HomeMy WebLinkAbout2016-08-22 City Council Agenda PacketCity Council
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DURING NORMAL BUSINESS HOURS.
August 22, 2016
Special Meeting
Council Chambers
5:30 PM
Agenda posted according to PAMC Section 2.04.070. Supporting materials are available in the Council Chambers on the Thursday 10 days preceding the meeting.
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TIME ESTIMATES Time estimates are provided as part of the Council's effort to manage its time at Council meetings. Listed times are estimates only and are subject to change at any time, including while the meeting is in progress. The Council
reserves the right to use more or less time on any item, to change the order of items and/or to continue items to another meeting. Particular items may be heard before or after the time estimated on the agenda. This may occur in order to best manage the time at a meeting or to adapt to the participation of the public. To ensure participation in a particular item, we suggest arriving at the beginning of the meeting and remaining until the item is called.
HEARINGS REQUIRED BY LAW
Applicants and/or appellants may have up to ten minutes at the outset of the public discussion to make their remarks and up to three minutes for concluding remarks after other members of the public have spoken.
Call to Order
Closed Session 5:30-5:45 PM
Public Comments: Members of the public may speak to the Closed Session item(s); three minutes per speaker.
1.CONFERENCE WITH CITY ATTORNEY
Subject: Written Liability Claim Against the City of Palo Alto by
Gilles Boccon-Gibod (Claim No. C16-0026)
Authority: Government Code Section 54956.9
Special Orders of the Day 5:45-5:50 PM
2.Proclamation of the City Council Honoring Robert Kelley
Agenda Changes, Additions and Deletions
City Manager Comments 5:50-6:00 PM
Oral Communications 6:00-6:15 PM
Members of the public may speak to any item NOT on the agenda. Council reserves the right to limit the duration of Oral Communications period to 30 minutes.
REVISED
2 August 22, 2016
MATERIALS RELATED TO AN ITEM ON THIS AGENDA SUBMITTED TO THE CITY COUNCIL AFTER DISTRIBUTION OF THE AGENDA
PACKET ARE AVAILABLE FOR PUBLIC INSPECTION IN THE CITY CLERK’S OFFICE AT PALO ALTO CITY HALL, 250 HAMILTON AVE.
DURING NORMAL BUSINESS HOURS.
Consent Calendar 6:15-6:20 PM Items will be voted on in one motion unless removed from the calendar by three Council Members.
3.Approval and Authorization of the City Manager to Execute a Contract
With Builders Protection, LLC in a Total Not-to-Exceed Amount of
$4,620,000 for Three Years for Water, Gas, Wastewater, Electric,
Storm Drain, and Street Resurfacing Construction Inspection Services;
and Finding That the Contract’s Approval is not a Project Requiring
California Environmental Quality Act Review
4.Adoption of a Resolution Correcting Clerical Errors in two Items
Previously Approved as Part of the Palo Alto Clean Local Energy
Accessible Now (CLEAN) Program
5.Approval of Contract Number C16163335 With Sierra Traffic Markings,
Inc. in the Amount of $850,000 to Provide On-call Traffic Safety
Services, Allowing Them to Implement Minor Roadway Improvements
in Response to Community Service Requests
6.Approval of a Revenue Agreement With the County of Santa Clara in
the Amount of $250,000 Over two Years for Support of Intensive Case
Management in Connection With Housing Subsidies to be Provided by
the County of Santa Clara for Palo Alto’s Homeless
7.Policy and Services Committee Recommendation to City Council for
Next Steps in the City's Neighborhood Engagement Initiative
Including: Establishing a Yearly Goal of Three Town Hall Meetings;
Updating the Co-Sponsorship Agreement; Adopting a List of
Neighborhood Associations; and Amending the Annual Budget to
Reduce the General Fund and Increase the General Liabilities
Insurance Program Fund by $5,000
8.Approval of Contract Amendment Number 4 With Van Scoyoc
Associates Inc. for Federal Legislative Representation to Extend the
Contract for Two Years Through July 31, 2018 and add $202,000 for a
Total Not-to-Exceed Amount of $606,000
9.Approval of an Amendment to the Existing Joint Powers Authority
Agreement With the Silicon Valley Regional Interoperability Authority
to Include Participation by the Santa Clara Valley Transit Authority
10.Approval for the Consolidation of the Unscheduled Vacancy on thePlanning and Transportation Commission With the Fall 2016 Board and
Commission Recruitment
3 August 22, 2016
MATERIALS RELATED TO AN ITEM ON THIS AGENDA SUBMITTED TO THE CITY COUNCIL AFTER DISTRIBUTION OF THE AGENDA
PACKET ARE AVAILABLE FOR PUBLIC INSPECTION IN THE CITY CLERK’S OFFICE AT PALO ALTO CITY HALL, 250 HAMILTON AVE.
DURING NORMAL BUSINESS HOURS.
Action Items Include: Reports of Committees/Commissions, Ordinances and Resolutions, Public Hearings, Reports of Officials,
Unfinished Business and Council Matters. 6:20-7:20 PM
11.Finance Committee Recommendation That Council Adopt a Resolution
Adopting a Net Energy Metering Successor Rate E-EEC-1 (Export
Electricity Compensation); Establishing the Net Energy MeteringTransition Policy; and Amending Rule and Regulation 2 (Definitions
and Abbreviations) and 29 (Net Energy Metering and Interconnection)
(Continued From June 27, 2016)
7:20-9:45 PM
12.Interim Retail Preservation Ordinance: Request for a Waiver at
100 Addison, Discussion Regarding Applicability to Retail and "Retail-
Like" Uses Which do not Have Required Entitlements, and Discussion
Regarding Potential Ordinance Improvements and Next Steps
13.Policy Discussion on Comprehensive Plan Update Environmental
Impact Report Scenarios 5 & 6 (Staff requests this item be
continued to August 29, 2016)
Inter-Governmental Legislative Affairs
9:45-10:15 PM
14.Status Update and Potential City Responses to the Governor's "By
Right" Housing Bill and Pending Bills Addressing Housing Issues
Council Member Questions, Comments and Announcements
Members of the public may not speak to the item(s)
Adjournment
AMERICANS WITH DISABILITY ACT (ADA) Persons with disabilities who require auxiliary aids or services in using City facilities, services or programs or who would like information on the City’s compliance with the Americans with Disabilities Act (ADA) of 1990, may contact (650) 329-2550 (Voice) 24 hours in advance.
MEMO
4 August 22, 2016
MATERIALS RELATED TO AN ITEM ON THIS AGENDA SUBMITTED TO THE CITY COUNCIL AFTER DISTRIBUTION OF THE AGENDA
PACKET ARE AVAILABLE FOR PUBLIC INSPECTION IN THE CITY CLERK’S OFFICE AT PALO ALTO CITY HALL, 250 HAMILTON AVE.
DURING NORMAL BUSINESS HOURS.
Additional Information
Schedule of Meetings
Schedule of Meetings
Tentative Agenda
Tentative Agenda
Informational Report
Update on Zero Waste Organics Collection Programs Including the
Residential Curbside Composting Program and the Recycling and Composting
Ordinance
City of Palo Alto Investment Activity Report for the Fourth Quarter, Fiscal
Year 2016
Public Letters to Council
Set 1
City of Palo Alto (ID # 7214)
City Council Staff Report
Report Type: Special Orders of the Day Meeting Date: 8/22/2016
City of Palo Alto Page 1
Summary Title: Proclamation Honoring Robert Kelley
Title: Proclamation of the City Council Honoring Robert Kelley
From: City Manager
Lead Department: City Clerk
Attachments:
Attachment A: Proclamation Honoring Robert Kelley (DOCX)
Proclamation
Robert Kelley
WHEREAS, Robert Kelley is a Palo Alto local who attended Jordan Middle School, Palo
Alto High School and Stanford University. He is known for his artistic excellence, innovation,
diversity, creativity and his continued commitment to education; and
WHEREAS, in 1970, he founded TheatreWorks, a professional, nonprofit theatre that now
has over 25,000 students participating in its programs each year, including productions at the
Palo Alto Children's Theatre and the Lucie Stern Theatre. Mr. Kelley has directed over 165
TheatreWorks productions, including many regional and world premieres; and
WHEREAS, Robert Kelley founded TheatreWorks at a time when performers of color were
rarely seen in local productions and he was passionate that the diversity of the community be
reflected on the stage; and
WHEREAS, Robert Kelley and TheatreWorks celebrate their 46th season as one of
California's largest theatres, with a permanent staff of 40, a Board of Trustees of 30 and the
current subscribers numbering over 8,000; and
WHEREAS, Robert Kelley has received numerous awards for his achievements such as the
Silicon Valley Arts Council Legacy Laureate, The Bay Area Theatre Circle Paine Knickerbocker
Award for Lifetime Achievement, BATCC Awards for Outstanding Directing for 10 Plays or
Musicals and Back Stage West Garland Awards for his directing.
NOW, THEREFORE, I, Patrick Burt, Mayor of the City of Palo Alto, on behalf of the City
Council do hereby honor the significant accomplishments of Robert Kelley and recognize his
important contributions to our community.
Presented: August 22, 2016
______________________________
Patrick Burt
Mayor
City of Palo Alto (ID # 6989)
City Council Staff Report
Report Type: Consent Calendar Meeting Date: 8/22/2016
City of Palo Alto Page 1
Summary Title: Water, Gas, Wastewater, Electric, Storm Drain, and Public
Works Construction Inspection Services
Title: Approval and Authorization of the City Manager to Execute a Contract
with Builders Protection, LLC in a Total Not-to-Exceed Amount of $4,620,000
for Three Years for Water, Gas, Wastewater, Electric, Storm Drain, and Street
Resurfacing Construction Inspection Services; and Finding that the Contract’s
Approval is Not a Project Requiring California Environmental Quality Act
Review
From: City Manager
Lead Department: Utilities
Recommendation
Staff recommends that Council approve and authorize the City Manager or his designee to:
1. Execute the attached contract with Builders Protection Group, LLC for a period of three
years in the amount of $4,200,000 for Water, Gas, Wastewater, Electric, Storm Drain
and Public Works Construction Inspection Services; and
2. Negotiate and execute one or more change orders to the contract with Builders
Protection Group, LLC for related, but unforeseen work, the total value of which shall
not exceed $420,000 (10% of the contract amount) over the three-year term of the
contract.
Staff also recommends that Council find that its approval of the attached contract is not a
project subject to California Environmental Quality Act Review.
Background
The City’s Utilities and Public Works Departments inspect the construction of their Capital
Improvement Program (“CIP”) projects to ensure safety, reliability, contractor performance and
compliance with contract specifications. Construction inspection of CIP projects has
traditionally been performed by Utilities Operations and Public Works Engineering Services
staff. Contract inspection services minimizes the risk of impacting the City's ability to deliver
City of Palo Alto Page 2
excellent level of services by maintaining progress on current and planned projects. Quality
assurance and quality control compliance with the construction documents, while preserving
scheduling requirements, cannot be accomplished with City’s staff due to the current
accelerated and increased magnitude of construction activity in the City over the past year.
Increased project workload results from: the 3-year cross-bore gas pipeline and sewer
inspection program; the replacement and elimination of remaining ABS gas mains and PVC gas
services and gas mains; backlog of water-gas-wastewater main replacements (gas – 70,000 LF,
wastewater collection – 34,000 LF, water – 20,000 LF); electric underground district rebuild;
electric transmission system improvements; 4 to 12 kilovolt voltage electric conversions; and
street resurfacing and storm drain projects. These projects may require up to 8 additional
inspectors (5 water-gas-wastewater, 2 electric and 1 storm drain). The inspection tasks are
being bundled together into one contract to ensure efficient management of qualified
inspection services for all inspection phases of the various projects, as well as competitive
pricing for the contract.
Discussion
This contract is to provide additional resources for the construction inspection of Utilities and
Public Works CIPs projects throughout the City. The Utilities CIP projects typically consist of the
replacement of overhead and underground electric distribution cables and equipment, and
water, gas and wastewater pipeline replacement. The Public Works projects typically consist of
CIP improvements to streets and storm drains.
The term of the contract is three years with an option for the City Manager to terminate the
contract with or without cause with 10 days written notice. Staff is also requesting contingency
funds, for additional services, not to exceed 10% of the contract amount.
The Request for Proposal (RFP) for these services anticipated the need for up to 8 inspectors
totaling approximately 17,000 hours of work annually.
City of Palo Alto Page 3
The following table is a summary of the RFP Solicitation process:
Proposal Title Inspection Services
Proposal Number 163687
Proposed Length of Contract 3 years
Number of Proposals Mailed 42
Total days to Respond to Proposal 27
Pre-proposal Teleconference Date 4/27/16
Number of Teleconference Participants 4
RFP Submittal Deadline 5/17/16
Number of Proposals Received 4
Range of Cost of Proposals From $75.00 / hr to $137.83 / hr
Number of Companies Interviewed 4
Company Selected Builders Protection Group, LLC
Location (City, State) Hawthorne, CA
Proposal Amount $1,400,000 / annually, Not To Exceed
*Bid summary provided in Attachment B.
The selection criteria for this proposal were as follows:
Quality and completeness of proposal
Quality, performance, and effectiveness of the services to be provided.
Proximity to Palo Alto
Project management history
Bid price
Proposer’s experience
There were 4 proposals submitted. Builders Protection Group, LLC was the best-value proposer
that could perform the required work and meet the licensing requirements in the RFP. Builders
Protection Group, LLC also demonstrated in an interview that it has the resources to perform
the work required in this contract.
Staff has evaluated all proposals submitted based on the selection criteria and recommends
that the proposal of $75.00/hr submitted by Builders Protection Group, LLC be accepted.
Staff confirmed with the Contractor’s State License Board that the contractor has the required
active licenses on file. Staff checked references supplied by the contractor for previous work
performed and found all to be satisfactory.
Timeline
Inspection services will be required beginning in August 2016 and continuing for three years on
an as-needed basis.
City of Palo Alto Page 4
Resource Impact
Funds for this contract will be appropriated over three fiscal years based on Council approval of
the Water, Gas, Wastewater, Electric and Storm Drain Capital Budgets and subject to
satisfactory performance by the contractor. Funding is available from the following Enterprise
Funds:
Utility Fund Cost Center and G/L
Water 522 20021002 - 31650
Gas 524 20020802 - 31650
Wastewater 527 20021202 - 31650
Electric 523 20020202 - 31650
Storm Drain 528 50070201 - 31610
Funding for this contract will be used as needed and is subject to the annual appropriation of
project funds. These resources are necessary to keep up with current CIP plans and funding
was anticipated and allocated within various projects in the Public Works and Utilities as part of
the FY 2017-2021 Adopted Capital Budget for staffing resources.
Policy Implications
The approval of this contract is consistent with existing City policies, including the Council-
approved Utilities Strategic Plan to operate the distribution system in a cost effective manner
and to invest in utility infrastructure to deliver reliable service.
Environmental Review
The approval of this construction inspection services contract does not meet the definition of a
project under Public Resources Code Sec. 21065, so California Environmental Quality Act
(“CEQA”) review is not required. According to CEQA Guidelines Sec. 15378, a project does not
include organizational or administrative activities of governments that will not result in direct or
indirect physical changes in the environment.
Attachments:
Attachment A: Pro Services Agreement C17163687 Inspection Services 7-27-16 6053801
(PDF)
Attachment B: Bid Summary (PDF)
Professional Services
Rev. April 27, 2016
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CITY OF PALO ALTO CONTRACT NO. C17163687
AGREEMENT BETWEEN THE CITY OF PALO ALTO AND
BUILDER’S PROTECTION GROUP, LLC
FOR PROFESSIONAL SERVICES
This Agreement is entered into on this 22nd day of August, 2016, (“Agreement”)
by and between the CITY OF PALO ALTO, a California chartered municipal corporation
(“CITY”), and BUILDER’S PROTECTION GROUP, LLC, a limited liability company, located
at 4860 W. 147th Street, Hawthorne, CA 90250, DIR number: 1000040617
("CONSULTANT").
RECITALS
The following recitals are a substantive portion of this Agreement.
A. CITY intends to inspect overhead and underground construction projects within the City
of Palo Alto on the City’s electric distribution system, water, gas, wastewater and storm drain on
various capital improvement projects (“Project”) and desires to engage a consultant to provide
these on-call services in connection with the Project (“Services”).
B. CONSULTANT has represented that it has 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”, attached to and made a part of this
Agreement.
NOW, THEREFORE, in consideration of the recitals, covenants, terms, and conditions,
in this Agreement, the parties agree:
AGREEMENT
SECTION 1. SCOPE OF SERVICES. CONSULTANT shall perform the Services described at
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 Services will be authorized by CITY, as needed, with a Task
Order assigned and approved by CITY’s Project Manager. Each Task Order shall be in
substantially the same form as Exhibit A-1. Each Task Order shall designate a CITY Project
Manager and shall contain a specific scope of work, a specific schedule of performance and a
specific compensation amount. The total price of all Task Orders issued under this Agreement
shall not exceed the amount of Compensation set forth in Section 4 of this Agreement.
ATTACHMENT A
Professional Services
Rev. April 27, 2016
2
CONSULTANT shall only be compensated for work performed under an authorized Task Order
and CITY may elect, but is not required, to authorize work up to the maximum compensation
amount set forth in Section 4.
SECTION 2. TERM.
The term of this Agreement shall be from the date of its full execution through August 31, 2019
unless terminated earlier pursuant to Section 19 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”, attached to and
made a part of this Agreement. 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 described in Exhibit “A” (“Basic Services”),
and reimbursable expenses, shall not exceed Four Million Two Hundred Thousand Dollars
($4,200,00.00). CONSULTANT agrees to complete all Basic Services, including reimbursable
expenses, within this amount. In the event Additional Services are authorized, the total
compensation for Basic Services, Additional Services and reimbursable expenses shall not
exceed Four Million Six Hundred Twenty Thousand Dollars ($4,620,000.00). The applicable
rates and schedule of payment are set out at Exhibit “C-1”, entitled “HOURLY RATE
SCHEDULE,” which is attached to and made a part of this Agreement. Any work performed or
expenses incurred for which payment would result in a total exceeding the maximum amount of
compensation set forth herein shall be at no cost to the CITY.
Additional Services, if any, shall be authorized in accordance with and subject to the provisions
of Exhibit “C”. CONSULTANT shall not receive any compensation for Additional Services
performed without the prior written authorization of CITY. Additional Services shall mean 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”.
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 an
identification of personnel who performed the services, hours worked, hourly rates, and
reimbursable expenses), based upon the CONSULTANT’s billing 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 payment requests shall be subject to verification by CITY.
CONSULTANT shall send all invoices to the City’s project manager at the address specified in
Section 13 below. The City will generally process and pay invoices within thirty (30) days of
receipt.
SECTION 6. QUALIFICATIONS/STANDARD OF CARE. All of the Services shall be
Professional Services
Rev. April 27, 2016
3
performed by CONSULTANT or under CONSULTANT’s supervision. CONSULTANT
represents that it possesses 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
subconsultants, if permitted, 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 of the 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. CONSULTANT shall procure all permits and licenses,
pay all charges and fees, and give all notices required by law in the performance of the Services.
SECTION 8. ERRORS/OMISSIONS. CONSULTANT is solely responsible for costs,
including, but not limited to, increases in the cost of Services, arising from or caused by
CONSULTANT’s errors and omissions, including, but not limited to, the costs of corrections
such errors and omissions, any change order markup costs, or costs arising from delay caused by
the errors and omissions or unreasonable delay in correcting the errors and omissions.
SECTION 9. COST ESTIMATES. If this Agreement pertains to the design of a public works
project, CONSULTANT shall submit estimates of probable construction costs at each phase of
design submittal. If the total estimated construction cost at any submittal exceeds ten percent
(10%) of CITY’s stated construction budget, 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. It is understood and agreed that in
performing the Services under this Agreement CONSULTANT, and any person employed by or
contracted with CONSULTANT to furnish labor and/or materials under this Agreement, shall act
as and be an independent contractor and not an agent or employee of CITY.
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 consent of the city manager.
Consent to one assignment will not be deemed to be consent to any subsequent assignment. Any
assignment made without the approval of the city manager will be void.
SECTION 12. SUBCONTRACTING.
Professional Services
Rev. April 27, 2016
4
CONSULTANT shall not subcontract any portion of the work to be performed under this
Agreement without the prior written authorization of the city manager or designee.
CONSULTANT shall be responsible for directing the work of any subconsultants and for any
compensation due to subconsultants. CITY assumes no responsibility whatsoever concerning
compensation. CONSULTANT shall be fully responsible to CITY for all acts and omissions of a
subconsultant. CONSULTANT shall change or add subconsultants only with the prior approval
of the city manager or his designee.
SECTION 13. PROJECT MANAGEMENT. CONSULTANT will assign Nick Shaygan
Lau as the Project Manager to have supervisory responsibility for the performance, progress, and
execution of the Services to represent CONSULTANT during the day-to-day work on the
Project. If circumstances cause the substitution of the project director, project coordinator, or any
other key personnel for any reason, the appointment of a substitute project director 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
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 Project or a threat
to the safety of persons or property.
CITY’s project manager is Romel Antonio, Utilities Department, Engineering Division, 1007
Elwell Court, Palo Alto, CA 94303, Telephone: 650-566-4518. The 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. Upon delivery, all work product, including
without limitation, all writings, drawings, plans, reports, specifications, calculations, documents,
other materials and copyright interests developed under this Agreement 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 pursuant to this Agreement shall
be vested in CITY, and CONSULTANT waives and relinquishes all claims to copyright or other
intellectual property rights in favor of the CITY. Neither CONSULTANT nor its contractors, if
any, shall make any of such materials 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 work.
SECTION 15. AUDITS. CONSULTANT will permit CITY to audit, at any reasonable time
during the term of this Agreement and for three (3) years thereafter, CONSULTANT’s records
pertaining to matters covered by this Agreement. CONSULTANT further agrees to maintain and
retain such records for at least three (3) years after the expiration or earlier termination of this
Agreement.
SECTION 16. INDEMNITY.
16.1. To the fullest extent permitted by law, CONSULTANT shall protect,
indemnify, defend and hold harmless CITY, its Council members, officers, employees and
Professional Services
Rev. April 27, 2016
5
agents (each an “Indemnified Party”) from and against any and all demands, claims, or liability
of any nature, including death or injury to any person, property damage or any other loss,
including all costs and expenses of whatever nature including attorneys fees, experts fees, court
costs and disbursements (“Claims”) resulting from, arising out of or in any manner related to
performance or nonperformance by CONSULTANT, its officers, employees, agents or
contractors under this Agreement, regardless of whether or not it is caused in part by an
Indemnified Party.
16.2. Notwithstanding the above, nothing in this Section 16 shall be construed
to require CONSULTANT to indemnify an Indemnified Party from Claims arising from the
active negligence, sole negligence or willful misconduct of an Indemnified Party.
16.3. The acceptance of CONSULTANT’s services and duties by CITY shall
not operate as a waiver of the right of indemnification. The provisions of this Section 16 shall
survive the expiration or early termination of this Agreement.
SECTION 17. WAIVERS. The waiver by either party of any breach or violation of any
covenant, term, condition or provision of this Agreement, or of the provisions of any ordinance
or law, will not be deemed to be a waiver of any other term, covenant, condition, provisions,
ordinance or law, or of any subsequent breach or violation of the same or of any other term,
covenant, condition, provision, ordinance or law.
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". 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
Professional Services
Rev. April 27, 2016
6
Procurement Officer during the entire term of this Agreement.
18.4. The procuring of such required policy or policies of insurance will not be
construed to limit CONSULTANT's liability hereunder nor to fulfill the indemnification
provisions of this Agreement. Notwithstanding the policy or policies of insurance,
CONSULTANT will be obligated for the full and total amount of any damage, injury, or loss
caused by or directly arising as a result of the Services performed under this Agreement,
including such damage, injury, or loss arising after the Agreement is terminated or the term has
expired.
SECTION 19. TERMINATION OR SUSPENSION OF AGREEMENT OR SERVICES.
19.1. The City Manager may suspend the performance of the Services, in whole
or in part, or terminate this Agreement, with or without cause, by giving ten (10) days prior
written notice thereof to CONSULTANT. Upon receipt of such notice, CONSULTANT will
immediately discontinue its performance of the Services.
19.2. CONSULTANT may terminate this Agreement or suspend its
performance of the Services by giving thirty (30) days prior written notice thereof to CITY, but
only in the event of a substantial failure of performance by CITY.
19.3. Upon such suspension or termination, CONSULTANT shall deliver to the
City Manager immediately any and all copies of studies, sketches, drawings, computations, and
other data, whether or not completed, prepared by CONSULTANT or its contractors, if any, or
given to CONSULTANT or its contractors, if any, in connection with this Agreement. Such
materials will become the property of CITY.
19.4. Upon such suspension or termination by CITY, CONSULTANT will be
paid for the Services rendered or materials delivered to CITY in accordance with the scope of
services on or before the effective date (i.e., 10 days after giving 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 which are of direct and immediate benefit to CITY as such
determination may be 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, 19.4, 20, and 25.
19.5. 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.
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
Professional Services
Rev. April 27, 2016
7
Post Office Box 10250
Palo Alto, CA 94303
With a copy to the Purchasing Manager
To CONSULTANT: Attention of the project director
at the address of CONSULTANT recited above
SECTION 21. CONFLICT OF INTEREST.
21.1. In accepting 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 subconsultants, contractors or persons having such an interest.
CONSULTANT certifies that no person who has or will have any financial interest under this
Agreement is an officer or employee of CITY; this provision will be interpreted in accordance
with the applicable provisions of the Palo Alto Municipal Code and the Government Code of the
State of California.
21.3. If the Project Manager determines that CONSULTANT is a “Consultant”
as that term is defined by the Regulations of the Fair Political Practices Commission,
CONSULTANT shall be required and agrees to file the appropriate financial disclosure
documents required by the Palo Alto Municipal Code and the Political Reform Act.
SECTION 22. NONDISCRIMINATION. As set forth in Palo Alto Municipal Code section
2.30.510, CONSULTANT certifies that in the performance of this Agreement, it shall not
discriminate in the employment of any person because of the race, skin color, gender, age,
religion, disability, national origin, ancestry, sexual orientation, 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.
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,
incorporated by reference and may be 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 CCONSULTANT 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
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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 Division’s office.
(c) Reusable/returnable pallets shall be taken back by CONSULTANT, at no
additional cost to CITY, for reuse or recycling. CONSULTANT shall provide
documentation from the facility accepting the pallets to verify that pallets are not
being disposed.
SECTION 24. COMPLIANCE WITH PALO ALTO MINIMUM WAGE ORDINANCE.
CONSULTANT shall comply with all requirements of the Palo Alto Municipal Code Chapter
4.62 (Citywide Minimum Wage), as it may be 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
25.1. This Agreement is subject to the fiscal provisions of the Charter of the
City of Palo Alto and the Palo Alto Municipal Code. 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 CONSULTANT is required to pay general prevailing wages as defined in
Subchapter 3, Title 8 of the California Code of Regulations and Section 16000 et seq. and
Section 1773.1 of the California Labor Code. Pursuant to the provisions of Section 1773 of the
Labor Code of the State of California, the City Council 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
Director of the Department of Industrial Relations (“DIR”). Copies of these rates may be
obtained at the Purchasing Division’s office of the City of Palo Alto. CONSULTANT shall
provide a copy of prevailing wage rates to any staff or subcontractor hired, and shall pay the
adopted prevailing wage rates as a minimum. CONSULTANT shall comply with the provisions
of all sections, including, but not limited to, Sections 1775, 1776, 1777.5, 1782, 1810, and 1813,
of the Labor Code pertaining to prevailing wages.
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26.2 CONSULTANT shall comply with the requirements of Exhibit “E” for any
contract for public works construction, alteration, demolition, repair or maintenance.
SECTION 27. MISCELLANEOUS PROVISIONS.
27.1. This Agreement will be governed by the laws of the State of California.
27.2. 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.
27.3. 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.
27.4. This document represents the entire and integrated agreement between the
parties and supersedes all prior negotiations, representations, and contracts, either written or oral.
This document may be amended only by a written instrument, which is signed by the parties.
27.5. The covenants, terms, conditions and provisions of this Agreement will
apply to, and will bind, the heirs, successors, executors, administrators, assignees, and
consultants of the parties.
27.6. If a court of competent jurisdiction finds or rules that any provision of this
Agreement or any amendment thereto is void or unenforceable, the unaffected provisions of this
Agreement and any amendments thereto will remain in full force and effect.
27.7. All exhibits referred to in this Agreement and any addenda, appendices,
attachments, and schedules to this Agreement which, from time to time, may be referred to in
any duly executed amendment hereto are by such reference incorporated in this Agreement and
will be deemed to be a part of this Agreement.
27.8 In the event of a conflict between the terms of this Agreement and the
exhibits hereto or CONSULTANT’s proposal (if any), the Agreement shall control. In the case
of any conflict between the exhibits hereto and CONSULTANT’s proposal, the exhibits shall
control.
27.9 If, pursuant to this contract with CONSULTANT, CITY shares with
CONSULTANT personal information as defined in California Civil Code section 1798.81.5(d)
about a California resident (“Personal Information”), CONSULTANT shall maintain reasonable
and appropriate security procedures to protect that Personal Information, and shall inform City
immediately upon learning that there has been a breach in the security of the system or in the
security of the Personal Information. CONSULTANT shall not use Personal Information for
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direct marketing purposes without City’s express written consent.
27.10 All unchecked boxes do not apply to this agreement.
27.11 The individuals executing this Agreement represent and warrant that they
have the legal capacity and authority to do so on behalf of their respective legal entities.
27.12 This Agreement may be signed in multiple counterparts, which shall, when
executed by all the parties, constitute a single binding agreement
IN WITNESS WHEREOF, the parties hereto have by their duly authorized
representatives executed this Agreement on the date first above written.
CITY OF PALO ALTO
____________________________
City Manager
APPROVED AS TO FORM:
__________________________
City Attorney or designee
BUILDER’S PROTECTION GROUP,
LLC
By:___________________________
Name: Adam Shaw______________
Title:__Vice President____________
By:___________________________
Name:___Zahra Anderson ________
Title:_Secretary_________________
Attachments:
EXHIBIT “A”: SCOPE OF SERVICES
EXHIBIT “A-1” PROFESSIONAL SERVICES TASK ORDER (for on-call contracts only)
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
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EXHIBIT “A”
SCOPE OF SERVICES
Builders Protection Group, LLC shall provide professional contract electrical, water, gas,
wastewater, storm drain, and general public works inspection services (e.g. trench excavation &
Backfill; curb, gutter, and sidewalk; paving, etc.) to support upcoming overhead and
underground construction projects within the City of Palo Alto on the City’s electric distribution
system, water, gas, wastewater, and storm drain Capital Improvement Projects and
improvements in the public right-of-way related to private land development. The inspection
work for the Public Works Department may also include inspection of and sign-off of work
associated with Street Work, Encroachment, Dewatering, Grading and Excavation Permits. In
addition to the inspection of infrastructure improvements, the Builders Protection Group, LLC
shall also be responsible for review of construction-related Best Management Practices;
stormwater pollution prevention plans; installation of permanent stormwater treatment
measures, and compliance with traffic control and logistics plans. The Builders Protection
Group, LLC shall furnish personnel with a strong background and experience in electric, water,
gas, wastewater, and storm drain utility construction practices and standards as well as general
public works construction practices.
Inspection services will be provided on an “as requested” basis. It is expected that the
inspector(s) will be available on-site in Palo Alto within 48 hours of the time services are
requested. It is expected that the majority of services will be required during normal working
hours of 7am-4pm, however, work may be required night and/or day, on weekends, holidays
and/or on a split shift basis. Work weeks may be in excess of or less than the standard 40-hour
week.
The total expenditure for the three-year contract is not to exceed $4,620,000 based on 5 full-
time water-gas-wastewater inspectors, 2 full-time electric inspectors, 1 full-time public works
inspector, and 1 part-time storm drain inspector, however, the City makes no guarantee as to
the actual amount of services to be requested under any resulting inspection services contract.
Contract term will be based on Utilities and Public Works departmental workloads and
satisfactory Builders Protection Group, LLC performance.
Construction Standards
Electric:
Construction inspection shall be in accordance with the City of Palo Alto Utilities (CPAU) Electric
Construction Standards manual; CPAU Electric Service Requirements manual; CPAU Safety
Rules manual; CPAU plans, Permits and other documents governing the construction of the
project; and California Public Utilities Commission (CPUC) General Orders 95, 128 & 165, rules
for construction and maintenance of overhead and underground electric supply and
communication systems.
Water-Gas-Wastewater:
Construction Inspection shall be in accordance with the City of Palo Alto Utility Standards for
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WGW construction. The Builders Protection Group, LLC shall have knowledge of and be familiar
with the applicable rules for construction from the Department of Public Health regulations
governing water main installation and Department of Transportation regulations governing gas
installations.
Public Works & Storm Drain:
Construction inspection shall be in accordance with the City of Palo Alto Standard Drawings and
Specifications as published by the Public Works Department.
Labor, Materials, Vehicles & Equipment
Builders Protection Group, LLC shall furnish their personnel with all materials, equipment
(including all Personal Protective Equipment [PPE]), and transportation required to perform the
work. The Builders Protection Group, LLC’s personnel shall have appropriate vehicles, cellular
phones, computers, and miscellaneous equipment, supplies, and if needed appropriate testing
subconsultants required to perform the work as assigned. The cost of materials, vehicles,
equipment, supplies, meals, lodging and travel expense including incidental overhead shall be
included in each of the standard hourly rate and for overtime. Base rate plus 10% premium
shall be allotted when Lead Inspector role has been approved in advance by the City.
The Builders Protection Group, LLC’s work shall be under the direction of, and shall be reviewed
by, the City’s Project Engineer/Project Manager as specified in the contract. The Builders
Protection Group, LLC shall assign specific person(s) for the duration of the Contract, unless
otherwise approved by the City’s respective Project Engineer assigned. Back-up Builders
Protection Group, LLC resources should be available in case of loss of staff, sickness, or
vacations, or as required by the work.
A copy of work experience and/or relevant and appropriate licensing shall be provided before
work begins to the City’s Project Manager. Builders Protection Group, LLC’s personnel who do
not meet all of the specified requirements, or who fail to perform their work in an acceptable
manner, shall be removed from the work when determined and directed by the City’s Project
Manager.
General Work Description
BPG’s field Inspector shall inspect new overhead and underground utility and public works
construction, alterations and repairs to insure compliance with plans, specifications and codes.
The Inspector’s responsibilities may include, but are not limited to the following:
Performs duties described in CPAU Inspector Checklist.
Maintains a daily log of construction project activity, tracks job status and submits progress
reports as required.
Ensures that all applicable utility rules, codes and safety regulations are complied with.
Ensures all facilities are constructed in accordance with applicable plans and specifications.
Notifies contractors and the City’s project Engineer of non-compliance with the contract plans
and specifications in a timely manner.
Reports and documents safety and compliance infractions and unsafe work procedures.
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Prepares inspection documentation for development of progress payments for the project
construction contractor.
Assists in preparing punch lists of uncompleted work, non-conformance reports, and deficiency
notices.
Certifies as to the acceptability of each project upon its completion.
Conducts and generates agenda minutes of weekly field meetings.
Documents installed work on the as built/record drawings on a daily basis (This may include the
use of GPS equipment for data acquisition).
Documents with photographs whenever possible.
Builders Protection Group, LLC shall conduct Site Safety Inspections and work with the
construction contractor at the start of projects on an “as-needed” basis
Qualifications
The Electrical Field Inspector or Water-Gas-Wastewater Field Inspector assigned to work on
CPAU’s Projects shall have a minimum of 10-15 years experience working for an Investor
Owned Electric Utility and/or a Municipal Public Utility in the areas of overhead and
underground construction, installation and rehabilitation of water-gas-wastewater pipelines,
maintenance and inspection with a working knowledge of CPUC General Orders 95, 128, & 168.
The Public Works/Storm Drain Field Inspector assigned to work on general public works and
storm drain projects shall also have a minimum of 10-15 years experience working in the area
of public works and underground construction. Builders Protection Group, LLC shall have the
ability to make sound decisions and to communicate with others and to assimilate and
understand information in a manner consistent with the essential job functions. Builders
Protection Group, LLC personnel shall maintain the physical condition appropriate to the
performance of the assigned duties which may include walking or standing for extended
periods of time.
Personnel qualifications and staffing levels for City projects shall be subject to the approval of
the City’s specific Project Engineer assigned. The Project Engineer shall reserve the right to
review the resume and interview any new proposed Builders Protection Group, LLC personnel
for City projects. References of inspection experience shall be available for all staff, and may be
requested at any time during the Contract.
Documentation & Deliverables
Inspection Work shall conform to the City’s Construction Standards, Project Drawings and the
Inspector Checklist. Builders Protection Group, LLC’s field inspector shall maintain a daily
journal/diary for each day the inspector performs work on the project. The contents of the
diary shall consist of brief, accurate statements of progress and conditions encountered during
the prosecution of the work. A copy of the daily diary/report shall be given daily to the City’s
assigned Project Engineer and will become a part of the permanent project record.
Any safety violations and inspections infractions found are to be communicated to the City and
Contractor in real time as they are discovered.
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Once a week an electronic effort summary report (web-based or in MS Word or MS Excel
format) shall be sent to the Project Engineer summarizing job highlights to Builders Protection
Group, LLCs work hours, the equipment inspected and any infractions found.
The Builders Protection Group, LLC shall provide a user login to the City of Palo Alto for the
Contractor’s information systems, BPG Central, for more detailed and real time project
tracking.
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EXHIBIT “A-1”
PROFESSIONAL SERVICES TASK ORDER (SAMPLE)
Consultant hereby agrees to perform the work 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 the Agreement by
this reference. The Consultant shall furnish the necessary facilities, professional, technical and supporting personnel
required by this Task Order as described below.
CONTRACT NO. ISSUE DATE
Purchase Requisition No.
1A. MASTER AGREEMENT NUMBER
1B. TASK ORDER NO.
2. CONSULTANT
3. PERIOD OF PERFORMANCE: START: COMPLETION:
4 TOTAL TASK ORDER PRICE: $__________________
BALANCE REMAINING IN MASTER AGREEMENT $__________________________________
5. BUDGET CODE: _______________
COST CENTER_________________ COST ELEMENT______________ WBS/CIP___
_______PHASE___
6. CITY PROJECT MANAGER’S
NAME/DEPARTMENT_________________________________________
7. DESCRIPTION OF SCOPE OF SERVICES
MUST INCLUDE:
WORK TO BE PERFORMED
SCHEDULE OF WORK
BASIS FOR PAYMENT & FEE SCHEDULE
DELIVERABLES
REIMBURSABLES (with “not to exceed” cost)
8. ATTACHMENTS: A: Scope of Services B: __________________________________
-----------------------------------------------------------------------------------------------------------------------------------
I hereby authorize the performance of I hereby acknowledge receipt and acceptance
the work described above in this Task Order. of this Task Order and warrant that I have
authority to sign on behalf of Consultant.
APPROVED: APPROVED:
CITY OF PALO ALTO COMPANY NAME: ______________________
BY:__________________________________ BY:____________________________________
Name ________________________________ Name __________________________________
Title_________________________________ Title___________________________________
Date _________________________________ Date ___________________________________
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EXHIBIT “B”
SCHEDULE OF PERFORMANCE
CONSULTANT shall follow the table details of the anticipated time-table for inspection
services and expected call back times. In the event the City needs to contact the inspector
outside of normal business hours, Jaco Lau will be available to the City. He can be contacted via
cell phone at (310) 627-7223.
Turnaround Schedule
Type of Project Turnaround Time
Call Back 24-hours
Inspection Services 2 Business Days (48-hours)
Emergency Inspection Services 24-hours
Publication of Inspection Effort Summary Reports 5 Business Days
Submittal of Inspection Reports Daily
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EXHIBIT “C”
COMPENSATION
The CITY agrees to compensate the CONSULTANT for professional services performed
in accordance with the terms and conditions of this Agreement based on the hourly rate
schedule attached as Exhibit C-1.
The compensation to be paid to CONSULTANT under this Agreement for all services,
additional services, and reimbursable expenses shall not exceed the amount(s) stated in
Section 4 of this Agreement. CONSULTANT agrees to complete all Services and
Additional Services, including reimbursable expenses, within this/these amount(s). Any
work performed or expenses incurred for which payment would result in a total exceeding
the maximum amount of compensation set forth in this Agreement shall be at no cost to
the CITY.
REIMBURSABLE EXPENSES
The administrative, overhead, secretarial time or secretarial overtime, word processing,
photocopying, in-house printing, insurance and other ordinary business expenses are
included within the scope of payment for services and are not reimbursable expenses.
CITY shall reimburse:
The following table outlines the pricing for inspections related to the latest City Standardsof the
specified utilities:
Title Duties Hourly Rates
Water-Gas-Wastewater
Inspections
Perform inspections and re-inspections to
determine compliance with the adopted State
codes, applicable laws, regulations, local
ordinances, and City policies.
Regular Hours: $75
Overtime: $100
Holiday: $100
Electric Inspections
Perform inspections and re-inspections to
determine compliance with the adopted State
codes, applicable laws, regulations, local
ordinances, and City policies.
Regular Hours: $75
Overtime: $100
Holiday: $100
Public Works Inspections
Perform inspections and re-inspections to
determine compliance with the adopted State
codes, applicable laws, regulations, local
ordinances, and City policies.
Regular Hours: $75
Overtime: $100
Holiday: $100
Storm Drain Inspections
Perform inspections and re-inspections to
determine compliance with the adopted State
codes, applicable laws, regulations, local
ordinances, and City policies.
Regular Hours: $75
Overtime: $100
Holiday: $100
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ADDITIONAL SERVICES
The CONSULTANT shall provide additional services only by advanced, written
authorization from the CITY. The CONSULTANT, at the CITY’s project manager’s
request, shall submit a detailed written proposal including a description of the scope of
services, schedule, level of effort, and CONSULTANT’s proposed maximum
compensation, including reimbursable expenses, for such services based on the rates set
forth in Exhibit C-1. The additional services scope, schedule and maximum
compensation shall be negotiated and agreed to in writing by the CITY’s Project Manager
and CONSULTANT prior to commencement of the services. Payment for additional
services is subject to all requirements and restrictions in this Agreement.
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EXHIBIT “C-1”
SCHEDULE OF RATES
Unexpected additional work or Emergency work (unplanned and less than 48 hour notification)
to be performed are charged at the following rates
Title Duties Hourly Rates
Inspections
Perform inspections, re-inspections, to determine compliance
with the adopted State codes, applicable laws, regulations, local
ordinances, and City policies.
Regular Hours: $75
Overtime: $112.5
Holiday: $150
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Builder’s Protection Group, LLC will charge the following PLUS an additional 10% for the
following additional services, as requested by the City:
2015-2016 STANDARD SCHEDULE OF FEES AND SERVICES
GEOTECHNICAL ENGINEERING, SPECIAL INSPECTIONS AND CONSTRUCTION MATERIALS TESTING SERVICES
PROFESSIONAL HOURLY RATES ** Prevailing Wage
Senior Staff Professional $200.00
Geotechnical Engineer $175.00
Staff Professional / Resident Engineer / QA Manager $150.00
Project Engineer $135.00
Senior Project Manager $175.00
Project Manager $150.00
Expert Witness $350.00
Draftsman $95.00
Secretarial Services $65.00
** Applies to all professional rates including but not limited to civil, geotechnical & environmental, geologists, & mechanical.
SPECIAL INSPECTION PERSONNEL HOURLY RATES Non Prevailing Wage Prevailing Wage
Certified ICC Special Inspector $ 90.00 $115.00
Pile Driving Inspector $ 95.00 $125.00
Soil / Asphalt Technician $ 90.00 $115.00
Laboratory Technician $ 90.00 $115.00
AWS/CWI Welding Inspector $ 95.00 $120.00
Supervisory Technician $ 135.00 $135.00
Certified ICC / DSA / OSHPD Building Inspector $ 125.00 $125.00
Senior Specialty Technician (FF, Coring, X-Ray, etc.) $ 125.00 $165.00
Non-Destructive Testing, Level III $ 115.00 $125.00
Senior Construction Inspector $ 115.00 $125.00
FIELD TESTING EQUIPMENT HOURLY RATES Prevailing Wage
Anchor Pull Testing $ 20.00
Torque Wrench $ 20.00
Skidmore Wilhelm H. S. Bolt Calibrator $ 30.00
Paint Coating Gauge / Moisture Meter $ 20.00
Floor Flatness Equipment $ 40.00
UT / MT / PT Testing Equipment $ 15.00
Radiographic Equipment (Cesium 192) $ 65.00
Ground Penetrating Radar $ 65.00
Nuclear Gauge or Sand Cone Equipment $ 20.00
Pachometer $ 20.00
Smart Tables / Laptop Computers $ 5.00
Coring Equipment (Core drill, generator, etc.) $ 55.00
Concrete Test Equipment, Air Meter, Unit Weight , Slump Kit, Platform Scale $ 15.00
Schmidt Hammer $ 20.00
Concrete Vapor Transmission Test Kits (Each) $ 80.00
BASIS OF CHARGES (CONTINUED) Notes
1. Outside Equipment & Services Cost plus 20%
2. Mileage 0.75/mile
3. Per Diem $125/Day, or cost plus 20% whichever is greater
4. Technical Services (Portal to Portal) Show-up/Cancellation: 2-hour minimum
Shop/Field Services: 4-hour increment
Work + 8 hours: 2-hour increment
Office Staff: 1-hour increment
5.Premium Time Over 8-hrs on Weekday and First 8-hrs on Saturday: 1.5 x Rate Over
12-hrs on Weekday and Over 8-hrs on Saturday: 2.0 x Rate
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EXHIBIT “D”
INSURANCE REQUIREMENTS
CONTRACTORS 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, BELOW:
REQUIRED TYPE OF COVERAGE REQUIREMENT
MINIMUM LIMITS
EACH
OCCURRENCE AGGREGATE
YES
YES
WORKER’S COMPENSATION
EMPLOYER’S LIABILITY
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: CONTRACTOR, 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 CONTRACTOR AND ITS
SUBCONSULTANTS, IF ANY, BUT ALSO, WITH THE EXCEPTION OF WORKERS’ COMPENSATION, EMPLOYER’S LIABILITY AND
PROFESSIONAL INSURANCE, NAMING AS ADDITIONAL INSUREDS CITY, ITS COUNCIL MEMBERS, OFFICERS, AGENTS,
AND EMPLOYEES.
I. INSURANCE COVERAGE MUST INCLUDE:
A. A PROVISION FOR A WRITTEN THIRTY (30) DAY ADVANCE NOTICE TO CITY OF CHANGE IN
COVERAGE OR OF COVERAGE CANCELLATION; AND
B. A CONTRACTUAL LIABILITY ENDORSEMENT PROVIDING INSURANCE COVERAGE FOR
CONTRACTOR’S AGREEMENT TO INDEMNIFY CITY.
C. DEDUCTIBLE AMOUNTS IN EXCESS OF $5,000 REQUIRE CITY’S PRIOR APPROVAL.
II. CONTACTOR MUST SUBMIT CERTIFICATES(S) OF INSURANCE EVIDENCING REQUIRED COVERAGE.
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.
B. CROSS LIABILITY
Professional Services
Rev. April 27, 2016
28
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.
NOTICES SHALL BE EMAILED TO: InsuranceCerts@CityofPaloAlto.org
PURCHASING AND CONTRACT ADMINISTRATION
CITY OF PALO ALTO
P.O. BOX 10250
PALO ALTO, CA 94303
Professional Services
Rev. April 27, 2016
29
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 to comply with the requirements of SB 854.
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.”
CITY gives notice to CONSULTANT and its listed subcontractors that CONSULTANT is
required to post all job site notices prescribed by law or regulation and CONSULTANT is
subject to SB 854-compliance monitoring and enforcement by DIR.
CITY requires CONSULTANT and its listed subcontractors to comply with the requirements of
Labor Code section 1776, including:
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.
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 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 the project manager at the end of each week during the Project.
If the certified payroll records are not produced to the project manager within the 10-day period,
Professional Services
Rev. April 27, 2016
30
then CONSULTANT and its listed subcontractors shall be subject to a penalty of one hundred
dollars ($100.00) per calendar day, or portion thereof, for each worker, and CITY shall withhold
the sum total of penalties from the progress payment(s) then due and payable to
CONSULTANT.
Inform the project manager of the location of CONSULTANT’s and its listed subcontractors’
payroll records (street address, city and county) at the commencement of the Project, and also
provide notice to the project manager within five (5) business days of any change of location of
those payroll records.
ATTACHMENT B: BID LIST SUMMARY
Type Apex BPG, LLP Canus 4LEAF
WGW
Regular 87.00$ 75.00$ 137.83$ 137.00$
OT 130.50$ 100.00$ 163.34$ 205.50$
Holiday 174.00$ 100.00$ 163.34$ 274.00$
Elecric
Regular 100.00$ 75.00$ 137.83$ 137.00$
OT 150.00$ 100.00$ 163.34$ 205.50$
Holiday 200.00$ 100.00$ 163.34$ 274.00$
Public Works
Regular 87.00$ 75.00$ 137.83$ 137.00$
OT 130.50$ 100.00$ 163.34$ 205.50$
Holiday 174.00$ 100.00$ 163.34$ 274.00$
PW - Storm
Regular 87.00$ 75.00$ 137.83$ 137.00$
OT 130.50$ 100.00$ 163.34$ 205.50$
Holiday 174.00$ 100.00$ 163.34$ 274.00$
Total 1,624.50$ 1,100.00$ 1,858.04$ 2,466.00$
Cost = 10%6.77 10 5.92 4.46
Points
CITY OF PALO ALTO OFFICE OF THE CITY ATTORNEY
August 22, 2016
The Honorable City Council
Palo Alto, California
Adoption of a Resolution Correcting Clerical Errors in two Items
Previously Approved as Part of the Palo Alto Clean Local Energy
Accessible Now (CLEAN) Program
Recommendation
To correct clerical errors associated with two Palo Alto Clean Local Energy Accessible Now
(CLEAN) Program resolutions approved on October 5, 2015 and March 28, 2016, staff
recommends that Council approve the attached Resolution.
Background
The purpose of this action is to correct errors that occurred with respect to two Palo Alto
CLEAN Program resolutions that the Council approved on October 5, 2015 and March 28,
2016:
On October 5, 2015, the City Council adopted Resolution No. 9552 to add Exhibit A-1,
CLEAN Program Eligibility Rules and Requirements, to Resolution 9512, originally adopted on
May 27, 2015. Resolution 9552 misstated Council’s May 27, 2015 action regarding the contract
price for solar energy resources in the CLEAN Program. Adoption of the attached Resolution
corrects this clerical error by amending Resolution 9552 to include the correct 16.5 c/kWh
contract price for solar energy resources for both 20 and 25 year contract terms.
On March 28, 2016 the City Council adopted Resolution No. 9580, adopting revised Palo
Alto CLEAN Program Eligibility Rules and Requirements and authorizing the City Manager or his
designee to sign contracts for resources meeting those Rules and Requirements. Although the
Council voted to maintain the Palo Alto CLEAN Program price for local solar energy resources at
16.5 c/kWh for both 20 and 25 year terms and continue the Program limit of 3 megawatts (MW),
Resolution 9580 inadvertently carried forward the misstated solar resource contract price from
Resolution 9552. Adoption of the attached Resolution corrects this clerical error to include the
appropriate 16.5 c/kWh contract price for solar energy resources.
Environmental Review
The proposed Resolution correcting clerical errors are not projects subject to environmental
review.
Page 2
ATTACHMENTS:
Attachment A: Resolution Amending and Correcting Resos 9552 and 9580 re Palo Alto
CLEAN program (PDF)
Department Head: Molly Stump, City Attorney
Not Yet Approved
160721 jb 6053799
RESOLUTION NO: _____
[Amending and Correcting Resolutions 9552 and 9580]
Resolution of the Council of the City of Palo Alto Amending and Correcting
Resolutions 9552 and 9580 to Correctly State the Prices and Program Limits for the
Palo Alto Clean Local Energy Accessible Now (CLEAN) Program
RECITALS
A. On October 5, 2015 the City Council of Palo Alto (“the City”) adopted Resolution No.
9552 correcting Resolution 9512 and modifying the City’s CLEAN Program to include Exhibit A-1 to
the Resolution, which was inadvertently omitted in Resolution 9512. Exhibit A-1 contained then-
current CLEAN Program Eligibility Rules and requirements necessary to implement changes to the
Palo Alto CLEAN Program.
B. Recital A(ii) of Resolution 9552 misstated Council’s May 27, 2015 action regarding the
contract price for solar energy resources in the CLEAN Program. At its May 27, 2015 meeting,
contrary to the title and Recital A(ii) of Resolution 9552, Council voted to continue the CLEAN
Program price for solar energy resources at 16.5 c/kWh for both 20 and 25 year terms.
C. On March 28, 2016, the City Council adopted Resolution 9580:
a. Adopting revised Palo Alto CLEAN Program Eligibility Rules and Requirements
and authorizing the City Manager or his designee to sign contracts for resources
meeting those Rules and Requirements,
b. Maintaining the Palo Alto CLEAN Program price for local solar energy resources
at 16.5 c/kWh for both 20 and 25 year terms and continuing with a Program
limit of 3 megawatts (MW),
c. Reducing the Palo Alto CLEAN Program price for local non-solar eligible
renewable energy resources to the updated avoided cost of such energy
($0.081/kWh for a 20-year contract term, or $0.082/kWh for a 25-year contract
term), from the prior avoided cost projection ($0.093/kWh for a 20-year
contract term, or $0.094/kWh for a 25-year contract term), and continuing with
a separate Program limit of 3 MW specifically for local non-solar eligible
renewable resources; and
d. Approving the amended CLEAN Program Power Purchase Agreement (PPA) to
implement the recommended changes.
D. The title and Recital F of Resolution 9580 inadvertently carried forward the misstated
solar resource contact price from Resolution 9552.
E. Based on the foregoing, the City Council of the City of Palo Alto finds and determines it
advisable to amend Resolutions 9552 and 9580 to correctly state the prices and Program limits for
the CLEAN Program.
Not Yet Approved
160721 jb 6053799
NOW THEREFORE, the Council of the City of Palo Alto RESOLVES AS FOLLOWS:
SECTION 1: The title of Resolution 9552 is hereby amended to state: “Resolution of the
Council of the City of Palo Alto Amending and Correcting Resolution No. 9512, Maintaining the
Contract Price for Palo Alto Clean Local Energy Accessible Now (CLEAN) Program at 16.5 c/kWh,
Expanding the CLEAN Program’s Eligibility to Non-Solar Renewable Energy Resources and adding a
25-year Contract Term Option and Adopting Revised Palo Alto CLEAN Program Eligibility Rules and
Requirements”.
SECTION 2: Recital A(ii) of Resolution 9552 is hereby amended to state: “Continue the Palo
Alto CLEAN Program for solar energy resources, maintaining the contract price of 16.5 cents per
kilowatt-hour, and continuing with a CLEAN Program limit for solar energy resources of 3
megawatts (MW);”
SECTION 3: This resolution supplements, amends, and corrects the original resolution No.
9552 only to the extent necessary to correctly state the price for solar projects as 16.5 c/kWh and,
except to the extent specifically amended by this resolution, the original resolution 9552 shall
remain in full force and effect.
SECTION 4: The title of Resolution 9580 is hereby amended to state: “Resolution of the
Council of the City of Palo Alto Maintaining the Contract Price for Palo Alto Clean Local Energy
Accessible Now (CLEAN) Program at 16.5 c/kW and Decreasing the Contract Rate for Non-Solar
Renewable Energy Resources to 8.1c/kWh to 8.2c/kWh Based on the Reduced Avoided Cost of Local
Renewable Energy and Amending Associated Program Rules”.
SECTION 5: Recital F of Resolution 9580 is hereby amended to state: “The City therefore
wants to continue the CLEAN Program for solar resources at 16.5c/kWh for both 20 and 25 year
terms and continue with a Program limit of 3 megawatts (MW). Additionally, the City wants to
reduce the price for local non-solar eligible renewable energy resources to the updated avoided
cost of such energy ($0.081/kWh for a 20-year contract term, or $0.082/kWh for a 25-year contract
term), and approve the amended CLEAN Program Power Purchase Agreement (PPA) to implement
the recommended changes.”
SECTION 6: SECTION 1 of Resolution 9580 is hereby amended to state: “The Council (1)
adopts revised Palo Alto CLEAN Program Eligibility Rules and Requirements, set forth in Exhibit 1
attached to this Resolution; (2) maintains the Palo Alto CLEAN Program price for local solar energy
resources at 16.5 c/kWh for both 20 and 25 year terms and continues with a Program limit of 3
megawatts (MW); (3) reduces the Palo Alto CLEAN Program price for local non-solar eligible
renewable energy resources to the updated avoided cost of such energy ($0.081/kWh for a 20-year
contract term, or $0.082/kWh for a 25-year contract term), from the prior avoided cost projection
($0.093/kWh for a 20-year contract term, or $0.094/kWh for a 25-year contract term); (4) continues
with a separate Program limit of 3 MW specifically for local non-solar eligible renewable resources;
Not Yet Approved
160721 jb 6053799
and (5) approves the amended CLEAN Program Power Purchase Agreement (PPA) to implement the
recommended changes.
SECTION 7: This resolution supplements, amends, and corrects the original resolution No.
9580 only to the extent necessary to correctly state the prices and Program limits for CLEAN
projects and approve the amended PPA, and except to the extent specifically amended by this
resolution, the original resolution 9580 shall remain in full force and effect.
SECTION 8: The Council finds that the adoption of this resolution is not subject to California
Environmental Quality ACT (CEQA) review under California Public Resources Code section
21080(b)(8), because the rate adopted reflects the reasonable cost of the CLEAN Program’s
operating expenses. Approval of the amended CLEAN Program Eligibility Rules and Requirements is
not a project under CEQA, and therefore, no environmental assessment is necessary.
INTRODUCED AND PASSED:
AYES:
NOES:
ABSENT:
ABSENTIONS:
ATTEST:
___________________________ _______________________
City Clerk Mayor
APPROVED AS TO FORM: APPROVED:
___________________________ _______________________
Senior Deputy City Attorney City Manager
___________________________
Director of Utilities
___________________________
Director of Administrative Services
City of Palo Alto (ID # 6885)
City Council Staff Report
Report Type: Consent Calendar Meeting Date: 8/22/2016
City of Palo Alto Page 1
Summary Title: Contract with Sierra Traffic for On-Call Traffic Safety Services
Title: Approval of Contract C16163335 with Sierra Traffic Markings, Inc in the
Amount of $850,000 to Provide On-call Traffic Safety Services, Allowing Them
to Implement Minor Roadway Improvements in Response to Community
Service Requests
From: City Manager
Lead Department: Planning and Community Environment
Recommendation
Staff recommends that Council authorize the City Manager or his designee to execute contract
C16163335 with Sierra Traffic Markings, Inc. (Attachment A), for a period of five years in an
amount not to exceed $850,000 for On-Call Traffic Safety Services and find the project exempt
from the California Environmental Quality Act (CEQA) under CEQA Guidelines Section 15301
(existing facilities).
Background
The contract for On-Call Traffic Safety Services provides for minor roadway improvements
identified in response to community service requests such as sign installations, roadway
marking, curb paintings and other miscellaneous safety improvements on an as-needed basis
throughout the term of the contract.
Since adoption of the Palo Alto 311 service request tracking system in April 2015, the Planning
and Community Environment Department has closed-out 169 transportation-related service
requests. These community-submitted requests include items such as the installation of new
red curb, parking signage, traffic signal timing changes, improvements to school walking and
bicycling routes, new crosswalk or pedestrian crossing sign installation, installation of bicycle
detection symbols at traffic signals, new conflict markings in bicycle lanes, turn-lane
modifications, and traffic calming on local streets.
Discussion
The City released a Request for Quotes (RFQ) on May 29, 2016, for On-call Traffic Safety
Services. Bids were opened on June 21, 2016 and the City received two quotes in response to
City of Palo Alto Page 2
the RFQ. The quotes received were competitive and each bidder provided for costs of each
task, as defined in the Scope of Work (see attached contract). Staff has reviewed all the quotes
submitted and recommends that the quote submitted by Sierra Traffic Markings, Inc. be
accepted, and that Sierra Traffic Markings, Inc. be declared as the lowest responsive bidder.
The contract for On-Call Traffic Safety Services contractor is essential to the closure of service
requests related to roadway signing and striping. The City has verified the Sierra Traffic
Marking, Inc. contractor license and has checked with their listed references. The company is in
good standing with the State of California. Sierra Traffic Markings, Inc. has experience working
in the City of Palo Alto and is familiar with all required City Standards and Specifications, as well
as the California Manual of Uniform Traffic Control Devices.
Timeline
Upon approval of this contract, Sierra Traffic Markings, Inc. will begin to complete work orders
issued by the Planning and Community Environment Department. These work orders are issued
each month in packages in order to minimize mobilization costs and maximize efficiency.
Resource Impact
Funding for this contract is available in the Fiscal Year 2017 Adopted Capital Improvement
Program (CIP) budget for CIP Project PL-12000 (Parking & Transportation Improvements) and
PL-00026 (Safe Routes to School). No additional funding is needed.
Policy Implications
The City’s Comprehensive Plan recommends that the City strive to accommodate all modes of
travel on its street system. This contract is consistent with the following goals and policies:
Goal T-4: An efficient roadway network is provided for all users, including motor vehicles,
transit vehicles, bicyclists and pedestrians
Goal T-6: A high level of safety for motorists, pedestrians, and bicyclists on Palo Alto streets.
Environmental Review
This contract and associated work qualifies for a Categorical Exemption is recommended under
CEQA Guidelines section 15301 (existing facilities). No trees will be removed and all work will
occur within the existing public right-of-way. The contract will result in the minor alteration of
existing roadways. A Notice Of Exemption will be filed with the County following Council
approval.
Attachments:
Attachment A: Sierra Traffic Contract C16163335 (PDF)
1
City of Palo Alto General Services Agreement Rev. April 27, 2016
CITY OF PALO ALTO CONTRACT NO. C16163335
GENERAL SERVICES AGREEMENT
THIS AGREEMENT made and entered into on the 29th day of August, 2016, by and
between the CITY OF PALO ALTO, a California chartered municipal corporation
(“CITY”), and SIERRA TRAFFIC MARKINGS, INC., a California corporation, located at 9725
Del Road, Suite B, Roseville, California, 95747, Telephone Number: (916) 774-9080
(“CONTRACTOR”). In consideration of their mutual covenants, the parties hereto agree
as follows:
1. SERVICES. CONTRACTOR shall provide or furnish the services (the “Services”)
described in the Scope of Services, attached at Exhibit A.
Optional On-Call Provision (This provision only applies if checked and only
applies to on-call agreements.)
Services will be authorized by CITY, as needed, with a Task Order assigned and
approved by CITY’s Project Manager. Each Task Order shall be in substantially the
same form as Exhibit A-1. Each Task Order shall designate a CITY Project
Manager and shall contain a specific scope of work, a specific schedule of
performance and a specific compensation amount. The total price of all Task
Orders issued under this Agreement shall not exceed the amount of
Compensation set forth in Section 5 of this Agreement. CONTRACTOR shall only
be compensated for work performed under an authorized Task Order and CITY
may elect, but is not required, to authorize work up to the maximum
compensation amount set forth in Section 5.
2. EXHIBITS. The following exhibits are attached to and made a part of this
Agreement:
“A” - Scope of Services
“A-1” – On-Call Task Order (Optional)
“B” - Schedule of Performance (Not Applicable)
“C” – Schedule of Fees
“D” - Insurance Requirements
3. TERM.
The term of this Agreement is from September 1, 2016 to August 30, 2021
inclusive, subject to the provisions of Sections Q and V of the General Terms and
Conditions.
DocuSign Envelope ID: B1307AAA-0738-46F8-9C61-4B92AFB3AA4B
2
City of Palo Alto General Services Agreement Rev. April 27, 2016
4. SCHEDULE OF PERFORMANCE. CONTRACTOR shall complete the Services within
the term of this Agreement in a reasonably prompt and timely manner based
upon the circumstances and direction communicated to CONTRACTOR, and if
applicable, in accordance with the schedule set forth in the Schedule of
Performance, attached at Exhibit B. Time is of the essence in this Agreement.
5. COMPENSATION FOR ORIGINAL TERM. CITY shall pay and CONTRACTOR agrees
to accept as not-to-exceed compensation for the full performance of the
Services and reimbursable expenses, if any:
The total maximum lump sum compensation of Eight Hundred Fifty Thousand
dollars ($850,000.00);
CONTRACTOR agrees that it can perform the Services for an amount not to
exceed the total maximum compensation set forth above. Any hours worked or
services performed by CONTRACTOR for which payment would result in a total
exceeding the maximum amount of compensation set forth above for
performance of the Services shall be at no cost to CITY.
6. COMPENSATION DURING ADDITIONAL TERMS.
CONTRACTOR’S compensation rates for each additional term shall be the
same as the original term;
7. ININVOICING. Send all invoices to CITY, Attention: Project Manager. The Project
Manager is: Shahla Yazdy, Planning & Community Services Department,
Transportation Department, Telephone: (650) 617-3151. Invoices shall be
submitted in arrears for Services performed. Invoices shall not be submitted
more frequently than monthly. Invoices shall provide a detailed statement of
Services performed during the invoice period and are subject to verification by
CITY. CITY shall pay the undisputed amount of invoices within 30 days of receipt.
GENERAL TERMS AND CONDITIONS
A. ACCEPTANCE. CONTRACTOR accepts and agrees to all terms and conditions of
this Agreement. This Agreement includes and is limited to the terms and
conditions set forth in sections 1 through 7 above, these general terms and
conditions and the attached exhibits.
B. QUALIFICATIONS. CONTRACTOR represents and warrants that it has the
expertise and qualifications to complete the services described in Section 1 of
this Agreement, entitled “SERVICES,” and that every individual charged with the
performance of the services under this Agreement has sufficient skill and
experience and is duly licensed or certified, to the extent such licensing or
DocuSign Envelope ID: B1307AAA-0738-46F8-9C61-4B92AFB3AA4B
3
City of Palo Alto General Services Agreement Rev. April 27, 2016
certification is required by law, to perform the Services. CITY expressly relies on
CONTRACTOR’s representations regarding its skills, knowledge, and
certifications. CONTRACTOR shall perform all work in accordance with generally
accepted business practices and performance standards of the industry,
including all federal, state, and local operation and safety regulations.
C. INDEPENDENT CONTRACTOR. It is understood and agreed that in the
performance of this Agreement, CONTRACTOR and any person employed by
CONTRACTOR shall at all times be considered an independent CONTRACTOR and
not an agent or employee of CITY. CONTRACTOR shall be responsible for
employing or engaging all persons necessary to complete the work required
under this Agreement.
D. SUBCONTRACTORS. CONTRACTOR may not use subcontractors to perform any
Services under this Agreement unless CONTRACTOR obtains prior written
consent of CITY. CONTRACTOR shall be solely responsible for directing the work
of approved subcontractors and for any compensation due to subcontractors.
E. TAXES AND CHARGES. CONTRACTOR shall be responsible for payment of all
taxes, fees, contributions or charges applicable to the conduct of CONTRACTOR’s
business.
F. COMPLIANCE WITH LAWS. CONTRACTOR shall in the performance of the
Services comply with all applicable federal, state and local laws, ordinances,
regulations, and orders.
G. PALO ALTO MINIMUM WAGE ORDINANCE. CONTRACTOR shall comply with all
requirements of the Palo Alto Municipal Code Chapter 4.62 (Citywide Minimum
Wage), as it may be 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,
CONTRACTOR 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, CONTRACTOR
shall post notices regarding the Palo Alto Minimum Wage Ordinance in
accordance with Palo Alto Municipal Code section 4.62.060.
H. DAMAGE TO PUBLIC OR PRIVATE PROPERTY. CONTRACTOR shall, at its sole
expense, repair in kind, or as the City Manager or designee shall direct, any
damage to public or private property that occurs in connection with
CONTRACTOR’s performance of the Services. CITY may decline to approve and
may withhold payment in whole or in part to such extent as may be necessary to
protect CITY from loss because of defective work not remedied or other damage
to the CITY occurring in connection with CONTRACTOR’s performance of the
DocuSign Envelope ID: B1307AAA-0738-46F8-9C61-4B92AFB3AA4B
4
City of Palo Alto General Services Agreement Rev. April 27, 2016
Services. CITY shall submit written documentation in support of such
withholding upon CONTRACTOR’s request. When the grounds described above
are removed, payment shall be made for amounts withheld because of them.
I. WARRANTIES. CONTRACTOR expressly warrants that all services provided under
this Agreement shall be performed in a professional and workmanlike manner in
accordance with generally accepted business practices and performance
standards of the industry and the requirements of this Agreement.
CONTRACTOR expressly warrants that all materials, goods and equipment
provided by CONTRACTOR under this Agreement shall be fit for the particular
purpose intended, shall be free from defects, and shall conform to the
requirements of this Agreement. CONTRACTOR agrees to promptly replace or
correct any material or service not in compliance with these warranties,
including incomplete, inaccurate, or defective material or service, at no further
cost to CITY. The warranties set forth in this section shall be in effect for a period
of one year from completion of the Services and shall survive the completion of
the Services or termination of this Agreement.
J. MONITORING OF SERVICES. CITY may monitor the Services performed under this
Agreement to determine whether CONTRACTOR’s work is completed in a
satisfactory manner and complies with the provisions of this Agreement.
K. CITY’S PROPERTY. Any reports, information, data or other material (including
copyright interests) developed, collected, assembled, prepared, or caused to be
prepared under this Agreement will become the property of CITY without
restriction or limitation upon their use and will not be made available to any
individual or organization by CONTRACTOR or its subcontractors, if any, without
the prior written approval of the City Manager.
L. AUDITS. CONTRACTOR agrees to permit CITY and its authorized representatives
to audit, at any reasonable time during the term of this Agreement and for three
(3) years from the date of final payment, CONTRACTOR’s records pertaining to
matters covered by this Agreement. CONTRACTOR agrees to maintain accurate
books and records in accordance with generally accepted accounting principles
for at least three (3) following the terms of this Agreement.
M. NO IMPLIED WAIVER. No payment, partial payment, acceptance, or partial
acceptance by CITY shall operate as a waiver on the part of CITY of any of its
rights under this Agreement.
N. INSURANCE. CONTRACTOR, at its sole cost, shall purchase and maintain in full
force during the term of this Agreement, the insurance coverage described at
Exhibit D. Insurance must be provided by companies with a Best’s Key Rating of
A-:VII or higher and which are otherwise acceptable to CITY’s Risk Manager. The
DocuSign Envelope ID: B1307AAA-0738-46F8-9C61-4B92AFB3AA4B
5
City of Palo Alto General Services Agreement Rev. April 27, 2016
Risk Manager must approve deductibles and self-insured retentions. In addition,
all policies, endorsements, certificates and/or binders are subject to approval by
the Risk Manager as to form and content. CONTRACTOR shall obtain a policy
endorsement naming the City of Palo Alto as an additional insured under any
general liability or automobile policy. CONTRACTOR shall obtain an
endorsement stating that the insurance is primary coverage and will not be
canceled or materially reduced in coverage or limits until after providing 30 days
prior written notice of the cancellation or modification to the Risk Manager.
CONTRACTOR shall provide certificates of such policies or other evidence of
coverage satisfactory to the Risk Manager, together with the required
endorsements and evidence of payment of premiums, to CITY concurrently with
the execution of this Agreement and shall throughout the term of this
Agreement provide current certificates evidencing the required insurance
coverages and endorsements to the Risk Manager. CONTRACTOR shall include
all subcontractors as insured under its policies or shall obtain and provide to CITY
separate certificates and endorsements for each subcontractor that meet all the
requirements of this section. The procuring of such required policies of insurance
shall not operate to limit CONTRACTOR’s liability or obligation to indemnify CITY
under this Agreement.
O. HOLD HARMLESS. To the fullest extent permitted by law and without limitation
by the provisions of section M relating to insurance, CONTRACTOR shall
indemnify, defend and hold harmless CITY, its Council members, officers,
employees and agents from and against any and all demands, claims, injuries,
losses, or liabilities of any nature, including death or injury to any person,
property damage or any other loss and including without limitation all damages,
penalties, fines and judgments, associated investigation and administrative
expenses and defense costs, including, but not limited to reasonable attorney’s
fees, courts costs and costs of alternative dispute resolution), arising out of, or
resulting in any way from or in connection with the performance of this
Agreement. CONTRACTOR’s obligations under this Section apply regardless of
whether or not a liability is caused or contributed to by any negligent (passive or
active) act or omission of CITY, except that CONTRACTOR shall not be obligated
to indemnify for liability arising from the sole negligence or willful misconduct of
CITY. The acceptance of the Services by CITY shall not operate as a waiver of the
right of indemnification. The provisions of this Section survive the completion of
the Services or termination of this Agreement.
P. NON-DISCRIMINATION. As set forth in Palo Alto Municipal Code section
2.30.510, CONTRACTOR certifies that in the performance of this Agreement, it
shall not discriminate in the employment of any person because of the race, skin
color, gender, age, religion, disability, national origin, ancestry, sexual
orientation, housing status, marital status, familial status, weight or height of
such person. CONTRACTOR acknowledges that it has read and understands the
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City of Palo Alto General Services Agreement Rev. April 27, 2016
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.
Q. WORKERS' COMPENSATION. CONTRACTOR, by executing this Agreement,
certifies that it is aware of the provisions of the Labor Code of the State of
California which require every employer to be insured against liability for
workers' compensation or to undertake self-insurance in accordance with the
provisions of that Code, and certifies that it will comply with such provisions, as
applicable, before commencing and during the performance of the Services.
R. TERMINATION. The City Manager may terminate this Agreement without cause
by giving ten (10) days’ prior written notice thereof to CONTRACTOR. If
CONTRACTOR fails to perform any of its material obligations under this
Agreement, in addition to all other remedies provided by law, the City Manager
may terminate this Agreement immediately upon written notice of termination.
Upon receipt of such notice of termination, CONTRACTOR shall immediately
discontinue performance. CITY shall pay CONTRACTOR for services satisfactorily
performed up to the effective date of termination. If the termination if for
cause, CITY may deduct from such payment the amount of actual damage, if any,
sustained by CITY due to CONTRACTOR’s failure to perform its material
obligations under this Agreement. Upon termination, CONTRACTOR shall
immediately deliver to the City Manager any and all copies of studies, sketches,
drawings, computations, and other material or products, whether or not
completed, prepared by CONTRACTOR or given to CONTRACTOR, in connection
with this Agreement. Such materials shall become the property of CITY.
S. ASSIGNMENTS/CHANGES. This Agreement binds the parties and their
successors and assigns to all covenants of this Agreement. This Agreement shall
not be assigned or transferred without the prior written consent of CITY. No
amendments, changes or variations of any kind are authorized without the
written consent of CITY.
T. CONFLICT OF INTEREST. In accepting this Agreement, CONTRACTOR 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 this Contract. CONTRACTOR further covenants that, in
the performance of this Contract, it will not employ any person having such an
interest. CONTRACTOR certifies that no CITY Officer, employee, or authorized
representative has any financial interest in the business of CONTRACTOR and
that no person associated with CONTRACTOR has any interest, direct or indirect,
which could conflict with the faithful performance of this Contract.
CONTRACTOR agrees to advise CITY if any conflict arises.
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City of Palo Alto General Services Agreement Rev. April 27, 2016
U. GOVERNING LAW. This contract shall be governed and interpreted by the laws
of the State of California.
V. ENTIRE AGREEMENT. This Agreement, including all exhibits, represents the
entire agreement between the parties with respect to the services that may be
the subject of this Agreement. Any variance in the exhibits does not affect the
validity of the Agreement and the Agreement itself controls over any conflicting
provisions in the exhibits. This Agreement supersedes all prior agreements,
representations, statements, negotiations and undertakings whether oral or
written.
W. 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. 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 Contract 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 Contract.
X. ENVIRONMENTALLY PREFERRED PURCHASING AND ZERO WASTE
REQUIREMENTS. CONTRACTOR shall comply with CITY’s Environmentally
Preferred Purchasing policies which are available at CITY’s Purchasing Division,
which are incorporated by reference and may be amended from time to time.
CONTRACTOR 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, CONTRACTOR shall comply with the
following zero waste requirements:
All printed materials provided by CONTRACTOR 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.
Goods purchased by Contractor 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
Division’s office.
Reusable/returnable pallets shall be taken back by CONTRCATOR, at no
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City of Palo Alto General Services Agreement Rev. April 27, 2016
additional cost to CITY, for reuse or recycling. CONTRACTOR shall provide
documentation from the facility accepting the pallets to verify that pallets
are not being disposed.
Y. AUTHORITY. The individual(s) executing this Agreement on behalf of the parties
represent and warrant that they have the legal capacity and authority to do so
on behalf of their respective legal entities.
Z. PREVAILING WAGESContractor is required to pay general prevailing wages as
defined in Subchapter 3, Title 8 of the California Code of Regulations and Section
16000 et seq. and Section 1773.1 of the California Labor Code. Pursuant to the
provisions of Section 1773 of the Labor Code of the State of California, the City
Council 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 Director of the Department of Industrial Relations (“DIR”). Copies of
these rates may be obtained at the Purchasing Division’s office of the City of Palo
Alto. Contractor shall provide a copy of prevailing wage rates to any staff or
subcontractor hired, and shall pay the adopted prevailing wage rates as a
minimum. Contractor shall comply with the provisions of all sections, including,
but not limited to, Sections 1775, 1776, 1777.5, 1782, 1810, and 1813, of the
Labor Code pertaining to prevailing wages.
AA. DIR REGISTRATION. In regard to any public work construction, alteration,
demolition, repair or maintenance work, CITY will not accept a bid proposal from
or enter into this Agreement with CONTRACTOR without proof that
CONTRACTOR and its listed subcontractors are registered with the California
Department of Industrial Relations (“DIR”) to perform public work, subject to
limited exceptions. City requires CONTRACTOR and its listed subcontractors to
comply with the requirements of SB 854.
CITY provides notice to CONTRACTOR 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.”
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City of Palo Alto General Services Agreement Rev. April 27, 2016
CITY gives notice to CONTRACTOR and its listed subcontractors that
CONTRCATOR is required to post all job site notices prescribed by law or
regulation and CONTRACTOR is subject to SB 854-compliance monitoring and
enforcement by DIR.
CITY requires CONTRACTOR and its listed subcontractors to comply with the
requirements of Labor Code section 1776, including:
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, CONTRACTOR and its
listed subcontractors, in connection with the Project.
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
CONTRACTOR and its listed subcontractors, respectively.
At the request of CITY, acting by its project manager, CONTRACTOR and its listed
subcontractors shall make the certified payroll records available for inspection or
furnished upon request to the project manager within ten (10) days of receipt of
CITY’s request.
[For state- and federally-funded projects] CITY requests CONTRACTOR
and its listed subcontractors to submit the certified payroll records to the
project manager at the end of each week during the Project.
If the certified payroll records are not produced to the project manager within
the 10-day period, then CONTRACTOR 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 CONTRACTOR.
Inform the project manager of the location of CONTRACTOR’s and its listed
subcontractors’ payroll records (street address, city and county) at the
commencement of the Project, and also provide notice to the project manager
within five (5) business days of any change of location of those payroll records.
BB. CONTRACT TERMS. All unchecked boxes do not apply to this Agreement. In the
case of any conflict between the terms of this Agreement and the exhibits hereto
or CONTRACTOR’s proposal (if any), the Agreement shall control. In the case of
any conflict between the exhibits hereto and CONTRACTOR’s proposal, the
exhibits shall control.
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City of Palo Alto General Services Agreement Rev. April 27, 2016
IN WITNESS WHEREOF, the parties hereto have by their duly authorized
representatives executed this Agreement on the date first above written.
CITY OF PALO ALTO
APPROVED AS TO FORM:
SIERRA TRAFFIC MARKINGS, INC.
Officer 1
Officer 2
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COO
Ron Johnson
COO
Rick Johnson
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City of Palo Alto General Services Agreement Rev. April 27, 2016
EXHIBIT A
SCOPE OF SERVICES
CITY shall negotiate with the CONTRACTOR at the start of each month, the amount
of work to be completed based on CITY-furnished "work order'' type
improvement plans. The CONTRACTOR shall provide cost estimates on the
negotiated work. The City shall review cost estimates and if approved provide
written authorization to the CONTRACTOR to proceed. The CONTRACTOR shall
complete the work during the issued month or time specified on the written
authorization.
(Task A) Standard Highway Signs- New Sign Installation onto Existing Sign Post
CONTRACTOR shall install a standard highway sign(s) onto existing sign post
and/or an existing Caltrans Type 15 Pole Standard. Existing City sign posts might
require the addition of a riser onto existing sign post to accommodate new
sign(s). Addition of a riser shall include the threading of the existing sign post,
installation of a coupling bracket, and pole extension to support the new
sign. The CONTRACTOR shall be responsible for providing a cost to include all
labor and material, including all necessary sign bracketing and banding material.
(Task B) Standard Highway Signs- New Sign & New Sign Post Installation
CONTRACTOR shall install a standard highway sign(s) onto CONTRACTOR
furnished and installed sign post. Installation of a new sign post shall include
coordination with U.S.A. underground, the use of a core drill with a 6-inch bit to
cut through existing concrete, installation of a new 2-inch (I.D.) sign post, and
the use of a portland cement to secure post and finishing to grade. Signs
shall be installed a minimum of 7-ft from bottom of new sign to the sidewalk
or existing grade. New sign post installations shall not use any pole risers to
accommodate the new sign installation(s). The CONTRACTOR shall be
responsible for providing a cost to include all labor and material, including
all required sign bracketing material. Upon completion of the pole
installation, CONTRACTOR shall remove all USA or other type markings from the
roadway, curb or sidewalk.
(Task C) Curb Painting
CONTRACTOR shall paint existing street curb as directed by the City. The City shall
mark the beginning and ending limits of paint in the field using white chalk paint.
CONTRACTOR shall paint red, green, yellow, blue, or white curb paint as directed by
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City of Palo Alto General Services Agreement Rev. April 27, 2016
the City. Prior to painting curb, the contractor shall remove any debris or
vegetation that may conflict with the painting of the curb. Paint material used
for street curbs shall be Ennis Paint Company - Standard Dry paint, or approved
equal, that meets Federal specification TT-P-1952B. CONTRACTOR shall be
responsible for providing a cost per linear foot (LF) of curb paint, to include all labor
and material, and adequate traffic control during installation and curing.
(Task D) Curb Painting Removal
CONTRACTOR shall remove existing curb painting as directed by the City. The City
shall mark the beginning and ending limits of the area where paint is to be
removed. CONTRACTOR shall not use any unapproved chemicals or solvents; if
used CONTRACTOR shall provide a reclamation system to capture spillage,
preventing contaminates from flowing into the sewer or storm drain system. The
City prefers a wet or dry vacuum type system. CONTRACTOR shall provide a cost
per linear foot (LF) including all labor and material for curb paint removal and
adequate traffic control during the removal process.
(Task E) Traffic Lane Lines- Grinding Removal
CONTRACTOR shall grind existing center lane lines or traffic lane lines as directed by
the City. The City shall mark in the field the beginning and ending limits of grinding
operations. CONTRACTOR shall take extra caution not to damage the
pavement. The CONTRACTOR shall be responsible or furnishing, installing, and
maintain adequate traffic control during grinding removal operations
may be used for the removal of existing paint or thermoplastic material and require
field collection and disposal. Other methods, such as use of an Eraser, are also
acceptable. CONTRACTOR shall provide a cost per LF for providing all labor and
material, and adequate traffic control during the removal process.
(Task F) Roadway Stencils/Thermoplastic Pavement Markings
CONTRACTOR shall install, using thermoplastic roadway material, Caltrans
standard pavement arrows and legends including Type IV turn arrows, Type VI lane
drop arrows, Bike Lane symbols, Bicycle Loop Detector symbols, Bike Sharrows, and
Numerals. CONTRACTOR shall check with City to make sure stencils used match
existing stencils used throughout the City. Prior to installation the CONTRACTOR
shall clean the roadway using a mechanical blower and apply primer to the roadway to
ensure proper adhesion to the pavement. The CONTRACTOR shall be responsible for
providing a cost per square foot (SF) to include all labor and material, and adequate traffic
control during installation. Caltrans standard plans will be used to determine actual
square footages for each roadway stencil marker.
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City of Palo Alto General Services Agreement Rev. April 27, 2016
(Note: Caltrans standard plans will be used to determine actual square footages for
each roadway stencil marker).
(Task G) 12-inch White and/or Yellow Thermoplastic Limit Line or Crosswalk Lines
CONTRACTOR shall cat-track for review and approval by the City the location of
12-inch white/yellow thermoplastic limit line or crosswalk lines based off of City
work-order details. Prior to installation the CONTRACTOR shall clean the
roadway using a mechanical blower and apply primer to the roadway to ensure
proper adhesion to the pavement. After written approval from the City on the
location of cat-track markings, CONTRACTOR shall install the 12-inch white/yellow
thermoplastic limit lines or crosswalk lines.
CONTRACTOR shall be responsible for providing a cost per LF for all material, labor
and adequate traffic control during installation.
(Note: When 24-inch limit lines or crosswalk lines are requested by the City, the
12-inch limit line per linear foot cost shall be used as a base cost.)
(Task H) Green Colored Bike Lane Material
CONTRACTOR shall install green material bike lanes, using either Ennis Flint MMA
(Cycle Grip) and/or Ennis Flint green preformed thermoplastic material.
CONTRACTOR may also propose other materials for City review and approval.
CONTRACTOR shall apply both materials as per manufacturers recommended
direction for quality placement. CONTRACTOR shall be responsible for providing a
cost per SF for all required material and labor and adequate traffic control during
installation.
(Task I) Traffic Control
CONTRACTOR shall provide a cost per hour to include for 1 to 2 men, all flagging and
all required signs/ set up requirements as per the Caltrans MUTCD traffic control set
up.
ADDITIONAL SERVICES
The need for additional types of General Street services may be required during the
term of this contract including the installation of traffic centerlines and lane lines in
paint or thermoplastic, or procurement of standard highway signs for installation by
the CONTRACTOR. Provide labor rates for striping and painting, etc
CITY APPROVED HARDWARE
Provided in Attachment A is a list of Sign Bracketing Hardware as well as all other
types of hardware used by the City of Palo Alto. The CONTRACTOR shall be
required to use the same sign bracketing, Hardware material and stencils/
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City of Palo Alto General Services Agreement Rev. April 27, 2016
pavement markings, as specified in Attachment A on projects to ensure
compatibility with existing field hardware.
All pipe installed in concrete islands to have the Snap-n-Safe breakaway device.
"No Parking" signs shall be placed by CONTRACTOR 72 hours prior to job, as
required. "No Parking" signs will be provided by City of Palo Alto.
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City of Palo Alto General Services Agreement Rev. April 27, 2016
ATTACHMENT A
Typical Sign Hardware used by the City of Palo Alto
Typical Standard bolts for sign installations – 5/16” –Hawkins # M2G-BHX
Typical Theft-proof bolts for sign installations – 5/16” – Hawkins # M2G - BTP
Typical 2” U-Clamp with side brackets to mount signs perpendicular to 2”sign pole for
double-sided signs – Hawkins # M2G-C2WB1
Typical 2” Clamp to mount signs flush on 2” sign pole for single-sided signs – Hawkins #
M2G-C2B
Typical Type K marker and base (often used on islands) – # OM2-1H for the 3-lite
reflector
Typical Side Mount Bracket used with banding to mount sign perpendicular to pole for
double-sided signs. Hawkins # M2G-1-SWS
Typical Flared Leg Bracket used with banding to mount sign flush with pole for single-
sided signs. Hawkins # M2G-UBF
Typical Threaded 2” L-Bracket for mounting double sided signs on top of a threaded 2”
sign pipe. Hawkins # M2G-2LBT
Typical Straight Leg Bracket used with banding to mount sign flush to pole for single-
sided signs. Hawkins # M2G-UB
Typical Non-threaded 2” L-Bracket for mounting double sided signs on top of a threaded
2”sign pipe. Hawkins # M2G-2LBT
Typical Bracket used to mount street name signs off of a light standard or traffic signal
pole. Banding must be used to attach bracket to source. Hawkins # V14(HD)SL-105
Typical 2” Pipe Cap to mount street name sign on top of 2”sign pipe – Hawkins #
V14(HD)SL
Typical 2” Cross-Bracket for mounting street name signs perpendicular to each other.
Hawkins # V14(HD)SL105
Typical 2” ID Galvanized Schedule 40 sign pipe used for mounting signs
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City of Palo Alto General Services Agreement Rev. April 27, 2016
Typical 2” Pipe Coupling for joining two pieces of 2” Schedule 40 pipe
Typical 201 Stainless Steel Banding Buckle – Band-It brand # UB256
Typical 201 Stainless Steel Banding – Hawkins # M2G-345 (UG)
Breakaway Coupler for mounting sign pipe in medians, traffic circles and other locations
where there may be frequent repairs. – Designovations Snapnsafe Breakaway Coupler
#S238R8
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City of Palo Alto General Services Agreement Rev. April 27, 2016
EXHIBIT “A-1”
GENERAL SERVICES TASK ORDER
Contractor hereby agrees to perform the work 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 the Agreement by this reference. The Contractor shall furnish the necessary
facilities, professional, technical and supporting personnel required by this Task Order as described
below.
CONTRACT NO. ISSUE DATE
Purchase Requisition No.
1A. MASTER AGREEMENT NUMBER
1B. TASK ORDER NO.
2. CONTRACTOR
3. PERIOD OF PERFORMANCE: START: COMPLETION:
4 TOTAL TASK ORDER PRICE: $__________________
BALANCEREMAINING IN MASTER AGREEMENT $__________________________________
5. BUDGET CODE: _______________
COST CENTER_________________ COST ELEMENT______________ WBS/CIP___PHASE___
6. CITYPROJECTMANAGER’SNAME/DEPARTMENT_____________________________________
7. DESCRIPTION OF SCOPE OF SERVICES
MUST INCLUDE:
WORK TO BE PERFORMED
SCHEDULE OF WORK
BASIS FOR PAYMENT & FEE SCHEDULE
DELIVERABLES
REIMBURSABLES (with “not to exceed” cost)
8. ATTACHMENTS: A: Scope of Services B: __________________________________
---------------------------------------------------------------------------------------------------------------------------------
I hereby authorize the performance of I hereby acknowledge receipt and acceptance
the work described above in this Task Order. of this Task Order and warrant that I have
authority to sign on behalf of Contractor.
APPROVED: APPROVED:
CITY OF PALO ALTO COMPANY NAME: ______________________
BY:__________________________________ BY:____________________________________
Name ________________________________ Name __________________________________
Title_________________________________ Title___________________________________
Date _________________________________ Date ___________________________________
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City of Palo Alto General Services Agreement Rev. April 27, 2016
EXHIBIT B
SCHEDULE OF PERFORMANCE
(On Call Services Not Applicable)
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City of Palo Alto General Services Agreement Rev. April 27, 2016
EXHIBIT C
SCHEDULE OF FEES
CITY shall pay CONTRACTOR according to the following rate schedule. The maximum
amount of compensation to be paid to CONTRACTOR, including both payment for
services and reimbursable expenses, shall not exceed the amounts set forth in Sections
5 and 6 of the Agreement. Any services provided or hours worked for which payment
would result in a total exceeding the maximum amount of compensation set forth
herein shall be at no cost to CITY.
Task A: Standard Highway Signs- New Sign Installation onto Existing Sign Post
Lump sum cost that includes all labor and materials costs for the installation of one
24”x30” standard highway sign onto an existing sign post.
$125 each
Task B: Standard Highway Signs- New Sign & New Sign Post Installation
Lump sum cost that includes all labor and materials costs for the installation of one
new standard 2-inch (I.D.) galvanized sign post and one 24”x30” standard highway
sign.
$250 each
Task C: Curb Painting
Lump sum cost that includes all labor and materials, per linear foot, for the installation
of street curb paint.
$2.00/ LF
Task D: Curb Painting Removal
Lump sum cost that includes all labor and materials, per linear foot, for the removal of
street curb paint.
$10.00/LF
Task E: Traffic Lane Lines- Grinding Removal
Lump sum cost that includes all labor and materials, per linear foot, for the removal of
traffic lane lines.
2.00/LF
Task F: Roadway Stencils/Thermoplastic Pavement Markings
Lump sum cost that includes all labor and material, per square foot, for the installation
of roadway stencils. (Note: Caltrans standard plans will be used to determine actual
square footages for each roadway stencil marker
$5.00/SF
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City of Palo Alto General Services Agreement Rev. April 27, 2016
Task G: 12-inch White and/or Yellow Thermoplastic Limit Line or Crosswalk Lines
Lump sum cost that includes all labor and material, per-linear ft cost for the installation
of 12-inch white thermoplastic limit lines or crosswalk lines. (Note: When 24-inch limit
lines or crosswalk lines are requested by the City, the 12-inch limit line per linear foot
cost shall be used as a base cost.)
