HomeMy WebLinkAbout2026-10-07 City Council Agenda PacketCITY COUNCIL
Regular Meeting
Monday, October 05, 2026
Council Chambers & Hybrid
5:30 PM
Amended Agenda
Amended agenda items appear below in RED
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
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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 1-3 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 1-3 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 October 05, 2026
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CALL TO ORDER
BOARDS, COMMISSIONS, AND COMMITTEES APPOINTMENTS (5:30 - 5:40 PM)
1.Appointment of Candidates to the Human Relations Commission (HRC), Parks and
Recreation (PRC), and Planning and Transportation Commission (PTC), CEQA Status - Not
a Project
SPECIAL ORDERS OF THE DAY (5:40 - 5:45 PM)
2.Proclamation Recognizing Fire Prevention Week- October 4-10
AGENDA CHANGES, ADDITIONS AND DELETIONS
IN-PERSON PUBLIC COMMENT (5:45 - 6:15 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 (6:15 - 6:25 PM)
Members of the public may not speak to the item(s).
STUDY SESSION (6:25 - 7:25 PM)
3.Best Practices in Managing Consultant Services
CONSENT CALENDAR (7:25 - 7:30 PM)
Items will be voted in one motion unless removed from the calendar by three Council Members.
4.Approval of Business Retention, Expansion, and Attraction (BRE/A) Strategy as
Recommended by the Economic Development Committee: CEQA – Not a Project
5.Approval of Letters of Intent with Avenidas and HeartFit for Life for collaboration on a
long-term public-private partnership for expanded services for aging adults at the
Cubberley site; CEQA status – Mitigated Negative Declaration Approved on May 19, 2026.
2 October 05, 2026
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6.Approval of Surveillance Use Policy for Security Cameras at the Palo Alto Animal Shelter;
CEQA Status - Not a Project.
7.Approval of Surveillance Use Policy for Security Cameras at the Palo Alto Junior Museum
& Zoo; CEQA Status - Not a Project.
8.Approval of FY 2026 Reappropriation Requests to FY 2027 Operating and Capital
Improvement Budgets and Additional Technical Clean-Up Actions and Corresponding
Amendments to the FY 2027 Budget Appropriation for Various Funds. CEQA Status: Not a
Project
9.Approval of Professional Services Contract Number C27196802 with BKF Engineers for
the Design of Four Quadrant Gate Systems Improvements required for Quiet Zone
Railroad Crossings at Churchill Avenue, Meadow Drive, and Charleston Road in an
Amount Not to Exceed $1,294,522 for a term ending December 31, 2029; CEQA status:
Categorically Exempt, CEQA Guidelines Section 15301.
CITY MANAGER COMMENTS (7:30 - 7:40 PM)
BREAK (15 MINUTES)
Listed times are estimates only and are subject to change at any time, including while the meeting is in progress.
ACTION ITEMS (Item 10: 7:55 - 9:15 PM; Item 11: 9:15 - 10:15 PM)
Include: Report of Committees/Commissions, Ordinances and Resolutions, Public Hearings, Report of Officials, Unfinished
Business and Council Matters.
10.Approval of FY 2027 Architectural Review Board, Historic Resources Board, Planning and
Transportation Commission, and Utilities Advisory Commission Work Plans; CEQA Status
– Not a Project
11.Consideration of City Council Positions on State and Local Measures Presented to Palo
Alto Voters on the November 3, 2026 Ballot; CEQA status – not a project
CLOSED SESSION (10:15 - 10:45 PM)
AA1.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
3 October 05, 2026
Materials submitted after distribution of the agenda packet are available for public inspection at www.paloalto.gov/agendas.
City Negotiators: Ed Shikada, Kristen O'Kane, Sunny Tong Subject of Negotiations:
Purchase, Exchange, and/or Lease Price and Terms of Payment
New Item Added
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.Informational Report: Utilities Quarterly Report for FY2026-Q3 (January 2026 – March
2026)
OTHER INFORMATION
Standing Committee Meetings this week
Finance Committee October 6, 2026 CANCELED
Public Comment Letters
Schedule of Meetings
4 October 05, 2026
Materials submitted after distribution of the agenda packet are available for public inspection at www.paloalto.gov/agendas.
AMENDED AGENDA ITEMS
AA1.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
New Item Added
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
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◦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
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◦When called, please limit your remarks to the time limit allotted. A timer will be
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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
5 October 05, 2026
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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.
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 October 05, 2026
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City Council
Staff Report
Report Type: BOARDS, COMMISSIONS, AND COMMITTEES
APPOINTMENTS
Lead Department: City Clerk
Meeting Date: October 5, 2026
Report #:2609-6816
TITLE
Appointment of Candidates to the Human Relations Commission (HRC), Parks and Recreation
(PRC), and Planning and Transportation Commission (PTC), CEQA Status - Not a Project
RECOMMENDATION
Staff recommends the City Council appoint up to three candidates to the HRC, up to four
candidates to the PRC, up to one candidate to the PTC, and authorize staff to continue
recruitment if any positions are not filled through this action.
BACKGROUND
Recruitment for Boards, Commissions, and Committees (BCCs) is split into fall and spring cycles.
The fall recruitment opened on July 28, 2026 and closed on September 2, 2026. This recruitment
includes 12 vacancies across 5 meeting bodies. The fall cycle includes HRC, PRC, PAC, and
SWMOC. Unscheduled vacancies on the HRC and PTC arose during the recruitment, and staff
incorporated this position into the fall recruitment for efficiency and cost savings. More details
on vacancies, eligibility requirements, and terms are included in the analysis section below.
The City Council interviewed candidates for PRC on September 22 and is scheduled to interview
candidates for HRC and PTC on September 30. Interviews for PAC and SWMOC are tentatively
scheduled for October 19, and appointments are tentatively scheduled for October 26.
ANALYSIS
A summary of the openings, eligibility requirements, and term lengths for each vacancy are
included below. In addition to the eligibility requirements below, no commissioners may be
Councilmembers, officers, or employees of the City.
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Human Relations Commission (HRC)
Number of Vacancies and Term Dates 2 Full Term Vacancies (11/1/2026 – 10/31/2029)
1 Partial Term Vacancy (11/1/25 – 10/31/28)
Seat Numbers 1, 4, 7
Number of Applicants 13 Total (9 in regular recruitment, 4 additional in
extended)
Number of Votes per Councilmember 3 (2 votes for full term vacancies and 1 vote for
partial term vacancy)
Eligibility Requirements1 Palo Alto residency
Parks and Recreation Commission (PRC)
Number of Vacancies and Term Dates 4 Full Term Vacancies (11/1/2026 – 10/31/2029)
Seat Numbers 1, 5, 6, 7
Number of Applicants 13
Number of Votes per Councilmember 4
Eligibility Requirements2 Each member of the commission shall have a
demonstrated interest in parks, open space and
recreation matters.
Palo Alto residency
Planning and Transportation Commission (PTC)
Number of Vacancies and Term Dates 1 Partial Term Vacancy (4/1/2026 – 3/31/2030)
Seat Number 4
Number of Applicants 9
Number of Votes per Councilmember 1
Eligibility Requirements3 Palo Alto residency
FISCAL/RESOURCE IMPACT
None.
STAKEHOLDER ENGAGEMENT
City staff publicized the recruitment through the following methods:
Electronic distribution via the City’s Uplift Local community newsletter, City Clerk’s Office
newsletter, City’s website, and City’s social media channels;
1 Palo Alto Municipal Code Section 2.22.010 https://codelibrary.amlegal.com/codes/paloalto/latest/paloalto_ca/0-
0-0-61320
2 Palo Alto Municipal Code Section 2.25.010 https://codelibrary.amlegal.com/codes/paloalto/latest/paloalto_ca/0-
0-0-61402
3 Palo Alto Municipal Code Section 2.20.010 https://codelibrary.amlegal.com/codes/paloalto/latest/paloalto_ca/0-
0-0-61282
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Physical posting and flyer distribution at City facilities, including libraries, community
centers, and City Hall;
Print and online ads in the Palo Alto Daily Post and Palo Alto Weekly; and
Outreach to previous applicants, community-based organizations and groups related to
the commissions’ subject matter jurisdiction.
ENVIRONMENTAL REVIEW
Council action on this item is not a project as defined by CEQA because it is an organizational or
administrative activity that will not result in direct or indirect physical changes in the
environment. CEQA Guidelines section 15378(b)(5).
ATTACHMENTS
Attachment A: BCC Applications
APPROVED BY:
Mahealani Ah Yun, City Clerk
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Meeting Date: October 5, 2026
Human Relations Commission Applications
Parks and Recreation Commission Applications
Planning and Transportation Commission Applications
Item 1
Attachment A - BCC
Applications
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City Council
Staff Report
Report Type: SPECIAL ORDERS OF THE DAY
Lead Department: Fire
Meeting Date: October 5, 2026
Report #:2609-6751
TITLE
Proclamation Recognizing Fire Prevention Week- October 4-10
ATTACHMENTS
Attachment A: Proclamation Recognizing Fire Prevention Week- October 4-10
APPROVED BY:
Stephen Lindsey, Fire Chief
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FIRE PREVENTION WEEK
October 4–10, 2026
WHEREAS, the City of Palo Alto is committed to ensuring the safety and security of all those living in, working
in, and visiting the community; and
WHEREAS, lithium-ion battery fires remain a serious and growing hazard, primarily caused by thermal runaway,
a chain reaction triggered by damage, overcharging, or manufacturing defects, with micromobility devices such as e-
bikes, scooters, laptops, and cellphones frequently involved; and
WHEREAS, all household members should develop and practice a home fire safety and escape plan that includes:
buying, charging, and recycling lithium-ion batteries safely; having two exits from every room in the home with a path
to the outside from exits; installing smoke alarms in all required locations; and designating a meeting place outside
where everyone in the home will meet upon exiting; and
WHEREAS, the City of Palo Alto Fire Department first responders are dedicated to reducing the occurrence of
home fires and home fire injuries through prevention and education; and
WHEREAS, the City of Palo Alto residents are encouraged to participate in public education measures, so that
they can take personal steps to increase their safety from fire; and
WHEREAS, the City of Palo Alto's 2026 Fire Prevention Week theme, “Charged Up, Safely,” effectively serves
to educate the public, including the many residents who rely on e-bikes, scooters, and other micromobility devices,
about simple but important charging habits that can help reduce the risk of lithium-ion battery fires, keeping themselves
and those around them safe.
NOW, THEREFORE I, Vicki Veenker, Mayor of the City of Palo Alto, on behalf of the entire City Council, do
hereby proclaim October 4–10, 2026 as Fire Prevention Week in the City of Palo Alto, and urge all community
members to participate in the public safety activities and efforts of the City of Palo Alto Fire and Emergency Services
Departments during Fire Prevention Week.
Presented: October 5, 2026
______________________________
Vicki Veenker
Mayor
Proclamation
Item 2
Attachment A -
Proclamation Recognizing
Fire Prevention Week-
October 4-10
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City Council
Staff Report
From: City Manager
Report Type: STUDY SESSION
Lead Department: City Manager
Meeting Date: October 5, 2026
Report #:2606-6480
TITLE
Best Practices in Managing Consultant Services
RECOMMENDATION
City Council discussion of ongoing work to ensure high quality and valuable services developed
through the engagement of professional consultants.
EXECUTIVE SUMMARY
The City of Palo Alto relies on professional consultants to supplement staff capacity, provide
specialized expertise, and advance priority projects and services. Consultants support important
City work, including capital improvement planning and delivery, specialized planning and
permitting services, recreation and arts programming, and community studies and plans.
The City’s goal is to ensure that each engagement is properly scoped, efficiently managed,
aligned with City initiatives, and thoroughly evaluated on its outcomes. Strong consultant
management practices help the City efficiently use public resources while preserving staff
capacity to provide local knowledge, policy direction, community engagement, and
accountability.
Since early 2025, staff has reviewed and developed best practices in this field as part of the
2026 Council Priorities workplan. An interdepartmental working group has prepared an internal
Best Practices in Managing Consultant Services guide, included as Attachment A. The guide is
intended to support staff from the initial decision to use a consultant through project closeout
and performance evaluation.
This work has already generated benefits as its principles are being incorporated into recent
and ongoing consultant projects. The next phase of work will focus on broader implementation,
including staff training, pilot tools, and feedback to refine the guide.
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BACKGROUND
The City of Palo Alto regularly engages professional consultants for a wide variety of functions.
These include, for example:
Planning, architectural, engineering, and construction management for capital
improvement projects;
Specialized and supplemental staffing for land use planning, processing entitlement
applications, building permitting and inspection, as well as other operations;
Specialized recreation, arts, and enrichment programming for community classes,
summer camps, and other public services;
Development of studies and plans on a broad range of topics in areas such as
economic development, transportation, and facilities planning.
The use of consultants is critical to the City’s ability to produce the volume, pace, and range of
services expected and required by the community. Consultants often provide unique skills and
experience on topics of importance, such as the City’s Auditor Baker-Tilly, Independent Police
Auditor OIR Group, and youth suicide prevention specialist the JED Foundation. At the same
time, in order to ensure that consultant engagements produce work products that provide the
value expected it is critical that expectations are set appropriately and that services provided
meet these expectations.
The City has focused attention on this effort since early 2025. At its May 28, 2025 meeting, the
Policy and Services Committee was presented with a workplan and expressed support for
improving transparency, staff capacity, and consistency in consultant use, while noting
concerns about overreliance and safeguarding community trust. The Committee discussed the
interplay of cost and expertise in long-term staff development, having clearer expectations for
consultants, and maintaining ongoing public engagement. At the October 22, 2025 City Council
meeting, City Council raised areas of interest such as when work should be performed by
consultants versus City staff, how to account for long-term staffing obligations when comparing
alternatives, opportunities to use local and community expertise where appropriate, consultant
responsiveness to Council and community input, the availability of future-year consultant data,
and the need for a more consistent approach to evaluating consultant performance.
The ongoing work has continued forward as one of the 2026 Council Priorities workplan. At its
May 5, 2026 meeting, the Finance Committee discussed consultant services in the context of
government efficiency, productivity, staffing impacts, transparency, and the importance of
being able to measure impacts going forward.
As previously reported to the City Council, much of this work is a leading practice. While within
the local government management profession there is a wealth of established practices on
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topics such as procurement and contract management, topics such as ensuring value in
products and building organizational capacity are seldomly addressed in the comprehensive
manner described here.
Purpose of the Consultant Management Review
The overarching goal is to clarify expectations around consultant management and reinforce
practices that ensure effective products, meet organizational needs, and support professional
growth among the City’s professional staff while also maintaining flexibility for the range of
consultant engagements. This effort establishes clear, practical expectations for the City staff
that engage and manage consultant services. The work helps the City:
Make thoughtful decisions about whether consultant services are needed;
Develop clear scopes, schedules, and expected deliverables;
Maintain appropriate City oversight while respecting consultants’ professional expertise
and independence;
Ensure consultants understand Palo Alto’s local context, policy direction, and
community expectations;
Identify and address risks or performance concerns early;
Evaluate completed work and apply lessons learned to future engagements; and
Consider whether recurring consultant work may be more effectively performed by City
staff over time.
The focus is primarily on professional-service engagements for studies, plans, analyses, and
similar work products. These engagements require active project management because the
quality and usefulness of the final product depend on both consultant expertise and effective
management of the engagement by the City.
The staff work completed in keeping with these goals has involved an inter-departmental team
that has examined the lifecycle of consultant engagements from initial concept and budgeting
to project management, issues resolution, and closeout and evaluation. Attachment A, the Best
Practices in Managing Consultant Services Guide, reflects the primary work product of this
effort.
City Auditor Baker-Tilly also contributed to this work, and provided the interdepartmental team
with an advisory report on best practices related to sourcing and contract administration. Their
report is provided as Attachment B.
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The Guide is organized along the typical steps involved in consultant engagement, including:
Assessing the need for consultant services;
Developing a clear scope of work and community engagement approach;
Selecting the appropriate service provider;
Establishing project roles, communication practices, and performance expectations;
Managing scope, schedule, budget, risks, and deliverables;
Addressing performance concerns or changes in project direction; and
Closing out projects and evaluating consultant performance.
TABLE 1
Key Stakeholders at Various Points in Project Lifecycle
Phase Key Stakeholders
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Precursors to Outsourcing
As part of the annual budget development process, staff assesses whether funds might
be more effectively allocated to consultant services or hiring in-house staff.
Through the City Council’s annual priority setting, projects (“objectives”) requiring
consultant assistance will be identified to enable the City Council to select its priorities
with this awareness.
Additional internal approvals are required for large task orders issued under master
agreements.
The City’s financial tracking system has now been coded to enable ongoing tracking of
consultant services expenditures citywide. Additional system enhancements may be
implemented in the future for reporting needs.
Guidance is provided for staff to develop scopes of service that reinforce clarity and
performance measurement.
The role of City staff relative to the consultant is to be clear. In particular, the scope
should reflect how staff will bring local knowledge (possessed by staff or other
stakeholders) to inform the work.
Scopes of services and roles should align with the City long-term goals for building
internal expertise.
The potential effect of Artificial Intelligence (AI) will be considered when defining the
scope of services.
Major projects may involve City Council review of scopes of services.
Community engagement is a central element of virtually all studies and planning efforts
in Palo Alto. It is therefore important to ensure the consultant is aware of the nature
and extent of community engagement expected.
Department staff consult with the City Manager’s Office communications staff to
develop community engagement plans, updated as projects proceed.
Staff take primary responsibility for identifying key stakeholders and arranging for
meeting venues and logistics. Online engagement tools are also coordinated with the
City Manager’s Office.
Palo Alto is uniquely fortunate to have residents and other community stakeholders
with specific expertise and interest in assisting on related initiatives. Where unique
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resident involvement might apply, staff will consult with the City Manager’s Office to
structure involvement, with the goal of leveraging resident expertise while ensuring
objective analysis.
Selecting the Service Provider
In selecting consultants, departments consider not only cost but also expertise,
alignment with project needs, and prior performance.
The process emphasizes open and fair opportunities to submit proposals that are
objectively evaluated and a selection based on the best interests of the City.
For efficiency, the City may procure services by utilizing the competitive bidding process
undertaken by another government entity or a joint purchase agreement.
Circumstances can arise that cause consideration of a change in direction, such as cost
proposals that exceed budget, and a lack of strong proposals. Department management
and the City Manager’s Office evaluate options and determine appropriate steps
forward.
Contract terms specify processes such as overall schedules, progress payments, and
penalties for non-performance. Project managers and departments ensure that
consultant payments align with project milestones, to ensure accountability and timely
progress.
Performance Management and Quality Control
At project kick-off, an important first step in the successful completion of a consultant
engagement is establishing primary points of contact on both the City’s and consultant’s
teams, and reviewing the scope and key understandings needed for the project. Regular
coordination meetings are set.
Project managers establish the City’s expectation for originality in work products and
ensure against the appearance of repackaged materials from prior engagements. In the
case that deliverables appear insufficiently customized, staff will request revision before
accepting the product.
While projects are intended to proceed smoothly, it is common for issues to arise.
Escalation paths provide important secondary points of contact if needed due to
disagreements or performance concerns from either the City or consultant.
Managing High-Visibility and Controversial Projects
The City hires consultants to take on complex and contentious projects, to leverage their
expertise that staff do not have, to provide objective and expert advice. The projects
provide an outlet for residents and other stakeholders to express their advocacy,
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sometimes deeply emotionally expressed. Consultants often absorb a portion of that
pressure, allowing staff to continue to maintain productive relationships with
stakeholders they must work with on other issues.
A two-step process for City Council, Boards and Commissions review may use study
sessions or committee hearings prior to action, in order to
• Provide structured opportunities for technical clarifications and response
from the consultant and staff, and
• allow the body to deliberate on policy direction after establishing a shared
baseline of understanding
A structured approach to capturing comments and documenting responses to
comments may be incorporated into the consultant scope of services.
In most circumstances staff must remain the primary interface with the community.
Adequate time for stakeholder feedback, responses to this feedback, and adjustments
to next steps should be anticipated and built into schedules.
Closeout and Evaluation
Project closeout includes confirmation of objectives met, review of team performance,
and feedback to consultants. A standardized evaluation form ensures consistent
reflection and improvement.
When appropriate, a lessons-learned note should identify process improvements for
internal teams and should be indexed so that future scopes and evaluations can
reference it.
Next Steps
This work has already generated benefits as its principles are being incorporated into recent
and ongoing consultant projects. Examples include the synthetic turf study, the South Palo Alto
pedestrian/cycling connectivity, and railroad quiet zone project development. In addition, as
part of the current budget, staffing in the Office of Transportation was augmented in order to
reduce reliance on consultant services.
Staff will continue implementation of the best practices through the following actions:
Distribute the Best Practices guide;
Develop and pilot practical templates and checklists for project managers;
Provide training in coordination with the Administrative Services Department, City
Attorney’s Office, Human Resources, and relevant departments;
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Seek feedback from consultants on practices that support successful engagements;
Incorporate lessons learned from pilot projects and staff feedback; and
Continue to integrate review of consultant services into the annual budget development
process.
Training on these best practices must build on current project management training, including
any existing certifications, modules, or external programs used to develop project managers. An
assessment of current training practices across departments is currently under way. Based on
this assessment, Human Resources staff are leading the development of a modular, audience-
appropriate training program that incorporates applicable best practices and may include
certification. Initial modules are expected to address foundational project planning and pre-
engagement activities, with separate modules for financial and relationship management
elements. Staff aim to implement citywide training by the end of FY2027.
FISCAL/RESOURCE IMPACT
The activities described in this report are being conducted within existing City resources. No
consultants were hired for the completion of this project.
STAKEHOLDER ENGAGEMENT
Teams that work closely with consultant management were asked to give feedback on the
consultant review work. As reflected in the workplan, engagement of City staff and the
consultant community is an integral part of ensuring this work is grounded in current practice
and results in advancement of City practices.
ENVIRONMENTAL REVIEW
The work is not a project as defined in the California Environmental Quality Act (CEQA).
ATTACHMENTS
Attachment A: Best Practices in Managing Consultant Services
Attachment B: Best Practices in Consultant Management, Baker Tilly Report
APPROVED BY:
Ed Shikada, City Manager
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Table of Contents
1. Introduction ................................................................................................................... 4
2. Purpose and Overall Approach ........................................................................................ 4
3. Precursors to Outsourcing ............................................................................................... 5
3.A Annual Budget Cycle Review .............................................................................................. 5
3.B Initiating New and Unbudgeted Projects ........................................................................... 6
3.C Financial Tracking of Contracts ........................................................................................... 7
4. The Outsourcing Process ................................................................................................. 7
4.A Developing the RFP Scope of Services ................................................................................ 7
4.B Selection of Contract Terms and Conditions ...................................................................... 9
4.C Scoping Community Engagement ..................................................................................... 10
4.D Finalizing the Scope of Services ........................................................................................ 11
4.E Service Provider Selection and Potential Efficiencies ....................................................... 11
4.F Handling Inadequate Proposals ........................................................................................ 12
4.G Finalizing the Scope of Services and Contract .................................................................. 12
5. Contract Management .................................................................................................. 13
5.A Budget Adherence and Invoicing ...................................................................................... 13
5.B Performance Management, Quality Control, and Timeliness .......................................... 13
5.C Managing High-Visibility and Controversial Projects........................................................ 14
5.D Stakeholder Engagement .................................................................................................. 16
5.E Closeout and Evaluation ................................................................................................... 16
6. Appendices *Finalization of appendices is currently in progress and therefore not
included* ............................................................................................................................ 16
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1. Introduction
This document provides a guide for City of Palo Alto staff on methods to ensure effective and
valuable engagement with professional consultants. It is intended to provide a comprehensive
guide and continuous improvement approach to decision-making and staff responsibilities for
budgeting, contracting, relationship and project management, and interface with community
members. This guide focuses specifically on consultants engaged in the preparation of studies,
plans, and similar types of services.
This resource provides citywide guidance on best practices, and the interdepartmental team
that contributed to its development can be appropriately proud of setting a new standard in
municipal management. It should be recognized, however, that even a well-executed project
can sometimes experience a negative outcome. Misaligned stakeholder expectations, shifting
goals, and community division are some of the factors that could lead to poorly received work
products. In addition, not every project requires extensive management. City staff are
responsible for balancing competing needs, so the tools and practices reflected in this guide
should be considered resources where needed rather than a performance standard. Individual
departments may also provide more specific direction reflecting specialized work that
supplement the guidance provided here.
2. Purpose and Overall Approach
The purpose of this guide is to set clear guidance and expectations in consultant engagement
while maintaining flexibility for specific situations and promoting professional growth. The
effective use of consultant services requires the involvement of organizational practices,
expectations, and responsibilities of City project managers, management, and others involved.
Overall, the practices and tools provided through this guide reflect the following key principles:
● Contracting is a partnership, requiring engagement and diligence from both the City and
consultants (service providers).
● Service providers bring subject matter experience, technical expertise, frequently
professional licenses, and proprietary tools.
● Staff bring local knowledge, including, an understanding of community expectations,
sources of available information, City resources, Council priorities, and established
practices. While consultants may perform specific tasks, the City retains ownership,
accountability, and informed oversight of the work and its outcomes.
● Balancing these perspectives requires engagement, skill, regular training, and
teamwork.
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Reflecting the common steps through which consultant projects are planned and implemented,
this guide focuses on enhancing organizational effectiveness and practices across the typical life
cycle of consultant engagements.
3. Precursors to Outsourcing
3.A Annual Budget Cycle Review
On an annual basis, the City Council has two primary touchpoints on overall consultant usage.
These are the annual budget adoption that occurs before the beginning of each fiscal year, and
the other is the annual priority setting that occurs at the beginning of each calendar year.
Budgeting for consultant services is typically handled through the annual budget process at an
aggregated level, with funding needs appropriated through each department’s Contractual
Services line item. Contractual Services currently includes all contract services, so professional
services are likely a subset of department line-item budgets and require specific review.
Alternatively, a special funding allocation may be made as a result of a grant or special City
Council action.
Each fiscal year, the Office of Management and Budget will issue guidance to departments on
budget development. Through each annual budget development process, Departments review
Contractual Services line items with the Budget Office and City Manager’s Off ice to (a) discuss
anticipated consultant projects and funding required, and (b) to determine whether fundings
would be better allocated toward hiring in-house staff to complete the required work on an
ongoing basis. The following considerations can guide this review:
a. Distinguishing Staffing/Augmentation and/both Technical/Subject Matter Experts:
Staffing augmentation contracts temporarily increase workforce capacity without
permanent hires. Technical services contracts allow the City to gain technical expertise
from firms or subject matter experts who have special skillsets, capabilities, or deep
knowledge in specific areas not available in-house. Both types of contracts allow the City
to respond efficiently to varying workload demands and specialized project
requirements. Lead departments should consult with the City Attorney’s Office and
Human Resources Department to ensure the terms of the staffing augmentation align
with the City's legal, labor, and operational requirements.
b. Ensuring Comprehensive Budget Estimates: Staff time required for project management,
oversight, and coordination must also be accounted for in workplans through FTE (full-
time equivalent) staff allocation and should reflect realistic estimates that incorporate
contingencies and additional services as needed. Absent specific estimates, staff time
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equal to 10-20% of anticipated consultant costs should be allocated for staff project
management. If not included in consultant costs, budgets must account for all applicable
resources required for anticipated projects such as technology licenses, office space,
and vehicles. Including administrative costs and timelines associated with outsourcing is
necessary for a comprehensive evaluation of trade-offs.
c. Balancing Consultant Services and In-House Staffing: Staff should evaluate where on-call
services might be more effective if converted to additional in-house staffing. This may
depend on skills required as well as the frequency of services required. Adding staff may
be justifiable when the resources involved are expected to be required for 3-5 years or
more. Where specialties may be needed, overall consultant costs may be reduced by
City staff handling administrative and other elements including community engagement.
The results of this evaluation will be integrated into the existing budget planning
workflow and discussed among departments, the Budget Office, and City Manager’s
Office in preparation of the annual proposed budget. Appendix A – Professional Services
Cost Evaluation provides the overview of the expected additions to the budget review.
The current approach to large contract budget appropriation is an overall review and
justification for the entire project. Future budget development will include evaluation of
the contract by each line-item.
d. Developing an Initial Scope: Large, complex, or high-risk projects can benefit from
development of an initial scope of work for department management and City
Manager’s Office (CMO) review. Similar to a budget justification, this would be a short
internal summary of the business need, desired outcomes, why consultant support is
needed, anticipated deliverables, and the expected roles of city staff versus the
consultant. Incorporating this step will help align expectations early, support budgeting
and staffing estimates, as well as result in a clearer, more focused final scope of work.
As referenced above, at the beginning of each calendar year the City Council annually sets
priorities for the upcoming year. As a part of this process, specific projects (or objectives) may
be identified that staff anticipates will require consultant assistance. In order to enable the City
Council to select priorities with awareness of consultant needs, staff will include this
information as part of the priority-setting process.
3.B Initiating New and Unbudgeted Projects
Consultant engagements may also be initiated outside the annual budget process, typically as a
result of City Council direction, involving budget amendments where needed. Where such
project assignments arise, departments should use the evaluation method described in Section
4.A to estimate staff allocation required for project management.
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At the start of each calendar year, the City Council sets priorities for the year. Given recent
increased interest in monitoring the use of consultants, staff will identify priority projects that
will likely involve consultants. This enables the City Council to consider this when determining
how many and which initiatives should be prioritized for the year.
3.C Financial Tracking of Contracts
Effective in 2026, all professional service engagements are assigned internal order number
“90240 - Professional Services” to individual contract requests. This practice will remain in
effect while SAP is the current system and will be updated as systems evolve. Staff will provide
the City Council a consolidated summary report semiannually to promote ongoing awareness
and decision-making.
Private development professional agreements will be excluded from reporting as this activity is
exempt from competitive solicitation requirements (Municipal Code Section 2.30.360 (h). These
agreements are funded wholly by private developers for private development related studies
and services. Community Services Department service contracts for specific individual’s unique
skills or creative output such as recreation instructors, art instructors and performers will also
be excluded from the reporting and Legal Services contracts that are exempt per PAMC
2.30.360(g).
Master agreements are consultant contracts established for “as needed” or “on-call” services,
where a contract is established without a specific scope of services . The City has used master
agreements as an efficient means of completing the procurement process in order to have one
or several consultants ready to start when specific projects are initiated. Task orders are then
issued to the consultant with a specific scope of services and budget. In order to ensure
consistent practices, all task orders valued at $100,000 or higher require City Manager
approval. This threshold will be periodically reviewed and subject to change (Appendix B – Task
Order Template).
4. The Outsourcing Process
4.A Developing the RFP Scope of Services
Once the decision to engage consultant services has been made, a scope of services must be
developed in order to conduct a Request for Proposals (RFP) or other solicitation. In the
infrequent case of a consultant being pre-selected, this section nonetheless provides guidance
for negotiating a scope of services that supports an effective outcome and staff meeting project
management responsibilities.
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The scope of services is a critical element of successful consultant engagement, as it provides
the “roadmap” of tasks and deliverables to be provided. It also represents a critical step at
which expectations of the products and services can be confirmed. Failure to adequately
anticipate these expectations can lead not only to unsuccessful outcomes, but also the need to
repeat steps and incur unnecessary costs.
Project managers should develop scopes that are outcomes-driven and reviewable, with
particular attention to the following:
a. Describe deliverables with measurable indicators of sufficiency.
b. Identify key milestones and timelines, including any critical deadlines.
c. Structure compensation to the completion of defined tasks.
d. Specify internal (“administrative”) reviews of draft deliverables where applicable,
including sufficient lead time.
e. Specifically address stakeholder engagement including public meetings (see Section
4.B4.B below).
f. Where workable, structure scopes to facilitate knowledge transfer through tactics such
as staff shadowing, co-facilitation, and training deliverables, especially for recurring
work.
g. Consider the role of intellectual property and Artificial Intelligence in the project with
clarity regarding ownership and access to work products following project completion .
It is common that scopes from prior contracts are used as a starting point. However, it is critical
that such drafts be updated for current circumstances and to address the issues above.
Staff may wish to consult peer agencies for examples and lessons learned. Staff may also
leverage the Scope Template Library (Appendix C), which includes examples demonstrating
effective project structure and risk allocation, and productive peer reviews received prior to
RFP issuance. If staff have examples of excellent work to contribute to the library, they may
contact the CMO coordinator to add them to the appendix SharePoint folder.
A key consideration in developing a scope of work is defining the role of City staff relative to the
consultant. In particular, the scope should reflect how staff will bring local knowledge
(possessed by staff or other stakeholders) to inform the work. Here are elements to consider in
defining the scope:
a. Identify prior work such as studies or plans that should be shared and reviewed with the
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consultant.
b. In addition to direct references, are there indirect but relevant recent events or
circumstances that the consultant should be aware of? Consider “onboarding”
meeting(s) between the consultant and key stakeholders early in the work to provide
the consultant with any needed context.
c. The scope of services should provide an initial outline of stakeholder engagement, to be
refined collaboratively with the consultant, as the City will typically have a better sense
than the consultant of community expectations and more effective communication
methods. This is described further in the next section.
d. Clearly identify expected products/deliverables, such as memos, reports, and plans,
including progress drafts. Also set expectations for City review of draft products and the
consultant’s responsibility to respond to comments, both in terms of timeframes as well
as the expected handling of feedback to the consultant. Scopes should articulate any
essential stakeholder touchpoints, and where applicable, how this feedback may affect
subsequent steps. The level of detail to be provided in deliverables (such as format and
analysis detail) should be specified at the outset to the extent applicable to the project.
e. The requested deliverables should be structured in a way that is easily translated to
contract sections. Task 1 should correspond to a similar label in the contract, and have
its pricing clearly marked, and so on. This is meant to minimize back and forth with
Purchasing and the consultant later in the process.
Artificial Intelligence (“AI”) is playing an evolving and increasing role in the workplace, and the
potential effect on the scope of service should be considered: Might some of the required work
be generated by AI and how will this be quality-checked? How would this affect the cost of the
required services? Questions such as these should be considered when developing the scope of
work. The City Attorney’s Office and Procurement staff have developed general disc losure
requirements to be incorporated into RFPs.
4.B Selection of Contract Terms and Conditions
Once a consultant is selected, the City and consultant must enter into a contract with the
consultant before work can begin and payment for services can be made. Project managers
should familiarize themselves with the contract terms and conditions that their consultants will
be required to meet. Pre-approved contract templates are available from Purchasing and can
be found in Appendix D. The template selected will depend on the type of engagement with the
consultant (e.g., professional services, IT services). The scope of services, timeline of
completion, and payment terms will be included as contract exhibits.
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The overall value of the contract will determine who has authority to approve the contract. In
addition, all contracts over $25,000 will need to be approved as to form by the City Attorney.
Consult with the City Attorney’s Office if any changes to the temp late are requested by the
consultant.
The determined scope of the project requires approval of the relevant department director or
their designee before proceeding.
4.C Scoping Community Engagement
Community engagement is a central element of virtually all studies and planning efforts in Palo
Alto. It is therefore important to ensure the consultant is aware of the nature and extent of
community engagement expected. Department staff should consult with the City Manager’s
Office communications staff to review the community engagement plan for a project. Project
managers should use the Project Coordination Plan Worksheet (Appendix E) to outline
anticipated community engagement efforts. Additional resources and training on community
engagement are under development.
Roles of the consultant and staff in community engagement should be carefully considered. In
general, staff should take the primary responsibility for identifying key stakeholders and
arranging for meeting venues and logistics. Any online engagement tools should be coordinated
with the City Manager’s Office communications staff.
Palo Alto is uniquely fortunate to have residents and other community stakeholders with
specific expertise and interest in volunteering to assist the City on related initiatives. Should
project managers encounter a situation in which unique resident involvement might apply, they
should consult with the City Manager’s Office to structure such involvement. The City’s goal
would be to leverage resident expertise to support engagement and project success while
ensuring objectivity and appropriate access to products in progress.
To ensure comprehensive notification of community stakeholders, project managers should
reference the developed Community Engagement Guide (Appendix F). It outlines standards for
what level of community engagement is required for different project types. Staff should
reference the training in community engagement strategies to develop a clear scope of work
that outlines project goals and anticipated levels of effort.
Engagement should be calibrated to decision points and led by City staff. Project managers
should define who needs to be informed, consulted, or asked to decide, and they should
schedule outreach at milestones where input will shape outcomes. Materials sho uld be
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accurate, accessible, and consistent with Council-adopted policies; consultants should support
creation and logistics while the City sets the message and remains the primary voice of the
project. The handling of stakeholder feedback should also be intentional, with responsibilities
assigned as appropriate to the consultant for documenting comments and responses to
comments.
4.D Finalizing the Scope of Services
Once drafted, project managers should consider the level of stakeholder engagement that
should be undertaken on the RFP itself prior to issuance. In some cases, a formal review up to
City Council approval of the scope of services may be warranted to ensure that the scope aligns
with expectations of the work product. If required approvals are uncertain, departments should
consult the City Manager’s Office.
4.E Service Provider Selection and Potential Efficiencies
Consultant selection should prioritize expertise, cost, and alignment with project objectives.
The selection process is managed by the Administrative Services Department Purchasing
Division, and references and training for staff to navigate this process are provided in the
Purchasing Manual (Appendix G). In particular, Chapter 8 – Professional Services provides
comprehensive guidance and procedures for the procurement of consultant services .
For efficiency, the City may also procure services by utilizing the competitive bidding process
undertaken by another government entity (known as Piggybacking) or through a joint purchase
agreement with one or more public agencies (Cooperative Purchasing).
Piggybacking: The City's utilization of the competitive solicitation process undertaken by
another public entity to award a contract for goods or services.
Cooperative (Joint) Purchasing (Co-op): Procuring goods or services through a regional or
national purchasing cooperative or by directly joining with one or more public agencies.
These alternative procurement methods are permissible, subject to the Municipal Code and
requirements including that the other government entity or Cooperative conducted a
competitive solicitation that are substantially the same as those required by the City, and that
process must have been substantially similar to the competitive bidding requirements; t he City
will realize overall value; and that the awarding agency is preferably governed by California law.
Before moving forward with a Piggybacking process or Cooperative agreement, the
Procurement Officer and/or the City Attorney’s Office must evaluate the timeliness and the
ability to negotiate additional pricing reductions or more favorable contract terms (e.g., liability,
indemnification, performance guarantees) beyond those in the original award.
Master Agreements: As noted previously in Section 3.C, the City may use Master Agreements
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to secure services. Master Agreements are consultant contracts established for “as-needed” or
“on-call” services, where a contract is established without a specific scope of services. This can
be an efficient means of completing the procurement process in order to have one or several
consultants ready to start when specific projects are initiated. Task orders are then issued to
the consultant with a specific scope of services and budget.
Project managers should consult with the Procurement team on the applicability of these
procurement options.
4.F Handling Inadequate Proposals
At various points in the consultant selection process, circumstances can arise that warrant a
change in direction. Project Managers should evaluate these circumstances and take
appropriate action to balance tensions between completing tasks and reconsidering the path
forward. During the outsourcing process, some of the issues that can arise include:
• Whether budget allocations are sufficient to achieve project objectives;
• Whether consultant interest in a project is sufficient to generate competitive and
worthwhile proposals;
• Whether the project scope is sufficiently defined to allow consultants to prepare
responsive proposals;
• Whether significant changes in project priorities, funding, schedule, or other
requirements have occurred since the solicitation was developed;
• Whether the proposals received demonstrate the qualifications, experience, or technical
approach necessary for successful project completion.
4.G Finalizing the Scope of Services and Contract
Following selection, the selected proposal is translated into the final scope of services attached
to the consultant’s contract. For simple projects this could be the consultant’s proposal as
submitted. For more complex projects, however, staff will discuss and finalize the scope of
services with the consultant. This provides and opportunity to confirm that the final scope of
services addresses:
a. Key elements described in Section 4.D, such as deliverables and progress payments;
b. Project staffing and key personnel;
c. Confirm the expected value of deliverables relative to cost, with an understanding of the
consultant’s cost to produce the needed work versus work produced previously for
other clients as well as AI-generated products;
d. Confirm community meetings and other engagement, boards and commission reviews,
council meetings;
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e. Comparison of costs relative to other similar work, using both internal and external
references.
5. Contract Management
Effective contract management requires clear and mutually reinforced alignment between
milestones, deliverables, payments, and other contract terms.
5.A Budget Adherence and Invoicing
The handling of invoices is an integral part of the client-consultant relationship. Progress
payments demonstrate the City’s satisfaction with consultant work, consistent with the scope
of services and compliance with agreed-upon terms. Project managers should verify invoice
consistency with the following:
a. Payments for the invoiced period (e.g. monthly) should be consistent with progress
toward deliverables. This should be confirmed quantitatively if provided for in
contract terms, or qualitatively if not.
b. Project managers should reconcile invoices with contract milestones, verify hourly
rates, and maintain a concise change log that explains scope and budget
adjustments.
c. Expiration checks should be calendared, and amendments initiated early to prevent
service gaps.
d. Project managers should also track payments to ensure timely payment of invoices.
e. Ensure any new tasks are properly approved before authorizing work to proceed.
f. At the department level, shared dashboards should show contract value, burn rates,
pending invoices, and critical dates.
One of the leading causes of increased consultant costs occurs through the inconsistent
handling of change orders, amendments, and additional work. The City’s Purchasing Manual
(Appendix G) defines how to properly organize and execute these auxiliary steps that can
become necessary for project success. The Public Works Consultant Management Guide
(Appendix H) outlines things to look out for and contingencies to manage.
Contract Management Training Resources and Templates are provided in Appendix I. Invoice
and Payment Tracking Tools are provided in Appendix J.
5.B Performance Management, Quality Control, and Timeliness
Performance management refers to the activities involved in ensuring quality deliverables and
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timeliness. Expectations should be measurable and reinforced in both the scope and working
cadence.
The project kick-off meeting is an important first step in the successful completion of a
consultant engagement. This meeting should include the primary points of contact on both the
City’s and consultants’ teams and review the scope and key understandings needed for the
project. See Kick-off Meeting Agenda Template (Appendix K). Among the topics to be covered
are:
a. Review scope of services, schedule, and deliverables as well as roles, responsibilities,
and expectations. The RACI (Responsible, Accountable, Consulted, Informed) matrix is
one such method for clarifying task ownership by mapping each project task to a team
role to reduce redundancies and unclaimed responsibilities.
b. Discussion of escalation paths - who to contact for inadequate responsiveness, delays in
projects and performance concerns. Establish standing meetings or other means of
progress coordination.
c. Documentation responsibilities, including agendas and meeting notes .
d. Lead time and turnaround expectations for scheduling meetings, review of deliverables.
e. Discussion of any key contract terms, if needed.
