HomeMy WebLinkAbout2026-06-15 City Council Action MinutesCITY COUNCIL
ACTION MINUTES
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Regular Meeting
June 15, 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 Expressing Appreciation to Bill Gutoff Upon His Retirement
NO ACTION
Agenda Changes, Additions and Deletions
Public Comment
Council Member Questions, Comments and Announcements
Action Items
2.PUBLIC HEARING & PROPOSITION 218 HEARING: Finance Committee Recommends
Adoption of Seven Resolutions: 1) Approving the Fiscal Year 2027 Water Utility Financial
Forecast, Reserve Management Practices and Reserve Transfer, and Amending Water
Rate Schedules W-1, W-2, W-3, W-4, and W-7; 2) Approving the Fiscal Year 2027
Wastewater Collection Utility Financial Forecast and Reserve Management Practices,
and Amending Wastewater Collection Rate Schedules S-1, S-2, S-6 and S-7; 3) Amending
Refuse Utility Rate Schedules R-1 and R-C; 4) Approving the Fiscal Year 2027 Electric
Utility Financial Forecast and Reserve Transfer, Amending the Electric Reserve
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Management Practices and Electric Rate Schedules E-1, E-1 TOU, E-2, E-2-G, E-4, E-4-G,
E-4 TOU, E-7, E-7-G, E-7 TOU, E-14, E-16, E-EEC-1, and E-NSE-1, and Directing the Use of
Up To $225,000 in Renewable Energy Certificate Exchange Net Revenues in Fiscal Year
2027 to Reduce Electric Customers’ Photovoltaic Generation and Energy Storage System
Installation Costs; 5) Approving the Fiscal Year 2027 Gas Utility Financial Forecast,
Reserve Transfer, and General Fund Transfer, and Amending the Reserve Management
Practices and Gas Rate Schedules G-1, G-2, and G-3; 6) Amending Utility Rate Schedules
EDF-1, and EDF-2; 7) Amending Storm Water Utility Rate Schedule D-1; CEQA Status: Not
a project under CEQA Guidelines Sections 15378(b)(4) and (5) and Exempt Under
Section 15273(a)
Note: Resolutions are included in the packet as Attachments A – G, Attachment H reflects the
Table of URLs for the Exhibits to Attachments A – G.
MOTION: Councilmember Lauing moved, seconded by Councilmember Burt to adopt the
Water Utility Resolution (Attachment A):
a.Approving the FY 2027 Water Utility Financial Forecast and Reserves Management
Practices; and
b.Approving the transfer of up to $5.5 million from the Operations Reserve to the CIP
Reserve in FY 2026; and
c.Amending the Water Utility Rate Schedules effective July 1, 2026 (FY 2027):
i.W-1 (General Residential Water service),
ii.W-2 (Water Service from Fire Hydrants),
iii.W-3 (Fire Service Connections),
iv.W-4 (Residential Master-Metered and General Non-Residential Water
Service), and
v.W-7 (Non-Residential Irrigation Water Service).
MOTION PASSED: 7-0
MOTION: Councilmember Lauing moved, seconded by Councilmember Lu to adopt the
Wastewater Collection Utility Resolution (Attachment B):
a.Approving the Fiscal Year (FY) 2027 Wastewater Collection Utility Financial Forecast
and Reserves Management Practices; and
b.Amending the Wastewater Collection Utility Rate Schedules effective July 1, 2026 (FY
2027):
i.S-1 (Residential Wastewater Collection and Disposal),
ii.S-2 (Commercial Wastewater Collection and Disposal),
iii.S-6 (Restaurant Wastewater Collection and Disposal), and
iv.S-7 (Commercial Wastewater Collection and Disposal – Industrial Discharger).
MOTION PASSED: 7-0
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ACTION MINUTES
MOTION: Councilmember Burt moved, seconded by Councilmember Lu to adopt the Refuse
Resolution (Attachment C):
a.Amending the Refuse Rate Schedules effective July 1, 2026 (FY 2027):
i.R-1 (Domestic Refuse Collection), and
ii.R-C (Commercial Refuse Collection).
