4-19-2022 Searchable Packet — Cupertino City Council, April 19, 2022 (part 3 of 4)

CITY OF CUPERTINO, CALIFORNIA
Cost of Services (User Fee) Study
Matrix Consulting Group Page 28
presents the current / proposed fee categories, the current fee, the total cost per unit, and the associated surplus / deficit.

Fee Name Current Fee
Total Cost Per
Unit – Staff
Time Only
Total Cost Per
Unit (Including
Materials)
Surplus / (Deficit)
per Unit
Flash Drive $0 $37 $49 $(49)
CD $13 $37 $37.50 $(24.50)
DVD $22 $37 $38.50 $(25.50)

As the table above shows the City Clerk is under -recovering for audio / video reproduction services, not only in terms of material costs but also in terms of staff time .

Depending upon the volume of these audio / video reproduction reques ts the City should not only consider raising the base fee but also charging material costs, especially as it relates to flash drives.

In addition to audio / video reproduction services, the City Clerk’s office is also the primary starting point for the petitions for reconsideration application. This application is / can be routed to multiple departments for an initial review and can then require additional meetings and reviews. During discussions with City staff it was decided that this fee was meant to not only account for the intake and routing of the application by the City Clerk’s department but also review of the application and handling by other departments. Currently, the City charges approximately $273 for each petition, whereas the total cost of providing that service is $288. It is the project teams recommendation that the City increase the current fee by $15 to its full cost to account for staff time in reviewing these petitions.

4. CODE ENFORCEMENT FEES
The last set of fees includes as part of the study on the General Services Fee Schedule related to Code Enforcement . Code Enforcement is involved with inspecting 427
CC 04-19-2022
427 of 632

CITY OF CUPERTINO, CALIFORNIA
Cost of Services (User Fee) Study
Matrix Consulting Group Page 29
and issuing permits related to handbills, massage establishments, sign removals, solicitor permits, use permits, trash fees, and bingo permits. The following table lists the current fee category, the current f ee, the total cost per unit and the associated surplus / (deficit):

Fee Name Current Fee Total Cost Per Unit Surplus / (Deficit) Handbill Permit - Initial $67 $124 $(57)
Renewals $34 $62 $(28)
Massage Establishment Fee
(fingerprinting / background check /
initial inspection)
$378
$278 $100
Renewal $97 $93 $4
Massage Managing Employee
(fingerprinting & background check) $313 $247 $66 Renewals $65 $93 $(28)
Massage Permit Appeal $168 $618 $(450)
Sign Removal - Public Right of Way $5 $93 $(88)
Sign Recovery Fee - Political Signs $3 $124 $(121) Solicitor Permit - Initial $331 $247 $84
Renewal $199 $62 $137
Taxi Driver Permit - Initial $331 $494 $(163)
Renewal $199 $62 $137
Use Permit - Initial
Application / Processing $- $1,004 $(1,004)
Non-Conforming Use $- $268 $(268)
Trash Fees - Initial
Plan Review - Trash Enclosure $- $332 $(332)
Plan Review - Trash Management Plan $- $483 $(483) Bingo Permit $- $131 $(131)

As shown in the table above, Code Enforcement is under -recovering for the majority of its fees on a per unit basis. The under -recovery ranges from a low of $28 to a high of $1,004. However, there are several fees for which Code Enforcement is over - recovering its costs, but that over -recovery ranges from a low of $4 to a high of $137 .

Additionally, there are some fees shown in the table above that do not have a current fee as while these services are being pro vided by Code Enforcement staff there is no fee being charged for those services. These services are related to Use Permits, Trash Fees, and Bingo Permits. As significant staff time is being spent on these efforts the City should consider adding these fees to its fee schedule. 428
CC 04-19-2022
428 of 632

CITY OF CUPERTINO, CALIFORNIA
Cost of Services (User Fee) Study
Matrix Consulting Group Page 30
Based upon volume information provided by Code enforcement, the division is annually under-recovering its costs by $9,000, or recovering 62% of its fee-related costs. The following table shows the current fee categories, the annual volume, the revenue at current fee, the total annual cost, and the associated annual surplus / deficit.