Project managers should ensure that consultant work products are tailored to the City’s specific
project, policy context, and stakeholder conditions. Project managers should establish the City’s
expectation for originality in work products and ensure against the appearance of repackaged
materials from prior engagements. In the case that deliverables appear insufficiently
customized, the project manager should request revision before accepting the product.
While projects are intended to proceed smoothly, it is common for issues to arise. It is,
therefore, important for protocols to be in place and proactive management to address issues
before they threaten successful and timely project completion. Escalation paths provide
important secondary points of contact if needed due to disagreements or performance
concerns from either the City or consultant. Escalation paths may also be reinforced
contractually, including implications for delays in the case of time-sensitive projects. While
strict enforcement can be challenging in a collaborative environment, contract terms can
reinforce expectations when needed. See example letters and guides for escalating inadequate
consultant performance in Appendix L.
5.C Managing High-Visibility and Controversial Projects
A key challenge that can arise in consultant engagements is how the work can proceed through
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projects that involve a high level of community scrutiny or controversy. This can range from
consultant-staff disagreements involving professional differences to public criticism of the work
that can become personal in nature.
The City hires consultants to take on complex and contentious projects, to leverage their
expertise that staff do not have, to provide objective and expert advice. The projects provide an
outlet for residents and other stakeholders to express their advocacy, sometimes deeply
emotionally expressed. Consultants often absorb a portion of that pressure, allowing staff to
continue to maintain productive relationships with stakeholders they must work with on other
issues.
To help navigate these dynamics, the following practices are particularly important:
a. Set expectations early in the engagement for quality of deliverables and responsiveness
to issues as they arise.
b. Maintain regular progress meetings involving management from both the consultant
and City, with meeting summaries and action items distributed for broader awareness
and aligned goals.
c. Progress payments are linked to acceptance of deliverables, as well as payment
turnaround times monitored.
d. Interdepartmental review, including CMO as well as any departments with relevant
expertise are scheduled in advance to avoid delays. Project managers should consult
with CMO staff to review applicability.
e. Consider a two-step process for City Council, Boards and Commissions using study
sessions or committee hearings prior to action, in order to
• Provide structured opportunities for technical clarifications and response from
the consultant and staff, and
• allow the body to deliberate on policy direction after establishing a shared
baseline of understanding
f. Structure the handling of public feedback Consider public comment period on draft
products to ensure transparent community review. Particular attention should be paid
to handling of comments received and other stakeholder feedback, including City
Council feedback received through study sessions as well as commissions and
community members. As applicable, a structured approach to capturing comments and
documenting responses to comments should be incorporated into the consultant scope
of services.
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5.D Stakeholder Engagement
When consultant projects involve stakeholder engagement, in most circumstances staff must
remain the primary interface with the community. Adequate time for stakeholder feedback,
responses to this feedback, and adjustments to next steps should be anticipated and built into
schedules.
Stakeholder engagement should proceed as described in the Project Coordination Plan
Worksheet (Appendix E) referenced in Section 4.B. Should issues arise that require variance
from this plan, project managers and department management should determine whether
revising the worksheet would be prudent to support project completion. Approaches and
methods that the City uses for community engagement are broad and tailored to the audience,
type of input sought, and timing available to gain the feedback to help inform decision -making.
5.E Closeout and Evaluation
Project closeout should include confirmation of objectives met, review of team performance,
and feedback to consultants. A standardized evaluation form ensures consistent reflection and
improvement. This could additionally include a periodic meeting with key city staff project
participants to develop lessons learned for continual training for subsequent projects.
Closeout should confirm delivery, capture learning, and inform future selections. Staff should
verify that all deliverables are accepted, files are archived to the designated repository, and
intellectual property and data handoffs are completed. A short performance evaluation should
record quality, timeliness, collaboration, and budget stewardship and should be shared with the
consultant along with any constructive feedback (Appendix M – Consultant
Completion/Evaluation Template). When appropriate, a lessons-learned note should identify
process improvements for internal teams and should be indexed so that future scopes and
evaluations can reference it.
6. Appendices *Finalization of appendices is currently in progress and therefore not included*
A. Professional Services Cost Evaluation
B. Task Order Template
C. Scope Template Library
D. Purchasing Contract Templates
E. Project Coordination Plan Worksheet
F. Community Engagement Guide
G. Purchasing Manual
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17
H. Public Works Consultant Management Guide
I. Contract Management Training Resources
J. Invoice and Payment Tracking Tools
K. Kickoff Meeting Agenda Template
L. Sample Consultant Performance Escalation Letter
M. Consultant Completion/Evaluation Template
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City of Palo Alto
Best Practices in
Consultant Management
December 8, 2025
ATTACHMENT B: BEST PRACTICES IN CONSULTANT MANAGEMENT Item 3
Attachment B - Best Practices in Consultant
Management, Baker Tilly Report
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2
Best Practices in Consultant Management
•Comprehensive City study currently underway to ensure high quality
services are delivered through the engagement of professional
consultants
•City study extends beyond procurement and contract management
processes for a more wholistic approach
o Strategically and flexibly leverage contracted consultants to perform studies to
address priorities while building organizational capacity
•Given a dearth of available best practice information in this area, Palo
Alto’s work is leading edge
•Baker Tilly analysis meant to augment City study by recommending
enhancements to certain aspects of the consultant management life
cycle
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3
Palo Alto Major Area of Consultant Focus
•Professional services related to studies, plans, and similar
scopes of work
o Majority of Council priority objectives rely on consulting services to
produce these studies
o Most work produced in this area requires specialized local
knowledge and robust community engagement
o Many of the studies require expertise beyond that of in-house staff
o Staff’s local knowledge and skill in managing contracts are essential
components to ensure success in effective consultant management
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4
Palo Alto Consultant Engagement Process and Areas for Reinforcement (October 22, 2025, Report 2507-4924)
Outsourcing
Precursors
Decision to
Outsource
Determine
Scope of
Services
Community
Engagement
Approach
Service Provider
Selection
Managing
Contingencies
Communication
and
Collaboration
Contract
Management
Performance
Management
Risk
Management
Closeout and
Evaluation
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Baker Tilly Areas of Focus, Reframed (Life Cycle Phases)
•Planning and Solicitation
o Determination of solicitation method (request for proposals or
qualifications)
o Scope of service development, including approach to community
engagement
o Strategic, targeted service provider selection
o Effective scope and fee discussions and negotiation of mutually
agreeable terms and conditions
•Contract Administration and Management
o Facilitated communication and collaboration
o Contract closeout and evaluation
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Professional services related to studies, plans, and similar scopes of work: Planning and solicitation phases
Recommendation 1: Leverage the use of prequalification programs to create a stable of consultants and subconsultants.
•Can include requirements for local knowledge
•Can be based on professional service specialty such as strategic planning or economic/fiscal analysis
•Can include consultant, sub-consultant pairings as a submittal option
•Can focus on area/degree of specialization such as community engagement
•Selection should be based on demonstrated competence, work history, etc.
•Can include negotiated hourly rates
Local
Knowledge
Professional
Service
Specialty
Professional
Service Sub-
specialty
Area of
Specialization
(Community
Engagement)
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Professional services related to studies, plans, and similar scopes of work: Planning and solicitation phases
Recommendation 2: Use best practice procurement tools to develop strategic relationships with consultants.
•Can incorporate aspects of strategic plan goals and objectives (Strategic Procurement Planning)
•Can include formal processes to identify and contract with consultants based on strategic, longer-term relationships (Supplier Relationship Management)
•Can include supplier diversity and sustainability goals
•Can incorporate elements of scope/opportunities for staff to participate in community engagement facilitation or other tasks to help build inhouse capacity, knowledge and knowhow
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Professional services related to studies, plans, and similar scopes of work: Planning and solicitation phases
Recommendation 3: Use a
consistent task / milestone /
deliverable-based template
approach that clearly ties City’s
acceptance of task completion
to progress payments.
Recommendation 4: Ensure that
city-generated scopes of work
are consistently used in
consulting contracts.
Scope Item(s)Cost Proposal Alignment
Task 2: Community Engagement Cost of Task 2:
$25,000
Subtask 2a:
Conduct one community workshop
Cost of subtask 2a:
$7,500
Deliverable(s):
1.Workshop agenda materials
2.Memorandum of workshop
results
Review and Accept Deliverables:
A.Review draft memo of workshop
results and finalize
B.Accept final memo and
authorize payment
Subtask 2b:
Conduct one community survey
Cost of subtask 2b:
$17,500
Deliverable(s):
1.Survey
2.Analysis of survey results and
associated takeaways
Review and Accept Deliverables:
A.Review draft survey and survey
results and finalize
B.Accept final analysis of survey
results and authorize payment
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Professional services related to studies, plans, and similar scopes of work: Planning and solicitation phases
Recommendation 5: Incorporate mutually
agreeable terms and conditions for resolving
professional disagreements or mediating disputes
in consultant contracts.
•Should discuss expectations during contract
negotiations
•Can include techniques such as Alternative
Dispute Resolution (ADR)
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Professional services related to studies, plans, and similar scopes of work: Contract administration and management
Recommendation 6: Establish a regular meeting cadence with the
consulting team’s project manager to facilitate efficient project completion
and enhance collaboration and clarity in communication.
•Should include short prescheduled check-in meetings every other week
to discuss project/deliverable status, budget, challenges, and consultant
performance
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Professional services related to studies, plans, and similar scopes of work: Contract administration and management
Recommendation 7: Implement processes and
procedures to evaluate consultant performance.
•Should include performance-based discussions
during engagements
•Can include a structured framework, i.e., a
balanced scorecard approach
•Can incorporate community feedback
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City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: City Manager
Meeting Date: October 5, 2026
Report #:2609-6716
TITLE
Approval of Business Retention, Expansion, and Attraction (BRE/A) Strategy as Recommended
by the Economic Development Committee: CEQA – Not a Project
RECOMMENDATION
The Economic Development Committee and staff recommend approval of the 2026 Business
Retention, Expansion, and Attraction (BRE/A) Strategy.
EXECUTIVE SUMMARY
The Economic Development team has developed a 2026 Business Retention, Expansion, and
Attraction (BRE/A) Strategy to create a sustainable, resilient, and thriving local economy
characterized by a strong sense of identity in Silicon Valley. On January 24, 2026, the City
Council reached consensus on adopting a 2026 economic development priority titled, “Enhance
Business Vibrancy” at the Council Retreat on values, priorities, and objectives. This reflects the
importance of economic development and the intersection between a healthy local economy
and the City’s long-term fiscal sustainability. The City continues to build from the current
Economic Development Strategy to achieve the City Council’s goals and priorities.
BACKGROUND
Economic development is taking a proactive approach to advocating for Palo Alto’s business
and entrepreneurial ecosystem that is reflective of the population it serves. Economic
development is a concerted effort by the Palo Alto City Council to ensure that the business
climate is healthy. Originally scheduled in March (deferred to accommodate time critical
items), on August 26, 2026, the Economic Development Committee voted unanimously to
recommend BRE/A Strategy approval by the City Council. Implementation actions are already
well underway.
ANALYSIS
A Business Retention, Expansion, and Attraction (BRE/A) Strategy has formalized Economic
Development’s Work Plan for calendar year 2026. The BRE/A Strategy consists of identifying
key industries for retention, expansion, and attraction, proactive business engagement to build
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strategic partnerships, determining areas where the City of Palo Alto can gain a competitive
advantage, and providing support for a favorable business environment that can lead to
increased employment opportunities and overall economic prosperity. The BRE/A Strategy will
result in preserving and enhancing the local business climate to ensure the City is fiscally stable
to provide essential services that the Palo Alto community deserves.
Enhance Business Vibrancy:
Strengthening the Tax Base
Competitive Advantage
Real Estate Assets
Engagement and Promotions:
Business and Community Engagement
Promotions and Marketing
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FISCAL/RESOURCE IMPACT
STAKEHOLDER ENGAGEMENT
th, representatives from the business and real estate communities expressed
support for the BRE/A Strategy at the Economic Development Committee meeting. Public
comments shared at the meeting included, but is not limited to: support for the Retail Vitality
Ordinance and the BRE/A Strategy, interest in Ramona Street placemaking strategies, regional
competitiveness, connecting land use and economic development, question the benefits of
reactivating the BID, illustrating the return on investment on City Council and Planning and
Transportation Commission policies, and seek to integrate economic development
consideration into staff and the City’s decision-making bodies.
ENVIRONMENTAL REVIEW
ATTACHMENTS
APPROVED BY:
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City of Palo Alto - City Council
Business Retention, Expansion, and Attraction (BRE/A) Strategy
Attachment A
The Business Retention, Expansion, and Attraction (BRE/A) Strategy is bounded by two
strategic categories: Enhance Business Vibrancy and Engagement and Promotions. The two
categories are supported by ten Economic Development focused implementation actions
for calendar year 2026, which are summarized below.
Enhance Business Vibrancy
• Business Retention, Expansion and Attraction (BRE/A) Strategy – Enhancing
Business Vibrancy is a 2026 City Council priority.
• Strengthening the Tax Base
o Sales tax, property tax, and transient occupancy tax revenue bases - Establish
a formal Corporate Visitation Program. Review quarterly data for sales and
transient occupancy tax revenues and bi-annually for property tax revenues to
identify and respond to changing trends. Performance Metric: Convene up to
three of the top twenty-five sales tax generators by the end of 2026 with the
goal of retaining businesses that enhance the City’s long-term fiscal
sustainability on a quarterly basis.
o New Investment Opportunities - Encourage new investments that create
economic impact, multiplier effects and sales tax revenue. Performance
Metric: Staff will explore financial and non-financial incentives and develop a
list to support, retain, and grow business opportunities to drive economic
vitality by Quarter 3 2026, and present to the Economic Development Ad Hoc
Committee for review and feedback.
• Competitive Advantage
o Venture Capital, Incubators, and Accelerators - IDA Ireland, Japan Innovation
Campus (JIC), Consulate General and Innovation Centre Denmark, Nordic
Innovation House, Flanders Investment and Trade (FIT), The Hive, Archimedes
Labs, StartX, Venture Dock, etc. Performance Metric: Meet with at least four
Venture Capital investment firms, incubators, and accelerators to develop
foreign direct investment (FDI) opportunities and continue to cultivate the
innovation and entrepreneurial ecosystem by the end of calendar year 2026.
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o Business Technical Assistance - Performance Metric: Partner with the Silicon
Valley Small Business Development Center (SV SBDC), Small Business
Administration (SBA), SCORE, Chamber of Commerce, etc. to host two small
business (live and virtual) training workshops in 2026.
• Real Estate Assets
o Real Estate Network - Property Owners, Real Estate Brokerage, Property
Managers, and Development Community Network to foment relationships to
fill vacant spaces and attract a mix of retail, office, and industrial businesses
to enhance diversity of businesses for a broader customer base. Performance
Metric: Economic Development will host a Real Estate Broker roundtable by
Quarter 4 2026 to learn about new opportunities, market trends, new uses,
permit processes, and align development efforts with market needs.
o City Real Estate Assets – Leverage City’s real estate assets for revenue
generation. Performance Metric: Economic Development will execute a
lease with Nobu for the use of 20 valet services parking spaces in Parking Lot
Q by Quarter 3 2026 to generate new revenues for the City.
Engagement and Promotions
• Business and Community Engagement
o Public-Private Partnerships - Engagement fosters trust and collaboration,
allowing for effective partnerships that leverage resources for community
projects - Performance Metric: Economic Development will promote the
Retail Vibrancy Ordinance reflecting flexibility in land use/zoning to the real
estate network starting in Quarter 3, establish two office hour events on
California Avenue and Downtown for additional business and community
engagement opportunities, and reengage with business and property owners
via Downtown/University Avenue Stakeholders meetings to address public
safety and cleanliness through a Business Improvement District (BID), and
University Avenue infrastructure improvements by the end of 2026.
o Open Container Resolution and Entertainment Zone - Performance Metric:
Economic Development presented to the Economic Development Ad Hoc
Committee to obtain a recommendation for the City Council’s consideration
of a California Avenue Entertainment Zone Ordinance in Quarter 2 2026.
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• Promotions and Marketing
o 2026 Activities and Events - Performance Metric: Economic Development
will partner with businesses, Palo Alto Recreation Foundation, and Chamber
on at least 3 California Avenue activities (Thursday Live/FIFA World Cup) and
promote the hospitality sector (digital/print) during the 2026 sporting and
concert events timeframe.
o Innovation and Entrepreneurship Branding - Enhance the Palo Alto brand in
innovation and entrepreneurship globally. The Palo Alto brand is intrinsically
tied to its proximity to technology businesses, world-class institutions, and its
creative workforce. Performance Metric: Economic Development will partner
with foreign investment offices to strengthen global partnerships through
foreign direct investment (FDI) and destination marketing. A destination
marketing website will be developed and launched in early Quarter 4 2026 in
collaboration with the Chamber of Commerce.
The BRE/A Strategy lays a foundation for creating a vibrant, resilient, inclusive, and
diversified economic future. Notwithstanding, the BRE/A Strategy highlights the need for a
future Economic Development Strategy that serves as a policy document that will guide the
City of Palo Alto’s economic development activities for a designated period. Should the City
Council consider a new Economic Development Strategy, it would align with the City’s
Comprehensive Plan and the Economic Development Element, Sustainability and Climate
Action Plan (S/CAP), and other City policy documents. A new Economic Development
Strategy will serve as Palo Alto’s road map to grow and diversify the local economy, support
businesses and workers, and improve the quality of life for Palo Altans.
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City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Community Services
Meeting Date: October 5, 2026
Report #:2608-6603
TITLE
Approval of Letters of Intent with Avenidas and HeartFit for Life for collaboration on a long-
term public-private partnership for expanded services for aging adults at the Cubberley site;
CEQA status – Mitigated Negative Declaration Approved on May 19, 2026.
RECOMMENDATION
Staff recommend the City Council approve and authorize the City Manager to execute Letters of
Intent (LOIs) with Avenidas (Attachment A) and Cardiac Therapy Foundation / HeartFit for Life
(Attachment B) for collaboration on long-term public-private partnerships for expanded
services for aging adults at the Cubberley site.
EXECUTIVE SUMMARY
City staff and the Cubberley Ad Hoc committee are coordinating with community partners to
advance elements of the Cubberley project using a public private partnership model. A
proposed partnership with Avenidas would expand programming and services for aging adults,
including the Avenidas Chinese Community Center currently located at Cubberley. A
partnership with Cardiac Therapy Foundation, known as HeartFit for Life or HeartFit in the
community, would continue cardiac therapy and rehabilitation programs for adults. Staff
recommend Council approve Letters of Intent with Avenidas (Attachment A) and HeartFit for
Life (Attachment B) to formalize a joint commitment to advance these project components.
BACKGROUND
The City is advancing a plan to redevelop a 15-acre portion of Cubberley, guided by the
Cubberley Conceptual Master Plan and associated CEQA environmental document adopted by
the City Council on May 18, 20261. The City and the Palo Alto Unified School District (PAUSD)
1 City Council, May 18, 2026; Agenda Item #13; SR #2512-5750,
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have a memorandum of understanding that would enable the City to purchase seven acres to
support a reimagined community center and fund school improvements. The City currently
owns eight acres at Cubberley; acquiring an additional seven acres would create an
opportunity to update the aging facility for the benefit of the community. Funding the
land purchase and site improvements could be possible through a combination of funding
sources including a ballot measure, nonprofit partnerships, philanthropy, grants, and fees from
new development.
3, the City Council voted to place a ½ cent (0.50%) Sales Tax (Transactions and
Use Tax) measure on the November 3, 2026 ballot. A simple majority (50% plus 1) vote
is required to pass. The Council also adopted advisory spending guidelines for proceeds of the
Transactions and Use Tax. Resolution No. 102964 states the Council plans to allocate the
proceeds to purchase the seven acres and implement part of the first phase of the Cubberley
Conceptual Master Plan to modernize aging buildings, expand the amount of green space, and
invest in spaces that provide recreation and culture. The City plans to leverage other
funding sources, including investments from community partnerships and fees from new
development along with this new revenue to advance the project. It is likely that the City will
issue certificates of participation (COPs) or similar financing mechanisms to advance funds for
land acquisition and to enable construction to proceed within the first few years after passage
of the measure.
5 and with TheatreWorks Silicon Valley for a performing arts
complex, February 9, 20266. Staff has recommended that the City Council approve a Letter of
Intent with Maker Nexus on September 28, 20267 for development of a community focused
maker space for all ages at the Cubberley site, and a further defined term sheet with the
Friends of the Recreation Wellness Center. A Letter of Intent with Palo Alto Community Child
3 City Council, June 8, 2026; Agenda Item #14; SR #2603-6081,
https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=887096&dbid=0&repo=PaloAlto&cr=1
4 City Council Resolution No. 10296,
https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=887259&dbid=0&repo=PaloAlto
5 City Council, December 2, 2024; Agenda Item #18; SR #2410-3634,
https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=83117&dbid=0&repo=PaloAlto
6 City Council, February 9, 2026; Agenda item #11; SR #2512-5774,
https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=85859&dbid=0&repo=PaloAlto
7 City Council, September 28, 2026; Agenda Item #5; SR#2607-6546,
https://cityofpaloalto.primegov.com/viewer/preview?id=0&type=8&uid=f6d6e0aa-ee64-46d5-bd50-
0c01c18d2011
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Care is also being discussed and anticipated to be presented for City Council approval in late
October. These LOIs are intended to demonstrate the City’s intent to advance certain elements
of the Cubberley project through partnering with organizations that provide a community
benefit and share in project costs. Additional agreements will be necessary to establish the
City’s and partners’ commitments as plans develop.
ANALYSIS
Avenidas
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HeartFit For Life
HeartFit for Life has operated cardiac therapy and rehabilitation programs at Cubberley since
2003, helping adults live longer, healthier lives. The organization serves more than 300
participants annually, with an average participant age of 76. Most participants are age 60 or
older, and more than half are Palo Alto residents. A partnership with HeartFit would provide
dedicated space for HeartFit’s programs while allowing shared spaces to support additional City
and community-based programs and services that promote health and well-being.
Following approval of the LOIs, the City will establish terms for a future agreement with each
organization to include cost sharing, fundraising goals, timelines, management structures, and
other terms.
FISCAL/RESOURCE IMPACT
There is no fiscal impact associated with approval of this LOI, as it is not a legally binding
agreement. Future agreements to further refine commitments could include fundraising goals,
cost sharing, and operating agreements and would be brought forward to Council for review
and consideration.
STAKEHOLDER ENGAGEMENT
Community outreach and stakeholder engagement efforts for the project have been extensive
and remain a central component of the overall process. Engagement with community partners
has been ongoing and is intended to understand which community organizations may have an
interest in contributing financially to development of the site while bringing exciting community
programs and events to Cubberley. Providing space for people of all ages and abilities where
everyone belongs and feels welcome is part of the vision for a new community center at the
Cubberley site.
ENVIRONMENTAL REVIEW
The Council adopted an Initial Study/Mitigated Negative Declaration for the Cubberley
Conceptual Master Plan on May 19, 2026 (SCH Number 2026030129).
ATTACHMENTS
Attachment A: Letter of Intent between the City of Palo Alto and Avenidas
Attachment B: Letter of Intent between the City of Palo Alto and HeartFit for Life
Attachment C: Background on Cubberley Project
APPROVED BY:
Kristen O'Kane, Community Services Director
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Letter of Intent for the Mutual Cooperation between the City of Palo Alto (hereinafter “ the City” or
“CPA” ) and Avenidas, a nonprofit 501(c)(3) charitable organization incorporated in the State of
California.
This Letter of Intent establishes the mutual interest of the City of Palo Alto and Avenidas in
advancing a long-term public-private partnership to establish dedicated space for older adult
services at the Cubberley Community Center site.
Advancing a Memorandum of Understanding with the Palo Alto Unified School District (PAUSD), the
City is master planning a 15-acre portion of the Cubberley site, dependent on City acquisition of
land from PAUSD. The redevelopment of Cubberley presents a sig nificant opportunity to strengthen
Palo Alto’s community infrastructure and ensure access to essential services for residents across
all life stages, including the City’s growing population of older adults.
Since its founding in 1969 as the Senior Coordinating Council, Avenidas has partnered with the City
of Palo Alto to deliver essential programs and services that support the health, independence, and
well-being of older adults. Through its longstanding agreement with the City at 450 Bryant Street,
Avenidas provides social services, health and wellness programs, caregiver support, enrichment
activities, volunteer opportunities, and community engagement that serve thousands of Palo Alto
residents annually. This partnership exemplifies how municipal collaboration with a nonprofit
service provider can leverage public investment with philanthropic support, volunteer engagement,
and external funding to maximize community benefit.
As Palo Alto’s older adult population continues to grow, there is increasing need for accessible,
appropriately designed, and geographically distributed space to support aging well. While Avenidas
has operated the Avenidas Chinese Community Center at Cubberley since 2018, current facilities
do not fully meet the needs of older adults in Palo Alto due to distance, accessibility, and space
limitations. Establishing dedicated space at Cubberley would significantly improve equitable
access to services, enhance safety and accessibility, and allow expansion of programs that reduce
isolation, improve health outcomes, and support residents in remaining active members of the
community.
The City and Avenidas now wish to collaborate and negotiate a long-term partnership to establish a
dedicated older adult services hub at the Cubberley site by achieving the following strategic
objectives:
1. Establish Dedicated Senior Services Space
Develop and construct or renovate facilities at Cubberley to create dedicated space for Avenidas
programs and services, including social services offices, program rooms, gathering spaces, and
administrative functions designed to meet the needs of older adults.
2. Explore a Long-Term Use and Management Model
Explore a management and occupancy model in which Avenidas would have primary and
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Palo Alto and Avenidas
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dedicated use of designated space to operate senior services, while collaborating with the City and
other partners to utilize shared community amenities such as wellness facilities, fitness spaces,
and multi-purpose rooms.
3. Develop Project Plans and Program Specifications
Collaborate in developing architectural plans, program specifications, and operational
requirements necessary to support expanded senior services, including opportunities for
integration with complementary community uses.
4. Explore Capital Funding and Fundraising Partnership
Explore a funding model in which the City and Avenidas jointly support the capital development of
the facility. Avenidas may initiate and lead fundraising efforts to raise a substantial portion of
capital costs through philanthropy, grants, and other external funding sources to supplement City
investment.
5. Define Operational and Program Coordination
Coordinate with other City departments and community partners to ensure effective utilization of
the facility.
6. Advance Equitable Access and Community Impact
Expand access to services for older adults throughout Palo Alto, and strengthen the City’s capacity
to support healthy aging, social connection, and community engagement.
The City and Avenidas are interested in undertaking and completing this project at Cubberley in
accordance with one or more future agreements subject to mutually acceptable terms and
conditions. The City and Avenidas will endeavor to negotiate potential agreement(s) over the next
six (6) to twelve (12) months, as practicable.
Elements to be included in future agreement(s) may include:
1. Terms and conditions of the agreement
2. Capital funding commitments, timelines, and fundraising goals
3. Roles and responsibilities related to planning, construction, and occupancy
4. Community engagement and outreach planning
5. Project schedule and planning milestones
6. Coordination with City departments and regulatory processes
7. Options for modification or termination of the joint planning process
This Letter of Intent is not a binding contract between the City and Avenidas and does not establish
a legal partnership or obligation. It is intended to facilitate discussion and planning toward future
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Palo Alto and Avenidas
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agreements that advance the shared goal of supporting Palo Alto’s older adults through expanded,
accessible, and dedicated community space.
Signed by Kristina Lugo, President and CEO, Avenidas
________________________________________________
Date:
________________________________________________
Signed by Ed Shikada, City Manager, City of Palo Alto
________________________________________________
Date:
________________________________________________
September 21, 2026
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Palo Alto and Avenidas
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Intent between the City of
Palo Alto and HeartFit for
Life
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The Cubberley Site
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Memorandum of Understanding with PAUSD
4 both the City Council and Palo Alto Unified School District (PAUSD or
District) Board of Education approved a Memorandum of Understanding (MOU) related
to the future of the Cubberley site. The MOU outlines key terms and conditions for the
purchase and future planning of Cubberley. The land purchase, which would transfer
ownership of seven acres from PAUSD to the City, is contingent on voter approval of a
bond measure in November 2026. This condensed timeframe requires development of
a master plan for the site by March 2026, conduct stakeholder and community
engagement and outreach, polling, financial analysis, CEQA analysis, and other critical
tasks. The addition of the seven acres, plus the eight acres already owned by the City of
1 City Council, December 2, 2024: https://portal.laserfiche.com/Portal/DocView.aspx?id=112707&repo=r-
704298fc&searchid=c3e3ed6f-6cda-4dd3-ba35-5d8d4be5579e
2 https://www.cityofpaloalto.org/files/assets/public/v/1/city-manager/communications-office/cubberley-
community-center_mappdf.pdf
3 Cubberley Concept Plan 2019: https://www.pausd.org/about-us/committees-task-forces/archived-
committees/cubberley-master-plan
4 City Council, October 7, 2024; Agenda Item AA1; SR #2409-3500,
https://portal.laserfiche.com/Portal/DocView.aspx?id=98415&repo=r-704298fc&searchid=e199f724-22ab-
472b8ad8-ca162c4dcf8a
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Palo Alto provides an opportunity to develop a new community center and other
improvements on a combined 15 acres at the Cubberley site to provide a range of City
programs, including health, wellness, and recreational opportunities for residents.
Master Plan Update and Pursuit of a Local Ballot Measure
9 related to the future of the Cubberley site. These actions included
approval of a contract with Concordia, LLC, and associated budget actions for
development of a revised Master Plan for the Cubberley Community Center site,
building on the previous master plan completed in 2019 by Concordia and guided by
significant community input. Additionally, the Council approved a Letter of Intent with
the Friends of the Palo Alto Recreation Wellness Center for the purpose of fundraising
for a recreation wellness center (gymnasium) at the Cubberley site, and a workplan for
pursuit of a November 2026 local ballot measure to fund the purchase of land and
development of a new community center at the Cubberley site.
10 to
continue the current use of the property, including playing fields, approval of a
professional services agreement with Rincon for CEQA analysis,11 and approval of
professional service agreements with Lew Edwards Group and Fairbank, Maslin, Metz
& Associates12 for ballot measure strategy advisement and community polling.
Cubberley Ad Hoc Committee
9 City Council, December 2, 2024; Agenda Item 18, SR #2410-3634,
https://portal.laserfiche.com/Portal/DocView.aspx?id=112713&repo=r-704298fc
10 City Council, December 2, 2024; Agenda Item 12; SR #2410-3651,
https://portal.laserfiche.com/Portal/DocView.aspx?id=112707&repo=r-704298fc
11 City Council, December 16, 2024; Agenda Item 12; SR #2411-3813,
https://portal.laserfiche.com/Portal/DocView.aspx?id=117742&repo=r-704298fc&searchid=96e9506b-
f1bd-485e-a4cb-fc804b5893d1
12 City Council, February 24, 2025; Agenda Item 4; SR #2501-4039,
https://portal.laserfiche.com/Portal/DocView.aspx?id=143364&repo=r-704298fc&searchid=fef509a6-
4d34-4060-bc7a-6ab87db7a0ae
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operating and financial models, and decisions on what should be placed on the
November 2026 ballot.
April 21, 2025 City Council Meeting
17 City Council meeting, staff presented outcomes from the first
community meeting held on March 19, an update on the Cubberley Master Plan Project
workplan and sought Council authorization to initiate the first community poll.
18 .
17 City Council, April 21, 2025; Agenda Item 11; SR #2503-4310,
https://portal.laserfiche.com/Portal/DocView.aspx?id=166428&repo=r-704298fc
18 Staff Presentation, April 21, 2025;
https://cityofpaloalto.primegov.com/Portal/viewer?id=0&type=7&uid=71ade3d7-a57a-4195-a59b-
c410d90832ea
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Theater/Performance Space, Greenspace, Makerspace, and Senior/Multigenerational
Programs.
21. The poll themes and questions were developed
with input from the Cubberley Ad Hoc Committee and will inform critical upcoming
milestones in the project. The Council did not take an action but supported proceeding
with the poll.
April 22,2025 Parks & Recreation Commission Meeting
22 staff presented an informational update to the Parks and
Recreation Commission, offering a comprehensive overview of the project's overall
workplan and timeline. The presentation included a detailed summary of Community
Meeting #1, highlighting key themes and priorities that emerged from the community’s
feedback. Staff also introduced Poll #1, which was launched at the end of April, and
encouraged Commissioners to help promote the survey to ensure broad community
participation. In addition, the presentation outlined several ways the Commission can
remain engaged and support the project, including serving as ambassadors within the
community, helping to share information, and providing feedback. The creation of a
PRC Cubberley ad-hoc committee was discussed and it was decided that this topic will
be further considered during the upcoming workplan revisions scheduled for the coming
months.
June 9, 2025 City Council Meeting
23 staff presented to City Council the results of the first community poll,
community engagement milestones coming up and updates to the workplan. The focus
of the first poll was to survey voter input on the goals and future of the community
center and possible support for a tax or bond measure. Staff also shared community
engagement. Overall, the poll found broad majority support for improvement at the
Cubberley site. Surveyed voters place highest priority on bringing the facility up to
modern standards for electrical, plumbing, safety, and accessibility early childhood
21 FM3 Presentation, April 21, 2025;
https://cityofpaloalto.primegov.com/Portal/viewer?id=0&type=7&uid=83ec6422-b6e4-4e83-9ca3-
ca746a5971a0
22 Staff Presentation, April 22, 2025;
https://cityofpaloalto.primegov.com/Portal/viewer?id=0&type=7&uid=dae0543c-e007-4fc1-9a69-
fd08b156ee94
23 City Council, June 9, 2025, Agenda Item 2; SR#2503-4313,
https://portal.laserfiche.com/Portal/DocView.aspx?id=182790&repo=r-704298fc&searchid=57dac2b5-
5c42-4ef0-978a-be940766f395
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education; affordability and efficient use of taxpayer dollars; and overall repairs for the
facility. Lastly, staff shared with the City Council the community revised Vision
Statement for the future of the Community Center.
June 12, 2025 Second Cubberley Master Plan Community Meeting
A vibrant, beloved,
and adaptable destination that promotes learning, connections, joy, and wellbeing
where all cultures and generations belong. Following this, staff provided an overview
presentation to orient attendees to the three 3-D concept plans being presented. Each
conceptual design includes an A, B, and C variations exploring different configurations
of building placement, new construction vs renovation, green space, bike and
pedestrian circulation, and parking—both above and below ground.
27.
27 Community Meeting #2 Summary, www.paloalto.gov/files/4280f185-ca1d-4965-940f-1e4fcaf6cb11/M2-
Summary-Report-Final.pdf
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June 19, 2025 Public Art Commission Meeting
On June 19, 2025,29 City staff presented to the Public Art Commission and discussed
potential opportunities to support the City’s Strategic Activation Plan for the Cubberley
site, which was developed by staff in coordination with the City Council’s Cubberley Ad
Hoc Committee. The plan outlined phased enhancements and activations aligned with
the broader master planning process, community engagement efforts, and the
anticipated November 2026 ballot initiative. As part of the discussion, Commissioners
explored how the ArtLift grant program—previously identified at their January retreat as
a potential tool—could be leveraged to support temporary public art installations at
Cubberley and other key locations. Ideas included murals, ground art, freestanding
sculptures, and performance-based activations to help generate community excitement
and reinforce the role of the arts in creating vibrant, inclusive public spaces.
June 24, 2025 Parks & Recreation Commission Meeting
On June 24, 2025,30 City staff provided the Parks and Recreation Commission with an
informational update on the Cubberley Community Center Master Plan. The
presentation included a recap of the second community meeting held on June 12,
where Concordia unveiled three concept designs for the site and invited community
feedback. Staff also presented the results of the first community poll, released in late
April, and shared a list of proposed near-term activation ideas for the Cubberley site,
inviting the Commission’s input. In addition, staff sought feedback from the Commission
on the three concept designs. The newly formed PRC Cubberley Ad Hoc Committee will
continue to refine the activation plans in July.
July 9, 2025 Planning and Transportation Commission Meeting
On July 9, 2025,31 the Planning and Transportation Commission (PTC) received an
update on the Cubberley Master Plan and was asked to provide input to help inform the
next phase of the planning process. Staff requested feedback on several key aspects
recently reviewed by the community, including arrival and parking, pedestrian
circulation, building scale and space organization, greenspace layout, the balance of
29 Staff Presentation, June 19, 2025;
https://cityofpaloalto.primegov.com/Portal/viewer?id=0&type=7&uid=a036e199-31cd-4d94-8214-
7fb0170e39ac
30 Staff Presentation, June 24, 2025;
https://cityofpaloalto.primegov.com/Portal/viewer?id=0&type=7&uid=ac29aa36-1b3a-4403-b8b2-
cc403685865d
31 Staff Presentation, June 9, 2025;
https://cityofpaloalto.primegov.com/Portal/viewer?id=0&type=7&uid=49fc32cf-caa1-4dd9-97f9-
5d5d02150256
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built and open space, and how the site can be a good neighbor. Additional PTC
feedback emphasized the importance of clear cost comparisons between renovation
and new construction, interest in public-private funding models, and support for a future
bond measure and donor engagement. Commissioners favored partial underground
parking and better integration with transit and surrounding neighborhoods. There was
broad interest in maintaining flexible green space for events, ensuring safe and
separate bike/pedestrian circulation, and preserving multigenerational, inclusive
programming. Suggestions also included clearer diagrams, more tangible use
examples, and consideration of impacts from surrounding development.
July 17, 2025 Architectural Review Board Meeting
35, the Architectural Review Board (ARB) received a presentation on
the Cubberley Master Plan and provided early feedback to help shape the next phase of
planning. The Board expressed strong support for phased development and
emphasized minimizing disruption to existing tenants and programs. Members praised
pedestrian and bike circulation, supported the proposed balance of buildings and green
space, and encouraged improvements to vehicle access and mobility hubs. There was
general support for new construction over renovation and interest in enhancing the site's
identity through public art and flexible community spaces. The ARB also encouraged a
welcoming design that reflects Cubberley’s civic and cultural significance while being a
good neighbor to the surrounding community.
September 17, 2025 Third Cubberley Master Plan Community Meeting
35 Staff Presentation, July 17, 2025;
https://cityofpaloalto.primegov.com/Portal/viewer?id=0&type=7&uid=2a9a7988-768f-465b-bcf9-
68166ff9af6f
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Phase 1 consists of two parts: a Recreation Wellness Center and a Performing Arts
Center. Phase 1 also includes renovation of remaining buildings so the full site
continues to be operational until phases 2 and 3 can be completed. Community
members were invited to assess the Phase 1 concept designs for the recreation
wellness and performing arts area and were asked to reflect on three key questions:
37.
September 23, 2025 Parks and Recreation Commission Meeting
38, the Parks and Recreation Commission (PRC) received a
presentation on the refined Cubberley Community Center Master Plan concept following
the third and final community meeting held on September 17, 2025. Commissioners
reviewed updates on program placement, phasing, and site circulation, and were asked
37 Community Meeting #3 Summary; www.paloalto.gov/files/assets/public/v/1/community-
services/cubberley-project/2025.11.11_m3-summary.pdf
38 Staff Presentation, September 23, 2025;
https://cityofpaloalto.primegov.com/viewer/preview?id=0&type=8&uid=efbb1418-4bbe-49b2-b786-
165e29017ca3
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to provide input on the same questions posed to the community: what is working well,
what could be improved, and what creative ideas could enhance the campus
experience.
October 20, 2025 City Council Meeting
41 with an emphasis on the first phase of site
development showing a combination of renovated and new building construction. The
focus on the first phase recognizes that funding will likely be a limiting factor in full site
redevelopment. At this meeting, staff shared objectives and themes for the second
community poll to determine voter support for a bond or tax measure to finance the land
purchase, and the extent of how much voters are willing to pay annually. Following the
October 20 meeting the second poll was conducted.
December 15, 2025 City Council Meeting
42,
including results from the second community poll and discussed next steps. Council
discussed key findings from Poll #2, which indicate broad voter support for the City
acquiring the Cubberley property and willingness to invest in limited funding focused on
basic repairs, safety upgrades, and accessibility improvements. Results showed
relatively higher support for parcel tax and sales tax funding mechanisms, with a $250
average annual parcel tax testing above 50% support and a 0.5% sales tax increase
capable of supporting significantly greater capital financing, pending state authorization.
41 City Council, October 20,2025; Agenda Item #1; SR #2503-4353,
https://portal.laserfiche.com/Portal/DocView.aspx?id=231071&repo=r-704298fc
42 City Council, December 15, 2025; Agenda Item #3; SR #2503-4355,
https://portal.laserfiche.com/Portal/DocView.aspx?id=246305&repo=r-704298fc
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Council expressed alignment with staff and the Ad Hoc Committee’s recommendation to
continue refining ballot measure options and to launch a third poll in January 2026 to
further test potential parcel tax and sales tax scenarios.
February 9, 2026 City Council Meeting
45,
including results from the third community poll and progress on public-private
partnerships to advance key components of the project. Staff shared that, in anticipation
of possible Council consideration of a November 2026 ballot measure to fund the
purchase of seven acres from PAUSD and advance all or portions of the project, three
of four planned community polls have been completed. Results show both parcel tax
and sales tax funding options testing at approximately 48% support—an improvement
from the prior poll, though still below the thresholds required for approval (two-thirds for
a parcel tax and a simple majority for a general-purpose sales tax). Despite these
challenges, Councilmembers remained optimistic, noting that support levels are
approaching viability, particularly for a sales tax option, and that emerging public-private
partnerships could strengthen the overall funding strategy.
45 City Council, February 9, 2026; Agenda Item #11; SR#2512-5774,
https://cityofpaloalto.primegov.com/viewer/preview?id=0&type=8&uid=fd6f9939-83a3-4ea7-817a-
e7719c9194a4
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expressed interest in exploring partnership opportunities with the City at the Cubberley
site.
March 11, 2026 Planning and Transportation Commission and Architectural
Review Board Special Joint Meeting
47 on the proposed
Cubberley Conceptual Master Plan and the Draft Initial Study/Mitigated Negative
Declaration (IS/MND) prepared under the California Environmental Quality Act (CEQA).
Staff presented the City’s long-term vision to redevelop approximately 15 acres of the
Cubberley campus, including the potential purchase of seven acres from the Palo Alto
Unified School District (PAUSD) for $65.5 million. Staff noted that the purchase and
implementation of the plan will depend on identifying funding sources, which may
include a potential sales tax ballot measure in November 2026, development impact
fees, grants, philanthropic contributions, and public-private partnerships.