$3.00/SF
Task H: Green Colored Bike Lane Material
1. Lump sum cost that includes all labor and material, per-square ft cost for the
installation of Ennis Flint MMA (Cycle Grip) Green Bike lane material.
$8.00/SF
2. Lump sum cost that includes all labor and material, per square ft cost for the
installation of Ennis Flint Green Preformed Thermoplastic Bike lane material.
$9.00/SF
Task I: Traffic Control
A cost per hour for traffic control services to include for 1 to 2 men, all flagging and all
required signs/ set up requirements as per the Caltrans MUTCD traffic control set up.
$180.00/hr
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City of Palo Alto General Services Agreement Rev. April 27, 2016
EXHIBIT D
INSURANCE REQUIREMENTS
CONTRACTORS 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,
BELOW:
REQUIRED TYPE OF COVERAGE REQUIREMENT
MINIMUM LIMITS
EACH
OCCURRENCE AGGREGATE
YES
YES
WORKER’S COMPENSATION
EMPLOYER’S LIABILITY
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
NO
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: CONTRACTOR, 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 CONTRACTOR AND
ITS SUBCONSULTANTS, IF ANY, BUT ALSO, WITH THE EXCEPTION OF WORKERS’
COMPENSATION, EMPLOYER’S LIABILITY AND PROFESSIONAL INSURANCE, NAMING AS
ADDITIONAL INSUREDS CITY, ITS COUNCIL MEMBERS, OFFICERS, AGENTS, AND EMPLOYEES.
I. INSURANCE COVERAGE MUST INCLUDE:
A. A PROVISION FOR A WRITTEN THIRTY DAY ADVANCE NOTICE TO CITY OF CHANGE
IN COVERAGE OR OF COVERAGE CANCELLATION; AND
B. A CONTRACTUAL LIABILITY ENDORSEMENT PROVIDING INSURANCE COVERAGE
FOR CONTRACTOR’S AGREEMENT TO INDEMNIFY CITY.
C. DEDUCTIBLE AMOUNTS IN EXCESS OF $5,000 REQUIRE CITY’S PRIOR APPROVAL.
II. CONTACTOR MUST SUBMIT CERTIFICATES(S) OF INSURANCE EVIDENCING REQUIRED
COVERAGE AT THE FOLLOWING URL: https://www.planetbids.com/portal/portal.cfm?CompanyID=25569.
III. ENDORSEMENT PROVISIONS, WITH RESPECT TO THE INSURANCE AFFORDED TO
“ADDITIONAL INSUREDS”
DocuSign Envelope ID: B1307AAA-0738-46F8-9C61-4B92AFB3AA4B
22
City of Palo Alto General Services Agreement Rev. April 27, 2016
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.
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
CONTRACTOR 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 CONTRACTOR SHALL PROVIDE CITY AT
LEAST A TEN (10) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF
CANCELLATION.
Vendors are required to file their evidence of insurance and any other related notices with the City of
Palo Alto at the following URL:
https://www.planetbids.com/portal/portal.cfm?CompanyID=25569
OR
http://www.cityofpaloalto.org/gov/depts/asd/planet_bids_how_to.asp
DocuSign Envelope ID: B1307AAA-0738-46F8-9C61-4B92AFB3AA4B
City of Palo Alto (ID # 7149)
City Council Staff Report
Report Type: Consent Calendar Meeting Date: 8/22/2016
City of Palo Alto Page 1
Summary Title: Revenue Agreement SCC - Homeless Services
Title: Approval of a Revenue Agreement With the County of Santa Clara in
the Amount of $250,000 Over two Years for Support of Intensive Case
Management in Connection with Housing Subsidies to be Provided by the
County of Santa Clara for Palo Alto’s Homeless
From: City Manager
Lead Department: Community Services
Recommendation
Staff recommends that Council approve, and delegate signature authority to the City Manager
to execute the attached contract (Attachment A) with the County of Santa Clara (County),
authorizing the City of Palo Alto (City) to provide funding in the amount of $250,000 over two
years for support of Intensive Case Management in connection with housing subsidies to be
provided by the County of Santa Clara for Palo Alto’s Homeless.
Background
This collaboration between the County and City was first approved by Council on October 7,
2013 as a means to positively impact homelessness in Palo Alto, particularly in light of the
(then) homeless situation at the Cubberley Community Center. The previous two year contract
period was June 24, 2014 – June 30, 2016.
Funding for the continuation of this collaboration was included as part of the FY2017 budget.
The current contract states that the City will provide funding in the amount of $250,000
($125,000/year for two years) for the support of intensive case management in collaboration
with housing subsidy funds provided by the County to assist and house 20 Palo Alto homeless
who have contact with the criminal justice system, have a high chance of recidivism,
significantly impacted County, State or local resources and are currently homeless or at risk of
becoming homeless. Program referrals are made by the Palo Alto Police Department and/or
local social service agencies.
Discussion
This contract with Santa Clara County advances our Healthy City Healthy Community priority
and specifically supports the Council work plan item that aims to strategically align and invest
City of Palo Alto Page 2
locally in regional efforts to support the unhoused. This collaborative effort to house homeless
individuals includes a commitment by Santa Clara County to budget approximately $500,000 for
housing subsidies and administration costs over the next 24 months. A case manager will work
intensively with each individual to ensure the client's needs are met in a variety of contexts.
Staff is seeking authorization for the execution of the new contract term of July 1, 2016 – June
30, 2018.
During the initial 2014-2016 contract cycle, 14 homeless individuals from Palo Alto were
housed. This was quite challenging due to the tight housing market in the County and the
backgrounds of the individuals to be housed. The program has also seen significant substance
abuse and mental health issues with the clients under this contract. This can make engagement
and follow through of case management tasks, including locating and applying for housing
challenging. For those already housed, stable housing has provided them the foundation to
rebuild their lives. Newly housed clients are given the opportunity to shift the time and energy
previously spent on survival and locating a safe place to sleep nightly to improving their medical
and mental health, gaining employment, benefits and education. All of the program
participants who have been housed continue to receive the support of a case manager and are
working on gaining life skills and tools to maintain their self-sufficiency and stability.
The Santa Clara County / City of Palo Alto partnership has also laid the foundation for a broader
program that is documented as part of this new contract. The County, at no cost to the City, has
expanded the Program by adding 20 additional slots to serve chronically homeless individuals in
the northern region of the County (not exclusively Palo Alto), a significant addition to positively
address the homeless landscape in the local area. The expanded program offers the flexibility in
identifying individuals for housing who are not involved in the criminal justice system. For
clarity, since this expansion is North County wide and not exclusively for Palo Alto’s homeless,
the additional 20 slots are not included in the total amount of individuals served, listed as part
of the contract terms.
Under this contract (Attachment A), the City shall reimburse the County for expenses
associated with the intensive case management services (listed as “Program” in the contract) in
an amount not to exceed $250,000 through June 30, 2018, thus allowing the Program to serve
approximately 20 unduplicated Program clients.
Resource Impact
This agreement has a total expenditure of $250,000 or $125,000 per year for two years. The
funding for Fiscal Year 2017 was included in the development of the Fiscal Year 2017 Adopted
Operating Budget for the Community Services Department. Funding for the second year of the
agreement will be incorporated into the development of the Fiscal Year 2018 Operating Budget.
Attachments:
ATTACHMENT A - REVENUE AGREEMENT COUNTY OF SANTA CLARA (PDF)
Attachment A - Revenue Agreement County of Santa Clara with County Signatures
(PDF)
City of Palo Alto (ID # 7176)
City Council Staff Report
Report Type: Consent Calendar Meeting Date: 8/22/2016
City of Palo Alto Page 1
Summary Title: City Engagement with Neighborhoods
Title: Policy and Services Committee Recommendation to City Council For
Next Steps in City's Neighborhood Engagement Initiative Including
Establishing a Yearly Goal of Three Town Hall Meetings, Updating the Co-
Sponsorship Agreement, Adopting a List of Neighborhood Associations, and
Amending the Annual Budget to Reduce the General Fund and Increase the
General Liabilities Insurance Program Fund by $5,000
From: City Manager
Lead Department: City Manager
Policy & Services Committee Recommends that the City Council:
1. Direct staff to plan for three Town Hall meetings per calendar year with an annual budget
appropriation of $8,000 on an ongoing basis beginning in FY 2018.
2. Direct staff to purchase General Liability Insurance Policy to cover neighborhood associations’ use of
City facilities with an annual budget appropriation of $5,000 in the General Liability Fund beginning
in FY 2018.
3. Amend the Fiscal Year 2017 Budget Appropriation Ordinance in the General Fund by:
a. Decreasing Non Departmental City Council Contingency in the amount of $38,000;
b. Increasing the City Manager’s General Expenses in the amount of $8,000;
c. Increasing the City Manager’s Grants and Subsidies in the amount of $25,000; and
d. Transferring $5,000 from the General Fund to the General Liabilities Insurance Program
Fund.
4. Amend the Fiscal Year 2017 Budget Appropriation Ordinance in the General Liabilities Insurance
Program Fund by:
a. Increasing the Operating Transfers-In from the General Fund in the amount of $5,000; and
b. Increasing the Contract Services in the amount of $5,000.
5. Endorse the Palo Alto Neighborhoods (PAN) list of neighborhood associations (attached), subject to
potential future revision by Council.
City of Palo Alto Page 2
6. Approve the attached Co-Sponsorship Policy and Application to allow neighborhood associations to
use City facilities free of room rental charges.
Background
On April 20, 2015, the City Council discussed a Colleagues’ Memo from Mayor Burt, Council members
Holman, Schmid, and Wolbach regarding Strengthening City Engagement with Neighborhoods. The
Colleagues’ Memo had seven recommendations. On June 9, 2015 the Policy & Services Committee
discussed the recommendations. On August 25, 2015 staff returned to the Committee with more
specific recommendations which were advanced to City Council for approval. On September 15, 2015,
the City Council directed staff to:
1. Begin ongoing town hall meetings rotating throughout the City, to engage neighborhood
associations on specific and city-wide issues, with two meetings to occur in 2015, and to return to
the Committee at the first meeting in 2016 with an update and assessment. Transfer $10,000 from
the City Council contingency account to the City Manager’s Office to fund cost associated with these
events.
2. Approve updates to the Know Your Neighbors Grant Program to provide associations resources to
further develop their organization. Transfer $25,000 from the City Council contingency account to
the City Manager’s Office to fund these requests for the remainder of the fiscal year.
3. Return to Policy & Services by December 31, 2015 with an update to the Community Services
Department’s Co-Sponsorship Agreement, to broaden the scope and allow for neighborhood groups
to use city facilities for meetings at no charge, as well as options for waiving insurance fees for these
meetings in city facilities.
4. Return to Policy & Services Committee, at the first meeting of 2016, after meeting with
neighborhood leaders, to further discuss development of the City’s Neighborhood Engagement
initiative, including association definition, support models, communication, conflict resolution,
ombudsman concept, City’s website and social media for neighborhoods.
On March 22, 2016 the Policy & Services Committee discussed ongoing town hall meetings,
Neighborhood Association definition, the use of the City facilities by neighborhood associations, an
Ombudsman program, the Know Your Neighbor Grants program and communication recommendations
from the Colleagues’ Memo. The staff report for the meeting, which contained twelve attachments,
including copies of previous staff reports minutes, and policies can be found here:
www.cityofpaloalto.org/civicax/filebank/documents/51506 (approximately 108 pages).
Discussion
At the Committee, meeting members discussed the number of Town Hall meetings per year. Members
agreed that four Town Hall meetings per year would be too impactful to the Council meeting schedule,
especially given that the Council often meets on the fourth Monday of every month. Conversely the
Committee thought that two Town Hall meetings per year would be too little. Therefore, the Committee
recommended three Town Hall meetings per calendar year with the option to increase frequency as the
program developed.
City of Palo Alto Page 3
With respect to the definition of neighborhood associations, after discussion with PAN leadership and
reviewing a survey conducted by the City of association leaders, the Committee decided to use the
exiting PAN list as the official list of neighborhood associations. The PAN list is accessible through the
City’s website. In the event that there is a disagreement about whether a new group is an association or
not, City staff will return to City Council to evaluate the matter.
The Committee also made two recommended revisions to the Co-Sponsorship Policy regarding the use
of City facilities free of room rental charges for associations. The first change is to add new language to
Section 1 of the policy titled Eligibility. The Committee recommended adding the words “other than
neighborhood associations as recognized by the City” to the first sentence. The sentence read:
Organizations applying for co-sponsorship status must meet the following eligibility criteria. The new
sentence will read: Organizations, other than neighborhood associations as recognized by the City,
applying for co-sponsorship status must meet the following eligibility criteria. The second change was to
add a new language to Section 3 of the Policy titled Levels of Co-Sponsorship and Benefits. The
Committee recommended adding a sentence to the “A” Level Facility section to state: For Neighborhood
Associations the facility use and total usage hours will be at the discretion of City staff with no facility
rental costs. Finally, in addition to changes to the policy, staff recommended changes to the application
to further streamline the approval process for neighborhood associations. Question number eight has
been added to allow associations to skip sections nine through twelve of the application.
Neighborhood associations will continue to complete a facility application/permit for each use which
includes a hold harmless agreement releasing the City from liability. The City will also purchase a general
liability policy to cover use of City facilities by neighborhood associations. These actions will allow
associations to use City facilities without room rental or insurance fees. If alcohol will be served at a
neighborhood meeting event, associations will need to pay for liquor liability insurance coverage as
there is no such coverage under general liability policy. Associations will continue to pay equipment and
custodial fees. If associations reserve rooms during City business hours no custodial fee will be applied.
The Committee also agreed that an ombudsman program and “communication officer” for each
association are not needed at this time. Therefore with approval of this report, the goals of the
Colleagues Memo have been implemented.
Resource Impact
Additional Council and staff time will be necessary in preparation of the Town Hall meetings and
additional resources may be necessary to address the outcome from the meetings, potentially impacting
other Council and staff priorities. Furthermore, as outlined in the recommendation language, funds from
the City Council Contingency are recommended to be transferred in order to cover three activities: 1)
town hall meetings supplies and material expenses ($8,000), 2) increased general liability insurance for
neighborhood associations ($5,000), and 3) funds for the Know Your Neighbor Grants program
($25,000). Total funds for this program equal $38,000.
Consistent with the recommendations from the Policy and Services Committee the FY 2017 City Council
contingency is recommended to be used in order to fund the additional costs associated with the town
hall meetings and increased liability costs for neighborhood associations. As part of the
recommendations in the original September 2015 direction from the Policy and Service Committee,
additional funding of $25,000 to augment the Know Your Neighbor Grants program for total annual
City of Palo Alto Page 4
funding of $50,000. This one-time increase approved in FY 2016 was not included in FY 2017 Adopted
Budget however, to maintain current service levels a transfer from the City Council Contingency is
recommended as well in FY 2017.
During the development of the upcoming Fiscal Year 2018 annual budget, the one-time funding of the
activities recommended to be added in this report will be evaluated and incorporated on an ongoing
basis as necessary.
Attachments:
Attachment A: Co-Sponsorship Policy (PDF)
Attachment B: Co-Sponsorship Application (PDF)
Attachment C: Policy and Services Committee Action Minutes 3-22-16 (PDF)
Attachment D: List of Palo Alto Neighborhoods (PDF)
Page 1 of 4 City Council Approved
August 22, 2016
Co‐Sponsorship Policy
The City of Palo Alto offers limited use of certain resources to organizations that apply for and
meet the guidelines for co‐sponsorship. The City has established a process and criteria to
determine co‐sponsorship eligibility and defines requirements, terms, and levels of support.
The purpose of the policy and application is to invite community groups providing compatible
services, activities, or programs to submit a request for co‐sponsorship status. Groups
requesting City support must relate their services to the co‐sponsorship policy and meet criteria
listed under section one below.
1. Eligibility: Organizations, other than neighborhood associations as recognized by the City,
applying for co‐sponsorship status must meet the following eligibility criteria:
A. The organization has state or federal 501(c)(3) certification as a non‐profit or is a
subgroup of a state or national non‐profit organization providing services in Palo
Alto.
B. Support organizations that are not certified as 501(c)(3) nonprofit groups may also
apply, such as other 501 nonprofit groups..
C. The organization’s goals must be aligned with and further the mission of the City of
Palo Alto.
D. The organization must provide a service or program that is compatible with those
provided by the City of Palo Alto.
E. New applications for co‐sponsorship are accepted throughout the year. Applications
are available at the Lucie Stern Community Center, Library or by calling (650) 463‐
4900, or by accessing the application on the City of Palo Alto website.
F. Organizations must reapply annually for co‐sponsorship. Renewal of an existing co‐
sponsorship for two additional years may be requested and will be reviewed and
approved at the discretion of the Department Director responsible for the oversight
of the City resource being used.
2. Requirements and Terms: Co‐sponsored organizations must also meet the following
requirements and adhere to the following terms:
A. The organization must provide applicable information documenting adherence to
requirements when applying for co‐sponsorship status.
B. All co‐sponsored programs or events must be open to the public and provide
services on a non‐discriminatory basis.
C. The majority of funds raised at a co‐sponsored charitable or fundraising event must
be used to support specific programs, services and events for residents of Palo Alto.
D. The co‐sponsored organization, except for neighborhood associations, must provide
all insurance coverage required by the City.
Page 2 of 4 City Council Approved
August 22, 2016
E. Programs and activities of co‐sponsored organizations are superseded by those of
the City or by previously contracted use of space.
F. The co‐sponsored organization must pay for required staffing, equipment, permit
fees, and any other charges from City departments.
G. The co‐sponsored organization must request facility usage through their designated
City staff liaison, regardless of meeting/event location, at least one month ahead of
meeting/event date(s). The staff liaison is assigned at the time of application
approval, and contact information will be provided to the co‐sponsored group.
H. Co‐sponsorship status does not apply to all events. Groups must request event co‐
sponsorship individually per event/meeting (or per series of events/meetings)
through the designated City staff liaison.
I. The City of Palo Alto must be listed on all related publicity with the phrase, “In
cooperation with the City of Palo Alto.”
3. Levels of co‐sponsorship and benefits: Depending on the characteristics of the group, co‐
sponsorship benefits are provided at an "A" level or a "B" level. Criteria and benefits for
each level are outlined in the following tables.
Eligibility Criteria‐ Level "A" vs. Level "B"
Residency Other
“A” Level 75% or more of members and
participants are residents or
enrolled in PAUSD schools.
Exceptions to the above
criteria may be made for
groups providing a function
benefiting Palo Alto as a
whole. Department Directors
responsible for the oversight
of the City resource being
used will be responsible for
any exceptions.
Human Services agencies that
are currently receiving City
funding.
“B” Level 50% or more of members and
participants are residents or
enrolled in PAUSD schools.
Human Services agencies that
are currently receiving City
funding.
Page 3 of 4 City Council Approved
August 22, 2016
Co‐Sponsorship Benefits‐ Level "A" vs. Level "B"
Facility Publicity
"A" Level Use of designated City
facilities may be provided
subject to availability and
limited to 40 hours annually
at no facility cost. Non‐profit
rates will be charged after
allotted hours have been
used. For neighborhood
associations the facility use
and total usage hours will be
at the discretion of City staff
with no facility rental costs.
Organization may request
name and contact to be listed
in select relevant Department
publications, depending on
availability of space.
Assistance with publicity may
be requested.
"B" Level Use of designated City
facilities may be provided
subject to availability and
limited to 12 hours at no
facility cost. Reduced rates
will be charged after allotted
hours have been used.
Organization may request
name and contact to be listed
in select Department
publications, depending on
availability of space.
4. Review and Approval Process: City Co‐Sponsorship applications will be reviewed by
Department Director responsible for the oversight of the City resource.
5. City Staff liaisons will:
A. Be the direct contact to the co‐sponsored organization.
B. Field all facility use requests.
C. Determine if co‐sponsorship is appropriate on a per event basis.
D. Select an appropriate approved and available facility.
E. Advise organizations of facility usage application requirements and provide a facility
contact for organizations to submit facility use applications.
F. Approve all publicity materials.
G. Track usage hours.
To assure that all applications for Co‐Sponsorship status receive proper consideration and to
ensure that the City is provided with the information needed to make informed decisions, all
applications will be subject to the following evaluation process:
A. Each application will be reviewed by Department Director responsible for the oversight
of the City resource being used in light of the above outlined criteria and requirements.
Page 4 of 4 City Council Approved
August 22, 2016
A determination will be made as to whether the applicant meets standards for co‐
sponsorship status and what benefit level is applicable.
B. Applicants will be notified of their approval status within one month of submitting a
completed application. Organizations approved for co‐sponsorship status will receive
information regarding the benefits to be made available and be introduced to their City
staff liaison.
C. Appeal process: If the Co‐Sponsorship is not approved a written appeal may be directed
to the City Manager or his/her designee outlining the reasons why co‐sponsorship status
should be approved.
D. Co‐sponsorship status approval is for up to one year and organizations may apply for
renewal annually. The renewal requirement may be extended up to 2 years at the
discretion Department Director responsible for the oversight of the City resource.
Co‐Sponsorship Application
Page 1 of 4 City Council Approved
August 22, 2016
Purpose:
The City of Palo Alto offers limited use of certain resources to organizations that apply for and
meet the guidelines for co‐sponsorship. The City has established a process and criteria to
determine co‐sponsorship eligibility and defines requirements, terms, and levels of support.
The purpose of the policy and application is to invite community groups providing compatible
services, activities, or programs to submit a request for co‐sponsorship status. Groups
requesting City support must relate their services to the co‐sponsorship policy and meet the
criteria listed under Section 1 in the co‐sponsorship policy document.
Instructions and application process:
1. Read the City of Palo Alto co‐sponsorship policy.
2. Obtain the application from the Lucie Stern Community Center, Library, or online at
www.cityofpaloalto.org
3. Gather required documents:
a. Current membership roster with residence status
b. Current board members with board role and contact information
c. Certificate of liability insurance coverage (or intent to purchase City liability
insurance)
d. State or federal certification of nonprofit status and type of nonprofit
4. Questions regarding the application and process may be addressed by calling the Lucie
Stern Community Center at (650) 463‐4900 or Library at (650) 329‐2436.
5. Make a copy of the application and supporting documents for the organization’s
records.
6. Return complete application and required documents to the City Department
responsible for oversight of the City resource being requested and a staff liaison will be
identified and serve as your point of contact.
7. Notice of approval or denial of the application will be received within one (1) month
from the date of submission.
8. If denied, an appeal may be made following the process noted in co‐sponsorship policy
document.
Co‐Sponsorship Application
Page 2 of 4 City Council Approved
August 22, 2016
Co‐Sponsorship Status Requested: ____ Level "A" * ____ Level "B" *
Level “A” – 75% of members are Palo Alto Residents or enrolled in PAUSD. Exceptions
may be made for groups providing a function benefiting Palo Alto as a whole. The Co‐
Sponsorship committee determines such exceptions.
Level “B” – 50% of members are Palo Alto Residents or enrolled in PAUSD
* For full eligibility criteria and benefits, refer to Co‐Sponsorship Policy.
1. Legal Name of Organization:
2. Contact Person:
3. Day Phone :
4. Evening Phone:
5. Email:
6. Mailing Address:
7. City, State, Zip Code:
8. Neighborhood Association: Yes ___ No ___ If yes skip to #12.
9. IRS 501(c)(3) or Franchise Tax Board Non‐Profit Number:
a. Date nonprofit number granted:_____________________
10. Mission statement of the organization or group:
11. List benefits to the community beyond any direct benefits to the organization or group
members and participants:
Co‐Sponsorship Application
Page 3 of 4 City Council Approved
August 22, 2016
12. Membership information: (please attach a current roster, including Palo Alto Residency
status)
Total # of Members ______ % of Palo Alto Residents ** ______
** If a member is a Non‐Resident enrolled in PAUSD they are considered a Resident.
Age Requirements: Minimum ______ Maximum _____
Special requirements for membership:
13. Facility information:
a. Facility and room requested:
b. Date and time requested:
c. Purpose of the event, meeting or program:
14. Insurance
Proof of current general liability insurance is required for all events/meetings of co‐sponsored
organizations. Please attach a current certificate of insurance, such as an Accord form, naming
the City of Palo Alto as "additional insured" for a minimum of $1,000,000.00 in general liability.
Alternatively, the group may purchase liability insurance through the City; see assigned Staff
Liaison for further information and cost. Neighborhood Associations are exempt from insurance
requirements.
If insurance certificate expires prior to an event, meeting, or activity, an updated current
certificate must be submitted.
In lieu of providing a blanket insurance certificate at time of application, groups may provide a
date specific certificate no later than one week prior to event, meeting, or activity.
Co‐Sponsorship Application
Page 4 of 4 City Council Approved
August 22, 2016
15. Acknowledgement: I (we) have read and understand the requirements for co‐sponsorship
status as outlined in the Co‐Sponsorship Policy. In compliance with the stated
requirements, the group agrees to:
Provide all required documents and organizational information as required in this
application.
Include the City logo and the statement "In cooperation with the City of Palo” on all related
publicity materials.
Submit two draft copies of all publicity materials to City staff liaison for approval prior to
publication and distribution.
Include statements regarding non‐discrimination and Americans with Disabilities Act on all
publications.
Pay the City for any costs incurred outside of normal co‐sponsorship benefits, such as
facility attendants, custodial services, and/or equipment usage in accordance established in
the City’s Municipal Fee Schedule. In addition, pay facility rental fees for usage above co‐
sponsorship allocation.
Direct the majority of funds raised by co‐sponsored events towards specific programs and
events for residents of Palo Alto.
Request facility usage through designated City staff liaison, regardless of event/meeting
location.
Request co‐sponsorship per event through staff liaison at least one month in advance of
meeting/event date(s).
Signature: ___________________________ Date: ______________________
Name:
Title:
Group/Organization:
City Approvals (please leave blank):
__________________________________ _______________
Staff Liaison Date
__________________________________ _______________
Department Director Date
POLICY AND SERVICES COMMITTEE
ACTION MINUTES
Page 1 of 2
Special Meeting March 22, 2016
Chairperson DuBois called the meeting to order at 6:05 P.M. in the
Community Meeting Room, 250 Hamilton Avenue, Palo Alto, California.
Present: Berman arrived at 6:06 P.M., DuBois (Chair), Kniss, Scharff
Absent:
Agenda Items
1. Continue Discussion Regarding City's Neighborhood Engagement Initiative Including the Ongoing Structure for Town Hall Meetings,
Updates to the Co-Sponsorship Agreement and Definition and
Standards for Neighborhood Associations.
MOTION: Vice Mayor Scharff moved, seconded by Council Member Kniss to
recommend the City Council continue Town Hall meetings with three
meetings per year on an ongoing basis supported by an annual budget
appropriation of $8,000.
MOTION PASSED: 4-0
MOTION: Vice Mayor Scharff moved, seconded by Council Member Berman
to recommend Staff change the Eligibility Requirements in the Co-
Sponsorship Agreement to also include the wording “organizations other
than neighborhood associations as recognized by the City.”
MOTION PASSED 4-0
MOTION: Council Member Kniss moved, seconded by Vice Mayor Scharff to
recommend Staff change the Facility Usage benefit to state that it will be
“subject to availability at the discretion of the City” and to recommend City
Council approve the Co-Sponsorship Agreement with the changes made at
this meeting.
ACTION MINUTES
Page 2 of 2
Policy and Services Committee Special Meeting Action Minutes 3/22/16
MOTION PASSED: 4-0
2. Staff Recommendation That the Policy and Services Committee
Recommend the City Council Accept the Description of the Status of
Audits for Fleet Utilization and Replacement Audit and the Animal
Services Audit.
MOTION: Council Member Berman moved, seconded by Council Member
DuBois to recommend the City Council accept the Status of Audit
Recommendations for the Fleet Utilization and Replacement Audit and the
Animal Services Audit.
MOTION PASSED: 3-0 Kniss absent
ADJOURNMENT: The meeting was adjourned at 7:57 P.M.
Attachment D: List of Palo Alto Neighborhood Associations
City of Palo Alto (ID # 7183)
City Council Staff Report
Report Type: Consent Calendar Meeting Date: 8/22/2016
City of Palo Alto Page 1
Summary Title: Approval of Contract Amendment for Federal Legislative
Services
Title: Approval of Contract Amendment No. 4 with Van Scoyoc Associates Inc.
for Federal Legislative Representation to Extend the Contract for Two Years
through July 31, 2018 and add $202,000 for a Total Not to Exceed Amount of
$606,000
From: City Manager
Lead Department: City Manager
Recommendation
Staff recommends that the City Council approve Contract Amendment No. 4 with Van Scoyoc
Associates, Inc. for a Two-Year Extension through July 31, 2018 in the amount $202,000 for a
Not to Exceed a Total of $606,000.
Background
In 2009, the City conducted a Request for Proposal for federal legislative services and selected
Van Scoyoc Associates Inc. (VSA), who the City has used since. For the five years prior to that,
the City contracted with The Ferguson Group to provide federal legislative advocacy services.
VSA was established in 1990 and is one of the largest independent lobbying firms in
Washington, D.C. VSA represents local governments, companies, philanthropic organizations,
schools, universities, and research consortia across the United States.
Federal legislative advocacy services are important for the City in several ways. Most
importantly, it allows Palo Alto to have a presence and voice with federal elected
representatives and federal agencies. Having someone physically present in Washington, D.C.
who can track issues that might impact Palo Alto and build relationships with key legislators,
their staff members and federal administrators is crucial to the success of the City’s legislative
priorities.
Discussion
Staff is requesting that the City Council approve this agreement with VSA so that the firm can
continue providing representation for the City on federal legislative issues. Staff recommends
City of Palo Alto Page 2
continuing with VSA’s services to maintain the continuity of the City’s representation and the
relationships with federal legislative and agency staff in Washington, D. C.
VSA has provided valuable services to Palo Alto since 2009. Below is sample list of the issues
that the firm is tracking or advocating for on the City’s behalf.
Legislative Matter City’s Objective
San Francisquito Creek Through congressional and administrative
advocacy, advance a federal flood control study
and facilitate construction projects.
High Speed Rail & Rail Grade Separation Oppose high speed rail; work with Caltrain and
regional entities to support grant request for rail
grade separation projects in the City.
Airplane Noise Engage the Federal Aviation Administration to
provide relief on airport noise.
Public, educational and government (PEG) Fees Work with Congress to find a solution to allow
local governments to use PEG fees to support
operational expenses of PEG access cable
programming.
Hydropower Secure reasonable hydropower licensing
regulations.
Sales Tax Collection on Internet Purchases Encourage collection of sales tax on internet
purchases to capture revenue not currently being
remitted to state and local governments.
Tax Reform Prevent unfavorable changes to the rules, usages,
and restrictions surrounding tax exempt municipal
bonds.
Waters of the United States Ensure that regulations are feasible and consistent
with city priorities for preserving and improving
water quality in the City.
Internet Neutrality Monitor the progress of the issues, including
federal court rulings and legislation.
Housing Program Funding Advocate for the highest funding levels possible
for federal housing programs.
Floodplain Executive Order and Standard Advocate for responsible floodplain management
rules promulgated after consultation with local
governments.
Water Conservation and Reuse Advocate for grants and loan guarantees for water
conservation and storage that may help advance
the City's water reuse plans.
Grant Opportunities Alert the City to grant announcements (such as
TIGER, COPS, SAFER and AFG) and assist the City in
obtaining Congressional letters of support for
submitted federal grant applications.
Additional provisions in VSA’s scope of work agreement with the City include:
City of Palo Alto Page 3
1. Conducting an assessment of City needs and opportunities and helping develop the City’s federal
legislative priorities and strategic initiatives;
2. Conducting regular meetings with City staff on legislative needs;
3. Providing information on grant funding opportunities;
4. Providing more targeted monthly reports to the City on the status of the City’s legislative priorities,
including accomplishments, status, and next steps.
Resource Impact
Funding for this contract is included in the City Manager’s Office Fiscal Year 2017 budget.
Attachments:
Attachment A: Contract Amendment No. 4 - Van Scoyoc Associates, Inc. (PDF)
1 of 4 Revision July 20, 2016
AMENDMENT NO. 4 TO CONTRACT NO. C12146667
BETWEEN THE CITY OF PALO ALTO AND
VAN SCOYOC ASSOCIATES, INC.
This Amendment No. 4 to Contract No. C12146667 (“Contract”) is entered into
August 15, 2016, by and between the CITY OF PALO ALTO, a California chartered municipal
corporation (“CITY”), and VAN SCOYOC ASSOCIATES, INC., a District of Columbia
Corporation, located at 101 Constitution Avenue, NW, Suite 600 West, Washington, D.C. 20001
(PH) 202-638-1950,("CONSULTANT").
R E C I T A L S
A. The Contract was entered into between the parties for the provision of for the
provision of Federal Legislative Representation.
B. CITY intends to extend the term and increase the compensation from
$404,000.00 by $202,000.00 to $606,000.00 for the continuation of services as specified in Exhibit
“A” Scope of Services.
C. The parties wish to amend the Contract.
NOW, THEREFORE, in consideration of the covenants, terms, conditions, and
provisions of this Amendment, the parties agree:
SECTION 1. Section 2 TERM is hereby amended to read as follows:
“SECTION 2. TERM.
The term of this Agreement shall be from the date of its full execution through July 31, 2018
unless terminated earlier pursuant to Section 19 of this Agreement.”
SECTION 2. Section 4 COMPENSATION is hereby amended to read as follows:
“SECTION 4. NOT TO EXCEED COMPENSATION.
The compensation to be paid to CONSULTANT for performance of the Services described in
Exhibit “A” (“Basic Services”), and reimbursable expenses, shall not exceed One Hundred One
Thousand Dollars ($101,000.00). per year. Total Compensation shall not exceed Six Hundred and
Six Thousand Dollars ($606,000.00). CONSULTANT agrees to complete all Basic Services,
including reimbursable expenses, within this amount. The applicable rates and schedule of payment
are set out at Exhibit “C-1”, entitled “RATE SCHEDULE,” which is attached to and made a part of
this Agreement. Any work performed or expenses incurred for which payment would result in a total
exceeding the maximum amount of compensation set forth herein shall be at no cost to the CITY.
DocuSign Envelope ID: 36A7CF0D-8F67-42A8-AE13-18B701023D55
2 of 4 Revision July 20, 2016
Additional Services, if any, shall be authorized in accordance with and subject to the provisions of
Exhibit “C”. CONSULTANT shall not receive any compensation for Additional Services performed
without the prior written authorization of CITY. Additional Services shall mean 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”.”
SECTION 3. The following exhibit(s) to the Contract is/are hereby amended to read
as set forth in the attachment(s) to this Amendment, which are incorporated in full by this reference:
a. Exhibit “C” entitled “COMPENSATION”.
b. Exhibit “C1” entitled “RATE SCHEDULE”.
SECTION 4. Except as herein modified, all other provisions of the Contract,
including any exhibits and subsequent amendments thereto, shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have by their duly authorized representatives
executed this Agreement on the date first above written.
CITY OF PALO ALTO
APPROVED AS TO FORM:
VAN SCOYOC ASSOCIATES, INC.
Attachments:
EXHIBIT "C": COMPENSATION
EXHIBIT "C1": RATE SCHEDULE
DocuSign Envelope ID: 36A7CF0D-8F67-42A8-AE13-18B701023D55
Stewart Van Scoyoc
President
Corporate Secretary
Janet Buckley
3 of 4 Revision July 20, 2016
EXHIBIT “C”
COMPENSATION
The CITY agrees to compensate the CONSULTANT for professional services performed in
accordance with the terms and conditions of this Agreement based on the rate schedule
attached as Exhibit C-1.
The compensation to be paid to CONSULTANT under this Agreement for all services,
additional services, and reimbursable expenses shall not exceed the amount(s) stated in
Section 4 of this Agreement. CONSULTANT agrees to complete all Services and Additional
Services, including reimbursable expenses, within this/these amount(s). Any work performed
or expenses incurred for which payment would result in a total exceeding the maximum
amount of compensation set forth in this Agreement shall be at no cost to the CITY.
REIMBURSABLE EXPENSES
The administrative, overhead, secretarial time or secretarial overtime, word processing,
photocopying, in-house printing, insurance and other ordinary business expenses are included
within the scope of payment for services and are not reimbursable expenses. CITY shall
reimburse CONSULTANT for the following reimbursable expenses at cost. Expenses for
which CONSULTANT shall be reimbursed are:
A. Travel outside the San Francisco Bay area, including transportation and meals, will be
reimbursed at actual cost subject to the City of Palo Alto’s policy for reimbursement of travel
and meal expenses for City of Palo Alto employees.
B. Long distance telephone service charges, cellular phone service charges, facsimile
transmission and postage charges are reimbursable at actual cost.
All requests for payment of expenses shall be accompanied by appropriate backup information.
Any expense anticipated to be more than $500.00 shall be approved in advance by the CITY’s
project manager.
ADDITIONAL SERVICES
The CONSULTANT shall provide additional services only by advanced, written authorization
from the CITY. The CONSULTANT, at the CITY’s project manager’s request, shall submit a
detailed written proposal including a description of the scope of services, schedule, level of
effort, and CONSULTANT’s proposed maximum compensation, including reimbursable
expenses, for such services based on the rates set forth in Exhibit C-1. The additional
services scope, schedule and maximum compensation shall be negotiated and agreed to in
writing by the CITY’s Project Manager and CONSULTANT prior to commencement of the
services. Payment for additional services is subject to all requirements and restrictions in this
Agreement.
DocuSign Envelope ID: 36A7CF0D-8F67-42A8-AE13-18B701023D55
4 of 4 Revision July 20, 2016
EXHIBIT “C-1”
SCHEDULE OF RATES
Monthly Flat Fee Retainer (To be invoiced Monthly) $8,000.00
Reimbursable expenses shall not exceed $5,000.00 per year.
DocuSign Envelope ID: 36A7CF0D-8F67-42A8-AE13-18B701023D55
Certificate Of Completion
Envelope Id: 36A7CF0D8F6742A8AE1318B701023D55 Status: Completed
Subject: Please DocuSign: C12146667 Van Scoyoc Associates Contract Amendment No. 4.doc
Source Envelope:
Document Pages: 4 Signatures: 2 Envelope Originator:
Certificate Pages: 2 Initials: 0 Christopher Anastole
AutoNav: Enabled
EnvelopeId Stamping: Enabled
Time Zone: (UTC-08:00) Pacific Time (US & Canada)
250 Hamilton Ave
Palo Alto , CA 94301
chris.anastole@cityofpaloalto.org
IP Address: 199.33.32.254
Record Tracking
Status: Original
7/27/2016 9:24:35 AM
Holder: Christopher Anastole
chris.anastole@cityofpaloalto.org
Location: DocuSign
Signer Events Signature Timestamp
Stewart Van Scoyoc
stu@vsadc.com
President
Security Level: Email, Account Authentication
(None)Using IP Address: 64.125.172.98
Sent: 7/27/2016 9:29:34 AM
Viewed: 7/27/2016 10:30:54 AM
Signed: 7/27/2016 11:44:28 AM
Electronic Record and Signature Disclosure:
Not Offered via DocuSign
ID:
Janet Buckley
jbuckley@vsadc.com
Corporate Secretary
Security Level: Email, Account Authentication
(None)Using IP Address: 38.122.2.10
Sent: 7/27/2016 11:44:29 AM
Viewed: 7/27/2016 11:46:50 AM
Signed: 7/27/2016 11:51:16 AM
Electronic Record and Signature Disclosure:
Not Offered via DocuSign
ID:
In Person Signer Events Signature Timestamp
Editor Delivery Events Status Timestamp
Agent Delivery Events Status Timestamp
Intermediary Delivery Events Status Timestamp
Certified Delivery Events Status Timestamp
Carbon Copy Events Status Timestamp
Judy Ng
Judy.Ng@CityofPaloAlto.org
Security Level: Email, Account Authentication
(None)
Sent: 7/27/2016 11:51:16 AM
Electronic Record and Signature Disclosure:
Not Offered via DocuSign
ID:
Carbon Copy Events Status Timestamp
Khashayar Alaee
Khashayar.Alaee@CityofPaloAlto.org
Sr. Management Analyst
City of Palo Alto
Security Level: Email, Account Authentication
(None)
Sent: 7/27/2016 11:51:17 AM
Electronic Record and Signature Disclosure:
Not Offered via DocuSign
ID:
Notary Events Timestamp
Envelope Summary Events Status Timestamps
Envelope Sent Hashed/Encrypted 7/27/2016 11:51:17 AM
Certified Delivered Security Checked 7/27/2016 11:51:17 AM
Signing Complete Security Checked 7/27/2016 11:51:17 AM
Completed Security Checked 7/27/2016 11:51:17 AM
City of Palo Alto (ID # 7182)
City Council Staff Report
Report Type: Consent Calendar Meeting Date: 8/22/2016
City of Palo Alto Page 1
Summary Title: SVRIA JPA Agreement
Title: Approval of an Amendment to the Existing Joint Powers Authority
Agreement With the Silicon Valley Regional Interoperability Authority to
Include Participation by the Santa Clara Valley Transit Authority
From: City Manager
Lead Department: Police
RECOMMENDATION
Staff recommends that Council authorize the City Manager or his designee to execute the
attached agreement amending the existing Joint Powers Agreement with the Silicon Valley
Regional Interoperability Authority (SVRIA) to include participation by the Santa Clara Valley
Transit Authority (VTA).
DISCUSSION
In 2010, the Palo Alto City Council approved an agreement to form the Silicon Valley Regional
Interoperability Authority, a Joint Powers Authority (JPA) in partnership with other Santa Clara
County municipalities and agencies to enhance and coordinate regional public safety data and
radio communications systems. Council approved a subsequent Memorandum of
Understanding (MOU) in June 2015 to participate in a multi-year project with other SVRIA
members to fund and construct a county-wide radio communications (SVRCS) system. VTA’s
participation was included in the approved cost estimates. That system is under construction
and the “Western Cell” that will provide the radio infrastructure for Palo Alto is nearly
complete. It is anticipated that Palo Alto will migrate to the SVRCS sometime in 2017. The
SVRCS will permit all public safety officers across the County to communicate with one another.
Palo Alto and other municipalities will use the system for local government radio
communication (Public Works, Utilities, etc.) as well as public safety.
In summer 2015, VTA entered into a Memorandum of Understanding (MOU) with the SVRIA to
become a participant in the SVRCS Radio system. As part of their request, VTA agreed to share
the costs of SVRCS. In addition, VTA required that they receive two seats on the Board of
Directors of SVRIA. One of VTA’s seats will be an elected member of VTA’s Board or of its Policy
Committee. The second Board seat will be designated for the VTA’s General Manager or
designee.
City of Palo Alto Page 2
RESOURCE IMPACT
VTA’s participation was calculated into the initial SVRCS assessment that Council approved last
year, though VTA’s participation does result in a reduction of Palo Alto’s obligation for the
SVRCS. The funding formula for the SVRCS allocates the infrastructure costs using two factors.
Fifty (50) percent of the cost is divided equally among the participating members and 50
percent is allocated based on population. System maintenance is calculated on a per subscriber
basis (number of radios on the system). VTA’s participation in SVRIA lowers the infrastructure
cost for other participating agencies by $5.5 million and the maintenance cost incrementally
based on their anticipated subscribers. The assessment of annual subscriber fees are scheduled
to begin in 2018.
POLICY IMPLICATIONS
Expenditure of funds is consistent with City policy.
ENVIRONMENTAL REVIEW
The equipment being supplied is in conformance with all applicable emissions laws and
regulations.
Attachments:
ATTACHMENT A: JPA Agreement SVRIA 053016 (PDF)
ATTACHMENT B: Memo to City Managers 053016 (PDF)
ATTACHMENT C: JPA Agreement SVRIA Redlined Revised MOU 053016 (PDF)
RD:SSG
JOINT POWERS AGREEMENT FOR THE
SILICON VALLEY REGIONAL INTEROPERABILITY AUTHORITY
Restatement __________, 2016
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JPA Agreement Restatement 5-30-16
THIS JOINT POWERS AGREEMENT FOR THE SILICON VALLEY REGIONAL INTEROPERABILITY AUTHORITY (the “Agreement”) originally entered into as of
November 2009, (“Effective Date”) by and among the public agencies executing this
Agreement (collectively, “Members” and individually, “Member”) and restated as of this
__ day of ___________2016 (“Restatement Date”)
RECITALS
A. WHEREAS, in 2001, the Cities of Campbell, Cupertino, Gilroy, Los Altos,
Milpitas, Monte Sereno, Morgan Hill, Mountain View, Palo Alto, Santa Clara, San Jose,
Saratoga, and Sunnyvale; the Towns of Los Gatos and Los Altos Hills; the South Santa
Clara County Fire District; the County of Santa Clara; San Jose State University; and
the Santa Clara Valley Water District (collectively, the “Network Participants”) entered into an agreement to exercise their joint contracting and purchasing powers pursuant to
Government Code Section 6502 (the “Joint Funding Agreement”), so as to jointly hire
consultants for the conceptual design and implementation strategy for an interoperable
communications network, to jointly purchase a radio and data communications system
or network to provide interoperability for the Network Participants, to integrate this system or network with other nearby regional public safety communications systems, to
participate in regional interoperability projects, to jointly fund activities and projects
related to interoperability; and to jointly apply for grants and funding to facilitate the
accomplishment of these goals;
B. WHEREAS, the campaign to accomplish the above goals came to be known as the Silicon Valley Regional Interoperability Project (“SVRIP”);
C. WHEREAS, the SVRIP has been very successful but many new projects and
opportunities have arisen and the joint exercise of powers under the Joint Funding
Agreement is no longer sufficient to address the expanded opportunities and objectives
of the SVRIP;
D. WHEREAS, the undersigned desire to create an independent joint powers
authority to implement and operate the SVRIP and other projects, and to formally
articulate the goals and purposes of the Authority;
E. WHEREAS, a SVRIP Executive Director, employed by the City of San Jose consistent with the Joint Funding Agreement, has been appointed by the SVRIP steering committee to assist in the formation and operation of the Authority;
F. WHEREAS, pursuant to the Joint Exercise of Powers Act, Title 1, Division 7,
Chapter 5, of the California Government Code, Government Code Section 6500 et seq.,
two or more public agencies may by agreement jointly exercise any power common to the contracting agencies; and
G. WHEREAS, the Members have determined that the public interest will be served
by the joint exercise of their common powers through this Agreement and the creation
of a joint powers authority for the purposes described herein; and.
H. Whereas, the Santa Clara Valley Transportation Authority has requested to
become a Member of the Joint Powers Authority and the Board of Directors
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desires to include their membership in an amendment of the Joint Powers
Agreement.
NOW THEREFORE, in consideration of the promises, terms, conditions, and
covenants contained herein, the Members agree as follows:
ARTICLE 1 – DEFINITIONS
1. Certain terms used in this Agreement shall be defined as follows:
1.1. "Agency" or “Public Agency” shall have the meaning provided in
Government Code Section 6500.
1.2. "Agreement" shall mean this Agreement that establishes the Silicon Valley Regional Interoperability Authority.
1.3. “Annual Operating Costs” shall mean the day to day expenses of the
Authority (other than systems maintenance expenses) which shall include
without limitation, personnel (except systems maintenance personnel),
overhead, legal and accounting services, and similar costs for the fiscal year; as such term may be further defined in the policies of the Authority
1.4. “Annual Systems Maintenance Costs” shall mean consulting and
maintenance services for existing hardware and software; systems maintenance
personnel costs; system site/facility maintenance; parts, software/firmware, labor
and equipment for regular maintenance; and noncapital replacements for the fiscal year; as such term may be further defined in the policies of the Authority.
1.5. "Authority" shall mean the Silicon Valley Regional Interoperability
Authority.
1.6. "Board" shall mean the Board of Directors which is the governing body of
the Silicon Valley Regional Interoperability Authority.
1.7. "Central County Agencies" shall include the City of Santa Clara, the City
of Sunnyvale, and the City of Milpitas.
1.8. “Overhead” shall mean the Authority’s ongoing necessary administrative
costs (such as system site/facility rent, office rent, utilities, office supplies, and insurance) which are not separately budgeted as part of a specific project, program, or service.
1.9. "Members" shall mean the public agencies which are signatories to this
Agreement prior to the Effective Date. Unless otherwise indicated, actions or
approvals of a Member are deemed to be those of the legislative body of the Member, plus the addition of the Santa Clara Valley Transportation Authority (“VTA”) as of the Restatement Date.
1.10. "Multiple Agency Directorship" shall mean any seat on the Board of
Directors which represents more than one Member.
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1.11. "Northwest County Agencies" shall include the City of Mountain View, the City of Palo Alto, the City of Los Altos and the Town of Los Altos Hills.
1.12. Restatement Date shall mean the date that this Agreement is formally
unanimously agreed to by all of the Member Agencies.
1.13. “Smaller Member” shall mean any Member whose population is less
than 15,000.
1.14. "South County Agencies" shall include the City of Gilroy and the City of
Morgan Hill.
1.15. "Southwest County Agencies" shall include the City of Cupertino, the
City of Campbell, the City of Saratoga, the Town of Los Gatos and the City of
Monte Sereno.
1.16. "Working Committee" shall mean the committee described in Article 6 of
this Agreement.
ARTICLE 2 – CREATION AND PURPOSES
2. The Silicon Valley Regional Interoperability Authority is created as described in this Article.
2.1. Creation of Authority and Jurisdiction. Pursuant to the Joint Exercise of
Powers Act, the Members hereby create the Silicon Valley Regional
Interoperability Authority, a public entity separate and distinct from each of the
Members, to exercise the powers common to the Members and as otherwise granted by the Joint Exercise of Powers Act. The jurisdiction of the Authority
shall be all territory within the geographic boundaries of the Members; however
the Authority may undertake any action outside such geographic boundaries as
is necessary or incidental to the accomplishment of its purposes.
2.2. Purpose of Authority. The purpose of the Authority is to enhance and improve communications, data sharing and other technological systems, tools and
processes for protection of the public and public safety and to facilitate related
local and regional cooperative efforts.
2.3. Purpose of Agreement. The purpose of this Agreement is to create the Authority; to facilitate the implementation of the Authority’s projects, systems and services; to provide for the Authority’s acquisition of real, personal and intangible
property, to provide for the Authority’s administration, planning, design,
financing, regulation, permitting, environmental evaluation, public outreach,
construction, operation, and maintenance of the Authority’s projects, systems and services; and to provide for any necessary or convenient related support services.
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ARTICLE 3 – POWERS
3. The Authority shall have all powers necessary or reasonably convenient to carry out
the purposes herein, subject to the limitations in this Article.
3.1. The Authority shall have all powers necessary or reasonably convenient to
carry out the purposes herein, including, but not limited to, the following powers:
3.1.1. To obtain and secure funding from any and all available public and private sources including local, state, and federal government, including but
not limited to, bond issuances, lease purchase agreements, grants, public
and private contributions, public and private loans, and other funds;
3.1.2. To manage and operate any projects, systems, and services
transferred or assigned to the Authority and fulfill any existing obligations incurred under the Joint Funding Agreement that are transferred or assigned
to the Authority;
3.1.3. To plan, design, finance, acquire, construct, operate, regulate, and
maintain systems, equipment, facilities, buildings, structures, software,
databases, and improvements;
3.1.4. To lease real, personal and intangible property;
3.1.5. To acquire, hold, or dispose of real, personal or intangible property
by negotiation, dedication or eminent domain;
3.1.6. To own, lease, sublease, acquire, operate, maintain and dispose of
materials, supplies, and equipment of all types including, but not limited to intangible property such as radio frequencies;
3.1.7. To conduct studies, tests, evaluations, investigations, and similar
activities;
3.1.8. To develop and/or adopt standards and specifications;
3.1.9. To obtain permits, rights, licenses and approvals, including FCC licenses;
3.1.10. To enter into agreements;
3.1.11. To contract for services from Members, including but not limited to
in-kind services;
3.1.12. To employ consultants, contractors, and staff and to adopt personnel rules and regulations;
3.1.13. To adopt bylaws, rules and regulations;
3.1.14. To delegate certain powers;
3.1.15. To acquire and maintain insurance of all types;
3.1.16. To accept, hold, invest, manage, and expend monies pursuant to the Joint Exercise of Powers Act;
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3.1.17. To work with elected officials and local, regional, state and federal agencies, including joint powers agencies and consortia, to pursue funding,
enter agreements, and otherwise act to carry out the purposes of the
Authority;
3.1.18. To incur debts, liabilities or obligations, provided that no debt,
liability, or obligation shall constitute a debt, liability or obligation of the Members, either jointly or severally;
3.1.19. To charge for services, programs, and/or system use by means of
subscriber fees or similar charges;
3.1.20. Subject to applicable legal authority, to cause assessments, fees or
charges to be levied in accordance with applicable State and Federal law;
3.1.21. To issue bonds and sell or lease any type of real or personal
property for purposes of debt financing;
3.1.22. To sue and be sued;
3.1.23. To conduct public outreach and education;
3.1.24. To participate in pilot and demonstration projects;
3.1.25. To reimburse Authority officers, employees and officials for
expenses incurred as permitted by law; and
3.1.26. To exercise all powers incidental to the foregoing.
3.1.27. In addition to those powers common to each of the members and
the powers conferred by the Joint Exercise of Powers Act, the Authority shall have those powers that may be conferred upon it by subsequently enacted
legislation.
3.2. Limitation on Eminent Domain Power. The Authority’s power of eminent
domain shall be exercised to acquire real property only in the manner prescribed
by the California Code of Civil Procedure, including the requirements of Sections 1245.230 and 1245.240 of the Code of Civil Procedure (as such statutes and
requirements may be amended) which provide that prior to the exercise of such
power the Board adopt, by a 2/3 vote of the entire Board, a resolution finding
that (1) the public interest and necessity require the proposed project; (2) the proposed project is planned or located in the manner that will be most compatible with the greatest public good and the least private injury; and (3) the
property described in the resolution is necessary for the proposed project.
Further, the Authority shall not exercise such power in the jurisdiction of a
municipal or county Member in absence of a resolution approved by a majority of the Member’s governing body evidencing the Member’s consent to the Authority’s exercise of eminent domain.
3.3. No Authority Taxing Power. The Authority shall not exercise any power it
possesses to impose taxes on the public, although it may receive the proceeds
of taxes imposed by other entities.
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3.4. Restriction on Exercise of Powers. Pursuant to Section 6509 of the Joint Exercise of Powers Act, the Authority has designated a general law city as the
Member for determination of the restrictions upon the Authority in exercising the
common powers under this Agreement and the City of Cupertino shall serve as
such Member. In the event that the City of Cupertino ceases to be a Member,
the Board may designate by resolution another general law city Member as the Member for determination of the restrictions upon the Authority in exercising the
common powers.
3.5. Unless expressly provided to the contrary herein, the Authority does not
intend, by virtue of Section 3.4 or this Agreement, to subject itself to the internal
policies or ordinances of any Member (e.g., Member purchasing or sunshine ordinances).
ARTICLE 4 – MEMBERSHIP
4. The Members of the Authority are the public agencies who enter into this Agreement
prior to the Effective Date plus the addition of VTA as of the Restatement Date. In
the event a city or town listed as represented by a Multiple Agency Directorship does not enter into this Agreement prior to the Effective Date, the city or town will not be a
Member and the listed entities in the applicable Multiple Agency Directorship will be
deemed amended to reflect this fact without further action. Admission of a new
Member shall not require amendment to this Agreement, however, after the Effective
Date new Members may be admitted only pursuant to the procedures described in Sections 4.1 and 4.2. Members may withdraw pursuant to the procedures described
in Sections 4.3.
4.1. A Public Agency may be considered for membership in the Authority after the
Effective Date, by presenting an adopted resolution of the Public Agency’s
governing body to the Board which includes a request to become a Member of the Authority.
4.2. The Authority shall accept new Members upon a majority affirmative vote of the
entire Board, payment of any Board determined fees and charges, including a
pro-rata share of organization, planning, project, and other costs and charges and upon satisfaction of any conditions established by the Board as a prerequisite for membership. At the time of admission, the Board shall adopt a
resolution assigning the new Member to be represented by one of the existing
Multiple Agency Directorships and amend the listed entities in the applicable
Multiple Agency Directorship shall be amended to reflect this fact. Each proposed Member shall also enter into a membership agreement, upon the date of execution of which it shall be bound to the terms of this Agreement as a
Member.
4.3. Withdrawal. Any Member may withdraw from this Agreement upon at least 6
(six) months written notice to the Authority and the Members. Any Director who is an elected official of the withdrawing Member and any Working Committee member who is an official, officer or employee of the withdrawing Member shall
be deemed to have resigned as of the date of receipt of the written notice.
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4.3.1. A withdrawing Member shall have no interest or claim in the assets of the Authority absent an Authority approved written agreement which contains
express provisions to the contrary.
4.3.2. Any withdrawing Member shall be obligated to pay an equitable share,
consistent with the cost sharing principles herein, of all debts, liabilities and
obligations of the Authority incurred prior to the effective date of the withdrawal; as such share is determined by the Board, as a condition
precedent to such withdrawal.
4.3.3. Provided, however, that the withdrawing Member’s obligations under
Section 4.3.2 shall not extend to debts, liabilities and obligations of the
Authority that are secured or otherwise committed pursuant to specific project, service, or program agreements (“limited scope agreements”) that
expressly omit the withdrawing Member. The specific pro-rata share of the
withdrawing Member of the debts, liabilities and obligations of the Authority
that are secured or otherwise committed pursuant to a limited scope
agreement shall be determined by the terms of those agreements and the withdrawing Member shall comply with all withdrawal terms of such
agreement.
4.3.4. A withdrawing or withdrawn Member’s payment obligation with respect to
its share of debts, liabilities and obligations shall survive withdrawal of the
Member and survive termination of this Agreement.
4.3.5. If a Member who is represented by a Multiple Agency Directorship
withdraws, the listed entities in the applicable Multiple Agency Directorship
may be amended to reflect this fact by a resolution of the Board.
ARTICLE 5 – BOARD OF DIRECTORS; ORGANIZATION
5. The Authority shall be governed by a Board of Directors (the "Board") consisting of
eleven (11) Directors. The term of a Director’s appointment shall be three (3) years
although Directors may be appointed for a shorter term consistent with the Board’s
bylaws. Directors may be appointed to multiple successive terms. An alternate shall be appointed for each Director. Alternates shall serve as Directors in the absence of their respective Directors and shall exercise all rights and privileges thereof.
Notwithstanding the above, each Director and each alternate for such Director shall
serve at the pleasure of the Member(s) they represent and may be removed by such
Member(s) at any time without any right to notice thereof.
5.1. Directors and alternates shall be appointed by the represented Member(s) as follows and, at the time of such appointment and for the duration of such
appointment, each shall be an elected official of a Member:
5.1.1. Two Directors shall represent the County of Santa Clara.
5.1.2. Two Directors shall represent the City of San Jose.
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5.1.3. One Director shall represent the Central County Agencies.
5.1.4. One Director shall represent the Northwest County Agencies.
5.1.5. One Director shall represent the South County Agencies.
5.1.6. One Director shall represent the Southwest County Agencies.
5.1.7. One Director shall be appointed by the City Selection Committee
(as formed pursuant to Government Code Section 50270 et seq.) for Santa Clara County. The Director shall be an elected official of a Member who
does not have an elected official on the Board at the time of appointment.
The Director appointed in this manner may be removed by the Member that
he or she serves.
5.1.8 Two Directors shall be appointed by the Santa Clara Valley Transportation Authority (“VTA”) Board of Directors. One Director shall be
the VTA’s General Manager or his or her designated Executive Level Staff
Member. The other VTA Director shall be an elected member of the VTA
Board of Directors or an elected VTA Policy Advisory Committee Member.
The elected Director shall not be from a City or Town with a current member on the Board of Directors of the Authority. Future Directors appointed to any
seat may not be from the cities or town already represented by the VTA
Directors.
Each directorship described in Sections 5.1.3 through 5.1.6 shall be a Multiple Agency Directorship and an action by a majority of the represented
Members shall appoint and remove such Directors. If the Director (or his or
her Alternate) shall fail to attend 70% of the meetings of the Board during
the fiscal year, the Directorship shall be deemed vacant and the Authority
shall send notice of the vacancy to the represented Member(s). If a Director shall cease to be an elected official of a Member, his or her seat shall be
deemed vacant. If a Director shall cease to be an employee of VTA, his or
her seat shall be deemed vacant. If the City Selection Committee or the
represented Members of a Multiple Agency Directorship fail to select a Director within ninety (90) days of a vacancy, the Board may appoint an interim Director from the elected officials of the represented Members (or of
those Members who do not have an elected official on the Board in the case
of the City Selection Committee’s directorship) to serve until the
appointment of the new Director is completed.
5.2. Each member of the Board shall have one vote. A majority of the members of
the entire Board shall constitute a quorum for the transaction of business.
Except where a supermajority is required by statute, this Agreement or a
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resolution of the Board, actions of the Board shall require the affirmative vote of a majority of the entire Board (i.e., six (6) affirmative votes).
5.3. The Board shall elect annually a Chair from among its membership to preside at
meetings and shall appoint a Secretary who may, but need not, be a Director.
The Board may, from time to time, elect such other officers as the Board shall
deem necessary or convenient to conduct the affairs of the Authority.
5.4. Meetings. The Board shall hold at least two regular meetings each year. The
Board shall by resolution establish the date, hour and location at which its
regular meetings shall be held. All meetings of the Board shall be held in
accordance with the Ralph M. Brown Act, Government Code Section 54950 et
seq. The Secretary shall cause minutes of all open meetings of the Board to be kept and shall cause a copy of the minutes to be forwarded to each Director and
the Members within thirty (30) days.
5.5. Bylaws. The Board, at its initial meeting, shall adopt by resolution rules of
procedure (“bylaws”), not inconsistent with the provisions of this Agreement, to
govern the conduct of its meetings. Such rules of procedure shall be in accordance with the Ralph M. Brown Act. Amendments to the Bylaws shall be
reviewed by the Working Committee and comments from the Working
Committee, if any, shall be presented to the Board at the time of Board
consideration of the amendments.
5.6. Political Reform Act Compliance. Directors of the Board, members of the Working Committee and designated officials and employees shall comply with
the Political Reform Act of 1974, Government Code Section 81000 et seq.
5.7. Executive Director. The Executive Director shall report to and take direction from
the Board and shall have such authority as is specified by resolution of the
Board. Where authorized by the Working Committee, the Executive Director may sign agreements, applications and other documents on behalf of the Authority.
The Executive Director shall be designated as a Government Code Section
6505.1 officer who has charge of, handles, and has access to, the Authority's
property and shall file with the Authority an official bond in the amount set by the Board. The premiums for such bond may be paid or reimbursed by the Authority.
5.7.1. The SVRIP Executive Director shall serve as the Authority’s
Executive Director during the term of the existing employment agreement
between the City of San Jose and the SVRIP Executive Director or until an
Executive Director is selected pursuant to Section 6.7.
5.8. General Counsel. The Authority shall have a General Counsel. The General Counsel shall report to and take direction from the Board. The Board may
designate one of the Authority's or a Member’s employees as General Counsel
or contract for such legal services with an independent contractor.
5.9. Policies. The Board may, upon the recommendation of the Working Committee, adopt policies regarding personnel, conflicts of interest and other matters that are necessary or convenient for the efficient operation of the Authority.
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5.10. In addition to such duties as may be necessary or desirable for the implementation of this Agreement, the Board shall have the duty to do the
following within the times specified or, if no time is specified, within a reasonable
time:
5.10.1. The Board shall hold an initial Board meeting within sixty (60) days
of the Effective Date, and adopt an initial budget, work plan, initial policies, and bylaws with or without a Working Committee recommendation;
5.10.2. The Board shall adopt a work plan for each fiscal year;
5.10.3. The Board shall select a General Counsel;
5.10.4. The Board shall direct the Working Committee to evaluate the need
for such insurance protection as is necessary to protect the interests of the Authority and its Members, and acquire and maintain if necessary, liability,
errors and omissions, property and/or other insurance.
ARTICLE 6 – WORKING COMMITTEE
6. Pursuant to Government Code Section 6508, the Authority delegates certain powers related to program development, policy formulation and program implementation to
the Working Committee described herein. Specifically, the Working Committee shall
have the composition, powers and duties described in this Article and the implied
powers necessary therefor.
6.1. The Working Committee shall ensure that a budget and work plan are timely prepared and by March 31 of each year, shall review and recommend the
budget and work plan to the Board for approval. Copies of the recommended
budget and work plan shall be promptly sent to the Members and the Directors.
The budget shall indicate the anticipated sources of revenues and the
anticipated uses of such revenues. The work plan shall outline the activities and priorities of the Authority for the following year.
6.2. The Working Committee may apply for and accept all grants and sub-grants that
are consistent with the approved work plan, provided that either (a) the amount
of matching funds required, if any, does not exceed that threshold provided in the approved work plan and budget, or (b) a Member or other entity volunteers to provide the matching funds without a guarantee of reimbursement.
6.3. The Working Committee may take action to implement or modify any projects,
programs or services, provided the projects, programs or services are consistent
with the budget and the parameters and thresholds in the work plan. Any projects, programs and services that are not consistent with the work plan and budget shall be reviewed by the Working Committee and recommended to the
Board for approval.
6.4. The Working Committee shall let for bid, if required, and award all contracts
consistent with the approved work plan, provided that the amount of funds
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required, if any, does not exceed that threshold provided in the approved work plan and budget. The Working Committee may approve any contract
amendment, provided that the additional costs to the Authority for such
amendment do not exceed the threshold provided in the Authority’s contracting
policy and sufficient funds are available in the approved budget.
6.5. The Working Committee shall approve all agreements with Members and other public agencies and all other contracts that are consistent with applicable law
and the approved work plan.
6.6. The Working Committee shall recommend a conflict of interest policy and
personnel rules, when necessary, and any amendments of those policies to the
Board for approval.
6.7. The Working Committee shall adopt policies regarding purchasing and
consultants. In addition, the Working Committee may adopt policies on other
issues that are necessary or convenient for the efficient operation of the
Authority.
6.8. The Working Committee shall recommend an Executive Director, subject to the Board’s approval and approval of the contract between the Authority and
Executive Director.
6.9. The Working Committee shall have thirteen (13) Committee Members, unless
such number is increased by a resolution adopted by an affirmative vote of 2/3
of the entire Board. Each Committee Member shall serve at the pleasure of the appointing entity identified in Section 6.9.1 and may be removed at any time by
that appointing entity without notice. Each Committee Member must be an
official, officer, or employee of a Member, but no single Member may have more
than three (3) Working Committee Members serving at one time. A Committee
Member may also be removed by the Member who he or she serves upon notice to the Authority. If a Committee Member shall fail to attend 70% of the meetings
of the Working Committee during the fiscal year, his or her seat shall be deemed
vacant and the Authority shall send notice of the vacancy to the appointing
entity. If a Committee Member shall cease to be an official, officer, or employee of a Member, his or her seat shall be deemed vacant. If an appointing entity shall fail to appoint a Committee Member within ninety (90) days of a vacancy,
the Working Committee may, by majority vote, appoint an interim Committee
Member from the officials, officers, or employees of the Members to serve until
the appointment of the new Committee Member is completed.
6.9.1. Working Committee Members shall be appointed by the following entities (or successor entities approved pursuant to a resolution of the
Working Committee) as follows:
6.9.1.1. Two City Managers appointed by the Santa Clara
County/City Managers Association.
6.9.1.2. One fire chief appointed by the Santa Clara County Fire Chiefs Association.
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6.9.1.3. One police chief appointed by the Santa Clara County Police Chiefs Association.
6.9.1.4. The Santa Clara County Executive or his or her designee.
6.9.1.5. Two members appointed by the San Jose City Manager.
6.9.1.6. The Director of Communications for Santa Clara County or
his or her designee.
6.9.1.7. One communications manager appointed by the Public
Safety Communications Managers Association (of Santa Clara County).
6.9.1.8. Two at-large members appointed by the Working
Committee.
6.9.1.9. Two Committee Members appointed by VTA’s General Manager.
6.9.2. Meetings of the Working Committee shall be conducted in
compliance with the Ralph M. Brown Act. The Working Committee may
adopt by resolution rules of procedure, not inconsistent with the provisions
of this Agreement, to govern the conduct of its meetings.
6.9.3. A majority of the Committee Members shall constitute a quorum for
the transaction of business and actions of the Working Committee shall
require the affirmative vote of a majority of the entire Working Committee
(i.e., as of the Effective Restatement Date, seven (7) Committee Members).
ARTICLE 7 – FISCAL MATTERS AND FUNDING
7. The Authority shall comply with the fiscal and recordkeeping requirements of the
Joint Exercise of Powers Act and shall take such other actions as necessary or
desirable to address the fiscal, funding and budgeting needs of the Authority.
7.1. Treasurer and Auditor. The Treasurer and Auditor/Controller of Santa Clara County, respectively, are designated the Treasurer and Auditor of the Authority
with the powers, duties, and responsibilities specified in the Joint Exercise of
Powers Act, including, without limitation, Sections 6505 and 6505.5 thereof;
provided however, the Board may revoke this designation by adopting a resolution appointing one or more of the Authority's or a Member’s officers or employees to either or both of the positions of Treasurer or Auditor as provided
in Sections 6505.6 of the Joint Exercise of Powers Act.
7.2. Accounts and Reports. The Board shall establish and maintain such funds and
accounts as may be required by generally accepted public accounting practice. The books and records of the Authority shall be open to inspection at all reasonable times to the Members and their respective representatives. The
accounts shall be prepared and maintained by the Treasurer and/or Auditor of
the Authority. The Auditor shall, within one hundred twenty (120) days after the
close of each fiscal year, cause an independent audit of all financial activities for
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such fiscal year to be prepared in accordance with Government Code Section 6505. The Authority shall promptly deliver copies of the audit report to each
Director and the Members.
7.3. Budget. The Board shall adopt an initial budget consistent with Section 5.10 and
adopt subsequent budgets no later than April 30th of each year thereafter.
Adoption of the budget shall require an affirmative vote of 2/3 of the entire Board.
7.4. Fiscal Year. The fiscal year of the Authority shall be the period from July 1st of
each year to and including the following June 30th.
7.5. Debts, Liabilities and Obligations. The debts, liabilities, and obligations of the
Authority shall not constitute debts, liabilities, or obligations of the Members, either jointly or severally.
7.6. Initial Contribution for Annual Operating Costs. Within thirty (30) days of the
Effective Date, each Member except the City of Los Altos Hills and the City of
Monte Sereno shall make an initial operating costs contribution of $13,157 to the
Authority. The City of Los Altos Hills and the City of Monte Sereno shall each make an initial operating costs contribution of $8,000. Notwithstanding the
above, any Member who has already contributed the identified amount pursuant
to the Joint Funding Agreement for the 2009-2010 fiscal year need not make
such initial operating costs contribution. Within thirty (30) days of the
Restatement Date, the VTA shall make a contribution towards operating costs of $13,157 to the Authority.
7.7. Initial Contribution for Annual Maintenance Costs. Within thirty (30) days of the
Effective Date, each Member shall make an initial systems maintenance
contribution of the amount required pursuant to the City Manager’s Association
approved maintenance assessment formula.
7.7.1. The City Managers’ Association approved maintenance
assessment formula provides the following population allocation
percentages: Campbell - 2.21%, Cupertino - 3.02% , Gilroy - 2.60%, Los
Altos - 1.60%, Los Altos Hills - 0.48%, Los Gatos - 1.67%, Milpitas – 3.76%, Monte Sereno - 0.20% , Morgan Hill - 2.02%, Mountain View – 4.16%, Palo Alto – 3.50% , San Jose – 53.47%, Santa Clara – 6.12%, Saratoga - 1.76%,
and Sunnyvale – 7.66%; and unincorporated Santa Clara County - 5.78%.
7.7.2. The following contributions are due based on the above
percentages: Campbell - $3,315, Cupertino - $4,530, Gilroy - $3,900, Los Altos - $2,400, Los Altos Hills - $720, Los Gatos - $2,505, Milpitas – $5,640, Monte Sereno - $300, Morgan Hill - $3,030, Mountain View – $6,240, Palo
Alto – $5,250 , San Jose – $80,205, Santa Clara – $9,180, Saratoga -
$2,640, and Sunnyvale – $11,490, and unincorporated Santa Clara County -
$8,670.
7.7.3. Notwithstanding the above, any Member who has already contributed the identified amount pursuant to the Joint Funding Agreement
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for the 2009-2010 fiscal year need not make such initial maintenance contribution.
7.8. Annual Operating Costs. Each year, the Working Committee shall propose
projected Annual Operating Costs, which projected costs shall be adopted by
the Board prior to or during approval of the budget.
7.8.1. Population Share. Half of the adopted Annual Operating Costs shall be allocated to the Members based on their respective population (the
“Population Share”). Each Member shall pay a portion of the Population
Share which shall be determined based on that Member’s population. The
Population Share, each Member’s share of the Population Share shall be
determined pursuant to the funding policy adopted by the Board at its initial meeting, as may be amended. The funding policy shall specify the accepted
method for calculating each Member’s population (e.g., census data).
Notwithstanding the foregoing, on or after the Restatement Date, the
Working Committee shall commission or obtain a cost allocation study which
considers usage, overhead, and other reasonable cost factors and with that data shall propose, subject to the adoption of the Board, an allocation
methodology for the VTA that is not based on population.
7.8.2. Membership Share. Half of the adopted Annual Operating Costs
shall be allocated to the Members based on the principle that Members
share these costs equally, except that the Smaller Members shall pay 60% of a Full Share (the “Membership Share”). Each Member except the Smaller
Members shall pay an equal full share of the adopted Annual Operating
Costs (Full Share”) the Smaller Members shall pay 60% of a Full Share. The
total of all shares shall be 100% of the Membership Share. A Full Share
shall be calculated according to the formula implementing the above principle contained in the funding policy adopted by the Board at its initial
meeting, as may be amended.
7.9. Annual Systems Maintenance Costs. Each year, the Working Committee shall
propose projected Annual Systems Maintenance Costs, which projected costs shall be approved by the Board prior to or during approval of the budget.
7.9.1. Each Member shall pay a share of the adopted Annual Systems
Maintenance Costs based on the principle that Members shall share
systems maintenance costs based on system and service usage and that
until sufficient data is available regarding Member usage, Member population data is an acceptable proxy for usage.
7.9.2. Each Member’s share of the adopted Annual Systems Maintenance
Costs shall be calculated according to the formula implementing the
principles in Section 7.9.1 contained in the funding policy adopted by the
Board at its initial meeting, as may be amended.
7.10. Other Projects, Programs and Services. In the event that a project, program, service, or reserve fund is approved which has costs that are not
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Annual Operating Costs or the Annual Systems Maintenance Costs, the Working Committee shall either (a) develop a proposed cost allocation formula for the
non-overhead costs based on the principle that costs shall be assessed to
Members based on usage but, if usage data or projected usage data is not
available, until sufficient data is available, Member population and entity type
data are acceptable proxies for usage or (b) conduct or obtain a cost allocation study which considers usage, overhead, and other reasonable cost factors. The
Board shall approve any such proposed cost allocation.
7.11. Limited Scope Agreements. Where a project or program is intentionally
designed to be limited in scope such that it only provides benefits to particular
Members, the Authority may enter into specific project or program agreements that provide for cost sharing by the particular affected Members; provided
however, both the Board and Working Committee must approve such
agreements.
7.12. Contributions on Behalf of Members. Special Districts or other parties may
tender to the Authority those contributions due from a Member on that Member’s behalf.
ARTICLE 8 –GENERAL PROVISIONS
8. The following general provisions apply to this Agreement.
8.1. Term and Termination. This Agreement shall be effective as of the Effective Date. It shall remain in effect until the purposes of the Authority are fully
accomplished, or until terminated by the vote of a majority of the governing bodies of
the Members; provided, however, that this Agreement may not be terminated, until
(a) all bonds or other instruments of indebtedness issued by the Authority and the
interest thereon, if any, have been paid in full or provision has been made for payment in full and (b) all outstanding obligations and liabilities of the Authority have
been paid in full or provision has been made for payment in full, except as set forth
in Section 8.2.
8.2. Disposition of Property upon Termination. In the event of termination of the Authority pursuant to Section 8.1 herein and where there will be a successor public entity which will carry on the functions of the Authority and assume its assets
and liabilities, the assets of the Authority shall be transferred to the successor public
entity. If upon termination pursuant to Section 8.1, there is no successor public entity
which will carry on the functions of the Authority and assume its assets, the assets shall be returned to the Members as follows: (a) all real property and any improvements thereon shall be conveyed to the Member which owned the property
prior to the formation of the Authority, and (b) all other assets shall be divided among
the Members in proportion to their respective contributions during the term of this
Agreement. If upon termination pursuant to Section 8.1, there is a successor public entity which will carry on some of the functions of the Authority and assume some of
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the assets, the Authority's Board shall allocate the assets between the successor public entity and the Members.
8.3. Indemnification. To the fullest extent allowed by law, the Authority shall
defend, indemnify, and save harmless the Members and their governing bodies,
officers, agents, and employees from all claims, losses, damages, costs, injury, and
liability of every kind, nature, and description directly or indirectly arising from the performance of any of the activities of the Authority or the activities undertaken
pursuant to this Agreement.
8.4. Liability of Board, Officers and Employees. The Directors, Working
Committee Members, officers, and employees of the Authority shall use ordinary
care and reasonable diligence in the exercise of their powers, and in the performance of their duties pursuant to this Agreement. They shall not be liable to
the Members for any mistake of judgment or other action made, taken, or omitted by
them in good faith, nor for any action made, taken, or omitted by any agent,
employee, or independent contractor selected with reasonable care, nor for loss
incurred through the investment of the Authority's funds, or failure to invest the same.
8.5. To the extent authorized by California law, no Director, Working
Committee Member, officer, or employee of the Authority shall be responsible for
any action made, taken, or omitted, by any other Director, Working Committee
Member, officer, or employee. No Director, Working Committee Member, officer, or employee of the Authority shall be required to give a bond or other security to
guarantee the faithful performance of his or her duties pursuant to this Agreement,
except as required herein pursuant to Government Code Section 6505.1. The funds
of the Authority shall be used to defend, indemnify, and hold harmless the Authority
and each Director, Working Committee Member, officer, or employee of the Authority for actions taken in good faith and within the scope of his or her authority.
Nothing herein shall limit the right of the Authority to purchase insurance to provide
coverage for the foregoing indemnity.
8.6. Successors: Assignment. This Agreement shall be binding upon and shall inure to the benefit of the successors of the Members. No Member may assign any rights or obligations hereunder without the unanimous consent of the governing
bodies of the other Members; provided, further, that no such assignment may be
made if it would materially and adversely affect (a) the rating of bonds issued by the
Authority, or (b) bondholders holding such bonds.
8.7. Amendments. This Agreement may be amended only upon approval of all the governing bodies of the Members. So long as any bonds of the Authority are
outstanding and unpaid, or funds are not otherwise set aside for the payment or
redemption thereof in accordance with the terms of such bonds and the
documentation relating thereto, this Agreement shall not be amended, modified or otherwise revised, changed or rescinded, if, in the judgment of the Board, such action would (a) materially and adversely affect (1) the rating of bonds issued by the
Authority, or (2) bondholders holding such bonds, or (b) limit or reduce the
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obligations of the Members to make, in the aggregate, the payments which are for the benefit of the owners of such bonds.
8.8. No Third Party Beneficiaries. This Agreement is intended solely for the
benefit of the Authority and its Members. No third party shall be deemed a
beneficiary of this Agreement or have any rights hereunder against the Authority or
its Members.
8.9. Dispute Resolution. In the event that any party to this Agreement should at
any time claim that another party (or parties) has breached or is breaching this
Agreement, the complaining party shall file with the governing body of claimed
breaching party, and with the Authority, a written claim of said breach, describing the
alleged breach and otherwise giving full information respecting the same. The Board shall thereupon, at a reasonable time and place, specified by it, give each of these
parties to the dispute an opportunity to be heard on the matter, and shall, upon
conclusion of said hearing, give the Members a full report of its findings and
recommendations. Said report, findings and recommendations shall be deemed
advisory only, shall not in any way bind any of the parties to the dispute, and shall not be deemed to establish any facts, either presumptively or finally. Upon receipt of
said report and recommendations, if any party to the dispute should be dissatisfied
with or disagree with the same, that party shall provide written notice to the other
parties within ten (10) business days, and the parties to the dispute or their
representatives shall meet at a reasonable time and place to be determined by them, for the purpose of resolving their differences. No action for breach of this
Agreement, and no action for any legal relief because of any such breach or alleged
breach of this Agreement shall be filed or commenced by any party unless and until
such party has first given to the other parties a reasonable time, after the parties to
the dispute have met to resolve their differences, within which to cure any breach or alleged breach.
8.10. Notices. Any notices to Members required by this Agreement shall be
delivered or mailed, U.S. first class, postage prepaid, addressed to the principal
office of the respective Members. Notices under this Agreement shall be deemed given and received at the earlier of actual receipt, or the second business day following deposit in the United States mail, as required above. Any Member may
amend its address for notice by notifying the other Members pursuant to this
Section.
8.11. Severability. Should any part, term, or provision of this Agreement be decided by the courts to be illegal or in conflict with any law of the State of California, or otherwise be rendered unenforceable or ineffectual, the validity of the remaining
portions or provisions shall not be affected thereby.
8.12. Liberal Construction. The provisions of this Agreement shall be liberally
construed as necessary or reasonably convenient to achieve the purposes of the Authority.
8.13. Headings. The headings used in this Agreement are for convenience only
and have no effect on the content, construction, or interpretation of the Agreement.
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8.14. Counterparts. This Agreement may be executed in any number of counterparts, and by different parties in separate counterparts, each of which, when
executed and delivered, shall be deemed to be an original and all of which
counterparts taken together shall constitute but one and the same instrument.
8.15. Non-Waiver. No waiver of the breach or default of any of the covenants,
agreements, restrictions, or conditions of this Agreement by any Member shall be construed to be a waiver of any succeeding breach of the same or other covenants,
agreements, restrictions, or conditions of this Agreement. No delay or omission of
exercising any right, power or remedy in the event of breach or default shall be
construed as a waiver thereof, or acquiescence therein, or be construed as a waiver
of a variation of any of the terms of this Agreement or any applicable agreement.
8.16. Agreement Complete. The foregoing constitutes the full and complete
Agreement of the parties. There are no oral understandings or agreements not set
forth in writing above. Any such agreements merge into this Agreement.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their duly authorized representatives.
City of Campbell
By: _______________________
Name: _______________________
Title: _______________________
Approved as to form:
By: _______________________
Name: _______________________
Title: _______________________
City of Cupertino
By: _______________________
Name: _______________________
Title: _______________________
City of Gilroy
By: _______________________
Name: _______________________
Title: _______________________
City of Los Altos
By: _______________________
Name: _______________________
Title: _______________________
Approved as to form:
By: _______________________
Name: _______________________
Title: _______________________
Approved as to form:
By: _______________________
Name: _______________________
Title: _______________________
Approved as to form:
By: _______________________
Name: _______________________
Title: _______________________
Approved as to form:
By: _______________________
Name: _______________________
Title: _______________________
Approved as to form:
By: _______________________
Name: _______________________
Title: _______________________
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Town of Los Altos Hills
By: _______________________
Name: _______________________
Title: _______________________
Town of Los Gatos
By: _______________________
Name: _______________________
Title: _______________________
City of Milpitas
By: _______________________
Name: _______________________
Title: _______________________
City of Monte Sereno
By: _______________________
Name: _______________________
Title: _______________________
City of Morgan Hill
By: _______________________
Name: _______________________
Title: _______________________
Approved as to form:
By: _______________________
Name: _______________________
Title: _______________________
Approved as to form:
By: _______________________
Name: _______________________
Title: _______________________
Approved as to form:
By: _______________________
Name: _______________________
Title: _______________________
Approved as to form:
By: _______________________
Name: _______________________
Title: _______________________
Approved as to form:
By: _______________________
Name: _______________________
Title: _______________________
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City of Mountain View
By: _______________________
Name: _______________________
Title: _______________________
City of Palo Alto
By: _______________________
Name: _______________________
Title: _______________________
City of San Jose
By: _______________________
Name: _______________________
Title: _______________________
City of Santa Clara
By: _______________________
Name: _______________________
Title: _______________________
County of Santa Clara
By: _______________________
Name: _______________________
Title: _______________________
Approved as to form:
By: _______________________
Name: _______________________
Title: _______________________
Approved as to form:
By: _______________________
Name: _______________________
Title: _______________________
Approved as to form:
By: _______________________
Name: _______________________
Title: _______________________
Approved as to form:
By: _______________________
Name: _______________________
Title: _______________________
Approved as to form:
By: _______________________
Name: _______________________
Title: _______________________
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City of Saratoga
By: _______________________
Name: _______________________
Title: _______________________
City of Sunnyvale
By: _______________________
Name: _______________________
Title: _______________________
Santa Clara Valley Transportation Authority
By: _______________________
Name:_______________________
Title:_________________________
Approved as to form:
By: _______________________
Name: _______________________
Title: _______________________
Approved as to form:
By: _______________________
Name: _______________________
Title: _______________________
Approved as to form:
By: _______________________
Name: _______________________
Title: _______________________
1
Silicon Valley Regional Interoperability Authority
TO: City Managers, Town Manager, County Administrator, City
Attorneys, Town Attorney and County Counsel
FROM: Heather Tannehill-Plamondon, Executive Director SVRIA
Gary M. Baum, General Counsel SVRIA
SUBJECT: Request for Approval of Restated Silicon Valley Regional
Interoperability Authority Joint Powers Agreement to
Accommodate Santa Clara Valley Transportation Authority as an
Additional Member.
REQUEST:
The Board of Directors of the Silicon Valley Regional Interoperability Authority (“SVRIA)
request that the current Members of SVRIA approve revisions to the Joint Powers Agreement
(“JPA”) in order to accommodate a new member, the Santa Clara Valley Transportation
Authority (“VTA”).
SUMMARY/DISCUSSION:
On May 26, 2016, the Board of Directors of the SVRIA reviewed and recommended certain
changes to the Joint Powers Agreement in order to include the VTA as a voting member of the
Board of Directors. These changes were based upon input from the Working Committee, City
Attorneys, City Managers, County Administrator, and VTA as well as direction from the Board
itself.
In the summer of 2015, VTA entered into a Memorandum of Understanding (“MOU”) with the
SVRIA to become a participant in the Silicon Valley Regional Communication System
(“SVRCS”). As part of their request, VTA agreed to share the costs of SVRCS. In addition,
VTA required that they receive two seats on the Board of Directors of SVRIA. One of VTA’s
seats will be an elected member of VTA’s Board or of its Policy Committee. The second Board
seat will be designated for the VTA’s General Manager or designee.
VTA brings approximately 2000 new users into the SVRCS. This would make VTA the third
largest member in SVRIA, after the City of San Jose and the County of Santa Clara. In addition,
VTA will make proportionate capital payments to the SVRCS in an amount totaling
approximately $5,500,000 over three years. Starting in fiscal year 2018 – 2019, VTA would
2
begin making annual operations and maintenance payments in excess of $700,000. By adding
this additional Member, all other Members’ payments will be reduced. VTA has requested two
Board seats. This is proportionate with VTA’s size and status as the third largest Member of
SVRIA. The JPA requires that any changes to the JPA be approved unanimously in order for
them to take effect. Thus, these changes will require approval every City and the County in
order for the changes to take effect.
The changes recommended by the SVRIA Board of Directors address VTA’s requests and those
of the Working Committee, County Administrator and City Managers. Any additional changes
at this time would require the approval of the Working Committee and Board of Directors. This
would substantially delay VTA’s entry onto the Board and SVRIA and ultimately could cause
VTA to reconsider its commitment to SVRCS. Our goal is to complete the review and approval
by all current Members no later than September 1, 2016.
The changes are summarized below.
1. Cover page change made to reflect the Restatement Date to be filled in following
unanimous approval of all Members of SVRIA.
2. Page 1, first paragraph, original Effective Date is described by including the original date
of adoption of the JPA document in November, 2009.
3. Page 1, first paragraph, Restatement Date is included as the date of unanimous approval
by all Members of SVRIA.
4. Page 1, Recital H added to explain that the changes made are based upon the request of
VTA.
5. Page 2, Section 1.9, the definition of Members is expanded to include the Santa Clara
Valley Transportation Authority (“VTA”).
6. Page 3, Section 1.12 added to define Restatement Date as the date the JPA Restatement is
unanimously approved by all of the Member Agencies.
7. Page 6, Section 3.5 was amended to correct a reference to Section 3.3 that should have
been listed as Section 3.4.
8. Page 6, Section 4 Members is expanded to include VTA as of the Restatement Date.
9. Page 7, paragraph 5 amended to reflect the increase in total Board of Directors from nine
to eleven.
10. Page 8, paragraph 5.1.8 is added to reflect the addition of two new Directors by VTA.
Both new directors will be appointed by the VTA’s Board of Directors. One Director
will be VTA General Manager or his or her designee of an Executive Level Staff
Member and one Director will be an elected member of the VTA Board of Directors or
Policy Advisory Committee from a City or Town that does not have a current member on
the Board of Directors of SVRIA.
11. Page 8, Section 5.1.8, addition of last sentence of paragraph of: “Future Directors
appointed to any seat may not be from the cities or town already represented by the
VTA Directors.” This requested change was made to make clear that any future
Director appointment would not cause the sitting VTA Director to need to resign as
any future appointment would need to be from a City not already on the Board.
12. Page 8, Paragraph under Section 5.1.8, addition of the following sentence: “If a Director
shall cease to be an employee of VTA, his or her seat shall be deemed vacant.” The
3
rationale is that if the VTA employee Director is no longer employed by VTA he or
she can longer be a SVRIA Director.
13. Page 8, Paragraph following Section 5.1.8 has had a provision added to reflect that one of
the Board Members from VTA will be an employee of VTA.
14. Page 8, paragraph 5.2, the increase in the Board of Director’s quorum from 5 to 6 is
listed.
15. Page 9, Section 5.5 has been amended to describe the procedure for Working Committee
review of Board of Director’s Bylaw amendments.
16. Page 13, Section 7.6 has been amended to include a requirement for VTA to pay $13,157
within 30 days after the Restatement Date.
17. Page 11, paragraph 6.9.1.9 memorializes the already approved addition of two
Committee Members from the VTA to the Working Committee.
18. Page 12, paragraph 6.9.3, this shows the increase in the quorum of the Working
Committee from 6 to 7.
19. Page 14, Section 7.8.1 a provision was added as follows: “Notwithstanding the
foregoing, on or after the Restatement Date, the Working Committee shall
commission or obtain a cost allocation study which considers usage, overhead, and
other reasonable cost factors and with that data shall propose, subject to the
adoption of the Board, an allocation methodology for the VTA that is not based on
population.” The intent of this change is to address a formula for VTA participation
for any future project that is outside of the SVRCS. For example [Heather do you
want to add something here?]
FISCAL IMPACT:
If these JPA changes are approved by all current Members of the SVRIA and VTA completes the
remaining requirements, then the current Members’ costs will be reduced because the SVRCS’s
fixed costs will be spread over more Members. If one or more current Members declines to
approve these JPA changes, then VTA could consider withdrawing from SVRCS. If this were to
happen, the current Members’ costs would rise proportionately.
ATTACHMENTS:
Redline copy of the Joint Powers Agreement Restatement showing proposed changes and a clean
copy showing the final revised Joint Power s Agreement Restatement
Memo to City Managers, Town Manager, County Administrator, City Attorneys, Town Attorney and County Counsel re JPA changes SVRIA for
VTA 5‐30‐16
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JOINT POWERS AGREEMENT FOR THE
SILICON VALLEY REGIONAL INTEROPERABILITY AUTHORITY
NOVEMBER 18, 2009
Restatement __________, 2016
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THIS JOINT POWERS AGREEMENT FOR THE SILICON VALLEY REGIONAL INTEROPERABILITY AUTHORITY (the “Agreement”) isoriginally entered into as of this
____ day ofNovember ___________ 2009___, (“Effective Date”) by and among the
public agencies executing this Agreement (collectively, “Members” and individually,
“Member”) and restated as of this __ day of ___________2016 (“Restatement Date”).
