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HomeMy WebLinkAbout2026-08-17 City Council Agenda PacketCITY COUNCIL Regular Meeting Monday, August 17, 2026 Council Chambers & Hybrid 5:30 PM City Council meetings will be held as “hybrid” meetings with the option to attend virtually or in person. Information on how the public may observe and participate in the meeting is located at the end of the agenda. Translation services are available upon request at least 24 hours before the meeting. The meeting will be broadcast on Cable TV Channel 76, 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 Public Comment for items not on the agenda will be accepted for up to 3 minutes or an amount of time determined by the Chair. In-person comments will be heard at the beginning of the agenda and remote comments will be heard at the end of the agenda. In-person general public comment will be heard for 30 minutes. Additional in-person 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 3 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. Multiple individuals wishing to speak on the same item may designate a spokesperson. Spokespeople must be representing 5 or more verified individuals who are present in person or via Zoom. Spokespeople are allowed up to 10 minutes, at the discretion of the Chair. Speaking time may be reduced if the Chair 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 before the meeting. Once received, the Clerk will share them 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: sticks, posts, poles or similar/other type of handle objects are strictly prohibited; the items do not create a facility, fire, or safety hazard; and 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, change the order of items and/or continue items to another meeting. 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 August 17, 2026 Materials submitted after distribution of the agenda packet are available for public inspection at www.paloalto.gov/agendas. CALL TO ORDER   CLOSED SESSION (5:30 - 7:00 PM)   1.CONFERENCE WITH CITY ATTORNEY-EXISTING LITIGATION Subject: Swinerton v. City of Palo Alto (JAMS Reference # 5100003409) Authority: Government Code Section 54956.9(d)(1) One Case, as Defendant 2.CONFERENCE WITH REAL PROPERTY NEGOTIATORS Authority: Government Code Section 54956.8 Property: 4000 Middlefield Road, Palo Alto (Informally known as the Cubberley Site) Negotiating Party: Palo Alto Unified School District City Negotiators: Ed Shikada, Kristen O'Kane, Sunny Tong Subject of Negotiations: Purchase, Exchange, and/or Lease Price and Terms of Payment AGENDA CHANGES, ADDITIONS AND DELETIONS   IN-PERSON PUBLIC COMMENT (7:00 - 7:30 PM) Members of the public may speak to any item NOT on the agenda. 1-3 minutes depending on number of speakers. In-person comments will be heard at the beginning of the agenda and remote comments will be heard at the end of the agenda. In-person Public Comment is limited to 30 minutes. Additional in-person public comments, if any, will be heard at the end of the agenda. COUNCIL MEMBER QUESTIONS, COMMENTS, ANNOUNCEMENTS (7:30 - 7:40 PM) Members of the public may not speak to the item(s).   CONSENT CALENDAR (7:40 - 7:45 PM) Items will be voted in one motion unless removed from the calendar by three Council Members.   3.Adoption of a Resolution Authorizing the City Manager or Their Designee to Transact for Electric Supplies to Meet the City’s Electrical Needs under Electric Master Agreements; CEQA Status: Not a project, CEQA Guidelines 15378(b)(5) 4.Approve Expansion of the City’s Overnight Warming/Cooling Location Program, Approve an Operating Framework for Emergency Inclement Weather Response; CEQA status. 5.Approval of Contract Number C27196410 with Salas O’Brien Engineers, Inc. for an Amount Not-to-Exceed $298,716 to Provide Professional Design Services for the Electrification of City Facilities Capital Improvement Program Project PE-24001, for a Contract Term through August 24, 2029; CEQA Status – Exempt under CEQA Guidelines Section 15301  2 August 17, 2026 Materials submitted after distribution of the agenda packet are available for public inspection at www.paloalto.gov/agendas. CITY MANAGER COMMENTS (7:45 - 7:55 PM)   BREAK (15 MINUTES) ACTION ITEMS (Item 6: 8:10 - 9:10 PM; Item 7: 9:10 - 10:10 PM) Include: Report of Committees/Commissions, Ordinances and Resolutions, Public Hearings, Report of Officials, Unfinished Business and Council Matters.   6.Adoption of an Ordinance Amending Various Palo Alto Municipal Code Chapters in Titles 16 and 18 to Address Changes in State Law and Direction from City Council Regarding Accessory and Junior Accessory Dwelling Units. CEQA Status: Exempt From the Provisions of the California Environmental Quality Act (CEQA) Pursuant to Public Resources Code Section 21080.17 and CEQA Guidelines Section 15061(b)(3). 7.PUBLIC HEARING/QUASI-JUDICIAL. 762 San Antonio Road [24PLN-00120]: Request for Approval of a Major Architectural Review Application to Demolish Three Existing Commercial Buildings and Construct an Eight-Story Multi-Family Residential Building Containing 228 Rental Apartments. The Project is Proposed in Accordance with California Government Code Section 65589.5(d)(5) “Builders Remedy". CEQA Status: An Addendum to the Previously Certified Environmental Impact Report for the Housing Incentive Program Expansion and 788 San Antonio Mixed Use Project (SCH # 2019090070) has Been Prepared. Zoning District: CS (AD); Service Commercial (Automobile Dealership). VIRTUAL PUBLIC COMMENT Members of the public may speak to any item NOT on the agenda. 1-3 minutes depending on number of speakers. In-person comments will be heard at the beginning of the agenda and remote comments will be heard at the end of the agenda. In-person Public Comment is limited to 30 minutes. Additional in-person public comments, if any, will be heard at the end of the agenda.   ADJOURNMENT INFORMATION REPORTS Information reports are provided for informational purposes only to the Council and the public but are not listed for action or discussion during this meeting’s agenda.   A.2100 Geng Road [24PLN-00356 & 24PLN-00357]: Determination of Impact Fees Following Fee Protest B.Boards, Commissions, and Committees 2026 Mid-Year Attendance Report; CEQA Status - Not a Project  3 August 17, 2026 Materials submitted after distribution of the agenda packet are available for public inspection at www.paloalto.gov/agendas. C.Investment Activity Report for the Fourth Quarter (April – June), Fiscal Year 2026. CEQA Status – Not a Project. OTHER INFORMATION Standing Committee Meetings this week Finance Committee August 18, 2026 Economic Development Committee August 19, 2026 CANCELED Public Comment Letters Schedule of Meetings      4 August 17, 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 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 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 August 17, 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 August 17, 2026 Materials submitted after distribution of the agenda packet are available for public inspection at www.paloalto.gov/agendas. City Council Staff Report From: City Manager Report Type: CONSENT CALENDAR Lead Department: Utilities Meeting Date: August 17, 2026 Report #:2606-6452 TITLE Adoption of a Resolution Authorizing the City Manager or Their Designee to Transact for Electric Supplies to Meet the City’s Electrical Needs under Electric Master Agreements; CEQA Status: Not a project, CEQA Guidelines 15378(b)(5) RECOMMENDATION Staff recommends that Council adopt a Resolution (Attachment A): Authorizing the City Manager or their designee to execute one or more transactions under Electric Master Agreements with one or more pre-approved suppliers to purchase and/or sell electricity supplies and related services to meet the City’s forecasted electricity load and regulatory requirements, subject to the following conditions: 1. The date for delivery of the electricity supplies for each transaction shall not exceed 36 months from the date the transaction is executed; 2. The delivery date of any transaction shall not extend beyond December 2040; 3. The maximum aggregate transaction limit under each Master Agreement shall be $125 million; 4. All transactions shall be subject to the Palo Alto Municipal Code; and 5. All transactions shall be subject to the Energy Risk Management Policy (Attachment B). 6. The transactions shall be undertaken with suppliers that have executed Master Agreements with the City; to date those suppliers are: a. Avangrid Renewables, LLC; b. BP Energy Company; c. Cargill Power Markets, LLC; d. Constellation Energy Generation, LLC; e. DRW Energy Trading LLC; f. Dynasty Power Inc.; g. NextEra Energy Marketing, LLC; h. NRG Business Marketing LLC; Item 3 Item 3 Staff Report        Item 3: Staff Report Pg. 1  Packet Pg. 7 of 253  i. PacifiCorp; j. Powerex Corp; k. Shell Energy North America (US), L.P.; l. Silicon Valley Clean Energy Authority (SVCE); and m. Turlock Irrigation District. EXECUTIVE SUMMARY Transacting with an active set of creditworthy counterparties is essential to ensure that the City meets its electric supply portfolio planning objectives, internal risk management controls, and external operational and regulatory requirements in a cost-effective and time-efficient manner. Authorizing the City Manager or their designee to execute transactions under the City’s electric Master Agreements with pre-approved suppliers will enable the purchase and/or sale of electricity supplies and related services to meet the City’s forecasted electricity load. In December 2024 City Council approved a similar resolution authorizing the City Manager or their designee to transact with specified suppliers for the calendar years 2025 through 2039 period, with an aggregate transaction limit of $75 million (Resolution 102041). The authorization being sought now is to shift this 15-year authorization period by one year, to calendar years 2026 through 2040 (with any given transaction term not to exceed 36 months from the date the transaction is executed), and to increase the aggregate transaction limit to $125 million. BACKGROUND & ANALYSIS The City procures long-term renewable electricity supplies from solar, wind, landfill gas, geothermal, and hydroelectric resources, for contract terms that span up to 35 years. In addition, City staff utilize electric Master Agreements with pre-approved suppliers to balance electric loads and supplies in the short- and medium-term, from one month to 36 months out. These transactions are carried out in compliance with the City’s Energy Risk Management Policy, which was last modified in June 2024 (Resolution 101662). The City’s Municipal Code also governs these procurements, permitting the City to award contracts for wholesale utility commodities and services to counterparties which have executed a Council-approved master agreement and are otherwise eligible to bid, and allowing Council to authorize the City Manager to award and sign contracts with eligible counterparties under certain specified limits3. City Council periodically approves new Master Agreements with suppliers to maintain a diverse set of suppliers for the City to competitively procure electricity supplies.4 1 Resolution 10204: https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=62085&dbid=0&repo=PaloAlto&cr=1. 2 Resolution 10166: https://portal.laserfiche.com/Portal/DocView.aspx?id=73765&repo=r- 704298fc&searchid=8dd38e5a-e018-4318-9027-4a24829093de 3 Palo Alto Municipal Code sections 2.30.340(a) and (b). 4 In December 2016 Council approved a standard form electric master agreement (Resolution 9652), based on the year 2000 version of the Edison Electric Institute (EEI) Master Power Purchase and Sale Agreement. This standard form agreement has been made available to any wholesale utility supplier on the City’s website since that time; Item 3 Item 3 Staff Report        Item 3: Staff Report Pg. 2  Packet Pg. 8 of 253  Currently the City has 13 suppliers, including three new suppliers approved by Council in March 2026 (Staff Report: 2508-51179). In October 2019 City Council also approved a standard form resource adequacy (RA) confirmation letter to the Western States Power Pool (WSPP) master agreement, and authorized staff to utilize that agreement for carrying out RA transactions (Resolution 986010).11 In March 2013 City Council approved a resolution authorizing the City Manager or their designee to transact under electric Master Agreements with nine specified suppliers for the calendar years 2013 through 2027 period, with an aggregate transaction limit of $50 million per agreement (Resolution 932412). Since that March 2013 Council authorization, staff have undertaken over 220 transactions during the subsequent 13 years, totaling $171.4 million, as outlined in Table 1 below. Table 1: Transaction Volumes under Approved Electric Master Agreements As shown above, over the past 13 years, the transaction volumes with two of these suppliers have exceeded $50 million and are approaching the $75 million aggregate authority limit established by Resolution 10204. Staff anticipates the volume of transactions in the next 10 to 15 years could be higher due to higher volumes and prices (particularly for resource adequacy (RA) capacity and renewable energy credits (RECs), both of which have experienced large price spikes during the past few years). To address these price escalators, staff recommends the transaction caps applicable to each Master Agreement be increased from $75 million to $125 million. 9 Staff Report 2508-5117: https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=86830&dbid=0&repo=PaloAlto 10 Resolution 9860: https://www.paloalto.gov/files/assets/public/v/1/city-clerk/resolutions/reso- 9860.pdf?t=52748.06 however, execution of and delegation of authority to transact under standard form master agreements with specific suppliers remains subject to Council approval before any transactions may be completed. https://www.cityofpaloalto.org/files/assets/public/v/1/city-clerk/resolutions/reso-9652.pdf 12 Resolution 9324: https://www.paloalto.gov/files/assets/public/v/1/city-clerk/resolutions/reso-9324.pdf Supplier Purchases ($) Sales ($)Total Transactions ($) BP Energy Company 2,020,420 600,300 2,620,720 Powerex 11,489,765 792,328 12,282,093 Shell Energy North America 35,788,992 21,721,729 57,510,721 Avangrid Renewables LLC 56,455 50 56,505 Turlock Irrigation District 709,344 1,628,250 2,337,594 NextEra Energy Marketing, LLC 48,472,511 21,103,693 69,576,204 Cargill Power Markets, LLC 6,329,143 - 6,329,143 Constellation Energy Generation, LLC 13,895,651 6,783,935 20,679,586 Pacificorp Energy - - - Silicon Valley Clean Energy Authority - 10,000 10,000 TOTAL 118,762,281 52,640,284 171,402,565 Item 3 Item 3 Staff Report        Item 3: Staff Report Pg. 3  Packet Pg. 9 of 253  As an additional risk mitigation measure, as part of the Utilities Risk Oversight and Coordinating Committee (UROCC)16, staff will be required to notify and obtain UROCC approval prior to any given supplier exceeding the existing ($75 million) authorized transaction limit. The UROCC will be enabled to advise staff on whether to authorize the additional headroom for that supplier, ensure current analysis such as credit worthiness are reviewed, and manage inherent risk associate with any over reliance on concentrated providers. FISCAL/RESOURCE IMPACT STAKEHOLDER ENGAGEMENT ENVIRONMENTAL REVIEW ATTACHMENTS APPROVED BY: Alan Kurotori, Director of Utilities 16 The UROCC, which consists of the Directors of Utilities, Public Works, and Administrative Services, as well as a representative from the City Manager’s Office, ensures proper risk management controls are in place with respect to the City’s energy procurement, and ensures compliance with the Council-approved Energy Risk Management Policy. Item 3 Item 3 Staff Report        Item 3: Staff Report Pg. 4  Packet Pg. 10 of 253  NOT YET APPROVED Attachment A 1 6059777 1 1 9 8 5 Resolution No. _____ Resolution of the Council of the City of Palo Alto Authorizing the City Manager or Their Designee to Transact for Electric Supplies to Meet the City’s Electrical Loads under Electric Master Agreements, under Specified Terms and Conditions During Calendar Years 2026 through 2040, Inclusive R E C I T A L S A. By Resolution 10204 adopted in 2024, the City Council authorized the City Manager or their designee to transact electric supplies to meet the City’s electrical loads under electric Master Agreements with suppliers during a 15-year delivery period, between calendar years 2025 through 2039, under the following conditions: I. The maximum term of any transaction shall not exceed three years, commencing on the date of execution of the transaction; II. No transaction entered into shall extend beyond December 31, 2039; III. The maximum expenditure under any Master Agreement shall not exceed $75 million in the aggregate. B. The Resolution also noted Council’s approval of an Energy Risk Management Policy, via Resolution 92721, which provided for the oversight and controls necessary to manage risks inherent in transacting electric supply under the Master Agreements; the Risk Management Policy has since been updated, most recently in June 2024 via Resolution 101662. C. Since the authorization provided in 2024 via Resolution 102043, staff has undertaken over 20 transactions totaling $59.7 million, of which $33.1 million is outstanding, meaning that delivery will occur during or after August 2026; D. In December 2016, via Resolution 96524, Council approved a standard form electric master agreement based on the year 2000 version of the Edison Electric Institute (EEI) Master Power Purchase and Sale Agreement. This standard form agreement has been made available to any wholesale utility supplier on the City’s website since that time; however, execution of, and delegation of authority to transact under, standard form master agreements with specific suppliers remains subject to Council approval before any transactions may be completed. The Council of the City of Palo Alto does RESOLVE as follows: 1 Resolution 9272: https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=53542&dbid=0&repo=PaloAlto 2 Resolution 10166: https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=62033&dbid=0&repo=PaloAlto 3 Resolution 10204: https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=62085&dbid=0&repo=PaloAlto 4 Resolution 9652: https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=54485&dbid=0&repo=PaloAlto Item 3 Attachment A - Resolution        Item 3: Staff Report Pg. 5  Packet Pg. 11 of 253  2 6059777 1 1 9 8 5 SECTION 1. The Council authorizes the City Manager or their designee to execute transactions under Council-approved Master Agreements with pre-approved suppliers to purchase and/or sell electricity supplies and related services to meet the City’s forecasted electricity load and regulatory requirements, subject to the following conditions: (a) The date for delivery of the electricity supplies for each transaction shall not exceed 36 months from the date the transaction is executed; (b) The delivery date of any transaction shall not extend beyond December 2040; (c) The maximum aggregate transaction limit under each Master Agreement shall be $125 million. However, as an additional risk mitigation measure, Utilities staff will notify the City’s Utilities Risk Oversight and Coordinating Committee9 (UROCC) whenever a given supplier approaches the $75 million transaction limit authorized by Resolution 10204, to permit the UROCC to advise staff on whether to authorize additional transactions up to the $125 million authorized herein for that supplier; (d) All transactions shall be subject to the Palo Alto Municipal Code; (e) All transactions shall be subject to the City’s Energy Risk Management Policy; and (f) The $33.1 million worth of outstanding transactions (to be delivered during or after August 2026) shall be applied against the $125 million maximum expenditure limit per Master Agreement established herein. SECTION 2. The suppliers that have Master Agreements with the City and are authorized to transact are listed below; this list may be expanded with City Council approval. a. Avangrid Renewables, LLC; b. BP Energy Company; c. Cargill Power Markets, LLC; d. Constellation Energy Generation, LLC; e. DRW Energy Trading LLC; f. Dynasty Power Inc.; g. NextEra Energy Marketing, LLC; h. NRG Business Marketing LLC; i. PacifiCorp; j. Powerex Corp; k. Shell Energy North America (US), L.P.; l. Silicon Valley Clean Energy Authority (SVCE); and m. Turlock Irrigation District. 9 The UROCC, which consists of the Directors of Utilities, Public Works, and Administrative Services, as well as a representative from the City Manager’s Office, ensures proper risk management controls are in place with respect to the City’s energy procurement, and ensures compliance with the Council-approved Energy Risk Management Policy. Item 3 Attachment A - Resolution        Item 3: Staff Report Pg. 6  Packet Pg. 12 of 253  3 6059777 1 1 9 8 5 SECTION 3. The Council hereby finds that authorizing the City Manager or their designee to transact for electric supplies to meet the City’s electrical loads under electric Master Agreements will not result in any direct or indirect physical change in the environment, and therefore does not constitute a project requiring environmental assessment for the purposes of the California Environmental Quality Act, pursuant to CEQA Guidelines section 15378(b)(5). Item 3 Attachment A - Resolution        Item 3: Staff Report Pg. 7  Packet Pg. 13 of 253  City of Palo Alto Energy Risk Management Policy City Council Approved: June 10, 2024 Report # 2404-2844 Item 3 Attachment B - Energy Risk Management Policy        Item 3: Staff Report Pg. 8  Packet Pg. 14 of 253  City’s Energy Risk Management Policy Last Approved by City Council on June 10, 2024 City of Palo Alto Energy Risk Management Policy Table of Contents A. OBJECTIVE AND SCOPE .......................................................................................................2 B. APPLICABILITY ......................................................................................................................3 C. RISK MANAGEMENT ROLES, RESPONSIBILITES, AND ORGANIZATION ..............4 1. City Council ............................................................................................................................4 2. Utilities Advisory Commission ..............................................................................................4 3. City Manager ..........................................................................................................................4 4. Utilities Risk Oversight and Coordinating Committee (UROCC) ....................................4 5. CPAU/ASD Oversight ............................................................................................................ 4 b. ASD Middle Office – Risk Management Controls and Reporting ..........................................................................5 c. Back Office – Settlement and Recording ................................................................................................................... 5 6. NORTHERN CALIFORNIA POWER AGENCY (NCPA) ...............................................5 D. TRANSACTIONS ......................................................................................................................6 2. Maximum Transaction Term .....................................................................................................................................6 3. Competitive Process .....................................................................................................................................................6 E. COUNTERPARTY CREDIT ....................................................................................................6 F. RISK MANAGEMENT REPORTING ....................................................................................7 G. AUTHORIZED PRODUCTS ..................................................................................................7 H. TRANSACTING AUTHORITY ...............................................................................................8 I. CONFLICT OF INTEREST .....................................................................................................8 J. DODD-FRANK APPLICABILITY AND COMPLIANCE ...................................................8 GLOSSARY OF TERMS ................................................................................................................9 Item 3 Attachment B - Energy Risk Management Policy        Item 3: Staff Report Pg. 9  Packet Pg. 15 of 253  City’s Energy Risk Management Policy Last Approved by City Council on June 10, 2024 A. OBJECTIVE AND SCOPE The City of Palo Alto’s (City) Department of Utilities (CPAU) purchases and sells electricity and gas to meet the needs of its customers. The City’s Energy Risk Management Policy (ERM Policy) describes the management organization, authority, and processes to monitor, measure, and control market risks, which include price risk, credit risk, and operational risk, to which the City is exposed in the normal course of managing its energy portfolio to meet the needs of the City’s electric and gas utility customers. The ERM Policy describes the key policies and control structures for prudent energy risk management processes, in accordance with the City’s municipal code, financial requirements set forth by the City Council and the Director of Administrative Services, and applicable law. The ERM Policy focuses on the following areas:  Segregation of duties and delegation of authority (Section C)  Organizational structure for risk management controls to include the front, middle, and back offices (Section C)  Transacting (Section D)  Counterparty credit (Section E)  Reporting (Section F)  Permitted transaction and product types (Section G)  Conflict of interest (Section I) The ERM Policy sets forth the City’s objectives, policies and control structures for prudent energy risk management. This Policy is supported by policy/implementation- level and operations-level documents including: the Energy Risk Management Guidelines (ERM Guidelines); Energy Risk Management Procedures (ERM Procedures) for the Front, Middle, and Back Offices; and the Long-Term Electric Acquisition Plan (LEAP), Gas Utility Long-Term Plan (GULP), and the Utilities Strategic Plan. The ERM Policy does not address general CPAU business risks such as fire, accident, casualty, worker health and safety, and general liability. Neither does the Policy cover the water fund, the electric and gas distribution business units, nor the telecommunications business unit. Item 3 Attachment B - Energy Risk Management Policy        Item 3: Staff Report Pg. 10  Packet Pg. 16 of 253  City’s Energy Risk Management Policy Last Approved by City Council on June 10, 2024 B. APPLICABILITY The ERM Policy applies to all City employees within business units engaged in transacting in the electric and gas markets. All employees participating in the energy procurement process must have knowledge of the ERM Policy and adhere to it during such participation. The electric and gas supply business units are part of the electric and natural gas enterprise funds and employees within these business units are responsible for the acquisition and potential sale of energy supply resources. Employees within the relevant business units are required to follow the ERM Policy regarding these topics: management, organization, authority, processes, tools and systems to monitor, measure, and control risks to which the City is exposed. Ener Ris Mana ement Polic , Guidelines, and Procedures Dia ram Energy Risk Management Policy (Highest Level) Approved by: City Council Ener Ris Mana ement Guidelines (Guidin Principles) Approved by: Utilities Risk Oversight Coordinating Council (UROCC) Energy Risk Management Procedures-(Detailed instructions on how to perform the procedures.) Front Office (approved by Utilities Director) Middle Office (approved by Administrative Services Department (ASD) Director, Back Office (approved by Utilities and ASD Directors Item 3 Attachment B - Energy Risk Management Policy        Item 3: Staff Report Pg. 11  Packet Pg. 17 of 253  City’s Energy Risk Management Policy Last Approved by City Council on June 10, 2024 C. RISK MANAGEMENT ROLES, RESPONSIBILITES, AND ORGANIZATION This section defines the overall roles and responsibilities for the City’s implementation of the ERM Policy. Additionally, the ERM Guidelines and Procedures contain more specific information describing these roles and responsibilities within the energy risk management program structure at the City. 1. City Council The City Council reviews and adopts by resolution the ERM Policy as developed and recommended by the Utilities Risk Oversight and Coordinating Committee (UROCC) and delegates its implementation to the City Manager. The Council will, at a minimum, review the Policy every three years. Additionally, the City Council shall receive semi-anual updates from the City Manager regarding energy risk management activities. 2. Utilities Advisory Commission The Utilities Advisory Commission (UAC) is responsible for advising the City Council on long-range planning and policy matters relating to the electric and gas utilities. While it has no formal responsibility in energy risk management, the UAC shall receive informational copies of the semi-annual reports sent to the Council regarding energy risk management activities. 3. City Manager The City Manager has overall responsibility for executing and ensuring compliance with policy adopted by the City Council. The City Manager reports semi-annually to the City Council regarding energy risk management activities. 4. Utilities Risk Oversight and Coordinating Committee (UROCC) The UROCC is an advisory board which governs by the UROCC Roles and Purpose document. UROCC consists of city management and staff. It is comprised of the Utilities General Manager (designated as the Chairperson), the Director of Administrative Services/Chief Financial Officer, the Director of Public Works, and a representative from the City Manager’s Office. The staff City Attorney assigned to Utilities and the City Auditor serve as non-voting advisors to the UROCC. The Energy Risk Senior Management Analyst serves as the Secretary to the UROCC. The UROCC is responsible for monitoring compliance with the ERM Policy. The UROCC is also responsible for approving and implementing the ERM Guidelines consistent with the City Council- approved ERM Policy. 5. CPAU/ASD Oversight City Staff (CPAU, ASD) implements and oversees ERM Policy, the ERM Guidelines, and ERM Procedures at the operational level in the City’s Front Office, Middle Office and Back Office. Item 3 Attachment B - Energy Risk Management Policy        Item 3: Staff Report Pg. 12  Packet Pg. 18 of 253  City’s Energy Risk Management Policy Last Approved by City Council on June 10, 2024 a. Utilities Resource Management Front Office – Planning and Procurement In reporting to the Utilities General Manager, the Front Office is primarily responsible for resource planning and procuring energy supplies and services. The Front Office, by delegation of the City Manager, has a critical role in risk management through its transacting operations. Front Office staff has the authority to commit the financial capital of the City to energy transactions with counterparties up to the limits designated in the ERM Guidelines. b. ASD Middle Office – Risk Management Controls and Reporting The Middle Office consists of the Energy Risk Senior Management Analyst, and he or she shall institute, supervise, and review all energy risk management activities, including portfolio exposure, credit exposure, transaction compliance, and ongoing approval of counterparties and transacting limits. In reporting to the Director of Administrative Services/Chief Financial Officer, the Middle Office provides the primary independent oversight of the energy procurement practices. c. Back Office – Settlement and Recording The Back Office is primarily responsible for settlement of bills, recording transactions, bookkeeping and accounting, and contract administration. Functions within the Back Office are performed by both the Administrative Services Department (ASD) and CPAU staff and are detailed in the ERM Guidelines. 6. NORTHERN CALIFORNIA POWER AGENCY (NCPA) NCPA balances the City of Palo Alto’s electric loads and electric supplies on a daily, hourly, and sub-hourly basis. The City is a member of the Northern California Power Agency (NCPA), which executes transactions on the City’s behalf. NCPA also undertakes transactions for durations greater than a month under the terms of the Council approved Market Purchase Program Agreement (MPP). The NCPA Commission approves its own energy risk management policies for the acquisition of energy supply resources. The City’s energy risk management staff, however, is actively involved in NCPA’s Risk Oversight Committee and meetings to monitor possible risk exposures resulting from the City’s membership in the NCPA Joint Powers Agency, even where the City is neither a project nor a program participant, to ensure that NCPA observes best practices in its energy risk management program as it relates to the City. All transactions undertaken by NCPA on behalf of Palo Alto under the MPP shall be governed by NCPA’s Risk Management Policy and Regulations, the City’s Energy Risk Management Policy and Guidelines, and the Council Resolution (#9896) approving the MPP Agreement. In the event of a conflict between the City’s and NCPA’s ERM governing documents, staff will direct NCPA to adhere to the City’s ERM Policy and Guidelines, via staff’s authorization of individual transactions under the MPP. Item 3 Attachment B - Energy Risk Management Policy        Item 3: Staff Report Pg. 13  Packet Pg. 19 of 253  City’s Energy Risk Management Policy Last Approved by City Council on June 10, 2024 D. TRANSACTIONS Transactions under the Electric Master Agreements and the Gas Master Agreements (collectively, Master Agreements) must be executed as described in this section and in a manner consistent with the authority granted by the Council to the City Manager and the Palo Alto Municipal Code (PAMC). Such transactions will be carried out to manage risk inherent to the electric and gas supply portfolios without exposing the City to unnecessary risk. There are three key elements: 1. Anti-speculation Speculative buying and selling of energy products is prohibited. Speculation is defined as buying energy not needed for meeting forecasted load or selling energy that is not owned. In no event shall transactions be entered into for the purpose of speculating on market conditions. The ERM Guidelines shall prescribe volume and sales dollar amount limits for forward purchases and sales. 2. Maximum Transaction Term The maximum term of any supply resource transaction (purchase or sale) is five years, as stated in PAMC Section 2.30.210(k), unless approved by the Council. 3. Competitive Process The Front Office will endeavor to obtain three or more quotations from eligible electric and gas supply counterparties and select the best price. The ERM Guidelines outline the trade capture process. E. COUNTERPARTY CREDIT Credit exposure related to wholesale commodity transactions and potentially defaulting counterparties shall be minimized by: 1. Establishing a credit risk management governance and oversight structure within the existing ERM program; 2. Providing a framework to enable the City to qualify energy suppliers and transact with eligible counterparties; 3. Providing counterparty transacting parameters (limits) to control and measure the City’s exposure to any one supplier; 4. Implementing a mechanism to monitor and report on supply portfolio-related counterparty credit exposures; and 5. Managing counterparty credit requirements. PAMC Section 2.30.340 sets forth creditworthiness standards and certain contractual provisions applicable to contracts for wholesale utility commodities and services. As such, transactions carried out under the Master Agreements are limited to counterparties with a Item 3 Attachment B - Energy Risk Management Policy        Item 3: Staff Report Pg. 14  Packet Pg. 20 of 253  City’s Energy Risk Management Policy Last Approved by City Council on June 10, 2024 Standard and Poor’s issuer rating of BBB- or better, or a Moody’s Investor Services issuer rating of Baa3 or better. Only the Council can approve exemptions to this requirement (See PAMC Section 2.30.340(d)(2)(c)). The ERM Guidelines shall set forth specific counterparty credit limits for volume, term, credit exposure, and counterparty reporting requirements. F. RISK MANAGEMENT REPORTING Reporting of critical information to relevant parties is a key component of energy risk management. Semi-Annual reports will be distributed to the UROCC, the UAC, and the Council; those reports shall provide details on the City’s forward contract purchases, market exposure, credit exposure, counterparty credit ratings, transaction compliance, and other relevant data. The Front and Middle Offices shall prepare performance reports containing an analysis of physical and financial positions. The frequency and content of performance reports for each oversight body shall be prescribed in the ERM Guidelines. Should the risks associated with the portfolio or a specific transaction within the portfolio fall outside of the risk limits prescribed in the ERM Guidelines, the Energy Risk Senior Management Analyst will quantify the risk, identify and recommend a remedy, if any, and report to the UROCC within one business day via email. The event and remedy, if any, will be reported to the Council in the next semi-annual energy risk management report. G. AUTHORIZED PRODUCTS The Council shall delegate to the City Manager the authority to transact under Council- approved Master Agreements. Products transacted under the Master Agreements (listed below) must be consistent with the needs of CPAU and fall within the authority granted by the Council to the City Manager. The following products and/or transactions are approved to be executed under the Master Agreements: 1. Purchase of physical fixed price, index-based price, call options, capped-price or collar-priced energy, gas, capacity, transportation, basis and transmission products to meet load requirements; 2. Sale of physical fixed price or index-based price energy, gas, capacity, storage, and transmission incidental to load; 3. Purchase of electric heat rate products to meet load; 4. Purchase and sale of renewable energy credits (RECs) with or without bundled energy; 5. Purchase of gas storage; 6. Purchase and sale of electric ancillary services; 7. Purchase of resource adequacy capacity products to meet the City’s resource adequacy requirement and the sale of resource adequacy capacity products to reduce cost associated with the City's resource adequacy obligation; Item 3 Attachment B - Energy Risk Management Policy        Item 3: Staff Report Pg. 15  Packet Pg. 21 of 253  City’s Energy Risk Management Policy Last Approved by City Council on June 10, 2024 8. Fixed price or index-priced purchases and sales to substitute the use of higher cost resources with lower cost market alternatives; 9. Fixed price or index-priced forward purchases and sales of transmission and transmission rights to meet contractual obligations or to dispose of surplus capacity; 10. Purchase of physical call options and physical collars; 11. Purchase and sale of emission allowances from bilateral trades and from the California Air Resources Board-administered Cap and Trade Program auctions and reserve auctions to satisfy actual and/or forecasted GHG emissions compliance obligations; 12. Purchases of carbon offsets to supply voluntary programs and/or to satisfy GHG emission compliance; and 13. Sales of Low Carbon Fuel Standard (LCFS) credits. H. TRANSACTING AUTHORITY In accordance with PAMC section 2.30.210(k), the City Manager has the authority to purchase and sell wholesale energy commodities for terms of up to five years and for a price not to exceed $250,000 or more in any one year. PAMC section 2.30.270(b) governs the City Manager’s delegation of authority. Delegation of authority for and on behalf of the City Manager shall be established in the ERM Guidelines. The City Clerk maintains the list of CPAU staff authorized to engage in wholesale utility commodity transactions. I. CONFLICT OF INTEREST In accordance with Chapter 2.09 of the PAMC and applicable California law, City personnel who are involved in transacting and exercising oversight of CPAU’s supply resource acquisition, contract negotiation, risk management, and back office programs may not participate in decisions in which they have a conflict of interest. J. DODD-FRANK APPLICABILITY AND COMPLIANCE Congress adopted the Dodd-Frank Act1 in 2010, which includes a variety of federal regulations largely affecting financial institutions. Certain types of “swap” transactions are subject to disclosure, registration and reporting requirements under Dodd-Frank, depending on the details of each individual transaction and the characteristics of the transacting parties. Since Dodd-Frank’s enactment, City utility transactions have fallen below applicable Dodd-Frank compliance triggers and have meet the Act’s exemptions from the definition of “swaps”. 1 Pub. L. 111-203, 124 Stat. 1376 (2010). Item 3 Attachment B - Energy Risk Management Policy        Item 3: Staff Report Pg. 16  Packet Pg. 22 of 253  City’s Energy Risk Management Policy Last Approved by City Council on June 10, 2024 GLOSSARY OF TERMS Back Office A set of positions in the Utilities and Administrative Services Departments whose responsibilities include trade confirmation, accounting, and other processes that support commodity transactions California Independent System Operator (CAISO) A non-profit public benefit corporation that oversees the operation of California's bulk electric power system, transmission lines, and market for electricity generated and transmitted by its member utilities. Call Options An option that allows the owne the right to purchase energy at the specified price Cap Price A structure product that contains a strip of multiple call option contracts with identical but staggered expirations. Carbon Offsets A reduction in emissions of greenhouse gases (GHGs) made in order to compensate for or to offset an emission made elsewhere. Credit Risk The probable change in the value of contract due to a counterparty Defaulting. Electric Ancillary Services The services (e.g., scheduling and dispatch) necessary to support the transmission of electric power from seller to purchaser given the obligations of control areas and transmitting utilities within those control areas to maintain reliable operations of the interconnected transmission system. For example, spare generating capacity that can quickly increase its energy output if the grid needs additional energy is an ancillary service. Electric Heat Rate Product A contract ase on how efficiently generato uses heat energy in fuel (i.e., natural gas) to generate electricity. Front Office A set of positions in the Utilities Department whose responsibilities include energy procurement operations. NCPA staff is permitted to undertake Palo Alto Front Office functions on the City’s behalf, as needed to conduct transactions authorized under the City’s Market Purchase Program Agreement with NCPA. Index-ase Price A price that varies base on publishe index prices. Low Carbon Fuel Standard (LCFS) Credit A product that can be bought or sold under the California Air Resource Board’s program to reduce the carbon intensity of transportation fuels. Market Risk The probable change in value of (or sensitivity to) a contract, position, or portfolio due to general changes in market conditions Item 3 Attachment B - Energy Risk Management Policy        Item 3: Staff Report Pg. 17  Packet Pg. 23 of 253  City’s Energy Risk Management Policy Last Approved by City Council on June 10, 2024 Market Purchase Program Program establishe y NCPA whereby a membe may authorize NCPA to transact on behalf of the member Master Agreement A standardize agreement fo the purchase an sale of wholesale energy commodities Middle Office A set of positions in the Administrative Services Department whose responsibilities include energy risk management activities Physical Fixed Price A contract for a fixed price which settles when one counterparty delivers the commodity to another counterparty and pays a cash settlement Resource Adequacy (RA) A regulatory construct developed to ensure that there will be sufficient resources available to serve electric demand under all but the most extreme conditions Resource Adequacy Qualifying Capacity Products from a generation unit located in the CAISO control area that meet RA requirements Risk Management The set of skills and processes for measuring, controlling, and hedging risk. Supply Portfolio The composition an amount of all purchase energy Transmission Product The sale o purchase of a non-energy asset to transport energy Item 3 Attachment B - Energy Risk Management Policy        Item 3: Staff Report Pg. 18  Packet Pg. 24 of 253  City Council Staff Report From: City Manager Report Type: CONSENT CALENDAR Lead Department: City Manager Meeting Date: August 17, 2026 Report #:2607-6566 TITLE Approve Expansion of the City’s Overnight Warming/Cooling Location Program, Approve an Operating Framework for Emergency Inclement Weather Response; CEQA status. RECOMMENDATION Staff recommends that the City Council approve the expansion of the City’s Overnight Warming/Cooling Location (“OWL”) program for the upcoming season to include operation during County of Santa Clara Inclement Weather Alert activations and up to ten additional City- directed activation nights, and approve the OWL operating framework, substantially in the form attached as Exhibit A. Funding for the expanded OWL program is already earmarked in the Human Services budget, and no additional appropriation is requested at this time. EXECUTIVE SUMMARY Staff recommends continuing and modestly expanding the City’s Overnight Warming Location (“OWL”) program following the pilot seasons as a temporary emergency response to provide overnight indoor refuge for unhoused individuals during severe weather conditions. Based on staff’s review, the program functioned as intended as a limited life-saving intervention and addressed a local gap in emergency overnight weather response.1 The program was initially established and described as the City’s Overnight Warming Location Program. Staff recommends broadening the terminology to “Overnight Warming/Cooling Location” to reflect the broader range of weather and environmental conditions that may create health and safety risks for unsheltered residents, including cold, rain, heat, smoke, and poor air quality.2 The proposed framework would retain operation during County of Santa Clara Inclement Weather Alert activations as the base activation level, while authorizing up to ten additional 1 The OWL program is one component of the City’s broader homelessness response ecosystem, which has included homeless outreach, Hotel de Zink, Heart and Home Collaborative, Homekey interim shelter, safe parking, affordable housing investments, and coordination with the County Office of Supportive Housing. 2 The program was initially established and described as the City’s Overnight Warming Location Program. Staff recommends broadening the terminology to “Overnight Warming/Cooling Location” to reflect the broader range of weather and environmental conditions that may create health and safety risks for unsheltered residents. Item 4 Item 4 Staff Report        Item 4: Staff Report Pg. 1  Packet Pg. 25 of 253  operator-directed activation nights when warranted. Operations would continue as a service provider–staffed model for Overnight Warming/Cooling Location (“OWL”) operations offers practical safety, operational, and cost benefits. Staff recommend transitioning to use of security personnel to be on an as needed basis, enabling greater support from train service provider personnel at a reduced cost. BACKGROUND 5, the pilot was designed as a temporary emergency measure to provide overnight indoor refuge during County of Santa Clara Inclement Weather Alert activations.6 ANALYSIS 5 City Council, March 11, 2024, Agenda Item #17, SR #2402-2694 6 The County of Santa Clara manages severe storms and cold snaps through AlertSCC, its official emergency notification system. During inclement weather alerts, the county activates temporary warming locations, coordinates sandbag distributions, and broadcasts localized safety warnings via text, email, and phone Item 4 Item 4 Staff Report        Item 4: Staff Report Pg. 2  Packet Pg. 26 of 253  Measure Pilot Result Total activation nights 16 nights Unduplicated participants served 33 unique participants Total bed-nights9 201 bed-nights Average nightly occupancy Approximately 12.6 participants per night Average occupancy rate 97% The pilot operated over a 2.5-week holiday period in December 2025 and provided 201 overnight indoor bed-nights for 33 unique participants. Participant demographics reflected the vulnerability of the population served: approximately one in four participants were women, one in three reported a disability, and the average participant age was approximately 50. Based on pilot operations, staff believes the program demonstrated value in several ways, including reducing overnight exposure to severe weather conditions for unsheltered residents; creating a defined emergency response option in North County when alternatives are limited; supporting engagement by trained provider staff; providing vital services such as food and dry clothing; and demonstrating that overnight weather activation can be operated in a controlled and manageable manner. The pilot also demonstrated that demand exceeded available capacity on multiple nights. In addition to the 201 bed-nights provided indoors, staff and the provider observed an average of approximately 2.8 additional individuals per night who could not be accommodated due to capacity limits, representing roughly 45 overflow instances over the 16-night activation period. Overall, the pilot demonstrated that a relatively modest City investment can provide targeted emergency overnight capacity during periods of elevated weather-related risk, while also identifying the need to consider capacity, overflow protocols, and service connection tracking in any future program design. Recommended Program Framework Staff recommends continuing the program under a more flexible and cost-conscious operating framework for the upcoming season, using funding already earmarked in the Human Services budget. First, staff recommends broadening the program framing from “Overnight Warming Location” to “Overnight Warming/Cooling Location.” This terminology better reflects the range of conditions that may create health and safety risks for unsheltered residents, including cold, rain, wind, heat, smoke, and poor air quality. 