47 Staff Presentation, March 11, 2026;
https://cityofpaloalto.primegov.com/viewer/preview?id=0&type=8&uid=c9289f37-122b-455b-959c-
febb294cc3c1
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and staff to evaluate as the project moves forward into future phases of planning and
design. Below are the approved motions:
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March 24, 2026 Parks and Recreation Commission Meeting
The Parks and Recreation Commission received a presentation from staff49 on the
proposed Cubberley Conceptual Master Plan and the Draft Initial Study/Mitigated
Negative Declaration (IS/MND) prepared under the California Environmental Quality Act
(CEQA), and results of the second and third community polls. Staff presented the City’s
long-term vision to redevelop approximately 15 acres of the Cubberley campus,
including the potential purchase of seven acres from the Palo Alto Unified School
District (PAUSD) for $65.5 million. Staff noted that the purchase and implementation of
the plan will depend on identifying funding sources, which may include a potential parcel
or sales tax ballot measure in November 2026, development impact fees, grants,
philanthropic contributions, and public-private partnerships.
Staff requested that the commission review and consider the Draft IS/MND and provide
a recommendation to the City Council regarding adoption of the Conceptual Master
Plan. City Council is scheduled to consider adoption of the plan in April 2026, while staff
continue advancing environmental review, partnership discussions, and funding and
financing strategies.
Commissioners expressed strong appreciation for the work completed to date and
shared overall excitement about the vision and direction of the project. Discussion
included the use of a Mitigated Negative Declaration under CEQA and the level of detail
at the conceptual stage, particularly related to architectural and landscape design,
including tree preservation and future planting strategies. The Commission also
considered key program elements such as recreation amenities and amphitheater
capacity, as well as project phasing, funding flexibility, and timelines tied to land
acquisition and partnership opportunities. Commissioners also discussed construction
impacts on existing operations and opportunities to support the project through grants,
partnerships, and continued community engagement and activation efforts. Following
discussion and public comment, Commissioner Smith made a motion to recommend the
City Council adopt the Cubberley Conceptual Master Plan, it was seconded by Vice
Chair Wei, and the vote passed (5–0) with 1 commissioner choosing to abstain.
Staff presented the Draft Conceptual Master Plan, Mitigated Negative Declaration, and
results of the fourth community poll to the City Council. Staff’s recommendation to
49 Staff Presentation, March 24, 2026;
https://cityofpaloalto.primegov.com/viewer/preview?id=0&type=8&uid=247caade-d1e4-47ca-b8e1-
bc3f8694739e
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adopt a Resolution adopting the Mitigated Negative Declaration and the Cubberley
Conceptual Master Plan was approved by Council unanimously. Staff also
recommended the Council provide direction on next steps to advance the project.
Following a presentation on the fourth-round polling results, the Council directed staff to
pursue a ½ cent sales tax measure on the November 2026 ballot.
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City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Community Services
Meeting Date: October 5, 2026
Report #:2602-5958
TITLE
Approval of Surveillance Use Policy for Security Cameras at the Palo Alto Animal Shelter; CEQA
Status - Not a Project.
RECOMMENDATION
Staff recommend that the City Council approve the attached surveillance use policy for the use
of security cameras to enhance security and safety and deter unauthorized or criminal activity
at the Palo Alto Animal Shelter (Attachment A).
EXECUTIVE SUMMARY
The Palo Alto Animal Shelter (operated by Pets in Need) has a need to acquire and use
surveillance technology to ensure the safety of animals, visitors, and staff. A Surveillance Use
Policy has been developed to comply with the City’s Surveillance Technology Ordinance and
include mitigations to ensure appropriate use of the information captured. Key elements are
summarized in Table 1 in the Analysis section of this report.
BACKGROUND
Palo Alto’s Surveillance Technology Ordinance, codified PAMC § 2.30.6201, et seq., sets criteria
and procedures to protect personal privacy in the acquisition and use of
surveillance technology and provide for ongoing oversight. Security camera technology is
“surveillance technology” as defined by the ordinance. The ordinance requires City Council
approval of the acquisition of new surveillance technology and of a Surveillance Use Policy
specific to each new approved technology. In approving new surveillance technology, the
Council must determine that its benefits outweigh the associated costs and concerns.
The ordinance sets forth specific elements that must be present in a Surveillance Use
1 Palo Alto Municipal Code Section 2.30.620, et seq.;
https://codelibrary.amlegal.com/codes/paloalto/latest/paloalto_ca/0-0-0-62120#JD_2.30.620
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Policy, including limitations on use, access, and retention, as well as a description of
compliance procedures.
ANALYSIS
1. A description of the surveillance technology, including how it works and what information
is captured
2. Information on the proposed purpose, use and benefits of the surveillance technology
3
of the Palo Alto Municipal Code.
The location or locations where surveillance technology may be used
Existing federal, state and local laws and regulations application to the surveillance
technology and the information it captures; the potential impacts on civil liberties and
privacy; and proposals to mitigate and manage any impacts
3 Palo Alto Municipal Code Section 2.30.680(a);
https://codelibrary.amlegal.com/codes/paloalto/latest/paloalto_ca/0-0-0-62178
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Surveillance technology will comply with applicable laws related to video and audio
recording. This includes Labor Code section 435, which forbids employers from recording in a
restroom, locker room, or changing room; and Penal Code section 632, which prohibits
recording audio of “confidential communication,” subject to exceptions such as for public
meetings under Penal Code section 632(c).
Mitigation Actions for Pets In Need:
Access to surveillance footage is limited to designated positions in Pets in Need and is
permitted only when there is a legitimate operational, safety, or investigative need.
The Chief Executive Officer is authorized to access surveillance footage and can authorize
access to other PIN management if relevant to the type of investigation. The Director of
Shelter Operations and Facilities & IT Manager are authorized to access and review
surveillance footage when requested by the CEO for a specific, authorized purpose but are
not authorized to independently access or review footage.
When footage is relevant to an investigation, only the applicable portion of the footage may
be clipped and shared with the following positions on a need-to-know basis:
Animal-related investigations: Director of Behavior & Medical Services and Behavior,
Training & Rescue Manager.
Employee-related investigations: Director of Human Resources and CEO.
City police personnel will be granted access for law enforcement purposes.
5) The costs of the surveillance technology, including acquisition, maintenance, personnel and
other costs, and current or potential sources of funding
All costs to purchase, install, and maintain the cameras will be the responsibility of Pets in
Need.
FISCAL/RESOURCE IMPACT
There is no cost to the City for the surveillance cameras at the Palo Alto Animal Shelter. Pets In
Need will purchase, install and maintain security cameras.
STAKEHOLDER ENGAGEMENT
The Community Services Department and Police Department coordinated with Pets in Need to
develop this policy.
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ENVIRONMENTAL REVIEW
ATTACHMENTS
APPROVED BY:
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Pets In Need - Palo Alto Animal Shelter
Purpose of surveillance technology:
Type of surveillance technology:
Locations:
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Policy
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Parking Lot: Allows management to view the facility when staff are not on site in case of alarm
activation and ensures safety of staff during early morning and evening hours. Camera will
capture all vehicles entering and exiting the property.
Cat hallway
Cat room 1
Cat room 2
Exterior breezeway
Exterior adoption dog kennels
Interior adoption dog kennels
Exterior stray dog kennels
Front of building (facing modular building)
Rear of building
Compliance with laws:
Mitigation actions:
Animal-related investigations: Director of Behavior & Medical Services and Behavior,
Training & Rescue Manager.
Employee-related investigations: Director of Human Resources and CEO.
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Animal Shelter Surveillance
Policy
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These positions may receive relevant clipped footage for purposes of the investigation but are
not otherwise authorized to independently access or review the surveillance system.
Annual reporting:
1) to the City by August 1 of each year to include:
1 Palo Alto Municipal Code Section 2.30.680(a);
https://codelibrary.amlegal.com/codes/paloalto/latest/paloalto_ca/0-0-0-62178
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Animal Shelter Surveillance
Policy
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City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Community Services
Meeting Date: October 5, 2026
Report #:2608-6630
TITLE
Approval of Surveillance Use Policy for Security Cameras at the Palo Alto Junior Museum & Zoo;
CEQA Status - Not a Project.
RECOMMENDATION
Staff recommend that the City Council approve the attached surveillance use policy for the use
of security cameras to enhance security and safety and deter unauthorized or
criminal activity at the Palo Alto Junior Museum & Zoo (Attachment A).
EXECUTIVE SUMMARY
The Palo Alto Junior Museum & Zoo have a need to acquire and use surveillance technology to
ensure the safety of animals, city assets, as well as safety of visitors, and staff, and the
protection of city assets. Surveillance Use Policies have been developed for the facility to
comply with the City’s Surveillance Technology Ordinance and include mitigations to ensure
appropriate use of the information captured. Key elements are summarized in the Analysis
section of this report.
BACKGROUND
Palo Alto’s Surveillance Technology Ordinance, codified PAMC § 2.30.6201, et seq., sets criteria
and procedures to protect personal privacy in the acquisition and use of surveillance
technology and provide for ongoing oversight. Security camera technology is “surveillance
technology” as defined by the ordinance. The ordinance requires City Council approval of the
acquisition of new surveillance technology and of a Surveillance Use Policy specific to each new
approved technology. In approving new surveillance technology, the Council must determine
that its benefits outweigh the associated costs and concerns. The ordinance sets forth specific
1 Palo Alto Municipal Code Section 2.30.620, et seq.;
https://codelibrary.amlegal.com/codes/paloalto/latest/paloalto_ca/0-0-0-62120#JD_2.30.620
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elements that must be present in a Surveillance Use Policy, including limitations on use, access,
and retention, as well as a description of compliance procedures.
ANALYSIS
1. A description of the surveillance technology, including how it works and what information
is captured
2. Information on the proposed purpose, use and benefits of the surveillance technology
The location or locations where the surveillance technology may be used
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4) Existing federal, state and local laws and regulations application to the surveillance
technology and the information it captures; the potential impacts on civil liberties and
privacy; and proposals to mitigate and manage any impacts
Surveillance technology will comply with applicable laws related to video recording. This
includes Labor Code section 435, which forbids employers from recording in a restroom,
locker room, or changing room. Lastly, the City is required to retain certain building security
recordings under Govt. Code section 34090.6(a), currently one year.
Mitigation Actions: Access to surveillance footage will be limited to authorized City personnel
for law enforcement purposes. Encryption and access control mechanisms will safeguard the
footage.
5) The costs of the surveillance technology, including acquisition, maintenance, personnel
and other costs, and current or potential sources of funding
Costs will include the acquisition of the four surveillance cameras, associated hardware,
alarm system, licensing, shipping, and professional services for the field technical installation
time, monitoring systems, and storage. The budget will also cover encryption and secure
storage solutions. The project costs would be paid for out of the Palo Alto Junior Museum &
Zoo Capital Improvement Program (CIP) Fund, AC-18001 JMZ Renovation. To streamline the
procurement process and reduce administrative costs, we utilized the City’s California
Multiple Award Schedule (CMAS) contract, which is a procure program which allows us to
purchase goods and services from pre-approved vendors at negotiated prices.
The project has a one-time cost of $63,705 and annual licensing fees of $2,561 are
anticipated and will be absorbed into the operating budget.
FISCAL/RESOURCE IMPACT
Surveillance technology costs for the Palo Alto Junior Museum & Zoo will be funded through
the JMZ Renovation Project, AC-18001, in the Capital Improvement Program. To streamline
procurement and reduce administrative costs, the equipment and related services were
purchased through the City’s California Multiple Award Schedule (CMAS) contract. The project
includes a one-time cost of $63,705. Ongoing annual licensing costs of $2,561 will be absorbed
within the Junior Museum & Zoo operating budget.
STAKEHOLDER ENGAGEMENT
The Community Services Department coordinated with Palo Alto Police Department,
Information Technology Department, Public Works and the City Attorney’s Office in developing
this policy. Labor relations staff shared details of the proposed installation with the labor
partner (SEIU) representing JMZ staff who could be impacted. SEIU confirmed they have no
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concern regarding the camera installation; the City has satisfied any meet and confer
obligations with its labor partners.
ENVIRONMENTAL REVIEW
ATTACHMENTS
APPROVED BY:
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NOT YET APPROVED
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Surveillance Use Policy for Security Cameras for Palo Alto Junior Museum and
Zoo
In accordance with Palo Alto Municipal Code Section PAMC § 2.30.680(d), the
Surveillance Use Policy for the City’s use of security cameras at the Palo Alto Junior
Museum and Zoo (JMZ) is as follows:
The intent of security cameras is to increase the safety and
security of City assets in and immediately around the Palo Alto Junior Museum and
Zoo, a place with staff, animals, and public coexist in a single space with multiple
access points.
City personnel may only access surveillance video (“footage”) for
official and legitimate security, safety, and law enforcement purposes consistent with
this Policy. The following uses of security cameras are specifically prohibited:
a. Harassment or Intimidation: It is a violation of this Policy to use the system to
harass and/or intimidate any individual or group.
b. Personal Use: It is a violation of this Policy to use the system or data for any
personal purpose.
c. First Amendment Rights. It is a violation of this policy to use the system or data
for the purpose or known effect of infringing upon First Amendment rights of any
person.
d. Invasion of Privacy: It is a violation of this Policy to use the system or data in any
manner contrary to local, state, and federal privacy laws.
Security cameras will record video 24/7. Depending on the
specific technology used, metadata such as time, date, and location of the camera may
be documented with the video.
All footage will be closely safeguarded and protected by both
procedural and technological means. The City will observe the following safeguards
regarding access to and use of stored data:
a. All footage shall be accessible only through two factor authentication and/or
Single Sign-on, to access sensitive systems and applications.
b. Only select and necessary leadership staff members of the Palo Alto Junior
Museum & Zoo shall have access to the footage and may delegate access to
specific City staff members as long as such delegation is in writing and compliant
with this Policy. Permissible personnel: the JMZ Senior Program Manager
(Executive Director), Zoo Director (Specialist), and Exhibits Director (Specialist).
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c. Staff may provide footage to law enforcement, including Palo Alto Police
Department (PAPD), for investigation. Once received, PAPD shall control footage
under their own Department policies.
d. Persons approved to access footage under this policy are permitted to access
the data for legitimate safety, security, and law enforcement purposes only, such
as when the footage relates to a specific incident or criminal investigation.
e. Encryption
o Verkada ensures that all connections to its web application from its users
are encrypted using certificated TLS configurations. Both website and
application are reachable exclusively over HTTPS.
o Verkada stores customer data in databases that are encrypted at rest.
f. Network security
o Production environments run in an isolated Virtual Private Cloud network
with only necessary services enabled.
o Verkada uses configurations that ensure only approved networking ports
and protocols are implemented.
g. Monitoring and Alerting
o Verkada tools monitor server CPU use, free storage space, message age
and read I/O in Verkada’s databases, servers and messaging queues and
notify appropriate personnel of any events or incidents based on
predetermined criteria. Incidents are escalated per policy.
5. Retention. The City shall comply with Govt. Code section 34090.6 et seq. to retain
footage pursuant to state law (currently one year). Additionally, the City will retain
relevant footage longer than the retention period if it is reasonable to believe it will
become evidence in a specific criminal investigation or is subject to a discovery request
or other lawful action to produce records.
6. Access by non-City Entities. The footage may be shared outside of the City with
law enforcement or prosecutorial agencies for official law enforcement purposes or as
required by law or court order.
7. Compliance Procedures. The Assistant Director for Community Services (Arts &
Sciences Division) and the JMZ Senior Program Manager (Executive Director) of the
Junior Museum & Zoo shall be responsible for ensuring compliance with procedures,
including, but not limited to:
a. Ensuring only designated staff are allowed access to footage when authorized by
this policy.
b. Ensuring the security and retention of the footage collected and compliance with
applicable laws.
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Junior Museum & Zoo
Surveillance Policy
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City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Administrative Services
Meeting Date: October 5, 2026
Report #:2607-6552
TITLE
Approval of FY 2026 Reappropriation Requests to FY 2027 Operating and Capital Improvement
Budgets and Additional Technical Clean-Up Actions and Corresponding Amendments to the FY
2027 Budget Appropriation for Various Funds. CEQA Status: Not a Project
RECOMMENDATION
Staff recommends that the City Council amend the Fiscal Year 2027 Budget Appropriation for
various funds as identified in Attachment A, and various capital projects as identified in
Attachment B and Attachment C (requires 2/3 approval).
EXECUTIVE SUMMARY
As a part of the fiscal year-end process, staff reviews the City’s unencumbered and unspent
appropriations of the fiscal year just ended (FY 2026), along with the City’s spending plans.
Encumbered amounts are contractual obligations (for example, commitments made through
purchase orders), which are carried forward from one fiscal year to the next without the need
for Council approval. Each year there are important projects that were unable to encumber
funds in the year that just ended. The reappropriation process allows staff to bring forward
funding recommendations to City Council to continue these projects into the next fiscal year (FY
2027) without impacting funding programmed for services in FY 2027.
In limited instances, staff also recommends appropriation actions unrelated to the
reappropriation process. This fiscal year these are technical clean-up actions for capital
projects.
BACKGROUND
Chapter 2.28, Section 2.28.090 of the Municipal Code allows for reappropriation of funding
from the previous fiscal year to the current fiscal year if the Administrative Services Department
(ASD) Director/Chief Financial Officer (CFO) certifies that sufficient unencumbered and
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unexpended funds are available in the Fiscal Year that just ended (FY 2026) to be carried
forward to the subsequent Fiscal Year (FY 2027).
ANALYSIS
Funding for Citywide Council Priorities: Items in this category are related to citywide
priority needs previously identified by the Council, as part of the FY 2027 priority setting
in January 2026, that could not be completed in FY 2026 and funding is recommended
to be reappropriated to FY 2027 to complete the work. Examples of projects in this
category include: Gas Cap and Trade Support for Electrification Programs ($9.1 million),
Advancing Racial Equity ($0.2 million), and Child Care Services ($55,000).
Timing and Workload Delays: Projects in this category were delayed due to competing
workload demands, appropriation of funds late in the fiscal year, or other unanticipated
delays. Examples of projects in this category include: Multi-Family EV Projects ($2.9
million), Customer Relationship Management (CRM) Platfrom ($0.5 million), Green
Stormwater Infrastructure (GSI) Parks Maintenance ($0.1 million), Roth Building
Maintenance ($30,000) and Airplane Noise Reduction Study ($75,000).
Multi-year Funding Agreements: Projects in this category include approved donations,
grants, loans, and other funding agreements that are anticipated to continue in the
coming year. Examples in this category include: Organized Retail Theft Grant ($2.3
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million), General Fund Training Programs ($50,000), Library Automated Materials
Handling (AMH) System ($80,000), and Citizens Option for Public Safety (COPS) Program
($72,558).
Management Training Program: The Management Training Program provides $1,000
per eligible employee under the terms outlined in the MGMT and PAPMA labor
agreements. The purpose of this program is to provide employees with resources to
improve and supplement their job and professional skills. In total, $150,000 in unused
funding is requested to be reappropriated for various training programs, including:
ethics, civics and citizen engagement, leadership and management, budget, finance,
procurement, interpersonal communication, presentation skills, business writing, time
management, project management, change management, online-based education, and
safety and security.
Operating Reappropriations Previously Approved in the FY 2027 Adopted Operating Budget
As part of the FY 2027 Budget review process, early reappropriation of anticipated savings in
the General Fund in FY 2026 was recommended and approved by the Council to fund actions in
FY 2027. The total approved amount of $180,000 already reappropriated to FY 2027 consisted
of $30,000 for the City Council Administrative Assistant pilot program and $150,000 to support
oversized vehicle compliance and enforcement work performed by the Office of
Transportation.
Capital Budget Reappropriations
The FY 2027 Adopted Budget included $142.1 million in reappropriated expenditure funds,
partially offset by $111.8 million in reappropriated revenue, across all City funds based on
estimates of anticipated spending and revenue collections in FY 2026. Since the adoption of the
capital budget, some adjustments and refinements to project reappropriations are required
since FY 2026 year-end actuals and projects costs have been updated to reflect actual
experience. These primarily reflect either increases or decreases to assumed reappropriations
in the FY 2027 Adopted Budget:
Additional reappropriations are recommended when project expenditures originally
anticipated to occur before the end of FY 2026 will now instead occur in FY 2027.
Similarly, revenue previously anticipated to be collected in FY 2026 will be
reappropriated to FY 2027 to align with actual collections.
Downward adjustments to reappropriations are recommended when expenses are no
longer anticipated to occur in FY 2027 and funding was previously reappropriated in the
budget document to FY 2027. If expenses were realized in FY 2026, an adjustment to
reduce the budgeted reappropriation is needed as the activity no longer needs funding
in FY 2027. The downward reappropriation of revenue is treated similarly; an
adjustment to reduce the reappropriated revenue is needed to align collections in the
appropriate fiscal year.
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Table 1 summarizes the recommended capital project adjustments by fund as detailed in
Attachment B. These Fiscal Year 2027 adjustment amounts represent the final step in the City
Council-approved change to the reappropriation process. There are sufficient expenditure
savings in Fiscal Year 2026 to support all recommended adjustments.
Table 1: Year-End Capital Project Reappropriation Summary – By Fund
Fund Number of
Projects
Recommended Expense
Reappropriation
Adjustment
Recommended Revenue
Reappropriation
Adjustment
Capital Improvement Fund (471)68 $17,569,946 $9,008,780
Cubberley Infrastructure Fund (472)2 $459,033 -
Airport Fund (530)2 $85,000 $2,532,103
Electric Fund (523)11 ($82,328)-
Fiber Optics Fund (533)1 $45,457 -
Gas Fund (524)1 $437,750 ($220,550)
Stormwater Management Fund (528)6 ($137,394)($82,982)
Wastewater Collection Fund (527)1 $117,450 -
Wastewater Treatment Fund (526)7 $6,080,473 $82,062,817
Water Fund (522)1 $72,080 -
Technology Fund (682)4 ($121,596)-
Vehicle Replacement and Maintenance Fund
(681)
6 $3,960,298 -
Total All Funds 110 $28,486,170 $93,300,168
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Meadow/Charleston and Churchill). In the Vehicle Replacement and Maintenance Fund,
adjustments of $4.0 million reflect multi-year delivery lead times for fleet equipment ordered in
prior years. Net downward adjustments in the Electric Fund (-$82,328) and Stormwater
Management Fund (-$137,394) reflect projects where construction was completed ahead of
schedule in FY 2026.
FISCAL/RESOURCE IMPACT
STAKEHOLDER ENGAGEMENT
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ENVIRONMENTAL REVIEW
ATTACHMENTS
APPROVED BY:
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FY 2024 TO FY 2025 OPERATING BUDGET REAPPROPRIATIONS ATTACHMENT A
Fund
Number Fund Name Department Title Description
Recommended
Revenue
Appropriation
Recommended
Expense
Appropriation
102 General Fund City Manager's Office/Non-
Departmental
Race and Equity Fund This action reappropriates the remaining funds of the original $500k
appropriated for the advancement of racial equity and the associated
workplan. The City is continuing efforts to educate and train staff, Council,
and Boards and Commission members on Diversity, Equity, Inclusion, and
Belonging (DEIB) topics.
$ - $ 194,285
102 General Fund Human Resources Training Programs This request seeks to reappropriate $50,000 in remaining Contract Services
funding from HR’s General Fund Training Programs cost center
(13040002/31070).
$ - $ 50,000
102 General Fund Human Resources/Non-
Departmental
Childcare Assistance Program HR plans to reallocate remaining unused funds in FY26 to FY27 ($55k) and
together with the FY27 request of 245K, this will bring total up to 300K in
FY27. Extending pilot program into year 4 then will coordinate with CMO to
gauge ongoing feasibility and interest for FY28 and beyond.
$ - $ 55,000
102 General Fund Human Resources/Non-
Departmental
Management Development Funds This request seeks to reappropriate a portion of remaining FY26
Management Development funds to support organizational development
and training contracts. After accounting for existing encumbrances, HR
anticipates that $150,000 will be sufficient to cover ongoing and
anticipated coaching, leadership development, and training needs. A
similar reappropriation request was approved and processed in the prior
fiscal year (2026-000300).
$ - $ 150,000
102 General Fund Public Works SFO GBAS & Airplane Noise Reappropriating the funds from FY26 to FY27. Continue engagement with
San Francisco Airport on SFO's Ground Based Augmentation System (GBAS)
project and other potential opportunities to decrease noise impacts
(formerly CHS11). This action reappropriates $75,000 that had been
allocated in the FY 2026 Adopted Budget for an on-call professional
services contract that will support work tasks resulting from engagement
initiated but not completed in FY 2026 with San Francisco International
Airport (SFO) on the Ground Based Augmentation System (GBAS) project
and other potential actions to decrease airplane noise.
$ - $ 75,000
102 General Fund Community Services Roth Building Maintenance This action reappropriates $30,000 for FY26 and FY27 Roth Building
Maintenance.
$ - $ 30,000
102 General Fund Library AMH maintenance service contract This action reappropriates $80k for Automated Materials Handling System
(AMHS) maintenance service contract with Lyngsoe for the Library's AMH
machines located at Mitchell Park, Rinconada, and Children's library
branches.
$ - $ 80,000
102 General Fund Police Track Watch This action reappropriates $213,539 in expected revenue to align budget
with actual billing per cost sharing agreement with PAUSD.
$ 213,539
213,539$ 634,285$ Total General Fund Reappropriation
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Reappropriation Requests
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FY 2024 TO FY 2025 OPERATING BUDGET REAPPROPRIATIONS ATTACHMENT A
Fund
Number Fund Name Department Title Description
Recommended
Revenue
Appropriation
Recommended
Expense
Appropriation
523 Electric Fund Utilities CRM Platform This action reappropriates $467,646 from FY26 budget to the FY27 budget
for a customer relationship management (CRM) platform to succeed EECP.
The previous contract expired on 4/30/2025.
$ 387,646
524 Gas Fund Utilities CRM Platform This action reappropriates $467,646 from FY26 budget to the FY27 budget
for a customer relationship management (CRM) platform to succeed EECP.
The previous contract expired on 4/30/2025.
$ 80,000
523 Electric Fund Utilities Multi-family EV 1.0 and 2.0 (LCFS)This action reappropriates $2,889,889 from the FY26 budget to the FY27
budget for EV programs to reserve funding for the multi-family EV 1.0 and
2.0 programs.
$ 2,889,889
524 Gas Fund Utilities Affordable Housing Grant and
Advanced HVAC
This action reappropriates $7,911,000 from the FY26 budget to the FY27
budget for Electrification and HVAC programs to reserve funding for the
Cap and Trade programs.
$ 7,911,000
524 Gas Fund Utilities Commercial HVAC Pilot and Block
Electrification
This action reappropriates $551,050 from the FY26 budget to the FY27
budget for Electrification and HVAC programs to support the S/CAP
initiatives.
$ 551,050
524 Gas Fund Utilities PAUSD electrification projects This action reappropriates $610,000 to cover performance payments and
customer rebates for the PAUSD electrification projects, funded by Gas Cap
& Trade. Anticipated project completion by 12/31/2026.
$ 610,000
528 Stormwater
Management Fund
Public Works ESD - for GSI Parks Maintenance This action reappropriates $118,000.00 from the operating budget, from CC
50070311 and GL 31990, from FY26 to FY27 for Green Stormwater
Infrastructure maintenance in the right-of-way as required by the
Municipal Regional Stormwater Permit, NPDES Permit #CAS612008.
$ 118,000
- 12,547,585.00
248 SLES Fund Police BSCC-ORT Organized Retail Theft grant provided by State of California Board of State
and Community Corrections awarded in FY24 and expires in FY28. This is
ongoing work patrolling retail districts, investigating related crimes,
conducting directed enforcement operations, along with any related court
time.
$ 2,603,390 $ 2,329,082
248 SLES Fund Police COPS Grant This action reappropriates $72,558 from FY26 to FY27 in the Supplemental
Law Enforcement Services Fund (Fund 248) to support the commissioning
of and moving into the new Public Safety Building, funded by the Citizens
Option for Public Safety (COPS) state allocation. Work includes contract
services ($53,458), non-capital tools and equipment ($7,100), and office
machinery and furniture ($12,000).
$ 72,558
2,603,390 2,401,640
Total Enterprise Fund Reappropriation
Total Special Revenue Fund Reappropriation
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FY 2026 TO FY 2027 CAPITAL BUDGET REAPPROPRIATIONS ATTACHMENT B
Fund Number and Name Project Title Proj. No.Adopted Exp Reapp Final Exp Reapp Total Exp Reapp Adopted Rev Reapp Final Rev Reapp Total Rev Reapp
471-Capital Improvement Fund Americans With Disabilities Act Compliance PF-93009 450,000 450,000 - - -
Animal Shelter Renovation PE-19002 2,145,239 353,350 2,498,589 - - -
Art In Public Spaces AC-86017 1,745,398 (39,340) 1,706,058 - - -
Athletic Courts Resurfacing PG-06001 - 118,191 118,191 - - -
Baylands Boardwalk Piling Repair PE-24000 - 43,938 43,938 - - -
Baylands Comprehensive Conservation Plan PG-17000 43,000 25,100 68,100 - - -
Baylands Interpretive Signage Program OS-24001 34,163 13,179 47,342 34,163 7,982 42,145
Baylands Levee Repair for Public Safety Access OS-09002 29,210 1,477 30,687 - - -
Benches, Signage, Walkways, Perimeter Landscaping, and Site PG-06003 - 183,455 183,455 - - -
Bicycle and Pedestrian Transportation Plan Implementation PL-04010 435,000 1,623,811 2,058,811 86,300 - 86,300
Boulware Park Improvements PE-17005 - 155,977 155,977 - 13,796 13,796
Building Systems Improvements PF-01003 246,030 327,627 573,657 - - -
California Avenue District Gateway Signs PE-17004 - 28,647 28,647 - - -
California Avenue Parking District Parking Improvements PF-25000 50,000 (4,000) 46,000 50,000 - 50,000
California Avenue Streetscape Update PL-23000 241,000 46,167 287,167 - - -
Charging Stations Repair and Maintenance PF-26001 92,349 (15,040) 77,309 - - -
Charleston Road/Alma Street Railroad Crossing Safety Improve PL-25002 682,400 29,253 711,653 713,248 289,363 1,002,611
Children's Theatre Facility Upgrade/Repair AC-28002 125,000 125,000 - - -
Churchill Avenue Enhanced Bikeway PL-14000 256,000 138,358 394,358 1,878,328 621,672 2,500,000
Churchill Avenue Rail Grade Separation and Safety Improvemen PL-24001 658,835 1,180,851 1,839,686 2,000,000 71,936 2,071,936
City Bridge Improvements PE-20001 - 1,570,094 1,570,094 - - -
City Hall Space Planning PE-19000 - 16,400 16,400 - - -
Civic Center Electrical Upgrade & EV Charger Installation PE-17010 1,351,085 1,351,085 174,000 - 174,000
Civic Center Fire Life Safety Upgrades PE-18016 324,997 (6) 324,991 - - -
Civic Center Waterproofing Study and Repairs PE-15020 941,037 941,037 - - -
Congestion Relief Projects PL-25001 400,000 68,436 468,436 400,000 100,000 500,000
Curb and Gutter Repairs PO-12001 - 17,901 17,901 - - -
Downtown Automated Parking Guidance Systems, Access Controls PL-15002 32,898 - 32,898 - - -
El Camino Park Turf Replacement PG-24000 - 1,748 1,748 - - -
Electric Charger Infrastructure Installation PF-23000 436,857 2,400 439,257 - - -
Electrification of City Facilities PE-24001 626,179 262,522 888,701 - - -
Embarcadero Road Improvements (Alma Street to Emerson Avenue TR-26000 - 1,164,408 1,164,408 - 2,886,000 2,886,000
Emergency Gate at Foothill and Miranda PE-26003 50,000 50,000 - - -
Fire Equipment Replacement FD-25000 279,908 (118,117) 161,791 262,557 (262,557) -
Fire Station 4 Replacement PE-18004 2,349,248 157,062 2,506,310 - - -
Fire Training Facility Replacement FD-24000 49,988 49,988 - - -
Foothills Nature Preserve Boronda Lake Dock Replacement OS-18000 - 18,794 18,794 - - -
Foothills Nature Preserve Dam Seepage Investigation and Repa PE-20000 100,144 18,005 118,149 - - -
Foothills Nature Preserve Improvements PE-21000 494,646 494,646 - - -
Golf Course Net and Turf Replacement PG-18000 - (14,970) (14,970) - - -
Heritage Park Site Amenities Replacement PG-21000 77,586 (7,070) 70,516 - - -
Homekey Facilities PE-24005 - 2,327,776 2,327,776 - - -
JMZ Renovation AC-18001 185,000 80,130 265,130 - - -
Johnson Park Renovation PE-21002 25,000 25,000 50,000 - - -
Library Automated Material Handling LB-21000 329,248 329,248 - - -
Library Furniture Replacements LB-26001 - 792 792 - - -
Lucie Stern Community Theater Mechanical Equipment Replaceme PE-24002 1,949,713 250,000 2,199,713 - - -
Lucie Stern Community Theatre Fire Curtain AC-24001 200,000 200,000 - - -
Lucie Stern Community Theatre Theatrical and House Lighting PE-24003 - 276,347 276,347 - - -
Meadow Drive and Charleston Road Rail Grade Separation and S PL-24000 1,593,463 1,216,146 2,809,609 1,197,619 2,497,287 3,694,906
Mitchell Park Community Center Audio Visual Equipment AC-26000 340,000 340,000 - - -
Mitchell Park Library Repair PE-24006 50,000 (15,550) 34,450 - - -
Municipal Service Center Lighting, Mechanical, and Electrica PF-16006 6,165,504 200,000 6,365,504 - - -
New California Avenue Area Parking Garage PE-18000 997,012 997,012 - - -
Expenses Revenues
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FY 2026 TO FY 2027 CAPITAL BUDGET REAPPROPRIATIONS ATTACHMENT B
Fund Number and Name Project Title Proj. No.Adopted Exp Reapp Final Exp Reapp Total Exp Reapp Adopted Rev Reapp Final Rev Reapp Total Rev Reapp
Expenses Revenues
471-Capital Improvement Fund New Downtown Parking Garage PE-15007 12,896,981 159,110 13,056,091 12,896,981 - 12,896,981
New Public Safety Building PE-15001 978,087 88,451 1,066,538 - - -
Newell Road/San Francisquito Creek Bridge Replacement PE-12011 976,810 46,989 1,023,799 10,268,732 261,799 10,530,531
Off-Road Pathway Resurfacing And Repair OS-09001 38,000 41,361 79,361 - - -
Open Space Lakes And Pond Maintenance OS-00002 - 24,248 24,248 - - -
Open Space Trails and Amenities OS-00001 - 113,252 113,252 - - -
PAAC Auditorium Audio Visual Equipment and Facility Public A AC-26001 165,506 (445) 165,061 - - -
Palo Alto Art Center Ceramics Equipment AC-28003 68,527 (68,527) - - - -
Park and Open Space Emergency Repairs PG-09002 43,779 (43,779) - - - -
Park Restroom Installation PG-19000 319,704 105,102 424,806 319,704 - 319,704
Parking District Implementation PL-15003 193,900 193,900 - - -
Parking Infrastructure Improvements PL-12000 200,000 352,203 552,203 - 415,035 415,035
Performing Arts Venues Seat Replacement AC-18000 108,023 11,152 119,175 - - -
Railroad Grade Separation and Safety Improvements PL-17001 1,999,819 93,844 2,093,663 2,093,843 - 2,093,843
Ramona Street Streetscape Update PE-26002 139,328 30,000 169,328 - - -
Ramos Park Improvements PG-14000 - 60,000 60,000 - - -
Rinconada Park Improvements PE-08001 101,150 6,426 107,576 - - -
Rinconada Pool Family Changing Room PE-24004 1,158,326 3,168 1,161,494 - - -
Robles Park Improvements PE-18015 891,958 891,958 - - -
Roofing Replacement PF-00006 300,000 300,000 - - -
Roth Building Rehabilitation Phase 1 PF-23001 - 9,808 9,808 - 239,810 239,810
Safe Routes To School PL-00026 - 426,839 426,839 - - -
San Francisquito Creek Joint Powers Authority Ongoing Creek PE-22000 54,521 54,521 - - -
Sidewalk Repairs PO-89003 - 141,379 141,379 - - -
Stanford Palo Alto Community Playing Fields Turf Replacement PG-26000 - 153,630 153,630 - - -
Street Maintenance PE-86070 - 1,804,764 1,804,764 - 17,936 17,936
Traffic Signal and Intelligent Transportation Systems PL-05030 1,350,000 1,367,760 2,717,760 800,000 1,848,721 2,648,721
Tree Grate Alternatives PF-26000 - 100,000 100,000 - - -
University Avenue Parking Improvements PF-14003 103,527 (1,038) 102,489 - - -
University Avenue Streetscape Update PE-21004 1,946,000 814,999 2,760,999 - - -
471-Capital Improvement Fund Total 50,617,083 17,569,946 68,187,029 33,175,475 9,008,780 42,184,255
472-Cubberley Fund Cubberley Community Center Redevelopment CB-26000 305,061 253,470 558,531 - - -
Cubberley Repairs CB-17001 100,000 205,563 305,563 - - -
472-Cubberley Fund Total 405,061 459,033 864,094 - - -
530-Airport Fund Airport Layout Plan AP-21000 - - - - 30,075 30,075
Automated Weather Observation System (AWOS)AP-19000 - 85,000 85,000 - 2,502,028 2,502,028
530-Airport Fund Total - 85,000 85,000 - 2,532,103 2,532,103
523-Electric Fund Colorado 60kV Bus Rebuild EL-17002 3,498,849 (513,249) 2,985,600 - - -
Colorado Transformer #3 Replacement EL-19001 3,780,000 28,541 3,808,541 - - -
East Meadow Substation 4 to 12kV Conversion EL-27004 - 9,892 9,892 - - -
Electric Customer Connections EL-89028 - 372,365 372,365 - - -
Electric Utility Geographic Information System EL-02011 - 170,390 170,390 - - -
Foothills Rebuild (Fire Mitigation)EL-21001 - 80,653 80,653 - - -
Grid Modernization 12kV Distribution Residential Rebuild EL-24000 12,762,653 - 12,762,653 39,240,000 - 39,240,000
Hanover Substation Upgrade Project EL-24001 2,957,140 - 2,957,140 - - -
Inter-substation Line Protection Relay EL-17005 645,333 (63,592) 581,741 - - -
Smart Grid Technology Installation EL-11014 268,098 (194,972) 73,126 - - -
Substation Facility Improvements EL-89044 974,866 (24,151) 950,715 - - -
Substation Protection Improvements EL-89038 - 246,984 246,984 - - -
Underground System Rebuild EL-16001 612,910 (195,189) 417,721 - - -
523-Electric Fund Total 25,499,849 (82,328) 25,417,521 39,240,000 - 39,240,000
533-Fiber Optics Fund Fiber Optics Customer Connections FO-10000 - 45,457 45,457 - - -
Fiber Optics Network - System Improvements FO-10001 43,310 - 43,310 - - -
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Attachment B - FY 2026 to FY 2027 Capital Reappropriation Requests
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FY 2026 TO FY 2027 CAPITAL BUDGET REAPPROPRIATIONS ATTACHMENT B
Fund Number and Name Project Title Proj. No.Adopted Exp Reapp Final Exp Reapp Total Exp Reapp Adopted Rev Reapp Final Rev Reapp Total Rev Reapp
Expenses Revenues
533-Fiber Optics Fund Fiber Optics Network - System Rebuild FO-16000 2,948,211 - 2,948,211 - - -
Fiber-to-the-Premises (FTTP)FO-24000 7,501,748 - 7,501,748 - - -
533-Fiber Optics Fund Total 10,493,269 45,457 10,538,726 - - -
524-Gas Fund Gas Distribution System Improvements GS-11002 758,910 - 758,910 - - -
Gas Line Repair at Arastradero Creek GS-25001 143,916 - 143,916 - - -
Gas Main Replacement - Project 25 GS-15000 5,138,088 437,750 5,575,838 7,500,000 (220,550) 7,279,450
Gas Main Replacement - Project 26 GS-16000 2,002,190 - 2,002,190 - - -
Gas Meters and Regulators GS-80019 198,910 - 198,910 - - -
524-Gas Fund Total 8,242,014 437,750 8,679,764 7,500,000 (220,550) 7,279,450
528-Stormwater Fund Center Drive Capacity Upgrades SD-26001 65,200 3,087 68,287 - - -
Corporation Way System Upgrades and Pump Station SD-21000 201,333 (1,110) 200,223 - - -
Green Stormwater Infrastructure SD-22001 1,030,250 (410,579) 619,671 1,030,250 (82,982) 947,268
Hamilton Avenue System Upgrades SD-25000 98,292 (41,195) 57,097 - - -
Storm Drainage System Replacement And Rehabilitation SD-06101 882,265 308,594 1,190,859 - - -
West Bayshore Road Pump Station SD-20000 - 3,809 3,809 - - -
West Bayshore Road Trunk Line Improvements SD-23000 19,236 - 19,236 - - -
528-Stormwater Fund Total 2,296,576 (137,394) 2,159,182 1,030,250 (82,982) 947,268
527-Wastewater Collection Fund Sewer Lateral/Manhole Rehabilitation and Replacement WC-99013 927,852 - 927,852 - - -
Wastewater System Improvements WC-15002 - 117,450 117,450 - - -
Wastewater Collection System Rehabilitation Proj 32 WC-20000 334,530 - 334,530 - - -
527-Wastewater Collection Fund Total 1,262,382 117,450 1,379,832 - - -
526-Wastewater Treatment Fund Headworks Facility Replacement WQ-16002 2,988,974 150,000 3,138,974 2,988,974 1,768,026 4,757,000
Horizontal Levee Pilot WQ-22001 - 93,657 93,657 - - -
Joint Intercepting Sewer Rehabilitation (Phase 1)WQ-24000 - - - - 1,164,062 1,164,062
Local Advanced Water Purification System WQ-19003 1,000,000 (90,523) 909,477 1,000,000 36,940,914 37,940,914
New Laboratory And Environmental Services Building WQ-14002 15,166,602 817,460 15,984,062 15,166,602 1,243,398 16,410,000
Outfall Line Construction WQ-19000 10,593,300 - 10,593,300 10,582,800 - 10,582,800
Plant Repair, Retrofit, and Equipment Replacement WQ-19002 - 5,109,879 5,109,879 - - -
Secondary Treatment Upgrades WQ-19001 1,112,320 - 1,112,320 1,112,320 40,946,417 42,058,737
526-Wastewater Treatment Fund Total 30,861,196 6,080,473 36,941,669 30,850,696 82,062,817 112,913,513
522-Water Fund Water Distribution System Improvements WS-11003 96,300 - 96,300 - - -
Water Main Replacement - Project 30 WS-16001 4,366,839 - 4,366,839 - - -
Water Meters WS-80015 154,630 - 154,630 - - -
Water Service and Hydrant Replacement WS-80014 50,000 - 50,000 - - -
Water System Supply Improvements WS-11004 1,061,540 - 1,061,540 - - -
Water Tank Seismic Upgrade and Rehabilitation WS-09000 100,000 - 100,000 - - -
Water, Gas, Wastewater Utility GIS Data WS-02014 - 72,080 72,080 - - -
522-Water Fund Total 5,829,309 72,080 5,901,389 - - -
682-Technology Fund City Council Chambers Upgrade TE-19001 1,641,440 (10,192) 1,631,248 - - -
Computer Aided Dispatch (CAD) Upgrade TE-23000 126,841 (41,153) 85,688 - - -
Enterprise Resource Planning Upgrade TE-19000 894,907 (33,470) 861,437 - - -
Infrastructure Management System TE-13004 365,281 (36,780) 328,501 - - -
IT Data Center Upgrade TE-25000 980,000 - 980,000 - - -
682-Technology Fund Total 4,008,469 (121,596) 3,886,873 - - -
681-Vehicle Fund Emergency Repair and Replacement VR-15001 - 51,929 51,929 - - -
FY 2020 Scheduled Vehicle and Equipment Replacement VR-20000 - 94,994 94,994 - - -
FY 2023 Scheduled Vehicle and Equipment Replacement VR-23000 - 168,696 168,696 - - -
FY 2024 Scheduled Vehicle and Equipment Replacement VR-24000 1,987,783 202,650 2,190,433 - - -
FY 2025 Scheduled Vehicle and Equipment Replacement VR-25000 625,812 2,180,679 2,806,491 - - -
FY 2026 Scheduled Vehicle and Equipment Replacement VR-26000 - 1,261,350 1,261,350 - - -
681-Vehicle Fund Total 2,613,595 3,960,298 6,573,893 - - -
Grand Total 142,128,803 28,486,170 170,614,973 111,796,421 93,300,168 205,096,589
Item 8
Attachment B - FY 2026 to FY 2027 Capital Reappropriation Requests
Item 8: Staff Report Pg. 11 Packet Pg. 105 of 241
CAPITAL IMPROVEMENT PROGRAM FY 2027 TECHNICAL CLEAN-UP ACTIONS ATTACHMENT C
Fund Name Department Project No.Project Title Description Revenue Expense
Capital Improvement Fund Community Services AC-28003 Palo Alto Art Center Ceramics Equipment This project was over-expended in FY 2026 and the
budget increased by $14,988 as part of the FY 2026
Year-End process. A corresponding decrease is
recommended in FY 2027 in order to maintain the
total project budget of $188,000 over the life of the
project.
