee for City Council consideration.
ANALYSIS
City Council Values
On February 10, 2026, the Policy & Services Committee discussed the City Council referral to
refine the City Council Values and considered proposed revisions submitted by City
Councilmembers Burt, Reckdahl, and Mayor Veenker.3 The Committee noted that the
proposals were mostly aligned, with differences primarily related to wording, organization and
level of specificity. The Committee emphasized readability, clarity, succinctness, and ensuring
that the final values incorporated key themes raised in all the suggested drafts, including
economic development, fiscal stewardship, equity, belonging, innovation, climate action and
adaptation, transparency, and community well-being. Following revisions and consensus on
language, the Committee agreed on a consolidated set of seven City Council Values and voted
unanimously to recommend that the City Council adopt the updated values:
1.Vibrant Community. Cultivate a dynamic community by fostering retail vibrancy,
economic development, engaging public spaces, and a high quality of life for all.
2.Fiscal Responsibility. Exercise disciplined financial management to ensure city revenues
and expenses remain balanced and sustainable, and are fiscally strategic and
responsible.
3.Accountable Governance. Earn public trust through transparent leadership, inclusive
engagement, and open communication.
4.Strategic Innovation. As the birthplace of Silicon Valley, embrace innovation in the
public and private sectors to optimize efficiency and outcomes.
5.Equity and Shared Prosperity. Center equity in every decision, and advance housing,
workforce, and social policies that promote inclusion, socioeconomic diversity, and
opportunity.
6.Climate Leadership and Environmental Stewardship. Lead with urgency on climate
action and adaptation, sustainability, and environmental protection for current and
future generations.
7.Community Well-Being & Belonging. Foster a safe, healthy, and welcoming community
where everyone belongs and can thrive physically, mentally, and socially.
3 February 10, 2026 Policy & Services Meeting:
https://cityofpaloalto.primegov.com/meetings/ItemWithTemplateType?id=10899&meetingTemplateType=2&com
piledMeetingDocumentId=18478
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Proposed 2026 Objectives
Group 1 objectives are categorized as mission-critical, and must be achieved to meet legal,
operational, safety, or strategic requirements. Objectives in this group will require City Council
engagement. These are captured in Attachment A.
Group 2 objectives are value-adding initiatives that are important, improve quality of life or
advance longer-term goals, but flexible in timing and dependent on capacity or completion of
Group 1 priorities. These do not create immediate risk if delayed. Many of the objectives
captured in this category are already underway and will not require Council action to be
completed. These are captured in Attachment B.
Staff Not Recommended objectives include projects that are not recommended to be part of
the 2026 list of objectives, for a variety of reasons including feasibility challenges, or work is
already underway as part of a greater effort, such as the draft proposed Business Retention,
Expansion, and Attraction (BRE/A) strategy in Attachment G. A narrative for each objective not
being recommended is summarized in Attachment C.
Priority Group
1
Group
2
Staff Not
Recommended
Total 42 24 14
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Ad Hoc Purpose Statements and Committee Workplans
Rail Committee (Brown Act)
Rail Safety/Youth Mental Health Ad Hoc
Cubberley Ad Hoc
Economic Development Ad Hoc (Brown Act)
Climate Action & Sustainability Ad Hoc (Brown Act)
Oversized Vehicles Impacts & Services Ad Hoc
Downtown Housing Plan and SB79 Ad Hoc
Valley Water Shoreline Funding Allocation Ad Hoc
FISCAL/RESOURCE IMPACT
STAKEHOLDER ENGAGEMENT
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The City uses the International Association for Public Participation (IAP2) as a guide to structure
community participation and align that participation with the type of input or feedback needed
based on the project/issue. Workplan engagement typically fit within these general focus areas:
Inform: Fact sheets, webpages, blog posts, information sessions, open houses, frequently asked
questions, community briefings, and website feedback forms
Consult & Involve: Surveys, focus groups, questions and answer sessions, office hours, public
meetings like community meetings, town halls, panel discussions, workshops, and polling
Collaborate & Empower: Working groups, ad hoc groups, feedback groups, boards,
commissions and committee meetings, community advisory panels, advisory groups, digital
engagement platforms, and voter ballot measures.
ENVIRONMENTAL REVIEW
ATTACHMENTS
APPROVED BY:
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ATTACHMENT A
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B C D E F G H I J K L M
2026 DRAFT CITY COUNCIL PRIORITIES AND OBJECTIVES
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Achieve Near‐Term Priority Housing Milestones (ANTPHM)‐ 15 Total
x
Adopt an updated Accessory Dwelling Unit (ADU) ordinance to comply with State law
and implement additional policy alternatives, including increased allowable square
footage and condominium conversions, consistent with City Council direction
(05.15.23). Milestone: Planning and Transportation Commission recommendation
and City Council consideration of draft ordinance.x 1
x
Evaluate opportunities that make multi‐family housing an attractive alternative to
commercial office development, consistent with Housing Element Program 3.9A.
Milestones: Feedback from Policy & Services Committee in Q1 and advance
ordinance to Council in Q2.x 1
x
Partner with Santa Clara County Housing Authority to achieve construction timeline
milestones for the Palo Alto Homekey project (which will provide transitional housing
and services for unhoused residents). Milestone: Formal opening of the Palo Alto
Homekey facility at 1237 San Antonio Rd.x 1
x
Receive a Prohousing Designation from the California Department of Housing and
Community Development in order to enhance the City's competitive advantage for
qualifying grants. Milestone: Apply to HCD in Q1; receive approval in Q2. x
x
Select a preferred alternative for the San Antonio Road Area Plan land use and
transportation alternatives based on community input and City Council direction.
Milestones : Stakeholder input for alternatives (PTC, community, and advisory
bodies') in Q1, Council selection of preferred alternative(s) in Q2, Environmental
Impact Review in Q3, and Council review of policy recommendations in Q4.x 1
x
Develop and adopt Objective Development Standards for the South of Forest Area
Coordinated Area Plan (SOFA), and present plan amendment options to replace
subjective standards with objective standards for Planning and Transportation
Commission and City Council consideration, consistent with Housing Element
Program 3.7. Explore alignment opportunities with SB 79 work and Downtown
Housing Plan. Milestones: Planning and Transportation Commission recommendation
and City Council consideration of amended SOFA CAP and/or municipal code
amendments by end of 2026. x 1
x
Codify the R1/SB 9 interim ordinance by establishing objective development
standards and increasing the maximum floor area for SB 9 units from 800 to 1,200
square feet, consistent with Housing Element Program 6.3A, and evaluate
implications for R1 and SB 9 projects within the City’s Individual Review Program.
Milestones: Planning and Transportation consideration of draft ordinance in Q3;
Council consideration in Q4.x 1
Priority
CC
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OBJECTIVES (42 Total)
Sorted by:
Council Priority, Group #, estimated completion date, and finally by additional resource needs.Q1 Q2 Q3 Q4
Gr
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Attachment A - Page 1 of 6
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Attachment A - City Council
2026 Priorities &
Objectives- Group 1
Item 9: Staff Report Pg. 7 Packet Pg. 85 of 205
ATTACHMENT A
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Priority
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Sorted by:
Council Priority, Group #, estimated completion date, and finally by additional resource needs.Q1 Q2 Q3 Q4
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Conduct and complete a study of short‐term rentals and adopt housing and
neighborhood preservation regulations that prioritize long‐term occupancy,
consistent with Housing Element Programs 4.2D–E (anticipates ordinance adoption
by July, 2027). Milestones: report to City Council in Q3; prepare alternatives for
Council and Planning and Transportation Commission review in Q4, 2026 or Q1, 2027,
if requested.x 1
x
Receive Council direction on optional SB 79 implementation strategies and, as
appropriate, present scenario Downtown Housing Plan scenarios to Council and
initiate environmental review. Milestones: Work with SB 79 and Downtown Housing
Plan City Council Ad‐Hoc Committee on next steps in Q1 and Q2 based on SB 79
implementation approach; advance Downtown Housing Plan based on direction
received from City Council through Q4.x 1
x
Adopt zoning incentives and development standards that support innovative housing
typologies, including micro‐units, intergenerational housing, housing for aging adults,
students, and lower‐income households, consistent with Housing Element Program
6.5B. Milestones : Study session with Planning and Transportation Commission in Q1;
recommendations for Architectural Review Board consideration in Q2; Planning and
Transportation Commission recommendation and City Council consideration of draft
ordinance in Q4.x 1
x
Update and adopt development impact fees for public safety, government facilities,
housing, transportation, parks, and community services, including completion of
nexus and feasibility studies and establishment of fee waivers for low‐income
inclusionary units. (Housing Element Programs 2.1B; 3.1B & C). Milestone: Present
development scenarios and growth assumptions to Council for feedback by Q2.
Adopt Parks, Library & Community Facility Fee Updates by Q3. Adopt additional fee
updates by Q1 2027.x 1
x
Issue Requests for Information or Requests for Proposals (RFI/P) to develop
approximately 218 affordable or workforce housing units on City‐owned surface
parking lots. (Housing Element Program 1.4A). Milestone: Review draft RFI/P with
Policy & Services Committee by Q3 2026 to issue the solicitation process by year end.x 1
x
Identify and designate additional Housing Element site capacity to maintain RHNA
compliance and buffer by evaluating new opportunity sites to address anticipated
capacity shortfalls in 2026, including impacts from development on faith‐based sites
and downtown parking lots. Milestones : Select consultant to provide technical
analysis in Q1; Planning and Transportation Commission recommendation and City
Council consideration of replacement Housing Element sites in Q3.x 1 $‐$$
Attachment A - Page 2 of 6
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ATTACHMENT A
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2026 DRAFT CITY COUNCIL PRIORITIES AND OBJECTIVES
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Sorted by:
Council Priority, Group #, estimated completion date, and finally by additional resource needs.Q1 Q2 Q3 Q4
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Implement Oversized Vehicles (OSV) Phase 1 work, including options for RV buyback
and storage, new recruiting safe parking and enforcement/signage relating to
detached/inoperable vehicles prohibition. Milestones: In coordination with the OSV
Ad hoc, seek Council direction on preferred option(s) on RV buyback and storage in
Q2. Implement signage and enforce detached/inoperable vehicles prohibition in Q2.
Work with OSV Ad Hoc on recruiting new safe parking and bring any potential
projects to Council for consideration in Q3. (related to 2025 Objective 3.3.4). x 1
$$‐
$$$
x
Initiate and advance Oversized Vehicles Phase 2 work, including oversized vehicle
permit pilot (e.g., collecting count data, designing permit process & terms, conducting
informal RFI/Q to operate pilot). Milestone : Develop OSV permit pilot, including
enhanced services and bring to Council for consideration. (related to 2025 Objective
3.3.4).x 1
$$‐
$$$
Cubberley Acquisition and Renovation Funding (CA&RF)‐ 2 Total
Continue to advance the Cubberley Project focusing on anticipated purchase of 7
acres from PAUSD and community polling for potential placement of a measure on
the November 2026 ballot and other funding source(s). x 1
Continue to explore and develop partnership opportunities with community
nonprofit organizations to advance certain elements of the master concept plan
through a combination of city and private investments.x 1
Enhance Business Vibrancy (EBV)‐ 5 Total
x
Develop a formal business retention/expansion/attraction program focused on
supporting existing Palo Alto businesses seeking to diversify the local economy,
increase the tax base that pays for essential public services, job creation, support
placemaking and special events, and branding opportunities. Milestone: With the
Economic Development Ad Hoc Committee, review and solidify for Council approval a
Business Retention, Expansion, and Attraction (BRE/A) Strategy with various
implementation actions; an initial draft is attached to this staff report.x 1
x
Adopt an ordinance expanding retail opportunities and strengthening retail resiliency,
including refining retail and retail‐like definitions and updating the retail preservation
ordinance. Milestone: PTC review and recommendation in Q2; City Council review
and action in Q3. Continued engagement with stakeholders prior to implementation. X 1
x
Implement the California Avenue near‐term signage plan replacing the El Camino Real
(October 2026) and Oregon Expressway (August 2026) signs—by completing their
procurement and installation. x 1
Attachment A - Page 3 of 6
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2026 Priorities &
Objectives- Group 1
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ATTACHMENT A
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Sorted by:
Council Priority, Group #, estimated completion date, and finally by additional resource needs.Q1 Q2 Q3 Q4
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Continue design work on new parking structure in Downtown core (Lot D).
Milestone: Complete entitlement process and design development phase by the end
of 2026.x 1
x
Secure City Council approval for the California Avenue Outdoor Activation Guidelines.
These guidelines will be finalized through continued stakeholder engagement that
includes a representative mix of business owners and residents and a formal
Architectural Review Board (ARB) review.x 1 $
Government Efficiency (GE)‐ 8 Total
x
Develop and balance FY 2027 budget by June 30 prioritizing government efficiency,
ongoing solutions and balancing fiscal impacts of policies and practices including
consultant contracts, downtown parking and general fund subsidies, nonprofit
partnerships and revenue enhancements.x 1
x
Implement a standardized Citywide Consultant Stewardship Framework—covering
the lifecycle from the decision to outsource and scope drafting to contract close‐
out—to develop and manage scope of services and enhanced reporting on use of
professional services.x 1
x
Improve City processes by streamlining approval of revised procurement thresholds
and contract authority.x 1
x x
Improve and streamline staff work on homelessness, housing and services for
vulnerable residents. Milestones: Centralize in City Manager's Office, Identify and
implement ways to improve processes and reporting (e.g., consolidating contracts,
standardizing reporting, HSRAP).x 1
x
Leverage the Palo Alto 311 staff working group workplan, vendor support and City
Auditor benchmarking advice to improve clarity and timing of constituent response
and satisfaction, and enhance staff efficiencies by aligning report categories with
constituent expectations, and implementing vendor‐proposed 2026 system
upgrades—including integrating AI tools.x 1
x
Modify the municipal code to remove the requirement for planning entitlement
approval (such as architectural review) or compliance with zoning regulations and
procedures for capital improvement or other city‐initiated projects on publicly owned
right of way and land. x 1
Attachment A - Page 4 of 6
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Attachment A - City Council
2026 Priorities &
Objectives- Group 1
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ATTACHMENT A
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Council Priority, Group #, estimated completion date, and finally by additional resource needs.Q1 Q2 Q3 Q4
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Explore options to streamline delivery of low‐cost, high‐value (aka quick build) traffic
safety improvements and update the City’s Traffic Calming Policy to align with Safety
Action Plan, Bicycle/Pedestrian Transportation Plan (BPTP) and Safe Routes to School.
Milestone: Council review of existing program, policy needs and approaches.x 1
x
Relocate City operations in Utilities and the Development Center back to City Hall in
order to reduce rent expense to third party landlords, maximizing revenue to the
General Fund, and consolidating property and facility management within City owned
land.x 1
Council Values‐ 12 Total
3,4
Open 429 Bryant Street Community Center. Complete construction and any
necessary partnership agreements to begin La Comida Senior Lunch Program at the
facility by end of July, 2026; plan further work for general community center
operations concurrently. x 1
3,4
Execute MOU with Santa Clara County for assignment of clinician to PD Psychiatric
Emergency Response Team (PERT) in Jan 2026.x 1
2
Adopt ordinance updates establishing additional Green Building Standards and Energy
Reach Codes. Milestone: City Council consideration of ordinance for adoption by June
2026.x 1
2
Complete 2026 Bicycle and Pedestrian Transportation Plan (BPTP) with City Council
adoption of the plan. x 1
2
Advance recommendations for the Regional Water Quality Control Plant Biosolids
Facility Plan. Milestone: Conduct community engagement, refine and review
recommendations with Council Committee in 2026, and further develop
implementation strategies in preparation for Council acceptance of the Biosolids
Facility Plan in 2027. x 1
2
Advance design of Grade Separation projects at Charleston Road, Meadow Drive and
Churchill Avenue. Milestone: Complete 15% design and select Locally Preferred
Alternative for 35% design at each crossing. x 1
4
Update the Safety Element and develop an Evacuation Plan pursuant to SB 99, AB
747, and AB 1409. Milestones: contract with consultant to develop evacuation plan,
present draft Safety Element amendments to Planning and Transportation
Commission and City Council consideration with final submittal to state for review in
Q3. x 1
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Attachment A - City Council
2026 Priorities &
Objectives- Group 1
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ATTACHMENT A
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Support Community Mental Health through provision of support for all ages through
community partnerships, programs, and initiatives. Milestone: continue work with
the Jed Foundation engagement to support youth mental health and suicide
prevention efforts.x 1
2
Implement the strategies contained in the 2026‐2027 Sustainability and Climate
Action Plan Work Plan. Milestone: Complete progress on strategies implementation
in substantial alignment with the Target Completion Dates contained in the Work
Plan.x 1
4
Pursue a natural grass athletic field pilot project to determine the best management
practices to enhance playability and durability. Milestones : Q1 work with the Parks
and Recreation Commission (PRC) to develop a workplan for the Turf Pilot. Q2 seek
Council approval of work plan and funding. Q3 Conduct enhanced maintenance pilot
and feasibility study at two locations. Q4 Conduct stakeholder engagement on
conceptual designs and present to PRC. Funding and construction of high performing
grass fields to be completed in 2027‐28 pending Council review and approval.x 1
$$‐
$$$
2
Develop and recommend for Council approval a multi‐year grid modernization capital
improvement plan focused on improving reliability and facilitating city‐wide customer
electrification by upgrading sub‐transmission, substation, and distribution
infrastructure. Issue the first tranche of debt financing in 2026.x 1 $$$$
4
Advance Quiet Zones at Palo Alto Avenue, Churchill Avenue, Meadow Drive, and
Charleston Road Rail Crossings. Milestone: Council approval of Notice of
Establishment and Quiet Zone implementation at Palo Alto Avenue; and identification
of funding and procurement of professional services for design of required
improvements to establish Quiet Zones at Churchill, Meadow and Charleston.x 1 $$$$
$ = up to 50K; $$ = 51‐499K, $$$ = 500K‐999k, $$$$ = 1M +
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Objectives- Group 1
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Achieve Near‐Term Priority Housing Milestones (ANPHM)‐ 6 Total
x
Present initial data from the first year rental registry program to Policy and Services
for discussion and an information report update to City Council. x 2
x
Present to Policy and Services an analysis related to anti‐rent gouging and forward
Committee recommendations to the City Council. x 2
x
Adopt a renter protection “fair chance” ordinance, including findings and
implementing regulations. (Housing Element Program 6.6I). Milestones: City Council
Policy and Services Committee consideration in Q2 of ordinance revised based on
City Council direction; City Council consideration upon P&S recommendation in Q3.
x 2
x
Release a Request for Proposals for development of the one‐acre site near
Matadero Creek dedicated to the City under the 2023 Sobrato/City Development
Agreement. Milestone: Issue RFP by end of 2026.x 2
x
Expand and implement the Safe Parking Program in commercial areas by increasing
geographic coverage and service availability citywide. (Housing Element Program
6.4A and Council assigned 12.04.23). Milestones: Initiate draft of zoning text
amendment by end of 2026.x 2
x
Organize an initial review of sources and methods to raise funding to support new
affordable housing production for future evaluation.x 2
Cubberley Acquisition and Renovation Funding (CA&RF)‐ 0 Total
Enhance Business Vibrancy (EBV)‐ 7 Total
x
Complete stable car free street improvements on Ramona Street, e.g. bollards and
barriers, signage, and parking regulations. Milestone: Implementation of updated
parking signage and painted curbs, and installation of spherical bollards, vehicular
barriers, and updated signage.x 2
x
Modernize Downtown parking policy to increase availability of premium parking,
reduce operating subsidies, encourage development and economic diversity and
vibrancy, and reduce fossil fuel dependency. Milestone: Council review of options to
modernize parking policy.x 2
Priority
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Sorted by:
Council Priority, Group #, estimated completion date, and finally by additional resource needs.Q1 Q2 Q3 Q4
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Attachment B - Page 1 of 3
Item 9
Attachment B - City Council
2026 Priorities &
Objectives- Group 2
Item 9: Staff Report Pg. 13 Packet Pg. 91 of 205
ATTACHMENT B
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2026 DRAFT CITY COUNCIL PRIORITIES AND OBJECTIVES
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OBJECTIVES (24 Total)
Sorted by:
Council Priority, Group #, estimated completion date, and finally by additional resource needs.Q1 Q2 Q3 Q4
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Extend the existing interim ordinance or adopt a new ordinance that restores and
implements subjective wireless communication facility regulations. Milestones:
Present an ordinance to the City Council in Q4.x 2
x
Begin feasibility analysis of Assessment District for University Avenue Streetscape.
Conduct analysis to determine practicality of an assessment district or similarly
funding strategy as a funding mechanism for capital enhancements to University
Avenue Streetscape. x 2 $$
x
Design and provide funding appropriations to improve the car free portion of
California Ave for bike and pedestrian markings and calming and minor physical
environment adjustments to reduce friction with the outdoor dining guidelines (e.g.
movement of bike racks). x 2 $$$
x
Engage stakeholders to develop design proposals for Car‐Free Ramona Street and
present to Council for necessary funding appropriations to implement initial
phase(s). Begin Historic Resource Board and Architectural Review Board review of
activation guidelines in late 2026/early 2027. x 2 $$$
x
Initiate process for Development of the Comprehensive Plan Update. Milestone :
Confirm a more limited scope for the upcoming 2030 Comprehensive Plan to inform
the release of an RFP by Q4 2026 to select a consultant to support the limited scope
refresh; consultant funding will be necessary.
x 2 $$$
Government Efficiency (GE)‐ 0 Total
N/A
Council Values‐ 11 Total
2
Adopt Bird‐Friendly Design standards. Milestones: City Council consideration in
March/April 2026 of ordinance recommended by PTC in late 2025. x 2
2
Adopt an ordinance updating Stream and Creek Corridor Setback requirements.
Milestone: PTC consideration of revised draft ordinance in Q2, 2026; Council
consideration of draft ordinance in Q3, 2026. x 2
2,4
Update the City's Natural Environment Element Update to comply with recent state
law. Milestone: Prepare draft revisions for review by the Parks and Recreation
Commission, Planning and Transportation Commission, and City Council by Q3,
2026. Present Comp Plan amendments to PRC, PTC, and City Council by the Q4 of
2026. x 2
Attachment B - Page 2 of 3
Item 9
Attachment B - City Council
2026 Priorities &
Objectives- Group 2
Item 9: Staff Report Pg. 14 Packet Pg. 92 of 205
ATTACHMENT B
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2026 DRAFT CITY COUNCIL PRIORITIES AND OBJECTIVES
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Sorted by:
Council Priority, Group #, estimated completion date, and finally by additional resource needs.Q1 Q2 Q3 Q4
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Advance design on South Palo Alto Bikeway project to increase walking and biking
and enhance safety. Milestone: Initiate work on pilot bikeway project.x 2
2,4
Complete concept design for additional east‐west bicycle/pedestrian crossing of
railroad tracks in the southern part of the City. Milestone: Council review of draft
report on South Palo Alto Connectivity.x 2
2
Continue to implement 3‐phase plan presented to Council in September 2024 for
phasing out leaded fuel at Palo Alto Airport. Milestone: Initiate lead air monitoring
program in Q1, work with the new fuel provider and supplier to inform tenants and
encourage the use of unleaded fuel, and provide a progress update to City Council.
x 2
4
Restart and make progress on the Palo Alto Airport master planning process.