RECITALS
A. WHEREAS, in 2001, the Cities of Campbell, Cupertino, Gilroy, Los Altos,
Milpitas, Monte Sereno, Morgan Hill, Mountain View, Palo Alto, Santa Clara, San Jose,
Saratoga, and Sunnyvale; the Towns of Los Gatos and Los Altos Hills; the South Santa
Clara County Fire District; the County of Santa Clara; San Jose State University; and
the Santa Clara Valley Water District (collectively, the “Network Participants”) entered into an agreement to exercise their joint contracting and purchasing powers pursuant to
Government Code Section 6502 (the “Joint Funding Agreement”), so as to jointly hire
consultants for the conceptual design and implementation strategy for an interoperable
communications network, to jointly purchase a radio and data communications system
or network to provide interoperability for the Network Participants, to integrate this system or network with other nearby regional public safety communications systems, to
participate in regional interoperability projects, to jointly fund activities and projects
related to interoperability; and to jointly apply for grants and funding to facilitate the
accomplishment of these goals;
B. WHEREAS, the campaign to accomplish the above goals came to be known as the Silicon Valley Regional Interoperability Project (“SVRIP”);
C. WHEREAS, the SVRIP has been very successful but many new projects and
opportunities have arisen and the joint exercise of powers under the Joint Funding
Agreement is no longer sufficient to address the expanded opportunities and objectives
of the SVRIP;
D. WHEREAS, the undersigned desire to create an independent joint powers
authority to implement and operate the SVRIP and other projects, and to formally
articulate the goals and purposes of the Authority;
E. WHEREAS, a SVRIP Executive Director, employed by the City of San Jose consistent with the Joint Funding Agreement, has been appointed by the SVRIP steering committee to assist in the formation and operation of the Authority;
F. WHEREAS, pursuant to the Joint Exercise of Powers Act, Title 1, Division 7,
Chapter 5, of the California Government Code, Government Code Section 6500 et seq.,
two or more public agencies may by agreement jointly exercise any power common to the contracting agencies; and
G. WHEREAS, the Members have determined that the public interest will be served
by the joint exercise of their common powers through this Agreement and the creation
of a joint powers authority for the purposes described herein; and.
H. Whereas, the Santa Clara Valley Transportation Authority has requested to
become a Member of the Joint Powers Authority and the Board of Directors
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desires to include their membership in an amendment of the Joint Powers
Agreement.
NOW THEREFORE, in consideration of the promises, terms, conditions, and
covenants contained herein, the Members agree as follows:
ARTICLE 1 – DEFINITIONS
1. Certain terms used in this Agreement shall be defined as follows:
1.1. "Agency" or “Public Agency” shall have the meaning provided in
Government Code Section 6500.
1.2. "Agreement" shall mean this Agreement that establishes the Silicon Valley Regional Interoperability Authority.
1.3. “Annual Operating Costs” shall mean the day to day expenses of the
Authority (other than systems maintenance expenses) which shall include
without limitation, personnel (except systems maintenance personnel),
overhead, legal and accounting services, and similar costs for the fiscal year; as such term may be further defined in the policies of the Authority
1.4. “Annual Systems Maintenance Costs” shall mean consulting and
maintenance services for existing hardware and software; systems maintenance
personnel costs; system site/facility maintenance; parts, software/firmware, labor
and equipment for regular maintenance; and noncapital replacements for the fiscal year; as such term may be further defined in the policies of the Authority.
1.5. "Authority" shall mean the Silicon Valley Regional Interoperability
Authority.
1.6. "Board" shall mean the Board of Directors which is the governing body of
the Silicon Valley Regional Interoperability Authority.
1.7. "Central County Agencies" shall include the City of Santa Clara, the City
of Sunnyvale, and the City of Milpitas.
1.8. “Overhead” shall mean the Authority’s ongoing necessary administrative
costs (such as system site/facility rent, office rent, utilities, office supplies, and insurance) which are not separately budgeted as part of a specific project, program, or service.
1.9. "Members" shall mean the public agencies which are signatories to this
Agreement prior to the Effective Date. Unless otherwise indicated, actions or
approvals of a Member are deemed to be those of the legislative body of the Member, plus the addition of the Santa Clara Valley Transportation Authority (“VTA”) as of the Restatement Date.
1.10. "Multiple Agency Directorship" shall mean any seat on the Board of
Directors which represents more than one Member.
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1.11. "Northwest County Agencies" shall include the City of Mountain View, the City of Palo Alto, the City of Los Altos and the Town of Los Altos Hills.
1.11.1.12. Restatement Date shall mean the date that this Agreement is formally
unanimously agreed to by all of the Member Agencies.
1.12.1.13. “Smaller Member” shall mean any Member whose population is less
than 15,000.
1.13.1.14. "South County Agencies" shall include the City of Gilroy and the City of
Morgan Hill.
1.14.1.15. "Southwest County Agencies" shall include the City of Cupertino, the
City of Campbell, the City of Saratoga, the Town of Los Gatos and the City of
Monte Sereno.
1.15.1.16. "Working Committee" shall mean the committee described in Article 6 of
this Agreement.
ARTICLE 2 – CREATION AND PURPOSES
2. The Silicon Valley Regional Interoperability Authority is created as described in this Article.
2.1. Creation of Authority and Jurisdiction. Pursuant to the Joint Exercise of
Powers Act, the Members hereby create the Silicon Valley Regional
Interoperability Authority, a public entity separate and distinct from each of the
Members, to exercise the powers common to the Members and as otherwise granted by the Joint Exercise of Powers Act. The jurisdiction of the Authority
shall be all territory within the geographic boundaries of the Members; however
the Authority may undertake any action outside such geographic boundaries as
is necessary or incidental to the accomplishment of its purposes.
2.2. Purpose of Authority. The purpose of the Authority is to enhance and improve communications, data sharing and other technological systems, tools and
processes for protection of the public and public safety and to facilitate related
local and regional cooperative efforts.
2.3. Purpose of Agreement. The purpose of this Agreement is to create the Authority; to facilitate the implementation of the Authority’s projects, systems and services; to provide for the Authority’s acquisition of real, personal and intangible
property, to provide for the Authority’s administration, planning, design,
financing, regulation, permitting, environmental evaluation, public outreach,
construction, operation, and maintenance of the Authority’s projects, systems and services; and to provide for any necessary or convenient related support services.
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ARTICLE 3 – POWERS
3. The Authority shall have all powers necessary or reasonably convenient to carry out
the purposes herein, subject to the limitations in this Article.
3.1. The Authority shall have all powers necessary or reasonably convenient to
carry out the purposes herein, including, but not limited to, the following powers:
3.1.1. To obtain and secure funding from any and all available public and private sources including local, state, and federal government, including but
not limited to, bond issuances, lease purchase agreements, grants, public
and private contributions, public and private loans, and other funds;
3.1.2. To manage and operate any projects, systems, and services
transferred or assigned to the Authority and fulfill any existing obligations incurred under the Joint Funding Agreement that are transferred or assigned
to the Authority;
3.1.3. To plan, design, finance, acquire, construct, operate, regulate, and
maintain systems, equipment, facilities, buildings, structures, software,
databases, and improvements;
3.1.4. To lease real, personal and intangible property;
3.1.5. To acquire, hold, or dispose of real, personal or intangible property
by negotiation, dedication or eminent domain;
3.1.6. To own, lease, sublease, acquire, operate, maintain and dispose of
materials, supplies, and equipment of all types including, but not limited to intangible property such as radio frequencies;
3.1.7. To conduct studies, tests, evaluations, investigations, and similar
activities;
3.1.8. To develop and/or adopt standards and specifications;
3.1.9. To obtain permits, rights, licenses and approvals, including FCC licenses;
3.1.10. To enter into agreements;
3.1.11. To contract for services from Members, including but not limited to
in-kind services;
3.1.12. To employ consultants, contractors, and staff and to adopt personnel rules and regulations;
3.1.13. To adopt bylaws, rules and regulations;
3.1.14. To delegate certain powers;
3.1.15. To acquire and maintain insurance of all types;
3.1.16. To accept, hold, invest, manage, and expend monies pursuant to the Joint Exercise of Powers Act;
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3.1.17. To work with elected officials and local, regional, state and federal agencies, including joint powers agencies and consortia, to pursue funding,
enter agreements, and otherwise act to carry out the purposes of the
Authority;
3.1.18. To incur debts, liabilities or obligations, provided that no debt,
liability, or obligation shall constitute a debt, liability or obligation of the Members, either jointly or severally;
3.1.19. To charge for services, programs, and/or system use by means of
subscriber fees or similar charges;
3.1.20. Subject to applicable legal authority, to cause assessments, fees or
charges to be levied in accordance with applicable State and Federal law;
3.1.21. To issue bonds and sell or lease any type of real or personal
property for purposes of debt financing;
3.1.22. To sue and be sued;
3.1.23. To conduct public outreach and education;
3.1.24. To participate in pilot and demonstration projects;
3.1.25. To reimburse Authority officers, employees and officials for
expenses incurred as permitted by law; and
3.1.26. To exercise all powers incidental to the foregoing.
3.1.27. In addition to those powers common to each of the members and
the powers conferred by the Joint Exercise of Powers Act, the Authority shall have those powers that may be conferred upon it by subsequently enacted
legislation.
3.2. Limitation on Eminent Domain Power. The Authority’s power of eminent
domain shall be exercised to acquire real property only in the manner prescribed
by the California Code of Civil Procedure, including the requirements of Sections 1245.230 and 1245.240 of the Code of Civil Procedure (as such statutes and
requirements may be amended) which provide that prior to the exercise of such
power the Board adopt, by a 2/3 vote of the entire Board, a resolution finding
that (1) the public interest and necessity require the proposed project; (2) the proposed project is planned or located in the manner that will be most compatible with the greatest public good and the least private injury; and (3) the
property described in the resolution is necessary for the proposed project.
Further, the Authority shall not exercise such power in the jurisdiction of a
municipal or county Member in absence of a resolution approved by a majority of the Member’s governing body evidencing the Member’s consent to the Authority’s exercise of eminent domain.
3.3. No Authority Taxing Power. The Authority shall not exercise any power it
possesses to impose taxes on the public, although it may receive the proceeds
of taxes imposed by other entities.
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3.4. Restriction on Exercise of Powers. Pursuant to Section 6509 of the Joint Exercise of Powers Act, the Authority has designated a general law city as the
Member for determination of the restrictions upon the Authority in exercising the
common powers under this Agreement and the City of Cupertino shall serve as
such Member. In the event that the City of Cupertino ceases to be a Member,
the Board may designate by resolution another general law city Member as the Member for determination of the restrictions upon the Authority in exercising the
common powers.
3.5. Unless expressly provided to the contrary herein, the Authority does not
intend, by virtue of Section 3.43 or this Agreement, to subject itself to the internal
policies or ordinances of any Member (e.g., Member purchasing or sunshine ordinances).
ARTICLE 4 – MEMBERSHIP
4. The Members of the Authority are the public agencies who enter into this Agreement
prior to the Effective Date plus the addition of VTA as of the Restatement Date. In
the event a city or town listed as represented by a Multiple Agency Directorship does not enter into this Agreement prior to the Effective Date, the city or town will not be a
Member and the listed entities in the applicable Multiple Agency Directorship will be
deemed amended to reflect this fact without further action. Admission of a new
Member shall not require amendment to this Agreement, however, after the Effective
Date new Members may be admitted only pursuant to the procedures described in Sections 4.1 and 4.2. Members may withdraw pursuant to the procedures described
in Sections 4.3.
4.1. A Public Agency may be considered for membership in the Authority after the
Effective Date, by presenting an adopted resolution of the Public Agency’s
governing body to the Board which includes a request to become a Member of the Authority.
4.2. The Authority shall accept new Members upon a majority affirmative vote of the
entire Board, payment of any Board determined fees and charges, including a
pro-rata share of organization, planning, project, and other costs and charges and upon satisfaction of any conditions established by the Board as a prerequisite for membership. At the time of admission, the Board shall adopt a
resolution assigning the new Member to be represented by one of the existing
Multiple Agency Directorships and amend the listed entities in the applicable
Multiple Agency Directorship shall be amended to reflect this fact. Each proposed Member shall also enter into a membership agreement, upon the date of execution of which it shall be bound to the terms of this Agreement as a
Member.
4.3. Withdrawal. Any Member may withdraw from this Agreement upon at least 6
(six) months written notice to the Authority and the Members. Any Director who is an elected official of the withdrawing Member and any Working Committee member who is an official, officer or employee of the withdrawing Member shall
be deemed to have resigned as of the date of receipt of the written notice.
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4.3.1. A withdrawing Member shall have no interest or claim in the assets of the Authority absent an Authority approved written agreement which contains
express provisions to the contrary.
4.3.2. Any withdrawing Member shall be obligated to pay an equitable share,
consistent with the cost sharing principles herein, of all debts, liabilities and
obligations of the Authority incurred prior to the effective date of the withdrawal; as such share is determined by the Board, as a condition
precedent to such withdrawal.
4.3.3. Provided, however, that the withdrawing Member’s obligations under
Section 4.3.2 shall not extend to debts, liabilities and obligations of the
Authority that are secured or otherwise committed pursuant to specific project, service, or program agreements (“limited scope agreements”) that
expressly omit the withdrawing Member. The specific pro-rata share of the
withdrawing Member of the debts, liabilities and obligations of the Authority
that are secured or otherwise committed pursuant to a limited scope
agreement shall be determined by the terms of those agreements and the withdrawing Member shall comply with all withdrawal terms of such
agreement.
4.3.4. A withdrawing or withdrawn Member’s payment obligation with respect to
its share of debts, liabilities and obligations shall survive withdrawal of the
Member and survive termination of this Agreement.
4.3.5. If a Member who is represented by a Multiple Agency Directorship
withdraws, the listed entities in the applicable Multiple Agency Directorship
may be amended to reflect this fact by a resolution of the Board.
ARTICLE 5 – BOARD OF DIRECTORS; ORGANIZATION
5. The Authority shall be governed by a Board of Directors (the "Board") consisting of
eleven nine (911) Directors. The term of a Director’s appointment shall be three (3)
years although Directors may be appointed for a shorter term consistent with the
Board’s bylaws. Directors may be appointed to multiple successive terms. An alternate shall be appointed for each Director. Alternates shall serve as Directors in the absence of their respective Directors and shall exercise all rights and privileges
thereof. Notwithstanding the above, each Director and each alternate for such
Director shall serve at the pleasure of the Member(s) they represent and may be
removed by such Member(s) at any time without any right to notice thereof.
5.1. Directors and alternates shall be appointed by the represented Member(s) as follows and, at the time of such appointment and for the duration of such
appointment, each shall be an elected official of a Member:
5.1.1. Two Directors shall represent the County of Santa Clara.
5.1.2. Two Directors shall represent the City of San Jose.
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5.1.3. One Director shall represent the Central County Agencies.
5.1.4. One Director shall represent the Northwest County Agencies.
5.1.5. One Director shall represent the South County Agencies.
5.1.6. One Director shall represent the Southwest County Agencies.
5.1.7. One Director shall be appointed by the City Selection Committee
(as formed pursuant to Government Code Section 50270 et seq.) for Santa Clara County. The Director shall be an elected official of a Member who
does not have an elected official on the Board at the time of appointment.
The Director appointed in this manner may be removed by the Member that
he or she serves.
5.1.8 Two Directors shall be appointed by the Santa Clara Valley Transportation Authority (“VTA”) Board of Directors. One Director shall be
the VTA’s General Manager or his or her designated Executive Level Staff
Member. The other VTA Director shall be an elected member of the VTA
Board of Directors or an elected VTA Policy Advisory Committee Member.
The elected Director shall not be from a City or Town with a current member on the Board of Directors of the Authority. Future Directors appointed to any
seat may not be from the cities or town already represented by the VTA
Directors.
Each directorship described in Sections 5.1.3 through 5.1.6 shall be a Multiple Agency Directorship and an action by a majority of the represented
Members shall appoint and remove such Directors. If the Director (or his or
her Alternate) shall fail to attend 70% of the meetings of the Board during
the fiscal year, the Directorship shall be deemed vacant and the Authority
shall send notice of the vacancy to the represented Member(s). If a Director shall cease to be an elected official of a Member, his or her seat shall be
deemed vacant. If a Director shall cease to be an employee of VTA, his or
her seat shall be deemed vacant. If the City Selection Committee or the
represented Members of a Multiple Agency Directorship fail to select a Director within ninety (90) days of a vacancy, the Board may appoint an interim Director from the elected officials of the represented Members (or of
those Members who do not have an elected official on the Board in the case
of the City Selection Committee’s directorship) to serve until the
appointment of the new Director is completed.
5.2. Each member of the Board shall have one vote. A majority of the members of
the entire Board shall constitute a quorum for the transaction of business.
Except where a supermajority is required by statute, this Agreement or a
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resolution of the Board, actions of the Board shall require the affirmative vote of a majority of the entire Board (i.e., sixfive (56) affirmative votes).
5.3. The Board shall elect annually a Chair from among its membership to preside at
meetings and shall appoint a Secretary who may, but need not, be a Director.
The Board may, from time to time, elect such other officers as the Board shall
deem necessary or convenient to conduct the affairs of the Authority.
5.4. Meetings. The Board shall hold at least two regular meetings each year. The
Board shall by resolution establish the date, hour and location at which its
regular meetings shall be held. All meetings of the Board shall be held in
accordance with the Ralph M. Brown Act, Government Code Section 54950 et
seq. The Secretary shall cause minutes of all open meetings of the Board to be kept and shall cause a copy of the minutes to be forwarded to each Director and
the Members within thirty (30) days.
5.5. Bylaws. The Board, at its initial meeting, shall adopt by resolution rules of
procedure (“bylaws”), not inconsistent with the provisions of this Agreement, to
govern the conduct of its meetings. Such rules of procedure shall be in accordance with the Ralph M. Brown Act. Recommendations for amendments to
the bylaws will be developed by Working Committee and forwarded to Board for
consideration.Amendments to the Bylaws shall be reviewed by the Working
Committee and comments from the Working Committee, if any, shall be
presented to the Board at the time of Board consideration of the amendments.
5.6. Political Reform Act Compliance. Directors of the Board, members of the
Working Committee and designated officials and employees shall comply with
the Political Reform Act of 1974, Government Code Section 81000 et seq.
5.7. Executive Director. The Executive Director shall report to and take direction from
the Board and shall have such authority as is specified by resolution of the Board. Where authorized by the Working Committee, the Executive Director may
sign agreements, applications and other documents on behalf of the Authority.
The Executive Director shall be designated as a Government Code Section
6505.1 officer who has charge of, handles, and has access to, the Authority's property and shall file with the Authority an official bond in the amount set by the Board. The premiums for such bond may be paid or reimbursed by the Authority.
5.7.1. The SVRIP Executive Director shall serve as the Authority’s
Executive Director during the term of the existing employment agreement
between the City of San Jose and the SVRIP Executive Director or until an Executive Director is selected pursuant to Section 6.7.
5.8. General Counsel. The Authority shall have a General Counsel. The General
Counsel shall report to and take direction from the Board. The Board may
designate one of the Authority's or a Member’s employees as General Counsel
or contract for such legal services with an independent contractor.
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5.9. Policies. The Board may, upon the recommendation of the Working Committee, adopt policies regarding personnel, conflicts of interest and other matters that
are necessary or convenient for the efficient operation of the Authority.
5.10. In addition to such duties as may be necessary or desirable for the
implementation of this Agreement, the Board shall have the duty to do the
following within the times specified or, if no time is specified, within a reasonable time:
5.10.1. The Board shall hold an initial Board meeting within sixty (60) days
of the Effective Date, and adopt an initial budget, work plan, initial policies,
and bylaws with or without a Working Committee recommendation;
5.10.2. The Board shall adopt a work plan for each fiscal year;
5.10.3. The Board shall select a General Counsel;
5.10.4. The Board shall direct the Working Committee to evaluate the need
for such insurance protection as is necessary to protect the interests of the
Authority and its Members, and acquire and maintain if necessary, liability,
errors and omissions, property and/or other insurance.
ARTICLE 6 – WORKING COMMITTEE
6. Pursuant to Government Code Section 6508, the Authority delegates certain powers
related to program development, policy formulation and program implementation to
the Working Committee described herein. Specifically, the Working Committee shall have the composition, powers and duties described in this Article and the implied
powers necessary therefor.
6.1. The Working Committee shall ensure that a budget and work plan are timely
prepared and by March 31 of each year, shall review and recommend the
budget and work plan to the Board for approval. Copies of the recommended budget and work plan shall be promptly sent to the Members and the Directors.
The budget shall indicate the anticipated sources of revenues and the
anticipated uses of such revenues. The work plan shall outline the activities and
priorities of the Authority for the following year.
6.2. The Working Committee may apply for and accept all grants and sub-grants that are consistent with the approved work plan, provided that either (a) the amount
of matching funds required, if any, does not exceed that threshold provided in
the approved work plan and budget, or (b) a Member or other entity volunteers
to provide the matching funds without a guarantee of reimbursement.
6.3. The Working Committee may take action to implement or modify any projects, programs or services, provided the projects, programs or services are consistent
with the budget and the parameters and thresholds in the work plan. Any
projects, programs and services that are not consistent with the work plan and
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budget shall be reviewed by the Working Committee and recommended to the Board for approval.
6.4. The Working Committee shall let for bid, if required, and award all contracts
consistent with the approved work plan, provided that the amount of funds
required, if any, does not exceed that threshold provided in the approved work
plan and budget. The Working Committee may approve any contract amendment, provided that the additional costs to the Authority for such
amendment do not exceed the threshold provided in the Authority’s contracting
policy and sufficient funds are available in the approved budget.
6.5. The Working Committee shall approve all agreements with Members and other
public agencies and all other contracts that are consistent with applicable law and the approved work plan.
6.6. The Working Committee shall recommend a conflict of interest policy and
personnel rules, when necessary, and any amendments of those policies to the
Board for approval.
6.7. The Working Committee shall adopt policies regarding purchasing and consultants. In addition, the Working Committee may adopt policies on other
issues that are necessary or convenient for the efficient operation of the
Authority.
6.8. The Working Committee shall recommend an Executive Director, subject to the
Board’s approval and approval of the contract between the Authority and Executive Director.
6.9. The Working Committee shall have thirteen eleven (113) Committee Members,
unless such number is increased by a resolution adopted by an affirmative vote
of 2/3 of the entire Board. Each Committee Member shall serve at the pleasure
of the appointing entity identified in Section 6.9.1 and may be removed at any time by that appointing entity without notice. Each Committee Member must be
an official, officer, or employee of a Member, but no single Member may have
more than three (3) Working Committee Members serving at one time. A
Committee Member may also be removed by the Member who he or she serves upon notice to the Authority. If a Committee Member shall fail to attend 70% of the meetings of the Working Committee during the fiscal year, his or her seat
shall be deemed vacant and the Authority shall send notice of the vacancy to the
appointing entity. If a Committee Member shall cease to be an official, officer, or
employee of a Member, his or her seat shall be deemed vacant. If an appointing entity shall fail to appoint a Committee Member within ninety (90) days of a vacancy, the Working Committee may, by majority vote, appoint an interim
Committee Member from the officials, officers, or employees of the Members to
serve until the appointment of the new Committee Member is completed.
6.9.1. Working Committee Members shall be appointed by the following entities (or successor entities approved pursuant to a resolution of the Working Committee) as follows:
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6.9.1.1. Two City Managers appointed by the Santa Clara County/City Managers Association.
6.9.1.2. One fire chief appointed by the Santa Clara County Fire
Chiefs Association.
6.9.1.3. One police chief appointed by the Santa Clara County Police
Chiefs Association.
6.9.1.4. The Santa Clara County Executive or his or her designee.
6.9.1.5. Two members appointed by the San Jose City Manager.
6.9.1.6. The Director of Communications for Santa Clara County or
his or her designee.
6.9.1.7. One communications manager appointed by the Public Safety Communications Managers Association (of Santa Clara County).
6.9.1.8. Two at-large members appointed by the Working
Committee.
6.9.1.9. Two Committee Members appointed by VTA’s General
Manager.
6.9.2. Meetings of the Working Committee shall be conducted in
compliance with the Ralph M. Brown Act. The Working Committee may
adopt by resolution rules of procedure, not inconsistent with the provisions
of this Agreement, to govern the conduct of its meetings.
6.9.3. A majority of the Committee Members shall constitute a quorum for the transaction of business and actions of the Working Committee shall
require the affirmative vote of a majority of the entire Working Committee
(i.e., as of the Effective Restatement Date, sixseven (67) Committee
Members).
ARTICLE 7 – FISCAL MATTERS AND FUNDING
7. The Authority shall comply with the fiscal and recordkeeping requirements of the
Joint Exercise of Powers Act and shall take such other actions as necessary or
desirable to address the fiscal, funding and budgeting needs of the Authority.
7.1. Treasurer and Auditor. The Treasurer and Auditor/Controller of Santa Clara County, respectively, are designated the Treasurer and Auditor of the Authority
with the powers, duties, and responsibilities specified in the Joint Exercise of
Powers Act, including, without limitation, Sections 6505 and 6505.5 thereof;
provided however, the Board may revoke this designation by adopting a resolution appointing one or more of the Authority's or a Member’s officers or employees to either or both of the positions of Treasurer or Auditor as provided
in Sections 6505.6 of the Joint Exercise of Powers Act.
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7.2. Accounts and Reports. The Board shall establish and maintain such funds and accounts as may be required by generally accepted public accounting practice.
The books and records of the Authority shall be open to inspection at all
reasonable times to the Members and their respective representatives. The
accounts shall be prepared and maintained by the Treasurer and/or Auditor of
the Authority. The Auditor shall, within one hundred twenty (120) days after the close of each fiscal year, cause an independent audit of all financial activities for
such fiscal year to be prepared in accordance with Government Code Section
6505. The Authority shall promptly deliver copies of the audit report to each
Director and the Members.
7.3. Budget. The Board shall adopt an initial budget consistent with Section 5.10 and adopt subsequent budgets no later than April 30th of each year thereafter.
Adoption of the budget shall require an affirmative vote of 2/3 of the entire
Board.
7.4. Fiscal Year. The fiscal year of the Authority shall be the period from July 1st of
each year to and including the following June 30th.
7.5. Debts, Liabilities and Obligations. The debts, liabilities, and obligations of the
Authority shall not constitute debts, liabilities, or obligations of the Members,
either jointly or severally.
7.6. Initial Contribution for Annual Operating Costs. Within thirty (30) days of the
Effective Date, each Member except the City of Los Altos Hills and the City of Monte Sereno shall make an initial operating costs contribution of $13,157 to the
Authority. The City of Los Altos Hills and the City of Monte Sereno shall each
make an initial operating costs contribution of $8,000. Notwithstanding the
above, any Member who has already contributed the identified amount pursuant
to the Joint Funding Agreement for the 2009-2010 fiscal year need not make such initial operating costs contribution. Within thirty (30) days of the
Restatement Date, the VTA shall make a contribution towards operating costs of
$13,157 to the Authority.
7.7. Initial Contribution for Annual Maintenance Costs. Within thirty (30) days of the Effective Date, each Member shall make an initial systems maintenance contribution of the amount required pursuant to the City Manager’s Association
approved maintenance assessment formula.
7.7.1. The City Managers’ Association approved maintenance
assessment formula provides the following population allocation percentages: Campbell - 2.21%, Cupertino - 3.02% , Gilroy - 2.60%, Los Altos - 1.60%, Los Altos Hills - 0.48%, Los Gatos - 1.67%, Milpitas – 3.76%,
Monte Sereno - 0.20% , Morgan Hill - 2.02%, Mountain View – 4.16%, Palo
Alto – 3.50% , San Jose – 53.47%, Santa Clara – 6.12%, Saratoga - 1.76%,
and Sunnyvale – 7.66%; and unincorporated Santa Clara County - 5.78%.
7.7.2. The following contributions are due based on the above percentages: Campbell - $3,315, Cupertino - $4,530, Gilroy - $3,900, Los
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Altos - $2,400, Los Altos Hills - $720, Los Gatos - $2,505, Milpitas – $5,640, Monte Sereno - $300, Morgan Hill - $3,030, Mountain View – $6,240, Palo
Alto – $5,250 , San Jose – $80,205, Santa Clara – $9,180, Saratoga -
$2,640, and Sunnyvale – $11,490, and unincorporated Santa Clara County -
$8,670.
7.7.3. Notwithstanding the above, any Member who has already contributed the identified amount pursuant to the Joint Funding Agreement
for the 2009-2010 fiscal year need not make such initial maintenance
contribution.
7.8. Annual Operating Costs. Each year, the Working Committee shall propose
projected Annual Operating Costs, which projected costs shall be adopted by the Board prior to or during approval of the budget.
7.8.1. Population Share. Half of the adopted Annual Operating Costs shall
be allocated to the Members based on their respective population (the
“Population Share”). Each Member shall pay a portion of the Population
Share which shall be determined based on that Member’s population. The Population Share, each Member’s share of the Population Share shall be
determined pursuant to the funding policy adopted by the Board at its initial
meeting, as may be amended. The funding policy shall specify the accepted
method for calculating each Member’s population (e.g., census data).
Notwithstanding the foregoing, on or after the Restatement Date, the Working Committee shall commission or obtain a cost allocation study which
considers usage, overhead, and other reasonable cost factors and with that
data shall propose, subject to the adoption of the Board, an allocation
methodology for the VTA that is not based on population.
7.8.1.
7.8.2. Membership Share. Half of the adopted Annual Operating Costs
shall be allocated to the Members based on the principle that Members
share these costs equally, except that the Smaller Members shall pay 60%
of a Full Share (the “Membership Share”). Each Member except the Smaller Members shall pay an equal full share of the adopted Annual Operating Costs (Full Share”) the Smaller Members shall pay 60% of a Full Share. The
total of all shares shall be 100% of the Membership Share. A Full Share
shall be calculated according to the formula implementing the above
principle contained in the funding policy adopted by the Board at its initial meeting, as may be amended.
7.9. Annual Systems Maintenance Costs. Each year, the Working Committee shall
propose projected Annual Systems Maintenance Costs, which projected costs
shall be approved by the Board prior to or during approval of the budget.
7.9.1. Each Member shall pay a share of the adopted Annual Systems Maintenance Costs based on the principle that Members shall share systems maintenance costs based on system and service usage and that
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until sufficient data is available regarding Member usage, Member population data is an acceptable proxy for usage.
7.9.2. Each Member’s share of the adopted Annual Systems Maintenance
Costs shall be calculated according to the formula implementing the
principles in Section 7.9.1 contained in the funding policy adopted by the
Board at its initial meeting, as may be amended.
7.10. Other Projects, Programs and Services. In the event that a project,
program, service, or reserve fund is approved which has costs that are not
Annual Operating Costs or the Annual Systems Maintenance Costs, the Working
Committee shall either (a) develop a proposed cost allocation formula for the
non-overhead costs based on the principle that costs shall be assessed to Members based on usage but, if usage data or projected usage data is not
available, until sufficient data is available, Member population and entity type
data are acceptable proxies for usage or (b) conduct or obtain a cost allocation
study which considers usage, overhead, and other reasonable cost factors. The
Board shall approve any such proposed cost allocation.
7.11. Limited Scope Agreements. Where a project or program is intentionally
designed to be limited in scope such that it only provides benefits to particular
Members, the Authority may enter into specific project or program agreements
that provide for cost sharing by the particular affected Members; provided
however, both the Board and Working Committee must approve such agreements.
7.12. Contributions on Behalf of Members. Special Districts or other parties may
tender to the Authority those contributions due from a Member on that Member’s
behalf.
ARTICLE 8 –GENERAL PROVISIONS
8. The following general provisions apply to this Agreement.
8.1. Term and Termination. This Agreement shall be effective as of the
Effective Date. It shall remain in effect until the purposes of the Authority are fully accomplished, or until terminated by the vote of a majority of the governing bodies of the Members; provided, however, that this Agreement may not be terminated, until
(a) all bonds or other instruments of indebtedness issued by the Authority and the
interest thereon, if any, have been paid in full or provision has been made for
payment in full and (b) all outstanding obligations and liabilities of the Authority have been paid in full or provision has been made for payment in full, except as set forth in Section 8.2.
8.2. Disposition of Property upon Termination. In the event of termination of
the Authority pursuant to Section 8.1 herein and where there will be a successor
public entity which will carry on the functions of the Authority and assume its assets and liabilities, the assets of the Authority shall be transferred to the successor public
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entity. If upon termination pursuant to Section 8.1, there is no successor public entity which will carry on the functions of the Authority and assume its assets, the assets
shall be returned to the Members as follows: (a) all real property and any
improvements thereon shall be conveyed to the Member which owned the property
prior to the formation of the Authority, and (b) all other assets shall be divided among
the Members in proportion to their respective contributions during the term of this Agreement. If upon termination pursuant to Section 8.1, there is a successor public
entity which will carry on some of the functions of the Authority and assume some of
the assets, the Authority's Board shall allocate the assets between the successor
public entity and the Members.
8.3. Indemnification. To the fullest extent allowed by law, the Authority shall defend, indemnify, and save harmless the Members and their governing bodies,
officers, agents, and employees from all claims, losses, damages, costs, injury, and
liability of every kind, nature, and description directly or indirectly arising from the
performance of any of the activities of the Authority or the activities undertaken
pursuant to this Agreement.
8.4. Liability of Board, Officers and Employees. The Directors, Working
Committee Members, officers, and employees of the Authority shall use ordinary
care and reasonable diligence in the exercise of their powers, and in the
performance of their duties pursuant to this Agreement. They shall not be liable to
the Members for any mistake of judgment or other action made, taken, or omitted by them in good faith, nor for any action made, taken, or omitted by any agent,
employee, or independent contractor selected with reasonable care, nor for loss
incurred through the investment of the Authority's funds, or failure to invest the
same.
8.5. To the extent authorized by California law, no Director, Working Committee Member, officer, or employee of the Authority shall be responsible for
any action made, taken, or omitted, by any other Director, Working Committee
Member, officer, or employee. No Director, Working Committee Member, officer, or
employee of the Authority shall be required to give a bond or other security to guarantee the faithful performance of his or her duties pursuant to this Agreement, except as required herein pursuant to Government Code Section 6505.1. The funds
of the Authority shall be used to defend, indemnify, and hold harmless the Authority
and each Director, Working Committee Member, officer, or employee of the
Authority for actions taken in good faith and within the scope of his or her authority. Nothing herein shall limit the right of the Authority to purchase insurance to provide coverage for the foregoing indemnity.
8.6. Successors: Assignment. This Agreement shall be binding upon and shall
inure to the benefit of the successors of the Members. No Member may assign any
rights or obligations hereunder without the unanimous consent of the governing bodies of the other Members; provided, further, that no such assignment may be made if it would materially and adversely affect (a) the rating of bonds issued by the
Authority, or (b) bondholders holding such bonds.
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8.7. Amendments. This Agreement may be amended only upon approval of all the governing bodies of the Members. So long as any bonds of the Authority are
outstanding and unpaid, or funds are not otherwise set aside for the payment or
redemption thereof in accordance with the terms of such bonds and the
documentation relating thereto, this Agreement shall not be amended, modified or
otherwise revised, changed or rescinded, if, in the judgment of the Board, such action would (a) materially and adversely affect (1) the rating of bonds issued by the
Authority, or (2) bondholders holding such bonds, or (b) limit or reduce the
obligations of the Members to make, in the aggregate, the payments which are for
the benefit of the owners of such bonds.
8.8. No Third Party Beneficiaries. This Agreement is intended solely for the benefit of the Authority and its Members. No third party shall be deemed a
beneficiary of this Agreement or have any rights hereunder against the Authority or
its Members.
8.9. Dispute Resolution. In the event that any party to this Agreement should at
any time claim that another party (or parties) has breached or is breaching this Agreement, the complaining party shall file with the governing body of claimed
breaching party, and with the Authority, a written claim of said breach, describing the
alleged breach and otherwise giving full information respecting the same. The Board
shall thereupon, at a reasonable time and place, specified by it, give each of these
parties to the dispute an opportunity to be heard on the matter, and shall, upon conclusion of said hearing, give the Members a full report of its findings and
recommendations. Said report, findings and recommendations shall be deemed
advisory only, shall not in any way bind any of the parties to the dispute, and shall
not be deemed to establish any facts, either presumptively or finally. Upon receipt of
said report and recommendations, if any party to the dispute should be dissatisfied with or disagree with the same, that party shall provide written notice to the other
parties within ten (10) business days, and the parties to the dispute or their
representatives shall meet at a reasonable time and place to be determined by
them, for the purpose of resolving their differences. No action for breach of this Agreement, and no action for any legal relief because of any such breach or alleged breach of this Agreement shall be filed or commenced by any party unless and until
such party has first given to the other parties a reasonable time, after the parties to
the dispute have met to resolve their differences, within which to cure any breach or
alleged breach.
8.10. Notices. Any notices to Members required by this Agreement shall be delivered or mailed, U.S. first class, postage prepaid, addressed to the principal
office of the respective Members. Notices under this Agreement shall be deemed
given and received at the earlier of actual receipt, or the second business day
following deposit in the United States mail, as required above. Any Member may amend its address for notice by notifying the other Members pursuant to this Section.
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8.11. Severability. Should any part, term, or provision of this Agreement be decided by the courts to be illegal or in conflict with any law of the State of California,
or otherwise be rendered unenforceable or ineffectual, the validity of the remaining
portions or provisions shall not be affected thereby.
8.12. Liberal Construction. The provisions of this Agreement shall be liberally
construed as necessary or reasonably convenient to achieve the purposes of the Authority.
8.13. Headings. The headings used in this Agreement are for convenience only
and have no effect on the content, construction, or interpretation of the Agreement.
8.14. Counterparts. This Agreement may be executed in any number of
counterparts, and by different parties in separate counterparts, each of which, when executed and delivered, shall be deemed to be an original and all of which
counterparts taken together shall constitute but one and the same instrument.
8.15. Non-Waiver. No waiver of the breach or default of any of the covenants,
agreements, restrictions, or conditions of this Agreement by any Member shall be
construed to be a waiver of any succeeding breach of the same or other covenants, agreements, restrictions, or conditions of this Agreement. No delay or omission of
exercising any right, power or remedy in the event of breach or default shall be
construed as a waiver thereof, or acquiescence therein, or be construed as a waiver
of a variation of any of the terms of this Agreement or any applicable agreement.
8.16. Agreement Complete. The foregoing constitutes the full and complete Agreement of the parties. There are no oral understandings or agreements not set
forth in writing above. Any such agreements merge into this Agreement.
This document continues on the following page.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their duly authorized representatives.
City of Campbell
By: _______________________
Name: _______________________
Title: _______________________
City of Cupertino
By: _______________________
Name: _______________________
Title: _______________________
City of Gilroy
By: _______________________
Name: _______________________
Title: _______________________
City of Los Altos
By: _______________________
Name: _______________________ Title: _______________________
Town of Los Altos Hills
By: _______________________
Name: _______________________
Title: _______________________
Approved as to form:
By: _______________________
Name: _______________________
Title: _______________________
Approved as to form:
By: _______________________
Name: _______________________
Title: _______________________
Approved as to form:
By: _______________________
Name: _______________________
Title: _______________________
Approved as to form:
By: _______________________
Name: _______________________ Title: _______________________
Approved as to form:
By: _______________________
Name: _______________________
Title: _______________________
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Town of Los Gatos
By: _______________________
Name: _______________________
Title: _______________________
City of Milpitas
By: _______________________
Name: _______________________
Title: _______________________
City of Monte Sereno
By: _______________________
Name: _______________________
Title: _______________________
City of Morgan Hill
By: _______________________ Name: _______________________
Title: _______________________
City of Mountain View
By: _______________________
Name: _______________________
Title: _______________________
Approved as to form:
By: _______________________
Name: _______________________
Title: _______________________
Approved as to form:
By: _______________________
Name: _______________________
Title: _______________________
Approved as to form:
By: _______________________
Name: _______________________
Title: _______________________
Approved as to form:
By: _______________________ Name: _______________________
Title: _______________________
Approved as to form:
By: _______________________
Name: _______________________
Title: _______________________
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City of Palo Alto
By: _______________________
Name: _______________________
Title: _______________________
City of San Jose
By: _______________________
Name: _______________________
Title: _______________________
City of Santa Clara
By: _______________________
Name: _______________________
Title: _______________________
County of Santa Clara
By: _______________________ Name: _______________________
Title: _______________________
City of Saratoga
By: _______________________
Name: _______________________
Title: _______________________
Approved as to form:
By: _______________________
Name: _______________________
Title: _______________________
Approved as to form:
By: _______________________
Name: _______________________
Title: _______________________
Approved as to form:
By: _______________________
Name: _______________________
Title: _______________________
Approved as to form:
By: _______________________ Name: _______________________
Title: _______________________
Approved as to form:
By: _______________________
Name: _______________________
Title: _______________________
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City of Sunnyvale
By: _______________________
Name: _______________________
Title: _______________________
Santa Clara Valley Transportation
Authority
By: _______________________
Name:_______________________
Title:_________________________
Approved as to form:
By: _______________________
Name: _______________________
Title: _______________________
Approved as to form:
By: _______________________
Name: _______________________
Title: _______________________
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CITY OF PALO ALTO OFFICE OF THE CITY CLERK
August 22, 2016
The Honorable City Council
Palo Alto, California
Approval for the Consolidation of the Unscheduled Vacancy on the
Planning and Transportation Commission With the Fall 2016 Board
and Commission Recruitment
Recommendation
Staff recommends the City Council direct Staff to include the recruitment of
the unscheduled vacant term of Yekaterina “Kate” Downing on the Planning
and Transportation Commission with the Fall 2016 Board and Commission
Recruitment.
Discussion
On July 27, 2016, the City Clerk’s Office was notified that Kate Downing was
resigning from the Planning and Transportation Commission (PTC) effective
July 27, 2016. Commissioner Downing’s term would have expired on
December 15, 2018.
The City Clerk’s Office will be recruiting to fill the following vacancies as part
of the Fall 2016 Board and Commission recruitment:
Historic Resources Board
Three, 3-year terms ending December 15, 2019
(Bower, Bunnenberg, and DiCicco)
Parks and Recreation Commission
Four, 3-year terms ending December 15, 2019
(Hetterly, Knopper, Lauing, and Reckdahl)
Planning and Transportation Commission
Two, 4-year terms ending December 15, 2020
(Gardias and Tanaka)
Storm Drain Oversight Committee
Two, 4-year terms ending December 15, 2020
(McGraw and Rosenberg)
Page 2
Consolidating the unscheduled vacancy on the PTC with the Fall 2016
recruitment will require less Staff time and advertising costs than conducting
a special recruitment to fill the unscheduled vacancy.
Department Head: Beth Minor, City Clerk
Page 3
City of Palo Alto (ID # 7150)
City Council Staff Report
Report Type: Action Items Meeting Date: 8/22/2016
City of Palo Alto Page 1
Summary Title: Net Energy Metering Successor Rate and Transition Policy
Title: Finance Committee Recommendation that Council Adopt a Resolution
Adopting a Net Energy Metering Successor Rate E-EEC-1 (Export Electricity
Compensation), Establishing the Net Energy Metering Transition Policy, and
Amending Rule and Regulation 2 (Definitions and Abbreviations) and 29 (Net
Energy Metering and Interconnection)(Continued from June 27, 2016)
From: City Manager
Lead Department: Utilities
Recommendation
Staff, the Utilities Advisory Commission (UAC), and the Finance Committee recommend that the
City Council adopt a resolution (Attachment A) adopting a Net Energy Metering (NEM)
Successor Rate, E-EEC-1 (“Export Electricity Compensation”, Attachment B); establishing the
NEM Transition Policy; and, Amending Utilities Rule and Regulation 2 (“Definitions and
Abbreviations”, Attachment C-1) and 29 (“Net Energy Metering and Interconnection”,
Attachment C-2).
Executive Summary
Net energy metering (NEM) is a billing mechanism designed to promote the installation of
renewable distributed generation by allowing customers to be compensated at the full retail
rate for electricity generated by their on-site systems, such as solar photovoltaic (solar PV)
systems. State law requires all electric utilities to offer NEM to customers with eligible
renewable distributed generation up to a maximum cap, or “NEM cap”, which in Palo Alto is 9.5
megawatts (MW). Under the City’s current rates, NEM customers can reduce, or completely
avoid, charges on their electric utility bill while still remaining interconnected with the electric
grid and utilizing grid services. Utilities generally refer to the terms and conditions for on-site
renewable generation installed after the NEM cap is reached as the “NEM successor rate” or
“NEM successor program.” As of mid-February 2016, the City of Palo Alto Utilities (CPAU) was
approximately 79% toward meeting the NEM cap, and could exceed it by the end of 2016.
As Utilities across the state approach their respective NEM caps, NEM successor rates are a
topic of much debate. To help guide staff efforts on the NEM successor rate development, City
City of Palo Alto Page 2
Council adopted NEM Successor Program Design Guidelines in January 2016 (Staff Report
6437).
Under the proposed NEM successor rate (Rate Schedule E-EEC-1, Export Electricity
Compensation), customers would receive a credit at the E-EEC-1 buyback rate for all electricity
sent to the grid (when instantaneous on-site generation is greater than instantaneous on-site
consumption), and they would be billed at the prevailing retail rate for all electricity drawn
from the grid (when instantaneous on-site consumption is greater than instantaneous on-site
generation). The proposed value of the credit for energy sent to the grid is 7.485 cents per
kilowatt-hour (kWh), which compensates the customer for the energy, avoided capacity
charges, avoided transmission/ancillary service charges, avoided transmission and distribution
system losses, and environmental attributes. The energy value takes into account that solar
energy is often generated at times of the state’s peak system demand. If approved, the credit
would take effect July 1, 2016, and would be updated annually along with the budget. Based on
staff analysis, the proposal will support continued solar PV deployment while ensuring that the
City’s electric rates are based on the cost of providing service, in compliance with state
constitutional requirements amended by Proposition 26.
In addition to the proposed NEM successor rate, staff also recommends adopting a transition
policy for customers with systems installed within the NEM cap. Specifically, staff proposes
adopting a 20-year transition period from the time of interconnection through which NEM
customers remain eligible for net metering under the terms currently set forth in California
Public Utilities Code 2827. In addition, staff proposes allowing NEM customers to expand their
systems by up to 10% of the original system size while still remaining eligible for net metering
after the NEM cap has been reached.
The Finance Committee reviewed the proposal at its May 17, 2016, meeting and voted
unanimously to recommend Council approve the proposed resolution.
Discussion
Staff carried out a thorough evaluation of a broad variety of NEM successor rate design options
considering the NEM successor design guidelines as well as conceptual and practical
considerations of each option. Under the proposed NEM successor rate, customers would
receive a credit for all electricity sent to the grid (energy generated in excess of instantaneous
usage), and they would be billed at the prevailing retail rate for all electricity they use from the
grid (energy used in excess of instantaneous generation).
To help promote regulatory certainty and transparency for existing NEM customers who have
invested in solar PV systems and for solar developers operating in Palo Alto, staff proposes that
existing NEM customers and all eligible customers within the NEM cap in CPAU service territory
remain eligible for NEM through a 20- year transition period from the date of system
interconnection. Staff also proposes allowing NEM customers to expand their systems by up to
City of Palo Alto Page 3
10% of the original system size while still remaining eligible for net metering after the NEM cap
has been reached.
A full explanation of the proposal and alternatives is provided in the report provided for the
Finance Committee’s May 17, 2016, meeting (Attachment D).
Committee Review and Recommendation
The UAC reviewed staff’s recommendation at its April 12, 2016, meeting and voted
unanimously to support staff’s recommendation. The minutes to the UAC meeting are provided
as Attachment E.
The Finance Committee reviewed the recommendation at its May 17, 2016, meeting. The
Finance Committee expressed support for the recommendation and voted unanimously (4-0) to
recommend Council approve the recommendation. Action minutes from the May 17, 2016,
Finance Committee meeting are provided as Attachment F.
Resource Impact
Staff has developed an implementation plan to be executed upon adoption of the NEM
successor rate to help ensure that CPAU will be ready for customers who install eligible
renewable energy systems after the NEM cap has been reached. Implementation of the
proposed NEM successor rate requires modifications to current business systems and processes
including installing bidirectional electric meters, programming of meter reading devices,
training meter reading staff, modifying the format of electric Utilities bills, and revising electric
usage billing calculations. Furthermore, all staff must be trained in these new systems and
processes. At present, all modifications to systems and processes are planned to utilize existing
staff and budget resources.
The proposed NEM successor rate is based on the cost to serve, and the credit value would be
updated annually to reflect the market value of solar energy, value of the RECs, avoided
capacity charges, avoided charges for transmission and ancillary services, and avoided
transmission and distribution system losses. Therefore, there would be no direct financial
resource impact for eligible systems installed under staff’s proposed NEM successor program.
Policy Impact
Fulfilling Palo Alto’s NEM legislative requirements and adopting the proposed NEM successor
program are consistent with the California Public Utilities Code and state constitutional
requirements regarding cost-based rates. Furthermore, adopting a NEM successor rate will add
greater market certainty for those interested in installing rooftop solar PV after the NEM cap
has been reached. The proposed policy directly supports Strategy #2 of the Local Solar Plan, to
“develop proper policies, incentives, price signals and rates to encourage solar installation”.
Furthermore, staff analyses indicates the proposed NEM successor rate will support continued
uptake of distributed renewable energy technologies in Palo Alto, which further supports the
Carbon Neutral Plan, the Local Solar Plan, and the City’s broader environmental sustainability
City of Palo Alto Page 4
goals, including those set out in the 2011 Utilities Strategic Plan and the 2007 Climate
Protection Plan.
Environmental Impact
Council’s adoption of a resolution establishing a NEM Successor Rate is not subject to the
California Environmental Quality Act (CEQA), pursuant to California Public Resources Code Sec.
21080(b)(8) and Title 14 of the California Code of Regulations Sec. 15273(a). After reviewing
the staff report and all attachments presented to Council, the Council incorporates these
documents herein and finds that sufficient evidence has been presented setting forth with
specificity the basis for this claim of CEQA exemption. Council’s adoption of a NEM transition
policy and amending Utility Rules and Regulations does not meet the California Environmental
Quality Act’s (CEQA) definition of “project” under California Public Resources Code Sec. 21065,
thus no environmental review is required.
Attachments:
Attachment A: Resolution Adopting NEM Successor Rate and Rate E-EEC-1 Rule 2 and 29
and Transition Policy (PDF)
Attachment B: Proposed Utilities Rate E-EEC-1 (Export Electricity Compensation Rate)
(PDF)
Attachment C-1: Proposed Utilities Rule and Regulation 2 in redline format (PDF)
Attachment C-2: Proposed Utilities Rule and Regulation 29 in redline format (PDF)
Attachment D: Finance Committee Staff Report 6863 - Net Energy Metering Successor
Rate and Transition Policy (PDF)
Attachment E: Excerpted Final UAC Minutes of April 12, 2016 Special Meeting (PDF)
Attachment A
NOT YET APPROVED
160502 jb 6053741 1
Resolution No. _________
Resolution of the Council of the City of Palo Alto Adopting the Net
Energy Metering Successor Rate, Utilities Rate Schedule E-EEC-1
(Export Electricity Compensation); Establishing the Net Energy
Metering Transition Policy; and, Amending Rule and Regulation 2
(Definitions and Abbreviations) and Rule and Regulation 29
(Net Energy Metering and Interconnection)
R E C I T A L S
A. Net Energy Metering (NEM), is a billing arrangement that provides credit to
customers for the full retail value of the electricity their system generates.
B. State law, California Public Utilities Code Section 2827 et. seq., requires all
electric utilities to offer NEM to eligible customers with distributed renewable generation up to
a maximum cap.
C. Palo Alto’s NEM Cap is 9.5 megawatts (MW) as adopted by Council Resolution
9557. The City’s NEM installations are currently approximately 79% of the proposed 9.5 MW
NEM Cap and staff estimates that the City’ NEM Cap will be reached by the end of 2016. Once
the NEM Cap is reached, NEM will be closed to new customers and the NEM Successor Rate will
become available instead.
D. Utilities refer to the terms and conditions for customer-sited, distributed
renewable generation installed after the NEM cap has been reached as the NEM successor rate
or program. Palo Alto’s NEM Successor Rate is defined by Utilities Rate Schedule E-EEC-1
(Export Electricity Compensation). The E-EEC-1 rate was developed in coordination with the
City’s 2016 electric cost of service analysis and may be established by the City Council through
its electric utility rate-making authority and processes.
E. Formally adopting a cost-based NEM Successor Rate (Rate Schedule E-EEC-1) in
Palo Alto will promote greater market certainty and transparency for customers and renewable
energy installers operating within the community, and is consistent with both NEM legislative
and regulatory obligations and the Council-adopted Local Solar Plan to promote distributed
solar projects.
F. Pursuant to Chapter 12.20.010 of the Palo Alto Municipal Code, the Council of
the City of Palo Alto may by resolution adopt rules and regulations governing utility services,
fees and charges. Updates to Rule and Regulation 2 (Definitions and Abbreviations) and Rule
and Regulation 29 (Net Energy Metering and Interconnection) are needed in order to
implement the NEM Successor Rate and transition policy.
The Council of the City of Palo Alto does hereby RESOLVE as follows:
Attachment A
NOT YET APPROVED
160502 jb 6053741 2
SECTION 1. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility
Rate Schedule E-EEC-1 (Export Electricity Compensation) is hereby adopted as attached and
incorporated.
a) Utility Rate Schedule E-EEC-1 shall become effective July 1, 2016.
b) The electricity export compensation rate approved by this resolution is based on
a detailed analysis of the value of energy exported to the electric grid, including
the energy, avoided capacity charges, avoided transmission and ancillary service
charges, avoided transmission and distribution system losses, and environmental
attributes and was developed in coordination with the City’s 2016 electric cost of
service analysis.
SECTION 2. The City Council makes the following findings regarding the
establishment of a Net Energy Metering transition policy:
1) A Net Energy Metering transition policy which establishes a 20 year transition period
and eligible facility expansion rules will promote regulatory certainty and
transparency for the City’s existing NEM and NEM Aggregation customers who have
invested in solar PV systems, and for solar developers operating in Palo Alto.
2) Setting the transition period at 20 years from the time of eligible facility
interconnection matches the transition period adopted by the California Public
Utility Commission for investor-owned utilities, and is reasonably based on eligible
systems’ expected useful life, module warranties, power purchase agreements, and
third-party financing agreements.
3) Allowing eligible facility expansion up to a given threshold will permit existing NEM
and NEM Aggregation customers and those installing eligible facilities within the
City’s NEM cap to retain their current NEM or NEM Aggregation rate structure in the
event that facility panels need replacement or minor expansion, and is broadly in-
line with expansion policies in effect in other California utility service territories.
SECTION 3. The City Council adopts the following NEM Transition Policy: A) Existing
City of Palo Alto Utilities (CPAU) NEM and NEM Aggregation customers and CPAU NEM and
NEM Aggregation customers who install eligible renewable electrical generation facilities within
the City’s NEM Cap (Resolution 9557) shall remain eligible for Net Energy Metering under the
terms and conditions set forth in California Public Utilities Code Section 2827 (effective as of
the date of this Resolution’s adoption) for a 20-year transition period from the time of initial
facility interconnection, and B) Existing CPAU NEM and NEM Aggregation customers and CPAU
NEM and NEM Aggregation customers who install eligible renewable electrical generation
facilities within the City’s NEM Cap may expand their eligible renewable electrical generation
facilities by up to 10% of the Initial Interconnection Capacity while still remaining eligible for
Net Energy Metering, even after the NEM cap has been reached.
SECTION 4. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rule and
Regulation 2 (Definitions and Abbreviations) is hereby amended as attached and incorporated.
Utility Rule and Regulation 2, as amended, shall become effective July 1, 2016.
SECTION 5. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rule and
Regulation 29 (Net Energy Metering and Interconnection) is hereby amended as attached and
incorporated. Utility Rule and Regulation 2, as amended, shall become effective July 1, 2016.
Attachment A
NOT YET APPROVED
160502 jb 6053741 3
SECTION 6. The adoption of Section 1 of resolution changing electric rates to meet
operating expenses, purchase supplies and materials, meet financial reserve needs and obtain
funds for capital improvements necessary to maintain service is not subject to the California
Environmental Quality Act (CEQA), pursuant to California Public Resources Code Sec.
21080(b)(8) and Title 14 of the California Code of Regulations Sec. 15273(a). After reviewing
the staff report and all attachments presented to Council, the Council incorporates these
documents herein and finds that sufficient evidence has been presented setting forth with
specificity the basis for this claim of CEQA exemption. The adoption of Sections 3, 4 and 5 of
this resolution establishing a transition policy and amending Utility Rules and Regulations does
not meet the California Environmental Quality Act’s definition of a “project” under Public
Resources Code Section 21065, thus no environmental review is required.
INTRODUCED AND PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:
___________________________ ___________________________
City Clerk Mayor
APPROVED AS TO FORM: APPROVED:
___________________________ ___________________________
Senior Deputy City Attorney City Manager
___________________________
Director of Utilities
___________________________
Director of Administrative Services
Attachment B
EXPORT ELECTRICITY COMPENSATION
UTILITY RATE SCHEDULE E-EEC-1
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Effective 7-1-2016
Sheet No.E-EEC-1
A. APPLICABILITY:
This schedule applies in conjunction with the otherwise applicable rate schedules for each customer
class. This schedule may not apply in conjunction with any time-of-use rate schedule. This schedule
applies to Customer-Generators as defined in Rule and Regulation 2 who are either not eligible for
Net Energy Metering or who are eligible for Net Energy metering but elect to take service under this
rate schedule.
B. TERRITORY:
Applies to locations within the service area of the City of Palo Alto.
C. RATE:
The following buyback rate shall apply to all energy exported to the grid.
Per kWh
Export electricity compensation rate $0.07485
D. SPECIAL CONDITIONS
1. Metering equipment: Electricity delivered by CPAU to the Customer-Generator or received by
CPAU from the Customer-Generator shall be measured using a meter capable of registering the
flow of electricity in two directions (aka “bidirectional meter”). The electrical power
measurements will be used for billing the Customer-Generator. CPAU shall furnish, install and
own the appropriate meter.
2. Billing:
a. CPAU shall measure during the billing period, in kilowatt-hours, the energy delivered and
received after the Customer-Generator serves its own instantaneous load.
b. CPAU shall bill the Customer-Generator consumption charges for the energy delivered by
CPAU to the Customer-Generator based on the Customer-Generator’s applicable rate
schedule.
c. In the event the energy generated exceeds the energy consumed and therefore is received
by CPAU, the Customer will receive a credit for all energy received by CPAU at the
buyback rate designated in section C above.
3. Generation facilities shall adhere to Rule and Regulation 27: Generating Facility
Interconnections.
{End}
DEFINITIONS AND ABBREVIATIONS
RULE AND REGULATION 2
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 7-1-201610-26-2015
Sheet No 1
A. ABBREVIATIONS
AMR - Automated Meter Reading
AER - Advance Engineering Request
Btu - British Thermal Unit
ccf - Hundred Cubic Feet
CEC - California Energy Commission
CPAU - City of Palo Alto Utilities
CPUC - California Public Utilities Commission.
ERU - Equivalent Residential Unit
FERC - Federal Energy Regulatory Commission
kVar - Kilovar
kVarh - Kilovar-hours
kW - Kilowatt
kWh - Kilowatt-hour
MW - Megawatt
MMBtu - One million Btus.
NEC - National Electric Code, Latest Version
NEM - Net Energy Metering
NEMA - Net Energy Metering Aggregation
NEMIA - Net Energy Metering Interconnection Agreement
NRTL - Nationally Recognized Testing Laboratory
PAMC - Palo Alto Municipal Code
PSIG - Per square inch gauge
PST - Pacific Standard Time
RWQCP - Regional Water Quality Control Plant
UUT - Utilities Users Tax
B. GENERAL DEFINITIONS
Account
The identification number in CPAU’s billing system for Utility Services.
ATTACHMENT C-1
DEFINITIONS AND ABBREVIATIONS
RULE AND REGULATION 2
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 7-1-201610-26-2015
Sheet No 2
Agency
Any local, county, state or federal governmental body or quasi-governmental body, including, without
limitation, the CPUC, the FERC and any joint powers agency, but excluding the City and any board,
commission or council of the City.
Aggregation Customer
A Customer with a Renewable Electrical Generation Facility wishing to install an eligible Renewable
Electrical Generation Facility that is sized to offset separately metered electric loads on adjacent or
contiguous properties that are solely owned, leased, or rented by them, and who have signed the Net
Energy Metering Interconnection Agreement for NEM Aggregation.
Applicant
An individual, corporation, partnership, Agency, or other legal entity or authorized agent of same,
requesting CPAU to supply any or all of the following:
1. Electric Service
2. Water Service
3. Gas Service
4. Wastewater Collection
5. Refuse Service
6. Storm and Surface Water Drainage Service
7. Fiber Optics Service
Or, an entity submitting an Application for Interconnection pursuant to Rule 27.
Application (for Interconnection of Generating Facilities)
An approved standard form (Load Sheet) submitted to CPAU for Interconnection of a Generating
Facility.
Beneficiary Account
The Electric Service Meter(s) serviced by an Aggregation Customer’s Generating Facility, as listed on
the Aggregation Customer’s NEMA-IA form.
Bidweek Price Index
The price reported in Natural Gas Intelligence “NGI’s Bidweek Survey”, California “PG&E Citygate”
under the column “avg.” for the calendar month.
DEFINITIONS AND ABBREVIATIONS
RULE AND REGULATION 2
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 7-1-201610-26-2015
Sheet No 3
Billing Period
Also “service period” or “billing cycle”. The normal Billing Period for CPAU Customers is
approximately 30 days, with variations occurring due to staff availability, holiday scheduling, field
verification of Meter readings, or any other billing-related issues requiring additional investigation prior
to issuance of the bill..
British Thermal Unit
Also “Btu”. The standard sub-unit of measurement comprising a Therm of natural Gas. One (1) Therm
equals 100,000 Btu.
Business Day
Any day, except a Saturday, Sunday, or any day observed as a legal holiday by the City.
Certification Test
A test pursuant to Rule 27 that verifies conformance of certain equipment with approved performance
standards in order to be classified as Certified Equipment. Certification Tests are performed by NRTLs.
Certification; Certified; Certificate
The documented results of a successful Certification Test.
Certified Equipment
Equipment that has passed all required Certification Tests.
Charge
Any assessment, cost, fee, surcharge or levy for Utility Service other than a Tax, including metered and
unmetered Utility Service, capacity, connections, construction, penalties, and mandated or required
Customer financial obligations for Service.
Charter
The Charter of the City of Palo Alto.
City Attorney
The individual designated as the City Attorney of the City under Section 2.08.120 of Chapter 2.08 of
Title 2 of the Palo Alto Municipal Code, and any Person who is designated the representative of the City
Attorney.
City’s Collector
The Person(s) authorized under Section 5.20.040 of the Palo Alto Municipal Code to provide collection,
DEFINITIONS AND ABBREVIATIONS
RULE AND REGULATION 2
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 7-1-201610-26-2015
Sheet No 4
processing and disposal of solid waste, Compostable Materials and Recyclable Materials pursuant to one
or more written contracts with the City.
City Manager
The individual designated as the City Manager of the City under Section 2.08.140 of Chapter 2.08 of
Title 2 of the Palo Alto Municipal Code, and any Person who is designated the representative of the City
Manager.
City of Palo Alto, or City
The government of the City of Palo Alto, a chartered City and a municipal corporation duly organized
and validly existing under the Laws of the State of California, with a principal place of business located
at 250 Hamilton Avenue, Palo Alto, County of Santa Clara. For the purposes of these Rules and
Regulations, the term “City” may include services provided by both the City of Palo Alto Utilities
Department and the City of Palo Alto Public Works Department.
City of Palo Alto Public Works Department (Public Works)
The City Department responsible for providing Refuse Service, Wastewater Treatment and Storm and
Surface Water Drainage Utility Services. Other Utility Services such as Water, Gas, Electric,
Wastewater Collection, and Fiber Optics are provided by the City of Palo Alto Utilities Department.
City of Palo Alto Utilities Department (CPAU)
The City Department responsible for providing Water, Gas, Electric, Wastewater Collection and Fiber
Optic Utility Services. Other Utility Services such as Refuse Service, Wastewater Treatment and Storm
and Surface Water Drainage are provided by the City of Palo Alto Public Works Department.
Code
The words "the Code" or "this Code" shall mean the Palo Alto Municipal Code.
Commercial Service
Commercial Utility Service is provided to businesses, non-profit organizations, public institutions, and
industrial Customers. The term also applies to Utility Services through Master Meters serving multi-
family Residential dwellings and common areas of multi-family facilities.
Compostable Materials
Organic materials designated by the City as acceptable for collection and processing.
DEFINITIONS AND ABBREVIATIONS
RULE AND REGULATION 2
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 7-1-201610-26-2015
Sheet No 5
Container
Any receptacle used for storage of solid waste, Recyclable Materials, Compostable Materials or other
materials designated by the City to be collected by the City’s Collector. Examples of containers include
carts, bins, compactors and drop boxes.
Cubic Foot of Gas (cf)
The quantity of Gas that, at a temperature of sixty (60) degrees Fahrenheit and a pressure of 14.73
pounds per square inch absolute, occupies one cubic foot.
Curtailment
The act of reducing or interrupting the delivery of natural Gas.
Customer
The Person, corporation, Agency, or entity that receives or is entitled to receive Utility Service(s) from
the City of Palo Alto, or in whose name Service is rendered for a particular Account as evidenced by the
signature on the Application, contract, or agreement for Service. In the absence of a signed instrument,
a Customer shall be identified by the receipt of any payment of bills regularly issued in the name of the
Person, corporation, or Agency regardless of the identity of the actual user of the Utility Service(s).
Customer-Generator:
An “eligible customer-generator,” as that term is defined by the California Public Utilities Code section
2827, as the same may be amended from time to time.
Dark Fiber
A Fiber Optic cable provided to end-users or resellers by CPAU without any of the light transmitters,
receivers, or electronics required for telecommunications over the Fiber. Infrastructure for Fiber Optic
activation is provided by the reseller or end-user.
Dark Fiber Infrastructure
Components of the CPAU Fiber Optic Distribution System required to provide Service to Customers
(licensees), that are attached, owned, controlled or used by the City, located overhead or underground
within the Public Right-of-Way, the Public Utility Easements and Leased Service Properties.
Dedicated Distribution Transformer
A Distribution Transformer that is dedicated to serving a single premise.
Demand
The highest rate of delivery of Electric energy, measured in Kilowatts (kW) or kilovolt amperes (kVA)
DEFINITIONS AND ABBREVIATIONS
RULE AND REGULATION 2
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 7-1-201610-26-2015
Sheet No 6
occurring instantaneously or registered over a fixed time period (normally fifteen minutes unless
otherwise specified within a monthly billing cycle).
Demand Charge
An electrical Charge or rate that is applied to a metered Demand reading expressed in Kilowatts to
compute a Demand Charge component of a Customer’s Electric bill.
Demarcation Point
The Demarcation Point for a project shall be the Customer side of the panel onto which the CPAU Fiber
terminates within the Customer Premises, unless otherwise specified in the Proposal for Dark Fiber
Services.
Distribution Services
Includes, but is not limited to, Utility Service provided by the Distribution System and other Services
such as billing, meter reading, administration, marketing, and Customer Services. Does not include
Services directly related to the Interconnection of a Generating Facility as per Rule 27.
Distribution System
The infrastructure owned and operated by CPAU which is capable of transmitting electrical power, other
than Interconnection Facilities, or transporting Water, Wastewater, or Gas within the City of Palo Alto.
The Electric Distribution System transmits power from the City’s Interconnection with PG&E to
CPAU’s Meter located on the Customer’s Premises. The Gas Distribution System transports Gas from
PG&E receiving stations to CPAU’s Meter located on the Customer Premises. The Water Distribution
System transports Water from the San Francisco Water Department receiving stations and CPAU wells
to the meter located on the Customer Premises. The Wastewater Collection System transports sewage
from the Customer’s Premises to the Water Quality Control Plant.
Effluent
Treated or untreated Wastewater flowing out of a Wastewater treatment facility, sewer, or industrial
outfall.
Electric, Electric Service
Utility Service provided to residents and business owners in the City of Palo Alto consisting of
generation, transmission, and distribution of electrical power for retail use. Electric Service is provided
by the City of Palo Alto Utilities Department.
Emergency
An actual or imminent condition or situation, which jeopardizes CPAU’s Distribution System Integrity.
DEFINITIONS AND ABBREVIATIONS
RULE AND REGULATION 2
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 7-1-201610-26-2015
Sheet No 7
Emergency Service
Electric Service supplied to, or made available to, Load devices which are operated only in Emergency
situations or in testing for same.
Energy Services
Energy commodity and any applicable ancillary Services used to generate and transport such commodity
from its origin to the City’s Point of Receipt. May also mean the sale of value added Services associated
or related to the Provision and/or usage of energy commodity.
Equivalent Residential Unit (ERU)
This is the basic unit for computing storm and surface water drainage fees. All single-family Residential
properties are billed the number of ERU’s specified in the table contained in Utility Rate Schedule D-1,
according to parcel size. All other properties have ERU's computed to the nearest 1/10 ERU using this
formula: No. Of ERU = Impervious Area (sq. ft.) / 2,500 sq. ft.
Fiber Optic, Fiber Optic Service
A solid core of optical transmission material. Fiber Optic Service that is provided by the City of Palo
Alto Utilities Department is referred to as Dark Fiber.
Fiber Optic Backbone
The high-density portion of the Dark Fiber Infrastructure installed and owned by the City.
Force Majeure
The occurrence of any event that has, had or may have an adverse effect on the design, construction,
installation, management, operation, testing, use or enjoyment of the City’s Utility Services, which is
beyond the reasonable control of the parties and which event includes, but is not limited to, an Act of
God, an irresistible superhuman cause, an act of a superior governmental authority, an act of a public
enemy, a labor dispute or strike or a boycott which could not be reasonably contemplated by the City or
Customer affected thereby, a defect in manufactured equipment (including, but not limited to, the Dark
Fibers), fire, floods, earthquakes, or any other similar cause.
Function
Some combination of hardware and software designed to provide specific features or capabilities. Its
use, as in Protective Function, is intended to encompass a range of implementations from a single-
purpose device to a section of software and specific pieces of hardware within a larger piece of
equipment to a collection of devices and software.
DEFINITIONS AND ABBREVIATIONS
RULE AND REGULATION 2
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 7-1-201610-26-2015
Sheet No 8
Gas
Any combustible gas or vapor, or combustible mixture of gaseous constituents used to produce heat by
burning. It shall include, but not be limited to, natural gas, gas manufactured from coal or oil, gas
obtained from biomass or from landfill, or a mixture of any or all of the above.
Gas, Gas Service
Utility Service provided to residents and business owners in the City of Palo Alto consisting of
procurement, transmission, and distribution of Gas for retail use. Gas Service is provided by the City of
Palo Alto Utilities Department.
Generating Facility
All Generators, electrical wires, equipment, and other facilities owned or provided by Producer for the
purpose of producing Electric power. This includes a solar or wind turbine Renewable Electrical
Generation Facility that is the subject of a Net Energy Metering and Interconnection Agreement and
Rule and Regulation 29.
Generator
A device converting mechanical, chemical or solar energy into electrical energy, including all of its
protective and control Functions and structural appurtenances. One or more Generators comprise a
Generating Facility.
Gross Nameplate Rating; Gross Nameplate Capacity
The total gross generating capacity of a Generator or Generating Facility as designated by the
manufacturer(s) of the Generator(s).
Initial Interconnection Capacity
The maximum rated generating capacity of a Renewable Electrical Generation Facility eligible for Net
Energy Metering prior to the Total Rated Generating Capacity exceeding the NEM Cap.
Initial Review
The review by CPAU, following receipt of an Application, to determine the following: (a) whether the
Generating Facility qualifies for Simplified Interconnection; or (b) if the Generating Facility can be
made to qualify for Interconnection with a Supplemental Review determining any additional
requirements.
Inspector
The authorized Inspector, agent, or representative of CPAU.
DEFINITIONS AND ABBREVIATIONS
RULE AND REGULATION 2
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 7-1-201610-26-2015
Sheet No 9
Interconnection; Interconnected
The physical connection of a Generating Facility in accordance with the requirements of the City’s
Utilities Rules and Regulations so that Parallel Operation with CPAU’s Distribution System can occur
(has occurred).
Interconnection Agreement
An agreement between CPAU and the Producer providing for the Interconnection of a Generating
Facility that gives certain rights and obligations to effect or end Interconnection. For the purposes of the
City’s Utilities Rules and Regulations, the Net Energy Metering and Interconnection Agreement (for
NEM and NEM Aggregation Customers), and the Power Purchase Agreements authorized by the City
Council may be considered as Interconnection Agreements for purposes of defining such term.
Interconnection Facilities
The electrical wires, switches and related equipment that are required in addition to the facilities
required to provide Electric Distribution Service to a Customer to allow Interconnection.
Interconnection Facilities may be located on either side of the Point of Common Coupling as appropriate
to their purpose and design. Interconnection Facilities may be integral to a Generating Facility or
provided separately.
Interconnection Study
A study to establish the requirements for Interconnection of a Generating Facility with CPAU’s
Distribution System.
Internet Exchange
Any Internet data center for telecommunications equipment and computer equipment for the purposes of
enabling traffic exchange and providing commercial-grade data center services.
Island; Islanding
A condition on CPAU’s Electric Distribution System in which one or more Generating Facilities deliver
power to Customers using a portion of CPAU’s Distribution System that is electrically isolated from the
remainder of CPAU’s Distribution System.
Junction
A location on the Dark Fiber Infrastructure where equipment is installed for the purpose of connecting
communication cables.
Junction Site
The area within the Transmission Pathway at which a Junction is located.
DEFINITIONS AND ABBREVIATIONS
RULE AND REGULATION 2
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 7-1-201610-26-2015
Sheet No 10
Kilovar (kVar)
A unit of reactive power equal to 1,000 reactive volt-amperes.
Kilovar-hours (kVarh)
The amount of reactive flow in one hour, at a constant rate of Kilovar.
Kilowatt (kW)
A unit of power equal to 1,000 watts.
Kilowatt-hour (kWh)
The amount of energy delivered in one hour, when delivery is at a constant rate of one Kilowatt; a
standard unit of billing for electrical energy.
Law
Any administrative or judicial act, decision, bill, Certificate, Charter, Code, constitution, opinion, order,
ordinance, policy, procedure, Rate, Regulation, resolution, Rule, Schedule, specification, statute, tariff,
or other requirement of any district, local, municipal, county, joint powers, state, or federal Agency, or
any other Agency having joint or several jurisdiction over the City of Palo Alto or City of Palo Alto
Utilities or Public Works Customers, including, without limitation, any regulation or order of an official
or quasi-official entity or body.
Licensed Fibers
One or more fibers comprising a part of the Dark Fiber Infrastructure that are dedicated to the exclusive
use of the Customer under the Provisions of the Dark Fiber License Agreement, Proposal to Dark Fiber
Services Agreement and the Utilities Rules and Regulations.
Licensed Fibers Route
A defined path of Licensed Fibers that is identified by specific End Points.
Load(s)
The Electric power Demand (kW) of the Customer at its Service Address within a measured period of
time, normally 15 minutes, or the quantity of Gas required by a Customer at its Service Address,
measured in MMBtu per Day.
Main Wastewater Line
Any Wastewater line not including a building connection (Service) sewer.
DEFINITIONS AND ABBREVIATIONS
RULE AND REGULATION 2
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 7-1-201610-26-2015
Sheet No 11
Master-metering
Where CPAU installs one Service and Meter to supply more than one residence, apartment dwelling
unit, mobile home space, store, or office.
Maximum Generation
For a customer with a non-utility generator located on the customer’s side of the Point of Common
Coupling, the Maximum Generation for that non-utility generator during any billing period is the
maximum average generation in kilowatts taken during any 15-minute interval in that billing period
provided that in case the generator output is intermittent or subject to violent fluctuations, the City may
use a 5-minute interval.
Meter
The instrument owned and maintained by CPAU that is used for measuring either the Electricity, Gas or
Water delivered to the Customer.
Metering
The measurement of electrical power flow in kW and/or energy in kWh, and, if necessary, reactive
power in kVar at a point, and its display to CPAU as required by Rule 27.
Metering Equipment
All equipment, hardware, software including Meter cabinets, conduit, etc., that are necessary for
Metering.
Meter Read
The recording of usage data from Metering Equipment.
Minimum Charge
The least amount for which Service will be rendered in accordance with the Rate Schedule.
Momentary Parallel Operation
The Interconnection of a Generating Facility to the Distribution System for one second (60 cycles) or
less.
Nationally Recognized Testing Laboratory (NRTL)
A laboratory accredited to perform the Certification Testing requirements under Rule 27.
Net Electricity Consumer
A Customer-Generator whose Generating Facility produces less electricity than is supplied by CPAU
DEFINITIONS AND ABBREVIATIONS
RULE AND REGULATION 2
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 7-1-201610-26-2015
Sheet No 12
during a particular period, as such definition may otherwise be modified or supplemented by any
definition in California Public Utilities Code section 2827(h)(2), as the same may be amended from time
to time.
Net Energy Metering
Net Energy Metering means measuring the difference between the electricity supplied through CPAU’s
Electric utility Distribution System and the electricity generated by the customer-generator’s facility and
delivered to CPAU’s Electric utility Distribution System over a specified twelve-month period.
Net Energy Metering Cap (NEM Cap)
Five (5) percent of the historical system peak of 190 MW from 2006, or 9.5 MW, using the CEC’s
Alternating Current (AC) capacity rating. Where the CEC AC rating is not available, CPAU will
multiply the inverter AC nameplate rating by 0.86.
Net Energy Metering Successor Program; Net Energy Metering Successor Rate
The terms and conditions for Customer-Generators whose Renewable Electrical Generation Facilities
are installed after the NEM cap has been reached, or Customers-Generators who are eligible for Net
Energy Metering but elect to take service under the Net Energy Metering Successor Rate. The terms and
conditions are defined by Utilities Rate Schedule E-EEC-1 (Export Electricity Compensation).
Net Generation Metering
Metering of the net electrical power of energy output in kW or energy in kWh, from a given Generating
Facility. This may also be the measurement of the difference between the total electrical energy
produced by a Generator and the electrical energy consumed by the auxiliary equipment necessary to
operate the Generator.
Net Nameplate Rating
The Gross Nameplate Rating minus the consumption of electrical power of a Generator or Generating
Facility as designated by the manufacturer(s) of the Generator(s).
Net Surplus Customer-Generator
A Customer-Generator who’s Generating Facility produces more electricity than is supplied by CPAU,
during a particular period, as such definition may otherwise be modified or supplemented by any
definition in California Public Utilities Code section 2827(h)(3), as the same may be amended from time
to time.
DEFINITIONS AND ABBREVIATIONS
RULE AND REGULATION 2
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 7-1-201610-26-2015
Sheet No 13
Net Surplus Electricity Compensation
A per kilowatt hour rate offered by CPAU to the Net Surplus Customer-Generators (excluding
Aggregation Customers) for net surplus electricity, as such definition may otherwise be modified or
supplemented by any definition in California Public Utilities Code section 2827(b)(8), as the same may
be amended from time to time. This rate is applicable only to Customer-Generators who are eligible for
Net Energy Metering and are subject to Rule and Regulation 29.
Non-Islanding
Designed to detect and disconnect from an Unintended Island with matched Load and generation.
Reliance solely on under/over voltage and frequency trip is not considered sufficient to qualify as Non-
Islanding.
Occupied Domestic Dwelling
Any house, cottage, flat, or apartment unit having a kitchen, bath, and sleeping facilities, which is
occupied by a Person or Persons.
Parallel Operation
The simultaneous operation of a Generator with power delivered or received by CPAU while
Interconnected. For the purpose of this Rule, Parallel Operation includes only those Generating
Facilities that are Interconnected with CPAU’s Distribution System for more than 60 cycles (one
second).
Performance Test, Performance Tested
After the completion of any Fiber Interconnection work, the City will conduct a Performance Test of
each Fiber constituting a part of the proposed leased fibers to determine its compliance with the
Performance Specifications.
Performance Specifications
These specifications will include, but not be limited to, criteria relating to end-to-end optical time
domain reflectometer data plots that identify the light optical transmission losses in each direction along
the leased fibers whenever the testing is possible, measured in decibels at a wavelength of 1310 or 1550
nanometers for singlemode Fiber, as a Function of distance, measured in kilometers.
Person
Any individual, for profit corporation, nonprofit corporation, limited liability company, partnership,
limited liability partnership, joint venture, business, family or testamentary trust, sole proprietorship, or
other form of business association.
DEFINITIONS AND ABBREVIATIONS
RULE AND REGULATION 2
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 7-1-201610-26-2015
Sheet No 14
PG&E Citygate
The PG&E Citygate is the point at which PG&E’s backbone transmission system connects to PG&E’s
local transmission system.
Point of Common Coupling (PCC)
The transfer point for electricity between the electrical conductors of CPAU and the electrical
conductors of the Producer.
Point of Common Coupling Metering
Metering located at the Point of Common Coupling. This is the same Metering as Net Generation
Metering for Generating Facilities with no host load.
Point of Delivery (POD)
Unless otherwise specified, the following definitions apply: For Electric, that location where the Service
lateral conductors connect to the Customer’s Service entrance equipment; for overhead Services, the
POD is at the weather-head connection; for under-ground Services, the POD is located at the terminals
ahead of or at the Meter; for multiple Meter arrangements with connections in a gutter, the POD is at
the Meter terminals (supply-side); for multiple Meter arrangements in a switchboard, the POD is
typically at the connectors in the utility entrance section; for Natural Gas, the POD is the point(s) on the
Distribution System where the City delivers natural Gas that it has transported to the Customer.
Point of Interconnection
The electrical transfer point between a Generating Facility and the Distribution System. This may or
may not be coincident with the Point of Common Coupling.
Point of Service (POS)
Where CPAU connects the Electric Service lateral to its Distribution System. For Fiber Optics Service,
this is where CPAU connects the Fiber Service to the backbone. This point is usually a box located in or
near the street or sidewalk and can be in the Public Right-of-Way. This point is at a mutually agreed
upon location established at the time of installation.
Pole Line
Overhead wires and overhead structures, including poles, towers, support wires, conductors, guys, studs,
platforms, cross arms braces, transformers, insulators, cutouts, switches, communication circuits,
appliances attachments, and appurtenances, located above ground and used or useful in supplying
Electric, communication, or similar or associated Service.
Power Factor
DEFINITIONS AND ABBREVIATIONS
RULE AND REGULATION 2
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 7-1-201610-26-2015
Sheet No 15
The percent of total power delivery (kVA) which does useful work. For billing purposes, average Power
Factor is calculated from a trigonometric function of the ratio of reactive kilovolt-ampere-hours to the
Kilowatt-hours consumed during the billing month. Power Factor is a ratio that reflects the reactive
power used by a Customer. CPAU maintains an overall system Power Factor above 95% to reduce
distribution system losses caused by low Power Factor.
Power Factor Adjustment
CPAU must install additional equipment to correct for Customers that maintain a low Power Factor, and
may make a Power Factor Adjustment to a Customer’s bill to account for those costs and the additional
energy costs and losses incurred by CPAU due to the Customer’s low Power Factor.
Premises
All structures, apparatus, or portion thereof occupied or operated by an individual(s), a family, or a
business enterprise, and situated on an integral parcel of land undivided by a public street, highway, or
railway.
Primary Service
CPAU Electric distribution Service provided to a Customer’s Premises at a voltage level equal to or
greater than 1000 volts.
Producer
The entity that executes an Interconnection Agreement with CPAU. The Producer may or may not own
or operate the Generating Facility, but is responsible for the rights and obligations related to the
Interconnection Agreement.
Proposal for Dark Fiber Services
A project-specific Service agreement that acts as a supplemental document for the Dark Fiber License
Agreement. This Service agreement shall include the proposed Interconnection fees, applicable Fiber
licensing fees, term of the Service, and summary of licensed Fiber elements.
Protective Function(s)
The equipment, hardware and/or software in a Generating Facility (whether discrete or integrated with
other Functions) whose purpose is to protect against Unsafe Operating Conditions.
Provision
Any agreement, circumstance, clause, condition, covenant, fact, objective, qualification, restriction,
recital, reservation, representation, term, warranty, or other stipulation in a contract or in Law that
defines or otherwise controls, establishes, or limits the performance required or permitted by any party.
DEFINITIONS AND ABBREVIATIONS
RULE AND REGULATION 2
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 7-1-201610-26-2015
Sheet No 16
Prudent Utility Practices
The methods, protocols, and procedures that are currently used or employed by utilities to design,
engineer, select, construct, operate and maintain facilities in a dependable, reliable, safe, efficient and
economic manner.
Public Right-of-Way
The areas owned, occupied or used by the City for the purposes of furnishing retail and/or wholesale
Electricity, Gas, Water, Wastewater, Storm and Surface Water Drainage, Refuse Service or
communications commodity and/or distribution Service, and the means of public transportation, to the
general public, including but not limited to, the public alleys, avenues, boulevards, courts, curbs, gutters,
lanes, places, roads, sidewalks, sidewalk planter areas, streets, and ways.
Public Utility Easements
The areas occupied or used by the City for the purpose of providing Utility Service to the general public,
and all related Services offered by the City’s Utilities Department and/or Public Works Department, the
rights of which were acquired by easements appurtenant or in gross, or are other interests or estates in
real property, or are the highest use permitted to be granted by the nature of the City’s interest in and to
the affected real property. This term incorporates all public Service easements for Utility Services that
have been recorded by the City with the Recorder of the County of Santa Clara, California.
Public Works Department
See City of Palo Alto Public Works Department.
Rate Schedule
One or more Council-adopted documents setting forth the Charges and conditions for a particular class
or type of Utility Service. A Rate Schedule includes wording such as Schedule number, title, class of
Service, applicability, territory, rates, conditions, and references to Rules.
Recyclable Materials
Materials designated by the City as acceptable for recycling collection and processing.
Refuse Service
Refuse Service includes weekly collection, processing and disposal of materials properly deposited in
the City Collector’s provided Containers for solid waste, as well as weekly collection and processing of
Recyclable Materials, weekly collection and processing of Compostable Materials, ongoing maintenance
of the closed Palo Alto Landfill, zero waste programs, street sweeping service, the household hazardous
waste program, and the annual Clean Up Day.
DEFINITIONS AND ABBREVIATIONS
RULE AND REGULATION 2
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 7-1-201610-26-2015
Sheet No 17
Renewable Electrical Generation Facility
A Generation Facility eligible for NEM under California Public Utilities Code section 2827 et seq. as
the same may be amended from time to time.
Reserved Capacity
For a customer with one or more non-utility generators located on the customer’s side of the Point of
Common Coupling, the Reserved Capacity for each billing period is the lesser of 1) the sum of the
Maximum Generation for that period for all non-utility generation sources; or 2) the maximum average
customer demand in kilowatts taken during any 15-minute interval in the billing period provided that in
case the load is intermittent or subject to violent fluctuations, the City may use a 5-minute interval.
Residential Service
Utility Service provided to separately metered single family or multi-family, domestic dwelling.
Rules and Regulations
See Utilities Rules and Regulations
Scheduling Coordinator
An entity providing the coordination of power schedules and nominations to effect transportation and
distribution of Gas, Electric power and energy.
Secondary Service
CPAU Electric distribution Service provided to a Customer’s Premises at a voltage level less than 1000
volts.
Service(s)
Utility Services offered by the City of Palo Alto include Electric, Fiber Optics, Gas, Water, Wastewater
Collection services provided by the Utilities Department (CPAU); and Refuse Service, Wastewater
Treatment, and Storm and Surface Water Drainage Services provided by the Public Works Department.
Service Address
The official physical address of the building or facility assigned by CPAU’s Planning Department, at
which Customer receives Utility Services.
Service Charge
A fixed monthly Charge applicable on certain Rate Schedules that does not vary with consumption. The
Charge is intended to recover a portion of certain fixed costs.
DEFINITIONS AND ABBREVIATIONS
RULE AND REGULATION 2
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 7-1-201610-26-2015
Sheet No 18
Service Drop
The overhead Electric Service conductors from the last pole or other aerial support to and including the
splices, if any, connecting to the service entrance conductors at the building or other structure. Or, in the
case of Fiber Optic Drops, the overhead Fiber Optics cable from the last pole or other aerial support to
the building or other structure to and including the termination box.
Services or Service Lines
Facilities of CPAU, excluding transformers and Meters, between CPAU’s infrastructure and the Point of
Delivery to the Customer.
Service Territory
The geographic boundaries within the City of Palo Alto limits served by the physical Distribution
System of the CPAU.
Short Circuit (Current) Contribution Ratio (SCCR)
The ratio of the Generating Facility’s short circuit contribution to the short circuit contribution provided
through CPAU’s Distribution System for a three-phase fault at the high voltage side of the distribution
transformer connecting the Generating Facility to CPAU’s system.
Simplified Interconnection
An Interconnection conforming to the minimum requirements as determined under Rule 27, Section I.
Single Line Diagram; Single Line Drawing
A schematic drawing, showing the major Electric switchgear, Protective Function devices, wires,
Generators, transformers and other devices, providing sufficient detail to communicate to a qualified
engineer the essential design and safety of the system being considered.
Special Facilities
See CPAU’s Rule and Regulation 20 governing Special Facilities.
Splice
A point where two separate sections of Fiber are physically connected.
Standard Refuse Container
A Standard Refuse Container shall have the meaning described in the Palo Alto Municipal Code. A
Standard Container shall also include a wheeled container with a capacity of not to exceed 32 gallons.
DEFINITIONS AND ABBREVIATIONS
RULE AND REGULATION 2
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 7-1-201610-26-2015
Sheet No 19
Standby Service
Back-up Energy Services provided by CPAU.
Storm and Surface Water Drainage
Utility Service provided to residents and business owners in the City of Palo Alto.
Storm and Surface Water Drainage Service is provided by the City of Palo Alto Public Works
Department.
Supplemental Review
A process wherein CPAU further reviews an Application that fails one or more of the Initial Review
Process screens. The Supplemental Review may result in one of the following: (a) approval of
Interconnection; (b) approval of Interconnection with additional requirements; or (c) cost and schedule
for an Interconnection Study.
System Integrity
The condition under which a Distribution System is deemed safe and can reliably perform its intended
Functions in accordance with the safety and reliability rules of CPAU.
Tax
Any assessment, Charge, imposition, license, or levy (including any Utility Users Tax) and imposed by
any Agency, including the City.
Telemetering
The electrical or electronic transmittal of Metering data in real-time to CPAU.
Temporary Service
Service requested for limited period of time or of indeterminate duration such as, but not limited to,
Service to provide power for construction, seasonal sales lots (Christmas trees), carnivals, rock crushers
or paving plants. Temporary Service does not include Emergency, breakdown, or Standby Service.
Therm
A Therm is a unit of heat energy equal to 100,000 British Thermal Units (Btu). It is approximately the
energy equivalent of burning 100 cubic feet (often referred to as 1 ccf) of natural Gas. Since Meters
measure volume and not energy content, a Therm factor is used to convert the volume of Gas used to its
heat equivalent, and thus calculate the actual energy use. The Therm factor is usually in the units
therms/ccf. It will vary with the mix of hydrocarbons in the natural Gas. Natural Gas with a higher than
average concentration of ethane, propane or butane will have a higher Therm factor. Impurities, such as
carbon dioxide or nitrogen lower the Therm factor.
DEFINITIONS AND ABBREVIATIONS
RULE AND REGULATION 2
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 7-1-201610-26-2015
Sheet No 20
Total Rated Generating Capacity
Total Rated Generating Capacity will be calculated as the sum of the rated generating capacity of all
installed Renewable Electrical Generation Facilities participating in NEM or NEM Aggregation. The
rated generating capacity for each individual Renewable Electrical Generation Facility participating in
NEM or NEM Aggregation will be calculated as follows:
1. For Solar: For each Renewable Electrical Generation Facility that is a solar photovoltaic
generating facility, CPAU will use the CEC’s Alternating Current (AC) rating; or where the
CEC AC rating is not available, CPAU will multiply the inverter AC nameplate rating by
0.86; and
2. For Non-Solar: For all other Renewable Electrical Generation Facilities, CPAU will use the
AC nameplate rating of the generating facility.
Transfer Trip
A Protective Function that trips a Generating Facility remotely by means of an automated
communications link controlled by CPAU.
Transmission Pathway
Those areas of the Public Right-of-Way, the Public Utility Easements and the Leased Service Properties
in which the Dark Fiber Infrastructure is located.
Trap
Any approved equipment or appliance for sealing an outlet from a house-connection sewer to
prevent the escape of sewer Gas from a main line through a building connection (service) sewer.
Underground Utility District
An area in the City within which poles, overhead electric or telecommunication wires, and associated
overhead structures are prohibited or as otherwise defined in Section 12.04.050 of the PAMC.
Unintended Island
The creation of an Island, usually following a loss of a portion of CPAU’s Distribution System, without
the approval of CPAU.
Unsafe Operating Conditions
Conditions that, if left uncorrected, could result in harm to personnel, damage to equipment, loss of
System Integrity or operation outside pre-established parameters required by the Interconnection
DEFINITIONS AND ABBREVIATIONS
RULE AND REGULATION 2
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 7-1-201610-26-2015
Sheet No 21
Agreement.