$ (14,988)
Capital Improvement Fund Public Works PE-19002 Animal Shelter Renovation
Staff recommends revising the project's FY 2027
revenue and expenditure budgets to reflect a
transfer of $297,534 from the Public Services
Donation Fund consisting of prior years' donations
from the George F. Goerl 2018 Revocable Trust
intended to benefit the Palo Alto Animal Shelter.
The transfer is recommended to enable compliance
with the City Fire Marshall's recommendation to
increase the scope of the project by installing
sprinklers throughout the facility for the safety of
employees and animals.
$ 297,534 $ 297,534
Public Services Donation Fund Non-Departmental N/A N/A
Staff recommends revising the Animal Shelter
Renovation project's FY 2027 revenue and
expenditure budgets to reflect a transfer of
$297,534 from the Public Services Donation Fund
consisting of prior years' donations from the George
F. Goerl 2018 Revocable Trust intended to benefit
the Palo Alto Animal Shelter. The transfer is
recommended to enable compliance with the City
Fire Marshall's recommendation to increase the
scope of the project by installing sprinklers
throughout the facility for the safety of employees
and animals.
$ 297,534
Item 8
Attachment C - Capital Improvement Plan FY 2027
Technical Clean-up Actions
Item 8: Staff Report Pg. 12 Packet Pg. 106 of 241
City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Transportation
Meeting Date: October 5, 2026
Report #:2608-6615
TITLE
Approval of Professional Services Contract Number C27196802 with BKF Engineers for the
Design of Four Quadrant Gate Systems Improvements required for Quiet Zone Railroad
Crossings at Churchill Avenue, Meadow Drive, and Charleston Road in an Amount Not to Exceed
$1,294,522 for a term ending December 31, 2029; CEQA status: Categorically Exempt, CEQA
Guidelines Section 15301.
RECOMMENDATION
Staff recommends the Council approve and authorize the City Manager or their designee to
execute Contract No. C27196802 (Attachment A), with BKF Engineers, to prepare the final
design documents including Plans, Specifications and Cost Estimates for the design of Quiet
Zone Improvements, which primarily includes four quadrant gate systems, at Churchill Avenue,
Meadow Drive, and Charleston Road for the total amount not-to-exceed $1,294,522 and a term
ending December 31, 2029.
EXECUTIVE SUMMARY
Authorization to execute a professional services agreement with BKF Engineers will enable
preparation of the final design and supporting documentation for construction of the quiet
zone improvements along the Caltrain corridor at three of the four train crossings.
Implementation of Quiet Zones along the train corridor is a City Council priority to address
longstanding community concerns regarding train horn noise. In 2025, the Quiet Zone Study
recommended installation of four-quadrant gate systems at Churchill Avenue, Meadow Drive,
and Charleston Road crossings. The City Council approved the conceptual plan for these
improvements on November 10, 20251, and further prioritized implementation of Quiet Zones
during its May 11, 20262, discussion of the Churchill Avenue crossing.
1 City Council, November 10, 2025; Item 7, Action Item, SR# 2509-5227
2 City Council, May 11, 2026; Item 8, Action Item, SR# 2604-6320
https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=88038&dbid=0&repo=PaloAlto
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The Quiet Zones improvements will also serve as interim safety improvements until the planned
grade separation projects are constructed. Implementation will require close coordination with
Caltrain, the Federal Railroad Administration (FRA), and the California Public Utilities
Commission (CPUC) to obtain the necessary approvals and permits.
BACKGROUND
1. Diagnostic
Review with
FRA & CPUC
2. Design of
Supplemental
Safety
Measures
(SSMs)
3.Request to
Alter Rail
Crossing to
CPUC (GO-88B)
4. Notice of
Intent (NOI) to
FRA & CPUC
5. Review &
Comment on
SSMs by FRA
6. Installation
of SSMs
7. Field Review
of SSMs &
Update of
FRA/CPUC
Inventory
8. Notice of
Establishment
(NOE) to FRA,
CPUC, JPB &
UP
9. Operators
Silence Routine
Horns
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The Palo Alto Council Priority affirmed implementation of quiet zones as a Council Priority
under Public Safety, Wellness and Belonging. On March 4, 2024, City Council approved an
agreement with Kimley Horn and Associates for performing a Quiet Zone Study (Staff
Report 2311-2269)5.
6 and September 16, 20257 The project received positive feedback from
these committees and Rail Committee unanimously recommended that City Council direct
staff to proceed with design of improvements.
5 City Council meeting, March 4, 2024, Consent Item SR# 2311-2269
6 Rail Committee, August 20, 2024; Item 1, Action Item, SR# 2405-3085
7 Rail Committee, September 16, 2025; Item 2, Action Item, SR# 2507-4951
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On November 10, 2025, City Council approved the conceptual plans and directed Staff to
initiate the design and review process for establishing Quiet Zone at the three crossings of
Churchill Avenue Meadow Drive, and Charleston Road crossing.11 The Office of Transportation
staff is now progressing with design of improvements required to implement quiet zone at
these crossings. These efforts relate to Step 2: Design of Supplementary Safety Measures
(SSM’s) of the flowchart presented above.
ANALYSIS
Summary of Request for Proposal
Proposal Description Quiet Zone Study RFP No. 189371
Proposed Length of Project 36 months
Number of Proposal Packages Downloaded 44
Total Days to Respond to Proposal 42
Pre-Proposal Meeting No
Pre-Proposal Meeting Date NA
Number of Proposals Received 2
Proposal Price Range $1.06M - $1.21M
Public Link to Solicitation https://procurement.opengov.com/portal/palo-
alto-ca/projects/260942
11 City Council, November 10, 2025; Item 7, Action Item, SR# 2509-5227
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Staff believes that the City only received two proposals for a number of reasons. First, the
highly competitive environment and the specialized nature of the study requires experience
with operating railroads, and working with Federal and State agencies - means that there are
limited subject matter experts available to perform such studies. Staff reached out to other
potential proposers for feedback, and some indicated that they did not submit a proposal due
to existing workload commitments and scheduling constraints. Potential proposers also
indicated that they only propose if they know that their service can deliver the high standards
of quality expected by the City of Palo Alto.
FISCAL/RESOURCE IMPACT
STAKEHOLDER ENGAGEMENT
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presented to Transportation Connect. These meetings provided opportunities for
stakeholders and public review and comment. Additionally, the project scope includes
outreach to the community and various committees involved with rail and transportation
related issues during the next steps of design and construction.
ENVIRONMENTAL REVIEW
ATTACHMENTS
APPROVED BY:
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CITY OF PALO ALTO CONTRACT NO. C27196802
AGREEMENT FOR PROFESSIONAL SERVICES
BETWEEN THE CITY OF PALO ALTO AND BKF ENGINEERS
This Agreement for Professional Services (this “Agreement”) is entered into as of the 28th day of
September, 2026 (the “Effective Date”), by and between the CITY OF PALO ALTO, a California
chartered municipal corporation (“CITY”), and BKF ENGINEERS, a California corporation,
located at 2100 Franklin Street, Suite 4C, Oakland CA 94612 (“CONSULTANT”).
The following recitals are a substantive portion of this Agreement and are fully incorporated herein
by this reference:
RECITALS
A. CITY intends to design the improvements at Churchill Avenue, Meadow Drive, and
Charleston Road crossings (the “Project”) and desires to engage a consultant to prepare plans,
specifications, cost estimates and support city in establishing quiet zone along Caltrain corridor in
in Palo Alto 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
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
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Transportation Engineers
Contract No. C27196802
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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 for four year(s) be from the effective date of this agreement
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 One Million One
Hundred Seventy-Six Thousand, Eight Hundred and Thirty-Eight, Dollars Dollars
($1,176,838). 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 One Hundred Seventeen Thousand, Six Hundred
Eighty-Four Dollars ($117,684.00) for the performance of Additional Services (as
defined below). The total compensation for performance of the Services, Additional
Services and any reimbursable expenses specified in Exhibit C, shall not exceed One
Million, Two Hundred Ninety-Four Thousand, Five Hundred Twenty-Two Dollars
($1,294,522.00), as detailed in Exhibit C.
“Additional Services” means any work that is determined by CITY to be necessary for the
proper completion of the Project, but which is not included within the Scope of Services
described at Exhibit A. CITY may elect to, but is not required to, authorize Additional
Services up to the maximum amount of compensation set forth for Additional Services in
this Section 4. CONSULTANT shall provide Additional Services only by advanced,
written authorization from CITY as detailed in this Section. Additional Services, if any,
shall be authorized by CITY with a Task Order assigned and authorized by CITY’s Project
Manager, as identified in Section 13 (Project Management). Each Task Order shall be in
substantially the same form as Exhibit A-1, entitled “PROFESSIONAL SERVICES TASK
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Transportation Engineers
Contract No. C27196802
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ORDER”. Each Task Order shall contain a specific scope of services, schedule of
performance and maximum compensation amount, in accordance with the provisions of
this Agreement. Compensation for Additional Services shall be specified by CITY in the
Task Order, based on whichever is lowest: the compensation structure set forth in Exhibit
C, the hourly rates set forth in Exhibit C-1, or a negotiated lump sum.
To accept a Task Order, CONSULTANT shall sign the Task Order and return it to CITY’s
Project Manager within the time specified by the Project Manager, and upon authorization
by CITY (defined as counter-signature by the CITY Project Manager), the fully executed
Task Order shall become part of this Agreement. The cumulative total compensation to
CONSULTANT for all Task Orders authorized under this Agreement shall not exceed the
amount of compensation set forth for Additional Services in this Section 4.
CONSULTANT shall only be compensated for Additional Services performed under an
authorized Task Order and only up to the maximum amount of compensation set forth for
Additional Services in this Section 4. Performance of and payment for any Additional
Services are subject to all requirements and restrictions in this Agreement.
SECTION 5. INVOICES. In order to request payment, CONSULTANT shall submit monthly
invoices to the CITY describing the Services performed and the applicable charges (including, if
applicable, an identification of personnel who performed the Services, hours worked, hourly rates,
and reimbursable expenses), based upon Exhibit C or, as applicable, CONSULTANT’s schedule
of rates set forth in Exhibit C-1. If applicable, the invoice shall also describe the percentage of
completion of each task. The information in CONSULTANT’s invoices shall be subject to
verification by CITY. CONSULTANT shall send all invoices to CITY’s Project Manager at the
address specified in Section 13 (Project Management) below. CITY will generally process and
pay invoices within thirty (30) days of receipt of an acceptable invoice.
SECTION 6. QUALIFICATIONS/STANDARD OF CARE. All Services shall be performed
by CONSULTANT or under CONSULTANT’s supervision. CONSULTANT represents that it,
its employees and subcontractors, if any, possess the professional and technical personnel
necessary to perform the Services required by this Agreement and that the personnel have
sufficient skill and experience to perform the Services assigned to them. CONSULTANT
represents that it, its employees and subcontractors, if any, have and shall maintain during the term
of this Agreement all licenses, permits, qualifications, insurance and approvals of whatever nature
that are legally required to perform the Services. All Services to be furnished by CONSULTANT
under this Agreement shall meet the professional standard and quality that prevail among
professionals in the same discipline and of similar knowledge and skill engaged in related work
throughout California under the same or similar circumstances.
SECTION 7. COMPLIANCE WITH LAWS. CONSULTANT shall keep itself informed of
and in compliance with all federal, state and local laws, ordinances, regulations, and orders that
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
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Transportation Engineers
Contract No. C27196802
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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.
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:
RSE Corporation
1820 Gateway Dr.
Suite 200
San Mateo, CA 94404
Hexagon Transportation Consultants
4 North Second Street, Suite 400
San Jose, CA 95113
Callander Associates
2025 Gateway Place, Suite 285
San Jose, CA 95110
Bess Utility Solutions (Supplier)
2463 Tripaldi Way
Hayward, CA 94545
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Potholing Contractor TBD
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 Jason Yee, email:
jyee@bkf.com, telephone: (650) 482-6434 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 Ripon Bhatia, Senior Engineer, Office of Transportation, 250
Hamilton Avenue, Palo Alto, CA, 94301, Telephone: (650) 329-2269.. 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)
years from the date of final payment, CONSULTANT’s records pertaining to matters covered by
this Agreement, including without limitation records demonstrating compliance with the
requirements of Section 10 (Independent Contractor). CONSULTANT further agrees to maintain
and retain accurate books and records in accordance with generally accepted accounting principles
for at least four (4) years after the expiration or earlier termination of this Agreement or the
completion of any audit hereunder, whichever is later.
SECTION 16. INDEMNITY.
16.1. To the fullest extent permitted by law, CONSULTANT shall indemnify, defend
and hold harmless CITY, its Council members, officers, employees and agents (each an
“Indemnified Party”) from and against any and all third party demands, claims, or liability of any
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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.
SECTION 17. WAIVERS. No waiver of a condition or nonperformance of an obligation under
this Agreement is effective unless it is in writing in accordance with Section 29.4 of this
Agreement. No delay or failure to require performance of any provision of this Agreement shall
constitute a waiver of that provision as to that or any other instance. Any waiver granted shall
apply solely to the specific instance expressly stated. No single or partial exercise of any right or
remedy will preclude any other or further exercise of any right or remedy.
SECTION 18. INSURANCE.
18.1. CONSULTANT, at its sole cost and expense, shall obtain and maintain, in
full force and effect during the term of this Agreement, the insurance coverage described in Exhibit
D, entitled “INSURANCE REQUIREMENTS”. CONSULTANT and its contractors, if any, shall
obtain a policy endorsement naming CITY as an additional insured under any general liability or
automobile policy or policies.
18.2. All insurance coverage required hereunder shall be provided through
carriers with AM Best’s Key Rating Guide ratings of A-:VII or higher which are licensed or
authorized to transact insurance business in the State of California. Any and all contractors of
CONSULTANT retained to perform Services under this Agreement will obtain and maintain, in
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
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or in part, or terminate this Agreement, with or without cause, by giving ten (10) days prior written
notice thereof to CONSULTANT. If CONSULTANT fails to perform any of its material
obligations under this Agreement, in addition to all other remedies provided under this Agreement
or at law, the City Manager may terminate this Agreement sooner upon written notice of
termination. Upon receipt of any notice of suspension or termination, CONSULTANT will
discontinue its performance of the Services on the effective date in the notice of suspension or
termination.
19.2. In event of suspension or termination, CONSULTANT will deliver to the
City Manager on or before the effective date in the notice of suspension or termination, any and
all work product, as detailed in Section 14 (Ownership of Materials), whether or not completed,
prepared by CONSULTANT or its contractors, if any, in the performance of this Agreement. Such
work product is the property of CITY, as detailed in Section 14 (Ownership of Materials).
19.3. In event of suspension or termination, CONSULTANT will be paid for the
Services rendered and work products delivered to CITY in accordance with the Scope of Services
up to the effective date in the notice of suspension or termination; provided, however, if this
Agreement is suspended or terminated on account of a default by CONSULTANT, CITY will be
obligated to compensate CONSULTANT only for that portion of CONSULTANT’s Services
provided in material conformity with this Agreement as such determination is made by the City
Manager acting in the reasonable exercise of his/her discretion. The following Sections will
survive any expiration or termination of this Agreement: 14, 15, 16, 17, 19.2, 19.3, 19.4, 20, 25,
27, 28, 29 and 30.
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
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Agreement is an officer or employee of CITY; this provision will be interpreted in accordance
with the applicable provisions of the Palo Alto Municipal Code and the Government Code of the
State of California, as amended from time to time. CONSULTANT agrees to notify CITY if any
conflict arises.
21.3. If the CONSULTANT meets the definition of a “Consultant” as defined by
the Regulations of the Fair Political Practices Commission, CONSULTANT will file the
appropriate financial disclosure documents required by the Palo Alto Municipal Code and the
Political Reform Act of 1974, as amended from time to time.
SECTION 22. NONDISCRIMINATION; COMPLIANCE WITH ADA.
22.1. As set forth in Palo Alto Municipal Code Section 2.30.510, as amended
from time to time, CONSULTANT certifies that in the performance of this Agreement, it shall not
discriminate in the employment of any person due to that person’s race, skin color, gender, gender
identity, age, religion, disability, national origin, ancestry, sexual orientation, pregnancy, genetic
information or condition, housing status, marital status, familial status, weight or height of such
person. CONSULTANT acknowledges that it has read and understands the provisions of Section
2.30.510 of the Palo Alto Municipal Code relating to Nondiscrimination Requirements and the
penalties for violation thereof, and agrees to meet all requirements of Section 2.30.510 pertaining
to nondiscrimination in employment.
22.2. CONSULTANT understands and agrees that pursuant to the Americans
Disabilities Act (“ADA”), programs, services and other activities provided by a public entity to
the public, whether directly or through a contractor or subcontractor, are required to be accessible
to the disabled public. CONSULTANT will provide the Services specified in this Agreement in a
manner that complies with the ADA and any other applicable federal, state and local disability
rights laws and regulations, as amended from time to time. CONSULTANT will not discriminate
against persons with disabilities in the provision of services, benefits or activities provided under
this Agreement.
SECTION 23. ENVIRONMENTALLY PREFERRED PURCHASING AND ZERO
WASTE REQUIREMENTS. CONSULTANT shall comply with the CITY’s Environmentally
Preferred Purchasing policies which are available at CITY’s Purchasing Department, hereby
incorporated by reference and as amended from time to time. CONSULTANT shall comply with
waste reduction, reuse, recycling and disposal requirements of CITY’s Zero Waste Program. Zero
Waste best practices include, first, minimizing and reducing waste; second, reusing waste; and,
third, recycling or composting waste. In particular, CONSULTANT shall comply with the
following Zero Waste requirements:
(a) All printed materials provided by CONSULTANT to CITY generated from a
personal computer and printer including but not limited to, proposals, quotes, invoices, reports,
and public education materials, shall be double-sided and printed on a minimum of 30% or greater
post-consumer content paper, unless otherwise approved by CITY’s Project Manager. Any
submitted materials printed by a professional printing company shall be a minimum of 30% or
greater post-consumer material and printed with vegetable-based inks.
(b) Goods purchased by CONSULTANT on behalf of CITY shall be purchased in
accordance with CITY’s Environmental Purchasing Policy including but not limited to Extended
Producer Responsibility requirements for products and packaging. A copy of this policy is on file
at the Purchasing Department’s office.
(c) Reusable/returnable pallets shall be taken back by CONSULTANT, at no
additional cost to CITY, for reuse or recycling. CONSULTANT shall provide documentation from
the facility accepting the pallets to verify that pallets are not being disposed.
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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 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
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”.
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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
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.
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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
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
EXHIBIT E: DIR REGISTRATION FOR PUBLIC WORKS CONTRACTS
THIS AGREEMENT IS NOT COMPLETE UNLESS ALL SELECTED EXHIBITS
ARE ATTACHED.
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CONTRACT No. C27196802
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
BKF ENGINEERS
Officer 1
By: ________________________________
Name: Tyler Sheldon
Title: Senior Vice President
Officer 2
By: ________________________________
Name: Ryan Esposito
Title: Chief Financial Officer
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EXHIBIT A
SCOPE OF SERVICES
CONSULTANT shall provide the Services detailed in this Exhibit A, entitled “SCOPE OF
SERVICES”. Notwithstanding any provision herein to the contrary, CONSULTANT’s duties and
services described in this Scope of Services shall not include preparing or assisting CITY with any
portion of CITY’s preparation of a request for proposals, request for qualifications, or any other
solicitation regarding a subsequent or additional contract with CITY. CITY shall at all times retain
responsibility for public contracting, including with respect to any subsequent phase of this project.
CONSULTANT’s participation in the planning, discussions, or drawing of project plans or
specifications shall be limited to conceptual, preliminary, or initial plans or specifications.
CONSULTANT shall cooperate with CITY to ensure that all bidders for a subsequent contract on
any subsequent phase of this project have access to the same information, including all conceptual,
preliminary, or initial plans or specifications prepared by CONSULTANT pursuant to this Scope
of Services.
The project scope of work includes the following tasks. This represents a detailed and
recommended scope of work that addresses the requirements below, with a focus on achieving
the objective of implementing a Quiet Zone in Palo Alto.
Task 1: Kick-off meeting and Final Scope/Schedule
The Consultant shall meet with the City Project Manager and key City staff to confirm project
goals, refine and finalize the scope of work, establish a detailed project schedule, and agree upon
communication protocols and a recurring meeting schedule.
• A project coordination meeting will be conducted at least biweekly.
• The Consultant shall submit a final scope and schedule for City approval prior to
proceeding with Task 2.
• Monthly progress reports shall be prepared summarizing scope status, schedule, budget,
and key issues.
Anticipated meetings for this task include:
• One (1) project kick-off meeting
• Monthly coordination meetings with City staff
Task 2: Development of Plans, Specifications, and Engineers Estimate
Consultants shall prepare design plans, specifications, and engineer’s estimates for construction
of the project, based on the approved conceptual design. Improvement plans shall include all
necessary required details prepared by a Registered Professional Civil Engineer with good
standing with the State of California. Proposed improvements may include, but not limited to,
the following types of elements: railroad gate arms and associated equipment, electrical
connections for railroad signals and power connections with railroad cabinets, cabinet
communication interconnect and equipment, site surveying, sidewalk realignment and/or
widening, utility relocations, signage and striping, other rail improvements. Improvement plans
for Railroad signal preemption and electrical connections for railroad signals and power shall be
prepared by a Registered Professional Electrical Engineer with good standing with the State of
California.
Project Specifications shall be consistent with Caltrain and Railroad Standard Specifications.
During plan development, the Consultant shall provide 50%, 90%, and 100% plans and
engineer’s estimates based on the improvement plans and comparable bids for similar projects to
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ensure the project remains within the project budget.
The Consultant Team will be responsible for preparing its own survey and potholing to properly
analyze the project area in order to prepare accurate design plans for construction. The City will
make available any survey and CAD files prepared as part of past projects (if available). This
proposal includes topographic survey to as-built around the proposed gate located at Churchill
and Charleston (if already constructed). A topographic survey of the larger project area at West
Meadow would be similar to the surveys prepared for the Churchill and Charleston Section 130
projects.
Consultant shall include in their fee, time required for meetings with City, Caltrain (JPB), CPUC,
FRA and for plan review at various levels of design submittals and final approval from Caltrain
staff.
Deliverables for Task 2 should include the following items:
• 50% PS&E Design Packages (PDF & 24-inch x 36-inch size plans, up to 10 sets)
• 90% PS&E Design Package (PDF only)
• 100% PS&E Bid Package (24”x36” size plans, 5 sets, soft copy in PDF format and
CADD files)
• Technical Project Specifications (soft copy in PDF format and Microsoft Word
documents)
• 50% and 100% Engineers Cost Estimate
• Procurement of all necessary permits to allow for the construction of the project
Meetings with City and JPB staff for the review of design plans, specifications and construction
staging shall be held on a regular basis and should be included in the Consultant’s fee. The
Consultant shall also serve as a scribe at all meetings and provide the City with meeting notes
and action notes within five (5) business days of each meeting.
The Consultant should plan on the following anticipated meeting schedule to successfully
develop the final project plans:
• Monthly coordination meetings with City, CPUC, FRA, and PCJPB/Caltrain staff
• Diagnostic meeting with all stakeholders (as needed)
• Coordination meetings with City Staff (as needed)
Task 3: Permitting & Reviews
Consultant shall assist in the development and submittal of materials required by outside
agencies necessary for the implementation of the Quiet Zone. Consultant shall prepare and
submit the GO 88-B application to the California Public Utilities Commission (CPUC) on behalf
of the City to seek approval for the alteration of the at-grade crossing.
Services shall include:
• Preparation and submittal of the CPUC General Order (GO) 88-B application
• Coordination with PCJPB/Caltrain to obtain plan review approvals, Site Specific Work
Plan (SSWP) review and approval, permits, and service agreements for work within the
Caltrain right-of-way
• Coordination with the FRA and preparation of all documentation required to obtain final
Quiet Zone authorization
• Preparation of environmental documentation pursuant to the California Environmental
Quality Act (CEQA). The project is anticipated to be categorically exempt; therefore,
preparation and filing of Notices of Exemption are expected. Required filing fees shall
be paid by the Consultant.
Deliverables include:
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• Final signed and approved Construction plan set, technical specifications, and bid
schedule for Caltrain procurement to construct improvements
• Service Agreement with Caltrain to perform this work
• Notice of Intent (NOI) filing
• GO 88-B approval
• Notice of Establishment (NOE)
• Final field review meeting
• Notice of Exemption (CEQA)
Task 4: Community Outreach
The Consultant shall be responsible for the preparation of all outreach materials, including media
ads to be coordinated for publication by the City, meeting notice flyers for mailing to residents
by the City, and community meeting presentations as directed by City staff. The Consultant
shall also serve as a scribe at all community meetings.
The Consultant should plan on the following anticipated meeting schedule to successfully
develop the final project plans:
Attend up to:
• Two (2) community outreach meetings
• One (1) Palo Alto Bicycle Advisory Committee meeting,
• One (1) City-School Traffic Safety Committee meeting
• One (1) PTC meeting
• Two (2) Rail Committee meetings
• One (1) City Council meeting.
The City will assist in securing community and project team meeting facilities. The Consultant
shall be responsible for the preparation of all outreach materials, including media ads to be
coordinated for publication by the City, meeting notice flyers for mailing to residents by the
City, and community meeting presentations. Outreach materials may include existing conditions
aerial/project limits diagram, existing conditions photo boards, rendered site plan, and
improvements image boards to illustrate the potential improvements. The Consultant shall also
serve as a scribe at all community meetings and provide the City with meeting notes and action
notes within five (5) business days of each meeting.
As an optional service, an online survey can be prepared to supplement input gathered during
Community Meetings #1 and #2 to solicit community feedback on the developing design and
summarize results in input summary memo.
Task 5: Construction Support Services (Optional):
Construction of the Quiet Zone improvements is anticipated to be managed by the Peninsula
Corridor Joint Powers Board (PCJPB/Caltrain). The Consultant shall provide design support
services, as needed, during the bidding and construction phases to assist the City and
PCJPB/Caltrain.
During the bidding period, services may include responding to bidder questions and supporting
the preparation of addenda, as required.
During construction, services may include, but are not limited to:
• Review and response to contractor submittals
• Response to Requests for Information (RFIs)
• Preparation of change order documentation related to design modifications
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• Participation in field reviews and meetings to resolve design conflicts or required
changes
• Review and inspection of railroad signal connections, interconnections, and equipment
necessary for railroad preemption and implementation of advanced preemption systems
All design support services shall be provided in coordination with the City and PCJPB/Caltrain
and shall comply with applicable railroad and Caltrain standards.
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EXHIBIT A-1
PROFESSIONAL SERVICES TASK ORDER
CONSULTANT shall perform the Services detailed below in accordance with all the terms and conditions
of the Agreement referenced in Item 1A below. All exhibits referenced in Item 8 are incorporated into this
Task Order by this reference. CONSULTANT shall furnish the necessary facilities, professional, technical
and supporting personnel required by this Task Order as described below.
CONTRACT NO.
OR PURCHASE ORDER REQUISITION NO. (AS APPLICABLE)
1A. MASTER AGREEMENT NO. (MAY BE SAME AS CONTRACT / P.O. NO. ABOVE):
1B. TASK ORDER NO.:
2. CONSULTANT NAME:
3. PERIOD OF PERFORMANCE: START: COMPLETION:
4 TOTAL TASK ORDER PRICE: $__________________
BALANCE REMAINING IN MASTER AGREEMENT/CONTRACT $_______________
5. BUDGET CODE_______________
COST CENTER________________
COST ELEMENT______________
WBS/CIP__________
PHASE__________
6. CITY PROJECT MANAGER’S NAME & DEPARTMENT:_____________________________________
7. DESCRIPTION OF SCOPE OF SERVICES (Attachment A)
MUST INCLUDE:
SERVICES AND DELIVERABLES TO BE PROVIDED
SCHEDULE OF PERFORMANCE
MAXIMUM COMPENSATION AMOUNT AND RATE SCHEDULE (as applicable)
REIMBURSABLE EXPENSES, if any (with “not to exceed” amount)
8. ATTACHMENTS: A: Task Order Scope of Services B (if any): _____________________________
I hereby authorize the performance of the
work described in this Task Order.
APPROVED:
CITY OF PALO ALTO
BY:____________________________________
Name __________________________________
Title___________________________________
Date ___________________________________
this Task Order and warrant that I have
authority to sign on behalf of Consultant.
APPROVED:
COMPANY NAME: ______________________
BY:____________________________________
Name __________________________________
Title___________________________________
Date ___________________________________
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EXHIBIT B
SCHEDULE OF PERFORMANCE
CONSULTANT shall perform the Services so as to complete each milestone within the number
of days/weeks specified below. The time to complete each milestone may be increased or
decreased by mutual written agreement of the Project Managers for CONSULTANT and CITY so
long as all work is completed within the term of the Agreement. CONSULTANT shall provide a
detailed schedule of work consistent with the schedule below within 2 weeks of receipt of the
notice to proceed (“NTP”) from the CITY.
Milestones Number of Days/Weeks (as specified below)
1. Meetings and Final Scope/Schedule 3 Months
2. Plans Specifications and Estimate 12 Months
3. Final Permitting and GO88B Approval 15 Months
4. Public Outreach 15 Months
5. Design Support During Construction 36 Months
Optional Schedule of Performance Provision for On-Call or Additional Services Agreements.
(This provision only applies if checked and only applies to on-call agreements per Section 1 or
agreements with Additional Services per Section 4.)
The schedule of performance shall be as provided in the approved Task Order, as detailed in
Section 1 (Scope of Services) in the case of on-call Services, or as detailed in Section 4 in the case
of Additional Services, provided in all cases that the schedule of performance shall fall within the
term as provided in Section 2 (Term) of this Agreement.
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EXHIBIT C
COMPENSATION
CITY agrees to compensate CONSULTANT for 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 1
(Meetings and F)
$24,970.00
Task 2
(PSE (meetings, traffic study, surveying, potholing, civil &
1,167,930
8908
Total for Services and Reimbursable Expenses $1,176,838.00
$117,684.00
Maximum Total Compensation $1,294,522.00
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.
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 up to the not-to-exceed amount of: $8908.00
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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.
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EXHIBIT C-1
SCHEDULE OF RATES
CONSULTANT’s schedule of rates is as follows:
BKF ENGINEERS
PROJECT MANAGEMENT
Principal-in-Charge $395.00
Manager VI* $365.00
Manager V* $335.00
Manager IV* $315.00
Manager III* $300.00
Manager II* $285.00
Manager I* $265.00
Project Coordinator III $220.00
Project Coordinator II $190.00
Project Coordinator I $165.00
Project Assistant II $140.00
Project Assistant I $120.00
CONSTRUCTION MANAGEMENT
Principal Construction Manager $375.00
Construction Manager V $345.00
Construction Manager IV $305.00
Construction Manager III $285.00
Construction Manager II $250.00
Construction Manager I $225.00
Resident Engineer IV $315.00
Resident Engineer III $295.00
Resident Engineer II $265.00
Resident Engineer I $245.00
Assistant Resident Engineer $230.00
Office Engineer II $165.00
Office Engineer I $140.00
Structure Representative IV $310.00
Structure Representative III $295.00
Structure Representative II $265.00
Structure Representative I $240.00
Construction Inspector III $220.00
Construction Inspector II $210.00
Construction Inspector I $195.00
FIELD SURVEYING
Utility Locator IV $245.00
Utility Locator III $215.00
Utility Locator II $180.00
Utility Locator I $130.00
Survey Party Chief II $255.00
Survey Party Chief I $245.00
Survey Chainperson II $170.00
Survey Chainperson I $160.00
Survey Apprentice IV $155.00
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Survey Apprentice III $145.00
Survey Apprentice II $130.00
Survey Apprentice I $100.00
DESIGN & TECHNICAL SERVICES
Principal Engineer $310.00
Engineer V $290.00
Engineer IV $265.00
Engineer III $245.00
Engineer II $215.00
Engineer I $190.00
Designer V $245.00
Designer IV $215.00
Designer III $190.00
Designer II $175.00
Designer I $160.00
Design Assistant $115.00
Principal Surveyor $310.00
Surveyor V $290.00
Surveyor IV $265.00
Surveyor III $245.00
Surveyor II $215.00
Surveyor I $190.00
Survey Technician V $245.00
Survey Technician IV $215.00
Survey Technician III $190.00
Survey Technician II $175.00
Survey Technician I $160.00
Survey Assistant $115.00
BIM Specialist III $245.00
BIM Specialist II $215.00
BIM Specialist I $190.00
Technician Manager $245.00
Technician IV $215.00
Technician III $190.00
Technician II $175.00
Technician I $160.00
Technical Analyst $160.00
ADMINISTRATIVE SUPPORT
Graphics/Visualization Specialist $165.00
Office Administrator II $135.00
Office Administrator I $110.00
PLANNING
Lead Technical Specialist $310.00
Technical Specialist V $275.00
Technical Specialist IV $240.00
Technical Specialist III $205.00
Technical Specialist II $170.00
Technical Specialist I $135.00
Planner/Scientist V $215.00
Planner/Scientist IV $200.00
Planner/Scientist III $185.00
Planner/Scientist II $165.00
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Planner/Scientist I $140.00
Technician/Field Monitor V $175.00
Technician/Field Monitor IV $160.00
Technician/Field Monitor III $145.00
Technician/Field Monitor II $130.00
Technician/Field Monitor I $115.00
GOVERNMENT SERVICES
City Engineer $295.00
Deputy City Engineer $250.00
Plan Check Engineer $205.00
Permit Engineer $195.00
Senior City Inspector $215.00
City Inspector $200.00
Inspector $185.00
Stormwater Specialist V $250.00
Stormwater Specialist IV $220.00
Stormwater Specialist III $190.00
Stormwater Specialist II $160.00
Stormwater Specialist I $130.00
Building Official $285.00
Senior Building Inspector $220.00
Building Inspector $195.00
Grant Writer/Specialist IV $220.00
Grant Writer/Specialist III $190.00
Grant Writer/Specialist II $160.00
Grant Writer/Specialist I $130.00
DIRECT EXPENSES Use of outside consultants and vendors as well as copies, blueprints,
survey stakes, monuments, computer plots, telephone, travel (out of area) and all similar charges
directly connected with the work will be charged at cost plus fifteen percent (15%). Mileage will
be charged at the prevailing IRS mileage
reimbursement rate.
PREVAILING WAGE RATES Several categories above are used for field work on projects and
subject to federal or state prevailing wage law and are subject to increases per DIR.
OVERTIME for non-exempt employees will be charged at 1.5 times the hourly rate shown
above; overtime for exempt employees and other classifications will be charged at 1.0 times the
hourly rate shown above.
EXPERT WITNESS rates are available upon request.
*MANAGER CLASSIFICATIONS include Program Manager, Project Manager, and Technical
Manager.
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CALLANDER ASSOCIATES
GENERAL
The following list of fees and reimbursable expense items shall be used in the provision of
services described in the agreement. These amounts shall be adjusted in January, upon
issuance of an updated Standard Schedule of Compensation:
Principal $265 /hour
Arborist/Construction Manager $202 /hour
Senior Project Manager $208 /hour
Project Manager 1 $199 /hour
Project Manager 2 $189 /hour
Job Captain $174 /hour
Designer 1 $164 /hour
Designer 2 $149 /hour
Assistant Designer $133 /hour
Accounting $201 /hour
Senior Project Administrator $153 /hour
Reimbursable Expenses Rates
Expenses cost + 15%
printing and reproductions,
postage and delivery, mileage,
travel expenses (hotel / food),
testing and outside services, and
other project related expenses
Communications and Insurance Surcharge 2.5% of total fees
Subconsultant Administration 10% of Subconsultant Costs
PAYMENTS
Payments are due within ten days after monthly billing. Callander Associates reserves
the right to suspend services for non-payment if payment is not received within a
period of 60 days after invoice date. Additionally invoices 60 days past due are
subject to a 1.5% per month interest charge. Retainer amounts, if indicated, are due
upon signing the agreement and shall be applied to the final invoice for the project.
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Hexagon 2026 Billing Rates
Professional Classification Rate per Hour
President $365
Principal $320
Senior Associate II $290
Senior Associate I $265
Associate II $240
Associate I $215
Planner/Engineer II $185
Planner/Engineer I $160
Outreach Coordinator $135
Admin/Graphics $135
Assistant Planner/Engineer $135
Technician $95
Direct expenses are billed at actual costs, with the exception of mileage, which is
reimbursed at the current rate per mile set by the IRS.
Billing rates shown are effective January 1, 2026 and subject to change January 1,
2027.
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2026 Hourly Billing Rates
Principal Manager $385
Senior Project Manager $350
Project Manager $300
Engineer V $350
Engineer IV $300
Engineer III $250
Engineer II $200
Engineer I $150
(Note 2)
Construction Manager $270
Senior Inspector $230
Engineer Technician III / Inspector $190
Engineer Technician II $150
Engineer Technician I $120
2-Man Survey Crew $350
3-Man Survey Crew $460
Project Controls Manager (Admin III) $235
Project Controls Specialist (Admin II) $175
Project Controls Admin (Admin II) $115
Other Direct Costs
Printing and Reproductions (Third-Party) Actual Cost
Computer No Charge
Data Hosting As Required
Vehicle Expenses
A. Company Vehicles No Charge
B. Personal Vehicles MILE IRS Rate
C. Rental Vehicle Actual Cost
Delivery Services Actual Cost
Communications (Phone/Cell/Fax) No Charge
Miscellaneous
A. Travel and Per diem EA Note 3
B. Special supplies/equipment Actual Cost
NOTES:
(1) Hourly rates are subject to an annual increase and promotion beginning July 1 of each year
(2) Classification includes the following:
• Field Technicians
• Office Technicians / CAD
• Surveyors / Survey Technicians
• Inspectors
• IT / Database / Software support
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(3) Travel related costs should be reimbursed in accordance with Caltrans’ Travel and Expense Claims
Guidelines for Consultants.
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EXHIBIT D
INSURANCE REQUIREMENTS
CONSULTANTS TO THE CITY OF PALO ALTO (CITY), AT THEIR SOLE EXPENSE, SHALL FOR THE TERM OF THE
CONTRACT OBTAIN AND MAINTAIN INSURANCE IN THE AMOUNTS FOR THE COVERAGE SPECIFIED BELOW,
AFFORDED BY COMPANIES WITH AM BEST’S KEY RATING OF A-:VII, OR HIGHER, LICENSED OR
AUTHORIZED TO TRANSACT INSURANCE BUSINESS IN THE STATE OF CALIFORNIA.
AWARD IS CONTINGENT ON COMPLIANCE WITH CITY’S INSURANCE REQUIREMENTS AS SPECIFIED HEREIN.
REQUIRED TYPE OF COVERAGE REQUIREMENT
MINIMUM LIMITS
EACH
OCCURRENCE AGGREGATE
YES
YES
WORKER’S COMPENSATION
EMPLOYER’S LIABILITY
STATUTORY
STATUTORY STATUTORY STATUTORY
YES
GENERAL LIABILITY, INCLUDING
PERSONAL INJURY, BROAD FORM
PROPERTY DAMAGE BLANKET
CONTRACTUAL, AND FIRE LEGAL
LIABILITY
BODILY INJURY
PROPERTY DAMAGE
BODILY INJURY & PROPERTY
DAMAGE COMBINED.
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$1,000,000
YES
AUTOMOBILE LIABILITY,
INCLUDING ALL OWNED, HIRED,
NON-OWNED
BODILY INJURY
- EACH PERSON
- EACH OCCURRENCE
PROPERTY DAMAGE
BODILY INJURY AND PROPERTY
DAMAGE, COMBINED
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$1,000,000
YES
PROFESSIONAL LIABILITY,
INCLUDING, ERRORS AND
OMISSIONS, MALPRACTICE (WHEN
APPLICABLE), AND NEGLIGENT
PERFORMANCE
ALL DAMAGES $1,000,000
YES
THE CITY OF PALO ALTO IS TO BE NAMED AS AN ADDITIONAL INSURED: CONSULTANT, AT ITS SOLE COST
AND EXPENSE, SHALL OBTAIN AND MAINTAIN, IN FULL FORCE AND EFFECT THROUGHOUT THE ENTIRE TERM
OF ANY RESULTANT AGREEMENT, THE INSURANCE COVERAGE HEREIN DESCRIBED, INSURING NOT ONLY
CONSULTANT
COMPENSATION, EMPLOYER’S LIABILITY AND PROFESSIONAL INSURANCE, NAMING AS ADDITIONAL
INSUREDS CITY, ITS COUNCIL MEMBERS, OFFICERS, AGENTS, AND EMPLOYEES.