Milestone: Develop updated alternatives informed by Council feedback from
September 2024, conduct public stakeholder meetings, and conduct a study session
with Council to review progress.x 2
4
Develop and adopt updates to the City’s seismic risk mitigation ordinance.
Milestone: Seek policy guidance from Policy and Services Committee, review draft
ordinance with Policy and Services Committee, and Council consideration of
ordinance updates by Q4 2026. x 2
2,3
Launch new Palo Alto education and rebate program for electric stoves and
cooktops, with a goal of 50 electric cooktop conversions from gas. Milestone:
Program is available to customers by the end of Q2 2026.x 2
2
Implement Quarry Road Extension in Partnership with Stanford University, Caltrans
and VTA. Milestone: Execute grant agreement with MTC and submit initial
engineering package to Caltrans to confirm process. x 2
6
Complete build‐out of fiber‐to‐the‐premises (FTTP) pilot Phase 1 and begin provision
of beta service for a municipal high speed fiber service. Establish internet service
provider operations and through iterative customer engagement, and provision
services to residents in the initial pilot area.x 2
$ = up to 50K; $$ = 51‐400K, $$$ = 500K‐999k, $$$$ = 1M +
Attachment B - Page 3 of 3
Item 9
Attachment B - City Council
2026 Priorities &
Objectives- Group 2
Item 9: Staff Report Pg. 15 Packet Pg. 93 of 205
ATTACHMENT C
Staff Not Recommended Objectives
For various reasons, including staff capacity to advance, feasibility challenges, or that work is already
underway, some objectives from the 2025 Priority Objectives list, previous Council suggestions, or the
Annual Retreat suggestions are not recommended to become priority objectives for 2026. Staff will be
prepared to respond to any Councilmember’s questions.
12. Begin implementation of the City Facility Electrification Plan. Milestone: Council approval of design
consultant contract and procurement of a contractor to construct projects at first two buildings.
This objective will continue as a staff priority but is not recommended for inclusion as a
standalone project, as it is already incorporated into the 2026–2027 Sustainability and Climate
Action Plan Work Plan. Instead, staff has added a broader objective focused on implementing
the Work Plan items overall, which encompasses this initiative.
15. Pilot electrification as a service, charging as a service, or creative financing programs to complement
the City' s single-family, multi-family, and/or non-residential electrification programs, that can be scaled.
Milestone: At least one new financing program is available to single-family, multi-family, and/or non-
residential customers by the end of 2026.
This objective will continue as a staff priority but is not recommended for inclusion as a
standalone project, as it is already incorporated into the 2026–2027 Sustainability and Climate
Action Plan Work Plan. Instead, staff has added a broader objective focused on implementing
the Work Plan items overall, which encompasses this initiative.
16. Develop long-term Climate Action funding and financing strategies and scenarios for Council
consideration. Milestone: Present strategies and scenarios to the Council Committee for consideration
by December 2026.
This objective will continue as a staff priority but is not recommended for inclusion as a
standalone project, as it is already incorporated into the 2026–2027 Sustainability and Climate
Action Plan Work Plan. Instead, staff has added a broader objective focused on implementing
the Work Plan items overall, which encompasses this initiative.
54. Implement Senate Bill 79 by developing and presenting implementation options and advancing a
recommended approach for City Council adoption. Seek direction from SB 79 and Downtown Housing
Plan City Council Ad-Hoc Committee on next steps in Q1 and Q2; present recommendations for City
Council consideration and next steps on SB 79 implementation before July 1, 2026; develop SB 79
alternative plan if directed by City Council.
Objective has been combined and updated with Objective #50.
82. Implement a gas-powered leaf blower ban citywide, based on recommendation from Policy and
Services Committee.
Staff is not recommending this project at this time due to limited resources and the need to
prioritize other Council-directed initiatives currently underway.
Item 9
Attachment C - Staff Not
Recommended Objectives
Item 9: Staff Report Pg. 16 Packet Pg. 94 of 205
ATTACHMENT C
83. Develop and implement strategies to activate vacant commercial storefronts, including establishing
regulatory tools and streamlined permitting for temporary pop-up stores.
Staff is not recommending this project at this time due to limited resources and the need to
prioritize other Council-directed initiatives currently underway.
Staff is not recommending this project at this time due to limited resources and the need to
prioritize other Council-directed initiatives currently underway.
Staff is not recommending this project at this time due to limited resources and the need to
prioritize other Council-directed initiatives currently underway.
Staff is not recommending this project at this time due to limited resources and the need to
prioritize other Council-directed initiatives currently underway.
Staff is not recommending this project at this time due to limited resources and the need to
prioritize other Council-directed initiatives currently underway.
Staff is not recommending this project at this time due to limited resources and the need to
prioritize other Council-directed initiatives currently underway.
Staff is not recommending this project at this time due to limited resources and the need to
prioritize other Council-directed initiatives currently underway. Moreover, the interested parties
can file a text amendment application to initiate this process.
Item 9
Attachment C - Staff Not
Recommended Objectives
Item 9: Staff Report Pg. 17 Packet Pg. 95 of 205
ATTACHMENT C
90. Council consideration of a design option for California Avenue. Continue engaging stakeholders to
refine alternative street designs for California Avenue and present to Council for discussion and action,
including funding appropriations to pursue a street design in late Q2/early Q3 2026.
Staff is not recommending this project at this time due to limited human and financial resources.
Suspending the project will allow staff to focus on completing the California Avenue Outdoor
Activation Guidelines and supporting businesses in their requests and plans for improvements.
To activate this project funding would be necessary both for staff and professional services
($$$).
These efforts are being incorporated into the proposed Business Retention, Expansion, and
Attraction (BRE/A) Strategy.
Item 9
Attachment C - Staff Not
Recommended Objectives
Item 9: Staff Report Pg. 18 Packet Pg. 96 of 205
ATTACHMENT D
2026 Ad Hoc Committee Purpose Statements
And Tentative meeting schedules
Rail Committee
To meet every other month
The Rail Committee reviews the projects and provides recommendations to the City Council based on
the Rail Guiding principles adopted by the City Council (August 8, 2022). The projects include: the grade
separations and safety improvements at existing crossings, additional east-west bicycle and pedestrian
railroad crossings, and quiet zone improvements. Rail committee will review and advance projects for
Council approval.
Rail Safety/Youth Mental Health
Meeting as needed
The Rail Safety/Youth Mental Health Ad Hoc Committee will facilitate Council decision-making on near-
term modifications to rail crossings in response to and for prevention of youth and other suicides. This
Ad Hoc Committee will also support communication with other agencies such as Caltrain.
City Council involvement and coordination with the JED Foundation’s ongoing postvention engagement
is handled by the City/Schools Liaison Committee.
Cubberley Ad Hoc Committee
To meet monthly or as necessary to meet the project schedule
The Cubberley Ad Hoc will facilitate City Council review and approval of the master plan process and
serve as the Council ambassador for engagement with the community and building community support
for development for a new community center at the Cubberley site. This includes making
recommendations to the Council on the future operating model (e.g. services available, recommend to
Finance Committee an approach to fees & charges, space allocation) and master plan that will
successfully receive voter support in 2026.
Coordination with PAUSD on Cubberley will occur through this committee rather than the City Schools
Liaison Committee. Operations, funding, and ballot measure work (including polling) may be heard by
the Finance Committee rather than the Cubberley Ad Hoc for recommendations to the full City Council.
Economic Development Ad Hoc Committee
To meet every other month
The Economic Development Committee will provide a regular forum for business and community
stakeholders to engage with Council members on implementation of the City’s economic development
strategy. The Economic Development Committee will make recommendations to the City Council and
provide ongoing engagement on approved economic development priorities to enhance business
vibrancy efforts, including business retention, expansion, and attraction.
Item 9
Attachment D - 2026 Ad
Hoc Committee Purpose
Statements
Item 9: Staff Report Pg. 19 Packet Pg. 97 of 205
ATTACHMENT D
Climate Action & Sustainability Ad Hoc Committee
To meet monthly
The Climate Action & Sustainability Committee facilitates implementation of the Climate Action
workplan items of the 2026/2027 Sustainability and Climate Action Plan (S/CAP) Workplan and the 2026
Council Priority Objectives which fall under the Council values on environmental sustainability.
Oversized Vehicles Impacts & Services Ad Hoc
Meeting as needed
The Oversized Vehicles (OSV) Ad Hoc Committee was created at the October 20, 2025 Council Meeting.
The Committee is tasked with 1) recommending details on increased enforcement; 2) sharing
recommendations on other issues related to the implementation of the Oct. 20 Council motion on OSVs
(including safe parking street cleaning, urgency ordinances for detached trailers and “vanlording,” and
considering options for buyback or parking program); 3) evaluating Phase 2 activities; and 4)
participating with staff in further engagement. To date, meeting frequency has been weekly, with few
exceptions.
Downtown Housing Plan and SB 79 Ad Hoc
Meeting as needed
Established late 2025, the purpose of the ad hoc is to explore options to implement SB 79, including no
additional action, and support staff’s continued work on the Downtown Housing Plan through the
balance of calendar year 2026. Meeting frequency will vary throughout the year with more meetings
initially and fewer meetings toward the end of the year averaging out to approximately one meeting
every two months.
Valley Water Shoreline Funding Allocation Ad Hoc
Meeting as needed
The Valley Water Shoreline Funding Allocation Ad Hoc was announced at the February 24, 2025 City
Council meeting, in response to a Valley Water proposal to shift funding for addressing sea level rise in
the north County to a south County project. The committee was announced with an expectation of
being active for approximately 60 days. Valley Water ultimately deferred taking the action in 2025, and
proceeded with making process improvements to support better communications and consultation for
future proposals affecting project funding.
Item 9
Attachment D - 2026 Ad
Hoc Committee Purpose
Statements
Item 9: Staff Report Pg. 20 Packet Pg. 98 of 205
City of Palo Alto I 250 Hamilton Avenue, Palo Alto, CA I www.paloalto.gov – February 2026
POLICY & SERVICES TENTATIVE TOPICS CALENDAR 2026
Tentative as of February 10, 2026
January
•Nonprofit Workplan item
•Referral (2024): Establish a frequency for joint City Council meetings or Policy & Services meeting
with Boards and Commissions, Youth Council, and meetings with Boards and Commissions Chairs; -
Kept referral per P&S on Dec. 9, 2025
February
•Council referral (from Jan 24, 2026 retreat): Update City Council Values and Consider Renaming
them (linked to adopted values on November 7, 2022 –
https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=2269&dbid=0&repo=PaloAlto
•SB 707 Brown Act Updates
•Seismic Ordinance Follow up discussion
Note: All items listed for the following months are tentative in date at this time. Items will be
moved around based on item readiness and agenda capacity in partnership with Committee
Chair closer to the actual meeting date.
March
•Nonprofit Partnership Phase I Improvements
•Consider Policy Tool Options to Encourage Multi-Family Development in Mixed-Use Districts (2023-
2031 Housing Element Program 3.9(A)).
•Audit: Utilities Reserves
April
•Discussion of Local Residential Rental Market Data and Recommendation regarding whether to
Pursue a Rent Stabilization Program
•Present initial data from the first-year rental registry program to Policy and Services for discussion
and an information report update to City Council.
•Legislative Update
•Fair Chance in Housing Ordinance
•Incentives at Strategic Locations to Shift the Economic Benefit of Redevelopment from Commercial
Toward Home Building (2023-2031 Housing Element Program 3.9(A)).
•Auditor Report: Junior Museum and Zoo
•Auditor Report: Annual Follow-up on Audit Recommendations
Item 9
Attachment E - Policy &
Services Committee
Workplan
Item 9: Staff Report Pg. 21 Packet Pg. 99 of 205
City of Palo Alto I 250 Hamilton Avenue, Palo Alto, CA I www.paloalto.gov – February 2026
May
•Referral Follow Up: Discussion and Recommendation to Council Regarding Potential New
Procedure for Councilmembers to Make Referrals to Staff Besides Colleagues’ Memo
•Auditor Task Orders
•Auditor Report: Public Safety Overtime
•Auditor Risk Assessment
•Quarterly Audit Status Report
June
•Review of Proposed Amendments to Seismic Risk Mitigation Ordinance
•Present to Policy and Services an analysis related to anti-rent gouging and forward Committee
recommendations to the City Council.
•(other items carried forward from April or May)
July – No meeting; Council break
August
•Tentative: Auditor Report
•Legislative Update (State and Federal)
September
•Tentative: Auditor Report
•Review RFI/P solicitation related to Housing Element Program 1.4A
October 29
•Tentative: Auditor Report
November 19
•Legislative Agenda and Guidelines; and Brief Legislative update
•Tentative: Nonprofit workplan
•2027 City Council Priorities Discussion (focused on process, the retreat and submitted ideas)
December 9
•Tentative: Auditor report
•No Procedures & Protocols Handbook Discussion (every other year and this is an off year)
•Informational: Report out on Status of Committee Referrals
Items removed:
•Referral (2024): Policy & Services to review and make recommendations for any initiatives to
support and strengthen neighborhood programs (linked to discussions in 2021) Removed from
referral list at Dec. 9, 2025 P&S Meeting 1 as the spirit of the referral has been accomplished
1 P&S Discussion, December 9, 2025, Item #5, Link:
https://cityofpaloalto.primegov.com/Portal/Meeting?meetingTemplateId=16351
Item 9
Attachment E - Policy &
Services Committee
Workplan
Item 9: Staff Report Pg. 22 Packet Pg. 100 of 205
City of Palo Alto I 250 Hamilton Avenue, Palo Alto, CA I www.paloalto.gov – February 2026
Referrals from February 9, 2026:
1. Refer to staff and subsequently the Policy & Services Committee for a recommendation to the full
City Council on the permissible and recommended practices relating to an item going to more than
one standing committee when appropriate (Procedures Section 1.2(a)2).
2. Refer to staff to return with recommended language regarding if staff should provide briefings,
respond to Councilmember questions, collaborate with Councilmembers to support City Council
representatives on regional bodies. (Not required to come to P&S, but could if needed)
3. Refer to staff and return to Council on the use of verbatim transcripts for PTC and UAC Board
minutes using AI. (Not required to come to P&S, but could if needed)
Further Work Requested Related to these Referrals:
1. Discussion of the Creation of the Advisory Committee regarding Council Compensation
(Previous Committee action completed. P&S Committee requested on Dec. 9, 2025 to keep this
item on the list to bring back)
2. Initial Discussion Regarding Potential New Procedure for Councilmembers Referrals to Staff
Item 9
Attachment E - Policy &
Services Committee
Workplan
Item 9: Staff Report Pg. 23 Packet Pg. 101 of 205
City of Palo Alto I 250 Hamilton Avenue, Palo Alto, CA. I www.cityofpaloalto.org
ATTACHMENT F
FINANCE COMMITTEE TENTATIVE TOPICS
CALENDAR 2026
As of January 30, 2026
The Municipal Code states that the role of the Council Finance Committee is to consider and
make recommendations on matters referred to it by the Council relating to finance, budget,
financial audits, capital planning and debt. (§2.04.210).
See the end of the document for information on the completed 2025 referrals as well as the
outstanding and on hold referrals to date.
January (6th) (Special Meeting)
Update and Adoption of the Investment Policy (to be done by June 30 per code)
Mayor appoints Committee and designates Chair; usually no FC meeting
February (3rd & 17th)
Feb 3 ‐‐ No Meeting, City Council meetings schedules for January impacts
March (3rd & 17th)
Utilities Advisory Commission Rate Forecasts and Five‐Year Financial Plans: Water,
Wastewater Collection
Storm Water Management Fee
April (7th & 21st)
Utilities Advisory Commission Rate Forecasts and Five‐Year Financial Plans: Gas, Electric.
Planning & Development Services ‐ Electrification State caps & fee subsidies
City Fee Updates (various)
Grid Mod Financing (Tentative)
May (5th, 6th, & 19th)
Annual Budget Review: Operating and Five‐year Capital Improvement Plan
Alternative meeting times (9:00am – 5:00pm) May 5 and May 6
Including Nonprofit Partnership Workplan Phase I funding
June (2nd & 16th)
Third Quarter Fiscal Year 2025 Financial Report
July
No meeting; Council Break
Item 9
Attachment F - Finance
Committee Workplan
Item 9: Staff Report Pg. 24 Packet Pg. 102 of 205
Finance Committee Tentative Topics, Calendar 2026
As of January 2026
August
Grid modernization financing
September
Accept California Public Employees’ Retirement System (CalPERS) Pension Annual
Valuation. Reports as of June 30, 2024.
Retiree Benefit Policy – review and update, if necessary.
October
November
Informational: Report out on Status of Committee Referrals
Discussion and Recommendation to the City Council to Accept the Macias Gini &
O'Connell's Audit of the City of Palo Alto's Financial Statements as of June 30, 2026 and
Management Letter
Discussion and Recommendation to Approve the Fiscal Year (FY) 2026 Annual
Comprehensive Financial Report (ACFR) and Approve Budget Amendments in Various
Funds
December
Review and Forward the FY 2028 ‐ FY 2037 Long Range Financial Forecast
First Quarter Fiscal Year 2026 Financial Report
Preliminary Utility Rate Forecast Review
Referred Topics:
A full report on the status of Finance Committee referrals and the status can be found on Item
2 on the November 18, 2025 agenda1.
Completed Referrals
1) Planning and Development Services Fee Study and Update
2) Parking Permits Pricing and Parking Permit Funds Financial Status. [scheduled for Council
consideration Spring 2026]
3) Ability Path financial support [addressed in FY 2025 Mid‐Year Report]
4) Fire Emergency Medical Response Fee Analysis and Update.
5) Fire Emergency Medical Reponses; Supplemental Resources – Approved 12‐Hour Peak
Ambulance with Single Role Staff (Implementation in 2026)
6) Active Recruitment Digital Marketing Services (Contract Services) – Staff discontinued
request due to financial situation, available workforce due to layoffs (federal level and local
tech) and limitations on digital marketing into the hard to recruit industries.
1 https://cityofpaloalto.primegov.com/Portal/Meeting?meetingTemplateId=16320
Item 9
Attachment F - Finance
Committee Workplan
Item 9: Staff Report Pg. 25 Packet Pg. 103 of 205
Finance Committee Tentative Topics, Calendar 2026
As of January 2026
7) Establish Organizational Development & Safety Division – Without adding headcount, Staff
created a merged division of organizational development and HRIS to support.
8) Explore financial, outreach, and policy processes for adding East Palo Alto to resident rates
for the golf course – East Palo Alto added to resident rates for golf course, effective July 1,
2025.
In Progress/Pending Referrals:
9) Review Parks Restroom Prioritization; Specifically, Pardee Park – Incorporated into FY22026
CIP that was approved by Council on June 16, 2025, CIP PG‐19000 anticipated to begin mid‐
2026.
10) Increasing Revenue‐ Generating CSD Programming to Meet Demand\Cost recovery policy
100% ‐‐ Further analysis and review in Spring 2026
11) Cost Recovery Policy – Update to include new 100% Category ‐ Spring 2026
12) Update Fee Cost Recovery Category for current fee cost categories – update fee categories
and fees as a part of budget development – Spring 2026
13) Risk Mgt, General Liability and Insurance – Update Council on risk management, safety
policies and risk transfer and claim analysis and mitigation strategies – going to Council
February 2026
Item 9
Attachment F - Finance
Committee Workplan
Item 9: Staff Report Pg. 26 Packet Pg. 104 of 205
City of Palo Alto - 2026 City Council Priorities
At the January 24, 2026 meeting, the Palo Alto City Council reached consensus on
adopting a 2026 Economic Development priority titled, “Enhance Business Vibrancy.”
The City Council acknowledges the importance of Economic Development and the
intersection between a healthy local economy and the City’s long-term fiscal
sustainability. The City of Palo Alto continues to build from the current Economic
Development Strategy to achieve the City Council’s goals and priorities.
Economic Development is taking a proactive approach to advocating for Palo Alto’s
business and entrepreneurial ecosystem that is reflective of the population it serves.
Economic Development is a concerted effort by the City of Palo Alto’s City Council to
ensure that the business climate is healthy. As such, the Economic Development team
recommends that the Economic Development Ad Hoc Committee (formerly Retail Ad Hoc
Committee) and City Council proceed with a formal Business Retention, Expansion, and
Attraction (BRE/A) Strategy.
A Business Retention, Expansion, and Attraction (BRE/A) Strategy will formalize
Economic Development’s Work Plan for calendar year 2026. A BRE/A Strategy consists
of identifying key industries for retention, expansion, and attraction, proactive business
engagement to build strategic partnerships, determining areas where the City of Palo Alto
can gain a competitive advantage, and providing support for a favorable business
environment that can lead to increased employment opportunities and overall economic
prosperity. The BRE/A Strategy will result in preserving and enhancing the local business
climate to ensure the City is fiscally stable to provide essential services that the Palo Alto
community deserves.
The BRE/A Strategy includes two tactical categories: Enhance Business Vibrancy and
Engagement and Promotions. While two 2026 City Council priority objectives are included
in the BRE/A such as #29 to develop a formal business retention, expansion, and
attraction program and #34 focused on activation activities and events, other key
components include strengthening the tax base, developing a competitive advantage, real
estate assets, business and community engagement, and promotions and marketing.
Performance Metrics are specific, measurable, achievable, relevant, and timely.
Item 9
Attachment G - Draft BREA
Strategy
Item 9: Staff Report Pg. 27 Packet Pg. 105 of 205
Business Retention, Expansion and Attraction (BRE/A) Strategy – Enhancing
Business Vibrancy is a 2026 City Council priority and includes priorities #29 and
#34.
Strengthening the Tax Base
o Sales tax, property tax, and transient occupancy tax revenue bases -
Establish a formal Corporate Visitation Program. Review quarterly data for
sales/transient occupancy tax revenues and bi-annually for property tax
revenues to identify and respond to changing trends. Performance Metric:
Convene up to five of the top twenty-five sales tax generators by the end of
2026 with the goal of retaining businesses that enhance the City’s long-term
fiscal sustainability on a quarterly basis.
o New Investment Opportunities - Encourage new investments that create
economic impact, multiplier effects and sales tax revenue. Performance
Metric: Staff will explore financial and non-financial incentives and develop
a list to support, retain, and grow business opportunities to drive economic
vitality by Quarter 3 2026, and present to the Economic Development Ad
Hoc Committee for review and feedback.