Fee Name Annual
Volume
Current
Fee
Total Cost
Per Unit
Surplus /
(Deficit)
Handbill Permit - Initial 16 $1,072 $1,977 $(905) Renewals
Massage Establishment Fee (fingerprinting /
background check / initial inspection) 10 $3,780 $2,780 $1,000 Renewal
Solicitor Permit - Initial 18 $5,958 $4,449 $1,509 Renewal 19 $3,781 $1,174 $2,607
Taxi Driver Permit - Initial
Renewal - $- $- $-
Use Permit - Initial
Application / Processing 4 $- $4,016 $(4,016) Non-Conforming Use 3 $- $803 $(803)
Trash Fees - Initial
Plan Review - Trash Enclosure 12 $- $3,985 $(3,985) Plan Review - Trash Management Plan 8 $- $3,862 $(3,862) Bingo Permit 4 $- $525 $(525)
TOTAL $14,591 $23,572 $(8,981)

As the table above shows, the largest source of annual under -recovery is related to renewal of Solicitor Permits and to other permitting services that are not currently being charged by the City. If the City decided to start charging for these services it could recover up to $13,000 in revenue annually for these services.

5. COMMUNITY FESTIVAL PROGRAM
As part of the General Services fee schedule, the project team also evaluated the cost associated with community festivals. Currently, the City puts on one major community festival – Earth Day festival. While this is a one-day festival there is significant amount of staff time that is devoted for prepping for the festival, for setting up the festival, managing the festival, and breaking the festival down on the day of the festival. The project team worked with City staff to identify staff and material costs 429
CC 04-19-2022
429 of 632

CITY OF CUPERTINO, CALIFORNIA
Cost of Services (User Fee) Study
Matrix Consulting Group Page 31
associated with the Earth Day festival to cost out this program and service to the Community. The following table shows the total cost of setting up and managing the Earth Day Festival:

Category Amount
Staffing Costs $30,624
Material Costs $3,000
TOTAL PROGRAM COST $33,624

As shown in the table above the total program cost for the Earth Day Festiva l is approximately $33,600. As this festival is primarily comprised of vendors, the project team worked with staff to identify the total number of vend ors to come up with a per vendor cost for the program. Staff identified that over the past several years the event has grown to include approximately 100 vendors, therefore the cost per vendor is approximately $336.

Due to the nature of the festival being about promoting environmental and sustainable practices, staff expressed the desire to not charge non -profit vendors or vendors complying with environmental standards and practices. Therefore, the project team recommends that should the City choose to cha rge other vendors, it should charge the full cost of $336 per vendor.

430
CC 04-19-2022
430 of 632

CITY OF CUPERTINO, CALIFORNIA
Cost of Services (User Fee) Study
Matrix Consulting Group Page 32

8. PLANNING

The Planning Division is responsible for administering all required review and evaluation processes for proposed land use projects. The Department also serves to maintain the goals and objectives of the City’s General Plan and Zoning Ordinance. The fees examined within this study relate to Use Permits, Architectural and Site Approvals, Design Review, Variances, and other planning fees.

1. FEE SCHEDULE MODIFICATIONS
Following discussion with division staff, some changes were made to the fee schedules. These changes included expanding fee categories and adding a new fee.

Planning broke out the current Heart of the City / Hillside exception fee into two separate fees – Heart of the City Exception and Hillside Exception – in order to account for changes in the processing of those exceptions. Similarly, staff also expanded the current Appeals fee into two separate categories – Appeals to Planning Commission and Appeals to City Council. These new categories allow staff to capture the time and different processes associated with appealing to the two different decision -making bodies.

Lastly, Planning Division has also added a noticing fee. This noticing fee is meant to capture staff and material costs associated with the noticing process.

Currently, this fee is charged as a deposit, but staff mentioned that for ease of applicants and staff it would be better to transition this to a flat fee.

431
CC 04-19-2022
431 of 632

CITY OF CUPERTINO, CALIFORNIA
Cost of Services (User Fee) Study
Matrix Consulting Group Page 33

2. DETAILED RESULTS
The following table details the total cost per unit for each fee category, the current fee charged, the total cost calculated through this study, and the resulting surplus or deficit.