I. INSURANCE COVERAGE MUST INCLUDE:
A. A CONTRACTUAL LIABILITY ENDORSEMENT PROVIDING INSURANCE COVERAGE FOR
CONSULTANT’S AGREEMENT TO INDEMNIFY CITY.
II. THE CONSULTANT MUST SUBMIT CERTIFICATES(S) OF INSURANCE EVIDENCING REQUIRED COVERAGE
AT THE FOLLOWING EMAIL: PURCHASINGSUPPORT@PALOALTO.GOV
III. ENDORSEMENT PROVISIONS WITH RESPECT TO THE INSURANCE AFFORDED TO ADDITIONAL
INSUREDS:
A. PRIMARY COVERAGE
WITH RESPECT TO CLAIMS ARISING OUT OF THE OPERATIONS OF THE NAMED INSURED,
INSURANCE AS AFFORDED BY THIS POLICY IS PRIMARY AND IS NOT ADDITIONAL TO OR
CONTRIBUTING WITH ANY OTHER INSURANCE CARRIED BY OR FOR THE BENEFIT OF THE
ADDITIONAL INSUREDS.
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B. CROSS LIABILITY
THE NAMING OF MORE THAN ONE PERSON, FIRM, OR CORPORATION AS INSUREDS UNDER
THE POLICY SHALL NOT, FOR THAT REASON ALONE, EXTINGUISH ANY RIGHTS OF THE
INSURED AGAINST ANOTHER, BUT THIS ENDORSEMENT, AND THE NAMING OF MULTIPLE
INSUREDS, SHALL NOT INCREASE THE TOTAL LIABILITY OF THE COMPANY UNDER THIS
POLICY.
C. NOTICE OF CANCELLATION
1. IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR ANY REASON
OTHER THAN THE NON-PAYMENT OF PREMIUM, THE CONSULTANT SHALL PROVIDE
CITY AT LEAST A THIRTY (30) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE
OF CANCELLATION.
2. IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR THE NON-PAYMENT
OF PREMIUM, THE CONSULTANT SHALL PROVIDE CITY AT LEAST A TEN (10) DAY
WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION.
EVIDENCE OF INSURANCE AND OTHER RELATED NOTICES ARE REQUIRED TO BE
FILED WITH THE CITY OF PALO ALTO SENT TO THE FOLLOWING EMAIL:
PURCHASINGSUPPORT@PALOALTO.GOV
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EXHIBIT E
DIR REGISTRATION FOR PUBLIC WORKS CONTRACTS
This Exhibit shall apply only to a contract for public works construction, alteration, demolition,
repair or maintenance work, CITY will not accept a bid proposal from or enter into this Agreement
with CONSULTANT without proof that CONSULTANT and its listed subcontractors are
registered with the California Department of Industrial Relations (“DIR”) to perform public work,
subject to limited exceptions. City requires CONSULTANT and its listed subcontractors, if any,
to comply with all applicable requirements of the California Labor Code including but not limited
to Labor Code Sections 1720 through 1861, and all applicable related regulations, including but
not limited to Subchapter 3, Title 8 of the California Code of Regulations Section 16000 et seq.,
as amended from time to time. This Exhibit E applies in addition to the provisions of Section 26
(Prevailing Wages and DIR Registration for Public Works Contracts) of the Agreement.
CITY provides notice to CONSULTANT of the requirements of California Labor Code Section
1771.1(a), which reads:
“A contractor or subcontractor shall not be qualified to bid on, be listed in a bid proposal, subject
to the requirements of Section 4104 of the Public Contract Code, or engage in the performance of
any contract for public work, as defined in this chapter, unless currently registered and qualified
to perform public work pursuant to Section 1725.5. It is not a violation of this section for an
unregistered contractor to submit a bid that is authorized by Section 7029.1 of the Business and
Professions Code or Section 10164 or 20103.5 of the Public Contract Code, provided the
contractor is registered to perform public work pursuant to Section 1725.5 at the time the contract
is awarded.”
This Project is subject to compliance monitoring and enforcement by DIR. All contractors must
be registered with DIR per Labor Code Section 1725.5 in order to submit a bid. All subcontractors
must also be registered with DIR. No contractor or subcontractor may be awarded a contract for
public work on a public works project unless registered with DIR. Additional information
regarding public works and prevailing wage requirements is available on the DIR web site (see
e.g. http://www.dir.ca.gov) as amended from time to time.
CITY gives notice to CONSULTANT and its listed subcontractors that CONSULTANT is
required to post all job site notices prescribed by law or regulation.
CONSULTANT shall furnish certified payroll records directly to the Labor Commissioner (DIR)
in accordance with Subchapter 3, Title 8 of the California Code of Regulations Section 16461 (8
CCR Section 16461).
CITY requires CONSULTANT and its listed subcontractors to comply with the requirements of
Labor Code Section 1776, including but not limited to:
Keep accurate payroll records, showing the name, address, social security number, work
classification, straight time and overtime hours worked each day and week, and the actual per diem
wages paid to each journeyman, apprentice, worker, or other employee employed by, respectively,
CONSULTANT and its listed subcontractors, in connection with the Project.
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The payroll records shall be verified as true and correct and shall be certified and made available
for inspection at all reasonable hours at the principal office of CONSULTANT and its listed
subcontractors, respectively.
At the request of CITY, acting by its Project Manager, CONSULTANT and its listed
subcontractors shall make the certified payroll records available for inspection or furnished upon
request to the CITY Project Manager within ten (10) days of receipt of CITY’s request.
CITY requests CONSULTANT and its listed subcontractors to submit the certified
payroll records to CITY’s Project Manager at the end of each week during the Project.
If the certified payroll records are not provided as required within the 10-day period, then
CONSULTANT and its listed subcontractors shall be subject to a penalty of one hundred dollars
($100.00) per calendar day, or portion thereof, for each worker, and CITY shall withhold the sum
total of penalties from the progress payment(s) then due and payable to CONSULTANT.
Inform CITY’s Project Manager of the location of CONSULTANT’s and its listed subcontractors’
payroll records (street address, city and county) at the commencement of the Project, and also
provide notice to CITY’s Project Manager within five (5) business days of any change of location
of those payroll records.
Eight (8) hours labor constitutes a legal day’s work. CONSULTANT shall forfeit as a penalty to
CITY, $25.00 for each worker employed in the execution of the Agreement by CONSULTANT
or any subcontractor for each calendar day during which such worker is required or permitted to
work more than eight (8) hours in any one calendar day or forty (40) hours in any one calendar
week in violation of the provisions of the Labor Code, and in particular, Sections 1810 through
1815 thereof, except that work performed by employees of CONSULTANT or any subcontractor
in excess of eight (8) hours per day, or forty (40) hours during any one week, shall be permitted
upon compensation for all hours worked in excess of eight (8) hours per day, or forty (40) hours
per week, at not less than one and one-half (1&1/2) times the basic rate of pay, as provided in
Section 1815.
CONSULTANT shall secure the payment of workers’ compensation to its employees as provided
in Labor Code Sections 1860 and 3700 (Labor Code 1861). CONSULTANT shall sign and file
with the CITY a statutorily prescribed statement acknowledging its obligation to secure the
payment of workers’ compensation to its employees before beginning work (Labor Code 1861).
CONSULTANT shall post job site notices per regulation (Labor Code 1771.4(a)(2)).
CONSULTANT shall comply with the statutory requirements regarding employment of
apprentices including without limitation Labor Code Section 1777.5. The statutory provisions will
be enforced for penalties for failure to pay prevailing wages and for failure to comply with wage
and hour laws.
Item 9
Attachment A - BKF
Transportation Engineers
Contract No. C27196802
Item 9: Staff Report Pg. 39 Packet Pg. 145 of 241
City Council
Staff Report
From: City Manager
Report Type: ACTION ITEMS
Lead Department: City Clerk
Meeting Date: October 5, 2026
Report #:2607-6592
TITLE
Approval of FY 2027 Architectural Review Board, Historic Resources Board, Planning and
Transportation Commission, and Utilities Advisory Commission Work Plans; CEQA Status – Not a
Project
RECOMMENDATION
The Architectural Review Board, Historic Resources Board, Planning and Transportation
Commission, and Utilities Advisory Commission recommend approval of their respective Fiscal
Year 2027 Work Plans.
BACKGROUND
On November 30, 2020, the City Council adopted the Boards, Commissions and Committees
(BCC) Handbook,1 which implemented annual review and approval of BCC work plans. Each BCC
is required to prepare an annual work plan for Council’s review and approval. The annual report
should include the results of the prior year’s work plan and should consist of up to three
priorities. When applicable, the City Council would like to see metrics of community
involvement and participation in meetings and activities included in the work plan. Work plans
should include if there is an intent to use Ad Hoc committees to assist in the BCC’s work for the
year ahead.
Council may refer additional items to the BCC in response to new developments. If the BCC
would like to add an issue for review after an annual work plan has been approved, a prompt
request by the BCC Chair to the City Council is required and the item will then be addressed by
the City Council as a whole.
1 Boards, Commissions, Committees Handbook: https://www.paloalto.gov/files/assets/public/v/5/city-clerk/bcc-
handbook.pdf
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At its December 2, 2024 meeting,3 the City Council approved dividing BCC recruitments and
work plan approvals into fall and spring cycles. Per the adopted schedule, work plans for the
Architectural Review Board, Historic Resources Board, Planning and Transportation
Commission, and Utilities Advisory Commission are before the City Council for consideration.
City Council will consider work plans for the remaining BCCs (Human Relations Commission,
Public Art Commission, Parks and Recreation Commission, and Storm Water Management
Oversight Committee) in the spring.
FISCAL/RESOURCE IMPACT
STAKEHOLDER ENGAGEMENT
ENVIRONMENTAL REVIEW
ATTACHMENTS
APPROVED BY:
3 City Council, December 2, 2024; Agenda Item #14; SR # 2409-3480
https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=83110&dbid=0&repo=PaloAlto&searchid=247938e
8-43ef-425b-b6cc-432d7cc553e0
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Prior Year
Accomplishments See attached summary for more information.
Architectural Review Board
Staff Liaison: Steven Switzer, Senior Planner
Lead Department: Current Planning, Planning and Development Services Division
About the Board The Architectural Review Board is composed of five members, at least three of whom are architects, landscape architects, building designers or other design professionals.
Terms are for three years. See Palo Alto Municipal Code (PAMC) Chapter 2.21. Residency is not required. For the ARB webpage go to bit.ly/paloaltoARB.
2026-2027 Workplan
Mission Statement The Palo Alto Architectural Review Board aims to maintain and enhance the aesthetic of planned, built, and landscaped environment of Palo Alto.
Current Commissioners Mousam Adcock (Chair), Yingxi Chen, David Hirsch, Kendra Rosenberg (Vice Chair), Marton Jojarth
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TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL
LAW / COUNCIL-APPROVED
On-Going
Planning staff prepare staff reports,
packets and presentations. They ensure
paper plan sets and material boards are
ready for ARB review. Other departments,
such as, City Attorney, Urban Forestry,
Transportation, etc., may be required from
time to time. Consultants, including CEQA
consultants, may also be required.
Issuance of recommendations on
projects and high-quality architecture
throughout the City.
Yes
COUNCIL-DIRECTED
POLICY UPDATE
N/A
2026-2027 Workplan
This is the Board's main mission and serves to ensure
the City develops high quality projects. This includes
preliminary review early in the planning process.
LOWER PRIORITY
Architectural Review Board
PROJECT/GOAL 1:
BENEFICIAL IMPACTS
Review Planning applications for conformance with ARB Findings and Objective Standards
Staff Liaison: Steven Switzer, Senior Planner
Lead Department: Current Planning, Planning and Development Services Division
PURPOSE STATEMENT:
The Architectural Review Board reviews and makes recommendations to the Planning Director on the building design, site planning, landscape planning, massing and
facades, material selection, lighting, signage and other related issues for most major new construction including additions and renovations that alter the exterior
building face. The type of buildings reviewed include commercial, industrial, and multiple-family residential. In addition, the ARB is a resource as knowledgeable
observers of many varied urban environments, to assist Palo Alto as it develops area plans to accommodate additional housing.
The ARB Scope of Review is fully noted in Title 18 of the Municipal Code, Chapter 18.76 under Section 18.76.020, Chapter 18.77 under Section 18.77.073, and
Chapter 18.38.
HIGH PRIORITY
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TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL
LAW / COUNCIL-APPROVED
On-Going Staff time. Council Approval Yes
COUNCIL-DIRECTED
POLICY UPDATE
Yes
TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL
LAW / COUNCIL-APPROVED
FY 2026-27 with major code and policy milestones
anticipated in calendar year 2026 and 2027
Additional staff at Planning so that the
quality and completeness of the work is
maintained.
Council Approval No
COUNCIL-DIRECTED
POLICY UPDATE
Yes
PROJECT/GOAL 3: Assist the City as it considers modifications to Objective Standards; Provide feedback based on research from projects as they go
through the objective standards ministerial processes. Suggest ways to better address different housing typology.
HIGH PRIORITY LOWER PRIORITY
•Design guidance for major growth areas
BENEFICIAL IMPACTS
The ARB has unique feedback to provide as a
stakeholder as they have interest in approving the
aesthetic environment of the City while also
understanding constraints that architects/developers
may come across when implementing standards being
considered
•Housing generation, feasibility and design quality.
•Downtown Housing Plan and SB 79 implementation
•Review and recommend aesthetic standards for Wireless Communication Facilities (WCFs) as part of an ongoing
WCF Ordinance update.
PROJECT/GOAL 2:
BENEFICIAL IMPACTS
Provide feedback to staff and Council on the creation of new guidelines, ordinances, and/or streetscapes, as directed by Council
Streamline the objective standard review process and
ensure that projects using the streamlined review
process/objective standards conform to the City’s
Comprehensive Plan, Goals and Policies, including its
high-quality design standards
HIGH PRIORITY LOWER PRIORITY
•Modifications to South of Forest Area Coordinated Area Plan (SOFA) subjective development standards with
objective standards consistent with Housing Element Program 3.7.
•Objective standards for diverse housing types
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TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL
LAW / COUNCIL-APPROVED
On-going
Planning staff to help research policies and
programs; coordination with long range
planning section staff.
Increased adherence to Comprehensive
Plan policies Yes
COUNCIL-DIRECTED
POLICY UPDATE
Yes
TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL
LAW / COUNCIL-APPROVED
On-going Staff time
•Have staff continue to provide updates
in the pending projects attachment on
development proposals.
•The ARB can appoint a representative
to attend Council and PTC and to
provide feedback on reviewed projects.
No
COUNCIL-DIRECTED
POLICY UPDATE
No
Improve Coordination between the Architectural Review Board and other boards, commissions, and Council.PROJECT/GOAL 5:
PROJECT/GOAL 4:
HIGH PRIORITY LOWER PRIORITY
This project would enhance implementation of the City's
Comprehensive Plan.
BENEFICIAL IMPACTS
•San Antonio Road Area Plan
•Downtown Housing Plan
•South of Forest Area (SOFA)
•California Avenue
•University Avenue streetscape improvements
Discuss specific Coordinated Area Plans/ streetscape improvements and provide comments that the ARB would recommend
exploring/implementing.
BENEFICIAL IMPACTS
Improved coordination between boards/commissions and
council to get feedback from colleagues on other boards.
Provide more coordinated feedback from the City for
developers.
HIGH PRIORITY LOWER PRIORITY
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ARCHITECTURAL REVIEW BOARD ANNUAL REPORT
PRIOR YEAR ACCOMPLISHMENTS FISCAL YEAR 2026
ITEMS OF NOTE
• The ARB provided valuable feedback to assist Council with respect to the San Antionio Road Area Plan, Cubberley Master Plan, and California Avenue
Pre-Approved Parklet designs. This work was consistent with Goal 2 and 4 of the 25/26 Work Plan.
• The ARB designated board members as representatives to attend Council and Planning and Transportation Commission meeting to provide feedback
on reviewed projects. In addition, the ARB selected board members to represent the board with the Urban Land Institute Initiative with Palo Alto,
Valley Transportation Authority (VTA), and Stanford related to the Palo Alto Transit Center. This work is consistent with Goal 5 of the 25/26 Work
Plan.
• The ARB reviewed around 17 projects, including multi-family housing with below-market units, mixed-use developments, master sign programs, and
retail modifications at Stanford Shopping Center aligning with Goal 1 of the 24/25 Work Plan.
APPLICATION REVIEW
The ARB prides itself on its collaborative review process, where board member’s diverse perspectives enhance proposed projects and improve Palo
Alto's built environment. Our oversight has made a significant impact, as shown in the renderings section of this report, comparing initial proposals to
final designs.
ADDRESS/PROJECT DESCRIPTION
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ADDRESS/PROJECT DESCRIPTION
4000 Middlefield Road (Cubberley Community Center) Cubberley Master Plan
San Antiono Road Area Plan San Antiono Road Area Plan
Cal Avenue Pre-Approved Parklets Pre-approved parklets for car-free streets
RENDERINGS
Below are renderings of approved projects, showcasing the evolution from their initial proposal to designs with the incorporated ARB feedback. A
summary of key design modifications made based on ARB feedback is also provided.
2100-2400 Geng Road
Initial Proposal: Final Design:
Incorporated Feedback:
• Incorporated a third duplex building typology to the project.
• Softened contrast of colors for a more muted color palette to align
with the Baylands Master Plan.
• Tiered retaining walls and landscaping on Geng Road and entry drive
to allow for a more gradual transition to the raised grade of the site.
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3606 El Camino Real
Initial Proposal: Final Design:
Incorporated Feedback:
• Continued the fin design motif to both building corners
• Included an accentuated massing break along El Camino Real and more inset balconies.
• Enhanced landscaping on the south side to transition the building into the lower density development of the Barron Park neighborhood.
• Revised podium level courtyards with improved access and circulation.
3781 El Camino Real
Initial Proposal: Final Design:
Incorporated Feedback:
• Expanded the podium level patios to maximize usable outdoor space and strengthened the connection between the building and the street.
• Improved bike circulation with direct connections to the parking garage and relocated trash staging to avoid right-of-way conflicts.
• Redesigned garage entry to better screen the two levels of parking from Curtner Avenue.
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Prior Year
Accomplishments
• Reviewed nine (9) applications including historic category upgrades, rehabilitation projects, accessibility upgrades, adaptive reuse, and transfer of development right
projects.
• Created the City’s first Historic Preservation Awards program that will occur every 5 years. The HRB reviewed over 100 projects in the past 10 years and selected 10 award
winners aligning with FY 25/26 work plan goal #5. This initiative aligns with Comprehensive Plan Program L 7.6, which promotes awards programs and other forms of public
recognition for exemplary Historic Preservation projects.
• Reviewed the Certified Local Government annual report and continued implementation of the City’s historic preservation program.
•An Ad Hoc Committee prepared a list of additional preservation incentives for Council consideration, including establishing a Mills Act Pilot Program, digital preservation
through photography and 3D scanning, and the relocation of structures.
Historic Resources Board
Staff Liaison: Steven Switzer, Senior Planner
Lead Department: Planning and Development Services
About the Commission
The City is a Certified Local Government (CLG) responsible for historic preservation - to identify, evaluate, register, and preserve historic properties within its jurisdictions
and promote the integration of local preservation interests and concerns into local planning and decision-making processes. Staff prepares an annual report of the activities
of the Certified Local Government each spring for the prior year and submits these to the State Office of Historic Preservation. This HRB Work Plan covers July 2026 - July
2027. The HRB consists of five members with terms for 3 years and are staggered per PAMC Section 2.27.020. For the HRB Webpage: https://www.cityofpaloalto.org/City-
Hall/Boards-Commissions/Historic-Resources-Board.
2026-2027 Workplan
Mission Statement
Per Palo Alto Municipal Code Chapter 2.27 Historic Resources Board, Section 2.27.040 Duties, HRB purview is:
(a) Render advice and guidance to a property owner upon the owner's application for alteration of any historic single-family or duplex building in the downtown area and any
such building designated as significant elsewhere in the city
(b) Inform the ARB of the historical and/or architectural significance of historic commercial and multiple-family structures in the downtown area and any such buildings
designated as significant elsewhere in the City that are under review by the ARB. Submit recommendations to the ARB regarding proposed exterior alterations of such
historic structures
(c) Recommend to the Council the designation of additional buildings and districts as historic. Research available information and add historical information to the inventory
sheets of historic structures/sites. This inventory is maintained in the department of planning and development services.
(d) Perform such other functions as may be delegated from time to time to the HRB by the City Council.
Current Commissioners Alisa Eagleston-Cieslewicz, Geddes Ulinskas, Caroline Willis (Vice Chair), Samantha Rohman(Chair),
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TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL
LAW / COUNCIL-APPROVED
Ongoing
Planning staff prepare staff reports,
packets and presentations. Other
departments, such as the City Attorney,
Urban Forestry, etc., may be required from
time to time. Consultants, including CEQA
consultants, may also be required.
Issuance of recommendations on
projects and protection of historic
resoruces throughout the City.
Yes
COUNCIL-DIRECTED
POLICY UPDATE
Yes
Historic Resources Board
Staff Liaison: Steven Switzer, Senior Planner
Lead Department: Planning and Development Services
PURPOSE STATEMENT:
The Board Commission's goals and purposes (purview) are set in Palo Alto Municipal Code Chapter 2.27 Historic Resources Board, Section 2.27.040
Duties. These duties include reviewing alterations to historic resources and providing recommendations on nominations to the local historic resources
inventory. The City's historic program includes the implementation of Comprehensive Plan policies on an ongoing basis including Policy L7.2 (preparation
of historic evaluations to determine eligibility for the California Register of Historical Resources and associated tracking), Policy L7.1.1 (recommend
eligible resources to the local inventory), and Policy L7.1.2: Reassess Historic Preservation Ordinance.
2026-2027 Workplan
Review Planning applications for conformance with Secretary of the Interior Standards for the Treatment of Historic Structures.
Protects and preserves the City’s historic
and architectural resources, strengthening
community identity, character, and cultural
and aesthetic value for current and future
generations.
HIGH PRIORITY LOWER PRIORITY
BENEFICIAL IMPACTS
PROJECT/GOAL 1:
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TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL
LAW / COUNCIL-APPROVED
Subject to Council direction.
City Council direction and accommodation
in the PDS department workplan would be
needed. HRB subcommittee and staff of
planning and city attorney departments to
prepare draft amendments for Council
review and adoption
Well-written ordinance language that
assists the public's understanding and
calms the fears of property owners
about governmental overreach
Council may provide
direction to modify
PAMC 16.49; CLG
cities maintain historic
preservation
ordinances.
COUNCIL-DIRECTED
POLICY UPDATE
Council may provide
direction to modify
PAMC 16.49; CLG
cities maintain historic
preservation
ordinances
TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL
LAW / COUNCIL-APPROVED
To begin in the first quarter and continue
throughout the duration of the 26/27 work
plan cycle
Staff of PDS would be tasked as well as an
HRB ad hoc committee to make progress.
Website contains links to information
resources and videos, to assist property
owners, staff, and others.
N/A
COUNCIL-DIRECTED
POLICY UPDATE
N/A
PROJECT/GOAL 2:
BENEFICIAL IMPACTS
PROJECT/GOAL 3:
BENEFICIAL IMPACTS
Limited modification to PAMC 16.49, historic preservation, providing clarifications regarding the HRB’s role. The HRB could discuss language
providing clarifications of its role with respect to three potential topics: (a) the nomination process, (b) the effect of HRB recommendations regarding
exterior modifications to residential historic resources, and (c) category changes (upgrades, downgrades, removals)
Education and Creating New User-Friendly Resources/Communication Regarding Historic Preservation. (a) find new ways to promote
preservation, including use of the existing zoning code incentives and State historic building code (b) improve upon communication types to provide the
community accessible information, including the use of videos (linked to the City’s and State’s webpages) to help property owners understand the local
and State preservation incentives and codes, (c) continue to provide updates to the historic review process bulletin as needed to communicate CEQA
requirements related to PAMC 16.49 and listed historic resources, and (d) enable the HRB staff liaison(s), the City’s historic preservation consultant, and
Chief Building Official to implement training providing an ongoing opportunity for HRB members, staff, and the community to gain working knowledge as
to the use of the State’s historic building code
LOWER PRIORITY
Lower priority: Goal item (c) - listed historic resources placed on the City's
inventory in the late 1970s and 1980s have not been reviewed to determine whether
any modifications reduce critical aspects of integrity and drop or lower the properties'
local historic resource category.
The benefits are providing clarification of the
HRB's role for the public
The benefits would be to improve
preservation in Palo Alto and clarity for
owners of historic properties.
Item (a) a table of existing zoning code incentives and another table of historic building
code provisions and Item (b) improvements to types of communications used to promote
historic preservation.
HIGH PRIORITY
HIGH PRIORITY
Priority is high to enable greater understanding of the HRB's role and address property
owners' concerns with respect to Goal items (a) and (b)
LOWER PRIORITY
Items (c) and (d)
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TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL
LAW / COUNCIL-APPROVED
Continuing efforts from last 25/26 FY
workplan targetting completion in the
second quarter
Staff of PDS would be tasked as well as an
HRB ad hoc committee to make progress.
Website contains links to updated
Inventory List, to assist property owners,
staff, and others.
No
COUNCIL-DIRECTED
POLICY UPDATE
No
TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL
LAW / COUNCIL-APPROVED
On-going throughout FY 26/27
PDS staff and CAO staff. City Council
direction and accommodation in the PDS
department workplan would be needed.
More historic properties are preserved
for future enjoyment of the owners and
community, due to the additional
incentives.
Yes
COUNCIL-DIRECTED
POLICY UPDATE
N/A
Properties that have been demolished remove from local inventory
Providing the public with updated
information
HIGH PRIORITY LOWER PRIORITY
PROJECT/GOAL 4:
Properties that have lost integrity over time that may need a category change
Prepare an updated Local Inventory Resource list that incorporates the recently designated properties from the 2023 Historic Reconnaissance Survey
efforts, Category Upgrades, and removal of properties that have been demolished.
BENEFICIAL IMPACTS
PROJECT/GOAL 5:
Additional preservation incentives (a) discuss and recommend additional zoning code incentives to continue the community engagement process that
began with the 2023 reconnaissance survey inventory update; (b) represent the HRB’s interests during public hearings, or participate in joint meetings
with the Planning and Transportation Commission and City Council, to review any proposed zoning code modifications incentivizing historic preservation
incentives; (c) outreach to the community after adoption of any adopted new incentives.
Benefit will be for all property owners who do
not currently see any benefit to listing their
property on the City's historic inventory
HIGH PRIORITY LOWER PRIORITY
• Review the Floor Area Bonus and Transfer of Development Rights (TDRs) incentives
for historic resources.
• Expand incentives to other Category 1 and 2 historic resources such as the text
amendment for TDRs at 51 Encina Avenue.
• Identify code barriers to rehabilitation, seismic upgrades, accessibility, and adaptive
reuse.
• Develop guidance tools for property owners and applicants.
• Evaluate additional financial incentives, including potential Mills Act or similar tools.
• Conduct outreach on preservation incentives and adaptive-reuse opportunities.
BENEFICIAL IMPACTS
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2026 HISTORIC RESOURCES BOARD AWARDS
For the inaugural Historic Resources Board (HRB) Awards Program, the HRB reviewed 159 preservaon projects completed over the
past 10 years and selected nine award recipients, including a Board's Choice Award recognizing a block in Professorville for its
collecve preservaon efforts and a special award honoring all residenal properes that voluntarily completed seismic retrofits
during the past decade. Creaon of this award program implements Comprehensive Plan Program L7.6, which encourages awards
programs and other forms of public recognion for exemplary historic preservaon projects.
215 Fulton Avenue| Residen al Preserva on 501 Kingsley Avenue | Residen al Rehabilita on
Listed Category 3 Resource. Work iden fied
from a 2016 permit including porch repair,
reroof, and window replacement. This is one
of three remaining Mission Revival Houses
built in the city from 1908-1909.
Listed Category 2 Resource built in 1897.
Work iden fied from a 2022 permit including
the removal of non historic addi ons from
the 1970s (Solarium) and restora on of the
Colonial Revival residence.
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2026 HISTORIC RESOURCES BOARD AWARDS
1100 Block of Ramona Street Professorville Historic District | Board Choice Award
As one of Palo Alto's oldest residen al neighborhoods, the Professorville Historic District reflects the unique background of
the city’s origins and its early es to the founding of Stanford. Collec vely the homes on the 1100 Block of Ramona Street
retain a high degree of historic integrity and con nue to exemplify the cohesive character and architectural significance of the
Professorville historic district.
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2026 HISTORIC RESOURCES BOARD AWARDS
2510 Waverley Street | Residen al Rehabilita on 1143 Bryant Street | Residen al Restora on
Listed Category 2 Resource built in 1937. Early
California style adobe style. Work iden fied from a
2022 permit including window and door
replacements and par al reroof with interior
modifica ons.
Located in the Professorville Historic District.
Work iden fied from a 2016 permit following
a fire that destroyed the residence’s interior.
Work included restora on of the basement,
first, and second floors.
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2026 HISTORIC RESOURCES BOARD AWARDS
900 High Street (Peninsula Creamery) |
Commercial Preserva on
165 Channing Avenue (Watercourse Way) |
Commercial Rehabilita on
Listed Category 2 resource and a family-owned
business over 100 years old. Founded in 1923. Work
iden fied from a 2021 permit for voluntary
accessibility upgrades.
Listed Category 4 resource built in 1931. Work
iden fied from a 2019 permit for voluntary
accessibility upgrades
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2026 HISTORIC RESOURCES BOARD AWARDS
450 Bryant Street (Avenidas) | Commercial Adap ve
Re-Use
Voluntary Seismic Retrofits | Residen al
Rehabilita on
Over the past 10 years, 14 residen al proper es have
voluntarily completed seismic retrofits.
Listed Category 2 resource built in 1927. Originally
designed by Birge Clark as the Palo Alto Fire and
Polica Sta on. The work iden fied here is from a
2016 permit for modifica ons to accommodate the
proposed Senior Ci zen Center use.
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Planning and Transportation Commission (PTC)
2026-27 Work Plan Date Re commended by PTC August 12 , 202 6
Staff Liaison: Jennifer Armer, Assistant Director, Planning and Development Services (PDS)
Lead Department: Planning and Development Services (PDS); Office of Transportation (OOT)
About the Commission The seven-member Planning & Transportation Commission adopted its 2025-26 work plan on July 8, 2026. The
members and chairs are listed below. Members serve 4-year terms. See Planning & Transportation Commission (PTC)
webpage link: http://www.paloalto.gov/gov/boards/ptc/default.asp
Current Commissioners • Allen Akin
• Bryna Chang (Chair)
• Bart Hechtman
• Todd James
• Kevin Ji (Vice Chair)
• Cari Templeton
Mission Statement The Planning & Transportation Commission advises the City Council, Planning Director, and Chief Transportation
Official on land use and transportation matters, including the Comprehensive Plan, zoning, transportation programs,
and related matters. The Commission's primary responsibilities include:
• Preparing and making recommendations to the City Council on the City's Comprehensive Plan and applying
the Comprehensive Plan to proposed development, public facilities, and transportation in Palo Alto;
• Considering and making recommendations to the City Council on zoning map and zoning ordinance changes;
any changes to Title 18 of the Palo Alto Municipal Code must be reviewed by the PTC and the City Council;
• Reviewing and making recommendations to the City Council on subdivisions and Site and Design Reviews,
on appeals on variances and use permits;
• Considering other policies and programs affecting development and land use in Palo Alto for final City
Council action;
• Reviewing and making recommendations on individual projects as described in the Municipal Code, and
Open Space development;
• Reviewing and making recommendations to the City Council on transportation, parking, and other related
mobility issues; and
• Ensuring robust community engagement and dialogue regarding planning, land use, and transportation ; and
providing recommendations to the City Council regarding these matters and incorporating the public
discussion. The PTC hearings provide a forum for public comment and public interaction.
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and Transportation Commission Work
Plan
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Prior Year Work Plan On February 2, 2026, the City Council accepted the July 9, 2025, PTC recommended 2025-26 Work Plan:
https://www.paloalto.gov/files/assets/public/v/1/planning-amp-development-services/ptc/council-approved-ptc-
2025-26-work-plan.pdf
Prior Year
Accomplishments
During the period of the PTC 2025-26 Work Plan:
• The PTC's transportation efforts included study sessions and/or recommendations on: Bicycle and Pedestrian
Transportation Plan Update; Crescent Park Traffic Calming; South Palo Alto Bike/Ped Connectivity; SamTrans
Grand Boulevard Initiative; and Palo Alto Link.
• The PTC's work on implementing the Comprehensive Plan, Housing Element, and Council Priorities included
study sessions and/or recommendations on: Cubberley Conceptual Master Plan; Retail Code Amendments;
Stream Corridor Protections; Bird Friendly Design Ordinance; Annual Review of Comprehensive Plan and
Housing Element progress report; Housing Element Implementation including Program 6.5; Prohousing
Designation application review; San Antonio Road Area Plan; Code Amendments for Special Setback, De
Minimis Exceptions, and the “Shrink Wrap Rule”; and ADU regulations.
• The PTC's work on development projects included review and recommendations on four Tentative Maps; two
Conditional Use Permits; two Site and Design applications; a Planned Community (PC) amendment; and three
Planned Home Zone (PHZ) applications.
PROJECT/GOAL 1: Area Planning: This goal carries forward the prior year goal for neighborhood planning approaches and overall
effectiveness of various approaches to neighborhood planning including both land use and mobility. The staff and PTC
will consider new neighborhoods that result from the 6th cycle Housing Element sites and demand for public
facilities/services. This goal includes continued work on both the Downtown Housing Plan and the San Antonio Road
Area Plan.
Beneficial Impacts Timeline Resources Needed Measure Of Success State Mandated/
Local Law/ Council
Approved
Development policy
recommendations and
preferred alternatives for the
new area plans enable City
Council to provide direction to
guide the City's future
development.
By June 2027 Staff time to research and
prepare staff reports and
conduct project coordination.
Consultant budgets have
already been allocated.
Successful conversation and
recommendations of policies
and preferred alternatives to
City Council, and initiation of
environmental review.
Yes – Council
assigned.
High Priority Lower Priority Council-Directed
Policy Update
Council directed work toward future area plans. N/A Yes
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and Transportation Commission Work
Plan
Item 10: Staff Report Pg. 20 Packet Pg. 165 of 241
PROJECT/GOAL 2: Housing Program Implementation: The Housing Element was adopted by City Council on April 15, 2024, and
certified by California Department of Housing and Community Development (HCD) on August 20, 2024. PTC will
continue work on Housing Element implementation programs as scheduled within the Housing Element.
Beneficial Impacts Timeline Resources Needed Measure Of Success State Mandated/
Local Law/ Council
Approved
Complying with the
requirements of the adopted
Housing Element to encourage
housing development and
comply with State Law.
PTC and Council review of
a number of programs will
proceed over the work
plan year, as required by
the Housing Element.
Staff and consultant
resources employed.
Implementation of programs
by target dates.
Yes - State Mandated
High Priority Lower Priority Council-Directed
Policy Update
Program 3.9 (incentivizing multi-family as an alternative to
commercial development); Program 4.2 (short term rentals);
Program 6.3 (SB 9 unit standards); and Program 6.5
(supporting innovative housing types).
SOFA objective standards Yes
PROJECT/GOAL 3: State Law Implementation – Laws with Prior Effective Dates and any new 2026 Laws to Become
Effective in 2027: The State adopts new laws every year, some like Senate Bill (SB) 79, required quick action through
an interim ordinance during the last fiscal year, that will then require consideration and recommendation from PTC of
a permanent ordinance, others will require modifications to maintain consistency with State law and Housing
Element goals.
Beneficial Impacts Timeline Resources Needed Measure Of Success State Mandated/
Local Law/ Council
Approved
Provide clarity to property
owners and potential
developers.
Ordinance
Recommendation during
2026-27 work plan term.
Staff and consultant
assistance.
Adoption of ordinance
amendments.
Yes - State
High Priority Lower Priority Council-Directed
Policy Update
Implementing State laws and discuss policy considerations. N/A Possibly
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PROJECT/GOAL 4: Parking Programs: The PTC will receive periodic updates regarding options for improving the City’s parking
programs. Updates may include parking program activities, recent parking data, and upcoming parking policy efforts
and program changes.
Beneficial Impacts Timeline Resources Needed Measure Of Success State Mandated/
Local Law/ Council
Approved
Improved parking operations. Ongoing. Staff resources. Feedback from PTC and
continued engagement from
the public.
Yes
High Priority Lower Priority Council-Directed
Policy Update
The staff work behind the project continues; proposed
updates help advance the work. Additionally, the PTC
welcomes opportunities to engage w/the public on this
topic.
This project represents a large body of ongoing work to manage
parking supply and parking policy.
Yes
PROJECT/GOAL 5: Comprehensive Plan Policy Implementation: This includes changes in Title 18 and other Comp Plan policies
that lead to Title 18 revisions.
Beneficial Impacts Timeline Resources Needed Measure Of Success State Mandated/
Local Law/ Council
Approved
Comprehensive Plan policies
and programs to completion.
As directed by Council. Staff and consultant
assistance – particularly
when staff resources will be
focused on implementation of
the Housing Element.
Adopted ordinances to amend
Title 18.
No
High Priority Lower Priority Council-Directed
Policy Update
N/A N/A Yes – Comprehensive
Plan
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PROJECT/GOAL 6: Title 18 Updates: Considering and making recommendations to the City Council on any changes to Title 18 of the
Palo Alto Municipal Code as directed by City Council, for example updates to the City’s Wireless Communications
Facilities Ordinance.
Beneficial Impacts Timeline Resources Needed Measure Of Success State Mandated/
Local Law/ Council
Approved
Development of code
recommendations to support
City Council updates.
As directed by Council. Staff and consultant
resources would be identified
based on specific projects.
Wireless Ordinance update is
currently unresourced.
Adopted ordinances to amend
Title 18.
No
High Priority Lower Priority Council-Directed
Policy Update
N/A N/A Yes
PROJECT/GOAL 7: Project Review: The PTC will provide review as part of their regular ongoing responsibility for recommendations to
City Council and staff on quasi-judicial development projects and transportation projects.
Beneficial Impacts Timeline Resources Needed Measure Of Success State Mandated/
Local Law/ Council
Approved
Public review of planning and
transportation projects.
Ongoing. Staff resources. Feedback from PTC and
continued engagement from
the public.
Yes
High Priority Lower Priority Council-Directed
Policy Update
N/A N/A Yes
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Plan
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PROJECT/GOAL 8: Comprehensive Plan Updates: The PTC will advise on updates of the Comprehensive Plan. This may include
updates to individual Elements as required by State law and/or small updates that have been surfaced by the PTC.
Beneficial Impacts Timeline Resources Needed Measure Of Success State Mandated/
Local Law/ Council
Approved
Improved consistency between
the Comprehensive Plan and
current City priorities, like
reducing fire risk in the urban
wildland interface.
As directed by Council. Staff and consultant
resources would be identified
based on specific updates.
These are currently
unresourced.
Determine extent to which
plan needs to be updated,
timeline, and activities for
completion.
Yes
High Priority Lower Priority Council-Directed
Policy Update
Safety Element Natural Environment Element, Initiate Comprehensive Plan
Update
Yes
PROJECT/GOAL 9: Improve PTC Processes and Scope: Investigate and implement improvements in PTC processes, including but
not limited to technology use and communication with Council, other boards, staff, and the public.
Beneficial Impacts Timeline Resources Needed Measure Of Success State Mandated/
Local Law/ Council
Approved
Faster applicant progress
through PTC reviews, reduced
load on Council and staff.
As directed by Council. Staff resources and budget
would be identified based on
specific efforts. These are
currently unresourced.
Reduction in average amount
of time per project review or
agenda item, in total over PTC
and Council (for items
involving PTC).
No
High Priority Lower Priority Council-Directed
Policy Update
N/A N/A No
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Plan
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Utility Advisory Commission Annual Workplan - FY 2027
City Council Priorities 2026:
UAC Purpose & Duties:
The purpose of the utilities advisory commission shall be
to advise the city council on present and prospective
long -range planning and policy and major program and
project matters relating to the electric utility, gas utility,
water utility, wastewater collection utility, fiber optics
utility and recycled water matters, excluding daily
operations.
See PAMC UAC Purpose & Duties 2.23.050
Item # UAC Workplan FY 2027 Objectives – By Category
Referred by City Council
4
Review and advise on reserve policies changes informed by the Baker Tilly Utility Reserve Assessment that
balance the need to be attractive to private markets and rates that are affordable to residents and competitive
to businesses, for inclusion in the FY 2028 rate setting. (PAMC 2.23.050.(b ).(4))
13
Review materials that inform upcoming action items on the BAWSCA agenda regarding SFPUC water policies
and provide advice to Council on a policy stance toward BAWSCA and SFPUC. (PAMC 2.23.050.(b).(1).(B))
Affecting Multiple Utilities
2 Review and recommend reliability, resiliency, emergency response, and preparedness metrics and goals
related to the local supplies and distribution of water and power. (PAMC 2.23.050.(b).(2))
5
Recommend FY 2028 and five -year capital improvement program, timing of the projects, pace of infrastructure
replacements, and use of financing mechanisms vs pay -go to ensure affordability across the five -year rate
projections and financial plans with a special focus on the electric and wastewater utilities. (PAMC
2.23.050.(b).(4))
3
Review and recommend to City Council FY 2028 rate changes to Water (including advise on a new Cost of
Service Study), Gas, Electric, Wastewater Collection, Recycled Water, and Fiber Optic Services with priority on
affordability. (PAMC 2.23.050.(b).(4))
Electric Utility
15
Electric Utility Business Strategy: Develop a flexible scenario -based business strategy that incorporates impacts
on CPAU of increased and highly uncertain demand from data centers and other loads, both within CPAU
territory and throughout CAISO.
