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HomeMy WebLinkAboutStaff Report 2604-6316CITY OF PALO ALTO CITY COUNCIL Special Meeting Wednesday, September 09, 2026 Council Chambers & Hybrid 5:00 PM     Agenda Item     8.Approval of Amendment No. 1 to the Cost-Sharing Agreement with the County of Santa Clara for Continued Operation of the Safe Parking Program at 2000 Geng Road to Extend the Term Through June 30, 2027 and Not-to-Exceed $196,032; Approval of Amendment No. 3 to Contract No. 1557819, the Lease Agreement with the County of Santa Clara, Extending the County’s Temporary Use of the Site Through June 30, 2027; Approval of FY 2027 Budget Amendment in the Permanent Local Housing Allocation (PLHA) Fund; and Authorization to Use PLHA Activity 6 Funds Accordingly; CEQA status – statutorily exempt. 9 9 1 8 City Council Staff Report From: City Manager Report Type: CONSENT CALENDAR Lead Department: City Manager Meeting Date: September 9, 2026 Report #:2604-6316 TITLE Approval of Amendment No. 1 to the Cost-Sharing Agreement with the County of Santa Clara for Continued Operation of the Safe Parking Program at 2000 Geng Road to Extend the Term Through June 30, 2027 and Not-to-Exceed $196,032; Approval of Amendment No. 3 to Contract No. 1557819, the Lease Agreement with the County of Santa Clara, Extending the County’s Temporary Use of the Site Through June 30, 2027; Approval of FY 2027 Budget Amendment in the Permanent Local Housing Allocation (PLHA) Fund; and Authorization to Use PLHA Activity 6 Funds Accordingly; CEQA status – statutorily exempt. RECOMMENDATION Staff recommends that the City Council approve and authorize the City Manager or their designee to: 1) Execute Amendment No. 1 (Attachment A) to the cost-sharing Agreement Between the County of Santa Clara and the City of Palo Alto at the 2000 Geng Road Safe Parking expanded site, extending the agreement term through June 30, 2027 and authorizing reimbursement of Permanent Local Housing Allocation (PHLA)-eligible documented costs for the period September 16, 2026 through June 30, 2027, in an amount not to exceed $196,032, including $63,068 for PLHA-eligible documented program costs subject to any required review or approval by the California Department of Housing and Community Development of the City’s proposed use of PHLA funds, provided that any resulting changes are non-substantive and do not increase the City’s costs or reduce the County’s maximum reimbursement amount; 2) Execute Amendment No. 3 to Contract No. 1557819, the Lease Agreement between the City of Palo Alto and the County of Santa Clara, extending the County’s temporary use of a portion of 2000 Geng Road for the Safe Parking Program through June 30, 2027; and 3) Amend the Fiscal Year 2027 Budget Appropriation Ordinance in the PLHA Fund, requiring a 2/3 vote, by: a) Increasing revenue from Other Agencies in the amount of $63,068; and 9 9 1 8 b) Increasing the City Manager Other Contract Services budget for eligible documented Safe Parking Program costs in the amount of $63,068 EXECUTIVE SUMMARY The City of Palo Alto and the County of Santa Clara have partnered on the operation of the Safe Parking Program at 2000 Geng Road as part of a coordinated regional response to homelessness. The program provides a safe parking location for households residing in vehicles and connects participants with case management and supportive services. Based on high program utilization and continued use of the site by Palo Alto-connected households, staff recommends approval of amendments to the City-County cost-sharing and lease agreements to allow the existing Geng Road Safe Parking Program to continue through June 30, 2027. Approval of Amendment No. 1 to the cost-sharing agreement would extend City funding participation through June 30, 2027 and authorize reimbursement of eligible documented costs incurred between September 16, 2026 and June 30, 2027, in an amount not to exceed $196,032, including $63,068 for PLHA-eligible documented program costs. Approval of Amendment No. 3 to Contract No. 1557819, the Lease Agreement, would extend the County’s temporary use of a portion of the City-owned property at 2000 Geng Road for Safe Parking Program purposes through June 30, 2027. The proposed actions would not establish a new safe parking site, expand the leased premises beyond the existing approved site configuration, or modify citywide parking regulations. The proposed funding plan includes $63,068 in PLHA funds, subject to applicable funding restrictions and review or approval by the California Department of Housing and Community Development, with the remaining $132,964 funded within existing FY 2027 General Fund appropriations approved by Council during the budget process. The proposed amendment preserves the City’s ability to review invoices and supporting documentation, request clarification, and deny reimbursement for costs that are inadequately documented, ineligible, inconsistent with the agreement, or above the approved not-to-exceed amount. BACKGROUND Safe parking programs provide safe, legal locations where households sheltering in vehicles can park and access services. The County of Santa Clara, through its Office of Supportive Housing, serves as the lead agency for the Santa Clara County Continuum of Care and coordinates supportive housing policies, shelter, outreach, and related homeless services countywide.1 On September 14, 2020, City Council approved an interim Safe Parking ordinance and a three- year lease with the County of Santa Clara for use of City property at 2000 Geng Road for Safe 1 The Santa Clara County Continuum of Care coordinates regional homelessness response activities, including coordinated assessment and referral processes used to connect eligible households with housing and supportive services. 