Competitive Advantage
o Venture Capital, Incubators, and Accelerators - IDA Ireland, Japan
Innovation Campus (JIC), Consulate General and Innovation Centre
Denmark, Nordic Innovation House, Flanders Investment and Trade (FIT),
The Hive, Archimedes Labs, StartX, Venture Dock, etc. Performance
Metric: Meet with at least four Venture Capital investment firms, incubators,
and accelerators to develop foreign direct investment (FDI) opportunities
and continue to cultivate the innovation and entrepreneurial ecosystem by
the end of calendar year 2026.
o Business Technical Assistance - Performance Metric: Partner with the
Silicon Valley Small Business Development Center (SV SBDC), Small
Business Administration (SBA), SCORE, Chamber of Commerce, etc. to
host two small business (live and virtual) training workshops in 2026.
Real Estate Assets
o Real Estate Network - Property Owners, Real Estate Brokerage, Property
Managers, and Development Community Network to foment relationships
to fill vacant spaces and attract a mix of retail, office, and industrial
businesses to enhance diversity of businesses for a broader customer base.
Performance Metric: Economic Development will host a Real Estate
Broker roundtable by Quarter 4 2026 to learn about new opportunities,
market trends, new uses, permit processes, and align development efforts
with market needs.
Item 9
Attachment G - Draft BREA
Strategy
Item 9: Staff Report Pg. 28 Packet Pg. 106 of 205
o City Real Estate Assets – Leverage City’s real estate assets for revenue
generation. Performance Metric: Economic Development will execute a
lease with Nobu for the use of 20 valet services parking spaces in Parking
Lot Q by April 2026 to generate new revenues for the City.
Engagement and Promotions
Business and Community Engagement
o Public-Private Partnerships - Engagement fosters trust and collaboration,
allowing for effective partnerships that leverage resources for community
projects - Performance Metric: Economic Development will promote the
Retail Vibrancy Ordinance reflecting flexibility in land use/zoning to the real
estate network starting in Quarter 2, and establish two office hour events on
California Avenue and Downtown for additional business and community
engagement opportunities by Quarter 3 2026.
o Open Container Resolution and Entertainment Zone - Performance
Metric: Economic Development will present to the Economic Development
Ad Hoc Committee to obtain a recommendation for the City Council’s
consideration of a California Avenue Entertainment Zone Ordinance in
April/May 2026.
Promotions and Marketing
o 2026 Activities and Events - Performance Metric: Economic Development
will partner with businesses, Palo Alto Recreation Foundation, and
Chamber on at least 3 California Avenue activities (3rdThursday/FIFA World
Cup) and promote the hospitality sector (digital/print) during the 2026
sporting events (March Madness Tournament/FIFA World Cup) from March
through July 2026.
The BRE/A Strategy is bounded by two strategic categories: Enhance Business Vibrancy
and Engagement and Promotions. The two categories are supported by nine new
Economic Development focused implementation actions for calendar year 2026.
Economic Development staff will continue to lead, co-lead, and/or monitor 2025 City
Council priority projects currently underway including: #30 Retail Vibrancy Ordinance, #31
California Avenue Signage, and #33 California Avenue Outdoor Activation Guidelines.
Economic Development staff recommends suspending #35 Car-free street improvements
on Ramona Street. And, obtain City Council feedback on whether to proceed with #39
California Avenue Design and Funding given that lack of financial resources and to
directly focus on the aforementioned 2025 on-going projects and the new BRE/A
Strategy.
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Attachment G - Draft BREA
Strategy
Item 9: Staff Report Pg. 29 Packet Pg. 107 of 205
The BRE/A Strategy lays a foundation for creating a vibrant, resilient, inclusive, and
diversified economic future. Notwithstanding, the BRE/A Strategy highlights the need for
a future Economic Development Strategy that serves as a policy document that will guide
the City of Palo Alto’s economic development activities for a designated period. Should
the City Council consider a new Economic Development Strategy, it would align with the
City’s Comprehensive Plan and the Economic Development Element, Sustainability and
Climate Action Plan (S/CAP), and other City policy documents. A new Economic
Development Strategy will serve as Palo Alto’s road map to grow and diversify the local
economy, support businesses and workers, and improve the quality of life for Palo Altans.
Item 9
Attachment G - Draft BREA
Strategy
Item 9: Staff Report Pg. 30 Packet Pg. 108 of 205
City Council
Staff Report
Report Type: INFORMATION REPORTS
Lead Department: Administrative Services
Meeting Date: February 23, 2026
Report #:2601-5819
TITLE
Monthly Investment Report - January 2026 (Unaudited)
RECOMMENDATION
This is an Information Report. No Council action is required.
ANALYSIS
The City’s Investment Policy (Policy)1 and California Government Code Section 53607 requires
that a report of transactions (investments, reinvestment, sold, and exchanged securities) be
made available to the Council on a monthly basis. This reporting requirement is separate and
distinct from the quarterly investment report submitted under California Government Code
Section 53646 that includes portfolio composition, a detailed list of all securities, performance
compared to the Policy, overall compliance with the Policy, and the City’s ability to meet
expenditure requirements over the next six months.
ATTACHMENTS
Attachment A: Investment Portfolio Transaction Ledger – January 2025
APPROVED BY:
Lauren Lai, Administrative Services Director
1 Investment Policy Fiscal Year 2025-2026 (Adopted February 9, 2026):
https://www.paloalto.gov/files/assets/public/v/2/administrative-services/investment-policies/investment-
policyfy-2025-2026.pdf
Item A
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Buy
Call Redemption
Maturity
Summary
CUSIP Security Description Security Type Transaction
Type
Settlement Date Quantity Price Acq/Disp Yield Amount Purchased/Sold Interest Total Amount
91282CPT2 UNITED STATES
TREASURY 3.5 01/15/2029
US GOV Buy 01/28/2026 5,000,000.00 99.609 3.640 -4,980,468.75 6,284.53 -4,986,753.28
64952WFR9 NEW YORK LIFE GLOBAL
FUNDING 4.25 01/09/2031
CORP Buy 01/28/2026 2,500,000.00 99.676 4.323 -2,491,900.00 5,607.64 -2,497,507.64
---------Buy 01/28/2026 7,500,000.00 ---3.868 -7,472,368.75 11,892.17 -7,484,260.92
CUSIP Security Description Security Type Transaction
Type
Settlement Date Quantity Price Acq/Disp Yield Amount Purchased/Sold Interest Total Amount
671082CN3 Oak Bank 4.8 01/19/2027 CD Call
Redemption
01/19/2026 -249,000.00 100.000 4.804 249,000.00 0.00 249,000.00
19648GSA1 COLORADO HOUSING
AND FINANCE
AUTHORITY 5.031
05/01/2034
MUNI Call
Redemption
01/01/2026 -100,000.00 100.000 4.834 100,000.00 0.00 100,000.00
---------Call
Redemption
01/14/2026 -349,000.00 100.000 4.813 349,000.00 0.00 349,000.00
CUSIP Security Description Security Type Transaction
Type
Settlement Date Quantity Price Acq/Disp Yield Amount Purchased/Sold Interest Total Amount
530520AC9 Liberty First Credit Union 4.5
01/27/2026
CD Maturity 01/27/2026 -249,000.00 100.000 4.504 249,000.00 0.00 249,000.00
45950VPJ9 INTERNATIONAL FINANCE
CORP 0.58 01/15/2026
SOVEREIGN GOV Maturity 01/15/2026 -3,000,000.00 100.000 0.519 3,000,000.00 0.00 3,000,000.00
31422B6K1 FEDERAL AGRICULTURAL
MORTGAGE CORP 0.48
01/15/2026
AGCY BOND Maturity 01/15/2026 -1,500,000.00 100.000 0.500 1,500,000.00 0.00 1,500,000.00
30960QAK3 Farmers Insurance Federal
Credit Union 0.5 01/27/2026
CD Maturity 01/27/2026 -249,000.00 100.000 0.551 249,000.00 0.00 249,000.00
066519QC6 BANKUNITED NA 0.55
01/22/2026
CD Maturity 01/22/2026 -249,000.00 100.000 0.601 249,000.00 0.00 249,000.00
---------Maturity 01/16/2026 -5,247,000.00 100.000 0.708 5,247,000.00 0.00 5,247,000.00
CUSIP Security Description Security Type Transaction
Type
Settlement Date Quantity Price Acq/Disp Yield Amount Purchased/Sold Interest Total Amount
------------01/23/2026 1,904,000.00 ---2.624 -1,876,368.75 11,892.17 -1,888,260.92
Palo Alto Monthly Transactions
01/01/2026 - 01/31/2026
1
ATTACHMENT A
Item AAttachment A - InvestmentPortfolio TransactionLedger - January 2025
Item A: Staff Report Pg. 2 Packet Pg. 110 of 205
City Council
Staff Report
From: City Manager
Report Type: INFORMATION REPORTS
Lead Department: Administrative Services
Meeting Date: February 23, 2026
Report #:2512-5667
TITLE
Investment Activity Report for the Second Quarter (October - December), Fiscal Year 2026.
CEQA Status – Not a Project
RECOMMENDATION
This is an informational report and no City Council action is required.
EXECUTIVE SUMMARY
This report is presented in accordance with California Government Code Section 53646 and the
City’s Investment Policy.
As of December 31, 2025, the consolidated portfolio totaled $658.9 million (par value),
including $537.5 million in investments and $121.4 million in liquid accounts. The investment
portfolio was in full compliance with the City’s Investment Policy, and staff projects adequate
liquidity to meet expenditure requirements for the next six months.
Attachments in this report provide detailed cash and investment information, including
portfolio holdings, performance metrics, and related financial summaries.
BACKGROUND
The City’s Investment Policy is reviewed and approved annually by Council and establishes the
framework for managing public funds in accordance with the Prudent Investor Standard under
state law. The policy outlines authorized investment types, maturity and credit quality limits,
diversification requirements, and reporting standards to ensure the objectives of safety,
liquidity, and yield.
The policy also requires the Administrative Services Department to provide the City Council
with monthly and quarterly investment reports, consistent with California Government Code
53646. Monthly reports provide details on investment activity during the period, such as
Item B
Item B Staff Report
Item B: Staff Report Pg. 1 Packet Pg. 111 of 205
purchases, calls, redemptions, and maturities. This quarterly report summarizes the City’s
investment holdings, portfolio performance, and compliance with the City’s Investment Policy
and California Government Code.
1, and this report is presented in accordance with the policy
in effect prior to those changes. Future quarterly investment reports will reflect the updated
policy.
Attachment A. The Investment Quarterly Report as of December 31, 2025 is
included in Attachment B. A complete list of current and historical holdings, as well as the City’s
Investment Policy, are available on the City’s website: www.paloalto.gov/investmentreporting.
ANALYSIS
Portfolio Overview
As of December 31, 2025, the City’s consolidated portfolio totaled $658.9 million (par value),
including $537.5 million in investments and $121.4 million in liquid accounts. The investment
portfolio had an average duration of 2.56 years and an average credit quality of AA+. The
duration is closely aligned to Chandler’s recommended positioning of 2.5 years within a one-to-
five-year maturity range.
Graph 1 below illustrates the City’s portfolio by security type, reflecting how funds are
allocated across permitted investment categories.
1 City Council, February 09, 2026: Agenda Item #3: SR #2512-5767
https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=85314&dbid=0&repo=PaloAlto
Item B
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Table 1 summarizes the portfolio’s maturity structure, which supports the City’s liquidity
objectives and duration strategy.
Investment Performance and Activity
For the quarter ended December 31, 2025, the City’s portfolio average market yield was 3.87%
compared to 3.55% for the ICE BofA 1-5 Year U.S. Treasury & Agency Index benchmark. The
portfolio's total return for the quarter was 1.56%, exceeding the benchmark return of 1.35%.
These results reflect the shorter performance period beginning in August 2025, when portfolio
management transitioned to Chandler. Future reports will include longer-term performance
measures as the investment strategy continues to be implemented.
During the quarter, $52.5 million in securities were purchased, $5.5 million were called or
redeemed, and $33.4 million matured.
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Table 2 summarizes key portfolio characteristics including maturity, duration, yield, and credit
quality. As of December 31st, the yield for LAIF and the two-year US Treasury were 3.98% and
3.48%, respectively. While these are not direct performance benchmarks, they provide useful
context for evaluating the portfolio’s positioning relative to short-term liquidity returns and
broader market conditions.
Table 2: Portfolio Characteristics
Benchmark*
Portfolio as of
Dec 31
Portfolio as of
Sept 30
*Benchmark: ICE BofA 105 Unsubordinated US Treasury & Agency Index
**The credit quality is a weighted average calculation of the highest S&P, Moody’s and Finch
Compliance and Credit Standards
The City’s Investment Policy establishes minimum credit rating requirements at the time of
purchase and requires that any securities whose credit ratings fall below the minimum
thresholds be reported to the City Council.
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Item B: Staff Report Pg. 4 Packet Pg. 114 of 205
Economic Outlook
The near-term economic outlook remains somewhat unclear due to delays in federal economic
data following the government shutdown. Recently released data indicate inflation remains
moderately above the Federal Reserve’s target, while labor market conditions continue to
soften.
Cash Flow Outlook
Cash flow needs fluctuate over the course of the fiscal year due to cyclical revenue patterns,
with larger inflows from major revenue sources, such as property tax receipts, occurring in the
second half of the year. One-time activities, such as the annual prepayment of pension
obligations and large capital expenditures, also influence these patterns. The City’s investment
strategy aligns with these cycles by timing maturities and maintaining sufficient liquidity to
meet ongoing needs as they occur.
Funds Held by Fiscal Agents and Trustees
The City holds bond proceeds, reserves, and debt service funds with fiscal agents, which are
invested in accordance with the respective bond indentures. The City also maintains a Section
115 Pension Trust with Public Agency Retirement Services (PARS), governed by the City’s
Retiree Benefit Funding Policy.
FISCAL/RESOURCE IMPACT
Item B
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STAKEHOLDER ENGAGEMENT
ENVIRONMENTAL REVIEW
ATTACHMENTS
APPROVED BY:
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Book Value Market Value
532,995,647$ 523,863,105$
Other Liquid Accounts
Cash with Wells Fargo Bank 1,541,957 1,541,957
Cash with US Bank 44,135,096 44,135,096
Fidelity Money Market Funds 33,277,590 33,277,590
Local Agency Investment Fund (LAIF)41,978,141 41,978,141
Total - Other Liquid Accounts 120,932,784 120,932,784
CONSOLIDATED PORTFOLIO TOTAL (Attachment B)653,928,431 644,795,889
Other Debt Service Funds*
US Bank Trust Services **
2009 Water Revenue Bonds (Build America Bonds)
Debt Service and Reserve Funds 2,091,406 2,091,406
2011 Utility Revenue Refunding Bonds
Debt Service and Reserve Funds 583,396 583,396
2018 Capital Improvement (Golf Course & 2002B COP Refinance)
(Taxable- Green Bond) Certificates of Participation
Debt Service Funds 702 702
2019 California Avenue Parking Garage Certificates of Participation
(Tax-Exempt and Taxable Bonds)
Debt Service and Reserve Funds 2,960 2,960
2021 Public Safety Building Certificates of Participation
Debt Service Funds 5,133 5,133
2022A & B General Obligation (Library) Bond
Cost of Issuance Funds 4,344 4,344
California Asset Management Program (CAMP) ***
2012 University Ave. Parking Refunding Bonds
Reserve Fund 3,193,715 3,193,715
Public Agencies Post-Employment Benefits Trust ****
Public Agency Retirement Services (PARS)124,856,167 124,856,167
Total Other Funds 130,737,824 130,737,824
GRAND TOTAL 784,666,254$ 775,533,713$
* These funds are subject to the requirements of the underlying debt indenture.
** U.S. Bank investments are in money market mutual funds that exclusively invest in U.S. Treasury securities.
*** CAMP investments are in money market mutual fund which invest in bankers acceptance, certificate of deposit,
commercial paper, federal agency securities, and repurchase agreements.
**** PARS investments are in moderately conservative index plus funds
Item B
Attachment A - Consolidated
Report of Cash Management
Item B: Staff Report Pg. 7 Packet Pg. 117 of 205
INVESTMENT REPORT
City of Palo Alto | As of December 31, 2025
CHANDLER ASSET MANAGEMENT | chandlerasset.com
Chandler Team:
For questions about your account, please call (800) 317-4747,
or contact clientservice@chandlerasset.com
Information contained herein is confidential. We urge you to compare this statement to the one you receive from your qualified custodian. Please see Important Disclosures at the end of the statement.
ATTACHMENT B Item B
Attachment B - Investment Quarterly
Report (as of December 31, 2025)
Item B: Staff Report Pg. 8 Packet Pg. 118 of 205
TABLE OF CONTENTS
ECONOMIC UPDATE
ACCOUNT PROFILE
CONSOLIDATED INFORMATION
PORTFOLIO HOLDINGS
1
ATTACHMENT B Item B
Attachment B - Investment Quarterly
Report (as of December 31, 2025)
Item B: Staff Report Pg. 9 Packet Pg. 119 of 205
ECONOMIC UPDATE
2
ATTACHMENT B Item B
Attachment B - Investment Quarterly
Report (as of December 31, 2025)
Item B: Staff Report Pg. 10 Packet Pg. 120 of 205
▪
▪
▪
The near-term economic outlook continues to be distorted by the data delays from the government shutdown. Recently released
government data—reflecting conditions from two to three months ago—indicate inflation remains moderately above the Federal Reserve’s
target, while labormarket conditions have continued to soften.As the flow of economic data normalizes, the Chandlerteam expects further
yield curve steepening as the Federal Reserve moves the policy rate toward a more neutral range. U.S. trade and fiscal policy alsoremain
sources of elevated market uncertainty.
The Federal Reserve's December Federal Open Market Committee meeting concluded withthe thirdconsecutive 25-basis-point rate cut in
2025,lowering the target range to 3.50%–3.75%.However, policymakers remain divided on the path forward. Four Fed governors project
one additional 25-basis-point cut in 2026,anotherfouranticipate no furthereasing, eight expect multiple cuts, andthree call for a potential
rate hike. Chair Jerome Powell notedthat the Fed is now “well placed to wait and see”howlabor market conditions andinflation evolve in
the near term.
The US Treasury yieldcurve steepened in December,as the 2-year Treasury yield dropped2 basis points to 3.48%, the 5-year Treasury was
up 13 basis points to 3.73%, and the 10-year Treasury yield was 15 basis points higher at 4.17%. The spread between the 2-year and 10-
year Treasury yield points on the curve was 17 basis points widerfrom November at +69 basis points at Decembermonth-end. The spread
between the 2-year Treasury and 10-year Treasury yield one year agowas +33 basis points. The spread between the 3-month and10-year
Treasury yield points on the curve was +54 basis points in December versus +21 basis points in November.
ECONOMIC UPDATE
3
ATTACHMENT B Item B
Attachment B - Investment Quarterly
Report (as of December 31, 2025)
Item B: Staff Report Pg. 11 Packet Pg. 121 of 205
-400
-200
0
200
400
600
800
1,000
MO
M
C
h
a
n
g
e
I
n
T
h
o
u
s
a
n
d
s
(
0
0
0
'
s
)
Nonfarm Payroll (000's)
Non-farm Payroll (000's)
3-month average (000's)
-1.0%
3.0%
7.0%
11.0%
15.0%
Unemployment Rate
Underemployment Rate (U6)
Unemployment Rate (U3)
Ra
t
e
(
%
)
The December Nonfarm Payrolls report showed weaker-than-expected job growth, with payrolls rising by 50,000 compared with the
consensus estimate of 70,000. This follows a downwardly revised gain of 56,000 in November. Employment declines were most
pronounced in retail trade and construction, while leisure and hospitality posted the strongest gains. Notably, the unemployment rate
edged down to 4.4% after increasing to 4.6% in November.
Source: US Department of Labor Source: US Department of Labor
EMPLOYMENT
4
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Report (as of December 31, 2025)
Item B: Staff Report Pg. 12 Packet Pg. 122 of 205
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
Job Openings
Recession
Historical Average
In
T
h
o
u
s
a
n
d
s
(
0
0
0
'
s
)
The Labor Department’s Job Openings and Labor Turnover Survey (JOLTS) reported that job openings fell to 7.1 million in November from a
downwardly revised 7.4 million in October. The drop in vacancies, alongside slower hiring, suggests the labor market continues to soften,
though employers remain cautious about laying off workers. The number of openings now roughly matches the number of unemployed
individuals, pointing to a labor market that is approaching equilibrium.
Source: US Department of Labor
JOB OPENINGS & LABOR TURNOVER SURVEY
5
ATTACHMENT B Item B
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Report (as of December 31, 2025)
Item B: Staff Report Pg. 13 Packet Pg. 123 of 205
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
10.0%
Consumer Price Index (CPI)
CPI YOY % Change
Core CPI YOY % Change
YO
Y
(
%
)
C
h
a
n
g
e
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
Personal Consumption Expenditures (PCE)
PCE Price Deflator
YOY % Change
PCE Core Deflator
YOY % Change
Fed Target
YO
Y
(
%
)
C
h
a
n
g
e
Inflation came in lowerthanexpected in November, withthe ConsumerPrice Index (CPI) rising 2.7% yearover yearand core CPI easing to
2.6%. Notably, both Owners’Equivalent Rent and Rent of Primary Residence contributed to the slowdown in services inflation. Shelter
costs typically lag broader market trends by 12 to 18 months. Services, meanwhile, have remained the dominant driver of inflation
throughout the post-pandemic period. The Personal Consumption Expenditures (PCE) Index for September, released on December 5,
showed headline inflation up 0.3% from August and 2.8% year over year. Core PCE rose 0.2% on the month and 2.8% on an annual basis.
Source: US Department of Labor Source: US Department of Commerce
INFLATION
6
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Report (as of December 31, 2025)
Item B: Staff Report Pg. 14 Packet Pg. 124 of 205
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
Retail Sales YOY % Change
YO
Y
(
%
)
C
h
a
n
g
e
OctoberRetail Sales, released witha one-month delay, were flat fromthe priormonth but up 3.5%year overyear. Eight of thirteen major
categories posted gains, while motor vehicle sales declined following the expiration of federal tax incentives for electric vehicles, and gas
station sales weakened amid lower fuel prices. The government shutdown may have weighed on consumer confidence regarding jobs,
incomes, andoverall financial conditions, bothcurrent and in the future. The Conference Board’s Consumer Confidence Index declined to
89.1 in December from an upwardly revised 92.9 in November, marking its fifth consecutive monthly drop. Consumers were pessimistic
about both business conditions and the labor market.