7
Develop policies and fee and rate structures specifically for large electric load growth including but not limited
to a financial charge for the reservation of electric system capacity, expansion of the large non -residential
electric rate (E-7) or new rate structure for large commercial loads within Palo Alto. (PAMC 2.23.050.(b).(1) and
2.23.050.(b).(4))
Item 10
Attachment D - 2026-2027
Utilities Advisory
Commission Work Plan
Item 10: Staff Report Pg. 25 Packet Pg. 170 of 241
8
Review and evaluate preliminary results of the E-1 T Electric Utility time -of-use rate pilot, changes in energy
usage patterns and financial impacts to customers and utility to inform further implementation to the full Palo
Alto community. (PAMC 2.23.050.(b).(2) and 2.23.050.(b).(4))
9
Review and recommend approval of new Power Purchase Agreements or other supplies to ensure electric
supply contracts are cost-effective and aligned with the City's long -term electric portfolio strategy and the
integrated resources plan. (PAMC 2.23.050.(b).(2))
14 Electric Grid Modernization: Review load projections and strategy for City -wide grid upgrades, design
standards and technologies, timing of investment and work, and customer impacts.
Fiber Utility
6
Review Fiber to the Premises (FTTP) pilot results including use of key performance indicators (KPI) and
recommend next steps. (Examples of KPIs include: take rate, customer satisfaction, cost per passing, revised
long-term financial model, and capital expenditure estimates ) (PAMC 2.23.050.(b).(5))
Gas Utility
1
The UAC will review progress towards a gas transition study that addresses the political, economic, legal,
environmental, regulatory, and operational elements of a potential gas decommissioning. (PAMC
2.23.050.(b).(1).(A) & 2.23.050.(b).(4))
Key Priorities or Ongoing
10
Advise on funding and financing strategies for S/CAP for City Council consideration (see S/CAP 2026 -2027 Work
Plan Item CA13) and advise on revision to current Carbon Neutral and Cap and Invest (C&I) funding City Council
spending resolutions to clarify use s balancing S/CAP strategies, long-term affordability, and decarbonization
incentives. (PAMC 2.23.050.(b).(5)
11 Review and recommend advisory positions on legislative proposals at the local, state, and federal level
impacting any of the five utilities through new laws, regulations, or ordinances. (PAMC 2.23.050.(b).(3))
12
Review customer survey results, communication methods, and new initiatives for the year (e.g.,
implementation of leak notifications), including review of effectiveness of engagements to inform continued
iterative changes. (PAMC 2.23.050.(b).(5).(c))
The Utilities Advisory Commission reviewed the Commission accomplishments and draft workplan at its June 3, 2026 meeting Agenda
item #3. FY 2026 UAC accomplishments can be found in the staff report. The agenda packet for Item 3 can be found here beginning on
page 11: https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=896997&dbid=0&repo=PaloAlto.
Item 10
Attachment D - 2026-2027
Utilities Advisory
Commission Work Plan
Item 10: Staff Report Pg. 26 Packet Pg. 171 of 241
City Council
Staff Report
From: City Manager
Report Type: ACTION ITEMS
Lead Department: City Clerk
Meeting Date: October 5, 2026
Report #:2606-6510
TITLE
Consideration of City Council Positions on State and Local Measures Presented to Palo Alto Voters
on the November 3, 2026 Ballot; CEQA status – not a project
RECOMMENDATION
Staff recommends the City Council review and discuss the November 3, 2026 state and local
ballot measures and consider adoption of positions as relevant to the City of Palo Alto or desired
by the City Council. Staff recommends that City Council consider taking the following suggested
positions based on the Legislative Guidelines and previous City Council action:
Proposition 1 – Support
Proposition 37 – Support
Proposition 43 – Oppose
Public Transit Revenue Measure District (Measure RTM) – City Council already supported
City of Palo Alto Measure J – Support
BACKGROUND
The City Council regularly considers taking positions in an election year on ballot measures
presented to Palo Alto voters. This item is intended to inform Palo Alto voters about the
upcoming election and provides the City Council the opportunity to hear from residents, discuss,
and take positions on measures if desired.
The Secretary of State has qualified 14 statewide measures for the November 3, 2026 election.
Townsend Public Affairs, the City’s legislative consultant, has summarized the statewide
measures in Attachment A. Additional information, including impartial analyses and arguments,
may be found in the Secretary of State’s Official Voter Information Guide.1 Additionally, there are
two (2) local measures that will be on Palo Alto voters’ ballots. Additional information, including
1 California General Election November 3, 2026 Official Voter Information Guide:
https://voterguide.sos.ca.gov/propositions/
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impartial analyses and arguments, may be found at the Santa Clara County Registrar of Voters3
and City4 webpages.
ANALYSIS
5 and previous City Council action. Staff only suggested positions where the
Legislative Guidelines clearly apply.
Title Summary
Suggestion and
Relevant
Guideline
Legislative Statue
Authorizes $11.25 billion in state general obligation bonds for
housing affordability programs, including for California
veterans, and to finance housing development projects seeking
federal tax credits.
Allocates funds:
o $5.1 billion to build and rehabilitate multifamily rental
housing;
o $2.1 billion to acquire, rehabilitate, or preserve affordable
housing units, and provide supportive housing for those
experiencing homelessness;
o $1.25 billion for state-funded mortgages for California
veterans;
o $1.1 billion for homeownership and downpayment
assistance;
o $1 billion for farmworker, tribal, and student housing;
o $500 million for housing infrastructure; and
o $200 million to support local housing programs.
Guideline:
3 Santa Clara County Registrar of Voters List of Local Measures: https://vote.santaclaracounty.gov/list-local-
measures-4
4 City of Palo Alto Municipal Elections: https://www.paloalto.gov/Departments/City-Clerk/Municipal-Elections
5 City of Palo Alto’s 2026 Federal and State Legislative Guidelines:
https://www.paloalto.gov/files/assets/public/v/2/city-manager/legislation/2026-legislative-guidelines.pdf
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Title Summary
Suggestion and
Relevant
Guideline
Proposition 2:
Increases the
State’s Rainy Day
Fund.
Legislative
Constitutional
Amendment
Increases California’s Rainy Day Fund, approved by voters in
2014, to provide funding for education, health care, public
safety, and other essential services during economic downturns.
Doubles the budget reserve cap from 10% to 20% of General
Fund revenues, requiring savings until Fund’s balance equals
20% of General Fund.
Requires additional savings in years when tax revenues are high.
Increases budget reserves available for education, state debts,
and pension obligations.
None.
Proposition 3:
Provides
Permanent
Funding for
Schools and
Health Care by
Extending Existing
Tax on High
Incomes.
Initiative
Constitutional
Amendment
Makes permanent the existing 2012 voter-approved tax rates
for high-income Californians, currently set to expire in 2031.
Rates apply to income over about $371,000 for single filers,
$742,000 for joint filers, and $505,000 for heads of household
(2025 levels; adjusted annually for inflation).
Allocates tax revenues 89% to K–12 schools, 11% to community
colleges.
Allows local school boards to decide how revenues are spent;
bars use for administrative costs.
Increases General Fund revenues available for health care,
budget reserves, and other programs.
None.
Proposition 4:
Repeals
Prohibition
Against Public
Funding of
Election
Campaigns.
Legislative Statute
Current law prohibits state and local governments from using
public funds for election campaigns except in charter cities and
counties.
This measure repeals that prohibition and allows state and local
governments to establish public campaign financing programs
for candidates who agree to specified spending limits and meet
eligibility criteria.
Prohibits public funding programs from using funds earmarked
for education, transportation, or public safety.
Prohibits candidates from using public funds for legal defense
costs, fines, or repayment of personal loans to campaigns.
Triples maximum fine for campaign contributions by foreign
entities.
None.
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Title Summary
Suggestion and
Relevant
Guideline
Proposition 5:
Changes Recall
Election Process
For Statewide
Officers.
Legislative
Constitutional
Amendment
Under current law, voters decide at the same election whether
(1) to recall a state officer, and (2) who will replace that officer
if recalled.
Under this measure:
o if the Governor is recalled, the Lieutenant Governor
becomes Governor for the remainder of the term or until a
successor is elected;
o for all other recalled officers, the office will remain vacant
until filled by a subsequent special election or appointment
as specified in existing law; and
o a recalled officer may be a candidate in a special election to
fill the office.
None.
Proposition 37:
Creates Loan
Program For
Middle-Income
Buyers of
Qualified New
Homes.
Initiative Statute
Authorizes up to $25 billion in bonds to offer eligible buyers
fixed-rate mortgages for up to 17% of the purchase price of a
“qualified new home” (new construction or first sale of
converted nonresidential property, priced below about $1
million–$1.5 million, depending on county, adjusted annually).
Borrowers must be California residents for one year, occupy the
home, earn less than twice the area’s median income, and pay
at least 3% down.
Requires that bonds be repaid by homeowners’ mortgage
payments, not the State.
Support.
Guideline:
“Promotes the
development and
enhancement of
safe and
affordable housing
and accessible
housing within the
City for all
economic
segments of the
population”
Proposition 38:
Authorizes Bonds
For Immunology
Medical Research.
Initiative Statute.
Authorizes $8.4 billion in state general obligation bonds for
immunology and immunotherapy research (technologies that
use body’s immune system to treat disease), with half dedicated
to cancer, heart disease, and Alzheimer’s disease.
Allocates funds equally between (1) a single University of
California-affiliated nonprofit medical research institute, and (2)
research grants for public or nonprofit universities and
institutions.
Requires funding recipients to sell technology and drugs derived
from research in California for 20% below national average
price.
Appropriates money from General Fund to repay bonds;
General Fund receives 10% of licensing royalties until bonds are
repaid.
None.
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Title Summary
Suggestion and
Relevant
Guideline
Proposition 39:
Prohibits Citizens
From Voting
Unless They
Present
Government-
Issued
Identification.
Initiative
Constitutional
Amendment
Prohibits voting by mail unless voter designates a government-
issued identification number for their voter registration.
Invalidates mail ballots if envelope does not include last four
digits of a government-issued identification number matching
the number designated in the voter’s registration (e.g., if voter
designates Social Security number for registration, but provides
driver’s license number on envelope, their ballot would not
count).
Prohibits voting in person without presenting government-
issued identification.
Requires elections officials to annually report percentage of
each county’s voters whose citizenship status they have
verified.
None.
Proposition 40:
Imposes One-Time
Tax on Certain
Taxpayers.
Initiative
Constitutional
Amendment and
Statute
Imposes one-time tax of up to 5% on certain taxpayers with
covered assets valued over $1 billion; covered assets include
businesses, securities, art, collectibles, and intellectual property,
but exclude real property and some pensions and retirement
accounts.
Allocates 90% of these tax revenues for health care, 10% for
food assistance or education-related programs; prohibits using
revenues to replace existing funding for these purposes.
Exempts such tax revenues from constitutional requirements
for school funding, budget reserves, and state spending limit.
None.
Proposition 41:
Prohibits New
State Taxes That
Exclude Revenues
From State
Spending Limit.
Requires Audits
For New State
Special Taxes.
Initiative
Constitutional
Amendment
Prohibits any new state taxes that exclude their revenues from
the state spending limit approved by voters in 1979.
For statewide special taxes, requires (1) a pre-election audit of
programs that would receive funding from a voter-proposed
special tax, and (2) recurring audits of programs funded by
special taxes enacted after January 1, 2026.
It states that other voter-approved measures appearing on the
same ballot are void if they conflict with this measure and this
measure receives more affirmative votes.
None.
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Title Summary
Suggestion and
Relevant
Guideline
Proposition 42:
Prohibits New
State Personal
Property Taxes
and Certain
Retroactive State
Taxes.
Initiative
Constitutional
Amendment
Prohibits new state taxes on personal property, including
business interests, intellectual property, and financial assets
(including assets in retirement and investment accounts).
Prohibits new state taxes that apply retroactively based on the
taxpayer’s conduct, activities, or a status that occurred before
the new tax’s effective date.
Applies to new taxes that are enacted or take effect on or after
January 1, 2026.
States that other voter-approved measures appearing on the
same ballot are void if they conflict with this measure and this
measure receives more affirmative votes.
None.
Proposition 43:
Limits Voters’
Ability To Raise
Revenues For
Local Government
Services.
Legislative
Constitutional
Amendment
Currently, local governments must obtain two-thirds voter
approval to impose, extend, or increase special taxes (taxes
dedicated to a specific purpose) that they place on the ballot.
However, this two-thirds vote requirement does not currently
apply to special taxes put on ballot by voter signature gathering.
This measure would limit voters’ ability to pass voter-proposed
local special taxes by raising the percentage of votes needed to
approve such ballot measures from a simple majority (over
50%) to a new two-thirds threshold.
Applies to voter-proposed ballot measures approved after
January 1, 2027.
Oppose.
Guideline:
“Supports the
lowering or
maintaining of
voter thresholds
for local revenue
measures”
Proposition 44:
Requires
Community
Health Clinics
Spend 90% Of
Revenue On
Program Services.
Initiative Statute
Imposes penalties on nonprofit Federally Qualified Health
Centers (community clinics providing primary care to medically
underserved areas and populations) that spend less than 90% of
revenue on “program services” advancing their charitable
purpose, including but not limited to patient services.
Department of Public Health may waive spending requirements
in exceptional circumstances.
Authorizes Attorney General to publish guidance defining
qualifying expenditures.
Monetary penalties may be refunded if centers become
compliant within five years.
Authorizes criminal charges for false reports or artificially
increasing spending ratio.
None.
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Title Summary
Suggestion and
Relevant
Guideline
Proposition 45:
Modifies
Environmental
Review for Certain
Projects.
Initiative Statute
Amends California Environmental Quality Act (CEQA) to
expedite environmental review for specified project categories
(including most housing, transportation, water, health, wildfire
mitigation, educational facility, internet access, and clean
energy projects). For these types of projects, this measure:
o Sets deadlines for public agencies to complete
environmental review and take required actions.
o Allows expedited review of environmental impacts,
limiting public agencies’ current obligation to consider a
range of feasible project alternatives to reduce
environmental impacts.
o Establishes deadlines for filing and resolving lawsuits
challenging project approvals; limits evidence courts may
consider and relief courts can order.
None.
Local Measures
Title Summary Suggested Position
Public Transit
Revenue Measure
District (Measure
RTM) – Connect
Bay Area Transit
Initiative
To prevent major service cuts to BART and other transit, avoid
increased traffic, and reduce pollution by: Preserving BART,
Caltrain, VTA, SamTrans, AC Transit, Muni, other transit for
everyone, including workers, students, seniors, persons with
disabilities; Supporting transit safety, cleanliness,
affordability, reliability; Repairing targeted roads/potholes;
Requiring financial transparency, oversight, accountability;
shall the measure enacting a 0.5% (Alameda, Contra Costa,
San Mateo, Santa Clara counties) and 1% (San Francisco) sales
tax for 14 years generating approximately $980,000,000
annually, be adopted?
Support
Prior City Council
Action:
The City Council
endorsed this measure
on March 2, 20269.
9 City Council, March 2, 2026; Agenda Item #4; SR# 2601-5865
https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=86659&dbid=0&repo=PaloAlto&searchid=4ac36678
-93df-47e6-8ba6-05de931a117d
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Title Summary Suggested Position
City of Palo Alto –
Measure J –
Transactions and
Use Tax
City of Palo Alto Community Safety/Services Measure. To
provide general city services including repairing Cubberley
Community Center for current safety, earthquake,
accessibility standards; upgrading deteriorating electrical
systems, wiring, plumbing; acquiring outdoor space/sites;
maintaining streets, safe, clean downtown/commercial cores;
preparing for natural disasters; repairing deteriorating
community spaces, libraries, shall City of Palo Alto’s measure
enacting a 0.5% (1/2¢) sales tax, providing approximately
$15,600,000 annually until ended by voters, with published
financial audits, all funds used locally, be adopted?
Support.
Prior City Council
Action:
Cubberley acquisition
and renovation funding
is a 2026 City Council
Priority11 and City
Council voted to place
the measure on the
ballot.12
FISCAL/RESOURCE IMPACT
There is no financial impact associated with adopting support or oppose positions on ballot
measures. The City Council annually budgets for legislative advocacy services, and these efforts
are led by staff in the City Manager and City Clerk’s Office with stakeholder support across
departments.
STAKEHOLDER ENGAGEMENT
Staff from multiple departments are involved in the City’s legislative advocacy process. Staff meet
regularly with the City’s legislative consultants to review pending state activity, including
legislation, grant opportunities, and ballot measures with potential impacts to the City.
Departments reviewed this list of ballot measures and propositions.
ENVIRONMENTAL REVIEW
The City’s legislative advocacy activities are not a project under section 15378(b)(5) of the
California Environmental Quality Act Guidelines (administrative activities that will not result in
direct or indirect physical change in the environment).
ATTACHMENTS
Attachment A: TPA Ballot Initiatives Memo
APPROVED BY:
Mahealani Ah Yun, City Clerk
Ed Shikada, City Manager
11 City Council January 24, 2026 Action Minutes:
https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=85782&dbid=0&repo=PaloAlto
12 City Council. June 8, 2026; Agenda Item #14; SR# 2603-6081
https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=887096&dbid=0&repo=PaloAlto
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CALIFORNIA ADVOCACY • FEDERAL ADVOCACY • GRANT WRITING
Sacramento • Washington, D.C.
Northern California• Central California• Southern California
MEMORANDUM
From Townsend Public Affairs
Date: July 17, 2026
Subject: November Ballot Update: Statewide Initiatives
EXECUTIVE SUMMARY
California's November 3, 2026 statewide ballot was finalized on June 25, 2026, marking the
constitutional deadline for citizen initiatives to qualify for the November election and the final
opportunity for proponents to withdraw qualified measures through negotiated agreements. The
weeks leading up to the deadline were defined by extensive negotiations among the Governor's
Office, Legislative Leadership, initiative proponents, business organizations, labor groups,
taxpayer advocates, and local government stakeholders, resulting in significant changes to the
measures voters will consider this November.
For local agencies, the most consequential outcome was the negotiated withdrawal of the
proposed Taxpayer Protection Act (Initiative 1983). In its place, the Legislature approved ACA 22,
which appears on the November ballot as Proposition 43. If approved by voters, the measure
would amend the California Constitution to require all local special taxes, including those
proposed through the citizen initiative process, to receive two-thirds voter approval. As part of the
same agreement, the Legislature approved ACA 21, removing ACA 13 from the ballot. While the
agreement eliminated provisions affecting charter city real estate transfer taxes and the
retroactive invalidation of certain existing local taxes, Proposition 43 preserves one of the
initiative's central policy objectives and could significantly affect future local and regional revenue
measures.
Additional negotiations also reshaped the ballot. Competing healthcare initiatives were withdrawn
pursuant to an agreement between healthcare stakeholders and the California Labor Federation,
while competing rideshare liability initiatives were removed following a settlement between Uber
and the Consumer Attorneys of California. Meanwhile, a broader debate over statewide taxation
remains on the ballot through competing measures addressing a one-time tax on ultra-high-net-
worth individuals, restrictions on future wealth taxes, and new accountability requirements for
statewide special taxes.
As a result of these negotiations, California voters will consider 14 statewide measures in
November, consisting of five legislative measures and nine citizen initiatives. The ballot
includes measures affecting affordable housing, state finances, local taxation, election
administration, campaign finance, environmental review, healthcare, and constitutional
governance.
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This memorandum provides an overview of the final statewide ballot, summarizes the negotiations
that shaped its composition, and highlights the measures with the greatest potential implications
for California local governments.
QUALIFIED STATEWIDE BALLOT MEASURES
PROPOSITION 1: Veterans and Affordable Housing Bond Act of 2026
Proposition 1 was placed on the ballot by the Legislature through SB 417 and would authorize
the State to issue $11.25 billion in general obligation bonds for affordable housing and veterans’
housing programs.
Of the total bond authorization, $10 billion would support affordable housing programs, while
$1.25 billion would support the CalVet Home Loan Program. The affordable housing funding
would be administered through existing and expanded state housing programs and would support
activities such as the development, rehabilitation, preservation, and acquisition of affordable
rental and ownership housing.
The measure is intended to provide a substantial new infusion of state housing resources at a
time when many existing housing programs are oversubscribed or nearing exhaustion. Funding
could support housing for lower-income households, people experiencing homelessness,
farmworkers, veterans, and other populations facing barriers to obtaining stable housing.
The specific timing and allocation of bond funding would depend on subsequent state budget
appropriations, program guidelines, and implementation decisions by state housing agencies.
Even if the measure is approved, the entire $11.25 billion would not be available immediately.
Bond funding would likely be appropriated over several fiscal years. Because the bonds would be
repaid from the State General Fund, the measure would also create long-term state debt-service
obligations.
PROPOSITION 2: Save for California’s Future Act
Proposition 2 was placed on the ballot by the Legislature through ACA 20 and would amend the
California Constitution to modify the State’s budget reserve requirements.
The measure would increase the constitutional limit on the State’s Budget Stabilization Account,
commonly referred to as the Rainy-Day Fund, from 10 percent to 20 percent of annual General
Fund revenues. The objective is to allow the State to retain a larger reserve during periods of
revenue growth so that additional resources are available during recessions, revenue downturns,
emergencies, or future budget deficits.
California’s revenue structure is particularly sensitive to changes in personal income, capital
gains, and the financial markets. As a result, state revenues can increase rapidly during strong
economic periods and decline substantially during downturns. Increasing the reserve limit is
intended to reduce the need for abrupt program reductions, borrowing, payment deferrals, or other
budget-balancing actions when revenues fall.
The measure would not raise taxes or immediately require the State to deposit the full amount
permitted under the higher reserve limit. Rather, it would increase the amount the State is
constitutionally permitted to retain and would operate within the State’s broader reserve and
budget framework.
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PROPOSITION 3: Permanent Funding for Schools and Health Care Through the Existing
Tax on High Incomes
Proposition 3 is an initiative constitutional amendment that would make permanent the higher
personal income tax rates originally approved by voters in 2012.
The existing tax applies to higher-income taxpayers and is currently scheduled to expire in 2031.
The income thresholds are adjusted annually for inflation. Based on the thresholds included in
the official ballot summary, the rates apply to taxable income above approximately $360,000 for
single filers, $490,000 for heads of household, and $721,000 for joint filers, using 2024 income
levels.
Proposition 3 would remove the 2031 expiration date and continue the tax rates indefinitely.
Revenue attributable to the measure would be allocated 89 percent to kindergarten through grade
12 schools and 11 percent to community colleges. Local school boards would retain authority to
determine how their allocated funding is spent, and the measure would prohibit the funds from
being used for administrative costs.
The Legislative Analyst and Director of Finance estimate that the measure would maintain
between $5 billion and $15 billion annually in state revenue, measured in today’s dollars, that
would otherwise end after 2031. The amount collected in any year would fluctuate significantly
because high-income tax collections are affected by wages, business income, capital gains, and
financial market conditions.
Although the measure is presented primarily as an education funding proposal, continuing the tax
could also affect the broader State General Fund. Maintaining these revenues could reduce
pressure on other state-funded programs, including health care, housing, homelessness,
transportation, and local assistance. Conversely, opponents may argue that permanently
extending the tax could affect taxpayer behavior, business decisions, or the State’s dependence
on volatile high-income tax revenue.
PROPOSITION 4: California Fair Elections Act of 2026
Proposition 4 was placed on the ballot through SB 42 and would amend the Political Reform Act
to permit state and local governments to establish public campaign financing programs.
Existing provisions of the Political Reform Act generally prohibit public officers from spending
public funds, and candidates from accepting public funds, for the purpose of seeking elective
office. Proposition 4 would remove that statewide prohibition and allow the State and local
jurisdictions to establish public financing systems if they choose to do so.
The measure would not automatically create a statewide public financing program, provide
funding for candidates, or require a city or county to establish such a program. Instead, it would
give state and local governments the legal authority to develop programs through which qualifying
candidates could receive public campaign funds, subject to locally or legislatively established
eligibility requirements, contribution limits, expenditure rules, disclosure requirements, and
enforcement provisions.
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Potential public financing models could include matching small-dollar contributions, providing
campaign grants, or issuing democracy vouchers or similar forms of public support. The precise
structure would be determined separately by each participating jurisdiction.
For cities and counties, the principal effect would be the restoration of local discretion. A
jurisdiction interested in public campaign financing would still need to adopt a program, identify a
lawful funding source, establish administrative and enforcement procedures, and comply with
applicable election laws.
Supporters contend that public financing can reduce candidates’ reliance on large donors and
encourage a broader range of individuals to seek office. Opponents may question whether public
funds should be used for political campaigns or whether such programs provide sufficient public
benefit. SB 42 was enacted subject to voter approval because it amends provisions of the voter-
approved Political Reform Act.
PROPOSITION 5: Recall of State Officers
Proposition 5 was placed on the ballot by the Legislature through SCA 1 and would change the
process used to replace a statewide elected officer who is removed through a recall election.
Under California’s current recall system, voters are generally asked two questions on the same
ballot. The first asks whether the officer should be recalled. The second asks which replacement
candidate should serve if the recall is successful. A replacement candidate can win with a plurality
of votes, even if that candidate receives fewer votes than the number of voters who opposed
recalling the incumbent.
Proposition 5 would eliminate the replacement-candidate portion of a recall election for state
officers. If voters approve a recall, the office would become vacant and would be filled under the
succession or vacancy procedures that otherwise apply to that office. For example, if a Governor
were recalled, the Lieutenant Governor would succeed to the office. Vacancies in other statewide
or legislative offices would be filled in accordance with the applicable constitutional or statutory
process.
The measure is intended to simplify recall elections and address concerns that an official who
was elected by a statewide majority could be replaced by a candidate receiving only a relatively
small plurality. It would not eliminate the public’s power to recall state officers, alter the signature
requirements for qualifying a recall, or apply to recalls of local officials unless otherwise provided
by law.
PROPOSITION 37: Middle-Income Homebuyer Loan Program
Proposition 37 is an initiative statute that would authorize up to $25 billion in bonds to establish a
home loan program for qualifying middle-income buyers purchasing newly constructed homes or
certain converted properties.
The program would provide eligible buyers with a fixed-rate mortgage covering up to 17 percent
of the purchase price of a qualified home. The assistance would be available for newly constructed
homes or the first sale of qualifying properties converted from non-residential use.
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To qualify, an applicant would generally have to be a California resident for at least one year,
intend to occupy the property as a primary residence, have household income below 200 percent
of area median income, and provide a down payment of at least 3 percent.
Eligible home prices would be capped at approximately $1 million to $1.5 million, depending on
the county, with the limits adjusted annually. Because housing costs vary considerably across
California, the applicable maximum would be determined geographically.
The measure states that the bonds would be repaid through mortgage payments made by
participating homeowners rather than through the State General Fund. Accordingly, the official
fiscal estimate identifies no direct state or local government costs. However, the ultimate financial
performance of the program would depend on loan repayments, interest rates, defaults,
administrative costs, and housing market conditions.
The measure would not directly require cities to approve new housing developments or change
local land-use standards. Its primary effect would be to expand financing assistance for eligible
buyers and potentially stimulate the production and purchase of qualifying homes.
PROPOSITION 38: Bonds for Immunology and Immunotherapy Research
Proposition 38 is an initiative statute that would authorize $8.4 billion in state general obligation
bonds for immunology and immunotherapy research.
The bond proceeds would be divided equally between two purposes. Half would be allocated to
a University of California-affiliated nonprofit medical research institute selected by the California
Department of Public Health. The other half would support a competitive grant program for public
or nonprofit universities and research institutions.
The measure would require that at least half of the research funding be directed toward cancer,
heart disease, and Alzheimer’s disease. It would also impose conditions related to the pricing and
availability of technologies and drugs developed using bond proceeds. Research recipients would
be required to make resulting technologies and drugs available in California at prices at least 20
percent below the national average price.
Unlike Proposition 37, these bonds would be repaid from the State General Fund. The Legislative
Analyst and Director of Finance estimate that repayment would cost approximately $500 million
annually for 25 years. The State could potentially recover some costs if funded research produces
commercially successful discoveries, but such revenues are uncertain.
The principal policy consideration is whether the State should incur long-term general obligation
debt to finance medical research, particularly where the benefits and potential commercial returns
cannot be predicted in advance.
PROPOSITION 39: Voter Identification and Citizenship Verification Requirements
Proposition 39 is an initiative constitutional amendment that would establish additional
identification and citizenship verification requirements for California voters.
Under current law, an individual registering to vote must declare under penalty of perjury that the
individual is a United States citizen and provide identifying information such as a birthdate, driver’s
license number, state identification number, or partial Social Security number.
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Proposition 39 would additionally require voters appearing at a polling place to present
government-issued identification. A person voting by mail would be required to provide the last
four digits of a government-issued identification number.
The State would be required to provide voter identification cards to eligible voters upon request.
Elections officials would also be required to issue annual reports identifying the percentage of
registered voters in each county whose citizenship has been verified.
The measure would significantly affect county elections officials, who administer elections on
behalf of the State. Counties would need to modify voting systems, ballot materials, voter
education programs, poll-worker training, vote-by-mail procedures, provisional ballot processes,
and citizenship verification systems.
The Legislative Analyst and Director of Finance estimate one-time state and local costs in the
tens of millions of dollars to prepare for implementation. Ongoing costs could range from tens of
millions to the low hundreds of millions of dollars annually, depending on how the identification,
reporting, outreach, and verification requirements are implemented.
The measure could also result in litigation concerning voter access, implementation standards,
acceptable forms of identification, provisional voting, and the State’s responsibility to provide
identification at no cost.
PROPOSITION 40: One-Time Tax on Certain Individuals and Trusts
Proposition 40 is an initiative constitutional amendment and statute that would impose a one-time
tax of up to 5 percent on individuals and trusts with covered assets exceeding $1 billion.
Covered assets would include businesses, securities, investment holdings, artwork, collectibles,
and intellectual property. Real property and certain pension and retirement accounts would be
excluded.
The measure would allocate 90 percent of the revenue to health care programs and 10 percent
to food assistance or education-related programs. It would prohibit the State from using the new
revenue to replace existing funding for those purposes, meaning the money would generally be
required to supplement rather than supplant current appropriations.
The measure would also exempt the new revenue from certain constitutional requirements,
including the Proposition 98 school-funding guarantee, state budget reserve requirements, and
the State Appropriations Limit.
The Legislative Analyst and Department of Finance estimate that the tax could generate tens of
billions of dollars over several years. However, they also estimate that the measure would likely
result in an ongoing reduction in state personal income tax revenue of hundreds of millions of
dollars or more annually. This could occur if affected taxpayers move, restructure assets, change
residency, or otherwise reduce future taxable income in California.
The measure does not impose a local tax or provide unrestricted revenue directly to local
governments. Nevertheless, funding for health care, food assistance, and education could flow
through county-administered or locally delivered programs.
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The measure could also have broader state budget implications. If the tax produces substantial
short-term revenue but reduces ongoing income tax collections, the State could experience both
an immediate funding increase and longer-term revenue losses.
Proposition 40 remained on the ballot despite efforts by state leaders and other organizations to
negotiate its withdrawal before the June 25 deadline.
PROPOSITION 41: Audits of Programs Funded by State Special Taxes and State Spending-
Limit Requirements
Proposition 41 is an initiative constitutional amendment concerning statewide special taxes,
program audits, and the State Appropriations Limit.
For a special tax proposed through the statewide initiative process, the measure would require
an audit of the programs proposed to receive the tax revenue before the election. The audit would
provide voters with information regarding the performance, administration, or financial condition
of those programs before they decide whether to approve the tax.
The measure would also require recurring audits of programs funded by state special taxes
enacted after January 1, 2026. The audit findings would likely be included in or referenced through
future voter information materials and public reports.
In addition, Proposition 41 would prohibit the enactment of new state taxes that exclude their
revenue from the existing voter-approved State Appropriations Limit. The restriction would apply
to taxes enacted after January 1, 2026, including taxes appearing on the November 2026 ballot.
This provision could directly interact with Proposition 40 because the billionaire wealth tax
proposes to exempt its revenue from the State Appropriations Limit. The outcome and legal
interaction of the two measures could depend on which receives more affirmative votes if both
are approved and their provisions are determined to conflict.
The official fiscal impact is unknown. Costs or savings would depend on the number of future
special tax initiatives, the programs subject to audit, the extent of audit recommendations, and
whether those recommendations produce operational savings.
PROPOSITION 42: Prohibition on New State Personal Property Taxes and Certain
Retroactive Taxes
Proposition 42 is an initiative constitutional amendment that would restrict the State’s authority to
impose certain future taxes.
The measure would prohibit new state taxes on the ownership or control of personal property.
The definition would encompass financial assets, investment accounts, retirement accounts,
business interests, intellectual property, and other forms of personal property.
The measure would also prohibit certain retroactive state taxes. A tax generally could not be
applied to conduct, activities, ownership, transactions, or taxpayer status that occurred before the
tax’s effective date, subject to limited exceptions.
The restrictions would apply to taxes enacted or taking effect on or after January 1, 2026, including
taxes appearing on the November 2026 ballot.
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The measure appears designed in part to prevent the State from adopting wealth taxes or asset-
based taxes similar to Proposition 40. If both Propositions 40 and 42 are approved, the measures
could conflict because Proposition 40 would impose a tax based on covered assets, while
Proposition 42 would prohibit new state taxes on the ownership or control of personal property.
The legal effect could depend on constitutional rules governing conflicting ballot measures,
including which measure receives more affirmative votes.
The Legislative Analyst and Department of Finance identify the fiscal effect as the possibility that
state tax revenues would be lower in the future. The measure would not necessarily reduce
revenue collected under current taxes, but it would limit the Legislature’s and voters’ options for
establishing certain new taxes later.
The measure applies to state taxation and would not directly prohibit local property, sales, parcel,
utility, or other local taxes. Its indirect significance for local agencies would arise if future state
revenue limitations reduce the resources available for state-local programs or increase pressure
on existing revenue sources.
PROPOSITION 43: Local Taxes and the Two-Thirds Vote Requirement
Proposition 43 was placed on the ballot through ACA 22 and would amend the California
Constitution to require approval by two-thirds of voters for local special taxes, including special
taxes proposed through the local initiative process.
A special tax is a tax whose proceeds are dedicated to one or more specified purposes. Examples
may include taxes dedicated to transportation, public safety, libraries, parks, housing,
homelessness programs, emergency response, or other identified services.
Local government-sponsored special taxes are already generally subject to a two-thirds voter-
approval requirement. However, following the California Supreme Court’s decision in California
Cannabis Coalition v. City of Upland, appellate decisions concluded that certain constitutional
procedural restrictions applying to local government-sponsored measures did not necessarily
apply in the same manner to measures placed on the ballot through the citizens’ initiative power.
That created a pathway under which some voter-sponsored special taxes could be approved by
a simple majority.
Proposition 43 would close that distinction by expressly applying the two-thirds vote requirement
to special taxes proposed by the electorate through the initiative process. As a result, a citizen-
sponsored special tax would be subject to the same voter-approval threshold as a special tax
placed on the ballot by a city council, county board of supervisors, or other local governing body.
Proposition 43 emerged from negotiations concerning the Howard Jarvis Taxpayers Association’s
broader Taxpayer Protection Act. The original initiative would have imposed additional restrictions,
including limitations involving real estate transfer taxes and retroactive invalidation of certain
previously approved taxes. Under the negotiated agreement, HJTA withdrew that initiative after
the Legislature placed ACA 22 on the ballot and removed ACA 13.
For local governments, Proposition 43 is among the most significant measures on the 2026 ballot.
Requiring two-thirds approval for all local special taxes would make voter-sponsored dedicated
revenue measures more difficult to approve. The effect could be particularly significant for regional
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measures, where reaching two-thirds approval across a large and politically diverse geography
can be challenging.
The measure would not raise taxes or invalidate all existing special taxes. Rather, it would
establish the approval threshold that future local special tax measures must meet. Local agencies
contemplating future revenue measures should evaluate how Proposition 43 could affect measure
structure, timing, polling, coalition development, and whether revenue is proposed as a general
or special tax.
PROPOSITION 44: Community Health Clinic Spending Requirements
Proposition 44 is an initiative statute that would require nonprofit Federally Qualified Health
Centers to spend at least 90 percent of their revenue on program services advancing their
charitable purposes.
Federally Qualified Health Centers provide primary and preventive care in medically underserved
communities and frequently serve patients who are uninsured, enrolled in Medi-Cal, or otherwise
face difficulty accessing health care.
Under Proposition 44, qualifying program expenditures could include patient care and other
services that directly advance a clinic’s charitable mission. No more than 10 percent of revenue
could generally be used for management, administration, overhead, and other non-program
expenses.
The California Department of Public Health would be authorized to waive the requirement in
exceptional circumstances. The Attorney General could issue guidance defining which expenses
qualify as program services and which are considered management or overhead.
Clinics that fail to comply could face monetary penalties. Those penalties could be refunded if the
clinic comes into compliance within five years. The measure would also authorize criminal
penalties for false reporting or schemes intended to artificially inflate a clinic’s reported program-
spending ratio.
The Legislative Analyst and Department of Finance estimate that state enforcement costs could
reach the low tens of millions of dollars annually. Much of that cost could be offset by fees and
penalties imposed on affected entities.
If clinics reduce administrative expenses to satisfy the 90 percent standard, the measure could
direct more resources toward patient care. At the same time, clinics may argue that the limitation
could constrain legitimate expenditures for compliance, technology, workforce administration,
facilities, billing, quality assurance, and other functions necessary to operate health care
organizations.
PROPOSITION 45: Environmental Review for Certain Projects
Proposition 45 is an initiative statute that would amend the California Environmental Quality Act
to expedite environmental review and litigation for specified categories of projects.
The measure would apply to many housing, transportation, water, health care, and clean-energy
projects. For covered projects, it would establish deadlines for public agencies to complete
environmental review and take required actions.
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The measure would also limit the extent to which an agency must evaluate a range of feasible
project alternatives. Under existing CEQA procedures, an environmental impact report generally
evaluates alternatives that could avoid or substantially reduce a project’s significant
environmental effects. Proposition 45 would narrow that obligation for covered projects in an effort
to reduce the time and cost associated with environmental documentation.
In addition, the measure would change judicial review of covered project approvals. It would
establish deadlines for filing and resolving CEQA lawsuits and limit the evidence courts may
consider and the remedies courts may order.
For cities, counties, transit agencies, water districts, joint powers authorities, and other lead or
responsible agencies, Proposition 45 could substantially alter environmental review procedures.
Agencies would need to revise internal practices, consultant contracts, hearing schedules,
document preparation timelines, and litigation strategies.
The measure could accelerate the approval and construction of housing, transit, water
infrastructure, renewable energy, and health care projects. It could also reduce administrative and
legal costs over the long term by limiting the scope and duration of environmental review and
litigation.
However, the deadlines could create near-term staffing and implementation challenges. Agencies
may need to complete complex reviews more quickly, coordinate with applicants and other
responsible agencies under shorter timeframes, and ensure that abbreviated processes remain
legally defensible.
The Legislative Analyst and Department of Finance estimate state and local implementation costs
in the tens of millions of dollars annually during the first several years. Over time, state and local
governments would likely experience net savings from reduced administrative and legal workload,
although the precise fiscal effects are uncertain. The effect on state courts could range from
savings in the tens of millions of dollars to costs in the low tens of millions annually.
Proposition 45 is likely to be particularly significant for local agencies with substantial housing,
infrastructure, transportation, water, or clean-energy project portfolios. It could create faster
project-delivery tools, but agencies would need detailed implementation guidance to understand
which projects qualify and how the new review and litigation requirements interact with other
environmental, land-use, coastal, endangered species, and permitting laws.
NEGOTIATIONS AND WITHDRAWALS OF MEASURES
California's November 3, 2026 statewide ballot was finalized on June 25, the constitutional
deadline for citizen initiatives to qualify for the November election and the final day proponents
could voluntarily withdraw qualified measures. In the days leading up to the deadline, negotiations
among the Governor's Office, Legislative Leadership, initiative proponents, taxpayer advocates,
labor organizations, business groups, healthcare interests, and local government stakeholders
significantly reshaped the ballot.
Ultimately, six qualified initiatives were withdrawn through negotiated agreements, while one
additional initiative failed to qualify because county signature verification extended beyond the
constitutional deadline. These negotiations reduced the number of statewide measures before
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voters and, in several cases, replaced broad initiative proposals with narrower legislative
compromises.
Taxpayer Protection Act Agreement
The most consequential agreement involved Initiative 1983, the Taxpayer Protection Act,
sponsored by the Howard Jarvis Taxpayers Association. The initiative proposed sweeping
changes to local taxation authority, including requiring a two-thirds vote for all local special taxes,
restricting charter city real estate transfer taxes, and potentially invalidating certain existing voter-
approved taxes through retroactive provisions.
Following months of negotiations, Initiative 1983 was withdrawn after the Legislature approved
ACA 22 (Proposition 43) and simultaneously removed ACA 13 from the ballot through ACA 21.
Unlike the original initiative, Proposition 43 is limited to requiring a two-thirds vote for all local
special taxes, including citizen-sponsored initiatives, and does not include the proposed
restrictions on charter city transfer taxes or retroactive provisions affecting existing local taxes.
For local governments, the agreement significantly reduced the immediate fiscal risk posed by
the original initiative while preserving one of its central policy objectives. If approved, Proposition
43 would make future local and regional special tax measures more difficult to pass by requiring
two-thirds voter approval regardless of how they qualify for the ballot.
Healthcare and Rideshare Settlements
Two additional negotiated settlements removed four qualified initiatives from the ballot.
Healthcare stakeholders and the California Labor Federation agreed to withdraw competing
initiatives involving healthcare executive compensation and healthcare union political spending.
Similarly, Uber and the Consumer Attorneys of California reached a settlement that resulted in the
withdrawal of competing initiatives concerning automobile liability, attorney fees, and rideshare
passenger safety.
While these measures had limited direct implications for local agencies, their withdrawal
eliminated several costly statewide campaigns and narrowed the policy issues voters will consider
in November.
LOOKING AHEAD
Although the statewide ballot is now finalized, implementation questions remain for many of the
measures should they be approved by voters.
Several propositions would require additional legislation, administrative rulemaking, or regulatory
guidance before they could be fully implemented. Others, particularly those involving
constitutional changes, taxation, and election administration, could generate litigation addressing
statutory interpretation and implementation.
Between now and the November election, campaign spending, endorsements, and public polling
will continue to shape the political environment surrounding these measures. Proposition 43 is
expected to generate substantial interest from local governments, taxpayer organizations, labor
groups, business organizations, and regional coalitions because of its implications for future local
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revenue measures. Likewise, housing, CEQA reform, voter identification requirements, and
statewide taxation are expected to remain prominent topics throughout the campaign.
Townsend Public Affairs will continue monitoring campaign developments, legislative
implementation discussions, fiscal analyses, and administrative guidance as the election
approaches. We will provide clients with updates regarding significant campaign developments,
implementation considerations, and the practical implications of each measure.