9 “Bed-nights” refers to the total number of overnight shelter stays provided. One person staying one night equals one bed-night; for example, 10 people staying for 3 nights equals 30 bed-nights. Item 4 Item 4 Staff Report        Item 4: Staff Report Pg. 3  Packet Pg. 27 of 253  Second, staff recommends preserving program operation during County of Santa Clara Inclement Weather Alert activations while authorizing up to 10 additional operator-directed activation nights during the contract term, subject to available funding. This added discretion is recommended because County activations may not always capture localized North County conditions or conditions that continue between formal County activations. City-directed activation nights would supplement, not replace, County-triggered activations. Option A – City-Provided Facility. The City would provide OWL space, or access to a City- controlled facility, and the operator would be responsible for staffing, operations, setup, close- down, supplies, participant oversight, and restoration of the space to required condition. Option B – Provider-Provided Facility. The operator would identify and secure a site suitable for overnight use, subject to City review for safety, accessibility, capacity, readiness on short notice, and operational practicality. This option recognizes that service providers may have established relationships with community-based, faith-based, nonprofit, or other partner facilities that may be better suited for this type of short-term emergency shelter operation. Allowing provider-identified sites would increase siting flexibility, reduce reliance on City- controlled facilities, and may improve the City’s ability to activate the program quickly when conditions warrant. Item 4 Item 4 Staff Report        Item 4: Staff Report Pg. 4  Packet Pg. 28 of 253  Issue Recommended Provider-Led Model Reduced Staffing + Dedicated Security by Default Core overnight function Two awake provider staff on site One provider staff plus one security guard Best fit for participant support Stronger alignment with trauma-informed service delivery and participant support More limited-service capacity during routine operations De-escalation and participant engagement Led by trained provider staff familiar with vulnerable populations Security may assist with site safety but is not a substitute for service engagement or trauma-informed de-escalation Operational flexibility Security or additional support can be added if conditions warrant Security cost is built into every activation, regardless of need Cost impact Lower estimated cost Higher estimated cost A provider-led model is recommended because routine OWL operations primarily require participant engagement, supervision, support, verbal de-escalation, and immediate operational response—functions that align more closely with trained service providers than dedicated security staff. Trained provider staff are better suited to the overnight shelter setting because they can use trauma-informed engagement, support participant stabilization, respond quickly to behavioral or interpersonal issues, and help maintain site safety and stability. While security may be appropriate in specific circumstances or at particular sites, staff does not recommend dedicated security as the default staffing model for every activation night. This recommendation is informed by the pilot program, where dedicated security provided mixed operational value and was not always fully integrated into site operations or responsive to overnight program needs. Although some performance issues could be addressed through stronger contract management and clearer expectations, a security-based model would still require additional oversight, cost more, and would not provide key program functions such as participant support, service connection, and provider-led de-escalation. For these reasons, staff recommends using security as a targeted tool when site conditions, risk assessment, or City direction warrant it, rather than building dedicated security into every activation by default. The provider-led model better aligns routine OWL operations with the City’s broader service-centered homelessness response framework, even though measurable housing exits are not the primary goal of the program. The proposed framework would also establish clearer monthly reporting for each activated month, including activation dates, County-triggered versus City-directed nights, cumulative City-directed nights, site used, staffing pattern, participant counts, turn-aways, and aggregated incident summaries. Item 4 Item 4 Staff Report        Item 4: Staff Report Pg. 5  Packet Pg. 29 of 253  Finally, the proposed framework would establish clearer reporting expectations. The operator would provide monthly reporting for each month in which the OWL is activated, including activation dates; County-triggered nights versus City-directed nights; cumulative use of City- directed nights; site used; staffing pattern; participant counts; turn-aways; and aggregated incident summaries. Provider-led model: one coordinator, two overnight staff, on-call support, and laundry; and Reduced staffing plus security model: one coordinator, one overnight staff, on-call support, laundry, and a dedicated security guard. Cost Scenario 15 Nights 20 Nights 25 Nights 30 Nights Savings under recommended model $1,311 $1,748 $2,185 $2,622 FISCAL/RESOURCE IMPACT Item 4 Item 4 Staff Report        Item 4: Staff Report Pg. 6  Packet Pg. 30 of 253  available $50,000 allocation, which is estimated to support up to approximately 30 activation nights under the provider-led model, actual number of activation nights would depend on final provider costs, activation frequency, site conditions, and operational needs. STAKEHOLDER ENGAGEMENT 11 and coordinated with relevant City departments to support implementation. If Council authorizes continuation of the program, staff will continue coordination with internal departments, service partners, and, as needed, site representatives to support implementation. If a provider-provided site is pursued, staff anticipates additional site-specific stakeholder communication and operational coordination as part of implementation. ENVIRONMENTAL REVIEW ATTACHMENTS APPROVED BY: 11 The City has provided public OWL and storm-related updates through City communication channels, including storm update webpages and public event notices. These communications have included site locations, operating hours, safety reminders, and information about County warming centers and related resources. (paloalto.gov) Item 4 Item 4 Staff Report        Item 4: Staff Report Pg. 7  Packet Pg. 31 of 253  Scope of Work and Operating Framework Overnight Warming/Cooling Location Program Attachment A Overnight Warming/Cooling Location Program Scope of Work and Operating Framework 1. Program Purpose The City’s Overnight Warming/Cooling Location Program, referred to as the “OWL Program,” is a limited, seasonal emergency response program intended to provide temporary overnight indoor refuge for unsheltered adults during periods of elevated weather -related or environmental health and safety risk. The OWL Program is intended to reduce overnight exposure to hazardous conditions, support basic life-safety needs, and provide a defined emergency response option when conditions warrant. The program is not intended to function as year -round shelter, transitional housing, permanent housing, medical care, or a comprehensive case management program. 2. Program Goals The goals of the OWL Program are to: 1. Provide temporary overnight indoor refuge during qualifying weather or environmental events; 2. Reduce risk of weather-related illness, injury, or death among unsheltered adults; 3. Maintain a safe, orderly, trauma-informed, and low-barrier overnight environment; 4. Provide basic supports such as seating or sleeping space, restrooms, water, light snacks or meals, dry clothing or blankets when available, and referrals to services; 5. Support coordination between the City, service providers, County partners, and other relevant stakeholders; and 6. Collect operational data to inform future City decision-making. Item 4 Attachment A - Overnight WarmingCooling Location Program Scope of Work and Operating Framework        Item 4: Staff Report Pg. 8  Packet Pg. 32 of 253  3. Activation Framework 3.1 County-Triggered Activations The OWL Program may operate during County of Santa Clara Inclement Weather Alert activations, subject to City direction, facility availability, provider readiness, staffing capacity, and available funding. County-triggered activations are intended to align the City’s response with regional emergency weather response efforts. 3.2 City-Directed Activations In addition to County-triggered activations, the City may authorize up to 10 additional City -directed activation nights during the contract term. City-directed activation nights may be used when local conditions, public health or safety concerns, service gaps, facility-specific considerations, or other City-identified needs warrant activation, even if County activation thresholds have not been met. City-directed activation nights are intended to supplement, not replace, County -triggered activations. 3.3 Conditions That May Support Activation The City may consider activation based on one or more of the following conditions: • Cold temperatures; • Rain or prolonged wet conditions; • Wind or storm conditions; • Heat; • Smoke or poor air quality; • Public health or safety concerns affecting unsheltered residents; • Closure, unavailability, or insufficiency of other emergency overnight options; • Anticipated unmet need in North County or Palo Alto; or • Other conditions identified by the City Manager or designee. 3.4 Activation Decision Authority Activation decisions shall be made by the City Manager or designee, in consultation with relevant City departments and the contracted operator as needed. Item 4 Attachment A - Overnight WarmingCooling Location Program Scope of Work and Operating Framework        Item 4: Staff Report Pg. 9  Packet Pg. 33 of 253  The City shall provide activation notice to the operator as early as practicable. The operator shall identify the minimum lead time required to activate staffing and site operations. 4. Eligible Participants The OWL Program shall serve unsheltered adults experiencing weather -related or environmental exposure risk. The program shall be operated as a low-barrier emergency overnight refuge, subject to site capacity, safety requirements, and reasonable participant conduct expectations. Unless otherwise approved by the City, the program shall serve adults age 18 and older. The operator shall establish protocols for responding to individuals who arrive with minor children, including referral to appropriate family shelter or emergency resou rces. 5. Facility Model Respondents or operators may propose one or both of the following facility arrangements. 5.1 Option A — City-Provided Facility Under this option, the City provides access to a City -controlled facility or designated space for OWL operations. The operator is responsible for: • Overnight staffing; • Participant intake and oversight; • Site setup; • Site close-down; • Supplies and operational materials, unless otherwise provided by the City; • Cleaning support as specified in the agreement; • Restoration of the space to the required daytime condition; • Incident response and reporting; and • Coordination with designated City staff. The City may establish facility-specific requirements related to access, security systems, restrooms, storage, custodial needs, fire/life-safety requirements, insurance, and hours of use. Item 4 Attachment A - Overnight WarmingCooling Location Program Scope of Work and Operating Framework        Item 4: Staff Report Pg. 10  Packet Pg. 34 of 253  5.2 Option B — Provider-Provided Facility Under this option, the operator identifies and secures a facility suitable for overnight OWL operations. Any provider-provided facility shall be subject to City review and approval. The City may consider: • Location and accessibility; • Proximity to transit or known areas of need; • Interior capacity; • Restroom access; • ADA accessibility or reasonable accommodation considerations; • Fire/life-safety readiness; • Ability to activate on short notice; • Insurance and liability requirements; • Site control or written authorization for use; • Neighborhood or site-specific operational considerations; • Ability to restore and secure the site after operations; and • Overall operational practicality. The operator shall be responsible for obtaining any necessary site permissions, agreements, or approvals unless otherwise agreed to by the City. 6. Operating Hours Unless otherwise approved by the City, OWL operations shall occur overnight. A typical operating schedule may include: Activity Illustrative Timeframe Staff arrival and setup 6:00 p.m. – 7:00 p.m. Participant check-in 7:00 p.m. – 9:00 p.m. Overnight operations 9:00 p.m. – 6:00 a.m. Morning departure 6:00 a.m. – 7:00 a.m. Close-down, cleaning, and restoration 7:00 a.m. – 8:00 a.m. Final hours shall be confirmed by the City and operator based on site requirements, participant needs, staffing availability, and activation conditions. Item 4 Attachment A - Overnight WarmingCooling Location Program Scope of Work and Operating Framework        Item 4: Staff Report Pg. 11  Packet Pg. 35 of 253  7. Capacity Program capacity shall be determined by the City in consultation with the operator and shall depend on the approved site, available staffing, fire/life-safety requirements, furnishings, restroom access, and operational feasibility. The operator shall not exceed the approved site capacity without prior City authorization. When capacity is reached, the operator shall implement turn -away and overflow protocols approved by the City, including documentation of unmet need and referral to alternative resources when available. 8. Staffing Model 8.1 Minimum Staffing The recommended operating model is provider-led and shall include, at minimum: • Two awake provider staff on site during overnight operations; • One designated program coordinator or supervisor responsible for planning, scheduling, reporting, and City coordination; • On-call supervisory support during activation hours; and • Additional staff as needed based on site conditions, capacity, participant needs, or City direction. The City may approve alternate staffing proposals if they provide equivalent or greater operational coverage and participant support. 8.2 Staff Qualifications Provider staff should have experience or training in one or more of the following areas: • Homeless services; • Trauma-informed care; • Harm reduction; • Verbal de-escalation; • Crisis response; • Working with vulnerable adults; Item 4 Attachment A - Overnight WarmingCooling Location Program Scope of Work and Operating Framework        Item 4: Staff Report Pg. 12  Packet Pg. 36 of 253  • Mandated reporting, if applicable; • Emergency procedures; • Basic first aid or CPR, preferred; and • Cultural competency and non-discrimination practices. 8.3 Security Dedicated security shall not be required by default for every activation night unless directed by the City or proposed by the operator and approved by the City. Security or additional site support may be added when warranted by: • Site-specific requirements; • Prior incidents or credible safety concerns; • Facility layout or access-control needs; • Large activation events; • Operator recommendation; • City risk assessment; or • City direction. Security personnel, if used, shall coordinate with provider staff and shall not replace provider staff responsible for participant engagement, support, and de -escalation. 9. Operator Responsibilities The operator shall be responsible for the following services and activities. 9.1 Pre-Activation Planning The operator shall: • Maintain an activation plan approved by the City; • Identify staffing availability and call-in procedures; • Maintain current contact information for City and provider staff; • Participate in pre-season planning meetings; • Conduct site walkthroughs and readiness checks as requested; • Develop site-specific operating procedures; • Maintain required supplies; and Item 4 Attachment A - Overnight WarmingCooling Location Program Scope of Work and Operating Framework        Item 4: Staff Report Pg. 13  Packet Pg. 37 of 253  • Confirm procedures for setup, check-in, overnight operations, close-down, cleaning, and reporting. 9.2 Activation Response Upon activation notice, the operator shall: • Confirm staffing availability; • Confirm site readiness; • Coordinate arrival and setup logistics; • Notify designated outreach or referral partners as directed by the City; • Prepare participant intake materials and supplies; • Open the site during approved operating hours; and • Maintain communication with City staff as needed. 9.3 Participant Intake and Oversight The operator shall: • Manage participant check-in; • Track participant counts; • Maintain an attendance log or equivalent record; • Communicate participant expectations; • Monitor participant safety and conduct; • Provide trauma-informed engagement and verbal de-escalation; • Support reasonable accommodations when feasible; • Maintain confidentiality of participant information; • Document turn-aways or overflow demand; and • Coordinate referrals to available services when appropriate. 9.4 Basic Services The operator shall provide or coordinate basic services, which may include: • Indoor overnight refuge; • Restroom access; • Water; • Light snacks or meals, if available; • Blankets, mats, cots, or other sleeping/resting supplies, depending on site setup; • Dry clothing, socks, hygiene supplies, or weather -related supplies, if available; Item 4 Attachment A - Overnight WarmingCooling Location Program Scope of Work and Operating Framework        Item 4: Staff Report Pg. 14  Packet Pg. 38 of 253  • Charging access, if feasible and safe; • Waste disposal; • Basic wellness observation; and • Referrals or information regarding community resources. 9.5 Site Setup and Close-Down The operator shall: • Set up the designated OWL space before participant arrival; • Arrange mats, cots, chairs, tables, signage, supplies, and intake area as applicable; • Maintain clear paths of travel and emergency exits; • Monitor restrooms and common areas during operations; • Close the site at the approved time; • Ensure all participants exit safely at close-down; • Remove or store program supplies; • Collect waste and personal items left behind in accordance with approved procedures; • Coordinate or perform cleaning as specified in the agreement; and • Restore the facility to the required condition for daytime use. 9.6 Incident Response The operator shall maintain and implement incident response procedures addressing: • Medical emergencies; • Behavioral incidents; • Participant conflict; • Substance use or suspected overdose; • Refusal to leave at close-down; • Lost or abandoned property; • Facility damage; • Fire alarms or evacuation; • Severe weather escalation; • Calls to 911, EMS, police, or fire; and • Notification to City staff. The operator shall immediately call 911 for life -threatening emergencies or conditions requiring emergency response. The operator shall notify the City of significant incidents as soon as practicable and provide written incident summaries consistent with reporting requirements. Item 4 Attachment A - Overnight WarmingCooling Location Program Scope of Work and Operating Framework        Item 4: Staff Report Pg. 15  Packet Pg. 39 of 253  10. Participant Expectations The operator shall establish participant expectations that are clear, reasonable, and appropriate for a low-barrier emergency refuge setting. Participant expectations may address: • Respectful conduct toward staff and other participants; • No violence, threats, or harassment; • No weapons; • No smoking or open flames inside the facility; • No property damage; • Compliance with basic safety instructions; • Respect for quiet hours; • Use of designated areas only; • Departure at close of operations; and • Compliance with site-specific requirements. Participant expectations should be applied consistently and in a manner that prioritizes safety, de - escalation, and access to emergency refuge whenever feasible. 11. Supplies and Equipment The operator shall provide, coordinate, or manage supplies necessary for OWL operations, unless otherwise specified by the City. Supplies may include: • Mats, cots, blankets, or sleeping supplies; • Disposable bedding or washable linens; • Personal protective equipment, if needed; • First aid kit; • Intake forms or digital tracking tools; • Flashlights or emergency lighting; • Snacks, meals, and water; • Hygiene supplies; • Dry socks, ponchos, or clothing items, if available; • Cleaning supplies; Item 4 Attachment A - Overnight WarmingCooling Location Program Scope of Work and Operating Framework        Item 4: Staff Report Pg. 16  Packet Pg. 40 of 253  • Trash bags and waste containers; • Signage; • Communication devices; and • Storage bins or carts. Laundry costs may be included in the operator’s budget, depending on the bedding model used. 12. Coordination and Communication The operator shall coordinate with City staff before, during, and after activations. Coordination may include: • Pre-season planning; • Activation confirmation; • Daily operational updates during activation periods; • Communication regarding capacity or turn -aways; • Incident notification; • Site issues or maintenance needs; • Outreach and referral coordination; • Post-activation debriefs; and • Monthly reporting. The City shall identify a primary program contact and backup contact for activation and operational coordination. 13. Data Collection and Reporting 13.1 Nightly Data For each activation night, the operator shall collect and maintain, at minimum: • Date of activation; • Activation type: County-triggered or City-directed; • Site used; • Operating hours; • Staffing pattern; • Number of participants served; • Number of unduplicated participants, if feasible; Item 4 Attachment A - Overnight WarmingCooling Location Program Scope of Work and Operating Framework        Item 4: Staff Report Pg. 17  Packet Pg. 41 of 253  • Number of turn-aways or individuals unable to be accommodated due to capacity; • Basic service connections or referrals provided; • Major incidents; • 911, EMS, police, or fire calls; • Site issues; and • Notes on unusual conditions or operational challenges. 13.2 Monthly Reporting For each month in which the OWL Program is activated, the operator shall submit a monthly report to the City that includes: • Activation dates; • County-triggered nights versus City-directed nights; • Cumulative use of City-directed activation nights; • Site used; • Staffing pattern; • Total participant counts; • Estimated unduplicated participants, if feasible; • Bed-nights provided; • Average nightly occupancy; • Turn-aways or overflow demand; • Referrals or service connections; • Aggregated incident summaries; • 911, EMS, police, or fire calls; • Supplies used or needed; • Operational issues; • Recommendations for improvement; and • Any other information reasonably requested by the City. 13.3 Participant Confidentiality The operator shall maintain participant confidentiality and shall report data to the City in aggregate unless individual-level information is required for emergency response, legal compliance, or another purpose authorized by the City and applicable law. Item 4 Attachment A - Overnight WarmingCooling Location Program Scope of Work and Operating Framework        Item 4: Staff Report Pg. 18  Packet Pg. 42 of 253  14. Performance Expectations The operator shall be expected to: 1. Respond to activation notices within the timeframe established in the agreement; 2. Maintain minimum staffing levels unless otherwise approved by the City; 3. Operate the site safely and consistently with the approved framework; 4. Maintain a trauma-informed and participant-centered environment; 5. Restore the site to required condition after each activation; 6. Track participant counts, turn-aways, and incidents; 7. Submit timely monthly reports; 8. Communicate promptly with the City regarding major operational issues; and 9. Participate in post-season evaluation. 15. Budget and Compensation The City anticipates funding the OWL Program on a seasonal, capped, emergency -response basis. The operator’s budget may include: • Program coordination; • Overnight provider staffing; • On-call supervisory support; • Supplies; • Laundry; • Food or snacks; • Transportation of supplies; • Site costs, if applicable; • Insurance or administrative costs, if allowable; • Security or additional site support, if approved by the City; and • Other direct operating costs approved by the City. Payment structure may be based on a combination of fixed readiness costs, per -activation costs, reimbursable expenses, or another structure determined through procurement and contract negotiation. The operator shall not exceed the approved contract amount without prior written City authorization. Item 4 Attachment A - Overnight WarmingCooling Location Program Scope of Work and Operating Framework        Item 4: Staff Report Pg. 19  Packet Pg. 43 of 253  16. Term The program term shall cover the upcoming OWL season, as defined in the final agreement. The City may include options to extend the agreement, amend the activation framework, or modify the scope of work subject to funding availability, contractor performance, operational need, and applicable City approval requirements. 17. Insurance, Compliance, and Contract Requirements The operator shall comply with all applicable City contracting requirements, including but not limited to: • Insurance; • Indemnification; • Business tax or registration requirements, if applicable; • Background check requirements, if applicable; • Nondiscrimination requirements; • Confidentiality requirements; • Data reporting requirements; • Emergency procedures; • Facility use requirements; • Procurement requirements; and • Any other requirements included in the final agreement. 18. City Responsibilities The City shall be responsible for: • Determining activation nights; • Identifying the City project manager or program contact; • Reviewing and approving the operating plan; • Reviewing and approving the site arrangement; • Providing access to City-controlled facilities, if applicable; • Coordinating with internal City departments as needed; • Reviewing reports and invoices; • Providing policy direction on City-directed activations; • Determining whether security or additional site support is required; and • Evaluating the program after the season. Item 4 Attachment A - Overnight WarmingCooling Location Program Scope of Work and Operating Framework        Item 4: Staff Report Pg. 20  Packet Pg. 44 of 253  19. Post-Season Evaluation Following the season, the operator shall participate in a post -season evaluation with City staff. The evaluation may include review of: • Total activation nights; • County-triggered versus City-directed activations; • Total bed-nights; • Unduplicated participants served, if feasible; • Average nightly occupancy; • Turn-aways; • Demographic information, if collected and appropriate to report in aggregate; • Referrals or service connections; • Incidents; • 911, EMS, police, or fire calls; • Site suitability; • Staffing adequacy; • Cost per activation; • Cost per bed-night; • Participant and staff feedback, if available; • Lessons learned; and • Recommendations for future program design. 20. Optional RFP / Procurement Language If this will be used in a solicitation, you may also add the following section. Proposal Requirements Respondents should submit a proposal that includes: 1. Organizational experience providing homeless services, emergency shelter, warming/cooling center operations, crisis response, or comparable services; 2. Proposed staffing model; 3. Proposed activation response time; 4. Proposed facility arrangement, including whether the respondent proposes a City -provided facility, provider-provided facility, or both; Item 4 Attachment A - Overnight WarmingCooling Location Program Scope of Work and Operating Framework        Item 4: Staff Report Pg. 21  Packet Pg. 45 of 253  5. Site information, if proposing a provider -provided facility; 6. Description of participant intake and oversight procedures; 7. Approach to trauma-informed care and de-escalation; 8. Safety and incident response protocols; 9. Approach to supplies, food, laundry, and site restoration; 10. Data collection and reporting capacity; 11. Proposed budget by activation scenario or per -night cost; 12. Insurance and compliance capacity; 13. References for similar work; and 14. Any assumptions, exclusions, or requested City support. Criteria Considerations Relevant experience Experience with unsheltered residents, emergency shelter, warming/cooling centers, or crisis response Operational readiness Ability to activate on short notice and maintain minimum staffing Staffing model Strength of provider-led staffing, supervision, and backup support Site feasibility Safety, accessibility, capacity, location, and readiness of proposed site, if applicable Participant support approach Trauma-informed care, de-escalation, low- barrier access, and service connection Safety and risk management Incident protocols, emergency procedures, communication, and site oversight Reporting capacity Ability to track activations, participant counts, turn-aways, incidents, and referrals Cost reasonableness Alignment of proposed budget with scope, activation assumptions, and City funding limits Flexibility Ability to support both County-triggered and City-directed activations Overall value Best fit for City needs, budget, operational practicality, and life-safety goals Item 4 Attachment A - Overnight WarmingCooling Location Program Scope of Work and Operating Framework        Item 4: Staff Report Pg. 22  Packet Pg. 46 of 253  City Council Staff Report From: City Manager Report Type: CONSENT CALENDAR Lead Department: Public Works Meeting Date: August 17, 2026 Report #:2606-6457 TITLE Approval of Contract Number C27196410 with Salas O’Brien Engineers, Inc. for an Amount Not- to-Exceed $298,716 to Provide Professional Design Services for the Electrification of City Facilities Capital Improvement Program Project PE-24001, for a Contract Term through August 24, 2029; CEQA Status – Exempt under CEQA Guidelines Section 15301 RECOMMENDATION Staff recommends that the City Council approve and authorize the City Manager or their designee to execute Contract No. C27196410 with Salas O’Brien Engineers, Inc. to provide professional design services for a total not-to-exceed amount of $298,716, including $244,288 for basic services and $54,428 for additional services, for the Electrification of City Facilities Capital Improvement Program Project (CIP PE-24001). The contract term will be through August 24, 2029. BACKGROUND In alignment with the City’s goal of reducing greenhouse gas (GHG) emissions 80% below 1990 levels by 2030 (“80 x 30”),1 the City adopted the Sustainability and Climate Action Plan (“S/CAP”),2 which provides a framework for achieving the City’s sustainability and climate goals. In June 2023, the City adopted the 2023–2025 S/CAP Workplan, which identifies Electrification of City Facilities as a key strategy to reduce emissions by transitioning municipal buildings from gas-burning equipment to electric alternatives.3 On March 2, 2026, the City Council approved the 2026–2027 S/CAP Workplan, which continues to identify facility electrification as a key strategy for municipal assets and operations and advances implementation through the Capital 1 City Council, April 18, 2016; Agenda Item #10; SR #6754 https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=79086 2 City Council, October 3, 2022; Agenda Item #9; SR #14720 https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=82036 3 City Council, June 5, 2023; Agenda Item #14; SR #2303-1158 https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=82342&dbid=0&repo=PaloAlto Item 5 Item 5 Staff Report        Item 5: Staff Report Pg. 1  Packet Pg. 47 of 253  Improvement Program (CIP).7 To support implementation efforts, the City conducted a Facility Condition Assessment (FCA), which included identifying City facilities with existing gas-burning equipment and the equipment’s remaining useful life. Based on the FCA findings, the following five facilities were identified to be included in the City Facility Electrification “pilot” program and was presented to the Climate Action and Sustainability Committee on December 12, 2025.8 1. Golf Course Pro Shop/Hofbrau 2. College Terrace Library 3. Downtown Library 4. Art Center 5. Ventura Community Center ANALYSIS During the December 12, 2025, Climate Action and Sustainability Committee discussion of the Facility Electrification Pilot Program, Committee members raised questions regarding the feasibility of performing facility electrification assessments and design services with City staff rather than utilizing consultant support.9 While City staff provide project management, facility operations expertise, and technical oversight, the scope of work for this effort includes specialized engineering assessments, electrical infrastructure evaluations, HVAC system analysis, and development of technical design documents. Establishing comparable in-house capabilities would require additional staffing resources, specialized training, software tools, and dedicated capacity beyond current staffing levels. Additionally, as part of the Fiscal Year 2027 budget balancing, a position was eliminated that worked on building infrastructure projects, further limiting staff’s capacity. Staff also checked with three neighboring cities and confirmed that they do not have staff with the technical expertise to design these types of projects in- house, and also rely on professional services support. The pilot program will provide an opportunity for staff to gain familiarity with facility electrification design approaches, permitting requirements and implementation considerations while leveraging consultant expertise to evaluate facility-specific conditions and develop recommendations and staff will be able to use the lessons learned from the pilot projects on future sites as appropriate. 7 City Council, March 2, 2026; Agenda Item #9; SR #2602-5985, https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=86664&dbid=0&repo=PaloAlto 8 Climate Action and Sustainability Committee, December 12, 2025; Agenda Item #1; SR #2507-5029, https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=84027&dbid=0&repo=PaloAlto 9 Climate Action and Sustainability Committee, December 12, 2025; Agenda Item #1; SR #2507-5029, https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=84027&dbid=0&repo=PaloAlto Item 5 Item 5 Staff Report        Item 5: Staff Report Pg. 2  Packet Pg. 48 of 253  Solicitation Process Table 1: Summary of Request for Proposal Proposal Description Electrification of City Facilities Proposed Length of Project 36 Months Number of Vendors Notified 3812 Number of Proposal Packages Downloaded 67 Total Days to Respond to Proposal 33 Pre-Proposal Meeting Yes, Non-Mandatory Pre Proposal Meeting Date March 9, 2026 Number of Proposals Received 10 Proposal Price Range $244,287-$1,556,499 Public Link to Solicitation https://procurement.opengov.com/portal/palo-alto- ca/projects/238336 FISCAL/RESOURCE IMPACT Item 5 Item 5 Staff Report        Item 5: Staff Report Pg. 3  Packet Pg. 49 of 253  STAKEHOLDER ENGAGEMENT Stakeholder engagement for the Electrification of City Facilities included coordination with the Public Works Facilities Section and the Climate Action and Sustainability Committee. As the project advances, Staff will continue coordination with Public Works Facilities and engage the Utilities Department, as appropriate. ENVIRONMENTAL REVIEW The project is categorically exempt from the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines Section 15301 (Existing Facilities), as the work consists of minor alterations to existing public facilities involving negligible or no expansion of existing use. ATTACHMENTS Attachment A: Contract No. C27196410 with Salas O’Brien APPROVED BY: Brad Eggleston, Director Public Works/City Engineer Item 5 Item 5 Staff Report        Item 5: Staff Report Pg. 4  Packet Pg. 50 of 253  Professional Services Rev. Oct 16,2024 Page 1 of 30 CITY OF PALO ALTO CONTRACT NO. C27196410 AGREEMENT FOR PROFESSIONAL SERVICES BETWEEN THE CITY OF PALO ALTO AND SALAS O’BRIEN ENGINEERS, INC. This Agreement for Professional Services (this “Agreement”) is entered into as of the 24th day of August, 2026 (the “Effective Date”), by and between the CITY OF PALO ALTO, a California chartered municipal corporation (“CITY”), and SALAS O’BRIEN ENGINEERS, INC., a California corporation, located at 305 South 11th Street, 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 electrify city facilities (the “Project”) and desires to engage a consultant to provide building assessment, design, cost estimates, and construction administration services for five facilities 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. Compensation for on-call Services shall be specified by CITY in the Task Order, based on Docusign Envelope ID: DE969B7B-EDC6-888D-804A-FE3ED51B2191 Item 5 Attachment A - Contract No. C27196410 with Salas O’Brien        Item 5: Staff Report Pg. 5  Packet Pg. 51 of 253  Professional Services Rev. Oct 16,2024 Page 2 of 30 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 August 24, 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 Two Hundred Forty- Four Thousand Two Hundred Eighty-Seven Dollars and Fifty Cents ($244,287.50). 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-Four Thousand Four Hundred Twenty-Eight Dollars and Fifty Cents ($54,428.50) 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 Two Hundred Ninety-Eight Thousand Seven Hundred Sixteen Dollars ($298,716.00), as detailed in Exhibit C. Docusign Envelope ID: DE969B7B-EDC6-888D-804A-FE3ED51B2191 Item 5 Attachment A - Contract No. C27196410 with Salas O’Brien        Item 5: Staff Report Pg. 6  Packet Pg. 52 of 253  Professional Services Rev. Oct 16,2024 Page 3 of 30 “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. Docusign Envelope ID: DE969B7B-EDC6-888D-804A-FE3ED51B2191 Item 5 Attachment A - Contract No. C27196410 with Salas O’Brien        Item 5: Staff Report Pg. 7  Packet Pg. 53 of 253  Professional Services Rev. Oct 16,2024 Page 4 of 30 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: DE969B7B-EDC6-888D-804A-FE3ED51B2191 Item 5 Attachment A - Contract No. C27196410 with Salas O’Brien        Item 5: Staff Report Pg. 8  Packet Pg. 54 of 253  Professional Services Rev. Oct 16,2024 Page 5 of 30 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 Jeffry Gosal 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 Kimberly Jarero, Public Works Department, Engineering Division, 250 Hamilton Ave, Palo Alto, CA, 94301, Telephone: (650) 838-2926. 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 representatives to audit, at any reasonable time during the term of this Agreement and for four (4) Docusign Envelope ID: DE969B7B-EDC6-888D-804A-FE3ED51B2191 Item 5 Attachment A - Contract No. C27196410 with Salas O’Brien        Item 5: Staff Report Pg. 9  Packet Pg. 55 of 253  Professional Services Rev. Oct 16,2024 Page 6 of 30 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. [Option A applies to the following design professionals pursuant to Civil Code Section 2782.8: architects; landscape architects; registered professional engineers and licensed professional land surveyors.] 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 third party 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”) to the extent that such Claims arise out of, pertain to, or relate to the negligence, recklessness, or willful misconduct of CONSULTANT, its officers, employees, agents or contractors under this Agreement, regardless of whether or not it is caused in part by an Indemnified Party. CITY will reimburse CONSULTANT for the proportionate percentage of defense costs exceeding CONSULTANT’s proportionate percentage of fault as determined by the final judgment of a court of competent jurisdiction. [Option B applies to any consultant who does not qualify as a design professional as defined in Civil Code Section 2782.8.] 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 Docusign Envelope ID: DE969B7B-EDC6-888D-804A-FE3ED51B2191 Item 5 Attachment A - Contract No. C27196410 with Salas O’Brien        Item 5: Staff Report Pg. 10  Packet Pg. 56 of 253  Professional Services Rev. Oct 16,2024 Page 7 of 30 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 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. Docusign Envelope ID: DE969B7B-EDC6-888D-804A-FE3ED51B2191 Item 5 Attachment A - Contract No. C27196410 with Salas O’Brien        Item 5: Staff Report Pg. 11  Packet Pg. 57 of 253  Professional Services Rev. Oct 16,2024 Page 8 of 30 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. 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 Docusign Envelope ID: DE969B7B-EDC6-888D-804A-FE3ED51B2191 Item 5 Attachment A - Contract No. C27196410 with Salas O’Brien        Item 5: Staff Report Pg. 12  Packet Pg. 58 of 253  Professional Services Rev. Oct 16,2024 Page 9 of 30 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 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 Docusign Envelope ID: DE969B7B-EDC6-888D-804A-FE3ED51B2191 Item 5 Attachment A - Contract No. C27196410 with Salas O’Brien        Item 5: Staff Report Pg. 13  Packet Pg. 59 of 253  Professional Services Rev. Oct 16,2024 Page 10 of 30 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 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). OR 26.1. This Project is subject to prevailing wages and related requirements as a “public works” under California Labor Code Sections 1720 et seq. and related regulations. CONSULTANT is required to pay general prevailing wages as defined in California Labor Code Section 1773.1 and Subchapter 3, Title 8 of the California Code of Regulations Section 16000 et seq., as amended from time to time. Pursuant to Labor Code Section 1773, the CITY has obtained the general prevailing rate of per diem wages and the general rate for holiday and overtime work in this locality for each craft, classification, or type of worker needed to execute the contract for this Project from the State of California Department of Industrial Relations (“DIR”). Copies of these rates may be obtained at the CITY’s Purchasing Department office. The general prevailing wage rates are also available at the DIR, Division of Labor Statistics and Research, web site (see e.g. http://www.dir.ca.gov/DLSR/PWD/index.htm) as amended from time Docusign Envelope ID: DE969B7B-EDC6-888D-804A-FE3ED51B2191 Item 5 Attachment A - Contract No. C27196410 with Salas O’Brien        Item 5: Staff Report Pg. 14  Packet Pg. 60 of 253  Professional Services Rev. Oct 16,2024 Page 11 of 30 to time. CONSULTANT shall post a copy of the general prevailing wage rates at all Project job sites and shall pay the adopted prevailing wage rates as a minimum. CONSULTANT shall comply with all applicable provisions of Division 2, Part 7, Chapter 1 of the California Labor Code (Labor Code Section 1720 et seq.), including but not limited to Sections 1725.5, 1771, 1771.1, 1771.4, 1773.2, 1774, 1775, 1776, 1777.5, 1782, 1810, 1813 and 1815, and all applicable implementing regulations, including but not limited to Subchapter 3, Title 8 of the California Code of Regulations Section 16000 et seq. (8 CCR Section 16000 et seq.), as amended from time to time. CONSULTANT shall comply with the requirements of Exhibit E, entitled “DIR REGISTRATION FOR PUBLIC WORKS CONTRACTS”, for any contract for public works construction, alteration, demolition, repair or maintenance, including but not limited to the obligations to register with, and furnish certified payroll records directly to, DIR. 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 a 9204 Public Works Project and is required to comply with the claims procedures set forth in Exhibit F, entitled “Claims for Public Contract Code Section 9204 Public Works Projects”. OR 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 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 Docusign Envelope ID: DE969B7B-EDC6-888D-804A-FE3ED51B2191 Item 5 Attachment A - Contract No. C27196410 with Salas O’Brien        Item 5: Staff Report Pg. 15  Packet Pg. 61 of 253  Professional Services Rev. Oct 16,2024 Page 12 of 30 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 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 Docusign Envelope ID: DE969B7B-EDC6-888D-804A-FE3ED51B2191 Item 5 Attachment A - Contract No. C27196410 with Salas O’Brien        Item 5: Staff Report Pg. 16  Packet Pg. 62 of 253  Professional Services Rev. Oct 16,2024 Page 13 of 30 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. Docusign Envelope ID: DE969B7B-EDC6-888D-804A-FE3ED51B2191 Item 5 Attachment A - Contract No. C27196410 with Salas O’Brien        Item 5: Staff Report Pg. 17  Packet Pg. 63 of 253  Professional Services Rev. Oct 16,2024 Page 14 of 30 CONTRACT No. C27196410 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 SALAS O’BRIEN ENGINEERS, INC. Officer 1 By: ________________________________ Name: Leslie Locsin Title: Vice President Officer 2 By: ________________________________ Name: Grant Reindl Title: CFO Docusign Envelope ID: DE969B7B-EDC6-888D-804A-FE3ED51B2191 Item 5 Attachment A - Contract No. C27196410 with Salas O’Brien        Item 5: Staff Report Pg. 18  Packet Pg. 64 of 253  Professional Services Rev. Oct 16,2024 Page 15 of 30 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. BACKGROUND INFORMATION The City of Palo Alto ("City") has long been a leader in sustainability, making significant progress towards reducing its carbon impacts, greenhouse gas (GHG) emissions, and resource consumption. In October 2022, the City adopted a carbon neutrality goal that helps support its existing sustainability goal of cutting emissions 80% below 1990 levels by 2030, also known as ("80x30 Goal). In June 2023, the City adopted the 2022 Sustainability and Climate Action Plan (“S/CAP”), a comprehensive roadmap detailing how the City intends to meet its carbon reduction targets while simultaneously enhancing the natural environment, preparing for climate-related impacts, and boosting quality of life for residents. Although greenhouse gas reduction is a core aim, the City embraces a holistic definition of sustainability. The plan is structured around eight key areas of focus: Climate Action, Energy, Mobility, Electric Vehicles, Water, Climate Adaptation and Sea Level Rise, Natural Environment, and Zero Waste. The City developed the 2023-2025 S/CAP Work Plan that outlines strategy to help support and meet the S/CAP goals. One key strategy is the City Facility Electrification (“Electrification”) initiative, which aims to electrify municipal buildings and reduce reliance on natural gas. To support the Electrification efforts, the City completed a Facility Condition Assessment (“FCA”) in 2023 to evaluate all municipal facilities—including their operational status—to specifically help identify existing gas-burning systems. This assessment helps provide a crucial understanding of our existing buildings. To advance Electrification initiative for City owned Facilities, the City now seeks a qualified design firm ("Consultant") to provide professional design and construction administration services. This initiative serves as a “pilot” project—specifically targeting the electrification of an initial five municipal facility buildings with a portion of the project budget reserved for on-call design services to support additional electrification projects as opportunities arise. The project will follow the traditional design–bid–build delivery method. Docusign Envelope ID: DE969B7B-EDC6-888D-804A-FE3ED51B2191 Item 5 Attachment A - Contract No. C27196410 with Salas O’Brien        Item 5: Staff Report Pg. 19  Packet Pg. 65 of 253  Professional Services Rev. Oct 16,2024 Page 16 of 30 Services must be provided by a licensed professional and may include, but are not limited: architect, electrical engineer, mechanical engineer, plumbing engineer, structural engineer, cost consultant, and other specialty consulting as needed. DESIGN CONSIDERATIONS The City plans to phase out gas-burning equipment in municipal facilities and transition to fully electrified systems. The scope of work includes, but is not limited to: • Complying with all applicable codes, laws and regulations including the California Building Code, Mechanical, Plumbing, Electrical, Fire code, California Green Building Code, ADA standards, and City of Palo Alto Municipal Codes, etc. • Assessing existing gas-powered units and their functions • Designing new electrical systems that maintain or improve current building performance • Converting gas-powered systems, including but not limited to, mechanical, heating, and cooling systems to electric alternatives • Supporting and integrating existing electric mechanical systems to ensure compatibility • Evaluating the current infrastructure to determine its capacity to support new electric systems • Performing load calculations and electrical system upgrades based on equipment replacements. • Address design proficiency, energy savings, code compliance, and aesthetics • Ensuring all upgrades meet code requirements for clearances, access pathways, working clearances, and overall compliance. • Providing detailed cost estimates at each design phase • Offering innovative cost-effective design solutions to enhance performance and sustainability • Advising and guiding City staff on best practices, emerging technologies, and implementation strategies The Consultant is expected to be fully versed in all permitting requirements for municipal facility electrification projects, including coordination with the City’s Planning Department, Building Division, and other relevant regulatory agencies. The Consultant shall ensure that designs meet all code and permitting requirements necessary for construction and operation. The City has identified certain equipment units for potential electrification based on its review of the FCA. The FCA reports pertaining to electrification are provided for reference only; the Consultant must independently verify conditions, evaluate options, and make recommendations for electrification aligned with the City’s goals, building operations, lifecycle, and cost- effectiveness. To optimize use of City assets, the City intends to prioritize electrification of equipment that is near their End of Useful (EUL), and to evaluate the unit’s Remaining Useful Life (RUL) of other equipment to determine whether electrification is practical and cost-effective when work is already occurring within a facility. The Consultant shall incorporate this evaluation when recommending unit replacements and developing designs acceptable to the City. Docusign Envelope ID: DE969B7B-EDC6-888D-804A-FE3ED51B2191 Item 5 Attachment A - Contract No. C27196410 with Salas O’Brien        Item 5: Staff Report Pg. 20  Packet Pg. 66 of 253  Professional Services Rev. Oct 16,2024 Page 17 of 30 This program represents a “pilot” for five buildings. Ultimately, a total of 18 facilities is expected to undergo electrification in phases. The City may extend the contract for additional services as needed. Pilot Facilities and Specific Equipment Units: • Art Center (26,441 SF) o Water Heater, Gas, Residential, 50 GAL - Basement o Ceramics Equipment, Kiln, 475 CFH - Kiln Room • College Terrace Library (5,050 SF) o Water Heater, Gas, Tankless, 3.2 GPM - Attic • Downtown Library (8,741 SF) o Water Heater, Gas, Tankless, 3.2 to 6.4 GPM - Janitor Closet o Packaged Unit, RTU, Pad or Roof-Mounted, 26 to 50 TON - Roof • Golf Course Pro Shop/ Cafe (12,406 SF) o Packaged Unit, RTU, Pad or Roof-Mounted, 4 TON - Exterior o Packaged Unit, RTU, Pad or Roof-Mounted, 6 to 7.5 TON - Exterior o Packaged Unit, RTU, Pad or Roof-Mounted, 8 to 10 TON - Exterior o Water Heater, Gas, Commercial (200 MBH), 100 to 199 GAL - Mechanical Room o Boiler, Gas, HVAC, 251 to 500 MBH - Mechanical Room o Foodservice Equipment – Kitchen ▪ 5 burner gas flat top ▪ 2 burner stovetop ▪ 2 deep frying bins ▪ 4 burner gas stovetop ▪ 3 gas ovens • Ventura Community Center (21,481 SF) o Water Heater, Gas, Residential, 40 GAL - Boiler Room o Water Heater, Gas, Residential, 50 GAL – Kitchen o Water Heater, Gas, Residential, 50 GAL - Admin Office o Furnace, Gas, 80 MBH - MPR o Foodservice Equipment, Range/Oven, 8-Burner - Kitchen o Boiler, Gas, HVAC, 1000 MBH - Boiler Room o Boiler, Gas, HVAC, 750 MBH - Boiler Room These facilities are to remain operational and occupied during entire design process The Consultant shall provide design services for the five identified pilot facilities concurrently. CITY DUTIES During the term of the Consultant’s professional services, the following items will be the responsibility of the City. A. City’s Project Manager or authorized designee shall manage Consultant’s performance. Consultant shall receive final direction only from the Project Manager or his or her authorized designee. The Project Manager shall resolve any conflicting direction from other groups, departments, or agencies. B. City will provide reviews and comment on what may be necessary to complete design milestones and/or approve completion of design milestones and cost estimates. At the Docusign Envelope ID: DE969B7B-EDC6-888D-804A-FE3ED51B2191 Item 5 Attachment A - Contract No. C27196410 with Salas O’Brien        Item 5: Staff Report Pg. 21  Packet Pg. 67 of 253  Professional Services Rev. Oct 16,2024 Page 18 of 30 completion of each phase, City will provide written authorization to the Consultant to proceed to the next phase. The time for City’s review will depend, in part of City’s satisfaction with the deliverables and whether further revision or cost reconciliation is required. C. City will provide available record drawings and as-built documents for the project facilities to the extent they exist. Consultant shall develop CAD backgrounds as necessary to prepare the contract documents where complete as-built CAD background drawings are unavailable. D. City will pay for permits and application fees as required by design. CONSULTANTS’ SCOPE OF SERVICES The Consultant’s basic services for City Facility Electrification consists of 8 Tasks: 1. Site Assessment and Programming 2. Schematic Design 3. Design Development 4. Construction Documents 5. Permitting 6. Project Bid Support 7. Construction Administration 8. Project Closeout All buildings shall remain operational and occupied during entire design and construction process. The consultant shall develop an approach including phased construction and only suggest temporary systems if necessary to maintain operations for facility. The Consultant will be responsible for surveying the various sites listed and will coordinate through the Project Manager. Consultant includes Building Automation System integration for Art Center and Downtown Library. Consultant shall treat each building facility as a separate project, each with its own deliverables, permitting, cost, schedule, etc. Consultant personnel shall not have direct contact with minors and shall coordinate site access with City’s Project Manager. Consultant will be escorted when required. Consultant shall provide CAD backgrounds as required for a full document if as-built CAD if City is unable to provide. Task 1 – Site Assessment and Programming 1.1 Project Kick-off Meeting A. Consultant shall attend project kick-off meeting scheduled by the City’s Project Manager which will include an introduction to City Facilities Maintenance Team (“Facilities”), City Utilities, and any other relevant party of the City. The Consultant shall ensure the main point of contact for the project is present, and any other team member that is will be considered part of the team. B. Consultant shall also attend building project introductory meeting with end/user to discuss building concerns and needs. Docusign Envelope ID: DE969B7B-EDC6-888D-804A-FE3ED51B2191 Item 5 Attachment A - Contract No. C27196410 with Salas O’Brien        Item 5: Staff Report Pg. 22  Packet Pg. 68 of 253  Professional Services Rev. Oct 16,2024 Page 19 of 30 C. Consultant shall meet with City’s Project Manager, Facilities, and relevant stakeholders to discuss project goals, timelines, sustainability targets, design standards, and needs of the building. D. Consultant shall provide prior to the project kick-off meeting a list of available dates for site assessment so that this can be coordinated with Facilities and the building user/manager. E. Consultant shall review the FCA prior to the project kick-off meeting but shall treat the FCA as reference only. Consultant shall prepare any questions pertaining to performance goals, basis of design, constraints, and survey strategy, and shall independently verify conditions and evaluate which equipment units should be electrified. 