0
20
40
60
80
100
120
140
160
In
d
e
x
L
e
v
e
l
Consumer Confidence
Recession
Source: US Department of Commerce Source: The Conference Board
All time high is 144.70 (1/31/00); All time low is 25.30 (2/28/09)
CONSUMER
7
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Report (as of December 31, 2025)
Item B: Staff Report Pg. 15 Packet Pg. 125 of 205
-25.0%
-20.0%
-15.0%
-10.0%
-5.0%
0.0%
5.0%
10.0%
15.0%
Leading Economic Indicators (LEI)
Recession
YO
Y
(%
)
C
h
a
n
g
e
-1.00
-0.75
-0.50
-0.25
0.00
0.25
0.50
0.75
1.00
Chicago Fed National Activity Index (CFNAI)
Recession
3
M
o
n
t
h
A
v
e
r
a
g
e
The Conference Board’s Leading Economic Index (LEI) declined 0.3% in September, marking its second consecutive monthly decrease after
a revised0.3%drop in August.On a year-over-yearbasis, the index fell 3.3%. According to the Conference Board, weakening expectations
among consumers and businesses contributed most to the LEI’s overall decline. The index continues to signal slower economic growth
through the end of 2025 and into 2026.The Chicago Fed National Activity Index (CFNAI) came in at -0.21 in September, following a
downwardly revised -0.31 in August, signaling that U.S. economic activity remained below its historical trend for the sixth consecutive
month. The three-month moving average ticked down to -0.21 in September from -0.18 in August, reinforcing signs of ongoing below-trend
national growth. Employment-related indicators turned slightly positive, contributing +0.01 in September after a -0.11 result in August.
Source: The Conference Board Source: Federal Reserve Bank of Chicago
LEADING INDICATORS OF ECONOMIC ACTIVITY
8
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0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
2,200
2,400
In
T
h
o
u
s
a
n
d
s
o
f
U
n
i
t
s
Annualized Housing Starts
Multi Family Housing Starts
Single Family Housing Starts
The S&P Cotality Case-Shiller20-City Composite Home Price Index rose 1.3% yearover year in October, slightly downfrom a 1.4% gain in
September and marking the slowest annual increase since mid‑2023.Short-term momentum also weakened, with 80 percent of the 20
tracked markets recording month-over-month price declines on a non-seasonally adjusted basis. Housing starts declined in October to an
annualized rate of 1.25 million units, down from 1.29 million in September. Existing home sales inched higher in November to a 4.13
million-unit pace, indicating only modest improvement despite some relief in mortgage rates. The Freddie Mac 30‑year fixed mortgage
rate fell throughout 2025 and averaged 6.18% at the end of December.
Source: US Department of Commerce Source: S&P
-20.0%
-16.0%
-12.0%
-8.0%
-4.0%
0.0%
4.0%
8.0%
12.0%
16.0%
20.0%
24.0%
S&P/Case-Shiller 20 City Composite Home Price Index
Recession
YO
Y
(
%
)
C
h
a
n
g
e
HOUSING
9
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Report (as of December 31, 2025)
Item B: Staff Report Pg. 17 Packet Pg. 127 of 205
40
45
50
55
60
65
70
Institute of Supply Management (ISM) Surveys
ISM Manufacturing ISM Services
EXPANDING
CONTRACTING
The Institute for Supply Management’s (ISM) manufacturing index slipped to 47.9 in December, down from 48.2 in November, marking
continued weakness across the sector. Manufacturing activity has now been in contraction for 36 of the past 38 months,as readings
below 50 indicate contraction andthose above 50 signal expansion. The latest decline was driven primarily by pullbacks in the Production
and Inventories components.In contrast, the ISM services index remained in expansion territory, rising to 54.4 in Decemberfrom 52.6 in
November. Respondents attributed the improvement to seasonal strength, though many remained cautious about the potential impact of
tariffs.
Source: Institute for Supply Management
SURVEY BASED MEASURES
10
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Report (as of December 31, 2025)
Item B: Staff Report Pg. 18 Packet Pg. 128 of 205
Components of GDP 12/24 3/25 6/25 9/25
2.6% 0.4% 1.7% 2.4%
-1.3% 3.8% -2.7% 0.0%
-0.1% -4.7% 4.8% 1.6%
0.3% -0.4% -0.4% 0.2%
0.3% 0.2% 0.3% 0.2%
1.9% -0.6% 3.8% 4.3%
State and Local (Consumption and Gross
Investment)
Personal Consumption Expenditures
Gross Private Domestic Investment
Net Exports and Imports
Federal Government Expenditures
Total
-10.0%
0.0%
10.0%
20.0%
30.0%
40.0%
Gross Domestic Product (GDP)
GDP QOQ % Change
GDP YOY % Change
Source: US Department of Commerce Source: US Department of Commerce
The U.S. inflation adjusted gross domestic product (GDP) report demonstrated continued strength in the third quarter, with the first
estimate showing a 4.3% annualized quarter-over-quarterincrease,up from 3.8%in the second quarter. Consumer spending accelerated,
while exports contributed 1.6 percentage points to growth—both key drivers of the quarter’s performance. The stronger-than-expected
result represented the fastest pace of U.S. economic expansion in twoyears. The consensus projection calls for1.1% growth in the fourth
quarter and 2.0% growth for the full year 2025.
GROSS DOMESTIC PRODUCT (GDP)
11
ATTACHMENT B Item B
Attachment B - Investment Quarterly
Report (as of December 31, 2025)
Item B: Staff Report Pg. 19 Packet Pg. 129 of 205
Source: Federal Reserve Source: Bloomberg
0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
8,000,000
9,000,000
10,000,000
Federal Reserve Balance Sheet Assets
Recession
In
$
m
i
l
l
i
o
n
s
The Federal Reserve lowered its benchmark interest rate by a quarterpoint to a target range of 3.50%to 3.75%at its Decembermeeting,
citing concerns about emerging weakness in the labor market. A few policymakers dissented, arguing that tighter monetary policy may
still be warranted to ensure progress on price stability. Beginning December 1,the Fed also haltedits balance sheet runoff, announcing
that principal and interest payments from its holdings will be reinvested in Treasury securities to maintain ample reserves and support
market stability.
FEDERAL RESERVE
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
Effective Federal Funds Rate
Recession
Yi
e
l
d
(
%
)
12
ATTACHMENT B Item B
Attachment B - Investment Quarterly
Report (as of December 31, 2025)
Item B: Staff Report Pg. 20 Packet Pg. 130 of 205
Source: Bloomberg Source: Bloomberg
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
US Treasury Note Yields
2-Year
5-Year
10-Year
Yi
e
l
d
(
%
)
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
US Treasury Yield Curve
Dec-25
Sep-25
Dec-24
Yi
e
l
d
(
%
)
At the end of December, the 2-yearyield was 77 basis points lower, and the 10-year yieldwas 40 basis points lower, year-over-year. The
spread between the 2-year and 10-year Treasury yield points on the curve increased to +69 basis points at December month-end versus
+52 basis points at November month-end. The prior 2-year/10-year yield curve inversion, which spanned from July 2022 to August 2024,
was historically long. The average historical spread (since 2005)is about +95 basis points. The spread between the 3-month and10-year
Treasury yield points on the curve was +54 basis points in December versus +21 basis points in November.
BOND YIELDS
13
ATTACHMENT B Item B
Attachment B - Investment Quarterly
Report (as of December 31, 2025)
Item B: Staff Report Pg. 21 Packet Pg. 131 of 205
ACCOUNT PROFILE
14
ATTACHMENT B Item B
Attachment B - Investment Quarterly
Report (as of December 31, 2025)
Item B: Staff Report Pg. 22 Packet Pg. 132 of 205
OBJECTIVES
Investment Objectives
Safety of principal is the foremost objective of the investment program. The investment portfolio shall remain sufficiently
liquid to meet all requirements that may be reasonably anticipated. The investment portfolio shall be designed with the
objective of attaining a market rate of return throughout budgetary and economic cycles, taking into account the
investment risk constraints and liquidity needs.
Chandler Asset Management Performance Objective
The performance objective for the portfolio is to earn a total rate of return through a market
cycle that is equal to or above the return on the benchmark index.
Strategy
In order to achieve these objectives, the portfolio invests in high quality fixed income securities that comply with the
investment policy and all regulation governing the funds.
15
ATTACHMENT B Item B
Attachment B - Investment Quarterly
Report (as of December 31, 2025)
Item B: Staff Report Pg. 23 Packet Pg. 133 of 205
STATEMENT OF COMPLIANCE
City of Palo Alto Consolidated | Account #11465 | As of December 31, 2025
Rules Name Limit Actual Compliance
Status Notes
BANKERS' ACCEPTANCES
Max %
Max Amount Issuer
COLLATERALIZED TIME DEPOSITS (NON-
NEGOTIABLE CD/TD)
Max %
Max % Issuer
COMMERCIAL PAPER
Max %
Max Amount Issuer
CORPORATE MEDIUM TERM NOTES
FDIC INSURED TIME DEPOSITS (NON-NEGOTIABLE
CD/TD)
Max %
Max % Issuer
FEDERAL AGENCIES
Max %
Max Callables
Max Maturity (Years)10.0 9.2 Compliant
GENERAL INVESTMENT GUIDELINES
Max % 5-10 Years Maturities
16
ATTACHMENT B Item B
Attachment B - Investment Quarterly
Report (as of December 31, 2025)
Item B: Staff Report Pg. 24 Packet Pg. 134 of 205
STATEMENT OF COMPLIANCE
City of Palo Alto Consolidated | Account #11465 | As of December 31, 2025
Rules Name Limit Actual Compliance
Status Notes
LOCAL AGENCY INVESTMENT FUND (LAIF)
Max Concentration
MONEY MARKET MUTUAL FUNDS
Max %
MUNICIPAL SECURITIES
Max %
NEGOTIABLE CERTIFICATES OF DEPOSIT (NCD)
Max %
Max Issuer Amount
REPURCHASE AGREEMENTS
SUPRANATIONAL OBLIGATIONS
Max %
Max % Issuer
Min Rating (AA by 1)0.0 0.0 Compliant
U.S. TREASURIES
Max %
Max Maturity (Years)10.0 4.9 Compliant
17
ATTACHMENT B Item B
Attachment B - Investment Quarterly
Report (as of December 31, 2025)
Item B: Staff Report Pg. 25 Packet Pg. 135 of 205
PORTFOLIO CHARACTERISTICS
Palo Alto Managed Acct | Account #11463 | As of December 31, 2025
Benchmark*12/31/2025
Portfolio
9/30/2025
Portfolio
Average Maturity (yrs)2.64 2.97 3.07
Average Modified Duration 2.47 2.56 2.64
Average Purchase Yield 2.76%2.61%
Average Market Yield 3.55%3.87%4.01%
Average Quality**AA+AA+AA+
Total Market Value 523,863,105 517,930,715
*Benchmark: ICE BofA 1-5 Year Unsubordinated US Treasury & Agency Index
**The credit quality is a weighted average calculation of the highest of S&P, Moody’s and Fitch.
18
ATTACHMENT B Item B
Attachment B - Investment Quarterly
Report (as of December 31, 2025)
Item B: Staff Report Pg. 26 Packet Pg. 136 of 205
SECTOR DISTRIBUTION
Palo Alto Managed Acct | Account #11463 | As of December 31, 2025
Sector as a Percentage of Market Value
Sector 12/31/2025 09/30/2025
Muni Bonds 40.62%41.49%
Agency 24.07%28.18%
Supras 13.24%13.70%
US Treasury 11.15%2.82%
Corporate 5.96%6.10%
Neg CD 3.77%4.62%
Money Mkt Fd 1.14%3.05%
19
ATTACHMENT B Item B
Attachment B - Investment Quarterly
Report (as of December 31, 2025)
Item B: Staff Report Pg. 27 Packet Pg. 137 of 205
ISSUERS
Palo Alto Managed Acct | Account #11463 | As of December 31, 2025
Issuer Investment Type % Portfolio
United States US Treasury 11.15%
Federal Home Loan Banks Agency 7.62%
Federal Agricultural Mortgage Corp Agency 7.35%
International Bank for Recon and Dev Supras 6.90%
Farm Credit System Agency 4.45%
Federal Home Loan Mortgage Corp Agency 3.38%
Inter-American Development Bank Supras 3.17%
International Finance Corporation Supras 2.78%
State of Hawaii Muni Bonds 1.58%
San Francisco City & County of Muni Bonds 1.32%
City of Oakland, California Muni Bonds 1.28%
State of Oregon Muni Bonds 1.21%
First American Govt Oblig Fund Money Mkt Fd 1.14%
State of Georgia Muni Bonds 1.12%
San Francisco California City & Coun Muni Bonds 1.11%
Commonwealth of Massachusetts Muni Bonds 1.08%
Santa Monica Community College Distr Muni Bonds 0.98%
City of Los Angeles Muni Bonds 0.98%
Apple Inc.Corporate 0.93%
Stanford University Corporate 0.93%
Los Angeles Community College Distri Muni Bonds 0.90%
State of Wisconsin Muni Bonds 0.90%
Alphabet Inc.Corporate 0.89%
San Bernardino Community College Dis Muni Bonds 0.82%
Solano California Community College Muni Bonds 0.80%
State of New York Muni Bonds 0.78%
Contra Costa Community College Distr Muni Bonds 0.72%
San Mateo Union High School District Muni Bonds 0.72%
San Diego County Water Authority Muni Bonds 0.71%
Andrew W. Mellon Foundation, The Corporate 0.71%
20
ATTACHMENT B Item B
Attachment B - Investment Quarterly
Report (as of December 31, 2025)
Item B: Staff Report Pg. 28 Packet Pg. 138 of 205
ISSUERS
Palo Alto Managed Acct | Account #11463 | As of December 31, 2025
Issuer Investment Type % Portfolio
Marin California Community College D Muni Bonds 0.71%
FNMA Agency 0.69%
Palo Alto Unified School District Muni Bonds 0.64%
San Diego Unified School District Muni Bonds 0.61%
County of Alameda, California Muni Bonds 0.60%
The University of Chicago Corporate 0.59%
Federal Agricultural Mortgage Corp.Agency 0.59%
City of Glendora, California Muni Bonds 0.58%
Johnson & Johnson Corporate 0.58%
Ohlone Community College District Muni Bonds 0.56%
State of Mississippi Muni Bonds 0.56%
City of Manhattan Beach, California Muni Bonds 0.54%
City of Corona, California Muni Bonds 0.51%
San Diego Community College District Muni Bonds 0.51%
Northwestern Mutual Global Funding Corporate 0.49%
Guardian Life Global Funding Corporate 0.48%
Santa Clara VY California Water Dist Muni Bonds 0.46%
City of Chula Vista, California Muni Bonds 0.44%
San Ramon Valley Unified School Dist Muni Bonds 0.44%
Santa Monica-Malibu Unified School D Muni Bonds 0.42%
Texas Public Finance Authority Muni Bonds 0.42%
City of Huntington Beach, California Muni Bonds 0.41%
Redwood City School District Muni Bonds 0.40%
State of Rhode Island Muni Bonds 0.39%
International Bank for Reconstructio Supras 0.39%
City of Fairfield, California Muni Bonds 0.38%
Riverside Community College District Muni Bonds 0.38%
Cabrillo California Community Colleg Muni Bonds 0.38%
Los Angeles Department of Water and Muni Bonds 0.38%
San Jose Unified School District Muni Bonds 0.37%
21
ATTACHMENT B Item B
Attachment B - Investment Quarterly
Report (as of December 31, 2025)
Item B: Staff Report Pg. 29 Packet Pg. 139 of 205
ISSUERS
Palo Alto Managed Acct | Account #11463 | As of December 31, 2025
Issuer Investment Type % Portfolio
Microsoft Corporation Corporate 0.36%
City of Santa Ana, California Muni Bonds 0.35%
Bay Area Toll Auth Calif Toll Brdg R Muni Bonds 0.33%
The New York State Urban Development Muni Bonds 0.32%
Antelope Valley Community College Di Muni Bonds 0.31%
State of Colorado Muni Bonds 0.29%
Yosemite Community California Colleg Muni Bonds 0.28%
Glendale California Unified School D Muni Bonds 0.28%
South Pasadena Unified School Distri Muni Bonds 0.26%
Fullerton School District, Californi Muni Bonds 0.26%
The Regents of the University of Cal Muni Bonds 0.25%
Redondo Beach California Unified Sch Muni Bonds 0.25%
Palomar California Community College Muni Bonds 0.25%
City of Covina, California Muni Bonds 0.25%
Tustin Unified School District Schoo Muni Bonds 0.25%
Calleguas California Municipal Water Muni Bonds 0.25%
San Dieguito Union High School Distr Muni Bonds 0.25%
Minnesota Housing Finance Agency Muni Bonds 0.24%
State of Texas Muni Bonds 0.24%
Sequoia Union High School District Muni Bonds 0.24%
Santa Clarita California Community C Muni Bonds 0.24%
Mountain View Whisman School Distric Muni Bonds 0.22%
Desert Community College District Muni Bonds 0.21%
San Jose Evergreen California Commun Muni Bonds 0.21%
Maryland Department of Housing and C Muni Bonds 0.21%
Sierra Joint Community College Distr Muni Bonds 0.19%
State of Alabama Muni Bonds 0.19%
State of Tennessee Muni Bonds 0.19%
Burbank California City Unified Scho Muni Bonds 0.19%
Menlo Park California City School Di Muni Bonds 0.19%
22
ATTACHMENT B Item B
Attachment B - Investment Quarterly
Report (as of December 31, 2025)
Item B: Staff Report Pg. 30 Packet Pg. 140 of 205
ISSUERS
Palo Alto Managed Acct | Account #11463 | As of December 31, 2025
Issuer Investment Type % Portfolio
Santa Cruz Metropolitan Transit Dist Muni Bonds 0.19%
Mount San Antonio California Communi Muni Bonds 0.19%
Los Angeles County California Public Muni Bonds 0.18%
City of La Habra, California Muni Bonds 0.18%
Beverly Hills Unified School Distric Muni Bonds 0.18%
Placentia-Yorba Linda California Uni Muni Bonds 0.17%
Desert Sands Unified School District Muni Bonds 0.17%
City of El Segundo, California Muni Bonds 0.16%
San Francisco Bay Area Rapid Transit Muni Bonds 0.16%
Beverly Hills California Public Fina Muni Bonds 0.16%
State of California Muni Bonds 0.14%
Huntington Beach California Public F Muni Bonds 0.14%
Santa Cruz County Capital Financing Muni Bonds 0.14%
California Infrastructure and Econom Muni Bonds 0.13%
Auburn California Muni Bonds 0.13%
Rancho Santiago Community College Di Muni Bonds 0.12%
City of Buena Park, California Muni Bonds 0.12%
Rancho Water District Financing Auth Muni Bonds 0.12%
Milpitas Unified School District Muni Bonds 0.11%
San Mateo-Foster City School Distric Muni Bonds 0.11%
City of Ontario, California Muni Bonds 0.11%
Temecula Valley Unified School Distr Muni Bonds 0.11%
City of Pacifica, California Muni Bonds 0.11%
Pasadena Public Financing Authority,Muni Bonds 0.11%
San Juan Unified School District Muni Bonds 0.10%
Santa Clara County Muni Bonds 0.10%
State of Ohio Muni Bonds 0.10%
Liberty Union High School District Muni Bonds 0.10%
Morgan Stanley Neg CD 0.10%
Oxnard Union High School District Muni Bonds 0.09%
23
ATTACHMENT B Item B
Attachment B - Investment Quarterly
Report (as of December 31, 2025)
Item B: Staff Report Pg. 31 Packet Pg. 141 of 205
ISSUERS
Palo Alto Managed Acct | Account #11463 | As of December 31, 2025
Issuer Investment Type % Portfolio
Chabot-Las Positas Community College Muni Bonds 0.09%
City of Monterey Park, California Muni Bonds 0.09%
Tracy Joint Unified School District Muni Bonds 0.09%
Campbell California Union High Schoo Muni Bonds 0.09%
Santa Barbara Unified School Distric Muni Bonds 0.09%
Santa Maria Joint Union High School Muni Bonds 0.09%
Roseville California Finance Authori Muni Bonds 0.08%
Torrance California Joint Powers Fin Muni Bonds 0.08%
San Jose, California Muni Bonds 0.07%
San Jose Financing Authority Muni Bonds 0.07%
City of San Ramon, California Muni Bonds 0.06%
Carlsbad Unified School District Muni Bonds 0.06%
Chaffey Community College District C Muni Bonds 0.05%
Sunnyvale School District, Californi Muni Bonds 0.05%
LEDYARD NATIONAL BANK Neg CD 0.05%
The Bippus State Bank Neg CD 0.05%
Global Federal Credit Union Neg CD 0.05%
Alliant Credit Union Neg CD 0.05%
American Express Company Neg CD 0.05%
The Peoples Bank Co.Neg CD 0.05%
Signature Federal Credit Union Neg CD 0.05%
The Pitney Bowes Bank Inc.Neg CD 0.05%
SPCO Credit Union Neg CD 0.05%
Austin Telco Federal Credit Union Neg CD 0.05%
Baxter Credit Union Neg CD 0.05%
County Schools Federal Credit Union Neg CD 0.05%
Workers Federal Credit Union Neg CD 0.05%
Enterprise Bank Neg CD 0.05%
UBS Bank USA Neg CD 0.05%
General Electric Credit Union Neg CD 0.05%
24
ATTACHMENT B Item B
Attachment B - Investment Quarterly
Report (as of December 31, 2025)
Item B: Staff Report Pg. 32 Packet Pg. 142 of 205
ISSUERS
Palo Alto Managed Acct | Account #11463 | As of December 31, 2025
Issuer Investment Type % Portfolio
First Technology Federal Credit Unio Neg CD 0.05%
Healthcare Systems Federal Credit Un Neg CD 0.05%
Amerant Bank N.A.Neg CD 0.05%
Southern Bank Neg CD 0.05%
Ally Bank Neg CD 0.05%
First Southwest Bank Neg CD 0.05%
CFG Bank Neg CD 0.05%
CNB Bank, Inc.Neg CD 0.05%
Truist Bank Neg CD 0.05%
GreenWay Bank Neg CD 0.05%
Wings Credit Union Neg CD 0.05%
First Guaranty Bancshares, Inc.Neg CD 0.05%
Diversified Members Credit Union Neg CD 0.05%
Transportation Alliance Bank, Inc.Neg CD 0.05%
Cornerstone Community Federal Credit Neg CD 0.05%
Metropolitan Capital Bank & Trust Neg CD 0.05%
Chambers State Bank Neg CD 0.05%
Achieve Financial Credit Union Neg CD 0.05%
Mutual Savings Association Neg CD 0.05%
Finwise Bank Neg CD 0.05%
Oak Bank Neg CD 0.05%
Liberty First Credit Union Neg CD 0.05%
Community Choice Credit Union Neg CD 0.05%
Public Service Credit Union Neg CD 0.05%
Evolve Bank & Trust Neg CD 0.05%
BankUnited NA CD 0.05%
Farmers Insurance Federal Credit Uni Neg CD 0.05%
Ponce Bank, National Association Neg CD 0.05%
County of Riverside, California Muni Bonds 0.05%
Meritrust Federal Credit Union Neg CD 0.05%
25
ATTACHMENT B Item B
Attachment B - Investment Quarterly
Report (as of December 31, 2025)
Item B: Staff Report Pg. 33 Packet Pg. 143 of 205
ISSUERS
Palo Alto Managed Acct | Account #11463 | As of December 31, 2025
Issuer Investment Type % Portfolio
BankFirst Neg CD 0.05%
Decorah Bank and Trust Company Neg CD 0.05%
Merrick Bank Neg CD 0.05%
Eaglemark Savings Bank Neg CD 0.05%
Toyota Financial Savings Bank Neg CD 0.05%
GreenState Credit Union Neg CD 0.05%
Institution for Savings in Newburypo Neg CD 0.05%
Kennett Trust Bank Neg CD 0.05%
Synchrony Bank Neg CD 0.05%
Monet Bank Neg CD 0.05%
Beal Bank USA Neg CD 0.05%
Delta National Bank and Trust Compan Neg CD 0.05%
Pentagon Federal Credit Union Neg CD 0.05%
Capital One Financial Corporation Neg CD 0.05%
Connexus Credit Union Neg CD 0.05%
First Oklahoma Bank Neg CD 0.05%
First National Bank of America Neg CD 0.05%
First Community Credit Union of Belo Neg CD 0.05%
Encore Bank Neg CD 0.05%
Cinfed Federal Credit Union Neg CD 0.05%
Live Oak Banking Company Neg CD 0.05%
Fremont Union High School District Muni Bonds 0.05%
Silicon Valley Clean Water Muni Bonds 0.05%
Gesa Credit Union Neg CD 0.05%
Jonesboro State Bank Neg CD 0.05%
Sunwest Bank Neg CD 0.05%
Bank of Montreal Neg CD 0.04%
Minnwest Bank Neg CD 0.04%
Farmers and Merchants State Bank Neg CD 0.04%
Legacy Bank & Trust Company Neg CD 0.04%
26
ATTACHMENT B Item B
Attachment B - Investment Quarterly
Report (as of December 31, 2025)
Item B: Staff Report Pg. 34 Packet Pg. 144 of 205
ISSUERS
Palo Alto Managed Acct | Account #11463 | As of December 31, 2025
Issuer Investment Type % Portfolio
The Farmers & Merchants Bank Neg CD 0.04%
Central Bank Neg CD 0.04%
Country Club Bank Neg CD 0.04%
Berkeley California Unified School D Muni Bonds 0.04%
Pony Express Bank Neg CD 0.04%
Peoples Bank Neg CD 0.04%
USF Federal Credit Union Neg CD 0.04%
San Diego Association of Governments Muni Bonds 0.04%
City of Downey, California Muni Bonds 0.03%
Sonoma County California Junior Coll Muni Bonds 0.03%
Southern California Public Power Aut Muni Bonds 0.02%
Orchard California School District Muni Bonds 0.02%
Cash Cash 0.00%
TOTAL 100.00%
27
ATTACHMENT B Item B
Attachment B - Investment Quarterly
Report (as of December 31, 2025)
Item B: Staff Report Pg. 35 Packet Pg. 145 of 205
QUALITY DISTRIBUTION
Rating 12/31/2025 09/30/2025
AAA 24.04%27.55%
AA 61.51%59.11%
A 0.72%0.77%
BBB 0.19%0.24%
A-1+1.90%--
NA 11.59%12.29%
B 0.05%0.05%
Rating 12/31/2025 09/30/2025
Aaa 24.32%27.77%
Aa 61.51%59.16%
A 0.24%0.24%
Baa --0.05%
P-1 1.90%--
NA 12.04%12.78%
Rating 12/31/2025 09/30/2025
AAA 9.39%11.49%
AA 43.53%41.51%
A 0.14%0.15%
BBB 0.09%0.09%
F1+1.90%--
NA 44.94%46.76%
Palo Alto Managed Acct | Account #11463 | As of December 31, 2025
S&P Rating Moody’s Rating Fitch Rating
28
ATTACHMENT B Item B
Attachment B - Investment Quarterly
Report (as of December 31, 2025)
Item B: Staff Report Pg. 36 Packet Pg. 146 of 205
0-.25 .25-.5 .5-1 1-2 2-3 3-4 4-5 5-7 7+
Portfolio 12.7%5.3%12.0%16.8%12.2%11.3%18.8%9.0%1.8%
ICE BofA 1-5 Year Unsubordinated US Treasury &
Agency Index 0.0%0.0%2.5%35.4%28.7%21.2%12.3%0.0%0.0%
DURATION DISTRIBUTION
Palo Alto Managed Acct | Account #11463 | As of December 31, 2025
Portfolio Compared to the Benchmark
29
ATTACHMENT B Item B
Attachment B - Investment Quarterly
Report (as of December 31, 2025)
Item B: Staff Report Pg. 37 Packet Pg. 147 of 205
TOTAL RATE OF RETURN*3 Months 12 Months 2 Years 3 Years 5 Years 10 Years Since Inception
Palo Alto Managed Acct 1.16%1.56%
Benchmark 1.11%1.35%
*Periods over 1 year are annualized.