9 9 1 8 Parking Program purposes.3 Under the lease, the County contracted with a local nonprofit operator to operate a Safe Parking Program at the site. 4 5 6 ANALYSIS 3 City Council, September 14, 2020, Item #9, https://www.cityofpaloalto.org/files/assets/public/v/1/agendas- minutes-reports/reports/city-manager-reports-cmrs/year-archive/2020-2/id-11513.pdf?t=58031.91 4 City Council, September 18, 2023 https://cityofpaloalto.primegov.com/meetings/ItemWithTemplateType?id=3115&meetingTemplateType=2 5City Council Staff Report, August 19, 2024, https://cityofpaloalto.primegov.com/Portal/Meeting?meetingTemplateId=14361 https://cityofpaloalto.primegov.com/meetings/pre-meeting/2169 Note, while the agreement allows for expansion of up to 22 total RV spaces, site conditions can accommodate 21 6 See Cost-Sharing Agreement Between the County of Santa Clara and the City of Palo Alto for the 2000 Geng Road Safe Parking Program, Exhibit A, Program Specifics 9 9 1 8 services and manages referrals consistent with the Santa Clara County Continuum of Care’s Coordinated Assessment System. The County is also responsible for maintaining financial records and providing backup documentation to support City payment of eligible documented costs. 9 9 1 8 applicable eligibility requirements, and sufficient documentation of eligible costs. Staff will continue to explore additional grant, partnership, and other eligible funding opportunities to offset City costs in future fiscal years, as appropriate. 11￿12 when spaces are unavailable. The waitlist functions as a pipeline for future enrollment but does not represent all households residing in vehicles in Palo Alto, because some households may not apply, may not meet eligibility requirements, may decline services, or may seek alternatives outside the Geng Road program. 13. Measure FY 2026 Q1 FY 2026 Q2 FY 2026 Q3 Total households enrolled 30 29 27 Total individuals enrolled 43 44 38 Palo Alto-affiliated households 24 21 20 Palo Alto-affiliated individuals 37 36 30 11 Interest list refers to those who have expressed an interest in the Safe Parking Program but may not have produced documents to prove eligibility 12 Waitlist refers to those who have been vetted and have all documents approved by the program 13 Based on County-provided quarterly program materials and invoice documentation for FY 2026 Q1 through FY 2026 Q3. FY 2026 Q4 program utilization and outcome data was not available in time for inclusion in this report. 9 9 1 8 and 463 days, respectively, for currently enrolled households, and 316 days and 389 days, respectively, for exiting households. Exit destinations for 11 household exits in Q3 included temporary stays with family or friends, places not meant for habitation, and permanent housing or permanent stays with family. 9 9 1 8 through FY 2026 Q3 invoice amounts reviewed. The County remains responsible for the costs associated with the original Safe Parking site area and original permitted spaces. 17 17 This not-to-exceed amount is covering an approximately 10-month period. 9 9 1 8 Safe Parking Program purposes through June 30, 2027. This action would align site control with the proposed cost-sharing term and allow uninterrupted program operation. 19 FISCAL/RESOURCE IMPACT Approval of Amendment No. 1 to the cost-sharing agreement would authorize reimbursement of eligible documented costs in an amount not to exceed $196,032 for the period September 16, 2026 through June 30, 2027, including $63,068 for PLHA-eligible documented program costs. 19 Government Code Section 8698.4 authorizes local agencies, under specified conditions, to allow designated parking areas for overnight shelter by persons and families who are homeless 9 9 1 8 The lease amendment itself does not authorize separate reimbursement beyond the proposed cost-sharing amendment. However, Amendment No. 3 to Contract No. 1557819, the Lease Agreement, is required to continue the County’s temporary use of the designated portion of 2000 Geng Road for Safe Parking Program purposes during the same period. STAKEHOLDER ENGAGEMENT This item was coordinated with the City Manager’s Office, City Attorney’s Office, Administrative Services/Finance, Utilities, relevant operating departments, and the County of Santa Clara Office of Supportive Housing. Staff