MOTION PASSED: 7-0
MOTION: Councilmember Reckdahl moved, seconded by Vice Mayor Stone to approve:
1.The Electric Utility Resolution (Attachment D):
a.Approving the FY 2027 Electric Utility Financial Forecast, and Amending the
Electric Utility Reserves Management Practices; and
b. Approving the transfer of up to $5 million from the Electric Utility Distribution
Operations Reserve to the Electric Utility Capital Reserve in FY 2026; and
c.Amending the Electric Utility Rate Schedules effective July 1, 2026 (FY 2027):
i.E-1 (Residential Electric Service),
ii.E-1 TOU (Residential Time of Use Electric Service)
iii.E-2 (Small Non-Residential Electric Service),
iv.E-2-G (Residential Master-Metered and Small Non-Residential Green
Power Electric Service,
v.E-4 (Medium Non-Residential Electric Service),
vi.E-4-G (Medium Non-Residential Green Power Electric Service),
vii.E-4 TOU (Medium Non-Residential Time of Use Electric Service),
viii.E-7 (Large Non-Residential Electric Service),
ix.E-7-G (Large Non-Residential Green Power Electric Service),
x.E-7 TOU (Large Non-Residential Time of Use Electric Service),
xi.E-14 (Street Lights),
xii.E-16 (Unmetered Electric Service),
xiii.E-EEC-1 (Export Electricity Compensation),
xiv.E-NSE-1 (Net Surplus Electricity Compensation); and
d.Directing the Use of Up To $225,000 in Renewable Energy Certificate Exchange
Net Revenues in Fiscal Year 2027 to Reduce Electric Customers’
Photovoltaic Generation and Energy Storage System Installation Costs, as local
decarbonization efforts, via:
i.Changing the funding mechanism for the Cap-and-Invest Reserve to allocate
up to $225,000 less in Cap-and-Invest auction revenues in FY 2027 to the
City’s Cap-and-Invest Reserve and instead allocate these funds for other local
decarbonization efforts; and, as a related matter:
1.Directing staff to review existing HVAC incentive levels including
consideration of financial offsets to lower the cost of related work
including panel upgrades, electric utility service upgrades, or the cost
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of building permit fees; and
2.Directing staff to return to City Council within FY 2027 to review the
Electric Supply Portfolio Carbon Neutral Plan and use of revenues
derived from the REC Exchange program.
2. The Gas Utility Resolution (Attachment E):
a.Approving the FY 2027 Gas Utility Financial Forecast, and Amending the Gas Utility
Reserves Management Practices; and
b.Approving the transfer of up to $1.5 million from the Gas Utility Operations Reserve
to the Distribution Rate Stabilization Reserve in FY 2026; and
c.Transferring up to 18% of gas utility gross revenues received during FY 2025 to the
General Fund in FY 2027; and
d. Amending the Gas Utility Rate Schedules effective July 1, 2026 (FY 2027):
i.G-1 Residential Gas Service,
ii.G-2 Residential Master-Metered and Commercial Gas Service, and
iii.G-3 Large Commercial Gas Service; and
3.The Fiber Optics Utility Resolution (Attachment F):
a.Amending the Dark Fiber Optic Utility Rate Schedules, consistent with the
applicable Consumer Price Index, effective July 1, 2026 (FY 2027):
i.EDF-1 (Dark Fiber Licensing Services), and
ii.EDF-2 (Dark Fiber Service Connection Fees); and
4. The Storm Water Management Resolution (Attachment G):
a.Amending the Storm Water Management Fee Rate Schedule, consistent with the
applicable Consumer Price Index, D-1 effective July 1, 2026 (FY 2027):
i.D-1 (General Storm and Surface Water Drainage)
MOTION PASSED: 7-0
3.PUBLIC HEARING: Adoption of an Ordinance Adopting the Operating and Capital
Budgets, Revised Table of Organization, and Municipal Fee Schedule for Fiscal Year
2027; Adoption of a Resolution Proposing the Appropriations Limit for Fiscal Year 2027 -
State Law/ City Charter; Accept the Bi-Annual Actuarial Valuation Report of Palo Alto's
Retiree Healthcare and Other Post-Employment Benefits (OPEB) as of June 30, 2025 and
Approve Annual Actuarially Determined Contribution for Fiscal Years 2027 and 2028;
Authorize the City Manager or their Designee to Negotiate and Execute a Memorandum
of Understanding and Funding Agreement (or Lease Agreement Amendment) with the
Palo Alto Museum to Provide Cost Sharing for Repairs to the Basement and
Waterproofing in the Roth Building and Improvements to Heritage Park Drainage
Councilmembers Lu, Veenker and City Manager Shikada recuse from Stanford-related items for
the Fiscal Year 2027 Budget (outlined in Attachment C).
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MOTION: Councilmember Lythcott-Haims moved, seconded by Councilmember Burt to
approve the Stanford-related items for the Fiscal Year 2027 Budget.