Total rate of return: A measure of a portfolio’s performance over time. It is the internal rate of return, which equates the beginning value of the portfolio with the ending market value; it includes interest earnings, realized
and unrealized gains and losses in the portfolio.
Benchmark: ICE BofA 1-5 Year Unsubordinated US Treasury & Agency Index
INVESTMENT PERFORMANCE
Palo Alto Managed Acct | Account #11463 | As of December 31, 2025
Total Rate of Return : Inception | 09/01/2025
30
ATTACHMENT B Item B
Attachment B - Investment Quarterly
Report (as of December 31, 2025)
Item B: Staff Report Pg. 38 Packet Pg. 148 of 205
PORTFOLIO CHARACTERISTICS
City of Palo Alto Reporting | Account #11464 | As of December 31, 2025
12/31/2025
Portfolio
9/30/2025
Portfolio
Average Maturity (yrs)0.00 0.00
Average Modified Duration 0.00 0.00
Average Purchase Yield 2.50%1.86%
Average Market Yield 2.50%1.86%
Average Quality**AAA AAA
Total Market Value 121,364,206 71,567,424
*Benchmark: NO BENCHMARK REQUIRED
**The credit quality is a weighted average calculation of the highest of S&P, Moody’s and Fitch.
31
ATTACHMENT B Item B
Attachment B - Investment Quarterly
Report (as of December 31, 2025)
Item B: Staff Report Pg. 39 Packet Pg. 149 of 205
SECTOR DISTRIBUTION
City of Palo Alto Reporting | Account #11464 | As of December 31, 2025
Sector as a Percentage of Market Value
Sector 12/31/2025 09/30/2025
Cash 65.29%55.60%
LAIF 34.71%44.40%
32
ATTACHMENT B Item B
Attachment B - Investment Quarterly
Report (as of December 31, 2025)
Item B: Staff Report Pg. 40 Packet Pg. 150 of 205
CONSOLIDATED INFORMATION
33
ATTACHMENT B Item B
Attachment B - Investment Quarterly
Report (as of December 31, 2025)
Item B: Staff Report Pg. 41 Packet Pg. 151 of 205
PORTFOLIO CHARACTERISTICS
City of Palo Alto Consolidated | Account #11465 | As of December 31, 2025
12/31/2025
Portfolio
9/30/2025
Portfolio
Average Maturity (yrs)2.41 2.70
Average Modified Duration 2.08 2.31
Average Purchase Yield 2.71%2.52%
Average Market Yield 3.61%3.75%
Average Quality**AA+AA+
Total Market Value 645,227,312 589,498,139
*Benchmark: NO BENCHMARK REQUIRED
**The credit quality is a weighted average calculation of the highest of S&P, Moody’s and Fitch.
34
ATTACHMENT B Item B
Attachment B - Investment Quarterly
Report (as of December 31, 2025)
Item B: Staff Report Pg. 42 Packet Pg. 152 of 205
SECTOR DISTRIBUTION
City of Palo Alto Consolidated | Account #11465 | As of December 31, 2025
Sector as a Percentage of Market Value
Sector 12/31/2025 09/30/2025
Muni Bonds 32.96%36.43%
Agency 19.53%24.75%
Cash 12.32%6.78%
Supras 10.74%12.03%
US Treasury 9.05%2.47%
LAIF 6.55%5.41%
Corporate 4.83%5.36%
Neg CD 3.06%4.05%
Money Mkt Fd 0.93%2.68%
35
ATTACHMENT B Item B
Attachment B - Investment Quarterly
Report (as of December 31, 2025)
Item B: Staff Report Pg. 43 Packet Pg. 153 of 205
IMPORTANT DISCLOSURES
2025 Chandler Asset Management, Inc, An Independent Registered Investment Adviser.
Information contained herein is confidential. Prices are provided by ICE Data Services Inc (“IDS”), an independent pricing source. In the event IDS does not provide a price or if the
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36
ATTACHMENT B Item B
Attachment B - Investment Quarterly
Report (as of December 31, 2025)
Item B: Staff Report Pg. 44 Packet Pg. 154 of 205
BENCHMARK DISCLOSURES
Benchmark Disclosure
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37
ATTACHMENT B Item B
Attachment B - Investment Quarterly
Report (as of December 31, 2025)
Item B: Staff Report Pg. 45 Packet Pg. 155 of 205
City Council
Ad Hoc Report
From: Oversized Vehicles Ad Hoc Committee
Report Type: STUDY SESSION
Members: Lauing (Chair), Lythcott-Haims, and Reckdahl
Meeting Date: February 23, 2026
Report #:2512-5591
TITLE
Status Report from the Oversized Vehicles (OSV) Ad Hoc Committee CEQA Status: Not a Project.
RECOMMENDATION
The Oversized Vehicles (OSV) Ad Hoc Committee recommends that the City Council receive and
provide feedback on the Committee’s report back including supplemental information from
staff.
Formation of the Council Ad Hoc
On October 20, 2025, the Palo Alto City Council approved a set of initial measures to address
the growing numbers of Oversized Vehicles (OSVs) and resulting community impacts, as well as
the needs of OSV dwellers, including:
1. Prioritizing the towing of unregistered vehicles parked on City streets.
2. Prohibiting the parking of detached trailers on public streets.
3. Prohibiting the renting of public parking spaces (“vanlording”).
4. To enhance cleanliness in OSV areas, the Council authorized a one-time deep cleaning
followed by a semi-monthly sweeping schedule. Because this sweeping requires
vehicles to be relocated, it also serves as a mechanism to ensure all parked OSVs remain
mobile and operable.
5. Recruit new safe parking on privately-owned and congregation-based parking lots,
excepting any safe parking site that requires undedicating parkland.
6. Council directed staff to return to Council for approvals of ordinances and contract
amendments as soon as possible.
7. Directed the Mayor to create an Ad Hoc Committee to recommend details on the
increased enforcement and evaluation of Phase 2 activities, reporting back to Council in
4 months.
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The initial ordinances for items 2-4 were approved by Council on December 8, 2025, with
second readings approved on January 12, 2026.
Background
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locker rooms with showers, it is considered the best-resourced safe parking lot of all that MMV
manages in the region. The City’s Safe Parking program also includes partnerships with local
faith-based communities. We currently have four (4) such partners, each of which provide four
(4) spots for overnight parking to cars only (not OSVs), for a total of 16 spots. These resources
by themselves cannot handle the scope of the OSV population in Palo Alto.
Strategic Goals
The Desire to Mitigate Litigation Risk
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citywide. Two of those cases resulted in settlement1 and one is still pending before the Ninth
Circuit Court of Appeals2, making it difficult to extrapolate clear legal precedent around how
much discretion cities may exercise in limiting or prohibiting OSV parking on public streets.
The Challenge of Expanding Safe Parking Opportunities
Expand the Geng Road program. The land adjacent to the MMV Geng Road is dedicated
parkland (baseball/softball/batting cage/parking lot). Undedication would require
approval of the voters. Council’s October 20, 2025 motion specifically indicated we were
not to look at land that would have to be undedicated.
Increase the Faith-Based Program. Our faith-based partners tell us that the challenging
neighborhood dynamics associated with their initial safe parking efforts prevent them
from doing more at this time. They feel it is “someone else’s turn.”
1 See Navarro et al. v. City of Mountain View at N.D. Cal. Case No. 21-cv-05381 and Geary et al. v. City of Pacifica
at Case No. 21-cv-01780.
2 See Yesue et al. v. City of Sebastopol at N.D. Cal. Case No. 22-cv-06474 and 9th Cir. Case No. 24-7691. The lawsuit
was filed in 2022 and Sebastopol suspended enforcement of its OSV parking restrictions until the District Court
ruled in its favor in 2024. The case is currently on appeal to the Ninth Circuit. Oral argument occurred in December
2025 with a decision anticipated in 2026.
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Lease vacant land/parking lots from corporations. None of the corporate entities we’ve
approached have been amenable to leasing their vacant lots to the City for safe parking.
Use City land. None of Palo Alto’s vacant or underutilized properties are deemed
suitable for this purpose.
Lease land owned by other government entities. Caltrans owns the lot bordered by Hwy
101, San Antonio Road and Transport Street. Currently it is leased to a garden supply
store. Due to a Caltrans policy change impacting the current use, staff are in touch with
Caltrans about converting the use to safe parking.
In sum, despite the success of the highly successful safe parking program operated by MMV at
Geng road, the high cost of land and a scarcity of suitable locations make it difficult to increase
the number of off-street safe parking spots, and off-street parking alone will not fully address
Palo Alto's significant OSV challenges. Therefore, we are proposing a pilot permit program
designed to reduce impacts and address the needs of OSV dwellers, and we have also secured a
commitment from County leaders to convene a regional conversation on this topic.
Exploring OSV Permit Program
Given the legal risks associated with an OSV ban and the difficulties of expanding off-street Safe
Parking, the Ad Hoc committee recommends exploring alternative strategies. An OSV permit
program would allow the City to mitigate the negative impacts of OSVs while providing targeted
support for residents with legitimate needs.
Core Features of an OSV Permit Program:
Capacity limits: The City will reduce the number of OSVs in Palo Alto by capping the
number of permits based on Palo Alto’s historical OSV population.
Conduct Standards: Permit holders must abide by a set of guidelines designed to
minimize community impacts. Rule violations would result in permit non-renewal.
Defined Eligibility: Participation is restricted to low-income individuals with
documented ties to the Palo Alto community.
Seek Housing: Pursue placement on County housing waitlists.
Parking Locations: OSV Parking would remain prohibited in residential zones and all
other areas where OSVs are currently restricted.
The permit program addresses community impacts through two primary mechanisms: it caps
the number of OSVs at a manageable level and establishes conduct standards that give the city
significant leverage to discourage problematic behavior. In addition, by bringing OSV dwellers
into regulatory compliance with the City’s expectations, the permit program also offers more
dignity and security to OSV dwellers.
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While the potential benefits are clear, many operational details require refinement before such
a program could be implemented citywide.
Proposed Pilot Permit Program
Designated Parking Zones: The Pilot Program will establish specific zones where permits
are required to park an OSV. Confining the Pilot to small areas simplifies enforcement
and allows for rapid installation of the legally required signage.
Non-Pilot Areas: Areas outside of the Pilot will have no change in OSV regulations. City
Staff and Police will conduct proactive monitoring to mitigate the impacts of
unpermitted OSVs moving from the pilot areas into non-pilot areas.
Pro-rated Permit Allocation: While a permanent city-wide program would determine
capacity based on historical OSV data, the Pilot’s permit cap will be scaled
proportionally to the capacity of the designated zones.
Conduct Standards: Permit applicants/holders will be expected to:
o Maintain Vehicle Registration and Safety: Permit applicants must have valid
vehicle registration and insurance. Vehicles must pass a safety inspection,
including a check for oil, water, and sewage leaks.
o Agree to being a "Good Neighbor:” Applicants must commit to a "Good
Neighbor" agreement, which includes guidelines for noise mitigation during
evening hours, pet containment, the prohibition of open fires, and a ban on
storing personal belongings in public spaces.
o Park Safely: Permit holders must ensure their vehicles do not obstruct sightlines
near intersections or driveways. To prevent a continuous 'wall of vehicles,' a
minimum 20-foot clearance must be maintained between parked OSVs.
Additionally, the extension of vehicle slide-outs is prohibited while parked on
City streets.
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o Seek Housing: To ensure that the program serves as a bridge to permanent
stability, participants must actively engage with service providers and apply for
available housing waitlists; those who refuse a housing placement will be
ineligible for permit renewal.
Restrict Eligibility to Income-Qualifying and Local Connection: Participation is restricted
to low-income individuals with established ties to Palo Alto, such as employment in Palo
Alto, PAUSD enrollment, or a history of long-term Palo Alto residency prior to
displacement.
Provide Access to Sanitation Services: To prevent waste and litter, a designated City
facility could accept garbage and sewage from permit holders during scheduled
collection times.
Permit Duration & Cost: Permits will be issued on a short-term basis (e.g., 30–90 days).
Fees will be structured to offset the costs of sanitation and administrative services. Non-
compliance with program standards will be grounds for permit non-renewal.
Should the pilot demonstrate success in reducing community impacts, the City will be prepared
for a rapid, phased expansion of the program.
The Need for Regional Coordination
The housing crisis and increase in homelessness is a regional, state, and national issue. When
individual cities decide to sweep out encampments of unhoused people or ban OSVs from
parking on their streets they simply push that population elsewhere. And such efforts do
nothing to address the needs of unhoused people for basic shelter, services, and dignity.
Because we in Palo Alto find ourselves impacted by the decisions of neighboring municipalities
which have banned OSV parking, we’ve sought to elevate the conversation to a regional level so
as to work on regional solutions. At our request, the Office of Santa Clara County District 5
Supervisor Margaret Abe-Koga, in partnership with the County’s Office of Supportive Housing,
and Joint Venture Silicon Valley are co-sponsoring a regional convening on this issue on Friday
April 17 from 1-4pm. They estimate inviting 50-60 attendees to that event including
representatives from Palo Alto, and they have requested that we present our pilot permit
program as an example of innovative responses to OSV impacts and vehicle-dweller needs.
Conclusion
Since the Council’s actions on October 20, the City has made significant progress despite the
scale of the problem and operational constraints such as limited towing capacity and the lack of
available land for more safe parking lots. The Ad Hoc Committee commends City staff for their
exceptional dedication, including their extensive work during evenings and weekends to
address this issue. Despite this progress, we recognize that OSVs continue to negatively impact
Palo Alto’s residents and businesses. We also understand the needs of individuals who have no
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viable housing alternative to their vehicles. The City remains committed to working on the
expanded measures needed to address all aspects of this problem.
ENVIRONMENTAL REVIEW
ATTACHMENTS
APPROVED BY:
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City Council
Attachment A: Staff Supplemental Report
to OSV Ad Hoc Status Report
From: City Manager
Report Type: STUDY SESSION
Lead Department: City Manager
Meeting Date: February 23, 2026
TITLE
Status Report from the Oversized Vehicles (OSV) Ad Hoc Committee; CEQA Status – Not a
Project.
RECOMMENDATION
Staff recommends that the City Council receive and provide feedback on the Oversized Vehicles
(OSV) Ad Hoc Committee’s report back regarding follow up information from the OSV Ad Hoc
Committee and this supplemental information from staff.
BACKGROUND
In response to growing concerns about the longer-term parking of inhabited oversized vehicles
on public streets, the City Council established an Oversized Vehicle (OSV) Ad Hoc Committee
(Committee) on October 20, 2025 1 and approved a phased approach to addressing community
concerns. The City Council action on October 20, 2025 included approval of the following:
Phase 1:
1. Develop an urgency ordinance to prohibit parking of detached/inoperable vehicles on
public streets,
2. Develop an urgency ordinance to prohibit the renting of public parking spaces
(“vanlording”),
3. Refine the scope and begin implementation of additional street cleanups and sweeping,
4. Return to Council for approvals of ordinances and contract amendments (e.g., street
sweeping) as soon as possible, estimated to require up to four (4) months,
5. Implementation and enforcement of these actions would follow,
1 Council Staff Report, October 20, 2025
https://cityofpaloalto.primegov.com/api/compilemeetingattachmenthistory/historyattachment/?historyId=3020b
489-edc3-4d4a-b48f-398bc6045634
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6. Work with LifeMoves to consider options, such as a buyback or parking program, to
accept RV residents quickly at the Homekey site or other housing options,
7. Recruit new safe parking on privately-owned and congregation-based parking lots,
excepting any safe parking site that requires undedicating parkland,
8. Create an Ad Hoc Committee to recommend details on the increased enforcement and
other issues on implementation on items 1-7 above; evaluation of activities in Phase 2
and report back to Council in 4-months, in furtherance of Council goals including
public health and public safety,
9. Approve amendments to the Fiscal Year 2026 Budget Appropriation (requires a 2/3
vote) to resource aspects of the phased approach in various funds:
a. General Fund by:
i. Increasing the contractual services appropriation for the City Manager’s
Office by $157,000 for resources to support program implementation;
ii. Decreasing the Business Tax Housing Affordability Reserve by $157,000;
iii. Increasing the contractual services appropriation for the Office of
Transportation by $150,000 for engineering services;
iv. Increasing the contractual services appropriation in the Public Works
Department by $60,000 for street clean-up services;
v. Increasing the contractual services appropriation in the Police
Department by $95,000 for marking and enforcement of vehicles;
vi. Decreasing the Budget Stabilization Reserve by $305,000;
b. Refuse Fund by:
i. Increasing the contractual services appropriation by $245,000 for new
permanent and temporary street cleaning signage; and
ii. Decreasing the Ending Fund Balance by $245,000
As immediate follow up of the City Council direction, on December 8, 2025, the City Council
adopted two urgency ordinances prohibiting vanlording and prohibiting detached trailer street
parking.2 The Committee reviewed the outreach materials related to these two ordinances.
Staff has posted signs allowing enforcement of the detached trailers ordinance.