Utilities Department
See City of Palo Alto Utilities Department.
Utilities Director
The individual designated as the Director of Utilities Department under Section 2.08.200 of Chapter
2.08 of Title 2 of the Palo Alto Municipal Code, and any Person who is designated the representative of
the director of utilities.
Utility(ies) Rules and Regulations, Rules and Regulations
The compendium of Utilities Rules and Regulations prepared by the City’s Utilities and Public Works
Departments and adopted by ordinance or resolution of the Council pursuant to Chapter 12.20 of the
Palo Alto Municipal Code, as amended from time to time.
Utility(ies) Service(s), Service(s)
Electric, Fiber optics, Water, Gas, Wastewater collection services provided by the City of Palo Alto
Utilities Department (CPAU) and Refuse Service, Wastewater Treatment and Storm and Surface Water
Drainage services provided by the City of Palo Alto Public Works Department.
Utilities User Tax (UUT)
City of Palo Alto Tax imposed on Utility Charges to a Water, Gas, and/or Electric Service user. This
may include Charges made for Electricity, Gas, and Water and Charges for Service including Customer
Charges, Service Charges, Standby Charges, Charges for Temporary Services, Demand Charges, and
annual and monthly Charges, as described in Chapter 2.35 of the Palo Alto Municipal Code.
Wastewater
Utility Service provided to residents and business owners in the City of Palo Alto. Wastewater Utility
Services include collection and treatment of Wastewater. Wastewater Collection Service is provided by
the City of Palo Alto Utilities Department, and Wastewater Treatment Service is provided by the City of
Palo Alto Public Works Department.
Water
Utility Service provided to residents and business owners in the City of Palo Alto for retail use. Water
Service is provided by the City of Palo Alto Utilities Department.
Water Column (WC)
DEFINITIONS AND ABBREVIATIONS
RULE AND REGULATION 2
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 7-1-201610-26-2015
Sheet No 22
Pressure unit based on the difference in inches between the heights of water columns as measured in a
manometer. 6” WC = 0.217 psi; 7” WC = 0.25 psi.
(END)
NET ENERGY METERING SERVICE AND INTERCONNECTION
RULE AND REGULATION 29
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 7-1-201610-26-2015
Sheet No. 1
A. APPLICABILITY
This Rule and Regulation is applicable to any City of Palo Alto Utilities (“CPAU”) Customer that is
an eligible Customer-Generator under the California Public Utilities Code that desireseligible to
participate in Net Energy Metering (“NEM”) or Net Energy Metering Aggregation (“NEM
Aggregation”) with via the use of a Renewable Electrical Generation Facility, not to exceed 1 MW,
located on the Customer’s owned, leased, or rented premises within CPAU service territory to that
will operate in parallel with the CPAU distribution system, so long as there is availability remaining
within the NEM Cap, as defined in Rule 2.
B. SCOPE
Notwithstanding the requirements and charges set forth in this Rule 29, CPAU reserves the right
to impose any requirements set forth in Rule 27 that are additional to or more stringent than those
set forth in this Rule 29, including those related to billing and charges, on NEM and NEM
Aggregation Customers to the maximum extent permitted by state law (Cal. Pub. Util. Code §
2827 et seq., as the same may be amended from time to time).
C. CUSTOMER ELIGIBILITY
1.General Requirements. In order to be eligible to participate in NEM or NEM Aggregation, a
Customer must:
a.Be a Customer-Generator, pursuant to the definition set forth in Rule and Regulation
2.
b.Construct, design, install, interconnect, operate and maintain a Renewable
Electrical Generation Facility (or combination of such facilities) that is:
i.On the Customer-Generator’s owned, leased or rented Premises,
ii.Of a total capacity of not more than one (1) MW (or 1,000 kW),
iii. Intended primarily to offset part or all of the Customer-Generator’s own
Electric Service requirements, and
ATTACHMENT C-2
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iv. Is not used to sell to any third person, or otherwise provide Electric
Service to any real estate parcel, premise, or location other than those that
are the subject of the Customer-Generator’s Interconnection Agreement
(IA).
c. Complete and provide CPAU with all required agreements, supporting
documents, and any payments related to interconnection.
2. NEM Cap. Customers remain eligible for NEM and NEM Aggregation until such time as
the Total Rated Generating Capacity used by NEM and NEM Aggregation Customers
combined reaches CPAU’s NEM Cap. NEM is available on a first-come, first-served
basis. Once the NEM Cap has been reached, NEM Service and Interconnection will be
closed to new customers.
a. After the NEM Cap has been reached, Customer-Generators may increase the
system capacity by a maximum of 10% of the Initial Interconnection Capacity.
Customer-Generators that expand their system beyond this limit are no longer
eligible for NEM and will be transitioned to the Net Energy Metering Successor
Rate.
3. Additional Requirements for NEM Aggregation. In addition to those eligibility
requirements set forth in Section 1(a) of this Rule and Regulation 29, a CPAU Customer
is only eligible to participate in NEM Aggregation where:
a. The Customer-Generator elects to aggregate Electric Service of the meters located
on the property where the Renewable Electrical Generation Facility is located
across properties that are adjacent or contiguous with that property; and
b. All properties across which the Customer-Generator elects to aggregate are solely
owned, leased, or rented by the eligible Customer.
4. NEM Transition Period. Customer-Generators within the NEM Cap remain subject to the
requirements and charges set forth in this Rule 29 through a period of twenty (20) years
from the original date of Iinterconnection of the eligible Renewable Energy Generating
Facility.
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D. BILLING FOR NEM
1. General Rules
a. Twelve Month True Up Period
i. At the end of each twelve-month period following:
aa. The date of Interconnection of the Renewable Electrical Generation
Facility, or
bb. For a Customer with a date of Interconnection of the Generating
Facility commencing prior to February 1, 2010, the day after CPAU’s
receipt of the Customer’s net surplus electricity election form,
ii. CPAU will determine whether the Customer-Generator is a Net Electricity
Consumer or a Net Surplus Customer-Generator during that period.
b. CPAU will bill the Customer-Generator for the electricity used during that twelve-
month period, whether the Customer-Generator is considered a Net Electricity
Consumer or a Net Surplus Customer-Generator.
c. CPAU shall provide the Customer-Generator with net electricity consumption
information with each monthly bill; that information shall include either the current
monetary balance owed to CPAU or the current amount of excess electricity
produced since the last twelve-month period.
d. If the Customer-Generator terminates the contractual relationship with CPAU, then
CPAU shall reconcile the Customer-Generator’s consumption and production of
electricity during any part of the twelve-month period following the last annual
settlement and reconciliation, using the procedures as outlined in this Rule.
e. For a Customer-Generator who has submitted an affirmative election, CPAU will
provide either Net Surplus Electricity Compensation in accordance with Electric
Utility Rate Schedule E-NSE-1, for any net surplus electricity generated during the
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prior twelve-month settlement period, or bill credits resulting from net surplus
electricity generation to be applied against electricity-related charges subsequently
incurred by the Customer-Generator.
f. If the Customer-Generator fails to make an affirmative election to receive Service
pursuant to Net Surplus Electricity Compensation, then CPAU shall retain any excess
electricity (expressed in Kilowatt-hours) generated during the prior twelve-month
settlement period, and it shall not be obligated to pay Net Surplus Electricity
Compensation, nor shall it be obligated to allow the application of net surplus
electricity credits to be used against Energy charges subsequently incurred by the
Customer-Generator.
g. CPAU will allow a Customer to change the election option once each twelve-month
settlement period provided that the Customer provides notice to CPAU one month
prior to the beginning of new settlement period.
2. Monthly Billing
a. Medium and large commercial Customer-Generators will be required to pay any
balances due to CPAU on a monthly basis.
b. Except as annual billing is provided for in this Rule 29, residential and small
commercial Customer-Generators will default to owing balances due on a monthly
basis, but may request annual billing as allowed for in California Public Utilities
Code sections 2827 (g) and (h)(2)(c).
c. Standby service charges for backup or maintenance electric service will be waived,
provided that the Customer-Generator qualifies for participation in net energy
metering at the Service Address.
d. For a Net Surplus Customer-Generator in a given month, any credits created will be
carried forward to future months, to be used for future electric charges, until the end
of the Customer-Generators Twelve Month True-Up Period.
3. Annual Billing
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a. Customers may request annual billing as allowed for in California Public Utilities
Code sections 2827 (g) and (h)(2)(c)..
b. Bill payment will not be considered delinquent, unless the Customer-Generator does
not pay a final billing statement within twenty (20) days of the date of issuance of
that final billing statement.
c. For annually billed residential or small commercial Customer-Generators, the net
balance of money owed to CPAU will be carried forward until the end of the twelve-
month period.
d. To accommodate annual billing, a Customer’s Electricity Service may be transferred
to a separate Utility Account so as not to interrupt monthly billing for other recurring,
non-electric Utility Services.
4. Additional Billing Rules Applicable to NEM Aggregation Customers
a. For each monthly billing period, the amount of electricity generated from the
Aggregation Customer’s Generating Facility during that billing period will be
accounted for on a per kWh basis.
b. The Aggregation Customer’s electricityenergy consumption will be totaled for
each Beneficiary Account that is listed to receive kwh energy credits from the
Generating Facility per the Customer’s Interconnection Agreement.
c. Each Beneficiary Account will be allotted a portion of the Generating Facilities
energy equal to that Beneficiary Account’s relative share of Aggregation
Customer’s total usage for the billing period.
d. The total amount of energy produced by a Generating Facility will be allotted in
each billing period.
e. The billing for Beneficiary Accounts will be the same as NEM customers, as
outlined in Section D.2(a) above, with the restriction that no Beneficiary Account
is eligible for Net Surplus Electricity Compensation in accordance with Electric
Utility Rate Schedule E-NSE-1, but may only carry forward energy credits.
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E. APPLICATION AND INTERCONNECTION PROCESS
1. Application Process
CPAU shall process a request for the establishment of NEM Service and Interconnection
from the Customer-Generator within the time period not exceeding that for Customers
requesting new Electric Service; provided, however, that such time period will not exceed
thirty (30) days from the date of (1) receipt of a completed Application form for Net Energy
Metering Service and Interconnection from the Customer-Generator, (2) Electric inspection
clearance from CPAU in accordance with California Public Utilities Code 2827(c)(2), and
(3) building inspection clearance from the City of Palo Alto Building Inspection Division. If
CPAU is unable to process the request within the thirty-day period or other applicable period,
then CPAU shall notify the Customer-Generator of the reason for its inability to process the
request and the expected completion date.
2. Interconnection Process
The Customer-Generator will be required to sign either an Interconnection Agreement, as
applicable, or an agreement containing substantially the terms and conditions of the above
referenced agreements and agree to be subject to applicable Utility Rates and Charges and
Utility Rules and Regulations in order to be eligible for NEM Service provided by CPAU.
CPAU will make available all necessary forms and contracts for NEM Service for download
from the Internet.
F. GENERATING FACILITY DESIGN AND OPERATING REQUIREMENTS
1. Safety Standards
The facility will meet all applicable federal, state and local safety and performance standards,
including those established by the National Electrical Code (NEC), the Institute of Electrical
and Electronic Engineers, and accredited testing laboratories such as Underwriters
Laboratories (UL) and, as applicable, the rules of the California Public Utilities Commission
regarding safety and reliability. The Customer-Generator whose facility meets those
standards and rules will not be required to install additional controls, perform or pay for
additional tests, or purchase additional liability insurance.
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2. Design Standards
In addition to the requirements more generally set forth in section D.1, Customer-Generator
will:
a. Conform to the applicable National Electric Code (NEC) Standards [NEC 690]
and applicable building codes.
b. Have a dedicated circuit from the inverter to the Service panel with a circuit breaker
or fuse [NEC 690-64(b)(1)].
c. Have an overcurrent device at the Service panel will be marked to indicate solar
power source [NEC 690-64(b)(4)].
d. Establish the following minimum specifications for Parallel Operation with CPAU’s
Electric utility Distribution System.
e. Install a visible break, lockable AC disconnect switch in the dedicated circuit to the
inverter. This switch will be located where it is easily accessible by CPAU personnel
and will be equipped with a CPAU padlock [CPAU Rule and Regulation 27].
f. Use an inverter that is UL 1741-appoved and have the following specifications for
Parallel Operation with CPAU’s Electric utility Distribution System:
i. Inverter output will automatically disconnect from CPAU’s utility source
upon the loss of CPAU’s utility voltage and will not be reconnected until at
least five (5) minutes after normal utility voltage and frequency have been
restored [UL 1741].
ii. Inverter will automatically disconnect from CPAU’s utility source within 120
cycles (2 seconds) if CPAU’s utility voltage isles than 106 volts or greater
than 132 volts on a 120-volt base [UL 1741].
iii. Inverter will automatically disconnect from CPAU’s utility source within 10
cycles (0.17 seconds) if CPAU’s utility frequency fluctuations is less than
59.3 hertz or greater than 60.5 hertz [UL 1741] cycle.
iv. Inverter output will comply with IEEE 519 standards for harmonic
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distortion [CPAU Rule and Regulation 27].
G. METERING
1. NEM may be accomplished by using a single Meter capable of registering the flow of
electricity in two different directions. If the Customer-Generator’s existing Meter is not
capable of measuring the flow of electricity in two directions, then the Customer-Generator
shall be responsible for all expenses involved in purchasing and installing a Meter that is able
to measure electricity flow in two directions.
2. In lieu of one Meter, an additional Meter to monitor the flow of electricity in each direction
may be installed with the consent of the Customer-Generator, at the expense of CPAU. The
additional Meter shall be used only to provide the information necessary to accurately bill or
credit the Customer-Generator and/or to collect solar or wind Electric generating system
performance information for research purposes.
3. Customer-Generator grants to CPAU, its officers, employees, agents and representatives the
non-exclusive right of ingress and egress on, over and across the Premises upon reasonable
prior notice for the purpose of inspecting and approving the installation and operation of the
Facility and authenticating the accuracy of the Mmeter(s), or in the event of an emergency or
in regard to a disconnection of the Facility, without notice, if in CPAU’s Director of Utilities’
sole judgment, a condition hazardous to life or property exists, and immediate action is
necessary to protect life or property from damage or interference directly caused by the
Equipment or as a result of the lack of properly operating protective devices.
H. GENERAL REQUIREMENTS
1. Customer-Generator will obtain and maintain the required governmental authorizations,
permits, and any policy or policies of insurance, including, without limitation,
commercial general liability, property, and professional liability insurance, as may be
required by applicable laws, subject only to subsection c below.
2. CPAU will not be obligated to accept or pay for, and it may require Customer-Generator
to interrupt or reduce, the delivery of available energy generated by the Facility under the
following: (a) whenever CPAU in its sole judgment determines that the interruption or
reduction is necessary in order for CPAU to construct, install, maintain, repair, replace,
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remove, investigate, or inspect any part of CPAU’s electric utility distribution system; or
(b) if CPAU determines that the interruption or reduction is necessary on account of an
emergency, voluntary or involuntary outage, event of Fforce Mmajeure, or compliance
with prudent electrical practices.
3. Notwithstanding any other provision of this Agreement, if CPAU determines that either
(a) the operation of the Facility may threaten or endanger the health, safety or welfare of
CPAU’s personnel or CPAU’s or its personnel’s property, or (b) the continued operation
of the Facility may endanger the operational integrity of CPAU’s electric utility
distribution system, CPAU will have the right to temporarily or permanently disconnect
the Facility from CPAU’s Eelectric Uutility dDistribution Ssystem upon the delivery of
reasonable notice to Customer-Generator; provided, however, CPAU may act without
giving prior notice to Customer-Generator, if CPAU determines that it is impracticable to
provide the notice. The Facility will remain disconnected until such time as CPAU’s
Director of Utilities is reasonably satisfied that the conditions referred to in this
subsection have been corrected or sufficiently addressed.
4. Customer-Generator will (a) maintain the Facility, which interconnects with CPAU’s
electric utility distribution system, in a safe and prudent manner and in conformance with
all applicable laws, rules and regulations, including, without limitation, the requirements
of this Section 3H, and (b) obtain any governmental approvals, authorizations and permits
required for the construction and operation of the Facility.
5. Customer-Generator will reimburse CPAU for any and all losses, damages, claims,
penalties, or liability that CPAU may incur or sustain as a result of Customer-Generator’s
failure to obtain and maintain any and all governmental approvals, authorizations and
permits that may be required for the construction, installation, operation, repair and
maintenance of the Facility.
City of Palo Alto (ID # 6863)
Finance Committee Staff Report
Report Type: Action Items Meeting Date: 5/17/2016
City of Palo Alto Page 1
Summary Title: Net Energy Metering Successor Rate and Transition Policy
Title: Utilities Advisory Commission Recommendation That the Finance
Committee Recommend the City Council Adopt a Resolution Adopting a Net
Energy Metering Successor Rate E-EEC-1 (Export Electricity Compensation),
Establishing the Net Energy Metering Transition Policy, and Amending Rule
and Regulation 2 (Definitions and Abbreviations) and 29 (Net Energy
Metering and Interconnection)
From: City Manager
Lead Department: Utilities
Recommendation
Staff and the Utilities Advisory Commission (UAC) recommend that the Finance Committee
recommend that the City Council:
Adopt a resolution (Attachment A) Adopting a Net Energy Metering (NEM) Successor Rate, E-
EEC-1 (“Export Electricity Compensation”, Attachment B); Establishing the NEM Transition
Policy; and, Amending Utilities Rule and Regulation 2 (“Definitions and Abbreviations”,
Attachment C-1) and 29 (“Net Energy Metering and Interconnection”, Attachment C-2).
Executive Summary
Net energy metering (NEM) is a billing mechanism designed to promote the installation of
renewable distributed generation by allowing customers to be compensated at the full retail
rate for electricity generated by their on-site systems, such as solar photovoltaic (solar PV)
systems. State law requires all electric utilities to offer NEM to customers with eligible
renewable distributed generation up to a maximum cap, or “NEM cap”, which in Palo Alto is 9.5
megawatts (MW). Under the City’s current rates, NEM customers can reduce, or completely
avoid, charges on their electric utility bill while still remaining interconnected with the electric
grid and utilizing grid services. Utilities generally refer to the terms and conditions for on-site
renewable generation installed after the NEM cap is reached as the “NEM successor rate” or
“NEM successor program.” As of mid-February 2016, the City of Palo Alto Utilities (CPAU) was
approximately 79% toward meeting the NEM cap, and could exceed it by the end of 2016.
ATTACHMENT D
City of Palo Alto Page 2
As Utilities across the state approach their respective NEM caps, NEM successor rates are a
topic of much debate. To help guide staff efforts on the NEM successor rate development, City
Council adopted NEM Successor Program Design Guidelines in January 2016.
Under the proposed NEM successor rate (Rate Schedule E-EEC-1, Export Electricity
Compensation), customers would receive a credit at the E-EEC-1 buyback rate for all electricity
sent to the grid (when instantaneous on-site generation is greater than instantaneous on-site
consumption), and they would be billed at the prevailing retail rate for all electricity drawn
from the grid (when instantaneous on-site consumption is greater than instantaneous on-site
generation). The proposed value of the credit for energy sent to the grid is 7.485 cents per
kilowatt-hour (kWh), which compensates the customer for the energy, avoided capacity
charges, avoided transmission/ancillary service charges, avoided transmission and distribution
system losses, and environmental attributes. The energy value takes into account that solar
energy is often generated at times of the state’s peak system demand. If approved, the credit
would take effect July 1, 2016, and would be updated annually along with the budget. Based on
staff analysis, the proposal will support continued solar PV deployment while ensuring that the
City’s electric rates are based on the cost of providing service, in compliance with state
constitutional requirements amended by Proposition 26.
In addition to the proposed NEM successor rate, staff also recommends adopting a transition
policy for customers with systems installed within the NEM cap. Specifically, staff proposes
adopting a 20-year transition period from the time of interconnection through which NEM
customers remain eligible for net metering under the terms currently set forth in California
Public Utilities Code 2827. In addition, staff proposes allowing NEM customers to expand their
systems by up to 10% of the original system size while still remaining eligible for net metering
after the NEM cap has been reached.
The UAC reviewed the proposed NEM successor program, rate and transition policy at its April
12, 2016 meeting. The UAC voted unanimously to approve the staff proposal.
Background
Net energy metering was established in California in 1996 as a mechanism to support
distributed energy generation such as solar PV (sometimes referred to as “customer-sited” or
“behind-the-meter” generation). In 1999, Palo Alto began a solar PV demonstration program,
through which the first net metered systems were installed in the City. At the time, the total
system price was over $10 per watt. Solar PV system costs have dropped by 70% compared to
the late 1990s.
The California Public Utilities Code section on NEM requires all electric utilities to offer NEM to
eligible customers with renewable distributed generation, up to a cap. In October 2015 Council
formally adopted a NEM cap for Palo Alto of 9.5 MW (Staff Report 6139). As of mid-February
2016, the City is approximately 79% toward meeting its NEM cap, as shown in Figure 1. To date,
City of Palo Alto Page 3
all local solar PV installations in Palo Alto utilize NEM, and all net energy metered systems are
solar PV systems.
Figure 1: Summary of NEM Participation (1999 through mid-February 2016)
All NEM customers are subject to terms and conditions outlined in the California Public Utilities
Code Section 2827, including the ability to receive credit for eligible on-site customer
generation at the retail rate, to have the credits roll over month-to-month over a 12-month
period, and the option to cash-out any net surplus generation that exists at the end of the 12-
month period. NEM customers remain subject to Council-approved changes to their otherwise
applicable electric rate schedules, including rate design changes and potential minimum or
fixed charges.
Assembly Bill 327 (AB 327) directed the California Public Utilities Commission (CPUC) to develop
a standard NEM successor tariff for the state’s investor-owned utilities (IOUs) no later than
December 31, 20151. For the IOUs, the NEM successor tariff is to take effect either after an IOU
has reached its NEM cap or July 1, 2017, whichever occurs first. On January 28, 2016, in a split
3-2 decision, the CPUC approved a NEM successor tariff for IOUs that leaves NEM largely intact.
The primary differences from the IOU’s original NEM structure are that IOU customers under
the NEM successor rate are required 1) to pay an interconnection fee estimated to be $75-
1 http://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201320140AB327
City of Palo Alto Page 4
$150, 2) to be subject to certain non-bypassable charges on all energy delivered to the
customer by the utility estimated to be 2-3 cents per kWh, and 3) to take service under a time-
of-use rate if interconnecting from January 1, 2018, onward. The CPUC decision also establishes
a 2019 review of the NEM successor tariff.
Publicly-owned utilities (POUs) in California, whose rates are not regulated by the CPUC, are
working with their respective governing bodies and stakeholders to formulate their own NEM
successor rates, to take effect after their respective NEM caps have been reached. To staff’s
knowledge, only two California POUs have adopted NEM successor rates: the City of Lompoc
and Turlock Irrigation District (TID). In contrast to the CPUC-adopted NEM successor tariff for
the IOUs, the POU-adopted NEM successor rates significantly modify the existing NEM program.
More detailed information of the adopted NEM successor rates at California POUs is included in
the Discussion section below.
Local Solar Plan
On April 22, 2014, the City Council adopted the Local Solar Plan (Staff Report 4608, Resolution
9402), which set the overarching goal of meeting 4% of the City’s total energy needs from local
solar by 2023, corresponding to achieving 23 MW of solar PV installed in the City. Included
within the Local Solar Plan is a strategy to develop proper policies, incentives, price signals and
rates to encourage solar installation, including the exploration of cost-based rate structures
that encourage the development of new solar systems in Palo Alto.
Electric Cost of Service Analysis (COSA)
CPAU carried out an electric cost of service analysis (COSA) in Winter 2015/2016. The primary
goal of the COSA was to review the allocation of costs to customer classes and the electric rate
design to ensure customers are charged according to the cost to serve them. The COSA also
included a review of the rate design issues created by increasing numbers of local solar
installations and the impact of rate designs on the economics of local solar for current and
future customers. The NEM successor rate development was carried out in close coordination
with the electric COSA. The proposed electric rate adjustments to be effective July 1, 2016 are
described in the FY 2017 Financial Plan which is presented in an April 2016 UAC report.
NEM Successor Program Design Guidelines & Stakeholder Feedback
In order to guide research and development efforts, staff developed a set of design guidelines
for the NEM successor rate, called the “NEM Successor Program Design Guidelines”. After
receiving recommendations from the UAC and the Finance Committee, City Council formally
adopted the NEM Successor Program Design Guidelines in January 2016 (Staff Report 6437).
Through the stakeholder review process of the design guidelines, CPAU also received extensive
feedback from the solar industry and advocates. The Energy Freedom Coalition of America
(EFCA), a SolarCity-funded national advocacy group promoting public awareness and the
benefits of solar and alternative energy, provided extensive feedback on NEM and the
proposed design guidelines in letters to the UAC, Finance Committee, and City Council
City of Palo Alto Page 5
preceding each step of the review process. The letter EFCA submitted to City Council is included
as Attachment F.
Discussion
Energy Flows in a Typical Residential PV System
When a customer installs a solar PV system, the energy produced by the system first serves the
customer load and is netted on-site. When the customer’s energy demand is greater than what
is being generated by the solar system at that point in time, then the customer draws additional
power from the grid to meet their energy needs. When the customer is using less energy than
the solar PV system is generating, the excess energy is exported to the grid. This energy is
referred to by a variety of terms including “energy sent to the grid,” “energy exports,” “surplus
energy,” and “excess energy.” Figure 2 is an illustration of a daily load of a residential customer
with a solar PV system that specifies the energy sent to the grid and the energy delivered by the
utility.
City of Palo Alto Page 6
Figure 2:
(Top) Illustration of a residential solar customer’s load, solar production, and net load
(Bottom) Illustration of the energy that is delivered by the utility to the customer and the
energy that is sent to the grid
NEM Successor Proposal
Staff carried out a thorough evaluation of a broad variety of NEM successor rate design options
considering the NEM successor design guidelines as well as conceptual and practical
considerations of each option. Under the proposed NEM successor rate, customers would
receive a credit for all electricity sent to the grid (energy generated in excess of instantaneous
usage), and they would be billed at the prevailing retail rate for all electricity they use from the
grid (energy used in excess of instantaneous generation). Large commercial customers, or
customers with small PV systems relative to their overall load, may rarely or potentially never
City of Palo Alto Page 7
export energy to the grid. Residential customers, or customers with systems sized to meet a
large fraction of their load, typically export energy on a daily basis during hours of peak solar
production.
Figure 3 shows all three categories of energy, including the solar energy netted on-site (solar
generation used directly on-site).
Figure 3: Illustration of three categories of energy: solar energy netted on-site, energy sent to
the grid, and energy delivered by the utility to the customer
Under the staff proposal, over the course of a billing period, the sum of all energy delivered by
the utility to the customer would be charged at the prevailing retail rate. For example, if the
solar customer is a residential customer, the energy delivered by the utility in the billing period
would be subject to the E-1 rate. In addition to the utility charges, the customer would also be
credited for all energy sent to the grid. The sum of all energy exports would be credited at the
credit rate of 7.485 cents per kWh. If in a given billing period, the total credits applied to the
customer’s utility bill for exported energy exceed the total charges applied for the energy
delivered to the customer, the surplus credit will automatically apply to the customer’s bill.
Please see Attachment E for an illustration of an example bill for a residential customer who
installs a solar system subject to the proposed NEM successor rate.
All NEM successor customers would be subject to the E-EEC-1 rate schedule, their prevailing
retail rate (e.g. E-1 for residential customers), and Rule and Regulation 27 “Generation Facility
Interconnections”. By contrast, all customers eligible for NEM who have systems installed
City of Palo Alto Page 8
within the NEM cap would be subject to their prevailing retail rate, Rule and Regulation 27
“Generation Facility Interconnections”, and Rule and Regulation 29 “Net Energy Metering and
Interconnection”. Rule and Regulation 29 would not apply to NEM successor customers.
Value of the Credit Rate
The value of the credit for energy sent to the grid is 7.485 cents per kWh. As shown in Figure 4,
this value compensates the customer for the energy, avoided capacity charges, avoided
transmission and ancillary service (AS) charges, avoided transmission and distribution (T&D)
system losses, and renewable energy credits (RECs), or environmental attributes. The energy
component to the overall credit rate is calculated by taking wholesale monthly round-the-clock
market price indicatives for northern California, and weighting them based on the typical
generation profile of rooftop solar PV systems in Palo Alto and the hourly profile of market
prices in northern California. In this way, the valuation methodology accounts for the fact that
solar energy is often generated at times of peak system demand. Avoided transmission and AS
charges are calculated based on the actual charges that the City pays to the California
Independent System Operator (CAISO) for these services. And, the value of the environmental
benefits is based on market price indicatives for the value of a “Bucket 1” REC. The 7.485 cents
per kWh credit would take effect July 1, 2016, and would be updated annually and approved
along with the budget.
City of Palo Alto Page 9
Figure 4: Value of credit rate
Metering
The proposed NEM successor rate structure requires a bidirectional meter. A bidirectional
meter is a meter with two registers to measure energy flowing in each direction: the first
register measures all energy drawn from the grid, while the second register measures all energy
sent to the grid. For example, if a customer has a solar system and that system is generating
energy that exceeds the instantaneous needs of the customer, energy is sent to the grid and
measured on the second register of the bidirectional meter. For all other times when the
energy generated by the solar system is not sufficient to meet the customer’s needs, then
energy is drawn from the grid and measured on the primary register. Under the proposed NEM
successor rate structure, at the end of the billing period, the sum of the energy drawn from the
grid measured on the primary register is billed at the applicable retail rate. The sum of the
energy sent back to the grid measured on the second register is credited to the customer’s
account according to the credit rate. The usage that is directly served with simultaneous solar
generation, the “solar energy netted on-site” shown in Figure 3, is not measured by the meter
and, therefore, effectively avoids the full bundled retail rate.
At present, the default meter type is a single-register meter. Therefore, a bidirectional meter
must be installed at a customer premise upon the installation of a solar PV system to
City of Palo Alto Page 10
implement the proposed NEM successor rate. These meters would be provided at no cost to
the customer as part of CPAU’s long-term meter replacement plan.
Environmental Attributes
As described above, the credit rate for energy sent to the grid is calculated based on the value
of the energy, avoided capacity costs, avoided transmission and ancillary services costs, avoided
transmission and distribution system losses, and environmental attributes, or RECs. Thus, all of
the exported energy and its environmental benefits would be bought by CPAU as a bundled
product. Under this proposal, the customer therefore could not claim the environmental
benefits of any of the energy that is sent to the grid. However, the customer would nonetheless
still be able to claim they are “going solar” for all of the energy that is netted on-site, as shown
in Figure 3. An alternative is for CPAU to value the energy sent to the grid at a rate that does
not include the environmental benefits—effectively stripping the REC from the energy—and
paying the customer only for “brown” energy, so that customers can claim the environmental
attributes for all energy produced from their systems. The staff proposal is to set the credit rate
for exports to include the value of the environmental attributes because it improves the
customer economics, and the customer would still be able to claim the RECs for all energy
netted on-site.
Interconnection Fees
Public Utilities Code Section 2827 prohibits electric utilities from charging existing eligible
customer generators for interconnection costs incurred by the utility. For systems installed
after the NEM cap is reached, customers will be subject to an interconnection charge set at the
level to recover the utility’s cost of connecting them to the local distribution system. Staff is
currently updating Utility Rate Schedule E-15 “Electric Service Connection Fees”2, which contain
charges for generation interconnection. The current estimate for the interconnection fee that
would apply to a NEM successor customer is a one-time charge of between $100-200. Staff
plans to take Schedule E-15 forward for Council review in Fall 2016.
Addressing the NEM Successor Program Design Guidelines in Relation to the Staff Proposal
The development of the proposed NEM successor rate and potential alternatives was the result
of a comprehensive evaluation guided by the Council-adopted design guidelines and the
stakeholder feedback received through that process. Attachment D discusses each of the design
guidelines in relation to the staff NEM successor program proposal.
Comparison to NEM Successor Rates Adopted in California and Across the Country
Table 1 provides a high-level summary of the NEM successor rates that have been adopted in
California and other states across the country. The most relevant comparison agencies to CPAU
are the listed California POUs.
2 The current version can be found here: http://www.cityofpaloalto.org/civicax/filebank/documents/8083.
City of Palo Alto Page 11
Table 1: High-level Summary of Adopted NEM Successor Rates
Utility/Regulatory
Body Description of Adopted NEM Successor Rate
Decision
Date
CPAU*, Staff
Proposal
All energy delivered by the utility charged at applicable retail
rate, and all energy sent to the grid credited at short-term
avoided cost export rate.
Under
review
Turlock Irrigation
District*
Mandatory time-of-use rate that incorporates time-dependent
demand and energy charges and standard fixed customer
charge.
Dec.
2014
City of Lompoc* Reverted to self-generation rate developed in the 1990s, which
charges customers for distribution system costs for all energy
generated and consumed on-site. Energy delivered to the
customer charged at the applicable retail rate. All energy sent
to the grid credited to customer at a wholesale rate.
June
2014
Hawaiian PUC All energy delivered by the utility to the customer charged at
applicable retail rate with a minimum monthly bill of $25, and
all energy sent to the grid credited at a fixed, island-dependent
export rate. Customer forfeits any surplus credit at the end of a
monthly billing cycle. HPUC also approved another rate option
that is available exclusively to customers with solar plus storage
systems that do not export to the grid.
Oct.
2015
California PUC Continuation of full retail rate compensation. NEM successor
customers subject to interconnection charges (est. $75-$150)
and certain non-bypassable charges on all energy delivered to
the customer (est. 2-3 ¢/kWh). Mandatory time-of-use rate in
2018. Planned NEM successor tariff review in 2019.
Jan.
2016
Nevada PUC All energy delivered by the utility charged at applicable retail
rate, and all energy sent to the grid credited at a fixed energy
rate.
Feb.
2016
Modesto
Irrigation District*
TBD Planned:
Summer
2016
* Subject to Proposition 26
Implications of Proposal on Solar Adoption in Palo Alto
Staff’s analysis indicates that the proposed NEM successor rate will continue to promote solar
adoption due to the following factors: the proposed NEM successor rate continues retail rate
City of Palo Alto Page 12
compensation for a significant fraction of the energy generated, solar PV system costs continue
to decline year-over-year, the federal investment tax credit for 30% of the total system costs
was extended until 2020, and customers can load-shift to enhance the economics of their on-
site system if desired. Under this NEM successor proposal, staff expects to still achieve the
Council-adopted Local Solar Plan goal of achieving 4% of the City’s energy needs from local
solar by 2023.
Customer Economics
The customer economics of a solar PV system adopted under the proposed NEM successor rate
are dependent on a number of factors including: 1) the fraction of energy exported to the grid
versus used immediately on-site, 2) the total solar PV system costs, 3) available federal
incentives, and 4) other tax implications. Each of these factors is discussed in greater detail
below.
1. Fraction of energy exported to the grid vs. used on-site
Customers that rarely export energy to the grid would have similar customer economics to
systems installed within the NEM cap. On the other hand, if the fraction of energy sent to the
grid is significant, it may impact the customer economics. Based on an analysis of CPAU’s NEM
solar customers, existing large commercial customers with solar systems rarely export.
Therefore, the staff proposal is effectively a continuation of NEM. Given CPAU lacks full
advanced meter deployment, residential solar customer data is more limited. The 2013 CPUC-
commissioned study of NEM in the IOU service territories indicated that on average 49% of
energy from residential systems is exported to the grid from their NEM customers3. Given the
higher export fraction for residential customers based on typical load patterns, other economic
factors discussed below may become more significant. Furthermore, under the proposed NEM
successor rate, customers may decide to load-shift to consume energy concurrently with the
solar generation, for instance by installing a behind-the-meter storage system or utilizing
programmable or controllable loads. Load-shifting could reduce the fraction of energy exported
to the grid and therefore increase the economic return of their solar system.
2. Solar PV system costs
As shown in Figure 5, the total solar PV system price has declined substantially in the past
decades. As discussed in the report referenced in the figure caption, in the early years, the
system price decline is attributed primarily to falling solar PV module costs. Since 2012, given
the relatively constant price of solar modules, the recent declines are due to reductions in other
total system cost components, including, system design, installation, permitting,
interconnection, and marketing and customer acquisition. Industry experts indicate there is
opportunity for further cost reductions and forecast continued price declines in the coming
three to five years.
3 Draft Net Energy Metering Cost-Effectiveness Evaluation, E3 (2013). (See
https://ethree.com/documents/CSI/CPUC_NEM_Draft_Report_9-26-13.pdf accessed February 26, 2016)
City of Palo Alto Page 13
Figure 5: Installed prices for residential and non-residential solar systems in the U.S.4
3. Federal incentives for solar
Significant federal incentives remain available for both commercial and residential projects. In
mid-December 2015, the federal investment tax credit (ITC), which was set to drop from 30% to
10% for commercial systems and to 0% for residential systems at the end of 2016, was
extended at the full 30% through the end of 2019, and will be phased downward year-by-year
to 10% for commercial projects and 0% for household-owned residential projects in 2022.
Commercially-owned projects also receive accelerated depreciation treatment, which, when
combined with the 30% ITC, is estimated to make up over 40% of the total system costs5.
4. Other tax implications
In addition to the ITC, the tax implications for customer-cited generation installed under the
NEM successor rate structure may differ from a system installed within the NEM cap, and may
therefore impact the customer economics. Any solar customer under the NEM successor rate
who within a given calendar year receives over $600 in payments from CPAU for energy sent to
the grid will receive a 1099 tax form. This is equivalent to how CPAU handles compensation
paid to customers who elect to cash out their net surplus electricity after a 12-month period.
Customers are encouraged to consult their tax advisor or legal counsel regarding tax
implications for any distributed energy system, including those installed within the NEM cap or
after the NEM cap has been reached.
Proposed Transition Policy for Customers within the NEM Cap
Transition Period
In March 2014, the CPUC ruled that for the IOUs, existing NEM customers and all those who
install eligible systems within each IOU’s respective NEM cap are eligible for full retail rate
4 Source of Figure 5 is Tracking the Sun, an annual solar PV cost tracking report produced by the Department of
Energy’s Lawrence Berkeley National Laboratory. (See http://newscenter.lbl.gov/2015/08/12/solar-prices-fell-
2015/ accessed February 26, 2016)
5 Private Net Benefits of Residential Solar PV: The Role of Electricity Tariffs, Tax Incentives and Rebates, S.
Borenstein (2015). (See https://ei.haas.berkeley.edu/research/papers/WP259.pdf accessed February 29, 2016)
City of Palo Alto Page 14
compensation through a 20-year transition period from the date of interconnection. The length
of the transition period was determined in part based on an assessment of expected useful life,
as indicated by module warranties, power purchase agreements, and third-party financing
agreements. To staff’s knowledge, no California POU has adopted a specified time frame that
NEM customers remain eligible for NEM. To help promote regulatory certainty and
transparency for existing NEM customers who have invested in solar PV systems and for solar
developers operating in Palo Alto, staff proposes that existing NEM customers and all eligible
customers within the NEM cap in CPAU service territory remain eligible for NEM through a 20-
year transition period from the date of system interconnection, matching the transition period
adopted by the CPUC for the IOUs.
System Expansions
Some customers who install systems within the NEM cap may wish to expand their systems
after the NEM cap has been reached. The circumstances under which the system could be
expanded and remain eligible for NEM are covered by the NEM transition policy. Staff proposes
that if the existing NEM system is modified or repaired after the NEM cap is reached, the
customer will remain eligible for NEM as long as the system does not increase by more than
10% of the original system size. If the system modification or expansion results in an increase of
over 10% of the original system size, the customer would be required to transition to the NEM
successor program for the entire system capacity. Allowing system expansion up to a given
threshold is broadly in-line with system expansion policies established in the California IOU
service territories and Turlock Irrigation District, as shown in Table 2. Adopting this policy would
allow a customer to expand their system by a few panels or to replace panels that failed
prematurely with higher efficiency panels while still remaining eligible for NEM under the
original program terms.
Table 2: Existing policies of California utilities for system expansions after the NEM cap has
been reached.
Utility Description of System Expansion Policy
CPAU,
Staff
Proposal
Customers remain eligible for NEM for system expansions within 10% of the original
system size. Larger system expansions require the entire system capacity to be
transitioned to the NEM successor rate.
Turlock
Irrigation
District
Residential customers whose original system size is less than 10 kW may increase
their system up to 11 kW total. Residential customers with an original system size
of 10 kW or greater and non-residential customers may increase their system by a
maximum of 10%. For expansions beyond these thresholds, the customer must
transition the entire system capacity to the NEM successor rate.
City of
Lompoc
No existing policy for system expansions.
Pacific
Gas &
Customers may increase the system size up to 10% of the original system size or 1
kW, whichever is greater, and remain eligible for NEM. Customers who wish to
City of Palo Alto Page 15
Utility Description of System Expansion Policy
Electric expand their systems more may either 1) Meter the added capacity separately
under the NEM successor tariff, or 2) elect for the entire system to take service
under the NEM successor tariff.
San
Diego
Gas &
Electric
Customers may increase the system size up to 10% of the original system size and
remain eligible for NEM. Customers who wish to expand their systems beyond 10%
may either 1) meter the added capacity separately under the NEM successor tariff,
or 2) elect for the entire system to take service under the NEM successor tariff.
Southern
California
Edison
Customers may increase the system size up to 10% of the original system size or 1
kW, whichever is greater, and remain eligible for NEM. Customers who wish to
expand their systems more may either 1) Meter the added capacity separately
under the NEM successor tariff, or 2) elect for the entire system to take service
under the NEM successor tariff.
Commission Review and Recommendation
The UAC reviewed staff’s proposal at its April 12, 2016 meeting. Commissioners voiced their
support for the staff proposal which discontinues NEM in its present form, in light of concerns
such as cost-shifting and the lack of a need to subsidize solar PV given the continued federal
incentives and decline in solar system costs in recent years. Commissioners requested
clarification on how the credit rate of 7.485 ¢/kWh is calculated, how often it would be
updated, and what components are included in the valuation methodology. Staff emphasized
that the proposed NEM successor rate is an electric rate, and like all other electric rates is
subject to Proposition 26 requirements that rates must be based on the cost to serve. Staff also
addressed commissioner questions regarding the differences between the CLEAN feed-in tariff
price of 16.5 ¢/kWh and the proposed NEM successor buy-back rate of 7.485 ¢/kWh. The UAC
ultimately voted unanimously (5-0) to recommend that Council approve the proposed NEM
successor rate and transition policy (Commissioners Ballantine, Cook, Danaher and Schwartz
and Chair Foster voting yes, and Commissioners Eglash and Hall absent). The draft minutes from
the UAC’s April 12, 2016 meeting are provided as Attachment G.
Next Steps
The tentative timeline for the review and approval of NEM-related policies and rates is shown
below.
City of Palo Alto Page 16
Tentative Timeline for Review and Approval of NEM-Related Policies and Rates
Description UAC
Finance
Committee Council
Proposed NEM Successor Rate and Transition
Policy April 2016 May 2016 June 2016
Update to Net Metering Net Surplus Electricity
Compensation Rate (E-NSE-1) June 2016 -- July 2016
Resource Impact
Staff has developed an implementation plan to be executed upon adoption of the NEM
successor rate to help ensure that CPAU will be ready for customers who install eligible
renewable energy systems after the NEM cap has been reached. Implementation of the
proposed NEM successor rate requires modifications to current business systems and processes
including installing bidirectional electric meters, programming of meter reading devices,
training meter reading staff, modifying the format of electric Utilities bills, and revising electric
usage billing calculations. Furthermore, all staff must be trained in these new systems and
processes. At present, all modifications to systems and processes are planned to utilize existing
staff and budget resources.
The proposed NEM successor rate is based on the cost to serve, and the credit value would be
updated annually to reflect the market value of solar energy, value of the RECs, avoided
capacity charges, avoided charges for transmission and ancillary services, and avoided
transmission and distribution system losses. Therefore, there would be no direct financial
resource impact for eligible systems installed under staff’s proposed NEM successor program.
Policy Impact
Fulfilling Palo Alto’s NEM legislative requirements and adopting the proposed NEM successor
program are consistent with the California Public Utilities Code and state constitutional
requirements regarding cost-based rates. Furthermore, adopting a NEM successor rate will add
greater market certainty for those interested in installing rooftop solar PV after the NEM cap
has been reached. The proposed policy directly supports Strategy #2 of the Local Solar Plan, to
“develop proper policies, incentives, price signals and rates to encourage solar installation”.
Furthermore, staff analyses indicates the proposed NEM successor rate will support continued
uptake of distributed renewable energy technologies in Palo Alto, which further supports the
Carbon Neutral Plan, the Local Solar Plan, and the City’s broader environmental sustainability
goals, including those set out in the 2011 Utilities Strategic Plan and the 2007 Climate
Protection Plan.
Environmental Impact
The Finance Committee’s review of staff’s proposed NEM successor program and transition
policy does not meet the California Environmental Quality Act’s (CEQA) definition of “project”
under California Public Resources Code Sec. 21065, thus no environmental review is required.
City of Palo Alto Page 17
Attachments:
Attachment A: Resolution to Adopt NEM Successor and Transition Policy (PDF)
Attachment B: Proposed Net Energy Metering Successor Rate Schedule E-EEC-1 (DOCX)
Attachment C-1: Proposed Rule and Reg 2 - redlined (DOCX)
Attachment C-2: Proposed Rule and Reg 29 - redlined (DOC)
Attachment D: Implementation of Council-Adopted NEM Successor Program Design
Guidelines (DOCX)
Attachment E: Bill Illustration for Residential Customer with Solar PV System under the
Proposed NEM Successor Rate (DOCX)
Attachment F: Energy Freedom Coalition of America Comments to Palo Alto City Council
(PDF)
Attachment G: Excerpted Draft UAC Minutes of Apr 12 2016 Meeting (DOCX)
Attachment A
NOT YET APPROVED
160502 jb 6053741 1
Resolution No. _________
Resolution of the Council of the City of Palo Alto Adopting the Net
Energy Metering Successor Rate, Utilities Rate Schedule E-EEC-1
(Export Electricity Compensation); Establishing the Net Energy
Metering Transition Policy; and, Amending Rule and Regulation 2
(Definitions and Abbreviations) and Rule and Regulation 29
(Net Energy Metering and Interconnection)
R E C I T A L S
A. Net Energy Metering (NEM), is a billing arrangement that provides credit to
customers for the full retail value of the electricity their system generates.
B. State law, California Public Utilities Code Section 2827 et. seq., requires all
electric utilities to offer NEM to eligible customers with distributed renewable generation up to
a maximum cap.
C. Palo Alto’s NEM Cap is 9.5 megawatts (MW) as adopted by Council Resolution
9557. The City’s NEM installations are currently approximately 79% of the proposed 9.5 MW
NEM Cap and staff estimates that the City’ NEM Cap will be reached by the end of 2016. Once
the NEM Cap is reached, NEM will be closed to new customers and the NEM Successor Rate will
become available instead.
D. Utilities refer to the terms and conditions for customer-sited, distributed
renewable generation installed after the NEM cap has been reached as the NEM successor rate
or program. Palo Alto’s NEM Successor Rate is defined by Utilities Rate Schedule E-EEC-1
(Export Electricity Compensation). The E-EEC-1 rate was developed in coordination with the
City’s 2016 electric cost of service analysis and may be established by the City Council through
its electric utility rate-making authority and processes.
E. Formally adopting a cost-based NEM Successor Rate (Rate Schedule E-EEC-1) in
Palo Alto will promote greater market certainty and transparency for customers and renewable
energy installers operating within the community, and is consistent with both NEM legislative
and regulatory obligations and the Council-adopted Local Solar Plan to promote distributed
solar projects.
F. Pursuant to Chapter 12.20.010 of the Palo Alto Municipal Code, the Council of
the City of Palo Alto may by resolution adopt rules and regulations governing utility services,
fees and charges. Updates to Rule and Regulation 2 (Definitions and Abbreviations) and Rule
and Regulation 29 (Net Energy Metering and Interconnection) are needed in order to
implement the NEM Successor Rate and transition policy.
The Council of the City of Palo Alto does hereby RESOLVE as follows:
Attachment A
NOT YET APPROVED
160502 jb 6053741 2
SECTION 1. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility
Rate Schedule E-EEC-1 (Export Electricity Compensation) is hereby adopted as attached and
incorporated.
a) Utility Rate Schedule E-EEC-1 shall become effective July 1, 2016.
b) The electricity export compensation rate approved by this resolution is based on
a detailed analysis of the value of energy exported to the electric grid, including
the energy, avoided capacity charges, avoided transmission and ancillary service
charges, avoided transmission and distribution system losses, and environmental
attributes and was developed in coordination with the City’s 2016 electric cost of
service analysis.
SECTION 2. The City Council makes the following findings regarding the
establishment of a Net Energy Metering transition policy:
1) A Net Energy Metering transition policy which establishes a 20 year transition period
and eligible facility expansion rules will promote regulatory certainty and
transparency for the City’s existing NEM and NEM Aggregation customers who have
invested in solar PV systems, and for solar developers operating in Palo Alto.
2) Setting the transition period at 20 years from the time of eligible facility
interconnection matches the transition period adopted by the California Public
Utility Commission for investor-owned utilities, and is reasonably based on eligible
systems’ expected useful life, module warranties, power purchase agreements, and
third-party financing agreements.
3) Allowing eligible facility expansion up to a given threshold will permit existing NEM
and NEM Aggregation customers and those installing eligible facilities within the
City’s NEM cap to retain their current NEM or NEM Aggregation rate structure in the
event that facility panels need replacement or minor expansion, and is broadly in-
line with expansion policies in effect in other California utility service territories.
SECTION 3. The City Council adopts the following NEM Transition Policy: A) Existing
City of Palo Alto Utilities (CPAU) NEM and NEM Aggregation customers and CPAU NEM and
NEM Aggregation customers who install eligible renewable electrical generation facilities within
the City’s NEM Cap (Resolution 9557) shall remain eligible for Net Energy Metering under the
terms and conditions set forth in California Public Utilities Code Section 2827 (effective as of
the date of this Resolution’s adoption) for a 20-year transition period from the time of initial
facility interconnection, and B) Existing CPAU NEM and NEM Aggregation customers and CPAU
NEM and NEM Aggregation customers who install eligible renewable electrical generation
facilities within the City’s NEM Cap may expand their eligible renewable electrical generation
facilities by up to 10% of the Initial Interconnection Capacity while still remaining eligible for
Net Energy Metering, even after the NEM cap has been reached.
SECTION 4. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rule and
Regulation 2 (Definitions and Abbreviations) is hereby amended as attached and incorporated.
Utility Rule and Regulation 2, as amended, shall become effective July 1, 2016.
SECTION 5. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rule and
Regulation 29 (Net Energy Metering and Interconnection) is hereby amended as attached and
incorporated. Utility Rule and Regulation 2, as amended, shall become effective July 1, 2016.
Attachment A
NOT YET APPROVED
160502 jb 6053741 3
SECTION 6. The adoption of Section 1 of resolution changing electric rates to meet
operating expenses, purchase supplies and materials, meet financial reserve needs and obtain
funds for capital improvements necessary to maintain service is not subject to the California
Environmental Quality Act (CEQA), pursuant to California Public Resources Code Sec.
21080(b)(8) and Title 14 of the California Code of Regulations Sec. 15273(a). After reviewing
the staff report and all attachments presented to Council, the Council incorporates these
documents herein and finds that sufficient evidence has been presented setting forth with
specificity the basis for this claim of CEQA exemption. The adoption of Sections 3, 4 and 5 of
this resolution establishing a transition policy and amending Utility Rules and Regulations does
not meet the California Environmental Quality Act’s definition of a “project” under Public
Resources Code Section 21065, thus no environmental review is required.
INTRODUCED AND PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:
___________________________ ___________________________
City Clerk Mayor
APPROVED AS TO FORM: APPROVED:
___________________________ ___________________________
Senior Deputy City Attorney City Manager
___________________________
Director of Utilities
___________________________
Director of Administrative Services
Attachment B
EXPORT ELECTRICITY COMPENSATION
UTILITY RATE SCHEDULE E-EEC-1
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Effective 7-1-2016
Sheet No.E-EEC-1
A. APPLICABILITY:
This Rate Schedule sets for the Net Energy Metering Successor Rate and applies in conjunction with
the otherwise applicable Rate Schedules for each Customer class. This schedule applies to
Customer-Generators who are either not eligible for Net Energy Metering or who are eligible for Net
Energy Metering but elect to take service under the City’s Net Energy Metering Successor Rate.
This Rate Schedule may not apply in conjunction with any time-of-use Rate Schedule.
B. TERRITORY:
Applies to locations within the service area of the City of Palo Alto.
C. RATE:
The following buyback rate shall apply to all energy exported to the grid.
Per kWh
Export electricity compensation rate $0.07485
D. SPECIAL CONDITIONS
1. Metering equipment: Electricity delivered by CPAU to the Customer-Generator or received by
CPAU from the Customer-Generator shall be measured using a meter capable of registering the
flow of electricity in two directions (aka “bidirectional meter”). The electrical power
measurements will be used for billing the Customer-Generator. CPAU shall furnish, install and
own the appropriate meter.
2. Billing:
a. CPAU shall measure during the billing period, in kilowatt-hours, the energy delivered and
received after the Customer-Generator serves its own instantaneous load.
b. CPAU shall bill the Customer-Generator consumption charges for the energy delivered by
CPAU to the Customer-Generator based on the Customer-Generator’s applicable rate
schedule.
c. In the event the energy generated exceeds the energy consumed and therefore is received
by CPAU, the Customer will receive a credit for all energy received by CPAU at the
buyback rate designated in section C above.
3. Generation facilities shall adhere to Rule and Regulation 27: Generating Facility
Interconnections.
{End}
DEFINITIONS AND ABBREVIATIONS
RULE AND REGULATION 2
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 7-1-201610-26-2015
Sheet No 1
A. ABBREVIATIONS
AMR - Automated Meter Reading
AER - Advance Engineering Request
Btu - British Thermal Unit
ccf - Hundred Cubic Feet
CEC - California Energy Commission
CPAU - City of Palo Alto Utilities
CPUC - California Public Utilities Commission.
ERU - Equivalent Residential Unit
FERC - Federal Energy Regulatory Commission
kVar - Kilovar
kVarh - Kilovar-hours
kW - Kilowatt
kWh - Kilowatt-hour
MW - Megawatt
MMBtu - One million Btus.
NEC - National Electric Code, Latest Version
NEM - Net Energy Metering
NEMA - Net Energy Metering Aggregation
NEMIA - Net Energy Metering Interconnection Agreement
NRTL - Nationally Recognized Testing Laboratory
PAMC - Palo Alto Municipal Code
PSIG - Per square inch gauge
PST - Pacific Standard Time
RWQCP - Regional Water Quality Control Plant
UUT - Utilities Users Tax
B. GENERAL DEFINITIONS
Account
The identification number in CPAU’s billing system for Utility Services.
DEFINITIONS AND ABBREVIATIONS
RULE AND REGULATION 2
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 7-1-201610-26-2015
Sheet No 2
Agency
Any local, county, state or federal governmental body or quasi-governmental body, including, without
limitation, the CPUC, the FERC and any joint powers agency, but excluding the City and any board,
commission or council of the City.
Aggregation Customer
A Customer with a Renewable Electrical Generation Facility wishing to install an eligible Renewable
Electrical Generation Facility that is sized to offset separately metered electric loads on adjacent or
contiguous properties that are solely owned, leased, or rented by them, and who have signed the Net
Energy Metering Interconnection Agreement for NEM Aggregation.
Applicant
An individual, corporation, partnership, Agency, or other legal entity or authorized agent of same,
requesting CPAU to supply any or all of the following:
1. Electric Service
2. Water Service
3. Gas Service
4. Wastewater Collection
5. Refuse Service
6. Storm and Surface Water Drainage Service
7. Fiber Optics Service
Or, an entity submitting an Application for Interconnection pursuant to Rule 27.
Application (for Interconnection of Generating Facilities)
An approved standard form (Load Sheet) submitted to CPAU for Interconnection of a Generating
Facility.
Beneficiary Account
The Electric Service Meter(s) serviced by an Aggregation Customer’s Generating Facility, as listed on
the Aggregation Customer’s NEMA-IA form.
Bidweek Price Index
The price reported in Natural Gas Intelligence “NGI’s Bidweek Survey”, California “PG&E Citygate”
under the column “avg.” for the calendar month.
DEFINITIONS AND ABBREVIATIONS
RULE AND REGULATION 2
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 7-1-201610-26-2015
Sheet No 3
Billing Period
Also “service period” or “billing cycle”. The normal Billing Period for CPAU Customers is
approximately 30 days, with variations occurring due to staff availability, holiday scheduling, field
verification of Meter readings, or any other billing-related issues requiring additional investigation prior
to issuance of the bill..
British Thermal Unit
Also “Btu”. The standard sub-unit of measurement comprising a Therm of natural Gas. One (1) Therm
equals 100,000 Btu.
Business Day
Any day, except a Saturday, Sunday, or any day observed as a legal holiday by the City.
Certification Test
A test pursuant to Rule 27 that verifies conformance of certain equipment with approved performance
standards in order to be classified as Certified Equipment. Certification Tests are performed by NRTLs.
Certification; Certified; Certificate
The documented results of a successful Certification Test.
Certified Equipment
Equipment that has passed all required Certification Tests.
Charge
Any assessment, cost, fee, surcharge or levy for Utility Service other than a Tax, including metered and
unmetered Utility Service, capacity, connections, construction, penalties, and mandated or required
Customer financial obligations for Service.
Charter
The Charter of the City of Palo Alto.
City Attorney
The individual designated as the City Attorney of the City under Section 2.08.120 of Chapter 2.08 of
Title 2 of the Palo Alto Municipal Code, and any Person who is designated the representative of the City
Attorney.
City’s Collector
The Person(s) authorized under Section 5.20.040 of the Palo Alto Municipal Code to provide collection,
DEFINITIONS AND ABBREVIATIONS
RULE AND REGULATION 2
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 7-1-201610-26-2015
Sheet No 4
processing and disposal of solid waste, Compostable Materials and Recyclable Materials pursuant to one
or more written contracts with the City.
City Manager
The individual designated as the City Manager of the City under Section 2.08.140 of Chapter 2.08 of
Title 2 of the Palo Alto Municipal Code, and any Person who is designated the representative of the City
Manager.
City of Palo Alto, or City
The government of the City of Palo Alto, a chartered City and a municipal corporation duly organized
and validly existing under the Laws of the State of California, with a principal place of business located
at 250 Hamilton Avenue, Palo Alto, County of Santa Clara. For the purposes of these Rules and
Regulations, the term “City” may include services provided by both the City of Palo Alto Utilities
Department and the City of Palo Alto Public Works Department.
City of Palo Alto Public Works Department (Public Works)
The City Department responsible for providing Refuse Service, Wastewater Treatment and Storm and
Surface Water Drainage Utility Services. Other Utility Services such as Water, Gas, Electric,
Wastewater Collection, and Fiber Optics are provided by the City of Palo Alto Utilities Department.
City of Palo Alto Utilities Department (CPAU)
The City Department responsible for providing Water, Gas, Electric, Wastewater Collection and Fiber
Optic Utility Services. Other Utility Services such as Refuse Service, Wastewater Treatment and Storm
and Surface Water Drainage are provided by the City of Palo Alto Public Works Department.
Code
The words "the Code" or "this Code" shall mean the Palo Alto Municipal Code.
Commercial Service
Commercial Utility Service is provided to businesses, non-profit organizations, public institutions, and
industrial Customers. The term also applies to Utility Services through Master Meters serving multi-
family Residential dwellings and common areas of multi-family facilities.
Compostable Materials
Organic materials designated by the City as acceptable for collection and processing.
DEFINITIONS AND ABBREVIATIONS
RULE AND REGULATION 2
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 7-1-201610-26-2015
Sheet No 5
Container
Any receptacle used for storage of solid waste, Recyclable Materials, Compostable Materials or other
materials designated by the City to be collected by the City’s Collector. Examples of containers include
carts, bins, compactors and drop boxes.
Cubic Foot of Gas (cf)
The quantity of Gas that, at a temperature of sixty (60) degrees Fahrenheit and a pressure of 14.73
pounds per square inch absolute, occupies one cubic foot.
Curtailment
The act of reducing or interrupting the delivery of natural Gas.
Customer
The Person, corporation, Agency, or entity that receives or is entitled to receive Utility Service(s) from
the City of Palo Alto, or in whose name Service is rendered for a particular Account as evidenced by the
signature on the Application, contract, or agreement for Service. In the absence of a signed instrument,
a Customer shall be identified by the receipt of any payment of bills regularly issued in the name of the
Person, corporation, or Agency regardless of the identity of the actual user of the Utility Service(s).
Customer-Generator:
An “eligible customer-generator,” as that term is defined by the California Public Utilities Code section
2827, as the same may be amended from time to time.
Dark Fiber
A Fiber Optic cable provided to end-users or resellers by CPAU without any of the light transmitters,
receivers, or electronics required for telecommunications over the Fiber. Infrastructure for Fiber Optic
activation is provided by the reseller or end-user.
Dark Fiber Infrastructure
Components of the CPAU Fiber Optic Distribution System required to provide Service to Customers
(licensees), that are attached, owned, controlled or used by the City, located overhead or underground
within the Public Right-of-Way, the Public Utility Easements and Leased Service Properties.
Dedicated Distribution Transformer
A Distribution Transformer that is dedicated to serving a single premise.
Demand
The highest rate of delivery of Electric energy, measured in Kilowatts (kW) or kilovolt amperes (kVA)
DEFINITIONS AND ABBREVIATIONS
RULE AND REGULATION 2
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 7-1-201610-26-2015
Sheet No 6
occurring instantaneously or registered over a fixed time period (normally fifteen minutes unless
otherwise specified within a monthly billing cycle).
Demand Charge
An electrical Charge or rate that is applied to a metered Demand reading expressed in Kilowatts to
compute a Demand Charge component of a Customer’s Electric bill.
Demarcation Point
The Demarcation Point for a project shall be the Customer side of the panel onto which the CPAU Fiber
terminates within the Customer Premises, unless otherwise specified in the Proposal for Dark Fiber
Services.
Distribution Services
Includes, but is not limited to, Utility Service provided by the Distribution System and other Services
such as billing, meter reading, administration, marketing, and Customer Services. Does not include
Services directly related to the Interconnection of a Generating Facility as per Rule 27.
Distribution System
The infrastructure owned and operated by CPAU which is capable of transmitting electrical power, other
than Interconnection Facilities, or transporting Water, Wastewater, or Gas within the City of Palo Alto.
The Electric Distribution System transmits power from the City’s Interconnection with PG&E to
CPAU’s Meter located on the Customer’s Premises. The Gas Distribution System transports Gas from
PG&E receiving stations to CPAU’s Meter located on the Customer Premises. The Water Distribution
System transports Water from the San Francisco Water Department receiving stations and CPAU wells
to the meter located on the Customer Premises. The Wastewater Collection System transports sewage
from the Customer’s Premises to the Water Quality Control Plant.
Effluent
Treated or untreated Wastewater flowing out of a Wastewater treatment facility, sewer, or industrial
outfall.
Electric, Electric Service
Utility Service provided to residents and business owners in the City of Palo Alto consisting of
generation, transmission, and distribution of electrical power for retail use. Electric Service is provided
by the City of Palo Alto Utilities Department.
Emergency
An actual or imminent condition or situation, which jeopardizes CPAU’s Distribution System Integrity.
DEFINITIONS AND ABBREVIATIONS
RULE AND REGULATION 2
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 7-1-201610-26-2015
Sheet No 7
Emergency Service
Electric Service supplied to, or made available to, Load devices which are operated only in Emergency
situations or in testing for same.
Energy Services
Energy commodity and any applicable ancillary Services used to generate and transport such commodity
from its origin to the City’s Point of Receipt. May also mean the sale of value added Services associated
or related to the Provision and/or usage of energy commodity.
Equivalent Residential Unit (ERU)
This is the basic unit for computing storm and surface water drainage fees. All single-family Residential
properties are billed the number of ERU’s specified in the table contained in Utility Rate Schedule D-1,
according to parcel size. All other properties have ERU's computed to the nearest 1/10 ERU using this
formula: No. Of ERU = Impervious Area (sq. ft.) / 2,500 sq. ft.
Fiber Optic, Fiber Optic Service
A solid core of optical transmission material. Fiber Optic Service that is provided by the City of Palo
Alto Utilities Department is referred to as Dark Fiber.
Fiber Optic Backbone
The high-density portion of the Dark Fiber Infrastructure installed and owned by the City.
Force Majeure
The occurrence of any event that has, had or may have an adverse effect on the design, construction,
installation, management, operation, testing, use or enjoyment of the City’s Utility Services, which is
beyond the reasonable control of the parties and which event includes, but is not limited to, an Act of
God, an irresistible superhuman cause, an act of a superior governmental authority, an act of a public
enemy, a labor dispute or strike or a boycott which could not be reasonably contemplated by the City or
Customer affected thereby, a defect in manufactured equipment (including, but not limited to, the Dark
Fibers), fire, floods, earthquakes, or any other similar cause.
Function
Some combination of hardware and software designed to provide specific features or capabilities. Its
use, as in Protective Function, is intended to encompass a range of implementations from a single-
purpose device to a section of software and specific pieces of hardware within a larger piece of
equipment to a collection of devices and software.
DEFINITIONS AND ABBREVIATIONS
RULE AND REGULATION 2
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 7-1-201610-26-2015
Sheet No 8
Gas
Any combustible gas or vapor, or combustible mixture of gaseous constituents used to produce heat by
burning. It shall include, but not be limited to, natural gas, gas manufactured from coal or oil, gas
obtained from biomass or from landfill, or a mixture of any or all of the above.
Gas, Gas Service
Utility Service provided to residents and business owners in the City of Palo Alto consisting of
procurement, transmission, and distribution of Gas for retail use. Gas Service is provided by the City of
Palo Alto Utilities Department.
Generating Facility
All Generators, electrical wires, equipment, and other facilities owned or provided by Producer for the
purpose of producing Electric power. This includes a solar or wind turbine Renewable Electrical
Generation Facility that is the subject of a Net Energy Metering and Interconnection Agreement and
Rule and Regulation 29.
Generator
A device converting mechanical, chemical or solar energy into electrical energy, including all of its
protective and control Functions and structural appurtenances. One or more Generators comprise a
Generating Facility.
Gross Nameplate Rating; Gross Nameplate Capacity
The total gross generating capacity of a Generator or Generating Facility as designated by the
manufacturer(s) of the Generator(s).
Initial Interconnection Capacity
The maximum rated generating capacity of a Renewable Electrical Generation Facility eligible for Net
Energy Metering prior to the City’s Total Rated Generating Capacity exceeding the NEM Cap.
Initial Review
The review by CPAU, following receipt of an Application, to determine the following: (a) whether the
Generating Facility qualifies for Simplified Interconnection; or (b) if the Generating Facility can be
made to qualify for Interconnection with a Supplemental Review determining any additional
requirements.
Inspector
The authorized Inspector, agent, or representative of CPAU.
DEFINITIONS AND ABBREVIATIONS
RULE AND REGULATION 2
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 7-1-201610-26-2015
Sheet No 9
Interconnection; Interconnected
The physical connection of a Generating Facility in accordance with the requirements of the City’s
Utilities Rules and Regulations so that Parallel Operation with CPAU’s Distribution System can occur
(has occurred).
Interconnection Agreement
An agreement between CPAU and the Producer providing for the Interconnection of a Generating
Facility that gives certain rights and obligations to effect or end Interconnection. For the purposes of the
City’s Utilities Rules and Regulations, the Net Energy Metering and Interconnection Agreement (for
NEM and NEM Aggregation Customers), and the Power Purchase Agreements authorized by the City
Council may be considered as Interconnection Agreements for purposes of defining such term.
Interconnection Facilities
The electrical wires, switches and related equipment that are required in addition to the facilities
required to provide Electric Distribution Service to a Customer to allow Interconnection.
Interconnection Facilities may be located on either side of the Point of Common Coupling as appropriate
to their purpose and design. Interconnection Facilities may be integral to a Generating Facility or
provided separately.
Interconnection Study
A study to establish the requirements for Interconnection of a Generating Facility with CPAU’s
Distribution System.
Internet Exchange
Any Internet data center for telecommunications equipment and computer equipment for the purposes of
enabling traffic exchange and providing commercial-grade data center services.
Island; Islanding
A condition on CPAU’s Electric Distribution System in which one or more Generating Facilities deliver
power to Customers using a portion of CPAU’s Distribution System that is electrically isolated from the
remainder of CPAU’s Distribution System.
Junction
A location on the Dark Fiber Infrastructure where equipment is installed for the purpose of connecting
communication cables.
Junction Site
The area within the Transmission Pathway at which a Junction is located.
DEFINITIONS AND ABBREVIATIONS
RULE AND REGULATION 2
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 7-1-201610-26-2015
Sheet No 10
Kilovar (kVar)
A unit of reactive power equal to 1,000 reactive volt-amperes.
Kilovar-hours (kVarh)
The amount of reactive flow in one hour, at a constant rate of Kilovar.
Kilowatt (kW)
A unit of power equal to 1,000 watts.
Kilowatt-hour (kWh)
The amount of energy delivered in one hour, when delivery is at a constant rate of one Kilowatt; a
standard unit of billing for electrical energy.
Law
Any administrative or judicial act, decision, bill, Certificate, Charter, Code, constitution, opinion, order,
ordinance, policy, procedure, Rate, Regulation, resolution, Rule, Schedule, specification, statute, tariff,
or other requirement of any district, local, municipal, county, joint powers, state, or federal Agency, or
any other Agency having joint or several jurisdiction over the City of Palo Alto or City of Palo Alto
Utilities or Public Works Customers, including, without limitation, any regulation or order of an official
or quasi-official entity or body.
Licensed Fibers
One or more fibers comprising a part of the Dark Fiber Infrastructure that are dedicated to the exclusive
use of the Customer under the Provisions of the Dark Fiber License Agreement, Proposal to Dark Fiber
Services Agreement and the Utilities Rules and Regulations.
Licensed Fibers Route
A defined path of Licensed Fibers that is identified by specific End Points.
Load(s)
The Electric power Demand (kW) of the Customer at its Service Address within a measured period of
time, normally 15 minutes, or the quantity of Gas required by a Customer at its Service Address,
measured in MMBtu per Day.
Main Wastewater Line
Any Wastewater line not including a building connection (Service) sewer.
DEFINITIONS AND ABBREVIATIONS
RULE AND REGULATION 2
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 7-1-201610-26-2015
Sheet No 11
Master-metering
Where CPAU installs one Service and Meter to supply more than one residence, apartment dwelling
unit, mobile home space, store, or office.
Maximum Generation
For a customer with a non-utility generator located on the customer’s side of the Point of Common
Coupling, the Maximum Generation for that non-utility generator during any billing period is the
maximum average generation in kilowatts taken during any 15-minute interval in that billing period
provided that in case the generator output is intermittent or subject to violent fluctuations, the City may
use a 5-minute interval.
Meter
The instrument owned and maintained by CPAU that is used for measuring either the Electricity, Gas or
Water delivered to the Customer.
Metering
The measurement of electrical power flow in kW and/or energy in kWh, and, if necessary, reactive
power in kVar at a point, and its display to CPAU as required by Rule 27.
Metering Equipment
All equipment, hardware, software including Meter cabinets, conduit, etc., that are necessary for
Metering.
Meter Read
The recording of usage data from Metering Equipment.
Minimum Charge
The least amount for which Service will be rendered in accordance with the Rate Schedule.
Momentary Parallel Operation
The Interconnection of a Generating Facility to the Distribution System for one second (60 cycles) or
less.
Nationally Recognized Testing Laboratory (NRTL)
A laboratory accredited to perform the Certification Testing requirements under Rule 27.
Net Electricity Consumer
A Customer-Generator whose Generating Facility produces less electricity than is supplied by CPAU
DEFINITIONS AND ABBREVIATIONS
RULE AND REGULATION 2
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 7-1-201610-26-2015
Sheet No 12
during a particular period, as such definition may otherwise be modified or supplemented by any
definition in California Public Utilities Code section 2827(h)(2), as the same may be amended from time
to time.
Net Energy Metering
Net Energy Metering means measuring the difference between the electricity supplied through CPAU’s
Electric utility Distribution System and the electricity generated by the customer-generator’s facility and
delivered to CPAU’s Electric utility Distribution System over a specified twelve-month period. This
definition does not apply to Customers subject to the Net Energy Metering Successor Rate.
Net Energy Metering Cap (NEM Cap)
Five (5) percent of the historical system peak of 190 MW from 2006, or 9.5 MW, using the CEC’s
Alternating Current (AC) capacity rating. Where the CEC AC rating is not available, CPAU will
multiply the inverter AC nameplate rating by 0.86.
Net Energy Metering Successor Program, or Net Energy Metering Successor Rate
The terms and conditions for Customer-Generators whose Renewable Electrical Generation Facilities
are installed after the Council-adopted NEM Cap has been reached, or Customers-Generators who are
eligible for Net Energy Metering but elect to take service under the Net Energy Metering Successor
Rate. NEM Successor Rate terms and conditions are defined by Utilities Rate Schedule E-EEC-1
(Export Electricity Compensation).
Net Generation Metering
Metering of the net electrical power of energy output in kW or energy in kWh, from a given Generating
Facility. This may also be the measurement of the difference between the total electrical energy
produced by a Generator and the electrical energy consumed by the auxiliary equipment necessary to
operate the Generator.
Net Nameplate Rating
The Gross Nameplate Rating minus the consumption of electrical power of a Generator or Generating
Facility as designated by the manufacturer(s) of the Generator(s).
Net Surplus Customer-Generator
A Customer-Generator who’s Generating Facility produces more electricity than is supplied by CPAU,
during a particular period, as such definition may otherwise be modified or supplemented by any
definition in California Public Utilities Code section 2827(h)(3), as the same may be amended from time
to time.
DEFINITIONS AND ABBREVIATIONS
RULE AND REGULATION 2
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 7-1-201610-26-2015
Sheet No 13
Net Surplus Electricity Compensation
A per kilowatt hour rate offered by CPAU to the Net Surplus Customer-Generators (excluding
Aggregation Customers) for net surplus electricity, as such definition may otherwise be modified or
supplemented by any definition in California Public Utilities Code section 2827(b)(8), as the same may
be amended from time to time. The Net Surplus Electricity Compensation Rate is applicable only to
Customer-Generators who are eligible for Net Energy Metering and are subject to Rule and Regulation
29; this Rate does not apply to Customer-Generators taking service under the NEM Successor Rate.
Non-Islanding
Designed to detect and disconnect from an Unintended Island with matched Load and generation.
Reliance solely on under/over voltage and frequency trip is not considered sufficient to qualify as Non-
Islanding.
Occupied Domestic Dwelling
Any house, cottage, flat, or apartment unit having a kitchen, bath, and sleeping facilities, which is
occupied by a Person or Persons.
Parallel Operation
The simultaneous operation of a Generator with power delivered or received by CPAU while
Interconnected. For the purpose of this Rule, Parallel Operation includes only those Generating
Facilities that are Interconnected with CPAU’s Distribution System for more than 60 cycles (one
second).
Performance Test, Performance Tested
After the completion of any Fiber Interconnection work, the City will conduct a Performance Test of
each Fiber constituting a part of the proposed leased fibers to determine its compliance with the
Performance Specifications.
Performance Specifications
These specifications will include, but not be limited to, criteria relating to end-to-end optical time
domain reflectometer data plots that identify the light optical transmission losses in each direction along
the leased fibers whenever the testing is possible, measured in decibels at a wavelength of 1310 or 1550
nanometers for singlemode Fiber, as a Function of distance, measured in kilometers.
Person
Any individual, for profit corporation, nonprofit corporation, limited liability company, partnership,
limited liability partnership, joint venture, business, family or testamentary trust, sole proprietorship, or
DEFINITIONS AND ABBREVIATIONS
RULE AND REGULATION 2
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 7-1-201610-26-2015
Sheet No 14
other form of business association.
PG&E Citygate
The PG&E Citygate is the point at which PG&E’s backbone transmission system connects to PG&E’s
local transmission system.
Point of Common Coupling (PCC)
The transfer point for electricity between the electrical conductors of CPAU and the electrical
conductors of the Producer.
Point of Common Coupling Metering
Metering located at the Point of Common Coupling. This is the same Metering as Net Generation
Metering for Generating Facilities with no host load.
Point of Delivery (POD)
Unless otherwise specified, the following definitions apply: For Electric, that location where the Service
lateral conductors connect to the Customer’s Service entrance equipment; for overhead Services, the
POD is at the weather-head connection; for under-ground Services, the POD is located at the terminals
ahead of or at the Meter; for multiple Meter arrangements with connections in a gutter, the POD is at
the Meter terminals (supply-side); for multiple Meter arrangements in a switchboard, the POD is
typically at the connectors in the utility entrance section; for Natural Gas, the POD is the point(s) on the
Distribution System where the City delivers natural Gas that it has transported to the Customer.
Point of Interconnection
The electrical transfer point between a Generating Facility and the Distribution System. This may or
may not be coincident with the Point of Common Coupling.
Point of Service (POS)
Where CPAU connects the Electric Service lateral to its Distribution System. For Fiber Optics Service,
this is where CPAU connects the Fiber Service to the backbone. This point is usually a box located in or
near the street or sidewalk and can be in the Public Right-of-Way. This point is at a mutually agreed
upon location established at the time of installation.
Pole Line
Overhead wires and overhead structures, including poles, towers, support wires, conductors, guys, studs,
platforms, cross arms braces, transformers, insulators, cutouts, switches, communication circuits,
appliances attachments, and appurtenances, located above ground and used or useful in supplying
Electric, communication, or similar or associated Service.
DEFINITIONS AND ABBREVIATIONS
RULE AND REGULATION 2
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 7-1-201610-26-2015
Sheet No 15
Power Factor
The percent of total power delivery (kVA) which does useful work. For billing purposes, average Power
Factor is calculated from a trigonometric function of the ratio of reactive kilovolt-ampere-hours to the
Kilowatt-hours consumed during the billing month. Power Factor is a ratio that reflects the reactive
power used by a Customer. CPAU maintains an overall system Power Factor above 95% to reduce
distribution system losses caused by low Power Factor.
Power Factor Adjustment
CPAU must install additional equipment to correct for Customers that maintain a low Power Factor, and
may make a Power Factor Adjustment to a Customer’s bill to account for those costs and the additional
energy costs and losses incurred by CPAU due to the Customer’s low Power Factor.
Premises
All structures, apparatus, or portion thereof occupied or operated by an individual(s), a family, or a
business enterprise, and situated on an integral parcel of land undivided by a public street, highway, or
railway.
Primary Service
CPAU Electric distribution Service provided to a Customer’s Premises at a voltage level equal to or
greater than 1000 volts.
Producer
The entity that executes an Interconnection Agreement with CPAU. The Producer may or may not own
or operate the Generating Facility, but is responsible for the rights and obligations related to the
Interconnection Agreement.
Proposal for Dark Fiber Services
A project-specific Service agreement that acts as a supplemental document for the Dark Fiber License
Agreement. This Service agreement shall include the proposed Interconnection fees, applicable Fiber
licensing fees, term of the Service, and summary of licensed Fiber elements.
Protective Function(s)
The equipment, hardware and/or software in a Generating Facility (whether discrete or integrated with
other Functions) whose purpose is to protect against Unsafe Operating Conditions.
Provision
Any agreement, circumstance, clause, condition, covenant, fact, objective, qualification, restriction,
DEFINITIONS AND ABBREVIATIONS
RULE AND REGULATION 2
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 7-1-201610-26-2015
Sheet No 16
recital, reservation, representation, term, warranty, or other stipulation in a contract or in Law that
defines or otherwise controls, establishes, or limits the performance required or permitted by any party.
Prudent Utility Practices
The methods, protocols, and procedures that are currently used or employed by utilities to design,
engineer, select, construct, operate and maintain facilities in a dependable, reliable, safe, efficient and
economic manner.
Public Right-of-Way
The areas owned, occupied or used by the City for the purposes of furnishing retail and/or wholesale
Electricity, Gas, Water, Wastewater, Storm and Surface Water Drainage, Refuse Service or
communications commodity and/or distribution Service, and the means of public transportation, to the
general public, including but not limited to, the public alleys, avenues, boulevards, courts, curbs, gutters,
lanes, places, roads, sidewalks, sidewalk planter areas, streets, and ways.
Public Utility Easements
The areas occupied or used by the City for the purpose of providing Utility Service to the general public,
and all related Services offered by the City’s Utilities Department and/or Public Works Department, the
rights of which were acquired by easements appurtenant or in gross, or are other interests or estates in
real property, or are the highest use permitted to be granted by the nature of the City’s interest in and to
the affected real property. This term incorporates all public Service easements for Utility Services that
have been recorded by the City with the Recorder of the County of Santa Clara, California.
Public Works Department
See City of Palo Alto Public Works Department.
Rate Schedule
One or more Council-adopted documents setting forth the Charges and conditions for a particular class
or type of Utility Service. A Rate Schedule includes wording such as Schedule number, title, class of
Service, applicability, territory, rates, conditions, and references to Rules.
Recyclable Materials
Materials designated by the City as acceptable for recycling collection and processing.
Refuse Service
Refuse Service includes weekly collection, processing and disposal of materials properly deposited in
the City Collector’s provided Containers for solid waste, as well as weekly collection and processing of
Recyclable Materials, weekly collection and processing of Compostable Materials, ongoing maintenance
DEFINITIONS AND ABBREVIATIONS
RULE AND REGULATION 2
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 7-1-201610-26-2015
Sheet No 17
of the closed Palo Alto Landfill, zero waste programs, street sweeping service, the household hazardous
waste program, and the annual Clean Up Day.
Renewable Electrical Generation Facility
A Generation Facility eligible for NEM under California Public Utilities Code section 2827 et seq. as
the same may be amended from time to time.
Reserved Capacity
For a customer with one or more non-utility generators located on the customer’s side of the Point of
Common Coupling, the Reserved Capacity for each billing period is the lesser of 1) the sum of the
Maximum Generation for that period for all non-utility generation sources; or 2) the maximum average
customer demand in kilowatts taken during any 15-minute interval in the billing period provided that in
case the load is intermittent or subject to violent fluctuations, the City may use a 5-minute interval.
Residential Service
Utility Service provided to separately metered single family or multi-family, domestic dwelling.
Rules and Regulations
See Utilities Rules and Regulations
Scheduling Coordinator
An entity providing the coordination of power schedules and nominations to effect transportation and
distribution of Gas, Electric power and energy.
Secondary Service
CPAU Electric distribution Service provided to a Customer’s Premises at a voltage level less than 1000
volts.
Service(s)
Utility Services offered by the City of Palo Alto include Electric, Fiber Optics, Gas, Water, Wastewater
Collection services provided by the Utilities Department (CPAU); and Refuse Service, Wastewater
Treatment, and Storm and Surface Water Drainage Services provided by the Public Works Department.
Service Address
The official physical address of the building or facility assigned by CPAU’s Planning Department, at
which Customer receives Utility Services.
Service Charge
DEFINITIONS AND ABBREVIATIONS
RULE AND REGULATION 2
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 7-1-201610-26-2015
Sheet No 18
A fixed monthly Charge applicable on certain Rate Schedules that does not vary with consumption. The
Charge is intended to recover a portion of certain fixed costs.
Service Drop
The overhead Electric Service conductors from the last pole or other aerial support to and including the
splices, if any, connecting to the service entrance conductors at the building or other structure. Or, in the
case of Fiber Optic Drops, the overhead Fiber Optics cable from the last pole or other aerial support to
the building or other structure to and including the termination box.
Services or Service Lines
Facilities of CPAU, excluding transformers and Meters, between CPAU’s infrastructure and the Point of
Delivery to the Customer.
Service Territory
The geographic boundaries within the City of Palo Alto limits served by the physical Distribution
System of the CPAU.
Short Circuit (Current) Contribution Ratio (SCCR)
The ratio of the Generating Facility’s short circuit contribution to the short circuit contribution provided
through CPAU’s Distribution System for a three-phase fault at the high voltage side of the distribution
transformer connecting the Generating Facility to CPAU’s system.
Simplified Interconnection
An Interconnection conforming to the minimum requirements as determined under Rule 27, Section I.
Single Line Diagram; Single Line Drawing
A schematic drawing, showing the major Electric switchgear, Protective Function devices, wires,
Generators, transformers and other devices, providing sufficient detail to communicate to a qualified
engineer the essential design and safety of the system being considered.
Special Facilities
See CPAU’s Rule and Regulation 20 governing Special Facilities.
Splice
A point where two separate sections of Fiber are physically connected.
Standard Refuse Container
A Standard Refuse Container shall have the meaning described in the Palo Alto Municipal Code. A
DEFINITIONS AND ABBREVIATIONS
RULE AND REGULATION 2
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 7-1-201610-26-2015
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Standard Container shall also include a wheeled container with a capacity of not to exceed 32 gallons.
Standby Service
Back-up Energy Services provided by CPAU.
Storm and Surface Water Drainage
Utility Service provided to residents and business owners in the City of Palo Alto.
Storm and Surface Water Drainage Service is provided by the City of Palo Alto Public Works
Department.
Supplemental Review
A process wherein CPAU further reviews an Application that fails one or more of the Initial Review
Process screens. The Supplemental Review may result in one of the following: (a) approval of
Interconnection; (b) approval of Interconnection with additional requirements; or (c) cost and schedule
for an Interconnection Study.
System Integrity
The condition under which a Distribution System is deemed safe and can reliably perform its intended
Functions in accordance with the safety and reliability rules of CPAU.
Tax
Any assessment, Charge, imposition, license, or levy (including any Utility Users Tax) and imposed by
any Agency, including the City.
Telemetering
The electrical or electronic transmittal of Metering data in real-time to CPAU.
Temporary Service
Service requested for limited period of time or of indeterminate duration such as, but not limited to,
Service to provide power for construction, seasonal sales lots (Christmas trees), carnivals, rock crushers
or paving plants. Temporary Service does not include Emergency, breakdown, or Standby Service.
Therm
A Therm is a unit of heat energy equal to 100,000 British Thermal Units (Btu). It is approximately the
energy equivalent of burning 100 cubic feet (often referred to as 1 ccf) of natural Gas. Since Meters
measure volume and not energy content, a Therm factor is used to convert the volume of Gas used to its
heat equivalent, and thus calculate the actual energy use. The Therm factor is usually in the units
therms/ccf. It will vary with the mix of hydrocarbons in the natural Gas. Natural Gas with a higher than
DEFINITIONS AND ABBREVIATIONS
RULE AND REGULATION 2
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 7-1-201610-26-2015
Sheet No 20
average concentration of ethane, propane or butane will have a higher Therm factor. Impurities, such as
carbon dioxide or nitrogen lower the Therm factor.
Total Rated Generating Capacity
Total Rated Generating Capacity will be calculated as the sum of the rated generating capacity of all
installed Renewable Electrical Generation Facilities participating in NEM or NEM Aggregation. The
rated generating capacity for each individual Renewable Electrical Generation Facility participating in
NEM or NEM Aggregation will be calculated as follows:
1. For Solar: For each Renewable Electrical Generation Facility that is a solar photovoltaic
generating facility, CPAU will use the CEC’s Alternating Current (AC) rating; or where the
CEC AC rating is not available, CPAU will multiply the inverter AC nameplate rating by
0.86; and
2. For Non-Solar: For all other Renewable Electrical Generation Facilities, CPAU will use the
AC nameplate rating of the generating facility.
Transfer Trip
A Protective Function that trips a Generating Facility remotely by means of an automated
communications link controlled by CPAU.
Transmission Pathway
Those areas of the Public Right-of-Way, the Public Utility Easements and the Leased Service Properties
in which the Dark Fiber Infrastructure is located.
Trap
Any approved equipment or appliance for sealing an outlet from a house-connection sewer to
prevent the escape of sewer Gas from a main line through a building connection (service) sewer.
Underground Utility District
An area in the City within which poles, overhead electric or telecommunication wires, and associated
overhead structures are prohibited or as otherwise defined in Section 12.04.050 of the PAMC.
Unintended Island
The creation of an Island, usually following a loss of a portion of CPAU’s Distribution System, without
the approval of CPAU.
Unsafe Operating Conditions
DEFINITIONS AND ABBREVIATIONS
RULE AND REGULATION 2
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 7-1-201610-26-2015
Sheet No 21
Conditions that, if left uncorrected, could result in harm to personnel, damage to equipment, loss of
System Integrity or operation outside pre-established parameters required by the Interconnection
Agreement.
Utilities Department
See City of Palo Alto Utilities Department.
Utilities Director
The individual designated as the Director of Utilities Department under Section 2.08.200 of Chapter
2.08 of Title 2 of the Palo Alto Municipal Code, and any Person who is designated the representative of
the director of utilities.
Utility(ies) Rules and Regulations, Rules and Regulations
The compendium of Utilities Rules and Regulations prepared by the City’s Utilities and Public Works
Departments and adopted by ordinance or resolution of the Council pursuant to Chapter 12.20 of the
Palo Alto Municipal Code, as amended from time to time.
Utility(ies) Service(s), Service(s)
Electric, Fiber optics, Water, Gas, Wastewater collection services provided by the City of Palo Alto
Utilities Department (CPAU) and Refuse Service, Wastewater Treatment and Storm and Surface Water
Drainage services provided by the City of Palo Alto Public Works Department.
Utilities User Tax (UUT)
City of Palo Alto Tax imposed on Utility Charges to a Water, Gas, and/or Electric Service user. This
may include Charges made for Electricity, Gas, and Water and Charges for Service including Customer
Charges, Service Charges, Standby Charges, Charges for Temporary Services, Demand Charges, and
annual and monthly Charges, as described in Chapter 2.35 of the Palo Alto Municipal Code.
Wastewater
Utility Service provided to residents and business owners in the City of Palo Alto. Wastewater Utility
Services include collection and treatment of Wastewater. Wastewater Collection Service is provided by
the City of Palo Alto Utilities Department, and Wastewater Treatment Service is provided by the City of
Palo Alto Public Works Department.
Water
Utility Service provided to residents and business owners in the City of Palo Alto for retail use. Water
Service is provided by the City of Palo Alto Utilities Department.
DEFINITIONS AND ABBREVIATIONS
RULE AND REGULATION 2
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 7-1-201610-26-2015
Sheet No 22
Water Column (WC)
Pressure unit based on the difference in inches between the heights of water columns as measured in a
manometer. 6” WC = 0.217 psi; 7” WC = 0.25 psi.
(END)
NET ENERGY METERING SERVICE AND INTERCONNECTION
RULE AND REGULATION 29
CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
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Sheet No. 1
A. APPLICABILITY
This Rule and Regulation is applicable to any City of Palo Alto Utilities (“CPAU”) Customer that is
an eligible Customer-Generator under the California Public Utilities Code that desireseligible to
participate in Net Energy Metering (“NEM”) or Net Energy Metering Aggregation (“NEM
Aggregation”) with via the use of a Renewable Electrical Generation Facility, not to exceed 1 MW,
located on the Customer’s owned, leased, or rented premises within CPAU service territory to that
will operate in parallel with the CPAU distribution system, so long as there is availability remaining
within the NEM Cap, as defined in Rule 2. This Rule and Regulation does not apply to Customer-
Generators who participate in the City’s Net Energy Metering Successor Program.
B. SCOPE
Notwithstanding the requirements and charges set forth in this Rule 29, CPAU reserves the right
to impose any requirements set forth in Rule 27 that are additional to or more stringent than those
set forth in this Rule 29, including those related to billing and charges, on NEM and NEM
Aggregation Customers to the maximum extent permitted by state law (Cal. Pub. Util. Code §
2827 et seq., as the same may be amended from time to time).
C. CUSTOMER ELIGIBILITY
1. General Requirements. In order to be eligible to participate in NEM or NEM Aggregation, a
Customer must:
a. Be a Customer-Generator, pursuant to the definition set forth in Rule and Regulation
2.
b. Construct, design, install, interconnect, operate and maintain a Renewable
Electrical Generation Facility (or combination of such facilities) that is:
i. On the Customer-Generator’s owned, leased or rented Premises,
ii. Of a total capacity of not more than one (1) MW (or 1,000 kW),
iii. Intended primarily to offset part or all of the Customer-Generator’s own
Electric Service requirements, and
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iv. Is not used to sell to any third person, or otherwise provide Electric
Service to any real estate parcel, premise, or location other than those that
are the subject of the Customer-Generator’s Interconnection Agreement
(IA).
c. Complete and provide CPAU with all required agreements, supporting
documents, and any payments related to interconnection.