MOTION PASSED: 5-0-2, Veenker, Lu recused
MOTION: Councilmember Burt moved, seconded by Councilmember Reckdahl to:
1.Adopt the Fiscal Year 2027 Budget Ordinance (Attachment A), which includes:
•City Manager’s Fiscal Year 2027 Proposed Operating and Capital Budgets, previously
distributed at the May 4th City Council Meeting (Attachment A, Exhibit 1)
•Amendments to the City Manager’s Fiscal Year 2027 Proposed Operating Budget
(Attachment A, Exhibit 2)
•Amendments to the City Manager’s Fiscal Year 2027 Proposed Capital Budget
(Attachment A, Exhibit 3)
•Fiscal Year 2027 City Table of Organization (Attachment A, Exhibit 4)
•Fiscal Year 2027 Municipal Fee Changes (Attachment A, Exhibit 5)
2.Accept the Fiscal Year 2027 – 2031 Capital Improvement Program (CIP)
3.Adopt a Resolution determining the Appropriations Limit for Fiscal Year 2027
(Attachment B)
4.Accept the June 30, 2025 actuarial valuation of Palo Alto's Retiree Healthcare Plan and
fund the annual Actuarially Determine Contribution (ADC) for Fiscal Year 2027 and 2028
5.Authorize the City Manager or their designee to negotiate and execute a Memorandum
of Understanding and Funding Agreement (or Lease Agreement Amendment) with the
Palo Alto Museum to provide cost sharing for repairs to the basement and
waterproofing in the Roth Building and improvements to Heritage Park drainage in an
expedited efforts to try to make sure that accomplished before the next rain season.
a)City to waive the permitting and inspection fees for the Museum.
b)Direct staff to move forward with cashflow support for the museum toward
repairs and to support the continued expedited process that staff is already
pursuing.
c)The City cover the expenses for the park repair to the extent that it can be
determined that it is principally the city's responsibility, and the City Manager
negotiate a cost-sharing on the building repairs.
6.Direct staff to return at mid-year or sooner to review whether there are any remaining
Canopy budgetary requests or if resolved through donations.
MOTION PASSED: 7-0
Consent Calendar
Councilmember Lythcott-Haims requested to pull Agenda Item Number 23a, 23b.
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Councilmembers Stone, Lythcott-Haims, and Veenker requested to pull Agenda Item Number
23c.
Councilmembers Lu and Veenker recused from Agenda Item Number 12.
Councilmember Lu and Reckdahl recused from Agenda Item Number 23a-c.
MOTION: Vice Mayor Stone moved, seconded by Mayor Veenker to approve Agenda Item
Numbers 4-17 (Item Number 18 Removed Off Agenda ), 19 -23a-b, and to pull off the Consent
Calendar Agenda Item Number 23c for Action.
MOTION PASSED ITEMS 4-11, 13-17, 19-22: 7-0
MOTION PASSED ITEM 12: 5-0-2, Lu, Veenker recused
MOTION PASSED ITEM 23a-b: 4-1-2, Lythcott-Haims no, Lu, Reckdahl recused
4.Approval of Minutes from June 1, 2026 Meeting
5.Approve Submittal of the 2026 Annual Water Shortage Assessment Report; CEQA status:
exempt.
6.Approve Conceptual Design for Alma Street-Charleston Road Railroad Crossing Near-
Term Section 130 Safety Improvement Project – Direct Staff to Complete Final Design,
Environmental Analysis, Project Specifications, and Engineering Cost Estimates based off
of the Conceptual Design as Recommended by Rail Committee; CEQA status:
Categorically Exempt under Section 15301-Class 1 minor alternations to existing
facilities.
7.Adoption of a Resolution Authorizing the City Manager to Submit the City’s Prohousing
Designation Program Application to the California Department of Housing and
Community Development. CEQA Status: Not a Project.
8.Adoption of Amended Salary Schedules for Service Employees‘ International Union,
Utilities Management and Professional Association of Palo Alto, International
Association of Fire Fighters, and Unrepresented Management and Professional
Employees and Limited Hourly groups; and Adoption of Side letters for the International
Association of Fire Fighters, Fire Chiefs‘ Association, and Palo Alto Police Officers‘
Association and Amendments to the FY 2027 Table of Organization to Reclassify 1.0
Economic Development Manager and 1.0 Treasury Manager - CEQA Status - Not A
Project.