The Committee has met almost weekly since October. The Committee members include
Councilmembers Ed Lauing (Chair), Julie Lythcott-Haims, and Keith Reckdahl. The Committee's
charge, as bolded in the City Council motion above, includes the following tasks:
• Task 1: Recommend details on increased enforcement
2 Council Staff Report, December 8, 2025
https://cityofpaloalto.primegov.com/meetings/ItemWithTemplateType?id=9662&meetingTemplateType=2&comp
iledMeetingDocumentId=17979
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• Task 2: Recommendations on other issues in implementation of the other items in the
motion (particularly related to items 6 and 7 in the motion (buyback/storage programs
and new safe parking options)
• Evaluating Phase 2 activities and options
• Engagement (not formally adopted by the City Council but highly encouraged)
• Reporting back to City Council in four months, in furtherance of City Council goals
including public health and safety related to the tasks
The Committee has been working collaboratively toward solutions focused on enhancing public
health and safety. Since November 2025, the Committee has met with City staff to receive
updates on cleaning and enforcement efforts and safe parking expansion efforts. The
Committee has also begun to evaluate new policy, assess potential impacts, and options for
safe parking and convening regional leaders to work on this as a regional issue. Their efforts aim
to provide the City Council with actionable considerations that address immediate concerns
and achieve long-term outcomes related to managing OSVs.
ANALYSIS
The Committee received information regarding staff’s implementation of the October 20, 2025
Phase 1 direction from City Council. Some key findings are shared below. In addition to those
findings and updates, the Committee has also focused on expanding parking options regarding
OSVs. This includes looking into options for (1) parking/storing OSVs while their owners
participate in interim housing and (2) storing towed OSVs to expand local tow capacity. Lastly,
the Committee began consideration of options for Phase II. More information about each of
these topics is shared below and in the Committee’s memo.
Findings Regarding Implementation of October 20, 2025 Phase I:
1. Street Cleaning and Sweeping: as of February 10, 2026, staff has conducted one-time
street deep cleaning (which includes debris removal, street cleaning, tree pruning, and
catch basin and storm drainpipe line cleaning) on 17 street segments. There are 18
street segments remaining in this effort for the streets identified in the October 20th
report. Each street (name and count) is counted twice since the work for opposite sides
of the street are scheduled for different dates. In addition to the one-time deep
cleaning, staff has also implemented a bi-weekly street sweeping effort on the streets
that have received deep cleaning. Both efforts, deep cleaning and street sweeping
require all vehicles (passenger vehicles and OSVs) to move from those parking spots or
be subject to citation and/or towing. To date, most vehicles have complied with the
requirement to relocate during street cleaning and street sweeping. Of note, after the
deep cleaning and/or street sweeping occur on any of the street segments, vehicles,
including OSVs, have returned to park on those street segments.
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2. Enforcement:
a. Towing: In 2024, through a contract towing service, police staff towed 12 OSVs.
In 2025, there were 47 OSVs towed.3 On October 20, 2025, the City Council
directed police staff to increase enforcement of existing parking and vehicle
registration laws that can result in a vehicle being towed from a public street.
From that City Council meeting to the date of this report, 33 OSVs have been
towed. In addition to towing, police staff have been supporting the street
cleaning and sweeping efforts with outreach and enforcement. Outreach efforts
have been successful for street cleanings scheduled on Saturdays. Of the first
nine (9) scheduled cleaning dates, only five (5) vehicles (all non-OSVs) were
towed for not moving out of the cleaning areas. For regularly scheduled street
sweeping, police conducted additional outreach and distributed flyers advising of
the routine cleaning schedule. To date, nine (9) passenger vehicles and three (3)
OSVs have been towed for failing to move from the scheduled sweeping areas. In
2025, the Police Department paid $53,285 to tow OSVs. In 2026, the Police
Department has only been billed and paid a portion of the costs for 2026 tows-
to-date. The current paid amount of $5,000 this calendar year will increase after
the City is fully billed/invoiced related to the tows-to-date. More information
about this process is included as a footnote below.4
b. Scheduled Sweeping Outreach: For the cleanings, Public Works posts “No
Parking” signs on A-frames and prepares outreach flyers two weeks prior to
scheduled cleanings. The Police Department also engages in outreach to the
individuals on street cleaning/sweeping streets. On the date of the scheduled
cleanings, after the deep cleaning is completed, Public Works updates the signs
to “No Parking for bi-monthly street sweeping” signs.
Transportation staff conducted field surveys of all 18 affected streets, mapped
and defined permanent signage locations, designed signage in accordance with
regulations, and began work order development for permanent signage
(including new poles) related to street sweeping and detached vehicles for
3 From January 1, 2025, to October 15, 2025, police staff towed 25 OSVs and from October 16, 2025, to December
31, 2025, police staff towed 22 vehicles for a total of 47 OSVs towed in 2025.
4 Towing services are paid in one of two ways. In order for a legal owner to retrieve their towed vehicle, the owner
must pay for all towing related fees to include the tow fee and storage fees. If a vehicle is truly abandoned or the
legal owner does not retrieve their vehicle for various reasons, the tow company will place a lien on the vehicle
and then sell or scrap the vehicle if the vehicle has no value. The Police Department is invoiced for all unpaid
towing related fees once a vehicle is sold (minus the tow sales revenue) or scrapped. This process can take
anywhere from 30-60 days and is the reason why the Department has additional unpaid invoices.
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review by Public Works field staff.
3. Outreach (in general and related to enforcement): The Homeless Outreach Team (HOT)
conducted 349 interactions between clients and case managers, including 338
documented outreach interactions through street- and site-based engagement. Each
interaction focused on building rapport, addressing barriers to services, and connecting
individuals to ongoing case management. All activities were tracked through HMIS
activity logs and outreach contact forms. In addition to direct outreach, staff engaged
with community members and service providers to share information and problem-
solve complex situations. Multiple service providers shared the observation that
enforcement actions undermine trust and reduce individuals’ willingness to engage with
City programs. This concern aligns with outreach staff observations and has implications
for effective service connection. Service providers already face lack of trust due to the
limited bed availability for those seeking shelter (as of now the average wait time for an
individual adult is four (4) weeks for a shelter bed).
4. Safe Parking Lots Recruitment
a. Congregational – Councilmember Lythcott-Haims spoke with providers and faith
leaders who expressed that they are already doing their part by providing safe
parking on their own lots and that they want to see other sectors of the
community to step up.
b. Private – all 3 Committee members talked directly with various property owners
regarding possible viable lots; owners shared concerns about risk and liability,
and thus there have been no takers to-date for safe parking.
c. Public – no viable City lots are available currently for safe parking; staff is in
discussion with Caltrans about a potential site; the Ad Hoc is also encouraging a
regional discussion on topic. More information on the regional convening
concept is included in Attachment B following this staff report.
Exploration of Phase II Concepts
1. OSV Permit Pilot – The OSV Ad Hoc Committee drafted, for discussion, an overview of a
possible permit program and that is included in their Committee memo to City Council.
2. Storage / buyback – Research is underway on RV storage and/or buyback and will be
provided to the Committee once completed.
City Council Input Requested
The Committee is seeking City Council feedback on the OSV Permit Pilot program concept
described in the Committee‘s memo to City Council which also includes information on other
implementation progress. The Committee recognizes the difficulty with finding safe parking
available space and would like to request City Council feedback on interest to consider adding
back the consideration of pursuing the process for the undedication of parkland at least on a
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temporary basis near Geng Road, as an option to expand the existing safe parking program
there. This was previously taken from consideration at the Policy and Services Committee
August 25, 2025 meeting and City Council informal confirmation of that Policy and Services
Committee recommendation.
FISCAL/RESOURCE IMPACT
Since October 20, a variety of financial and staff resources have been deployed in this effort, as
shown in the table below. Phase 1 efforts to date are within the budget that City Council
authorized for this work.
Table 1: RESOURCES EXPENDED OCT 20 – FEB 7 RELATING TO OSV WORK
Description Resources and Staff Time
There is also 40 CSO overtime hours
Including Hourly work.
5
Additional staff and funding resources will be needed to pursue the Phase 2 work and any
program that the City Council is interested in pursuing. Staff will further refine cost estimates
after further City Council clarity on interests for next steps.
5 This resource is an existing staff member who has been reassigned to work on this priority at the expense of
progressing other projects and priorities. The cost for this time spent is approximately $32,000.
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STAKEHOLDER ENGAGEMENT
The Committee and staff organized a Community Open House6 to share information with the
public about the materials that went to City Council Committee and full City Council in August
and October. The open house had about 80 attendees and had stations focused on the
following:
• Enforcement
• Parking management: curb painting, time restrictions, signage etc.
• Cleaning and sweeping program
• Sheltered housing
• Parking and storage
• Phase 2 activities
Staff collected feedback shared by the community at the open house and summarized it for the
Ad Hoc Committee.
In addition to the feedback received at the open house, staff continue to monitor and respond
to correspondence submitted to the City Council on this topic. Staff are also actively engaging
with the local service provider network to share information, answer questions, and gather
insights regarding what providers are hearing directly from their clients. This ongoing outreach
helps ensure that staff remain informed of community concerns, service impacts, and emerging
themes, and allows for responsive coordination as the project moves forward.
ENVIRONMENTAL REVIEW
This is a study session only and no action is planned. Any subsequent projects as defined by
CEQA will undergo review at the appropriate time.
ATTACHMENTS
Attachment B: Regional Convening Overview
APPROVED BY:
Ed Shikada, City Manager
6 Information on OSV Open House, January 28, 2026: https://www.paloalto.gov/Events-Directory/City-
Manager/Oversized-Vehicles-Community-Open-House
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Convening Paragraph
As the systemic issue of housing unaffordability continues to plague our region, our
communities are experiencing an increase in unhoused people who live in their vehicles
and park alongside city curbs. The presence of such individuals and their vehicles r esults
in health and safety impacts for adjacent business owners and residents. And many
vehicle dwellers report that they would prefer to live in a shelter or even in a safe parking
lot, but such options are not available or have requirements they cannot meet.
The negative impacts of vehicle dwellers and vehicles on city streets are being addressed
on a city-by-city level, typically by severely restricting or outright banning overnight parking,
where one jurisdiction’s solution becomes another jurisdiction’s pro blem. The City of Palo
Alto has not banned overnight parking and is seeing its numbers of such vehicles increase.
We seek to join in a solutions-oriented dialogue with others who are interested in exploring
a regional approach to addressing both sides of this complex issue (the negative impacts
and the needs of vehicle dwellers). Safe parking programs and other innovations have
shown some success and lessons learned, though resources required and perceptions
constrain their expansion.
Therefore, Palo Alto is proposing a Convening on this matter to be held in Spring of 2026,
and to be co-led by the City of Palo Alto, Office of Santa Clara County Supervisor Margaret
Abe-Koba, Santa Clara County Office of Supportive Housing, Joint Venture Silicon Valley,
and Stanford University. Invitations to the Convening will be extended to: city and county
staff and elected officials from around the region; non -profit leaders who work with
unhoused people; developers, business owners, and other property owners; members of
academe; and thought leaders from myriad sectors and industries.
Intended outcomes of the Convening are:
1.Conduct an outside-the-box conversation on this challenging issue that utilizes
design thinking to get us to previously unexplored potential solutions that reduce
negative impacts and also improve quality of life and dignity for vehicle dwellers.
2.Identify potential solutions that will address both the negative impacts of vehicle
dwellers and that create a more permanent and dignified housing solution for such
persons.
3.Create a task force to flesh out the solutions and identify funding sources.
Attachment to Staff Report - Overview of Regional Convening Item 2
Attachment B - Regional
Convening Overview
Item 2: Staff Report Pg. 16 Packet Pg. 171 of 205
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City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Police
Meeting Date: February 23, 2026
Report #:2602-5924
TITLE
Approval of Amendment No. 1 to Contract No. S26196996 for One Year with Yosh Enterprises
Inc. dba Orion Security for Track Watch Services at Four Grade Crossings in the Amount of
$1,623,314 for a New Total Not-to-Exceed Amount of $1,708,314; Authorize the Negotiation
and Execution of a Cost Sharing Agreement with Palo Alto Unified School District for $854,157;
and Approval of a Fiscal Year 2026 Operating Budget Amendment in the General Fund; CEQA
status - Not a project.
RECOMMENDATION
Staff recommends that the City Council:
1. Approve and authorize the City Manager or their designee to execute Amendment No. 1
to Contract No. S26196996 (Attachment A) with Yosh Enterprises Inc. dba Orion
Security to provide track watch services at four Caltrain grade crossings in the Amount
of $1,623,314, for a new total not-to-exceed amount of $1,708,314;
2. Approve and authorize the City Manager or their designee to negotiate and execute a
Cost Sharing Agreement with Palo Alto Unified School District (PAUSD) for $854,157 for
50% of the track watch services contract cost (Draft - Attachment B); and
3. Amend the Fiscal Year 2026 Operating Budget Appropriation for the General Fund
(requires a 2/3 vote) by:
a. Increasing the Police Department revenue by $427,078
b. Increasing the Police Department contract expense appropriation by
$854,157; and
c. Decreasing the Budget Stabilization Reserve (BSR) by $427,078
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BACKGROUND
1 and again July 2016 to June 20182. The service
provided on-site monitoring in response to teen fatalities that have occurred along the
Caltrain corridor in Palo Alto.
ANALYSIS
1 September 13, 2010, City Council Meeting, Information Report: Contracts Awarded by City Manager
https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=74230&dbid=0&repo=PaloAlto
2 June 5, 2017 City Council Meeting, Item #6, Link: https://www.paloalto.gov/files/assets/public/v/1/agendas-
minutes-reports/reports/city-manager-reports-cmrs/year-archive/2017/id-8032.pdf
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require further evaluation during the upcoming budget cycle to ensure long-term rail safety
goals are met.
Table #1: Summary of Informal Request for Proposal Process
Request for Proposals Name
Total Days to Respond to RFP
Pre-Proposal Meeting
# of Company Attendees at Pre-Proposal Meeting
# of Proposals Received
Proposal Price Range
FISCAL/RESOURCE IMPACT
STAKEHOLDER ENGAGEMENT
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This service has been discussed at the City Council Rail Safety/Youth Mental Health Ad Hoc
Committee in collaboration with Caltrain staff and the Palo Alto Unified School District.
Additionally, community members, in partnership with Project Safety Net, have been organizing
a volunteer-led track watch program over the past several months. There has been community
dialogue on the topic and requests for the installment of monitors at the track 24/7 at least for
the time being as an additional safety measure at the train tracks. This contract is in response
to these discussions.
ENVIRONMENTAL REVIEW
ATTACHMENTS
APPROVED BY:
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Vers.: Aug. 5, 2019
Page 1 of 3
AMENDMENT NO. 1 TO CONTRACT NO. S26196996
BETWEEN THE CITY OF PALO ALTO AND
YOSH ENTERPRISES INC. dba ORION SECURITY
This Amendment No. 1 (this “Amendment”) to Contract No. S26196996 (the “Contract” as
defined below) is entered into as of February 23, 2026 by and between the CITY OF PALO ALTO, a
California chartered municipa l corporation (“CITY”), and YOSH ENTERPRISES INC. dba ORION
SECURITY , a California corporation, located at 675 East Gish Roa d, San Jose, CA 95112
(“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 of providing unarmed security officers services for the Caltrain Crossings, as
detailed therein.
B. The Parties now wish to amend the Contract in order to increase the compensation
by One Million Six Hundred Twenty-Three Thousand Three Hundred Fourteen Dollars ($1,623,314),
from Eighty-Five Thousand Dollars ($85,000) to a new not-to-exceed total compensation of One
Million Seven Hundred Eight Thousand Three Hundred Fourteen Dollars ($1,708,314), with no
change to the current term, 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:
a.Contract. The term “Contract” shall mean Contract No. S26194249 between
CONSULTANT and CITY, dated February 17, 2026.
b.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:
“SECTION 4. NOT TO EXCEED COMPENSATION. 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 One
Million Seven Hundred Eight Thousand Three Hundred Fourteen Dollars ($1,708,314).
The hourly schedule of rates, if applicable, is set out in Exhibit C-1, entitled “SCHEDULE
Docusign Envelope ID: 2629E3CB-3993-4616-B887-22CB9418AD83
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Attachment A - Amendment
#1 to dba Orion Security;
Contract S26196996
Item 7: Staff Report Pg. 5 Packet Pg. 176 of 205
Vers.: Aug. 5, 2019
Page 2 of 3
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.”
SECTION 3. 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 4. 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: 2629E3CB-3993-4616-B887-22CB9418AD83
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Attachment A - Amendment
#1 to dba Orion Security;
Contract S26196996
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Vers.: Aug. 5, 2019
Page 3 of 3
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
YOSH ENTERPRISES INC. dba ORION
SECURITY
Officer 1
By:______________________________
Name:___________________________
Title:____________________________
Officer 2 (Required for Corp. or LLC)
By:______________________________
Name:___________________________
Title:____________________________
Docusign Envelope ID: 2629E3CB-3993-4616-B887-22CB9418AD83
Yosh Gahramani
CEO
President
Joseph Baba
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Attachment A - Amendment
#1 to dba Orion Security;
Contract S26196996
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PURCHASING GUIDE – APPENDIX L PAGE 1 OF 2
Short Form Agreement for Revenue Contracts
Cost-Sharing Agreement between the City of Palo Alto and the
Palo Alto Unified School District for Security Guards at Four #S26196996R
BY THIS AGREEMENT MADE AND ENTERED INTO ON FEBRUARY 23, 2026 BY AND BETWEEN THE CITY OF
PALO ALTO (“CITY”) AND THE PALO ALTO UNIFIED SCHOOL DISTRICT (“DISTRICT”), 25 CHURCHILL
AVENUE, PALO ALTO, CA 94306. IN CONSIDERATION OF THEIR MUTUAL COVENANTS, THE PARTIES
HERETO AGREE AS FOLLOWS:
CITY SHALL PROVIDE OR FURNISH THE FOLLOWING SPECIFIED 1) GOODS AND MATERIALS, 2) SERVICES
OR 3) A COMBINATION THEREOF AS SPECIFIED IN THE EXHIBITS NAMED BELOW AND ATTACHED HERETO
AND INCORPORATED HEREIN BY THIS REFERENCE: EXHIBIT A – SCOPE OF SERVICES.
EXHIBITS THE FOLLOWING ATTACHED EXHIBITS HEREBY ARE MADE PART OF THIS AGREEMENT:
CONTRACT IS NOT COMPLETE UNLESS ALL EXHIBITS ARE ATTACHED
Exhibit A - Scope of Services
Exhibt B- Payment Plan
Exhibt C- Insurance Requirements
TERM THE SERVICES AND/OR MATERIALS FURNISHED UNDER THIS AGREEMENT SHALL
COMMENCE ON FEBRUARY 23, 2026 AND SHALL BE COMPLETED ON OR BEFORE FEBRUARY 22, 2027.
COMPENSATION FOR THE FULL PERFORMANCE OF THIS AGREEMENT, DISTRICT SHALL PAY CITY: AN
AMOUNT NOT TO EXCEED $854,157 IN ACCORDANCE WITH EXHIBIT B.
CITY ACCOUNT NUMBER (FOR CITY REFERENCE USE):
COST CENTER GL ACCT PROJECT /INTERNAL ORDER PHASE NO. DOLLAR AMOUNT
70050002-15900 FY26: $213,539.25
FY27: $640,617.75
GENERAL TERMS AND CONDITIONS ARE INCLUDED ON ALL PAGES OF THIS AGREEMENT.
.
HOLD HARMLESS. Each party shall indemnify, defend and hold harmless the other party, its Council Members, Board Members, officers, employees,
and agents from any and all demands, claims or liability of any nature, including wrongful death, caused by or arising out of the other party, its officers’,
directors’, employees’ or agents’ negligent acts, errors, or omissions, or willful misconduct.
ENTIRE AGREEMENT. This agreement and the terms and conditions on the following pages represent the entire agreement between the parties with
respect to the purchase and sale of the goods, equipment, materials or supplies or payment for services which may be the subject of this agreement. All
prior agreements, representations, statements, negotiations and undertakings whether oral or written are superseded hereby.
UNSIGNED DRAFT version - Subject to update by either party
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Attachment B - DRAFT Cost
sharing agreement with
PAUSD; Contract
S26196996R
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PAGE 2 OF 3 APPEMDIX L – SHORT FORM AGREEMENTS FOR REVENUE CONTRACTS
THIS AGREEMENT SHALL BECOME EFFECTIVE UPON ITS APPROVAL AND EXECUTION BY THE PARTIES. IN WITNESS THEREOF, THE
PARTIES HAVE EXECUTED THIS AGREEMENT THE DAY, MONTH, AND YEAR FIRST WRITTEN ABOVE.
PROJECT MANAGER AND REPRESENTATIVE DISTRICT
FOR CITY
NAME: Lt. Nicolas Martinez BY _________________________________
DEPT: Police Department TITLE _____________________________________________
CITY OF PALO ALTO
P.O, BOX 10250
PALO ALTO, CA 94303
INVOICING SEND ALL INVOICES TO THE DISTRICT, ATTN: PROJECT MANAGER
CITY OF PALO ALTO APPROVALS: (ROUTE FOR SIGNATURES ACCORDING TO NUMBERS IN APPROVAL BOXES BELOW)
Budgeted
ADMINISTRATION INSURANCE
REVIEW
BY:_____________________________________
BY:________________________ _______________________
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Attachment B - DRAFT Cost
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S26196996R
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PURCHASING GUIDE – APPENDIX L PAGE 3 OF 4
CITY OF PALO ALTO
GENERAL TERMS AND CONDITIONS
A. ACCEPTANCE. This agreement is limited to the terms
and conditions on pages 1 through 4 inclusive and any exhibits
referenced.
B. GOVERNING LAW AND VENUE. This agreement
shall be governed by the laws of the state of California. The
courts of the State of California in the County of Santa Clara
and the federal court for the Northern District of California
have sole jurisdiction over any disputes that arise over this
agreement.
C. NO EMPLOYMENT; CONFLICTS. It is understood and
agreed that this agreement is not a contract of employment in
the sense that the relation of master and servant exists between
the CITY and undersigned. At all times CITY shall be deemed
to be an independent contractor and DISTRICT is not
authorized to bind CITY to any contracts or other obligations.
In executing this agreement, DISTRICT certifies that no one
who has or will have any financial interest under this
agreement is an officer or employee of CITY.