1.2 Site Surveys A. Consultant shall include separate site visits to survey each building, one site visit at minimum to understand full scope of work required and existing function of each facility. B. Consultant will coordinate, schedule, and receive authorization prior to any site visit. Coordination of visits will be coordinated through the City’s Project Manager. C. Consultant shall work with City’s Project Manager to identify the existing conditions and analyze the buildings’ functional needs and include recommendations. D. Consultant shall review building as-built drawings (if available), utility data, and FCA reports prior to site survey visit that will be provided by the City’s Project Manager. E. Consultant shall consider the RUL or EUL of the equipment to be electrified and provide an updated assessment analysis if units not approaching EUL, would be electrified regardless due to the phasing of construction, operation of the units for functionality of the building, and if cost analysis is beneficial to the City. F. Consultant shall perform electrical load calculations and evaluate existing building electrical infrastructure to determine upgrades required to support the proposed electrification improvements. Consultant shall notify the City if calculated loads indicat e that utility coordination may be required. 1.3 Site Assessment Reports and Programming A. Consultant shall provide separate reports for each building facility as each building will require different needs. B. Consultant shall gather information from site visits and provide an assessment report that includes electrification recommendations. Recommendations must be based on the Consultant’s independent evaluation and may differ from the FCA findings if warranted by building operations, lifecycle, or cost considerations. C. Consultant shall provide a summary report of findings and recommendations including items noted above to help City further understand existing facility condition and help provide design direction with will help commence the beginning of Task 2. D. Consultant shall include a study in the report that includes at least three vendors for equipment to ensure that multiple options are available during the construction phase. E. Consultant shall identify and implement opportunities to help accommodate existing occupants with minimal disruption during construction. F. Deliverables shall be electronic, either PDF or Word document. Draft reports can be submitted via Microsoft Word. Final reports and deliverables of survey assessment shall be provided in PDF. Docusign Envelope ID: DE969B7B-EDC6-888D-804A-FE3ED51B2191 Item 5 Attachment A - Contract No. C27196410 with Salas O’Brien        Item 5: Staff Report Pg. 23  Packet Pg. 69 of 253  Professional Services Rev. Oct 16,2024 Page 20 of 30 G. The City will review the site assessment report provided by the consultant. Following this review, the City will schedule a follow-up meeting with Consultant, Facilities, and relevant parties to review, discuss, and ask questions of assessment report. This meeting will include an agreed upon deadline date for the Schematic Design procurement, City and Facility review time and comments and target scheduled date to hold a Schematic Design Review Meeting. Once all has been clarified, the City Project Manager will provide direction to Consultant to begin Task 2. Task 2 – Schematic Design A. Consultant and relevant design professionals shall provide a schematic design incorporating information gathered from the site survey findings. B. The schematic design shall be a preliminary package that includes, but is not limited to, the demolition of existing units, capping or removal of unused lines pertaining to mechanical, electrical, plumbing, low voltage, etc., and must include the development of new design drawings. This includes infrastructure, pathways, scale, schematic pathways, equipment schedule, and conceptual plans. It will be the responsibility of the consultant to consider runs, bends, linear footage when designing and ensure the design is compliant to the manufacturer specifications and requirements. C. Consultant shall include an outline of specifications, equipment schedule, and project schedule for City and Facilities to review. D. Consultant shall include schematic level cost estimate upon completion of the schematic design for each building. E. Consultant shall provide deliverables in electronic form for the schematic design. F. Consultant shall meet with City to review design, equipment schedule, cost estimate, and City and Facility comments, to identify opportunities for enhancement or necessity for value engineering. G. City will review and approve schematic design after comments have been addressed and revisions to these comments have been made. Task 3 – Design Development A. Consultant shall refine and update the schematic design drawings for each building in response to comments from City, Facilities, and any other City representatives. Drawings shall further include but is not limited to demolition plans, new construction line diagrams, new equipment, new underground and site utility if applicable, detailed equipment schedule, etc. B. Consultant shall coordinate and meet with the project team, Facilities, Planning, Buildings, Utilities, as needed to help refine the Design Development drawing sets. C. Consultant shall provide refined specifications, equipment list, and technical specifications. D. Upon completion of the design development, Consultant shall provide a design- development level construction cost estimate and project schedule including time for permits for each building. E. Consultant shall provide deliverables in PDF version. F. Consultant shall meet with City to review design, equipment schedule, cost estimate, and City and Facility comments, to identify opportunities for enhancement or necessity for value engineering. Docusign Envelope ID: DE969B7B-EDC6-888D-804A-FE3ED51B2191 Item 5 Attachment A - Contract No. C27196410 with Salas O’Brien        Item 5: Staff Report Pg. 24  Packet Pg. 70 of 253  Professional Services Rev. Oct 16,2024 Page 21 of 30 G. City will review and approve development design after comments have been addressed and revisions to these comments have been made. Task 4 – Construction Documents A. The Consultant shall acknowledge that Construction Documents will be submitted at 60%, 95%, and 100% completion stages for each building. Deadlines for each submission will be determined during project coordination, and both the City and the Consultant wil l be provided with reasonable timeframes for review and execution. B. The Consultant shall refine and update the design development drawings for each building in response to comments from the City, Facilities, and other designated City representatives. The drawings shall include, but are not limited to, demolition plans, new construction line diagrams, new equipment layouts, applicable underground and site utilities, ADA-compliant design elements, code-required working clearances, implementation of City of Palo Alto Municipal Code, etc. C. Consultant shall coordinate and meet with the City’s Project Manager, Facilities, Planning, Buildings, Utilities, as needed to help refine the Construction Document drawing sets. D. Consultant shall provide refined specifications, finalize equipment list, technical specifications, updated cost estimates, and updated project schedule for each building. E. Consultant shall coordinate technical specifications with City’s General Conditions and Construction Contract Template. F. Consultant shall ensure that 60%, 95%, and 100% must be provided in a suitable level for Construction. The intent for 60% Construction Document Review by City and Facilities is to help review for constructability and verify previous comments were implemented. G. Consultant shall provide 60% Contract Document including an updated cost estimate and project schedule including time for permits for each building. City and Facilities will review these deliverables and provide comments to help produce the 95% Construction Documents. H. Consultants will have the opportunity to meet with City and Facilities to review comments for implementation to help produce the 95% Construction Documents. I. After discussing 60% Construction Document comments, Consultant shall take 60% Construction Document comments and utilize these notes to produce help produce the 95% Contract Documents. J. Consultant shall provide 95% Construction Documents intended for the Building Department plan check review. The Project Manager will review 95% Construction Document in parallel to the permit review. The City entrusts that the Consultant will have incorporated previous comments prior to submitting to Building Department plan check review. K. Consultant shall prepare final 100% complete Construction Documents based on feedback provided at the 95% review and the permit review. These 100% documents will be used as the Construction Documents to be issued for bid to procure the construction contract(s). All exhibits, drawings, specifications, reports, and other materials required to support complete construction bid shall be provided. Task 5 – Permitting A. Consultant shall submit and obtain a building permit by providing all necessary drawings, calculations, and supporting documentation, and by coordinating with the Planning Docusign Envelope ID: DE969B7B-EDC6-888D-804A-FE3ED51B2191 Item 5 Attachment A - Contract No. C27196410 with Salas O’Brien        Item 5: Staff Report Pg. 25  Packet Pg. 71 of 253  Professional Services Rev. Oct 16,2024 Page 22 of 30 Department and Building Division, as required. B. The Consultant shall review and respond to all plan check comments and track and manage comments on a spreadsheet. C. The Consultant shall be responsible for all services, exhibits, and applications needed to secure permits or approvals known at the time the services are performed, including all design-stage permits and approvals. The City will be responsible for paying all applicable permits and application fees. Task 6 – Project Bid Support A. Consultant shall assist with City for preparation of construction bid packages (IFB’s). B. Consultant shall review and respond to bidder inquiries within 48 hours during bid period. C. Consultant shall prepare addenda and revisions as required within hours during bid period. D. Consultant shall compile conformed drawing set for each project. E. Consultant shall attend and assist the City at pre-bid conferences and job-site walks. There will be a job-site walk at each building location to be scheduled and coordinated by the City’s Project Manager. F. Consultant shall acknowledge that the contractor bid will include the pilot listed buildings. City does not intend to issue separate IFB’s for each building. Task 7 - Construction Administrative A. Consultant shall provide assistance to City staff during construction bidding phase that shall include bid phase questions, bid phase addenda if applicable, etc. B. Consultant shall attend onsite pre-construction meetings with selected contractor to establish project expectations. C. Consultant shall assist City in reviewing and responding to submittals within ten (10) calendar days upon receiving submittal. D. Consultant shall respond to contractor requests for information (RFI) within five (5) calendar days upon receiving the request. E. Consultant shall assist City in clarifying any questions that may arise during the project in a timely manner. F. Consultant shall assist City in preparing, reviewing, and provide comments and/or solutions to change orders within ten (10) calendar days upon receiving the change orders. G. Consultant shall attend weekly project progress meetings that will be held virtually, unless otherwise requested to meet in person for emergency site meeting, and shall attend on-site meetings as required to help resolve an issue to not delay project progress. H. Consultant shall understand that each building will be treated as it’s own project as each building is unique, however the weekly progress meeting will be utilized to discuss all buildings. I. Consultant shall provide project addenda’s as needed within five (5) calendar days upon determination that it is required, and consult and confirm if this shall be resubmitted to the building department. J. Consultant shall review inspection reports. K. Consultant shall visit the project at appropriate intervals during construction to become generally familiar with the progress and quality of the contractor’s work and to determine if the work is proceeding in general accordance with the Contract Documents. L. Consultant shall participate in the final project review and prepare final review punch list. Docusign Envelope ID: DE969B7B-EDC6-888D-804A-FE3ED51B2191 Item 5 Attachment A - Contract No. C27196410 with Salas O’Brien        Item 5: Staff Report Pg. 26  Packet Pg. 72 of 253  Professional Services Rev. Oct 16,2024 Page 23 of 30 Consultant shall field verify, perform back checks, and sign off on punch list item completion. Project platform for document control will be selected by the Contractor. Consultant shall include functional testing and verification of installed systems to confirm proper operation in accordance with the design intent. Task 8 - Project Closeout A. Consultant shall review as-built drawings from the contractor and issue record as-built plans for the project within thirty (30) calendar days from the day Notice of Completion is sent to the Contractor. As-built plans shall be delivered to the City in both AutoCAD 2023 or later version and PDF formats. B. Consultant shall visit the project with City staff before the warranty period expires (approximately 10 months) to review project status and advise City on warranty items that should be fixed. Docusign Envelope ID: DE969B7B-EDC6-888D-804A-FE3ED51B2191 Item 5 Attachment A - Contract No. C27196410 with Salas O’Brien        Item 5: Staff Report Pg. 27  Packet Pg. 73 of 253  Professional Services Rev. Oct 16,2024 Page 24 of 30 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 ___________________________________ I hereby acknowledge receipt and acceptance of this Task Order and warrant that I have authority to sign on behalf of Consultant. APPROVED: COMPANY NAME: ______________________ BY:____________________________________ Name __________________________________ Title___________________________________ Date ___________________________________ Docusign Envelope ID: DE969B7B-EDC6-888D-804A-FE3ED51B2191 Item 5 Attachment A - Contract No. C27196410 with Salas O’Brien        Item 5: Staff Report Pg. 28  Packet Pg. 74 of 253  Professional Services Rev. Oct 16,2024 Page 25 of 30 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. Milestones Completion Number of Weeks (as specified below) from NTP 1. Task 1 - Site Assessment and Programming 6 weeks 2. Task 2 - Schematic Design 12 weeks 3. Task 3 - Design Development 18 weeks 4. Task 4 - Construction Documents 24 weeks 5. Task 5 - Permitting 34 weeks 6. Task 6 - Project Bid Support 40 weeks 7. Task 7 - Construction Administrative 80 weeks 8. Task 8 - Project Closeout 84 weeks The following schedule is an outline of project milestones. Dates and durations are subject to change based on project needs, City review times, permitting, and other factors. The College Terrace Library and Art Center will be advanced and completed on an accelerated basis following the Notice to Proceed and Contractor shall allocate sufficient resources to meet this prioritization. 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: DE969B7B-EDC6-888D-804A-FE3ED51B2191 Item 5 Attachment A - Contract No. C27196410 with Salas O’Brien        Item 5: Staff Report Pg. 29  Packet Pg. 75 of 253  Professional Services Rev. Oct 16,2024 Page 26 of 30 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 TASK NOT TO EXCEED AMOUNT Task 1 (Art Center) $27,780 Task 2 (College Terrace Library) $14,702.50 Task 3 (Downtown Library) $40,175 Task 4 (Golf Course Pro Shop / Cafe) $88,605 Task 5 (Ventura Community Center) $73,025 Sub-total for Services $244,287.50 Reimbursable Expenses (if any) $0 Total for Services and Reimbursable Expenses $244,287.50 Additional Services (if any, per Section 4) $54,428.50 Maximum Total Compensation $298,716.00 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: DE969B7B-EDC6-888D-804A-FE3ED51B2191 Item 5 Attachment A - Contract No. C27196410 with Salas O’Brien        Item 5: Staff Report Pg. 30  Packet Pg. 76 of 253  Professional Services Rev. Oct 16,2024 Page 27 of 30 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: DE969B7B-EDC6-888D-804A-FE3ED51B2191 Item 5 Attachment A - Contract No. C27196410 with Salas O’Brien        Item 5: Staff Report Pg. 31  Packet Pg. 77 of 253  Professional Services Rev. Oct 16,2024 Page 28 of 30 EXHIBIT C-1 SCHEDULE OF RATES CONSULTANT’s schedule of rates is as follows: Labor Category Hourly Rates Principal $310 Senior Architect / Sr. Vice President $300 Vice President / Associate Vice President / Director / Associate / Sr. Project Manager $275 Architect / Professional Engineer / Sr. Structural Engineer $225 Design Engineer / Project Engineer $215 Structural Staff Engineer $205 Construction Project Manager $220 Design Manager / Program Manager / Drafting Manager (CADD) $200 Field Technician / Program Specialist / Coordinator / Drafter (CAD) $160 Program / Project Assistant $125 Docusign Envelope ID: DE969B7B-EDC6-888D-804A-FE3ED51B2191 Item 5 Attachment A - Contract No. C27196410 with Salas O’Brien        Item 5: Staff Report Pg. 32  Packet Pg. 78 of 253  Professional Services Rev. Oct 16,2024 Page 29 of 30 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 AND ITS SUBCONSULTANTS, IF ANY, BUT ALSO, WITH THE EXCEPTION OF WORKERS’ 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. Docusign Envelope ID: DE969B7B-EDC6-888D-804A-FE3ED51B2191 Item 5 Attachment A - Contract No. C27196410 with Salas O’Brien        Item 5: Staff Report Pg. 33  Packet Pg. 79 of 253  Professional Services Rev. Oct 16,2024 Page 30 of 30 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 Docusign Envelope ID: DE969B7B-EDC6-888D-804A-FE3ED51B2191 Item 5 Attachment A - Contract No. C27196410 with Salas O’Brien        Item 5: Staff Report Pg. 34  Packet Pg. 80 of 253  CITY COUNCIL Staff Report From: City Manager Report Type: ACTION ITEMS Lead Department: Planning and Development Services Meeting Date: August 17, 2026 Report #: 2605-6356 TITLE Adoption of an Ordinance Amending Various Palo Alto Municipal Code Chapters in Titles 16 and 18 to Address Changes in State Law and Direction from City Council Regarding Accessory and Junior Accessory Dwelling Units. CEQA Status: Exempt From the Provisions of the California Environmental Quality Act (CEQA) Pursuant to Public Resources Code Section 21080.17 and CEQA Guidelines Section 15061(b)(3). RECOMMENDATION Staff recommends the City Council: 1. Adopt the Draft Ordinance (Attachment A) amending Palo Alto Municipal Code (PAMC) Title 16 (Building) and Title 18 (Zoning) regulations for Accessory Dwelling Units (ADUs) and Junior Accessory Dwelling Units (JADUs). EXECUTIVE SUMMARY On June 2025, the City Council adopted the City’s latest ADU ordinance, which addressed comments from the California Department of Housing and Community Development (HCD) identifying conflicts between State law and the City’s previous ADU/JADU ordinance.1,2 At that time, the City Council also directed staff to explore (1) increasing the maximum allowed size of ADUs from 1,000 to 1,200 square feet, and (2) options to allow ADUs to be sold separately from the primary home. Following Council’s adoption of the City’s most recent ADU/JADU ordinance, the State legislature adopted new ADU/JADU provisions to further incentivize dwelling unit production. The proposed ordinance reflects modifications to local regulations to align with new State laws. In addition, staff explored the modifications to the maximum allowable ADU size and for separate conveyance of ADUs in accordance with Council’s direction. The Planning and Transportation Commission (PTC) reviewed the draft ordinance on May 13, 2026 and recommended that Council adopt the draft ordinance including an increase in the maximum size of ADUs to 1,200 square feet. The PTC recommended staff return to discuss 1 May 12, 2025 Council Meeting (Action Item #10): 2 Ordinance 5656: https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=48336&dbid=0&repo=PaloAlto Item 6 Item 6 Staff Report        Item 6: Staff Report Pg. 1  Packet Pg. 81 of 253  separate sale of ADUs once more data was available on the implementation by other cities. Staff recommends that Council adopt the draft ordinance (clean version in Attachment A and annotated version in Attachment B) consistent with the PTC’s recommendations. While the PTC did not recommend adoption of the separate sale of ADUs at this time, Attachments C includes draft language that could be added to the ordinance to allow for separate sale of ADUs. BACKGROUND 5 The following components require amendments to the City’s ADU regulations, or affect the amendment process: Assembly Bill (AB) 1154 (effective January 1, 2026) Senate Bill (SB) 9 (effective January 1, 2026) SB 543 (effective January 1, 2026) 5 HCD ADU Handbook: https://www.hcd.ca.gov/sites/default/files/docs/policy-and-research/adu- handbookupdate.pdf Item 6 Item 6 Staff Report        Item 6: Staff Report Pg. 2  Packet Pg. 82 of 253  c. Specifies that an ADU or JADU that contains less than 500 square feet of interior livable space does not increase assessable space (Gov. Code, § 66311, subds. (d)). This is important to the calculation and imposition of school fees. d. Revises size limitations to be based on the square footage of “interior living space” of the ADU (Gov. Code, § 66321, subds. (b)(2)(A), (b)(2)(B), and (b)(3)). e. Specifies the number of allowable ADUs described under Government Code section 66323 per lot (Gov. Code, § 66323, subd. (a)) to allow for four accessory dwelling units to be constructed on site. f. Clarifies that fire sprinklers are not required for a JADU if the primary residence does not have fire sprinklers and that the addition of a JADU cannot trigger the requirement for fire sprinklers (Gov. Code, § 66323, subd. (d)). g. Adds section 66333.5, which specifies that if a local agency fails to submit an adopted JADU ordinance to HCD within the 60-day timeline or fails to respond to HCD’s findings regarding their ordinance within the 30-day timeline, that ordinance is null and void and the local agency must only apply State ADU Law when processing applications for JADUs. Past Council Direction At the time Council adopted Ordinance 5656, the City’s most recent ADU/JADU Ordinance, they also directed staff to investigate the feasibility of expanding the maximum allowable size for ADUs. Under State law, the maximum allowable size for a detached ADU is 1,200 square feet where the City’s current maximum is 1,000 square feet for a two-bedroom unit, attached or detached. Council also directed staff to evaluate allowing ADUs to be sold separately from the primary dwelling unit which became an opt-in option for all jurisdictions in California in 2024 under SB 477; qualified nonprofit corporations were permitted to do this under AB 1033 without a jurisdiction opting-in. Planning and Transportation Commission Recommendation The Planning and Transportation Commission (PTC) reviewed the draft ordinance on May 13, 2026, and recommended 6-0-1 (Hechtman absent), to adopt the ordinance including the increase to the maximum allowable size for ADUs from 1,000 square feet to 1,200 square feet.7 The PTC felt there was not enough data available at this time to determine how successful separate sale of ADUs would be and, accordingly, did not incorporate it into the recommended ordinance. The PTC recommended staff return to discuss separate sale of ADUs once more data was available. Attachment C includes draft language allowing separate sale of ADUs should Council wish to adopt it. This option is discussed in more detail below. ANALYSIS State Law Changes The changes required under AB 1154 and SB 9 are minimally impactful to the City’s current ADU regulations and processes, as these are either policies currently in place or are not significant 7 Currently, PAMC 18.09.040(e) provides that walls shared between the primary home and attached ADUs are fully Item 6 Item 6 Staff Report        Item 6: Staff Report Pg. 3  Packet Pg. 83 of 253  changes. SB 543 is impactful to how Planning staff review permits for ADU/JADUs, which is discussed in more detail below. Changes to Calculating Square Footage for ADU/JADUs a space in a dwelling intended for human habitation, including living, sleeping, eating, cooking, or sanitation.” This definition does not include attached utility or storage areas when their only access is external from the unit. As shown in the examples below, the change from exterior to interior stud walls can have a significant effect on how many ADUs will trigger the 750-square-foot threshold for paying development impact fees (500 square feet for school impact fees): Image 1: Exterior Stud Wall Measurement (Current) – 294 Square Feet Source: Collaborative Design Studio, Inc. Item 6 Item 6 Staff Report        Item 6: Staff Report Pg. 4  Packet Pg. 84 of 253  Image 2: Interior Livable Area Measurement – 259 Square Feet Source: Collaborative Design Studio, Inc. Since 2020, the average unit size of ADUs has gradually increased from a range of 400 to 500 square feet of Gross Floor Area to a range of 550 to 600 square feet of Gross Floor Area. Changing how ADU square footage is counted will likely continue this trend and may result in additional increases in total structure size. HCD has not provided official guidance on how interior or exterior walls should be considered, but staff believe that a reasonable interpretation of the State’s intent is to include the interior partition walls towards the floor area and lot coverage for an ADU/JADU (Image 2), and the draft ordinance reflects this understanding and maintains a simplified calculation. When speaking with local architects, their preference is to exclude the interior walls from the unit’s floor area and lot coverage limits, as an incentive to ADU/JADU development. In the draft ordinance the exterior walls will not count towards the square footage for the unit, nor to the site’s development limits. Introducing Appeals to ADU/JADU Permits State law now requires the City establish an appeal process for ADU/JADU permits when they have been determined incomplete or have been denied by the City. The applicant pursuing this appeal must provide the City with their reasons for appeal in writing and the City has 60 days from then to return a final written determination on the permit’s incompleteness or denial. This appeal must go to the governing body of the City. The City currently has an appeal process established in PAMC Chapter 18.78 and certain Planning application types (such as a Major Architectural Review) go straight to the City Council Item 6 Item 6 Staff Report        Item 6: Staff Report Pg. 5  Packet Pg. 85 of 253  Consent Calendar when the Director’s decision is appealed, typically within 45 days of receiving the appeal. The draft ordinance recommends that any ADU appeals received be placed on the City Council’s Consent Calendar within 45 days of receiving the request, consistent with this existing process. Pulling the item for discussion would still require the City to make a final determination within the 60-day timeframe. It is worth noting that staff works collaboratively with applicants to get the information needed to approve applications and that the City has not denied a permit for an ADU/JADU since State laws changed in 2017. Allowable Number of ADU/JADUs 9 9 See bottom of page 18/55 in the HCD ADU Handbook. Item 6 Item 6 Staff Report        Item 6: Staff Report Pg. 6  Packet Pg. 86 of 253  second-unit development while also providing some measures (such as privacy measures) to limit impacts on neighbors. Since then, the City has predominantly seen applicants following the local standards for second unit development instead of using State law allowances. Allowing Separate Sale for ADUs 11 which required jurisdictions to allow certain ADUs developed by qualified nonprofit corporations to be sold separately from the primary unit and allowed jurisdictions to extend this option to all other ADUs. Since then, roughly 10 jurisdictions in California have passed ordinances allowing for separate sale of ADUs, and more appear to be poised to adopt ordinances in the coming year. While San Jose was the earliest jurisdiction to extend separate sale to all ADUs in 2024, their staff noted only two applications had been approved and two more were currently under review since 2024. Other jurisdictions (such as San Jose, Santa Cruz, and more recently Berkeley and City of San Diego) have either recently adopted ordinances or have experienced a similar low volume of projects despite early adoption of an ordinance. While members of the public have reached out to City staff since 2024 on this topic, it is unclear whether the City would see a significant volume of applications for separate ownership, if allowed. In comparison, since the adoption of SB 9 (2021) procedures in 2021, the City has received 38 applications for urban lot splits and/or two-unit development. 11 AB 1033 language was incorporated into GC Section 66340-66342: Item 6 Item 6 Staff Report        Item 6: Staff Report Pg. 7  Packet Pg. 87 of 253  At the May 13, 2026, meeting, the PTC discussed this option and expressed concern about the effectiveness of this policy based on the following topics: FISCAL/RESOURCE IMPACT STAKEHOLDER ENGAGEMENT ENVIRONMENTAL REVIEW Item 6 Item 6 Staff Report        Item 6: Staff Report Pg. 8  Packet Pg. 88 of 253  ALTERNATIVE ACTIONS In addition to the recommended action, the Council may: 1. Adopt the draft ordinance with modifications; 2. Not approve the draft ordinance and leave the code unchanged; or 3. Continue the hearing to a date (un)certain with specific direction. Attachment A: Draft Ordinance (Clean Version) Attachment B: Draft Ordinance (Annotated Version) Attachment C: Draft Text to Allow Separate ADU Ownership : Jonathan Lait, Planning and Development Services Director Item 6 Item 6 Staff Report        Item 6: Staff Report Pg. 9  Packet Pg. 89 of 253  *NOT YET APPROVED* 1 0160203_20260729_ay16 Ordinance No. _____ Ordinance of the Council of the City of Palo Alto Amending Title 16 (Building Regulations), Title 18 (Zoning), and Title 21 (Subdivisions) of the Palo Alto Municipal Code to Amend Requirements Relating to Accessory Dwelling Units and Junior Accessory Dwelling Units The Council of the City of Palo Alto does ORDAIN as follows: SECTION 1. Findings and Declarations. A. In 2025, the City of Palo Alto adopted Ordinance 5656, amending the City’s requirements for ADUs and JADUs to reflect changes in State law and guidance from the California Department of Housing and Community Development (HCD). B. On May 12, 2025, the City Council directed staff to evaluate modifying the City’s ordinance to increase the maximum size for ADUs to 1,200 square feet and allowing ADU condominiums as allowed under AB 1033 (2024). C. On September 30, 2025, the Governor signed Assembly Bills (AB) 130, 462, 1154 and Senate Bills (SB) 9 and 543, effective between June 30, 2025 and January 1, 2026. These various bills affect the processing time and requirements for ADU/JADU permits as well as the number of permissible ADU/JADUs on one lot. D. Upon recommendation of City Staff and the Planning and Transportation Commission, the Council of the City of Palo Alto desires to amend its ADU/JADU ordinance to implementing SB 1211 and to make additional clerical amendments and minor amendments to conform with State law. E. Section 4 of this Ordinance amends Chapter 16.58 (Development Impact Fee) of Title 16 (Building Regulations) of the Palo Alto Municipal Code. This is an administrative amendment to align how impact fees for ADUs must be calculated based on interior livable space rather than gross square footage as defined in Chapter 18.04.030 (Definitions) of Title 18 (Zoning) of the Palo Alto Municipal Code. F. Section 5 of this Ordinance introduces a new Chapter, Chapter 21.09 (Parcel Maps for Separate Sale of ADUs), in Title 21 (Subdivisions and Other Divisions of Land) of the Palo Alto Municipal Code. This new chapter intends to address Council’s direction to allow for ADUs to be sold separately from the primary structure.0 G. This ordinance is adopted to incorporate changes in state law that have occurred since the adoption of Ordinance 5656 and to respond to direction from the City Council. SECTION 2. Chapter 18.09 (Accessory Dwelling Units and Junior Accessory Dwelling Units) of Title 18 (Zoning) of the Palo Alto Municipal Code (“PAMC”) is amended to read as Item 6 Attachment A - Draft Ordinance (Clean Version)        Item 6: Staff Report Pg. 10  Packet Pg. 90 of 253  *NOT YET APPROVED* 2 0160203_20260729_ay16 follows (additions underlined and deletions struck-through): 18.09.010 Purpose The intent of this Chapter is to provide regulations to accommodate accessory and junior accessory dwelling units (ADU/JADU), in order to provide for variety to the city's housing stock and additional affordable housing opportunities. These units shall be separate, self- contained living units, with separate entrances from the main residence, whether attached or detached. The standards below are provided to minimize the impacts of units on nearby residents and throughout the city, and to assure that the size and location of such dwellings is compatible with the existing or proposed residence(s) on the site and with other structures in the area. 18.09.020 Applicable Zoning Districts The establishment of an ADU accessory dwelling unit is permitted in zoning districts when single-family or multi-family residential is a permitted land use. The development of a single-family home with multiple ADU/JADUs, ADU, and/or a JADU on a lot that allows for single-family development shall not be considered a multifamily development pursuant to PAMC Section 18.04.030, nor shall they require Architectural Review pursuant to other sections of Title Chapter 18. 18.09.030 Units Exempt from Generally Applicable Local Regulations (a) Government Code sections 66323 provides that certain units shall be approved notwithstanding State or local regulations that may otherwise apply. The following types of units shall be governed by the standards in this section. In the event of a conflict between this section and Government Code section 66323, the Government Code shall prevail. (1) An ADU and JADU within the existing space of a single-family dwelling or an ADU within the existing space of an accessory structure (i.e. conversion without substantial addition). (2) An ADU and JADU within the proposed space of a single-family dwelling. (3) A detached, new construction ADU on a lot with a proposed or existing single-family dwelling, provided the ADU does not exceed 800 square feet, four-foot side and rear (i.e. interior) setbacks, or the maximum height described in subparagraph (A), (B), or (C) of paragraph (4) of subdivision (b) of Government Code Section 66321, as applicable. (4) ADUs created by conversion of portions of existing multi-family dwellings not used as livable space. Item 6 Attachment A - Draft Ordinance (Clean Version)        Item 6: Staff Report Pg. 11  Packet Pg. 91 of 253  *NOT YET APPROVED* 3 0160203_20260729_ay16 (5) Up to eight detached ADUs on a lot with an existing multi-family dwelling, provided that the number of ADUs does not exceed the number of existing units on the lot. (6) Up to two detached ADUs on a lot with a proposed multi-family dwelling. (b) The Development Standards for units governed by this section are summarized in Table 1. Regulations set forth in section 18.09.040 do not apply to units created under 18.09.030. The minimum and maximum sizes indicated in Table 1 do not prohibit units that are greater than 800 square feet. These sizes simply serve to distinguish when a unit transitions from regulations set forth in Table 1 and section 18.09.030 to regulations set forth in Table 2 and section 18.09.040. Table 1: Development Standards for Units Described in Government Code Section 66323 Single-Family Multi-Family Conversion of Space Within the Existing Space of a Single-Family Home or Accessory Structure Construction of Attached ADU and/or JADU Within the Proposed Space of a Single- Family Home New Construction of Detached ADU Conversion of Non-Habitable Space Within Existing Multi- family Dwelling Structure Conversion or Construction of Detached(4) ADU on a site with Existing Multi-family Structure Conversion or Construction of Detached(4) ADU on a site with Proposed Multi- family Structure Number of Units Allowed 1 Attached ADU, 1 Detached ADU, and 1 JADU 25% of the existing units (at least one) Up to 8 (not to exceed the number of existing units on the lot) 2 Minimum size(1) 150 sf Maximum size(1) N/A2 800 sf N/A Setbacks N/A, if condition is sufficient for fire and safety Underlying zone standard for Single Family Home (ADU must be within allowable space of Single-Family Home) 4 feet from side and rear lot lines; underlying zoning for front setback N/A 4 feet from side and rear lot lines; underlying zoning for front setback Daylight Plane N/A N/A Maximum Height(3) N/A 16(5) N/A 16(5)(6) Parking None State Law Reference 66323(a)(1) 66323(a)(1) 66323(a)(2) 66323(a)(3) 66323(a)(4) (1) Lofts where the height from the floor level to the underside of the rafter or finished roof surface is 5' or greater shall count towards the unit’s floor area. Item 6 Attachment A - Draft Ordinance (Clean Version)        Item 6: Staff Report Pg. 12  Packet Pg. 92 of 253  *NOT YET APPROVED* 4 0160203_20260729_ay16 (2) The maximum size of a JADU is 500 square feet. See PAMC 18.09.030(h) for additional information. (3) Units built in a flood zone are not entitled to any height extensions granted to the primary dwelling. (4) Units must be detached from primary dwellings but may be attached to each other. (5) A height of 18 feet for a detached ADU on a lot with an existing or proposed single family or multifamily dwelling unit that is within one-half of one mile walking distance of a major transit stop or a high-quality transit corridor, as those terms are defined in Section 21155 of the Public Resources Code. An additional two feet in height shall be provided to accommodate a roof pitch on an ADU that is aligned with the roof pitch of the primary dwelling unit. (6) A height of 18 feet for a detached ADU on a lot with an existing or proposed multifamily, multistory dwelling. (c) Development standards stated elsewhere in this Section or Title 18, including standards related to FAR, lot coverage, and privacy, are not applicable to ADUs or JADUs that qualify for approval under this section. When there is an ADU or JADU attached to an existing or proposed primary dwelling, the shared wall between these units shall contribute to the maximum allowable Floor Area, Lot Coverage, and Maximum House Size of the primary unit. For a single-family home, this measurement shall be taken to the outside stud wall in accordance with Section 18.04.030(a)(65)(D). For a multi-family dwelling, this measurement shall be taken to the outside surface of exterior walls in accordance with Section 18.04.030(a)(65)(B) and (C). (d) For ADUs and JADUs only, the allowable square footages noted in Table 1 and this section for these units shall be based on the interior livable space for the purposes of FAR, lot coverage, and maximum house size. The exterior walls not counted towards interior livable space for these units will not count against the property’s FAR, lot coverage, or maximum house size requirements. (e) The establishment of ADUs accessory dwelling units and JADUs junior accessory dwelling units pursuant to this section shall not be conditioned on the correction of non- conforming zoning conditions; provided, however, that nothing in this section shall limit the authority of the Chief Building Official to require correction of building standards relating to health and safety. Upon request of the owner for a delay in enforcement, the Chief Building Official shall delay enforcement of a building standard, subject to compliance with Section 17980.12 of the Health and Safety Code. (f) The installation of fire sprinklers shall not be required in an ADU accessory dwelling unit if sprinklers are not required for the primary residence. The construction of an ADU accessory dwelling unit shall not trigger a requirement for fire sprinklers to be installed Item 6 Attachment A - Draft Ordinance (Clean Version)        Item 6: Staff Report Pg. 13  Packet Pg. 93 of 253  *NOT YET APPROVED* 5 0160203_20260729_ay16 in the existing multifamily dwelling. Nothing in this section shall preclude the Fire Marshal from accepting fire sprinklers as an alternative means of compliance with generally applicable fire protection requirements. (g) Rental of any unit created pursuant to this section shall be for a term of 30 days or more. (h) Attached units shall have independent exterior access from a proposed or existing single-family dwelling. Except for JADUs, attached units shall not have an interior access point to the primary dwelling (e.g. hotel door or other similar feature/appurtenance). If a permitted JADU does not include a separate bathroom, the permitted JADU shall include a separate entrance from the main entrance to the structure, with an interior entry to the main living area. (i) Conversion of existing living area or an existing accessory structure pursuant to Government Code section 66314(d)(7) may include reconstruction in-place of a non- conforming structure, so long as the renovation or reconstruction does not increase the degree of non-compliance, such as increased height, envelope, or further intrusion into required setbacks. An expansion of not more than 150 square feet beyond the same physical dimensions as the existing accessory structure may be provided to accommodate ingress and egress. Any addition to the existing accessory structure that is not limited to providing for ingress and egress to the unit, and that exceeds the envelope of the existing accessory structure shall be subject to Section 18.09.040. (j) Street addresses shall be assigned to all units prior to building permit final to assist in emergency response. (k) The unit shall not be sold separately from the primary residence, except as allowed under Government Code Section 66341. (l) Replacement parking is not required when an off-street parking space is converted to, or demolished in conjunction with the construction of, an ADU or JADU. (m) JADUs shall comply with the requirements of Section 18.09.050. (n) An applicant that seeks to appeal the City’s determination of completeness or denial of a permit for an ADU must submit their appeal in writing to the City identifying the reasons for their appeal and pay the accompanied appeal fee, as set forth in the adopted municipal fee schedule. Appeals for these applications shall follow the procedures for appeal under PAMC 18.77.075 except that the appeal shall be placed on Council’s Consent Agenda within 45 days of filing a timely appeal. Any decision from the Council, either on consent or through an agendized item, is final. 18.09.040 Units Subject to Local Standards Item 6 Attachment A - Draft Ordinance (Clean Version)        Item 6: Staff Report Pg. 14  Packet Pg. 94 of 253  *NOT YET APPROVED* 6 0160203_20260729_ay16 (a) This section shall govern applications for ADUs that do not qualify for approval under section 18.09.030 and for which the City may impose local standards pursuant to Government Code section 66314. Nothing in this section shall be interpreted to prohibit an ADU of up to 800 square feet, at the heights stated in Table 2, with a four-foot side and rear setbacks. (b) The Development Standards for units governed by this section are provided in Table 2. These regulations do not limit the height of existing structures converted into ADU unless the envelope of the building is proposed to be modified beyond any existing legal, non-conforming condition. Table 2: All other Units Attached Detached Number of Units Allowed1 1 Minimum size 150 sf Maximum size 1,200900 sf (1,000 sf for two or more bedrooms required to exceed 1,000 sf); no more than 50% of the size of the single-family home 1,200900 sf (1,000 sf for two or more bedrooms required to exceed 1,000 sf) Setbacks 4 feet from side and rear lot lines; Daylight Plane Underlying zone standard per footnote (7) N/A Maximum Height3 Res. Estate (RE) 30 feet Open Space (OS) 25 feet All other eligible zones 16 feet(5)(6)(7) Parking None Square Footage Exemption when in conjunction with a single family home(4) Up to 800 sf (1) An attached and or detached ADU may be built in conjunction with the allowable units prescribed under Table 1 and PAMC 18.09.050(f) a JADU on a lot with an existing or proposed single family home. One attached or detached ADU may be built in conjunction with the allowable units prescribed under Table 1 on an existing or proposed multifamily building. (2) Lofts where the height from the floor level to the underside of the rafter or finished roof surface is 5' or greater shall count towards the unit’s floor area. (3) Units built in a flood zone are not entitled to any height extensions granted to the primary dwelling. Item 6 Attachment A - Draft Ordinance (Clean Version)        Item 6: Staff Report Pg. 15  Packet Pg. 95 of 253  *NOT YET APPROVED* 7 0160203_20260729_ay16 (4) Lots with both an attached and detached ADU may exempt a maximum combined total of 800 square feet of both ADUs from FAR, Lot Coverage, and Maximum House Size calculations. Any square footage that exceeds this exemption shall contribute to the FAR, Lot Coverage, and (if attached) Maximum House Size calculations for the subject property. This exemption is not afforded to lots with existing or proposed multifamily dwellings. (5) A height of 18 feet for a detached ADU on a lot with an existing or proposed single family or multifamily dwelling unit that is within one-half of one mile walking distance of a major transit stop or a high-quality transit corridor, as those terms are defined in Section 21155 of the Public Resources Code. An additional two feet in height shall be provided to accommodate a roof pitch on an ADU that is aligned with the roof pitch of the primary dwelling unit. (6) A height of 18 feet for a detached ADU on a lot with an existing or proposed multifamily, multistory dwelling. (7) A height of 25 feet or the height limitation in the underlying zone district that applies to the primary dwelling, whichever is lower, for an ADU that is attached to a primary dwelling. These ADUs shall not exceed two stories in height. (c) A single-family or multifamily dwelling shall exist on the lot or shall be constructed on the lot in conjunction with the construction of an ADU. (d) Interior livable space for ADU square footage shall not be included in FAR, Lot Coverage, and Maximum House Size calculations for a lot with an existing or proposed single family home, up to the amounts stated in Table 2. ADU s Square footage in excess of the exemptions provided in Table 2 shall be included in FAR, Lot Coverage, and Maximum House Size calculations for the lot. (e) When there is an ADU attached to an existing or proposed primary dwelling, the shared wall between these units shall contribute to the maximum allowable Floor Area, Lot Coverage, and Maximum House Size of the primary unit. For a single-family home, this measurement shall be taken to the outside stud wall in accordance with Section 18.04.030(a)(65)(D). For a multi-family dwelling, this measurement shall be taken to the outside surface of exterior walls in accordance with Section 18.04.030(a)(65)(B) and (C). (f) Attached units shall have independent exterior access from a proposed or existing single-family dwelling. Attached units shall not have an interior access point to the primary dwelling (e.g. hotel door or other similar feature/appurtenance). (g) For ADUs only, the allowable square footages noted in Table 2 and this section for these units shall be based on the interior livable space for the purposes of FAR, lot coverage, and maximum house size. The exterior walls not counted towards interior livable space Item 6 Attachment A - Draft Ordinance (Clean Version)        Item 6: Staff Report Pg. 16  Packet Pg. 96 of 253  *NOT YET APPROVED* 8 0160203_20260729_ay16 for these units will not count against the property’s FAR, lot coverage, or maximum house size requirements. Reserved (h) For properties listed in the California Register of Historical Resources compliance with the appropriate Secretary of Interior’s Standards for the Treatment of Historic Properties shall be required. (i) Noise-producing equipment such as air conditioners, water heaters, and similar service equipment that exclusively serves an ADU may be located anywhere on the site, provided they maintain the underlying front yard setback requirements of the property and, if the property is a corner lot, a 10-foot street-side setback. All such equipment shall be insulated and housed, except that the Director may permit installation without housing and insulation, provided that a combination of technical noise specifications, location of equipment, and/or other screening or buffering will assure compliance with the city’s Noise Ordinance at the nearest property line. All service equipment must meet the city’s Noise Ordinance in Chapter 9.10 of the Municipal Code. (j) Setbacks (1) Detached units shall maintain a minimum three-foot distance from the primary unit, measured from the exterior walls of structures. (2) A basement or other subterranean portion that serves an ADU may encroach into a setback required for the primary dwelling provided the following conditions are met: (A) Newly constructed basement walls are no closer than four feet to an adjacent interior side or rear property line. (B) A new lightwell associated with a basement shall not be placed closer than four feet to an adjacent interior property line. When visible from the right of way, these facilities shall be screened from view with vegetation. (C) Habitable ADU basements shall contribute toward the unit’s total allowable floor area. Any floor area in excess of the exemptions provided in this Section shall contribute to the total allowable limits for the site. (3) Projections, including but not limited to windows, doors, mechanical equipment, venting or exhaust systems, are not permitted to encroach into the required setbacks, with the exception of a roof eave of up to 2 feet. (4) For corner lots developed as a single-family home, when an existing or proposed primary dwelling unit is expanded or constructed simultaneously with the construction of a new ADU, the homeowner may elect to build all structures to a 10- foot street-side setback and a 16-foot front yard setback, regardless of the presence Item 6 Attachment A - Draft Ordinance (Clean Version)        Item 6: Staff Report Pg. 17  Packet Pg. 97 of 253  *NOT YET APPROVED* 9 0160203_20260729_ay16 of a more restrictive special setback, unless a fire or life-safety regulation requires a greater setback. Pursuant Government Code section 66321(b)(3), a street-side setback may not preclude the development of an 800 square foot unit. (5) When an existing, legal, nonconforming structure is converted or reconstructed to create an ADU, any portion of the ADU that is in the same location and falls within the building envelope of the original structure shall not be subject to the development standards stated in this Section. Any portion of the ADU that is in a different location or exceeds the envelope of the original structure shall comply with the development standards stated in this Section. (6) Notwithstanding the development standards stated in Table 2 and paragraph (5) above, when an existing, legal, non-conforming structure is converted in-place to an ADU, the envelope of the structure may be modified to encroach further into a setback or daylight plane as follows: (A) The height of the existing structure may be increased by no more than one linear foot in height commensurate to the existing roofline of the structure provided the height of the addition does not exceed 12 feet from grade. The roofline shall not be changed to a style other than what currently exists on the structure. (B) Each non-conforming wall may be expanded by no more than six inches in thickness based on its existing location and configuration, as measured to exterior surface of the material, to provide for greater insulation and energy requirements provided that a minimum of one foot is maintained between the addition and an adjacent interior property line. An existing wall of a structure that does not currently have a separation of one foot from a parallel property line shall not be expanded outward. (C) All other additions not specified here shall follow the standard setbacks for the ADU identified in Table 2. (k) Design (1) Except on corner lots, where feasible, ADUs the unit shall not have an entranceway facing the same lot line (property line) as the entranceway to the main dwelling unit unless the entranceway to the ADU accessory unit is located in the rear half of the lot. Exterior staircases to second floor units shall be located toward the interior side or rear yard of the property. (2) Privacy (A) Second story doors and decks shall not face a neighboring property line. Second story decks and balconies shall utilize screening barriers to prevent views towards an adjacent interior property line. These barriers shall be a minimum Item 6 Attachment A - Draft Ordinance (Clean Version)        Item 6: Staff Report Pg. 18  Packet Pg. 98 of 253  *NOT YET APPROVED* 10 0160203_20260729_ay16 five-foot, six-inch height from the floor level of the deck or balcony and shall not include perforations of any kind that would allow visibility between properties. (B) Windows on a second floor, loft, or equivalent elevated space, excluding those required for egress, shall have a five-foot sill height as measured from the second-finished floor level, or utilize obscured opaque glazing on the entirety any window that faces an adjacent interior property line. (C) Windows on a second finished floor, loft, or equivalent elevated space, shall be offset from neighbor’s windows to maximize privacy. (D) Where feasible, egress windows on the first and second finished floor of an ADU shall not face towards an adjacent interior property line. If this is not feasible, then these windows shall utilize obscured opaque glazing on the whole window. (E) If the first finished floor of an ADU is two feet or more above grade, then first floor windows shall include the following: i. Non-egress, operable windows facing an adjacent interior property line shall have a windowsill(s) that start five feet above the first finished floor for the unit; ii. Non-egress, non-operable windows facing an adjacent interior property line shall have the lower half of window(s) (minimum of five feet above the first finished floor) utilize obscured opaque glazing. (F) Where feasible, the use of skylights (whether operable or not) shall be used in lieu of operable windows that face adjacent interior properties. (G) No exterior lighting shall be mounted above seven feet. All lighting mounted on walls shall be directed downwards and shall not direct light towards adjacent interior property lines. Any ground lighting shall not direct light upwards to the building or sky. (l) Parking (1) Replacement parking is not required when a garage, carport, covered parking structure, or uncovered parking space is converted to, or demolished in conjunction with the construction of, an ADU. (2) When parking is provided, the unit shall have street access from a driveway in common with the main residence in order to prevent new curb cuts, excessive paving, and elimination of street trees, unless separate driveway access will result in fewer environmental impacts such as paving, grading or tree removal. Item 6 Attachment A - Draft Ordinance (Clean Version)        Item 6: Staff Report Pg. 19  Packet Pg. 99 of 253  *NOT YET APPROVED* 11 0160203_20260729_ay16 (3) When a single-family dwelling unit is permitted simultaneously with the construction of new ADU, the primary unit’s covered parking requirements identified in Chapter 18.10 and 18.12 do not need to be provided. Two uncovered parking spaces shall be provided in any configuration on the lot including within the front or street-side setback for the property. (4) If covered parking for a unit is provided in any district, the maximum size of the covered parking area for the ADUaccessory dwelling unit is 220 square feet. This space shall count towards the total floor area for the site but does not contribute to the maximum size of the unit. Any attached garage shall not have an interior access point to the ADU (e.g. hotel door or other similar feature/appurtenance). (m) Landscape (1) For the purposes of this subsection (m), “protected tree” means: (A) Any locally native tree of the species Acer macrophyllum (Bigleaf Maple), Calocedrus decurrens (California Incense Cedar), Quercus agrifolia (Coast Live Oak), Quercus douglasii (Blue Oak), Quercus kelloggii (California Black Oak), or Quercus lobata (Valley Oak) which is eleven and one-half inches in diameter (thirty-six inches in circumference) or more when measured four and one-half feet (fifty-four inches) above natural grade. (B) Any Coast Redwood tree (species Sequoia sempervirens) that is eighteen inches in diameter (fifty-seven inches in circumference) or more when measured four and one-half feet (fifty-four inches) above natural grade. (C) Any tree of any species, other than a Coast Redwood Tree, fifteen inches in diameter (forty-seven inches in circumference) or more when measured four and one-half feet (fifty-four inches) above natural grade. A “protected tree” does not include a tree of any species on the Exempt Species List put forth by the Department of Urban Forestry and available on the City’s website. (D) Any tree designated for protection during review and approval of a current or previously completed development project. (E) Any tree designated for carbon sequestration and storage and/or environmental mitigation purposes as identified in an agreement between the property owner and a responsible government agency or recorded as a deed restriction. (F) Any heritage tree previously designated by the city council. (G) Any tree previously planted as a replacement mitigation tree. Item 6 Attachment A - Draft Ordinance (Clean Version)        Item 6: Staff Report Pg. 20  Packet Pg. 100 of 253  *NOT YET APPROVED* 12 0160203_20260729_ay16 (2) Except as provided in subsection (3) below, the construction of an ADU shall not impact any protected tree, on the subject property or any adjacent lot by requiring: (A) Removal of more than twenty-five percent of the functioning leaf, stem, or root area of a tree in any twenty-four-month period; or (B) Removal of more than fifteen percent of the functioning root area of any Quercus (oak) species in any thirty-six-month period; or (C) Trenching, excavating, altering the grade, or paving within the tree protection zone of a tree in a way that foreseeably leads to the death of the tree. For the purposes of this subsection (m), "tree protection zone" means the area defined by a circle with a radius ten times the diameter of the trunk when measured four and one-half feet (fifty-four inches) above natural grade. (3) If an action prohibited by section 18.09.040(m)(2) is necessary to allow the construction of an ADU that meets the minimum standards set forth in state law, the tree shall be replaced according to the objective requirements identified in the Tree Canopy Replacement Table of the Palo Alto Tree and Landscape Technical Manual. (4) The construction of an ADU must comply with applicable objective standards and specifications in the Tree and Landscape Technical Manual for the protection of trees during construction. Compliance with this subsection (4) shall not delay or cause the denial of an ADU or JADU building permit or use permit. (n) Miscellaneous requirements (1) Street addresses shall be assigned to all units prior to building permit final to assist in emergency response. (2) The unit shall not be sold separately from the primary residence except as allowed under Government Code Section 66341 and PAMC 21.09. (3) Rental of any unit created pursuant to this section shall be for a term of 30 days or more. (4) The installation of fire sprinklers shall not be required in an accessory dwelling unit if sprinklers are not required for the primary residence. Nothing in this section shall preclude the Fire Marshal from accepting fire sprinklers as an alternative means of compliance with generally applicable fire protection requirements. (5) An applicant that seeks to appeal the City’s determination of completeness or denial of a permit for an ADU must submit their appeal in writing to the City identifying the reasons for their appeal and pay the accompanied appeal fee, as set forth in the adopted municipal fee schedule. Appeals for these applications shall follow the Item 6 Attachment A - Draft Ordinance (Clean Version)        Item 6: Staff Report Pg. 21  Packet Pg. 101 of 253  *NOT YET APPROVED* 13 0160203_20260729_ay16 procedures for appeal under PAMC 18.77.075 except that the appeal shall be placed on Council’s Consent Agenda within 45 days of filing a timely appeal. Any decision from the Council, either on consent or through an agendized item, is final. 18.09.050 Additional Requirements for JADUs (a) A JADU may be created on a lot in a single-family residential zone with an existing or proposed single family residence. A JADU shall be attached to or created within the walls of an existing or proposed primary dwelling, including enclosed uses within the residence, such as an attached garage. (b) The JADU shall include an efficiency kitchen, requiring the following components: A cooking facility with appliances, and; food preparation counter and storage cabinets that are of reasonable size in relation to the size of the JADU junior accessory dwelling unit. (1) JADUs may share sanitation facilities (bathrooms, laundry facilities, etc.) with the primary unit. If a permitted JADU does not include a separate bathroom, the permitted junior accessory dwelling unit shall include a separate entrance from the main entrance to the structure, with an interior entry to the main living area. In this instance, the floor area and lot coverage associated with shared space shall count towards the primary unit’s maximum allowances only. The combined sanitation facilities between the units shall include shower, toilet, and sink fixtures at a minimum and shall conform to the minimum requirements specified in the Building Code. (c) For the purposes of any fire or life protection ordinance or regulation or for the purposes of providing service for water, sewer, or power, a JADU shall not be considered a separate or new unit. (d) The owner of a parcel proposed for a JADU shall occupy as a primary residence either the primary dwelling or the JADU. Owner-occupancy is not required if the owner is a governmental agency, land trust, or housing organization or if the required bathroom for the JADU is provided in the unit, rather than inside the primary home. (e) Prior to the issuance of a building permit for a JADU, the owner shall record a deed restriction in a form approved by the city that includes a prohibition on the sale of the junior accessory dwelling unit separate from the sale of the single-family residence, identifies that if the unit is rented it shall be rented for no shorter term than 30 days, is requires owner-occupancy consistent with subsection (d) above, and restricts the size and attributes of the JADU to those that conform with this section. (f) JADU incentive. The existing or proposed primary dwelling unit shall be afforded bonus square footage equal to the square footage of a proposed JADU when a JADU is constructed on site, provided the JADU meets the following requirements: Item 6 Attachment A - Draft Ordinance (Clean Version)        Item 6: Staff Report Pg. 22  Packet Pg. 102 of 253  *NOT YET APPROVED* 14 0160203_20260729_ay16 1) The JADU must conform to the underlying zoning district’s development standards for single family homes. 2) The maximum number of units on site shall not exceed fivefour (threetwo ADUs, one JADU, and one primary home). 3) The maximum size of the JADU shall not exceed 500 square feet. 4) The total maximum bonus/exempt floor area provided for the site under Section 18.09.040 and 18.09.050 may not exceed 800 square feet. 5) The exterior entryway to the JADU shall not face the same direction as the entrance to the primary home. 6) All egress windows which face an adjacent residential property must utilize obscure opaque glazing on the whole window. 7) All non-egress windows which face an adjacent residential property must have a windowsill(s) that start five feet above the first finished floor for the unit. 8) All noise producing equipment associated with the JADU must comply with the noise regulations in PAMC 9.10. 9) When a single-family dwelling unit is permitted simultaneously with the construction of new JADU using these provisions, the primary unit’s covered parking requirements do not need to be provided. Instead, two uncovered parking spaces shall be provided in any configuration on the lot including within the front or street-side setback for the property. SECTION 3. Subsection (g) of Section 16.58.030 (Exemptions) of Chapter 16.58 (Development Impact Fees) of Title 16 (Building) of the Palo Alto Municipal Code (“PAMC”) is amended to read as follows (additions underlined and deletions struck-through): (g) Accessory dwelling units (ADU) less than 750 square feet in size of interior livable space. Any impact fees to be charged for an accessory dwelling unit of 750 square feet of interior livable space or more shall be proportional to the square footage of the primary dwelling unit; SECTION 4. Any provision of the Palo Alto Municipal Code or appendices thereto inconsistent with the provisions of this Ordinance, to the extent of such inconsistencies and no further, is hereby repealed or modified to that extent necessary to affect the provisions of this Ordinance. SECTION 5. If any section, subsection, sentence, clause, or phrase of this Ordinance is for any reason held to be invalid or unconstitutional by a decision of any court of competent Item 6 Attachment A - Draft Ordinance (Clean Version)        Item 6: Staff Report Pg. 23  Packet Pg. 103 of 253  *NOT YET APPROVED* 15 0160203_20260729_ay16 jurisdiction, such decision shall not affect the validity of the remaining portions of this Ordinance. The City Council hereby declares that it would have passed this Ordinance and each and every section, subsection, sentence, clause, or phrase not declared invalid or unconstitutional without regard to whether any portion of the ordinance would be subsequently declared invalid or unconstitutional. SECTION 6. The Council finds that the adoption of this Ordinance is exempt from the provisions of the California Environmental Quality Act (CEQA) pursuant to Public Resources Code Section 21080.17 and CEQA Guidelines sections 15061(b)(3), because it constitutes amendments to the City’s zoning ordinance to conform with preemptive State law, including Article 2 (commencing with Section 66314) and Article 3 (commencing with Section 66333) of Chapter 13 of Division 1 of Title 7 of, the Government Code, as well as other minor and non- substantive amendments. As such, it can be seen with certainty that the proposed action will not have the potential for causing a significant effect on the environment. // // // // // // // // // // // // // // Item 6 Attachment A - Draft Ordinance (Clean Version)        Item 6: Staff Report Pg. 24  Packet Pg. 104 of 253  *NOT YET APPROVED* 16 0160203_20260729_ay16 SECTION 7. This ordinance shall be effective on the thirty-first date after the date of its adoption. INTRODUCED: PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: ____________________________ ____________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: ____________________________ ____________________________ City Attorney or Designee City Manager ____________________________ Director of Planning and Development Services Item 6 Attachment A - Draft Ordinance (Clean Version)        Item 6: Staff Report Pg. 25  Packet Pg. 105 of 253  *NOT YET APPROVED* 1 0160204_20260729_ay16 Ordinance No. _____ Ordinance of the Council of the City of Palo Alto Amending Title 16 (Building Regulations), Title 18 (Zoning), and Title 21 (Subdivisions) of the Palo Alto Municipal Code to Amend Requirements Relating to Accessory Dwelling Units and Junior Accessory Dwelling Units The Council of the City of Palo Alto does ORDAIN as follows: SECTION 1. Findings and Declarations. A. In 2025, the City of Palo Alto adopted Ordinance 5656, amending the City’s requirements for ADUs and JADUs to reflect changes in State law and guidance from the California Department of Housing and Community Development (HCD). B. On May 12, 2025, the City Council directed staff to evaluate modifying the City’s ordinance to increase the maximum size for ADUs to 1,200 square feet and allowing ADU condominiums as allowed under AB 1033 (2024). C. On September 30, 2025, the Governor signed Assembly Bills (AB) 130, 462, 1154 and Senate Bills (SB) 9 and 543, effective between June 30, 2025 and January 1, 2026. These various bills affect the processing time and requirements for ADU/JADU permits as well as the number of permissible ADU/JADUs on one lot. D. Upon recommendation of City Staff and the Planning and Transportation Commission, the Council of the City of Palo Alto desires to amend its ADU/JADU ordinance to implementing SB 1211 and to make additional clerical amendments and minor amendments to conform with State law. E. Section 4 of this Ordinance amends Chapter 16.58 (Development Impact Fee) of Title 16 (Building Regulations) of the Palo Alto Municipal Code. This is an administrative amendment to align how impact fees for ADUs must be calculated based on interior livable space rather than gross square footage as defined in Chapter 18.04.030 (Definitions) of Title 18 (Zoning) of the Palo Alto Municipal Code. F. Section 5 of this Ordinance introduces a new Chapter, Chapter 21.09 (Parcel Maps for Separate Sale of ADUs), in Title 21 (Subdivisions and Other Divisions of Land) of the Palo Alto Municipal Code. This new chapter intends to address Council’s direction to allow for ADUs to be sold separately from the primary structure. G. This ordinance is adopted to incorporate changes in state law that have occurred since the adoption of Ordinance 5656 and to respond to direction from the City Council. SECTION 2. Chapter 18.09 (Accessory Dwelling Units and Junior Accessory Dwelling Units) of Title 18 (Zoning) of the Palo Alto Municipal Code (“PAMC”) is amended to read as Item 6 Attachment B - Draft Ordinance (Annotated Version)        Item 6: Staff Report Pg. 26  Packet Pg. 106 of 253  *NOT YET APPROVED* 2 0160204_20260729_ay16 follows (additions underlined and deletions struck-through): 18.09.010 Purpose The intent of this Chapter is to provide regulations to accommodate accessory and junior accessory dwelling units (ADU/JADU), in order to provide for variety to the city's housing stock and additional affordable housing opportunities. These units shall be separate, self- contained living units, with separate entrances from the main residence, whether attached or detached. The standards below are provided to minimize the impacts of units on nearby residents and throughout the city, and to assure that the size and location of such dwellings is compatible with the existing or proposed residence(s) on the site and with other structures in the area. 18.09.020 Applicable Zoning Districts The establishment of an ADU accessory dwelling unit is permitted in zoning districts when single-family or multi-family residential is a permitted land use. The development of a single-family home with multiple ADU/JADUs, ADU, and/or a JADU on a lot that allows for single-family development shall not be considered a multifamily development pursuant to PAMC Section 18.04.030, nor shall they require Architectural Review pursuant to other sections of Title Chapter 18. 18.09.030 Units Exempt from Generally Applicable Local Regulations (a) Government Code sections 66323 provides that certain units shall be approved notwithstanding State or local regulations that may otherwise apply. The following types of units shall be governed by the standards in this section. In the event of a conflict between this section and Government Code section 66323, the Government Code shall prevail. (1) An ADU and JADU within the existing space of a single-family dwelling or an ADU within the existing space of an accessory structure (i.e. conversion without substantial addition). (2) An ADU and JADU within the proposed space of a single-family dwelling. (3) A detached, new construction ADU on a lot with a proposed or existing single-family dwelling, provided the ADU does not exceed 800 square feet, four-foot side and rear (i.e. interior) setbacks, or the maximum height described in subparagraph (A), (B), or (C) of paragraph (4) of subdivision (b) of Government Code Section 66321, as applicable. (4) ADUs created by conversion of portions of existing multi-family dwellings not used as livable space. Commented [GS1]: SB 543 Item 6 Attachment B - Draft Ordinance (Annotated Version)        Item 6: Staff Report Pg. 27  Packet Pg. 107 of 253  *NOT YET APPROVED* 3 0160204_20260729_ay16 (5) Up to eight detached ADUs on a lot with an existing multi-family dwelling, provided that the number of ADUs does not exceed the number of existing units on the lot. (6) Up to two detached ADUs on a lot with a proposed multi-family dwelling. (b) The Development Standards for units governed by this section are summarized in Table 1. Regulations set forth in section 18.09.040 do not apply to units created under 18.09.030. The minimum and maximum sizes indicated in Table 1 do not prohibit units that are greater than 800 square feet. These sizes simply serve to distinguish when a unit transitions from regulations set forth in Table 1 and section 18.09.030 to regulations set forth in Table 2 and section 18.09.040. Table 1: Development Standards for Units Described in Government Code Section 66323 Single-Family Multi-Family Conversion of Space Within the Existing Space of a Single-Family Home or Accessory Structure Construction of Attached ADU and/or JADU Within the Proposed Space of a Single- Family Home New Construction of Detached ADU Conversion of Non-Habitable Space Within Existing Multi- family Dwelling Structure Conversion or Construction of Detached(4) ADU on a site with Existing Multi-family Structure Conversion or Construction of Detached(4) ADU on a site with Proposed Multi- family Structure Number of Units Allowed 1 Attached ADU, 1 Detached ADU, and 1 JADU 25% of the existing units (at least one) Up to 8 (not to exceed the number of existing units on the lot) 2 Minimum size(1) 150 sf Maximum size(1) N/A2 800 sf N/A Setbacks N/A, if condition is sufficient for fire and safety Underlying zone standard for Single Family Home (ADU must be within allowable space of Single-Family Home) 4 feet from side and rear lot lines; underlying zoning for front setback N/A 4 feet from side and rear lot lines; underlying zoning for front setback Daylight Plane N/A N/A Maximum Height(3) N/A 16(5) N/A 16(5)(6) Parking None State Law Reference 66323(a)(1) 66323(a)(1) 66323(a)(2) 66323(a)(3) 66323(a)(4) (1) Lofts where the height from the floor level to the underside of the rafter or finished roof surface is 5' or greater shall count towards the unit’s floor area. Commented [GS2]: SB 543 Item 6 Attachment B - Draft Ordinance (Annotated Version)        Item 6: Staff Report Pg. 28  Packet Pg. 108 of 253  *NOT YET APPROVED* 4 0160204_20260729_ay16 (2) The maximum size of a JADU is 500 square feet. See PAMC 18.09.030(h) for additional information. (3) Units built in a flood zone are not entitled to any height extensions granted to the primary dwelling. (4) Units must be detached from primary dwellings but may be attached to each other. (5) A height of 18 feet for a detached ADU on a lot with an existing or proposed single family or multifamily dwelling unit that is within one-half of one mile walking distance of a major transit stop or a high-quality transit corridor, as those terms are defined in Section 21155 of the Public Resources Code. An additional two feet in height shall be provided to accommodate a roof pitch on an ADU that is aligned with the roof pitch of the primary dwelling unit. (6) A height of 18 feet for a detached ADU on a lot with an existing or proposed multifamily, multistory dwelling. (c) Development standards stated elsewhere in this Section or Title 18, including standards related to FAR, lot coverage, and privacy, are not applicable to ADUs or JADUs that qualify for approval under this section. When there is an ADU or JADU attached to an existing or proposed primary dwelling, the shared wall between these units shall contribute to the maximum allowable Floor Area, Lot Coverage, and Maximum House Size of the primary unit. For a single-family home, this measurement shall be taken to the outside stud wall in accordance with Section 18.04.030(a)(65)(D). For a multi-family dwelling, this measurement shall be taken to the outside surface of exterior walls in accordance with Section 18.04.030(a)(65)(B) and (C). (d) For ADUs and JADUs only, the allowable square footages noted in Table 1 and this section for these units shall be based on the interior livable space for the purposes of FAR, lot coverage, and maximum house size. The exterior walls not counted towards interior livable space for these units will not count against the property’s FAR, lot coverage, or maximum house size requirements. (e) The establishment of ADUs accessory dwelling units and JADUs junior accessory dwelling units pursuant to this section shall not be conditioned on the correction of non- conforming zoning conditions; provided, however, that nothing in this section shall limit the authority of the Chief Building Official to require correction of building standards relating to health and safety. Upon request of the owner for a delay in enforcement, the Chief Building Official shall delay enforcement of a building standard, subject to compliance with Section 17980.12 of the Health and Safety Code. (f) The installation of fire sprinklers shall not be required in an ADU accessory dwelling unit if sprinklers are not required for the primary residence. The construction of an ADU accessory dwelling unit shall not trigger a requirement for fire sprinklers to be installed Commented [GS3]: SB 543 Commented [GS4]: SB 543 Item 6 Attachment B - Draft Ordinance (Annotated Version)        Item 6: Staff Report Pg. 29  Packet Pg. 109 of 253  *NOT YET APPROVED* 5 0160204_20260729_ay16 in the existing multifamily dwelling. Nothing in this section shall preclude the Fire Marshal from accepting fire sprinklers as an alternative means of compliance with generally applicable fire protection requirements. (g) Rental of any unit created pursuant to this section shall be for a term of 30 days or more. (h) Attached units shall have independent exterior access from a proposed or existing single-family dwelling. Except for JADUs, attached units shall not have an interior access point to the primary dwelling (e.g. hotel door or other similar feature/appurtenance). If a permitted JADU does not include a separate bathroom, the permitted JADU shall include a separate entrance from the main entrance to the structure, with an interior entry to the main living area. (i) Conversion of existing living area or an existing accessory structure pursuant to Government Code section 66314(d)(7) may include reconstruction in-place of a non- conforming structure, so long as the renovation or reconstruction does not increase the degree of non-compliance, such as increased height, envelope, or further intrusion into required setbacks. An expansion of not more than 150 square feet beyond the same physical dimensions as the existing accessory structure may be provided to accommodate ingress and egress. Any addition to the existing accessory structure that is not limited to providing for ingress and egress to the unit, and that exceeds the envelope of the existing accessory structure shall be subject to Section 18.09.040. (j) Street addresses shall be assigned to all units prior to building permit final to assist in emergency response. (k) The unit shall not be sold separately from the primary residence, except as allowed under Government Code Section 66341. (l) Replacement parking is not required when an off-street parking space is converted to, or demolished in conjunction with the construction of, an ADU or JADU. (m) JADUs shall comply with the requirements of Section 18.09.050. (n) An applicant that seeks to appeal the City’s determination of completeness or denial of a permit for an ADU must submit their appeal in writing to the City identifying the reasons for their appeal and pay the accompanied appeal fee, as set forth in the adopted municipal fee schedule. Appeals for these applications shall follow the procedures for appeal under PAMC 18.77.075 except that the appeal shall be placed on Council’s Consent Agenda within 45 days of filing a timely appeal. Any decision from the Council, either on consent or through an agendized item, is final. 18.09.040 Units Subject to Local Standards Commented [GS5]: SB 543 Item 6 Attachment B - Draft Ordinance (Annotated Version)        Item 6: Staff Report Pg. 30  Packet Pg. 110 of 253  *NOT YET APPROVED* 6 0160204_20260729_ay16 (a) This section shall govern applications for ADUs that do not qualify for approval under section 18.09.030 and for which the City may impose local standards pursuant to Government Code section 66314. Nothing in this section shall be interpreted to prohibit an ADU of up to 800 square feet, at the heights stated in Table 2, with a four-foot side and rear setbacks. (b) The Development Standards for units governed by this section are provided in Table 2. These regulations do not limit the height of existing structures converted into ADU unless the envelope of the building is proposed to be modified beyond any existing legal, non-conforming condition. Table 2: All other Units Attached Detached Number of Units Allowed1 1 Minimum size 150 sf Maximum size 1,200900 sf (1,000 sf for two or more bedrooms required to exceed 1,000 sf); no more than 50% of the size of the single-family home 1,200900 sf (1,000 sf for two or more bedrooms required to exceed 1,000 sf) Setbacks 4 feet from side and rear lot lines; Daylight Plane Underlying zone standard per footnote (7) N/A Maximum Height3 Res. Estate (RE) 30 feet Open Space (OS) 25 feet All other eligible zones 16 feet(5)(6)(7) Parking None Square Footage Exemption when in conjunction with a single family home(4) Up to 800 sf (1) An attached and or detached ADU may be built in conjunction with the allowable units prescribed under Table 1 and PAMC 18.09.050(f)a JADU on a lot with an existing or proposed single family home. One attached or detached ADU may be built in conjunction with the allowable units prescribed under Table 1 on an existing or proposed multifamily building. (2) Lofts where the height from the floor level to the underside of the rafter or finished roof surface is 5' or greater shall count towards the unit’s floor area. (3) Units built in a flood zone are not entitled to any height extensions granted to the primary dwelling. Commented [GS6]: PTC Recommendation Commented [GS7]: SB 543 Item 6 Attachment B - Draft Ordinance (Annotated Version)        Item 6: Staff Report Pg. 31  Packet Pg. 111 of 253  *NOT YET APPROVED* 7 0160204_20260729_ay16 (4) Lots with both an attached and detached ADU may exempt a maximum combined total of 800 square feet of both ADUs from FAR, Lot Coverage, and Maximum House Size calculations. Any square footage that exceeds this exemption shall contribute to the FAR, Lot Coverage, and (if attached) Maximum House Size calculations for the subject property. This exemption is not afforded to lots with existing or proposed multifamily dwellings. (5) A height of 18 feet for a detached ADU on a lot with an existing or proposed single family or multifamily dwelling unit that is within one-half of one mile walking distance of a major transit stop or a high-quality transit corridor, as those terms are defined in Section 21155 of the Public Resources Code. An additional two feet in height shall be provided to accommodate a roof pitch on an ADU that is aligned with the roof pitch of the primary dwelling unit. (6) A height of 18 feet for a detached ADU on a lot with an existing or proposed multifamily, multistory dwelling. (7) A height of 25 feet or the height limitation in the underlying zone district that applies to the primary dwelling, whichever is lower, for an ADU that is attached to a primary dwelling. These ADUs shall not exceed two stories in height. (c) A single-family or multifamily dwelling shall exist on the lot or shall be constructed on the lot in conjunction with the construction of an ADU. (d) Interior livable space for ADU square footage shall not be included in FAR, Lot Coverage, and Maximum House Size calculations for a lot with an existing or proposed single family home, up to the amounts stated in Table 2. ADU s Square footage in excess of the exemptions provided in Table 2 shall be included in FAR, Lot Coverage, and Maximum House Size calculations for the lot. (e) When there is an ADU attached to an existing or proposed primary dwelling, the shared wall between these units shall contribute to the maximum allowable Floor Area, Lot Coverage, and Maximum House Size of the primary unit. For a single-family home, this measurement shall be taken to the outside stud wall in accordance with Section 18.04.030(a)(65)(D). For a multi-family dwelling, this measurement shall be taken to the outside surface of exterior walls in accordance with Section 18.04.030(a)(65)(B) and (C). (f) Attached units shall have independent exterior access from a proposed or existing single-family dwelling. Attached units shall not have an interior access point to the primary dwelling (e.g. hotel door or other similar feature/appurtenance). (g) For ADUs only, the allowable square footages noted in Table 2 and this section for these units shall be based on the interior livable space for the purposes of FAR, lot coverage, and maximum house size. The exterior walls not counted towards interior livable space Commented [GS8]: SB 543 Commented [GS9]: SB 543 Item 6 Attachment B - Draft Ordinance (Annotated Version)        Item 6: Staff Report Pg. 32  Packet Pg. 112 of 253  *NOT YET APPROVED* 8 0160204_20260729_ay16 for these units will not count against the property’s FAR, lot coverage, or maximum house size requirements. Reserved (h) For properties listed in the California Register of Historical Resources compliance with the appropriate Secretary of Interior’s Standards for the Treatment of Historic Properties shall be required. (i) Noise-producing equipment such as air conditioners, water heaters, and similar service equipment that exclusively serves an ADU may be located anywhere on the site, provided they maintain the underlying front yard setback requirements of the property and, if the property is a corner lot, a 10-foot street-side setback. All such equipment shall be insulated and housed, except that the Director may permit installation without housing and insulation, provided that a combination of technical noise specifications, location of equipment, and/or other screening or buffering will assure compliance with the city’s Noise Ordinance at the nearest property line. All service equipment must meet the city’s Noise Ordinance in Chapter 9.10 of the Municipal Code. (j) Setbacks (1) Detached units shall maintain a minimum three-foot distance from the primary unit, measured from the exterior walls of structures. (2) A basement or other subterranean portion that serves an ADU may encroach into a setback required for the primary dwelling provided the following conditions are met: (A) Newly constructed basement walls are no closer than four feet to an adjacent interior side or rear property line. (B) A new lightwell associated with a basement shall not be placed closer than four feet to an adjacent interior property line. When visible from the right of way, these facilities shall be screened from view with vegetation. (C) Habitable ADU basements shall contribute toward the unit’s total allowable floor area. Any floor area in excess of the exemptions provided in this Section shall contribute to the total allowable limits for the site. (3) Projections, including but not limited to windows, doors, mechanical equipment, venting or exhaust systems, are not permitted to encroach into the required setbacks, with the exception of a roof eave of up to 2 feet. (4) For corner lots developed as a single-family home, when an existing or proposed primary dwelling unit is expanded or constructed simultaneously with the construction of a new ADU, the homeowner may elect to build all structures to a 10- foot street-side setback and a 16-foot front yard setback, regardless of the presence of a more restrictive special setback, unless a fire or life-safety regulation requires a Commented [GS10]: SB 543 Item 6 Attachment B - Draft Ordinance (Annotated Version)        Item 6: Staff Report Pg. 33  Packet Pg. 113 of 253  *NOT YET APPROVED* 9 0160204_20260729_ay16 greater setback. Pursuant Government Code section 66321(b)(3), a street-side setback may not preclude the development of an 800 square foot unit. (5) When an existing, legal, nonconforming structure is converted or reconstructed to create an ADU, any portion of the ADU that is in the same location and falls within the building envelope of the original structure shall not be subject to the development standards stated in this Section. Any portion of the ADU that is in a different location or exceeds the envelope of the original structure shall comply with the development standards stated in this Section. (6) Notwithstanding the development standards stated in Table 2 and paragraph (5) above, when an existing, legal, non-conforming structure is converted in-place to an ADU, the envelope of the structure may be modified to encroach further into a setback or daylight plane as follows: (A) The height of the existing structure may be increased by no more than one linear foot in height commensurate to the existing roofline of the structure provided the height of the addition does not exceed 12 feet from grade. The roofline shall not be changed to a style other than what currently exists on the structure. (B) Each non-conforming wall may be expanded by no more than six inches in thickness based on its existing location and configuration, as measured to exterior surface of the material, to provide for greater insulation and energy requirements provided that a minimum of one foot is maintained between the addition and an adjacent interior property line. An existing wall of a structure that does not currently have a separation of one foot from a parallel property line shall not be expanded outward. (C) All other additions not specified here shall follow the standard setbacks for the ADU identified in Table 2. (k) Design (1) Except on corner lots, where feasible, ADUs the unit shall not have an entranceway facing the same lot line (property line) as the entranceway to the main dwelling unit unless the entranceway to the ADU accessory unit is located in the rear half of the lot. Exterior staircases to second floor units shall be located toward the interior side or rear yard of the property. (2) Privacy (A) Second story doors and decks shall not face a neighboring property line. Second story decks and balconies shall utilize screening barriers to prevent views towards an adjacent interior property line. These barriers shall be a minimum Item 6 Attachment B - Draft Ordinance (Annotated Version)        Item 6: Staff Report Pg. 34  Packet Pg. 114 of 253  *NOT YET APPROVED* 10 0160204_20260729_ay16 five-foot, six-inch height from the floor level of the deck or balcony and shall not include perforations of any kind that would allow visibility between properties. (B) Windows on a second floor, loft, or equivalent elevated space, excluding those required for egress, shall have a five-foot sill height as measured from the second-finished floor level, or utilize obscured opaque glazing on the entirety any window that faces an adjacent interior property line. (C) Windows on a second finished floor, loft, or equivalent elevated space, shall be offset from neighbor’s windows to maximize privacy. (D) Where feasible, egress windows on the first and second finished floor of an ADU shall not face towards an adjacent interior property line. If this is not feasible, then these windows shall utilize obscured opaque glazing on the whole window. (E) If the first finished floor of an ADU is two feet or more above grade, then first floor windows shall include the following: i. Non-egress, operable windows facing an adjacent interior property line shall have a windowsill(s) that start five feet above the first finished floor for the unit; ii. Non-egress, non-operable windows facing an adjacent interior property line shall have the lower half of window(s) (minimum of five feet above the first finished floor) utilize obscured opaque glazing. (F) Where feasible, the use of skylights (whether operable or not) shall be used in lieu of operable windows that face adjacent interior properties. (G) No exterior lighting shall be mounted above seven feet. All lighting mounted on walls shall be directed downwards and shall not direct light towards adjacent interior property lines. Any ground lighting shall not direct light upwards to the building or sky. (l) Parking (1) Replacement parking is not required when a garage, carport, covered parking structure, or uncovered parking space is converted to, or demolished in conjunction with the construction of, an ADU. (2) When parking is provided, the unit shall have street access from a driveway in common with the main residence in order to prevent new curb cuts, excessive paving, and elimination of street trees, unless separate driveway access will result in fewer environmental impacts such as paving, grading or tree removal. Item 6 Attachment B - Draft Ordinance (Annotated Version)        Item 6: Staff Report Pg. 35  Packet Pg. 115 of 253  *NOT YET APPROVED* 11 0160204_20260729_ay16 (3) When a single-family dwelling unit is permitted simultaneously with the construction of new ADU, the primary unit’s covered parking requirements identified in Chapter 18.10 and 18.12 do not need to be provided. Two uncovered parking spaces shall be provided in any configuration on the lot including within the front or street-side setback for the property. (4) If covered parking for a unit is provided in any district, the maximum size of the covered parking area for the ADU accessory dwelling unit is 220 square feet. This space shall count towards the total floor area for the site but does not contribute to the maximum size of the unit. Any attached garage shall not have an interior access point to the ADU (e.g. hotel door or other similar feature/appurtenance). (m) Landscape (1) For the purposes of this subsection (m), “protected tree” means: (A) Any locally native tree of the species Acer macrophyllum (Bigleaf Maple), Calocedrus decurrens (California Incense Cedar), Quercus agrifolia (Coast Live Oak), Quercus douglasii (Blue Oak), Quercus kelloggii (California Black Oak), or Quercus lobata (Valley Oak) which is eleven and one-half inches in diameter (thirty-six inches in circumference) or more when measured four and one-half feet (fifty-four inches) above natural grade. (B) Any Coast Redwood tree (species Sequoia sempervirens) that is eighteen inches in diameter (fifty-seven inches in circumference) or more when measured four and one-half feet (fifty-four inches) above natural grade. (C) Any tree of any species, other than a Coast Redwood Tree, fifteen inches in diameter (forty-seven inches in circumference) or more when measured four and one-half feet (fifty-four inches) above natural grade. A “protected tree” does not include a tree of any species on the Exempt Species List put forth by the Department of Urban Forestry and available on the City’s website. (D) Any tree designated for protection during review and approval of a current or previously completed development project. (E) Any tree designated for carbon sequestration and storage and/or environmental mitigation purposes as identified in an agreement between the property owner and a responsible government agency or recorded as a deed restriction. (F) Any heritage tree previously designated by the city council. (G) Any tree previously planted as a replacement mitigation tree. Item 6 Attachment B - Draft Ordinance (Annotated Version)        Item 6: Staff Report Pg. 36  Packet Pg. 116 of 253  *NOT YET APPROVED* 12 0160204_20260729_ay16 (2) Except as provided in subsection (3) below, the construction of an ADU shall not impact any protected tree, on the subject property or any adjacent lot by requiring: (A) Removal of more than twenty-five percent of the functioning leaf, stem, or root area of a tree in any twenty-four-month period; or (B) Removal of more than fifteen percent of the functioning root area of any Quercus (oak) species in any thirty-six-month period; or (C) Trenching, excavating, altering the grade, or paving within the tree protection zone of a tree in a way that foreseeably leads to the death of the tree. For the purposes of this subsection (m), "tree protection zone" means the area defined by a circle with a radius ten times the diameter of the trunk when measured four and one-half feet (fifty-four inches) above natural grade. (3) If an action prohibited by section 18.09.040(m)(2) is necessary to allow the construction of an ADU that meets the minimum standards set forth in state law, the tree shall be replaced according to the objective requirements identified in the Tree Canopy Replacement Table of the Palo Alto Tree and Landscape Technical Manual. (4) The construction of an ADU must comply with applicable objective standards and specifications in the Tree and Landscape Technical Manual for the protection of trees during construction. Compliance with this subsection (4) shall not delay or cause the denial of an ADU or JADU building permit or use permit. (n) Miscellaneous requirements (1) Street addresses shall be assigned to all units prior to building permit final to assist in emergency response. (2) The unit shall not be sold separately from the primary residence except as allowed under Government Code Section 66341 and PAMC 21.09. (3) Rental of any unit created pursuant to this section shall be for a term of 30 days or more. (4) The installation of fire sprinklers shall not be required in an accessory dwelling unit if sprinklers are not required for the primary residence. Nothing in this section shall preclude the Fire Marshal from accepting fire sprinklers as an alternative means of compliance with generally applicable fire protection requirements. (5) An applicant that seeks to appeal the City’s determination of completeness or denial of a permit for an ADU must submit their appeal in writing to the City identifying the reasons for their appeal and pay the accompanied appeal fee, as set forth in the adopted municipal fee schedule. Appeals for these applications shall follow the Item 6 Attachment B - Draft Ordinance (Annotated Version)        Item 6: Staff Report Pg. 37  Packet Pg. 117 of 253  *NOT YET APPROVED* 13 0160204_20260729_ay16 procedures for appeal under PAMC 18.77.075 except that the appeal shall be placed on Council’s Consent Agenda within 45 days of filing a timely appeal. Any decision from the Council, either on consent or through an agendized item, is final. 18.09.050 Additional Requirements for JADUs (a) A JADU may be created on a lot in a single-family residential zone with an existing or proposed single family residence. A JADU shall be attached to or created within the walls of an existing or proposed primary dwelling, including enclosed uses within the residence, such as an attached garage. (b) The JADU shall include an efficiency kitchen, requiring the following components: A cooking facility with appliances, and; food preparation counter and storage cabinets that are of reasonable size in relation to the size of the JADU junior accessory dwelling unit. (1) JADUs may share sanitation facilities (bathrooms, laundry facilities, etc.) with the primary unit. If a permitted JADU does not include a separate bathroom, the permitted junior accessory dwelling unit shall include a separate entrance from the main entrance to the structure, with an interior entry to the main living area. In this instance, the floor area and lot coverage associated with shared space shall count towards the primary unit’s maximum allowances only. The combined sanitation facilities between the units shall include shower, toilet, and sink fixtures at a minimum and shall conform to the minimum requirements specified in the Building Code. (c) For the purposes of any fire or life protection ordinance or regulation or for the purposes of providing service for water, sewer, or power, a JADU shall not be considered a separate or new unit. (d) The owner of a parcel proposed for a JADU shall occupy as a primary residence either the primary dwelling or the JADU. Owner-occupancy is not required if the owner is a governmental agency, land trust, or housing organization or if the required bathroom for the JADU is provided in the unit, rather than inside the primary home. (e) Prior to the issuance of a building permit for a JADU, the owner shall record a deed restriction in a form approved by the city that includes a prohibition on the sale of the junior accessory dwelling unit separate from the sale of the single-family residence, identifies that if the unit is rented it shall be rented for no shorter term than 30 days, is requires owner-occupancy consistent with subsection (d) above, and restricts the size and attributes of the JADU to those that conform with this section. (f) JADU incentive. The existing or proposed primary dwelling unit shall be afforded bonus square footage equal to the square footage of a proposed JADU when a JADU is constructed on site, provided the JADU meets the following requirements: Commented [GS11]: SB 543 Commented [GS12]: AB 1154 Commented [GS13]: AB 1154 Item 6 Attachment B - Draft Ordinance (Annotated Version)        Item 6: Staff Report Pg. 38  Packet Pg. 118 of 253  *NOT YET APPROVED* 14 0160204_20260729_ay16 1) The JADU must conform to the underlying zoning district’s development standards for single family homes. 2) The maximum number of units on site shall not exceed fivefour (three two ADUs, one JADU, and one primary home). 3) The maximum size of the JADU shall not exceed 500 square feet. 4) The total maximum bonus/exempt floor area provided for the site under Section 18.09.040 and 18.09.050 may not exceed 800 square feet. 5) The exterior entryway to the JADU shall not face the same direction as the entrance to the primary home. 6) All egress windows which face an adjacent residential property must utilize obscure opaque glazing on the whole window. 7) All non-egress windows which face an adjacent residential property must have a windowsill(s) that start five feet above the first finished floor for the unit. 8) All noise producing equipment associated with the JADU must comply with the noise regulations in PAMC 9.10. 