participate in regular coordination with the County Office of Supportive Housing, including monthly contract management meetings and monthly leadership meetings, to discuss program operations, contract administration, reimbursement documentation, service coordination, and implementation issues. ENVIRONMENTAL REVIEW 9 9 1 8 approval of Amendment No. 2 expanding the leased premises, the City considered environmental review for the temporary Safe Parking use of the site.21 The proposed actions before Council do not establish a new Safe Parking site, expand the leased premises beyond the existing approved site configuration, modify citywide parking regulations, or authorize physical changes to the property. The actions would continue the existing temporary use and related cost-sharing arrangement. The proposed actions are not a project under the California Environmental Quality Act because they constitute administrative, fiscal, and organizational activities that will not result in direct or reasonably foreseeable indirect physical changes in the environment. In the alternative, the actions are statutorily exempt under PRC section 21080.10(c) as contracts providing services for people experiencing homelessness. ATTACHMENTS Attachment A: Amendment No. 1 to the Agreement Between the County of Santa Clara and the City of Palo Alto for Cost Sharing at 2000 Geng Road Safe Parking Expanded Site Attachment B: Amendment No. 3 to Contract No. 1557819, the Lease Agreement Between the City of Palo Alto and the County of Santa Clara for Use of 2000 Geng Road APPROVED BY: Ed Shikada, City Manager 21 See City Council Staff Report ID #11513, dated September 14, 2020, regarding adoption of an interim Safe Parking ordinance and approval of a three-year lease with the County of Santa Clara for City property located at 2000 Geng Road for Safe Parking Program purposes. Vers.: Aug. 5, 2019 Page 1 of 2 AMENDMENT NO. 3 TO CONTRACT NO. 1557819 BETWEEN THE CITY OF PALO ALTO AND THE COUNTY OF SANTA CLARA This Amendment No. 3 (this “Amendment”) to Contract No. 1557819 (the “Contract” as defined below) is entered into as of September 12, 2026 by and between the CITY OF PALO ALTO, a California chartered municipal corporation (“CITY”), and the COUNTY OF SANTA CLARA, a political subdivision of the State of California (“COUNTY”). CITY and COUNTY are referred to collectively as the “Parties” in this Amendment. R E C I T A L S A. The Contract (as defined below) was entered into by and between the Parties hereto for the provision of the use of a portion of 2000 Geng Road for the County’s 24-hour safe parking program for recreational and other vehicles and persons residing in such vehicles on a temporary basis (“Safe Parking”), as detailed therein. B. The Parties now wish to amend the Contract to extend the term. NOW, THEREFORE, in consideration of the covenants, terms, conditions, and provisions of this Amendment, the Parties agree: SECTION 1. Definitions. The following definitions shall apply to this Amendment: a. Contract. The term “Contract” shall mean Contract No. 1557819 between COUNTY and CITY, dated September 17, 2020, as amended by: • Amendment 1, dated September 12, 2023, and • Amendment 2, dated August 26, 2024 b. Other Terms. Capitalized terms used and not defined in this Amendment shall have the meanings assigned to such terms in the Contract. SECTION 2. Section 2 of the Contract is hereby amended to read as follows: 2. Term. The term of this Agreement shall commence upon the Effective Date and end on June 30, 2027 (“Term”). Notwithstanding anything to the contrary this Agreement, the Term shall expire no later than the date Government Code Section 8698.4 (or any statutory replacement thereof) is repealed. It is understood that this Agreement is intended to give County a temporary use of the Premises and that County shall not be entitled to relocation benefits, assistance, damages (liquidated or otherwise), costs, Vers.: Aug. 5, 2019 Page 2 of 2 claims or fees from City upon expiration, termination, or cancellation of this Agreement. SECTION 3. Legal Effect. Except as modified by this Amendment, all other provisions of the Contract, including any exhibits thereto, shall remain in full force and effect. SECTION 4. Incorporation of Recitals. The recitals set forth above are terms of this Amendment and are fully incorporated herein by this reference. SIGNATURES OF THE PARTIES IN WITNESS WHEREOF, the Parties have by their duly authorized representatives executed this Amendment effective as of the date first above written. CITY OF PALO ALTO ______________________________ City Manager APPROVED AS TO FORM: ______________________________ City Attorney or designee COUNTY OF SANTA CLARA ______________________________ Name: Title: APPROVED AS TO FORM AND LEGALITY: ______________________________ Name: Title: Page 1 of 6 AMENDMENT NO. 1 TO AGREEMENT BETWEEN THE CITY OF PALO ALTO AND THE COUNTY OF SANTA CLARA FOR COST SHARING AT 2000 GENG ROAD SAFE PARKING EXPANDED SITE This Amendment No. 1 (this “Amendment”) to the Agreement Between