D. INSURANCE. DISTRICT agrees to provide the insurance
specified in the “Insurance Requirements” form attached hereto
as Exhibit C or self-insure to equivalent standards. In the event
DISTRICT is unable to secure a policy endorsement naming
the City of Palo Alto as an additional insured under any
comprehensive general liability or comprehensive automobile
policy or policies, DISTRICT shall at a minimum, and only
with the written approval of City’s Risk Manager or designee,
cause each such insurance policy obtained by it to contain an
endorsement providing that the insurer waives all right of
recovery by way of subrogation against CITY, its officers,
agents, and employees in connection with any damage, claim,
liability personal injury, or wrongful death covered by any such
policy. Each such policy obtained by DISTRICT shall contain
an endorsement requiring thirty (30) days' written notice from
the insurer to CITY before cancellation or reduction in the
coverage or limits of such policy. DISTRICT shall provide
certificates of such policies or other evidence of coverage
satisfactory to City's Risk Manager, together with evidence of
payment of premiums, to CITY at the commencement of this
agreement, and on renewal of the policy, or policies, not later
than twenty (20) days before expiration of the terms of any
such policy.
E. TERMINATION. This agreement may be terminated by
either party upon thirty (30) days written notice to the other
party. Monies then owing based upon work satisfactorily
accomplished shall be paid to CITY.
F. CHANGES. This agreement shall not be assigned or
transferred without the written consent of the either party. No
changes or variations of any kind are authorized without the
written consent of the both parties.
G. Reserved.
H. NO IMPLIED WAIVER. No payment, partial payment,
acceptance, or partial acceptance by either party shall operate
as a waiver on the part of such party of any of its rights under
this agreement.
I. Reserved.
J. Reserved.
K. Reserved.
L. Reserved.
M. PRICE TERMS.
(a) Extra charges, invoices and payment. No extra charges of
any kind will be allowed unless specifically agreed to in
writing by CITY. All state and federal excise, sales and use
taxes shall be stated separately on the invoices.
quantities. In event CITY reduces its price for such materials
or services during the term of this agreement, CITY agrees to
reduce the prices or rates hereof correspondingly.
N. Reserved.
O. Reserved.
P. NO THIRD PARTY BENEFICIARIES. Nothing in this
Agreement shall give any rights to any person other than the
Parties to this Agreement.
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Attachment B - DRAFT Cost
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PAUSD; Contract
S26196996R
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PAGE 4 OF 5 APPEMDIX L – SHORT FORM AGREEMENTS FOR REVENUE CONTRACTS
Exhibit A – Scope of Services
DISTRICT shall pay CITY in exchange for the provision of certain security guard services (“Services”):
• CITY will contract for 24x7 security guard coverage at four separate Caltrain crossings: Meadow Drive, Charleston
Road, Churchill Avenue, and Alma Street, pursuant to the specific details and terms in the City’s contract (currently
contract S26196996 with Yosh Enterprises Inc. dba Orion Security, as may be amended).
• If the City’s vendor should change from Yosh Enterprises Inc. and the City executes a new contract for these Services,
the DISTRICT shall have the option of (1) terminating this cost-sharing Agreement effective as of the last day of
services provided by Yosh Enterprises, or (2) the parties may mutually agree in writing to continue this funding
Agreement under the new vendor, but shall not exceed the existing term and compensation of this cost-sharing
Agreement (unless this cost-sharing Agreement is amended in writing).
• The funding from the DISTRICT will be used to partially reimburse the City of Palo Alto to pay for and provide these
security guard services for the benefit of the community.
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Attachment B - DRAFT Cost
sharing agreement with
PAUSD; Contract
S26196996R
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PURCHASING GUIDE – APPENDIX L PAGE 5 OF 6
Exhibit B – Payment Plan
Subject to the following terms, DISTRICT shall reimburse CITY for 50% of the City’s direct costs of City contract
S26196996, as may be amended, not to exceed the amount in the “COMPENSATION” section on the first page of this
Agreement. The reimbursement shall occur in four payments stated below, which is based on a total reimbursement amount of
$854,157 (which is 50% of the City’s contract cost of $1,708,314). However, if the City’s actual contract costs are less than
this, the City shall adjust the final payment so that the DISTRICT’s total payments under this Agreement are 50% of actual
contract costs. The CITY shall provide DISTRICT copies of invoices for the Services upon request.
Period Payment Amount
City shall invoice DISTRICT at the end of each Period above, and payment shall be due within 30 days of the invoice date.
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Attachment B - DRAFT Cost
sharing agreement with
PAUSD; Contract
S26196996R
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Professional Services
Rev. Oct 16,2024 Page 1 of 22
CITY OF PALO ALTO CONTRACT NO. S26196996
AGREEMENT FOR PROFESSIONAL SERVICES
BETWEEN THE CITY OF PALO ALTO AND YOSH ENTERPRISES INC. dba ORION
SECURITY
This Agreement for Professional Services (this “Agreement”) is entered into as of the 19th day of
February, 2026 (the “Effective Date”), by and between the CITY OF PALO ALTO, a California
chartered municipal corporation (“CITY”), and YOSH ENTERPRISES INC. dba ORION
SECURITY, a California corporation, located at 675 East Gish Road, San Jose, CA 95112
(“CONSULTANT”).
The following recitals are a substantive portion of this Agreement and are fully incorporated herein
by this reference:
RECITALS
A.CITY intends to issue a contract (the “Project”) and desires to engage a consultant to
provide unarmed security officers services for the Caltrain Crossings in connection with the Project
(the “Services”, as detailed more fully in Exhibit A).
B.CONSULTANT represents that it, its employees and subconsultants, if any, possess the
necessary professional expertise, qualifications, and capability, and all required licenses and/or
certifications to provide the Services.
C.CITY, in reliance on these representations, desires to engage CONSULTANT to provide
the Services as more fully described in Exhibit A, entitled “SCOPE OF SERVICES”.
NOW, THEREFORE, in consideration of the recitals, covenants, terms, and conditions, in this
Agreement, the parties agree as follows:
SECTION 1. SCOPE OF SERVICES. CONSULTANT shall perform the Services described
in Exhibit A in accordance with the terms and conditions contained in this Agreement. The
performance of all Services shall be to the reasonable satisfaction of CITY.
Optional On-Call Provision (This provision only applies if checked and only applies to
on-call agreements.)
CITY may elect to, but is not required to, authorize on-call Services up to the maximum
compensation amount set forth in Section 4 (Not to Exceed Compensation).
CONSULTANT shall provide on-call Services only by advanced, written authorization
from CITY as detailed in this Section. On-call Services, if any, shall be authorized by
CITY, as needed, with a Task Order assigned and approved 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.
Docusign Envelope ID: DB700FC4-183F-4ABA-8BA5-23A59D438E33
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Attachment C - Original
Track Watch; Contract
S26196996
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Professional Services
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Compensation for on-call 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 due
to CONSULTANT for all Task Orders issued under this Agreement shall not exceed the
amount of compensation set forth in Section 4. CONSULTANT shall only be compensated
for on-call Services performed under an authorized Task Order and only up to the
maximum compensation amount set forth in Section 4. Performance of and payment for
any on-call Services are subject to all requirements and restrictions in this Agreement.
SECTION 2. TERM.
The term of this Agreement shall be from the effective date of this agreement through February
18, 2027, unless terminated earlier pursuant to Section 19 (Termination) of this Agreement.
SECTION 3. SCHEDULE OF PERFORMANCE. Time is of the essence in the performance
of Services under this Agreement. CONSULTANT shall complete the Services within the term of
this Agreement and in accordance with the schedule set forth in Exhibit B, entitled “SCHEDULE
OF PERFORMANCE”. Any Services for which times for performance are not specified in this
Agreement shall be commenced and completed by CONSULTANT in a reasonably prompt and
timely manner based upon the circumstances and direction communicated to the CONSULTANT.
CITY’s agreement to extend the term or the schedule for performance shall not preclude recovery
of damages for delay if the extension is required due to the fault of CONSULTANT.
SECTION 4. NOT TO EXCEED COMPENSATION. 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 Eighty-Five Thousand
Dollars ($85,000). The hourly schedule of rates, if applicable, is set out in Exhibit C-1, entitled
“SCHEDULE OF RATES.” Any work performed or expenses incurred for which payment would
result in a total exceeding the maximum compensation set forth in this Section 4 shall be at no cost
to the CITY.
Optional Additional Services Provision (This provision applies only if checked and a
not-to-exceed compensation amount for Additional Services is allocated below under this
Section 4.)
In addition to the not-to-exceed compensation specified above, CITY has set aside the not-
to-exceed compensation amount of Dollars ($ ) 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 Dollars ($ ), 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
Docusign Envelope ID: DB700FC4-183F-4ABA-8BA5-23A59D438E33
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Track Watch; Contract
S26196996
Item 7: Staff Report Pg. 14 Packet Pg. 185 of 205
Professional Services
Rev. Oct 16,2024 Page 3 of 22
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 5. INVOICES. In order to request payment, CONSULTANT shall submit monthly
invoices to the CITY describing the Services performed and the applicable charges (including, if
applicable, an identification of personnel who performed the Services, hours worked, hourly rates,
and reimbursable expenses), based upon Exhibit C or, as applicable, CONSULTANT’s schedule
of rates set forth in Exhibit C-1. If applicable, the invoice shall also describe the percentage of
completion of each task. The information in CONSULTANT’s invoices shall be subject to
verification by CITY. CONSULTANT shall send all invoices to CITY’s Project Manager at the
address specified in Section 13 (Project Management) below. CITY will generally process and
pay invoices within thirty (30) days of receipt of an acceptable invoice.
SECTION 6. QUALIFICATIONS/STANDARD OF CARE. All Services shall be performed
by CONSULTANT or under CONSULTANT’s supervision. CONSULTANT represents that it,
its employees and subcontractors, if any, possess the professional and technical personnel
necessary to perform the Services required by this Agreement and that the personnel have
sufficient skill and experience to perform the Services assigned to them. CONSULTANT
represents that it, its employees and subcontractors, if any, have and shall maintain during the term
of this Agreement all licenses, permits, qualifications, insurance and approvals of whatever nature
that are legally required to perform the Services. All Services to be furnished by CONSULTANT
under this Agreement shall meet the professional standard and quality that prevail among
professionals in the same discipline and of similar knowledge and skill engaged in related work
throughout California under the same or similar circumstances.
SECTION 7. COMPLIANCE WITH LAWS. CONSULTANT shall keep itself informed of
and in compliance with all federal, state and local laws, ordinances, regulations, and orders that
Docusign Envelope ID: DB700FC4-183F-4ABA-8BA5-23A59D438E33
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Track Watch; Contract
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Professional Services
Rev. Oct 16,2024 Page 4 of 22
may affect in any manner the Project or the performance of the Services or those engaged to
perform Services under this Agreement, as amended from time to time. CONSULTANT shall
procure all permits and licenses, pay all charges and fees, and give all notices required by law in
the performance of the Services.
SECTION 8. ERRORS/OMISSIONS. CONSULTANT is solely responsible for costs,
including, but not limited to, increases in the cost of Services, arising from or caused by
CONSULTANT’s errors and omissions, including, but not limited to, the costs of corrections such
errors and omissions, any change order markup costs, or costs arising from delay caused by the
errors and omissions or unreasonable delay in correcting the errors and omissions.
SECTION 9. COST ESTIMATES. If this Agreement pertains to the design of a public works
project, CONSULTANT shall submit estimates of probable construction costs at each phase of
design submittal. If the total estimated construction cost at any submittal exceeds the CITY’s
stated construction budget by ten percent (10%) or more, CONSULTANT shall make
recommendations to CITY for aligning the Project design with the budget, incorporate CITY
approved recommendations, and revise the design to meet the Project budget, at no additional cost
to CITY.
SECTION 10. INDEPENDENT CONTRACTOR. CONSULTANT acknowledges and agrees
that CONSULTANT and any agent or employee of CONSULTANT will act as and shall be
deemed at all times to be an independent contractor and shall be wholly responsible for the manner
in which CONSULTANT performs the Services requested by CITY under this Agreement.
CONSULTANT and any agent or employee of CONSULTANT will not have employee status
with CITY, nor be entitled to participate in any plans, arrangements, or distributions by CITY
pertaining to or in connection with any retirement, health or other benefits that CITY may offer its
employees. CONSULTANT will be responsible for all obligations and payments, whether
imposed by federal, state or local law, including, but not limited to, FICA, income tax
withholdings, workers’ compensation, unemployment compensation, insurance, and other similar
responsibilities related to CONSULTANT’s performance of the Services, or any agent or
employee of CONSULTANT providing same. Nothing in this Agreement shall be construed as
creating an employment or agency relationship between CITY and CONSULTANT or any agent
or employee of CONSULTANT. Any terms in this Agreement referring to direction from CITY
shall be construed as providing for direction as to policy and the result of CONSULTANT’s
provision of the Services only, and not as to the means by which such a result is obtained.
SECTION 11. ASSIGNMENT. The parties agree that the expertise and experience of
CONSULTANT are material considerations for this Agreement. CONSULTANT shall not assign
or transfer any interest in this Agreement nor the performance of any of CONSULTANT’s
obligations hereunder without the prior written approval of the City Manager. Any purported
assignment made without the prior written approval of the City Manager will be void and without
effect. Subject to the foregoing, the covenants, terms, conditions and provisions of this Agreement
will apply to, and will bind, the heirs, successors, executors, administrators and assignees of the
parties.
SECTION 12. SUBCONTRACTING.
Option A: No Subcontractor: CONSULTANT shall not subcontract any portion of the
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Services to be performed under this Agreement without the prior written authorization of the City
Manager or designee. In the event CONSULTANT does subcontract any portion of the work to
be performed under this Agreement, CONSULTANT shall be fully responsible for all acts and
omissions of subcontractors.
Option B: Subcontracts Authorized: Notwithstanding Section 11 (Assignment) above, CITY
agrees that subcontractors may be used to complete the Services. The subcontractors authorized
by CITY to perform work on this Project are:
CONSULTANT shall be responsible for directing the work of any subcontractors and for any
compensation due to subcontractors. CITY assumes no responsibility whatsoever concerning
compensation of subcontractors. CONSULTANT shall be fully responsible to CITY for all acts
and omissions of subcontractors. CONSULTANT shall change or add subcontractors only with
the prior written approval of the City Manager or designee.
SECTION 13. PROJECT MANAGEMENT. CONSULTANT will assign Thomas Pratt Jr. as
the CONSULTANT’s Project Manager, Telephone: 408-287-4411 ext. 105, Email:
tpratt@orionsecurity.com to have supervisory responsibility for the performance, progress, and
execution of the Services and represent CONSULTANT during the day-to-day performance of the
Services. If circumstances cause the substitution of the CONSULTANT’s Project Manager or any
other of CONSULTANT’s key personnel for any reason, the appointment of a substitute Project
Manager and the assignment of any key new or replacement personnel will be subject to the prior
written approval of the CITY’s Project Manager. CONSULTANT, at CITY’s request, shall
promptly remove CONSULTANT personnel who CITY finds do not perform the Services in an
acceptable manner, are uncooperative, or present a threat to the adequate or timely completion of
the Services or a threat to the safety of persons or property.
CITY’s Project Manager is Nicolas Martinez, Palo Alto Police Department, 250 Hamilton Ave.,
Palo Alto, CA 94301 , Telephone: (650)838-2899, Email: nicolas.martinez@paloalto.gov. CITY’s
Project Manager will be CONSULTANT’s point of contact with respect to performance, progress
and execution of the Services. CITY may designate an alternate Project Manager from time to
time.
SECTION 14. OWNERSHIP OF MATERIALS. All work product, including without
limitation, all writings, drawings, studies, sketches, photographs, plans, reports, specifications,
computations, models, recordings, data, documents, and other materials and copyright interests
developed under this Agreement, in any form or media, shall be and remain the exclusive property
of CITY without restriction or limitation upon their use. CONSULTANT agrees that all copyrights
which arise from creation of the work product pursuant to this Agreement are vested in CITY, and
CONSULTANT hereby waives and relinquishes all claims to copyright or other intellectual
property rights in favor of CITY. Neither CONSULTANT nor its subcontractors, if any, shall
make any of such work product available to any individual or organization without the prior written
approval of the City Manager or designee. CONSULTANT makes no representation of the
suitability of the work product for use in or application to circumstances not contemplated by the
Scope of Services.
SECTION 15. AUDITS. CONSULTANT agrees to permit CITY and its authorized
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representatives to audit, at any reasonable time during the term of this Agreement and for four (4)
years from the date of final payment, CONSULTANT’s records pertaining to matters covered by
this Agreement, including without limitation records demonstrating compliance with the
requirements of Section 10 (Independent Contractor). CONSULTANT further agrees to maintain
and retain accurate books and records in accordance with generally accepted accounting principles
for at least four (4) years after the expiration or earlier termination of this Agreement or the
completion of any audit hereunder, whichever is later.
SECTION 16. INDEMNITY.
16.1. To the fullest extent permitted by law, CONSULTANT shall indemnify,
defend and hold harmless CITY, its Council members, officers, employees and agents (each an
“Indemnified Party”) from and against any and all demands, claims, or liability of any nature,
including death or injury to any person, property damage or any other loss, including all costs and
expenses of whatever nature including attorney’s fees, experts fees, court costs and disbursements
(“Claims”) resulting from, arising out of or in any manner related to performance or
nonperformance by CONSULTANT, its officers, employees, agents or contractors under this
Agreement, regardless of whether or not it is caused in part by an Indemnified Party.
16.2. Notwithstanding the above, nothing in this Section 16 shall be construed to
require CONSULTANT to indemnify an Indemnified Party from a Claim arising from the active
negligence or willful misconduct of an Indemnified Party that is not contributed to by any act of,
or by any omission to perform a duty imposed by law or agreement by, CONSULTANT, its
officers, employees, agents or contractors under this Agreement.
16.3. The acceptance of CONSULTANT’s Services and duties by CITY shall not
operate as a waiver of the right of indemnification. The provisions of this Section 16 shall survive
the expiration or early termination of this Agreement.
SECTION 17. WAIVERS. No waiver of a condition or nonperformance of an obligation under
this Agreement is effective unless it is in writing in accordance with Section 29.4 of this
Agreement. No delay or failure to require performance of any provision of this Agreement shall
constitute a waiver of that provision as to that or any other instance. Any waiver granted shall
apply solely to the specific instance expressly stated. No single or partial exercise of any right or
remedy will preclude any other or further exercise of any right or remedy.
SECTION 18. INSURANCE.
18.1. CONSULTANT, at its sole cost and expense, shall obtain and maintain, in
full force and effect during the term of this Agreement, the insurance coverage described in Exhibit
D, entitled “INSURANCE REQUIREMENTS”. CONSULTANT and its contractors, if any, shall
obtain a policy endorsement naming CITY as an additional insured under any general liability or
automobile policy or policies.
18.2. All insurance coverage required hereunder shall be provided through
carriers with AM Best’s Key Rating Guide ratings of A-:VII or higher which are licensed or
authorized to transact insurance business in the State of California. Any and all contractors of
CONSULTANT retained to perform Services under this Agreement will obtain and maintain, in
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full force and effect during the term of this Agreement, identical insurance coverage, naming CITY
as an additional insured under such policies as required above.
18.3. Certificates evidencing such insurance shall be filed with CITY
concurrently with the execution of this Agreement. The certificates will be subject to the approval
of CITY’s Risk Manager and will contain an endorsement stating that the insurance is primary
coverage and will not be canceled, or materially reduced in coverage or limits, by the insurer except
after filing with the Purchasing Manager thirty (30) days’ prior written notice of the cancellation
or modification. If the insurer cancels or modifies the insurance and provides less than thirty (30)
days’ notice to CONSULTANT, CONSULTANT shall provide the Purchasing Manager written
notice of the cancellation or modification within two (2) business days of the CONSULTANT’s
receipt of such notice. CONSULTANT shall be responsible for ensuring that current certificates
evidencing the insurance are provided to CITY’s Chief Procurement Officer during the entire term
of this Agreement.
18.4. The procuring of such required policy or policies of insurance will not be
construed to limit CONSULTANT’s liability hereunder nor to fulfill the indemnification
provisions of this Agreement. Notwithstanding the policy or policies of insurance,
CONSULTANT will be obligated for the full and total amount of any damage, injury, or loss
caused by or directly arising as a result of the Services performed under this Agreement, including
such damage, injury, or loss arising after the Agreement is terminated or the term has expired.
SECTION 19. TERMINATION OR SUSPENSION OF AGREEMENT OR SERVICES.
19.1. The City Manager may suspend the performance of the Services, in whole
or in part, or terminate this Agreement, with or without cause, by giving ten (10) days prior written
notice thereof to CONSULTANT. If CONSULTANT fails to perform any of its material
obligations under this Agreement, in addition to all other remedies provided under this Agreement
or at law, the City Manager may terminate this Agreement sooner upon written notice of
termination. Upon receipt of any notice of suspension or termination, CONSULTANT will
discontinue its performance of the Services on the effective date in the notice of suspension or
termination.
19.2. In event of suspension or termination, CONSULTANT will deliver to the
City Manager on or before the effective date in the notice of suspension or termination, any and
all work product, as detailed in Section 14 (Ownership of Materials), whether or not completed,
prepared by CONSULTANT or its contractors, if any, in the performance of this Agreement. Such
work product is the property of CITY, as detailed in Section 14 (Ownership of Materials).
19.3. In event of suspension or termination, CONSULTANT will be paid for the
Services rendered and work products delivered to CITY in accordance with the Scope of Services
up to the effective date in the notice of suspension or termination; provided, however, if this
Agreement is suspended or terminated on account of a default by CONSULTANT, CITY will be
obligated to compensate CONSULTANT only for that portion of CONSULTANT’s Services
provided in material conformity with this Agreement as such determination is made by the City
Manager acting in the reasonable exercise of his/her discretion. The following Sections will
survive any expiration or termination of this Agreement: 14, 15, 16, 17, 19.2, 19.3, 19.4, 20, 25,
27, 28, 29 and 30.
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19.4. No payment, partial payment, acceptance, or partial acceptance by CITY
will operate as a waiver on the part of CITY of any of its rights under this Agreement, unless made
in accordance with Section 17 (Waivers).
SECTION 20. NOTICES.
All notices hereunder will be given in writing and mailed, postage prepaid, by
certified mail, addressed as follows:
To CITY: Office of the City Clerk
City of Palo Alto
Post Office Box 10250
Palo Alto, CA 94303
With a copy to the Purchasing Manager
To CONSULTANT: Attention of the Project Manager at the address of
CONSULTANT recited on the first page of this Agreement.
CONSULTANT shall provide written notice to CITY of any change of address.
SECTION 21. CONFLICT OF INTEREST.
21.1. In executing this Agreement, CONSULTANT 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 the Services.
21.2. CONSULTANT further covenants that, in the performance of this
Agreement, it will not employ subcontractors or other persons or parties having such an interest.
CONSULTANT certifies that no person who has or will have any financial interest under this
Agreement is an officer or employee of CITY; this provision will be interpreted in accordance
with the applicable provisions of the Palo Alto Municipal Code and the Government Code of the
State of California, as amended from time to time. CONSULTANT agrees to notify CITY if any
conflict arises.