9) When a single-family dwelling unit is permitted simultaneously with the construction of new JADU using these provisions, the primary unit’s covered parking requirements do not need to be provided. Instead, two uncovered parking spaces shall be provided in any configuration on the lot including within the front or street-side setback for the property. SECTION 3. Subsection (g) of Section 16.58.030 (Exemptions) of Chapter 16.58 (Development Impact Fees) of Title 16 (Building) of the Palo Alto Municipal Code (“PAMC”) is amended to read as follows (additions underlined and deletions struck-through): (g) Accessory dwelling units (ADU) less than 750 square feet in size of interior livable space. Any impact fees to be charged for an accessory dwelling unit of 750 square feet of interior livable space or more shall be proportional to the square footage of the primary dwelling unit; SECTION 4. Any provision of the Palo Alto Municipal Code or appendices thereto inconsistent with the provisions of this Ordinance, to the extent of such inconsistencies and no further, is hereby repealed or modified to that extent necessary to affect the provisions of this Ordinance. Commented [GS14]: SB 543 Commented [GS15]: Staff clarification to incentivize use of this provision. Mirrored in 18.09.040(l)(3). Commented [GS16]: SB 543 Item 6 Attachment B - Draft Ordinance (Annotated Version)        Item 6: Staff Report Pg. 39  Packet Pg. 119 of 253  *NOT YET APPROVED* 15 0160204_20260729_ay16 SECTION 5. If any section, subsection, sentence, clause, or phrase of this Ordinance is for any reason held to be invalid or unconstitutional by a decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Ordinance. The City Council hereby declares that it would have passed this Ordinance and each and every section, subsection, sentence, clause, or phrase not declared invalid or unconstitutional without regard to whether any portion of the ordinance would be subsequently declared invalid or unconstitutional. SECTION 6. The Council finds that the adoption of this Ordinance is exempt from the provisions of the California Environmental Quality Act (CEQA) pursuant to Public Resources Code Section 21080.17 and CEQA Guidelines sections 15061(b)(3), because it constitutes amendments to the City’s zoning ordinance to conform with preemptive State law, including Article 2 (commencing with Section 66314) and Article 3 (commencing with Section 66333) of Chapter 13 of Division 1 of Title 7 of, the Government Code, as well as other minor and non- substantive amendments. As such, it can be seen with certainty that the proposed action will not have the potential for causing a significant effect on the environment. // // // // // // // // // // // // // // // Item 6 Attachment B - Draft Ordinance (Annotated Version)        Item 6: Staff Report Pg. 40  Packet Pg. 120 of 253  *NOT YET APPROVED* 16 0160204_20260729_ay16 SECTION 7. This ordinance shall be effective on the thirty-first date after the date of its adoption. INTRODUCED: PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: ____________________________ ____________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: ____________________________ ____________________________ City Attorney or Designee City Manager ____________________________ Director of Planning and Development Services Item 6 Attachment B - Draft Ordinance (Annotated Version)        Item 6: Staff Report Pg. 41  Packet Pg. 121 of 253  *NOT YET APPROVED* 1 0160205_20260729_ay16 Attachment C – Draft Text to Allow Separate ADU Ownership 1. Establish Section 21.09. (Parcel Maps for Separate Sale of ADUs) of Title 21 (Subdivisions and Other Divisions of Land) 21.09.010 Purpose and Applicability The intent of this Chapter is to implement California Government Code Section 66342 and to apply objective local development standards for condominium subdivisions that facilitate separate conveyance of accessory dwelling units. Except as expressly stated in this Chapter, all other objective policies and requirements governing subdivisions shall apply. Where this Chapter or Government Code Section 66432 conflict with any other provisions of this Code, this Chapter and the Government Code shall control. 21.09.020 Permit Required Pursuant to Government Code Section 66342, this Chapter provides for the streamlined approval of subdivisions for condominium purposes to permit separate conveyance of existing or proposed Accessory Dwelling Units (ADU) from a primary residence. These condominiums shall be sold or otherwise conveyed separate from the primary residence only under the conditions outlined in this Chapter or pursuant to Government Code Section 66342. 21.09.030 ADU Condominium Requirements To achieve the purposes of this Chapter, all projects shall conform to the following requirements: (a) The Director of Planning is authorized to promulgate regulations, forms, and/or checklists setting forth application requirements for a parcel map for this Chapter. (b) All structures and buildings included as part of a condominium project shall conform to the building and zoning requirements applicable to the zoning district in which the project is proposed to be located. Designation of individual condominium units shall not be deemed to reduce or eliminate any of the building and zoning requirements applicable to any such buildings or structures. (c) The condominium shall be created pursuant to the Davis-Stirling Common Interest Development Act (Part 5 (commencing with Section 4000) of Division 4 of the Civil Code). (d) The condominium shall be created in conformance with all applicable objective requirements of the Subdivision Map Act (Division 2 (commencing with Section 66410)) and all other objective requirements of this Chapter. Item 6 Attachment C - Draft Text to Allow Separate ADU Ownership        Item 6: Staff Report Pg. 42  Packet Pg. 122 of 253  *NOT YET APPROVED* 2 0160205_20260729_ay16 (1) Neither a subdivision map nor a condominium plan shall be recorded with the county recorder without each lienholder’s consent. The following shall apply to the consent of a lienholder: (A) A lienholder may refuse to give consent. (B) A lienholder may consent provided that any terms and conditions required by the lienholder are satisfied. (2) Prior to recordation of the initial or any subsequent modifications to the condominium plan, written evidence of the lienholder’s consent shall be provided to City staff and the county recorder along with a signed statement from each lienholder that states as follows: “(Name of lienholder) hereby consents to the recording of this condominium plan in their sole and absolute discretion and the borrower has or will satisfy any additional terms and conditions the lienholder may have.” (3) The lienholder’s consent shall be included on the condominium plan, or attached to the condominium plan that includes the following information: (A) The lienholder’s signature. (B) The name of the record owner or ground lessee. (C) The legal description of the real property. (D) The identities of all parties with an interest in the real property as reflected in the real property records. (E) The lienholder’s consent shall be recorded in the office of the county recorder of the county in which the real property is located. (e) An ADU shall be sold or otherwise conveyed separate from the primary residence only under the conditions outlined in this Chapter, Title 21 of the Palo Alto Municipal Code, and under the applicable conditions of Government Code Section 66342. Prior to approval of a parcel map, a home or property owners’ association or similar entity shall be formed for any condominium project. The association shall, at a minimum, provide for the administration, management and maintenance of all common areas including landscaping, drive aisles and parking areas, maintenance of the exterior of all buildings, pool or common roof, the collection of dues, payment of public utilities not billed separately to each unit, and enforcement of standards within the project. (1) The owner of a property or a separate interest within an existing planned development that has an existing association, as defined in Section 4080 of the Civil Code, shall not record a condominium plan to create a common interest development under Section 4100 of the Civil Code without the express written authorization by the existing association. Item 6 Attachment C - Draft Text to Allow Separate ADU Ownership        Item 6: Staff Report Pg. 43  Packet Pg. 123 of 253  *NOT YET APPROVED* 3 0160205_20260729_ay16 (2) For purposes of this subparagraph, written authorization by the existing association means approval by the board at a duly noticed board meeting, as defined in Section 4090 of the Civil Code, and if needed pursuant to the existing association’s governing documents, membership approval of the existing association. (f) The applicant shall prepare a declaration of covenants, conditions and restrictions (CC&Rs) which shall be recorded and apply to each owner of a condominium unit within the project. The CC&Rs shall be recorded at, or prior to, the time of parcel map approval, and shall include all applicable conditions of approval and requirements of the City. The CC&Rs shall, at a minimum, provide: (1) That any amendment to the CC&Rs related to the conditions of approval or other requirements of this Chapter may not be approved without prior consent of the City. (2) That there shall be an entity created (e.g., a property or homeowners’ association) which shall be financially responsible for and shall provide for the effective establishment, operation, management, use, repair and maintenance of all common areas and facilities. (3) A provision containing information regarding the conveyance of units and any assignment of parking, an estimate of any initial assessment fees anticipated for maintenance of common areas and facilities, and an indication of appropriate responsibilities for maintenance of all utility lines and services for each unit. (4) A provision addressing the payment of utilities including water, sewer, gas and electricity by the homeowner or through the association. (5) A provision requiring that any owner who rents his/her condominium unit shall conform to the homeowners’ association which is responsible for management of the common areas and enforcement of the CC&Rs. (6) That rental of any dwelling unit created by the parcel map shall be for a term longer than 30 consecutive days. (g) In addition to such covenants, conditions, and restrictions that may be required by the Department of Real Estate of the State of California pursuant to Title 6 (Condominiums) of the Civil Code or other State laws or policies, the organization documents shall provide for the following: (1) Conveyance of units. (2) Management of common areas within the project. Item 6 Attachment C - Draft Text to Allow Separate ADU Ownership        Item 6: Staff Report Pg. 44  Packet Pg. 124 of 253  *NOT YET APPROVED* 4 0160205_20260729_ay16 (3) A proposed annual operating budget containing a reserve fund to pay major anticipated maintenance, repair, or replacement expenses; and indicating the association fees needed for the operating budget and reserve fund. (4) FHA regulatory agreement, if any. (h) If an accessory dwelling unit is established as a condominium, the homeowner shall notify providers of utilities, including water, sewer, gas, and electricity, of the condominium creation and separate conveyance. (i) Prior to approval of the parcel map, a safety inspection of the ADU(s) shall be conducted as evidenced through issuance of a final Building Permit or a housing quality standards report from a building inspector certified by the United States Department of Housing and Urban Development when applicable, and which conforms to current Building Code and Fire Code requirements. (j) The Director of Planning shall cause a notice of the pending application to be posted at the site of the proposed ADU Condominium and for notice to be mailed to owners and residents of property within 600 feet of the property. (k) The Director of Planning shall ministerially review and approve a parcel map for an ADU Condominium if they determine that the parcel map application meets all requirements of this Chapter, Chapter 18.09, and Title 21. The Director of Planning shall deny a parcel map application that does not meet any requirement of this Chapter, Chapter 18.09, and Title 21. (l) In addition to other application submittal requirements created by the City and published on its website, the following information shall be provided: (1) Statement regarding current ownership of all improvements and underlying land. (2) A site plan and boundary map showing the location of all existing or proposed: easements, structures, mature and/or scenic trees, and other improvements upon the property. (3) Dimensions and location of each building or unit and the location of all fences and walls. (4) The location, size, and design for all common areas, including all facilities and amenities provided within the common areas for use by unit owners. (5) Location and condition for all paved areas, including pedestrian walkways. (6) Maintenance plan of all buildings and common areas and facilities. Item 6 Attachment C - Draft Text to Allow Separate ADU Ownership        Item 6: Staff Report Pg. 45  Packet Pg. 125 of 253  *NOT YET APPROVED* 5 0160205_20260729_ay16 (m) The Director of Planning shall determine the appropriate fee required for an application for parcel map for an ADU Condominium, which may be the fee currently established for a Preliminary Parcel Map, Parcel Map, or SB 9 application. Item 6 Attachment C - Draft Text to Allow Separate ADU Ownership        Item 6: Staff Report Pg. 46  Packet Pg. 126 of 253  CITY COUNCIL Staff Report From: City Manager Report Type: ACTION ITEMS Lead Department: Planning and Development Services Meeting Date: August 17, 2026 Report #: 2604-6295 TITLE PUBLIC HEARING/QUASI-JUDICIAL. 762 San Antonio Road [24PLN-00120]: Request for Approval of a Major Architectural Review Application to Demolish Three Existing Commercial Buildings and Construct an Eight-Story Multi-Family Residential Building Containing 228 Rental Apartments. The Project is Proposed in Accordance with California Government Code Section 65589.5(d)(5) “Builders Remedy". CEQA Status: An Addendum to the Previously Certified Environmental Impact Report for the Housing Incentive Program Expansion and 788 San Antonio Mixed Use Project (SCH # 2019090070) has Been Prepared. Zoning District: CS (AD); Service Commercial (Automobile Dealership). RECOMMENDATION Staff recommend that the City Council: 1. Consider the Addendum to the previously certified Environmental Impact Report (EIR) (SCH#2019090070) (Attachment F); and 2. Approve the Major Architectural Review application based on findings and subject to conditions of approval in the Record of Land Use Action (RLUA) in Attachment B. EXECUTIVE SUMMARY The applicant requests approval of a Major Architectural Review application to demolish three existing commercial buildings and to construct an eight-story multi-family residential development containing 228 rental apartments, including 30 deed-restricted below-market- rate units affordable to lower-income households (Attachments E and F). The project includes three levels of above-grade parking, residential amenity spaces, landscaping, and associated site improvements on an approximately two-acre site located at 762 San Antonio Road (Attachment A). The project qualifies as a Builder's Remedy project pursuant to Government Code Section 65589.5(d)(5) and is subject to the Housing Accountability Act, Senate Bill (SB) 330, Assembly Bill (AB) 1893, and State Density Bonus Law. The applicant submitted a complete SB 330 pre- application on January 9, 2024, which established the applicable development standards for project review. The Architectural Review Board (ARB) recommended approval of the project on June 4, 2026. Item 7 Item 7 Staff Report        Item 7: Staff Report Pg. 1  Packet Pg. 127 of 253  Staff find that the project is consistent with relevant plans and regulations, as modified by State housing laws, and satisfies the required findings. The project would contribute toward the City's housing goals through the construction of 228 residential units, including 30 units rented at a rate affordable to low-income households. Accordingly, staff recommend that the City Council approve the Major Architectural Review application, subject to the conditions contained in the Record of Land Use Action. BACKGROUND 1 At that hearing, the ARB provided feedback regarding building massing and scale, architectural articulation, materiality, landscaping, open space design, pedestrian experience, circulation, and rooftop amenities. 1 August 7, 2025, ARB Staff report: https://cityofpaloalto.primegov.com/meetings/ItemWithTemplateType?id=8368&meetingTemplateType=2&compiledMeeting DocumentId=15247 Item 7 Item 7 Staff Report        Item 7: Staff Report Pg. 2  Packet Pg. 128 of 253  Because the California Environmental Quality Act analysis was not yet complete, the ARB continued the project to a date uncertain.3 4 and recommended approval of the Major AR application with the following modifications.5 In forwarding its recommendation for approval, the ARB found that the project demonstrated meaningful improvements to the building's architectural expression, pedestrian orientation, open space design, and overall site planning, while supporting the City's housing objectives. Following the ARB recommendation, the applicant submitted revised plans on July 14, 2026. The revisions did not materially alter the approved project design and were limited to incorporating minor refinements and providing additional information, including unit floor plans, for City Council review and consideration. Architectural Review – Major (AR): The process for evaluating this type of application is set forth in Palo Alto Municipal Code (PAMC) 18.77.070. Major AR applications are reviewed by the ARB and recommendations are forwarded to the Planning & Development Services Director for action within five business days of the Board’s recommendation. Pursuant to PAMC Section 18.40.170, the Director may forward decision on the application to the City Council. AR projects are evaluated against specific findings. All findings must be made in the affirmative to approve the project. Failure to make any one finding requires project redesign or denial. The findings to approve an AR application are provided in Attachment B. Housing Accountability Act (Government Code §65589.5): The project qualifies as a “housing development project,” including housing for very low-, low-, or moderate- income households under the Housing Accountability Act. Pursuant to Government 3 August 7, 2025, ARB meeting minutes: https://cityofpaloalto.primegov.com/Public/CompiledDocument?meetingTemplateId=16790&compileOutputType=1 4 June 4, 2026, ARB Staff report: https://cityofpaloalto.primegov.com/api/compilemeetingattachmenthistory/historyattachment/?historyId=8ce5486d-350f- 4f5b-9197-f5164813cdc8 5 June 4, 2026, ARB meeting minutes: https://cityofpaloalto.primegov.com/Public/CompiledDocument?meetingTemplateId=19489&compileOutputType=1 Item 7 Item 7 Staff Report        Item 7: Staff Report Pg. 3  Packet Pg. 129 of 253  Code Section 65589.5, the City may not deny or impose conditions of approval that would render the project infeasible unless it makes specific written findings, including a finding of a specific, adverse impact to public health or safety that cannot be mitigated. Builder’s Remedy (Government Code §65589.5(d)(5) and AB 1893): The project is proposed as a Builder’s Remedy project and is therefore subject to streamlined application of objective standards. The City’s review is limited to objective zoning, design, and development standards that are applicable to residential development of the proposed density. The project may not be conditioned or reduced in a manner that would preclude development consistent with applicable State law protections. ANALYSIS The applicant requests multiple waivers from objective development standards related to building articulation, façade activation, open space provisions, pedestrian access dimensions, and setback requirements (Attachment D) that would preclude development at the proposed density. Pursuant to Government Code Section 65589.5, a Builder’s Remedy project cannot be denied on the basis of inconsistency with the City‘s zoning or Comprehensive Plan land use designation. Moreover, a project’s consistency with City regulations is judged after the application of waivers under State Density Bonus Law, which must be granted unless the City can make findings supported by substantial evidence that the standards do not physically preclude development of the project at the proposed density or that denial is necessary to protect public health and safety. Consistency with the Comprehensive Plan, Area Plans, and Guidelines9 The Comprehensive Plan land use designation for the project site is Service Commercial, which states: "Consistent with the Comprehensive Plan's encouragement of housing near transit centers, higher density multi-family housing may be allowed in specific locations.” The project is not located near a transit center; however, it is consistent with other relevant goals and policies of the Comprehensive Plan that encourage high density housing growth along this corridor. Moreover, both sites are identified as Housing Inventory Sites under the adopted Housing Element, albeit at a lower density. The proposed density is discussed further below. A detailed review of the project’s consistency with relevant goals and policies set forth in the Comprehensive Plan is provided in the RLUA (Attachment B). However, staff notes that the proposed application was filed in accordance with the Builder’s Remedy provision in the Housing Accountability Act. This provision applies to jurisdictions where a compliant Housing Element has not been adopted by the jurisdiction and certified by the Department of Housing and Community Development (HCD). Although the City has an adopted and certified Housing Element as of August 2024, the compliant SB 330 pre-application was filed on January 9, 2024, and therefore froze development standards in effect at the time of submittal. Therefore, even 9 The Palo Alto Comprehensive Plan is available online: https://www.paloalto.gov/Departments/Planning-Development- Services/Housing-Policies-Projects/2030-Comprehensive-Plan Item 7 Item 7 Staff Report        Item 7: Staff Report Pg. 4  Packet Pg. 130 of 253  though the project is arguably inconsistent with the Comprehensive Plan because the proposed density exceeds what would be allowed absent the application of State laws, it cannot be denied on this basis. Housing Element Projections and Proposed Density San Antonio Road Area Plan 11 The plan covers approximately 275 acres along the Palo Alto–Mountain View border and seeks to guide long-term transformation of the corridor into mixed-use neighborhoods with improved access to transit, employment, community services, and recreation. The planning effort includes evaluation of land use changes, housing capacity, and multi-modal mobility improvements, including connections to the San Antonio Caltrain station and nearby destinations such as the Cubberley Community Center and Baylands Nature Preserve. 11 San Antonio Road Area Plan: https://www.paloalto.gov/Departments/Planning-Development-Services/Housing-Policies- Projects/San-Antonio-Road-Area-Plan Item 7 Item 7 Staff Report        Item 7: Staff Report Pg. 5  Packet Pg. 131 of 253  The project has been designed to comply with the existing San Antonio Road special setback requirements. The proposed improvements are located outside of the required setback area and do not preclude the City from pursuing future streetscape, transportation, or mobility improvements contemplated as part of the San Antonio Road Area Plan. 13 Comparison to PAMC 18.14.020 El Camino Real (ECR) Focus Area Standards 13 The Palo Alto Zoning Code is available online: https://codelibrary.amlegal.com/codes/paloalto/latest/overview Item 7 Item 7 Staff Report        Item 7: Staff Report Pg. 6  Packet Pg. 132 of 253  •Upper Story Step-back: Per PAMC 18.14.020 Table 3: The project provides a six-foot step-back where 10-foot step-back on El Camino Real (the major street frontage) is required. •Garage openings: Per PAMC 18.14.020 Table 3: Note (4) b: On the Leghorn Street frontage, 83% of the frontage is dedicated to garage openings, loading entries, and utility access, where no more than 50% is allowed. Comparison to PAMC 18.24 Contextual Design Criteria and Objective Design Standards In addition to the base development standards, the project is subject to applicable objective design standards in PAMC Chapter 18.24. The applicant requests waivers to allow the project to deviate from the following standards as detailed in Attachment D and E: •Pedestrian Walkways: Per PAMC 18.24.020(b)(1)(C): Pedestrian walkways that are designed to provide access to bicycles shall have a minimum width of eight feet, with two feet of clear space on either side. The entry to the bike room south of the main entrance is eight feet wide but provides only 2 feet of landscaping on one side for a total width of 10 feet, where 12 feet with 2 feet of landscaping on each side is required. Waiver is also needed for bike room access from Leghorn, where proposed bike room access is 5'-0" wide. •Side and Rear Step Backs: Per PAMC 18.24.050(b)(1)(B): On the side and rear elevations, the step back shall occur for a minimum of 70% of each façade length and shall occur between 33 and 37 feet in height when adjacent to one-story buildings. By contrast for the Project, the North elevation provides a 44.8% step-back; the South elevation provides a 35.5% step-back. •Side Street Step Back: Per PAMC 18.24.050(b)(1)(A) and (B): On the Leghorn side, the required upper floor step back extends 45% of the frontage where 70% is required. (Note: for both of these, the plans dimension all the way across the building façade, however we understand the City proposed to count only the portion adjacent to each individual frontage, so that the portions of the building “behind” the 780 San Antonio parcel do not count). •Façade Transparency: Per PAMC 18.24.060(c)(6)(A) and (B): On the Leghorn Street frontage, the Project does not provide 14-foot floor-to-floor and 50% transparency. If the Project had to provide 50% transparency storefront space on the ground level with 14 feet double-height, the design would reduce the building area by approximately 480 SF (assuming a 20' deep active space). •Screening of Above Grade Parking: Per PAMC 18.24.060(c)(7)(B): On the Leghorn Street frontage, the above grade parking is not lined with commercial or habitable uses with a minimum depth of 20 feet. •Common Open Space Landscaping: Per PAMC 18.24.080(b)(2)(F): The fourth-floor common open space is 15% landscaped, and the eighth-floor common open space contains no planting, where a minimum of 20% is required. Item 7 Item 7 Staff Report        Item 7: Staff Report Pg. 7  Packet Pg. 133 of 253  Multi-Modal Access & Parking th, 2026 to gather feedback on possible locations for artwork and the artist they are considering for the project. The Public Art Commission was very supportive of the artist under consideration. Areas for art integration focused on the San Antonio Road side of the building and mostly focused on architecturally integrated artworks on the exterior of the building. The applicant will return to the Public Art Commission for a Final Review and approval of the artwork in the coming months. Item 7 Item 7 Staff Report        Item 7: Staff Report Pg. 8  Packet Pg. 134 of 253  Code Section 65589.5, State Density Bonus Law, and the project’s Builder’s Remedy status, these inconsistencies do not constitute a basis for denial where the requested waivers are necessary to accommodate the proposed residential density and where no specific adverse impact to public health or safety has been identified. Accordingly, staff recommend that the City Council approve the project. FISCAL/RESOURCE IMPACT STAKEHOLDER ENGAGEMENT ENVIRONMENTAL REVIEW Item 7 Item 7 Staff Report        Item 7: Staff Report Pg. 9  Packet Pg. 135 of 253  The project remains within the scope of the impacts analyzed in the certified 2020 EIR, and all applicable mitigation measures continue to apply. Accordingly, an Addendum prepared pursuant to CEQA Guidelines Section 15164 is appropriate, and no subsequent or supplemental EIR is required. ATTACHMENTS APPROVED BY: Item 7 Item 7 Staff Report        Item 7: Staff Report Pg. 10  Packet Pg. 136 of 253  24 24 15 15Bu ng 14 Building 4 Building 3 Bu ilding 15 Building 1 250.0' 94.1' 73.8' 95.3' 457.3 ' 250.0' 94.1' 73.8' 95.3' 457.3 ' 250.0' 94.1' 73.8' 95.3' 457.3 ' 250.0' 94.1' 73.8' 95.3' 457.3 ' 250.0' 94.1' 73.8' 95.3' 457.3 ' 250.0' 94.1' 73.8' 95.3' 457.3 ' 250.0' 94.1' 73.8' 95.3' 457.3 ' 250.0' 94.1' 73.8' 95.3' 457.3 ' 250.0' 94.1' 73.8' 95.3' 457.3 ' 250.0' 94.1' 73.8' 95.3' 457.3 ' 250.0' 94.1' 73.8' 95.3' 457.3 ' 250.0' 94.1' 73.8' 95.3' 457.3 ' 250.0' 94.1' 73.8' 95.3' 457.3 ' 250.0' 94.1' 73.8' 95.3' 457.3 ' 250.0' 94.1' 73.8' 95.3' 457.3 ' 250.0' 94.1' 73.8' 95.3' 457.3 ' 250.0' 94.1' 73.8' 95.3' 457.3 ' 250.0' 94.1' 73.8' 95.3' 457.3 ' 250.0' 94.1' 73.8' 95.3' 457.3 ' 250.0' 94.1' 73.8' 95.3' 457.3 ' 250.0' 94.1' 73.8' 95.3' 457.3 ' 250.0' 94.1' 73.8' 95.3' 457.3 ' 250.0' 94.1' 73.8' 95.3' 457.3 ' 250.0' 94.1' 73.8' 95.3' 457.3 ' 250.0' 94.1' 73.8' 95.3' 457.3 ' 250.0' 94.1' 73.8' 95.3' 457.3 ' 250.0' 94.1' 73.8' 95.3' 457.3 ' 250.0' 94.1' 73.8' 95.3' 457.3 ' 250.0' 94.1' 73.8' 95.3' 457.3 ' 250.0' 94.1' 73.8' 95.3' 457.3 ' 250.0' 94.1' 73.8' 95.3' 457.3 ' 250.0' 94.1' 73.8' 95.3' 457.3 ' 250.0' 94.1' 73.8' 95.3' 457.3 ' 250.0' 94.1' 73.8' 95.3' 457.3 ' 250.0' 94.1' 73.8' 95.3' 457.3 ' 250.0' 94.1' 73.8' 95.3' 457.3 ' 250.0' 94.1' 73.8' 95.3' 457.3 ' 250.0' 94.1' 73.8' 95.3' 457.3 ' 250.0' 94.1' 73.8' 95.3' 457.3 ' 250.0' 94.1' 73.8' 95.3' 457.3 ' 250.0' 94.1' 73.8' 95.3' 457.3 ' 250.0' 94.1' 73.8' 95.3' 457.3 ' 250.0' 94.1' 73.8' 95.3' 457.3 ' 250.0' 94.1' 73.8' 95.3' 457.3 ' 250.0' 94.1' 73.8' 95.3' 457.3 ' 250.0' 94.1' 73.8' 95.3' 457.3 ' 250.0' 94.1' 73.8' 95.3' 457.3 ' 250.0' 94.1' 73.8' 95.3' 457.3 ' 250.0' 94.1' 73.8' 95.3' 457.3 ' 250.0' 94.1' 73.8' 95.3' 457.3 ' 250.0' 94.1' 73.8' 95.3' 457.3 ' 250.0' 94.1' 73.8' 95.3' 457.3 ' 250.0' 94.1' 73.8' 95.3' 457.3 ' 250.0' 94.1' 73.8' 95.3' 457.3 ' 250.0' 94.1' 73.8' 95.3' 457.3 ' 250.0' 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94.1' 73.8' 95.3' 457.3 ' 250.0' 94.1' 73.8' 95.3' 457.3 ' 250.0' 94.1' 73.8' 95.3' 457.3 ' 250.0' 94.1' 73.8' 95.3' 457.3 ' 250.0' 242.4' 73.8' 94.1' 250.0' 242.4' 73.8' 94.1' 250.0' 242.4' 73.8' 94.1' 250.0' 242.4' 73.8' 94.1' 250.0' 242.4' 73.8' 94.1' 250.0' 242.4' 73.8' 94.1' 250.0' 242.4' 73.8' 94.1' 250.0' 242.4' 73.8' 94.1' 250.0' 242.4' 73.8' 94.1' 250.0' 242.4' 73.8' 94.1' 250.0' 242.4' 73.8' 94.1' 250.0' 242.4' 73.8' 94.1' 250.0' 242.4' 73.8' 94.1' 250.0' 242.4' 73.8' 94.1' 250.0' 242.4' 73.8' 94.1' 250.0' 242.4' 73.8' 94.1' 250.0' 242.4' 73.8' 94.1' 250.0' 242.4' 73.8' 94.1' 250.0' 242.4' 73.8' 94.1' 250.0' 242.4' 73.8' 94.1' 250.0' 242.4' 73.8' 94.1' 250.0' 242.4' 73.8' 94.1' 250.0' 242.4' 73.8' 94.1' 250.0' 242.4' 73.8' 94.1' 250.0' 242.4' 73.8' 94.1' 250.0' 242.4' 73.8' 94.1' 250.0' 242.4' 73.8' 94.1' 250.0' 242.4' 73.8' 94.1' 250.0' 242.4' 73.8' 94.1' 250.0' 242.4' 73.8' 94.1' 250.0' 242.4' 73.8' 94.1' 250.0' 242.4' 73.8' 94.1' 250.0' 242.4' 73.8' 94.1' 250.0' 242.4' 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744 750 765 777 720 788 748 780 762 760 SA N ANTONIO ROAD LEGHORN STREET CS(AD) CS This map is a product of the City of Palo Alto GIS This document is a graphic representation only of best available sources. Legend Highlighted Features 0'70' Attachment A Location Map 762 San Antonio CITYOF PALOALTO I NC O R P O R A TE D CALI FORNIA P a l o A l t o T h e C i t y o f APRI L 1 6 189 4 The City of Palo Alto assumes no responsibility for any errors. ©1989 to 2016 City of Palo Alto ekallas, 2024-10-01 21:29:14 (\\cc-maps\Encompass\Admin\Personal\Planning.mdb) Item 7 Attachment A -Location Map        Item 7: Staff Report Pg. 11  Packet Pg. 137 of 253  1 1 0 4 0 1 DRAFT ACTION NO. 2026-__ On August 10, 2026, the City Council of the City of Palo Alto (“City Council”) approved a Major Architectural Review application for development of 228 residential rental units (“the project”). In approving the application, Council makes the following findings, determinations, and declarations: SECTION 1. Background. A. On January 9, 2024, Acclaim Companies filed a compliant pre-application (24PLN-00011) in accordance with Senate Bill (SB) 330 and with California Government Code Section 65589.5(d)(5) (also known as Builder’s Remedy). B. On April 23, 2024, Acclaim Companies filed an Architectural Review application (24PLN-00120) for construction of a 228-unit residential rental project. The project includes 30 deed-restricted low-income units as well as the following density bonus waivers and concessions in accordance with State Density Bonus Law, and additional protections as a “builder’s remedy project,” under AB 1893: Waiver 1: Garage Opening (83% of frontage where 50% are allowed) Waiver 2: Upper Floor Step-back (6-foot step-back where 10-foot is required) Waiver 3: Bicycle access and clearance (2 feet of landscaping on one side for a total width of 10 feet, where 12 feet with 2 feet of landscaping on each side is required and 5-foot wide bike room access along Leghorn where 12 feet is required) Waiver 4: Side and Rear Elevation Step-back (the North elevation provides a 44.8% step-back, the South elevation provides a 35.5% step-back where 70% of each façade length step-back shall occur between 33 and 37 feet in height when adjacent to one-story buildings) Waiver 5: Front Upper Floor step-back (On the Leghorn side, the required upper floor-step back extends 45% of the frontage where 70% is required) Waiver 6: Storefront transparency (On the Leghorn Street frontage, the Project does not provide 14-foot floor-to-floor and 50% transparency) Waiver 7: Above-Grade Parking (On the Leghorn Street frontage, the above grade parking is not lined with commercial or habitable uses with a minimum depth of 20 feet.) Waiver 8: Open Space (The fourth-floor common open space is 15% landscaped, and the eighth-floor common open space contains no planting, where a minimum of 20% is required). Item 7 Attachment B - Draft Record of Land Use Action (RLUA)        Item 7: Staff Report Pg. 12  Packet Pg. 138 of 253  2 1 0 4 0 1 C. On August 7, 2025, following staff review, the Architectural Review Board held a duly noticed public hearing to review the formal Major Architectural Review application (24PLN-00120) to provide initial feedback on the design. D. On June 4, 2026 the Architectural Review Board held a duly noticed public hearing to consider the addendum to the previously certified Environmental Impact Report (EIR) (SCH#2019090070) and recommend approval of the Major Architectural Review application. E. On August 17, 2026 the City Council held a duly noticed public hearing at which evidence was considered, and all persons were afforded an opportunity to be heard in accordance with the City Council’s policies and procedures. F. The project site is comprised of two existing lots: APN No. 147-05-012, approximately 43,562 square feet and APN No. 147-05-102, approximately 43,558 square feet; occupied by the Hengehold Truck Rental facility and associated commercial structures totaling approximately 8,628 square feet; Adjacent uses include a mix of auto service, office, hotel and multi-family uses. SECTION 2. Environmental Review. The City, as the lead agency for the Project, has prepared an Addendum to the Previously Certified Environmental Impact Report (EIR) for the Housing Incentive Program Expansion and 788 San Antonio Mixed Use Project (SCH # 2019090070) consistent with the California Environmental Quality Act (CEQA) Guidelines. The project remains within the scope of the impacts analyzed in the certified 2020 EIR, and all applicable mitigation measures continue to apply. Accordingly, an Addendum prepared pursuant to CEQA Guidelines Section 15164 is appropriate, and no subsequent or supplemental EIR is required. SECTION 3. Architectural Review Findings. In order to make a recommendation of approval, the project must comply with the following Findings for Architectural Review as required in Chapter 18.76.020 of the PAMC. Finding 1: The design is consistent with applicable provisions of the Palo Alto Comprehensive Plan, Zoning Code, coordinated area plans (including compatibility requirements), and any relevant design guides. The project is consistent with Finding #1 because: A summary of the project’s consistency with the Comprehensive Plan is provided in this table. Because the project is a “builder’s remedy project,” as defined in Gov. Code section 65589.5(h)(11), and in accordance with Gov. Code section 65589.5(f)(6)(A), the project is required to comply only with objective, quantifiable, written development standards, Item 7 Attachment B - Draft Record of Land Use Action (RLUA)        Item 7: Staff Report Pg. 13  Packet Pg. 139 of 253  3 1 0 4 0 1 conditions, and policies that would have applied to the project had it been proposed on a site with a general plan designation and zoning classification that allow the density and unit type proposed by the applicant. Moreover, in accordance with Gov. Code section 65589.5(f)(6)(D)(iii), a project that complies with such objective standards, conditions, and policies “shall be deemed consistent, compliant, and in conformity with an applicable plan, program, policy, ordinance, standard, requirement, redevelopment plan and implementing instruments, or other similar provision for all purposes.” Comp Plan Goals and Policies How project adheres or does not adhere to Comp Plan Housing Element Policy 4.3 Implement development standards, objective design standards, and architectural and green building standards that encourage new high-quality rental and ownership housing. Land Use and Community Design Element Goal L-1 A compact and resilient city providing residents and visitors with attractive neighborhoods, work places, shopping districts, public facilities and open spaces. Policy L-1.3: Infill development in the urban service area should be compatible with its surroundings and the overall scale and character of the city to ensure a compact, efficient development pattern. Item 7 Attachment B - Draft Record of Land Use Action (RLUA)        Item 7: Staff Report Pg. 14  Packet Pg. 140 of 253  4 1 0 4 0 1 Comp Plan Goals and Policies How project adheres or does not adhere to Comp Plan Policy L-1.4: Commit to creating an inventory of below market rate housing for purchase and rental. The proposed residential project includes 228 rental units, and 13 percent of the proposed units would be provided at a rate affordable to low-income households. This would add 30 low-income rental units to the City’s BMR housing stock. Goal L-2 An enhanced sense of “community” with development designed to foster public life, meet citywide needs and embrace the principles of sustainability. The project is designed to comply with CALGreen Tier 2 requirements that incorporate sustainable design, construction, and operational requirements to reduce energy and water operational costs and increase indoor air quality for building owners and occupants. Policy L-2.2 Enhance connections between commercial and mixed use centers and the surrounding residential neighborhoods by promoting walkable and bikeable connections and a diverse range of retail and services that caters to the daily needs of residents. The project site is located on and adjacent to San Antonio Road, defined by a mix of commercial uses and housing. The City is recommending a Class IV separated Bikeway which will run along the project’s frontage on San Antonio Road to San Antonio Caltrain Station. Residents would be able to utilize these connections to other surrounding areas. Goal L-6: Well-designed buildings that create coherent development patterns and enhance city streets. The project frontage along San Antonio Road provides a sidewalk and new street trees for an inviting streetscape. The project includes high quality materials such as aluminum storefronts, stone facade panels, glass and metal railings in creating a cohesive design. Policy L-9.2 Encourage development that creatively integrates parking into the project, including by locating it behind buildings or underground wherever possible, or by providing for shared use of parking areas. Encourage other alternatives to surface parking lots that minimize the amount of land devoted to parking while still maintaining safe streets, street trees, a vibrant local economy and sufficient parking to meet demand. Parking would be located inside of the building on the ground floor and partially on the second and third levels of the eight story building. Further, 284 parking spaces would be provided on-site exceeding the El Camino Real focus area parking requirements of 228 spaces. Transportation Element Policy T-3.7 Encourage pedestrian-friendly design features such as sidewalks, street trees, on-street parking, gathering spaces, gardens, The project includes direct connections to the sidewalk that help to activate the frontage Item 7 Attachment B - Draft Record of Land Use Action (RLUA)        Item 7: Staff Report Pg. 15  Packet Pg. 141 of 253  5 1 0 4 0 1 Comp Plan Goals and Policies How project adheres or does not adhere to Comp Plan outdoor furniture, art and interesting architectural details. along San Antonio Road in addition to new street trees and plantings. Policy T-3.9 Support citywide sustainability efforts by preserving and enhancing the tree canopy where feasible within the public right- of-way, consistent with the Urban Forest Management Plan, as amended. The project meets the tree canopy replacement requirements through on-site plantings. The project includes removal of 6 trees and replaces with 25 trees, which are proposed to be located along property lines, in the right of way, and within open space areas. Finding 2: The project has a unified and coherent design, that: a.creates an internal sense of order and desirable environment for occupants, visitors, and the general community, b.preserves, respects and integrates existing natural features that contribute positively to the site and the historic character including historic resources of the area when relevant, c.is consistent with the context-based design criteria of the applicable zone district, d.provides harmonious transitions in scale, mass and character to adjacent land uses and land use designations, e.enhances living conditions on the site (if it includes residential uses) and in adjacent residential areas. The project is consistent with Finding #2 because: The project incorporates a cohesive contemporary architectural design with consistent materials, façade articulation, landscaping, and integrated common open space areas that create a functional and attractive residential environment. The site does not contain historic resources or significant natural features. Newly planted landscaping and canopy trees will enhance the streetscape and pedestrian experience. The project has been evaluated against applicable objective zoning and design standards, including the El Camino Real Focus Area standards and PAMC Chapter 18.24. Where the project does not comply with an objective standard, the applicant has requested waivers pursuant to State Density Bonus Law and the Housing Accountability Act as detailed in section 1 of this Record of Land Use Action. The building incorporates upper-level step-backs, façade modulation, material variation, and landscaping to reduce perceived massing and provide appropriate transitions to surrounding commercial, office, hotel, and residential uses. The project also enhances living conditions through the provision of common open space, rooftop amenities, bicycle facilities, and pedestrian-oriented design features. Item 7 Attachment B - Draft Record of Land Use Action (RLUA)        Item 7: Staff Report Pg. 16  Packet Pg. 142 of 253  6 1 0 4 0 1 Finding 3: The design is of high aesthetic quality, using high quality, integrated materials and appropriate construction techniques, and incorporating textures, colors, and other details that are compatible with and enhance the surrounding area. The proposed project incorporates a contemporary architectural design with a cohesive palette of high-quality materials, including stone-textured tile, metal panels, glazing, and textured exterior finishes that are integrated throughout the building façades. The revised design simplifies the material palette and color scheme in response to prior ARB feedback and incorporates additional façade articulation, vertical modulation, and enhanced pedestrian-level detailing to improve the overall architectural quality of the project. The project includes substantial glazing, landscaping, rooftop amenity areas, and pedestrian- oriented ground-floor elements that contribute to an active and visually engaging streetscape along San Antonio Road and Leghorn Street. The building design, materials, textures, and architectural detailing are compatible with the evolving mixed-use and residential character of the surrounding corridor and enhance the visual quality of the site and adjacent public realm. Finding 4: The design is functional, allowing for ease and safety of pedestrian and bicycle traffic and providing for elements that support the building’s necessary operations (e.g. convenient vehicle access to property and utilities, appropriate arrangement and amount of open space and integrated signage, if applicable, etc.). The project provides a functional site layout with clearly defined pedestrian, bicycle, and vehicular circulation. Pedestrian access is provided from both San Antonio Road and Leghorn Street through a centralized residential lobby and improved internal circulation design. The project includes long-term and short-term bicycle parking facilities with convenient access from the street frontage and garage areas to support multimodal transportation. Vehicular access is separated between the two street frontages to improve circulation efficiency and reduce conflicts. The project includes three levels of structured parking, loading and delivery areas, passenger drop-off spaces, utility areas, and service functions integrated into the building design. Common and private open space areas, rooftop amenities, landscaping, and pedestrian-oriented ground-floor elements are incorporated throughout the site to support residential livability and overall project functionality. Finding 5: The landscape design complements and enhances the building design and its surroundings, is appropriate to the site’s functions, and utilizes to the extent practical, regional indigenous drought resistant plant material capable of providing desirable habitat that can be appropriately maintained. Item 7 Attachment B - Draft Record of Land Use Action (RLUA)        Item 7: Staff Report Pg. 17  Packet Pg. 143 of 253  7 1 0 4 0 1 The project is consistent with Finding #5 because: The proposed landscape design complements the contemporary architectural character of the project through integrated planting areas, canopy trees, rooftop landscaping, and pedestrian- oriented streetscape improvements along San Antonio Road and Leghorn Street. Landscaping is incorporated throughout the site to soften building massing, enhance the pedestrian environment, and support common open space and amenity areas. The landscape plan includes drought-tolerant and climate-appropriate plant materials consistent with the City’s water conservation goals and long-term maintenance considerations. New landscaping and tree planting improve the visual quality of the site and contribute to a more attractive and livable residential environment for residents and the surrounding neighborhood. Finding 6: The project incorporates design principles that achieve sustainability in areas related to energy efficiency, water conservation, building materials, landscaping, and site planning. In accordance with the City’s Green Building Regulations, the project will satisfy the requirements for CALGreen Mandatory Measures + Tier 2 requirements. The project incorporates sustainable design features through compact infill development, multimodal transportation access, structured parking, bicycle facilities, water-efficient landscaping, and rooftop open space areas. The project utilizes drought-tolerant landscaping and climate- appropriate plant materials to support water conservation and long-term site sustainability. SECTION 4. Conditions of Approval Architectural Review. Planning 1. CONFORMANCE WITH PLANS. Construction and development shall be in substantial conformance with the approved plans entitled, "762 San Antonio, Palo Alto, CA 94303 uploaded to the Palo Alto Online Permitting Services Citizen Portal on July 14, 2026, as modified by these conditions of approval. 1. BUILDING PERMIT. Apply for a building permit and meet any and all conditions of provided for in this document. A copy of this approval with conditions shall be printed on the second page of the plans submitted for building permits and shall incorporate the following changes: a) On Sheet C3.0 delete the new hydrant proposed on Leghorn Street in Mountain View per Palo Alto Fire Department feedback. b) On Sheets A500 through A503 include floor plans for all proposed unit types. Item 7 Attachment B - Draft Record of Land Use Action (RLUA)        Item 7: Staff Report Pg. 18  Packet Pg. 144 of 253  8 1 0 4 0 1 2. BELOW MARKET RATE (BMR) HOUSING. This project is proposed as a Builder’s Remedy project, as defined in AB 1893, and is providing thirteen percent of the proposed 228 base units at prices affordable to lower income households. The applicant shall execute and record a BMR regulatory agreement in a form satisfactory to the City Attorney. The project shall conform to the approved regulatory agreement, which shall be recorded prior to issuance of building permit. All BMR units constructed under this condition shall be in conformance with the City’s BMR Program rules and regulations. Failure to comply with the timing of this condition and any adopted BMR Program rules and regulations shall not waive its later enforcement. The provision of on-site units is an alternative means of compliance with the City’s affordable housing requirements. Pursuant Palo Alto Municipal Code Section 16.65.080, subd. (c), and Section 3 of Ordinance 5623, the project will satisfy 86.7% of its affordable housing obligation with on-site units and shall pay the remaining 13.3% of this obligation in the form of housing impact fees. Item 7 Attachment B - Draft Record of Land Use Action (RLUA)        Item 7: Staff Report Pg. 19  Packet Pg. 145 of 253  9 1 0 4 0 1 measures beyond the basic control measures are not required. In accordance with Mitigation Measure AQ-1 of the Housing Incentive Program EIR and AIR 2a of the Comprehensive Plan EIR, the applicant or its designee shall implement BAAQMD- Basic Control requirements, as applicable, during all demolition, grading, and construction activities to reduce construction-related particulate emissions: a. Exposed surfaces (e.g., parking areas, staging areas, soil piles, graded areas, and unpaved access roads) shall be watered two times per day or covered. b. Haul trucks transporting soil, sand, or other loose material off-site shall be covered. c. Visible mud or dirt track-out onto adjacent public roads shall be removed using wet power vacuum street sweepers at least once per day. The use of dry power sweeping is prohibited. d. Vehicle speeds on unpaved roads shall be limited to 15 miles per hour. e. Roadways, driveways, and sidewalks to be paved shall be completed as soon as possible. Building pads shall be laid as soon as possible after grading unless seeding or soil binders are used. f. Idling times shall be minimized either by shutting equipment off when not in use or reducing the maximum idling time to five minutes (as required by the California airborne toxics control measure Chapter13, Section 2485 of California Code of Regulations [CCR]). Clear signage explaining this rule shall be provided for construction workers at all access points. g. Construction equipment shall be maintained and properly tuned in accordance with the manufacturer’s specifications. Equipment shall be checked by a certified mechanic and determined to be running in proper condition prior to operation. h. A publicly visible sign shall be posted with the telephone number and name of an individual working for the construction contractor who can be contacted regarding dust complaints. This person shall respond and take corrective action within 48 hours. The BAAQMD’s phone number shall also be visible to ensure compliance with applicable regulations. 8. MITIGATION MEASURE BIO-1, NESTING BIRD SURVEYS AND AVOIDANCE. Construction, grading, site preparation and other ground-disturbing activities required for development allowed by the proposed HIP expansion that would involve vegetation or tree removal shall be prohibited during the general avian nesting season (February 1 – August 31), if feasible. If nesting season avoidance is not feasible, the applicant shall retain a qualified biologist, as approved by the City of Palo Alto, to conduct a preconstruction nesting bird survey to determine the presence/absence, location, and activity status of any active nests on or adjacent to the development site. The extent of the survey buffer area surrounding the site shall be established by the qualified biologist to ensure that direct and indirect effects to nesting birds are avoided. To avoid the destruction of active nests and to protect the reproductive success of birds protected by the MBTA and CFGC, nesting bird surveys shall Item 7 Attachment B - Draft Record of Land Use Action (RLUA)        Item 7: Staff Report Pg. 20  Packet Pg. 146 of 253  10 1 0 4 0 1 be performed not more than 14 days prior to scheduled vegetation clearance and structure demolition. In the event that active nests are discovered, a suitable buffer (typically a minimum buffer of 50 feet for passerines and a minimum buffer of 250 feet for raptors) shall be established around such active nests and no construction shall be allowed within the buffer areas until a qualified biologist has determined that the nest is no longer active (i.e., the nestlings have fledged and are no longer reliant on the nest). No ground disturbing activities shall occur within this buffer until the qualified biologist has confirmed that breeding/nesting is completed and the young have fledged the nest. Nesting bird surveys are not required for construction activities occurring between August 31 and February 1. 