the County of Santa Clara and the City of Palo Alto (the “Contract” as defined below) is entered into as of September 12, 2026 by and between the CITY OF PALO ALTO, a California chartered mun icipal corporation (“CITY”), and the COUNTY OF SANTA CLARA, a political subdivision of the State of California (“COUNTY”). CITY and COUNTY are referred to collectively as the “Parties” in this Amendment. R E C I T A L S A. The Contract (as defined below) was entered into by and between the Parties hereto for the City to contribute funds to the County’s operation of the Expanded Site at 2000 Geng Road for Safe Parking (“Safe Parking”), as detailed therein. B. The Parties now wish to amend the Contract in order to extend the term of the Contract and amend other terms. NOW, THEREFORE, in consideration of the covenants, terms, conditions, and provisions of this Amendment, the Parties agree: SECTION 1. Definitions. The following definitions shall apply to this Amendment: a. Contract. The term “Contract” shall mean the “Agreement Between the County of Santa Clara and the City of Palo Alto” between COUNTY and CITY, effective February 1, 2025. b. Other Terms. Capitalized terms used and not defined in this Amendment shall have the meanings assigned to such terms in the Contract. SECTION 2. Section 1 of the Contract is hereby amended to read as follows: 1) TERM This Agreement is effective on February 1, 2025 and will continue thereafter through June 30, 2027 unless extended by mutual consent or terminated as provided below in Sections 4 and 13. SECTION 3. Section 2 of the Contract is hereby amended to read as follows: 2) ROLES AND RESPONSIBILITIES a) The Parties shall jointly develop, implement, and monitor the programs described in Exhibit A: Program Specifics (“Programs”). Page 2 of 6 b) City’s Responsibilities i) The City shall designate a Program Manager to: (1) Serve as the County’s liaison to the City’s departments and City Council; (2) Participate in management meetings for the Programs, which will be held as needed; and (3) Actively assist in the developmen t and improvement of the Programs to ensure that the Programs meet their goals. ii) The City shall reimburse the County for eligible expenses incurred in connection with this Agreement, up to the maximum amounts specified below in Table 1, following receipt, review, and approval of the County’s invoice or payment request. The County’s invoice or payment request will consist of a summary of eligible costs in accordance with this agreement. Table 1: City’s Not-to-Exceed Contribution Time Period Total Maximum Financial Obligation February 1, 2025 - June 30, 2025 $98,507 July 1, 2025 – June 30, 2026 $235,238 July 1, 2026 – September 15, 2026 $59,104 Utility Charges (as defined below) for February 1, 2025 – September 15, 2026 $55,000 September 16, 2026 – June 30, 2027 $295,004 Utility Charges (as defined below) for September 16, 2026 – June 30, 2027 $30,000 TOTAL $772,853 The County shall submit its final invoice no later than sixty (60) days after expiration or termination of this Agreement, unless the City agrees in writing to a later date. The City shall have no obligation to reimburse invoices submitted after that date. Notwithstanding anything to the contrary in the Geng Road Lease, the City shall pay for electricity, gas, refuse, sewer, and water for the Geng Road site (“Utility Charges”) during the time periods above up to the specified amounts in Table 1 above. Utilit y Charges may be paid directly from the City to itself as the utility provider, through interdepartmental transfer or other City accounting mechanism, or the City may reimburse the County for actual eligible utility costs paid, as applicable. Page 3 of 6 iii) The City’s contribution under this Agreement may be funded from a combination of Permanent Local Housing Allocation (“PLHA”) funds, General Fund appropriations, and/or other legally available funds, subject to applicable restrictions on the use of suc h funds, City Council appropriations, and all applicable federal, state, and local laws and requirements. c) County’s Responsibilities i) The County shall designate one or more Program Managers to: (1) Serve as the City’s liaison to County departments; (2) Plan and lead management and coordination meetings, which will be held as needed; (3) Lead in development, management, and refinement of the Programs to ensure that the Programs meet their goals; and (4) Lead coordination meetings with appropriate stakeholders to ensure the Programs’ success. ii) The County shall provide or subcontract Programs’ services. To the maximum extent practicable, the County shall leverage other resources to offset, improve, or expand the Programs’ services. iii) The County or its contractors shall implement referral criteria and procedures consistent with the Santa Clara County Continuum of Care’s Coordinated Assessment System. iv) The County shall maintain complete and accurate financial records supporting all costs for which reimbursement is sought under this Agreement and reasonably requested by