Fee Name Current
Fee
Total Cost
Per Unit
Surplus /
(Deficit) per Unit
Tentative Parcel Map (Five or More) $15,974 $21,179 $(5,205) Parcel Map (0-4) $7,461 $12,732 $(5,271)
Use Permit / Development - Major $15,974 $21,343 $(5,369) Use Permit / Development - Minor $7,461 $12,809 $(5,348) Amendment to Use Permit / Development Permit - Major $7,988 $10,746 $(2,758) Amendment to Use Permit / Development Permit - Minor $3,730 $5,884 $(2,154) Architectural & Site Approval - Major $7,461 $13,189 $(5,728) Architectural & Site Approval - Minor $3,609 $8,862 $(5,253) Architectural & Site Approval - Minor Duplex / Residential $3,609 $5,768 $(2,159) Planning Commission Interpretation $3,649 $4,762 $(1,113) Exception $2,813 $4,509 $(1,696)
Heart of the City Exception $7,077 $13,063 $(5,986) Hillside Exception $7,077 $13,539 $(6,462)
R-1 Design Review $2,400 $3,910 $(1,510)
R-1 No Design Review $2,400 $3,271 $(871)
R-1 Exception $2,694 $4,673 $(1,979)
Minor Residential Permit $1,206 $2,311 $(1,105) Env. Impact Report (Plus State & County Filing Fees) $27,948 $27,948 Categorical Exemption (Plus County Filing Fee) $250 $230 $20 Sign Exception $2,108 $3,290 $(1,182)
Fence Exception $716 $2,891 $(2,175)
Variance $2,813 $5,167 $(2,354)
Director - Minor Modification $1,259 $3,156 $(1,897)
Conditional Use Permit - Administrative $3,730 $4,676 $(946) Reasonable Accommodation
First Tree $180 $1,362 $(1,182)
Each Additional Tree $92 $160 $(68)
Tree Management Plan $1,259 $4,702 $(3,443)
Heritage Tree Designation $107 $2,630 $(2,523)
Temporary Use Permit $1,439 $2,824 $(1,385)
Temporary Sign Permit $211 $319 $(108)
Sign Program $721 $2,582 $(1,861)
Appeals
Planning Commission $182 $7,834 $(7,652)
City Council $182 $8,239 $(8,057)
Zoning Verification Letter $190 $338 $(148)
Public Convenience & Necessity Letter $190 $169 $21
Noticing Fee $368 $(368)

The table above shows that Planning is under -recovering for the majority of its fees, and these under-recoveries ranges from a low of $68 to a high of $8,057 . There 432
CC 04-19-2022
432 of 632

CITY OF CUPERTINO, CALIFORNIA
Cost of Services (User Fee) Study
Matrix Consulting Group Page 34
are only two fees for which the division is over -recovering its costs; however this over - recovery is only $20 and $21 respectively. While many of these fees show a large under-recovery on a per unit basis, in order of the division to make decisions about raising its fees it should look at the fees with the highest volume or workload.

3. REVENUE IMPACTS
Overall, the Planning Division is currently maintaining a cost recovery level of 51% and is under -recovering its costs by $501,000. The following table shows the volume associated with each fee category, the current revenue, projected annual cost, and associated annual deficit.

Fee Name Annual
Volume
Revenue
at Current
Fee
Total
Annual
Cost
Annual
Surplus /
(Deficit)
Use Permit / Development - Major 3 $47,922 $64,030 $(16,108) Use Permit / Development - Minor 4 $29,844 $51,235 $(21,391) Amendment to Use Permit / Development
Permit - Major 1 $7,988 $10,746 $(2,758)
Amendment to Use Permit / Development
Permit - Minor 1 $3,730 $5,884 $(2,154)
Architectural and Site Approval - Major 13 $96,993 $171,460 $(74,467) Architectural and Site Approval - Minor 13 $46,917 $115,200 $(68,283) Exception 7 $19,691 $31,561 $(11,870)
R1 Design Review 56 $134,400 $218,962 $(84,562)
Minor Residential Permit 46 $55,476 $106,321 $(50,845) Sign Exception 4 $8,432 $13,159 $(4,727)
Fence Exception 3 $2,148 $8,673 $(6,525)
Director - Minor Modification 36 $45,324 $113,602 $(68,278) Tree Removal Permit
First Tree 64 $11,520 $87,171 $(75,651)
Tree Management Plan 1 $1,259 $4,702 $(3,443)
Temporary Use Permit 2 $2,878 $5,648 $(2,770)
Sign Program 4 $2,884 $10,329 $(7,445)
TOTAL $517,406 $1,018,683 $(501,277)