9. MITIGATION MEASURE CR-1, WORKER’S ENVIRONMENTAL AWARENESS PROGRAM (WEAP). For all development subject to the proposed HIP expansion, a qualified archaeologist shall be retained who meets the Secretary of the Interior’s Professional Qualifications Standards for archaeology to conduct WEAP training for archaeological sensitivity for all construction personnel prior to the commencement of ground disturbing activities. Archaeological sensitivity training should include a description of the types of cultural resources that may be encountered, cultural sensitivity issues, regulatory issues, and the proper protocol for treatment of the materials in the event of a find. 10. MITIGATION MEASURE CR-2, UNANTICIPATED DISCOVERY OF CULTURAL RESOURCES. For all development subject to the proposed HIP expansion, in the event that archaeological resources are unearthed during project construction, all earth-disturbing work near the find must be temporarily suspended or redirected until an archaeologist meeting the Secretary of the Interior’s Professional Qualification Standards for archaeology (NPS 1983) has evaluated the nature and significance of the find. If the discovery proves to be significant under CEQA, additional work, such as preservation in place or archaeological data recovery, shall occur as required by the archeologist in coordination with City staff and descendants and/or stakeholder groups, as warranted. Once the resource has been properly treated or protected, work in the area may resume. A Native American representative shall be retained to monitor mitigation work associated with Native American cultural material. 11. MITIGATION MEASURE GEO-1, GEOTECHNICAL INVESTIGATION. Prior to approval of grading permits for a building or structure associated with the development allowed by the HIP expansion, a detailed final geotechnical investigation shall be performed to identify significant geotechnical constraints on the proposed development. The report shall develop formal recommendations for project design and construction, including site grading/soil preparation and foundation design. Among other components, the report shall include a quantitative evaluation of liquefaction susceptibility including projected levels of post-liquefaction settlement; an evaluation of soil shrink-swell potential; and an investigation of compressible soils that may be prone to settlement/subsidence. The report shall be provided by the applicant to the City of Palo Alto for review and approval and to ensure that foundations designed for all proposed structures are appropriate and meet code requirements. The geotechnical engineer of record shall also review the final grading, drainage, and foundation plans to confirm incorporation of the report recommendations Item 7 Attachment B - Draft Record of Land Use Action (RLUA)        Item 7: Staff Report Pg. 21  Packet Pg. 147 of 253  11 1 0 4 0 1 and field monitoring during project construction shall be performed to verify that the work is performed as recommended. 12. MITIGATION MEASURE GEO-4, DISCOVERY OF PALENTOLOGICAL RESOURCES. Construction activities associated with the development allowed under the HIP expansion shall adhere to the following measures. 1. Ground Disturbance. For ground-disturbing activities for projects associated with the HIP expansion, in the event that an unanticipated fossil discovery is made, then in accordance with SVP (2010) guidelines, it is the responsibility of any worker who observes fossils within the project site to stop work in the immediate vicinity of the find and notify a qualified professional paleontologist who shall be retained to evaluate the discovery, determine its significance and if additional mitigation or treatment is warranted. Work in the area of the discovery will resume once the find is properly documented and authorization is given to resume construction work. Any significant paleontological resources found during construction monitoring will be prepared, identified, analyzed, and permanently curated in an approved regional museum repository. 2. Excavation Below 18 Feet. Prior to the commencement of grading and excavation below a depth of 18 feet for any project associated with the HIP expansion, applicants shall retain a qualified paleontologist approved by the County to monitor grading and excavation. Monitoring onsite shall occur whenever grading activities are occurring. Additional monitors in addition to one full-time monitor may be required to provide adequate coverage if earth-moving activities are occurring simultaneously. Any paleontological resources discovered by construction personnel or subcontractors shall be reported immediately to the paleontologist. In the event undetected buried resources are encountered during grading and excavation, work shall be halted or diverted from the area and the paleontologist shall evaluate the resource and propose appropriate mitigation measures. Measures may include testing, data recovery, reburial, archival review and/or transfer to the appropriate museum or educational institution. All testing, data recovery, reburial, archival review or transfer to research institutions related to monitoring discoveries shall be determined by the qualified paleontologist and shall be reported to the City. 13. MITIGATION MEASURE HAZ-1, SITE RISK MANAGEMENT PLAN. Prior to issuance of permits allowing groundwater dewatering or earth-disturbing activity, the developer shall prepare a site risk management plan (SRMP). The SRMP will address known and unknown environmental issues that may be encountered during development. The plan shall identify appropriate measures to be followed when impacted soil and groundwater are encountered during demolition, excavation, dewatering, and construction. This includes health and safety measures to reduce exposure to potentially impacted soil and groundwater for construction workers and dust control measures to reduce exposure to contaminated dust particles for nearby residents. Item 7 Attachment B - Draft Record of Land Use Action (RLUA)        Item 7: Staff Report Pg. 22  Packet Pg. 148 of 253  12 1 0 4 0 1 Health and safety measures shall include the required personal protective equipment (PPE) to be used by site personnel, including action levels and decision criteria for upgrading the levels of PPE. The SRMP shall also identify personnel to be notified, emergency contacts, and a sampling protocol if impacted media is encountered. The excavation and demolition contractors shall be made aware of the possibility of encountering known and unknown hazardous materials including impacted soil and groundwater; and shall be provided with appropriate contact and notification information. The plan shall include a provision stating at what point it is safe to continue with the excavation or demolition, and identify the person authorized to make that determination. In addition, the SRMP shall include measures for the appropriate handling and profiling of impacted soil and groundwater to be removed from the project site and disposed offsite. Removal, transportation, and disposal of impacted soil and groundwater shall be performed in accordance with applicable federal, state, and local laws, regulations, and ordinances. The SMRP shall be submitted to the City of Palo Alto for review and approval. 14. MITIGATION MEASURE N-1, CONSTRUCTION-RELATED NOISE REDUCTION MEASURES. The applicant shall apply the following measures during construction of projects in the HIP expansion area: Mufflers. Construction equipment shall be properly maintained and all internal combustion engine driven machinery with intake and exhaust mufflers and engine shrouds, as applicable, shall be in good condition and appropriate for the equipment. During construction, all equipment, fixed or mobile, shall be operated with closed engine doors and shall be equipped with properly operating and maintained mufflers, consistent with manufacturers’ standards. Electrical Power. Electrical power, rather than diesel equipment, shall be used to run compressors and similar power tools and to power temporary structures, such as construction trailers or caretaker facilities. Equipment Staging. All stationary equipment (e.g., air compressors, portable generators) shall be staged as far away from sensitive receptors as feasible. Where feasible, construct temporary noise barriers around stationary equipment in a manner that fully blocks the line of sight to residential windows in the adjacent apartment complex. Equipment Idling. Construction vehicles and equipment shall not be left idling for longer than five minutes when not in use. Workers’ Radios. All noise from workers’ radios shall be controlled to a point that they are not audible at sensitive receptors near construction activity. Smart Back-up Alarms. Mobile construction equipment shall have smart back-up alarms that automatically adjust the sound level of the alarm in response to ambient noise levels. Alternatively, back-up alarms shall be disabled and Item 7 Attachment B - Draft Record of Land Use Action (RLUA)        Item 7: Staff Report Pg. 23  Packet Pg. 149 of 253  13 1 0 4 0 1 replaced with human spotters to ensure safety when mobile construction equipment is moving in the reverse direction. Sound Barrier. During the demolition, site preparation, grading, building, and paving phases of construction, temporary sound barriers shall be installed and maintained facing sensitive receptors (e.g., residential units, educational facilities) located within 100 feet of the center of construction activity. Temporary sound barriers shall, at a minimum, block the line of sight between noise-generating construction equipment and adjacent windows at sensitive receptors and shall be placed as close to the source equipment as feasible. Such barriers shall be field tested to reduce noise by at least 10 dBA at sensitive receptors. A sound barrier can achieve a 5 dBA noise level reduction when it is tall enough to break the line-of-sight from the source equipment to the sensitive receptor, and it can achieve an approximate 1 dBA additional noise level reduction for each 2 feet of height after it breaks the line of sight (FHWA 2011). Mobile sound barriers may be used as appropriate to attenuate construction noise near the source equipment. Disturbance Coordinator. The applicant shall designate a disturbance coordinator who shall be responsible for responding to any local complaints about construction noise. The noise disturbance coordinator shall determine the cause of the noise complaint (e.g., starting too early, bad muffler) and shall require that reasonable measures warranted to correct the problem be implemented. A telephone number for the disturbance coordinator shall be conspicuously posted at the construction site. 15. MITIGATION MEASURE TCR-1, UNANTICIPATED DISCOVERY OF TRIBAL CULTURAL RESOURCES. In the event that cultural resources of Native American origin are identified during construction of any development associated with proposed HIP expansion, all earth-disturbing work in the vicinity of the find must be temporarily suspended or redirected until an archaeologist has evaluated the nature and significance of the find and an appropriate Native American representative, based on the nature of the find, is consulted. If the County, in consultation with local Native Americans, determines that the resource is a tribal cultural resource and thus significant under CEQA, a mitigation plan shall be prepared and implemented in accordance with state guidelines and in consultation with Native American groups. The plan would include avoidance of the resource or, if avoidance of the resource is infeasible, the plan would outline the appropriate treatment of the resource in coordination with the archeologist, if applicable, and the appropriate Native American tribal representative. 16. OPEN AIR LOUDSPEAKERS (AMPLIFIED MUSIC). In accordance with PAMC Section 9.12, no amplified music shall be used for producing sound in or upon any open area, to which the public has access, between the hours of 11:00pm and one hour after sunrise. In addition, all rooftop gardens/decks shall comply with the provisions of PAMC 18.42.230. Item 7 Attachment B - Draft Record of Land Use Action (RLUA)        Item 7: Staff Report Pg. 24  Packet Pg. 150 of 253  14 1 0 4 0 1 17. NOISE THRESHOLDS ON RESIDENTIAL PROPERTY. In accordance with PAMC Section 9.10.030, No person shall produce, suffer or allow to be produced by any machine, animal or device, or any combination of same, on residential property, a noise level more than six dB above the local ambient at any point outside of the property line. At building permit, provide the proposed HVAC specifications. If the proposed decibel level of the HVAC exceeds the decibel level of the HVAC evaluated in the CEQA analysis, a noise analysis of the proposed equipment’s consistency with the municipal code shall be required. Item 7 Attachment B - Draft Record of Land Use Action (RLUA)        Item 7: Staff Report Pg. 25  Packet Pg. 151 of 253  15 1 0 4 0 1 FROM CHALLENGING THE VALIDITY OR REASONABLENESS OF THE FEES, DEDICATIONS, RESERVATIONS, AND EXACTIONS. If these requirements constitute fees, taxes, assessments, dedications, reservations, or other exactions as specified in Government Code Sections 66020(a) or 66021, this is to provide notification that, as of the date of this notice, the 90-day period has begun in which you may protest these requirements. This matter is subject to the California Code of Civil Procedures (CCP) Section 1094.5; the time by which judicial review must be sought is governed by CCP Section 1094.6. 24. INDEMNITY. To the extent permitted by law, the Applicant shall indemnify and hold harmless the City, its City Council, its officers, employees and agents (the “indemnified parties”) from and against any claim, action, or proceeding brought by a third party against the indemnified parties and the applicant to attack, set aside or void, any permit or approval authorized hereby for the Project, including (without limitation) reimbursing the City for its actual attorneys’ fees and costs incurred in defense of the litigation. The City may, in its sole discretion, elect to defend any such action with attorneys of its own choice. 25. FINAL INSPECTION. A Planning Division Final inspection will be required to determine substantial compliance with the approved plans prior to the scheduling of a Building Division final. Any revisions during the building process must be approved by Planning. Contact your Project Planner, Kristina Dobkevicius at Kristina.Dobkevicius@paloalto.gov to schedule this inspection. Public Art 26. The applicant submitted a public art application indicating their intent to commission art on- site. They came to the Public Art Commission for their Initial Review June 18th, 2026 to gather feedback on possible locations for artwork and the artist they are considering for the project. The Public Art Commission was very supportive of the artist under consideration. Areas for art integration focused on the San Antonio Road side of the building and mostly focused on architecturally integrated artworks on the exterior of the building. The applicant will return to the Public Art Commission for a Final Review and approval of the artwork in the coming months. Building Division 27. A complete construction set shall be submitted to the building department for review and shall include, but is not limited to: architectural drawings, structural drawings and calculations, mechanical plans, electrical plans, plumbing plans, and Title 24 energy analysis. 28. All sheets shall be stamped and signed by the designer responsible. 29. Construction drawings shall be subject to compliance with the current set of California building codes at the time of permit submittal. Item 7 Attachment B - Draft Record of Land Use Action (RLUA)        Item 7: Staff Report Pg. 26  Packet Pg. 152 of 253  16 1 0 4 0 1 Transportation 30. BICYCLE PARKING: The applicant shall provide bicycle parking spaces in accordance with the minimum requirements of PAMC Section 18.54.060, as applicable to the proposed use(s). Residential 1 space per dwelling unit (100% long-term), 10% short-term. 31. All required long-term bicycle parking shall be provided in a restricted-access bicycle enclosures. 32. All required short-term bicycle parking shall consist of racks that allow users to lock both the bicycle frame and at least one wheel. Racks shall be installed in visible, accessible locations no more than 50 feet from the primary building entrance. For developments requiring more than 10 short-term spaces, at least 50% of such spaces shall be covered. 33. Short-term guest bicycle parking provided within the parking garage shall be clearly identified with signage posted both at the primary building entrance and within the garage directing users to the designated bicycle parking area. Signage shall include a bicycle symbol and directional arrow consistent with MUTCD standards. If the garage is access-controlled, the applicant shall provide a mechanism for bicycle guests to access the facility. 34. Bicycle parking racks shall be spaced a minimum of 30 inches apart to allow for safe maneuvering. All bicycle parking areas shall be paved, and access aisles shall be a minimum of four feet wide. Bicycle parking areas shall be clearly signed indicating their location. 35. All bicycle parking areas shall be illuminated with a minimum of one foot-candle of illumination at ground level. 36. TRANSPORTATION DEMAND MANAGEMENT: Pursuant to Palo Alto Municipal Code Section 18.52.050, the applicant is subject to the requirements of the final approved TDM plan. As such, the applicant shall submit monitoring reports to the city demonstrating effective compliance with their transportation demand management plan and goal of reducing single-occupant motor vehicle trip generation by 20% as required by the 2030 Comprehensive Plan. Failure to implement the approved TDM Plan or meet trip reduction targets shall constitute a violation of this approval. 37. SAN ANTONIO ROAD AREA SETBACK AND FUTURE MOBILITY IMPROVEMENTS: Any landscaping, softscape, or other non-structural improvements installed within the setback area along San Antonio Road shall be subject to removal by the applicant or property owner, at no cost to the City, as necessary to accommodate future roadway, bicycle, or pedestrian mobility improvements within the San Antonio Road corridor. The applicant shall acknowledge this requirement in writing prior to issuance of a building permit. 38. WASTE OPERATIONS: Trash staging shall not occur within the public right of way. Item 7 Attachment B - Draft Record of Land Use Action (RLUA)        Item 7: Staff Report Pg. 27  Packet Pg. 153 of 253  17 1 0 4 0 1 Public Works Zero Waste Deconstruction and Construction Materials Management Requirements. 39. REQUIRED DECONSTRUCTION. In conformance with PAMC 5.24, deconstruction and source separation are required for all residential and commercial projects where structures (other than a garage or ADU) are being completely removed, demolition is no longer allowed. Deconstruction takes longer than traditional demolition, it is important to plan ahead. For more information, visit www.cityofpaloalto.org/deconstruction. 40. SALVAGE SURVEY FOR REUSE. A Salvage Survey is required for deconstruction permit applications. The survey shall be conducted by a City approved reuse vendor. The survey submittal shall include an itemized list of materials that are salvageable for reuse from the project. The applicant shall source separate and deliver materials for reuse. Certification is required indicating that all materials identified in the survey are properly salvaged. Contact The ReUse People to schedule this FREE survey by phone (888) 588-9490 or e-mail info@thereusepeople.org. More information can be found at www.TheReusePeople.org. Please upload a completed copy to the deconstruction permit. 41. SOURCE SEPARATION FOR RECYCLING. The applicant shall source separate deconstruction materials into specific categories for recycling. Additional staging areas for source separated materials will need to be considered. All materials shall be delivered to one of the City approved materials recovery facilities listed in Green Halo, all records shall be uploaded to www.greenhalosystems.com. 42. For more information, refer to www.cityofpaloalto.org/deconstruction. 43. Following Conditions Pertains to: Petwash area, garage, leasing office, lobbies, lounge, and mail area; garage, speak easy, lobby, and tech & entertainment rooms; poolside lounge/cabana, clubhouse, fitness center, and courtyard/pool/spa area. a. The following comments below are part of the Palo Alto Municipality Code. If your scope of work includes internal and external bins then cut-sheets for the color-coded internal and external containers, related color-coded millwork, and it’s colored signage must be included in the building plans prior to receiving approval from Zero Waste. Please see below for more details. b. As per Palo Alto Municipal Code 5.20.108 the site is required to have color-coded refuse containers, related color-coded millwork, and colored signage. The three refuse containers shall include recycle (blue container), compost (green container), and garbage (black container). Applicant shall present on the plan the locations and quantity of both (any) internal and external refuse containers, it’s millwork, along with the signage. This requirement applies to any external or internal refuse containers located in common areas such as entrances, conference rooms, back of the house kitchen, café, Item 7 Attachment B - Draft Record of Land Use Action (RLUA)        Item 7: Staff Report Pg. 28  Packet Pg. 154 of 253  18 1 0 4 0 1 dining area, and etc. except for restrooms, copy area, and mother’s room. Millwork to store the color-coded refuse containers must have a minimum of four inches in height worth of color-coding, wrapping around the full width of the millwork. Signage must be color coded with photos or illustrations of commonly discarded items. Restrooms must have a green compost container for paper towels and a small black landfill bin for sanitary products. Copy area must have either a recycle bin only or all three refuse receptacles (green compost, blue recycle, and black landfill container). Mother’s room must minimally have a green compost container and black landfill container. Please refer to PAMC 5.20.108 and the Internal Container Guide. Examples of appropriate signage can be found in the Managing Zero Waste at Your Business Guide. Electronic copies of these signage can be found on the Zero Waste Palo Alto’s website, https://www.cityofpaloalto.org/Departments/Public-Works/Zero-Waste/What-Goes- Where/Toolkit#section-2 and hard copies can be requested from the waste hauler, Greenwaste of Palo Alto, (650) 493-4894. Public Works Engineering 44. PUBLIC WORKS APPLICATIONS, FORMS, AND DOCUMENTS. Applicant shall be advised that most forms, applications, and informational documents related to Public Works Engineering conditions can be found at the following link: https://www.cityofpaloalto.org/Departments/Public-Works/Engineering-Services/Forms-and- Permits 45. LOT MERGER. This project is subject to, and contingent upon the approval of a Lot Merger/Lot Line Removal. This shall be done through the approval and recordation of a Certificate of Compliance or a Parcel Map and shall be in accordance with the provisions of the California Subdivision Map Act and Palo Alto Municipal Code Title 21. All existing and proposed property lines, easements, dedications are subject to City’s technical review and staff approval during the map process prior to issuance of any construction permits. 46. MAP OR CERTIFICATE OF COMPLIANCE THIRD-PARTY REVIEW. The City contracts with a third-party surveyor that will review and provide approval of the map’s technical correctness as the City Surveyor, as permitted by the Subdivision Map Act. The Public Works Department will forward a Scope & Fee Letter from the third-party surveyor and the applicant will be responsible for payment of the fees indicated therein, which is based on the complexity of the map. 47. STREETWORK PERMIT. The applicant shall obtain a Streetwork Permit from the Department of Public Works for all public improvements. 48. UPGRADE OF EXISTING PUBLIC IMPROVEMENTS. As part of the plan review for improvements within the public right-of-way, any existing improvements to be re-used by the project, which are not to current City standards and are not specifically in these project Item 7 Attachment B - Draft Record of Land Use Action (RLUA)        Item 7: Staff Report Pg. 29  Packet Pg. 155 of 253  19 1 0 4 0 1 conditions (such as streetlights, utility covers and lids, etc.), shall be upgraded to current City standards as required by the Director of Public Works and the Director of Utilities. 49. MODIFICATIONS TO EXISTING PUBLIC UTILITIES. The Developer is responsible for any changes or modifications to existing utilities, streets, and public infrastructure within or adjacent to the project site. This includes, but is not limited to, the relocation of utility facilities, conduits, or vaults required due to grade changes in the sidewalk area resulting from the development. 50. DAMAGE TO EXISTING PUBLIC IMPROVEMENTS. The Developer is responsible for repairing any damage to existing public improvements fronting or adjacent to the project site caused by construction, to the satisfaction of the Public Works Department. 51. EXISTING UTILITY ABANDONMENT AND/OR RELOCATION. The Developer is responsible for researching all existing utility lines to ensure there are no conflicts with the project. Any existing utility lines (public or private) or their appurtenances that conflict with the project or do not serve it must be capped, abandoned, removed, relocated, or disposed of to the satisfaction of the City. 52. RE-USE OF EXISTING STORM DRAINS. The re-use of existing City storm drain service lines and appurtenances is subject to City review and approval. The Developer’s contractor shall expose the existing storm drain facilities during construction for City inspection or provide video documentation of their condition. Any deficient facilities, as determined by Public Works, must be replaced by the Developer. 53. STORM DRAIN TRIBUTARY PATTERN. This project must follow the existing storm drain tributary pattern. Any deviations require additional analysis and approval by Public Works during plan review. The project shall not negatively impact the drainage pattern for adjacent properties. 54. GRADING AND EXCAVATION PERMIT. A Grading Permit is required per PAMC Chapter 16.28. The permit application and all applicable documents (see Section H of application) shall be submitted to Public Works Engineering. Add the following note: “THIS GRADING PERMIT WILL ONLY AUTHORIZE GENERAL GRADING AND INSTALLATION OF THE STORM DRAIN SYSTEM. OTHER BUILDING AND UTILITY IMPROVEMENTS ARE SHOWN FOR REFERENCE INFORMATION ONLY AND ARE SUBJECT TO SEPARATE BUILDING PERMIT APPROVAL.” 55. CIVIL ENGINEER CERTIFICATION. Upon completion of the rough grading work and at the final completion of the work, applicant shall provide an as-graded grading plan prepared by the civil engineer that includes original ground surface elevations, as-graded ground surface elevations, lot drainage patterns and locations and elevations of all surface and subsurface drainage facilities. The civil engineer shall certify that the work was done in accordance with the final approved grading plan. Item 7 Attachment B - Draft Record of Land Use Action (RLUA)        Item 7: Staff Report Pg. 30  Packet Pg. 156 of 253  20 1 0 4 0 1 56. SOILS ENGINEER CERTIFICATION. Upon completion of the rough grading work and at the final completion of the work, applicant shall provide a soil grading report prepared by the soils engineer, including locations and elevation of field density tests, summaries of field and laboratory tests and other substantiating data, and comments on any changes made during grading and their effect on the recommendations made in the soils engineering investigation report. The soils engineer shall certify as to the adequacy of the site for the intended use. Item 7 Attachment B - Draft Record of Land Use Action (RLUA)        Item 7: Staff Report Pg. 31  Packet Pg. 157 of 253  21 1 0 4 0 1 obtain coverage under the permit. The General Permit requires the applicant to prepare and implement a Storm Water Pollution Prevention Plan (SWPPP). The applicant is required to submit two copies of the NOI and the draft SWPPP to the Public Works Department for review and approval prior to issuance of the building permit. The SWPPP should include both permanent, post-development project design features and temporary measures employed during construction. 62. ENCROACHMENT PERMIT. Prior to any work in the public right-of-way, the applicant shall obtain an encroachment permit from the Public Works Department for any work that encroaches onto the City right-of-way. 63. LOGISTICS PLAN. A construction logistics plan shall be provided addressing all impacts to the public including, at a minimum: work hours, noticing of affected businesses, bus stop relocations, construction signage, dust control, noise control, storm water pollution prevention, job trailer, contractors’ parking, truck routes, staging, concrete pours, crane lifts, scaffolding, materials storage, pedestrian safety, and traffic control. All truck routes shall conform to the City of Palo Alto’s Trucks and Truck Route Ordinance, Chapter 10.48, and the route map. NOTE: Some items/tasks on the logistics plan may require an encroachment permit. 64. STORMWATER POLLUTION PREVENTION. All improvement plan sets shall include the “Pollution Prevention – It’s Part of the Plan” sheet. 65. C.3 THIRD-PARTY CERTIFICATION. Applicant shall provide certification from a qualified third- party reviewer that the proposed permanent storm water pollution prevention measures comply with the requirements of Provision C.3 and Palo Alto Municipal Code Chapter 16.11. 66. Submit the following: a. Provide a stamped and signed C.3 data form (April 2024 version) from SCVURPPP. https://scvurppp.org/2024/09/19/provision-c-3-data-form-2024/ b. Final stamped and signed letter confirming which documents were reviewed and that the project complies with Provision C.3 and PAMC 16.11. 67. C.3 STORMWATER AGREEMENT. The applicant shall enter into a Stormwater Maintenance Agreement with the City to guarantee the ongoing maintenance of the permanent storm water pollution prevention measures. The City will inspect the treatment measures yearly and charge an inspection fee. The agreement shall be executed by the applicant team prior to building permit final. 68. C.3 FINAL THIRD PARTY CERTIFICATION PRIOR TO OCCUPANCY. Within 45 days of the installation of the required storm water treatment measures and prior to the issuance of an occupancy permit for the building, the third-party reviewer shall submit to the City a Item 7 Attachment B - Draft Record of Land Use Action (RLUA)        Item 7: Staff Report Pg. 32  Packet Pg. 158 of 253  22 1 0 4 0 1 certification verifying that all the permanent storm water pollution prevention measures were installed in accordance with the approved plans. 69. PAVEMENT RESTORATION. The applicant shall restore the pavement along the entire project frontage, curb-to-curb, by performing a 3.5” grind and overlay. The exact restoration limits will be determined once the resulting road condition is known following completion of heavy construction activities and utility lateral installations, at minimum the extent will be the project frontage. 70. IMPERVIOUS SURFACE AREA. The project will be creating or replacing 500 square feet or more of impervious surface. Accordingly, the applicant shall provide calculations of the existing and proposed impervious surface areas with the building permit application. The Impervious Area Worksheet for Land Developments form and instructions are available at the Development Center or on our website. To determine the impervious surface area that is being disturbed, provide the quantity on the site plan. 71. EXISTING EASEMENTS. Provide documentation showing approval from the entities affected by the onsite easements to verify that the work within said easements is permitted. 72. PRIOR TO PUBLIC WORKS FINAL/ACCEPTANCE (STORM DRAIN LOGO). The applicant is required to paint “No Dumping/Flows to Adobe Creek” in blue on a white background adjacent to all onsite storm drain inlets. The name of the creek to which the proposed development drains can be obtained from Public Works Engineering. Stencils of the logo are available from the Public Works Environmental Compliance Division, which may be contacted at (650) 329-2598. Include the instruction to paint the logos on the construction grading and drainage plan. 73. PRIOR TO PUBLIC WORKS FINAL/ACCEPTANCE (RECORD DRAWINGS). At the conclusion of the project applicant shall provide digital as-built/record drawings of all improvements constructed in the public right-of-way or easements in which the City owns an interest. Urban Forestry 74. The owner and contractor shall implement all protection and inspection schedule measures, design recommendations and construction scheduling as stated in the TPR and/or Sheet T- 1, and is subject to code compliance action pursuant to PAMC 8.10.080. The required protective fencing shall remain in place until final landscaping and inspection of the project. If called for, project arborist approval must be obtained and documented in the monthly activity report sent to the City. When required, the Contractor and Arborist Monthly Tree Activity Report shall be sent monthly to the City (pwps@cityofpaloalto.org) beginning with the initial verification approval, using the template in the Tree Technical Manual, Addendum 11. Item 7 Attachment B - Draft Record of Land Use Action (RLUA)        Item 7: Staff Report Pg. 33  Packet Pg. 159 of 253  23 1 0 4 0 1 75. Tree Damage, Injury Mitigation and Inspections apply to Contractor. Reporting, injury mitigation measures and arborist inspection schedule (1-5) apply pursuant to TTM, Section 2.20-2.30. Contractor shall be responsible for the repair or replacement of any publicly owned or protected trees that are damaged during construction, pursuant to Title 8 of the PAMC and city Tree Technical Manual, Section 2.25. No storage of material, topsoil, vehicles or equipment shall be permitted within the tree enclosure area. The ground under and around the tree canopy area shall not be altered. Trees to be retained shall be irrigated, aerated and maintained as necessary to ensure survival. Fire Item 7 Attachment B - Draft Record of Land Use Action (RLUA)        Item 7: Staff Report Pg. 34  Packet Pg. 160 of 253  24 1 0 4 0 1 sprinkler density in bike storage room. 82. Knox Remote Power Boxes are required for the main electrical disconnect, secondary electrical power source disconnects and 100% garage exhaust activation. 83. Submit fire flow analysis report detailing the required fire hydrant water delivery GPM/duration according to the 2022 CA Fire Code Appendix B. PAFD will only allow a 50% required fire flow reduction for fire sprinklered buildings. 84. Upgrade public fire hydrants on San Antonio Rd between Leghorn St and Charleston Rd to current CPAU standards. Install new public FH at the South/East corner of San Antonio Rd and Leghorn St. 85. PAFD Hazmat site closure permit required. 86. Garage will require a manually activated smoke exhaust system for the removal of smoke/toxic fumes in the event of vehicle fires. 87. Do not install elevator shunt trip circuit breaker. Follow 2025 CBC section 3005.4.1 and install smoke detector in elevator machine room. 88. Install an electrical disconnect switch (EPO) for EVCE’s. 89. Each stair shall provide roof access. 90. Install Knox key switch for Fire Department access through garage vehicle security barriers. Watershed Protection The following comments are provided as a courtesy and must be complied with before receiving a Demolition Permit for this project (after the Planning entitlement approval): 91. NOTICE OF REGULATION OF PCB MATERIAL – EFFECTIVE JULY 1st, 2019: Please be advised that new requirements regarding stormwater control during building demolition for polychlorinated biphenyls (PCBs) became effective starting July 1st, 2019, in accordance with the San Francisco Bay Region Municipal Regional Stormwater NPDES Permit (MRP), Order No. R2-2015-0049. MRP Provision C.12.f. requires that San Francisco Bay Area municipalities develop a program to ensure that PCBs from building materials (e.g. caulk, paint, mastic) do not enter the storm drain system during building demolition. Palo Alto City Council adopted the PCBs regulation in May 2019. For specific questions about your project, please email CleanBay@cityofpaloalto.org, call 650-329-2122 or visit http://www.cityofpaloalto.org/pcbdemoprogram. The following conditions shall apply to ALL projects submitting for a Demolition Permit Item 7 Attachment B - Draft Record of Land Use Action (RLUA)        Item 7: Staff Report Pg. 35  Packet Pg. 161 of 253  25 1 0 4 0 1 Application on or after July 1st, 2019: The project is a commercial, public, institutional, or industrial structure constructed or remodeled between January 1, 1950 and December 31, 1980. Single-family and two-family homes are exempt regardless of age. The framing of the building contains material other than wood. Wood-frame structures are exempt. The proposed demolition is a complete demolition of the building. Partial demolitions do not apply to the requirements. If the representative sample results or records DO NOT indicate PCB concentrations ≥50 ppm in one or more “priority materials,” then the screening assessment is complete. Applicant submits screening form and the supporting sampling documentation with the demolition permit application. No additional action is required. If the representative sample results or records DO indicate PCBs concentrations ≥50 ppm in one or more “priority materials,” then the screening assessment is complete, but the Applicant MUST also contact applicable State and Federal Agencies to meet further requirements. Applicant submits screening form and the supporting sampling documentation with the demolition permit application, and also must contact the State and Federal Agencies as indicated on Page 3 of the “PCBs Screening Assessment Form.” Water-Gas-Wastewater Utilities Item 7 Attachment B - Draft Record of Land Use Action (RLUA)        Item 7: Staff Report Pg. 36  Packet Pg. 162 of 253  26 1 0 4 0 1 PRIOR TO ISSUANCE OF DEMOLITION PERMIT: 95. The applicant shall submit a request to disconnect utility services and remove meters. The utilities demo is to be processed within 10 working days after receipt of the request. The demolition permit will be issued by the building inspection division after all utility services and/or meters have been disconnected and removed. FOR BUILDING PERMIT (WGW Utility Engineering): 96. The applicant shall submit a completed water-gas-wastewater service connection application - load sheet for the City of Palo Alto Utilities. The applicant must provide all the information requested for utility service demands (water in fixture units/g.p.m., gas in b.t.u.h, and sewer in fixture units/g.p.d.). The applicant shall provide the existing (prior) loads, the new loads, and the combined/total loads (the new loads plus any existing loads to remain). 97. The applicant shall submit improvement plans for utility construction. The plans must show the size and location of all underground utilities within the development and the public right of way including meters, backflow preventers, fire service requirements, sewer mains, sewer cleanouts, sewer lift stations, and any other required utilities. Plans for new wastewater laterals and mains need to include new wastewater pipe profiles showing existing potentially conflicting utilities especially storm drain pipes, electric and communication duct banks. Existing duct banks need to be daylighted by potholing to the bottom of the duct bank to verify cross section prior to plan approval and starting lateral installation. Plans for new storm drain mains and laterals need to include profiles showing existing potential conflicts with sewer, water, and gas. 98. The applicant must show on the site plan the existence of any auxiliary water supply, (i.e. water well, gray water, recycled water, rain catchment, water storage tank, etc). 99. The applicant shall be responsible for installing and upgrading the existing utility mains and/or services, laterals as necessary to handle anticipated peak loads. This responsibility includes all costs associated with the design and construction for the installation/upgrade of the utility mains and/or services/laterals. 100. An approved reduced pressure principle assembly (RPPA backflow preventer device) is required for all existing and new water connections from Palo Alto Utilities to comply with requirements of California administrative code, title 17, sections 7583 through 7605 inclusive. The RPPA shall be installed on the owner's property and directly behind the water meter within 5 feet of the property line. RPPA’s for domestic service shall be lead free. Show the location of the RPPA on the plans. 101. An approved reduced pressure detector assembly (RPDA backflow preventer device, Item 7 Attachment B - Draft Record of Land Use Action (RLUA)        Item 7: Staff Report Pg. 37  Packet Pg. 163 of 253  27 1 0 4 0 1 STD. WD-12A or STD. WD-12B) is required for all existing and new fire water connections from Palo Alto Utilities to comply with requirements of California administrative code, title 17, sections 7583 through 7605 inclusive. The RPDA shall be installed on the owner's property and directly behind the City owned meter, within 5’ (feet) of the property line or City Right of Way. 102. All backflow preventer devices shall be approved by the WGW engineering division. Inspection by the city inspector is required for the supply pipe between the meter and the assembly. 103. The applicant shall pay the capacity fees and connection fees associated with new utility service/s or added demand on existing services. The approved relocation of services, meters, hydrants, or other facilities will be performed at the cost of the person/entity requesting the relocation. 104. If a new water service line installation for fire system usage is required. Show the location of the new water service on the plans. The applicant shall provide to the engineering department a copy of the plans for fire system including all fire department's requirements. 105. Each unit or building shall have its own water meter and gas meter shown on the plans. Each parcel shall have its own water and gas service and sewer lateral connection shown on the plans. 106. A sewer lateral per lot is required. Show the location of the new sewer lateral on the plans. A profile of the sewer lateral is required showing any possible conflicts with storm, electric/communications duct banks or other utilities. 107. All existing water, and gas. and wastewater services/laterals that will not be reused shall be abandoned at the main per the latest WGW utilities standards. 108. Utility vaults, transformers, utility cabinets, concrete bases, or other structures cannot be placed over existing water, gas, or wastewater mains/services. Maintain 1’ horizontal clear separation from the vault/cabinet/concrete base to existing utilities as found in the field. If there is a conflict with existing utilities, Cabinets/vaults/bases shall be relocated from the plan location as needed to meet field conditions. Trees may not be planted within 10 feet of existing water, gas, and wastewater mains/laterals/water services/or meters. New water or wastewater services/laterals/meters may not be installed within 10’ of existing trees. Maintain 10’ between new trees and new water and wastewater services/laterals/meters. 109. The applicant shall provide to the WGW Utility Engineering department a copy of the plans for fire system including all fire department's requirements prior to the actual service Item 7 Attachment B - Draft Record of Land Use Action (RLUA)        Item 7: Staff Report Pg. 38  Packet Pg. 164 of 253  28 1 0 4 0 1 installation. 110. All utility installations shall be in accordance with the City of Palo Alto utility standards for water, gas, & wastewater. 111. Delete new hydrant proposed on Leghorn St in Mountain View per Palo Alto fire dept. 112. The proposed gas service alignment and gas meter location is not approved. Joint trench with CPAU gas is not allowed; revise plan. The gas service alignment shall be revised toward the right side property line. The proposed storm line shall be shown towards the building such that minimum horizontal separation (3ft) to the gas service is met. The proposed water service would need adjustment as well. The proposed gate/fence impeding CPAU access to the gas meter shall be revised toward the rear of the property, such that no access constraint to the gas service or gas meter assembly is created. Decorative hardscape or permeable (drainage) hardscape shall not cover within 3ft horizontal of the gas service; limit to standard concrete or asphalt. Depending on the loads and other factors the gas meter assembly may significantly exceed the area allocated. The gas meter location proposed on cycle 5 plans, is strongly preferred if the large (prohibited) offset shown in the middle of gas service were removed by adjusting transformer placement slightly. 113. The walkway contains a portion of water meter vault (4ft x 8ft), it is recommended to adjust such that the water meter vault is not within the walkway. 114. A smaller PUE of 10ft x 10ft for the 4ft x 8ft water meter vault is acceptable. 115. The 6" sewer lateral proposed; if this sizing is not adequate an addition lateral (4" or 6") in the alignment of the existing sewer lateral (to be disconnected at the sewer main) would be acceptable. Connections larger than 6" are not allowed. 116. Show all above ground utilities (backflow assemblies, transformers, etc.) on renderings and elevation sheets. This equipment is large, at multiple locations, and requires screening per planning dept. 117. The current proposed plan set 762 San Antonio_Builder's Remedy Resubmittal No.7_Drawings.pdf submitted on 07/14/2026 has been reviewed and no sewer capacity concerns have been determined to be found. Any changes that result in increases to the design or sewer load will result in further analysis which may potentially lead to offsite sewer improvements. Public Art 118. The applicant intends to incorporate public art into the project. At the initial review with the Public Art Commission (PAC) June 18, the PAC encouraged the applicant to maximize Item 7 Attachment B - Draft Record of Land Use Action (RLUA)        Item 7: Staff Report Pg. 39  Packet Pg. 165 of 253  29 1 0 4 0 1 the impact of the artwork by utilizing the San Antonio facing side of the building. The applicant and the PAC discussed utilizing the vertical shade element as a location for public art, but the PAC also encourage the applicant to have elements on the lower levels of the building so that pedestrians and cyclists would also experience the artwork. The applicant plans to return to the PAC for Final Review in the coming months with the final artwork. SECTION 5. Term of Approval. 1. Architectural Review Application. In the event actual construction of the project is not commenced within two years of the Effective Date, the approval shall expire and be of no further force or effect. An extension may be granted in accordance with the allowances set forth in the municipal code and state law. // // INTRODUCED AND PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: APPROVED: _________________________ ____________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED AS TO CONTENT: ___________________________ ___________________________ Assistant City Attorney City Manager ___________________________ Director of Planning and Development Services PLANS AND DRAWINGS REFERENCED: Those plans prepared by Studio T Square, titled “C7_762 San Antonio Road_PLANS.pdf” consisting of 92 pages, dated and submitted July 14, 2026. Item 7 Attachment B - Draft Record of Land Use Action (RLUA)        Item 7: Staff Report Pg. 40  Packet Pg. 166 of 253  5 7 2 6 ATTACHMENT C 762 San Antonio Road, 24PLN-00120 Table 1: COMPARISON WITH CHAPTER 18.14 (CS DISTRICT FOR HOUSING OPPORTUNITY SITES AND EL CAMINO REAL FOCUS AREA) Residential Development Standards Regulation Required CS (18.16)Required El Camino Real Focus Area Proposed Minimum Site Area, width and depth None None 147-05-102: Approximately 223 feet wide, 170 feet deep, 43,558 square feet 147-05-012: Approximately 107 feet wide, 410 feet deep, 43,652 square feet Total Merged Lot: Irregular shape 87,120 square feet (2 acres) total Minimum Front Yard (Leghorn Street) 25 feet special setback – see Chapter 20.08 & zoning maps 25 feet special setback – see Chapter 20.08 & zoning maps 25 feet Street Side Yard (San Antonio Road) 24 feet special setback – see Chapter 20.08 & zoning maps 24 feet special setback – see Chapter 20.08 & zoning maps 25 feet Rear Yard 10 feet for residential portion of proposed project; none for commercial 10 feet for residential portion of proposed project; none for commercial 10 feet Interior Side Yard None None 10 feet on all sides Max. Site Coverage 50% (38,676.5 square feet) 80% (61,882.4 square feet)72.26% (62,957 square feet) Item 7 Attachment C - Zoning Consistency Table        Item 7: Staff Report Pg. 41  Packet Pg. 167 of 253  5 7 2 6 Max. Building Height 50 feet or 35 feet within 150 feet of a residential district (other than an RM-40 or PC zone) abutting Rooftop Garden features allowed to exceed height by 12 feet Stair and Elevator overrun allowed to minimum height feasible for access Mechanical equipment allowed to exceed height by 15 feet 85 feet Above 55 feet in height: minimum 10 foot step- back from lower facade, for a minimum 70% of the facade length; 84’-5” feet; 90’ to parapet, 96’ to stair enclosure At 62 feet 8 inches the project includes a step- back of 6 feet for a minimum of 70% of the façade length. The entire building meets the 25- foot special setback. Daylight Plane for lot lines abutting one or more residential zone districts other than an RM-40 or PC Zone None, as this site is not abutting a residential zone (6) Daylight plane height and slope shall be identical to those of the most restrictive residential zoning district abutting the lot line, none as not abutting a residential zone Not Applicable/not adjacent to existing residential zone Maximum Residential Density 40 du/ac per Housing Element for both parcels None 114 du/ac (228 units proposed) Max. Floor Area Ratio (FAR) 1.25:1.0 4.0 Total 3.45:1 (300,218 square feet) 100% residential Minimum Useable Open Space 150 square feet per unit 34,200 square feet total 150 square feet per unit 34,200 square feet total 41,084 sf total/180 square feet per unit Minimum Mixed- use Ground Floor Commercial FAR None for Housing Inventory Sites No requirement None provided (1) No parking or loading space, whether required or optional, shall be located in the first 10 feet adjoining the street property line of any required yard. (2) Any minimum front, street side, or interior yard shall be planted and maintained as a landscaped screen excluding areas required for access to the site. A solid wall or fence between 5 and 8 feet in height shall be constructed along any common interior lot line. (6) The initial height and slope shall be identical to those of the most restrictive residential zone abutting the site line in question. (7) Average setback from the property line may be calculated by taking the area between the property line and the upper facade. This area, in square feet, shall be greater than or equal to the facade length multiplied by 20. Example: 200-foot facade length x 20-foot average setback + minimum 4,000 sq. ft. area of setback per floor. For purposes of this calculation, portions of the upper facade with a setback greater than 40 feet shall be treated as if the facade is located at 40 feet from the property line. For purposes of this calculation, roof projections and eaves up to four feet in depth shall be excluded. Item 7 Attachment C - Zoning Consistency Table        Item 7: Staff Report Pg. 42  Packet Pg. 168 of 253  5 7 2 6 Table 2: CONFORMANCE WITH CHAPTER 18.52 (Off-Street Parking and Loading) for Proposed Residential Type Required Proposed Vehicle Parking One space per micro and one-bedroom ((19+121)x 1=140); two spaces per two- bedroom or larger unit ((63+25)x 2=176);) with al least one space per unit covered; 316 spaces total 1 space/unit (Per AB2097: 0 space/unit within ½ mile of Caltrain) in the El Camino Real Focus Area 228 spaces total Tandem parking allowed for any unit requiring two spaces (one tandem space per unit, associated directly with another parking space for the same unit, up to a maximum of 25% of total required spaces for any project with more than four (4) units) 284 spaces 232 EVSE or EVSE ready 31 tandem Bicycle Parking 1 Long Term (LT)space per unit (228 LT spaces) 1 Short Term (ST) space per 10 units (23 ST spaces) 228 LT 24 ST Loading Space 1, for residential structures with >50 units 1 loading space inside the garage on the ground floor Tandem parking allowed for any unit requiring two spaces (one tandem space per unit, associated directly with another parking space for the same unit, up to a maximum of 25% of total required spaces for any project with more than four (4) units) Item 7 Attachment C - Zoning Consistency Table        Item 7: Staff Report Pg. 43  Packet Pg. 169 of 253  ATTACHMENT D: City of Palo Alto - Objective Design Standards Consistency Analysis Page 1 Objective Design Standards Checklist The Objective Design Standards Checklist is a tool to evaluate a project’s compliance with the Zoning Ordinance (Chapter 18.24). The Checklist is not the Zoning Ordinance. Applicants shall be responsible for meeting the standards in the Zoning Ordinance. To simplify evaluation of the Zoning Ordinance, language in the Checklist may vary from the Zoning Ordinance. (Note: sf = square feet) If a standard is not applicable to applicant’s project, please write N/A in Applicant’s Justification column. 