the City for audit purposes. v) To the extent the City uses PLHA or other restricted funds under this Agreement, the County shall cooperate with the City in providing documentation required by the State or funder to support cost eligibility, reporting, monitoring, and audit compliance. The City shall communicate any known funding-source-specific documentation requirements to the County reasonably in advance. d) The Parties shall work collaboratively to: i) Establish the Programs’ success and outcome measures consistent with the Santa Clara County Continuum of Care’s System Performance Measures; ii) Identify resources that would enable the Programs to more effe ctively use City and County funds and improve Programs, incorporating lessons learned from similar Programs; iii) Meet regularly to discuss the performance and progress of the Programs. When appropriate, the Parties shall jointly develop corrective actions to be implemented by the Programs’ contractors; iv) Jointly monitor the Programs’ expenses and outcomes. Based on the availability of the City’s Page 4 of 6 funds in future years and the Programs’ outcomes, the Parties will determine whether to continue, expand, contract, or terminate the Programs at the end of the Term ; e) Funding under this Agreement is contingent on appropriations approved by the City Council and, where applicable, on the continued availability and lawful use of PLHA or other restricted funding sources. Nothing herein, however, shall prevent the obligation of the City Council to reimburse costs eligible under this Agreement where any non -compliance with PLHA or other restricted funding sources was due to conditions not communicated to the County in advan ce. SECTION 4. The following exhibit to the Contract is hereby amended to read as set forth in the attachment to this Amendment, which is hereby incorporated in full into this Amendment and into the Contract by this reference: a. Exhibit “A” entitled “PROGRAM SPECIFICS”, AMENDED, REPLACES PREVIOUS. SECTION 3. Legal Effect. Except as modified by this Amendment, all other provisions of the Contract, including any exhibits thereto, shall remain in full force and effect. SECTION 4. Incorporation of Recitals. The recitals set forth above are terms of this Amendment and are fully incorporated herein by this reference. SIGNATURES OF THE PARTIES IN WITNESS WHEREOF, the Parties have by their duly authorized representatives executed this Amendment effective as of the date first above written. CITY OF PALO ALTO ______________________________ City Manager APPROVED AS TO FORM: ______________________________ City Attorney or designee COUNTY OF SANTA CLARA ______________________________ Name: Title: APPROVED AS TO FORM AND LEGALITY: ______________________________ Name: Title: Attachment: Exhibit “A” “PROGRAM SPECIFICS” Page 5 of 6 EXHIBIT A: PROGRAM SPECIFICS This Exhibit describes the Programs that will be implemented under this Agreement, either directly by the County or by a County subcontractor. A. Safe Parking (SP) 1. Program Description SP programs provide homeless households with a temporary, overnight, safe location to park, as along with case management and related supportive services. 2. Ordinance The County agrees to comply with all of the terms and conditions set forth in the City’s Safe Parking Ordinance. 3. Target Population The Program shall serve homeless households who are unsheltered and sleeping in their vehicle with priority for households with students enrolled in a school district within Palo Alto as outlined in the Safe Parking Ordinance. 4. Number of Households The County or its contractors shall serve up to 10 households at a given point in time. 5. Program Funding Amount The City shall reimburse the County for eligible documented Program costs in accordance with Section 2(b)(ii) of this Agreement, up to the maximum amounts authorized under this Agreement. 6. Reporting Requirements a) The County shall provide quarterly reports to the City no later than thirty (30) days following the end of each calendar quarter, unless otherwise agreed in writing by the Parties. Quarterly reports shall include, at a minimum: b) Number of unduplicated clients served: a. All clients served. b. Clients served that are connected to the City. c) Exit destinations: a. Number of unduplicated clients exits per period by exit categories. b. Number of unduplicated clients exits per period by exit categories for those connected to the City. Page 6 of 6 d) Enrollments of Palo Alto connected clients for the time period as well as enrollments that are new in that time period. e) Average length of time that individuals and families remain in program. f) Returns to homelessness within 12 months of individuals and families served, as data becomes available. g) Returns to homelessness within 2 years of individuals and families served, as data becomes available. h) A summary budget-to-actual report of operation and maintenance costs funded by the City during the reporting period, in categories and a format agreed upon by the Parties.