9.Approval of Construction Contract Number C26197272 with O’Grady Paving, Inc. in the
Amount of $3,802,573 for the Fiscal Year 2026 Street Resurfacing Project, Capital
Improvement Program Projects PE-86070, PO-12001, PG-06001, PO-11001, and OS-
09001; and Authorization for the City Manager or Their Designee to Execute Change
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Orders in an Amount Not-to-Exceed $910,258 for Related, Additional but Unforeseen
Work Which May Develop During the Project; CEQA Status – Exempt under CEQA
Guidelines Section 15301(c)
10.Approval of Amendment Number 1 to Purchase Order C26195416 with Carahsoft in the
Amount of $375,246 for Additional SAP Business Data Cloud Capacity Units and Related
Non-Productive Memory Extension; CEQA Status - Not a Project
11.Approval of a First Amendment to Lease With 1900 Embarcadero Property Owner, LP, to
Continue Occupying an Approximate 5,469 Square Foot Portion of the Office Building at
1900 Embarcadero Road, Through June 30, 2031, at a Total Base Rent of $1,306,605;
CEQA Status – Exempt under CEQA Guidelines Section 15301
12.Approval of Amendment No. 4 to Contract Number C23184827 with Nomad Transit, LLC
(Via) in the Amount of $152,000 for a total not to exceed $5,053,550 to Extend the City
of Palo Alto On-Demand Transit Service for Four Months through October 31, 2026;
Approval of Amendment No. 3 to extend the Cost Sharing Agreement with Stanford
University to Partially Fund Palo Alto Link Service up to $200,000 in FY 2027 through
October 31, 2026; and Approval of a three-year Contract with the Palo Alto
Transportation Management Association (PATMA), in the Amount of $500,000; CEQA
status – not a project.
13.Approval of Contract Amendment Number 5 to Contract S20178065 with OIR Group, in
the Amount of $40,000 and for a one-year extension to continue Independent Police
Auditing Services in Palo Alto. CEQA Status – Not a Project.
14.Approval of Professional Services Contract Number C26195541 with HDA Architects, Inc.
in an Amount Not-to-Exceed $221,650 to Provide Architectural Design Services for the
Animal Shelter Renovation – Capital Improvement Program Project PE-19002; CEQA
Status – Exempt under CEQA Guidelines Section 15301(e)
15.Approval of Professional Services Contract Number C26196545 with Michael Baker
International (MBI) for $116,000 in FY 2027 and a Not-to Exceed Amount of $464,000 to
Provide Administration and Consulting Services for the City’s Community Development
Block Grant (CDBG) Program for a Term of Four-Years Through June 2030. CEQA Status:
Exempt in Accordance with CEQA Guidelines Section 15061(b)(3).
16.PUBLIC HEARING / QUASI-JUDICIAL. 929 Laurel Glenn Dr [25PLN-00005]: Adoption of a
Record of Land Use Action Approving a Major Site and Design Application for the
Construction of a New 6,581-Square-Foot Single-Family Residence and Associated Site
Improvements on a Vacant 4.23-Acre Site. CEQA Status: Exempt Per CEQA Guidelines
Section 15303. Zoning District: Open Space (OS).
17.QUASI-JUDICIAL. Approval of a Record of Land Use Action to Add the Property Located
at 855 Hamilton Avenue to the City’s Historic Resources Inventory as a Category 2
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Resource Based on Owner Interest Identified Through the 2023 Reconnaissance Survey.
CEQA Status: Not a Project.
18.QUASI-JUDICIAL. 3200 Park/340 Portage: Final Map and Street Naming [26PLN-00009]:
Request for a Final Map to Subdivide One Existing 3.92-Acre Parcel for Condominium
Purposes, Consistent with the Approved Development Agreement, and to Name the
New Private Streets. Zone District: PC 5597. CEQA Status: Council Adopted Resolution
10123 Certifying the EIR for the Project on September 12, 2023 (SCH # 2021120444).
Item Number 18 Removed Off Agenda
19.FIRST READ: Adopt an Ordinance to Amend College Terrace Residential Preferential
Parking Program Fixed Permit Terms, Sale and Grace Periods in PAMC 10.46.060; CEQA
status: categorically exempt.
20.FIRST READING: Adoption of an Ordinance to Amend Palo Alto Municipal Code Title 18
(Zoning) Section 18.18.120 (Noncomplying Uses and Facilities) to Allow Existing Floor
Area to be Replaced in New Buildings Without Increasing the Degree of Existing Non-
Compliance as Recommended by the Economic Development Committee. CEQA Status:
Exempt from CEQA per Section 15061(b)(3) (Common Sense Exemption).
21.FIRST READING: Adoption of an Ordinance to Amend Various Sections of Title 16
(Building Regulations) and Title 18 (Zoning) of the Palo Alto Municipal Code to
Implement Retail Vitality Policies in the Comprehensive Plan, Including Changes to the
Zoning Map for Parcels Zoned CN(GF) as Recommended by the Economic Development
Committee. CEQA Status: The Ordinance is Consistent with and Represents
Implementation of Adopted Policies in the Comprehensive Plan, for Which an
Environmental Impact Report (Comprehensive Plan EIR) was Certified on February 5,
2016.