18.24.020 Public Realm/Sidewalk Character Check Standard Sheet #Notes (b)(1) Sidewalk Widths (A) In the following districts, public sidewalk width (curb to back of walk) is at least: Commercial Mixed-Use District: CN, CS, CC, CC(2), CD-C, CD-S, CD-N, PTOD: 10 ft El Camino Real: 12 ft San Antonio Road, from Middlefield Road to East Charleston Road: 12 ft And consists of: A101 Maintains existing sidewalk width; Complies Pedestrian clear path width of 8 foot minimum:8 feet; Complies ☒ Landscape or furniture area width of 2 foot minimum: 7 feet L-100 Between 7 feet and 8 feet; Complies ☒ If the existing public sidewalk does not meet the minimum standard, a publicly accessible extension of the sidewalk, with corresponding public access easement, shall be provided. There is adequate space in the required setback to widen the sidewalk; Complies ☒ (B) Public sidewalks or walkways connecting through a development parcel (e.g. on a through lot with a public access easement, leading to a commercial entry) must be at least 6 feet wide. N/A (C) The width of walkways designed to provide bicycle access (e.g. pathway to bike racks/lockers) must be at least 12 feet wide, consisting of: A101 Complies Pedestrian clear path width (8 feet min.): 14 feet 10 inches and approximately 8 feet L-100 Complies☒ Clear space/buffer – (2 feet min. on each side of path, ground cover is allowed): 3feet to 4 feet only on one side in some instances L-100 The entry to the bike room south of the main entrance is Item 7 Attachment D - Objective Design Standards Consistency Analysis        Item 7: Staff Report Pg. 44  Packet Pg. 170 of 253  ATTACHMENT D: City of Palo Alto - Objective Design Standards Consistency Analysis Page 2 eight feet wide but provides only 2 feet of landscaping on one side for a total width of 10 feet, where 12 feet with 2 feet of landscaping on each side is required. If the Project had to comply with this requirement, it would lose 400 square feet, qualifying it for a waiver. Waiver is also needed for bike room access from Leghorn, where proposed bike room access is 5'-0" wide; Waiver requested Check Standard Sheet #Applicant’s Justification (B)(2) Street Trees 1. One street tree provided for every 30 linear feet of public sidewalk length and located within six feet of the sidewalk. L-100 Complies a. Length of parcel frontage/public sidewalk length: 223 feet 9 inches b. Street Trees required (i.e. frontage/30 feet): 8☒ c. Street Trees provided: 6 in the planter strip and 4 within six feet of the sidewalk. (B)(3) Accent Paving Parcels abutting University Avenue between Alma Street and Webster include accent paving along the project frontages, as indicated below: N/A Brick paving at corners ☐ Brick trim mid-block ☐Parcel abutting California Avenue between El Camino Real and Park Blvd include decorative glass accent paving along project frontages N/A (B)(4) Mobility Infrastructure Item 7 Attachment D - Objective Design Standards Consistency Analysis        Item 7: Staff Report Pg. 45  Packet Pg. 171 of 253  ATTACHMENT D: City of Palo Alto - Objective Design Standards Consistency Analysis Page 3 ☒ (A) On-site micromobility infrastructure (e.g. bike racks/lockers) is located within 30 feet of the primary building entry and/or on a path leading to the primary building entry; OR A101 Complies Pi c k O n e ☐Existing micromobility infrastructure (e.g. bike racks/lockers) is already located within 50 feet of project site and located in a public right-of-way. ☒ (B) Primary building entries shall provide at least one seating area or bench within 30 feet of building entry and/or path leading to building entry. On arterials (see Map T-5), except Downtown, seating areas or benches shall not be located between the sidewalk and the curb; OR A101 Complies Pi c k O n e ☐Existing seating areas or benches that are already located in the public right-of-way within 50 feet of the building entry. 18.24.030 Site Access Check Standard Sheet #Applicant’s Justification (b)(1) Through Lot Connections ☐ Through lots located more than 300 feet from an intersecting street or pedestrian walkway shall provide a publicly accessible sidewalk or pedestrian walkway (with public access easements) connecting the two streets. N/A (b)(2) Building Entries ☒ Primary Building Entries shall be located from a public right-of-way. If there is no public right-of-way adjacent to the building, entries shall be located from a private street or Pedestrian Walkway. A101 Complies (b)(3) Vehicle Access ☒(A) Vehicle access shall be located on alleys or side streets when they abut the property.A101 Complies ☒ (B) Except for driveway access and short-term loading spaces (e.g. taxi), off-street parking, off-street vehicle loading (delivery trucks), and vehicular circulation areas are prohibited between the building and primary building frontage. A101 Complies Item 7 Attachment D - Objective Design Standards Consistency Analysis        Item 7: Staff Report Pg. 46  Packet Pg. 172 of 253  ATTACHMENT D: City of Palo Alto - Objective Design Standards Consistency Analysis Page 4 (b)(4) Loading Docks and Service Areas Loading and service areas shall be integrated into building and landscape design and located to minimize impact on the pedestrian experience as follows: ☒(A) Loading docks and service areas shall be located on façades that do not face a primary building frontage A101 Complies ☒ (B) Loading docks and service areas located within setback areas shall be screened by a solid fence, or wall, or dense landscaping and separated from pedestrian access to the primary building entry to avoid impeding pedestrian movement/safety. A300 Complies 18.24.040 Building Orientation and Setbacks Check Standard Sheet #Applicant’s Justification (b)(1) Building Corner Elements (less than 40 feet in height) Corner buildings less than 40 feet in height and end units of townhouses or other attached housing products that face the street shall include all of the following features on their secondary building frontage: (A) height and width of corner element shall have a ratio greater than 1.2:1. For townhomes, the width would be equal to the smaller side of one unit?N/A a. Secondary building frontage height: _____ feet b. Secondary building frontage length: _____ feet ☐ c. Secondary building frontage height to width ratio: ___ (B) minimum of 15% fenestration area. a. Total secondary building frontage façade area: ___ sf b. Secondary building frontage façade fenestration area: ___ sf☐ c. Percent of fenestration area _____ % Ch e c k A l l ☐(C) At least one facade modulation with a minimum depth of 18 inches and a minimum width of two feet. Item 7 Attachment D - Objective Design Standards Consistency Analysis        Item 7: Staff Report Pg. 47  Packet Pg. 173 of 253  ATTACHMENT D: City of Palo Alto - Objective Design Standards Consistency Analysis Page 5 (b)(2)(A) & (B) Treatment of Buildings Corners on Corner Lots (40+ feet in height) Corner Buildings 40 feet or taller in height shall include at least one of the following special features: A. Street wall is located at the minimum front yard setback or build-to line for a minimum aggregated length of 40 feet on both facades meeting at the corner and includes one or more of the following building features: N/A ☐i. An entry to ground floor retail or primary building entrance located within 25 feet of the corner of the building. ☐ii. A different material application and/or fenestration pattern from the rest of the façade. Ch e c k O n e o r M o r e w i t h i n A o r B ☐iii. A change in height of at least 4 feet greater or less than the height of the adjacent/abutting primary façade. B. An open space with a minimum dimension of 20 feet and minimum area of 450 sf. The open space shall be at least one of the following ☐i. A publicly accessible open space/plaza. ☐ii. A space used for outdoor seating for public dining. Ch e c k O n e o r Mo r e w i t h i n A o r B ☐ iii. A residential Common Open Space adjacent to a common interior space (i.e. lobby, retail, etc.) and less than two feet above adjacent sidewalk grade. Fences and railing shall be a minimum 50% open/transparent. (b)(3) Primary Building Entry The primary building entry meets at least one of the following standards: ☒A. Faces a public right-of-way.A101 Complies ☒B. Faces a publicly accessible pedestrian walkway.A101 Complies C. Is visible from a public right-of-way through a forecourt or front porch that meets the following standards: i. For residential buildings with fewer than seven units, building entry forecourts or front porch minimum dimensions of (min. 36 sf and min. dimension of 6 feet required): ___ sf and ___ ft. min. dimension Ch e c k O n e o r M o r e ☐ ii. For commercial buildings or residential buildings with seven or more units, building entry forecourts or front porch minimum Item 7 Attachment D - Objective Design Standards Consistency Analysis        Item 7: Staff Report Pg. 48  Packet Pg. 174 of 253  ATTACHMENT D: City of Palo Alto - Objective Design Standards Consistency Analysis Page 5 Item 7 Attachment D - Objective Design Standards Consistency Analysis        Item 7: Staff Report Pg. 49  Packet Pg. 175 of 253  ATTACHMENT D: City of Palo Alto - Objective Design Standards Consistency Analysis Page 6 dimensions of (min. 100 sf and a min. width of 8 feet required): ___ sf and ___ ft. min. width (b)(4) Ground Floor Residential Units A. Finished Floor Height for Ground Floor Units ☐ The finished floor of ground floor residential units, when adjacent to a public right-of- way, must be within the minimum and maximum heights according to setback distance from back of walk identified in Figure 2a and 2b of the Zoning Ordinance. Calculate minimum ground floor finished floor height: N/A, no ground floor units. ☐Setback adjacent to public right of way: 24 feet ☐ Minimum ground floor finished floor height: _____ feet 𝒚 = ― 𝟒 𝟏𝟓(𝒙)+ 𝟏𝟔 𝟑 where 𝑥 = setback length from back of walk, in feet and 𝑦 = ground floor finished floor height, in feet ☐Sites with slopes greater than 2% along building façade – Average height of finished floor: _____ feet Ch e c k A l l t h a t A p p l y ☐Sites located in flood zones – the minimum ground floor finished floor height shall be defined by FEMA, less flood zone elevation: _____ feet B. Setback Trees Ground floor units with a setback greater than 15 feet must have at minimum an average of one tree per 40 linear feet of facade length, within the setback area. N/A Facade length: ______ feet Trees required: ____ tree(s) (i.e. façade length / 40) ☐ Trees provided: ____ tree(s) C and D. Front Setback Item 7 Attachment D - Objective Design Standards Consistency Analysis        Item 7: Staff Report Pg. 50  Packet Pg. 176 of 253  ATTACHMENT D: City of Palo Alto - Objective Design Standards Consistency Analysis Page 7 ☐C. Ground floor residential entries are setback a minimum of 10 feet from the back of public sidewalk; OR N/A Pi c k O n e ☐ D. Where no minimum building setback is required, all ground floor residential units must be set back a minimum 5 feet from back of public sidewalk. Check Standard Sheet #Applicant’s Justification E. Unit Entry A minimum 80% of ground floor residential units that face a public right-of-way or publicly accessible path, or open space shall have a unit entry with direct access to the sidewalk, path, or open space for minimum. N/A a. Total number of ground floor residential units facing a public right-of-way, publicly accessible path, or open space: ____ units b. 80% of total units in (a): ____ units ☐ c. Subset of number of units in (a) that have a unit entry with direct access to the sidewalk, path, or open space: ____ entries (b)(5) Front Yard Setback Character Required setbacks provide a hardscape and/or landscaped area to create a transition between public and private space. The following standards apply, based on intended use and exclusive of areas devoted to outdoor seating, front porches, door swing of building entries, and publicly accessible open space and meet the following: Ch e ck Al l th a t Ap pl y☐(A). Ground-floor retail or retail like uses have a minimum of 10% of the required setback as landscape or planters.N/A Item 7 Attachment D - Objective Design Standards Consistency Analysis        Item 7: Staff Report Pg. 51  Packet Pg. 177 of 253  ATTACHMENT D: City of Palo Alto - Objective Design Standards Consistency Analysis Page 7 Item 7 Attachment D - Objective Design Standards Consistency Analysis        Item 7: Staff Report Pg. 52  Packet Pg. 178 of 253  ATTACHMENT D: City of Palo Alto - Objective Design Standards Consistency Analysis Page 8 i. Minimum setback area (setback x frontage x 10%): ____ sf ii. Landscape or planter area in required setback: ____ sf (B). Ground-floor residential uses have a minimum of 60% landscaped area in the required setback area. L-002 Complies i. Minimum setback area (setback x frontage x 60%): 3,222 sf☒ ii. Landscape area in required setback: 3,621 sf (b)(6) Side Yard Setback Character ☐ (A) Each detached dwelling unit shall have at least one usable side yard, at least six feet wide, between the house and fence or other structure, to provide outdoor passage between the front and rear yards. N/A 18.24.050 Building Massing Check Standard Sheet #Notes (b)(1) Upper Floor Step Backs and Daylight Planes (A) When the height of the subject building is more than 20 feet above the average height (i.e. average of low and high roof elevations) of an adjacent building(s), an upper floor step back shall start within two vertical feet of the average height of the adjacent building. The step back shall be a minimum depth of six feet along both the façade on the primary building frontage and the façade facing the adjacent building, and the step shall occur for a minimum of 70% of each façade length. A310 On the Leghorn side, the required upper floor step back extends 45% of the frontage where 70% is required; Waiver requested i. Proposed building height: 84 feet and 5 inches, 90 feet to parapet ii. Average building height of the adjacent building(s): single-story ☒ iii. Building height where upper floor step back begins: 52 ft 6 in ☒(B) Notwithstanding, subsection (A), when adjacent to a single-story building, the upper floor step back shall occur between 33 and 37 feet in height. The north elevation provides a 44.8% step-back; the South elevation provides a 35.5% step-back. If the Project had to comply with this requirement, it Item 7 Attachment D - Objective Design Standards Consistency Analysis        Item 7: Staff Report Pg. 53  Packet Pg. 179 of 253  ATTACHMENT D: City of Palo Alto - Objective Design Standards Consistency Analysis Page 9 would lose 6,200 square feet; Waiver requested ☒ (C) If a project meets the following criteria, a daylight plane with an initial height of 25 feet above grade at the property line and a 45-degree angle shall be required. This daylight plane is required if all of these criteria are met: i. The project is not subject to a daylight plane requirement, pursuant to district regulations in Title 18; and ii. The project proposes a building which is more than 20 feet above the average height (i.e., average of low and high roof elevations) of an adjacent building(s); and iii. The project abuts residential units in the side or rear yard. N/A, no residential units abut this project. (b)(2) Privacy and Transitions to Residential Uses When a building abuts a residential use on an interior side and/or rear property line, the building shall break down the abutting façade and maintain privacy by meeting all of the following:N/A ☐ (A) Landscape Screening. A landscape screen that includes a row of trees with a minimum one tree per 25 linear feet and continuous shrubbery planting. This screening plant material shall be a minimum 72 inches (6 feet) in height when planted. Required trees shall be minimum 24” box size. ☐(B) Façade Breaks. A minimum façade break of 4 feet in width, 2 feet in depth, and 32 sf of area (i.e. 8 ft tall minimum) for every 36 to 40 feet of façade length ☐ (C) Maximum Amount of Transparent Windows. Within 40 feet of an abutting structure, no more than 15% of the facing façade area shall be windows or other glazing. Additional windows are allowed in order to maintain light, if fixed and fully obscuredCh e c k A l l (D) Windows. Within 30 feet of facing residential windows (except garage or common space windows) or private open space on an adjacent residential building, facing windows on the subject site shall meet the following: (i) Window sills at and above the 2nd floor shall be at least five feet above finished floor; or (ii) Windows shall have opaque or translucent glazing at or below five feet above finished floor; or Item 7 Attachment D - Objective Design Standards Consistency Analysis        Item 7: Staff Report Pg. 54  Packet Pg. 180 of 253  ATTACHMENT D: City of Palo Alto - Objective Design Standards Consistency Analysis Page 10 (iii) Windows shall be angled up to 30 degrees (parallel to window) to face away from the adjacent privacy impacts; and (iv) Landscape screening shall be 24-inch box size or larger and eight+ feet height at planting; 50% evergreens; and located to align with proposed second floor windows at maturity. (E). Balconies: Within 30 feet of residential windows (except garage or common space windows) or private open space on an adjacent residential building, balconies and decks on the subject site shall be designed to prevent views: (i) No sight lines to the adjacent property window or open space are permitted within five feet above the balcony or deck flooring and a 45- degree angle downward from balcony railing. (ii) Submit section view of proposed balcony/deck and abutting residential windows and/or private open space. (iii) Provide balcony/deck design measure which may include: a. Minimum 85% solid railing b. Obscure glass railing c. Barrier with min. 18" horizontal depth from railing (e.g. planter) (b)(3)(A) & (B) Maximum Façade Length - facing a street or public path Buildings 70 feet in length or greater and greater than 25 feet in height For building facades 70 feet in length or greater and facing a public street, right- of-way, or publicly accessible path shall not have a continuous façade plane greater than 70% of the façade length without an upper floor modulation, of at least 2 feet in depth Largest façade length featuring continuous plane: Total Façade length: 202 feet 2 inches ☒ Percent of façade length without upper floor modulation (a/b) (maximum 70%): 55.2 %Complies Buildings 250 feet in length or greaterPi c k O n e C a t e g o r y ☐ (A) Buildings 250 feet in length or greater, which face a public street, right-of- way, or publicly accessible path, shall have at least one vertical façade break with a minimum area greater than 400 sf and a width greater than or equal to two times the depth N/A Item 7 Attachment D - Objective Design Standards Consistency Analysis        Item 7: Staff Report Pg. 55  Packet Pg. 181 of 253  ATTACHMENT D: City of Palo Alto - Objective Design Standards Consistency Analysis Page 11 Total Building length: _____ feet Number of vertical façade breaks: ___ area Width: ____ feet, Depth: ____ feet, Area: ____ sf Buildings between 150 feet and 250 feet in length (B) Buildings 150 to 250 feet in length, which face a public street, right-of-way, or publicly accessible path, shall have at least one vertical façade break with a minimum area greater than 64 sf and a minimum width of 8 feet and minimum depth of 4 feet. A310 Complies Total Building length: 202 feet 2 inches ☒ Number of vertical façade breaks: 1 area Width: 12 feet 6 inches, Depth: 8 feet 8 inches, Area: 108 sf Check Standard Sheet #Applicant’s Justification (b)(4) Special Conditions: Railroad Frontages All parcels with lot lines abutting railroad rights-of-way shall meet the following standards on the railroad-abutting façade(s):N/A ☐(A) A minimum facade break of at least 10 feet in width and six feet in depth for every 60 feet of façade length. Ch e c k Al l ☐(B) For portions of a building 20 feet or greater in height shall not have a continuous façade length that exceeds 60 feet. (b)(5) Diversity of Housing Types ☐ A diversity of housing types (e.g. detached units, attached rowhouses/townhouses, condominiums or apartments, mixed use) are required for projects on large lots: Less than one acre lots: minimum 1 housing types 1 to 2-acre lots: minimum 2 housing types; or G100 The 2-acre site provides only one housing type. Item 7 Attachment D - Objective Design Standards Consistency Analysis        Item 7: Staff Report Pg. 56  Packet Pg. 182 of 253  ATTACHMENT D: City of Palo Alto - Objective Design Standards Consistency Analysis Page 11 Item 7 Attachment D - Objective Design Standards Consistency Analysis        Item 7: Staff Report Pg. 57  Packet Pg. 183 of 253  ATTACHMENT D: City of Palo Alto - Objective Design Standards Consistency Analysis Page 12 More than 2-acre lots: minimum 3 housing types 18.24.060 Façade Design Check Two or More Standard Sheet #Applicant’s Justification (c)(1) Base-Middle-Top ☒ Buildings three stories or taller and on lots wider than 50 feet shall be designed to differentiate a defined base or ground floor, a middle or body, and a top, cornice, or parapet cap. Each of these elements shall be distinguished from one another for a minimum of 80% of the façade length through use of three or more of the following four techniques: ☐ i. Variation in Building Modulation: Building modulation shall extend for a minimum 80% of the façade length feet, and shall include one or more of the following building features. ☐a. Horizontal shifts. Changes in floor plates that protrude and/or recess with a minimum dimension of 2 feet from the primary facade. ☐ b. Upper floor step backs. A horizontal step back of upper-floor façades with a minimum 5 foot step-back from the primary façade for a minimum of 80% of the length of the façade Ch e c k o n e o r m o r e i f se l e c t e d ☐ c. Ground floor step back. A horizontal shift of the ground floor facade with a minimum depth of 2 feet for a minimum 80% of the length of the façade. Ground floor step backs shall not exceed the maximum setback, where stated ☒ii. Variation in Façade Articulation: Façade articulation modulation shall include one or more of the following building features.A310 Complies Ch e c k on e o r mo r e i f se l e c t e d ☒ a. Horizontal and/or Vertical Recesses or Projections. Recesses or projections such as a pattern of recessed grouping of windows, recessed panels, bay windows or similar strategies. The recess or projection shall be a minimum 4 inches in depth. Item 7 Attachment D - Objective Design Standards Consistency Analysis        Item 7: Staff Report Pg. 58  Packet Pg. 184 of 253  ATTACHMENT D: City of Palo Alto - Objective Design Standards Consistency Analysis Page 13 ☐b. Horizontal and/or Vertical Projections. Projections such as shading, weather protection devices, decorative architectural details, or similar strategies. ☐ c. Datum Lines. Datum lines that continue the length of the building, such as parapets or cornices, with a minimum 4 inches in height or a minimum 2 inches in depth and include a change in material ☒iii. Variation in two of the following:A310 Complies ☒a. Fenestration Size ☒b. Fenestration Proportion ☒c. Fenestration Pattern Ch e c k t w o i f se l e c t e d ☒d. Fenestration Depth or Projection ☒iv. Variation in two of the following:A310 Complies ☒a. Façade Material ☐b. Facade Material Size ☒c. Façade Texture and Pattern Ch e c k t w o i f se l e c t e d ☒d. Façade Color (c)(2) Façade Composition Building facades shall use a variety of strategies including building modulation, fenestration, and façade articulation to create visual interest and express a variety of scales through a variety of strategies. All facades shall include a minimum of three of the following façade articulation strategies to create visual interest: ☒A. Vertical and horizontal recesses such as a pattern of recessed grouping of windows or recessed panels. The recess shall be a minimum 4 inches in depth.A310 Complies ☐B. Vertical and horizontal projections such as shading and weather protection devices or decorative architectural details. Projections shall be a minimum 4 inches in depth. ☐ C. Datum lines that continue the length of the building, such as cornices, with a minimum 4 inches in depth, or a minimum 2 inches in depth and include a change in material. Ch e c k T h r e e o r M o r e ☒D. Balconies, habitable projections, or Juliet balconies (every 20 to 40 feet) with a minimum 4 inches in depth.A310 Complies Item 7 Attachment D - Objective Design Standards Consistency Analysis        Item 7: Staff Report Pg. 59  Packet Pg. 185 of 253  ATTACHMENT D: City of Palo Alto - Objective Design Standards Consistency Analysis Page 14 ☐E. Screening devices such as lattices, louvers, shading devices, or perforated metal screens. ☐F. Use of fine-grained building materials, such as brick or wood shingles, not to exceed 8 inches in either height or width. ☒G. Incorporate a minimum of three colors, materials, and/or textures across the whole building.A320 Complies (c)(3) Compatible Rhythm and Pattern (A) Buildings shall express a vertical rhythm and pattern that reflects the size and scale of a housing unit and/or individual rooms and spaces. This may be achieved with building modulation to create vertically oriented façades (height greater than the width of the façade), façade articulation and fenestration repetitive vertically oriented patterns. Depending on the length of the façade, the following standards apply: ☐ i. For continuous façades less than 100 feet in length, the façade shall have vertically oriented patterns of vertical recesses or projections, façade articulation, and/or fenestration. ii. For continuous façades 100 feet or greater in length, the façade shall include either: ☒ a. A vertical recess or change in façade plane with a minimum 2 feet deep vertical shift modulation for a minimum 4 feet in width to establish a vertical rhythm between 20 to 50 feet in width; OR A310 Complies Ch e c k O n e ☐b. A vertical recess or projection with a minimum depth of 2 feet that establishes the vertical rhythm between 10 to 16 feet in width (B) Residential mixed-use buildings ☒i. Vertical Patterns and Modulation: Façades shall use vertical patterns of building modulation, façade articulation, and fenestration.A310 Complies Ch e c k O n e o r Mo r e ☐ ii. Horizontal Patterns and Modulation: Façades that use horizontal articulation and fenestration patterns shall use a vertical massing strategy with a minimum 4 feet wide and 2 feet deep vertical shift in modulation at least once every 50 feet of façade length. (C) Storefronts ☒Storefront uses must express a vertical rhythm not to exceed 30 to 50 feet in width.A310 Complies (c)(4) Emphasize Building Elements & Massing Item 7 Attachment D - Objective Design Standards Consistency Analysis        Item 7: Staff Report Pg. 60  Packet Pg. 186 of 253  ATTACHMENT D: City of Palo Alto - Objective Design Standards Consistency Analysis Page 15 (A)(i) Building Entries within Façade Design. Primary building entries shall be scaled proportionally to the number of people served (amount of floor-area or number of units accessed). Building entries shall meet the following minimum dimensions: ☐a. Individual residential entries: 5 feet in width ☒b. Shared residential entry, such as mixed-use buildings: 8 feet in width A101 Complies ☐c. Commercial building entry: 20 feet in width Ch e c k A l l ☐d. Storefront entry: 6 feet in width (ii) Primary building entries (not inclusive of individual residential entries) shall include a façade modulation that includes at least one of the following: ☒a. Recess or projection from the primary façade plane (minimum 2 feet).A101 Complies Ch e c k On e o r Mo r e ☐b. Weather protection that is a minimum 4 feet wide and 4 feet deep by recessing the entry, providing an awning or using a combination of these methods (c)(5) Storefront/Retail Ground Floors A. Ground floor height shall be a minimum 14 feet floor-to-floor OR shall maintain a 2nd floor datum line of an abutting building.N/A, non-retail ground floor a. Ground floor height (minimum 14 feet): _____ feet; OR☐ b. Height of 2nd floor datum line of abutting building: 22 feet B. Transparency shall include a minimum 60% transparent glazing between 2 and 10 feet in height from sidewalk, providing unobstructed views into the commercial space.N/A a. Façade area between 2 feet and 10 feet: b. Transparent glazing area between 2 feet and 10 feet: ☐ c. Percentage of transparent glazing (minimum 60%): ☐C. If provided, bulkheads and solid base walls measure between 12 and 30 inches from finished grade N/A D. Primary entries shall include weather protection by recessing the entry, providing an awning or using a combination of these methods. N/A a. Weather protection width (minimum 6 feet): ☐ b. Weather protection depth (minimum 4 feet): Item 7 Attachment D - Objective Design Standards Consistency Analysis        Item 7: Staff Report Pg. 61  Packet Pg. 187 of 253  ATTACHMENT D: City of Palo Alto - Objective Design Standards Consistency Analysis Page 16 ☐E. Awnings, canopies and weather protection: (i) When transom windows are above display windows, awnings, canopies and similar, weather protection elements shall be installed between transom and display windows. These elements should allow for light to enter the storefront through the transom windows and allow the weather protection feature to shade the display window. (ii) Awnings may be fixed or retractable N/A (c)(6) Other Non-Residential Ground Floors ☒(A) Ground floor height must be a minimum 14 feet floor-to-floor OR match the 2nd floor datum line of an abutting building ☐Ground floor height (minimum 14 feet): _____ feet; OR Pi c k On e ☒Height of 2nd floor datum line of abutting building: 19 feet 1 inch A300 Complies (B) Minimum of 50% transparent glazing between 4 and 10 feet in height from sidewalk or terrace grade, providing unobstructed views into the commercial space A310 On the Leghorn Street frontage, the Project does not provide 14 foot floor-to-floor and 50% transparency. If the Project had to provide 50% transparency storefront space on the ground level with 14 feet double-height, the design would reduce the building area by approximately 480 SF (assuming a 20' deep active space); Waiver requested Façade area between 2 feet and 10 feet: Transparent glazing area: ☒ Percentage of transparent glazing (minimum 50%): 60%Complies (C) Primary entries include weather protection that is a minimum 6 feet wide and 4 feet deep by recessing the entry, providing an awning or using a combination of these methods. Weather protection width (minimum 6 feet): 10 feet 9 inches and 10 feet☐ Weather protection depth (minimum 4 feet): 5 feet Complies (c)(7) Parking/Loading/Utilities (A) Entry Size Item 7 Attachment D - Objective Design Standards Consistency Analysis        Item 7: Staff Report Pg. 62  Packet Pg. 188 of 253  ATTACHMENT D: City of Palo Alto - Objective Design Standards Consistency Analysis Page 17 No more than 25% of the site frontage facing a street shall be devoted to garage openings, carports, surface parking, loading entries, or utilities access. On sites with less than 100 feet of frontage, no more than 25 feet. A101 On the Leghorn Street frontage, 83% of the frontage is dedicated to garage openings, loading entries, and utility access; Waiver requested Site frontage: Frontage devoted to garage openings, carports, surface parking, loading entries, or utilities access: ☐ Percent of frontage devoted to garage openings, carports, surface parking, loading entries, or utilities access 83% (B) Above Ground Structured Parking ☐ Above grade structured parking levels facing a public right-of-way or publicly accessible open space/path, with the exception of vehicular alleys, must be lined with commercial or habitable uses with a minimum depth of 20 feet A101 On the Leghorn Street frontage, the above grade parking is not lined with commercial or habitable uses with a minimum depth of 20 feet; Waiver requested (C)&(D) Partially Sub-Grade Structured Parking ☐Partially sub-grade parking must not have an exposed façade that exceeds 5 feet in height above abutting grade at back of sidewalk.N/A ☐Partially sub-grade parking must be screened with continuous landscaping and shrubbery with minimum height of 3 feet and be located within 10 feet of the sub-grade parking.N/A 18.24.080 Open Space Check Standard Sheet #Applicant’s Justification (b)(1) Private Open Space ☒ (A) Floor area includes clear space with a minimum dimension of a circle with a six- foot diameter.A103 Complies Item 7 Attachment D - Objective Design Standards Consistency Analysis        Item 7: Staff Report Pg. 63  Packet Pg. 189 of 253  ATTACHMENT D: City of Palo Alto - Objective Design Standards Consistency Analysis Page 18 ☒(B) Minimum clear height dimension of 8’-6” feet.A300 Complies ☒(C) Directly accessible from a residential unit.A103 Complies ☐(C) Balconies are not located within the daylight plane. N/A, no daylight plane applies (b)(1)(E) Private Open Space - Ground Floor Patios ☐ (i) RM-20 and RM-30 districts: Minimum 100 sf of area, the least dimension of which is 8 feet for at least 75% of the area.N/A ☐ (ii) RM-40 districts: Minimum 80 sf of area, the least dimension of which is 6 feet for at least 75% of the area N/A ☐ (iii) Street facing private open space on the ground floor shall meet the finished floor height for ground floor residential standards in section 18.24.040(b)(4)N/A (b)(2) Common Open Space ☒(A)&(B) Minimum 200 sf of area. Area shall include a space with a minimum dimension of a circle with a 10-foot diameter. A201 L-002 Complies ☒(C) A minimum of 60% of the area shall be open to the sky and free of permanent weather protection or encroachments. Trellises and similar open-air features allowed A201 L-002 Complies ☐ (D) Notwithstanding subsection (1), courtyards enclosed on four sides shall have a minimum dimension of 40 feet and have a minimum courtyard width to building height ratio of 1:1.25 N/A ☒(E) Common open space provides seating. A201 L-002 Complies ☐(F) Common open space has a minimum 20% of landscaping.A201 L002 The fourth-floor common open space is 15% landscaped, and the eighth-floor common open space contains no planting, where a minimum of 20% is required. If the Project had to comply with this requirement, it would lose over 1,810 square Item 7 Attachment D - Objective Design Standards Consistency Analysis        Item 7: Staff Report Pg. 64  Packet Pg. 190 of 253  ATTACHMENT D: City of Palo Alto - Objective Design Standards Consistency Analysis Page 19 feet of residential floor area; Waiver requested ☒ (G) Planting in above grade courtyards has minimum soil depth of 12 inches for ground cover, 20 inches for shrubs, and 36 inches for trees. L002 Complies 18.24.090 Materials Check Standard Sheet #Applicant’s Justification ☒ (b)(1) Primary, secondary, and accent materials are allowed or prohibited as in the Residential and Residential Mixed-use Material List, which may be updated from time to time by the Director of Planning with a recommendation by the ARB. See webpage for list - https://www.cityofpaloalto.org/News-Articles/Planning-and-Development- Services/Multifamily-Mixed-Use-Objective-Standards A320 Complies 18.24.100 Sustainability and Green Building Code Check Standard Sheet #Applicant’s Justification ☒ (b) See Chapter 16.14: California Green Building Standards additional requirements for green building and sustainable design. Notwithstanding Section 18.24.010(c), these regulations may not be modified through alternative compliance. GB-1 Complies Item 7 Attachment D - Objective Design Standards Consistency Analysis        Item 7: Staff Report Pg. 65  Packet Pg. 191 of 253  560 Mission Street, Suite 1900 | San Francisco, California 94105 | T +1.415.743.6900 | F +1.415.743.6910 -743-6990 1 415 743-6941 .plume@hklaw.com Chicago | Dallas | Denver | Fort Lauderdale | Houston | Jacksonville | London | Los Angeles | Mexico City Miami | Monterrey | Nashville | Newport Beach | New York | Orlando | Philadelphia | Portland | Richmond May 26, 2026 Re: Third Supplemental Letter Regarding State Density Bonus Law Application - 762 San Antonio Road Dear Palo: As described in our prior correspondence, this firm represents Acclaim Companies (the “Applicant”) and Globe Investments LLC (the “Property Owner”) on whose behalf we provide this letter associated with Application No. 24PLN-00120 at 762 San Antonio Road (the “Project”), in Palo Alto, California (the “City”). On May 15, 2026 the Applicant uploaded supplemental materials to the City’s portal, which included an updated Affordable Housing Compliance Plan containing new and modified State Density Bonus Law requests. We hereby provide the same requests in this letter as well, as follows: State Density Bonus Law Requests We hereby make the following State Density Bonus Law requests in connection with the Project, notwithstanding the fact that the Builder’s Remedy element of the Project allows such inconsistencies, in the alternative/additional to the Builder’s Remedy. We continue to reserve the right to modify these requests or make additional requests, if warranted.1 Waivers •Waiver from 18.24.020(b)(1)(C): Pedestrian walkways that are designed to provide access to bicycles shall have a minimum width of eight feet, with two feet of clear space on either side. The entry to the bike room south of the main entrance is eight feet wide but provides only 2 feet of landscaping on one side for a total width of 10 feet, where 12 feet with 2 feet of landscaping on each side is required. If the Project had to comply with this requirement, 1 For example, we have not yet identified any incentives/concessions, but reserve the right to do so. As a Builder’s Remedy 2.0 development, the Project is eligible for three incentives/concessions. (Govt. Code Sections 65589.5(f)(6)(C)(i), 65915(d)(2)(A)). ATTACHMENT EItem 7 Attachment E - Applicant’s Project Description and Legal Request Letter        Item 7: Staff Report Pg. 66  Packet Pg. 192 of 253  Palo Alto Planning & Devp. May 26, 2026 Page 2 #539134338_v1 it would lose 400 square feet, qualifying it for a waiver. Waiver is also needed for bike room access from Leghorn, where proposed bike room access is 5'-0" wide. To meet the 12' wide path, the Project would need to relocate trash staging area inside the building and result in a building area reduction of approximately 450 SF, qualifying the Project for a waiver. • Waiver from 18.14.020 Table 3 with regard to upper story step backs: The requirement is a step back minimum on 10’ on El Camino Real (the major street frontage). The project provides a 6’ step-back. If the Project had to comply with this requirement, it would lose 1,680 square feet on each of the top three floors and the marketability and usability of the rooms would suffer, likely resulting in a loss of several units, qualifying the Project for a waiver. • Waiver from 18.24.050(b)(1)(B): On the side and rear elevations, the step back shall occur for a minimum of 70% of each façade length and shall occur between 33 and 37 feet in height when adjacent to one-story buildings. By contrast for the Project, the North elevation provides a 44.8% step-back; the South elevation provides a 35.5% step-back. If the Project had to comply with this requirement, it would lose 6,200 square feet, qualifying it for a waiver. • Waiver from 18.24.050(b)(1)(A) and (B): On the Leghorn side, the required upper floor step back extends 45% of the frontage where 70% is required. (Note: for both of these, the plans dimension all the way across the building façade, however we understand the City proposed to count only the portion adjacent to each individual frontage, so that the portions of the building “behind” the 780 San Antonio parcel do not count). If the Project had to comply with this requirement, it would lose 1,800 square feet, qualifying it for a waiver. • Waiver from 18.24.050(b)(3)(B): The Project previously requested a waiver of this standard, the redesigned Project is currently in compliance. The Applicant reserves the right to reassert this waiver if needed in the future. • Waiver from Zoning Code Section 18.14.020 Table 3, Note b: On the Leghorn Street frontage, 83% of the frontage is dedicated to garage openings, loading entries, and utility access, where no more than 50% is allowed. If the Project had to comply with this requirement, it would lose approximately 1,800 square feet, qualifying it for a waiver. • Waiver from 18.24.060(c)(6)(A) and (B): On the Leghorn Street frontage, the Project does not provide 14 foot floor-to-floor and 50% transparency. If the Project had to provide 50% transparency storefront space on the ground level with 14 feet double-height, the design would reduce the building area by approximately 480 SF (assuming a 20' deep active space). Item 7 Attachment E - Applicant’s Project Description and Legal Request Letter        Item 7: Staff Report Pg. 67  Packet Pg. 193 of 253  Palo Alto Planning & Devp. May 26, 2026 Page 3 #539134338_v1 • Waiver from 18.24.060(c)(7)(B): On the Leghorn Street frontage, the above grade parking is not lined with commercial or habitable uses with a minimum depth of 20 feet. If the Project had to comply with this requirement, it would lose 1,800 square feet, qualifying it for a waiver. • Waiver from 18.24.080(b)(2)(F): The fourth-floor common open space is 15% landscaped, and the eighth-floor common open space contains no planting, where a minimum of 20% is required. If the Project had to comply with this requirement, it would lose over 1,810 square feet of residential floor area, qualifying it for a waiver. Notably if the vegetated stormwater areas were included in the calculation, the Project would be in excess of the standard. • Waiver from Special Setback for Leghorn Street: On the Leghorn Street frontage, the third through seventh floors encroach into the required 25-foot setback, and the project is instead set back 20 feet. These floors must encroach into the setback in order to satisfy the aerial fire access requirements that the building not be farther than 30 feet from the fire apparatus. If the Project had to comply with this requirement, it would lose 875 square feet of residential floor area, qualifying it for a waiver. While the Project is not subject to Zoning Code parking requirements due to the applicability of the Builder’s Remedy, we further note that the Project is additionally entitled to the parking maximums under the State Density Bonus Law, with which the Project complies Sincerely, HOLLAND & KNIGHT LLP Genna Yarkin Tamsen Plume Item 7 Attachment E - Applicant’s Project Description and Legal Request Letter        Item 7: Staff Report Pg. 68  Packet Pg. 194 of 253  Project Plans In order to reduce paper consumption, a limited number of hard copy project plans are provided to City Council members for their review. The same plans are available to the public, at all hours of the day, via the following online resources. 1. Go to: paloalto.gov/PermitView 2. Search for “762 San Antonio Road” and open the record by clicking on the blue dot 3. Review the record details on the left side and open the “more details” option 4. Use the “Records Info” drop down menu and select “Attachments” 5. You will find links to the project plans, environmental documents, and other important information. https://www.cityofpaloalto.org/Departments/Planning-Development-Services/Current- Planning/Projects/762-San-Antonio Item 7 Attachment F - Project Plans and EIR Addendum        Item 7: Staff Report Pg. 69  Packet Pg. 195 of 253  CITY COUNCIL Staff Report From: City Manager Report Type: INFORMATION REPORTS Lead Department: Planning and Development Services Meeting Date: August 17, 2026 Report #: 2607-6521 TITLE 2100 Geng Road [24PLN-00356 & 24PLN-00357]: Determination of Impact Fees Following Fee Protest RECOMMENDATION This report is informational and does not require action by the City Council. BACKGROUND On March 16, 2026, City Council approved a Site and Design application, Conditional Use Permit, and Vesting Tentative Map for development of 145 for-sale townhome units located at 2100 Geng Road. The effective date of the approval was April 16, 2026, corresponding with the effective date of the related Park Improvement Ordinance No. 5696 for project improvements located on City park land. A March 16, 2026, supplemental report informed the City Council that the applicant had identified a potential issue with the calculation of Parkland Dedication in-lieu fees and intended to file a fee protest pursuant to the City's fee protest procedures while staff evaluated whether recent legal developments warranted a revision to the fee calculation. On May 13, 2026, the applicant submitted a timely fee protest pursuant to Palo Alto Municipal Code (PAMC) Sections 16.64.060 and 16.64.070 regarding the impact fees applicable to the proposed residential development, which includes 36 detached units and 109 attached units. The fee protest requested that the impact fee calculation recognize the site’s existing baseline condition, including demolition of the existing 191,900 square feet of office gross floor area, so that the project’s park-related fee obligation reflects the net new impact generated by the proposed development (Attachment A). ANALYSIS Pursuant to PAMC Sections 16.64.060 and 16.64.070, an applicant may protest the imposition of an impact fee by submitting a written notice identifying the factual and legal basis for the Item A Item A Staff Report        Item A: Staff Report Pg. 1  Packet Pg. 196 of 253  protest. Following review of the protest, supporting evidence, and any additional information, the Director of Planning and Development Services issues a written determination establishing whether the fee should remain unchanged or be increased or decreased. FEE CATEGORY PREVIOUS FEE APPLICABLE FEE CREDIT NET FEES DUE General Government Library Public Safety Community Center Parkland Dedication / Parks Impact Public Art In-Lieu* TOTAL $ 6,344,604.55 *Based on estimated construction valuation of $58.5 million, per application submitted 2/12/2026, and not included in previous total fee calculation. Item A Item A Staff Report        Item A: Staff Report Pg. 2  Packet Pg. 197 of 253  adjustments to apply the appropriate residential impact fee rates, and establishes the impact fees due for the project based on the information currently available to the City. FISCAL/RESOURCE IMPACT STAKEHOLDER ENGAGEMENT ENVIRONMENTAL REVIEW ATTACHMENTS APPROVED BY: Item A Item A Staff Report        Item A: Staff Report Pg. 3  Packet Pg. 198 of 253  Ashley Weinstein-Carnes D (415) 293-6470 aweinstein-carnes@coblentzlaw.com May 13, 2026 VIA E-MAIL Jonathan Lait Director of Planning and Development City of Palo Alto 250 Hamilton Avenue Palo Alto, CA 94301 Jonathan.Lait@paloalto.gov Re: 2100-2400 Geng Road - Impact Fee Credit Dear Director Lait: We represent Strada Investment Group in connection with the approved residential project at 2100-2400 Geng Road (“Project”). We appreciate the City's continued work with the applicant team to finalize the Project's impact fee calculation. Consistent with Palo Alto Municipal Code Sections 16.64.060 and 16.64.070, this letter is submitted to document our understanding of the approach to calculating fee credits as discussed with the City Attorney's Office, and to request an updated determination from the Planning Department of the impact fees due for the Project. Project and Applicable Fee Framework The Project will replace the existing office improvements at the site with 145 new residential units, including 36 detached units and 109 attached units. The Project submitted its SB 330 preliminary application on July 8, 2024, and the requested fee determination reflects the applicable vested FY2025 fee schedule as of that date, except that, at the City Attorney’s Office’s request, the park fee credit has been calculated using the FY2026 commercial parks impact fee rate. The impact fee calculations should recognize the site's existing baseline condition, including the 191,900 square feet of existing office gross floor area to be demolished, so that the Project's park-related fee obligation reflects its actual net new impact after accounting for demolition of the existing office buildings. In practical terms, the existing office use already generated park- related demand, and the Project will remove that demand when the office buildings are demolished; that reduction should be taken into account when evaluating the new park demand attributable to the redevelopment of the site. Item A Attachment A - Applicant Fee Protest Letter        Item A: Staff Report Pg. 4  Packet Pg. 199 of 253  Jonathan Lait May 13, 2026 Page 2 This approach is consistent with the City's treatment of the Project's other impact fee categories, where Planning’s fee calculations already appropriately recognize credit for removal of the existing office space, which aligns with the broader legal framework that impact fees should be based on the Project’s net new impacts. We also want to highlight that the Project will add meaningful residential open space where none exists today and will be immediately adjacent to Baylands Athletic Center. While we acknowledge that the Project's on-site open space will be private common open space for the new residents and will not substitute for City parkland, we offer those details as further context for why it is appropriate to view the site holistically when finalizing the Project's park-related fee obligation. Requested Updated Determination Based on the approach discussed with the City Attorney's Office, Strada understands that the Project's fee calculation will include a credit of $3,781,663.92 against the Parkland Dedication fee. That credit reflects the City's published commercial parks impact fee rate of $19,706.43 per net new 1,000 square feet as applied to the 191,900 square feet of existing office space to be demolished. With that credit reflected, the Project's total net fees due are $6,404,414.03. This total is calculated by applying the FY 2025 fee schedule in effect when the Project's SB 330 preliminary application was submitted, assigning the single-family rate to the Project's 36 detached units and the multifamily rate to the remaining 109 attached units, consistent with City direction, and applying credits for the demolished office space. Process and Next Steps We respectfully request that the Director issue an updated written determination under Palo Alto Municipal Code Section 16.64.070 confirming the impact fees due for the Project consistent with the calculation above. At this time, and assuming the City is in agreement with the above calculations, we are not requesting an informal hearing. However, we are available for an informal hearing if the City determines that one is required or appropriate under Palo Alto Municipal Code Section 16.64.070. * * * Item A Attachment A - Applicant Fee Protest Letter        Item A: Staff Report Pg. 5  Packet Pg. 200 of 253  Jonathan Lait May 13, 2026 Page 3 We appreciate the City’s collaborative work on the Project and this issue specifically. We believe this approach achieves the right result for both the Project and the City by recognizing the site’s existing baseline, ensuring the fee obligation is appropriately tied to the Project’s actual net new impacts, and allowing much-needed housing to move forward quickly and feasibly. Sincerely, Ashley Weinstein-Carnes Coblentz Patch Duffy & Bass LLP cc: Albert Yang, Assistant City Attorney Steven Switzer, City of Palo Alto Item A Attachment A - Applicant Fee Protest Letter        Item A: Staff Report Pg. 6  Packet Pg. 201 of 253  City Council Staff Report From: City Manager Report Type: INFORMATION REPORTS Lead Department: City Clerk Meeting Date: August 17, 2026 Report #:2607-6588 TITLE Boards, Commissions, and Committees 2026 Mid-Year Attendance Report; CEQA Status - Not a Project RECOMMENDATION This is an informational report, and no action is recommended. BACKGROUND The Boards, Commissions, and Committees (BCC) Handbook specifies that a compilation of attendance will be submitted to the City Clerk and presented to City Council at least annually listing absences for all members. The Handbook emphasizes the significance of consistent attendance and outlines the policies surrounding absences. Regular attendance by all members is essential to ensure collaborative and efficient