2. NEM Cap.
a) Eligibility for NEM and NEM Aggregation. NEM and NEM Aggregation is
available on a first-come, first served basis. Customers shall remain eligible for
NEM and NEM Aggregation until such time as the Total Rated Generating
Capacity used by NEM and NEM Aggregation Customers combined reaches
CPAU’s NEM Cap. NEM is available on a first-come, first-served basis. Once the
NEM Cap has been reached, NEM Service and Interconnection this Rule and
Regulation will be closed to new cCustomers. Customer-Generators installed after
the NEM Cap has been reached will be subject to the Net Energy Metering
Successor Rate.
a)b) System Expansions. Customer-Generators eligible for NEM or NEM
Aggregation may increase the system capacity of their Renewable Electrical
Generation Facilities by a maximum of 10% of the Initial Interconnectino
Capacity after the NEM Cap has been reached. Customers whose system
modifications or expansions exceed this limit will no longer be eligible for NEM
or NEM Aggregation, and will be subject to the Net Energy Metering Successor
Rate.
3. Additional Requirements for NEM Aggregation. In addition to those eligibility
requirements set forth in Section 1(a) of this Rule and Regulation 29, a CPAU Customer
is only eligible to participate in NEM Aggregation where:
a. The Customer-Generator elects to aggregate Electric Service of the meters located
on the property where the Renewable Electrical Generation Facility is located
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UTILITIES RULES AND REGULATIONS
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across properties that are adjacent or contiguous with that property; and
b. All properties across which the Customer-Generator elects to aggregate are solely
owned, leased, or rented by the eligible Customer.
4. NEM Transition Period. Customers eligible for NEM or NEM Aggregation remain
subject to the requirements and charges set forth in this Rule 29 through a period of
twenty (20) years from the original date of Interconnection of the eligible Renewable
Energy Generating Facility.
D. BILLING FOR NEM
1. General Rules
a. Twelve Month True Up Period
i. At the end of each twelve-month period following:
aa. The date of Interconnection of the Renewable Electrical Generation
Facility, or
bb. For a Customer with a date of Interconnection of the Generating
Facility commencing prior to February 1, 2010, the day after CPAU’s
receipt of the Customer’s net surplus electricity election form,
ii. CPAU will determine whether the Customer-Generator is a Net Electricity
Consumer or a Net Surplus Customer-Generator during that period.
b. CPAU will bill the Customer-Generator for the electricity used during that twelve-
month period, whether the Customer-Generator is considered a Net Electricity
Consumer or a Net Surplus Customer-Generator.
c. CPAU shall provide the Customer-Generator with net electricity consumption
information with each monthly bill; that information shall include either the current
monetary balance owed to CPAU or the current amount of excess electricity
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produced since the last twelve-month period.
d. If the Customer-Generator terminates the contractual relationship with CPAU, then
CPAU shall reconcile the Customer-Generator’s consumption and production of
electricity during any part of the twelve-month period following the last annual
settlement and reconciliation, using the procedures as outlined in this Rule.
e. For a Customer-Generator who has submitted an affirmative election, CPAU will
provide either Net Surplus Electricity Compensation in accordance with Electric
Utility Rate Schedule E-NSE-1, for any net surplus electricity generated during the
prior twelve-month settlement period, or bill credits resulting from net surplus
electricity generation to be applied against electricity-related charges subsequently
incurred by the Customer-Generator.
f. If the Customer-Generator fails to make an affirmative election to receive Service
pursuant to Net Surplus Electricity Compensation, then CPAU shall retain any excess
electricity (expressed in Kilowatt-hours) generated during the prior twelve-month
settlement period, and it shall not be obligated to pay Net Surplus Electricity
Compensation, nor shall it be obligated to allow the application of net surplus
electricity credits to be used against Energy charges subsequently incurred by the
Customer-Generator.
g. CPAU will allow a Customer to change the election option once each twelve-month
settlement period provided that the Customer provides notice to CPAU one month
prior to the beginning of new settlement period.
2. Monthly Billing
a. Medium and large commercial Customer-Generators will be required to pay any
balances due to CPAU on a monthly basis.
b. Except as annual billing is provided for in this Rule 29, residential and small
commercial Customer-Generators will default to owing balances due on a monthly
basis, but may request annual billing as allowed for in California Public Utilities
Code sections 2827 (g) and (h)(2)(c).
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c. Standby service charges for backup or maintenance electric service will be waived,
provided that the Customer-Generator qualifies for participation in net energy
metering at the Service Address.
d. For a Net Surplus Customer-Generator in a given month, any credits created will be
carried forward to future months, to be used for future electric charges, until the end
of the Customer-Generators Twelve Month True-Up Period.
3. Annual Billing
a. Customers may request annual billing as allowed for in California Public Utilities
Code sections 2827 (g) and (h)(2)(c)..
b. Bill payment will not be considered delinquent, unless the Customer-Generator does
not pay a final billing statement within twenty (20) days of the date of issuance of
that final billing statement.
c. For annually billed residential or small commercial Customer-Generators, the net
balance of money owed to CPAU will be carried forward until the end of the twelve-
month period.
d. To accommodate annual billing, a Customer’s Electricity Service may be transferred
to a separate Utility Account so as not to interrupt monthly billing for other recurring,
non-electric Utility Services.
4. Additional Billing Rules Applicable to NEM Aggregation Customers
a. For each monthly billing period, the amount of electricity generated from the
Aggregation Customer’s Generating Facility during that billing period will be
accounted for on a per kWh basis.
b. The Aggregation Customer’s electricityenergy consumption will be totaled for
each Beneficiary Account that is listed to receive kwh energy credits from the
Generating Facility per the Customer’s Interconnection Agreement.
c. Each Beneficiary Account will be allotted a portion of the Generating Facilities
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Sheet No. 6
energy equal to that Beneficiary Account’s relative share of Aggregation
Customer’s total usage for the billing period.
d. The total amount of energy produced by a Generating Facility will be allotted in
each billing period.
e. The billing for Beneficiary Accounts will be the same as NEM customers, as
outlined in Section D.2(a) above, with the restriction that no Beneficiary Account
is eligible for Net Surplus Electricity Compensation in accordance with Electric
Utility Rate Schedule E-NSE-1, but may only carry forward energy credits.
E. APPLICATION AND INTERCONNECTION PROCESS
1. Application Process
CPAU shall process a request for the establishment of NEM and Interconnection from the
Customer-Generator within the time period not exceeding that for Customers requesting new
Electric Service; provided, however, that such time period will not exceed thirty (30) days
from the date of (1) receipt of a completed Application form for Net Energy Metering
Service and Interconnection from the Customer-Generator, (2) Electric inspection clearance
from CPAU in accordance with California Public Utilities Code 2827(c)(2), and (3) building
inspection clearance from the City of Palo Alto Building Inspection Division. If CPAU is
unable to process the request within the thirty-day period or other applicable period, then
CPAU shall notify the Customer-Generator of the reason for its inability to process the
request and the expected completion date.
2. Interconnection Process
The Customer-Generator will be required to sign either an Interconnection Agreement, as
applicable, or an agreement containing substantially the terms and conditions of the above
referenced agreements and agree to be subject to applicable Utility Rates and Charges and
Utility Rules and Regulations in order to be eligible for NEM Service provided by CPAU.
CPAU will make available all necessary forms and contracts for NEM Service for download
from the Internet.
F. GENERATING FACILITY DESIGN AND OPERATING REQUIREMENTS
NET ENERGY METERING SERVICE AND INTERCONNECTION
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CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
Issued by the City Council
Effective 7-1-201610-26-2015
Sheet No. 7
1. Safety Standards
The facility will meet all applicable federal, state and local safety and performance standards,
including those established by the National Electrical Code (NEC), the Institute of Electrical
and Electronic Engineers, and accredited testing laboratories such as Underwriters
Laboratories (UL) and, as applicable, the rules of the California Public Utilities Commission
regarding safety and reliability. The Customer-Generator whose facility meets those
standards and rules will not be required to install additional controls, perform or pay for
additional tests, or purchase additional liability insurance.
2. Design Standards
In addition to the requirements more generally set forth in section D.1, Customer-Generator
will:
a. Conform to the applicable National Electric Code (NEC) Standards [NEC 690]
and applicable building codes.
b. Have a dedicated circuit from the inverter to the Service panel with a circuit breaker
or fuse [NEC 690-64(b)(1)].
c. Have an overcurrent device at the Service panel will be marked to indicate solar
power source [NEC 690-64(b)(4)].
d. Establish the following minimum specifications for Parallel Operation with CPAU’s
Electric utility Distribution System.
e. Install a visible break, lockable AC disconnect switch in the dedicated circuit to the
inverter. This switch will be located where it is easily accessible by CPAU personnel
and will be equipped with a CPAU padlock [CPAU Rule and Regulation 27].
f. Use an inverter that is UL 1741-appoved and have the following specifications for
Parallel Operation with CPAU’s Electric utility Distribution System:
i. Inverter output will automatically disconnect from CPAU’s utility source
upon the loss of CPAU’s utility voltage and will not be reconnected until at
least five (5) minutes after normal utility voltage and frequency have been
NET ENERGY METERING SERVICE AND INTERCONNECTION
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CITY OF PALO ALTO
UTILITIES RULES AND REGULATIONS
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Sheet No. 8
restored [UL 1741].
ii. Inverter will automatically disconnect from CPAU’s utility source within 120
cycles (2 seconds) if CPAU’s utility voltage isles than 106 volts or greater
than 132 volts on a 120-volt base [UL 1741].
iii. Inverter will automatically disconnect from CPAU’s utility source within 10
cycles (0.17 seconds) if CPAU’s utility frequency fluctuations is less than
59.3 hertz or greater than 60.5 hertz [UL 1741] cycle.
iv. Inverter output will comply with IEEE 519 standards for harmonic
distortion [CPAU Rule and Regulation 27].
G. METERING
1. NEM may be accomplished by using a single Meter capable of registering the flow of
electricity in two different directions. If the Customer-Generator’s existing Meter is not
capable of measuring the flow of electricity in two directions, then the Customer-Generator
shall be responsible for all expenses involved in purchasing and installing a Meter that is able
to measure electricity flow in two directions.
2. In lieu of one Meter, an additional Meter to monitor the flow of electricity in each direction
may be installed with the consent of the Customer-Generator, at the expense of CPAU. The
additional Meter shall be used only to provide the information necessary to accurately bill or
credit the Customer-Generator and/or to collect solar or wind Electric generating system
performance information for research purposes.
3. Customer-Generator grants to CPAU, its officers, employees, agents and representatives the
non-exclusive right of ingress and egress on, over and across the Premises upon reasonable
prior notice for the purpose of inspecting and approving the installation and operation of the
Facility and authenticating the accuracy of the Mmeter(s), or in the event of an emergency or
in regard to a disconnection of the Facility, without notice, if in CPAU’s Director of Utilities’
sole judgment, a condition hazardous to life or property exists, and immediate action is
necessary to protect life or property from damage or interference directly caused by the
Equipment or as a result of the lack of properly operating protective devices.
H. GENERAL REQUIREMENTS
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1. Customer-Generator will obtain and maintain the required governmental authorizations,
permits, and any policy or policies of insurance, including, without limitation,
commercial general liability, property, and professional liability insurance, as may be
required by applicable laws, subject only to subsection c below.
2. CPAU will not be obligated to accept or pay for, and it may require Customer-Generator
to interrupt or reduce, the delivery of available energy generated by the Facility under the
following: (a) whenever CPAU in its sole judgment determines that the interruption or
reduction is necessary in order for CPAU to construct, install, maintain, repair, replace,
remove, investigate, or inspect any part of CPAU’s electric utility distribution system; or
(b) if CPAU determines that the interruption or reduction is necessary on account of an
emergency, voluntary or involuntary outage, event of Fforce Mmajeure, or compliance
with prudent electrical practices.
3. Notwithstanding any other provision of this Agreement, if CPAU determines that either
(a) the operation of the Facility may threaten or endanger the health, safety or welfare of
CPAU’s personnel or CPAU’s or its personnel’s property, or (b) the continued operation
of the Facility may endanger the operational integrity of CPAU’s electric utility
distribution system, CPAU will have the right to temporarily or permanently disconnect
the Facility from CPAU’s Eelectric Uutility Ddistribution Ssystem upon the delivery of
reasonable notice to Customer-Generator; provided, however, CPAU may act without
giving prior notice to Customer-Generator, if CPAU determines that it is impracticable to
provide the notice. The Facility will remain disconnected until such time as CPAU’s
Director of Utilities is reasonably satisfied that the conditions referred to in this
subsection have been corrected or sufficiently addressed.
4. Customer-Generator will (a) maintain the Facility, which interconnects with CPAU’s
electric utility distribution system, in a safe and prudent manner and in conformance with
all applicable laws, rules and regulations, including, without limitation, the requirements
of this Section 3H, and (b) obtain any governmental approvals, authorizations and permits
required for the construction and operation of the Facility.
5. Customer-Generator will reimburse CPAU for any and all losses, damages, claims,
penalties, or liability that CPAU may incur or sustain as a result of Customer-Generator’s
failure to obtain and maintain any and all governmental approvals, authorizations and
NET ENERGY METERING SERVICE AND INTERCONNECTION
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permits that may be required for the construction, installation, operation, repair and
maintenance of the Facility.
Attachment E
Page 1 of 3
Implementation of Council-Adopted Net Energy Metering (NEM)
Successor Program Design Guidelines
Guideline 1. Rates must be based on the cost to serve customers. This is the overriding
principle for the NEM Successor Program development; all other design considerations are
subsidiary to this basic premise.
Based on the assessment completed by the City’s electric cost of service study consultant and
staff, the proposed NEM successor rate is based on the cost to serve.
Guideline 2. Consider and evaluate program options that compensate customers fairly and
equitably for local renewable energy production.
The combination of tiered, electric rate structures and NEM make solar installations on high-
energy consuming households considerably more cost-effective compared to low- or average-
energy consuming households. This combination hinders solar adoption by households that
have average or low electricity consumption achieved through conservation and energy
efficiency measures. The proposed NEM successor rate, which provides a flat rate based on the
utility’s avoided cost for any energy exported to the grid, provides equitable and fair
compensation to customers. Any energy generated that is used immediately on-site would
effectively receive retail rate compensation for avoided energy purchases, similar to how a
customer would be compensated for implementing an energy efficiency measure.
Guideline 3. Consider and evaluate compensating solar participants at a rate equivalent to
the value of solar to Palo Alto via “value of solar tariff”.
A “value of solar tariff” is a rate design in which customers are compensated at a specified rate
for all generation produced from their on-site systems. On-site consumption is metered
separately and charged in full at the applicable retail rate for that customer class. It is often
referred to as a “buy-all, sell-all” rate option, where no energy is netted on-site as is the case
with the staff proposal. The compensation rate for the on-site generation would be based on
the value of local solar energy generation calculated using avoided cost models that are utilized
in all of the City’s resource acquisition and financial planning. An advantage of the value of solar
tariff design is that it utilizes a standardized and transparent framework for valuing distributed
generation that would be updated regularly.
Staff ultimately did not propose a “value of solar tariff” option for two reasons. First, the
customer may feel unsatisfied that generation from a solar PV system is not counted on a
kilowatt-hour basis toward reducing on-site consumption, as is the case with an energy
efficiency measure. Second, this option would require installing a second meter at the customer
premise to measure all generation from the on-site system, adding cost and requiring
significant changes to current processes and systems to implement.
Attachment E
Page 2 of 3
Guideline 4. Consider and evaluate the impact on the concurrent adoption of on-site
generation and other demand-side technologies.
Many of the same motivations that drive the adoption of solar PV may also drive customers to
adopt other advanced energy technologies, such as electric vehicles (EVs), energy storage,
smart thermostats, and building energy management systems. Staff evaluated the impact of
the concurrent adoption of a solar PV system under the proposed NEM successor rate and
other demand-side technologies. The NEM successor rate proposal provides an economic
incentive for customers to load-shift to use energy from a solar PV system as it is being
generated, prior to being exported to the grid. Customers could load-shift manually by changing
behavior patterns, but more likely will utilize programmable and controllable loads, such as one
or more of those listed above.
Regarding energy storage in particular, currently the market for storage systems for residential
customers in Palo Alto is extremely limited. CPAU has offered a pilot time-of-use rate1 to
approximately 120 residential customers through the CustomerConnect advanced metering
pilot program. However, the price differential between summer peak usage compared to
summer off-peak usage is 7.64 cents per kWh, which is not sufficiently high to make behind-
the-meter energy storage cost-effective based on current storage cost estimates, excluding any
other potential benefits beyond energy arbitrage (charging the battery when the retail rate is
lower and discharging to meet energy needs when the retail rate is higher). The proposed NEM
successor rate would provide 9.416 cents per kWh differential that could be captured by energy
arbitrage, which is the difference between the value of exported energy and the highest
residential rate tier, thus increasing the value stream to prospective storage systems and
expanding the storage market beyond the CustomerConnect pilot participants. Staff plans to
bring forward an updated energy storage assessment for review in 2017, which will evaluate a
variety of use cases, including residential and non-residential applications. Furthermore, staff is
currently evaluating responses to a competitive solicitation called “Solutions to Leverage the
Value of Distributed Energy Resources within the City of Palo Alto”, some of which could utilize
behind-the-meter storage, in addition to other advanced energy technologies discussed above.
Guideline 5. Consider and evaluate the likely impact on the rate of solar adoption and
implications for meeting the Local Solar Plan goal.
The overarching Local Solar Plan goal is to meet 4% of the City’s load from local solar by 2023,
which translates to achieving 23 MW of installed local solar PV capacity. As discussed in the
2015 update on the Local Solar Plan (Staff Report 6649), the Local Solar Plan goal could be
achieved with current and planned programs, existing incentives, and realistic forecasts for
falling solar system prices. The analysis supported that the City could meet the goal without
expanding rebates or NEM incentives beyond the 9.5 MW cap. Since that time, the 30% federal
ITC was extended through the end of 2019, which provides substantial unexpected support for
solar deployment. Palo Alto’s progress toward meeting the Local Solar Plan goal will be
reevaluated on an ongoing basis as new policies and programs come forward for review.
1 http://www.cityofpaloalto.org/civicax/filebank/documents/32678
Attachment E
Page 3 of 3
Guideline 6. Consider the ease of marketing and communicating the program to customers.
Utilities customers are increasingly seeking more detailed information regarding their energy
usage and costs, which makes communications and marketing considerations a primary
concern in the development of rates and programs. During the research and development of a
NEM successor rate, staff evaluated all rate options based on a number of criteria, including
specifically the ease of marketing and communication. Utilities communications and marketing
staff have assessed the proposed NEM successor rate and did not identify any significant
communications-related barriers for the proposed program. Furthermore, at this point in time,
staff does not anticipate needing additional resources for NEM successor program marketing
and outreach efforts.
Guideline 7. Assess technology constraints of program implementation.
The seventh design guideline was to assess all technology constraints for implementing the
proposed NEM successor rates and alternatives, along with associated staff and budget
resource impacts. Staff evaluated a broad variety of NEM successor rate options and identified
compatibility of each to CPAU’s existing systems and processes, such as the customer
information and billing system and metering infrastructure. A mandatory time-of-use rate is not
recommended because of the substantial resource impact of manually implementing such a
rate prior to having full advanced metering infrastructure (AMI) deployment and a billing
system capable of automatically processing the bills. AMI is identified as a long-term rate design
issue for the electric COSA, and evaluation of time-of-use and other rate structures that AMI
enables will be evaluated during Phase Two of the Electric COSA work plan. The NEM successor
program will be revisited at that time in coordination with the COSA.
Guideline 8. Consider and evaluate the impact on non-solar customers.
The proposed NEM successor rate is based on the cost to serve, and the credit value would be
updated annually to reflect the market value of solar energy, value of the RECs, avoided
capacity charges, avoided transmission and distribution system losses, and avoided charges for
transmission and ancillary services. Therefore, there would be no direct financial resource
impact for eligible systems installed under the NEM successor.
Attachment E
Page 1 of 2
Bill Illustration for Residential Customer with Solar PV System under the Proposed Net
Energy Metering (NEM) Successor Rate
Table 1 below estimates the potential electric utility bill of a residential customer installing a solar photovoltaic
(solar PV) system under the proposed Net Energy Metering (NEM) successor rate with a solar system sized to
meet 50% of the customer’s energy usage on site. Each column is labelled as follows.
1. Total Energy Consumption (kWh): This column shows the customer’s total energy consumption on a monthly
basis. This customer uses 12,184 kWh over the entire year, which is approximately two times the average
residential consumption.
2. Solar Energy Production (kWh): This column shows the total energy generated from the customer’s solar PV
system. This simplified example assumes that the customer sized the solar PV system to meet 50% of the total
annual energy consumption shown in column 1.
3. Solar Energy Netted On-site (kWh): Under the proposed NEM successor rate, a customer’s solar PV generation
will first meet simultaneous on-site energy needs, and then any excess energy generation is sent to the grid.
This column shows the amount of energy that is netted on-site to meet instantaneous customer needs, which
was estimated from analyzing hourly load data from the CustomerConnect advanced metering pilot and
hourly generation data from the National Renewable Energy Laboratory’s PVWatts Calculator1.
4. Solar Energy Sent to the Grid (kWh): This column shows the amount of energy sent to the grid, summed over
hours of the day when solar PV production exceeds on-site load.
5. Energy Delivered to Customer (kWh): This column shows the amount of energy delivered by the utility to the
customer. This includes energy delivered at night and during times of the day when the customer’s on-site
energy needs exceed the on-site solar PV generation.
6. Bill Charges for Energy Delivered: This column shows monthly bill charges to the customer after applying the
proposed residential retail rate in the accompanying UAC report to the energy quantity shown in column 5.
7. Bill Credit for Energy Sent to the Grid: This column shows the monthly bill credits to the customer after
applying the credit rate (7.485 ¢/kWh) to the energy quantity in column 4.
8. Monthly Bill with Solar: This column shows the customer’s monthly utility bill with their solar PV system under
the NEM successor rate, after taking column 6 and subtracting column 7. During summer months, for some
customers the credit for exported energy may exceed charges applied to the energy delivered to the
customer, resulting in net credit.
9. Monthly Bill without Solar: This column shows what the customer’s monthly utility bill would have been
without a solar PV system. The calculation takes the consumption in column 1 and applies the proposed
residential retail rate.
10. Monthly Bill with Solar under NEM: This column shows what the monthly utility bill would be for a solar PV
system installed within the NEM cap. The calculation takes the difference between total consumption and
generation and applies the proposed residential retail rate.
1 http://pvwatts.nrel.gov/
Attachment E
Page 2 of 2
Table 1: Bill Illustration of a Residential Customer with a Solar PV System under the Proposed NEM Successor Rate
Month
1. Total
Energy
Consumption
(kWh)
2. Solar
Energy
Production
(kWh)
3. Energy
Netted
On-site
(kWh)
4. Solar
Energy Sent
to the Grid
(kWh)
5. Energy
Delivered to
Customer
(kWh)
6. Bill
Charges for
Energy
Delivered
7. Bill Credit
for Energy
Sent to the
Grid*
8. Monthly
Bill with
Solar
9. Monthly
Bill
Without
Solar
10.
Monthly
Bill with
Solar
Under
NEM
Jan. 1,400 327 244 84 1,156 $175 ($6) $169 $217 $161
Feb. 1,204 314 250 64 954 $143 ($5) $138 $184 $132
Mar. 1,061 519 309 210 752 $107 ($16) $91 $160 $72
Apr. 918 610 311 299 607 $83 ($22) $61 $136 $34
May 885 704 341 363 543 $72 ($27) $45 $130 $20
June 882 659 352 307 530 $70 ($23) $47 $130 $25
July 929 711 377 334 552 $73 ($25) $48 $138 $24
Aug. 894 582 312 270 582 $78 ($20) $58 $132 $34
Sept. 930 551 301 250 629 $87 ($19) $68 $138 $45
Oct. 943 467 266 201 677 $94 ($15) $79 $140 $60
Nov. 954 348 191 157 764 $110 ($12) $98 $142 $83
Dec. 1,184 299 198 101 985 $147 ($8) $139 $180 $130
Total: 12,184 6,092 3,452 2,640 8,732 $1,240 ($198) $1,042 $1,825 $820
*All credits shown in parentheses.
Table 2: Annual Bill Comparison of Residential Customer with a Solar PV System
Annual Bill Comparison for Customer Illustration
Annual Bill with Solar under Proposed NEM Successor Rate (column 8) $1,042
Annual Bill with Solar under NEM (column 10) $820
Annual Bill Difference Between NEM and NEM Successor $222
Annual Bill without Solar (column 9) $1,825
December 30, 2015
City of Palo Alto, City Council
250 Hamilton Ave.
Palo Alto, CA 94301
Re: Item #5, Finance Committee Recommendation that the City Council Approve Design Guidelines for
the Net Energy Metering Successor Program – OPPOSE UNLESS AMENDED
Dear Members of the City Council,
Energy Freedom Coalition of America ("EFCA") is a national advocacy group that seeks to promote both
the public awareness of the benefits of solar and alternative energy, as well as the use of rooftop and
other customer-owned and third-party owned distributed solar electrical generation, for residential and
commercial applications. EFCA applauds the City of Palo Alto Utilities’ (CPAU) effort to undertake a
thorough and thoughtful process in developing a solar program that will continue to promote rooftop
solar adoption for Palo Alto’s residents. However, the guidelines as currently written are incomplete and
should not be approved. Before the City Council approves the proposed guidelines, we recommend
adding a new guideline and expanding several of the current guidelines.
New Guideline
We strongly recommend that a new guideline be added, for a total of 7 guidelines.
New Guideline: Evaluate the benefits and costs of continuing the NEM program without modification
after the cap has been reached.
CPAU has the authority to continue its NEM program after the cap has been reached, and should
strongly consider this option. NEM is a simple, effective, and reliable payment mechanism that fairly
compensates solar customers for the value their systems provide to the grid. NEM has been crucial to
the widespread adoption of solar in California, and now exists in 44 states. In California, NEM has
leveraged more than $10 billion in private investment, reduced electricity demand, and helped support
more than 54,000 in-state jobs. Rooftop solar is vital to continue growing the clean energy economy,
both locally and across the state, and to meeting the state’s ambitious clean energy goals. Continuing
NEM will provide market certainty and predictability, and will help local homeowners, schools, and
businesses to save on their electric bills while reducing greenhouse gas emissions. Moreover, NEM
requires only a single meter, provides a form of compensation that is not subject to federal income tax,
and gives customers the satisfaction of offsetting their own usage with renewable power.
If changes to the current NEM program are considered, CPAU should examine changes that “phase-in”
gradually over time. One of the most successful programs in the country for promoting rooftop solar at a
reasonable cost was the California Solar Initiative, which was structured as a 10-year program with
incentives that stepped down gradually and predictably as the solar market grew in size. This program
design worked well because the long-term nature of the program sent a signal to investors that the
incentive regime would not change abruptly, while the gradual step-down of incentives aligned the
incentive structure with the long-term solar cost trajectory. When designing any successor NEM tariff,
CPAU should consider one that creates long-term stability and predictability for the market, rather than
one that could be reviewed and changed on an ad hoc basis.
Modifications to Existing Guidelines
In addition to the new guideline listed above, we recommend several modifications to the existing
guidelines.
Current Guideline 1: Evaluate program options that compensate customers fairly and equitably for local
renewable energy production.
Proposed Guideline 1: Evaluate program options that compensate customers fairly and equitably for
local renewable energy production. Consider environmental benefits, short-term and long-term system
cost savings from behind-the-meter, and consistency with the objectives of AB 327.
Behind-the-meter solar provides several benefits to the grid which results in reduced costs for all
ratepayers. In the short-term, when a generation resource is located behind a customer’s meter, it is
avoiding line losses when compared to more remote generation that is delivered across transmission
and distribution facilities. In the long-term, distributed generation may enable a utility to avoid or defer
large-scale capital transmission and distribution projects and associated maintenance and upgrades.
CPAU’s NEM successor program should adequately take into account these avoided costs when
assessing any perceived “cost-shift” between solar and non-solar customers.
Should CPAU choose not to continue its current NEM program after the cap has been reached, the
successor program should be aligned with the goals and requirements outlined in Assembly Bill 327 (AB
327). While AB 327 has directed the CPUC to adopt a successor program to NEM by 2016, the new
program must ensure that (1) the total benefits of the new tariff must be equal to the total costs; and
(2) customer-sited renewable distributed generation continues to grow sustainably. All NEM successor
programs considered by CPAU should be consistent with these requirements. There are a number of
changes that could be made to the existing NEM program, such as minimum bills for NEM customers
that could address ratepayer equity issues while maintaining a viable NEM program that continues
progress toward CPAU’s energy and climate goals.
Current Guideline 2: Consider compensating solar participants at a rate equivalent to the value of solar
to Palo Alto via “value of solar tariff.”
Proposed Guideline 2: Consider compensating solar participants at a rate equivalent to the value of
solar to Palo Alto via “value of solar tariff”. Thoroughly review both the positive and negative attributes
of a “value of solar tariff”.
A “value of solar tariff” (VOST) is a rate design in which customers are compensated at a specified rate
based on the value of local solar energy generation for all generation produced from their on-site
systems. Unlike NEM, a VOST does not allow a customer to consume their on-site generation before
selling to the utility. While a VOST appears to be straight forward and transparent, it has many negative
attributes. One primary issue is that a VOST creates a hidden tax for ratepayers, as the income paid to
the solar customer by the utility for solar electricity may be subject to income tax, and in some cases
may even make customers ineligible for the federal investment tax credit on their solar systems. The
fact that VOSTs may be regularly updated also poses an issue, as this wavering rate guarantees regular
market uncertainty that can be harmful to solar customers. Customers in states like Texas and
Minnesota where VOSTs have been introduced have quickly seen the value compensated to them for
their solar decline.
While a VOST may appear to provide a fair market value to distributed generation, its many negative
attributes make it a confusing and potentially harmful alternative to NEM. CPAU should carefully
examine these issues before considering a VOST as a fair alternative to NEM.
Current Guideline 5: Consider the ease of marketing and communicating the program to customers.
Proposed Guideline 5: Consider the ease of marketing and communicating the program to new and
existing customers. Prioritize a program design that is easy to understand, and does not harm existing
NEM customers.
NEM is a simple, easy to understand, and trusted program that has been in effect in California for almost
two decades, making it the most established state incentive for solar and other distributed generation
technologies. CPAU should carefully consider the significant customer outreach and education that will
be necessary to minimize confusion and harm to behind-the-meter solar adoption should the NEM
successor program differ significantly from the current NEM program.
CPAU should ensure that any NEM successor tariff does not harm existing NEM customers. When
customers make the substantial investment to buy a rooftop solar system, they typically assume that
their electric rate and NEM compensation mechanism will not change for the life of the solar system.
Requiring existing NEM customers to transition onto a new tariff will change the return on investment
for those customers in a way most likely did not expect. The CPUC has approved a NEM transition period
that allows current NEM customers to continue on their current NEM tariff for 20 years after their install
date. The CPAU should carefully consider the impact on existing NEM customers when developing a
successor tariff and should provide guidance on a transition plan.
Palo Alto has long been a leader in innovative rate and program designs, and we hope this post-NEM
program continues that trend. Thank you for taking comments on this important issue. We look forward
to working with you as this process continues.
Regards,
Julia Jazynka
Associate
Energy Freedom Coalition of America, LLC
EXCERPTED DRAFT MINUTES OF THE APRIL 12, 2016
UTILITIES ADVISORY COMMISSION SPECIAL MEETING
ITEM 2. ACTION: Staff Request that the Utilities Advisory Commission Recommend that City
Council approve the Proposed Net Energy Metering Successor Rate E-EEC-1 and Net Energy
Metering Grandfathering Policy
Resource Planner Aimee Bailey summarized the written report. Bailey stated that a State
requirement requires net energy metering (NEM) until a cap is reached. She explained that
NEM is like “rolling the meter backward” by providing full retail rate compensation for
distributed generation, which in Palo Alto are rooftop solar photovoltaic (PV) systems. Palo
Alto’s NEM cap is 9.5 MW and when it is reached, a successor program is needed.
Bailey discussed the 8 NEM Successor Program design guidelines that were reviewed by the
UAC in November 2015 and approved by Council in January 2016. She noted that the NEM
successor rate must be consistent with the cost of service and must be compliant with
Proposition 26. Bailey mentioned that the City’s installed NEM capacity was 7.5 MW as of mid-
February and that the City may reach its NEM cap by the end of 2016. However, if a few large
systems were installed by commercial customers, the cap could be reached quickly and,
therefore, a successor program needs to be in place to provide certainty for customers
contemplating installing solar PV.
Bailey noted that there is a proposed bill in the State legislature (Assembly Bill 2339) that may
require the NEM cap to be calculated differently—and could double the City’s NEM cap, but it is
still in the legislative review process and may be amended. If and when the bill is signed into
law, Palo Alto would comply.
Bailey presented the proposed rate: a two-part rate that charged the retail rate for any energy
delivered to the customer and a credit applied for any energy delivered to the grid. The credit
rate is based on the short-term value of solar and would change every year as that value
changes. For FY 2017, the proposed credit rate is 7.485 cents per kilowatt-hour (₵/kWh). Bailey
showed an illustration of a customer with a solar PV system to show when energy usage is
greater than PV generation and when PV generation is greater than usage. She showed an
illustration of a PV customer’s bill with the current NEM program compared to the proposed
NEM successor program.
Bailey described the components of the proposed credit rate for FY 2017 of 7.485 ₵/kWh: 3.02
₵/kWh for avoided energy cost + 1.45 ₵/kWh for the environmental attribute + 0.58 ₵/kWh for
capacity + 2.00 ₵/kWh for avoided transmission costs and ancillary service value + 0.44 ₵/kWh
for avoided transmission and distribution system losses.
Commissioner Ballantine said that smart inverters, if installed or required in the future, could
increase the value of the ancillary services used in the credit rate calculation. He remarked that
he hoped that an expanded discussion on this topic may be better suited for the upcoming UAC
meeting in June when the rolling calendar shows the subject of storage and microgrids on the
agenda. He asked how the City will encourage people to stabilize the grid using advanced
inverters. Bailey confirmed that the proposed credit rate did not include any additional value
stream that advanced inverters could provide. She said that the City is very interested in this
subject and released a request for proposal for encouraging distributing energy resources.
Commissioner Schwartz noted that Arizona Public Service has a good program for managing
inverters that the City could potentially learn from.
Commissioner Danaher asked why the energy value is only 3.02 ₵/kWh since solar generation is
in the middle of the day. He asked what the City’s energy costs are and how the value was
developed. Bailey explained that the energy value is based on the shape of solar energy
production so that it is higher than energy generation that occurs on a “flat” 24/7 basis. She
said it was a short-term value based on the forward prices for mid-day energy for FY 2017 and
is consistent with all assumptions used to manage the City’s electric portfolio. Commissioner
Danaher asked if the value included the Renewable Energy Certificates (RECs). Bailey explained
that the RECs are included and are currently valued at 1.45 ₵/kWh. Bailey said that the energy
value was for the solar generation profile and, therefore, takes into account the timing of the
energy generated at peak demand.
Vice Chair Cook asked how this value compared to the avoided cost of local solar used in the
Palo Alto CLEAN (feed-in tariff) program. Assistant Director Jane Ratchye explained that one of
the fundamental differences between the proposed credit value for the NEM successor
program compared to the avoided cost of solar for the CLEAN program is that the NEM
successor value is based on a short-term avoided cost (for FY 2017) while the CLEAN program is
based on a long-term levelized cost over a 20- or 25-year period.
Commissioner Schwartz asked if the City can use the excess capacity generated by PV systems
in excess of the customer’s usage. Bailey noted that many customers do not export any energy,
but use most or all energy generated on site. She added that solar generation does assist the
City in lowering its peak demand, which reduces its costs for capacity needs and that the
proposed credit rate includes that value of local solar. She said that this value will be re-
evaluated every year, which is part of the reason that the credit rate will be adjusted annually
to ensure that local solar generation is fairly compensated at full value.
Bailey noted that NEM will require a bidirectional meter that would be required to measure
separately the energy delivered to the customer as well as the energy received from the
customer. She said that the meter would be paid for by the utility (all ratepayers) as meter
replacement is part of the long-term plan. However, the customer would pay an
interconnection fee under the Electric Service Connection Fee schedule (Rate Schedule E-15)
that is currently being revisited (estimated to be a one-time fee of $100-$200). She added that
the City would likely be required to issue 1099s for exported energy if its value exceeded $600
annually.
Bailey noted that customer economics for solar PV depend on many factors including the
fraction of energy used on site versus the amount exported, solar PV costs, federal incentives,
and other tax implications. She said that if all solar energy is used no-site and none is exported
to the grid, the proposed NEM successor program is effectively identical to the current NEM
program and customer economics do not change. Bailey said that this is the case for most
commercial customers who use all the energy they generate on site. Customers who shift
energy usage to times when their PV system is generating would improve the economics of
their system.
Commissioner Schwartz asked about the impact of storage on customer load and whether
there is some optimization that could occur. Bailey said that staff is evaluating that impact in its
evaluation of storage and other distributed energy resources (DERs). She pointed out that this
was discussed in Attachment B of the report, which addresses each of the Council-approved
NEM successor program design guidelines. Bailey mentioned that the proposed rate
encourages storage and other DERs, especially in light of the impact of renewables on the grid
and the “duck curve” issues.
Commissioner Ballantine said that if the maximum amount of roof space in the City was used
for solar PV generation to effectively power Palo Alto, but the one “bad day” occurred with a
power outage, the lack of smart inverters would result in a drop of all the load in Palo Alto. He
encouraged the City to find ways to encourage smart inverters and the local use of storage to
avoid that potential problem.
Bailey described the proposed grandfathering program that would enable NEM customers to
remain on NEM for 20 years from the time of interconnection and to expand their systems by
up to 10% of the original system capacity after the NEM cap is reached.
Public Comment
Tom Kabat said that NEM rules were very valuable to get PV off the ground and the industry did
respond to these incentives resulting in a dramatic lowering of costs. Now the industry has
expanded and costs have come down to between 6 and 9 cents per kWh over the life of the
system. He said that the City’s “game changing” carbon neutral policy makes the investment in
local solar less valuable since the new resources added to the electric portfolio are low-priced
solar located outside the City. He said that the staff estimate of the value of local solar is fair
and is not overpaying as in the Palo Alto CLEAN program. The staff proposal is fair to current PV
customers (by grandfathering them in for the life of their investments), to future PV customer
(by fairly valuing their generation and requiring them to pay the normal cost for energy
delivered to them), and to their shaded neighbors and other non-PV customers (since they
don’t have to pay higher rates to support PV customers). The program also encourages energy
storage (to take on the duck curve problem), and is a policy to encourage electrification, which
is the way to reduce carbon emissions since the City’s electric portfolio is already carbon
neutral.
Gina Goodhill Rosen, a representative of Solar City, supports the NEM grandfathering proposal,
but strongly opposes the successor program as she says it undervalues the solar generation
produced. Without a comprehensive, rigorous analysis of both the costs and benefits of NEM,
the consideration of the proposal should be delayed. NEM fairly compensates solar customers,
has been working well and is part of the reason the solar industry has been so successful. Solar
has brought many jobs and millions of dollars of investment to the state and city. The proposal
does not fairly compensate PV customers for the benefits they provide to the grid and
compensates them at a significantly lower rate than the Palo Alto CLEAN program does. This
mixed message is confusing to customers and implicitly recognizes that there are benefits of
local solar that are not being recognized in this proposed NEM successor program. This
proposal does not support the City’s and state’s climate goals and is in stark contrast to the
California Public Utilities Commission’s (CPUC’s) decision to continue NEM for the investor-
owned utilities (IOUs) who serve the large majority of the state’s residents and businesses.
Legislation (AB 2339) may expand the NEM cap for municipal utilities or the City could
independently choose to expand its own cap. She said that the City should delay action on the
NEM successor program until the legislation has been enacted.
Chair Foster asked Ms. Rosen to expand upon the CPUC decision with respect to the IOUs. MS
Rosen said that the CPUC adopted basically a continuance of NEM for the IOUs after a year-long
stakeholder review process.
Chair Foster for staff’s comment about the CPUC decision to continue NEM. Bailey said that the
City is not subject to CPUC regulations and the IOUs are not subject to Proposition 26. Bailey
reiterated that the credit rate proposed is a cost-justified rate that was developed in concert
with the Electric Cost of Service Analysis (COSA) and that it is compliant with Proposition 26,
which is the overriding consideration for the development of this rate. Chair Foster asked for
staff’s comments on the disparity between the proposed credit rate of 7.485 ₵/kWh and the
Palo Alto CLEAN price of 16.5 ₵/kWh. Ratchye mentioned that the Palo Alto CLEAN rate is
available to all customers, including residential customers, so customers are free to participate
in the Palo Alto CLEAN program and get the16.5 ₵/kWh rate for all the energy generated by
their PV system. Bailey explained the differences between the CLEAN program price and the
NEM successor credit rate. For one, the CLEAN price is fixed for a 20- or 25-year period, but the
NEM successor rate would change every year as the avoided cost changes (up or down) over
time. Also, the energy component of the rate is calculated using market rate forecasts for what
the City would buy energy from the market for the next year for an energy production profile of
solar energy generation. The energy avoided cost for the CLEAN price was calculated by taking
the average of the best ten proposed prices received in the most recent Request for Proposals
(RFP) for long-term renewable Power Purchase Agreements.
Chair Foster asked if there is any choice on this, or is the City stuck by the Proposition 26
requirement. Deputy Senior Assistant City Attorney Jessica Mullan said that there are always
choices, but the legal requirement is to have rates that are cost justified such as the proposed
rate. Any other proposal would require the consultant to determine that it was cost justified.
Commissioner Ballantine asked whether the Palo Alto CLEAN price is compliant with
Proposition 26. Ratchye explained that the CLEAN price is for resources procured for the whole
portfolio so that the cost is shared by all customers, but that customer rates need to comply
with the cost-based requirement of Proposition 26.
Commissioner Schwartz noted that Solar City has a different business model than the City. She
said that the City is also tasked with keeping rates and costs low for the ratepayers. She said
that as you look at the evolving industry and that the City has done much to encourage solar,
but this is a place where the City can control costs to residents and not unduly burden those
with lower energy usage or those who cannot install solar on their homes. She said that his is
one place where we can minimize costs to residents and not unduly burden the people who
have shade trees and won’t put solar on their house or if their usage and bills are too low and
the staff recommendation does that and she supports it. Commissioner Schwartz said she was
called by someone selling solar installer today who asked if her bill was under $75 and she said
yes, then they hung up on her.
Commissioner Danaher said he supports continuing NEM as suggested by Ms. Rosen in
Mountain View or other places, but in Palo Alto, we have large contracts for solar energy that
are a less expensive way to provide solar to the City. He only reluctantly supports the CLEAN
program price since he wants to get renewable energy at the lowest possible cost. He supports
the staff proposal, especially until there are smart inverters that could provide an actual extra
local benefit for local solar.
Vice Chair Cook supports continuing NEM, which he said is what this proposal does. He said
that as the technology gets less expensive over time, the same incentive is not required. He said
that continuing the program at a lower cost makes sense.
ACTION:
Commissioner Schwartz moved to recommend that the UAC recommend Council approve
staff’s proposal and Vice Chair Cook seconded the motion. The motion carried unanimously (5-
0) with Chair Foster, Vice Chair Cook, Commissioners Ballantine, Danaher, and Schwartz voting
yes and Commissioners Eglash and Hall absent.
EXCERPTED FINAL MINUTES OF THE APRIL 12, 2016
UTILITIES ADVISORY COMMISSION SPECIAL MEETING
ITEM 2. ACTION: Staff Request that the Utilities Advisory Commission Recommend that City
Council approve the Proposed Net Energy Metering Successor Rate E-EEC-1 and Net Energy
Metering Grandfathering Policy
Resource Planner Aimee Bailey summarized the written report. Bailey stated that a State
requirement requires net energy metering (NEM) until a cap is reached. She explained that
NEM is like “rolling the meter backward” by providing full retail rate compensation for
distributed generation, which in Palo Alto are rooftop solar photovoltaic (PV) systems. Palo
Alto’s NEM cap is 9.5 MW and when it is reached, a successor program is needed.
Bailey discussed the 8 NEM Successor Program design guidelines that were reviewed by the
UAC in November 2015 and approved by Council in January 2016. She noted that the NEM
successor rate must be consistent with the cost of service and must be compliant with
Proposition 26. Bailey mentioned that the City’s installed NEM capacity was 7.5 MW as of mid-
February and that the City may reach its NEM cap by the end of 2016. However, if a few large
systems were installed by commercial customers, the cap could be reached quickly and,
therefore, a successor program needs to be in place to provide certainty for customers
contemplating installing solar PV.
Bailey noted that there is a proposed bill in the State legislature (Assembly Bill 2339) that may
require the NEM cap to be calculated differently—and could double the City’s NEM cap, but it is
still in the legislative review process and may be amended. If and when the bill is signed into
law, Palo Alto would comply.
Bailey presented the proposed rate: a two-part rate that charged the retail rate for any energy
delivered to the customer and a credit applied for any energy delivered to the grid. The credit
rate is based on the short-term value of solar and would change every year as that value
changes. For FY 2017, the proposed credit rate is 7.485 cents per kilowatt-hour (₵/kWh). Bailey
showed an illustration of a customer with a solar PV system to show when energy usage is
greater than PV generation and when PV generation is greater than usage. She showed an
illustration of a PV customer’s bill with the current NEM program compared to the proposed
NEM successor program.
Bailey described the components of the proposed credit rate for FY 2017 of 7.485 ₵/kWh: 3.02
₵/kWh for avoided energy cost + 1.45 ₵/kWh for the environmental attribute + 0.58 ₵/kWh for
ATTACHMENT E
capacity + 2.00 ₵/kWh for avoided transmission costs and ancillary service value + 0.44 ₵/kWh
for avoided transmission and distribution system losses.
Commissioner Ballantine said that smart inverters, if installed or required in the future, could
increase the value of the ancillary services used in the credit rate calculation. He remarked that
he hoped that an expanded discussion on this topic may be better suited for the upcoming UAC
meeting in June when the rolling calendar shows the subject of storage and microgrids on the
agenda. He asked how the City will encourage people to stabilize the grid using advanced
inverters. Bailey confirmed that the proposed credit rate did not include any additional value
stream that advanced inverters could provide. She said that the City is very interested in this
subject and released a request for proposal for encouraging distributing energy resources.
Commissioner Schwartz noted that Arizona Public Service has a good program for managing
inverters that the City could potentially learn from.
Commissioner Danaher asked why the energy value is only 3.02 ₵/kWh since solar generation is
in the middle of the day. He asked what the City’s energy costs are and how the value was
developed. Bailey explained that the energy value is based on the shape of solar energy
production so that it is higher than energy generation that occurs on a “flat” 24/7 basis. She
said it was a short-term value based on the forward prices for mid-day energy for FY 2017 and
is consistent with all assumptions used to manage the City’s electric portfolio. Commissioner
Danaher asked if the value included the Renewable Energy Certificates (RECs). Bailey explained
that the RECs are included and are currently valued at 1.45 ₵/kWh. Bailey said that the energy
value was for the solar generation profile and, therefore, takes into account the timing of the
energy generated at peak demand.
Vice Chair Cook asked how this value compared to the avoided cost of local solar used in the
Palo Alto CLEAN (feed-in tariff) program. Assistant Director Jane Ratchye explained that one of
the fundamental differences between the proposed credit value for the NEM successor
program compared to the avoided cost of solar for the CLEAN program is that the NEM
successor value is based on a short-term avoided cost (for FY 2017) while the CLEAN program is
based on a long-term levelized cost over a 20- or 25-year period.
Commissioner Schwartz asked if the City can use the excess capacity generated by PV systems
in excess of the customer’s usage. Bailey noted that many customers do not export any energy,
but use most or all energy generated on site. She added that solar generation does assist the
City in lowering its peak demand, which reduces its costs for capacity needs and that the
proposed credit rate includes that value of local solar. She said that this value will be re-
evaluated every year, which is part of the reason that the credit rate will be adjusted annually
to ensure that local solar generation is fairly compensated at full value.
Bailey noted that NEM will require a bidirectional meter that would be required to measure
separately the energy delivered to the customer as well as the energy received from the
customer. She said that the meter would be paid for by the utility (all ratepayers) as meter
replacement is part of the long-term plan. However, the customer would pay an
interconnection fee under the Electric Service Connection Fee schedule (Rate Schedule E-15)
that is currently being revisited (estimated to be a one-time fee of $100-$200). She added that
the City would likely be required to issue 1099s for exported energy if its value exceeded $600
annually.
Bailey noted that customer economics for solar PV depend on many factors including the
fraction of energy used on site versus the amount exported, solar PV costs, federal incentives,
and other tax implications. She said that if all solar energy is used no-site and none is exported
to the grid, the proposed NEM successor program is effectively identical to the current NEM
program and customer economics do not change. Bailey said that this is the case for most
commercial customers who use all the energy they generate on site. Customers who shift
energy usage to times when their PV system is generating would improve the economics of
their system.
Commissioner Schwartz asked about the impact of storage on customer load and whether
there is some optimization that could occur. Bailey said that staff is evaluating that impact in its
evaluation of storage and other distributed energy resources (DERs). She pointed out that this
was discussed in Attachment B of the report, which addresses each of the Council-approved
NEM successor program design guidelines. Bailey mentioned that the proposed rate
encourages storage and other DERs, especially in light of the impact of renewables on the grid
and the “duck curve” issues.
Commissioner Ballantine said that if the maximum amount of roof space in the City was used
for solar PV generation to effectively power Palo Alto, but the one “bad day” occurred with a
power outage, the lack of smart inverters would result in a drop of all the load in Palo Alto. He
encouraged the City to find ways to encourage smart inverters and the local use of storage to
avoid that potential problem.
Bailey described the proposed grandfathering program that would enable NEM customers to
remain on NEM for 20 years from the time of interconnection and to expand their systems by
up to 10% of the original system capacity after the NEM cap is reached.
Public Comment
Tom Kabat said that NEM rules were very valuable to get PV off the ground and the industry did
respond to these incentives resulting in a dramatic lowering of costs. Now the industry has
expanded and costs have come down to between 6 and 9 cents per kWh over the life of the
system. He said that the City’s “game changing” carbon neutral policy makes the investment in
local solar less valuable since the new resources added to the electric portfolio are low-priced
solar located outside the City. He said that the staff estimate of the value of local solar is fair
and is not overpaying as in the Palo Alto CLEAN program. The staff proposal is fair to current PV
customers (by grandfathering them in for the life of their investments), to future PV customer
(by fairly valuing their generation and requiring them to pay the normal cost for energy
delivered to them), and to their shaded neighbors and other non-PV customers (since they
don’t have to pay higher rates to support PV customers). The program also encourages energy
storage (to take on the duck curve problem), and is a policy to encourage electrification, which
is the way to reduce carbon emissions since the City’s electric portfolio is already carbon
neutral.
Gina Goodhill Rosen, a representative of Solar City, supports the NEM grandfathering proposal,
but strongly opposes the successor program as she says it undervalues the solar generation
produced. Without a comprehensive, rigorous analysis of both the costs and benefits of NEM,
the consideration of the proposal should be delayed. NEM fairly compensates solar customers,
has been working well and is part of the reason the solar industry has been so successful. Solar
has brought many jobs and millions of dollars of investment to the state and city. The proposal
does not fairly compensate PV customers for the benefits they provide to the grid and
compensates them at a significantly lower rate than the Palo Alto CLEAN program does. This
mixed message is confusing to customers and implicitly recognizes that there are benefits of
local solar that are not being recognized in this proposed NEM successor program. This
proposal does not support the City’s and state’s climate goals and is in stark contrast to the
California Public Utilities Commission’s (CPUC’s) decision to continue NEM for the investor-
owned utilities (IOUs) who serve the large majority of the state’s residents and businesses.
Legislation (AB 2339) may expand the NEM cap for municipal utilities or the City could
independently choose to expand its own cap. She said that the City should delay action on the
NEM successor program until the legislation has been enacted.
Chair Foster asked Ms. Rosen to expand upon the CPUC decision with respect to the IOUs. MS
Rosen said that the CPUC adopted basically a continuance of NEM for the IOUs after a year-long
stakeholder review process.
Chair Foster for staff’s comment about the CPUC decision to continue NEM. Bailey said that the
City is not subject to CPUC regulations and the IOUs are not subject to Proposition 26. Bailey
reiterated that the credit rate proposed is a cost-justified rate that was developed in concert
with the Electric Cost of Service Analysis (COSA) and that it is compliant with Proposition 26,
which is the overriding consideration for the development of this rate. Chair Foster asked for
staff’s comments on the disparity between the proposed credit rate of 7.485 ₵/kWh and the
Palo Alto CLEAN price of 16.5 ₵/kWh. Ratchye mentioned that the Palo Alto CLEAN rate is
available to all customers, including residential customers, so customers are free to participate
in the Palo Alto CLEAN program and get the16.5 ₵/kWh rate for all the energy generated by
their PV system. Bailey explained the differences between the CLEAN program price and the
NEM successor credit rate. For one, the CLEAN price is fixed for a 20- or 25-year period, but the
NEM successor rate would change every year as the avoided cost changes (up or down) over
time. Also, the energy component of the rate is calculated using market rate forecasts for what
the City would buy energy from the market for the next year for an energy production profile of
solar energy generation. The energy avoided cost for the CLEAN price was calculated by taking
the average of the best ten proposed prices received in the most recent Request for Proposals
(RFP) for long-term renewable Power Purchase Agreements.
Chair Foster asked if there is any choice on this, or is the City stuck by the Proposition 26
requirement. Deputy Senior Assistant City Attorney Jessica Mullan said that there are always
choices, but the legal requirement is to have rates that are cost justified such as the proposed
rate. Any other proposal would require the consultant to determine that it was cost justified.
Commissioner Ballantine asked whether the Palo Alto CLEAN price is compliant with
Proposition 26. Ratchye explained that the CLEAN price is for resources procured for the whole
portfolio so that the cost is shared by all customers, but that customer rates need to comply
with the cost-based requirement of Proposition 26.
Commissioner Schwartz noted that Solar City has a different business model than the City. She
said that the City is also tasked with keeping rates and costs low for the ratepayers. She said
that as you look at the evolving industry and that the City has done much to encourage solar,
but this is a place where the City can control costs to residents and not unduly burden those
with lower energy usage or those who cannot install solar on their homes. She said that his is
one place where we can minimize costs to residents and not unduly burden the people who
have shade trees and won’t put solar on their house or if their usage and bills are too low and
the staff recommendation does that and she supports it. Commissioner Schwartz said she was
called by someone selling solar installer today who asked if her bill was under $75 and she said
yes, then they hung up on her.
Commissioner Danaher said he supports continuing NEM as suggested by Ms. Rosen in
Mountain View or other places, but in Palo Alto, we have large contracts for solar energy that
are a less expensive way to provide solar to the City. He only reluctantly supports the CLEAN
program price since he wants to get renewable energy at the lowest possible cost. He supports
the staff proposal, especially until there are smart inverters that could provide an actual extra
local benefit for local solar.
Vice Chair Cook supports continuing NEM, which he said is what this proposal does. He said
that as the technology gets less expensive over time, the same incentive is not required. He said
that continuing the program at a lower cost makes sense.
ACTION:
Commissioner Schwartz moved to recommend that the UAC recommend Council approve
staff’s proposal and Vice Chair Cook seconded the motion. The motion carried unanimously (5-
0) with Chair Foster, Vice Chair Cook, Commissioners Ballantine, Danaher, and Schwartz voting
yes and Commissioners Eglash and Hall absent.
City of Palo Alto (ID # 7138)
City Council Staff Report
Report Type: Action Items Meeting Date: 8/22/2016
City of Palo Alto Page 1
Summary Title: Interim Retail Preservation Ordinance Discussion
Title: Interim Retail Preservation Ordinance: Request For Waiver at 100
Addison, Discussion Regarding Applicability to Retail and "Retail-Like" Uses
which Do Not Have Required Entitlements, and Discussion Regarding
Potential Ordinance Improvements & Next Steps
From: City Manager
Lead Department: Planning and Community Environment
Recommendation:
Staff recommends that the City Council review interim retail preservation Ordinance No. 5325
adopted on May 11, 2015 and extended by Ordinance No. 5330 on June 15, 2015 and:
a) deny the request for waiver for the property at 100 Addison Avenue (continued from
June 20, 2016);
b) provide direction to staff regarding interpretation and/or adjustments needed to the
interim ordinance, with particular attention to situations represented by properties at
3241 Park Boulevard and 425 Portage Avenue, and the request for waiver for the
property at 999 Alma Street; and
c) provide direction to staff regarding prioritization of additional permanent zoning
ordinance amendments needed prior to expiration of the interim ordinance in April 30,
2017.
Executive Summary:
In mid-2015, the City Council adopted an urgency ordinance prohibiting the conversion of
ground floor spaces used for retail and “retail like” uses to office or other uses. The ordinance,
which is scheduled to sunset on April 30, 2017, was intended to protect retail spaces from
converting to other uses while the City developed permanent zoning amendments to enhance
retail protections.
Since the urgency ordinance was adopted, the City has adopted permanent zoning
City of Palo Alto Page 2
amendments affecting the California Avenue Area (Ordinance No. 5358, adopted October 26,
2015) and closed a loophole affecting the Community Commercial (CC), Neighborhood
Commercial (CN), and Service Commercial (CS) zoning districts (Ordinance No. 5373, adopted
January 11, 2016). Additional, permanent zoning amendments remain to be developed and
planning staff is currently beginning work on an ordinance affecting Downtown.
Several provisions in the urgency ordinance have proven difficult to administer, and/or have
resulted in specific requests for a waiver or for a staff determination that the ordinance does
not apply. This evening’s discussion will provide the City Council with an opportunity to weigh
in on those specific requests, to provide guidance regarding interpretation and/or amendments
to the urgency ordinance, and to prioritize permanent retail protections if desired.
Background & Discussion:
On May 11, 2015, the City Council adopted an urgency ordinance establishing a moratorium on
the conversion of ground floor retail and “retail like” uses to other uses (Attachment A). The
urgency ordinance was extended on June 15, 2015 (Attachment B), and will remain in effect
until replaced or until it expires on April 30, 2017.
Provisions of the Interim Ordinance
The ordinance prohibits the conversion of ground floor retail use “permitted or operating as of
March 2, 2015 or thereafter” to any other non-retail use, and defines “retail use” as including
the following:
retail service
eating and drinking service
hotels
personal services
theaters
travel agencies
commercial recreation
commercial nurseries
auto dealerships
day care centers
service stations and
automotive services.
The ordinance applies to legal non-conforming uses, stating that such uses “shall remain… and
shall not be subject to the change, discontinuance, or termination provisions of Chapter 18.70.”
Importantly, however, the ordinance’s applicability to legal non-conforming uses does not
extend to illegal and non-conforming uses, and there was an early instance where retail uses
that had been illegally established in an industrial zoning district where retail is not a permitted
City of Palo Alto Page 3
use were allowed to convert to office use.1 As discussed further below, in administering the
ordinance, retail and retail-like uses that were established without the benefit of a Use and
Occupancy permit or other city approval, but are permitted or conditionally permitted uses in
the district are treated as non-conforming uses and subject to the limitations on conversion to a
non-retail use.
The ordinance also applies to basements “currently in retail use or in use for retail support
purposes,” which is subject to some interpretation, and contains an exemption for “pipeline
projects.” There are also provisions regarding “waivers and adjustments” (18.85.104). These
provisions allow an applicant to request a waiver based on economic hardship by “showing that
applying requirements [of the ordinance] would effectuate an unconstitutional taking of
property or otherwise have an unconstitutional application to the property.”
The ordinance also states that “the applicant shall bear the burden of presenting substantial
evidence to support a waiver or modification request… and shall set forth in detail the factual
and legal basis for the claim, including all supporting technical documentation.” Requests must
be submitted to the Director of Planning and Community Environment “together with an
economic analysis or other supporting documentation” and must be acted upon by the City
Council.
Request for Waiver (100 Addison Ave.)
On May 11, 2016, Ms. Kristina Lawson, representing the owners of 100 Addison Avenue, the
True Morris Family, LLC, submitted a request for waiver (Attachment C). This request followed
several earlier inquiries and requests that had been rejected as incomplete by the Director of
Planning.
As explained in Ms. Lawson’s request, the building at 100 Addison Avenue was occupied by
Addison Antiques, a retail use, until June 30, 2015. According to the applicant, since that date,
the owners have been unsuccessfully seeking to lease the building to a new retail or “retail-like”
tenant(s).
The 100 Addison request for waiver was placed on the City Council’s consent agenda with a
recommendation for denial on June 20, 2016 and was removed from consent by three
members of the City Council and continued to a date uncertain. Please see CMR #7048 in
Attachment E for the June 20th staff report and materials.
Staff does not believe the requestor has demonstrated that an unconstitutional taking of
property has occurred. While the location is not central to downtown, and will not be able to
command retail rents as high as those in other locations, the Department of Planning and
Community Environment has received inquiries from potential retail tenants and believes that
1 A “legal nonconforming use” complied with zoning regulations at the time the use was established and became
nonconforming due to a change in regulations. On the other hand an “illegal nonconforming use” neither
complied with previous or current zoning regulations.
City of Palo Alto Page 4
the subject property is leasable for a retail or retail-like use at a rent that would enable the
property owner to at least recover their costs. It is notable that the requestor bases their
arguments on “investment-backed expectations” derived from rents offered by an office
tenant, rather than the retail use that has historically existed on the property. The requestor’s
expert states that “if a retail tenant were actually secured, the base rent for such tenant would
be substantially lower than what we have received [from a prospective office tenant]” implying
that the rent would be lower than desired, not lower than the owner’s expenses.
Other Requests for Waiver (999 Alma and 425 Portage)
In mid-July, staff received the attached requests for waiver from representatives of the
properties at 999 Alma Street and 425 Portage Avenue. These requests were not accompanied
by an economic analysis or other supporting documentation as required in the interim
ordinance and are discussed further in the section below.
Consultations & Requests for Determination
Administering the interim ordinance has proven difficult because a number of property owners
have argued that the ordinance should not apply to their specific situation, usually arguing that
the retail or “retail-like” use was not legally established. Two recent examples are the pet store
at 425 Portage Avenue and the auto service space at 3241 Park Boulevard. Correspondence
from the owner of 3241 Park Boulevard is included as Attachment D. Correspondence from
the owners of 425 Portage and 999 Alma Street are included as Attachment F and G.
In all instances, the property has been in retail or “retail-like” use for a number of years and the
owner is now interested in eliminating the use/space and converting it or redeveloping it for an
alternate use. 425 Portage is zoned Service Commercial (CS), where retail is a permitted use,
however the pet store was established without proper approvals and should have required
additional parking or a variance from the parking requirement. 3241 Park Boulevard is zoned
GM, where auto service uses are permitted with a conditional use permit, however a
conditional use permit was not obtained despite several remodels of the auto service use
established c. 1969 (this is according to research by the property owner). 999 Alma Street is
zoned RT-35, and similar to the property at 100 Addison, would be governed by the South of
Forest Area (SOFA) development standards if the retail preservation ordinance was not in place.
Staff was consulted regarding these circumstances, and did not agree that 425 Portage or 3242
Park should be exempt from the interim ordinance’s requirements. In both of these cases, staff
concluded that the owners had well-established retail or retail like uses that were operating as
of the March 2, 2015 date specified in the ordinance. That the owners did not receive proper
city approvals (Use and Occupancy, and for 3242 Park, a CUP) does not exempt them from the
ordinance, which stipulates that retail uses “permitted or operating” shall be subject to the
regulations. The word “or” in this case means either one of the two terms or both may apply.
The owners disagree with this conclusion and are seeking relief via a City Council interpretation,
a clarifying amendment to the interim ordinance, or a waiver. The request for waiver at 999
City of Palo Alto Page 5
Alma Street includes a discussion of the owner’s objectives and a proposal to use a portion of
the space for retail and a portion for office, or to use the entire space as a school. As indicated
earlier, the owner has not submitted an economic analysis to demonstrate infeasibility of
leasing to a retail use. The City Council could nonetheless consider the request or suggest
modifications to the interim ordinance to address this site and others.
Permanent Zoning Changes to Preserve Ground Floor Retail
The City has adopted two permanent zoning amendments to protect ground floor retail since
the urgency ordinance was adopted. The first related to the California Avenue Area (Ordinance
No. 5358, adopted October 26, 2015), and the second was a “clean-up” ordinance that closed a
loophole affecting the Community Commercial (CC), Neighborhood Commercial (CN), and
Service Commercial (CS) zoning districts (Ordinance No. 5373, adopted January 11, 2016). It’s
worth noting that the California Avenue Area ordinance did not extend permanent retail
protections (in the form of the “R” overlay zone) to the 425 Portage or the 3241 Park Boulevard
vicinity.
Additional, permanent zoning amendments still need to be developed before the expiration of
the current interim ordinance in April 2017. Planning staff is currently beginning work on an
ordinance affecting Downtown and expects this work will:
Re-examine the boundaries of the retail protections offered by the “GF” overlay zone;
Add protections for retail uses and retail-support uses in basements;
Update the definition of retail service; and
Consider a provision requiring legal and non-conforming (non-retail) uses on the ground
floor to have display windows rather than obscured windows.
City Council interests and direction on the downtown ordinance would be welcomed, along
with City Council input on the relative priority of additional zoning changes to strengthen retail
preservation measures in other areas of the City, including El Camino Real and the community
centers. As discussed at the “Committee of the Whole” meeting on May 31, 2016, developing
an ordinance addressing these other areas of the City would require deferring other long range
planning projects.
Environmental Review
The requested action consists of direction to staff and/or interpretations of an existing
ordinance and does not constitute a “project” requiring review under the California
Environmental Quality Act (CEQA).
Attachments:
Attachment A: Retail Preservation Ordinance No. 5325 (PDF)
Attachment B: Retail Preservation Ordinance No. 5330 (PDF)
Attachment C: May 11, 2016 Request for Waiver_100 Addison (PDF)
Attachment D-1: 3241 Park Boulevard Request for Determination (PDF)
Attachment D-2: 3241 Park 8-02-2016 Letter to CPA (PDF)
City of Palo Alto Page 6
Attachment E: June 20, 2016 Staff Report (7048) (PDF)
Attachment F: July 14 Request for Waiver 425 Portage Ave. (PDF)
Attachment G: July 14 Request for Waiver 999 Alma Street (PDF)
City of Palo Alto (ID # 7048)
City Council Staff Report
Report Type: Consent Calendar Meeting Date: 6/20/2016
City of Palo Alto Page 1
Summary Title: Request for Waiver from Retail Preservation Ordinance
Title: Denial of a Request for Waiver of the City's Moratorium on Conversion
of Ground Floor Retail for the Property at 100 Addison Avenue
From: City Manager
Lead Department: Planning and Community Environment
Recommendation
Staff recommends that the City Council deny the request for waiver from the City’s moratorium
on conversion of ground floor retail uses as it applies to the property at 100 Addison Avenue
based on a finding that the requestor has not demonstrated that the City’s moratorium would
effectuate an unconstitutional taking of property.
Background
On May 11, 2015, the City Council adopted an urgency ordinance establishing a moratorium on
the conversion of ground floor retail and “retail like” uses to other uses (Attachment A). The
urgency ordinance was extended on June 15, 2015 (Attachment B), and will remain in effect
until replaced or until it expires on April 30, 2017.
The ordinance contains provisions regarding “waivers and adjustments” (18.85.104) that allow
an applicant to request a waiver based on economic hardship by “showing that applying
requirements [of the ordinance] would effectuate an unconstitutional taking of property or
otherwise have an unconstitutional application to the property.”
The ordinance also states that “the applicant shall bear the burden of presenting substantial
evidence to support a waiver or modification request… and shall set forth in detail the factual
and legal basis for the claim, including all supporting technical documentation.” Requests must
be submitted to the Director of Planning and Community Environment “together with an
economic analysis or other supporting documentation” and must be acted upon by the City
Council.
On May 11, 2016, Ms. Kristina Lawson, representing the owners of 100 Addison Avenue, the
True Morris Family, LLC, submitted a request for waiver (Attachment C). This request followed
several earlier inquiries and requests that had been rejected as incomplete by the Director of
City of Palo Alto Page 2
Planning.
As explained in Ms. Lawson’s request, the building at 100 Addison Avenue was occupied by
Addison Antiques, a retail use, until June 30, 2015. Since that date, the owners have been
unsuccessfully seeking to lease the building to a new retail or “retail-like” tenant(s).
Discussion
The attached request for waiver from the City’s moratorium on conversion of ground floor
retail uses argues that the City’s ordinance “goes ‘too far’ in imposing upon the owner an
unreasonable economic loss and interfering with the owner’s distinct investment-backed
expectations, thereby amounting to a de facto taking of the Property for public purposes.”
As explained in the request, the property owner was on the verge of leasing the 4,000 square
foot building and parking lot at 100 Addison Avenue to an office use at a rent of $5.20 per
square foot in June 2015, when they became aware of the City’s moratorium. Thus, the
requestor believes the owner has “lost” a significant sum of money. (See the request, p. 5.)
Since then, the property owner has sought to lease the building to a retail or “retail-like” use,
but without success, and the requestor believes that “in the unlikely event” that a retail tenant
can be found, the base rent would be for approximately $1.50 per square foot. (See the
request, p. 6.)
The requestor identifies the owner’s annual carrying costs as $273,622, but this includes “lost
opportunity costs of $194,880” based on the inability to lease for office use and management
costs of $65,142. Without these line items, the owner’s annual carrying costs (taxes, utilities,
and insurance) would be $13,600. (See the request, p. 7.) The requestor also agrees with
staff’s position that “the City has no obligation to maximize the owners return on investment
and that all zoning regulations have some impact on revenue potential.” (See the request, p.
8.)
City staff does not believe the requestor has demonstrated that an unconstitutional taking of
property has occurred. While the location is not central to downtown, and will never be able to
command rents as high as those in other locations, the Department of Planning and Community
Environment has received inquiries from potential retail tenants, and believes that the subject
property is leasable for a retail or retail-like use at a rent that would enable the property owner
to at least recover their costs. It is notable that the requestor offers expert opinions stating
that “if a retail tenant were actually secured, the base rent for such tenant would be
substantially lower than what we have received” implying that the rent would be lower than
desired, not lower than the owner’s expenses. In addition, staff notes that the applicant’s only
evidence of inability to find a retail tenant is an August 2015 from the applicant’s realtor stating
he was unable to secure a retail tenant. Based on the letter (not signed under penalty of
perjury), it appears the property was marketed as a retail property for approximately 6 weeks
in 2015. There is no evidence of more recent marketing and no evidence of marketing to “retail
City of Palo Alto Page 3
like” uses permitted under the ordinance. Further, there is no discussion of whether modifying
the proposed lease term or rent or the offering of a tenant improvement allowance or other
incentives would have yielded a viable retail or retail like tenant. Finally the restriction is only
for a two year period. State law recognizes that comprehensive land use planning may require
temporary moratoria and expressly allows for such moratoria for periods up to two years. The
City’s retail preservation ordinance was enacted under the State moratoria law. Placing a time
out on the conversion of retail use to office use while the City evaluates the long term
feasibility of ground floor retail outside the core downtown is precisely the aim of the
moratorium.
The permanent ordinance developed for consideration before the expiration of the current
interim ordinance in April 2017 can re-evaluate the appropriateness of ground floor retail at
this location. City staff has encouraged the property owners and their representative to
participate in the public process associated with the permanent ordinance when it occurs.
Environmental Review
The requested action would require the subject parcel to be reused for the same use that was
in place in June 2015, and would not constitute a “project” requireing review under the
California Environmental Quality Act (CEQA).
Attachments:
• Attachment A: Retail Preservation Ordinance No. 5325 Adopted May 11, 2015 (PDF)
• Attachment B: Retail Preservation Ordinance No. 5330 Adopted June 15, 2015 (PDF)
• Attachment C: May 11, 2016 Request for Waiver - 100 Addison (PDF)
City of Palo Alto (ID # 7142)
City Council Staff Report
Report Type: Action Items Meeting Date: 8/22/2016
City of Palo Alto Page 1
Summary Title: Comprehensive Plan EIR Scenarios 5 & 6
Title: Policy Discussion on Comprehensive Plan Update Environmental Impact
Report Scenarios 5 & 6
From: City Manager
Lead Department: Planning and Community Environment
RECOMMENDATION
Staff recommends that the City Council review the policy parameters of Scenarios 5 and 6
proposed for analysis as part of the Comprehensive Plan Update Environmental Impact Report
(EIR) and provide direction to staff regarding requested modifications.
Based on the Council’s direction, staff will work with the City’s consultants to conduct an
environmental analysis of the new EIR scenarios. The draft environmental analysis will be
circulated for public review prior to preparation of a Final EIR.
EXECUTIVE SUMMARY
The City is the “lead agency” under the California Environmental Quality Act (CEQA) and must
prepare and certify an Environmental Impact Report (EIR) to assess potential impacts of the
Comprehensive Plan Update prior to approval of the Update. The EIR is being prepared in
parallel with the Comprehensive Plan Update itself, and tests potential policy choices via the
use of high level alternatives or “scenarios” which are analyzed at an equal level of detail.
During their review of the Draft EIR, the City Council requested that the Draft EIR, which
analyzes four scenarios, be supplemented with an analysis of a fifth and sixth scenario. The
quantitative parameters of the fifth and sixth scenario (i.e. the projected population, housing,
and jobs in 2030) were established by the City Council on May 16, 2016, however at a hearing
on June 6, 2016, the Council ran out of time to weigh in on policy choices that should be
reflected in each scenario.
This evening’s agenda item will provide the City Council with an opportunity to define the
policies and programs, zoning code amendments, infrastructure investments, sustainability
measures, and mitigation/performance measures they would like to analyze as part of the new
scenarios. Additional information is provided in the attached materials, including Attachment F
City of Palo Alto Page 2
from the June 6, 2016 staff report, excerpts from the May 16, 2016 staff report, and mitigation
measures included in the Draft EIR.
BACKGROUND
The City Council expressed their desire to add at least one new planning scenario to those in
the Draft EIR on January 19, 2016 and adopted the following motion:
A. Direct Staff to come to the City Council Retreat with a more definitive schedule
of when the variety of issues discussed this evening will be scheduled for Council
consideration; and
B. Direct Staff to return to Council with the DEIR as well as a possible fifth scenario
which lowers the jobs/housing ratio and the implications that will have on the
timing and process of completing the Comprehensive Plan Update.
On February 22, 2016, the City Council added to this direction with the following motion:
Direct Staff to develop a “fifth scenario” for analysis in a supplement to the Draft
Environmental Impact Report (DEIR) that:
A. Adds the sustainability options from the current scenarios, which reduce
impacts, including traffic, greenhouse gas impacts, noise, etc.; and
B. Includes further mitigations along with prospective mitigation enforcement
measures for a scenario that improves the quality of life in Palo Alto by
mitigating the impacts of future growth and development; and
C. Wherever possible, the scenario will use Palo Alto specific data; and
D. Where possible, integrate the Sustainability Climate Action Plan (S/CAP) in the
fifth scenario; and
E. Evaluate mechanisms for regulating employment densities in existing buildings;
and
F. Evaluate lower General Office and R/D development than Scenario 2; and
G. Evaluate transportation and parking regulation triggers if mitigation measures
are failing or exceeding expectations.
On May 16, 2016, the City Council provided direction on Scenarios 5 & 6 with the following
motion:
City of Palo Alto Page 3
Direct Staff to evaluate two variations of Scenario Number 5 including a performance
based approach with policies and mitigation measures to limit the impacts of growth
and other quality of life issues. Both Scenarios would include Staff recommended
Sustainability and Climate Action Plan (S/CAP) elements:
A. Option A from the Staff Report; and
B. Option C from the Staff Report, incorporating 6,000 housing units; and
C. Approve Amendment Number 5 to Contract Number C08125506 with
Placeworks to add $423,814 for a total not to exceed $2,801,157 for completion
of the Comprehensive Plan Update and associated EIR; and
D. Amend the Fiscal Year 2016 Budget Appropriation Ordinance for the General
Fund by:
i. Increasing the Planning and Community Environment Department
appropriation by $356,140; and
ii. Decreasing the Budget Stabilization Reserve by $423,814.
On June 6, 2016, the City Council ran out of time to provide additional guidance on the
definition of the scenarios, continuing their discussion after adopting a motion to reopen the
public comment period for the Comprehensive Plan Update Draft Environmental Impact Report
(DEIR) for Scenarios 1-4, to run concurrently with the public comment period for Scenarios 5
and 6.
Tonight’s agenda item has been scheduled to allow the City Council to continue the discussion
they began on June 6, 2016 and to provide direction on the policy parameters of Scenarios 5
and 6. The quantitative parameters (i.e. the population, housing, and jobs numbers for 2030)
were defined on May 16, 2016 as described in Attachment A.
As the Council will recall from their earlier discussions, providing direction regarding
parameters of scenarios proposed for analysis does not constitute direction or a commitment
regarding components of the Comprehensive Plan Update itself. The Council will have
opportunities to weigh in on policy parameters in the context of their review of the CAC’s draft
land use element, and to provide final direction/decisions once the EIR is complete.
NEXT STEPS
Analysis of the new EIR scenarios is expected to take approximately 4-5 months, after which
time the analysis will be circulated for public review and comment as a supplement to the Draft
EIR. (Note: analysis of the sixth scenario is contingent on an additional amendment to the
City of Palo Alto Page 4
consultant contract, which is currently being developed.) As requested by the City Council,
additional comments on the Draft EIR will also be accepted during the public review period for
the supplement.
Following the public review period, the City will prepare formal written responses to all
substantive comments received on the Draft EIR and on the analysis of the additional scenarios
in the form of a Final EIR. The City Council is required to review and certify the FEIR prior to
taking action on the Comprehensive Plan Update. Certification of the Final EIR and
consideration of the Comprehensive Plan Update is currently scheduled for the second half of
2017.
Concurrent with preparation and review of the additional analysis, the City Council will have the
opportunity to review draft elements of the Comprehensive Plan Update as they are produced
by the Citizens Advisory Committee (CAC). The City Council’s review and direction on the draft
elements will determine the final form of the Comprehensive Plan Update that is considered for
adoption and described in the Final EIR as the “preferred” scenario.
Attachments:
Attachment A: Summary of New Scenarios for Analysis in the Comp Plan EIR
(Attachment F from June 6, 2016) (DOCX)
Attachment B: Excerpt from CMR #6800 May 16, 2016 (DOC)
Attachment C: Comp Plan Mitigation Measures (DOCX)
Palo Alto Comprehensive Plan Update
Summary of Additional Scenarios Proposed for Analysis
in a Supplement to the Draft EIR
May 23, 2016
This attachment summarizes the City Council’s direction to analyze additional scenarios in a
supplement to the Draft Environmental Impact Report (EIR) on the City’s Comprehensive Plan
Update prior to proceeding to a Final EIR. As described further below, two new scenarios
would supplement those included in the Draft EIR as follows:
Table 1. Summary of EIR Scenarios: Population & Employment Parameters (1)
Net Change 2015-2030
(City of Palo Alto Only) Resulting
Jobs/Housing Balance
in 20303 Population/
Housing
Non-Res
Sq. Ft.2 Jobs
1. Business as Usual 6,600/2,720 3.3M 15,480 Jobs/Employed
Residents Ratio of 3.20
2. Slowing Growth 6,600/2,720 3M 9,850 Jobs/Employed
Residents Ratio of 3.04
3. Housing Tested I 8,435/3,545 3.5M 12,755 Jobs/Employed
Residents Ratio of 3.03
4. Sustainability Tested I 10,455/4,420 4.M 15,480 Jobs/Employed
Residents Ratio of 3.04
5. [NEW]
Sustainability Tested II 8435/3,546 2.7M 8,868 Jobs/Employed
Residents Ratio of 2.93
6. [NEW]
Housing Tested II 13,737/6,000 2.7M 8,868 Jobs/Employed
Residents Ratio of 2.71
(1) The scenarios also include different ideas for zoning/implementation actions,
transportation investments, and sustainability measures as discussed further
below.
(2) This number includes 1.3M sq. ft. that has already been approved at the Stanford
Medical Center. The balance of the new nonresidential square footage would be
located in areas both inside and outside of the “monitored areas” referenced in
Policy L-8 and Map L-6 in the Comp Plan and in areas both inside and outside of
the area subject to the interim annual limit of 50,000 square feet new office/R&D
space.
(3) The number of employed residents in 2030 is estimated at approximately 48% of
total population based on ABAG Projections 2013. The ratio of jobs to employed
residents in this column assumes a 2014 base of 65,685 people and 95,460 jobs.
Source: Palo Alto Department of Planning & Community Environment, May 2016
The City of Palo Alto has been working on an update to its Comprehensive Plan since 2008 and
May 23, 2016
Summary of EIR Scenarios
Page 2
published a Draft Environmental Impact Report (EIR) in February 2016 assessing four
“scenarios” or alternatives at an equal level of detail, hoping to inform policy direction
regarding the location and amount of growth desired by 2030, as well as policies and programs
needed to mitigate the impacts of that growth.
On January 19 and February 22, the City Council indicated their desire to analyze an additional
scenario in a supplement to the Draft EIR and on May 16, the City Council provided basic
parameters of two new scenarios (scenarios number 5 & 6), as shown in Table 1.
The first new scenario, Scenario 5, Sustainability Tested II, proposes 10% fewer jobs than
Scenario 2, Slowing Growth, and the same number of housing units as Scenario 3,
Housing Tested I. This new scenario is intended to test the efficacy of mitigation and
sustainability measures when applied to relatively slow growth over the 15 year
planning period.
The second new scenario, Scenario 6, Housing Tested II, proposes 10% fewer jobs than
Scenario 2, Slowing Growth, and 36% more housing than Scenario 4, Sustainability I.
This new scenario is intended to test policies and programs to accelerate the production
of housing over the 15 year planning period, while applying mitigation and sustainability
measures to address the impacts of growth.
In both of the new scenarios, Comprehensive Plan programs and zoning changes would be
developed to provide for a mix of housing for Palo Alto residents, including affordable housing,
senior housing, housing for special needs populations, micro units, housing with preferences for
members of the local workforce, and housing with reduced parking and traffic impacts, reduced
air emissions, and reduced energy and water use when compared with conventional units.
Housing locations and characteristics for each scenario are summarized in Table 2, below.
Table 2. Summary of Housing-Related Policies & Programsa
Summary of Housing Policies & & Programs Scenarios
1 2 3 4 5 6
Maintain All Existing Housing Sites √ √ √
Eliminate Housing Sites on San Antonio and South El
Camino √ √ √
Increase residential densities on sites in Downtown,
the California Ave Area and along El Camino Real √ √ √ √
Add new housing sites to the El Camino frontage of
the Research Park and the Shopping Center √ √
Consider additional sites near SUMC or in western
portion of the Research Park √
Convert some commercial development potential
(FAR) to residential FAR √ √ √ √ √
Remove constraints on the addition of Accessory
Dwelling Units √ √ √ √ √
May 23, 2016
Summary of EIR Scenarios
Page 3
Summary of Housing Policies & & Programs Scenarios
1 2 3 4 5 6
Adopt policies to avoid the loss of existing housing
and displacement √ √ √ √ √
Adopt regulations and incentives to create smaller
units √ √ √ √ √
(a)This list is not a complete listing of possible policy and zoning changes, but includes major initiatives required to
reach the housing projections of each scenario. There is some overlap between these and the zoning changes
summarized later.
Source: Palo Alto Department of Planning & Community Environment, May 2016
Brief Description of the Six Scenarios
1. “Business As Usual” – the “business as usual” scenario shows the results if the City
continued to operate under the existing Comprehensive Plan with no changes to goals,
policies and programs. Any new housing built would be constructed under existing
zoning and no innovations in housing or new approaches to address the high cost of
housing would be explored. No new growth management measures are anticipated, and
any transit or traffic improvements would come from the existing infrastructure plan for
the City. This scenario uses a local forecast of housing growth based on the City’s past
performance (a long term average of about 150-160 new dwelling units per year), and
ABAG’s 2013 projection of job growth.
2. Scenario Two, or the “Growth Slowed” Scenario, would slow the pace of job growth
when compared with Scenario One by moderating the pace of office/R&D development
throughout the city. Scenario Two would also ensure that the modest amount of
housing growth expected under Scenario One would be built-out as small units and
other housing types appropriate for seniors and the Palo Alto workforce.
Transportation investments in this scenario would include implementation of the
County’s expressway plan.
3. Scenario Three, or the “Housing Tested I” Scenario, would implement a growth
management regime similar to the interim annual limit on office/R&D adopted by the
City Council in 2015 for the fastest changing areas of the City and would eliminate
housing sites along San Antonio and South El Camino. In place of these housing sites,
Scenario 3 would increase housing densities on other housing sites Downtown, near
California Avenue, and in other locations in the City close to transit and services.
Policies, regulations, and incentives would be designed to ensure smaller units for the
working professional and senior populations of the City. Transportation investments
would include grade separating the Caltrain crossings at Meadow and Charleston by
placing the railroad tracks in a trench.
May 23, 2016
Summary of EIR Scenarios
Page 4
4. Scenario Four, or the “Sustainability Tested I” Scenario, assumes the most growth in
housing and employment, consistent with ABAG projections. Rather than moderating
the pace of development, this scenario would seek to limit the impacts of development.
Housing sites along San Antonio and South El Camino would be eliminated and replaced
by both increased densities on other housing sites and by the addition of new sites
along the El Camino Real frontage of the Stanford Research Park and the Stanford
Shopping Center. Potential policies and regulations would be enacted to advance
sustainability objectives, including free transit passes for residents in transit-served
areas, achieving LEED platinum certification for new development, maximizing local
solar energy production, foregoing new natural gas hookups, and utilizing drought-
tolerant landscaping. Transportation investments would include grade separating the
Caltrain crossings at Meadow and Charleston by placing the railroad tracks in a trench,
and incorporating mix flow bus rapid transit on El Camino Real (with curbside stations
and queue jumping for transit vehicles).
5. Scenario Five, or the “Sustainability Tested II” Scenario, would implement a growth
management program to limit the pace of office/R&D development and convert some
commercial development potential (Floor Area Ratio or FAR) to residential FAR in
Downtown and the California Avenue area. Scenario 5 would eliminate housing sites
along San Antonio and South El Camino and in place of these sites, would increase
housing densities on sites Downtown and in the California Avenue area close to transit
and services. Policies, regulations, and incentives would be designed to ensure smaller
units for the working professional and senior populations of the City. Potential policies
and regulations would be enacted to advance sustainability objectives, including free
transit passes for residents in transit-served areas, achieving LEED platinum certification
for new development, maximizing local solar energy production, foregoing new natural
gas hookups, and utilizing drought-tolerant landscaping. Transportation investments
would include grade separating the Caltrain crossings at Meadow and Charleston by
placing the railroad tracks in a trench.
6. Scenario Six, or the “Housing Tested II” Scenario, would also implement a growth
management program to limit the pace of office/R&D development and would convert
some commercial development potential (Floor Area Ratio or FAR) to residential FAR in
Downtown, the California Avenue area, and along the El Camino Real corridor. Scenario
Six would eliminate housing sites along San Antonio and South El Camino and in place of
these sites, would both increase housing densities in other areas of the City close to
transit and services, and add new housing sites along the El Camino Real frontage of the
Stanford Research Park and the Stanford Shopping Center. Additional housing sites in
the Research Park could also be considered. Policies, regulations, and incentives would
be designed to ensure smaller units for the working professional and senior populations
of the City. Potential policies and regulations would be enacted to advance
sustainability objectives, including free transit passes for residents in transit-served
May 23, 2016
Summary of EIR Scenarios
Page 5
areas, achieving LEED platinum certification for new development, maximizing local
solar energy production, foregoing new natural gas hookups, and utilizing drought-
tolerant landscaping. Transportation investments would include grade separating the
Caltrain crossings at Meadow and Charleston by placing the railroad tracks in a trench,
and incorporating mix flow bus rapid transit on El Camino Real (with curbside stations
and queue jumping for transit vehicles).
Under all scenarios, goals and policies of the Comprehensive Plan Update will be implemented
through programs, some of which will support specific changes in the City’s zoning ordinance.
The four EIR scenarios recognize this fact by suggesting and evaluating zoning code
amendments that could accompany the Comp Plan Update. These suggested amendments are
not meant to be prescriptive, but generally outline actions that could be taken to implement
the policy parameters of each scenario.
Similarly, the evaluation of Scenarios 5 & 6 can test a variety of zoning amendments to achieve
the population/housing and employment/square footage numbers included in Table 1.
Suggestions are included in Table 3, below.
Table 3. Zoning Code Amendments for the EIR Scenarios
Proposed Zoning Code Amendmentsa Scenarios
1 2 3 4 5a 6a
Planned Community (PC) zoning district provisions
would be reformed. √ √ √ √ √ √
Strategies to preserve retail would be enhanced for
the city’s neighborhoods. √ √ √ √ √ √
Incentives would be considered for small lot
consolidation along El Camino Real. √ √ √ √ √ √
A Conditional Use Permit (CUP) would be required
for new office and R&D uses in order to regulate
employment densities.
√ √ √
An alternate mechanism would be explored for
moderating employment densities, either through
regulation or revenue collection.
√ √
Allowable commercial densities would be reduced
and replaced with residential densities. √ √ √ √ √
Modest exceptions to the City’s 50-foot height limit
would be permitted for projects with ground floor
retail and residences above.
√ √ √
Allowable residential densities would be increased
downtown and near California Avenue, possibly by
adding the PTODb zoning designation to downtown
and streamlining the permitting process to allow for
residential development in the PTOD zone by right.
Another possibility would be to eliminate maximum
dwelling unit densities and use minimum densities
and FAR to encourage more, smaller units.
√ √ √ √
May 23, 2016
Summary of EIR Scenarios
Page 6
Proposed Zoning Code Amendmentsa Scenarios
1 2 3 4 5a 6a
Allowable residential densities would be increased
on the El Camino Corridor, possibly by adding the
PTODb zoning designation to pedestrian “nodes”
along the corridor with modified regulations to
encourage use of the designation. Another
possibility would be to eliminate maximum dwelling
unit densities and use minimum densities and FAR to
encourage more, smaller units.
√ √
Mitigation and sustainability measures would be
adopted to minimize impacts of new market rate
housing and new non-residential development by
requiring mitigation, monitoring, and enforcement.
√ √
(a)The suggested zoning changes listed here do not include all of the sustainability measures or mitigation
measures which could be applied to the scenarios.
(b) The Pedestrian and Transit-Oriented Development (PTOD) combining zoning district is intended to allow higher
density residential dwellings on commercial, industrial, and multi-family parcels within a walkable distance of
Caltrain stations, while protecting low density residential parcels and parcels with historical resources.
Source: Comp Plan Update Draft EIR, February 2016 and Palo Alto Department of Planning & Community
Environment, May 2016
The Comprehensive Plan Update will identify infrastructure investments expected to occur over
the next 15 years to the extent feasible and will rely on the City’s adopted infrastructure plan as
a base document. The planning scenarios evaluated in the program-level EIR provide an
opportunity to evaluate other potential transportation infrastructure projects, and these are
included in Table 4, below.
Table 4. Infrastructure Investments for the EIR Scenarios
Summary of Infrastructure Investmentsa Scenarios
1 2 3 4 5 6
New Public Safety Building √ √ √ √ √ √
Bicycle Bridge over US 101 √ √ √ √ √ √
Bicycle/Pedestrian Plan Implementation Projects √ √ √ √ √ √
Byxbee Park √ √ √ √ √ √
California Avenue Parking Garage √ √ √ √ √ √
Downtown Parking Garage √ √ √ √ √ √
Fire Stations √ √ √ √ √ √
County Expressway Plan Implementation √
Grade separation of Caltrain in a trench below
Charleston and Meadow; other improvements along
the corridor.
√ √ √ √
Bus Rapid Transit on El Camino Real in mixed-flow
lanes with the addition of queue jumping and
curbside stations.
√ √
(a)This list is not a complete listing of the City’s infrastructure plan, but includes those investments highlighted in
Draft EIR Scenarios 1-4 as well as others that may be appropriate for highlighting in Scenarios 5&6. There may be
some overlap between the suggested investments listed here and the sustainability measures and
May 23, 2016
Summary of EIR Scenarios
Page 7
performance/mitigation measures referenced later.
Source: Comp Plan Update Draft EIR, February 2016 and Palo Alto Department of Planning & Community
Environment, May 2016
On April 18, 2016, the City Council indicated their support for the draft SCAP goal of reducing
GHG Emissions 80% below 1990 levels by 2030 (twenty years ahead of the State’s goal) and
requested clarity on how the Comp Plan Update and the SCAP will be integrated. The two plans
are intended to be coordinated and complimentary, and while SCAP principles and strategies
have not been fully defined as of yet, Table 5 acknowledges the relationship between the two
plans, and indicates some of the sustainability measures that are common to both for
evaluation as part of the EIR scenarios.