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Staff Report: 2608-6709 – Page 1 of 49
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City Council
Staff Report
From: City Manager
Report Type: INFORMATION REPORTS
Lead Department: Utilities
Meeting Date: October 5, 2026
Report #:2608-6709
TITLE
Informational Report: Utilities Quarterly Report for FY2026-Q3 (January 2026 – March 2026)
RECOMMENDATION
This is an informational report, and no action is requested.
EXECUTIVE SUMMARY
This report has been prepared to keep the Council apprised of the major issues that are facing the water,
gas, electric, wastewater collection and fiber utilities including legislative/regulatory issues, utility-related
capital improvement programs, operations, reliability impact measures and a utility financial summary.
This item was transmitted to the Utility Advisory Commission (UAC) on August 5, 2026; however, upon
further review, certain components of this report are required to be transmitted to the City Council per
the Energy Risk Management Guidelines. Information required includes:
- Net supply cost versus budget for the reporting fiscal year (Figure 2)
- Electric market exposure that includes a 36 month load resource balance by month (section 8.4)
- Hydro Generation providing a 36 month review of hydro and renewables uncertainty in the
electric utility (Figure 3)
- Financial forecasted position reflecting the estimated and/or approved ending balance of the
electric utility reserves and net revenue projections and uncertainty for the electric utility
- Annually the transmission of the cap and invest allowance revenues and expenditures per City
Council approved resolutions 9487 and 10077 for the electric and gas utilities.
Key information is summarized below:
Vacancies and Staffing – Appendix B
The Utilities Department has 37 vacant positions out of 269 authorized positions or a 14% vacancy
rate at the end of March 2026, compared to 46 vacancies or 17% in December 2025.
Electric Operations continues to have the highest number of vacancies at 16 full-time employees
(FTEs) or a 20% vacancy rate, however, there are 3 new hires since the previous quarter. CPAU is
in the process of hiring and developing in-house crews to reduce reliance on third party
contractors to reduce construction cost, improve work quality, and build in-house expertise.
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Electric Utility:
Electric net supply cost for FY 2026 is currently projected to be $83.8M, which represents an
8.34% decrease from the adopted budget level of $91.7M. During FY 2026 through Q3, congestion
and loss costs were down $6.2 million and transmission costs were down $1.8 million. (Section
1.1.1)
Utilities staff is working with the Northern California Power Agency (NCPA) to identify new
renewable energy and storage projects. (Section 1.1.3)
An update regarding the electric grid modernization work is provided. With the completion of the
pilot project in April 2025, 908 homes in the Pilot area are ready for electrification and overhead
design and material procurement is in progress for the remainder of Phase 1, which will include
an additional ~3,500 homes (Section 1.2). An update on electric power outages and reliability is
provided (Section 1.3)
Electric sales volumes in FY 2026 through Q3 were 6.1% higher than forecasted. (Section 1.4.1)
Gas prices have been relatively low and stable. (Section 2.1)
One gas main replacement project is in progress, and one is in the design stage; repairs at
Arastradero Creek from the winter of 2023 storms are anticipated to begin mid-2027. (Section 2.2)
An update on gas service interruptions and work to proactively meet new compliance goals before
they go into effect is provided (Section 2.3)
Gas sales are highly weather-dependent and were down 8.8% below forecast through Q3 of FY
2026 resulting from mild winter conditions. (Section 2.4.1)
As of April 1, precipitation at the Hetch Hetchy weather station was about 93% of median for Water
Year 2026. (Section 3.1)
Two water main replacement projects are in the design stage; design work to relocate a water
pumping line at Arastradero Creek is underway and the relocation work is anticipated to begin July
2028. (Section 3.2)
Water sales through Q3 of FY 2026 were about 3.6% lower than forecasted; this number increased
relative to Q2 when water sales were 6.1% below forecast driven by the water March weather in
2026. (Section 3.4.1)
Actual wastewater sales revenues through Q3 are tracking 3.8% above the budget. (Section 4.3.1)
Dark fiber sales decreased by $0.3 million compared to the same period in the prior fiscal year.
This decline in operating revenues is mainly from lower customer sales associated with customer
disconnections due to move-outs and business closures.
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Utilities Quarterly Report
Fiscal Year 2023
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1 ELECTRIC UTILITY..........................................................................................................................................7
1.1 ELECTRICITY SUPPLY AND TRANSMISSION ...............................................................................................................7
1.1.1 Forecasted Supply Costs ......................................................................................................................7
1.1.2 Hydroelectric Conditions .....................................................................................................................8
1.1.3 Renewable Energy Procurement .........................................................................................................9
1.2 CAPITAL IMPROVEMENT PLAN STATUS ..................................................................................................................9
1.3 RELIABILITY ....................................................................................................................................................11
1.4 FINANCIAL HEALTH ..........................................................................................................................................11
1.4.1 Sales Forecasts vs. Actuals ................................................................................................................11
1.4.2 Financial Position ..............................................................................................................................12
2.1 GAS SUPPLY AND TRANSMISSION .......................................................................................................................14
2.1.1 Actual and Forecasted Supply Costs ..................................................................................................15
2.2 CAPITAL IMPROVEMENT PLAN STATUS ................................................................................................................15
2.3 RELIABILITY ....................................................................................................................................................16
2.4 FINANCIAL HEALTH ..........................................................................................................................................17
2.4.1 Sales Forecasts vs. Actuals ................................................................................................................17
2.4.2 Financial Position ..............................................................................................................................18
3.1 WATER SUPPLY AND TRANSMISSION ...................................................................................................................20
3.2 CAPITAL IMPROVEMENT PLAN STATUS ................................................................................................................22
3.3 RELIABILITY ....................................................................................................................................................25
3.4 FINANCIAL HEALTH ..........................................................................................................................................26
3.4.1 Sales Forecasts vs. Actuals ................................................................................................................26
3.4.2 Financial Position ..............................................................................................................................27
4.1 WASTEWATER TREATMENT UPDATES AND CAPITAL PLANNING STATUS .....................................................................28
4.1.1 Treatment Cost Trends ......................................................................................................................28
4.1.2 Regional Water Quality Control Plant Capital Planning Status .........................................................30
4.2 COLLECTION SYSTEM CAPITAL IMPROVEMENT PLAN STATUS....................................................................................30
4.3 FINANCIAL HEALTH ..........................................................................................................................................32
4.3.1 Sales Forecasts vs. Actuals ................................................................................................................32
4.3.2 Financial Position ..............................................................................................................................32
5.1 FIBER UTILITY STRATEGIC PLANNING ...................................................................................................................33
5.2 CAPITAL IMPROVEMENT PLAN STATUS ................................................................................................................33
5.3 RELIABILITY ....................................................................................................................................................34
5.4 FINANCIAL HEALTH ..........................................................................................................................................34
5.4.1 Fiber Sales .........................................................................................................................................34
5.4.2 Financial Position ..............................................................................................................................34
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7 LEGISLATIVE, REGULATORY AND INDUSTRY ACTIVITY .................................................................................37
7.1 STATE LEGISLATIVE ACTIVITY .............................................................................................................................37
7.2 STATE REGULATORY ACTIVITY ............................................................................................................................37
7.3 FEDERAL ACTIVITY ...........................................................................................................................................38
8.1 OVERVIEW OF HEDGING PROGRAMS...................................................................................................................40
8.2 OVERVIEW OF ENERGY RISK MANAGEMENT PROGRAM ..........................................................................................40
8.3 FORWARD DEALS ............................................................................................................................................41
8.4 ELECTRIC MARKET EXPOSURE ............................................................................................................................41
Figures
FIGURE 1: FY 2026 Q3 NET SUPPLY COST FORECAST VS. ACTUALS .............................................................................................8
FIGURE 2: FY 2026 Q1 – Q3 ADOPTED BUDGET VS ACTUAL NET SUPPLY COST ($K).....................................................................8
FIGURE 3: HYDRO GENERATION: FY 2026-2028 ACTUALS & PROJECTIONS (GWH)......................................................................9
FIGURE 4: HYDRO GENERATION: FY 2027-2029 UNCERTAINTY (GWH)......................................................................................9
FIGURE 5: ELECTRIC SALES VOLUME (KWH), FY 2026-Q3 ......................................................................................................12
FIGURE 6: ELECTRIC SALES REVENUE ($), FY 2026-Q3 ...........................................................................................................12
FIGURE 7: BUDGET VS CURRENT ESTIMATE ($1,000S), FY 2026 ..............................................................................................13
FIGURE 8: PALO ALTO GAS COMMODITY RATES .....................................................................................................................14
FIGURE 9: GAS SUPPLY COSTS ($), ACTUAL VS BUDGET, FY2026-Q3........................................................................................15
FIGURE 10: SEWER LATERAL INSPECTION ..............................................................................................................................16
FIGURE 11: GAS SERVICE INTERRUPTIONS, FY 2025 TO FY 2026 .............................................................................................17
FIGURE 12: GAS SALES VOLUME (THERMS), FY 2026 Q3 .......................................................................................................17
FIGURE 13: GAS SALES REVENUE ($), FY 2026 Q3................................................................................................................18
FIGURE 14: CURRENT WATER YEAR 10-STATION SNOW PILLOWS INDEX ....................................................................................21
FIGURE 15: SFPUC WATER DELIVERIES ...............................................................................................................................21
FIGURE 16: WATER SERVICE INTERRUPTIONS, FY 2025 TO FY 2026 .........................................................................................25
FIGURE 17: WATER SALES VOLUME (CCF), FY 2026 Q3 ........................................................................................................26
FIGURE 18: WATER SALES REVENUE ($), FY 2026 Q3 ...........................................................................................................27
FIGURE 19: PALO ALTO’S SHARE OF WASTEWATER TREATMENT EXPENSES .................................................................................29
FIGURE 20: CURRENT RWQCP CAPITAL WORK IN-PROGRESS (AS OF MARCH 31, 2026).............................................................30
FIGURE 21: WASTEWATER SALES REVENUE ($), FY 2026 Q3 ..................................................................................................32
FIGURE 22: ELECTRIC RESOURCE ADEQUACY DEALS ................................................................................................................41
FIGURE 23: ELECTRIC LOAD RESOURCE BALANCE, FY 2026 – 2029 ..........................................................................................42
FIGURE 24: UTILITIES VACANCIES AND RECRUITMENTS BY DIVISION ...........................................................................................43
FIGURE 25: ELECTRIFICATION PERMITS BY CATEGORY ..............................................................................................................45
FIGURE 26: ELECTRIC OUTAGE RELIABILITY, CY 2019 THROUGH 2025 ......................................................................................45
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FIGURE 27 : CALENDAR YEAR 2025 SUSTAINED OUTAGES BY CAUSE .........................................................................................46
IGURE 28: OFFSET PORTFOLIO COMPOSITION ......................................................................................................................48
IGURE 29: OFFSET PROJECT DESCRIPTIONS ..........................................................................................................................48
IGURE 29: OFFSET PROJECT DESCRIPTIONS (CONT’D.)...........................................................................................................49
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1 Electric Utility
The City’s electric utility serves all residential and non-residential electric demands in Palo Alto at a lower
cost than PG&E in surrounding communities. Its electric supply portfolio is 100% carbon neutral. The City
maintains and operates an electric distribution system but does not operate any transmission lines or any
generating capacity on its own. Instead, the City belongs to Northern California Power Agency (NCPA)
which operates its Calaveras hydroelectric generating plant and provides power scheduling services for
its other generating resources. This carbon free power is supplied through power purchase agreements
with various generation operators.
1.1 Electricity Supply and Transmission
Below is an update on electricity supply and transmission services.
1.1.1 Forecasted Supply Costs
The electric net supply cost for FY 2026 is currently projected to be $83.8 M, which represents an 8.34%
decrease from the Adopted Budget level of $91.7 M. For FY 2027, electric net supply cost is projected to
be $95.78 M. During Q3 of FY 2026, net supply cost was about ~$4.0M lower than the adopted budget.
The largest changes relative to the previous quarter’s actual cost were the lower congestion and loss costs
(down $3.5 M) and the lower transmission costs (down $1.1M). Overall, actual supply costs for FY 2026
through the end of Q3 are currently 8.71% below the budgeted level. Similar to Q3’s performance, actual
congestion and loss costs were below budget by $6.2 million, and transmission costs were lower than
budget by $1.8 million year to date. FY 2026 has seen higher-than-expected load demand, which reduced
surplus energy sales (down $3.5M). Revenue from RA sales as well was also higher than expected (up $2.2
M). Based on these actuals and the forecasted supply costs for the remainder of the year, which differ
from the estimated April and May costs shown in the figure below, FY 2026 net supply cost is projected
to end the fiscal year $7.65 M below the adopted budget.
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Figure 1: FY 2026 Q3 Net Supply Cost Forecast vs. Actuals
Figure 2: FY 2026 Q1 – Q3 Adopted Budget vs Actual Net Supply Cost ($K)
1.1.2 Hydroelectric Conditions
The City receives power from two hydroelectric projects, the Calaveras project and the Western Base
Resource contract for federal hydropower from the Central Valley Project.1 The watershed for Western
1 The Calaveras project is a hydropower project located in Calaveras County that is maintained and operated by the Northern
California Power Agency on behalf of the City and other project participants. The City is also one of several public entities with
contracts with the Western Area Power Administration for “Base Resource” electricity, which is the hydroelectric power available
from the federal government’s Central Valley Project (operated by the Bureau of Reclamation) after accounting for power used
for Central Valley Project operations and power delivered to certain “preference” customers.
Adopted
Budget
Back
Office
Actual
Variance Variance %
Jul-25 4,553 4,184 (368) -8.1%
Aug-25 6,431 6,651 220 3.4%
Sep-25 6,714 5,590 (1,124) -16.7%
Oct-25 8,346 6,978 (1,368) -16.4%
Nov-25 8,709 9,836 1,127 12.9%
Dec-25 8,786 8,222 (563) -6.4%
Jan-26 9,490 6,342 (3,149) -33.2%
Feb-26 8,193 7,299 (894) -10.9%
Mar-26 8,446 8,499 53 0.6%
Total 69,667 63,601 (6,066) -8.7%
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hydropower is primarily in the northern end of California, while the watershed for the Calaveras project
is in the Central Sierras.
st, precipitation in northern California is about 1% above average for
this time of year, while central California is 11% below average. Hydro generation levels are currently
projected to be roughly average for FY 2026 and FY 2027, with total output of about 96% of the long-term
average level for FY 2026 through FY 2028. As shown in Figure 3, hydropower generation has high
uncertainty beyond roughly six months from the forecast date.
Figure 3: Hydro Generation: FY 2026-2028 Actuals & Projections (GWh)
Figure 4: Hydro Generation: FY 2027-2029 Uncertainty (GWh)
1.1.3 Renewable Energy Procurement
1.2 Capital Improvement Plan Status
FY 2026 FY 2027 FY 2028
Calaveras Generation (GWh)106 113 97
Western Generation (GWh)244 259 259
Total Hydro Generation (GWh)350 372 356
% of Long-term Average Total 93%99%95%
Long-term Average Total Hydro (GWh)376 376 376
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EL-17001 (East Meadow Circles 4/12kV Conversion)
This project is scheduled to be completed in several phases. Phase 1 is completed. Phase 2
engineering design is completed. Phase 2 construction is expected to be completed December
2026.
This project is in the design phase, which is scheduled to be completed in December 2026.
Construction will be completed by December 2027.
The engineering design for this project is currently in progress. The project will be completed in
multiple phases and will take additional years to complete. All engineering design phases are
expected to be completed by December 2026. Construction is expected to be completed by
December 2028.
CPAU staff and contract consultants are continuously working on pole replacement designs for
construction. 44 poles were replaced to date in FY 2026. The replacement of poles will continue
to be prioritized in the Grid Modernization areas.
This project is scheduled to be completed in two phases. Substation Security lighting and camera
contract was awarded in June 2022. The installation for the first phase was completed for 7 of the
9 substations in December 2024. The next phase of the Substation Physical Security Project is
pending the Colorado Master Plan. The Colorado Master Plan incorporates and coordinates all
planned construction work at Colorado Substation, and the Physical Security work is expected to
start in FY27.
This project funds the purchase and replacement of both 60kV and 12kV substation circuit
breakers that are reaching the end of their useful life expectancy. Council approved the purchase
request for the sixteen 12kV circuit breakers and eight 60kV breakers. The installation of the 12kV
breakers is complete. The project to purchase the eight 60KV breakers was approved by City
Council on May 20, 2024. The engineering design and installation of the 60kV breakers has been
postponed pending the results and recommendations of a Master Plan for Colorado Substation,
a Plan that coordinates all planned work in the Substation and is expected to result in a re-design
of the 60KV Buss to either a Breaker-and-a-Half or Ring Buss scheme. The final Master Plan from
the City's consultant Ampirical is expected to be delivered by the end of FY26, and the tentative
schedule for the Colorado Substation re-design is expected to commence in FY27.
This project will rebuild approximately 9 miles of overhead line in Foothills Park, as necessary to
lower the risk of wildfires due to overhead electric lines. Staff has completed 39,200 feet of
substructure work and de-energized an equivalent amount of overhead electric lines.
Substructure for Phase 1 was completed in Spring 2022 and the substructure for Phase 2 was
completed in June 2023. Phase 3 construction is 100% complete with substructures and cable
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installed and energized. Phase 4 construction has completed 20,700 feet of the planned 22,000
feet. Phase 4 undergrounding and has slowed due to winter weather. Phase 5 substructure
installation along Arastradero road is 100% completed with all substructure and cable installed
and energized. Phase 4 undergrounding is planned for completion this summer and overhead
lines (currently de-energized) will be removed on all phases as weather permits. All work is
expected to be complete before the end of fiscal year 2026.
EL-02011 (Electric Utility Geographic Information System (GIS))
The project scope includes on-going maintenance/technical support of the existing GIS system
and implementation of the new GIS platform, ESRI. IT is developing a new ESRI based, asset
management system Electric Engineering and Operations that will be completed by July 2026.
EL-24000 (Grid Modernization)
The Pilot project was completed April 2025. Sixty-six poles have been replaced in the Grid
Modernization Pilot area. Additionally, 908 homes in the Pilot area are ready for electrification.
The overhead design and material procurement is in progress for the remainder of Phase 1. This
includes an additional ~3,500 homes within boundaries of Embarcadero Road, West Bayshore
Road, Loma Verde Ave, Middlefield Road, Oregon Expressway, and El Camino Real. The scope
remains the same as the Pilot area, which is to upgrade and install new transformers, overhead
wires, poles and attachment equipment. The target date for Engineering design is December 2026
and construction to follow (12-18 months). Additionally, as Engineering staff review customer
service upgrade requests and maintenance projects throughout the City, opportunities for
infrastructure upgrades are being designed and constructed. An additional 24 transformers have
been designed for upgrade or new install, which makes 150+ homes ready for electrification
outside of the Phase 1 area. East Meadow Circles is also currently in construction which will
convert the line voltage to 12kV and electrify 289 homes by July 2026.
1.3 Reliability
CPAU tracks electric power outages through industry recognized indices; System Average Interruption
Duration Index (SAIDI), System Average Interruption Frequency Index (SAIFI), and Customer Average
Interruption Duration Index (CAIDI). The chart below summarizes outage indices for Palo Alto. With this
quarterly update, staff is presenting outage indices and discussion in Appendix C.
1.4 Financial Health
Below is a summary of the financial position for the electric utility.
1.4.1 Sales Forecasts vs. Actuals
Actual electric sales volumes through FY 2026-Q3 were 6.1% higher than forecast (653.9 GWh), driven by
continued consumption from the top ten commercial customers, largely reflecting increased data center
demand. Overall, actual sales revenues through FY 2026-Q3 exceeded the Financial Plan by 1.5%.
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Figure 5: Electric Sales Volume (kWh), FY 2026-Q3
FY 2026-Q3
1.4.2 Financial Position
In FY 2026, total revenues are expected to be about $16.6 million, or 7% higher than budgeted, due to
load growth and higher-than-expected wholesale revenues. Total expenses are expected to be about
$27.5 million, or 12% higher than budgeted, due to higher supply purchases and increased capital
investment funding, including grid modernization, partially offset by lower operations costs. Staff will
update the estimated numbers with actual figures in the Q4 report.
6.1%
1.5%
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Figure 7: Budget vs Current Estimate ($1,000s), FY 2026
Budget Estimated Var.Var. %
Sales Revenue 190,025 199,175 9,151 5%
Other Revenue 49,870 57,326 7,456 15%
Revenue 239,895 256,501 16,607 7%
Supply Purchases 127,961 134,879 6,919 5%
Operations (w/o CIP) 91,434 81,766 (9,668)-11%
CIP 5,332 35,591 30,259 567%
Expense 224,727 252,236 27,509 12%
Net (Cost)/Benefit 15,168 4,265 (10,902)-72%
Staff proposed a 6% rate increase in FY 2027 in the March 31 UAC meeting3, which is the same as projected
in the FY 2026 Financial Forecast4 presented to Council on June 16, 2025. Staff projects the Electric Utility’s
Operations Reserve will total $41.6 million at end of FY 2026, which is below the target level of $49.3
million. Staff expects that debt will be issued in FY 2027 to offset a portion of the grid modernization costs
already spent and planned in FY 2026 – FY 2029. At the Finance Committee meeting on April 21, 20265,
the Finance Committee approved staff’s proposal, with a modification to increase the $6 million to the
hydro stabilization reserve over a two-year period with a corresponding reduction in the rate increase
from 6% to 4.5% in FY 2027. This revised proposal was approved unanimously. The City Council approved
the revised Electric rate proposal in June 2026.
3 Staff Report 2512-5641: https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=87018&dbid=0&repo=PaloAlto
4 Attachment D, Exhibit 1 to Staff Report 2411-3776, June 16, 2025:
5 Staff Report 2512-5603: https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=87766&dbid=0&repo=PaloAlto
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2 Gas Utility
The City’s gas utility serves all residential and non-residential gas demand in Palo Alto. The City maintains
and operates a system of medium-pressure gas lines for delivering gas but does not operate any
transmission lines. Costs for the gas utility are split approximately two thirds for the operation,
maintenance, and capital improvement and one third for the cost of the gas commodity, PG&E gas
transmission, compliance with the State’s Cap and Trade Program and the City’s Carbon Neutral Gas
Program.
2.1 Gas Supply and Transmission
After experiencing a notable price spike during winter 2022-2023, natural gas prices in California have
seen a significant decline, returning to more typical ranges. This shift can be attributed to several factors,
including milder temperatures and above average gas storage levels in the West. The combination of
these factors has kept natural gas prices low, and we do not expect a significant price spike to occur in the
near future. The chart below shows Palo Alto’s gas commodity rates from September 2021 through March
2026.
Figure 8: Palo Alto Gas Commodity Rates
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2.1.1 Actual and Forecasted Supply Costs
Actual supply costs ($11.42 million) through FY 2026-Q3 were approximately 32% lower than budgeted
($16.88 million) in the FY 2026 Financial Forecast. This variance was primarily driven by historically low
natural gas prices, which remained well below initial forecasts. PG&E benchmark prices at Citygate and
Malin were projected at $4.74 and $4.14 per MMBtu through the third quarter of 2026, while actual
average costs have been substantially lower at $3.28 per MMBtu.
Figure 9: Gas Supply Costs ($), Actual vs Budget, FY2026-Q3
2.2 Capital Improvement Plan Status
The following capital projects are currently in progress:
GS-15000 – GMR 25 (Gas Main Replacement 25)
The GMR 25 project will replace approximately 26,000 linear feet of gas mains on Ross Road from
Colorado Avenue to East Meadow Drive and surrounding streets, as well as North and
Southampton Drive and surrounding streets, and Walter Hays Drive and surrounding streets.
Construction on the project began in March 2026 and is anticipated to finish in mid-2027. Currently
the contractor is installing pipelines in the North and Southampton Drive and surrounding streets
area. A $16.5 million reimbursable grant from the Pipeline and Hazardous Material Safety
Administration was awarded for this project.
GS-25001 – Gas Line Repair at Arastradero Creek
During the 2023 winter storms, portions of Arastradero Creek eroded away and exposed a gas
pipeline crossing Arastradero Creek. This project completed the data gathering phase and will
begin the design and permitting phase of the work. A permanent solution was presented to the
permitting agencies (Water Board, CDFW, USACE) in August 2025 for input. Construction on this
project is anticipated in mid-2027 through mid-2028. All work will take place in the Pearson
Arastradero Preserve.
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GS-16000 – GMR 26 (Gas Main Replacement 26)
The GMR 26 project will replace approximately 26,000 linear feet of gas mains in the Midtown,
Palo Verde, Fairmeadow, and Evergreen Park neighborhoods. The project is currently in design
with construction anticipated in mid-2027.
The Cross Bore Phase IV Project includes a total of 963 sewer laterals located throughout the City.
The project inspections are on-going and are being performed by the City’s Operational crew. The
laterals that cannot be completed by city crews, will be inspected by a contractor at a later date. A
total of 271 laterals have been inspected by city crews, with 153 confirmed to be free of cross
bores, and 118 more presenting more complex situations requiring reinspection with specialty
equipment, which may be completed by a contractor or staff with additional training. A lateral
launch camera may be required for the reinspection, which Operations staff recently acquired.
Training was completed in December 2025. 692 sewer laterals remain to be inspected by city crews
and will continue in 2026 when new hourly employees are anticipated to be hired.
Figure 10: Sewer Lateral Inspection
2.3 Reliability
The City of Palo Alto tracks all gas service interruptions. A summary chart of these interruptions can be
found below. Gas service interruptions are usually due to repairs of broken or damaged gas services and
mains. This kind of damage is often caused by excavation by outside parties digging in the City. In Q1 FY25,
staff recorded higher numbers in gas service interruption tracking due to the division allocating more
resources to resolve existing gas leaks. These leaks are small and are monitored; however, expected
changes in gas legislation will require them to be resolved more quickly. The gas division has been
proactively working to meet upcoming compliance goals before the new rules go into effect. In Q2 FY
2026 there was an increased number of gas dig-ins by outside contractors. These were responsible for 7
of the 11 outages and 189 of the customers affected. In Q3 FY 2026 the total minutes increased from Q2
due to unplanned gas leaks and repairs needed to resolve these leaks.
153
118
692
Total Sewer Laterals Completed
Total Sewer Laterals Incomplete
Total Addresses remaining to be
Inspected
963 sewer laterals for Inspection
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Figure 11: Gas Service Interruptions, FY 2025 to FY 2026
FY 2025 FY 2026
Gas Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Number of Breaks 13 7 6 6 4 11 9
Total Minutes 1860 1205 1050 930 300 1063 1770
Customers
Affected 135 48 23 40 17 200 202
2.4 Financial Health
Below is a summary of the financial position for the gas utility.
2.4.1 Sales Forecasts vs. Actuals
Actual gas sales volumes through Q3 2026 were approximately 8.8% below forecast, resulting in revenues
20.6% below budget, as gas market prices remained lower than anticipated. In addition, milder-than-
normal winter conditions in the Palo Alto area contributed to reduced heating demand, with
approximately 57% of days in Q3 2026 above historical temperature norms and no corresponding increase
in extreme cold days.
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Figure 13: Gas Sales Revenue ($), FY 2026 Q3
2.4.2 Financial Position
At the end of FY 2025, the Gas Utility’s Operations Reserve was $9.7 million, slightly above the minimum
guideline level of $8.6 million (this balance includes $8.57 million held in the CIP Reappropriations Reserve
to be reimbursed through a grant, and $5.4 million temporarily recorded in the Operations Commitments
Reserve due to an administrative oversight, which should have been placed in Operations Reserve).
Gas sales revenue in FY 2025 was about $4.7 million below forecast due to lower usage. Although supply
purchases were $3.2 million below forecast and distribution expenses were $0.6 million lower, these
savings did not fully offset the revenue shortfall. CIP expenses exceeded projections by $6.8 million,
funded largely through the CIP Reappropriation and Commitments Reserve for Gas Main Replacement
Project 24. In FY 2026 and FY 2027, staff projects the Operations Reserve will be impacted by lower sales
revenues from lower consumption and higher CIP expenses. Staff projects the Gas Utility’s Operations
Reserve will total $12.1 million at end of FY 2026.
As a result, staff proposed a 9% overall increase for FY 2027 in the March 31 UAC meeting9, assuming
supply charges remain unchanged, which is higher than the 6% overall increase projected in the FY 2026
Financial Forecast10 presented to Council on June 16, 2025. Commissioners voted 4-3 to recommend an
overall rate increase of 7% for FY 2027, instead of the staff proposed overall rate increase of 9%, and
identify potential options to address the resulting gap, including reducing the General Fund Transfer and
tapping reserves. At the April 21 Finance Committee meeting11, staff proposed a 9% overall increase for
FY
9 Staff Report 2512-5641: https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=87018&dbid=0&repo=PaloAlto
10 Attachment D, Exhibit 1 to Staff Report 2411-3776, June 16, 2025:
11 Staff Report 2512-5607: https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=87765&dbid=0&repo=PaloAlto
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2027 and outlined alternative options for lowering the rate increases. A Committee member proposed
deferring the staff’s rate reduction options, particularly reducing and extending the gas spike mitigation
collection, for consideration by the full City Council. However, another Committee member expressed
concern about the risk of future gas commodity spikes and preferred to maintain the current pace of rate
increases as proposed by staff. The Finance Committee approved staff’s proposal, which passed on a 2-1
vote. The City Council approved the 9% overall gas rate increase in June 2026.
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3 Water Utility
The Water Utility serves water to virtually all Palo Alto residential and non-residential customers. All
potable water in the City is from the San Francisco Public Utilities Commission (SFPUC) Hetch Hetchy
Water System. This system delivers high quality water from the Sierra Nevada and uses no pumping to
deliver water to the City. Palo Alto uses a small amount of recycled water for irrigation of the Municipal
Golf Course and a few other sites near the Regional Water Quality Control Plant. The City also maintains
a system of reservoirs, wells, and emergency interties that enable Palo Alto to serve water during an
interruption of the Hetch Hetchy system. Costs for the Water Utility are split approximately half for the
operation, maintenance and periodic replacement of Palo Alto’s water system and half for the costs of
the water purchased.
3.1 Water Supply and Transmission
As of April 1, 2026, cumulative Hetch Hetchy Weather Station precipitation for Water Year (WY) 2026 was
93% of median, and the Regional Water System total storage operated by the San Francisco Public Utilities
Commission (SFPUC) was at 93% of maximum storage and the Water Bank was full. Regional Water System
Storage is 1,387 Thousand Acre Feet (TAF) as of April 1, 2026.
March 2026 brought unusually hot and dry conditions in the Tuolumne River Basin, accelerating snowmelt
and producing earlier-than-normal runoff and elevated river flows. Even so, reservoir operations are being
actively managed to maintain seasonal targets, and all upcountry reservoirs are projected to reach
maximum storage by the end of runoff, with the Water Bank expected to remain full. Overall, current
storage conditions remain strong, supporting a reliable water supply outlook for the year. The figure
below shows current water year 10-Station Snow Pillows Index as of April 1 (red line), based on real-time
snow water equivalent measurements in the Tuolumne Basin. Historic median, wet and dry years, and
previous water year are included for comparison purposes.
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Figure 14: Current Water Year 10-Station Snow Pillows Index
The figure below shows water usage for the South Bay/East Bay (including Palo Alto) compared to several
benchmarks, including 2015, 2025 and a five-year average. For the South Bay/East Bay region as well as
systemwide, demand for 2026 has been higher than the average of the last five years, reflecting the
unusually hot and dry conditions in March.
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California Senate Bill 555, adopted in 2015, requires all California water suppliers to submit annual
validated water loss audits to the Department of Water Resources. These audits are prepared and
validated in accordance with the American Water Works Association M36 Manual for Water Audits and
Loss Control Programs. The audits help identify the scale and sources of water loss and guide operational
and capital investments that improve the efficiency of water production and delivery.
CY2022
o Apparent Losses: 16.1 gal/connection/day
o Real Losses: 6.7 gal/connection/day
CY2023
o Apparent Losses: 16.7 gal/connection/day
o Real Losses: 4.0 gal/connection/day
CY2024
o Apparent Losses: 11.6 gal/connection/day
o Real Losses: 6.8 gal/connection/day
3.2 Capital Improvement Plan Status
WS-09000 – Water Tank Seismic Upgrade and Rehabilitation
The seismic water system improvement project will be completing an engineering assessment
and seismic analysis of two 60-year-old, one-million-gallon, welded steel tanks located near the
San Andreas Fault. These are the last two water storage tanks in the distribution network yet to
be seismically retrofitted. The tanks also require rehabilitation and new coatings. The engineering
assessment will be completed by Fall of 2026. Staff will solicit services for engineering design, and
the anticipated project construction start date for rehabilitation is January 2030.
WS-16001 – WMR 30 (Water Main Replacement 30)
The WMR 30 project is currently in the design phase and will replace approximately 2,700 linear
feet of water main on Stanford Avenue and Channing Avenue. The anticipated project construction
start date is in Spring of 2027.
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WS-19001 – WMR 31 (Water Main Replacement 31)
The WMR 31 project is currently in a preliminary scoping phase. The project will replace
approximately 4,000 linear feet of water main. This pipe replacement project is being coordinated
with the Gas Replacement Program. A combined water and gas replacement project is anticipated
to start in Summer of 2028.
Arastradero Creek Relocation: During the 2023 winter storms, a section of Arastradero Creek
eroded away and exposed a gas pipeline crossing. The gas line is in close proximity to a large
diameter water pumping line. This project will relocate the water pumping line to a location out
of the creek bed and eliminate the undermined creek crossing. The project is currently in design
and permitting phase of the work. A preliminary design for the relocated water line has been
completed. Work to relocate the pipeline is anticipated for July 2028.
Water System Leak Detection: Leaks are repaired when they reach the surface, but small leaks
can remain hidden. This project will use acoustical leak detection to identify and map small,
unreported leaks in the distribution system. The data will guide future repairs and pipe
replacement priorities. Leak detection began in April of 2026 and will finish by Summer of 2026,
with additional leak detection repeated in 2027 and 2028 under a 3-year contract, as needed. This
approach follows state guidance.
Water HDPE and Water Standard Updates: The Plastic Pipe Institute released a new technical
paper for engineering and design of in-line anchor blocks for new HDPE pipe. This project will
prepare new engineering calculations and standard details. HDPE is the primary pipe material for
all new water pipes in Palo Alto. These engineered details will be used in all water main
replacement projects within the City. Calculation and new details are expected to be completed
by Summer of 2026.
Risk and Resilience Assessment & Emergency Response Plan: In compliance with the Safe
Drinking Water Act Section 1433 and the America’s Water Infrastructure Act Section 2013 an
update to the Risk and Resilience Assessment was completed in December of 2025 and certified
with the U.S. EPA before the deadline. An update to the Emergency Response Plan (“ERP”) for the
water utility began in January of 2026. The first draft of the ERP was completed in April of 2026
and the final plan will be completed and certified by June of 2026.
Water System Master Plan: The previous full system water system master plan was completed in
1999, and a Master Plan of the water distribution piping network was completed in 2015. A new
Water System Master Plan will evaluate the City’s existing water distribution system, demands,
and maintenance needs. The plan will develop a recommended and prioritized list of capital
improvement projects. Professional engineering services to prepare the plan will be solicited by
Spring of 2026.
Well Improvements: Palo Alto owns eight wells. The pump at the El Camino Park Well failed and
was removed, rebuilt, and returned to service. About one hundred eighty feet of column pipe was
replaced with new 10-inch steel pipe, and the pump received a new power cable, new coatings,
and a new intake strainer. The well casing was inspected and cleaned before reinstallation.
Engineering and operations staff are planning a well site assessment for potential emergency
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backup power needs, with an informal review completed in Winter 2025 to identify generator
locations, new power cables, and other well site improvements. Generator sizing calculations and
a strategic plan to provide back-up power generation to each well site will be completed in
Summer of 2026.
Wildfire Hardening Improvements: Wildfires can contaminate potable water and damage water
system infrastructure. The Office of Emergency Services, with input from water engineering staff,
updated vegetation removal plans and wildfire hardening buffers around water facilities in Fire
Hazard Severity Zones. Professional services will be solicited in 2026 to evaluate vulnerable
facilities in these zones and recommend improvements.
Appurtenances and Large Meter Replacements: Small water meters are routinely replaced and
monitored for low and no flow errors. Meters three inches and larger serve critical customers and
require more complex testing and replacement. Several large meters have been identified for
replacement through the AMI program, which will improve accuracy and data quality for annual
water audits and loss reduction efforts. A solicitation for construction services is planned for
Spring 2026 and will include on call work to replace aging sampling stations and air release valves.
Water Storage Improvements: The City of Palo Alto owns and maintains seven water storage
reservoirs, two of which need improvement or replacement. A new PAX water tank mixer has
been purchased to replace the mixer for the Montebello Tank site after the water tank mixer
failed. The Boronda Tank roof has multiple indentations where water collects and ponds on the
roof. Construction services will be solicited in 2026 to mitigate the roof ponding in accordance
with State Water Resources Control Board requirements.
Water Supply Connections: Palo Alto receives water through five connections to the San
Francisco Public Utility Commission Regional Water System. Three of the connections tie into the
36-inch Palo Alto Pipeline along El Camino Real. The supply connection at California Avenue and
El Camino Real was reconstructed in 2024, providing improved control of water supply pressure.
Engineering and operations plan to adjust valving from the new station to serve a second pressure
zone and strengthen system resiliency. This project will also add communication and control
devices and pipe supports. Operations have improved water quality monitoring with new on
demand chlorine analyzers installed at the supply connections.
Automatic Flushing Systems: Most storage in the distribution network is reserved for emergency
supply. About six and a half million gallons are stored west of El Camino Real in tanks built in the
1950s and 1960s, including a series of five tanks and pump stations from Arastradero Road to
Montebello Road. Water in these tanks and in the main City reservoirs is routinely cycled into the
system to maintain freshness, and staff flush low-demand areas to manage water age. Operations
and engineering have identified potential sites for automatic flushing systems that can be
coordinated with tank down flush cycles and seasonal water quality needs. A pilot is planned for
2026.
WS-13002 – Water General Equipment/Tools
This project will purchase multiple new tools and equipment to support operation and
engineering needs. The following equipment and tools will be purchased this fiscal year.
o A new tapping machine to replace an old tapping machine with a failed motor
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o New clamp-on flow monitoring device
o New line stopping equipment and replacement components
WS-80013 – Water System Customer Connections
This project is a permanent, ongoing project. The project includes improvements required to
provide service to new customers and customers requesting expanded service. Work includes
new main extensions, valves, domestic services, meters on upgraded services, backflow devices,
fire services, and fire hydrants.
WS-80014 – Water Service and Hydrant Replacement
This project is a permanent, ongoing project. The project replaces system control valves,
deteriorated services, and replacing fire hydrants.
WS-80015 – Water Meters
New meters have been purchased for the AMI program, which is currently 90% complete. In 2026,
staff will purchase all of the new large meters of 3” and larger, for the Appurtenance and Large
Meter Replacement project work described above in the WS-11004 section.
3.3 Reliability
The City of Palo Alto tracks all water service interruptions. A summary chart of these interruptions can be
found below. Water service interruptions are usually due to repairs of broken or damaged water services
and mains. The number of water service interruptions increased in Q3, although there is no systemic
cause. Five incidents in Q3 affected more customers than usual and a few were longer shutdowns than
usual. For example, one break affected 25 people with an outage of 600 minutes.
Figure 16: Water Service Interruptions, FY 2025 to FY 2026
FY 2025 FY 2026WaterQ1Q2Q3Q4Q1Q2Q3 Q4
Number of Breaks 8 7 7 8 6 7 12
Combined Minutes 510 1250 795 960 1200 1295 2308
Customers Affected 127 99 61 146 95 114 162
Water distribution network hydraulic capacity design includes sizing pipelines, pump stations, pressure-
regulating valves, tanks and reservoirs to meet water demand and system flow needs. Fire-flow demand
plus maximum day demand is an important limiting demand condition for pipe sizing and system
operation. In 2025, the Fire Department and Water Transmission Operational team completed multiple
large, multi-hydrant fire flow tests throughout the two largest pressure zones. The results indicated
stronger than expected water system performance, and it improved coordination between the Fire
Department and Water utility.
The City of Palo Alto’s water system has seven emergency interties with neighboring water agencies.
There are two interties with Stanford University, one intertie with the City of East Palo Alto, two interties
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with the City of Mountain View, and two interties with Purissima Hills Water District. The City of Palo Alto
and the City of East Palo Alto maintain an emergency intertie on the University Avenue bridge over the
San Francisquito Creek. The City of East Palo Alto completed the first phase of the reconstruction of the
emergency intertie. The project improved reliability and flows of the emergency intertie. The General
Manager of Purissima Hills Water District requested an additional emergency intertie located near the
intersection of Page Mill and Old Page Mill Road. City of Palo Alto and Purissima Hills Water District
engineering teams are analyzing benefits.
3.4 Financial Health
3.4.1 Sales Forecasts vs. Actuals
Figure 17: Water Sales Volume (CCF), FY 2026 Q3
-3.6%
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Figure 18: Water Sales Revenue ($), FY 2026 Q3
3.4.2 Financial Position
At FY 2025 year-end, the Water Operations Reserve balance was $16.35 million, which is within the
guideline range. Additionally, the Rate Stabilization Reserve had $4 million remaining at the end of FY
2025. In March 2026, staff presented to the Utilities Advisory Commission (UAC)15 and the Finance
Committee16 a 12% distribution rate increase and an 8% commodity rate increase, which is equivalent to
a 10% overall system average increase. The UAC recommended (vote: 5-2) an overall 8% rate increase for
FY 2027 and reducing the amount going to the operation reserves by $1.2 million from the proposed
amount. The Finance Committee (vote: 3-0) agreed with that recommendation. On April 28, 2026, the San
Francisco Public Utilities Commission adopted a wholesale rate (commodity rate) increase of 7.4% for FY
2027. The City Council approved the overall 8% rate increase in June 2026, which reflects an 8.3%
distribution rate increase and a pass-through 7.4% commodity rate increase.
15 Staff Report 2512-5639: https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=86697&dbid=0&repo=PaloAlto
16 Staff Report 2512-5604: https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=86855&dbid=0&repo=PaloAlto
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4 Wastewater Utility
The Wastewater Utility includes the system of sewer pipes that collect and transport wastewater to the
Regional Water Quality Control Plant (RWQCP) operated by the City of Palo Alto under a partnership
agreement with several surrounding communities, as well as Palo Alto’s share of the cost of operating the
RWQCP. The RWQCP provides treatment and disposal of wastewater for Palo Alto. Costs for the
Wastewater Utility are split approximately half for the operation, maintenance and periodic replacement
of Palo Alto’s sewer collection system and half for the costs of wastewater treatment at the RWQCP.