21.3. If the CONSULTANT meets the definition of a “Consultant” as defined by
the Regulations of the Fair Political Practices Commission, CONSULTANT will file the
appropriate financial disclosure documents required by the Palo Alto Municipal Code and the
Political Reform Act of 1974, as amended from time to time.
SECTION 22. NONDISCRIMINATION; COMPLIANCE WITH ADA.
22.1. As set forth in Palo Alto Municipal Code Section 2.30.510, as amended
from time to time, CONSULTANT certifies that in the performance of this Agreement, it shall not
discriminate in the employment of any person due to that person’s race, skin color, gender, gender
identity, age, religion, disability, national origin, ancestry, sexual orientation, pregnancy, genetic
information or condition, housing status, marital status, familial status, weight or height of such
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person. CONSULTANT 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.
22.2. CONSULTANT understands and agrees that pursuant to the Americans
Disabilities Act (“ADA”), programs, services and other activities provided by a public entity to
the public, whether directly or through a contractor or subcontractor, are required to be accessible
to the disabled public. CONSULTANT will provide the Services specified in this Agreement in a
manner that complies with the ADA and any other applicable federal, state and local disability
rights laws and regulations, as amended from time to time. CONSULTANT will not discriminate
against persons with disabilities in the provision of services, benefits or activities provided under
this Agreement.
SECTION 23. ENVIRONMENTALLY PREFERRED PURCHASING AND ZERO
WASTE REQUIREMENTS. CONSULTANT shall comply with the CITY’s Environmentally
Preferred Purchasing policies which are available at CITY’s Purchasing Department, hereby
incorporated by reference and as amended from time to time. CONSULTANT 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, CONSULTANT shall comply with the
following Zero Waste requirements:
(a)All printed materials provided by CONSULTANT 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.
(b)Goods purchased by CONSULTANT 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 Department’s office.
(c)Reusable/returnable pallets shall be taken back by CONSULTANT, at no
additional cost to CITY, for reuse or recycling. CONSULTANT shall provide documentation from
the facility accepting the pallets to verify that pallets are not being disposed.
SECTION 24. COMPLIANCE WITH PALO ALTO MINIMUM WAGE ORDINANCE.
CONSULTANT shall comply with all requirements of the Palo Alto Municipal Code Chapter 4.62
(Citywide Minimum Wage), as 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, CONSULTANT 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,
CONSULTANT shall post notices regarding the Palo Alto Minimum Wage Ordinance in
accordance with Palo Alto Municipal Code Section 4.62.060.
SECTION 25. 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, as amended from time to
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time. 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.
SECTION 26. PREVAILING WAGES AND DIR REGISTRATION FOR PUBLIC
WORKS CONTRACTS.
26.1. This Project is not subject to prevailing wages and related
requirements. CONSULTANT is not required to pay prevailing wages and meet related
requirements under the California Labor Code and California Code of Regulations in the
performance and implementation of the Project if the contract:
(1)is not a public works contract;
(2)is for a public works construction project of $25,000 or less, per California
Labor Code Sections 1782(d)(1), 1725.5(f) and 1773.3(j); or
(3)is for a public works alteration, demolition, repair, or maintenance project of
$15,000 or less, per California Labor Code Sections 1782(d)(1), 1725.5(f) and
1773.3(j).
SECTION 27. CLAIMS PROCEDURE FOR “9204 PUBLIC WORKS PROJECTS”. For
purposes of this Section 27, 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. (Cal. Pub. Cont. Code § 9204.) Per California Public Contract Code
Section 9204, for Public Works Projects, certain claims procedures shall apply, as set forth in
Exhibit F, entitled “Claims for Public Contract Code Section 9204 Public Works Projects”.
This Project is not a 9204 Public Works Project.
SECTION 28. CONFIDENTIAL INFORMATION.
28.1. In the performance of this Agreement, CONSULTANT may have access to
CITY’s Confidential Information (defined below). CONSULTANT will hold Confidential
Information in strict confidence, not disclose it to any third party, and will use it only for the
performance of its obligations to CITY under this Agreement and for no other purpose.
CONSULTANT will maintain reasonable and appropriate administrative, technical and physical
safeguards to ensure the security, confidentiality and integrity of the Confidential Information.
Notwithstanding the foregoing, CONSULTANT may disclose Confidential Information to its
employees, agents and subcontractors, if any, to the extent they have a need to know in order to
perform CONSULTANT’s obligations to CITY under this Agreement and for no other purpose,
provided that the CONSULTANT informs them of, and requires them to follow, the confidentiality
and security obligations of this Agreement.
28.2. “Confidential Information” means all data, information (including without
limitation “Personal Information” about a California resident as defined in Civil Code Section
1798 et seq., as amended from time to time) and materials, in any form or media, tangible or
intangible, provided or otherwise made available to CONSULTANT by CITY, directly or
indirectly, pursuant to this Agreement. Confidential Information excludes information that
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CONSULTANT can show by appropriate documentation: (i) was publicly known at the time it
was provided or has subsequently become publicly known other than by a breach of this
Agreement; (ii) was rightfully in CONSULTANT’s possession free of any obligation of
confidence prior to receipt of Confidential Information; (iii) is rightfully obtained by
CONSULTANT from a third party without breach of any confidentiality obligation; (iv) is
independently developed by employees of CONSULTANT without any use of or access to the
Confidential Information; or (v) CONSULTANT has written consent to disclose signed by an
authorized representative of CITY.
28.3. Notwithstanding the foregoing, CONSULTANT may disclose Confidential
Information to the extent required by order of a court of competent jurisdiction or governmental
body, provided that CONSULTANT will notify CITY in writing of such order immediately upon
receipt and prior to any such disclosure (unless CONSULTANT is prohibited by law from doing
so), to give CITY an opportunity to oppose or otherwise respond to such order.
28.4. CONSULTANT will notify City promptly upon learning of any breach in
the security of its systems or unauthorized disclosure of, or access to, Confidential Information in
its possession or control, and if such Confidential Information consists of Personal Information,
CONSULTANT will provide information to CITY sufficient to meet the notice requirements of
Civil Code Section 1798 et seq., as applicable, as amended from time to time.
28.5. Prior to or upon termination or expiration of this Agreement,
CONSULTANT will honor any request from the CITY to return or securely destroy all copies of
Confidential Information. All Confidential Information is and will remain the property of the CITY
and nothing contained in this Agreement grants or confers any rights to such Confidential
Information on CONSULTANT.
28.6. If selected in Section 30 (Exhibits), this Agreement is also subject to the
terms and conditions of the Information Privacy Policy and Cybersecurity Terms and Conditions.
SECTION 29. MISCELLANEOUS PROVISIONS.
29.1. This Agreement will be governed by California law, without regard to its
conflict of law provisions.
29.2. In the event that an action is brought, the parties agree that trial of such
action will be vested exclusively in the state courts of California in the County of Santa Clara,
State of California.
29.3. The prevailing party in any action brought to enforce the provisions of this
Agreement may recover its reasonable costs and attorneys’ fees expended in connection with that
action. The prevailing party shall be entitled to recover an amount equal to the fair market value
of legal services provided by attorneys employed by it as well as any attorneys’ fees paid to third
parties.
29.4. This Agreement, including all exhibits, constitutes the entire and integrated
agreement between the parties with respect to the subject matter of this Agreement, and supersedes
all prior agreements, negotiations, representations, statements and undertakings, either oral or
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written. This Agreement may be amended only by a written instrument, which is signed by the
authorized representatives of the parties and approved as required under Palo Alto Municipal
Code, as amended from time to time.
29.5. If a court of competent jurisdiction finds or rules that any provision of this
Agreement is void or unenforceable, the unaffected provisions of this Agreement will remain in
full force and effect.
29.6. In the event of a conflict between the terms of this Agreement and the
exhibits hereto (per Section 30) or CONSULTANT’s proposal (if any), the Agreement shall
control. In the event of a conflict between the exhibits hereto and CONSULTANT’s proposal (if
any), the exhibits shall control.
29.7. The provisions of all checked boxes in this Agreement shall apply to this
Agreement; the provisions of any unchecked boxes shall not apply to this Agreement.
29.8. All section headings contained in this Agreement are for convenience and
reference only and are not intended to define or limit the scope of any provision of this Agreement.
29.9. This Agreement may be signed in multiple counterparts, which, when
executed by the authorized representatives of the parties, shall together constitute a single binding
agreement.
SECTION 30. EXHIBITS. Each of the following exhibits, if the check box for such exhibit is
selected below, is hereby attached and incorporated into this Agreement by reference as though
fully set forth herein:
EXHIBIT A: SCOPE OF SERVICES
EXHIBIT B: SCHEDULE OF PERFORMANCE
EXHIBIT C: COMPENSATION
EXHIBIT C-1: SCHEDULE OF RATES
EXHIBIT D: INSURANCE REQUIREMENTS
THIS AGREEMENT IS NOT COMPLETE UNLESS ALL SELECTED EXHIBITS
ARE ATTACHED.
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CONTRACT NO. S26196996
SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have by their duly authorized representatives
executed this Agreement as of the date first above written.
CITY OF PALO ALTO
____________________________
Purchasing Manager
APPROVED AS TO FORM:
__________________________
City Attorney or designee
YOSH ENTERPRISES INC. dba ORION
SECURITY
Officer 1
By: ________________________________
Name: ______________________________
Title: _______________________________
Officer 2
By: ________________________________
Name: ______________________________
Title: _______________________________
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Yosh Gahramani
CEO
President
Joseph Baba
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EXHIBIT A
SCOPE OF SERVICES
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.
CONTRACTOR shall supply all labor, materials, equipment and incidentals necessary to
provide unarmed security officers services for the Caltrain Crossings at the following locations:
Meadow Drive, Charleston Road, Churchill Avenue, and Alma.
Services will start February 23, 2026, at 7:00 a.m. and end on the last day of the Term (as
described in Section 2 of this Agreement) at 11:59 p.m.
The Contractor shall notify the City’s designated Project Manager at least 24 hours in advance
if for any reason the security officers cannot meet the required schedule.
A. Work to be Performed:
1. CONTRACTOR will provide continuous Twenty-Four (24) hours a day, seven
(7) days a week security guard service.
2. CONTRACTOR will be visible for safety monitoring at the designated Caltrain
crossings.
3. CONTRACTOR will observe pedestrian activity, monitor the northbound and
southbound tracks.
4. CONTRACTOR will help maintain a safe environment for the public.
5. CONTRACTOR will provide four (4) stationary officers at the designated
crossing locations
6. CONTRACTOR will provide two (2) unarmed, uniformed rover officers which
will be assigned to provide continuous coverage for all designated crossings by
relieving stationary officers for scheduled breaks and responding to any
immediate needs at each location.
7. CONTRACTOR will provide rover officers will remain in communication
with all posted guards and will ensure no crossing is left unattended at any
time.
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8. CONTRACTOR will report any safety concerns or incidents to the city.
9. CONTRACTOR rover officers will immediately contact Palo Alto Police
dispatch and provide support as needed.
10. CONTRACTOR will provide daily activity and incident reports that will be
submitted to the city project manager.
11. CONTRACTOR security guards will be tracked by their cell phones during
their shifts.
B. Personnel Requirements:
1. Officer Uniforms
a) All security officers must always wear a security uniform.
b) The uniform must have the word “Security” on the front and back of the
uniform, in conformance with the State of California requirements.
c) The name of the individual officer will be on the front of the uniform.
d) All uniforms (collar shirts and pants) will be cleaned and pressed regularly.
e) All collar shirts will be tucked in neatly with dark color slacks and shoes.
f) High visibility apparel and/or reflective vest is recommended due
to the requirement of working in vehicle traffic situations.
g) All uniforms will be approved by the City’s Project Manager prior to
wearing them onsite.
2. Officer Qualifications:
a) Be able to communicate effectively in both written and oral English.
b) Possess a valid California Driver’s License or Identification.
c) Be a legal resident of the United States of America.
d) Have successfully completed the educational requirements and successfully
passed the examinations required by the State of California, Department of
Consumer Affairs.
e) Be capable of performing the assigned tasks.
f) Passed background check and have no disqualifying criminal conviction
record as determined by City.
g) Possess a current security guard card.
3. Code of Conduct
a) No security staff is allowed on the premises outside of the assigned hours
unless authorized by the City’s Project Manager.
b) Security staff is not allowed to have visitors while on duty.
c) Security staff will not leave the site without notifying the Project Manager
C. Equipment:
1. CONTRACTOR will furnish all equipment necessary to perform the work.
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2. All equipment will be kept in good condition.
3. Required equipment will include but not be limited to:
a) Flashlights and two-way radios/smart phones.
b) Appropriate winter and summer wear for staff meeting guidelines
in the “Personnel” section above.
D. Reports
1. Security Officers will be responsible for the following reports.
a) Daily log sheets.
b) Contractor will submit to the City’s Project Manager an Incident Report for
any security related issue.
c) Contractor may use their own forms, subject to prior approval from the
City’s Project Manager. All reports should be submitted via email. All
reports prepared during the term of this Contract will become the property
of the City.
E. Officer Wages
1. Contractor must follow the federal, state, and local minimum wage law each
year of the contract.
F. Invoicing
1. Contractor will submit monthly invoices at the beginning of each month,
no later than the 5th of each month, and the invoices will only include staff
hours worked.
2. Contractor will include time sheets for each staff member that worked
during the billing cycle.
G. Replacement of Security Guards
1. City reserves the right to refuse or reject any personnel, who, in the City’s
discretion, fails to meet the minimum requirements.
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EXHIBIT B
SCHEDULE OF PERFORMANCE
CONSULTANT shall provide the unarmed security officers according to the Scope of Services
listed in Exhibit A as directed by the city project manager.
Optional Schedule of Performance Provision for On-Call or Additional Services Agreements.
(This provision only applies if checked and only applies to on-call agreements per Section 1 or
agreements with Additional Services per Section 4.)
The schedule of performance shall be as provided in the approved Task Order, as detailed in
Section 1 (Scope of Services) in the case of on-call Services, or as detailed in Section 4 in the case
of Additional Services, provided in all cases that the schedule of performance shall fall within the
term as provided in Section 2 (Term) of this Agreement.
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EXHIBIT C
COMPENSATION
CITY agrees to compensate CONSULTANT for the Services performed in accordance with the
terms and conditions of this Agreement, including Services, any specified reimbursable expenses,
and Additional Services (if any, per Section 4 of the Agreement), based on the hourly rate schedule
attached as Exhibit C-1.
The compensation to be paid to CONSULTANT under this Agreement for all Services, any
specified reimbursable expenses, and Additional Services (if any, per Section 4), shall not exceed
the amount(s) stated 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.
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: NONE up to the not-to-exceed amount of: $0.00.
All requests for reimbursement of expenses, if any are specified as reimbursable under this
section, shall be accompanied by appropriate backup documentation and information.
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EXHIBIT C-1
SCHEDULE OF RATES
CONSULTANT’s schedule of rates is as follows:
Type of Coverage: Two (2) unarmed, uniformed rover officers will be assigned to provide continuous coverage for all designated
crossings by relieving stationary officers for scheduled breaks and responding to any immediate needs at each location . Rover
officers will remain in communication with all posted guards and will ensure no crossing is left unattended at any time . In the
event of any safety concern or incident, rover officers will immediately contact Palo Alto Police dispatch and provide support as
needed. Daily activity and incident reports will be submitted to the City.
Sunday
Monday
Tuesday
Wednesday
Thursday
Friday
Saturday
Total Weekly
Hours
✅
✅ ✅ ✅ ✅ ✅ ✅
168
24 Hours 24 hours 24 Hours 24 Hours 24 Hours 24 Hours 24 Hours 336
Unarmed- Uniformed Stationary Security Officer
Officer’s Minimum Hourly Pay Rate…………………………………………………… $24.00
Hourly Bill Rate…………………………………………………………………………… $33.40
Holiday & Overtime Hourly Bill Rate………………………………………………….. $50.10
Features
Assigned Account Manager…………………………………………………………….. $0.00/included
Online Web portal….……………………………………………………………………… $0.00/included
Digital Reports …………..………………………………………………………………… $0.00/included
GPS Tracking ….…….………………………….…………………………………………. $0.00/included
Monthly Cost Samsung A16 Smart Phone (4) ..….………………………………….. $0.00/included
Security Signs ………...…………………………………………………………………… $0.00/included
Security Refrigerator Magnets………………………………………………………….. $0.00/included
24 Hour Dispatch Center…………………………………………………………………. $0.00/included
Web Parking Software..…………………………………………………………………… $0.00/included
Marked Security Vehicle with amber lights(Optional)………………………………. $1,200.00/Month
Total Cost for Two (2) Marked Security Vehicles with amber lights……………… $2,400.00/Month
Total Cost for Two (2) Driving Rover Security Officers
Weekly……………………………………………………………………………………….. $11,222.40
Monthly………………………………………………………………………………………. $48,592.99
Monthly Including 2 Security Vehicles………………………………………………….. $50,992.99
● The quote includes the cost of all materials, uniforms, training, account setup, supervision, taxes, insurance,
fuel, maintenance, workers compensation, etc.
● Total ‘Monthly’ cost is an estimation based on the average 4.33 weeks in a month. Total ‘Yearly’ cost is
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The “Holiday & Overtime Hourly Bill Rate” shall only apply on eight holidays days per calendar
year for both Rover and Stationary security officers. The eight holidays shall be mutually agreed
upon by CONSULTANT and CITY.
Type of Coverage: Four (4) unarmed, uniformed officers will be assigned to fixed posts at the designated Caltrain crossings.
Officers will remain on site to monitor the tracks and surrounding areas, assist pedestrians when appropriate, and immediately
contact Palo Alto Police dispatch for any incidents or safety concerns. Officers will remain alert and visible at all times and will not
leave their assigned post unless properly relieved. Daily activity reports and any required incident reports will be completed and
submitted to the City.
Sunday
Monday
Tuesday
Wednesday
Thursday
Friday
Saturday
Total Weekly
Hours
✅
✅ ✅ ✅ ✅ ✅ ✅
168
24 Hours 24 hours 24 Hours 24 Hours 24 Hours 24 Hours 24 Hours 672
Unarmed- Uniformed Stationary Security Officer
Officer’s Minimum Hourly Pay Rate…………………………………………………… $22.00
Hourly Bill Rate…………………………………………………………………………… $31.40
Holiday & Overtime Hourly Bill Rate………………………………………………….. $47.10
Features
Assigned Account Manager…………………………………………………………….. $0.00/included
Online Web portal….……………………………………………………………………… $0.00/included
Digital Reports …………..………………………………………………………………… $0.00/included
GPS Tracking ….…….………………………….…………………………………………. $0.00/included
Monthly Cost Samsung A16 Smart Phone (4) ..….………………………………….. $0.00/included
Security Signs ………...…………………………………………………………………… $0.00/included
Security Refrigerator Magnets………………………………………………………….. $0.00/included
24 Hour Dispatch Center…………………………………………………………………. $0.00/included
Web Parking Software..…………………………………………………………………… $0.00/included
Total Cost for Four (4) Stationary Officers
Weekly………………………………………………………………………………………… $21,100.80
Monthly………………………………………………………………………………………. $91.366.46
Total Cost for all six (6) Officers, Including Roving Positions & 2 Vehicles
Monthly………………………………………………………………………………………… $142,359.00
● The quote includes the cost of all materials, uniforms, training, account setup, supervision, taxes, insurance,
fuel, maintenance, workers compensation, etc.
● Total ‘Monthly’ cost is an estimation based on the average 4.33 weeks in a month. Total ‘Yearly’ cost is
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EXHIBIT D
INSURANCE REQUIREMENTS
CONSULTANTS 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 HEREIN.
REQUIRED TYPE OF COVERAGE REQUIREMENT
MINIMUM LIMITS
EACH
OCCURRENCE AGGREGATE
YES
YES
WORKER’S COMPENSATION
EMPLOYER’S LIABILITY
STATUTORY
STATUTORY STATUTORY STATUTORY
YES
GENERAL LIABILITY, INCLUDING
PERSONAL INJURY, BROAD FORM
PROPERTY DAMAGE BLANKET
CONTRACTUAL, AND FIRE LEGAL
LIABILITY
BODILY INJURY
PROPERTY DAMAGE
BODILY INJURY & PROPERTY
DAMAGE COMBINED.
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$1,000,000
YES
AUTOMOBILE LIABILITY,
INCLUDING ALL OWNED, HIRED,
NON-OWNED
BODILY INJURY
- EACH PERSON
- EACH OCCURRENCE
PROPERTY DAMAGE
BODILY INJURY AND PROPERTY
DAMAGE, COMBINED
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$1,000,000
YES
PROFESSIONAL LIABILITY,
INCLUDING, ERRORS AND
OMISSIONS, MALPRACTICE (WHEN
APPLICABLE), AND NEGLIGENT
PERFORMANCE
ALL DAMAGES $1,000,000
YES
THE CITY OF PALO ALTO IS TO BE NAMED AS AN ADDITIONAL INSURED: CONSULTANT, 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
CONSULTANT
COMPENSATION, EMPLOYER’S LIABILITY AND PROFESSIONAL INSURANCE, NAMING AS ADDITIONAL
INSUREDS CITY, ITS COUNCIL MEMBERS, OFFICERS, AGENTS, AND EMPLOYEES.
I. INSURANCE COVERAGE MUST INCLUDE:
A. A CONTRACTUAL LIABILITY ENDORSEMENT PROVIDING INSURANCE COVERAGE FOR
CONSULTANT’S AGREEMENT TO INDEMNIFY CITY.
II. THE CONSULTANT MUST SUBMIT CERTIFICATES(S) OF INSURANCE EVIDENCING REQUIRED
COVERAGE AT THE FOLLOWING EMAIL: PurchasingSupport@PaloAlto.Gov
III. ENDORSEMENT PROVISIONS WITH RESPECT TO THE INSURANCE AFFORDED TO ADDITIONAL
INSUREDS:
A. PRIMARY COVERAGE
WITH RESPECT TO CLAIMS ARISING OUT OF THE OPERATIONS OF THE NAMED INSURED,
INSURANCE AS AFFORDED BY THIS POLICY IS PRIMARY AND IS NOT ADDITIONAL TO OR
CONTRIBUTING WITH ANY OTHER INSURANCE CARRIED BY OR FOR THE BENEFIT OF THE
ADDITIONAL INSUREDS.
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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 CONSULTANT 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 CONSULTANT SHALL PROVIDE CITY AT LEAST A TEN (10) DAY
WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION.
EVIDENCE OF INSURANCE AND OTHER RELATED NOTICES ARE REQUIRED TO BE
FILED WITH THE CITY OF PALO ALTO SENT TO THE FOLLOWING EMAIL:
Purchasingsupport@PaloAlto.Gov
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