Table 5. Sustainability Measures for the EIR Scenarios
Summary of Sustainability Measuresa Scenarios
1 2 3 4 5 6
Mobility
Paid transit passes for employees in workplaces with
over 50 employees (portion of SCAP Strategy F-INC-
1)
√ √ √ √ √ √
Employer incentives for carpooling and bicycling
(SCAP Strategy F-FAC-3.4) √ √ √ √ √
Unbundled parking costs for multi-family units
(portion of SCAP Strategy T-INC-2) √ √ √ √
Parking charge program for existing workplaces with
over 50 employees (portion of SCAP Strategy T-INC-
2)
√ √ √
Paid parking in Downtown and California Avenue
areas (portion of SCAP Strategy T-INC-2) √ √ √
Free transit passes for all Palo Alto residents in
transit-accessible areas (portion of SCAP Strategy F-
INC-1)
√ √ √
Adoption of the SCAP goal of a 80% reduction in
GHG emissions by 2030 and alignment of the
Comprehensive Plan Update with SCAP principles.
Inclusion of Comprehensive Plan policies and
programs supportive of the refinement and
furtherance of SCAP strategies.
√ √
(a)The suggested sustainability measures listed here do not include every strategy from the draft SCAP, which is
still a work in progress. This list also does not include mitigation measures which are listed separately below, even
though many address topics related to sustainability (for example, transportation mitigation to limit and off-set
new trips).
Source: Comp Plan Update Draft EIR, February 2016; Draft SCAP, April 2016, and Palo Alto Department of Planning
& Community Environment, May 2016
All of the EIR scenarios will require mitigation measures to address significant environmental
impacts and consistent with the Council’s direction, these will be analyzed as part of Scenarios
5 and 6. For example, the analysis will assess the effectiveness of Mitigation Measure
May 23, 2016
Summary of EIR Scenarios
Page 8
TRANS1a, which establishes a framework for imposing a “no net new trips” requirement on
market rate housing, office/R&D development, and other uses. The measure reads:
TRANS-1a: Adopt a programmatic approach to reducing traffic with the goal of achieving no
net increase in peak period motor vehicle trips from new development, with an exception
for uses that directly contribute to the neighborhood character and diversity of Palo Alto
(such as ground floor retail and below market rate housing). The program should, at a
minimum:
Require new development projects to prepare and implement a Transportation Demand
Management (TDM) Plan to achieve the following reduction in peak period motor
vehicle trips from the rates included in the Institute of Transportation Engineers’ Trip
Generation Manual for the appropriate land use category. These reductions are
deemed aggressive, yet feasible, for the districts indicated.
o 45 percent reduction in the Downtown district
o 35 percent reduction in the California Avenue area
o 30 percent reduction in the Stanford Research Park
o 30 percent reduction in the El Camino Real Corridor
o 20 percent reduction in other areas of the city
TDM Plans must be approved by the City and monitored by the property owner on an
annual basis. The Plans must contain enforcement mechanisms or penalties that accrue
if targets are not met.
Require new development projects to offset remaining peak period motor vehicle trips
through one of the following methods:
o By directly contracting with another property owner or organization to reduce
trips generated from another site; or
o By paying an annual fee to the City for use in reducing motor vehicle trips to
the extent feasible through the provision of transit services, carpool/rideshare
incentives, bicycle lanes, and other similar programs and improvements.
A full list of EIR mitigation measures needed for Scenarios 2-4 is included in the Executive
Summary (Chapter 1) of the Draft EIR and potential modifications or additions to this list will be
considered during the analysis of Scenarios 5-6.
Next Steps
Once the Draft EIR comment period has concluded and final direction on the new scenarios is
provided, staff will post written comments on the website and make them available to the
Council, the Planning & Transportation Commission, and the public. Staff will also work with
the City’s consultants, Placeworks, to modify the scope of work included in the contract
amendment approved on May 16, 2016 to allow for analysis of a sixth scenario. (The
May 23, 2016
Summary of EIR Scenarios
Page 9
amendment assumed only five scenarios.) Some efficiencies may be possible given that the
new scenario five is very similar to those already analyzed in the Draft EIR, but it’s expected
that an additional contract amendment will be required.
Excerpt from May 16, 2016 Staff Report (CMR#6800)
Page 1
The following discussion addresses five characteristics of the Fifth Scenario consistent with this
motion: (1) Net change in employment & non-residential development 2015-2030; (2) Net
change in population and housing 2015-2030; (3) Potential zoning changes to accomplish these
levels of development; (4) Infrastructure investments; (5) Potential sustainability measures to
reduce impacts; and (6) Other potential performance or mitigation measures to address the
impacts of development.
The EIR will assess the impacts of the scenario, including the level of growth assumed as well as
the principal investments and policy parameters that are articulated as part of the scenario.
The proposed contract amendment in Attachment A provides for an analysis of the scenario
with and without mitigation measures and other performance measures or strategies to reduce
or eliminate physical impacts and preserve or improve quality of life.
1. Jobs & Sq. Ft.
The City Council has articulated their desire for lower office/R&D development and
employment than assumed in Scenario 2 and the options presented in Table 2, above, suggest
or 10% fewer jobs and square footage than in Scenario 2 (i.e. a total of 8,868 new jobs and
2.8M new sq. ft.).
With this projection of future job growth, Palo Alto would see the 2,400 jobs anticipated as part
of the SUMC as well as an average of 431 jobs per year over the 15 year life of the Comp Plan.
This seems low given the amount of land zoned for non-residential uses and existing building
space in use for employment-generating uses in the City.
With the projected increase in new square footage, Palo Alto would see completion of the 1.3M
sq. ft. approved as part of the SUMC project, plus an average of 93,000 sq. ft. in additional non-
residential square footage per year. New non-residential square footage in areas shown on
Comp Plan Map L-6 are subject to the square footage cap in Comp Plan Policy L-8, and new
office/R&D square footage would be limited to 50,000 square feet in areas subject to the City’s
interim annual limit on Office/R&D uses if this program were continued after the two-year trial.
[Note that new jobs and new non-residential square footage are not proportionally related
because new jobs can be added in existing as well as new building space. Generally, the rate of
job growth and employment densities change cyclically, with more jobs and higher densities in
good economic times, and fewer jobs in economic downturns. See the Zoning section below
for a discussion of regulating employment densities.]
2. Population & Housing
A majority of the City Council expressed their desire to pursue removal of housing sites along
San Antonio Road and South El Camino Real, and replace those with higher residential densities
on sites in Downtown and the California Avenue area. This would result in housing and
Excerpt from May 16, 2016 Staff Report (CMR#6800)
Page 2
population projections consistent with Scenario 3, which is consistent with Option A in Table 2,
above.
The Council did not weigh-in on whether they would be interested in exploring higher
residential densities and new housing sites in “pedestrian nodes” along the El Camino Real
corridor. This is an idea advanced in Scenario 4 and reflected to varying degrees in Option B
and C above, which also assume rezoning to convert non-residential density (floor area ratio or
FAR) to residential density in some areas of the City. (See below for more on potential zoning
changes for evaluation as part of Scenario 5.)
At the Council’s discussions about Scenario 5 (February 22) and housing policies generally
(March 21), the City Council expressed its interest in stimulating workforce housing (i.e. housing
for teachers, fire fighters, and others who work in Palo Alto) and testing the idea of micro-units
with reduced parking and other sustainability measures (bike share/car share, net zero energy,
all electric buildings, etc.). These and other housing types (accessory dwelling units, multifamily
affordable units, cohousing, etc.) can be facilitated via changes to the City’s zoning regulations
and/or use of the City’s Below Market Rate (BMR) housing program and Council has requested
that staff consider actions that might be taken before the Comprehensive Plan Update.
3. Zoning Changes
Goals and policies of the Comprehensive Plan Update will be implemented through programs,
some of which will support specific changes in the City’s zoning ordinance. The four EIR
scenarios recognize this fact by suggesting and evaluating zoning code amendments that could
accompany the Comp Plan Update. These suggested amendments are not meant to be
prescriptive, but generally outline actions that could be taken to implement the policy
parameters of each scenario.
Similarly, the evaluation of Scenario 5 can test a variety of zoning amendments to achieve the
population/housing and employment/square footage numbers discussed above. Suggestions
are included in Table 4, below. City Council input on potential additions and subtractions for
Scenario 5 would be helpful.
Table 4. Possible Zoning Code Amendments for Scenarios 5
Proposed Zoning Code Amendmentsa Scenarios
1 2 3 4 5a
Planned Community (PC) zoning district provisions would be
reformed. √ √ √ √ √
Strategies to preserve retail would be enhanced for the
city’s neighborhoods. √ √ √ √ √
Incentives would be considered for small lot consolidation
along El Camino Real. √ √ √ √ √
A Conditional Use Permit (CUP) would be required for new
office and R&D uses in order to regulate employment √ √ √
Excerpt from May 16, 2016 Staff Report (CMR#6800)
Page 3
Proposed Zoning Code Amendmentsa Scenarios
1 2 3 4 5a
densities.
An alternate mechanism would be explored for moderating
employment densities, either through regulation or revenue
collection (See Discussion below.)
√
Allowable commercial densities in the Downtown (CD
zoning District) would be reduced and replaced with
residential densities.
√ √ √ √
In the Neighborhood Commercial (CN) and Service
Commercial (CS) districts, non-retail portions of allowable
commercial floor area ratios (FARs) would be reduced and
replaced with residential use.
√ √ √
In the Community Commercial 2 (CC-2) district, the
allowable 2.0 FAR would be reduced to an FAR of 1.5 near
California Avenue.
√ √
In the Community Commercial 2 (CC-2) district, commercial
FAR would be somewhat reduced and replaced with
residential FAR.
√
Modest exceptions to the City’s 50-foot height limit would
be permitted for residential uses only (including projects
with ground floor retail and residences above).
√ √ √
Allowable residential densities would be increased
downtown, possibly by adding the PTODb zoning designation
to downtown and streamlining the permitting process to
allow for residential development in the PTOD zone by right.
√ √ √
Allowable residential densities would be increased on the El
Camino Corridor, possibly by adding the PTODb zoning
designation to pedestrian “nodes” along the corridor with
modified regulations to encourage use of the designation.
√ √
Performance-based zoning strategies would be adopted to
minimize impacts of new market rate housing and new non-
residential development by requiring mitigation,
monitoring, and enforcement. Code changes could also
address housing types and preferences.
√
(a)The suggested zoning changes listed here do not include all of the sustainability measures or mitigation
measures which are listed separately below.
(b) The Pedestrian and Transit-Oriented Development (PTOD) combining zoning district is intended to allow higher
density residential dwellings on commercial, industrial, and multi-family parcels within a walkable distance of
Caltrain stations, while protecting low density residential parcels and parcels with historical resources.
Source: Comp Plan Update Draft EIR, February 2016 and Palo Alto Department of Planning & Community
Environment, April 2016
The City Council requested staff evaluate mechanisms for regulating employment densities and
this concept was originally evaluated as part of EIR scenarios 2-4 by assuming a Conditional Use
Permit (CUP) would be required for new office/R&D development, allowing the City to impose a
Excerpt from May 16, 2016 Staff Report (CMR#6800)
Page 4
condition to impose a limit of 250 sq. ft. per worker or something similar.
This approach would address the issue prospectively (i.e. on a going forward basis as new uses
are approved), and would not address some Councilmembers’ interests in regulating
employment densities in existing uses. It would also create enforcement challenges for this
City, likely necessitating additional enforcement staff as the number of new uses subject to
employment density conditions increases over time.
To regulate employment densities in existing uses would be more difficult. In general, there are
a range of possible methods to regulate employment density1, including:
Building Code regulations. The Building Code contains maximum occupancy densities.
These densities are based primarily on ensuring safe egress in case of fire or other
disaster. Occupancy densities vary by use and the occupancy density for business and
industrial uses are 100 gross square feet per occupant. The Building Code contains
uniform standards and to alter these standards the City must make local “climactic,
geographical or topographical” findings. Palo Alto has an existing permitting scheme
called “use and occupancy which could provide a practical enforcement mechanism for
either building permit occupancy limits or related regulatory “use” requirements
discussed below.
Zoning – permitted uses. Like most cities Palo alto’s zooning categories currently do not
contain occupancy limits. While posing some practical enforcement challenges, it is
legally possible to incorporate occupancy limits into either permitted or conditionally
permitted use classifications (see below).
Zoning – conditional use permits. It is possible to allow a base level of zoning density as
a matter of right and require some form of discretionary permits (such as a conditional
use permit) for increased density.
Zoning – performance based zoning. This is a relatively new concept which specifies the
goals (i.e. number of jobs, houses, car trips, etc.) and allows the applicant to propose a
qualifying building. See http://www.citylab.com/housing/2014/08/braving-the-new-
world-of-performance-based-zoning/375926/.
Zoning – transportation demand management strategies. Since concerns about
employee density is generally tied to traffic impacts, many cities attempt to regulate the
direct traffic impacts. Transportation demand management (TDM) programs can be
structured in a variety of ways, including payment of impact fees (supported by a nexus
study linking high employment densities to traffic impacts) and mandatory participation
in the newly established TMA. While the primary focus of TDM strategies is to reduce
1 Establishing occupancy limits for housing units, restricting housing based on school impacts, and limiting
development of housing units in general is legally challenging. The State Housing and Community Development
Department (HCD), the Building Industry Association (BIA) and affordable housing advocates aggressively monitor
such restrictions, and litigation would be very likely in the current housing environment.
Excerpt from May 16, 2016 Staff Report (CMR#6800)
Page 5
Single Occupancy Vehicle (SOV) trips of new development, many programs also have
some incidental benefit of reducing SOV trips of existing development (i.e.
establishment of shuttles that can be used by other neighboring businesses).
Development Agreements. These allow more customized parcel specific regulations.
Head count tax/Impact Fee. Most of the zoning methods regulate new development. It
is more difficult to regulate existing businesses. One way to regulate existing businesses
is to set a head count tax at a level designed to disincentive density.
4. Infrastructure Investments
The Comprehensive Plan Update will identify infrastructure investments expected to occur over
the next 15 years to the extent feasible and will rely on the City’s adopted infrastructure plan as
a base document. The planning scenarios evaluated in the program-level EIR provide an
opportunity to evaluate other potential transportation infrastructure projects, and these are
included in Table 5, below. City Council input on potential additions and subtractions for
Scenario 5 would be appreciated.
Table 5. Possible Infrastructure Investments for Scenario 5
Summary of Infrastructure Investmentsa Scenarios
1 2 3 4 5a
New Public Safety Building √ √ √ √ √
Bicycle Bridge over US 101 √ √ √ √ √
Bicycle/Pedestrian Plan Implementation Projects √ √ √ √ √
Byxbee Park √ √ √ √ √
California Avenue Parking Garage √ √ √ √ √
Downtown Parking Garage √ √ √ √ √
Fire Stations √ √ √ √ √
County Expressway Plan Implementation √
Grade separation of Caltrain in a trench below Charleston
and Meadow; other improvements along the corridor. √ √ √
Bus Rapid Transit on El Camino Real in mixed-flow lanes
with the addition of queue jumping and curbside stations. √ √
(a)This list is not a complete listing of the City’s infrastructure plan, but includes those investments
highlighted in Draft EIR Scenarios 1-4 as well as others that may be appropriate for highlighting in
Scenario 5. There may be some overlap between the suggested investments listed here and the
sustainability measures and performance/mitigation measures referenced later.
Source: Comp Plan Update Draft EIR, February 2016 and Palo Alto Department of Planning & Community
Environment, April 2016
5. Sustainability Measures
On April 18, 2016, the City Council indicated their support for the draft SCAP goal of reducing
GHG Emissions 80% below 1990 levels by 2030 (twenty years ahead of the State’s goal) and
requested clarity on how the Comp Plan Update and the SCAP will be integrated. As noted
earlier, a Sustainability subcommittee of the Comp Plan CAC is assisting with this effort to
ensure that each element of the Comp Plan Update includes policies and programs that are
Excerpt from May 16, 2016 Staff Report (CMR#6800)
Page 6
supportive of the SCAP goal and consistent with its principles and strategies. At the end of the
day, the two plans are intended to be coordinated and complimentary. Also, by incorporating
the SCAP by reference, the Comp Plan will indicate the City’s commitment to the plan, yet still
allow it to be updated as needed over time without the need for a Comprehensive Plan
amendment.
While SCAP principles and strategies have not been fully defined as of yet, Table 6
acknowledges the relationship between the two plans.
Table 6. Possible Sustainability Measures for Scenarios 5
Summary of Sustainability Measuresa Scenarios
1 2 3 4 5a
Mobility
Paid transit passes for employees in workplaces with over
50 employees (portion of SCAP Strategy F-INC-1) √ √ √ √ √
Employer incentives for carpooling and bicycling (SCAP
Strategy F-FAC-3.4) √ √ √ √
Unbundled parking costs for multi-family units (portion of
SCAP Strategy T-INC-2) √ √ √
Parking charge program for existing workplaces with over 50
employees (portion of SCAP Strategy T-INC-2) √ √
Paid parking in Downtown and California Avenue areas
(portion of SCAP Strategy T-INC-2) √ √
Free transit passes for all Palo Alto residents in transit-
accessible areas (portion of SCAP Strategy F-INC-1) √ √
Adoption of the SCAP goal of a 80% reduction in GHG
emissions by 2030 and alignment of the Comprehensive
Plan Update with SCAP principles. Inclusion of
Comprehensive Plan policies and programs that are
supportive of the refinement and furtherance of SCAP
strategies.
√
(a)The suggested sustainability measures listed here do not include every strategy from the draft SCAP,
which is still a work in progress. This list also does not include mitigation measures which are listed
separately below, even though many address topics related to sustainability (for example, transportation
mitigation to limit and off-set new trips).
Source: Comp Plan Update Draft EIR, February 2016; Draft SCAP, April 2016, and Palo Alto Department of Planning
& Community Environment, April 2016
6. Performance/Mitigation Measures
All of the EIR scenarios will require mitigation measures to address significant environmental
impacts and these can be the source of performance measures analyzed as part of Scenario 5.
For example, Mitigation Measure TRANS1a, establishes a framework for imposing a “no net
new trips” requirement on market rate housing, office/R&D development, and other uses. The
measure reads:
Excerpt from May 16, 2016 Staff Report (CMR#6800)
Page 7
TRANS-1a: Adopt a programmatic approach to reducing traffic with the goal of achieving no
net increase in peak period motor vehicle trips from new development, with an exception
for uses that directly contribute to the neighborhood character and diversity of Palo Alto
(such as ground floor retail and below market rate housing). The program should, at a
minimum:
Require new development projects to prepare and implement a Transportation Demand
Management (TDM) Plan to achieve the following reduction in peak period motor
vehicle trips from the rates included in the Institute of Transportation Engineers’ Trip
Generation Manual for the appropriate land use category. These reductions are deemed
aggressive, yet feasible, for the districts indicated.
o 45 percent reduction in the Downtown district
o 35 percent reduction in the California Avenue area
o 30 percent reduction in the Stanford Research Park
o 30 percent reduction in the El Camino Real Corridor
o 20 percent reduction in other areas of the city
TDM Plans must be approved by the City and monitored by the property owner on an
annual basis. The Plans must contain enforcement mechanisms or penalties that accrue
if targets are not met.
Require new development projects to offset remaining peak period motor vehicle trips
through one of the following methods:
o By directly contracting with another property owner or organization to reduce
trips generated from another site; or
o By paying an annual fee to the City for use in reducing motor vehicle trips to the
extent feasible through the provision of transit services, carpool/rideshare
incentives, bicycle lanes, and other similar programs and improvements.
A full list of EIR mitigation measures needed for Scenarios 2-4 is included in Attachment B. The
analysis of Scenario 5 will determine whether these or other measures are required for Scenario
5, however the City Council’s initial input on potential additions and subtractions for inclusion
as part of Scenario 5 would be appreciated.
P L A C E W O R K S 1
City of Palo Alto Comprehensive Plan Update Draft EIR Mitigation Measures
Aesthetics and Visual Resources
AES-1: The following policies and programs, or equally effective language, shall be included in the proposed Plan to ensure that future
development under Scenarios 3 and 4 would not degrade the visual character or quality of the area:
Policy: Promote high quality, creative design, and site planning that is compatible with surrounding development and public spaces.
Policy: Preserve the character of residential neighborhoods by encouraging new or remodeled structures to be compatible with the
neighborhood and adjacent structures.
Policy: Maintain and enhance the University/Downtown area as the central business district of the City, with a mix of commercial, civic,
cultural, recreational, and residential uses. Promote quality design that recognizes the regional and historic importance of the area and
reinforces its pedestrian character.
Program: Review and revise as needed the Downtown, El Camino Real, and South of El Camino Real Design Guidelines to support and enhance
the existing visual character of these neighborhoods with building forms and massing that relate to the street and the pedestrian, whether
through traditional architectural forms or innovative new designs.
Program: In areas of the City having a historic or consistent design character, design new development to maintain and support the existing
character.
AES-4: The City shall develop an ordinance that will require development projects of a certain size or location to prepare an analysis of potential
shade/shadow impacts. The ordinance shall focus on potential impacts to public open spaces (other than public streets and adjacent sidewalks)
between 9:00 a.m. and 3:00 p.m. from September 21 to March 21. Projects that are shown to shadow open spaces during these times shall
mitigate these impacts through building and site design features.
Air Quality
AIR-1: The policies and programs, or equally effective language, shall be included in the proposed Plan to ensure that it is consistent with the
2010 Bay Area Clean Air Plan:
Policy: Make land use decisions that encourage walking, bicycling, and public transit use.
Policy: Reduce emission of particulates from wood burning stoves, construction activity, automobiles, and other sources.
Program: Locate higher density development near transit corridors and near multimodal transit stations. Support regional, State, and federal
programs that improve air quality in the Bay Area.
Program: Encourage infill, redevelopment, and re-use of vacant or underutilized parcels employing minimum density requirements that are
appropriate to support transit, bicycling, and walking.
Program: Promote mixed-use development to provide housing and commercial services near employment centers, thereby reducing the
necessity of driving.
AIR-2a: As part of the City’s development approval process, the City shall require applicants for future development projects to comply with the
current BAAQMD basic control measures for reducing construction emissions of PM10 (Table 8-1, Basic Construction Mitigation Measures
Recommended for All Proposed Projects, of the BAAQMD CEQA Guidelines).
AIR-2b: Prior to issuance of construction permits, development project applicants that are subject to CEQA and have the potential to exceed the
BAAQMD screening-criteria listed in the BAAQMD CEQA Guidelines shall prepare and submit to the City of Palo Alto a technical assessment
evaluating potential project construction-related air quality impacts. The evaluation shall be prepared in conformance with BAAQMD
methodology in assessing air quality impacts. If construction-related criteria air pollutants are determined to have the potential to exceed the
2 M A R C H 2 2 , 2 0 1 6
City of Palo Alto Comprehensive Plan Update Draft EIR Mitigation Measures
BAAQMD thresholds of significance, as identified in the BAAQMD CEQA Guidelines, the City of Palo Alto shall require that applicants for new
development projects incorporate mitigation measures (Table 8-2, Additional Construction Mitigation Measures Recommended for Projects with
Construction Emissions Above the Threshold, of the BAAQMD CEQA Guidelines or applicable construction mitigation measures subsequently
approved by BAAQMD) to reduce air pollutant emissions during construction activities to below these thresholds. These identified measures
shall be incorporated into all appropriate construction documents (e.g., construction management plans) submitted to the City and shall be
verified by the City’s Planning and Community Environment Department.
AIR-2c: Prior to issuance of construction permits, development project applicants that are subject to CEQA and have the potential to exceed the
BAAQMD screening-criteria listed in the BAAQMD CEQA Guidelines shall prepare and submit to the City of Palo Alto a technical assessment
evaluating potential project operation phase-related air quality impacts. The evaluation shall be prepared in conformance with BAAQMD
methodology in assessing air quality impacts. If operational-related criteria air pollutants are determined to have the potential to exceed the
BAAQMD thresholds of significance, as identified in BAAQMD’s CEQA Guidelines, the City of Palo Alto Planning and Community Environment
Department shall require that applicants for new development projects incorporate mitigation measures to reduce air pollutant emissions
during operational activities.
AIR-2d: Implement Mitigation Measure TRANS-1a. In addition, the following policy and program, or equally effective language, shall be included
in the proposed Plan to reduce long-term air quality impacts by emphasizing walkable neighborhoods and supporting alternative modes of
transportation.
Policy: Encourage new residential, commercial and mixed-use development around transit stations, locations with bicycle and pedestrian
connectivity, neighborhood-serving retail, and city services to allow residents and employees to meet daily needs without the use of the
private automobile.
Program: Promote mixed-use development to provide housing and commercial services near employment centers, thereby reducing the
necessity of driving.
AIR-3a: Applicants for future non-residential land uses within the city that: 1) have the potential to generate 100 or more diesel truck trips per
day or have 40 or more trucks with operating diesel-powered TRUs, and 2) are within 1,000 feet of a sensitive land use (e.g., residential, schools,
hospitals, nursing homes), as measured from the property line of a proposed project to the property line of the nearest sensitive use, shall
submit a health risk assessment (HRA) to the City of Palo Alto prior to future discretionary Project approval or shall comply with best practices
recommended for implementation by the BAAQMD.
The HRA shall be prepared in accordance with policies and procedures of the State Office of Environmental Health Hazard Assessment and the
Bay Area Air Quality Management District. If the HRA shows that the incremental cancer risk exceeds 10 in one million (10E-06), PM2.5
concentrations exceed 0.3 µg/m3, or the appropriate noncancer hazard index exceeds 1.0, the applicant will be required to identify and
demonstrate that mitigation measures are capable of reducing potential cancer and noncancer risks to an acceptable level, including appropriate
enforcement mechanisms.
Mitigation measures and best practices may include but are not limited to:
Restricting idling on-site beyond Air Toxic Control Measures idling restrictions, as feasible.
Electrifying warehousing docks.
Requiring use of newer equipment and/or vehicles.
Restricting off-site truck travel through the creation of truck routes.
P L A C E W O R K S 3
City of Palo Alto Comprehensive Plan Update Draft EIR Mitigation Measures
Mitigation measures identified in the project-specific HRA shall be identified as mitigation measures in the environmental document and/or
incorporated into the site development plan as a component of a proposed project.
AIR-3b: Applicants for residential and other sensitive land use projects (e.g., hospitals, nursing homes, and day care centers) that are subject to
CEQA within 1,000 feet of a major sources of TACs (e.g., warehouses, industrial areas, freeways, and roadways with traffic volumes over 10,000
vehicle per day), as measured from the property line of the project to the property line of the source/edge of the nearest travel lane, shall
submit a health risk assessment (HRA) to the City of Palo Alto prior to future discretionary Project approval or shall comply with best practices
recommended by the BAAQMD.
The HRA shall be prepared in accordance with policies and procedures of the State Office of Environmental Health Hazard Assessment (OEHHA)
and the Bay Area Air Quality Management District. The latest OEHHA guidelines shall be used for the analysis, including age sensitivity factors,
breathing rates, and body weights appropriate for children age zero to 16 years. If the HRA shows that the incremental cancer risk exceeds 10 in
one million (10E-06), PM2.5 concentrations exceed 0.3 µg/m3, or the appropriate noncancer hazard index exceeds 1.0, the applicant will be
required to identify and demonstrate that mitigation measures are capable of reducing potential cancer and non-cancer risks to an acceptable
level (i.e., below 10 in one million or a hazard index of 1.0), including appropriate enforcement mechanisms.
Measures and/or best practices to reduce risk may include but are not limited to:
Air intakes located away from high volume roadways and/or truck loading zones.
Heating, ventilation, and air conditioning systems of the buildings provided with appropriately sized Maximum Efficiency Rating Value (MERV)
filters.
Mitigation measures identified in the HRA and best practices shall be incorporated into the site development plan as a condition of approval.
The air intake design and MERV filter requirements shall be noted and/or reflected on all building plans submitted to the City and shall be
verified by the City’s Planning and Community Environment Department.
AIR-4: The following policy, or equally effective language, shall be included in the proposed Plan to reduce odor impacts:
Policy: All potential sources of odor and/or toxic air contaminants should be adequately buffered, mechanically or otherwise mitigated, to
avoid odor and toxic impacts that violate human health standards.
Biological Resources
None
Cultural Resources
CULT-1a: The City shall prepare and adopt an ordinance that would regulate the demolition or alteration of a historic resource listed on the
National and/or California Register, or listed on the City’s Historic Inventory, if alterations would significantly alter the historic value and/or
character defining features of the historic resource.
CULT-1b: Include a program in the Comprehensive Plan Update requiring the City to update and maintain the City’s Historic Resource Inventory
to determine all historic resources that are eligible for the California Register as well as important examples of California history or prehistory.
Historic resources may consist of a single building or structure or a district.
Include a policy in the Comprehensive Plan requiring an evaluation prior to the issuance of a demolition or alterations permit, where proposed
development would affect a potential historic resource that has not been evaluated for inclusion into the City’s Historic Resources Inventory.
4 M A R C H 2 2 , 2 0 1 6
City of Palo Alto Comprehensive Plan Update Draft EIR Mitigation Measures
CULT-1c: The following policy and program, or equally effective language, shall be included in the proposed Plan to ensure that future
development under all four scenarios would not adversely affect a historic resource listed or eligible for listing on the National and/or California
Register, or listed on the City’s Historic Inventory:
Policy: Protect Palo Alto’s archaeological resources, including natural land formations, sacred sites, the historical landscape, historic habitats,
and remains of settlements here before the founding of Palo Alto in the nineteenth century.
Program: Require that a records search of the California Historical Resources Information System be conducted and reviewed by a cultural
resources professional for proposed new development to determine whether the site contains known prehistoric or historic cultural resources
and the potential for as-yet-undiscovered cultural resources.
CULT-2: Implement Mitigation Measures CULT-1a, CULT-1b, and CULT-1c.
CULT-3: The following policies, or equally effective language, shall be included in the proposed Plan to ensure that future development under all
four scenarios would not damage archaeological resources:
Policy: Protect Palo Alto’s archaeological resources, including natural land formations, sacred sites, the historical landscape, historic habitats,
and remains of settlements here before the founding of Palo Alto in the nineteenth century.
Policy: Require that a records search of the California Historical Resources Information System be conducted and reviewed by a cultural
resources professional for proposed new development to determine whether the site contains known prehistoric or historic cultural resources
and to determine the potential presence of as-yet-undiscovered cultural resources.
Policy: Require that areas found to contain significant prehistoric artifacts be examined by a qualified consulting archaeologist for appropriate
protection and preservation.
Policy: Require that if cultural resources, including archaeological or paleontological resources, are uncovered during grading or other on-site
excavation activities, construction shall stop until appropriate mitigation is determined and implemented.
Policy: Require that any archaeological or paleontological resources on a development project site, as a condition of project approval, be
either preserved at their location or adequately documented as a condition of removal. When a development project has sufficient flexibility,
avoidance and preservation of the resource shall be the primary mitigation measure, unless the City identifies a superior mitigation. If
resources are documented, their preservation should be coordinated with descendants and/or stakeholder groups, as warranted.
Policy: Continue to consult with tribes as required by California Government Code Section 65352.3. In doing so, use appropriate procedures to
accommodate tribal concerns when a tribe has a religious prohibition against revealing precise information about the location or previous
practice at a particular sacred site.
No mitigation necessary.
CULT-5: The following policies, or equally effective language, shall be included in the proposed Plan to ensure that future development under all
four scenarios would not damage paleontological resources:
Policy: Require that areas found to contain significant prehistoric artifacts be examined by a qualified consulting archaeologist for appropriate
protection and preservation.
Policy: Require that if cultural resources, including archaeological or paleontological resources and unique geologic features, are uncovered
during grading or other on-site excavation activities, construction shall stop until appropriate mitigation is determined and implemented.
Policy: Require that any archaeological or paleontological resources on a development project site, as a condition of project approval, be
P L A C E W O R K S 5
City of Palo Alto Comprehensive Plan Update Draft EIR Mitigation Measures
either preserved at their location or adequately documented as a condition of removal. When a development project has sufficient flexibility,
avoidance and preservation of the resource shall be the primary mitigation measure, unless the City identifies a superior mitigation. If
resources are documented, their preservation should be coordinated with descendants and/or stakeholder groups, as warranted.
CULT-6: Implement Mitigation Measures CULT-1a, CULT-1b, and CULT-1c.
CULT-7: Implement Mitigation Measures CULT-1a, CULT-1b, CULT-1c, CULT-3, and CULT-5.
Geology, Soils, and Seismicity
None
Greenhouse Gas Emissions and Climate Change
GHG-2: To ensure that Palo Alto’s GHG emissions are reduced consistent with the State’s long-term goals, the proposed Plan should contain the
following policy and program, or equally effective language, articulating these goals and ensuring steady progress towards their achievement:
Policy: Strive to achieve and exceed target reductions in greenhouse gas emission levels set forth by Executive Order S-03-05.
Program: Adopt an updated GHG emission reduction plan as part of the S/CAP aimed at achieving or exceeding the State’s goals, and monitor
the City’s progress on an annual basis.
GHG reduction policies included in the S/CAP, which is being prepared in conjunction with proposed Plan, would ensure substantial progress
toward the long-term GHG reduction goals of Executive Order S-03-05. However, at this time, additional State and federal actions, as well as
advances in technology, are necessary to achieve the deep cuts required to meet the 2050 emissions target. These actions are beyond the
jurisdiction of the City of Palo Alto and therefore it is unclear whether the City alone can mitigate this impact to a less-than-significant level.
GHG-3: To address the potential impacts associated with exposing additional people to the effects of climate change, the proposed Plan should
include the following policies and programs, or equally effective language, to ensure that future development would address potential risks and
that the City would work with other agencies to coordinate strategies for minimizing risk, ensuring appropriate response/recovery, and planning
for resiliency:
Policy: Monitor and respond to the risk of flooding caused by climate change that may result in changes to precipitation patterns, sea level
rise, and storm surges.
Policy: Promote and participate in cooperative planning with other public agencies and regional and adjacent jurisdictions, especially
regarding issues related to climate change, such as water supply, sea level rise, fire protection services, emergency medical services, and
emergency response planning.
Program: Develop and implement “green infrastructure” practices to mitigate flooding through improved permeability or paved areas, and
storm water capture and storage.
Program: Regularly coordinate with regional, State, and federal agencies on rising sea levels in the San Francisco Bay and major tributaries to
determine if additional adaptation strategies should be adopted to address flooding hazards from increased sea levels for existing or new
development and infrastructure. This includes monitoring Federal Emergency Management Agency flood map updates to identify areas in the
city susceptible to sea level rise, addressing changes to State and regional sea and bay level rise estimates, and coordinating with adjacent
municipalities on flood control improvements as appropriate.
Program: Prepare response strategies that address sea level rise and increased flooding, and other events related to climate change, such as
increased flooding, landslides, soil erosion, wildfires, and storm events. Include response strategies to address sea level rise on Palo Alto’s
6 M A R C H 2 2 , 2 0 1 6
City of Palo Alto Comprehensive Plan Update Draft EIR Mitigation Measures
levee system.
Program: Develop new development requirements for shoreline development to ensure that new development is designed and located to
provide protection from potential impacts of flooding resulting from sea level rise and significant flood events. Requirements may include:
new setbacks to ensure to structures are set back far enough inland that they will not be endangered by erosion; limits on subdivisions and lot
line adjustments in areas vulnerable to sea level rise to avoid the creation of new shoreline lots; incentive or transfer of development rights
(TDR) programs to relocate existing development away from high risk areas; and/or triggers for relocation or removal of existing structures
based on changing site conditions and other factors.
Hazards and Hazardous Materials
None
Hydrology and Water Quality
HYD-2: The City shall continue to investigate the potential impacts of basement construction dewatering and update standard conditions of
approval to contain the following or equally effective measures:
Prohibit dewatering during the rainy season.
Encouraging greater fill station use by distributing more door-hangers and enlisting other public outreach regarding dewatering, fill stations,
and trees.
Strengthening outreach on the water cycle and value of fresh water flows to storm drains, creeks, and the Bay.
Refining requirements for contractor Use Plans, including maximizing on-site water use, one day/week water truck hauling service for
neighbors, and City landscaping and piping to nearby parks or major users where feasible.
Expanding fill station specifications to address water pressure issues resulting from multiple concurrent users, including separate pumps for
neighbors where needed and sidewalk bridges for hoses to prevent tripping hazards.
Broadening the City’s Basement Pumping Guidelines to require a determination of the impacts of groundwater pumping on adjacent
buildings, infrastructure, and trees or landscaping. Applicants would determine the size of the temporary cone of depression caused by
pumping and avoidance measures would be required if impacts are anticipated. The Urban Forestry staff may develop guidelines for soil
enhancement and supplemental watering (by project applicant) for neighboring landscaping. Additional measures could include adjusting the
location, depth, or duration of pumping or altering construction methods.
Land Use and Planning
LAND-1: Include policies and programs in the proposed Plan to ensure that the intensity of future development under Scenarios 3 and 4 would
not adversely change the land use patterns or affect the quality of life in Palo Alto neighborhoods. This could be accomplished by maintaining
existing Comp Plan policies related to compatibility and quality of life in the area:
Policy: Maintain Palo Alto’s varied residential neighborhoods while sustaining the vitality of its commercial areas and public facilities. Use the
Zoning Ordinance as a tool to enhance Palo Alto’s desirable qualities.
Policy: Evaluate changes in land use in the context of regional needs, overall city welfare and objectives, and the desires of surrounding
neighborhoods.
Policy: Promote increased compatibility, interdependence, and support between commercial and mixed-use centers and the surrounding
residential neighborhoods.
P L A C E W O R K S 7
City of Palo Alto Comprehensive Plan Update Draft EIR Mitigation Measures
Program: Encourage greater use of allowed density within zoning regulations through smaller housing units near multimodal transit stations
to take advantage of transit availability.
LAND-2: The following policies and programs, or equally effective language, should be included in the proposed Plan to further reduce potential
impacts to visual character and ensure compatibility with adjacent land uses:
Policy: Where possible, avoid abrupt changes in scale and density between residential and non-residential areas and between residential
areas of different densities. To promote compatibility and gradual transitions between land uses, place zoning district boundaries at mid-block
locations rather than along streets wherever possible.
Policy: Preserve the character of residential neighborhoods by encouraging new or remodeled structures to be compatible with the
neighborhood and adjacent structures.
Policy: Promote high quality, creative design and site planning that is compatible with surrounding development and public spaces.
Program: Maintain and periodically review height and density limits to discourage single uses that are inappropriate in size and scale to the
surrounding uses.
Program: Review and change zoning regulations to promote gradual transitions in the scale of development where residential districts abut
more intense uses.
Program: Use the Zoning Ordinance, design review process, design guidelines, and Coordinated Area Plans to ensure high-quality residential
and commercial design.
LAND-5: To avoid potential impacts from physically dividing an established community, the proposed Plan shall include the following policies, or
equally effective policies:
Policy: Design future transportation projects (including roadway, bicycle, pedestrian, and transit projects) to improve connections between
and within neighborhoods, rather than divide neighborhoods.
Policy: Pursue a below-grade alignment and not an elevated alignment for regional fixed rail in Palo Alto, including both high speed rail and
Caltrain.
Policy: Ensure that future grade separation projects include a community participation and review process, and undergo environmental
review. Future grade separation improvement projects would have the potential to cause environmental impacts, such as impacts associated
with construction-related emissions, noise, and traffic, and aesthetics and land use impacts. These impacts, and alternatives to these grade
separation projects, would be evaluated in detail when the projects are more clearly defined.
Noise
NOISE-1a: The following policies and programs, or equally effective language, shall be included in the proposed Plan to ensure that long-term
operational noise under Scenarios 2, 3, and 4 would not result in significant increases in average 24-hour noise levels.
Policy: Encourage the location of land uses in areas with compatible noise environments. Use the guidelines in the table “Land Use
Compatibility for Community Noise Environment” to determine compatibility.
- For exterior noise, the guideline for “normally acceptable” noise levels in residential areas is an Ldn of 60 dBA. This level is a guideline for the
design and location of future development and a goal for the reduction of noise in existing development. However, 60 dBA Ldn is a guideline
which cannot necessarily be reached in all residential areas within the constraints of economic or aesthetic feasibility. This guideline will be
primarily applied where outdoor use is a major consideration (e.g., backyards in single-family housing developments and recreational areas
8 M A R C H 2 2 , 2 0 1 6
City of Palo Alto Comprehensive Plan Update Draft EIR Mitigation Measures
in multiple-family housing projects). Where the City determines that providing an Ldn of 60 dBA or lower outdoors is not feasible, the noise
level in outdoor areas intended for recreational use should be reduced to as close to the standard as feasible through project design.
- For interior noise, the requirements of the State of California Building Standards Code (Title 24) and the Noise Insulation Standards (Title 25)
are extended to all new dwelling units in Palo Alto. Specifically, interior levels for all habitable rooms must not exceed an Ldn of 45 dBA in all
new dwelling units in Palo Alto.
- Noise exposure(s) should be determined from a) more detailed noise exposure studies, or b) area-specific or project-specific noise
measurements, as appropriate. Noise contour maps in this plan can be used as a preliminary screening tool in determining approximate
noise exposure.
- Prior to the initial development application for future developments near noise-sensitive land uses, the applicant shall submit an acoustical
analysis by an acoustical engineer demonstrating projected compliance with the Comprehensive Plan, the Noise Ordinance, and the State
building code. The analysis shall be based on acoustical readings, equipment specifications, architectural designs (even if preliminary), and
any proposed sound reduction/insulation measures, such that the pertinent land use compatibility, interior environments, and project-
related noise emissions can be demonstrated to comply with prescribed city, county, and state noise standards.
Policy: The City may require proposals to reduce noise impacts of development on adjacent properties through appropriate means including,
but not limited to, the following:
- Construct noise walls when compatible with aesthetic concerns.
- Screen and control noise sources such as parking, outdoor activities, and mechanical equipment.
- Increase setbacks for noise sources from adjacent dwellings.
- Whenever possible, retain fences, walls, or landscaping that serve as noise buffers although design, safety, and other impacts must be
addressed.
- Use soundproofing materials and double-glazed windows.
- Control hours of operation, including deliveries and trash pickup, to minimize noise impacts.
Program: Update the Noise Ordinance to provide for clear interpretation of the regulations, and to review the appropriateness of existing
standards. Strictly enforce the Noise Ordinance.
NOISE-1b: The following policy, or equally effective language, shall be included in the proposed Plan to ensure that aircraft noise under all four
scenarios would not result in significant increases in average 24-hour noise levels.
The following new policy shall be adopted as part of the proposed Plan. The wording of this policy may change as long as the revised policy is
equally effective in mitigating potential aircraft noise impacts:
Policy: Ensure compliance with the airport related land use compatibility standards for community noise environments by prohibiting
incompatible land use development within the 60 dBA CNEL noise contours of the Palo Alto airport.
NOISE-1c: The following policies, or equally effective language, shall be included in the proposed Plan to ensure that railway noise under all four
scenarios would not result in significant increases in average 24-hour noise levels.
Policy: Minimize noise spillover from rail related activities into adjacent residential or noise-sensitive areas.
Policy: Reduce impacts from noise and ground borne vibrations associated with rail operations by requiring that future development of
habitable buildings address the following:
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City of Palo Alto Comprehensive Plan Update Draft EIR Mitigation Measures
- Be sited at least 100 feet from the centerline of the tracks whenever feasible.
- Interior noise level of up to 45 dBA Ldn, with windows closed must be ensured through structural design. For habitable buildings located
within 100 feet from the centerline of railroad tracks, developments shall provide a detailed noise impact analysis, prepared by a qualified
acoustical consultant technician, demonstrating that noise and ground borne vibration issues associated with rail operations have been
adequately addressed (i.e., by building siting or construction techniques). This study must demonstrate that an interior noise level of 45 dBA
Ldn will not be exceeded with windows closed.
- Provide a detailed vibration impact analysis, prepared by a qualified acoustical consultant, demonstrating that ground-borne vibration levels
will not exceed 72 VdB (relative to one microinch/sec) at residential buildings or 65 VdB at buildings with vibration-sensitive uses.
NOISE-2: Implement Mitigation Measures NOISE-1a, NOISE-1b, and NOISE-1c.
NOISE-3: Implement Mitigation Measures NOISE-1a, NOISE-1b, and NOISE-1c.
NOISE-4a: The following policies and programs, or equally effective language, shall be included in the proposed Plan to ensure that future
development under all four scenarios would not result in indoor noise levels that exceed acceptable levels in residential development.
Policy: Encourage the location of land uses in areas with compatible noise environments. Use the guidelines in the table “Land Use
Compatibility for Community Noise Environment” to determine compatibility.
- For exterior noise, the guideline for “normally acceptable” noise levels in residential areas is an Ldn of 60 dBA. This level is a guideline for the
design and location of future development and a goal for the reduction of noise in existing development. However, 60 dBA Ldn is a guideline
which cannot necessarily be reached in all residential areas within the constraints of economic or aesthetic feasibility. This guideline will be
primarily applied where outdoor use is a major consideration (e.g., backyards in single family housing developments and recreational areas
in multiple family housing projects). Where the City determines that providing an Ldn of 60 dBA or lower outdoors is not feasible, the noise
level in outdoor areas intended for recreational use should be reduced to as close to the standard as feasible through project design.
- For interior noise, the requirements of the State of California Building Standards Code (Title 24) and the Noise Insulation Standards (Title 25)
are extended to all new dwelling units in Palo Alto. Specifically, interior levels for all habitable rooms must not exceed an Ldn of 45 dBA in all
new dwelling units in Palo Alto.
- Noise exposure(s) should be determined from (a more detailed noise exposure studies, or (b) on area-specific or project-specific noise
measurements, as appropriate. Noise contour maps in this plan can be used as a preliminary screening tool in determining approximate
noise exposure.
Prior to the initial development application for future developments near noise-sensitive land uses, the applicant shall submit an acoustical
analysis by an acoustical engineer demonstrating projected compliance with the Comprehensive Plan, the Noise Ordinance, and the State
building code. The analysis shall be based on acoustical readings, equipment specifications, architectural designs (even if preliminary), and any
proposed sound reduction/insulation measures, such that the pertinent land use compatibility, interior environments, and project-related
noise emissions can be demonstrated to comply with prescribed city, county, and state noise standards.
Policy: For all future residential projects greater than four dwelling units that are proposed to be within the 65 dBA Ldn noise contours, as
depicted on current Comprehensive Plan mapping, an acoustical analysis prepared by a qualified acoustical consultant shall be submitted to
the City as part of the entitlement review application. As part of the above acoustical analysis, require that projects include appropriate
layout, structural, and/or architectural design features to ensure meeting the interior noise standards of the City and State codes.
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NOISE-4b: The Land Use Noise Compatibility Guidelines established in the current Comprehensive Plan shall be maintained under all four
scenarios.
NOISE-5a: The following policies, or equally effective language, shall be included in the proposed Plan to ensure that future development under
all four scenarios would not result in significant construction-related vibration impacts.
Policy: Require a detailed construction noise impact analysis, prepared by a qualified acoustical consultant, for all projects that require
discretionary approval and that are located within 100 feet of any noise sensitive land uses. If impacts are identified, require a noise
monitoring plan to be prepared and submitted prior to the issuance of construction permits. This plan shall identify the monitoring locations,
durations and regularity, the instrumentation to be used, and the appropriate noise control measures that will be incorporated to ensure
compliance with the noise ordinance.
Policy: Continue to prioritize construction noise limits around sensitive receptors.
NOISE-5b: Implement Mitigation Measure NOISE-1c.
NOISE-6: Implement Mitigation Measures NOISE-4a and NOISE-4b.
NOISE-7: Implement Mitigation Measures NOISE-1a, NOISE-1b, NOISE-1c, NOISE-4a, and NOISE-4b.
NOISE-8: The following policies, or equally effective language, shall be included in the proposed Plan to ensure that future development under
all four scenarios would not result in significant impacts to sensitive receptors from construction noise and vibration.
Policy: Require a detailed construction noise and vibration impact analysis, prepared by a qualified acoustical consultant, for all projects
that require discretionary approval and that are located within 100 feet of any noise- and/or vibration-sensitive land uses.
- If noise impacts are identified, require a noise monitoring plan to be prepared and submitted prior to the issuance of construction permits.
This plan shall identify the noise monitoring locations, durations and regularity, the instrumentation to be used, and the appropriate noise
control/mitigation measures that will be incorporated to ensure compliance with the noise ordinance.
- If projected daytime vibration levels exceed 90 VdB (relative to one microinch/sec) at workshop uses, 84 VdB at offices uses, 78 VdB at
residential uses, or the limits for VC-A through VC-E uses shown in the FTA manual, a vibration mitigation plan is to be prepared and
submitted prior to the issuance of construction permits.
Policy: Continue to prioritize construction noise and vibration limits around sensitive receptors.
NOISE-11a: Implement Mitigation Measure NOISE-1c.
NOISE-11b: The following programs, or equally effective language, shall be included in the proposed Plan to preclude overall community noise
impacts that are in excess of established State and/or City standards.
Program: Encourage the Joint Powers Board to pursue technologies to reduce train whistle noise in communities served by Caltrain.
Program: Evaluate changing at-grade rail crossings so that they qualify as Quiet Zones based on Federal Railroad Administration (FRA) rules
and guidelines in order to mitigate the effects of train horn noise without adversely affecting safety at railroad crossings.
NOISE-11c: City of Palo Alto staff and officials shall participate in and contribute to the environmental impact assessment of future Caltrain and
HSR development programs for railway operations within the city’s SOI.
Population and Housing
P L A C E W O R K S 11
City of Palo Alto Comprehensive Plan Update Draft EIR Mitigation Measures
POP-4a: Conduct a nexus study and update the City’s affordable housing linkage fee for commercial development to ensure that new job-
generating development adequately mitigates the costs of its impacts on housing affordability in Palo Alto.
POP-4b: Continue to increase the supply of housing in the city through implementation of the adopted Housing Element policies and programs,
and/or slow the rate of job growth in the city. Possible zoning adjustments to accomplish more housing and/or fewer jobs could include changes
to allow more residential density by right in areas that are well-served by services and transit, somewhat reducing commercial FAR and replacing
it with residential FAR, and/or implementing an annual limit on new office and R&D development.
Public Services and Recreation
PS-7: To address the potential impacts of necessary property acquisition and park construction/
improvement, the Comprehensive Plan Update and/or the Parks, Trails, Natural Open Space and Recreation Master Plan shall incorporate
policies and programs addressing funding, community input, and environmental review, as follows:
Continue to collect park impact and park dedication (in lieu) fees from new development to ensure there is funding to add and improve
parklands during the life of the Comprehensive Plan. Reevaluate the fees on a regular basis.
Consider integrating new pocket parks within existing neighborhoods where this is possible by acquiring small parcels or conditioning new
development.
Where there is publicly owned land that could be improved for public use, consider designating this land as parkland when improvements
occur.
Pursue reliable and sustainable mechanisms to address a growing gap in maintenance funding as park and community services facilities uses
increase.
Monitor the health of the parks and the effectiveness of recreation facilities in the face of growing demand and use; evaluate services to
respond to growing and changing demographic patterns.
Monitor impacts on habitat and ecosystems and develop conservation plans to preserve and protect them.
Ensure that new parks and park improvements are developed with ample community input and assessed to ensure that significant
environmental impacts are avoided or mitigated to be less than significant.
Consider utilizing park impact and park dedication (in lieu) fees to rehabilitate, expand, or otherwise increase utilization of existing parks and
recreation facilities.
In addition to these measures, the City would require permitting and review of new parks in accordance with CEQA, which would ensure that
any environmental impacts are disclosed and mitigated to the extent possible. This EIR is a programmatic document and does not evaluate the
environmental impacts of any project-specific development. With mitigation, the impact is less than significant.
PS-8: Implement Mitigation Measure PS-7, above.
Transportation and Traffic
TRANS-1a: Adopt a programmatic approach to reducing traffic with the goal of achieving no net increase in peak period motor vehicle trips from
new development, with an exception for uses that directly contribute to the neighborhood character and diversity of Palo Alto (such as ground
floor retail and below market rate housing). The program should, at a minimum:
Require new development projects to prepare and implement a Transportation Demand Management (TDM) Plan to achieve the following
reduction in peak period motor vehicle trips from the rates included in the Institute of Transportation Engineers’ Trip Generation Manual for
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City of Palo Alto Comprehensive Plan Update Draft EIR Mitigation Measures
the appropriate land use category. These reductions are deemed aggressive, yet feasible, for the districts indicated.
- 45 percent reduction in the Downtown district
- 35 percent reduction in the California Avenue area
- 30 percent reduction in the Stanford Research Park
- 30 percent reduction in the El Camino Real Corridor
- 20 percent reduction in other areas of the city
TDM Plans must be approved by the City and monitored by the property owner on an annual basis. The Plans must contain enforcement
mechanisms or penalties that accrue if targets are not met.
Require new development projects to offset remaining peak period motor vehicle trips through one of the following methods:
- By directly contracting with another property owner or organization to reduce trips generated from another site; or
- By paying an annual fee to the City for use in reducing motor vehicle trips to the extent feasible through the provision of transit services,
carpool/rideshare incentives, bicycle lanes, and other similar programs and improvements.
TRANS-1b: Establish and implement a policy that eliminates (“unbundles”) free or subsidized parking in new commercial and residential
development (i.e. requiring employees and residents to pay separately for parking).
TRANS-1c: Work to advance plans for grade separation at intersections along the Caltrain tracks to reduce traffic congestion/delay and improve
safety; seek funding for design and implementation from local, regional, State, and federal sources. Ensure that future grade separation projects
include a community participation and review process, and undergo environmental review. Future grade separation improvement projects
would have the potential to cause environmental impacts, such as impacts associated with construction-related emissions, noise, and traffic,
and aesthetics and land use impacts. These impacts, and alternatives to these grade separation projects, would be evaluated in detail when the
projects are more clearly defined.
TRANS-1d: Take a leadership role in regional transportation planning and advocating for specific transit improvements and investments, such as
Caltrain service enhancements, Dumbarton Express service, enhanced bus service on El Camino Real with queue jumping and curbside
platforms, and additional VTA bus service.
TRANS-1e: Work with the PAUSD to ensure that decisions regarding school assignments are analyzed to reduce peak period motor vehicle trips
to and from school sites.
TRANS-3a: The City shall require new development projects to prepare and implement TDM programs, as described in TRANS-1a. TDM programs
for worksites may include measures such as private bus services and free shuttle services to transit stations geared towards commuters.
TRANS-3b: Take a leadership role in regional transportation planning and advocating for specific multi-modal freeway improvements, such as
dynamic pricing, express bus service, transit and HOV priority, and other enhanced mobility options.
TRANS-6: Provide traffic signal prioritization for buses at Palo Alto intersections, focusing first on regional transit routes. Also, provide queue
jump lanes and curbside platforms for buses on El Camino Real.
In concert with Mitigation Measure TRANS-6, Mitigation Measures TRANS-1a, TRANS-1b, and TRANS-3 would eliminate the impact on transit at
the following intersections, which are projected to operate at a substandard level of service and are used by at least one bus route:
Middlefield Road and East Charleston Road (#2) under Scenarios 1 and 4
El Camino Real (SR 82) and San Antonio Road (#8) under Scenarios 1, 2, 3, and 4
Foothill Expressway and Page Mill Road (#9) under Scenarios 1, 3, and 4
P L A C E W O R K S 13
City of Palo Alto Comprehensive Plan Update Draft EIR Mitigation Measures
Foothill Expressway and Arastradero Road (#10) under Scenarios 1, 3, and 4
Alma Street and East/West Charleston Road (#4) under Scenarios 1 and 2
VTA Route 88 runs on East/West Charleston Road and crosses the Caltrain tracks and Alma Street. The intersection of Alma Street and East/West
Charleston Road (#4), is one of the impacted intersections under Scenarios 1 and 2, but signal pre-emption for VTA’s bus service would not be
possible at this location, due to the railroad crossing and the need for Caltrain to have signal pre-emption capabilities. However, signal priority
for VTA buses should be possible at this intersection, and would provide sufficient mitigation to eliminate the impact on transit at this
intersection. However, impacts on transit at all intersections and segments where buses operate would not be eliminated.
No further feasible mitigation measures have been identified. Thus, all four scenarios would have a significant impact on transit operations by
increasing congestion. These impacts are considered significant and unavoidable.
TRANS-8: Develop a proactive neighborhood traffic calming program with a tool box of specific improvements that can be used to discourage
non-local drivers from using local, neighborhood streets to bypass traffic congestion on arterials.
TRANS-9: Implement Mitigation Measure TRANS-8.
Utilities and Service Systems
UTIL-15: The following policies and programs, or equally effective language, shall be included in the proposed Plan to ensure that future
development under Scenarios 2, 3, and 4 would comply with applicable solid waste regulations:
Policy: Reduce the amount of solid waste disposed in the City’s landfill by reducing the amount of waste generated and promoting the cost-
effective reuse of materials that would otherwise be placed in a landfill.
Policy: Reduce solid waste generation through salvage and reuse of building materials, including architecturally and historically significant
materials.
Policy: Encourage the use of reusable, returnable, recyclable, and repairable goods through incentives, educational displays and activities, and
through City purchasing policies and practices.
Policy: Increase program participation to maximize recycling and composting from all residents, businesses, and institutions, and consider
ways to expand recycling and composting programs.
UTIL-17: The following policies and programs, or equally effective language, shall be included in the proposed Plan to ensure that future
development under Scenarios 2, 3, and 4 maximize energy efficiency and conservation:
Policy: Optimize energy conservation and efficiency in new and existing residences, businesses, and industries in Palo Alto.
Policy: Maintain Palo Alto’s long-term supply of electricity and natural gas while transitioning to renewable energy and energy conservation.
Program: Encourage establishment of public education programs addressing energy conservation and efficiency.
Program: Incorporate cost-effective energy conservation measures into construction, maintenance, and City operation and procurement
practices.
Program: Incorporate State and federal energy efficiency and renewable energy standards and policies in relevant City codes, regulations, and
procedures for both privately-owned and City-owned projects and properties.
Program: Evaluate the merits of electrification strategies and implement suitable programs to switch from gasoline/natural gas to electricity to
achieve deep carbon emission reduction.
14 M A R C H 2 2 , 2 0 1 6
CITY OF
PALO
ALTO
TO:
FROM:
DATE:.
SUBJECT:
13
HONORABLE CITY COUNCIL
HILLARY GITELMAN, DIRECTOR, PLANNING AND COMMUNITY ENVIRONMENT
AUGUST 18, 2016
AUGUST 22, 2016 AGENDA ITEM 13-Policy Discussion on Comprehensive Plan Update
Environmental Impact Report Scenarios 5&6.
Staff is requesting continuance of this item until August 29, 2016 to permit more time for discussion of
other items on the agenda this evening.
City of Palo Alto (ID # 7205)
City Council Staff Report
Report Type: Inter-Governmental Legislative Affairs Meeting Date: 8/22/2016
City of Palo Alto Page 1
Summary Title: Governor's By Right Housing Bill -- Status Update
Title: Status Update and Potential City Responses to the Governor's "By
Right" Housing Bill and Pending Bills Addressing Housing Issues
From: City Manager
Lead Department: Planning and Community Environment
Recommendation:
Staff recommends that the City Council discuss the status of the Governor’s “By Right” Housing
Proposal, as well as other pending bills related to housing issues, and direct the staff to prepare
a letter stating the City’s position on these bills, if desired.
Background & Discussion:
There has been a focus on housing in Sacramento this year, with a move by the Governor to
streamline local approval of housing projects, and several efforts to require local governments
to make it easier for second units (also called accessory dwelling units or “granny units”) to be
added within existing neighborhoods. This agenda item is intended to provide an update on
these activities and to allow the Council to weigh-in further if desired.
Governor’s By Right Housing Bill
In an effort to encourage housing production, Governor Jerry Brown proposed a trailer bill to
the May 2016-17 State budget revision that would streamline the approval of certain
multifamily housing projects that include a portion of deed-restricted affordable units. The idea
was to give certain multifamily projects “by right” entitlement to develop, thereby removing a
local government’s discretionary authority to reject such projects and shortening the approval
process.
The City Council provided comments (Attachment A) on an early version of the bill and in
response to comments like these, the Governor’s office both agreed to make changes, and to
subject the bill to review by the Legislature outside of the budget process. After meeting with
various stakeholders, including cities, labor groups, and environmental interests, we
understand the Governor is informally declaring his intent to withdraw the proposal. Staff will
be prepared to update the Council on August 22nd regarding any formal determinations.
City of Palo Alto Page 2
Second Unit Legislation
Separately, the legislature has been working on three bills regarding second units, which are
summarized below. (These summaries are derived from the analysis presented in legislative
committee this summer.)
SB 1069 (Wieckowski) and AB 2299 (Bloom)
These bills would repeal a local government's ability to prohibit second units and prohibit local
agencies from imposing a parking requirement on new second units in some instances. Also,
under the current version SB 1069, ADUs cannot be considered new residential uses for the
purposes of calculating private or public utility connection fees. According to the author, the
intent of this provision is not to prohibit any utility fees from being charged on ADUs. Rather, it
is to ensure that "some utility and hook-up fees can be charged provided that these are
calibrated to reflect the actual impact of an accessory dwelling on an existing lot that already
has utility service, landscaping, and a primary dwelling." City staff has engaged legislative staff
to clarify language in SB 1069.
Copies of these bills are included as Attachment C and D. As of August 10, SB 1069 is headed to
the Appropriations committee for a hearing and AB 2299 will be taken up on the Senate floor
shortly.
AB 2406 (Thurmond)
This bill would define a “junior accessory dwelling unit” as a unit created by repurposing
existing, spare bedrooms and creating a small, simple and flexible type of in-law apartment
within the current building envelop. The bill would prohibit requiring additional parking, and
eliminates requirements for fire separation and fire sprinklers, as the in-law apartment stays
connected to the main living area through an adjoining door. As of August 9th, an urgency
clause was added, meaning the bill will take effect immediately if and when the Governor signs
the bill.
A copy of AB 2406 is included as Attachment E. As of August 10, this bill will be taken up on the
Senate floor shortly.
Density Bonus Legislation
There is a bill moving forward to amend the State Density Bonus law that may also be of
interest. As we understand it, AB 2501 (Bloom) would prohibit local agencies from requiring
additional studies (like Palo Alto’s pro forma requirement) when considering requests for
concessions under the State Density Bonus Law. The bill does allow local governments to
require reasonable documentation when a density bonus is requested.
A copy of AB 2501 is included as Attachment F. As of August 10, the bill will be taken up on the
Senate floor shortly.
On August 22nd, staff will update Council on the current status of each bill.
City of Palo Alto Page 3
Attachments:
Attachment A: City's Comment Letter on the June Version of the Bill (PDF)
Attachment B: CSAC COMMENT LETTER 7 14 16 (PDF)
Attachment C: SB-1069 Second Units (PDF)
Attachment D: AB-2299 Second Units (PDF)
Attachment F: AB-2501 Housing_ density bonuses. (PDF)
Attachment E: AB-2406 Junior Accessory Units (PDF)
P.O. Box 10250
Palo Alto, CA 94303
650.329.2571
650.328.3631 fax
June 9, 2016
The Honorable Edmund G. Brown, Jr. Governor, State of California
State Capitol Building
Sacramento, CA 95814
RE: By Right Housing Proposal Notice of Opposition
Dear Governor Brown:
After considerable examination, the City of Palo Alto opposes your recently released proposal to
limit local discretionary land use approvals of specified housing developments by having such
opportunities for public review, project-level environmental review and any helpful design review,
all of which are essential to promote thoughtful and sustainable housing development.
First, this legislation is more than an item on a budget sheet; it is a significant statewide policy
proposal. Such fundamental policy changes should not be rushed through as a budget proposal, but
merit review by the appropriate legislative committees in a deliberative fashion.
The 30 day review and response time required by the proposal effectually eliminates public review of
these major development projects, which, in turn, undermines the principals of transparency and
public engagement. Absent such principals, the integrity of local government may be at stake. While
it may be frustrating for some developers to modify their projects to address concerns about traffic,
parking, massing and other development impacts, those affected by such projects have a right to have
their concerns considered redressed. Indeed, it is the public nature of the development process that
encourages decision makers to balance the interests of all stakeholders for any given project.
Moreover, public review and discussion uphold the accountability of elected officials and ensures a
fair process for all proposals. Without an adequate opportunity for the public to voice concerns or
support for a project, your proposal risks eroding the fundamental trust between developers, the
public, and local elected officials.
Restricting design review is also short-
design of its built environment. The people that make up that community and the local experts that
can offer technical insights should be allowed a reasonable amount of time to consider and contribute
to that design. More practically, the design review process can serve as the time to gain the most
community support for a proposed project. Condensing the timeline for design review weakens the
City of Palo Alto
Office of the Mayor and City Council
P.O. Box 10250
Palo Alto, CA 94303
650.329.2571
650.328.3631 fax
opportunity to foster community acceptance and needlessly raises the possibility of long term
significant compatibility concerns or simply bad design eliminates meaningful design review.
Amendments, published as recently as June 1, 2016 have improved the proposal. It now clarifies that
and other amendments diminish the ambiguity about what objective zoning standards the project
must satisfy. These clarifications while helpful still limit local control by maintaining the review of
city wide, which is 5-10% higher than the transit priority area requirements in the proposal.
Aided by the mechanisms of the traditional legislative process, we are certain that state legislators
and local jurisdictions could craft a much stronger proposal; one that balances the interests of the
state and individual municipalities. Recognizing the importance of balancing both housing needs and
local control, we intend to work with the League of California Cities, our lobbyists and legislators on
improvements to the bill. Notwithstanding our objections above, we believe the following
amendments are examples demonstrating how the bill could be improved.
Amendments
1. Amend section 65913.3(a)(3) to ensure the proposal does not unintentionally serve as a
means to create more commercial uses than housing units:
containing two or more dwelling units that is a housing development project as defined by
subdivision (2) of subsection (h) of Section 65589.5 of the Government Code, but does not
include a second unit, as defined by subdivision (4) of subsection (i) of Section 65852.2 of
the Government Code, or the conversion of an existing structure to condominiums. To the
extent the attached housing development is a mixed use project, the neighborhood
commercial component shall not exceed the square footage of the housing component. In
cities that have a jobs to employed residents ratio greater than 3 to 1, the development shall
not exacerbate the jobs-housing imbalance.
2. Amend section 65913.3(d) to both increase the time allowed for the design review process
review provided it does not
reduce units:
Any design review of the development shall not exceed ninety (90) one hundred twenty (120)
days from the submittal of the development to the local government pursuant to this section,
and shall not in any way inhibit, chill, result in a reduction of proposed housing units or
preclude the ministerial approval provided by this section and the effect thereof.
3. Amend section 65913.3(b)(4)(C)to increase the required level of affordability in jurisdictions
which have existing inclusionary requirements in excess of those described in the bill:
P.O. Box 10250
Palo Alto, CA 94303
650.329.2571
650.328.3631 fax
property to a level of affordability equal to or greater than either of the following:
(i) At least ten percent of the total units of a housing development for lower income
households, as defined in Section 50079.5 of the Health and Safety Code.
(ii) At least five percent of the total units of a housing development for very low income
households, as defined in Section 50105 of Health and Safety Code.
(iii) Subsections (i) and (ii) notwithstanding, in cities and counties where inclusionary zoning
restrictions require a higher percentage of units to be reserved for low or very low income
households, as defined in Section 50079.5 and Section 50105 of the Health and Safety Code,
then such higher requirements shall apply.
4. Amend 65913.3(k) to ensure that moderate, low or very low income tenants displaced as a
result of the new development have priority for occupying any new housing, in addition to
the rights afforded to those same individuals under the Government Code Section 7260 et
seq.
We cannot support a housing proposal without far more protection for local authority in the
development process.
On behalf of the residents we represent who deserve a voice in the future shape of their communities;
the City of Palo Alto respectfully states our opposition to this measure.
Sincerely,
Patrick Burt, Mayor
City of Palo Alto
Cc: The Honorable Anthony Rendon, Speaker, California State Assembly
The Honorable Kevin de Leon, President pro Tempore, California State Senate
The Honorable Phil Ting, Vice Chair, Joint Budget Conference Committee
The Honorable Mark Leno, Chair, Joint Budget Conference Committee
The Honorable Rich Gordon, Assembly Member
The Honorable Adrin Nazarian, Assembly Member
The Honorable Jerry Hill, Senator
The Honorable Richard Roth, Senator
Graciela Castillo-Krings, Office of Governor Edmund G. Brown, Jr.
Ben Metcalf, Director, California Department of Housing and Community Development
Dan Carrigg, League of California Cities, CarriggD@cacities.org
The Palo Alto City Council
C/O STEFAN/GEORGE ASSOCIATES
1333 36TH STREET
SACRAMENTO CA 95816-5401
P: 916.736.2434
F: 916.456.1283
www.calapa.org
1
July 14, 2016
The Honorable Jerry Brown
Governor of California
State Capitol, Room 1173
Sacramento, California 95814
SUBJECT: Comments on June 10, 2016 Version of By Right Approval
of Affordable Housing Budget Trailer Bill
Dear Governor Brown:
The American Planning Association, California Chapter (APA California) and the
California State Association of Counties (CSAC) have continued to monitor and
comment on your budget trailer bill proposal that would require by right approval
of affordable housing meeting specific criteria. To date, a significant majority of
our concerns have not been addressed in any of the drafts released, including
the most recent June 10th version of the proposal. We had a conference call with
HCD and your staff a few weeks ago and have scheduled another meeting to
discuss our ongoing concerns. In addition, we are providing with this letter
detailed technical comments on the latest draft (see attached).
Both APA and CSAC support by right approvals of affordable housing but in a
more limited application than the draft trailer bill currently mandates. We
strongly urge you to use the latest version of AB 2522 (Bloom) as the basis
for your proposal. This more limited concept would use ministerial approval
processes already authorized in existing law. Projects would qualify for the by
right approval if they are located on infill sites already designated by the city or
county in the housing element for housing, in truly urbanized areas, and
consistent with written, adopted, objective General Plan, zoning and design
review criteria. By right approval would apply to multifamily rental housing
projects that include at least 20% low-income or 100% moderate-income
(workforce) housing. Such by right approval is already required on any housing
element site where rezoning was required. APA and CSAC also support a
requirement for notice of and public comment during the ministerial design review
of the project, and for delaying implementation of the bill one to two years to
allow cities and counties the time to adopt written, objective by right criteria.
These by right concepts were vetted by multiple planning experts to ensure
consistency with existing planning laws, processes, definitions, and ministerial
review, and targets both low-income and workforce housing. The plight of
moderate-income households, particularly in coastal counties, has been well
documented, and the by right process should be available to assist those
households as well.
C/O STEFAN/GEORGE ASSOCIATES
1333 36TH STREET
SACRAMENTO CA 95816-5401
P: 916.736.2434
F: 916.456.1283
www.calapa.org
2
However, the June 10th by right budget trailer bill continues to be much broader
in application and requires in many cases substantially fewer affordable units
than the concept outlined above. The trailer bill also includes a number of
provisions that are inconsistent with existing requirements related to project
review at the local level, are written poorly, and which seem to be at cross
purposes with the goal of the bill. Without changes to these provisions, APA and
CSAC cannot support the budget trailer bill.
In addition to the technical concerns with the bill included in the attached, we
respectfully request the following amendments:
In proposed S. 65913.3(a)(13), narrow the sites eligible for by right to actual
infill sites identified in the housing element. Instead of using the current
broad definition of urban uses in (13) that includes any residential or non-
residential uses at any density, amend the bill to require the sites to be
designated by the city or county in the housing element for housing and use the
definition of “urbanized area” from existing S. 65589.4 to read as follows: (13)
“Urbanized area” means an area defined in S. 21071 of the Public Resources
Code or within a census designated place with a population density of at least
5,000 persons per square mile or, if the attached housing development consists
of 50 or fewer units, within an incorporated city with a population density of 2,500
persons per square mile and a total population of at least 25,000 persons.
In proposed S. 65913.3(h), delete these provisions which allow “any
person” to file suit either to enforce the statute to grant ministerial
approval or to challenge a by right decision made consistent with the
statute. This invites lawsuits against local government from both proponents and
opponents of the project and is not needed, since a writ of mandate is always
available if government is not performing its required duties.
In proposed S. 65913.3(b)(4)(C) & (D), amend to require at least 20% low-
income or 100% moderate-income (workforce) housing be included in a
project to be eligible for by right housing.
Delete proposed S. 65913.3(b)(5)(H) that grants HCD unprecedented control
over local land use authority. Section (H) grants HCD the authority to
determine areas inappropriate for affordable housing development and the
authority to develop regulations with objective criteria for making those
determinations. It then inexplicably does not actually require HCD to adopt
regulations in order to object to local land use and zoning decisions. This simply
is contradictory, appears aimed at allowing HCD additional authority over
housing elements, and is not related to applicants requesting by right approvals.
Amend proposed S. 65913(d) to start the clock after submittal of a complete
application, and to allow adequate time for review: Require the city or county
to determine whether a project is consistent with the objective criteria and with
the objective planning standards, including consistency with objective design
review standards, within 120 days after an application under this by right section
is deemed complete. The process for determining completeness is familiar to
local agencies and developers and ensures that adequate information is
available to make an informed decision.
Add a new S. 65913.3 (o) to state that the Coastal Act applies to sites that
are in the coastal zone: (o) Nothing in this section shall be construed to relieve
the public agency from complying with the California Coastal Act of 1976
C/O STEFAN/GEORGE ASSOCIATES
1333 36TH STREET
SACRAMENTO CA 95816-5401
P: 916.736.2434
F: 916.456.1283
www.calapa.org
3
(Division 20 commencing with Section 30000) of the Public Resources Code.
Add language to ensure that ‘by right’ approval is a recognized incentive
under the Costa Hawkins Act so that developers’ promises to provide
affordable rental housing are enforceable and not in violation of the Costa
Hawkins Act. See suggested language in 65913.3(c).
Require OPR, in consultation with cities and counties, to develop additional
guidance and examples of “objective zoning standards” and to develop
examples of how ministerial design criteria may be accomplished.
Tie the by right statute to the allocation of monies to update local general
plans and develop design criteria and provide increased housing tax
credits and/or other general fund dollars and the creation of a permanent
source to support the ongoing construction of affordable housing.
APA and CSAC believe that a by right statute would be an important tool for
cities and counties to get affordable and market-rate housing built on urban sites
consistent with their own planning, zoning and design standards -- while at the
same time providing a fast-track advantage for market-rate developers who elect
to build affordable and workforce housing.
If the state could add 20% affordable housing to every market-rate development,
the increase in the affordable housing stock would be increased dramatically. By
right approval of mixed-income housing will actually help to get housing built,
while retaining important opportunities for the public to participate in planning for
housing in their own communities early in the process. However, there is still a
need for funds to assist in the construction of affordable housing. By right
housing alone will not be the answer to fulfill the need.
Our organizations remain willing to work with your office and HCD on this issue
and amendments to address our concerns. If you have any questions, please
contact APA California’s lobbyist, Sande George with Stefan/George Associates,
916-443-5301 or sgeorge@stefangeorge.com or Kiana Valentine, legislative
representative for CSAC, (916) 266-3892, kvalentine@counties.org.
Sincerely,
John Terell
John Terell, AICP
Vice President Policy and Legislation, APA California
jcterell@aol.com
Kiana Valentine
Legislative Representative, California State Association of Counties
cc: HCD
Members of the Budget Conference Committee
Republican Caucus
The Honorable Anthony Rendon, Speaker of the Assembly
The Honorable Kevin De Leon, President Pro Tem of the Senate
OPR
AMENDED IN ASSEMBLY AUGUST 1, 2016
AMENDED IN ASSEMBLY JUNE 16, 2016
AMENDED IN SENATE APRIL 26, 2016
AMENDED IN SENATE APRIL 13, 2016
AMENDED IN SENATE APRIL 6, 2016
SENATE BILL No. 1069
Introduced by Senator Wieckowski
(Coauthor: Assembly Member Atkins)
February 16, 2016
An act to amend Sections 65582.1, 65583.1, 65589.4, 65852.150,
65852.2, and 66412.2 of the Government Code, relating to land use.
legislative counsel’s digest
SB 1069, as amended, Wieckowski. Land use: zoning.
The Planning and Zoning Law authorizes the legislative body of a
city or county to regulate, among other things, the intensity of land use,
and also authorizes a local agency to provide by ordinance for the
creation of 2nd units in single-family and multifamily residential zones,
as specified. That law makes findings and declarations with respect to
the value of 2nd units to California’s housing supply.
This bill would replace the term “second unit” with “accessory
dwelling unit” throughout the law. The bill would additionally find and
declare that, among other things, allowing accessory dwelling units in
single-family or multifamily residential zones provides additional rental
housing stock stock, and these units are an essential component of
housing supply in California.
94
The Planning and Zoning Law authorizes the ordinance for the
creation of 2nd units in single-family and multifamily residential zones
to include specified provisions regarding areas where accessory dwelling
units may be located, standards, including the imposition of parking
standards, and lot density. Existing law, when a local agency has not
adopted an ordinance governing 2nd units as so described, requires the
local agency to approve or disapprove the application ministerially, as
provided.
This bill would instead require the ordinance for the creation of
accessory dwelling units to include the provisions described above. The
bill would prohibit the imposition of parking standards under specified
circumstances. The bill would revise requirements for the approval or
disapproval of an accessory dwelling unit application when a local
agency has not adopted an ordinance. The bill would also require the
ministerial approval of an application for a building permit to create an
one accessory dwelling unit within the existing space of a single family
single-family residence or accessory structure, as specified. The bill
would prohibit a local agency from requiring an applicant for this
permit to install a new or separate utility connection directly between
the unit and the utility or imposing a related connection fee or capacity
charge. The bill would authorize a local agency to impose this
requirement for other accessory dwelling units.
By increasing the duties of local officials, this bill would impose a
state-mandated local program.
The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the state.
Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act
for a specified reason.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.
The people of the State of California do enact as follows:
line 1 SECTION 1. Section 65582.1 of the Government Code is
line 2 amended to read:
line 3 65582.1. The Legislature finds and declares that it has provided
line 4 reforms and incentives to facilitate and expedite the construction
line 5 of affordable housing. Those reforms and incentives can be found
line 6 in the following provisions:
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line 1 (a) Housing element law (Article 10.6 (commencing with
line 2 Section 65580) of Chapter 3).
line 3 (b) Extension of statute of limitations in actions challenging the
line 4 housing element and brought in support of affordable housing
line 5 (subdivision (d) of Section 65009).
line 6 (c) Restrictions on disapproval of housing developments
line 7 (Section 65589.5).
line 8 (d) Priority for affordable housing in the allocation of water and
line 9 sewer hookups (Section 65589.7).
line 10 (e) Least cost zoning law (Section 65913.1).
line 11 (f) Density bonus law (Section 65915).
line 12 (g) Accessory dwelling units (Sections 65852.150 and 65852.2).
line 13 (h) By-right housing, in which certain multifamily housing are
line 14 designated a permitted use (Section 65589.4).
line 15 (i) No-net-loss-in zoning density law limiting downzonings and
line 16 density reductions (Section 65863).
line 17 (j) Requiring persons who sue to halt affordable housing to pay
line 18 attorney fees (Section 65914) or post a bond (Section 529.2 of the
line 19 Code of Civil Procedure).
line 20 (k) Reduced time for action on affordable housing applications
line 21 under the approval of development permits process (Article 5
line 22 (commencing with Section 65950) of Chapter 4.5).
line 23 (l) Limiting moratoriums on multifamily housing (Section
line 24 65858).
line 25 (m) Prohibiting discrimination against affordable housing
line 26 (Section 65008).
line 27 (n) California Fair Employment and Housing Act (Part 2.8
line 28 (commencing with Section 12900) of Division 3).
line 29 (o) Community redevelopment law (Part 1 (commencing with
line 30 Section 33000) of Division 24 of the Health and Safety Code, and
line 31 in particular Sections 33334.2 and 33413).
line 32 SEC. 2. Section 65583.1 of the Government Code is amended
line 33 to read:
line 34 65583.1. (a) The Department of Housing and Community
line 35 Development, in evaluating a proposed or adopted housing element
line 36 for substantial compliance with this article, may allow a city or
line 37 county to identify adequate sites, as required pursuant to Section
line 38 65583, by a variety of methods, including, but not limited to,
line 39 redesignation of property to a more intense land use category and
line 40 increasing the density allowed within one or more categories. The
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SB 1069— 3 —
line 1 department may also allow a city or county to identify sites for
line 2 accessory dwelling units based on the number of accessory
line 3 dwelling units developed in the prior housing element planning
line 4 period whether or not the units are permitted by right, the need for
line 5 these units in the community, the resources or incentives available
line 6 for their development, and any other relevant factors, as determined
line 7 by the department. Nothing in this section reduces the responsibility
line 8 of a city or county to identify, by income category, the total number
line 9 of sites for residential development as required by this article.
line 10 (b) Sites that contain permanent housing units located on a
line 11 military base undergoing closure or conversion as a result of action
line 12 pursuant to the Defense Authorization Amendments and Base
line 13 Closure and Realignment Act (Public Law 100-526), the Defense
line 14 Base Closure and Realignment Act of 1990 (Public Law 101-510),
line 15 or any subsequent act requiring the closure or conversion of a
line 16 military base may be identified as an adequate site if the housing
line 17 element demonstrates that the housing units will be available for
line 18 occupancy by households within the planning period of the
line 19 element. No sites containing housing units scheduled or planned
line 20 for demolition or conversion to nonresidential uses shall qualify
line 21 as an adequate site.
line 22 Any city, city and county, or county using this subdivision shall
line 23 address the progress in meeting this section in the reports provided
line 24 pursuant to paragraph (1) of subdivision (b) of Section 65400.
line 25 (c) (1) The Department of Housing and Community
line 26 Development may allow a city or county to substitute the provision
line 27 of units for up to 25 percent of the community’s obligation to
line 28 identify adequate sites for any income category in its housing
line 29 element pursuant to paragraph (1) of subdivision (c) of Section
line 30 65583 where the community includes in its housing element a
line 31 program committing the local government to provide units in that
line 32 income category within the city or county that will be made
line 33 available through the provision of committed assistance during
line 34 the planning period covered by the element to low- and very low
line 35 income households at affordable housing costs or affordable rents,
line 36 as defined in Sections 50052.5 and 50053 of the Health and Safety
line 37 Code, and which meet the requirements of paragraph (2). Except
line 38 as otherwise provided in this subdivision, the community may
line 39 substitute one dwelling unit for one dwelling unit site in the
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line 1 applicable income category. The program shall do all of the
line 2 following:
line 3 (A) Identify the specific, existing sources of committed
line 4 assistance and dedicate a specific portion of the funds from those
line 5 sources to the provision of housing pursuant to this subdivision.
line 6 (B) Indicate the number of units that will be provided to both
line 7 low- and very low income households and demonstrate that the
line 8 amount of dedicated funds is sufficient to develop the units at
line 9 affordable housing costs or affordable rents.
line 10 (C) Demonstrate that the units meet the requirements of
line 11 paragraph (2).
line 12 (2) Only units that comply with subparagraph (A), (B), or (C)
line 13 qualify for inclusion in the housing element program described in
line 14 paragraph (1), as follows:
line 15 (A) Units that are to be substantially rehabilitated with
line 16 committed assistance from the city or county and constitute a net
line 17 increase in the community’s stock of housing affordable to low-
line 18 and very low income households. For purposes of this
line 19 subparagraph, a unit is not eligible to be “substantially
line 20 rehabilitated” unless all of the following requirements are met:
line 21 (i) At the time the unit is identified for substantial rehabilitation,
line 22 (I) the local government has determined that the unit is at imminent
line 23 risk of loss to the housing stock, (II) the local government has
line 24 committed to provide relocation assistance pursuant to Chapter 16
line 25 (commencing with Section 7260) of Division 7 of Title 1 to any
line 26 occupants temporarily or permanently displaced by the
line 27 rehabilitation or code enforcement activity, or the relocation is
line 28 otherwise provided prior to displacement either as a condition of
line 29 receivership, or provided by the property owner or the local
line 30 government pursuant to Article 2.5 (commencing with Section
line 31 17975) of Chapter 5 of Part 1.5 of Division 13 of the Health and
line 32 Safety Code, or as otherwise provided by local ordinance; provided
line 33 the assistance includes not less than the equivalent of four months’
line 34 rent and moving expenses and comparable replacement housing
line 35 consistent with the moving expenses and comparable replacement
line 36 housing required pursuant to Section 7260, (III) the local
line 37 government requires that any displaced occupants will have the
line 38 right to reoccupy the rehabilitated units, and (IV) the unit has been
line 39 found by the local government or a court to be unfit for human
line 40 habitation due to the existence of at least four violations of the
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SB 1069— 5 —
line 1 conditions listed in subdivisions (a) to (g), inclusive, of Section
line 2 17995.3 of the Health and Safety Code.
line 3 (ii) The rehabilitated unit will have long-term affordability
line 4 covenants and restrictions that require the unit to be available to,
line 5 and occupied by, persons or families of low- or very low income
line 6 at affordable housing costs for at least 20 years or the time period
line 7 required by any applicable federal or state law or regulation.
line 8 (iii) Prior to initial occupancy after rehabilitation, the local code
line 9 enforcement agency shall issue a certificate of occupancy indicating
line 10 compliance with all applicable state and local building code and
line 11 health and safety code requirements.
line 12 (B) Units that are located either on foreclosed property or in a
line 13 multifamily rental or ownership housing complex of three or more
line 14 units, are converted with committed assistance from the city or
line 15 county from nonaffordable to affordable by acquisition of the unit
line 16 or the purchase of affordability covenants and restrictions for the
line 17 unit, are not acquired by eminent domain, and constitute a net
line 18 increase in the community’s stock of housing affordable to low-
line 19 and very low income households. For purposes of this
line 20 subparagraph, a unit is not converted by acquisition or the purchase
line 21 of affordability covenants unless all of the following occur:
line 22 (i) The unit is made available for rent at a cost affordable to
line 23 low- or very low income households.
line 24 (ii) At the time the unit is identified for acquisition, the unit is
line 25 not available at an affordable housing cost to either of the
line 26 following:
line 27 (I) Low-income households, if the unit will be made affordable
line 28 to low-income households.
line 29 (II) Very low income households, if the unit will be made
line 30 affordable to very low income households.
line 31 (iii) At the time the unit is identified for acquisition the unit is
line 32 not occupied by low- or very low income households or if the
line 33 acquired unit is occupied, the local government has committed to
line 34 provide relocation assistance prior to displacement, if any, pursuant
line 35 to Chapter 16 (commencing with Section 7260) of Division 7 of
line 36 Title 1 to any occupants displaced by the conversion, or the
line 37 relocation is otherwise provided prior to displacement; provided
line 38 the assistance includes not less than the equivalent of four months’
line 39 rent and moving expenses and comparable replacement housing
94
— 6 —SB 1069
line 1 consistent with the moving expenses and comparable replacement
line 2 housing required pursuant to Section 7260.
line 3 (iv) The unit is in decent, safe, and sanitary condition at the
line 4 time of occupancy.
line 5 (v) The unit has long-term affordability covenants and
line 6 restrictions that require the unit to be affordable to persons of low-
line 7 or very low income for not less than 55 years.
line 8 (vi) For units located in multifamily ownership housing
line 9 complexes with three or more units, or on or after January 1, 2015,
line 10 on foreclosed properties, at least an equal number of
line 11 new-construction multifamily rental units affordable to lower
line 12 income households have been constructed in the city or county
line 13 within the same planning period as the number of ownership units
line 14 to be converted.
line 15 (C) Units that will be preserved at affordable housing costs to
line 16 persons or families of low- or very low incomes with committed
line 17 assistance from the city or county by acquisition of the unit or the
line 18 purchase of affordability covenants for the unit. For purposes of
line 19 this subparagraph, a unit shall not be deemed preserved unless all
line 20 of the following occur:
line 21 (i) The unit has long-term affordability covenants and
line 22 restrictions that require the unit to be affordable to, and reserved
line 23 for occupancy by, persons of the same or lower income group as
line 24 the current occupants for a period of at least 40 years.
line 25 (ii) The unit is within an “assisted housing development,” as
line 26 defined in paragraph (3) of subdivision (a) of Section 65863.10.
line 27 (iii) The city or county finds, after a public hearing, that the unit
line 28 is eligible, and is reasonably expected, to change from housing
line 29 affordable to low- and very low income households to any other
line 30 use during the next five years due to termination of subsidy
line 31 contracts, mortgage prepayment, or expiration of restrictions on
line 32 use.
line 33 (iv) The unit is in decent, safe, and sanitary condition at the
line 34 time of occupancy.
line 35 (v) At the time the unit is identified for preservation it is
line 36 available at affordable cost to persons or families of low- or very
line 37 low income.
line 38 (3) This subdivision does not apply to any city or county that,
line 39 during the current or immediately prior planning period, as defined
line 40 by Section 65588, has not met any of its share of the regional need
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SB 1069— 7 —
line 1 for affordable housing, as defined in Section 65584, for low- and
line 2 very low income households. A city or county shall document for
line 3 any housing unit that a building permit has been issued and all
line 4 development and permit fees have been paid or the unit is eligible
line 5 to be lawfully occupied.
line 6 (4) For purposes of this subdivision, “committed assistance”
line 7 means that the city or county enters into a legally enforceable
line 8 agreement during the period from the beginning of the projection
line 9 period until the end of the second year of the planning period that
line 10 obligates sufficient available funds to provide the assistance
line 11 necessary to make the identified units affordable and that requires
line 12 that the units be made available for occupancy within two years
line 13 of the execution of the agreement. “Committed assistance” does
line 14 not include tenant-based rental assistance.
line 15 (5) For purposes of this subdivision, “net increase” includes
line 16 only housing units provided committed assistance pursuant to
line 17 subparagraph (A) or (B) of paragraph (2) in the current planning
line 18 period, as defined in Section 65588, that were not provided
line 19 committed assistance in the immediately prior planning period.
line 20 (6) For purposes of this subdivision, “the time the unit is
line 21 identified” means the earliest time when any city or county agent,
line 22 acting on behalf of a public entity, has proposed in writing or has
line 23 proposed orally or in writing to the property owner, that the unit
line 24 be considered for substantial rehabilitation, acquisition, or
line 25 preservation.
line 26 (7) In the third year of the planning period, as defined by Section
line 27 65588, in the report required pursuant to Section 65400, each city
line 28 or county that has included in its housing element a program to
line 29 provide units pursuant to subparagraph (A), (B), or (C) of
line 30 paragraph (2) shall report in writing to the legislative body, and
line 31 to the department within 30 days of making its report to the
line 32 legislative body, on its progress in providing units pursuant to this
line 33 subdivision. The report shall identify the specific units for which
line 34 committed assistance has been provided or which have been made
line 35 available to low- and very low income households, and it shall
line 36 adequately document how each unit complies with this subdivision.
line 37 If, by July 1 of the third year of the planning period, the city or
line 38 county has not entered into an enforceable agreement of committed
line 39 assistance for all units specified in the programs adopted pursuant
line 40 to subparagraph (A), (B), or (C) of paragraph (2), the city or county
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— 8 —SB 1069
line 1 shall, not later than July 1 of the fourth year of the planning period,
line 2 adopt an amended housing element in accordance with Section
line 3 65585, identifying additional adequate sites pursuant to paragraph
line 4 (1) of subdivision (c) of Section 65583 sufficient to accommodate
line 5 the number of units for which committed assistance was not
line 6 provided. If a city or county does not amend its housing element
line 7 to identify adequate sites to address any shortfall, or fails to
line 8 complete the rehabilitation, acquisition, purchase of affordability
line 9 covenants, or the preservation of any housing unit within two years
line 10 after committed assistance was provided to that unit, it shall be
line 11 prohibited from identifying units pursuant to subparagraph (A),
line 12 (B), or (C) of paragraph (2) in the housing element that it adopts
line 13 for the next planning period, as defined in Section 65588, above
line 14 the number of units actually provided or preserved due to
line 15 committed assistance.
line 16 (d) A city or county may reduce its share of the regional housing
line 17 need by the number of units built between the start of the projection
line 18 period and the deadline for adoption of the housing element. If the
line 19 city or county reduces its share pursuant to this subdivision, the
line 20 city or county shall include in the housing element a description
line 21 of the methodology for assigning those housing units to an income
line 22 category based on actual or projected sales price, rent levels, or
line 23 other mechanisms establishing affordability.
line 24 SEC. 3. Section 65589.4 of the Government Code is amended
line 25 to read:
line 26 65589.4. (a) An attached housing development shall be a
line 27 permitted use not subject to a conditional use permit on any parcel
line 28 zoned for an attached housing development if local law so provides
line 29 or if it satisfies the requirements of subdivision (b) and either of
line 30 the following:
line 31 (1) The attached housing development satisfies the criteria of
line 32 Section 21159.22, 21159.23, or 21159.24 of the Public Resources
line 33 Code.
line 34 (2) The attached housing development meets all of the following
line 35 criteria:
line 36 (A) The attached housing development is subject to a
line 37 discretionary decision other than a conditional use permit and a
line 38 negative declaration or mitigated negative declaration has been
line 39 adopted for the attached housing development under the California
line 40 Environmental Quality Act (Division 13 (commencing with Section
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SB 1069— 9 —
line 1 21000) of the Public Resources Code). If no public hearing is held
line 2 with respect to the discretionary decision, then the negative
line 3 declaration or mitigated negative declaration for the attached
line 4 housing development may be adopted only after a public hearing
line 5 to receive comments on the negative declaration or mitigated
line 6 negative declaration.
line 7 (B) The attached housing development is consistent with both
line 8 the jurisdiction’s zoning ordinance and general plan as it existed
line 9 on the date the application was deemed complete, except that an
line 10 attached housing development shall not be deemed to be
line 11 inconsistent with the zoning designation for the site if that zoning
line 12 designation is inconsistent with the general plan only because the
line 13 attached housing development site has not been rezoned to conform
line 14 with the most recent adopted general plan.
line 15 (C) The attached housing development is located in an area that
line 16 is covered by one of the following documents that has been adopted
line 17 by the jurisdiction within five years of the date the application for
line 18 the attached housing development was deemed complete:
line 19 (i) A general plan.
line 20 (ii) A revision or update to the general plan that includes at least
line 21 the land use and circulation elements.
line 22 (iii) An applicable community plan.
line 23 (iv) An applicable specific plan.
line 24 (D) The attached housing development consists of not more
line 25 than 100 residential units with a minimum density of not less than
line 26 12 units per acre or a minimum density of not less than eight units
line 27 per acre if the attached housing development consists of four or
line 28 fewer units.
line 29 (E) The attached housing development is located in an urbanized
line 30 area as defined in Section 21071 of the Public Resources Code or
line 31 within a census-defined place with a population density of at least
line 32 5,000 persons per square mile or, if the attached housing
line 33 development consists of 50 or fewer units, within an incorporated
line 34 city with a population density of at least 2,500 persons per square
line 35 mile and a total population of at least 25,000 persons.
line 36 (F) The attached housing development is located on an infill
line 37 site as defined in Section 21061.0.5 of the Public Resources Code.
line 38 (b) At least 10 percent of the units of the attached housing
line 39 development shall be available at affordable housing cost to very
line 40 low income households, as defined in Section 50105 of the Health
94
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line 1 and Safety Code, or at least 20 percent of the units of the attached
line 2 housing development shall be available at affordable housing cost
line 3 to lower income households, as defined in Section 50079.5 of the
line 4 Health and Safety Code, or at least 50 percent of the units of the
line 5 attached housing development available at affordable housing cost
line 6 to moderate-income households, consistent with Section 50052.5
line 7 of the Health and Safety Code. The developer of the attached
line 8 housing development shall provide sufficient legal commitments
line 9 to the local agency to ensure the continued availability and use of
line 10 the housing units for very low, low-, or moderate-income
line 11 households for a period of at least 30 years.
line 12 (c) Nothing in this section shall prohibit a local agency from
line 13 applying design and site review standards in existence on the date
line 14 the application was deemed complete.
line 15 (d) The provisions of this section are independent of any
line 16 obligation of a jurisdiction pursuant to subdivision (c) of Section
line 17 65583 to identify multifamily sites developable by right.
line 18 (e) This section does not apply to the issuance of coastal
line 19 development permits pursuant to the California Coastal Act
line 20 (Division 20 (commencing with Section 30000) of the Public
line 21 Resources Code).
line 22 (f) This section does not relieve a public agency from complying
line 23 with the California Environmental Quality Act (Division 13
line 24 (commencing with Section 21000) of the Public Resources Code)
line 25 or relieve an applicant or public agency from complying with the
line 26 Subdivision Map Act (Division 2 (commencing with Section
line 27 66473)).
line 28 (g) This section is applicable to all cities and counties, including
line 29 charter cities, because the Legislature finds that the lack of
line 30 affordable housing is of vital statewide importance, and thus a
line 31 matter of statewide concern.
line 32 (h) For purposes of this section, “attached housing development”
line 33 means a newly constructed or substantially rehabilitated structure
line 34 containing two or more dwelling units and consisting only of
line 35 residential units, but does not include an accessory dwelling unit,
line 36 as defined by paragraph (4) of subdivision (i) (j) of Section
line 37 65852.2, or the conversion of an existing structure to
line 38 condominiums.
line 39 SEC. 4. Section 65852.150 of the Government Code is amended
line 40 to read:
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SB 1069— 11 —
line 1 65852.150. (a) The Legislature finds and declares all of the
line 2 following:
line 3 (1) Accessory dwelling units are a valuable form of housing in
line 4 California.
line 5 (2) Accessory dwelling units provide housing for family
line 6 members, students, the elderly, in-home health care providers, the
line 7 disabled, and others, at below market prices within existing
line 8 neighborhoods.
line 9 (3) Homeowners who create accessory dwelling units benefit
line 10 from added income, and an increased sense of security.
line 11 (4) Allowing accessory dwelling units in single-family or
line 12 multifamily residential zones provides additional rental housing
line 13 stock in California.
line 14 (5) California faces a severe housing crisis.
line 15 (6) The state is falling far short of meeting current and future
line 16 housing demand with serious consequences for the state’s
line 17 economy, our ability to build green infill consistent with state
line 18 greenhouse gas reduction goals, and the well-being of our citizens,
line 19 particularly lower and middle-income earners.
line 20 (7) Accessory dwelling units offer lower cost housing to meet
line 21 the needs of existing and future residents within existing
line 22 neighborhoods, while respecting architectural character.
line 23 (8) Accessory dwelling units are, therefore, an essential
line 24 component of California’s housing supply.
line 25 (b) It is the intent of the Legislature that an accessory dwelling
line 26 unit-ordinance unit ordinance adopted by a local agency has the
line 27 effect of providing for the creation of accessory dwelling units and
line 28 that provisions in this ordinance relating to matters including unit
line 29 size, parking, fees fees, and other requirements, are not so arbitrary,
line 30 excessive, or burdensome so as to unreasonably restrict the ability
line 31 of homeowners to create accessory dwelling units in zones in which
line 32 they are authorized by local ordinance.
line 33 SEC. 5. Section 65852.2 of the Government Code is amended
line 34 to read:
line 35 65852.2. (a) (1) A local agency may, by ordinance, provide
line 36 for the creation of accessory dwelling units in single-family and
line 37 multifamily residential zones. The ordinance shall do all of the
line 38 following:
line 39 (A) Designate areas within the jurisdiction of the local agency
line 40 where accessory dwelling units may be permitted. The designation
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line 1 of areas may be based on criteria, that may include, but are not
line 2 limited to, the adequacy of water and sewer services and the impact
line 3 of accessory dwelling units on traffic flow and public safety.
line 4 (B) Impose standards on accessory dwelling units that include,
line 5 but are not limited to, parking, height, setback, lot coverage,
line 6 architectural review, maximum size of a unit, and standards that
line 7 prevent adverse impacts on any real property that is listed in the
line 8 California Register of Historic Places.
line 9 (C) Provide that accessory dwelling units do not exceed the
line 10 allowable density for the lot upon which the accessory dwelling
line 11 unit is located, and that accessory dwelling units are a residential
line 12 use that is consistent with the existing general plan and zoning
line 13 designation for the lot.
line 14 (2) The ordinance shall not be considered in the application of
line 15 any local ordinance, policy, or program to limit residential growth.
line 16 (3) When a local agency receives its first application on or after
line 17 July 1, 2003, for a permit pursuant to this subdivision, the
line 18 application shall be considered ministerially without discretionary
line 19 review or a hearing, notwithstanding Section 65901 or 65906 or
line 20 any local ordinance regulating the issuance of variances or special
line 21 use permits, within 90 days of submittal of a complete building
line 22 permit application. A local agency may charge a fee to reimburse
line 23 it for costs that it incurs as a result of amendments to this paragraph
line 24 enacted during the 2001–02 Regular Session of the Legislature,
line 25 including the costs of adopting or amending any ordinance that
line 26 provides for the creation of accessory dwelling units.
line 27 (b) (1) When a local agency that has not adopted an ordinance
line 28 governing accessory dwelling units in accordance with subdivision
line 29 (a) receives its first application on or after July 1, 1983, for a permit
line 30 pursuant to this subdivision, the local agency shall accept the
line 31 application and approve or disapprove the application ministerially
line 32 without discretionary review pursuant to this subdivision unless
line 33 it adopts an ordinance in accordance with subdivision (a) within
line 34 90 days after receiving the application. Notwithstanding Section
line 35 65901 or 65906, every local agency shall ministerially approve
line 36 the creation of an accessory dwelling unit if the accessory dwelling
line 37 unit complies with all of the following:
line 38 (A) The unit is not intended for sale separate from the primary
line 39 residence and may be rented.
line 40 (B) The lot is zoned for single-family or multifamily use.