4.1 Wastewater Treatment Updates and Capital Planning Status
The RWQCP, operated by Palo Alto's Public Works Department, provides wastewater treatment to Palo
Alto, Mountain View, Stanford, Los Altos, East Palo Alto, and Los Altos Hills. The Palo Alto Wastewater
Collection Utility contributes approximately 36% of the costs in FY 2025. Capital costs, driven by necessary
upgrades to aging equipment and changing environmental regulations, are a major factor in cost
increases. With plant equipment over 50 years old, significant rehabilitation and replacement are required
to maintain safe, compliant wastewater treatment operations.
4.1.1 Treatment Cost Trends
RWQCP staff project a 10% average annual increase in net treatment costs paid by Palo Alto’s Wastewater
Utility from FY 2027 to FY 2031. The main drivers are capital projects, materials, and debt service
(including loan repayments). Treatment capital expenses, including debt service, are expected to rise by
about 29% per year on average to fund equipment replacement and major upgrades. The figure below
outlines Palo Alto’s share of estimated net treatment costs, including treatment operations costs, pay-as-
you-go CIP expenses, existing debt service, and planned debt service payments shown in the "Planned
Debt Service" bar.
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Figure 19: Palo Alto’s Share of Wastewater Treatment Expenses
Note: Total wastewater treatment expenses (green line) shown above are presented net of projected Valley Water grant funding
While operations costs make up the bulk of treatment expenses, they are growing slower than planned
debt service. The largest increase in planned debt service in FY 2030 is primarily due to the debt service
repayments beginning on the Secondary Treatment Upgrades, which is an estimated $193 million capital
project to remove nutrients from the wastewater (denitrification) in order to meet upcoming regulatory
requirements. Nutrient removal is important to reduce algae blooms that kill fish and other aquatic life.
The Secondary Treatment Upgrades project will also replace critical, aging mechanical and electrical
equipment.
In June 2024, the Council approved a Cost-Sharing Agreement with the Santa Clara Valley Water District
for the Guiding Principle 5 grant program, which funds future RWQCP19 projects. The program supports
communities like Palo Alto, where taxpayers pay State Water Project property taxes but rely on non-Valley
Water supplies for most of their water. Staff estimates a total of $11.2 million in grant funding for Palo
Alto’s share of approved RWQCP projects, directly benefiting local customers. Four upcoming projects are
eligible for this funding:
Outfall Line Construction
Headworks Facility Replacement
12kV Electrical Power Distribution Loop Improvements
Joint Intercepting Sewer Rehabilitation
In FY 2025, approximately $2.8 million in CIP expenses were reimbursed through this funding, and about
$3.9 million in reimbursements are anticipated in FY 2026.
19 Staff Report 2404-2877, June 3, 2024 https://portal.laserfiche.com/Portal/DocView.aspx?id=72164&repo=r-704298fc
12,734
5%
13,387
24%
16,625
7%
17,833
2%
18,200
32%
24,101
3%
24,861
-
5,000
10,000
15,000
20,000
25,000
30,000
2025 2026 2027 2028 2029 2030 2031
Actuals Projected
Ne
t
E
x
p
e
n
s
e
s
(
$
0
0
0
)
Fiscal Year
Treatment O&M Pay-as-you-go CIP Expenses Existing Debt Services
Planned Debt Services Total and YOY%
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4.1.2 Regional Water Quality Control Plant Capital Planning Status
The RWQCP continues to undergo significant capital improvements to address aging infrastructure,
respond to evolving regulations, and meet future capacity needs. These efforts are guided by the Long-
Range Facilities Plan (LRFP), which was originally adopted in 2012 and is now undergoing a comprehensive
update, anticipated for completion in 2027. The following table summarizes these ongoing projects and
provides their status and costs. Palo Alto’s share of these costs is captured in Figure 17 in the “Planned
Debt Service” category.
Figure 20: Current RWQCP Capital Work In-Progress (as of March 31, 2026)
The RWQCP plans to fund these capital projects through a combination of mechanisms including pay-as-
you-go, State Revolving Fund loans, and revenue bonds. One of the largest projects is the Headworks
Facility Replacement, which will upgrade the raw sewage pumping systems along with bar screens and
grit removal equipment to improve reliability and protect downstream processes. As part of a broader
campus-wide approach to meet future space needs, the RWQCP is evaluating the purchase of neighboring
properties and, following Council approval of a 20-year lease agreement in May 2025, has initiated design
and construction of tenant improvements at a leased facility located at 2470 Embarcadero Way to provide
necessary laboratory and office space.
4.2 Collection System Capital Improvement Plan Status
The following capital projects are currently in progress:
WC-15002 – Wastewater System Improvements - Sewer Master Plan Study
The Master Plan Study evaluated the City’s existing wastewater collection system, flows, and flow
patterns to determine the adequacy of the system’s hydraulic capacity to meet current and
anticipated future wastewater flow demands and develop a recommended prioritized Sewer Main
rehabilitation plan. The project kicked off in December 2023. The project was completed in
December 2025.
WC-15002– Wastewater System Improvements and WC-13002 – Lodge/Foothills Lift Station Emergency
Back-up Generator Purchase
The Lodge/Foothills Lift Station (LFHLS) experienced pump failure of Pump #1 and partial failure of
Pump #2. Pump #1 was removed, repaired, and reinstalled. Pump #2 was removed and
transported to vendor to repair. Pump #2 was repaired and installed in December 2025.
Engineering assessed that the current back-up generator was undersized for load demands on the
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lift station pumps. An undersized generator at a lift station causes severe damage to the pumps
by failing to provide enough starting wattage, leading to low voltage (brownout conditions). This
causes excessive heat, overloaded motors, premature mechanical seal failure, and burnout. The
generator was delivered to the City on December 24, 2025. The City has finalized the DMV Special
Equipment registration of this generator in February 2026. The City is now in the process of
obtaining a PERP permit (Portable Equipment Registration Program) and schedule a training
session for our City staff to safely operate this new generator in April 2026. Shortly after the City
will begin mobilization to the Lodge/Foothills Lift Station location.
WC-15002– Wastewater System Improvements – Arastradero Creek Wastewater Relocation
During the 2023 winter storms, a section of Arastradero Creek eroded away and exposed a gas
pipeline crossing. The gas line is in close proximity to a sanitary sewer main. This project will
relocate the sanitary sewer main to a location out of the creek bed and eliminate the undermined
creek crossing. The project is currently in design and permitting phase of the work. A preliminary
design for the relocated sanitary sewer main has been completed. Work to relocate the pipeline is
anticipated for July 2028.
WC-20000 - SSR 32 (Sanitary Sewer Replacement 32)
The SSR 32 project is currently in the planning phase and will replace approximately 26,000 lineal
feet of sewer mains, laterals, and manholes. Currently, the project is in the process of being
rescoped based on the recently received Sewer Master Plan which identifies prioritized
improvements based on rehabilitation and capacity issues. Design will restart in FY27 for
construction in FY28.
WC-26001 – 3-Year CCTV Sanitary Sewer Main Inspection
The City has created a Request for Proposal (RFP) for a three-year program to Closed Circuit
Television (CCTV) Sanitary Sewer Mains. The project will incorporate CCTV pipeline inspections to
approximately 225,000 linear feet of Sanitary Sewer Main over a three-year duration at an annual
rate of approximately 75,000 linear feet per year. Results of the project will be used to identify
defective Sanitary Sewer Mains which will be incorporated into future SSRs to rehabilitate and
replace Sanitary Sewer Mains. The project has an anticipated start date in October 2026.
WC-99013 – Sanitary Sewer Lateral Rehabilitation and Replacement
The City is in the process of developing an IFB for a three-year program to rehabilitate or replace
Sanitary Sewer Lower Laterals (Lower Laterals). City staff has identified approximately 210 Lower
Laterals that will be rehabilitated or replaced over a three-year period at an annual rate of
approximately 70 per year. In addition to addressing defective Lower Laterals, the project will
reduce inflow and infiltration into the sanitary sewer system. The target date for Solicitation
process will be in April 2026. The project will go to council in August 2026, with an anticipated
project commencement date in September 2026.
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4.3 Financial Health
Below is a summary of the financial position for the wastewater utility.
4.3.1 Sales Forecasts vs. Actuals
Wastewater sales revenues through Q3 FY 2026 were 3.8% above budget.
Figure 21: Wastewater Sales Revenue ($), FY 2026 Q3
4.3.2 Financial Position
At the end of FY 2025, the Wastewater Collection Utility’s Operations Reserve was $1.7 million, which is
below the risk assessment level of $2.8 million.
In FY 2025, the Utility received $2.7 million in Valley Water grant revenue to offset Wastewater Treatment
costs, directly benefiting Palo Alto customers. The cash balance at the end of FY 2025 was approximately
$0.9 million, which is lower than Staff’s projections. The Utility plans to fully repay the Fiber Utility loan21
due in FY 2026.
Staff proposed a 16% rate increase in FY 2027 at the March 4 UAC meeting22 and March 17 Finance
Committee meeting23. The UAC voted 6-1 and the Finance Committee voted unanimously to move
forward with the proposal. The City Council approved the Wastewater Collection 16% rate increase in
June 2026.
21 Resolution 10173: https://portal.laserfiche.com/Portal/DocView.aspx?id=83857&repo=r-704298fc
22 Staff Report 2503-4364: https://cityofpaloalto.primegov.com/viewer/preview?id=0&type=8&uid=18457643-b8bd-4c15-b8db-
822059719251
23 Staff Report 2512-5608: https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=86858&dbid=0&repo=PaloAlto
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5 Fiber Utility
The City offers a "dark" fiber service, providing a fiber connection from Palo Alto businesses to the
downtown Internet Exchange. At the exchange, businesses select an internet service provider (ISP) for
bandwidth and connection speed. The City is piloting Palo Alto Fiber ISP service under the fiber-to-the-
premises project (FTTP) to provide residents with a fast, reliable, affordable, and local internet service.
5.1 Fiber Utility Strategic Planning
Below are highlights and status updates of the Fiber-to-the-Premises (FTTP) Project:
The fiber hut at the Colorado Substation is fully operational, supporting the Phase 1 pilot area
for residential fiber internet services and providing the infrastructure needed to support future
system growth.
Staff connected the first early adopter customer to Palo Alto Fiber internet and received positive
feedback.
Activation of 20 or more early adopters in the pilot area is targeted by the end of July. These
early adopters will help staff validate contractor installation processes, service activation,
customer service workflows, and network support.
5.2 Capital Improvement Plan Status
The following capital projects are currently in progress:
FO-16000 – Fiber Optic System Rebuild
o The new fiber backbone will be built in segments based on City and dark fiber business
needs and in consideration of any strategic FTTP opportunities. CPAU is installing new
aerial ducts or substructure (conduit and boxes) and fiber backbone cables to increase
capacity from 144 to 432 fiber strands in areas that are at or near capacity to meet new
customer dark fiber connection requests. The initial areas of rebuild are in Stanford
Research Park for capacity and along Colorado Ave to provide resiliency and redundancy
for electric and fiber.
FO-24000 – Fiber-to-the-Premises
o The pilot area consists of approximately 800 homes which are bounded by Embarcadero
Road, Louis Road, Colorado Avenue, Greer Road and West Bayshore Road. Staff
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anticipate launch of service in March of 2026. As of May, the fiber hut at the Colorado Substation is fully
operational, supporting the Phase 1 pilot area for residential fiber internet services and providing the
infrastructure needed to support future system growth. Staff also completed installation for two early
adopter customers, and working through initial performance challenges, received positive feedback
from the residents on staff’s support and responsiveness. Activation of 20 or more early adopters in the
pilot area is targeted by the end of June.
5.3 Reliability
5.4 Financial Health
5.4.1 Fiber Sales
5.4.2 Financial Position
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6 Communications
This section summarizes communication highlights from the City of Palo Alto Utilities (CPAU), updates on
major campaigns and noteworthy events. Copies of ads, bill inserts, and brochures are available online at
www.paloalto.gov/UTLbillinsert
Gas COSA Update: The Gas Cost of Service Analysis (COSA) update was approved by Council in December
for an effective date of February 1, 2026. Staff are communicating with customers about this and other
proposed utility rate changes for fiscal year 2027.
Time-of-Use (TOU) Rates Implementation Update: CPAU began a phased rollout of the TOU rate to
customers in March 2026. Several customers expressed interest in switching to the TOU rate and
requested an assessment of whether the TOU rate would be financially beneficial based on household
energy consumption. The TOU rate may be favorable for customers who have high energy consumption
and/or may drive an EV and charge at home. For customers with lower energy consumption and/or the
inability to shift energy usage, switching to the TOU may not be beneficial due to limited savings or a
potential increase in monthly billing costs. Broader marketing of this new rate schedule is planned for
early summer following testing in the first and second quarters of 2026.
Utility Billing Print Vendor Change: CPAU is working with a new vendor to print utility bills, which provides
the city with multiple benefits. The new vendor, InfoSend, provides continuity of operations for utility
billing with redundant facilities in multiple states. The city will be saving approximately $150,000 annually,
or 25% from the previous contract, for printing and mailing. E-bill customers will now be able to see utility
bill inserts with their bills rather than having to click through our website. Key information on the bill
remains the same, and there is no change to billing processes, schedules, or payment options.
Gas Main Replacement Project 25 (GMR 25): GMR 25 will replace roughly five miles of gas mains and
services that are near their operational life expectancy in the Duveneck/St. Francis, Leland Manor, and
Midtown and Palo Verde neighborhoods. This is a critical infrastructure initiative to enhance safety and
reliability of gas distribution infrastructure. CPAU is using funding for this project from the $16.5 million-
dollar federal grant awarded by the Pipeline and Hazardous Material Safety Administration (PHMSA). GMR
25 began in early 2026 and is scheduled for completion in summer 2027.
Wildfire Mitigation: The California Wildfire Safety Advisory Board (WSAB) completed its review of utilities
wildfire mitigation plans and applauded Palo Alto in its public report for substantially reducing wildfire
risk by undergrounding overhead utility lines in the high fire threat district, the Foothills. The WSAB also
commended the city for its contributions to an innovative gas monitoring network for early detection of
wildfire. The WSAB members and staff acknowledged that this technology is not widely used by publicly
owned utilities or investor-owned utilities. It was recommended that CPAU report on the status of its
undergrounding project (scheduled for completion in 2026) in the next wildfire mitigation plan, and its
efforts to reduce risk from remaining infrastructure. WSAB also advised that the city report the results,
benefits, and challenges of deploying gas monitoring technology to inform broader adoption decisions in
the utility community.
Electric Integrated Resource Plan: Every five years, CPAU submits an Electric Integrated Resource Plan
(IRP) to the California Energy Commission (CEC) to demonstrate that the city is on track to meet the state’s
requirements for long-term energy policy goals, greenhouse gas emissions reduction targets, and
renewables portfolio standard. The CEC recently sent CPAU a detailed report and letter from the Executive
Director to verify that the 2023 IRP, which staff provided in April 2024, satisfies all requirements, including
meeting the state’s mandated 60% by 2030 renewables standard.
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Charging Smart Gold Designation: The city received Gold level designation from Charging Smart, a
program funded by the US Department of Energy and implemented by the International Renewable
Energy Council, for its leadership in advancing efficient EV charging. After reviewing the city’s efforts, the
program awarded Palo Alto its highest-level award for robust planning, streamlined permitting,
community programs, and fleet and infrastructure investments. This recognition showcases our progress
and helps us exchange best practices with other communities advancing clean mobility.
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7 Legislative, Regulatory and Industry Activity
7.1 State Legislative Activity
The 2026 California legislative session continues last year’s focus on utilities affordability, wildfire
mitigation, and permitting streamlining with data center costs and rates seeing increased attention.
Hundreds of utilities-related bills have been introduced, though many only impact investor-owned utilities
(IOUs), and CPAU staff are actively tracking about 130 bills with help from trade associations NCPA and
CMUA. Some bills of particular interest to CPAU are listed below:
AB 34 (Patterson) | California Renewables Portfolio Standard Program: local publicly owned
electric utilities: large hydroelectric generation. This bill is a reintroduction of last year’s AB 1273
with the language relating to CPUC oversight (the reason for the Governor’s veto in 2025)
removed to focus AB 34 solely on large hydropower generation, specifically, it would allow local
publicly owned electric utilities to count large hydroelectric generation toward their renewable
procurement goals. Sponsored by NCPA at the behest of CPAU, AB 34 is estimated to save CPAU
roughly $1 million per year starting in 2030. AB 34 was signed into law by Governor Newsom on
July 13, 2026.
SB 222 (Wiener) | Residential heat pump systems: water heaters and HVAC: installations. This bill
is a reintroduction of last year’s SB 282 and aims to streamline permitting and installation of heat
pump water heater and HVAC systems. Some of the bill’s goals include automated permitting for
simple installations, easier inspection requirements, and caps on permit fees.
SB 868 (Wiener) | Electricity: portable solar generation devices. This bill is part of a nationwide
trend to allow small, safety-certified solar generation systems up to 1,200 watts to plug directly
into standard electrical outlets to offset electricity usage. SB 868 forbids utilities from requiring
interconnection agreements or approval or imposition of fees for the installation of plug-in solar
generation systems.
SB 875 (Wiener) | Public utilities: eminent domain. This bill seeks to reduce the barriers local
public entities face when trying to break away from PG&E and form their own publicly owned
utility (POU). The driving force behind this bill is a desire to address legal delays faced by San
Francisco as they attempt to leave PG&E and form their own POU. SB 875 failed passage out of
the Senate Energy, Utilities, and Communications Committee and will not advance.
SB 943 (Becker) | Public utilities: electricity: transmission charge: industrial transition usage. This
bill, among other things, directs the CPUC to request the California Independent System Operator
(CAISO) reconsider the structure of the transmission access charge (TAC) to better reflect cost
causation principles. CPAU supports TAC reforms that move away from charging based solely on
the volume of electricity and towards a hybrid structure that incorporates both volume and
demand for electricity, because CPAU would see lower TAC costs.
7.2 State Regulatory Activity
Long-awaited draft amendments to the Cap and Invest regulation were released by the California Air
Resources Board (CARB) in January and April 2026, consuming most of the regulatory focus for CPAU staff.
The first round of Cap and Invest amendments focused on accelerating emission reductions to meet state
goals in 2030 and 2045, primarily by reducing electric and gas utility free allowance allocations. An
allowance is equivalent to one ton of CO2 and they are bought and sold in CARB’s quarterly auctions. CARB
elected not to change the allowance allocation methodology and simply updated the data for electric load
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forecasts, electric resource mixes, and Renewable Portfolio Standard (RPS) requirements for each utility.
As a result, most electric utilities would have seen a significant decrease in their free allowance allocations
from 2027 – 2030. To protect ratepayer affordability, utilities and their associations, including NCPA and
CMUA, pushed back strongly on this proposal by advocating for methodological changes that properly
account for the RPS program or prevent allowance allocation reductions entirely. The second round of
amendments incorporated some of the recommended changes, thereby reducing the severity of the
allowance reductions for most utilities. Some utilities, including CPAU, see an increase in allowance
allocation for a variety of reasons including increasing load or changing electric portfolios. On the gas
utility side, AB 1207 required CARB to transition free allowances away from natural gas corporations and
to electric utilities. CPAU occupies a unique niche in the proposed amendments because as a gas POU,
CPAU will not lose any allowances allocated to its natural gas utility but also will not receive any of the
additional allowances that are transitioned away from natural gas corporations. The other proposed
change is restricting allowable uses of new natural gas allowance value to fuel switching and
electrification, eliminating the existing usage of allowance value for more efficient natural gas appliances,
though allowance value acquired before September 1, 2026 may still be used for natural gas efficiency
projects. To have an effective date of 2027, CARB has a self-imposed deadline of May 28th for Board
adoption of the amended regulation, so another round of proposed amendments is unlikely at this time.
7.3 Federal Activity
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Appendices
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8 Appendix A: Energy Risk Management Program
This appendix provides a quarterly update on the City’s Energy Risk Management Program.
8.1 Overview of Hedging Programs
The City’s Utilities Department maintains a hedging program for its Electric and Gas Utilities. In the Gas
Utility, the program protects against short-term (intra-month) price spikes caused by weather or major
incidents on the Western gas system. However, the City does not hedge its gas supply more than one
month in advance, choosing instead to protect the Gas Utility’s financial position by passing gas supply
costs through to customers via a charge that varies monthly based on gas market prices. As a result, the
Gas Utility’s only market exposure is the amount by which gas demand deviates from forecasts within the
month. This exposure is relatively small and can be managed using Gas Utility Operating Reserves.
Additionally, the City Council approved a $0.055 charge per therm for mitigating the impact of short-term
natural gas price spikes.27 A risk assessment is performed each year as part of the Gas Utility financial
planning process to ensure adequate reserves to cover all risks. The most recent Gas Utility Financial
Forecast was adopted June 16, 2026 (Staff Report #2602-589428).
The City has entered into long-term contracts for its Electric Utility to ensure that the City has carbon free
electricity supplies equal to 100% of Palo Alto’s annual electric demand. However, the output from these
generating sources does not match Palo Alto’s electric load on an hourly basis. In the summer, the City
has a surplus of carbon free energy and it has a deficit in the winter. This exposes the City to market price
risk, and staff maintains a hedging program (executing short-term market purchases and sales to balance
the City’s load and supplies) to protect against this risk. In addition, hydroelectric generation makes up
approximately half the City’s energy supply. During dry years, these resources do not generate as much
energy, creating an additional market exposure that must be hedged.
8.2 Overview of Energy Risk Management Program
The hedging programs described above are conducted in accordance with the City’s Energy Risk
Management Program, which includes a set of Policies adopted by the City Council (Resolution 1016629),
Guidelines adopted by the City’s Utilities Risk Oversight Coordinating Committee (UROCC), and
Procedures approved by the Utilities Director. In addition, NCPA maintains its own Risk Management
Program that applies to intra-month transactions it makes on behalf of the City (and other NCPA
members) to balance the City's hourly load and supplies. The City is able to provide policy level oversight
27 Resolution 10187, adopted August 19, 2024:
https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=62063&dbid=0&repo=PaloAlto
28 Staff Report #2411-3776
https://cityofpaloalto.primegov.com/api/compilemeetingattachmenthistory/historyattachment/?historyId=35104f06-6925-
4fe3-89c7-b0e53e6eec42
29 Resolution 10166, adopted June 10, 2024:
https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=62033&dbid=0&repo=PaloAlto
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of this program through its seat on the NCPA Risk Oversight Committee, which is held by the City’s Risk
Manager.
8.3 Forward Deals
Figure 22: Electric Resource Adequacy Deals
Delivery Month Deal Type Avg RA
(MW-mo)
Price ($/kW-mo)
8.4 Electric Market Exposure
The load resource balance (LRB) for the
prompt 12-month period is 103%. The LRB percentage represents the percentage of resources available
to cover the City’s load (i.e. the resources available for the prompt 12 months are 3% greater than the
City’s load). The City’s expected load for the prompt 36-month period is shown by the black line in the
chart below. The red dashed line below represents the City’s net resource position, including completed
energy transactions. Additional purchases will be executed for FY 2027 and FY 2028 in the coming months.
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Figure 23: Electric Load Resource Balance, FY 2026 – 2029
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9 Appendix B: Staffing and Vacancies
The Utilities Department has 37 vacant positions out of 269 authorized positions, or a 14% vacancy rate.
The City developed a Recruitment Strategic Plan33 to reduce the citywide vacancy rate. Some of the many
initiatives and accomplishments completed to improve the city’s recruitment and retention include:
Through analysis of workflow and process efficiency opportunities, the City successfully reduced
the onboarding timeline from 60+ days to an average of 23 days from time an offer is accepted to
the new employee’s first days.
Relaunched the Citywide Internship program and continues to expand participation to grow and
invest in building a strong future talent pipeline.
Enhanced the City’s training courses for hiring managers to provide opportunities to learn about
recruitment trends and improving the employee experience.
Reengaged active participation in career fairs at community colleges, universities and local
community events.
Enhanced collaboration with the City Communications team to create active social media
recruitment campaigns for hard-to-fill positions.
Strengthened citywide training programs to strengthen the knowledge, skills, and abilities of all
employees, empowering them to grow at their own pace as leaders, whether as supervisors and
managers or as individual contributors.
Figure 24: Utilities Vacancies and Recruitments by Division
33 May 6, 2024 City Council Meeting, Staff Report 2404-2890:
https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=82820&dbid=0&repo=PaloAlto&searchid=d230fd3b-dd24-4eb1-
b495-84560e808bc3
As of March 31, 2026
Division
Authorized
FTEs
Vacant
FTEs
Active
Recruitments Vacancy %
Administration 15 2 0 13%
Customer Service 24 0 0 0%
FTTP & S/CAP 6 3 0 50%
Resource Management 26 4 3 15%
Electric Engineering 25 2 2 8%
Electric Operations 81 16 14 20%
WGW Engineering 23 4 4 17%
WGW Operations 69 6 6 9%
Total 269 37 29 14%
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10 Appendix C: Electric Utility Annual Infrastructure Maintenance and
Replacement Report
Executive Summary
Calendar year 2024 safety metrics include zero OSHA recordable injuries and no lost workdays
but did include three minor, non-recordable accidents. To maintain employee competency with
safe working practices, the City provides ten department-wide safety meetings, numerous online
training courses and field assessments. During CY2024 employees collectively completed over
1,388 training courses.
The City of Palo Alto continues to provide safe and reliable electric service at the lowest
reasonable cost. System reliability numbers have improved primarily due to milder winter
weather but also due to improvements in restoration processes following an outage.
While slowed by the loss of key staff within the metering division, progress continues to complete
the AMI project. Currently staff are coordinating across departments to add a new AMI base
station atop City Hall providing connectivity and transmission for the downtown district, Stanford
campus, and Oak Creek apartments. The base station will allow approximately 3,000 electric
meters to be modernized.
The Grid Modernization Pilot for the distribution system is completed. The electric infrastructure
suppling roughly 908 homes has been upgraded including the replacement of 70 wood utility
poles, 106 new transformers, and 22,650 feet of new low-voltage wire. The cost to complete the
pilot area reached just over $10 million with contracted labor being the largest cost.
Design work continues on necessary upgrades to the Colorado Substation. Recently the City
Council approved of a professional services agreement with Burns & McDonnell to support the
City in the redesign and replacement of aging infrastructure within the Colorado substation. Staff
have begun scoping the work with Burns & McDonnell and expect to have a final high-level
assessment of the substation by December of 2025.
CY2025 (to-date) Electrification Permit Applications
To manage increased load, CPA’s Electric Engineering is responsible for evaluating all electrification-
related applications. Figure 1 provides a summary of activity levels across the five main categories. As
shown, electrification and the adoption of electric appliances is increasing year over year.
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Figure 25: Electrification Permits by Category
Between 2021 and 2025, electrification experienced Compound Annual Growth Rates (CAGR) ranging
from 13% for ESS up to 74% for hot water heat pumps. This upward trajectory is anticipated to persist
through 2026, as suggested by mid-year performance data.
Electrification is placing pressure on local permitting organizations, including the City of Palo Alto (CPA).
CPA is grappling with a flood of permit applications, often with longer review times and at times
inadequate staffing to perform the necessary permit reviews. Although CPA Electric Engineering staff are
relatively new, they have undergone training to competently conduct the required reviews.
System Reliability Indices
The reliability indices presented below, in general, represent the duration and frequency of unplanned
outages to the average Palo Alto electric customer. By including and excluding Major Event Days (MED),
staff can review both the impact of major events (impacting more than 10% of Palo Alto’s electric
customers) versus more typical day-to-day operations. Reliability indices for CY2025 show improvement
over CY2023 and CY 2024. The improved system reliability is attributed to milder winter weather and
improvements in outage restoration procedures.
Figure 26: Electric Outage Reliability, CY 2019 through 2025
132.8 1.065 124.7 25.3 0.225 112.0
46.2 0.830 55.7 20.9 0.165 126.7
39.7 0.277 143.1 9.4 0.029 329.3
71.7 0.622 115.3 13.4 0.070 190.5
0
50
100
150
200
250
300
350
400
2021 2022 2023 2024 2025
PV ESS EVCS HEAT PUMPS W_HEATPUMP
Electrification Trends City of Palo Alto
Nu
m
b
e
r
o
f
U
n
i
t
s
Year
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Major Event Days Included Major Event Days Excluded
CY SAIDI SAIFI CAIDI SAIDI SAIFI CAIDI
2023 154.1 1.182 130.4 43.5 0.176 247.0
2024 134.7 0.844 159.7 67.4 0.474 142.1
2025 68.1 0.617 110.4 27.2 0.111 245.2
CPAU Reliability indices compared to PG&E’s performance locally show Palo Alto’s electric system roughly
five times more reliable than PG&E’s. When compared nationally, Palo Alto’s reliability numbers for
FY2025 fall within the nation’s top quartile for best performing systems. Continued investment in
preventative maintenance and asset replacement will help to maintain and improve overall system
reliability.
Separating unplanned power outages
by their primary cause helps focus
where reliability work is needed. For
CPAU most unplanned outages are due
to equipment-related failures (failure,
damage or worn out). The next two
largest causes of power outages are
trees outages and outages where the
cause could not be determined
(unknown). Equipment failures
continue to be the leading cause of
outages indicating a need for ongoing
planned replacement through the
City’s Capital Improvement Program.
Figure 27 : Calendar Year 2025 Sustained Outages by Cause
CY2025 Facility Inspections
General Order 165 (overhead and underground) and 174 (substations) cover facility inspections. Some
inspections are monthly, some annual, and others are between 3 to 10-year cycles. Completion of these
inspections helps to identify issues that can be resolved prior a power outage, or that otherwise could
impact customer service.
Type of Inspection (inspection unit)Units Due in CY 2025 Still Outstanding % Complete
Annual Visual Patrols (equipment)6,816 0 100.0%
Overhead Detailed (poles & all related
equip.)1,215 451*62.88%
Underground Detailed (subsurface
equipment, boxes, & vaults)1,258 0 100
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Type of Inspection (inspection unit)Units Due in CY 2025 Still Outstanding % Complete
Wood Pole Intrusive (poles tested)22 222**0
Substation (inspections)132 132 100.0%
* Grid Mod Construction in zone of inspection. These inspections will be completed in the current year.
**Previous contract ended in 2025, new contract awarded in 2026. These intrusive inspections will be completed in
the current calendar year.
Preventative Maintenance Tags
GO 165 inspections generate maintenance tags to correct either construction infractions or maintenance
issues. Tags are graded based upon their severity and risk to the public or potential to cause a power
outage. Three rankings are possible: Priority-1, complete immediately or within 30-days, Priority-2,
complete within 24 months, and Priority-3, complete within 60-months. Maintenance tags can range from
minor work of clearing vegetation around poles or pad-mounted equipment to identifying portions of the
system that need to be fully reconstructed. Lack of maintaining an adequate number of qualified staff
impacts the City’s ability to complete preventative maintenance tags.
CY2025 Overhead Maintenance Tags
Grade Total Due in CY2025 Completed Pending
Priority-1 14 14 0
Priority-2 26 108 26
Priority-3 335 250 321
Total 375 372 347
Overhead maintenance tags typically include the replacement of reflective strips at the base of utility
poles, high-voltage warning signs, replacement of down guy visibility markers, and others. Most work
helps maintain the City’s compliance with industry construction standards and prevents future power
outages.
CY2025 Underground Maintenance Tags
Grade Total Due in CY2025 Completed Pending
Priority-1 2 2 0
Priority-2 158 0 158
Priority-3 133 0 133
Total 293 2 293
Underground maintenance tags typically include the replacement of signage on vaults and pad-mounted
equipment, replacement of cracked or broken vault lids, removal of vegetation, replacement of worn or
deteriorated underground equipment, and others. This work also maintains the City’s compliance with
industry construction standards and prevents future power outages.
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11 Appendix D: PaloAltoGreen Gas Program
In December 2020, Council adopted Resolution #993035 maintaining the Carbon Neutral Natural Gas Plan
to achieve carbon neutrality for the gas supply portfolio using high-quality carbon offsets with a cost cap
of $19 per ton CO2e.
Offsets are purchased to neutralize
emissions equal to those caused by natural
gas usage in Palo Alto. Staff procured
115,000 tons of offsets from U.S. Forest and
Livestock projects during Spring 2025 to
cover FY25 usage. The figure below shows
the composition of all offset purchases for
the Carbon Neutral Gas Plan through Q3
2026.
Figure 28: Offset Portfolio Composition
The following table provides a description of the projects.
Figure 29: Offset Project Descriptions
35 Resolution #9930 https://www.cityofpaloalto.org/files/assets/public/v/1/city-clerk/resolutions/resolutions-1909-to-
present/2020/reso-9930.pdf
Project Name Project Type Description
Grotegut Dairy Livestock Grotegut Dairy is a 3,900 milk-cow operation in Newton, Wisconsin with a methane capture system.
Green Trees U.S. Forest
GreenTrees Advanced Carbon Restored Ecosystem is reforestation of agricultural lands into native
hardwood forest in Mississippi, Louisiana, Arkansas, and Illinois
San Juan Lachao Mexico Forest
Protection of forests located in High Biological Value Zones which contain flora and fauna listed in the
Mexican Endangered Species List and the International Union for Conservation of Nature’s Red List of
Threatened Species. Project in San juan Lachao near Palo Alto's Sister City of Oaxaca.
Blandin Forest U.S. Forest Blandin Native American Hardwoods Conservation and Carbon Sequestration project in Minnesota.
Pocosin+ U.S. Forest
These projects are all forested land that will not be disturbed by human development. Without this
protection, the forests would be converted to grow wheat or corn. Forest conservation plays a vital role in
protecting freshwater systems like lakes. The forests around the lakes act as natural water filters and purify
the water for all who use it. The projects also support healthy populations of red wolf, bald eagle, black
bear, and various bird species.
Refex ODS Ozone Depleting Substance
The RemTec facility in Bowling Green, Ohio uses an argon arc plasma destruction device to achieve 99.99
percent removal. The majority of refrigerants originated in California, and all were sourced within the
United States.
The RemTec facility uses an argon arc plasma destruction device to achieve the required destruction and
removal efficiency of 99.99 percent. The majority of ODS refrigerants originated in California, and all were
sourced within the United States.
Methane Capture Mine Methane Capture
This project is the first of its kind. Peabody Natural Gas, LLC removed methane from the North Antelope
Rochelle Coal Mine before mining. The methane was compressed and transported to a natural gas pipeline
and distributed to a national gas grid for use as fuel. Before implementation of the project, all the methane
was vented to the atmosphere.
Virginia
Conservation
Forestry Program U.S. Forest
The Virginia Conservation Forestry Program - Clifton Farm and Rich Mountain is a 9000+ acre
improved forest management project in which the timber and carbon ownership and
management rights have been transferred to The Nature Conservancy's Conservation Forestry
Program. The program manages for multiple goals to include: Water quality protection,
habitat diversity, high value forest products, and carbon sequestration.
Co-benefits: Biodiversity, Watershed Protection, Climate Resilience, and Connectivity
Riverview Farm
Anaerobic Digester Livestock
Riverview is a carbon offset project generating emission reductions thought the capture and destruction of
methane at a dairy farm in Minnesota. Under the baseline, manure managed in open lagoons led to the
fugitive emission of methane to the atmosphere. In the project scenario, this methane is captured by an
anaerobic digester and destroyed on site in the production of electricity. Co-benefits include job creation
and the improvement of local air and water quality.
Big River / Salmon
Creek Forests IFM U.S. Forest
The Big River and Salmon Creek Forests are located in Mendocino County, CA and cover 16,000 acres of
redwood and Douglas-fir forest. This project is a conservation-based forest management project.
Co-benefits include the creation of 140 jobs, protection of 37 miles of streams, and improved water quality
for local fish and bird species.
Hiawatha
Sportsmans Club U.S. Forest
Located in Michigan’s Upper Peninsula, Hiawatha Sportsmans Club (HSC) is a member-owned 35,000-acre
forest and Michigan’s oldest certified Tree Farm. The property contains a variety of habitats: Lake Michigan
shoreline, inland lakes, spring-fed rivers, marsh, mature conifer and hardwood forest and open fields.
Supported by HSC’s sustainable forest management, these diverse habitats attract and sustain a wide
variety of birds, mammals and other wildlife.
Appalachian
Mountain Club
Maine Woods
Initiative U.S. Forest
Founded in 1876, the Appalachian Mountain Club (AMC) is the oldest outdoor conservation and recreation
organization in the U.S. By implementing sustainable management practices like deferred harvesting,
extended rotations, and the retention of standing dead wood, AMC enhances forest carbon stocks and
promotes long-term ecological health. The project sequesters carbon effectively while supporting diverse
wildlife habitats and protecting soil and water quality, all in alignment with Maine's best management
practices. Through the Maine Woods Initiative, AMC demonstrates that conservation and economic
opportunity can coexist, integrating sustainable forestry with outdoor recreation to create lasting, positive
impacts for Maine's forests and communities.
Alliance Dairy Livestock
Founded in 1876, the Appalachian Mountain Club (AMC) is the oldest outdoor conservation and recreation
organization in the U.S. By implementing sustainable management practices like deferred harvesting,
extended rotations, and the retention of standing dead wood, AMC enhances forest carbon stocks and
promotes long-term ecological health. The project sequesters carbon effectively while supporting diverse
wildlife habitats and protecting soil and water quality, all in alignment with Maine's best management
practices. Through the Maine Woods Initiative, AMC demonstrates that conservation and economic
opportunity can coexist, integrating sustainable forestry with outdoor recreation to create lasting, positive
impacts for Maine's forests and communities.
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Item A Staff Report
Item A: Staff Report Pg. 49 Packet Pg. 240 of 241
Staff Report: 2608-6709 – Page 49 of 49
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Figure 29: Offset Project Descriptions (Cont’d.)
Approved By:
Alan Kurotori, Director of Utilities
Staff: Tim Denterlein, Resource Planner
Project Name Project Type DescriptionGrotegut Dairy Livestock Grotegut Dairy is a 3,900 milk-cow operation in Newton, Wisconsin with a methane capture system.Green Trees U.S. Forest GreenTrees Advanced Carbon Restored Ecosystem is reforestation of agricultural lands into native hardwood forest in Mississippi, Louisiana, Arkansas, and IllinoisSan Juan Lachao Mexico Forest Protection of forests located in High Biological Value Zones which contain flora and fauna listed in the Mexican Endangered Species List and the International Union for Conservation of Nature’s Red List of Threatened Species. Project in San juan Lachao near Palo Alto's Sister City of Oaxaca.Blandin Forest U.S. Forest Blandin Native American Hardwoods Conservation and Carbon Sequestration project in Minnesota.Pocosin+ U.S. Forest These projects are all forested land that will not be disturbed by human development. Without this protection, the forests would be converted to grow wheat or corn. Forest conservation plays a vital role in protecting freshwater systems like lakes. The forests around the lakes act as natural water filters and purify the water for all who use it. The projects also support healthy populations of red wolf, bald eagle, black bear, and various bird species.
Refex ODS Ozone Depleting Substance
The RemTec facility in Bowling Green, Ohio uses an argon arc plasma destruction device to achieve 99.99 percent removal. The majority of refrigerants originated in California, and all were sourced within the United States.
The RemTec facility uses an argon arc plasma destruction device to achieve the required destruction and
removal efficiency of 99.99 percent. The majority of ODS refrigerants originated in California, and all were
sourced within the United States.
Methane Capture Mine Methane Capture
This project is the first of its kind. Peabody Natural Gas, LLC removed methane from the North Antelope
Rochelle Coal Mine before mining. The methane was compressed and transported to a natural gas pipeline
and distributed to a national gas grid for use as fuel. Before implementation of the project, all the methane
was vented to the atmosphere.
Virginia
Conservation
Forestry Program U.S. Forest
The Virginia Conservation Forestry Program - Clifton Farm and Rich Mountain is a 9000+ acre
improved forest management project in which the timber and carbon ownership and
management rights have been transferred to The Nature Conservancy's Conservation Forestry
Program. The program manages for multiple goals to include: Water quality protection,
habitat diversity, high value forest products, and carbon sequestration.
Co-benefits: Biodiversity, Watershed Protection, Climate Resilience, and Connectivity
Riverview Farm
Anaerobic Digester Livestock
Riverview is a carbon offset project generating emission reductions thought the capture and destruction of
methane at a dairy farm in Minnesota. Under the baseline, manure managed in open lagoons led to the
fugitive emission of methane to the atmosphere. In the project scenario, this methane is captured by an
anaerobic digester and destroyed on site in the production of electricity. Co-benefits include job creation
and the improvement of local air and water quality.
Big River / Salmon
Creek Forests IFM U.S. Forest
The Big River and Salmon Creek Forests are located in Mendocino County, CA and cover 16,000 acres of
redwood and Douglas-fir forest. This project is a conservation-based forest management project.
Co-benefits include the creation of 140 jobs, protection of 37 miles of streams, and improved water quality
for local fish and bird species.
Hiawatha
Sportsmans Club U.S. Forest
Located in Michigan’s Upper Peninsula, Hiawatha Sportsmans Club (HSC) is a member-owned 35,000-acre
forest and Michigan’s oldest certified Tree Farm. The property contains a variety of habitats: Lake Michigan
shoreline, inland lakes, spring-fed rivers, marsh, mature conifer and hardwood forest and open fields.
Supported by HSC’s sustainable forest management, these diverse habitats attract and sustain a wide
variety of birds, mammals and other wildlife.
Appalachian
Mountain Club
Maine Woods
Initiative U.S. Forest
Founded in 1876, the Appalachian Mountain Club (AMC) is the oldest outdoor conservation and recreation
organization in the U.S. By implementing sustainable management practices like deferred harvesting,
extended rotations, and the retention of standing dead wood, AMC enhances forest carbon stocks and
promotes long-term ecological health. The project sequesters carbon effectively while supporting diverse
wildlife habitats and protecting soil and water quality, all in alignment with Maine's best management
practices. Through the Maine Woods Initiative, AMC demonstrates that conservation and economic
opportunity can coexist, integrating sustainable forestry with outdoor recreation to create lasting, positive
impacts for Maine's forests and communities.
Alliance Dairy Livestock
Founded in 1876, the Appalachian Mountain Club (AMC) is the oldest outdoor conservation and recreation
organization in the U.S. By implementing sustainable management practices like deferred harvesting,
extended rotations, and the retention of standing dead wood, AMC enhances forest carbon stocks and
promotes long-term ecological health. The project sequesters carbon effectively while supporting diverse
wildlife habitats and protecting soil and water quality, all in alignment with Maine's best management
practices. Through the Maine Woods Initiative, AMC demonstrates that conservation and economic
opportunity can coexist, integrating sustainable forestry with outdoor recreation to create lasting, positive
impacts for Maine's forests and communities.
Item A
Item A Staff Report
Item A: Staff Report Pg. 50 Packet Pg. 241 of 241