public participation. Members are expected to make every effort to attend all scheduled meetings. Should a member be absent from more than one-third of the BCC meetings within a calendar year, their absences will be reported to the City Council, which could result in a removal. ANALYSIS Staff has collaborated with the assigned administrative support to compile a report detailing the attendance and absences of the members and commissioners. The report reflects the numbers of absences, remote attendance, and total of meetings attended from January through June 2026, as well as percentage of missed meetings. Commissioners who joined mid- year or finished their terms during the reported period are indicated with an “X.” The purpose of this Mid-Year Attendance Report is to maintain transparency and determine if BCC members are on track with adhering to attendance requirements. Staff acknowledge that three BCC members between the Historic Resources Board and the Human Relations Commission have exceeded the attendance requirements, however, do not expect this to be indicative of future attendance nor elevated to a level of concern. ATTACHMENTS Attachment A: 2026 Mid-Year Attendance Report of Boards, Commissions, and Committees Item B Item B Staff Report        Item B: Staff Report Pg. 1  Packet Pg. 202 of 253  APPROVED BY: Item B Item B Staff Report        Item B: Staff Report Pg. 2  Packet Pg. 203 of 253  Architectural Review Board Mousam Adcock Yingxi Chen David Hirsch Marton Jojarth Kendra Rosenberg 1/1/2026 Meeting Canceled Meeting Canceled Meeting Canceled Meeting Canceled Meeting Canceled 1/15/2026 Absent In Person Absent In Person In Person 2/5/2026 Meeting Canceled Meeting Canceled Meeting Canceled Meeting Canceled Meeting Canceled 2/19/2026 Meeting Canceled Meeting Canceled Meeting Canceled Meeting Canceled Meeting Canceled 3/5/2026 In Person In Person In Person In Person In Person 3/19/2026 In Person In Person In Person In Person In Person 4/2/2026 Meeting Canceled Meeting Canceled Meeting Canceled Meeting Canceled Meeting Canceled 4/16/2026 In Person In Person In Person In Person Absent 5/7/2026 In Person In Person In Person Absent In Person 5/21/2026 In Person In Person In Person In Person In Person 6/4/2026 In Person Absent In Person In Person In Person 6/18/2026 Meeting Canceled Meeting Canceled Meeting Canceled Meeting Canceled Meeting Canceled Meetings Attended In-Person 6 6 6 6 6 Meetings Attended Remote (Just Cause)0 0 0 0 0 Meetings Attended Remote (Standard Brown Act)0 0 0 0 0 Total Meetings Attended 6 6 6 6 6 Total Meeting Absent 1 1 1 1 1 Percentage of Meetings Absent 14.29%14.29%14.29%14.29%14.29% Historic Resources Board Alisa Eagleston- Cieslewicz Christian Pease Samantha Rohman Geddes Ulinskas Caroline Willis 1/8/2026 In Person In Person In Person In Person In Person 2/12/2026 In Person In Person Absent In Person In Person 3/12/2026 In Person In Person Absent In Person In Person 4/9/2026 In Person X In Person In Person In Person 5/14/2026 Meeting Canceled X Meeting Canceled Meeting Canceled Meeting Canceled 6/11/2026 In Person X In Person In Person In Person Meetings Attended In-Person 5 3 3 5 5 Meetings Attended Remote (Just Cause)0 0 0 0 0 Meetings Attended Remote (Standard Brown Act)0 0 0 0 0 Total Meetings Attended 5 3 3 5 5 Total Meeting Absent 0 0 2 0 0 Percentage of Meetings Absent 0.00%0.00%40.00%0.00%0.00% 2026 Mid-Year Attendance Report of Boards, Commissions, and Committees Item B Attachment A - 2026 Mid-Year Attendance Report of Boards, Commissions, and Committees        Item B: Staff Report Pg. 3  Packet Pg. 204 of 253  Human Relations Commission Salwa Ansari Donald Barr Katie Causey Amy Hsieh Sridhar Karnam Michelle Kraus Raizel Rosenberg Mary Kate Stimmler 1/8/2026 In Person In Person In Person In Person In Person In Person X Absent 2/12/2026 In Person In Person Absent In Person In Person In Person X Absent 3/12/2026 Meeting Canceled Meeting Canceled Meeting Canceled Meeting Canceled Meeting Canceled Meeting Canceled X Meeting Canceled 3/17/2026 In Person In Person In Person In Person Absent In Person X In Person 4/9/2026 In Person In Person In Person X Absent In Person In Person Absent 5/14/2026 In Person In Person In Person X In Person In Person In Person In Person 6/11/2026 Remote (Just Cause)In Person In Person X In Person In Person In Person In Person Meetings Attended In-Person 5 6 5 3 4 6 3 3 Meetings Attended Remote (Just Cause)1 0 0 0 0 0 0 0 Meetings Attended Remote (Standard Brown Act)0 0 0 0 0 0 0 0 Total Meetings Attended 6 6 5 3 4 6 3 3 Total Meeting Absent 0 0 1 0 2 0 0 3 Percentage of Meetings Absent 0.00%0.00%16.67%0.00%33.33%0.00%0.00%50.00% Parks & Recreation Commission Nellis Freeman Bing Wei Amanda Brown Vadim Axelrod Yudy Deng Roger Smith Shani Kleinhaus 1/27/2026 In Person In Person In Person In Person In Person In Person In Person 2/13/2026 In Person In Person In Person In Person In Person In Person In Person 2/24/2026 In Person In Person In Person In Person In Person In Person In Person 3/24/2026 In Person In Person Absent In Person In Person In Person In Person 4/28/2026 In Person In Person In Person In Person In Person In Person In Person 5/26/2026 In Person In Person In Person In Person In Person In Person In Person 6/23/2026 In Person Absent Absent In Person In Person In Person In Person Meetings Attended In-Person 7 6 5 7 7 7 7 Meetings Attended Remote (Just Cause)0 0 0 0 0 0 0 Meetings Attended Remote (Standard Brown Act)0 0 0 0 0 0 0 Total Meetings Attended 7 6 5 7 7 7 7 Total Meeting Absent 0 1 2 0 0 0 0 Percentage of Meetings Absent 0.00%14.29%28.57%0.00%0.00%0.00%0.00% Item B Attachment A - 2026 Mid-Year Attendance Report of Boards, Commissions, and Committees        Item B: Staff Report Pg. 4  Packet Pg. 205 of 253  Public Art Commission Hsinya Shen Harriet Stern Robin Mullery Anjana Joshi Tara de la Garza Amber Smith Simon Tran 1/15/2026 In Person In Person In Person Absent In Person In Person In Person 2/10/2026 Retreat In Person In Person In Person In Person In Person In Person In Person 2/12/2026 In Person In Person In Person In Person In Person In Person In Person 3/19/2026 In Person In Person In Person In Person In Person In Person In Person 4/16/2026 In Person Absent In Person In Person In Person In Person In Person 5/21/2026 Meeting Canceled Meeting Canceled Meeting Canceled Meeting Canceled Meeting Canceled Meeting Canceled Meeting Canceled 6/18/2026 In Person In Person In Person In Person In Person In Person In Person Meetings Attended In-Person 6 5 6 5 6 6 6 Meetings Attended Remote (Just Cause)0 0 0 0 0 0 0 Meetings Attended Remote (Standard Brown Act)0 0 0 0 0 0 0 Total Meetings Attended 6 5 6 5 6 6 6 Total Meeting Absent 0 1 0 1 0 0 0 Percentage of Meetings Absent 0.00%16.67%0.00%16.67%0.00%0.00%0.00% Planning & Transportation Commission Allen Akin Bryna Chang Bart Hechtman Todd James Kevin Ji Forest Peterson Cari Templeton 1/14/2026 In Person In Person In Person In Person In Person In Person In Person 1/28/2026 Meeting Canceled Meeting Canceled Meeting Canceled Meeting Canceled Meeting Canceled Meeting Canceled Meeting Canceled 2/11/2026 In Person In Person In Person Absent In Person In Person In Person 2/25/2026 In Person Absent In Person In Person In Person In Person In Person 3/11/2026 In Person In Person In Person Absent Absent In Person In Person 3/25/2026 In Person In Person In Person In Person In Person In Person In Person 4/8/2026 In Person Remote (Standard Brown Act)In Person Absent In Person Remote (Just Cause)Absent 4/29/2026 In Person In Person In Person In Person In Person In Person In Person 5/13/2026 In Person In Person Absent In Person In Person In Person In Person 5/27/2026 In Person In Person Absent In Person In Person In Person In Person 6/10/2026 In Person In Person Absent In Person In Person In Person In Person 6/24/2026 Meeting Canceled Meeting Canceled Meeting Canceled Meeting Canceled Meeting Canceled Meeting Canceled Meeting Canceled Meetings Attended In-Person 10 8 7 7 9 9 9 Meetings Attended Remote (Just Cause)0 0 0 0 0 1 0 Meetings Attended Remote (Standard Brown Act)0 1 0 0 0 0 0 Total Meetings Attended 10 9 7 7 9 10 9 Total Meeting Absent 0 1 3 3 1 0 1 Percentage of Meetings Absent 0.00%10.00%30.00%30.00%10.00%0.00%10.00% Item B Attachment A - 2026 Mid-Year Attendance Report of Boards, Commissions, and Committees        Item B: Staff Report Pg. 5  Packet Pg. 206 of 253  Stormwater Management Oversight Committee Hal Mickelson Catherine Perman Ambika Pajjuri Kevin Mayer Gregory Bennett Ron Owes (Vacant Position) 4/13/2026 In Person In Person In Person In Person Remote (Just Cause)In Person Meetings Attended In-Person 1 1 1 1 0 1 Meetings Attended Remote (Just Cause)0 0 0 0 1 0 Meetings Attended Remote (Standard Brown Act)0 0 0 0 0 0 Total Meetings Attended 1 1 1 1 1 1 Total Meeting Absent 0 0 0 0 0 0 Percentage of Meetings Absent 0.00%0.00%0.00%0.00%0.00%0.00% Utilities Advisory Commission Rachel Croft Utsav Gupta Meagan Mauter Phil Metz Robert Phillips Greg Scharff Chris Tucher 1/7/2026 In Person In Person In Person In Person In Person In Person In Person 2/4/2026 In Person In Person In Person In Person In Person In Person In Person 3/4/2026 In Person In Person In Person In Person In Person In Person In Person 3/31/2026 In Person In Person In Person In Person In Person In Person In Person 5/6/2026 In Person In Person In Person In Person In Person Remote (Just Cause)In Person 6/3/2026 In Person Absent In Person In Person Remote (Just Cause)Absent In Person Meetings Attended In-Person 6 5 6 6 5 4 6 Meetings Attended Remote (Just Cause)0 0 0 0 1 1 0 Meetings Attended Remote (Standard Brown Act)0 0 0 0 0 0 0 Total Meetings Attended 6 5 6 6 6 5 6 Total Meeting Absent 0 1 0 0 0 1 0 Percentage of Meetings Absent 0.00%16.67%0.00%0.00%0.00%16.67%0.00% Item B Attachment A - 2026 Mid-Year Attendance Report of Boards, Commissions, and Committees        Item B: Staff Report Pg. 6  Packet Pg. 207 of 253  City Council Staff Report From: City Manager Report Type: INFORMATION REPORTS Lead Department: Administrative Services Meeting Date: August 17, 2026 Report #:2512-5702 TITLE Investment Activity Report for the Fourth Quarter (April – June), 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 June 30, 2026, the consolidated portfolio totaled $671.2 million (market value), including $528.5 million in investments and $142.6 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 and links 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 return. 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 purchases, calls, redemptions, and maturities. This quarterly report summarizes the City’s Item C Item C Staff Report        Item C: Staff Report Pg. 1  Packet Pg. 208 of 253  investment holdings, portfolio performance, and compliance with the City’s Investment Policy and California Government Code. ANALYSIS Graph 1 below illustrates the City’s portfolio by security type, reflecting how funds are allocated across permitted investment categories Table 1 summarizes the portfolio’s maturity structure, which supports the City’s liquidity objectives and duration strategy. U.S. Treasury U.S. Agency Bonds U.S. Municipal/ State Bonds Certificates of Deposits (CD) U.S. Corporate Bonds Supranational Organizations Bonds Money Market Fund Asset-Backed Securities (ABS/MBS) Liquid Accounts  21.2% Investment by Type - $671.2 Million (Market Value) Item C Item C Staff Report        Item C: Staff Report Pg. 2  Packet Pg. 209 of 253  Investment Performance and Activity For the quarter ended June 30, 2026, the City’s portfolio average market yield was 4.32% compared to 4.16% for the ICE BofA 1-5 Year U.S. Treasury & Agency Index benchmark. The portfolio's total return for the quarter was 0.41%, exceeding the benchmark return of 0.24%. During the quarter, approximately $43.5 million in securities were purchased, $3.5 million were called or redeemed, and $34.0 million matured. Table 2 summarizes key portfolio characteristics including maturity, duration, yield, and credit quality. As of June 30th, the yield for LAIF and the two-year US Treasury were 3.82% and 4.15%, respectively. While these are not direct performance benchmarks, they provide useful context for evaluating the portfolio’s positioning relative to short-term liquidity returns and broader market conditions. Table 2: Portfolio Characteristics Benchmark* Portfolio as of June 30 Portfolio as of March 31 Average Maturity (yrs) 2.64 2.95 2.99 Average Modified Duration 2.46 2.54 2.63 Average Purchase Yield 3.17% 3.04% Average Market Yield 4.16% 4.32% 4.06% Average Credit Quality** AA+ AA+ AA+ *Benchmark: ICE BofA 1-5 Unsubordinated US Treasury & Agency Index **The credit quality is a weighted average calculation of the highest S&P, Moody’s and Finch Compliance and Credit Standards The City’s Investment Policy defines general portfolio limits and controls, including a maximum stated maturity of 10 years, no more than 30% of the market value of the total portfolio in maturities beyond five years, and maintaining a market value above 95% of book value. All FY 2026 Q4 Maturities - Market Value (millions) Up to 1 Year 1 to 2 Years 2 to 3 Years 3 to 5 Years Over 5 Years Portfolio Total * % of Portfolio Par Value U.S. Treasury 24.0$ -$ 30.0$ 14.9$ 9.7$ 78.7$ 11.7% 79.0$ U.S. Agency Bonds 15.9 14.2 4.5 8.2 67.4 110.3 16.4% 119.9 U.S. Municipal/ State Bonds 47.4 45.9 30.6 21.6 45.5 191.0 28.5% 196.8 Certificates of Deposits (CD) 5.5 0.5 5.2 1.4 3.4 15.9 2.4% 16.2 U.S. Corporate Bonds 9.1 - 8.4 4.2 38.5 60.2 9.0% 60.7 Supranational Organizations Bonds 5.9 - 6.0 8.6 19.1 39.7 5.9% 39.4 Money Market Fund 2.3 - - - - 2.3 0.3% 2.3 Asset-Backed Securities (ABS/MBS) - - - 14.3 16.2 30.4 4.5% 30.5 Liquid Accounts 142.6 - - - - 142.6 21.2% 142.6 (US Bank, Wells Fargo, Fidelity, LAIF) Grand Total 252.7$ 60.6$ 84.7$ 73.3$ 199.8$ 671.2$ 100% 687.4$ % of Portfolio 37.6% 9.0% 12.6% 10.9% 29.8% 100.0% Investment Type Item C Item C Staff Report        Item C: Staff Report Pg. 3  Packet Pg. 210 of 253  marketable securities are held by a third-party custodian, and valuations are independently verified. Economic Outlook Inflation remained above the Federal Reserve’s target during the quarter, although underlying inflation showed signs of stabilizing. Higher energy prices associated with Middle East tensions contributed to elevated headline inflation earlier in the quarter. However, oil prices declined by quarter-end as concerns over supply disruptions eased. Cash Flow Outlook Cash flow needs fluctuate over the course of the fiscal year as a result of 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) and Retiree Medical Funds (Other Post-Employment Benefits Trust or OPEB), governed by the City’s Retiree Benefit Funding Policy. Item C Item C Staff Report        Item C: Staff Report Pg. 4  Packet Pg. 211 of 253  FISCAL/RESOURCE IMPACT STAKEHOLDER ENGAGEMENT ENVIRONMENTAL REVIEW ATTACHMENTS APPROVED BY: Item C Item C Staff Report        Item C: Staff Report Pg. 5  Packet Pg. 212 of 253  Book Value Market Value City Investment Portfolio 540,468,988$ 528,545,305$ Other Liquid Accounts Cash with Wells Fargo Bank 2,836,723 2,836,723 Cash with US Bank & Receivables 57,564,793 57,564,793 Fidelity Money Market Funds 39,210,090 39,210,090 Local Agency Investment Fund (LAIF) 42,998,482 42,998,482 Total - Other Liquid Accounts 142,610,088 142,610,088 CONSOLIDATED PORTFOLIO TOTAL (Attachment B)683,079,076 671,155,393 Other Debt Service Funds* Debt Service Proceeds US Bank Trust Services ** 2009 Water Revenue Bonds (Build America Bonds) Debt Service and Reserve Funds 2,125,189 2,125,189 2011 Utility Revenue Refunding Bonds Debt Service and Reserve Funds 593,117 593,117 2018 Capital Improvement (Golf Course & 2002B COP Refinance) (Taxable- Green Bond) Certificates of Participation Debt Service Funds 940 940 2019 California Avenue Parking Garage Certificates of Participation (Tax-Exempt and Taxable Bonds) Debt Service and Reserve Funds 4,167 4,167 2021 Public Safety Building Certificates of Participation Debt Service Funds 6,881 6,881 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 3,244,271 3,244,271 Public Agencies Post-Employment Benefits Trust **** Public Agency Retirement Services (PARS) 131,022,499 131,022,499 Total Other Funds 137,001,408 137,001,408 GRAND TOTAL 820,080,484$ 808,156,801$ * 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 Attachment A Fourth Quarter, Fiscal Year 2025-26 (Unaudited) Consolidated Report of Cash Management City of Palo Alto Cash and Investments Item C Attachment A - Consolidated Report of Cash Management        Item C: Staff Report Pg. 6  Packet Pg. 213 of 253  INVESTMENT REPORT City of Palo Alto| As of June 30, 2026 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 1 Item CAttachment B - InvestmentQuarterly Report (as of June30, 2026)      Item C: Staff Report Pg. 7  Packet Pg. 214 of 253  TABLE OF CONTENTS ECONOMIC UPDATE ACCOUNT PROFILE CONSOLIDATED INFORMATION ATTACHMENT B 2 Item CAttachment B - InvestmentQuarterly Report (as of June30, 2026)      Item C: Staff Report Pg. 8  Packet Pg. 215 of 253  ECONOMIC UPDATE ATTACHMENT B 3 Item CAttachment B - InvestmentQuarterly Report (as of June30, 2026)      Item C: Staff Report Pg. 9  Packet Pg. 216 of 253  ƒ ƒ ƒ Energy prices and inflation remained the primary drivers of the macro backdrop as the U.S.-Israel-Iran conflict entered its third month, disrupting global oil supply. Headline CPI accelerated at the fastest pace in more than three years, reflecting volatility in the energy component. Crude oil, however, retraced roughly 20% from its May–early June peak as diplomatic progress between the United States and Iran pointed to a potential framework for de-escalation. The labor market remained resilient, with continued payroll growth and s ubdued jobless claims. Risk assets held firm, as equities hovered near record highs and credit spreads remained historically tight amid broadly better-than-expected corporate earnings. Taken together, the current market environment has further constrained the case for near-term monetary policy easing, leading the Chandler team to push out its expected timing for rate cuts beyond the six-month investment horizon. The Federal Reserve’s June FOMC meeting ended withpolicymakers unanimously holding the target range at 3.50%–3.75%, a notable shift fromthe 8–4 split at April’s meeting, which markedJerome Powell’s final session as Chair. Under newChair KevinWarsh, swornin onMay 22, the Committee released an unusually concise statement that referenced Middle East tensions and energy supply disruptions while removing prior forward guidance that had suggested a bias toward rate cuts. Updated projections leaned more hawkish, with 9 of 18 officials expecting at least one rate hike this year and 6 anticipating multiple increases. The shift signals that restoring price stability has reemerged as the central focus of monetary policy deliberations. The Treasury yield curve flattened modestly in June as short-term yields responded to a more hawkish shift in Federal Reserve guidance. The 2-year yield rose to 4.15% from 3.98% the prior month, while the 10-year yield edged down slightly to 4.44% from 4.45%. As a result, the 2s/10s spread narrowed to 29 basis points, down from roughly 47 basis points a month earlier and significantly below the 69 basis point spread at the start of the year. Meanwhile, the 3-month/10-year spread remained positive at 64 basis points. Front-end rates absorbed the bulk of the Fed’s updated rate outlook, while longer maturities were partly anchored by a late-month decline in oi l prices. ECONOMIC UPDATE ATTACHMENT B 4 Item CAttachment B - InvestmentQuarterly Report (as of June30, 2026)      Item C: Staff Report Pg. 10  Packet Pg. 217 of 253  -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 ) Non-farm Payroll (000's) 3-month average (000's) 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% Unemployment Rate Underemployment Rate (U6) Unemployment Rate (U3) Ra t e ( % ) Nonfarmpayrolls increased by just 57,000 inJune, well belowthe 113,000 consensus and marking a sharpslowdown fromMay’s pace. The unemployment rate edged down to 4.2%, though the decline was driven by a drop in labor force participation to 61.5%, its lowest level since March 2021. Revisions further weakened the report’s signal. April payrolls were revised down by 31,000 to 148,000, while May was lowered by 43,000 to 129,000, resulting in a combined two-month downward revision of 74,000. Source: US Department of Labor Source: US Department of Labor EMPLOYMENT ATTACHMENT B 5 Item CAttachment B - InvestmentQuarterly Report (as of June30, 2026)      Item C: Staff Report Pg. 11  Packet Pg. 218 of 253  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 ( 00 0 ' s ) Job openings were essentially unchanged at 7.6 million in May, remaining elevated by historical standards even as hiring momentum moderates. Gains inwholesale trade andaccommodation andfoodservices were offset by declines inhealthcare andsocial assistance, as well as finance and insurance. April openings were revised down by 33,000 to 7.6 million, while hires were revised up by 99,000, highlighting ongoing churn but a broadly stable labor market backdrop. Source: US Department of Labor JOB OPENINGS & LABOR TURNOVER SURVEY ATTACHMENT B 6 Item CAttachment B - InvestmentQuarterly Report (as of June30, 2026)      Item C: Staff Report Pg. 12  Packet Pg. 219 of 253  Source: Bloomberg Indices Source: Bloomberg Indices ENERGY MARKETS Crude oil prices declined sharply in June as supply disruptions tied to the Middle East conflict began to ease. Tanker traffic through the Strait of Hormuz normalized, and signs of progress in U.S.–Iran negotiations helped unwind the geopolitical risk premium that had driven prices higher earlier in the year. West Texas Intermediate settled near $69.37 per barrel on June 30, while Brent crude closed around $72.96, both well below their recent peaks. Brent’s 21% monthly decline marked its steepest drop since March 2020, while WTI fell more than 20%, its largest monthly loss since late 2021. Beyond crude, broader energy markets alsosoftened. Refined product cracks narrowed as gasoline and diesel demand showed signs of seasonal moderation, while U.S. natural gas prices remained range-bound amid ample storage and steady production. Taken together, the retracement in oil and broader energy prices reflects a rapid compression in geopolitical risk premia and improved near-term supply visibility, even as underlying structural risks in the region remain unresolved. 2.00 2.50 3.00 3.50 4.00 4.50 5.00 5.50 6.00 6.50 US Fuel Prices Average Retail Price US Diesel Average Retail Price US Gas ($ ) P e r G a l l o n 40 60 80 100 120 140 160 Oil Prices West Texas Intermediate (WTI Spot Cushing) Dated Brent (Global Spot) Pr i c e P e r B a r r e l ( W T I S p o t ) ATTACHMENT B 7 Item CAttachment B - InvestmentQuarterly Report (as of June30, 2026)      Item C: Staff Report Pg. 13  Packet Pg. 220 of 253  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 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 Inflation firmed in May, with the Personal Consumption Expenditures (PCE) price index rising 0.4% on the month and 4.1%year overyear, up from 3.8% in April and marking the highest annual rate of the current cycle. Core PCE, which excludes food andenergy, increased 0.3% inMay and3.4%overthe year. Energy prices remained the primary driverof the headline acceleration, reflecting supply disruptions tiedto the Iranian conflict. A similarpattern was evident inthe headline Consumer Price Index (CPI), which rose 0.5% onthe monthand 4.2%year over year, the fastest annual pace since 2023. Energy prices climbed 3.9% in May and 23.5% from a year earlier, largely due to crude oil reaching a four-year high. In contrast, core CPI rose a more modest 0.2% on the month and 2.9% year over year, indicating that inflation pressures remain concentrated in energy rather than broad-based. Source: US Department of Labor Source: US Department of Commerce INFLATION ATTACHMENT B 8 Item CAttachment B - InvestmentQuarterly Report (as of June30, 2026)      Item C: Staff Report Pg. 14  Packet Pg. 221 of 253  0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% Retail Sales YOY % Change Retail sales rose a robust 0.9%inMay to$763.7 billion, nearly double the pace economists hadpenciled inand anacceleration fromApril's downwardly revised0.4%gain. The closely watched control group, which feeds directly intogross domestic product calculations, advanced 0.7%, pointing todurable underlying demand. Gasoline station receipts rose as energy prices stayed high, while autosales rebounded after anApril pullback. The Conference Board's ConsumerConfidence Index ticked up0.6 points to91.2 inJune, thoughthe improvement masked a further deterioration in how households view the job market, with the share calling jobs ‘hard-to-get’ climbing to a five year high. Spending has proven more resilient than sentiment across recent months. 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 ATTACHMENT B 9 Item CAttachment B - InvestmentQuarterly Report (as of June30, 2026)      Item C: Staff Report Pg. 15  Packet Pg. 222 of 253  -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) edgedup0.1%inMay to 99.3, following a revised 0.2%increase inApril. Despite the monthly gains, the LEI’s six- and twelve-month growth rates remained negative at -0.6% and -1.5%, respectively. The advance was driven primarily by financial components, including equity prices andthe interest rate spread, while consumerexpectations continued to weighon the index. The Chicago Fed National Activity Index fell to -0.10 in May from an upwardly revised 0.19 in April. Production-related and employment-related indicators each subtracted from the index, while the sales, orders, and inventories category made a small positive contribution. Source: The Conference Board Source: Federal Reserve Bank of Chicago LEADING INDICATORS OF ECONOMIC ACTIVITY ATTACHMENT B 10 Item CAttachment B - InvestmentQuarterly Report (as of June30, 2026)      Item C: Staff Report Pg. 16  Packet Pg. 223 of 253  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 Housing starts declined sharply in May to a seasonally adjusted annual rate of 1,177,000, a 15.4% drop from a downwardly revised 1,392,000 in April. The pullback was driven primarily by multifamily construction, while single-family starts edged down a more modest 1.9% to 882,000; total multifamily starts came in at 295,000 units. The S&P CoreLogic Case-Shiller 20-City Composite rose 1.1% yearover year in April, marking its first pickup since November 2025, following an upwardly revised 0.9% gain in March. Freddie Mac’s average 30- year fixed mortgage rate increased to 6.44% in May from 6.33% in April, reinforcing ongoing affordability constraints for prospective buyers. 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 ATTACHMENT B 11 Item CAttachment B - InvestmentQuarterly Report (as of June30, 2026)      Item C: Staff Report Pg. 17  Packet Pg. 224 of 253  40 45 50 55 60 65 70 Institute of Supply Management (ISM) Surveys ISM Manufacturing ISM Services EXPANDING CONTRACTING Manufacturing activity cooled slightly in June, with the Institute for Supply Management's Manufacturing Index easing to53.3%, down0.7 percentage point from May but still marking a sixth consecutive month of expansion. Services activity alsomoderated, as the ISMServices Index eased to54.0% from54.5%, a twenty-fourth consecutive month inexpansion territory. Business activity and neworders bothslowed, though the employment component jumped to 51.2% from 47.9%, its strongest reading since late 2021 andthe first expansion inservices hiring in four months. Source: Institute for Supply Management PURCHASING MANAGERS INDEX (PMI) ATTACHMENT B 12 Item CAttachment B - InvestmentQuarterly Report (as of June30, 2026)      Item C: Staff Report Pg. 18  Packet Pg. 225 of 253  Components of GDP 6/25 9/25 12/25 3/26 1.7% 2.3% 1.3% 0.4% -2.7% 0.0% 0.4% 1.4% 4.8% 1.6% -0.2% -0.4% -0.4% 0.2% -1.2% 0.6% 0.3% 0.2% 0.2% 0.2% 3.8% 4.4% 0.5% 2.1% Personal Consumption Expenditures Gross Private Domestic Investment Net Exports and Imports Federal Government Expenditures Total State and Local (Consumption and Gross Investment)-2.0% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% Gross Domestic Product (GDP) GDP QOQ % Change GDP YOY % Change Source: US Department of Commerce Source: US Department of Commerce Real gross domestic product increased at an annualized rate of 2.1% in the first quarter of 2026, according to the Bureau of Economic Analysis’ thirdestimate, upfrom1.6%inthe priorestimate andanacceleration from0.5%inthe fourth quarterof 2025. The 0.5 percentage point upward revision was driven primarily by a downward revision to imports—which subtract from GDP—partly offset by a downward revision to consumer spending. GROSS DOMESTIC PRODUCT (GDP) ATTACHMENT B 13 Item CAttachment B - InvestmentQuarterly Report (as of June30, 2026)      Item C: Staff Report Pg. 19  Packet Pg. 226 of 253  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 OpenMarket Committee (FOMC) heldthe target range forthe federal funds rate at 3.50%to 3.75%at its June 16–17 meeting, witha unanimous 12–0 vote. This marked a notable shift fromthe April meeting—Jerome Powell’s last as chair—which sawfour dissents in an 8–4 decision. The return to consensus under Chair Kevin Warsh signals a clear change in tone. Minutes from the June meeting are scheduled forrelease inearly July. The June Summary of Economic Projections reflected a more hawkishoutlook. The median projection for the federal funds rate atyear-end 2026 rose to3.8%, upfrom3.4%inMarch, before easing to3.6% in2027 and3.4% in2028. Officials also revised their inflation forecasts, with headline PCE projected at 3.6% in 2026 (from 2.7%) and core PCE at 3.3%. By contrast, median projections for real GDP growth and the unemployment rate—2.2% and 4.3%, respectively—were little changed. 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 ( % ) ATTACHMENT B 14 Item CAttachment B - InvestmentQuarterly Report (as of June30, 2026)      Item C: Staff Report Pg. 20  Packet Pg. 227 of 253  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 ( % ) 2.0% 2.5% 3.0% 3.5% 4.0% 4.5% 5.0% 5.5% US Treasury Yield Curve Jun-26 Mar-26 Jun-25 Yi e l d ( % ) Treasury yields ended June mixed, with a modest flattening across the curve as markets digested a more hawkish Federal Reserve signal. The 2-yearyieldrose to4.15% from3.98% at the endof May, while the 10-year yieldedged downto 4.44%from 4.45%. The 2s/10s spread narrowed to29 basis points, downfrom47 basis points a month earlier. The 3-month/10-yearspread remained positive atroughly 64 basis points atmonth-end. Relative to the 69 basis point spread at the start of 2026, the curve has flattened materially year todate, reflecting a repricing higher in front-end rates as expectations shift toward the possibility of further Fed tightening rather than easing. BOND YIELDS ATTACHMENT B 15 Item CAttachment B - InvestmentQuarterly Report (as of June30, 2026)      Item C: Staff Report Pg. 21  Packet Pg. 228 of 253  ACCOUNT PROFILE ATTACHMENT B 16 Item CAttachment B - InvestmentQuarterly Report (as of June30, 2026)      Item C: Staff Report Pg. 22  Packet Pg. 229 of 253  OBJECTIVES Investment Objectives 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. 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. 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. ATTACHMENT B 17 Item CAttachment B - InvestmentQuarterly Report (as of June30, 2026)      Item C: Staff Report Pg. 23  Packet Pg. 230 of 253  STATEMENT OF COMPLIANCE City of Palo Alto Consolidated | Account #11465 | As of June 30, 2026 Rules Name Limit Actual Compliance Status Notes MORTGAGE SECURITIES Max % Issuer (MV)30.0 0.7 Compliant Maturity (Years)10.0 2.6 Compliant ASSET-BACKED SECURITIES (ABS) Max % (MV; ABS & MBS)20.0 3.8 Compliant % Issuer (MV)5.0 0.7 Compliant Maturity (Years)5.0 4.6 Compliant Rating (AA- by 1)0.0 0.0 Compliant BANKERS' ACCEPTANCES Max % (MV)40.0 0.0 Compliant % Issuer (MV)5.0 0.0 Compliant Maturity (Days)180.0 0.0 Compliant COLLATERALIZED BANK DEPOSITS Max % 100.0 0.0 Compliant COLLATERALIZED TIME DEPOSITS (NON- CD/TD) Max % (MV; FDIC & Collateralized CD/TD)20.0 0.0 Compliant % Issuer (MV)10.0 0.0 Compliant Rating (A-1 by 1; A- by 1 if > FDIC Limit)0.0 0.0 Compliant COMMERCIAL PAPER Max % (MV)40.0 0.0 Compliant % Issuer (MV)5.0 0.0 Compliant Maturity (Days)397.0 0.0 Compliant Rating (A-1 by 1 or A- by 1)0.0 0.0 Compliant CORPORATE MEDIUM TERM NOTES Max % (MV)30.0 9.0 Compliant % Issuer (MV)5.0 0.7 Compliant Maturity (Years)5.0 4.9 Compliant Rating (A- by 1)0.0 0.0 Compliant ATTACHMENT B 18 Item CAttachment B - InvestmentQuarterly Report (as of June30, 2026)      Item C: Staff Report Pg. 24  Packet Pg. 231 of 253  STATEMENT OF COMPLIANCE City of Palo Alto Consolidated | Account #11465 | As of June 30, 2026 Rules Name Limit Actual Compliance Status Notes INSURED TIME DEPOSITS (NON-NEGOTIABLE Max % (MV; FDIC & Collateralized CD/TD)20.0 0.0 Compliant % Issuer (MV)10.0 0.0 Compliant Rating (A-1 by 1; A- by 1)0.0 0.0 Compliant FEDERAL AGENCIES Max % (MV)100.0 16.4 Compliant % Issuer (MV)30.0 5.5 Compliant Callables (MV)20.0 12.1 Compliant Maturity (Years)10.0 8.7 Compliant GENERAL INVESTMENT GUIDELINES Max % 5-10 Years Maturities (MV)30.0 9.0 Compliant Maturity (Years)10.0 8.7 Compliant LOCAL AGENCY INVESTMENT FUND (LAIF) Max Concentration (MV)75.0 43.0 Compliant LOCAL GOVERNMENT INVESTMENT POOL (LGIP) Max % (MV)20.0 0.0 Compliant MONEY MARKET MUTUAL FUNDS Max % (MV)20.0 0.3 Compliant % Issuer (MV)20.0 0.3 Compliant Rating (AAA by 2)0.0 0.0 Compliant MORTGAGE-BACKED SECURITIES (NON-AGENCY) Max % (MV; ABS & MBS)20.0 3.8 Compliant % Issuer (MV)5.0 0.0 Compliant Maturity (Years)5.0 0.0 Compliant Rating (AA- by 1)0.0 0.0 Compliant MUNICIPAL SECURITIES Max % (MV)30.0 0.0 Compliant % Issuer (MV)5.0 1.1 Compliant Maturity (Years)10.0 8.5 Compliant ATTACHMENT B 19 Item CAttachment B - InvestmentQuarterly Report (as of June30, 2026)      Item C: Staff Report Pg. 25  Packet Pg. 232 of 253  STATEMENT OF COMPLIANCE City of Palo Alto Consolidated | Account #11465 | As of June 30, 2026 Rules Name Limit Actual Compliance Status Notes Min Rating (A- by 1)0.0 0.0 Compliant NEGOTIABLE CERTIFICATES OF DEPOSIT (NCD) Max % (MV)30.0 0.3 Compliant % Issuer (MV)5.0 0.0 Compliant Maturity (Years)5.0 3.8 Compliant Rating (A-1 by 1 or A- by 1 if > FDIC Limit) 0.0 0.0 Compliant REPURCHASE AGREEMENTS Max Maturity (Years)1.0 0.0 Compliant SRI PROHIBITED INVESTMENTS Prohibited Investment - Fossil Fuels 0.0 0.0 Compliant Investments - Firearms 0.0 0.0 Compliant Investments - Tobacco 0.0 0.0 Compliant SUPRANATIONAL OBLIGATIONS Max % (MV)30.0 5.9 Compliant % Issuer (MV)10.0 3.7 Compliant Maturity (Years)5.0 3.7 Compliant Rating (AA- by 1)0.0 0.0 Compliant U.S. TREASURIES Max % (MV)100.0 11.7 Compliant Maturity (Years)10.0 4.4 Compliant ATTACHMENT B 20 Item CAttachment B - InvestmentQuarterly Report (as of June30, 2026)      Item C: Staff Report Pg. 26  Packet Pg. 233 of 253  PORTFOLIO CHARACTERISTICS Palo Alto Managed Acct | Account #11463 | As of June 30, 2026 Benchmark*6/30/2026 Portfolio 3/31/2026 Portfolio Average Maturity (yrs)2.64 2.95 2.99 Modified Duration 2.46 2.54 2.63 Purchase Yield 3.17%3.04% Market Yield 4.16%4.32%4.06% Quality**AA+AA+AA+ Market Value 528,545,305 526,367,008 *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. ATTACHMENT B 21 Item CAttachment B - InvestmentQuarterly Report (as of June30, 2026)      Item C: Staff Report Pg. 27  Packet Pg. 234 of 253  SECTOR DISTRIBUTION Palo Alto Managed Acct | Account #11463 | As of June 30, 2026 Sector as a Percentage of Market Value Sector 06/30/2026 Muni Bonds 36.07% 20.93% Treasury 14.91% 11.38% 7.45% 4.88% 2.65% CMBS 0.91% Mkt Fd 0.43% CD 0.38% ATTACHMENT B 22 Item CAttachment B - InvestmentQuarterly Report (as of June30, 2026)      Item C: Staff Report Pg. 28  Packet Pg. 235 of 253  QUALITY DISTRIBUTION Palo Alto Managed Acct | Account #11463 | As of June 30, 2026 S&P Rating Moody’s Rating Fitch Rating Rating 06/30/2026 AAA 20.04% 54.54% 4.93% 0.19% -1+2.35% 17.90% 0.05% Rating 06/30/2026 Aaa 20.77% 53.46% 4.97% -1 2.35% 18.45% Rating 06/30/2026 AAA 12.04% 37.71% 2.28% -- 2.35% 45.62% ATTACHMENT B 23 Item CAttachment B - InvestmentQuarterly Report (as of June30, 2026)      Item C: Staff Report Pg. 29  Packet Pg. 236 of 253  DURATION DISTRIBUTION Palo Alto Managed Acct | Account #11463 | As of June 30, 2026 Portfolio Compared to the Benchmark 0-.25 .25-.5 .5-1 1-2 2-3 3-4 4-5 5-7 Portfolio 11.8% 3.0% 8.6% 20.4% 15.6% 17.5% 14.9% 7.6% BofA 1-5 Year Unsubordinated US Treasury & Index 0.0% 0.0% 2.5% 36.2% 28.4% 20.6% 12.3% 0.0% ATTACHMENT B 24 Item CAttachment B - InvestmentQuarterly Report (as of June30, 2026)      Item C: Staff Report Pg. 30  Packet Pg. 237 of 253  INVESTMENT PERFORMANCE Palo Alto Managed Acct | Account #11463 | As of June 30, 2026 Total Rate of Return: Inception | 09/01/2025 TOTAL RATE OF RETURN*3 Months 12 Months 2 Years 3 Years 5 Years 10 Years Since Inception Palo Alto Managed Acct 0.41% Benchmark 0.24% *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 ATTACHMENT B 25 Item CAttachment B - InvestmentQuarterly Report (as of June30, 2026)      Item C: Staff Report Pg. 31  Packet Pg. 238 of 253  PORTFOLIO CHARACTERISTICS City of Palo Alto Reporting | Account #11464 | As of June 30, 2026 6/30/2026 Portfolio 3/31/2026 Portfolio Average Maturity (yrs)0.00 0.00 Modified Duration 0.00 0.00 Purchase Yield 2.33%1.95% Market Yield 2.33%1.95% Quality**AAA AAA Market Value 142,610,088 145,024,434 *Benchmark: NO BENCHMARK REQUIRED **The credit quality is a weighted average calculation of the highest of S&P, Moody’s and Fitch. ATTACHMENT B 26 Item CAttachment B - InvestmentQuarterly Report (as of June30, 2026)      Item C: Staff Report Pg. 32  Packet Pg. 239 of 253  SECTOR DISTRIBUTION City of Palo Alto Reporting | Account #11464 | As of June 30, 2026 Sector as a Percentage of Market Value Sector 06/30/2026 Cash 69.85% 30.15% ATTACHMENT B 27 Item CAttachment B - InvestmentQuarterly Report (as of June30, 2026)      Item C: Staff Report Pg. 33  Packet Pg. 240 of 253  CONSOLIDATED INFORMATION ATTACHMENT B 28 Item CAttachment B - InvestmentQuarterly Report (as of June30, 2026)      Item C: Staff Report Pg. 34  Packet Pg. 241 of 253  PORTFOLIO CHARACTERISTICS City of Palo Alto Consolidated | Account #11465 | As of June 30, 2026 6/30/2026 Portfolio 3/31/2026 Portfolio Average Maturity (yrs)2.32 2.34 Modified Duration 2.00 2.06 Purchase Yield 2.99%2.81% Market Yield 3.90%3.60% Quality**AA+AA+ Market Value 671,155,393 671,391,442 *Benchmark: NO BENCHMARK REQUIRED **The credit quality is a weighted average calculation of the highest of S&P, Moody’s and Fitch. ATTACHMENT B 29 Item CAttachment B - InvestmentQuarterly Report (as of June30, 2026)      Item C: Staff Report Pg. 35  Packet Pg. 242 of 253  SECTOR DISTRIBUTION City of Palo Alto Consolidated | Account #11465 | As of June 30, 2026 Sector as a Percentage of Market Value Sector 06/30/2026 Muni Bonds 28.36% 16.46% 14.94% Treasury 11.72% 8.95% 6.45% 5.86% 3.84% 2.08% CMBS 0.71% Mkt Fd 0.34% CD 0.30% ATTACHMENT B 30 Item CAttachment B - InvestmentQuarterly Report (as of June30, 2026)      Item C: Staff Report Pg. 36  Packet Pg. 243 of 253  ISSUERS City of Palo Alto Consolidated | Account #11465 | As of June 30, 2026 Issuer Investment Type % United States US Treasury Bank Cash LAIF Cash Home Loan Banks Agency Agricultural Mortgage Corp Agency Bank for Recon and Dev Supras Credit System Agency Home Loan Mortgage Corp Agency -American Development Bank Supras of Hawaii Muni Bonds of Oakland, California Muni Bonds Francisco California City & Coun Muni Bonds of Georgia Muni Bonds of Massachusetts Muni Bonds Francisco City & County of Muni Bonds of Los Angeles, California Muni Bonds Monica Community College Distr Muni Bonds of Oregon Muni Bonds University Corporate Home Loan Mortgage Corp Agency CMBS Angeles Community College Distri Muni Bonds Inc.Corporate Auto Lease Sec Trust ABS Bernardino Community College Dis Muni Bonds California Community College Muni Bonds Inc.Corporate Auto Receivables Owner Trust ABS Motor Corporation Corporate -Benz Auto Receivables Trust ABS ATTACHMENT B 31 Item CAttachment B - InvestmentQuarterly Report (as of June30, 2026)      Item C: Staff Report Pg. 37  Packet Pg. 244 of 253  ISSUERS City of Palo Alto Consolidated | Account #11465 | As of June 30, 2026 Issuer Investment Type % Andrew W. Mellon Foundation, The Corporate Costa Community College Dist Muni Bonds Mateo Union High School District Muni Bonds California Community College D Muni Bonds Vehicle Lease Trust ABS Alto Unified School District Muni Bonds Diego Unified School District Muni Bonds National Mortgage Assoc Agency University of Chicago Corporate Finance Corporation Supras of Alameda, California Muni Bonds Motor Company ABS Community College District Muni Bonds of Mississippi Muni Bonds Fargo & Company Cash of Manhattan Beach, California Muni Bonds Inc.Corporate Diego Community College District Muni Bonds of Corona Muni Bonds of New York Muni Bonds Bancorp Corporate Stanley Corporate & Company Corporate Incorporated Corporate Mutual Global Funding Corporate Chase & Co.Corporate Lilly and Company Corporate Platforms, Inc.Corporate York Life Insurance Company Corporate Life Global Funding Corporate ATTACHMENT B 32 Item CAttachment B - InvestmentQuarterly Report (as of June30, 2026)      Item C: Staff Report Pg. 38  Packet Pg. 245 of 253  ISSUERS City of Palo Alto Consolidated | Account #11465 | As of June 30, 2026 Issuer Investment Type % Simon Property Group, Inc.Corporate Clara VY California Water Dist Muni Bonds of America Corporation Corporate Ramon Valley Unified School Dist Muni Bonds American Govt Oblig Fund Money Mkt Fd Monica-Malibu Unified School D Muni Bonds Public Finance Authority Muni Bonds City School District Muni Bonds of Rhode Island Muni Bonds Community College District Muni Bonds of Fairfield, California Muni Bonds California Cmmnty College Muni Bonds Jose Unified School District Muni Bonds Angeles Department of Water and Muni Bonds Auto Receivables Owner Trust ABS Corporation Corporate -Mobile Us Trust 2026-1 ABS of Santa Ana, California Muni Bonds Deere Owner Trust ABS Financial Auto Leasing Trust ABS of Glendora, California Muni Bonds Valley Cmnty College Dist Muni Bonds Community California Colleg Muni Bonds California Unified School D Muni Bonds Diego County Water Authority Muni Bonds of Colorado Muni Bonds School District, Californi Muni Bonds Pasadena Unified School Distri Muni Bonds California Community College Muni Bonds Regents of the University of Cal Muni Bonds ATTACHMENT B 33 Item CAttachment B - InvestmentQuarterly Report (as of June30, 2026)      Item C: Staff Report Pg. 39  Packet Pg. 246 of 253  ISSUERS City of Palo Alto Consolidated | Account #11465 | As of June 30, 2026 Issuer Investment Type % City of Chula Vista, California Muni Bonds Beach California Unified Sch Muni Bonds of Covina Muni Bonds Unified School District Schoo Muni Bonds Dieguito Union High School Distr Muni Bonds California Municipal Water Muni Bonds Housing Finance Agency Muni Bonds Clarita California Community C Muni Bonds of Texas Muni Bonds Union High School District Muni Bonds Inc.Corporate View Whisman School Distric Muni Bonds Community College District Muni Bonds Dep of Housing & Com Muni Bonds Jose Evergreen California Commun Muni Bonds of Tennessee Muni Bonds California City Unified SD Muni Bonds of Alabama Muni Bonds Joint Community College Distr Muni Bonds Park California City School Di Muni Bonds New York State Urban Development Muni Bonds Cruz Metropolitan Transit Dist Muni Bonds San Antonio California Communi Muni Bonds Angeles County California Public Muni Bonds of La Habra, California Muni Bonds Hills Unified School Dist Muni Bonds -Yorba Linda California Uni Muni Bonds Sands Unified School District Muni Bonds of El Segundo Muni Bonds Francisco Bay Area Rapid Transit Muni Bonds ATTACHMENT B 34 Item CAttachment B - InvestmentQuarterly Report (as of June30, 2026)      Item C: Staff Report Pg. 40  Packet Pg. 247 of 253  ISSUERS City of Palo Alto Consolidated | Account #11465 | As of June 30, 2026 Issuer Investment Type % California Dep of Water Resources Muni Bonds Beach CA Pub Fin Auth Muni Bonds Infrastructure & Economic Muni Bonds California Muni Bonds Santiago Community College Di Muni Bonds of Buena Park, California Muni Bonds Water District Financing Auth Muni Bonds Ontario, California Muni Bonds Unified School District Muni Bonds Mateo-Foster City School Distric Muni Bonds Valley Unified School Distr Muni Bonds Public Financing Authority,Muni Bonds Cash Juan Unified School District Muni Bonds Clara County Muni Bonds of Ohio Muni Bonds Union High School District Muni Bonds Union High School District Muni Bonds -Las Positas Community College Muni Bonds of Monterey Park, California Muni Bonds Hills Cali Public Finance Muni Bonds Joint Unified School District Muni Bonds California Union HS Muni Bonds Maria Joint Union High School Muni Bonds Barbara Unified School Distric Muni Bonds California Finance Authori Muni Bonds California Joint Powers Fin Muni Bonds Jose, California Muni Bonds of San Ramon, California Muni Bonds Unified School District Muni Bonds ATTACHMENT B 35 Item CAttachment B - InvestmentQuarterly Report (as of June30, 2026)      Item C: Staff Report Pg. 41  Packet Pg. 248 of 253  ISSUERS City of Palo Alto Consolidated | Account #11465 | As of June 30, 2026 Issuer Investment Type % Chaffey Community College District Muni Bonds Cruz County Capital Financing Muni Bonds School District, Californi Muni Bonds National Bank CD Credit Union CD Federal Credit Union CD Express Company Neg CD Peoples Bank Co.CD Telco Federal Credit Union CD Southwest Bank CD Bippus State Bank CD Bank, Inc.CD Credit Union CD Bank USA, National Association Neg CD Funding Bancorp, Inc.CD Electric Credit Union CD Stanley Neg CD Federal Credit Union CD Guaranty Bancshares, Inc.CD Schools Federal Credit Union CD Credit Union CD Pitney Bowes Bank Inc.CD Federal Credit Union CD Technology Federal Credit Unio CD Bank Neg CD Systems Fed Credit Union CD Members Credit Union CD Bank CD Savings Association CD Service Credit Union CD ATTACHMENT B 36 Item CAttachment B - InvestmentQuarterly Report (as of June30, 2026)      Item C: Staff Report Pg. 42  Packet Pg. 249 of 253  ISSUERS City of Palo Alto Consolidated | Account #11465 | As of June 30, 2026 Issuer Investment Type % Amazon.com, Inc.CD Savings Bank CD Bank Neg CD Financial Savings Bank Neg CD Credit Union CD for Savings in Newburyport CD Bank CD Bank CD Federal Credit Union CD Rabobank U.A. NY CD Bank, National Association CD of Riverside, California Muni Bonds One Financial Corporation Neg CD Financial Corporation CD Bank CD Credit Union CD Bank and Trust Company CD National Bank and Trust Comp CD Oklahoma Bank CD National Bank of America CD Community Credit Union of Belo CD CD Federal Credit Union CD Bank CD Trust Bank CD Oak Banking Company CD Valley Clean Water Muni Bonds Credit Union CD State Bank CD Bank CD ATTACHMENT B 37 Item CAttachment B - InvestmentQuarterly Report (as of June30, 2026)      Item C: Staff Report Pg. 43  Packet Pg. 250 of 253  ISSUERS City of Palo Alto Consolidated | Account #11465 | As of June 30, 2026 Issuer Investment Type % Bank of Montreal Neg CD Bank CD Bank & Trust Company CD and Merchants State Bank CD Farmers & Merchants Bank CD Bank CD Club Bank CD California Unified SD Muni Bonds Bank CD Express Bank CD Federal Credit Union CD Union High School District Muni Bonds of Downey Muni Bonds County California Junior Coll Muni Bonds California School District Muni Bonds TOTAL 100.00% ATTACHMENT B 38 Item CAttachment B - InvestmentQuarterly Report (as of June30, 2026)      Item C: Staff Report Pg. 44  Packet Pg. 251 of 253  IMPORTANT DISCLOSURES 2026 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 price provided is not reflective of fair market value, Chandler will obtain pricing from an alternative approved third party pricing source in accordance with our written valuation policy and procedures. Our valuation procedures are also disclosed in Item 5 of our Form ADV Part 2A. Performance results are presented gross-of-advisory fees and represent the client’s Total Return. The deduction of advisory fees lowers performance results. These results include the reinvestment of dividends and other earnings. Past performance may not be indicative of future results. Therefore, clients should not assume that future performance of any specific investment or investment strategy will be profitable or equal to past performance levels. All investment strategies have the potential for profit or loss. Economic factors, market conditions or changes in investment strategies, contributions or withdrawals may materially alter the performance and results of your portfolio. Index returns assume reinvestment of all distributions. Historical performance results for investment indexes generally do not reflect the deduction of transaction and/or custodial charges or the deduction of an investment management fee, the incurrence of which would have the effect of decreasing historical performance results. It is not possible to invest directly in an index. Source ICE Data Indices, LLC (“ICE”), used with permission. ICE permits use of the ICE indices and related data on an “as is” basis; ICE, its affiliates and their respective third party suppliers disclaim any and all warranties and representations, express and/or implied, including any warranties of merchantability or fitness for a particular purpose or use, including the indices, index data and any data included in, related to, or derived therefrom. Neither ICE data, its affiliates or their respective third party providers guarantee the quality, adequacy, accuracy, timeliness or completeness of the indices or the index data or any component thereof, and the indices and index data and all components thereof are provided on an “as is” basis and licensee’s use it at licensee’s own risk. ICE data, its affiliates and their respective third party do not sponsor, endorse, or recommend chandler asset management, or any of its products or services. This report is provided for informational purposes only and should not be construed as a specific investment or legal advice. The information contained herein was obtained from sources believed to be reliable as of the date of publication, but may become outdated or superseded at any time without notice. Any opinions or views expressed are based on current market conditions and are subject to change. This report may contain forecasts and forward-looking statements which are inherently limited and should not be relied upon as indicator of future results. Past performance is not indicative of future results. This report is not intended to constitute an offer, solicitation, recommendation or advice regarding any securities or investment strategy and should not be regarded by recipients as a substitute for the exercise of their own judgment. Fixed income investments are subject to interest, credit and market risk. Interest rate risk: the value of fixed income investments will decline as interest rates rise. Credit risk: the possibility that the borrower may not be able to repay interest and principal. Low rated bonds generally have to pay higher interest rates to attract investors willing to take on greater risk. Market risk: the bond market in general could decline due to economic conditions, especially during periods of rising interest rates. Ratings information have been provided by Moody’s, S&P and Fitch through data feeds we believe to be reliable as of the date of this statement, however we cannot guarantee its accuracy. Security level ratings for U.S. Agency issued mortgage-backed securities (“MBS”) reflect the issuer rating because the securities themselves are not rated. The issuing U.S. Agency guarantees the full and timely payment of both principal and interest. LGIP Yields: Reported yields for local government investment pools may be presented as either the 30-day yield or the monthly distribution yield, as applicable. For certain funds, the 30-day yield is calculated using reported daily yield data. Yield calculations are subject to change and may not be directly comparable across funds. LAIF Yields: Additional Disclosure for CA Clients - As a result of a reporting lag from the Local Agency Investment Fund (LAIF), reported LAIF yields represent the most recently available Daily Effective Yield and may reflect data from approximately 7–10 days prior to month-end. ATTACHMENT B 39 Item CAttachment B - InvestmentQuarterly Report (as of June30, 2026)      Item C: Staff Report Pg. 45  Packet Pg. 252 of 253  BENCHMARK DISCLOSURES ICE BofA 1-5 YrUnsubordinated US & Agency Index ICE BofA 1-5 Year Unsubordinated US Treasury & Agency Index tracks the performance of US dollar denominated US Treasury and US agency debt issued in the US domestic market. Qualifying securities must have an investment grade rating (based an average of Moody’s, S&P and Fitch). Qualifying securities must have at least one year remaining term to final maturity and less five years remaining term to final maturity, at least 18 months to maturity at time of issuance, a fixed coupon schedule, and a amount outstanding of $1 billion for sovereigns and $250 million for agencies. ATTACHMENT B 40 Item CAttachment B - InvestmentQuarterly Report (as of June30, 2026)      Item C: Staff Report Pg. 46  Packet Pg. 253 of 253