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SB 1069— 13 —
line 1 (C) The lot contains an existing single-family dwelling.
line 2 (D) The accessory dwelling unit is either attached to the existing
line 3 dwelling and located within the living area of the existing dwelling
line 4 or detached from the existing dwelling and located on the same
line 5 lot as the existing dwelling.
line 6 (E) The increased floor area of an attached accessory dwelling
line 7 unit shall not exceed 50 percent of the existing living area. area,
line 8 with a maximum increase in floor area of 1,200 square feet.
line 9 (F) The total area of floorspace for a detached accessory
line 10 dwelling unit shall not exceed 1,200 square feet.
line 11 (G) Requirements relating to height, setback, lot coverage,
line 12 architectural review, site plan review, fees, charges, and other
line 13 zoning requirements generally applicable to residential construction
line 14 in the zone in which the property is located.
line 15 (H) Local building code requirements that apply to detached
line 16 dwellings, as appropriate.
line 17 (I) Approval by the local health officer where a private sewage
line 18 disposal system is being used, if required.
line 19 (2) No other local ordinance, policy, or regulation shall be the
line 20 basis for the denial of a building permit or a use permit under this
line 21 subdivision.
line 22 (3) This subdivision establishes the maximum standards that
line 23 local agencies shall use to evaluate proposed accessory dwelling
line 24 units on lots zoned for residential use that contain an existing
line 25 single-family dwelling. No additional standards, other than those
line 26 provided in this subdivision or subdivision (a), shall be utilized or
line 27 imposed, except that a local agency may require an applicant for
line 28 a permit issued pursuant to this subdivision to be an
line 29 owner-occupant or that the property be used for rentals of terms
line 30 longer than 30 days.
line 31 (4) A local agency may amend its zoning ordinance or general
line 32 plan to incorporate the policies, procedures, or other provisions
line 33 applicable to the creation of accessory dwelling units if these
line 34 provisions are consistent with the limitations of this subdivision.
line 35 (5) An accessory dwelling unit that conforms to this subdivision
line 36 shall not be considered to exceed the allowable density for the lot
line 37 upon which it is located, and shall be deemed to be a residential
line 38 use that is consistent with the existing general plan and zoning
line 39 designations for the lot. The accessory dwelling units shall not be
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line 1 considered in the application of any local ordinance, policy, or
line 2 program to limit residential growth.
line 3 (c) A local agency may establish minimum and maximum unit
line 4 size requirements for both attached and detached accessory
line 5 dwelling units. No minimum or maximum size for an accessory
line 6 dwelling unit, or size based upon a percentage of the existing
line 7 dwelling, shall be established by ordinance for either attached or
line 8 detached dwellings that does not otherwise permit at least a
line 9 500-foot accessory dwelling unit or a 500-foot an efficiency unit
line 10 to be constructed in compliance with local development standards.
line 11 Accessory dwelling units shall not be required to provide fire
line 12 sprinklers if they are not required for the primary residence.
line 13 (d) Parking requirements for accessory dwelling units shall not
line 14 exceed one parking space per unit or per bedroom. These spaces
line 15 may be provided as tandem parking on an existing driveway.
line 16 Off-street parking shall be permitted in setback areas in locations
line 17 determined by the local agency or through tandem parking, unless
line 18 specific findings are made that parking in setback areas or tandem
line 19 parking is not feasible based upon fire and life safety conditions.
line 20 This subdivision shall not apply to a unit that is described in
line 21 subdivision (e).
line 22 (e) Notwithstanding any other law, a local agency, whether or
line 23 not it has adopted an ordinance governing accessory dwelling units
line 24 in accordance with subdivision (a), shall not impose parking
line 25 standards for an accessory dwelling unit in any of the following
line 26 instances:
line 27 (1) The accessory dwelling unit is located within one-half mile
line 28 of public transit or shopping.
line 29 (2) The accessory dwelling unit is located within an
line 30 architecturally and historically significant historic district.
line 31 (3) The accessory dwelling unit is part of the existing primary
line 32 residence.
line 33 (4) When on-street parking permits are required but not offered
line 34 to the occupant of the accessory dwelling unit.
line 35 (5) When there is a car share vehicle located within one block
line 36 of the accessory dwelling unit.
line 37 (f) Notwithstanding subdivisions (a) to (e), inclusive, a local
line 38 agency shall ministerially approve an application for a building
line 39 permit to create within a single-family residential zone one
line 40 accessory dwelling unit per single-family lot if the unit is contained
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SB 1069— 15 —
line 1 within the existing space of a single-family residence or accessory
line 2 structure, has independent exterior access from the existing
line 3 residence, and the side and rear setbacks are sufficient for fire
line 4 safety. Accessory dwelling units shall not be required to provide
line 5 fire sprinklers if they are not required for the primary residence.
line 6 (g) (1) Fees charged for the construction of accessory dwelling
line 7 units shall be determined in accordance with Chapter 5
line 8 (commencing with Section 66000). Accessory 66000) and Chapter
line 9 7 (commencing with Section 66012).
line 10 (2) Accessory dwelling units shall not be considered new
line 11 residential uses for the purposes of calculating private or public
line 12 utility local agency connection fees, fees or capacity charges for
line 13 utilities, including water and sewer service.
line 14 (A) For an accessory dwelling unit described in subdivision (f),
line 15 a local agency shall not require the applicant to install a new or
line 16 separate utility connection directly between the accessory dwelling
line 17 unit and the utility or impose a related connection fee capacity
line 18 charge.
line 19 (B) For an accessory dwelling unit that is not described in
line 20 subdivision (f), a local agency may require a new or separate
line 21 utility connection directly between the accessory dwelling unity
line 22 and the utility. Consistent with Section 66013, the connection may
line 23 be subject to a connection fee or capacity charge that shall be
line 24 proportionate to the burden of the proposed accessory dwelling
line 25 unit, based upon either its size or the number of its plumbing
line 26 fixtures, upon the water or sewer system. This fee or charge shall
line 27 not exceed the reasonable cost of providing this service.
line 28 (h) This section does not limit the authority of local agencies
line 29 to adopt less restrictive requirements for the creation of accessory
line 30 dwelling units.
line 31 (i) Local agencies shall submit a copy of the ordinances adopted
line 32 pursuant to subdivision (a) to the Department of Housing and
line 33 Community Development within 60 days after adoption.
line 34 (j) As used in this section, the following terms mean:
line 35 (1) “Living area,” area” means the interior habitable area of a
line 36 dwelling unit including basements and attics but does not include
line 37 a garage or any accessory structure.
line 38 (2) “Local agency” means a city, county, or city and county,
line 39 whether general law or chartered.
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line 1 (3) For purposes of this section, “neighborhood” has the same
line 2 meaning as set forth in Section 65589.5.
line 3 (4) “Accessory dwelling unit” means an attached or a detached
line 4 residential dwelling unit which provides complete independent
line 5 living facilities for one or more persons. It shall include permanent
line 6 provisions for living, sleeping, eating, cooking, and sanitation on
line 7 the same parcel as the single-family dwelling is situated. An
line 8 accessory dwelling unit also includes the following:
line 9 (A) An efficiency unit, as defined in Section 17958.1 of Health
line 10 and Safety Code.
line 11 (B) A manufactured home, as defined in Section 18007 of the
line 12 Health and Safety Code.
line 13 (k) Nothing in this section shall be construed to supersede or in
line 14 any way alter or lessen the effect or application of the California
line 15 Coastal Act (Division 20 (commencing with Section 30000) of
line 16 the Public Resources Code), except that the local government shall
line 17 not be required to hold public hearings for coastal development
line 18 permit applications for second accessory dwelling units.
line 19 SEC. 6. Section 66412.2 of the Government Code is amended
line 20 to read:
line 21 66412.2. This division shall not apply to the construction,
line 22 financing, or leasing of dwelling units pursuant to Section 65852.1
line 23 or accessory dwelling units pursuant to Section 65852.2, but this
line 24 division shall be applicable to the sale or transfer, but not leasing,
line 25 of those units.
line 26 SEC. 7. No reimbursement is required by this act pursuant to
line 27 Section 6 of Article XIIIB of the California Constitution because
line 28 a local agency or school district has the authority to levy service
line 29 charges, fees, or assessments sufficient to pay for the program or
line 30 level of service mandated by this act, within the meaning of Section
line 31 17556 of the Government Code.
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SB 1069— 17 —
AMENDED IN ASSEMBLY APRIL 5, 2016
california legislature—2015–16 regular session
ASSEMBLY BILL No. 2299
Introduced by Assembly Member Bloom
February 18, 2016
An act to amend Section 65852.2 of the Government Code, relating
to land use.
legislative counsel’s digest
AB 2299, as amended, Bloom. Land use: housing: 2nd units.
The Planning and Zoning Law authorizes the legislative body of a
city or county to regulate, among other things, the intensity of land use,
and also authorizes a local agency to provide by ordinance for the
creation of 2nd units in single-family and multifamily residential zones,
as specified.
This bill would, instead, require a local agency to provide by ordinance
for the creation of 2nd units in these zones. By The bill would also
specify that a local agency may reduce or eliminate parking
requirements for any 2nd unit located within its jurisdiction.
Existing law also requires a local agency, if it has not adopted an
ordinance governing 2nd units and receives an application for a permit
for the creation of a 2nd unit, as provided, to grant a variance or special
use permit if the 2nd unit complies with specified requirements,
including specified zoning requirements generally applicable to
residential construction in the zone in which the property is located.
This bill would prohibit a requirement for a passageway or pathway
clear to the sky between the 2nd unit and a public street and, for a 2nd
unit constructed above a garage located on an alley, for a setback of
more than 5 feet from the side and rear lot. The bill would also provide
98
that a 2nd unit constructed above a garage or a garage converted in
whole or in part into a 2nd unit is deemed to be an accessory building
or accessory use that may be permitted within a required yard or setback
area, provided that the 2nd unit is set back a minimum of 5 feet from
the side and rear lot areas.
Existing law requires that parking requirements for 2nd units not
exceed one parking space per unit or per bedroom. Under existing law,
additional parking may be required provided that a finding is made
that the additional parking requirements are directly related to the use
of the 2nd unit and are consistent with existing neighborhood standards
applicable to residential dwellings.
This bill would delete the above-described authorization for additional
parking requirements. The bill would also provide that, when a garage,
carport, or covered parking structure is demolished in conjunction with
the construction of a 2nd unit and the local agency requires that those
off-street parking spaces be replaced, the replacement spaces may be
located in any configuration on the same lot as the 2nd unit, as provided.
By increasing the duties of local officials, officials with respect to
land use regulations, this bill would impose a state-mandated local
program.
The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the state.
Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act
for a specified reason.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.
The people of the State of California do enact as follows:
line 1 SECTION 1. Section 65852.2 of the Government Code is
line 2 amended to read:
line 3 65852.2. (a) (1) A local agency shall, by ordinance, provide
line 4 for the creation of second units in single-family and multifamily
line 5 residential zones. The ordinance shall do all of the following:
line 6 (A) Designate areas within the jurisdiction of the local agency
line 7 where second units may be permitted. The designation of areas
line 8 may be based on criteria, that may include, but are not limited to,
line 9 the adequacy of water and sewer services and the impact of second
line 10 units on traffic flow.
98
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line 1 (B) Impose standards on second units that include, but are not
line 2 limited to, parking, height, setback, lot coverage, landscape,
line 3 architectural review, maximum size of a unit, and standards that
line 4 prevent adverse impacts on any real property that is listed in the
line 5 California Register of Historic Places. However, notwithstanding
line 6 subdivision (d), a local agency shall not impose parking standards
line 7 for a second unit that is located within one-half mile of public
line 8 transit or shopping or is within an architecturally and historically
line 9 significant historic district.
line 10 (C) Notwithstanding subparagraph (B), a local agency may
line 11 reduce or eliminate parking requirements for any second unit
line 12 located within its jurisdiction.
line 13 (C)
line 14 (D) Provide that second units do not exceed the allowable
line 15 density for the lot upon which the second unit is located, and that
line 16 second units are a residential use that is consistent with the existing
line 17 general plan and zoning designation for the lot.
line 18 (2) The ordinance shall not be considered in the application of
line 19 any local ordinance, policy, or program to limit residential growth.
line 20 (3) When a local agency receives its first application on or after
line 21 July 1, 2003, for a permit pursuant to this subdivision, the
line 22 application shall be considered ministerially without discretionary
line 23 review or a hearing, notwithstanding Section 65901 or 65906 or
line 24 any local ordinance regulating the issuance of variances or special
line 25 use permits. A local agency may charge a fee to reimburse it for
line 26 costs that it incurs as a result of amendments to this paragraph
line 27 enacted during the 2001–02 Regular Session of the Legislature,
line 28 including the costs of adopting or amending any ordinance that
line 29 provides for the creation of second units.
line 30 (b) (1) When a local agency has not adopted an ordinance
line 31 governing second units in accordance with subdivision (a) receives
line 32 its first application on or after July 1, 1983, for a permit pursuant
line 33 to this subdivision, the local agency shall accept the application
line 34 and approve or disapprove the application ministerially without
line 35 discretionary review pursuant to this subdivision unless it adopts
line 36 an ordinance in accordance with subdivision (a) within 120 days
line 37 after receiving the application. Notwithstanding Section 65901 or
line 38 65906, every local agency shall grant a variance or special use
line 39 permit for the creation of a second unit if the second unit complies
line 40 with all of the following:
98
AB 2299— 3 —
line 1 (A) The unit is not intended for sale and may be rented.
line 2 (B) The lot is zoned for single-family or multifamily use.
line 3 (C) The lot contains an existing single-family dwelling.
line 4 (D) The second unit is either attached to the existing dwelling
line 5 and located within the living area of the existing dwelling or
line 6 detached from the existing dwelling and located on the same lot
line 7 as the existing dwelling.
line 8 (E) The increased floor area of an attached second unit shall
line 9 not exceed 30 percent of the existing living area.
line 10 (F) The total area of floorspace for a detached second unit shall
line 11 not exceed 1,200 square feet.
line 12 (G) Requirements relating to height, setback, lot coverage,
line 13 architectural review, site plan review, fees, charges, and other
line 14 zoning requirements generally applicable to residential construction
line 15 in the zone in which the property is located. located, except as
line 16 follows:
line 17 (i) No passageway or pathway clear to the sky between the
line 18 second unit and a public street shall be required in conjunction
line 19 with the construction of a second unit.
line 20 (ii) No setback more than five feet from the side and rear lot
line 21 line shall be required for a second unit constructed above a garage
line 22 located on an alley.
line 23 (H) Local building code requirements that apply to detached
line 24 dwellings, as appropriate.
line 25 (I) Approval by the local health officer where a private sewage
line 26 disposal system is being used, if required.
line 27 (2) No other local ordinance, policy, or regulation shall be the
line 28 basis for the denial of a building permit or a use permit under this
line 29 subdivision.
line 30 (3) This subdivision establishes the maximum standards that
line 31 local agencies shall use to evaluate proposed second units on lots
line 32 zoned for residential use that contain an existing single-family
line 33 dwelling. No additional standards, other than those provided in
line 34 this subdivision or subdivision (a), shall be utilized or imposed,
line 35 except that a local agency may require an applicant for a permit
line 36 issued pursuant to this subdivision to be an owner-occupant.
line 37 (4) No changes in zoning ordinances or other ordinances or any
line 38 changes in the general plan shall be required to implement this
line 39 subdivision. A local agency may amend its zoning ordinance or
line 40 general plan to incorporate the policies, procedures, or other
98
— 4 —AB 2299
line 1 provisions applicable to the creation of second units if these
line 2 provisions are consistent with the limitations of this subdivision.
line 3 (5) A second unit that conforms to this subdivision shall be
line 4 deemed to be an accessory use or an accessory building and shall
line 5 not be considered to exceed the allowable density for the lot upon
line 6 which it is located, and shall be deemed to be a residential use that
line 7 is consistent with the existing general plan and zoning designations
line 8 for the lot. The second units shall not be considered in the
line 9 application of any local ordinance, policy, or program to limit
line 10 residential growth.
line 11 (c) A local agency may establish minimum and maximum unit
line 12 size requirements for both attached and detached second units. No
line 13 minimum or maximum size for a second unit, or size based upon
line 14 a percentage of the existing dwelling, shall be established by
line 15 ordinance for either attached or detached dwellings that does not
line 16 permit at least an efficiency unit to be constructed in compliance
line 17 with local development standards.
line 18 (d) (1) Parking requirements for second units shall not exceed
line 19 one parking space per unit or per bedroom. Additional parking
line 20 may be required provided that a finding is made that the additional
line 21 parking requirements are directly related to the use of the second
line 22 unit and are consistent with existing neighborhood standards
line 23 applicable to existing dwellings. Off-street parking shall be
line 24 permitted in setback areas in locations determined by the local
line 25 agency or through tandem parking, unless specific findings are
line 26 made that parking in setback areas or tandem parking is not feasible
line 27 based upon specific site or regional topographical or fire and life
line 28 safety conditions, or that it is not permitted anywhere else in the
line 29 jurisdiction.
line 30 (2) When a garage, carport, or covered parking structure is
line 31 demolished in conjunction with the construction of a second unit,
line 32 and the local agency requires that those off-street parking spaces
line 33 be replaced, the replacement spaces may be located in any
line 34 configuration on the same lot as the second unit, including, but
line 35 not limited to, as covered spaces, uncovered spaces, or tandem
line 36 spaces, or by the use of mechanical automobile parking lifts.
line 37 (e) Fees charged for the construction of second units shall be
line 38 determined in accordance with Chapter 5 (commencing with
line 39 Section 66000).
98
AB 2299— 5 —
line 1 (f) This section does not limit the authority of local agencies to
line 2 adopt less restrictive requirements for the creation of second units.
line 3 (g) Local agencies shall submit a copy of the ordinances adopted
line 4 pursuant to subdivision (a) to the Department of Housing and
line 5 Community Development within 60 days after adoption.
line 6 (h) As used in this section, the following terms mean:
line 7 (1) “Living area,” means the interior habitable area of a dwelling
line 8 unit including basements and attics but does not include a garage
line 9 or any accessory structure.
line 10 (2) “Local agency” means a city, county, or city and county,
line 11 whether general law or chartered.
line 12 (3) For purposes of this section, “neighborhood” has the same
line 13 meaning as set forth in Section 65589.5.
line 14 (4) “Second unit” means an attached or a detached residential
line 15 dwelling unit which provides complete independent living facilities
line 16 for one or more persons. It shall include permanent provisions for
line 17 living, sleeping, eating, cooking, and sanitation on the same parcel
line 18 as the single-family dwelling is situated. A second unit also
line 19 includes the following:
line 20 (A) An efficiency unit, as defined in Section 17958.1 of Health
line 21 and Safety Code.
line 22 (B) A manufactured home, as defined in Section 18007 of the
line 23 Health and Safety Code.
line 24 (i) Nothing in this section shall be construed to supersede or in
line 25 any way alter or lessen the effect or application of the California
line 26 Coastal Act (Division 20 (commencing with Section 30000) of
line 27 the Public Resources Code), except that the local government shall
line 28 not be required to hold public hearings for coastal development
line 29 permit applications for second units.
line 30 SEC. 2. No reimbursement is required by this act pursuant to
line 31 Section 6 of Article XIIIB of the California Constitution because
line 32 a local agency or school district has the authority to levy service
line 33 charges, fees, or assessments sufficient to pay for the program or
line 34 level of service mandated by this act, within the meaning of Section
line 35 17556 of the Government Code.
O
98
— 6 —AB 2299
AMENDED IN SENATE AUGUST 1, 2016
AMENDED IN SENATE JUNE 15, 2016
AMENDED IN ASSEMBLY APRIL 14, 2016
AMENDED IN ASSEMBLY APRIL 5, 2016
california legislature—2015–16 regular session
ASSEMBLY BILL No. 2501
Introduced by Assembly Members Bloom and Low
(Coauthor: Assembly Member Daly)
February 19, 2016
An act to amend Section 65915 of the Government Code, relating to
housing.
legislative counsel’s digest
AB 2501, as amended, Bloom. Housing: density bonuses.
Existing law, the Planning and Zoning Law, requires, when an
applicant proposes a housing development within the jurisdiction of
the local government, that the city, county, or city and county provide
the developer with a density bonus and other incentives or concessions
for the production of lower income housing units or for the donation
of land within the development if the developer, among other things,
agrees to construct a specified percentage of units for very low-, low-,
or moderate-income households or qualifying residents. Existing law
authorizes the waiver or reduction of development standards that would
preclude this development. Existing law requires continued affordability
for 55 years or longer, as specified, of all very low and low-income
units that qualified an applicant for a density bonus. Existing law
requires a city, county, or city and county to adopt an ordinance to
95
implement these requirements and to establish procedures to carry them
out.
This bill would revise and recast these provisions to require the local
government to adopt procedures and timelines for processing a density
bonus application, provide a list of documents and information required
to be submitted with the application in order for it to be deemed
complete, and notify the applicant whether it is complete. By increasing
the duties of local officials, this bill would impose a state-mandated
local program. The bill would prohibit a local government from
requiring additional reports or studies to be prepared by the developer
as a condition of the an application. The bill would additionally require
each component of any density calculation that results in fractional
units to be rounded up to the next whole number, and would provide
that this provision is declaratory of existing law.
Existing law defines the term “density bonus” for these purposes to
mean a density increase over the otherwise maximum allowable
residential density as of the date of the application and provides that
the applicant may elect to accept a lesser percentage of density bonus.
This bill would specify that the term “density bonus” means a density
increase over the maximum allowable gross residential density at the
time of the date of the application, or, if elected by the applicant, a lesser
percentage of density increase or no increase in density.
Existing law requires a local government to grant a proposal for
specific incentives or concessions requested by an applicant unless the
local government makes written findings, based on substantial evidence,
that, among other things, the concession or incentive is not required in
order to provide affordable housing costs or for rents for the targeted
units, as specified.
This bill would, instead, provide that the local government is required
to provide the requested concessions or incentives unless it finds, based
on substantial evidence, that the concession or incentive does not reduce
the cost of development result in identifiable and actual cost reductions,
to provide for affordable housing costs or rents for the targeted units.
units, as specified.
Existing law defines the term “housing development” for these
purposes to mean a development project for five or more residential
units.
This bill would expand that definition to include mixed-use housing.
95
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The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the state.
Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act
for a specified reason.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.
The people of the State of California do enact as follows:
line 1 SECTION 1. Section 65915 of the Government Code is
line 2 amended to read:
line 3 65915. (a) (1) When an applicant seeks a density bonus for
line 4 a housing development within, or for the donation of land for
line 5 housing within, the jurisdiction of a city, county, or city and county,
line 6 that local government shall comply with this section. A city,
line 7 county, or city and county shall adopt an ordinance that specifies
line 8 how compliance with this section will be implemented. Failure to
line 9 adopt an ordinance shall not relieve a city, county, or city and
line 10 county from complying with this section.
line 11 (2) A local government shall not condition the submission,
line 12 review, or approval of an application for a density bonus pursuant
line 13 to this chapter on the preparation of an additional report or study
line 14 that is not otherwise required by state law, including this section.
line 15 This subdivision does not prohibit a local government from
line 16 requiring an applicant to provide reasonable documentation to
line 17 establish eligibility for a requested density bonus, incentives or
line 18 concessions, as described in subdivision (d), waivers or reductions
line 19 of development standards, as described in subdivision (e), and
line 20 parking ratios, as described in subdivision (p).
line 21 (3) In order to provide for the expeditious processing of a density
line 22 bonus application, the local government shall do all of the
line 23 following:
line 24 (A) Adopt procedures and timelines for processing a density
line 25 bonus application.
line 26 (B) Provide a list of all documents and information required to
line 27 be submitted with the density bonus application in order for the
line 28 density bonus application to be deemed complete. This list shall
line 29 be consistent with this chapter.
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line 1 (C) Notify the applicant for a density bonus whether the
line 2 application is complete in a manner consistent with Section 65943.
line 3 (b) (1) A city, county, or city and county shall grant one density
line 4 bonus, the amount of which shall be as specified in subdivision
line 5 (f), and, if requested by the applicant and consistent with the
line 6 applicable requirements of this section, incentives or concessions,
line 7 as described in subdivision (d), waivers or reductions of
line 8 development standards, as described in subdivision (e), and parking
line 9 ratios, as described in subdivision (p). (p), when an applicant for
line 10 a housing development seeks and agrees to construct a housing
line 11 development, excluding any units permitted by the density bonus
line 12 awarded pursuant to this section, that will contain at least any one
line 13 of the following:
line 14 (A) Ten percent of the total units of a housing development for
line 15 lower income households, as defined in Section 50079.5 of the
line 16 Health and Safety Code.
line 17 (B) Five percent of the total units of a housing development for
line 18 very low income households, as defined in Section 50105 of the
line 19 Health and Safety Code.
line 20 (C) A senior citizen housing development, as defined in Sections
line 21 51.3 and 51.12 of the Civil Code, or a mobilehome park that limits
line 22 residency based on age requirements for housing for older persons
line 23 pursuant to Section 798.76 or 799.5 of the Civil Code.
line 24 (D) Ten percent of the total dwelling units in a common interest
line 25 development, as defined in Section 4100 of the Civil Code, for
line 26 persons and families of moderate income, as defined in Section
line 27 50093 of the Health and Safety Code, provided that all units in the
line 28 development are offered to the public for purchase.
line 29 (2) For purposes of calculating the amount of the density bonus
line 30 pursuant to subdivision (f), an applicant who requests a density
line 31 bonus pursuant to this subdivision shall elect whether the bonus
line 32 shall be awarded on the basis of subparagraph (A), (B), (C), or (D)
line 33 of paragraph (1).
line 34 (3) For the purposes of this section, “total units” or “total
line 35 dwelling units” does not include units added by a density bonus
line 36 awarded pursuant to this section or any local law granting a greater
line 37 density bonus.
line 38 (c) (1) An applicant shall agree to, and the city, county, or city
line 39 and county shall ensure, the continued affordability of all very low
line 40 and low-income rental units that qualified the applicant for the
95
— 4 —AB 2501
line 1 award of the density bonus for 55 years or a longer period of time
line 2 if required by the construction or mortgage financing assistance
line 3 program, mortgage insurance program, or rental subsidy program.
line 4 Rents for the lower income density bonus units shall be set at an
line 5 affordable rent as defined in Section 50053 of the Health and Safety
line 6 Code.
line 7 (2) An applicant shall agree to, and the city, county, or city and
line 8 county shall ensure that, the initial occupant of all for-sale units
line 9 that qualified the applicant for the award of the density bonus are
line 10 persons and families of very low, low, or moderate income, as
line 11 required, and that the units are offered at an affordable housing
line 12 cost, as that cost is defined in Section 50052.5 of the Health and
line 13 Safety Code. The local government shall enforce an equity sharing
line 14 agreement, unless it is in conflict with the requirements of another
line 15 public funding source or law. The following apply to the equity
line 16 sharing agreement:
line 17 (A) Upon resale, the seller of the unit shall retain the value of
line 18 any improvements, the downpayment, and the seller’s proportionate
line 19 share of appreciation. The local government shall recapture any
line 20 initial subsidy, as defined in subparagraph (B), and its proportionate
line 21 share of appreciation, as defined in subparagraph (C), which
line 22 amount shall be used within five years for any of the purposes
line 23 described in subdivision (e) of Section 33334.2 of the Health and
line 24 Safety Code that promote home ownership.
line 25 (B) For purposes of this subdivision, the local government’s
line 26 initial subsidy shall be equal to the fair market value of the home
line 27 at the time of initial sale minus the initial sale price to the
line 28 moderate-income household, plus the amount of any downpayment
line 29 assistance or mortgage assistance. If upon resale the market value
line 30 is lower than the initial market value, then the value at the time of
line 31 the resale shall be used as the initial market value.
line 32 (C) For purposes of this subdivision, the local government’s
line 33 proportionate share of appreciation shall be equal to the ratio of
line 34 the local government’s initial subsidy to the fair market value of
line 35 the home at the time of initial sale.
line 36 (3) (A) An applicant shall be ineligible for a density bonus or
line 37 any other incentives or concessions under this section if the housing
line 38 development is proposed on any property that includes a parcel or
line 39 parcels on which rental dwelling units are or, if the dwelling units
line 40 have been vacated or demolished in the five-year period preceding
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AB 2501— 5 —
line 1 the application, have been subject to a recorded covenant,
line 2 ordinance, or law that restricts rents to levels affordable to persons
line 3 and families of lower or very low income; subject to any other
line 4 form of rent or price control through a public entity’s valid exercise
line 5 of its police power; or occupied by lower or very low income
line 6 households, unless the proposed housing development replaces
line 7 those units, and either of the following applies:
line 8 (i) The proposed housing development, inclusive of the units
line 9 replaced pursuant to this paragraph, contains affordable units at
line 10 the percentages set forth in subdivision (b).
line 11 (ii) Each unit in the development, exclusive of a manager’s unit
line 12 or units, is affordable to, and occupied by, either a lower or very
line 13 low income household.
line 14 (B) For the purposes of this paragraph, “replace” shall mean
line 15 either of the following:
line 16 (i) If any dwelling units described in subparagraph (A) are
line 17 occupied on the date of application, the proposed housing
line 18 development shall provide at least the same number of units of
line 19 equivalent size or type, or both, to be made available at affordable
line 20 rent or affordable housing cost to, and occupied by, persons and
line 21 families in the same or lower income category as those households
line 22 in occupancy. For unoccupied dwelling units described in
line 23 subparagraph (A) in a development with occupied units, the
line 24 proposed housing development shall provide units of equivalent
line 25 size or type, or both, to be made available at affordable rent or
line 26 affordable housing cost to, and occupied by, persons and families
line 27 in the same or lower income category in the same proportion of
line 28 affordability as the occupied units. All replacement calculations
line 29 resulting in fractional units shall be rounded up to the next whole
line 30 number. If the replacement units will be rental dwelling units,
line 31 these units shall be subject to a recorded affordability restriction
line 32 for at least 55 years. If the proposed development is for-sale units,
line 33 the units replaced shall be subject to paragraph (2).
line 34 (ii) If all dwelling units described in subparagraph (A) have
line 35 been vacated or demolished within the five-year period preceding
line 36 the application, the proposed housing development shall provide
line 37 at least the same number of units of equivalent size or type, or
line 38 both, as existed at the highpoint of those units in the five-year
line 39 period preceding the application to be made available at affordable
line 40 rent or affordable housing cost to, and occupied by, persons and
95
— 6 —AB 2501
line 1 families in the same or lower income category as those persons
line 2 and families in occupancy at that time, if known. If the incomes
line 3 of the persons and families in occupancy at the highpoint is not
line 4 known, then one-half of the required units shall be made available
line 5 at affordable rent or affordable housing cost to, and occupied by,
line 6 very low income persons and families and one-half of the required
line 7 units shall be made available for rent at affordable housing costs
line 8 to, and occupied by, low-income persons and families. All
line 9 replacement calculations resulting in fractional units shall be
line 10 rounded up to the next whole number. If the replacement units will
line 11 be rental dwelling units, these units shall be subject to a recorded
line 12 affordability restriction for at least 55 years. If the proposed
line 13 development is for-sale units, the units replaced shall be subject
line 14 to paragraph (2).
line 15 (C) Paragraph (3) of subdivision (c) does not apply to an
line 16 applicant seeking a density bonus for a proposed housing
line 17 development if his or her application was submitted to, or
line 18 processed by, a city, county, or city and county before January 1,
line 19 2015.
line 20 (d) (1) An applicant for a density bonus pursuant to subdivision
line 21 (b) may submit to a city, county, or city and county a proposal for
line 22 the specific incentives or concessions that the applicant requests
line 23 pursuant to this section, and may request a meeting with the city,
line 24 county, or city and county. The city, county, or city and county
line 25 shall grant the concession or incentive requested by the applicant
line 26 unless the city, county, or city and county makes a written finding,
line 27 based upon substantial evidence, of any of the following:
line 28 (A) The concession or incentive does not reduce the cost of
line 29 development result in identifiable and actual cost reductions,
line 30 consistent with subdivision (k), to provide for affordable housing
line 31 costs, as defined in Section 50052.5 of the Health and Safety Code,
line 32 or for rents for the targeted units to be set as specified in
line 33 subdivision (c).
line 34 (B) The concession or incentive would have a specific adverse
line 35 impact, as defined in paragraph (2) of subdivision (d) of Section
line 36 65589.5, upon public health and safety or the physical environment
line 37 or on any real property that is listed in the California Register of
line 38 Historical Resources and for which there is no feasible method to
line 39 satisfactorily mitigate or avoid the specific adverse impact without
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line 1 rendering the development unaffordable to low- and
line 2 moderate-income households.
line 3 (C) The concession or incentive would be contrary to state or
line 4 federal law.
line 5 (2) The applicant shall receive the following number of
line 6 incentives or concessions:
line 7 (A) One incentive or concession for projects that include at least
line 8 10 percent of the total units for lower income households, at least
line 9 5 percent for very low income households, or at least 10 percent
line 10 for persons and families of moderate income in a common interest
line 11 development.
line 12 (B) Two incentives or concessions for projects that include at
line 13 least 20 percent of the total units for lower income households, at
line 14 least 10 percent for very low income households, or at least 20
line 15 percent for persons and families of moderate income in a common
line 16 interest development.
line 17 (C) Three incentives or concessions for projects that include at
line 18 least 30 percent of the total units for lower income households, at
line 19 least 15 percent for very low income households, or at least 30
line 20 percent for persons and families of moderate income in a common
line 21 interest development.
line 22 (3) The applicant may initiate judicial proceedings if the city,
line 23 county, or city and county refuses to grant a requested density
line 24 bonus, incentive, or concession. If a court finds that the refusal to
line 25 grant a requested density bonus, incentive, or concession is in
line 26 violation of this section, the court shall award the plaintiff
line 27 reasonable attorney’s fees and costs of suit. Nothing in this
line 28 subdivision shall be interpreted to require a local government to
line 29 grant an incentive or concession that has a specific, adverse impact,
line 30 as defined in paragraph (2) of subdivision (d) of Section 65589.5,
line 31 upon health, safety, or the physical environment, and for which
line 32 there is no feasible method to satisfactorily mitigate or avoid the
line 33 specific adverse impact. Nothing in this subdivision shall be
line 34 interpreted to require a local government to grant an incentive or
line 35 concession that would have an adverse impact on any real property
line 36 that is listed in the California Register of Historical Resources.
line 37 The city, county, or city and county shall establish procedures for
line 38 carrying out this section, that shall include legislative body
line 39 approval of the means of compliance with this section.
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— 8 —AB 2501
line 1 (4) The city, county, or city and county shall bear the burden
line 2 of proof for the denial of a requested concession or incentive.
line 3 (e) (1) In no case may a city, county, or city and county apply
line 4 any development standard that will have the effect of physically
line 5 precluding the construction of a development meeting the criteria
line 6 of subdivision (b) at the densities or with the concessions or
line 7 incentives permitted by this section. An applicant may submit to
line 8 a city, county, or city and county a proposal for the waiver or
line 9 reduction of development standards that will have the effect of
line 10 physically precluding the construction of a development meeting
line 11 the criteria of subdivision (b) at the densities or with the
line 12 concessions or incentives permitted under this section, and may
line 13 request a meeting with the city, county, or city and county. If a
line 14 court finds that the refusal to grant a waiver or reduction of
line 15 development standards is in violation of this section, the court
line 16 shall award the plaintiff reasonable attorney’s fees and costs of
line 17 suit. Nothing in this subdivision shall be interpreted to require a
line 18 local government to waive or reduce development standards if the
line 19 waiver or reduction would have a specific, adverse impact, as
line 20 defined in paragraph (2) of subdivision (d) of Section 65589.5,
line 21 upon health, safety, or the physical environment, and for which
line 22 there is no feasible method to satisfactorily mitigate or avoid the
line 23 specific adverse impact. Nothing in this subdivision shall be
line 24 interpreted to require a local government to waive or reduce
line 25 development standards that would have an adverse impact on any
line 26 real property that is listed in the California Register of Historical
line 27 Resources, or to grant any waiver or reduction that would be
line 28 contrary to state or federal law.
line 29 (2) A proposal for the waiver or reduction of development
line 30 standards pursuant to this subdivision shall neither reduce nor
line 31 increase the number of incentives or concessions to which the
line 32 applicant is entitled pursuant to subdivision (d).
line 33 (f) For the purposes of this chapter, “density bonus” means a
line 34 density increase over the otherwise maximum allowable gross
line 35 residential density as of the date of application by the applicant to
line 36 the city, county, or city and county, or, if elected by the applicant,
line 37 a lesser percentage of density increase, including, but not limited
line 38 to, no increase in density. The amount of density increase to which
line 39 the applicant is entitled shall vary according to the amount by
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line 1 which the percentage of affordable housing units exceeds the
line 2 percentage established in subdivision (b).
line 3 (1) For housing developments meeting the criteria of
line 4 subparagraph (A) of paragraph (1) of subdivision (b), the density
line 5 bonus shall be calculated as follows:
line 6
line 7 Percentage Density
line 8 Bonus
Percentage Low-Income Units
line 9 20 10
line 10 21.511
line 11 23 12
line 12 24.513
line 13 26 14
line 14 27.515
line 15 30.517
line 16 32 18
line 17 33.519
line 18 35 20
line 19
line 20 (2) For housing developments meeting the criteria of
line 21 subparagraph (B) of paragraph (1) of subdivision (b), the density
line 22 bonus shall be calculated as follows:
line 23
line 24 Percentage Density BonusPercentage Very Low Income Units
line 25 20 5
line 26 22.56
line 27 25 7
line 28 27.58
line 29 30 9
line 30 32.510
line 31 35 11
line 32
line 33 (3) For housing developments meeting the criteria of
line 34 subparagraph (C) of paragraph (1) of subdivision (b), the density
line 35 bonus shall be 20 percent of the number of senior housing units.
line 36 (4) For housing developments meeting the criteria of
line 37 subparagraph (D) of paragraph (1) of subdivision (b), the density
line 38 bonus shall be calculated as follows:
line 39
line 40 Percentage Density BonusPercentage Moderate-Income Units
95
— 10 —AB 2501
line 1 510
line 2 611
line 3 712
line 4 813
line 5 914
line 6 1015
line 7 1116
line 8 1217
line 9 1318
line 10 1419
line 11 1520
line 12 1621
line 13 1722
line 14 1823
line 15 1924
line 16 2025
line 17 2126
line 18 2227
line 19 2328
line 20 2429
line 21 2530
line 22 2631
line 23 2732
line 24 2833
line 25 2934
line 26 3035
line 27 3136
line 28 3237
line 29 3338
line 30 3439
line 31 3540
line 32
line 33 (5) All density calculations resulting in fractional units shall be
line 34 rounded up to the next whole number. The granting of a density
line 35 bonus shall not require, or be interpreted, in and of itself, to require
line 36 a general plan amendment, local coastal plan amendment, zoning
line 37 change, or other discretionary approval.
line 38 (g) (1) When an applicant for a tentative subdivision map,
line 39 parcel map, or other residential development approval donates
line 40 land to a city, county, or city and county in accordance with this
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line 1 subdivision, the applicant shall be entitled to a 15-percent increase
line 2 above the otherwise maximum allowable residential density for
line 3 the entire development, as follows:
line 4
line 5 Percentage Density BonusPercentage Very Low Income
line 6 1510
line 7 1611
line 8 1712
line 9 1813
line 10 1914
line 11 2015
line 12 2116
line 13 2217
line 14 2318
line 15 2419
line 16 2520
line 17 2621
line 18 2722
line 19 2823
line 20 2924
line 21 3025
line 22 3126
line 23 3227
line 24 3328
line 25 3429
line 26 3530
line 27
line 28 (2) This increase shall be in addition to any increase in density
line 29 mandated by subdivision (b), up to a maximum combined mandated
line 30 density increase of 35 percent if an applicant seeks an increase
line 31 pursuant to both this subdivision and subdivision (b). All density
line 32 calculations resulting in fractional units shall be rounded up to the
line 33 next whole number. Nothing in this subdivision shall be construed
line 34 to enlarge or diminish the authority of a city, county, or city and
line 35 county to require a developer to donate land as a condition of
line 36 development. An applicant shall be eligible for the increased
line 37 density bonus described in this subdivision if all of the following
line 38 conditions are met:
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— 12 —AB 2501
line 1 (A) The applicant donates and transfers the land no later than
line 2 the date of approval of the final subdivision map, parcel map, or
line 3 residential development application.
line 4 (B) The developable acreage and zoning classification of the
line 5 land being transferred are sufficient to permit construction of units
line 6 affordable to very low income households in an amount not less
line 7 than 10 percent of the number of residential units of the proposed
line 8 development.
line 9 (C) The transferred land is at least one acre in size or of
line 10 sufficient size to permit development of at least 40 units, has the
line 11 appropriate general plan designation, is appropriately zoned with
line 12 appropriate development standards for development at the density
line 13 described in paragraph (3) of subdivision (c) of Section 65583.2,
line 14 and is or will be served by adequate public facilities and
line 15 infrastructure.
line 16 (D) The transferred land shall have all of the permits and
line 17 approvals, other than building permits, necessary for the
line 18 development of the very low income housing units on the
line 19 transferred land, not later than the date of approval of the final
line 20 subdivision map, parcel map, or residential development
line 21 application, except that the local government may subject the
line 22 proposed development to subsequent design review to the extent
line 23 authorized by subdivision (i) of Section 65583.2 if the design is
line 24 not reviewed by the local government prior to the time of transfer.
line 25 (E) The transferred land and the affordable units shall be subject
line 26 to a deed restriction ensuring continued affordability of the units
line 27 consistent with paragraphs (1) and (2) of subdivision (c), which
line 28 shall be recorded on the property at the time of the transfer.
line 29 (F) The land is transferred to the local agency or to a housing
line 30 developer approved by the local agency. The local agency may
line 31 require the applicant to identify and transfer the land to the
line 32 developer.
line 33 (G) The transferred land shall be within the boundary of the
line 34 proposed development or, if the local agency agrees, within
line 35 one-quarter mile of the boundary of the proposed development.
line 36 (H) A proposed source of funding for the very low income units
line 37 shall be identified not later than the date of approval of the final
line 38 subdivision map, parcel map, or residential development
line 39 application.
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line 1 (h) (1) When an applicant proposes to construct a housing
line 2 development that conforms to the requirements of subdivision (b)
line 3 and includes a child care facility that will be located on the
line 4 premises of, as part of, or adjacent to, the project, the city, county,
line 5 or city and county shall grant either of the following:
line 6 (A) An additional density bonus that is an amount of square
line 7 feet of residential space that is equal to or greater than the amount
line 8 of square feet in the child care facility.
line 9 (B) An additional concession or incentive that contributes
line 10 significantly to the economic feasibility of the construction of the
line 11 child care facility.
line 12 (2) The city, county, or city and county shall require, as a
line 13 condition of approving the housing development, that the following
line 14 occur:
line 15 (A) The child care facility shall remain in operation for a period
line 16 of time that is as long as or longer than the period of time during
line 17 which the density bonus units are required to remain affordable
line 18 pursuant to subdivision (c).
line 19 (B) Of the children who attend the child care facility, the
line 20 children of very low income households, lower income households,
line 21 or families of moderate income shall equal a percentage that is
line 22 equal to or greater than the percentage of dwelling units that are
line 23 required for very low income households, lower income
line 24 households, or families of moderate income pursuant to subdivision
line 25 (b).
line 26 (3) Notwithstanding any requirement of this subdivision, a city,
line 27 county, or city and county shall not be required to provide a density
line 28 bonus or concession for a child care facility if it finds, based upon
line 29 substantial evidence, that the community has adequate child care
line 30 facilities.
line 31 (4) “Child care facility,” as used in this section, means a child
line 32 day care facility other than a family day care home, including, but
line 33 not limited to, infant centers, preschools, extended day care
line 34 facilities, and schoolage child care centers.
line 35 (i) “Housing development,” as used in this section, means a
line 36 development project for five or more residential units, including
line 37 mixed-use developments. For the purposes of this section, “housing
line 38 development” also includes a subdivision or common interest
line 39 development, as defined in Section 4100 of the Civil Code,
line 40 approved by a city, county, or city and county and consists of
95
— 14 —AB 2501
line 1 residential units or unimproved residential lots and either a project
line 2 to substantially rehabilitate and convert an existing commercial
line 3 building to residential use or the substantial rehabilitation of an
line 4 existing multifamily dwelling, as defined in subdivision (d) of
line 5 Section 65863.4, where the result of the rehabilitation would be a
line 6 net increase in available residential units. For the purpose of
line 7 calculating a density bonus, the residential units shall be on
line 8 contiguous sites that are the subject of one development
line 9 application, but do not have to be based upon individual
line 10 subdivision maps or parcels. The density bonus shall be permitted
line 11 in geographic areas of the housing development other than the
line 12 areas where the units for the lower income households are located.
line 13 (j) (1) The granting of a concession or incentive shall not require
line 14 or be interpreted, in and of itself, to require a general plan
line 15 amendment, local coastal plan amendment, zoning change, special
line 16 studies, study, or other discretionary approval. For purposes of
line 17 this subdivision, “study” does not include reasonable
line 18 documentation to establish eligibility for the concession or
line 19 incentive or to demonstrate that the incentive or concession meets
line 20 the definition set forth in subdivision (k). This provision is
line 21 declaratory of existing law.
line 22 (2) Except as provided in subdivisions (d) and (e), the granting
line 23 of a density bonus shall not require or be interpreted to require the
line 24 waiver of a local ordinance or provisions of a local ordinance
line 25 unrelated to development standards.
line 26 (k) For the purposes of this chapter, concession or incentive
line 27 means any of the following:
line 28 (1) A reduction in site development standards or a modification
line 29 of zoning code requirements or architectural design requirements
line 30 that exceed the minimum building standards approved by the
line 31 California Building Standards Commission as provided in Part 2.5
line 32 (commencing with Section 18901) of Division 13 of the Health
line 33 and Safety Code, including, but not limited to, a reduction in
line 34 setback and square footage requirements and in the ratio of
line 35 vehicular parking spaces that would otherwise be required that
line 36 results in identifiable and actual cost reductions. reductions, to
line 37 provide for affordable housing costs, as defined in Section 50052.5
line 38 of the Health and Safety Code, or for rents for the targeted units
line 39 to be set as specified in subdivision (c).
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line 1 (2) Approval of mixed-use zoning in conjunction with the
line 2 housing project if commercial, office, industrial, or other land uses
line 3 will reduce the cost of the housing development and if the
line 4 commercial, office, industrial, or other land uses are compatible
line 5 with the housing project and the existing or planned development
line 6 in the area where the proposed housing project will be located.
line 7 (3) Other regulatory incentives or concessions proposed by the
line 8 developer or the city, county, or city and county that result in
line 9 identifiable and actual cost reductions. reductions to provide for
line 10 affordable housing costs, as defined in Section 50052.5 of the
line 11 Health and Safety Code, or for rents for the targeted units to be
line 12 set as specified in subdivision (c). In no case shall this include an
line 13 increase in density above the percentages specified in subdivision
line 14 (f).
line 15 (l) Subdivision (k) does not limit or require the provision of
line 16 direct financial incentives for the housing development, including
line 17 the provision of publicly owned land, by the city, county, or city
line 18 and county, or the waiver of fees or dedication requirements.
line 19 (m) This section does not supersede or in any way alter or lessen
line 20 the effect or application of the California Coastal Act of 1976
line 21 (Division 20 (commencing with Section 30000) of the Public
line 22 Resources Code).
line 23 (n) If permitted by local ordinance, nothing in this section shall
line 24 be construed to prohibit a city, county, or city and county from
line 25 granting a density bonus greater than what is described in this
line 26 section for a development that meets the requirements of this
line 27 section or from granting a proportionately lower density bonus
line 28 than what is required by this section for developments that do not
line 29 meet the requirements of this section.
line 30 (o) For purposes of this section, the following definitions shall
line 31 apply:
line 32 (1) “Development standard” includes a site or construction
line 33 condition, including, but not limited to, a height limitation, a
line 34 setback requirement, a floor area ratio, an onsite open-space
line 35 requirement, or a parking ratio that applies to a residential
line 36 development pursuant to any ordinance, general plan element,
line 37 specific plan, charter, or other local condition, law, policy,
line 38 resolution, or regulation.
line 39 (2) “Maximum allowable residential density” means the density
line 40 allowed under the zoning ordinance and land use element of the
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line 1 general plan, or if a range of density is permitted, means the
line 2 maximum allowable density for the specific zoning range and land
line 3 use element of the general plan applicable to the project. Where
line 4 the density allowed under the zoning ordinance is inconsistent
line 5 with the density allowed under the land use element of the general
line 6 plan, the general plan density shall prevail.
line 7 (p) (1) Except as provided in paragraphs (2) and (3), upon the
line 8 request of the developer, a city, county, or city and county shall
line 9 not require a vehicular parking ratio, inclusive of handicapped and
line 10 guest parking, of a development meeting the criteria of subdivisions
line 11 (b) and (c), that exceeds the following ratios:
line 12 (A) Zero to one bedroom: one onsite parking space.
line 13 (B) Two to three bedrooms: two onsite parking spaces.
line 14 (C) Four and more bedrooms: two and one-half parking spaces.
line 15 (2) Notwithstanding paragraph (1), if a development includes
line 16 the maximum percentage of low- or very low income units
line 17 provided for in paragraphs (1) and (2) of subdivision (f) and is
line 18 located within one-half mile of a major transit stop, as defined in
line 19 subdivision (b) of Section 21155 of the Public Resources Code,
line 20 and there is unobstructed access to the major transit stop from the
line 21 development, then, upon the request of the developer, a city,
line 22 county, or city and county shall not impose a vehicular parking
line 23 ratio, inclusive of handicapped and guest parking, that exceeds 0.5
line 24 spaces per bedroom. For purposes of this subdivision, a
line 25 development shall have unobstructed access to a major transit stop
line 26 if a resident is able to access the major transit stop without
line 27 encountering natural or constructed impediments.
line 28 (3) Notwithstanding paragraph (1), if a development consists
line 29 solely of rental units, exclusive of a manager’s unit or units, with
line 30 an affordable housing cost to lower income families, as provided
line 31 in Section 50052.5 of the Health and Safety Code, then, upon the
line 32 request of the developer, a city, county, or city and county shall
line 33 not impose a vehicular parking ratio, inclusive of handicapped and
line 34 guest parking, that exceeds the following ratios:
line 35 (A) If the development is located within one-half mile of a major
line 36 transit stop, as defined in subdivision (b) of Section 21155 of the
line 37 Public Resources Code, and there is unobstructed access to the
line 38 major transit stop from the development, the ratio shall not exceed
line 39 0.5 spaces per unit.
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AB 2501— 17 —
line 1 (B) If the development is a for-rent housing development for
line 2 individuals who are 62 years of age or older that complies with
line 3 Sections 51.2 and 51.3 of the Civil Code, the ratio shall not exceed
line 4 0.5 spaces per unit. The development shall have either paratransit
line 5 service or unobstructed access, within one-half mile, to fixed bus
line 6 route service that operates at least eight times per day.
line 7 (C) If the development is a special needs housing development,
line 8 as defined in Section 51312 of the Health and Safety Code, the
line 9 ratio shall not exceed 0.3 spaces per unit. The development shall
line 10 have either paratransit service or unobstructed access, within
line 11 one-half mile, to fixed bus route service that operates at least eight
line 12 times per day.
line 13 (4) If the total number of parking spaces required for a
line 14 development is other than a whole number, the number shall be
line 15 rounded up to the next whole number. For purposes of this
line 16 subdivision, a development may provide on-site parking through
line 17 tandem parking or uncovered parking, but not through on-street
line 18 parking.
line 19 (5) This subdivision shall apply to a development that meets
line 20 the requirements of subdivisions (b) and (c), but only at the request
line 21 of the applicant. An applicant may request parking incentives or
line 22 concessions beyond those provided in this subdivision pursuant
line 23 to subdivision (d).
line 24 (6) This subdivision does not preclude a city, county, or city
line 25 and county from reducing or eliminating a parking requirement
line 26 for development projects of any type in any location.
line 27 (7) Notwithstanding paragraphs (2) and (3), if a city, county,
line 28 city and county, or an independent consultant has conducted an
line 29 areawide or jurisdictionwide parking study in the last seven years,
line 30 then the city, county, or city and county may impose a higher
line 31 vehicular parking ratio not to exceed the ratio described in
line 32 paragraph (1), based upon substantial evidence found in the parking
line 33 study, that includes, but is not limited to, an analysis of parking
line 34 availability, differing levels of transit access, walkability access
line 35 to transit services, the potential for shared parking, the effect of
line 36 parking requirements on the cost of market-rate and subsidized
line 37 developments, and the lower rates of car ownership for low- and
line 38 very low income individuals, including seniors and special needs
line 39 individuals. The city, county, or city and county shall pay the costs
line 40 of any new study. The city, county, or city and county shall make
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line 1 findings, based on a parking study completed in conformity with
line 2 this paragraph, supporting the need for the higher parking ratio.
line 3 (8) A request pursuant to this subdivision shall neither reduce
line 4 nor increase the number of incentives or concessions to which the
line 5 applicant is entitled pursuant to subdivision (d).
line 6 (q) Each component of any density calculation, including base
line 7 density and bonus density, resulting in fractional units shall by
line 8 separately rounded up to the next whole number. The Legislature
line 9 finds and declares that this provision is declaratory of existing law.
line 10 (r) This chapter shall be interpreted liberally in favor of
line 11 producing the maximum number of total housing units.
line 12 SEC. 2. No reimbursement is required by this act pursuant to
line 13 Section 6 of Article XIIIB of the California Constitution because
line 14 a local agency or school district has the authority to levy service
line 15 charges, fees, or assessments sufficient to pay for the program or
line 16 level of service mandated by this act, within the meaning of Section
line 17 17556 of the Government Code.
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AB 2501— 19 —
AMENDED IN SENATE AUGUST 9, 2016
AMENDED IN SENATE JUNE 8, 2016
AMENDED IN ASSEMBLY APRIL 28, 2016
AMENDED IN ASSEMBLY APRIL 18, 2016
california legislature—2015–16 regular session
ASSEMBLY BILL No. 2406
Introduced by Assembly Member Thurmond
(Coauthor: Assembly Member Levine)
February 19, 2016
An act to amend Section 65852.2 of, and to add Section 65852.22
to, the Government Code, relating to housing. housing, and declaring
the urgency thereof, to take effect immediately.
legislative counsel’s digest
AB 2406, as amended, Thurmond. Housing: junior accessory dwelling
units.
The Planning and Zoning Law authorizes a local agency to provide
by ordinance for the creation of 2nd units in single-family and
multifamily residential areas, as prescribed.
This bill would, in addition, authorize a local agency to provide by
ordinance for the creation of junior accessory dwelling units, as defined,
in single-family residential zones. The bill would require the ordinance
to include, among other things, standards for the creation of a junior
accessory dwelling unit, required deed restrictions, and occupancy
requirements. The bill would prohibit an ordinance from requiring, as
a condition of granting a permit, water and sewer connection fees or
95
permit for a junior accessory dwelling unit, additional parking
requirements.
This bill would declare that it is to take effect immediately as an
urgency statute.
Vote: majority 2⁄3. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.
The people of the State of California do enact as follows:
line 1 SECTION 1. Section 65852.2 of the Government Code is
line 2 amended to read:
line 3 65852.2. (a) (1) Any local agency may, by ordinance, provide
line 4 for the creation of second units in single-family and multifamily
line 5 residential zones. The ordinance may do any of the following:
line 6 (A) Designate areas within the jurisdiction of the local agency
line 7 where second units may be permitted. The designation of areas
line 8 may be based on criteria, that may include, but are not limited to,
line 9 the adequacy of water and sewer services and the impact of second
line 10 units on traffic flow.
line 11 (B) Impose standards on second units that include, but are not
line 12 limited to, parking, height, setback, lot coverage, architectural
line 13 review, maximum size of a unit, and standards that prevent adverse
line 14 impacts on any real property that is listed in the California Register
line 15 of Historic Places.
line 16 (C) Provide that second units do not exceed the allowable
line 17 density for the lot upon which the second unit is located, and that
line 18 second units are a residential use that is consistent with the existing
line 19 general plan and zoning designation for the lot.
line 20 (2) The ordinance shall not be considered in the application of
line 21 any local ordinance, policy, or program to limit residential growth.
line 22 (3) When a local agency receives its first application on or after
line 23 July 1, 2003, for a permit pursuant to this subdivision, the
line 24 application shall be considered ministerially without discretionary
line 25 review or a hearing, notwithstanding Section 65901 or 65906 or
line 26 any local ordinance regulating the issuance of variances or special
line 27 use permits. Nothing in this paragraph may be construed to require
line 28 a local government to adopt or amend an ordinance for the creation
line 29 of second units. A local agency may charge a fee to reimburse it
line 30 for costs that it incurs as a result of amendments to this paragraph
line 31 enacted during the 2001–02 Regular Session of the Legislature,
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line 1 including the costs of adopting or amending any ordinance that
line 2 provides for the creation of second units.
line 3 (b) (1) When a local agency which has not adopted an ordinance
line 4 governing second units in accordance with subdivision (a) or (c)
line 5 receives its first application on or after July 1, 1983, for a permit
line 6 pursuant to this subdivision, the local agency shall accept the
line 7 application and approve or disapprove the application ministerially
line 8 without discretionary review pursuant to this subdivision unless
line 9 it adopts an ordinance in accordance with subdivision (a) or (c)
line 10 within 120 days after receiving the application. Notwithstanding
line 11 Section 65901 or 65906, every local agency shall grant a variance
line 12 or special use permit for the creation of a second unit if the second
line 13 unit complies with all of the following:
line 14 (A) The unit is not intended for sale and may be rented.
line 15 (B) The lot is zoned for single-family or multifamily use.
line 16 (C) The lot contains an existing single-family dwelling.
line 17 (D) The second unit is either attached to the existing dwelling
line 18 and located within the living area of the existing dwelling or
line 19 detached from the existing dwelling and located on the same lot
line 20 as the existing dwelling.
line 21 (E) The increased floor area of an attached second unit shall
line 22 not exceed 30 percent of the existing living area.
line 23 (F) The total area of floorspace for a detached second unit shall
line 24 not exceed 1,200 square feet.
line 25 (G) Requirements relating to height, setback, lot coverage,
line 26 architectural review, site plan review, fees, charges, and other
line 27 zoning requirements generally applicable to residential construction
line 28 in the zone in which the property is located.
line 29 (H) Local building code requirements which apply to detached
line 30 dwellings, as appropriate.
line 31 (I) Approval by the local health officer where a private sewage
line 32 disposal system is being used, if required.
line 33 (2) No other local ordinance, policy, or regulation shall be the
line 34 basis for the denial of a building permit or a use permit under this
line 35 subdivision.
line 36 (3) This subdivision establishes the maximum standards that
line 37 local agencies shall use to evaluate proposed second units on lots
line 38 zoned for residential use which contain an existing single-family
line 39 dwelling. No additional standards, other than those provided in
line 40 this subdivision or subdivision (a), shall be utilized or imposed,
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AB 2406— 3 —
line 1 except that a local agency may require an applicant for a permit
line 2 issued pursuant to this subdivision to be an owner-occupant.
line 3 (4) No changes in zoning ordinances or other ordinances or any
line 4 changes in the general plan shall be required to implement this
line 5 subdivision. Any local agency may amend its zoning ordinance
line 6 or general plan to incorporate the policies, procedures, or other
line 7 provisions applicable to the creation of second units if these
line 8 provisions are consistent with the limitations of this subdivision.
line 9 (5) A second unit which conforms to the requirements of this
line 10 subdivision shall not be considered to exceed the allowable density
line 11 for the lot upon which it is located, and shall be deemed to be a
line 12 residential use which is consistent with the existing general plan
line 13 and zoning designations for the lot. The second units shall not be
line 14 considered in the application of any local ordinance, policy, or
line 15 program to limit residential growth.
line 16 (c) No local agency shall adopt an ordinance which totally
line 17 precludes second units within single-family or multifamily zoned
line 18 areas unless the ordinance contains findings acknowledging that
line 19 the ordinance may limit housing opportunities of the region and
line 20 further contains findings that specific adverse impacts on the public
line 21 health, safety, and welfare that would result from allowing second
line 22 units within single-family and multifamily zoned areas justify
line 23 adopting the ordinance.
line 24 (d) A local agency may establish minimum and maximum unit
line 25 size requirements for both attached and detached second units. No
line 26 minimum or maximum size for a second unit, or size based upon
line 27 a percentage of the existing dwelling, shall be established by
line 28 ordinance for either attached or detached dwellings which does
line 29 not permit at least an efficiency unit to be constructed in
line 30 compliance with local development standards.
line 31 (e) Parking requirements for second units shall not exceed one
line 32 parking space per unit or per bedroom. Additional parking may
line 33 be required provided that a finding is made that the additional
line 34 parking requirements are directly related to the use of the second
line 35 unit and are consistent with existing neighborhood standards
line 36 applicable to existing dwellings. Off-street parking shall be
line 37 permitted in setback areas in locations determined by the local
line 38 agency or through tandem parking, unless specific findings are
line 39 made that parking in setback areas or tandem parking is not feasible
line 40 based upon specific site or regional topographical or fire and life
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line 1 safety conditions, or that it is not permitted anywhere else in the
line 2 jurisdiction.
line 3 (f) Fees charged for the construction of second units shall be
line 4 determined in accordance with Chapter 5 (commencing with
line 5 Section 66000).
line 6 (g) This section does not limit the authority of local agencies
line 7 to adopt less restrictive requirements for the creation of second
line 8 units.
line 9 (h) Local agencies shall submit a copy of the ordinances adopted
line 10 pursuant to subdivision (a) or (c) to the Department of Housing
line 11 and Community Development within 60 days after adoption.
line 12 (i) As used in this section, the following terms mean:
line 13 (1) “Living area” means the interior habitable area of a dwelling
line 14 unit including basements and attics but does not include a garage
line 15 or any accessory structure.
line 16 (2) “Local agency” means a city, county, or city and county,
line 17 whether general law or chartered.
line 18 (3) For purposes of this section, “neighborhood” has the same
line 19 meaning as set forth in Section 65589.5.
line 20 (4) “Second unit” means an attached or a detached residential
line 21 dwelling unit which provides complete independent living facilities
line 22 for one or more persons. It shall include permanent provisions for
line 23 living, sleeping, eating, cooking, and sanitation on the same parcel
line 24 as the single-family dwelling is situated. A second unit also
line 25 includes the following:
line 26 (A) An efficiency unit, as defined in Section 17958.1 of Health
line 27 and Safety Code.
line 28 (B) A manufactured home, as defined in Section 18007 of the
line 29 Health and Safety Code.
line 30 (j) Nothing in this section shall be construed to supersede or in
line 31 any way alter or lessen the effect or application of the California
line 32 Coastal Act (Division 20 (commencing with Section 30000) of
line 33 the Public Resources Code), except that the local government shall
line 34 not be required to hold public hearings for coastal development
line 35 permit applications for second units.
line 36 (k) This section shall not apply to the regulation of junior
line 37 accessory dwelling units, as set forth in Section 65852.22.
line 38 SEC. 2. Section 65852.22 is added to the Government Code,
line 39 immediately following Section 65852.2, to read:
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AB 2406— 5 —
line 1 65852.22. (a) A local agency may, by ordinance, provide for
line 2 the creation of junior accessory dwelling units in single-family
line 3 residential zones. The ordinance may require a permit to be
line 4 obtained for the creation of a junior accessory dwelling unit, and
line 5 shall do all of the following:
line 6 (1) Limit the number of junior accessory dwelling units to one
line 7 per residential lot zoned for single-family residences with a
line 8 single-family residence already built on the lot.
line 9 (2) Require owner-occupancy in the single-family residence in
line 10 which the junior accessory dwelling unit will be permitted. The
line 11 owner may reside in either the remaining portion of the structure
line 12 or the newly created junior accessory dwelling unit.
line 13 Owner-occupancy shall not be required if the owner is another
line 14 governmental agency, land trust, or housing organization.
line 15 (3) Require the recordation of a deed restriction, which shall
line 16 run with the land, shall be filed with the permitting agency, and
line 17 shall include both of the following:
line 18 (A) A prohibition on the sale of the junior accessory dwelling
line 19 unit separate from the sale of the single-family residence, including
line 20 a statement that the deed restriction may be enforced against future
line 21 purchasers.
line 22 (B) A restriction on the size and attributes of the junior accessory
line 23 dwelling unit that conforms with this section.
line 24 (4) Require a permitted junior accessory dwelling unit to be
line 25 constructed within the existing walls of the structure, and require
line 26 the inclusion of an existing bedroom.
line 27 (5) Require a permitted junior accessory dwelling to include a
line 28 separate entrance from the main entrance to the structure, with an
line 29 interior entry to the main living area. A permitted junior accessory
line 30 dwelling may include a second interior doorway for sound
line 31 attenuation.
line 32 (6) The permitted junior accessory dwelling unit shall include
line 33 an efficiency kitchen, which shall include all of the following:
line 34 (A) A sink with a maximum waste line diameter of 1.5 inches.
line 35 (B) A cooking facility with appliances that do not require
line 36 electrical service greater than 120 volts, or natural or propane gas.
line 37 (C) A food preparation counter and storage cabinets that are of
line 38 reasonable size in relation to the size of the junior accessory
line 39 dwelling unit.
line 40 (b) (1) An ordinance shall not:
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line 1 (A) Require not require additional parking as a condition to
line 2 granting grant a permit.
line 3 (B) Authorize the imposition of a water connection fee as a
line 4 condition to granting a permit.
line 5 (C) Authorize the imposition of a sewer connection fee as a
line 6 condition to granting a permit.
line 7 (2) This subdivision shall not be interpreted to prohibit the
line 8 requirement of an inspection, including the imposition of a fee for
line 9 that inspection, to determine whether the junior accessory dwelling
line 10 unit is in compliance with applicable building standards.
line 11 (c) For the purposes of any fire or life protection ordinance or
line 12 regulation, a junior accessory dwelling unit shall not be considered
line 13 a separate or new dwelling unit. This section shall not be construed
line 14 to prohibit a city, county, city and county, or other local public
line 15 entity from adopting an ordinance or regulation relating to fire and
line 16 life protection requirements within a single-family residence that
line 17 contains a junior accessory dwelling unit so long as the ordinance
line 18 or regulation applies uniformly to all single-family residences
line 19 within the zone regardless of whether the single-family residence
line 20 includes a junior accessory dwelling unit or not.
line 21 (d) For the purposes of providing service for water, sewer, or
line 22 power, including a connection fee, a junior accessory dwelling
line 23 unit shall not be considered a separate or new dwelling unit.
line 24 (e) This section shall not be construed to prohibit a local agency
line 25 from adopting an ordinance or regulation, related to parking or
line 26 a service or a connection fee for water, sewer, or power, that
line 27 applies to a single-family residence that contains a junior
line 28 accessory dwelling unit, so long as that ordinance or regulation
line 29 applies uniformly to all single-family residences regardless of
line 30 whether the single-family residence includes a junior accessory
line 31 dwelling unit.
line 32 (e)
line 33 (f) For purposes of this section, the following terms have the
line 34 following meanings:
line 35 (1) “Junior accessory dwelling unit” means a unit that is no
line 36 more than 500 square feet in size and contained entirely within an
line 37 existing single-family structure. A junior accessory dwelling unit
line 38 may include separate sanitation facilities, or may share sanitation
line 39 facilities with the existing structure.
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AB 2406— 7 —
line 1 (2) “Local agency” means a city, county, or city and county,
line 2 whether general law or chartered.
line 3 SEC. 3. This act is an urgency statute necessary for the
line 4 immediate preservation of the public peace, health, or safety within
line 5 the meaning of Article IV of the Constitution and shall go into
line 6 immediate effect. The facts constituting the necessity are:
line 7 In order to allow local jurisdictions the ability to promulgate
line 8 ordinances that create secure income for homeowners and secure
line 9 housing for renters, at the earliest possible time, it is necessary
line 10 for this act to take effect immediately.
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95
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City of Palo Alto (ID # 7008)
City Council Staff Report
Report Type: Informational Report Meeting Date: 8/22/2016
City of Palo Alto Page 1
Council Priority: Environmental Sustainability
Summary Title: Update on Zero Waste Organics Collection Programs
Title: Update on Zero Waste Organics Collection Programs Including the
Residential Curbside Composting Program and the Recycling and Composting
Ordinance
From: City Manager
Lead Department: Public Works
This report is to provide information only and no Council action is required.
Executive Summary
The City of Palo Alto has one of the highest waste diversion rates in the state at
nearly 80 percent (from landfills). To increase that rate even further, two
important diversion programs were recently implemented: a single-family
residential food scraps collection program, implemented on July 1, 2015; and a
phased Recycling and Composting Ordinance, requiring compliance by large
commercial facilities, food service establishments, and multifamily complexes, by
April 1, 2016.
In just over one year of operation, participation in the single-family residential
program is greater than 60 percent and more than 1,500 tons of food scraps have
been diverted to composting. In less than five months of the Recycling and
Composting Ordinance compliance requirement, 100 percent of restaurants and
other large facilities have implemented compost programs. These early results are
very encouraging. Once these programs are fully implemented, they have the
potential to divert more than 7,000 tons of food scraps per year from landfilling
to composting.
City of Palo Alto Page 2
Background
Food and soiled paper make up 40 percent of the garbage in Palo Alto. While a
small percentage of these organics is recovered at the Sunnyvale Materials
Recovery and Transfer (SMaRT) Station, the vast majority are landfilled. Once in
the landfill, the organics materials decompose, which results in the release of
harmful greenhouse gases – nearly 2,800 MT of CO2 equivalents (CO2e) annually.
In an effort to dramatically reduce these emissions and meet the City’s zero waste
diversion goals, staff has developed and implemented waste diversion programs
ensuring that every resident, business, student, and visitor has access to compost
service. The City also continues to provide incentives for backyard/home
composting. Staff has also been engaging in efforts to reduce the amount of
edible food wasted and if that is not possible, use it to feed people who are in
need. Once fully implemented and mature, these collective programs are
anticipated to reduce the amount of food and soiled paper landfilled by 7,000
tons per year.
Residential Food Scraps Collection
As of July 1, 2015, all single-family residents are able to place food scraps and
soiled paper in the green, compost cart (CMR ID #5558 approved 3/23/2015).
Participation in the single-family residential food scraps program exceeds many
other jurisdictions. During the first year of the program, approximately 60 percent
of single-family households placing green compost carts on the street for pick up
were putting food scraps in the cart1, resulting in over 1,500 tons of food diverted
from landfill.
All multifamily complexes joined the curbside food scrap program as part of Phase
One of the Recycling and Composting Ordinance as of April 1, 2016 (CMR ID
#6475 approved 1/11/2016). The City and GreenWaste staff has invested heavily
into this major outreach effort by delivering kitchen buckets to and conducting
training sessions for multifamily residents. Staff has met thousands of residents
and answered countless questions from April to July. This direct outreach to
1 Staff has been able to determine a reasonably accurate estimate for the residential curbside compost collection
program through lid flipping and a community survey. Staff looked into the green, blue, and black carts of over
2,200 households representing each of the 20 garbage routes throughout the City. This data nearly matched the
results from a survey mailed out to residents in February 2016 to determine program participation and identify
barriers to participation.
City of Palo Alto Page 3
residents is the most effective way to help residents adjust to changing the way
they handle their waste.
Residents are still encouraged to participate in backyard/home composting. The
Santa Clara County Composting Education Program, operated by the University of
California Extension, has held numerous composting workshops over the past two
years in Palo Alto where 313 Palo Alto residents have participated with 196
compost bins given away. Palo Alto is the only city in the county that provides
residents who attend a workshop with a free backyard compost bin.
It is important to note that reducing food waste starts in the grocery store and
household kitchen. Staff developed shopping and food storage tips, available at
www.cityofpaloalto.org/foodwaste, and included these tips with the 20,000+
kitchen buckets provided to every Palo Alto household.
Recycling and Composting Ordinance
As noted earlier, multifamily residential complexes were required to subscribe to
compost service to comply with Phase One of the City’s Recycling and Composting
Ordinance on April 1, 2016. Nearly 100 percent of complexes now have compost
service. In addition to multifamily complexes, Phase One of the Recycling and
Composting Ordinance included all food service establishments (e.g., restaurants,
grocery stores, commercial kitchens) and any customers with over 8 cubic yards
of garbage service per week – around 400 total customers. The requirements of
the Recycling and Composting Ordinance guarantee that the City is meeting its
obligations under the first phase of the state’s mandatory organics recycling law
AB 18262. All of the restaurants and major garbage generators in the City now
have compost service, a major accomplishment.
To increase the amount of material diverted from the landfill City staff and
GreenWaste have been working with these customers, providing regular training
and improvements in “front-of-the-house” containers (i.e., sorting containers for
customers throwing out their waste). GreenWaste is also conducting routine
waste audits to monitor the amount of contamination in compost and recycling
containers, as well as the amount of recoverables placed in the garbage
2 Phase one of Assembly Bill 1826 requires that all customers generating 8 cubic yards of organics per week needed
to have an organics diversion program in place by April 1, 2016
(http://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201320140AB1826).
City of Palo Alto Page 4
containers. GreenWaste is issuing notice tags to customers with the results of the
audits3. Since April 2016, the amount of compost collected from commercial
customers has increased by 19 percent.
All of the compostable material collected curbside, from both residential and
commercial customers, is processed at the Zero Waste Energy Development
(ZWED) Facility in North San Jose. The food scraps are first anaerobically digested
where methane gas is generated and then combusted to create renewable
power. The remaining digestate is composted and used as a soil amendment. By
sending food scraps to ZWED, material that once went to the landfill yielding
harmful greenhouse gas emissions now becomes renewable energy and compost.
Discussion
Residential Food Scraps Collection
Despite a high level of participation in the food scraps program, many residents
are not placing soiled paper and meat in the green compost cart. To address any
real or perceived barriers to composting soiled paper and meat, staff created an
outreach campaign with mailers and cable commercials utilizing our fictitious
character, “Zak Zero”, to help “normalize” composting in the community
(https://youtu.be/neaAcS4Dkic).
Recycling and Composting Ordinance
The managers of the handful of complexes that are still not in compliance are
subject to fines associated with Chapter 5.20 of the Municipal Code. Staff is
confident that these remaining complexes will soon comply and provide compost
service to their residents.
The amount of compost collected should continue to increase with the
implementation of Phase Two (all commercial customers with 2 or more cubic
yards of garbage service per week) on January 1, 2017, and Phase Three (all
remaining commercial customers) on January 1, 2018.
3 The cart tags come in three colors: green, doing a good job sorting; yellow, could improve sorting behavior; and
red, doing a poor job of sorting and the cart is heavily contaminated. Customers receiving three red tags will begin
to see extra pick-up and contamination fees associated with the Recycling and Composting Ordinance. Multifamily
complexes, as long as they provide all collection services, adequate signage, and educate tenants will not be
subject to Recycling and Composting Ordinance fees.
City of Palo Alto Page 5
Since 2009, commercial compost service has cost less than garbage service, and
most customers have saved money by adding compost service. However, many
customers reported in surveys that the then-optional compost service cost
differential (garbage was 10 percent higher) was an insufficient incentive.
Therefore the relative discount for compost was increased to 20 percent on July
1, 2016. This financial incentive coupled with the requirements in the Ordinance
to sort properly should maximize the amount of diversion from the commercial
sector.
Looking forward, staff is evaluating possible changes to the Ordinance that will:
1) Require commercial customers to use clear plastic “garbage” bags so
GreenWaste can easily verify compliance; and
2) Include a provision where restaurants and other food service
establishments will need to establish a relationship with a food rescue
organization.
Food Rescue
Getting food scraps out of the landfill and into the food scraps collection program
is a primary zero waste goal; however, much of the food that is either landfilled or
composted is prepared food or uncooked food that is still edible. An estimated
4,000 tons of edible food is landfilled or composted each year. Although
composting is the preferred option to landfilling, it is even better to reduce the
amount of food waste we generate in the first place. For the food waste that is
generated, getting that food into the hands of hungry people is best. According to
a June 2015 report by FoodShift for Santa Clara County, 1 in 4 people in Santa
Clara County go to bed hungry every night.
Staff has been working to address food insecurity. Last summer, staff partnered
with Second Harvest Food Bank to establish a food rescue program for Piazza’s
Fine Foods. Over the course of the year, Piazza’s has donated over 24,000 pounds
of food. Staff has also worked closely with the Santa Clara County Food Rescue
Committee to develop a community food rescue plan, which is expected by the
end of 2016.
Reducing food waste reduces the greenhouse gas emissions across the supply
chain and at the landfill, helping to protect the environment. In addition, food
scraps that are anaerobically digested provide renewable energy and compost. On
City of Palo Alto Page 6
the economic side, the green compost cart is less expensive than the black
garbage cart and donating food can provide tax deductions. The social value of
food rescue can provide the greatest benefit. Food that would have otherwise
been landfilled is now providing a nutritious meal. Zero waste means more than
just keeping material out of the landfill; it means we make best use of the all
resources. The good news is that the first choice is as simple as sorting waste
properly.
City of Palo Alto (ID # 7190)
City Council Staff Report
Report Type: Informational Report Meeting Date: 8/22/2016
City of Palo Alto Page 1
Summary Title: Investment Activity Report
Title: City of Palo Alto Investment Activity Report for the Fourth Quarter,
Fiscal Year 2016
From: City Manager
Lead Department: Administrative Services
Background
The purpose of this report is to inform Council of the City’s investment portfolio status as of the
end of the fourth quarter. The City’s investment policy requires that staff report quarterly to
Council on the City’s portfolio composition compared to Council-adopted policy, portfolio
performance, and other key investment and cash flow information.
Discussion
The City’s investment portfolio is detailed in Attachment B. It is grouped by investment type
and includes the investment issuer, date of maturity, current market value, the book and face
(par) value, and the weighted average maturity of each type of investment and of the entire
portfolio.
The par value of the City’s portfolio is $523.3 million; in comparison, last quarter it was $515.0
million and last year it was $517.9 million. The growth in the portfolio of $8.3 million since the
last quarter primarily results from the timing of cash flows. Such factors as the timing of
property tax and special assessments receipts (e.g. general obligation and parking bonds); and
payment of the sales tax (“triple flip”) and in-lieu vehicle license fee tax payments (received in
January and May 2015) affect cash receipts and flow.
The portfolio consists of $59.9 million in liquid accounts and $463.4 million in U. S. government
treasury investments, agency securities, bonds of State of California local government agencies,
bonds of some of the fifty United States, medium-term corporate notes, and certificates of
deposit. The $463.4 million includes $140.8 million in investments maturing in less than two
years, comprising 30.4 percent of the City’s investment in notes and securities. The investment
policy requires that at least $50 million be maintained in securities maturing in less than two
years.
City of Palo Alto Page 2
As a cost saving measure, the Council approved a prepayment of the City’s fiscal year 2017
pension payment instead of making payments with each payroll period. To accumulate the
prepayment amount, staff deposited incoming revenues and maturing investments into liquid
accounts instead of investing in longer-term investments. The prepayment amount of $30.8
million was made in July 2016. The City is expected to save $1.1 million in PERS payments;
however, the savings will be offset by the loss of approximately $0.25 million in interest
income. This results in net citywide savings of $0.85 million. The saving is a consequence of
PERS’ ability to earn interest earlier and at a higher rate than the City could realize.
The current market value of the portfolio is 101.7 percent of the book value while last quarter it
was 101.4 percent. In last year’s fourth quarter the ratio was 100.6 percent. The market value
of securities fluctuates, depending on how interest rates perform. When interest rates
decrease, the market value of the securities in the City’s portfolio likely will increase. Likewise,
when interest rates increase, the market value of the securities likely will decrease.
Understanding and showing market values is not only a reporting requirement, but essential to
knowing the principal risks in actively buying and selling securities. It is important to note,
however, that the City’s practice is to buy and hold investments until they mature so changes in
market price do not affect the City’s investment principal. The market valuation is provided by
Union Bank of California, which is the City’s safekeeping agent. The average life to maturity of
the investment portfolio is 3.63 years compared to 3.53 years last quarter and 3.47 years last
year.
Investments Made During the Fourth Quarter
During the fourth quarter, $74.2 million of government agency securities with an average yield
of 2.4% percent matured. During the same period, government securities totaling $85.1 million
with an average yield of 2.3% percent were purchased. The expectation is interest rates will
remain near historically low levels; the portfolio’s yield is expected to decline. The City’s short-
term money market and pool account decreased by $2.6 million compared to the third quarter.
Investment staff continually monitors the City’s short-term cash flow needs and adjusts liquid
funds to meet them.
Availability of Funds for the Next Six Months
Normally, the flow of revenues from the City’s utility billings and General Fund sources is
sufficient to provide funds for ongoing expenditures in those respective funds. Projections
indicate receipts will be $229.5 million and expenditures will be $250.7 million over the next six
months, indicating an overall decline in the portfolio of $21.2 million. The expected decline is
primarily attributable to the $30.8 million in pension prepayment. Without this payment, the
portfolio would have increased by $9.6 million. Prepayment to PERs means that the City will
not record monthly expenses so, all else being equal, the portfolio should increase during the
fiscal year.
As of June 30, 2016, the City had $59.9 million deposited in the Local Agency Investment Fund
(LAIF) and a money market account that could be withdrawn on a daily basis. In addition,
City of Palo Alto Page 3
investments totaling $30.7 million will mature between July 1, 2016 and December 31, 2016.
On the basis of the above projections, staff is confident that the City will have more than
sufficient funds or liquidity to meet expenditure requirements for the next six months.
Compliance with City Investment Policy
During the fourth quarter, staff complied with all aspects of the investment policy. Attachment
C lists the major restrictions in the City’s investment policy compared with the portfolio’s actual
performance.
Investment Yields
Interest income on an accrual basis for the fourth quarter was $2.4 million; the same as last
quarter and the prior year fourth quarter. Interest income in the fourth quarter of 2015 was
1.80 percent. As of June 30, 2016, the yield to maturity of the City’s portfolio was 1.88
percent. This compares to a yield of 1.86 percent in the third quarter; though the yield on new
investments has risen in the last few quarters, the continued (historical) low interest rate is
expected to put downward pressure on the portfolio yield. The City’s portfolio yield of 1.88
percent compares to LAIF’s average yield for the quarter of 0.47 percent and an average yield
on the two-year and five-year Treasury bonds during the fourth quarter of approximately 0.77
percent and 1.22 percent, respectively.
Yield Trends
After seven years, the Federal Open Market Committee (FOMC) raised the federal funds and
discount rates in December 2015 by a quarter percent to 0.50 and 1.0 percent, respectively. In
its July 2016 report, the FOMC cited strengthening consumer spending, improving labor market
and moderate economic growth with inflation remaining below the FOMC’s long-term goal of 2
percent. Business spending remains weak. The FOMC expects future rate increase to be gradual
and dependent on the economic outlook. Factors that could keep a lid on rate increases
include: low inflation, weak wage growth, and global economic weakness.
Funds Held by the City or Managed Under Contract
Attachment A is a consolidated report of all City investment funds, including those not held
directly in the investment portfolio. These include cash in the City’s regular bank account with
US Bank and Wells Fargo. The bond proceeds, reserves, and debt service payments being held
by the City’s fiscal agents are subject to the requirements of the underlying debt indenture. The
trustees for the bond funds are U.S. Bank and California Asset Management Program (CAMP).
Bond funds with U.S. Bank are invested in federal agency and money market mutual funds that
consist exclusively of U.S. Treasury securities. Bond funds in CAMP are invested in banker’s
acceptance notes, certificates of deposit, commercial paper, federal agency securities, and
repurchase agreements. The most recent data on funds held by the fiscal agent is as of June 30,
2016.
Fiscal Impact
This is an information report.
City of Palo Alto Page 4
Environmental Review
This information report is not a project under the California Environmental Quality Act;
therefore, an environmental review is not required.