22.SECOND READING: Ordinance of the Council of the City of Palo Alto Amending the Sign
Code (PAMC section 16.20.160) to Allow Certain Signs in Conjunction with Parklets
(FIRST READING: June 1, 2025; PASSED: 6-1, Lu no)
23.SECOND READING and Adoption of Temporary Ordinances Implementing Senate Bill (SB)
79, and Introduction and Adoption of Interim Urgency Ordinances Excluding Certain
Historic Resource Sites and Transit-Oriented Development (TOD) Eligible Sites from
Government Code Section 65912.157 and Authorizing Corresponding Zoning Map
Updates. CEQA Status: Exempt Under Government Code Section 65912.160(c)(2).
a. SECOND READING and Adoption of Temporary Ordinances Implementing SB 79 (Staff
Recommendations 1 & 2)
b.Introduction and Adoption of Interim Urgency Ordinances Excluding Certain Historic
Resource Sites from Government Code Section 65912.157 (Staff Recommendation 3)
c.Introduction and Adoption of Interim Urgency Ordinances Excluding Certain Transit-
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Oriented Development (TOD) Eligible Sites from Government Code Section 65912.157
(Staff Recommendation 4)
Action Item
23c. Introduction and Adoption of Interim Urgency Ordinances Excluding Certain Transit-
Oriented Development (TOD) Eligible Sites from Government Code Section 65912.157
MOTION: Mayor Veenker moved, seconded by Councilmember Lythcott-Haims to direct staff
not to proceed with adopting the interim urgency ordinance of 23C.
MOTION PASSED: 5-0-2, Lu, Reckdahl recused
MOTION SPLIT FOR THE PURPOSE OF VOTING
MOTION: Mayor Veenker moved, seconded by Councilmember Lythcott-Haims to direct staff
to explore opportunities to accelerate housing production on California Avenue and adjacent
areas of El Camino Real and bring back to Council a proposal for zoning revisions to effectuate
such production within the next 6 to 12 months.
MOTION PASSED: 4-1-2, Burt no, Lu, Reckdahl recused
Closed Session
AA1. CONFERENCE WITH LEGAL COUNSEL—POTENTIAL LITIGATION (one case)
Subject: Initiation of litigation in one case
Authority: Government Code Section 54956.9(d)(4) New Item Added
MOTION: Councilmember Lu moved, seconded by Councilmember Reckdahl to go into Closed
Session.
MOTION PASSED: 5-0-2, Lauing, Stone absent for vote
Council went into Closed Session at 9:46 P.M.
Council returned from Closed Session at 10:18 P.M.
Mayor Veenker announced that the City Council authorized the City Attorney to join an amicus
brief in support of the plaintiff's position in County of Santa Clara versus U.S. Immigrations and
Customs Enforcement, case number 26CV5604.
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City Manager Comments
Ed Shikada, City Manager
Action Items
24.Adopt a Resolution Approving the 2026 Bicycle and Pedestrian Transportation Plan
(BPTP); CEQA Status: Exempt Pursuant to Public Resources Code Section 21080.20.
MOTION: Councilmember Burt moved, seconded by Councilmember Reckdahl to adopt a
Resolution Approving the Final 2026 Bicycle and Pedestrian Transportation Plan (BPTP)
(Attachment A), including staff-recommended changes from the Pedestrian and Bicycle
Advisory Committee (PABAC) (Attachment B) with the following amendments and additions:
a)Evaluate extension of the two-way bike track on Middlefield between California
Avenue and Garland,
b)Look at safety improvements for Newell/Embarcadero intersection,
c)Add language from public commenter on access to the San Antonio station,
d)Add PABAC language or equivalent to it, that clarifies what staff is already
embraced on the interpretation of T- 4.1 regarding filters not being closures,
e)Evaluate stop signs or other protections when roadways cross bike boulevards
and bike routes,
f)Complete Streets policy within the bike plan including bicycle-friendly street
design and the PABAC recommendation on bicycle-friendly street design,
g)Refer staff the evaluation of reconciling bike access along car-free portion
California Avenue particularly for school and other commutes with pedestrian
safety during peak use hours including the possibility of time-of-day restrictions,
h)Council supports PAUSD pursuing restrictions of class two and three e-bikes.
MOTION PASSED: 7-0
Adjournment: The meeting was adjourned at 11:44 P.M.
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Action Minutes: 06/15/2026
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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