Attachments:
Attachment A: Consolidated Report of Cash Management (PDF)
Attachment B: Investment Portfolio (PDF)
Attachment C: Investment Policy Compliance (PDF)
Book Value Market Value
City Investment Portfolio (see Attachment B)527,351,509$ 536,511,230$
Other Funds Held by the City
Cash with Wells Fargo Bank 752,985 752,985
(includes general and imprest accounts)
Cash with US Bank 2,906,342 2,906,342
(includes general and imprest accounts)
Petty/Working Cash 12,678 12,678
Total - Other Funds Held By City 3,672,006 3,672,006
Funds Under Management of Third Party Trustees *
US Bank Trust Services **
1995 Utility Revenue Bonds
Debt Service Fund 3 3
2002 Downtown Parking Impvt. (Taxable) Certificates of Participation
Reserve Fund 238,331 238,331
2009 Water Revenue Bonds (Build America Bonds)
Project, Debt Service, Reserve, Cost of Issuance Funds 2,631,240 2,631,240
2010 General Obligation Bonds
Debt Service 4 4
2011 Utility Revenue Refunding Bonds
Debt Service, Reserve, and Cost of Issuance Funds 1,484,342 1,484,342
2012 University Ave. Parking Refunding Bonds
Cost of Issuance Fund 13,960 13,960
2013 General Obligation Bonds
Debt Service 10,785 10,785
California Asset Management Program (CAMP) ***
2012 University Ave. Parking Refunding Bonds
Reserve Fund 2,535,280 2,535,280
2013 General Obligation (Library) Bond
Project Fund 710,783 710,783
Total Under Trustee Management 7,624,729 7,624,729
GRAND TOTAL 538,648,244$ 547,807,965$
* These funds are subject to the requirements of the underlying debt indenture.
** U.S. Bank investments are in money market mutual funds that exclusively invest in U.S. Treasury securities.
*** CAMP investments are in money market mutual fund which invest in bankers acceptance, certificate of deposit,
commercial paper, federal agency securities, and repurchase agreements.
Fourth Quarter, Fiscal Year 2015-16
(Unaudited)
(Debt Service Proceeds)
Attachment A
Consolidated Report of Cash Management
City of Palo Alto Cash and Investments
City of Palo Alto City of Palo Alto
Administration Svcs. Dept.
250 Hamilton Ave., 4th Floor
Palo Alto, CA 94301
(650)329-2362
June 30, 2016
Fund ALL - Portfolio Listings
Investments by Fund
Par Value
Days To
Maturity
Maturity
Date
Current
RateMarket ValueCUSIPInvestment #Issuer
PurchaseDate Book Value
YTM
360
YTM
365
Managed Pool Accounts
Fidelity Investments158 2,401,391.59SYS158 10.01007/01/2015 2,401,391.59 0.009 0.0102,401,391.59
Local Agency Investment Fund159 57,486,615.94SYS159 10.58007/01/2015 57,522,327.89 0.572 0.58057,486,615.94
Subtotal and Average 59,888,007.53 59,888,007.53 59,923,719.48 0.550 0.557 1
Negotiable CD's
Comenity Capital Bank1183 NCD 245,000.0020033ABE5 05/03/2018 6711.00005/03/2013 246,923.25 0.986 1.000245,000.00
American Federal Bank1476 NCD 245,000.0002600ADE4 09/30/2022 2,2822.45009/30/2015 250,407.15 2.418 2.451245,000.00
Alpine Bank1525 NCD 245,000.0002082CBG4 08/16/2023 2,6022.40002/16/2016 247,998.80 2.367 2.400245,000.00
American Eagle Bank1371 NCD 245,000.0002554BCE9 05/28/2019 1,0611.85008/26/2014 250,154.80 1.825 1.850245,000.00
American Express Centurion Bk1178 NCD 245,000.0002587DMV7 05/02/2018 6701.10005/02/2013 246,920.80 1.084 1.100245,000.00
American Express Centurion Bk1333 NCD 245,000.0002587CAC4 07/10/2019 1,1041.95007/10/2014 251,039.25 1.923 1.950245,000.00
Barclays Bank / Delaware1187 NCD 245,000.0006740AZB8 04/30/2018 6680.70005/07/2013 248,165.40 0.690 0.699245,000.00
Bankers Bank of the West1421 NCD 245,000.0006610TDB8 12/30/2019 1,2771.85012/29/2014 252,041.30 1.824 1.850245,000.00
Compass Bank1231 NCD 245,000.0020451PAW6 07/10/2018 7391.65007/10/2013 245,227.85 1.627 1.650245,000.00
Belmont Savings Bank1280 NCD 245,000.00080515AT6 11/13/2018 8651.55005/13/2014 249,025.35 1.528 1.550245,000.00
Bar Harbor Bank & Trust1377 NCD 245,000.00066851SG2 08/27/2019 1,1521.75008/27/2014 251,129.90 1.726 1.750245,000.00
Bank Champaign1477 NCD 245,000.0006607ABD2 09/30/2022 2,2822.50009/30/2015 245,328.30 2.467 2.501245,000.00
Bank of Deerfield1396 NCD 245,000.00061785CM1 09/30/2020 1,5522.20009/30/2014 253,557.85 2.171 2.201245,000.00
Bank of Holland Michigan1302 NCD 245,000.00062649ZV3 05/21/2019 1,0541.70005/21/2014 250,919.20 1.677 1.701245,000.00
Frontier Bank Madison NE1498 NCD 245,000.0035907XCL9 11/22/2021 1,9702.00011/20/2015 245,147.00 1.974 2.001245,000.00
Bank West1472 NCD 245,000.00063615AX6 09/16/2022 2,2682.25009/16/2015 257,619.95 2.220 2.251245,000.00
BMW Bank of North America1202 NCD 245,000.0005568P3E5 05/24/2017 3270.90005/24/2013 246,129.45 0.887 0.900245,000.00
BankWest, Inc.1380 NCD 150,000.0006652CEY3 09/16/2019 1,1721.90009/15/2014 153,801.00 1.873 1.900150,000.00
Bofi Federal Bank1381 NCD 50,000.0009710LAF2 08/30/2022 2,2512.25008/25/2014 50,057.50 2.493 2.52749,230.95
Bofi Federal Bank1382 NCD 100,000.0009710LAE5 08/08/2022 2,2292.35008/25/2014 100,165.00 2.592 2.62898,465.40
Bofi Federal Bank1402 NCD 100,000.0009710LAF2 08/30/2022 2,2512.25010/21/2014 100,115.00 2.462 2.49698,627.44
Banco Poplar North America1478 NCD 245,000.0005965GVP8 10/07/2020 1,5592.25010/07/2015 253,526.00 2.219 2.250245,000.00
Bridgewater Bank Bloom MN1393 NCD 245,000.00108622EA5 09/24/2019 1,1801.85009/24/2014 251,220.55 1.825 1.850245,000.00
Business Bank1531 NCD 245,000.0012325EHA3 02/10/2021 1,6851.55002/10/2016 252,577.85 1.530 1.551245,000.00
Worlds Foremost Bank1387 NCD 200,000.00981571AT9 09/04/2019 1,1602.10009/04/2014 205,044.00 2.072 2.101200,000.00
Campbell County Bank1307 NCD 245,000.00134204BZ8 05/30/2019 1,0631.65005/30/2014 251,031.90 1.628 1.650245,000.00
Portfolio CPA
AP
Run Date: 08/03/2016 - 11:11 FI (PRF_FI) 7.1.1
Report Ver. 7.3.3a
June 30, 2016
Par Value
Days To
Maturity
Maturity
Date
Current
RateMarket Value
Fund ALL - Portfolio Listings
Investments by Fund Page 2
CUSIP Investment #Issuer
Purchase
Date Book Value YTM
360
YTM
365
Negotiable CD's
Cathay Bank1194 NCD 245,000.00149159HS7 04/30/2018 6681.00005/14/2013 245,722.75 0.987 1.000244,999.10
CBC National Bank1571 NCD 245,000.0012480LDV6 04/15/2021 1,7491.50004/15/2016 249,451.65 1.479 1.500245,000.00
Celtic Bank1362 NCD 245,000.0015118RJW8 08/20/2019 1,1451.90008/20/2014 251,107.85 1.875 1.901245,000.00
Central State Bank1538 NCD 245,000.0015524EAA2 02/16/2022 2,0561.70002/16/2016 253,315.30 1.678 1.701245,000.00
Centrix Bank & Trust1220 NCD 245,000.0015640ABQ3 06/27/2018 7261.30006/27/2013 246,685.60 1.282 1.300245,000.00
CIT Bank1175 NCD 245,000.0017284CCN2 04/24/2018 6621.20004/24/2013 246,033.90 1.183 1.200245,000.00
Citizens State Bank1541 NCD 250,000.0017670BAQ1 02/17/2023 2,4221.75002/19/2016 257,207.50 1.727 1.751250,000.00
Enerbank USA1246 NCD 245,000.0029266NYZ4 01/30/2020 1,3082.05001/30/2014 253,232.00 2.021 2.050245,000.00
Community State Bank1536 NCD 245,000.0020404YBQ7 02/24/2022 2,0641.95002/24/2016 245,475.30 1.924 1.951245,000.00
Capital One Bank USA NA1384 NCD 250,000.00140420NR7 09/04/2019 1,1601.80009/04/2014 256,247.50 1.775 1.800250,000.00
Capital One Bank USA NA1457 NCD 245,000.0014042E5M8 08/12/2020 1,5032.30008/12/2015 254,020.90 2.268 2.300245,000.00
Community Bank Pasadena1627 NCD 245,000.00203507BA5 06/15/2021 1,8101.55006/16/2016 245,681.10 1.529 1.550245,000.00
Commuincity Finl Svcs Bank1530 NCD 245,000.0020364ABA2 02/17/2021 1,6921.60002/17/2016 252,555.80 1.579 1.601245,000.00
Commercial Bank1369 NCD 245,000.0020143PDB3 05/20/2019 1,0531.85008/19/2014 250,132.75 1.824 1.850245,000.00
Community State Bank, IA1471 NCD 245,000.0020404MAN1 09/12/2022 2,2642.25009/11/2015 257,622.40 2.224 2.255245,000.00
Discover Bank / Delaware1176 NCD 245,000.00254671NJ5 05/01/2018 6691.15005/01/2013 246,918.35 1.134 1.150245,000.00
East Boston Savings Bank1463 NCD 245,000.0027113PAL5 08/24/2020 1,5151.90008/24/2015 254,427.60 1.876 1.902245,000.00
Ever Bank1454 NCD 245,000.0029976DZK9 07/30/2020 1,4902.00007/30/2015 253,085.00 1.972 2.000245,000.00
Farmers & Merchants Bank1439 NCD 245,000.00308862DH1 08/19/2021 1,8752.15002/19/2015 245,151.90 2.120 2.150245,000.00
Farmer's and Merchants Bank1360 NCD 250,000.00308702BQ1 02/16/2021 1,6912.20008/15/2014 261,135.00 2.169 2.200250,000.00
First Bank of Highland1330 NCD 245,000.00319141BV8 07/03/2019 1,0971.85007/03/2014 245,749.70 1.824 1.850245,000.00
First Business Bank1250 NCD 245,000.0031938QF25 02/19/2020 1,3282.00002/19/2014 253,442.70 1.972 2.000245,000.00
First Choice Bank / NJ1297 NCD 245,000.00319464AR4 05/28/2019 1,0611.70005/28/2014 251,014.75 1.677 1.701245,000.00
State Bank of Fenton (MI)1283 NCD 245,000.00856188AU1 02/15/2019 9591.65005/15/2014 248,381.00 1.630 1.653245,000.00
First Federal S&L Bank1626 NCD 245,000.0032018YAW8 06/22/2023 2,5471.80006/22/2016 245,058.80 1.776 1.800245,000.00
1st Financial Bank1485 NCD 245,000.0032022RFD4 03/16/2022 2,0842.10010/19/2015 245,129.85 2.120 2.150244,345.41
Flushing Bank1413 NCD 245,000.0034387ABA6 12/10/2018 8921.80012/10/2014 248,403.05 1.776 1.801245,000.00
First General Bank1222 NCD 245,000.00320337AR9 07/03/2018 7321.30007/03/2013 246,685.60 1.282 1.300245,000.00
First Eagle National Bank1400 NCD 245,000.0032008JAG8 10/15/2021 1,9322.45010/17/2014 258,443.15 2.416 2.449245,000.00
First National Bank of America1391 NCD 240,000.0032110YEF8 08/03/2022 2,2242.35009/09/2014 240,352.80 2.665 2.703235,374.70
First Nationnal Bank / KS1537 NCD 245,000.00334342BU5 02/26/2021 1,7011.55002/26/2016 245,149.45 1.530 1.551245,000.00
The FNB of Mcgregor1480 NCD 245,000.0032112UBW0 09/30/2021 1,9172.00010/01/2015 255,566.85 1.972 1.999245,000.00
Portfolio CPA
AP
Run Date: 08/03/2016 - 11:11 FI (PRF_FI) 7.1.1
Report Ver. 7.3.3a
June 30, 2016
Par Value
Days To
Maturity
Maturity
Date
Current
RateMarket Value
Fund ALL - Portfolio Listings
Investments by Fund Page 3
CUSIP Investment #Issuer
Purchase
Date Book Value YTM
360
YTM
365
Negotiable CD's
First Nat. Bank of Park Falls1473 NCD 245,000.0032114RAQ9 09/17/2021 1,9042.20009/17/2015 245,132.30 2.171 2.201245,000.00
First Premier Bank1255 NCD 245,000.0033610RNX7 03/08/2021 1,7112.50003/07/2014 257,864.95 2.465 2.500245,000.00
First Merchants Bank1351 NCD 245,000.0032082BDH9 08/06/2019 1,1311.90008/06/2014 251,154.40 1.873 1.900245,000.00
Community First Bank1555 NCD 250,000.0020369JAA9 03/17/2022 2,0851.70003/17/2016 249,885.00 1.677 1.700250,000.00
Farmer's & Merchant's SVG Bank1551 NCD 245,000.00308863AH2 02/26/2021 1,7011.55002/29/2016 250,069.05 1.525 1.546245,000.00
First Neighbor Bank, NA1469 NCD 245,000.0033581VAF6 09/03/2021 1,8902.40009/03/2015 256,091.15 2.367 2.400245,000.00
First Savings Bank Northwest1335 NCD 245,000.0033621JAB4 07/18/2019 1,1121.80007/18/2014 245,110.25 1.776 1.801245,000.00
First State Bank1366 NCD 245,000.0033648RAT6 08/20/2019 1,1451.85008/20/2014 251,188.70 1.825 1.851245,000.00
First State Bank of Purdy1475 NCD 248,000.0033646TAE7 04/13/2022 2,1122.35009/25/2015 249,210.24 2.321 2.353247,978.10
Fox Chase Bank1305 NCD 245,000.0035137QAV6 06/06/2019 1,0701.70006/06/2014 251,049.05 1.677 1.700245,000.00
Gulf Coast Bank & Trust1462 NCD 200,000.00402194ES9 05/20/2021 1,7842.00008/13/2015 200,370.00 1.972 1.999200,000.00
Gold Coast Bank1375 NCD 245,000.0038058KDA1 08/05/2019 1,1301.80009/04/2014 250,877.55 1.775 1.800245,000.00
GE Capital Bank1184 NCD 245,000.0036161TJR7 05/03/2018 6711.00005/03/2013 245,142.10 0.986 1.000245,000.00
GE Capital Bank1262 NCD 245,000.0036157PXV6 03/22/2021 1,7252.65003/21/2014 257,828.20 2.613 2.650245,000.00
Goldman Sachs Bank USA1177 NCD 245,000.0038147JEC2 05/01/2018 6691.15005/01/2013 245,808.50 1.134 1.150245,000.00
HSBC Bank1564 NCD 245,000.0040434AR84 10/07/2021 1,9242.00004/07/2016 249,018.00 1.972 2.000245,000.00
Dubuque Bank & Trust1372 NCD 245,000.00263849BD2 08/21/2019 1,1461.90008/21/2014 251,095.60 1.873 1.900245,000.00
Iroquois Federal Sav Loan Asso1535 NCD 245,000.0046355PBV9 08/12/2020 1,5031.60002/12/2016 246,413.65 1.578 1.600245,000.00
Investors Bank1460 NCD 245,000.0046176PEJ0 08/25/2020 1,5162.00008/25/2015 254,087.05 1.972 2.000245,000.00
Inst. for Sav in Newburyport1455 NCD 245,000.0045780PAN5 07/30/2021 1,8552.30007/31/2015 255,581.55 2.269 2.301245,000.00
Iowa State Bank1343 NCD 250,000.0046256YAB5 07/23/2019 1,1171.80007/23/2014 256,197.50 1.775 1.800250,000.00
JP Morgan Chase BAnk NA1200 NCD 245,000.0048124JD39 12/05/2018 8871.25006/05/2013 245,686.00 1.232 1.250245,000.00
LCA Bank Corporation1306 NCD 245,000.00501798FJ6 05/30/2019 1,0631.65005/30/2014 251,024.55 1.627 1.650245,000.00
Leader Bank1364 NCD 245,000.0052168UCN0 08/22/2019 1,1472.00008/22/2014 245,472.85 1.973 2.001245,000.00
Legends Bank1533 NCD 245,000.0052465JGM3 02/11/2022 2,0511.70002/12/2016 254,148.30 1.678 1.701245,000.00
Luana Savings Bank1367 NCD 245,000.00549103QA0 09/07/2021 1,8942.25009/05/2014 253,026.20 2.219 2.250245,000.00
Machias Savings Bank1358 NCD 245,000.00554479DN2 08/28/2019 1,1531.80008/28/2014 251,279.35 1.776 1.801245,000.00
Mascoma Savings Bank1319 NCD 248,000.0057461PAG1 01/15/2019 9281.80006/20/2014 253,292.32 1.627 1.650248,909.55
Medallion Bank - Salt Lake1238 NCD 245,000.0058403BJ31 01/10/2019 9231.85001/10/2014 250,142.55 1.825 1.850245,000.00
Merrick Bank1464 NCD 245,000.0059013JHE2 08/20/2020 1,5111.90008/20/2015 250,122.95 1.876 1.902245,000.00
Merchants National Bank OH1534 NCD 245,000.00588806AV1 02/17/2022 2,0571.80002/17/2016 253,288.35 1.776 1.801245,000.00
Mifflinburg Bank & Trust Co.1321 NCD 132,000.00598580AB4 04/30/2019 1,0331.65006/20/2014 135,152.16 1.627 1.649132,000.00
Portfolio CPA
AP
Run Date: 08/03/2016 - 11:11 FI (PRF_FI) 7.1.1
Report Ver. 7.3.3a
June 30, 2016
Par Value
Days To
Maturity
Maturity
Date
Current
RateMarket Value
Fund ALL - Portfolio Listings
Investments by Fund Page 4
CUSIP Investment #Issuer
Purchase
Date Book Value YTM
360
YTM
365
Negotiable CD's
Marlin Business Bank1483 NCD 245,000.0057116AKU1 10/21/2020 1,5731.75010/21/2015 253,638.70 1.727 1.751245,000.00
MutualOne Bank1407 NCD 250,000.0062847HAA7 11/21/2019 1,2381.85011/21/2014 257,145.00 1.825 1.850250,000.00
MY Safra Bank FSB1467 NCD 245,000.0055406JAL6 09/03/2020 1,5251.90009/03/2015 254,214.45 1.873 1.900245,000.00
NBT Bank1322 NCD 156,000.00628779FJ4 06/06/2019 1,0701.80006/20/2014 159,793.92 1.775 1.799156,000.00
NBT Bank1373 NCD 94,000.00628779FN5 08/20/2019 1,1452.10008/20/2014 96,330.26 2.071 2.10094,000.00
Customers Bank1388 NCD 250,000.0023204HCA4 09/10/2019 1,1662.10009/10/2014 256,217.50 2.071 2.100250,000.00
NCB Savings Bank1344 NCD 245,000.00628825JL6 07/25/2019 1,1191.80007/25/2014 249,664.80 1.775 1.800245,000.00
National Bank Commerce1607 NCD 245,000.00633368DY8 05/11/2023 2,5051.80005/11/2016 247,677.85 1.776 1.800245,000.00
Nebraska State Bank & Trust1466 NCD 245,000.0063969ABL7 08/26/2022 2,2472.25008/26/2015 258,379.45 2.220 2.251245,000.00
Lake Sunapee Bank FSB1309 NCD 245,000.00510868AG7 06/05/2019 1,0691.75006/05/2014 251,041.70 1.727 1.750245,000.00
Connectone Bank1355 NCD 245,000.0020786AAT2 08/13/2019 1,1381.85008/13/2014 251,017.20 1.824 1.850245,000.00
Bank of Northern Michigan1298 NCD 245,000.0006414TNW9 05/21/2020 1,4202.00005/21/2014 253,648.50 1.972 2.000245,000.00
Northfield Bank1365 NCD 245,000.0066612AAA6 08/12/2019 1,1371.85008/13/2014 251,169.10 1.824 1.850245,000.00
Northstar Bank1326 NCD 245,000.0066704MEG2 07/18/2019 1,1121.75007/18/2014 251,159.30 1.727 1.751245,000.00
Naqtional Bank of NY City1312 NCD 245,000.00634116CB1 06/18/2019 1,0821.65006/18/2014 251,017.20 1.627 1.650245,000.00
Oostburg State Bank1532 NCD 245,000.00683430BU5 02/09/2021 1,6841.55002/09/2016 251,906.55 1.530 1.551245,000.00
Williamette Valley Bank1524 NCD 245,000.00969294BY2 02/06/2023 2,4112.10002/04/2016 251,076.00 2.072 2.101245,000.00
Orrstown Bank1465 NCD 245,000.00687377DR9 08/20/2020 1,5112.00008/20/2015 245,455.70 1.974 2.002245,000.00
Peoples United Bank1378 NCD 245,000.0071270QGB6 08/27/2019 1,1521.95008/27/2014 251,098.05 1.923 1.950245,000.00
Peapack-Gladstone Bank1275 NCD 245,000.00704692AK8 04/17/2019 1,0201.80004/17/2014 250,782.00 1.776 1.801245,000.00
Planters Bank1363 NCD 245,000.0072741PCU9 08/20/2021 1,8762.50008/20/2014 245,600.25 2.467 2.501245,000.00
Prime Alliance Bank1331 NCD 245,000.0074160NED8 07/11/2019 1,1051.70007/11/2014 251,078.45 1.677 1.701245,000.00
Park National Bank1395 NCD 250,000.00700654AV8 03/26/2019 9982.10009/26/2014 254,310.00 2.070 2.099250,000.00
Providence Bank1445 NCD 245,000.00743738BQ8 02/25/2022 2,0652.10002/26/2015 258,092.80 2.072 2.101245,000.00
Peoples State Bank, WI1304 NCD 245,000.00712515GY5 05/23/2019 1,0561.70005/23/2014 250,924.10 1.676 1.700245,000.00
Private Bank & Trust Co.1293 NCD 245,000.0074267GUN5 11/21/2018 8731.65005/21/2014 249,089.05 1.627 1.650245,000.00
Ohio Valley Bank1338 NCD 250,000.00677721CE0 07/23/2019 1,1171.80007/23/2014 256,285.00 1.776 1.801250,000.00
Reliance Savings Bank1636 NCD 245,000.0075950XAD1 06/22/2021 1,8171.45006/22/2016 245,639.45 1.430 1.450245,000.00
Sallie Mae Bank1350 NCD 245,000.00795450SC0 07/30/2019 1,1242.05007/30/2014 251,129.90 2.021 2.050245,000.00
State Bank Definace1233 NCD 245,000.00855736CX0 07/19/2018 7481.65007/19/2013 248,853.85 1.628 1.650245,000.00
State Bank of India1390 NCD 245,000.00856284Z98 09/11/2019 1,1672.15009/11/2014 251,166.65 2.120 2.150245,000.00
State Bank of Texas1230 NCD 245,000.00856528CG7 07/17/2018 7461.60007/17/2013 245,088.20 1.578 1.600245,000.00
Portfolio CPA
AP
Run Date: 08/03/2016 - 11:11 FI (PRF_FI) 7.1.1
Report Ver. 7.3.3a
June 30, 2016
Par Value
Days To
Maturity
Maturity
Date
Current
RateMarket Value
Fund ALL - Portfolio Listings
Investments by Fund Page 5
CUSIP Investment #Issuer
Purchase
Date Book Value YTM
360
YTM
365
Negotiable CD's
Security National Bank1499 NCD 245,000.00814414AC2 11/19/2021 1,9672.00011/19/2015 246,281.35 1.974 2.001245,000.00
Somerset Trust Company Bank1616 NCD 245,000.00835104BL3 06/12/2023 2,5371.80006/10/2016 245,122.50 1.776 1.800245,000.00
Bell State Bank & Trust1223 NCD 245,000.0007815AAG2 06/28/2018 7271.30006/28/2013 246,636.60 1.282 1.300245,000.00
Sterns Bank NA1221 NCD 245,000.00857894NG0 06/28/2018 7271.30006/28/2013 246,685.60 1.282 1.300245,000.00
Stockman Bank1557 NCD 245,000.0086128QBX5 03/30/2023 2,4632.00003/30/2016 247,775.85 1.973 2.000245,000.00
Third Federal Savings and Loan1242 NCD 245,000.0088413QAF5 10/22/2018 8431.75001/22/2014 249,655.00 1.726 1.750245,000.00
Tioga State Bank1386 NCD 245,000.00887768BL2 09/12/2019 1,1681.85009/12/2014 245,333.20 1.825 1.850245,000.00
Thomasville Natl Bank1266 NCD 245,000.00884693BJ0 04/12/2021 1,7462.40004/11/2014 257,953.15 2.367 2.400245,000.00
Uinta Bank1639 NCD 245,000.00903572BC8 12/26/2023 2,7341.70006/24/2016 245,019.60 1.676 1.700245,000.00
United Bankers' Bank1379 NCD 245,000.00909557EA4 04/29/2019 1,0321.80008/29/2014 249,728.50 1.776 1.800245,000.00
Unity Bank1529 NCD 245,000.0091330ABF3 02/26/2021 1,7011.60002/26/2016 251,975.15 1.579 1.601245,000.00
Valley Central Savings Bank1422 NCD 245,000.0091944RAF5 12/30/2019 1,2771.85012/29/2014 252,041.30 1.824 1.850245,000.00
Washington Trst Westerly1345 NCD 245,000.00940637GJ4 07/31/2019 1,1251.90007/31/2014 251,147.05 1.873 1.900245,000.00
Webster Bank NA1252 NCD 245,000.0094768NJM7 02/12/2019 9561.90002/12/2014 249,936.75 1.873 1.900245,000.00
Northwest Bank1308 NCD 245,000.0066736AAK5 05/29/2019 1,0621.65005/29/2014 251,024.55 1.628 1.650245,000.00
Western State Bank1392 NCD 245,000.0095960NJA6 03/26/2020 1,3642.10009/26/2014 252,124.60 2.071 2.100245,000.00
Wells Fargo Bank1656 NCD 245,000.009497486H5 06/30/2021 1,8251.60006/30/2016 245,588.00 1.578 1.600245,000.00
Woodford State Bank1459 NCD 245,000.00979424AA6 07/29/2022 2,2192.35008/12/2015 257,622.40 2.317 2.349245,000.00
Zions First National Bank1417 NCD 250,000.0098970TU79 12/10/2019 1,2571.90012/08/2014 255,532.50 1.873 1.899250,000.00
Subtotal and Average 33,564,930.65 33,573,000.00 34,272,547.20 1.817 1.842 1,427
Medium Term Notes
Apple, Inc.1342 MTN 2,000,000.00037833AQ3 05/06/2019 1,0392.10007/15/2014 2,058,220.00 1.982 2.0102,004,843.73
Apple, Inc.1461 MTN 750,000.00037833AX8 02/07/2020 1,3161.55008/13/2015 755,557.50 1.980 2.008738,220.37
Apple, Inc.1497 MTN 1,500,000.00037833BD1 05/06/2020 1,4052.00011/05/2015 1,539,855.00 1.854 1.8791,506,613.14
Apple, Inc.1543 MTN 700,000.00037833BS8 02/23/2021 1,6982.25002/23/2016 720,216.00 2.140 2.169702,418.83
Johnson & Johnson1411 MTN 2,000,000.00478160BM5 12/05/2019 1,2521.87511/24/2014 2,059,780.00 1.874 1.9001,998,364.66
Johnson & Johnson1418 MTN 1,500,000.00478160BM5 12/05/2019 1,2521.87512/08/2014 1,544,835.00 1.824 1.8501,501,214.43
Johnson & Johnson1624 MTN 1,000,000.00478160BS2 03/01/2021 1,7041.65006/07/2016 1,017,180.00 1.530 1.5511,004,318.31
Microsoft Corporation1448 MTN 2,000,000.00594918AV0 02/12/2020 1,3211.85002/12/2015 2,044,080.00 1.785 1.8102,002,716.06
Microsoft Corporation1496 MTN 2,000,000.00594918BG8 11/03/2020 1,5862.00011/05/2015 2,051,040.00 1.913 1.9402,004,864.96
Microsoft Corporation1515 MTN 900,000.00594918BG8 11/03/2020 1,5862.00001/07/2016 922,968.00 1.887 1.913903,206.78
Portfolio CPA
AP
Run Date: 08/03/2016 - 11:11 FI (PRF_FI) 7.1.1
Report Ver. 7.3.3a
June 30, 2016
Par Value
Days To
Maturity
Maturity
Date
Current
RateMarket Value
Fund ALL - Portfolio Listings
Investments by Fund Page 6
CUSIP Investment #Issuer
Purchase
Date Book Value YTM
360
YTM
365
Medium Term Notes
Stanford University1336 MTN 300,000.00854403AC6 05/01/2019 1,0344.75007/10/2014 329,397.00 1.966 1.993322,232.64
Stanford University1347 MTN 150,000.00854403AC6 05/01/2019 1,0344.75007/24/2014 164,698.50 1.896 1.922161,425.54
Stanford University1349 MTN 225,000.00854403AC6 05/01/2019 1,0344.75007/25/2014 247,047.75 1.895 1.921242,148.30
Stanford University1419 MTN 105,000.00854403AC6 05/01/2019 1,0344.75012/11/2014 115,288.95 1.893 1.920113,035.89
Subtotal and Average 15,205,623.64 15,130,000.00 15,570,163.70 1.873 1.899 1,353
Federal Agency Issues - Coupon
Federal Agricultural Mortgage1028 3,000,000.0031315PPC7 02/21/2019 9651.79002/21/2012 3,071,700.00 1.765 1.7903,000,000.00
Federal Agricultural Mortgage1031 2,000,000.0031315PQC6 09/06/2018 7971.55003/06/2012 2,033,460.00 1.528 1.5502,000,000.00
Federal Agricultural Mortgage1052 1,500,000.0031315PTW9 04/10/2019 1,0131.87004/10/2012 1,542,015.00 1.844 1.8701,500,000.00
Federal Agricultural Mortgage1055 1,500,000.0031315PTQ2 04/10/2017 2831.26004/10/2012 1,507,860.00 1.242 1.2601,500,000.00
Federal Agricultural Mortgage1090 2,000,000.0031315PZQ5 06/05/2017 3391.11006/05/2012 2,009,100.00 1.094 1.1102,000,000.00
Federal Agricultural Mortgage1096 2,000,000.0031315PZQ5 06/05/2017 3391.11006/20/2012 2,009,100.00 0.998 1.0122,001,766.36
Federal Agricultural Mortgage1098 2,000,000.0031315PPK9 07/03/2017 3671.02007/03/2012 2,007,860.00 1.006 1.0202,000,000.00
Federal Agricultural Mortgage1109 2,000,000.0031315PSX8 08/23/2017 4181.03008/23/2012 2,008,560.00 1.015 1.0302,000,000.00
Federal Agricultural Mortgage1122 Call 1,000,000.0031315PNY1 11/21/2022 2,3342.19011/21/2012 1,000,000.00 2.163 2.193999,840.28
Federal Agricultural Mortgage1123 Call 1,500,000.0031315PQL6 11/29/2021 1,9772.00011/29/2012 1,509,165.00 1.972 2.0001,500,000.00
Federal Agricultural Mortgage1124 Call 1,750,000.0031315PNY1 11/21/2022 2,3342.19011/21/2012 1,750,000.00 2.166 2.1961,749,440.97
Federal Agricultural Mortgage1130 1,500,000.0031315PPX1 07/05/2022 2,1952.20012/13/2012 1,550,640.00 1.930 1.9571,519,888.12
Federal Agricultural Mortgage1134 750,000.0031315PB32 11/21/2022 2,3342.00012/19/2012 769,155.00 2.081 2.110745,262.53
Federal Agricultural Mortgage1136 1,500,000.0031315PTY5 12/27/2019 1,2741.48012/27/2012 1,522,830.00 1.395 1.4151,503,222.24
Federal Agricultural Mortgage1137 1,500,000.0031315PUE7 12/27/2022 2,3702.18001/04/2013 1,543,155.00 2.165 2.1961,498,604.45
Federal Agricultural Mortgage1138 740,000.0031315PEY1 12/30/2019 1,2774.50001/04/2013 827,172.00 1.514 1.535812,481.37
Federal Agricultural Mortgage1139 500,000.0031315PWN5 06/01/2021 1,7963.84001/04/2013 550,370.00 1.946 1.973542,092.32
Federal Agricultural Mortgage1141 1,500,000.0031315PUE7 12/27/2022 2,3702.18001/08/2013 1,543,155.00 2.195 2.2251,496,036.15
Federal Agricultural Mortgage1142 1,200,000.0031315PTW9 04/10/2019 1,0131.87001/09/2013 1,233,612.00 1.400 1.4201,214,286.01
Federal Agricultural Mortgage1143 451,000.0031315PPC7 02/21/2019 9651.79001/09/2013 461,778.90 1.372 1.392455,524.41
Federal Agricultural Mortgage1144 1,500,000.0031315PUE7 12/27/2022 2,3702.18001/23/2013 1,543,155.00 2.111 2.1411,503,392.23
Federal Agricultural Mortgage1147 2,595,000.0031315PUE7 12/27/2022 2,3702.18001/28/2013 2,669,658.15 2.199 2.2292,587,475.68
Federal Agricultural Mortgage1152 2,000,000.0031315PPF0 01/30/2019 9431.32002/11/2013 2,025,620.00 1.220 1.2372,004,115.44
Federal Agricultural Mortgage1155 1,500,000.0031315PPF0 01/30/2019 9431.32002/21/2013 1,519,215.00 1.262 1.2801,501,480.15
Federal Agricultural Mortgage1160 1,500,000.0031315PQM4 03/06/2018 6130.94003/07/2013 1,505,610.00 0.925 0.9371,500,049.13
Portfolio CPA
AP
Run Date: 08/03/2016 - 11:11 FI (PRF_FI) 7.1.1
Report Ver. 7.3.3a
June 30, 2016
Par Value
Days To
Maturity
Maturity
Date
Current
RateMarket Value
Fund ALL - Portfolio Listings
Investments by Fund Page 7
CUSIP Investment #Issuer
Purchase
Date Book Value YTM
360
YTM
365
Federal Agency Issues - Coupon
Federal Agricultural Mortgage1163 1,500,000.0031315PQM4 03/06/2018 6130.94003/08/2013 1,505,610.00 0.987 1.0011,498,495.91
Federal Agricultural Mortgage1179 1,500,000.0031315PXM6 05/02/2018 6700.85005/02/2013 1,502,865.00 0.864 0.8771,499,274.00
Federal Agricultural Mortgage1186 1,450,000.0031315PXH7 01/09/2019 9222.10005/01/2013 1,497,647.00 1.055 1.0701,486,444.36
Federal Agricultural Mortgage1199 1,500,000.0031315PZZ5 03/09/2018 6160.77005/15/2013 1,500,210.00 0.961 0.9751,494,935.09
Federal Agricultural Mortgage1209 1,500,000.0031315PZZ5 03/09/2018 6160.77005/30/2013 1,500,210.00 1.151 1.1671,490,246.00
Federal Agricultural Mortgage1224 1,500,000.0031315PC98 06/12/2018 7111.18006/21/2013 1,512,870.00 1.549 1.5701,489,055.24
Federal Agricultural Mortgage1225 1,500,000.0031315PC98 06/12/2018 7111.18006/21/2013 1,512,870.00 1.575 1.5971,488,316.67
Federal Agricultural Mortgage1226 1,500,000.0031315PC98 06/12/2018 7111.18006/25/2013 1,512,870.00 1.783 1.8081,482,530.50
Federal Agricultural Mortgage1243 1,500,000.0031315PQT9 03/06/2020 1,3441.41001/15/2014 1,513,125.00 2.462 2.4961,444,689.79
Federal Agricultural Mortgage1244 1,500,000.0031315P3G2 09/09/2020 1,5312.80001/15/2014 1,599,060.00 2.635 2.6721,507,303.78
Federal Agricultural Mortgage1256 1,500,000.0031315PXH7 01/09/2019 9222.10003/05/2014 1,549,290.00 1.702 1.7261,513,502.86
Federal Agricultural Mortgage1257 300,000.0031315PTU3 03/09/2021 1,7124.16003/06/2014 332,823.00 2.574 2.609319,809.41
Federal Agricultural Mortgage1258 1,500,000.0031315P6P9 03/05/2024 2,8043.40003/07/2014 1,643,865.00 3.325 3.3721,502,707.92
Federal Agricultural Mortgage1259 1,500,000.0031315P6P9 03/05/2024 2,8043.40003/10/2014 1,643,865.00 3.424 3.4711,493,080.39
Federal Agricultural Mortgage1264 1,500,000.0031315PK40 03/26/2021 1,7292.50003/26/2014 1,582,005.00 2.495 2.5301,498,020.98
Federal Agricultural Mortgage1265 1,800,000.0031315PJ67 02/28/2019 9721.70003/28/2014 1,838,916.00 1.784 1.8091,795,021.98
Federal Agricultural Mortgage1271 1,000,000.0031315P4B2 01/30/2024 2,7693.46004/09/2014 1,108,160.00 3.297 3.3431,007,442.73
Federal Agricultural Mortgage1279 1,250,000.0031315PPX1 07/05/2022 2,1952.20004/23/2014 1,292,200.00 2.889 2.9301,201,536.02
Federal Agricultural Mortgage1399 500,000.0031315PVF3 04/03/2020 1,3721.47510/15/2014 507,075.00 1.857 1.882492,752.24
Federal Agricultural Mortgage1406 1,500,000.0031315PA58 11/20/2019 1,2371.31011/07/2014 1,518,915.00 1.854 1.8801,472,496.86
Federal Agricultural Mortgage1408 2,000,000.0031315PM22 11/20/2019 1,2371.84011/20/2014 2,060,340.00 1.814 1.8402,000,000.00
Federal Agricultural Mortgage1410 1,500,000.0031315PM22 11/20/2019 1,2371.84011/20/2014 1,545,255.00 1.848 1.8731,498,374.67
Federal Agricultural Mortgage1423 1,500,000.0031315PZ85 12/23/2019 1,2701.85012/23/2014 1,541,910.00 1.851 1.8761,498,674.97
Federal Agricultural Mortgage1427 675,000.0031315P2C2 05/05/2021 1,7692.51001/09/2015 712,638.00 2.110 2.140686,249.60
Federal Agricultural Mortgage1428 404,000.0031315PL23 03/27/2024 2,8263.33001/09/2015 447,458.28 2.540 2.575424,862.25
Federal Agricultural Mortgage1430 Call 500,000.0031315PC23 01/24/2023 2,3982.30001/21/2015 500,085.00 2.605 2.641489,959.50
Federal Agricultural Mortgage1433 1,604,000.0031315PD89 06/12/2023 2,5372.61001/22/2015 1,692,508.72 2.269 2.3011,635,133.76
Federal Agricultural Mortgage1447 1,450,000.0031315PD89 06/12/2023 2,5372.61002/09/2015 1,530,011.00 2.377 2.4101,468,126.21
Federal Agricultural Mortgage1452 1,000,000.003130H0AJ2 03/01/2022 2,0692.15003/05/2015 1,032,720.00 2.120 2.1501,000,000.00
Federal Agricultural Mortgage1470 Call 2,000,000.003132X0BX8 09/08/2025 3,3563.23009/08/2015 2,004,320.00 3.185 3.2302,000,000.00
Federal Agricultural Mortgage1488 Call 2,000,000.0031315PC23 01/24/2023 2,3982.30010/23/2015 2,000,340.00 2.398 2.4321,984,162.20
Federal Agricultural Mortgage1493 Call 1,000,000.003132X0CV1 10/28/2025 3,4062.98010/28/2015 1,001,860.00 2.956 2.997998,601.25
Portfolio CPA
AP
Run Date: 08/03/2016 - 11:11 FI (PRF_FI) 7.1.1
Report Ver. 7.3.3a
June 30, 2016
Par Value
Days To
Maturity
Maturity
Date
Current
RateMarket Value
Fund ALL - Portfolio Listings
Investments by Fund Page 8
CUSIP Investment #Issuer
Purchase
Date Book Value YTM
360
YTM
365
Federal Agency Issues - Coupon
Federal Agricultural Mortgage1495 Call 1,500,000.003132X0CV1 10/28/2025 3,4062.98010/30/2015 1,502,790.00 2.985 3.0261,494,401.89
Federal Agricultural Mortgage1504 Call 1,500,000.003132X0BN0 07/15/2025 3,3013.20011/16/2015 1,501,470.00 3.047 3.0901,512,767.20
Federal Agricultural Mortgage1552 Call 1,500,000.003132X0EU1 01/27/2026 3,4972.93002/26/2016 1,502,625.00 2.831 2.8701,507,324.32
Federal Agricultural Mortgage1554 Call 1,500,000.003132X0EU1 01/27/2026 3,4972.93003/02/2016 1,502,625.00 2.878 2.9181,501,449.93
Federal Agricultural Mortgage1576 1,000,000.0031315PZS1 01/24/2023 2,3982.13004/06/2016 1,025,950.00 1.839 1.8641,016,254.31
Federal Agricultural Mortgage1580 474,000.0031315PEM7 08/04/2025 3,3214.35004/08/2016 560,121.06 2.296 2.328551,907.56
Federal Agricultural Mortgage1595 1,500,000.0031315P2J7 05/01/2024 2,8613.30004/21/2016 1,662,630.00 2.084 2.1121,627,661.11
Federal Agricultural Mortgage1604 1,500,000.0031315P2J7 05/01/2024 2,8613.30004/26/2016 1,662,630.00 2.159 2.1891,619,026.48
Federal Agricultural Mortgage1617 500,000.0031315PUE7 12/27/2022 2,3702.18005/26/2016 514,385.00 1.844 1.870509,399.17
Federal Agricultural Mortgage839 1,500,000.0031315PEY1 12/30/2019 1,2774.50012/30/2009 1,676,700.00 4.438 4.5001,500,000.00
Federal Agricultural Mortgage840 2,000,000.0031315PGE3 01/19/2017 2024.12501/19/2010 2,039,540.00 4.068 4.1252,000,000.00
Federal Agricultural Mortgage866 1,000,000.0031315PAT6 05/17/2017 3203.75005/17/2010 1,027,490.00 3.698 3.7501,000,000.00
Federal Agricultural Mortgage923 1,500,000.0031315PNM7 12/28/2017 5453.15012/28/2010 1,554,510.00 3.106 3.1501,500,000.00
Federal Agricultural Mortgage942 1,500,000.0031315PTU3 03/09/2021 1,7124.16003/09/2011 1,664,115.00 4.103 4.1601,500,000.00
Federal Agricultural Mortgage975 1,000,000.0031315PA25 07/27/2016 262.00007/27/2011 1,001,250.00 2.063 2.092999,937.17
Federal Farm Credit Bank1006 2,000,000.0031331KK90 10/26/2016 1171.35010/26/2011 2,005,880.00 1.331 1.3502,000,000.00
Federal Farm Credit Bank1092 1,500,000.003133EAUF3 06/14/2019 1,0781.50006/14/2012 1,530,195.00 1.479 1.5001,500,000.00
Federal Farm Credit Bank1205 575,000.0031331JQM8 06/04/2018 7033.40005/23/2013 604,233.00 1.045 1.060600,157.00
Federal Farm Credit Bank1206 950,000.0031331YW63 06/12/2018 7114.90005/23/2013 1,025,724.50 1.045 1.0601,018,985.84
Federal Farm Credit Bank722 2,000,000.0031331YCJ7 10/30/2017 4864.90010/30/2007 2,113,480.00 4.832 4.9002,000,000.00
Federal Farm Credit Bank725 2,000,000.0031331YHQ6 12/15/2017 5324.62512/12/2007 2,115,180.00 4.561 4.6242,000,000.00
Federal Farm Credit Bank850 2,000,000.0031331JFZ1 03/08/2017 2503.37503/08/2010 2,038,540.00 3.328 3.3752,000,000.00
Federal Farm Credit Bank870 1,000,000.0031331JQB2 06/02/2017 3363.00006/02/2010 1,021,830.00 2.958 3.0001,000,000.00
Federal Farm Credit Bank872 2,000,000.0031331YEL0 11/15/2016 1375.00006/04/2010 2,033,780.00 3.027 3.0702,012,943.53
Federal Farm Credit Bank903 1,000,000.0031331JN90 09/29/2020 1,5512.87509/29/2010 1,070,730.00 2.835 2.8751,000,000.00
Federal Farm Credit Bank910 2,000,000.0031331JX32 10/28/2016 1191.70010/28/2010 2,008,160.00 1.676 1.7002,000,000.00
Federal Farm Credit Bank918 2,000,000.0031331J5F6 12/16/2020 1,6293.62512/16/2010 2,213,960.00 3.575 3.6252,000,000.00
Federal Farm Credit Bank925 1,500,000.0031331JX32 10/28/2016 1191.70001/04/2011 1,506,120.00 2.576 2.6111,495,899.25
Federal Farm Credit Bank932 3,000,000.0031331J2M4 11/22/2016 1441.87501/14/2011 3,016,590.00 2.483 2.5182,993,012.87
Federal Farm Credit Bank937 2,000,000.0031331KBX7 02/10/2017 2242.87502/10/2011 2,028,360.00 2.835 2.8752,000,000.00
Federal Farm Credit Bank959 1,500,000.0031331KQD5 06/27/2017 3612.30006/27/2011 1,524,765.00 2.268 2.3001,500,000.00
Federal Farm Credit Bank .1181 Call 1,500,000.003133EA4J4 10/11/2018 8321.15004/30/2013 1,500,030.00 1.137 1.1531,499,874.55
Portfolio CPA
AP
Run Date: 08/03/2016 - 11:11 FI (PRF_FI) 7.1.1
Report Ver. 7.3.3a
June 30, 2016
Par Value
Days To
Maturity
Maturity
Date
Current
RateMarket Value
Fund ALL - Portfolio Listings
Investments by Fund Page 9
CUSIP Investment #Issuer
Purchase
Date Book Value YTM
360
YTM
365
Federal Agency Issues - Coupon
Federal Farm Credit Bank .1189 Call 1,500,000.003133ECMF8 04/24/2018 6620.98005/06/2013 1,500,015.00 0.986 1.0001,499,452.18
Federal Farm Credit Bank .1227 1,500,000.003133ECTM6 07/02/2018 7311.90007/02/2013 1,534,515.00 1.873 1.9001,500,000.00
Federal Farm Credit Bank .1241 500,000.003133ECRH9 06/06/2023 2,5312.45001/09/2014 529,855.00 3.383 3.430471,175.27
Federal Farm Credit Bank .1506 Call 1,500,000.003133EE4B3 07/21/2025 3,3073.17011/18/2015 1,501,560.00 3.067 3.1101,506,949.61
Federal Farm Credit Bank .1511 Call 1,500,000.003133EFBU0 09/02/2025 3,3503.10012/16/2015 1,501,815.00 3.053 3.0951,500,000.00
Federal Farm Credit Bank .1512 Call 1,100,000.003133EFBU0 09/02/2025 3,3503.10012/24/2015 1,101,331.00 3.060 3.1021,099,739.74
Federal Farm Credit Bank .1526 625,000.003133EAA65 07/26/2023 2,5812.12501/27/2016 648,068.75 2.024 2.052627,970.27
Federal Farm Credit Bank .1563 500,000.0031331XSS2 03/14/2022 2,0825.16003/17/2016 605,145.00 1.876 1.902587,388.61
Federal Farm Credit Bank .1565 Call 1,000,000.003133EFT98 03/28/2025 3,1922.62003/28/2016 1,009,710.00 2.596 2.632999,028.70
Federal Farm Credit Bank .1572 Call 1,500,000.003133EFU47 12/28/2023 2,7362.40003/30/2016 1,500,120.00 2.367 2.4001,500,000.00
Federal Farm Credit Bank .1574 Call 1,500,000.003133EFY50 01/06/2025 3,1112.59004/06/2016 1,500,030.00 2.554 2.5901,500,000.00
Federal Farm Credit Bank .1575 Call 1,660,000.003133EF2C0 04/13/2026 3,5732.72004/13/2016 1,660,099.60 2.682 2.7201,660,000.00
Federal Farm Credit Bank .1581 Call 1,000,000.003133EC6Y5 12/12/2022 2,3552.12004/08/2016 1,000,010.00 2.094 2.123999,758.63
Federal Farm Credit Bank .1582 Call 1,500,000.003133EF3D7 04/21/2025 3,2162.54004/21/2016 1,504,065.00 2.505 2.5401,500,000.00
Federal Farm Credit Bank .1584 Call 1,500,000.003133EF3D7 04/21/2025 3,2162.54004/21/2016 1,504,065.00 2.505 2.5401,500,000.00
Federal Farm Credit Bank .1585 Call 1,500,000.003133EF4A2 04/19/2022 2,1181.92004/19/2016 1,504,425.00 1.893 1.9201,500,000.00
Federal Farm Credit Bank .1591 Call 1,500,000.003133EF2D8 04/13/2026 3,5732.64004/19/2016 1,502,640.00 2.603 2.6391,500,000.00
Federal Farm Credit Bank .1593 250,000.003133EC4L5 11/23/2021 1,9711.61004/21/2016 253,840.00 1.558 1.580250,383.67
Federal Farm Credit Bank .1596 1,000,000.003133ECPF5 05/13/2022 2,1421.87504/21/2016 1,031,130.00 1.578 1.6001,015,312.48
Federal Farm Credit Bank .1598 Call 1,000,000.003133EFX44 10/05/2022 2,2872.05004/22/2016 1,003,960.00 2.021 2.0491,000,000.00
Federal Farm Credit Bank .1601 Call 500,000.003133ECAY0 12/20/2022 2,3632.18004/25/2016 500,020.00 2.149 2.179500,000.00
Federal Farm Credit Bank .1603 Call 1,930,000.003133EFYV3 02/17/2026 3,5182.82004/26/2016 1,947,099.80 2.722 2.7601,939,661.81
Federal Farm Credit Bank .1606 Call 1,605,000.003133EFYF8 02/10/2025 3,1462.73004/28/2016 1,616,860.95 2.621 2.6571,613,808.92
Federal Farm Credit Bank .1608 Call 1,000,000.003133EF6Y8 05/11/2026 3,6012.61005/11/2016 1,000,380.00 2.574 2.6101,000,000.00
Federal Farm Credit Bank .1609 Call 1,000,000.003133EF6T9 05/12/2025 3,2372.47005/12/2016 1,002,960.00 2.436 2.4701,000,000.00
Federal Farm Credit Bank .1612 Call 1,000,000.003133EFWF0 01/26/2023 2,4002.34005/10/2016 1,005,940.00 2.191 2.2211,007,170.37
Federal Farm Credit Bank .1615 1,000,000.003133EC7D0 12/13/2024 3,0872.12505/13/2016 1,031,400.00 1.930 1.9561,013,014.64
Federal Farm Credit Bank .1618 Call 1,500,000.003133EGDL6 12/02/2024 3,0762.34006/02/2016 1,500,210.00 2.307 2.3401,500,000.00
Federal Farm Credit Bank .1623 Call 1,500,000.003133EGEB7 06/09/2026 3,6302.57006/09/2016 1,505,745.00 2.534 2.5701,500,000.00
Federal Farm Credit Bank .1629 Call 1,000,000.003133EGFS9 12/15/2022 2,3581.97006/15/2016 1,000,220.00 1.943 1.9701,000,000.00
Federal Farm Credit Bank .1630 Call 1,000,000.003133EF2D8 04/13/2026 3,5732.64006/13/2016 1,001,760.00 2.522 2.5571,007,063.90
Federal Farm Credit Bank .1631 Call 530,000.003133EGDL6 12/02/2024 3,0762.34006/14/2016 530,074.20 2.307 2.339530,000.00
Portfolio CPA
AP
Run Date: 08/03/2016 - 11:11 FI (PRF_FI) 7.1.1
Report Ver. 7.3.3a
June 30, 2016
Par Value
Days To
Maturity
Maturity
Date
Current
RateMarket Value
Fund ALL - Portfolio Listings
Investments by Fund Page 10
CUSIP Investment #Issuer
Purchase
Date Book Value YTM
360
YTM
365
Federal Agency Issues - Coupon
Federal Farm Credit Bank .1634 Call 1,000,000.003133EF2D8 04/13/2026 3,5732.64006/16/2016 1,001,760.00 2.489 2.5241,009,957.59
Federal Farm Credit Bank .1638 Call 2,000,000.003133EGGR0 06/22/2026 3,6432.50006/22/2016 2,002,040.00 2.465 2.5002,000,000.00
Federal Farm Credit Bank .1641 Call 1,500,000.003133EGHN8 06/30/2025 3,2862.42006/30/2016 1,505,400.00 2.386 2.4201,500,000.00
Federal Farm Credit Bank .1642 Call 1,000,000.003133EGHU2 06/30/2025 3,2862.45006/30/2016 1,000,910.00 2.416 2.4501,000,000.00
Federal Home Loan Bank1012 2,000,000.00313376BR5 12/14/2018 8961.75012/16/2011 2,047,740.00 1.725 1.7492,000,000.00
Federal Home Loan Bank1017 2,000,000.00313376V36 01/25/2017 2081.00001/25/2012 2,006,500.00 0.986 1.0002,000,000.00
Federal Home Loan Bank1021 2,000,000.00313376VN2 12/22/2016 1741.10001/30/2012 2,005,960.00 1.084 1.1002,000,000.00
Federal Home Loan Bank1027 2,000,000.003133787M7 02/27/2017 2411.05002/21/2012 2,007,940.00 1.035 1.0492,000,000.00
Federal Home Loan Bank1038 1,500,000.003133782N0 03/10/2017 2520.87503/08/2012 1,504,290.00 0.999 1.0131,498,605.07
Federal Home Loan Bank1039 1,500,000.003133782M2 03/08/2019 9801.50003/08/2012 1,527,240.00 1.574 1.5961,496,344.97
Federal Home Loan Bank1041 1,500,000.00313378LA7 02/25/2022 2,0652.33003/20/2012 1,581,315.00 2.298 2.3301,500,000.00
Federal Home Loan Bank1045 2,000,000.00313378QP9 03/28/2017 2701.26003/28/2012 2,011,400.00 1.242 1.2602,000,000.00
Federal Home Loan Bank1049 1,500,000.00313378VG3 05/22/2019 1,0551.85004/09/2012 1,543,815.00 1.824 1.8501,500,000.00
Federal Home Loan Bank1057 1,500,000.00313378ZW4 04/17/2017 2901.05004/17/2012 1,506,495.00 1.035 1.0501,500,000.00
Federal Home Loan Bank1058 1,500,000.003133792L2 10/20/2017 4761.23004/20/2012 1,511,925.00 1.213 1.2301,500,000.00
Federal Home Loan Bank1068 1,500,000.00313379BL2 12/29/2017 5461.25004/30/2012 1,513,020.00 1.232 1.2501,500,000.00
Federal Home Loan Bank1070 1,500,000.00313379BG3 04/27/2017 3001.07004/27/2012 1,506,915.00 1.055 1.0701,500,000.00
Federal Home Loan Bank1073 2,000,000.00313379EC9 11/18/2020 1,6012.00005/18/2012 2,073,880.00 1.972 2.0002,000,000.00
Federal Home Loan Bank1089 2,000,000.00313379PD5 09/20/2017 4461.09006/07/2012 2,012,340.00 1.075 1.0902,000,000.00
Federal Home Loan Bank1101 Call 155,172.413133805L7 08/08/2022 2,2292.25008/08/2012 155,175.51 2.219 2.250155,172.41
Federal Home Loan Bank1116 Call 276,666.67313380WT0 10/11/2022 2,2932.25010/11/2012 276,674.97 2.227 2.258276,536.41
Federal Home Loan Bank1125 1,500,000.00313381C94 12/13/2019 1,2601.25011/30/2012 1,516,410.00 1.196 1.2121,501,841.16
Federal Home Loan Bank1126 Call 750,000.00313381DA0 12/05/2022 2,3482.19012/05/2012 750,015.00 2.165 2.195749,758.96
Federal Home Loan Bank1127 1,500,000.00313381GB5 11/30/2018 8821.00011/30/2012 1,507,905.00 0.986 1.0001,500,000.00
Federal Home Loan Bank1131 1,500,000.00313381C94 12/13/2019 1,2601.25012/13/2012 1,516,410.00 1.232 1.2491,500,000.00
Federal Home Loan Bank1135 1,500,000.00313376BR5 12/14/2018 8961.75012/19/2012 1,535,805.00 1.075 1.0901,523,444.57
Federal Home Loan Bank1140 1,500,000.00313376BR5 12/14/2018 8961.75001/08/2013 1,535,805.00 1.117 1.1321,521,901.38
Federal Home Loan Bank1146 Call 212,500.00313381DA0 12/05/2022 2,3482.19001/25/2013 212,504.25 2.201 2.232211,980.58
Federal Home Loan Bank1154 1,500,000.003133XRFZ8 06/08/2018 7074.75002/21/2013 1,616,310.00 1.020 1.0351,604,710.09
Federal Home Loan Bank1156 1,315,000.003133XHRJ3 12/10/2021 1,9885.00002/25/2013 1,572,135.10 1.825 1.8501,522,087.93
Federal Home Loan Bank1157 2,000,000.003133XSR59 12/14/2018 8963.75002/25/2013 2,144,620.00 1.128 1.1442,123,304.67
Federal Home Loan Bank1168 530,000.003133XSR59 12/14/2018 8963.75003/11/2013 568,324.30 1.165 1.182562,176.85
Portfolio CPA
AP
Run Date: 08/03/2016 - 11:11 FI (PRF_FI) 7.1.1
Report Ver. 7.3.3a
June 30, 2016
Par Value
Days To
Maturity
Maturity
Date
Current
RateMarket Value
Fund ALL - Portfolio Listings
Investments by Fund Page 11
CUSIP Investment #Issuer
Purchase
Date Book Value YTM
360
YTM
365
Federal Agency Issues - Coupon
Federal Home Loan Bank1182 Call 1,500,000.00313381C29 06/04/2018 7031.05004/30/2013 1,498,260.00 1.039 1.0541,499,886.64
Federal Home Loan Bank1204 Call 557,958.01313383EP2 06/20/2018 7191.25006/20/2013 557,959.13 1.232 1.250557,958.01
Federal Home Loan Bank1212 1,500,000.00313379DT3 06/08/2018 7071.25006/05/2013 1,516,935.00 1.222 1.2391,500,307.33
Federal Home Loan Bank1213 2,000,000.00313379DT3 06/08/2018 7071.25006/06/2013 2,022,580.00 1.191 1.2082,001,571.58
Federal Home Loan Bank1216 Call 1,500,000.00313382Y98 05/16/2018 6841.00006/12/2013 1,500,015.00 1.412 1.4321,488,299.75
Federal Home Loan Bank1217 Call 1,000,000.00313382FP3 03/20/2018 6271.00006/12/2013 1,000,030.00 1.372 1.391993,514.55
Federal Home Loan Bank1228 1,500,000.00313373UU4 06/08/2018 7072.75007/01/2013 1,560,855.00 1.605 1.6271,531,202.62
Federal Home Loan Bank1240 1,500,000.00313371U79 12/11/2020 1,6243.12501/09/2014 1,626,735.00 2.615 2.6511,528,622.79
Federal Home Loan Bank1248 1,500,000.003130A0J27 01/07/2020 1,2852.22001/23/2014 1,563,300.00 2.194 2.2251,499,743.14
Federal Home Loan Bank1253 1,500,000.003130A12B3 03/13/2020 1,3512.12502/24/2014 1,561,245.00 2.095 2.1241,500,000.00
Federal Home Loan Bank1261 1,500,000.00313382K69 03/12/2021 1,7151.75003/13/2014 1,541,355.00 2.418 2.4511,454,818.28
Federal Home Loan Bank1267 1,500,000.00313370US5 09/11/2020 1,5332.87504/02/2014 1,610,700.00 2.271 2.3031,533,257.12
Federal Home Loan Bank1270 200,000.00313379EC9 11/18/2020 1,6012.00004/08/2014 207,388.00 2.263 2.295197,613.30
Federal Home Loan Bank1272 550,000.00313379EC9 11/18/2020 1,6012.00004/09/2014 570,317.00 2.263 2.295543,433.81
Federal Home Loan Bank1278 325,000.003133XTYY6 06/14/2019 1,0784.37504/22/2014 358,436.00 1.889 1.916347,365.97
Federal Home Loan Bank1314 1,500,000.00313379EE5 06/14/2019 1,0781.62506/04/2014 1,533,945.00 1.700 1.7241,495,797.92
Federal Home Loan Bank1318 1,500,000.00313379EE5 06/14/2019 1,0781.62506/16/2014 1,533,945.00 1.774 1.7991,492,660.48
Federal Home Loan Bank1324 Call 1,250,000.003133836A4 05/22/2019 1,0550.80006/24/2014 1,250,112.50 1.766 1.7911,215,775.95
Federal Home Loan Bank1332 1,500,000.003130A2FH4 06/14/2019 1,0781.75007/02/2014 1,539,510.00 1.686 1.7101,501,682.19
Federal Home Loan Bank1353 Call 335,000.00313380WT0 10/11/2022 2,2932.25007/25/2014 335,010.05 2.801 2.840323,986.71
Federal Home Loan Bank1558 Call 2,000,000.003130A7J55 04/29/2021 1,7632.00004/29/2016 2,002,300.00 1.972 2.0002,000,000.00
Federal Home Loan Bank1562 Call 1,500,000.003130A7J55 04/29/2021 1,7632.00004/29/2016 1,501,725.00 1.972 2.0001,500,000.00
Federal Home Loan Bank1577 1,500,000.003130A7Q73 12/08/2021 1,9861.53004/08/2016 1,519,080.00 1.450 1.4701,504,656.51
Federal Home Loan Bank1583 Call 1,690,000.003130A7RS6 04/27/2026 3,5872.65004/27/2016 1,693,126.50 2.619 2.6551,689,170.02
Federal Home Loan Bank1587 Call 1,500,000.003130A7TA3 04/28/2023 2,4922.07004/28/2016 1,503,015.00 2.041 2.0701,500,000.00
Federal Home Loan Bank1597 Call 1,500,000.003130A7PC3 04/11/2025 3,2062.60004/21/2016 1,501,575.00 2.562 2.5981,500,000.00
Federal Home Loan Bank1599 Call 1,500,000.003130A7PC3 04/11/2025 3,2062.60004/22/2016 1,501,575.00 2.562 2.5971,500,000.00
Federal Home Loan Bank1602 Call 500,000.00313381CK9 12/07/2023 2,7152.32004/25/2016 500,010.00 2.295 2.327499,756.02
Federal Home Loan Bank1605 1,000,000.00313382K69 03/12/2021 1,7151.75004/27/2016 1,027,570.00 1.490 1.5111,010,753.03
Federal Home Loan Bank1619 500,000.003133827D9 02/08/2021 1,6831.75006/02/2016 512,655.00 1.476 1.496505,610.31
Federal Home Loan Bank1620 400,000.003133XDVS7 12/11/2020 1,6245.25006/02/2016 470,460.00 1.461 1.481464,568.89
Federal Home Loan Bank1628 Call 1,500,000.003130A8F99 06/15/2026 3,6362.58006/15/2016 1,501,230.00 2.544 2.5801,500,000.00
Portfolio CPA
AP
Run Date: 08/03/2016 - 11:11 FI (PRF_FI) 7.1.1
Report Ver. 7.3.3a
June 30, 2016
Par Value
Days To
Maturity
Maturity
Date
Current
RateMarket Value
Fund ALL - Portfolio Listings
Investments by Fund Page 12
CUSIP Investment #Issuer
Purchase
Date Book Value YTM
360
YTM
365
Federal Agency Issues - Coupon
Federal Home Loan Bank1632 Call 2,000,000.003130A8J46 06/29/2026 3,6502.52006/29/2016 1,994,520.00 2.485 2.5202,000,000.00
Federal Home Loan Bank1633 Call 1,500,000.003130A8J79 12/27/2024 3,1012.35006/27/2016 1,501,320.00 2.317 2.3501,500,000.00
Federal Home Loan Bank1635 Call 1,500,000.003130A8JG9 06/22/2023 2,5472.07006/22/2016 1,501,425.00 2.041 2.0701,500,000.00
Federal Home Loan Bank1637 Call 1,000,000.003130A8J79 12/27/2024 3,1012.35006/27/2016 1,000,880.00 2.317 2.3501,000,000.00
Federal Home Loan Bank1640 Call 1,500,000.003130A8JX2 06/29/2026 3,6502.54006/29/2016 1,500,675.00 2.505 2.5401,500,000.00
Federal Home Loan Bank1643 Call 1,500,000.003130A8HF3 09/23/2025 3,3712.44006/23/2016 1,500,630.00 2.430 2.4641,497,007.21
Federal Home Loan Bank1644 Call 1,500,000.003130A8HT3 12/29/2025 3,4682.47006/29/2016 1,500,825.00 2.451 2.4851,498,096.11
Federal Home Loan Bank1648 Call 1,500,000.003130A8J46 06/29/2026 3,6502.52006/29/2016 1,495,890.00 2.425 2.4591,500,449.75
Federal Home Loan Bank1649 250,000.003130A0EN6 12/10/2021 1,9882.87506/28/2016 269,482.50 1.232 1.249271,308.62
Federal Home Loan Bank1652 Call 980,000.003130A8F99 06/15/2026 3,6362.58006/29/2016 980,803.60 2.524 2.560981,706.21
Federal Home Loan Bank822 3,000,000.003133XUMS9 09/13/2019 1,1694.50008/12/2009 3,339,120.00 4.437 4.4993,000,000.00
Federal Home Loan Bank832 3,000,000.003133XVRJ2 12/09/2016 1613.50011/19/2009 3,040,230.00 3.325 3.3723,001,483.44
Federal Home Loan Bank833 1,200,000.003133MJQF0 08/15/2016 455.50011/19/2009 1,207,572.00 3.304 3.3501,202,800.62
Federal Home Loan Bank860 1,500,000.003133XHVS8 12/09/2016 1615.00004/26/2010 1,530,000.00 3.430 3.4781,508,877.31
Federal Home Loan Bank911 1,500,000.00313371PV2 12/09/2016 1611.62511/09/2010 1,507,485.00 1.602 1.6241,500,000.00
Federal Home Loan Bank920 1,500,000.00313371PV2 12/09/2016 1611.62512/15/2010 1,507,485.00 2.550 2.5851,494,171.82
Federal Home Loan Bank924 1,500,000.003133MJQF0 08/15/2016 455.50001/04/2011 1,509,465.00 2.516 2.5501,505,006.66
Federal Home Loan Bank926 1,500,000.00313371PV2 12/09/2016 1611.62501/04/2011 1,507,485.00 2.592 2.6291,493,914.28
Federal Home Loan Bank940 2,000,000.003133X0PF0 08/15/2018 7755.37502/17/2011 2,195,520.00 3.423 3.4702,070,623.28
Federal Home Loan Bank982 2,000,000.00313375KP1 03/15/2017 2571.50009/15/2011 2,014,380.00 1.479 1.5002,000,000.00
Federal Home Loan Bank985 2,000,000.00313375M87 10/14/2016 1051.27009/14/2011 2,005,100.00 1.252 1.2702,000,000.00
Federal Home Loan Bank990 2,000,000.00313370TW8 09/09/2016 702.00009/13/2011 2,006,060.00 1.163 1.1802,002,999.42
Federal Home Loan Bank992 2,000,000.00313371ZX7 12/08/2017 5252.62509/13/2011 2,056,720.00 1.526 1.5472,029,375.73
Fed. Home Loan Mortgage Corp.1036 1,500,000.003137EABA6 11/17/2017 5045.12503/01/2012 1,593,330.00 1.227 1.2441,577,164.67
Fed. Home Loan Mortgage Corp.1106 1,500,000.003134G3A91 08/22/2019 1,1471.40008/22/2012 1,524,840.00 1.380 1.4001,500,000.00
Fed. Home Loan Mortgage Corp.1113 1,500,000.003134G3L73 12/26/2019 1,2731.50009/26/2012 1,522,125.00 1.479 1.5001,500,000.00
Fed. Home Loan Mortgage Corp.1153 1,500,000.003137EADP1 03/07/2018 6140.87502/11/2013 1,502,760.00 0.960 0.9731,497,582.64
Fed. Home Loan Mortgage Corp.1166 1,500,000.003137EADN6 01/12/2018 5600.75003/15/2013 1,502,565.00 0.948 0.9621,495,254.17
Fed. Home Loan Mortgage Corp.1273 2,000,000.003134G45T1 12/10/2021 1,9882.00004/10/2014 2,076,160.00 2.564 2.6001,941,116.43
Fed. Home Loan Mortgage Corp.1277 1,000,000.003134G45T1 12/10/2021 1,9882.00004/22/2014 1,038,080.00 2.643 2.680966,722.66
Fed. Home Loan Mortgage Corp.1282 300,000.003134G3A91 08/22/2019 1,1471.40005/01/2014 304,968.00 1.914 1.941295,170.61
Fed. Home Loan Mortgage Corp.1286 300,000.003134G35V8 03/13/2020 1,3511.65005/02/2014 307,839.00 2.053 2.082295,502.37
Portfolio CPA
AP
Run Date: 08/03/2016 - 11:11 FI (PRF_FI) 7.1.1
Report Ver. 7.3.3a
June 30, 2016
Par Value
Days To
Maturity
Maturity
Date
Current
RateMarket Value
Fund ALL - Portfolio Listings
Investments by Fund Page 13
CUSIP Investment #Issuer
Purchase
Date Book Value YTM
360
YTM
365
Federal Agency Issues - Coupon
Fed. Home Loan Mortgage Corp.1287 300,000.003134G3U40 11/21/2019 1,2381.45005/02/2014 304,617.00 1.938 1.965295,056.53
Fed. Home Loan Mortgage Corp.1291 1,000,000.003134G3K58 03/19/2020 1,3571.50005/06/2014 1,013,190.00 2.041 2.070980,142.13
Fed. Home Loan Mortgage Corp.1292 1,000,000.003134G44G0 05/22/2020 1,4211.50005/06/2014 1,020,250.00 2.091 2.120977,459.09
Fed. Home Loan Mortgage Corp.1301 1,000,000.003134G3L73 12/26/2019 1,2731.50005/13/2014 1,014,750.00 1.945 1.972984,490.86
Fed. Home Loan Mortgage Corp.1352 1,000,000.003134G43G1 05/07/2019 1,0401.20007/25/2014 1,010,270.00 1.765 1.790983,949.52
Fed. Home Loan Mortgage Corp.1566 Call 1,500,000.003134G8UQ0 03/30/2021 1,7331.80003/30/2016 1,501,035.00 1.775 1.8001,500,000.00
Fed. Home Loan Mortgage Corp.1588 Call 2,000,000.003134G8ZK8 04/28/2023 2,4921.75004/28/2016 2,001,640.00 2.096 2.1252,000,000.00
Fed. Home Loan Mortgage Corp.1590 Call 2,000,000.003134G8ZK8 04/28/2023 2,4921.75004/28/2016 2,001,640.00 2.096 2.1252,000,000.00
Fed. Home Loan Mortgage Corp.1594 Call 1,500,000.003134G9DG9 05/26/2021 1,7901.80005/26/2016 1,500,945.00 1.775 1.8001,500,000.00
Fed. Home Loan Mortgage Corp.1600 Call 1,000,000.003134G9DW4 05/17/2022 2,1462.00005/17/2016 1,000,450.00 1.972 2.0001,000,000.00
Fed. Home Loan Mortgage Corp.1614 Call 1,500,000.003134G9LP0 06/30/2021 1,8251.75006/30/2016 1,501,185.00 1.726 1.7501,500,000.00
Fed. Home Loan Mortgage Corp.993 2,000,000.003137EAAY5 08/23/2017 4185.50009/13/2011 2,111,420.00 1.415 1.4352,088,876.49
Federal National Mortgage Asso1022 2,000,000.0031398ADM1 06/12/2017 3465.37501/25/2012 2,088,880.00 1.317 1.3362,073,586.99
Federal National Mortgage Asso1023 2,590,000.003136FPXN2 11/24/2017 5112.30001/25/2012 2,649,440.50 1.406 1.4262,620,238.66
Federal National Mortgage Asso1033 3,000,000.003135G0JA2 04/27/2017 3001.12503/01/2012 3,013,290.00 1.134 1.1502,999,401.94
Federal National Mortgage Asso1035 2,000,000.0031398ALG5 01/23/2018 5714.37703/01/2012 2,115,580.00 1.388 1.4082,088,643.45
Federal National Mortgage Asso1048 2,000,000.003136G0AW1 10/16/2020 1,5682.35004/16/2012 2,102,300.00 2.317 2.3502,000,000.00
Federal National Mortgage Asso1059 2,000,000.003136G0DU2 04/30/2020 1,3992.00004/30/2012 2,063,400.00 1.972 2.0002,000,000.00
Federal National Mortgage Asso1061 1,500,000.003136G0EC1 04/30/2020 1,3992.05004/30/2012 1,557,315.00 2.021 2.0501,500,000.00
Federal National Mortgage Asso1066 2,000,000.003136G0FJ5 10/30/2020 1,5822.00004/30/2012 2,072,300.00 1.972 2.0002,000,000.00
Federal National Mortgage Asso1082 450,000.003136FPYB7 05/23/2017 3262.05005/11/2012 456,214.50 1.070 1.085453,769.64
Federal National Mortgage Asso1118 500,000.003136FPXN2 11/24/2017 5112.30010/18/2012 511,475.00 0.927 0.940509,255.16
Federal National Mortgage Asso1120 Call 1,000,000.003135G0RC9 10/25/2022 2,3072.20010/25/2012 1,000,050.00 2.196 2.226998,484.00
Federal National Mortgage Asso1149 1,500,000.003135G0TG8 02/08/2018 5870.87501/31/2013 1,507,650.00 1.019 1.0341,496,283.19
Federal National Mortgage Asso1174 1,500,000.003135G0WJ8 05/21/2018 6890.87504/15/2013 1,505,940.00 0.905 0.9171,498,811.11
Federal National Mortgage Asso1190 Call 1,000,000.003135G0XD0 05/21/2018 6891.00005/21/2013 1,000,170.00 0.996 1.010999,811.11
Federal National Mortgage Asso1191 Call 2,000,000.003135G0XA6 05/21/2018 6891.03005/21/2013 2,000,480.00 1.015 1.0302,000,000.00
Federal National Mortgage Asso1197 1,500,000.003135G0WJ8 05/21/2018 6890.87505/21/2013 1,505,940.00 0.986 1.0001,496,553.53
Federal National Mortgage Asso1210 Call 1,500,000.003135G0XK4 05/25/2018 6931.05005/30/2013 1,500,255.00 1.035 1.0501,500,000.00
Federal National Mortgage Asso1214 Call 1,500,000.003135G0XD0 05/21/2018 6891.00006/07/2013 1,500,255.00 1.262 1.2791,492,338.57
Federal National Mortgage Asso1268 1,500,000.003136FTR43 08/28/2020 1,5192.00004/08/2014 1,556,055.00 2.172 2.2021,488,274.58
Federal National Mortgage Asso1276 1,000,000.003136G0U58 04/30/2021 1,7641.75004/16/2014 1,025,610.00 2.364 2.397971,382.68
Portfolio CPA
AP
Run Date: 08/03/2016 - 11:11 FI (PRF_FI) 7.1.1
Report Ver. 7.3.3a
June 30, 2016
Par Value
Days To
Maturity
Maturity
Date
Current
RateMarket Value
Fund ALL - Portfolio Listings
Investments by Fund Page 14
CUSIP Investment #Issuer
Purchase
Date Book Value YTM
360
YTM
365
Federal Agency Issues - Coupon
Federal National Mortgage Asso1288 250,000.003136G0M57 04/09/2021 1,7431.75005/02/2014 255,552.50 2.452 2.486241,970.74
Federal National Mortgage Asso1290 1,000,000.003136G0Y70 01/30/2019 9431.08005/05/2014 1,008,830.00 1.633 1.656985,757.15
Federal National Mortgage Asso1315 1,200,000.003136G0YK1 08/28/2019 1,1531.50006/05/2014 1,225,848.00 1.815 1.8401,187,754.46
Federal National Mortgage Asso1317 1,000,000.003136G02P5 04/29/2019 1,0321.20006/12/2014 1,010,990.00 1.765 1.790984,089.32
Federal National Mortgage Asso1429 Call 2,000,000.003136G0S93 04/30/2021 1,7641.80001/15/2015 2,000,380.00 2.081 2.1101,972,053.16
Federal National Mortgage Asso1502 Call 1,000,000.003136G13X5 12/27/2023 2,7352.25011/10/2015 1,000,930.00 2.569 2.605976,061.14
Federal National Mortgage Asso1546 Call 1,000,000.003136G3AN5 03/16/2021 1,7191.50003/16/2016 1,000,420.00 1.978 2.0061,000,000.00
Federal National Mortgage Asso1654 1,000,000.003136G0EG2 04/23/2021 1,7572.28006/30/2016 1,049,390.00 1.171 1.1871,050,938.59
Federal National Mortgage Asso928 1,500,000.0031359MS61 07/15/2016 145.37501/04/2011 1,502,910.00 2.422 2.4551,501,583.07
Federal National Mortgage Asso991 2,000,000.0031359M4D2 02/13/2017 2275.00009/13/2011 2,055,560.00 1.272 1.2902,044,053.91
Tennessee Valley Authority1132 500,000.00880591EL2 02/15/2021 1,6903.87512/14/2012 560,910.00 1.596 1.618548,663.94
Tennessee Valley Authority1133 1,010,000.00880591EN8 08/15/2022 2,2361.87512/14/2012 1,034,825.80 1.893 1.9201,007,464.44
Tennessee Valley Authority1145 1,500,000.00880591EL2 02/15/2021 1,6903.87501/23/2013 1,682,730.00 1.647 1.6691,642,474.98
Tennessee Valley Authority1170 1,500,000.00880591EC2 04/01/2018 6394.50003/25/2013 1,598,925.00 0.913 0.9261,591,464.07
Tennessee Valley Authority1260 1,160,000.00880591EL2 02/15/2021 1,6903.87503/12/2014 1,301,311.20 2.427 2.4611,229,296.62
Tennessee Valley Authority1508 1,000,000.00880591CJ9 11/01/2025 3,4106.75011/20/2015 1,382,350.00 2.807 2.8461,315,329.57
Tennessee Valley Authority1519 750,000.00880591ER9 09/15/2024 2,9982.87501/15/2016 813,742.50 2.564 2.600765,046.94
Tennessee Valley Authority1589 775,000.00880591CJ9 11/01/2025 3,4106.75004/18/2016 1,071,321.25 2.337 2.3701,057,070.92
Tennessee Valley Authority861 2,000,000.00880591EA6 07/18/2017 3825.50004/26/2010 2,101,060.00 3.602 3.6522,033,712.67
Tennessee Valley Authority954 2,000,000.00880591CU4 12/15/2017 5326.25005/23/2011 2,157,480.00 2.624 2.6612,095,278.37
Subtotal and Average 375,778,688.82 373,180,297.09 382,730,432.57 2.031 2.059 1,481
Treasury Securities - Coupon
U.S. Treasury1201 TB 2,000,000.00912828UJ7 01/31/2018 5790.87505/16/2013 2,009,300.00 0.779 0.7902,002,628.38
U.S. Treasury1237 TB 2,000,000.00912828SD3 01/31/2019 9441.25001/07/2014 2,029,540.00 1.682 1.7051,977,516.22
U.S. Treasury1284 TB 1,500,000.00912828TH3 07/31/2019 1,1250.87505/02/2014 1,506,150.00 1.726 1.7501,461,509.95
U.S. Treasury1285 TB 1,500,000.00912828TN0 08/31/2019 1,1561.00005/02/2014 1,511,550.00 1.755 1.7801,464,828.38
U.S. Treasury1289 TB 1,500,000.00912828SX9 05/31/2019 1,0641.12505/05/2014 1,518,405.00 1.692 1.7161,475,358.74
U.S. Treasury1299 TB 1,500,000.00912828SX9 05/31/2019 1,0641.12505/13/2014 1,518,405.00 1.654 1.6771,476,942.28
U.S. Treasury1316 TB 1,500,000.00912828TC4 06/30/2019 1,0941.00006/10/2014 1,512,720.00 1.687 1.7111,469,511.83
Subtotal and Average 11,328,295.78 11,500,000.00 11,606,070.00 1.536 1.558 980
Portfolio CPA
AP
Run Date: 08/03/2016 - 11:11 FI (PRF_FI) 7.1.1
Report Ver. 7.3.3a
June 30, 2016
Par Value
Days To
Maturity
Maturity
Date
Current
RateMarket Value
Fund ALL - Portfolio Listings
Investments by Fund Page 15
CUSIP Investment #Issuer
Purchase
Date Book Value YTM
360
YTM
365
Municipal Bonds
Acalanes Union High School Dis1494 MUN 1,000,000.00004284B38 08/01/2021 1,8572.38110/30/2015 1,040,850.00 2.120 2.1501,010,974.70
Burlingame School District1548 MUN 730,000.00121457EQ4 08/01/2025 3,3186.23802/24/2016 879,489.40 3.557 3.606876,790.40
Carlsbad Unified School Dist .1547 MUN 300,000.00142665DH8 08/01/2021 1,8574.58402/24/2016 341,004.00 2.130 2.159334,711.40
Carlsbad Unified School Dist .1556 MUN 1,250,000.00142665DH8 08/01/2021 1,8574.58403/04/2016 1,420,850.00 2.138 2.1681,393,950.39
Cerritos Community College Dis1523 MUN 500,000.00156792GV9 08/01/2021 1,8572.78101/27/2016 530,145.00 2.012 2.040517,723.51
Fremon Union High School Distr1646 MUN 525,000.00357172VA0 02/01/2026 3,5026.08006/28/2016 664,461.00 2.994 3.035658,758.69
State of Georgia1613 MUN 500,000.00373384RU2 10/01/2022 2,2833.57005/17/2016 558,045.00 1.878 1.904548,923.28
State of Georgia1645 MUN 365,000.00373384W69 02/01/2023 2,4063.25006/27/2016 398,539.85 1.898 1.925394,759.32
Mtn. View-Whisman School Dist.1348 MUN 500,000.0062451FFK1 08/01/2021 1,8572.97307/24/2014 528,960.00 2.893 2.933505,119.94
Mt. San Antonio Community Coll1489 MUN 1,335,000.00623040GX4 08/01/2023 2,5874.10310/26/2015 1,520,711.85 2.490 2.5251,469,696.25
State of Ohio1550 MUN 1,500,000.00677522HZ0 05/01/2021 1,7651.57003/09/2016 1,525,830.00 1.548 1.5701,500,000.00
Palo Alto Unified School Dist.1192 MUN 2,000,000.00697379UE3 08/01/2021 1,8572.44105/10/2013 2,114,840.00 2.031 2.0602,035,438.10
Palo Alto Unified School Dist.1193 MUN 1,800,000.00697379UE3 08/01/2021 1,8572.44105/13/2013 1,903,356.00 2.031 2.0601,831,893.23
Palo Alto Unified School Dist.1195 MUN 1,990,000.00697379UE3 08/01/2021 1,8572.44105/15/2013 2,104,265.80 2.051 2.0802,023,386.36
Palo Alto Unified School Dist.1437 MUN 200,000.00697379UE3 08/01/2021 1,8572.44101/27/2015 211,484.00 2.041 2.070203,510.10
Palo Alto Unified School Dist.1610 MUN 1,000,000.00697379UE3 08/01/2021 1,8572.44105/12/2016 1,057,420.00 1.528 1.5501,043,329.80
City & County of San Francisco1441 MUN 360,000.00797646NL6 06/15/2022 2,1754.95002/09/2015 420,390.00 2.416 2.450408,769.44
City & County of San Francisco1509 MUN 1,000,000.00797646NC6 06/15/2025 3,2715.45011/27/2015 1,267,900.00 3.067 3.1101,180,086.38
San Jose Unified School Dist.1435 MUN 580,000.00798186C83 08/01/2023 2,5872.50001/29/2015 599,412.60 2.663 2.700572,701.60
San Mateo Union High School Dt1516 MUN 245,000.00799017KT4 09/01/2019 1,1572.19301/08/2016 253,180.55 1.775 1.800247,935.52
San Mateo Union High School Dt1518 MUN 180,000.00799017KV9 09/01/2021 1,8882.72001/19/2016 189,685.80 2.046 2.075185,631.33
State of Texas1482 MUN 920,000.00882723PP8 10/01/2021 1,9182.58910/14/2015 978,429.20 1.864 1.890951,779.47
State of Texas1586 MUN 1,000,000.00882722KA8 10/01/2023 2,6485.64304/19/2016 1,148,160.00 3.339 3.3851,143,550.00
State of Texas1592 MUN 235,000.00882722JZ5 10/01/2022 2,2835.50304/21/2016 269,744.75 3.047 3.090266,907.33
State of Texas1621 MUN 500,000.00882723A41 10/01/2020 1,5531.77706/07/2016 513,280.00 1.450 1.470506,291.31
State of Texas1625 MUN 485,000.00882722KC4 10/01/2025 3,3795.91306/09/2016 560,359.30 3.831 3.885560,698.24
University of California1340 MUN 1,875,000.0091412GSB2 07/01/2019 1,0951.79607/14/2014 1,919,475.00 2.007 2.0351,862,263.01
University of California1356 MUN 425,000.0091412GGU3 05/15/2020 1,4143.34807/31/2014 454,826.50 2.281 2.313440,848.89
University of California1368 MUN 250,000.0091412GGT6 05/15/2019 1,0483.04808/08/2014 263,085.00 1.982 2.010257,069.98
University of California1383 MUN 955,000.0091412GSB2 07/01/2019 1,0951.79608/27/2014 977,652.60 1.972 2.000949,440.85
University of California1414 MUN 750,000.0091412GSB2 07/01/2019 1,0951.79611/28/2014 767,790.00 1.923 1.950746,697.28
University of California1420 MUN 1,500,000.0091412GSB2 07/01/2019 1,0951.79612/12/2014 1,535,580.00 1.943 1.9701,492,537.52
Portfolio CPA
AP
Run Date: 08/03/2016 - 11:11 FI (PRF_FI) 7.1.1
Report Ver. 7.3.3a
June 30, 2016
Par Value
Days To
Maturity
Maturity
Date
Current
RateMarket Value
Fund ALL - Portfolio Listings
Investments by Fund Page 16
CUSIP Investment #Issuer
Purchase
Date Book Value YTM
360
YTM
365
Municipal Bonds
University of California1481 MUN 260,000.0091412GQB4 05/15/2020 1,4141.99510/08/2015 266,026.80 1.824 1.850261,391.14
State of Utah1622 MUN 750,000.00917542QT2 07/01/2020 1,4613.28906/07/2016 811,170.00 1.430 1.450803,380.33
State of Vermont1456 MUN 2,000,000.00924258TT3 08/15/2023 2,6014.25008/06/2015 2,127,740.00 3.275 3.3202,115,340.06
West Valley-Mission Community1479 MUN 250,000.0095640HBT4 08/01/2024 2,9536.09010/01/2015 284,157.50 4.030 4.086283,677.76
Subtotal and Average 31,585,962.91 30,015,000.00 32,408,297.50 2.299 2.331 2,008
Total Investments and Average 527,351,509.33 523,286,304.62 536,511,230.45 1.850 1.876 1,326
Portfolio CPA
AP
Run Date: 08/03/2016 - 11:11 FI (PRF_FI) 7.1.1
Report Ver. 7.3.3a
1 General Investment Guidelines:
a) The max. stated final maturity of individual securities in the portfolio should be 10 years.Full Compliance
b) A max. of 30 percent of the par value of the portfolio shall be invested in securities with maturities
beyond 5 years.27.0%
c) The City shall maintain a minimum of one month's cash needs in short term investments.Full Compliance
d) At least $50 million shall be maintained in securities maturing in less than 2 years.
Plus two managed pool accounts which provide instant liquidity:
- Local Agency Investment Fund (LAIF) - maximum investment limit is $50 million $57.5 million
- Fidelity Investments
e) Should market value of the portfolio fall below 95 percent of the book value, report this fact within a
reasonable time to the City Council and evaluate if there are risk of holding securities to maturity.101.7%
d) Commitments to purchase securities newly introduced on the market shall be made no more than three (3)
working days before pricing.Full Compliance
f) Whenever possible, the City will obtain three or more quotations on the purchase or sale of
comparable securities (excludes new issues, LAIF, City of Palo Alto bonds, money market
accounts, and mutual funds).Full Compliance
2 U.S. Government Securities:Full Compliance
a) There is no limit on purchase of these securities.
b) Securities will not exceed 10 years maturity.
3 U.S. Government Agency Securities:Full Compliance
a) There is no limit on purchase of these securities except for:
Callable and Multi-step-up securities provided that:
- The potential call dates are known at the time of purchase;Full Compliance
- the interest rates at which they "step-up" are known at the time of purchase; and Full Compliance
- the entire face value of the security is redeemed at the call date.Full Compliance
- No more than 25 percent of the par value of portfolio.20.5%
b) Securities will not exceed 10 years maturity.
4 Bonds of the State of California Local Government Agencies Full Compliance
a)Having at time of investment a minimum Double A (AA/AA2) rating as provided by a nationally 5.7%
recognized rating service (e.g., Moody’s and/or Standard and Poor’s).
b)May not exceed 10 percent of the par value of the portfolio.
5 Certificates of Deposit:Full Compliance
a) May not exceed 20 percent of the par value of the portfolio;
b) No more than 10 percent of the par value of the portfolio in collateralized CDs in any institution.
c) Purchase collateralized deposits only from federally insured large banks that are rated by
a nationally recognized rating agency (e.g. Moody's, Standard & Poor's, etc.).
d) For non-rated banks, deposit should be limited to amounts federally insured (FDIC)
e) Rollovers are not permitted without specific instruction from authorized City staff.
6 Banker's Acceptance Notes:None Held
a) No more than 30 percent of the par value of the portfolio.
b) Not to exceed 180 days maturity.
c) No more than $5 million with any one institution.
$140.8 million
$2.4 million
2.2%
Attachment C
Investment Policy Compliance
As of June 30, 2016
Investment Policy Requirements
Compliance
Check
Attachment C
Investment Policy Compliance
As of June 30, 2016
Investment Policy Requirements
Compliance
Check
7 Commercial Paper:None Held
a) No more than 15 percent of the par value of the portfolio.
b) Having highest letter or numerical rating from a nationally recognized rating service.
c) Not to exceed 270 days maturity.
d) No more than $3 million or 10 percent of the outstanding commercial paper of any one institution,
whichever is lesser.
8 Short-Term Repurchase Agreement (REPO):None Held
a) Not to exceed 1 year.
b) Market value of securities that underlay a repurchase agreement shall be valued at 102 percent or
greater of the funds borrowed against those securities.
9 Money Market Deposit Accounts Full Compliance
a) Liquid bank accounts which seek to maintain a net asset value of $1.00.
10 Mutual Funds:None Held
a) No more than 20 percent of the par value of the portfolio.
b) No more than 10 percent of the par value with any one institution.
11 Negotiable Certificates of Deposit (NCD):Full Compliance
a) No more than 10 percent of the par value of the portfolio.6.4%
b) No more than $5 million in any one institution.FDIC Insured
12 Medium-Term Corporate Notes:Full Compliance
a) No more than 10 percent of the par value of the portfolio.2.9%
b) Not to exceed 5 years maturity.
c) Securities eligible for investment shall have a minimum rating of AA from a nationally recognized
rating service.
d) No more than $5 million of the par value may be invested in securities of any single issuer, other
than the U.S. Government, its agencies and instrumentality.
e) If securities owned by the City are downgraded by either rating agencies to a level below AA it
shall be the City's policy to review the credit situation and make a determination as to whether
to sell or retain such securities.
13 Prohibited Investments:
a) Reverse Repurchase Agreements
b) Derivatives as defined in Appendix B of the Investment Policy
14 All securities shall be delivered to the City's safekeeping custodian, and held in the name of the
City, with the exception of :
- Certificates of Deposit, Mutual Funds, and LAIF
Full Compliance
None Held
Full Compliance