As the table above shows the majority of the division’s under -recovery is associated with R1- Design Review, Removal of First Tree, and Architectural Major Site Approval. These three applications alone account for approximately 47% of the division’s under-recovery. This is due to the large amount of volume in those 433
CC 04-19-2022
433 of 632

CITY OF CUPERTINO, CALIFORNIA
Cost of Services (User Fee) Study
Matrix Consulting Group Page 35
applications. However, it is important to note that the under -recovery associated with the tree removal permit might be slightly overstated as all of the volume was coded to the removal of the first tree, as there is currently no tracking mechanism that breaks out first tree vs. each additional tree. These high annual subsidies are associated with the large per unit subsidies. As previously discussed the division should focus on some of these high volume permits like R1 Design Review, Minor Residential and Director -Minor Modification permits when considering raising fees.

434
CC 04-19-2022
434 of 632

CITY OF CUPERTINO, CALIFORNIA
Cost of Services (User Fee) Study
Matrix Consulting Group Page 36

9. RECREATION SERVICES

The Recreation Services Department strives to enhance the leisure lifestyle and quality of life of both residents of and visitors to the City by providing affordable, fun, integrated, and safe recreational activities for people of all ages and abilities . The Department organizes, markets, and oversees recreation and leisure services in a variety of programs, including a Sports Center, Senior Programs, Youth and Teen activities and classes, trips, facility rentals, and other recreation activities. The following subsections provide a brief introduction to Recreation Services fees and costs assessed in the study, the cost recovery on each division level, and a discussion of facility rentals.

1. BACKGROUND & INTRODUCTION
Recreation fees are historically market driven, as residents have a choice between utilizing programs offered in their own city or those of a neighboring city.

Grants, special funding, or general fund subsidies often offset programs and services provided by Recreation departments in order to ensure that all citizens have equal opportunity and choice of participation. Recreation fees were not assessed in this study, as they are not subject to the same regulations and guidelines as other user fees.

Currently, the Cupertino Recreation & Community Services Departments sets and updates its fees internally on a seasonal basis. The primary methodo logy used for fee-setting is to determine the demand of a program based upon participation, conducting market surveys, and determining the benefit of the program to the community. These are typically the most important components of determining parks and recreation fees. Additionally, each division and program supervisor sets fees for 435
CC 04-19-2022
435 of 632

CITY OF CUPERTINO, CALIFORNIA
Cost of Services (User Fee) Study
Matrix Consulting Group Page 37
each program prior to implementing the program; ensuring that all of these various factors are considered prior to launching any program.

While the project team did not asse ss individual program fees as part of this study, it did review the cost recovery associated with each Recreation Services Division, and the department as a whole. The Recreation Department is recovering approximately 55% of its direct costs, which is above the average, 20-40% seen in other jurisdictions. This cost recovery percentage equates to an annual subsidy of approximately $4.7 million. In order to assess each program’s recovery level, the project team compared fiscal year 15/16 budgeted expenditures with fiscal year 14/15 actual revenue to assess the direct cost recovery. The following table shows program expenditures, revenue and cost recovery for Recreation & Community Services division.

Division Program FY 15
Revenue FY 16 Budget Cost
Recovery %
60 Parks & Recreation $44,295 $500,595 9%
61 Facilities & Community Events $383,485 $1,032,269 37% 62 Youth & Teen Programs $2,004,659 $3,877,135 52% 63 Sports & Fitness $2,566,662 $3,030,393 85%
64 Senior Programs $712,460 $1,923,704 37%
65 Community Services $7,608 $79,479 10%
TOTAL $5,719,171 $10,443,575 55%

As the table shows above that Parks & Recreation, which primarily consists of Leadership, Administration, and parks planning has the lowest cost recovery. The revenue in this section is related to providing training opportunities for growing leaders within the Cupertino community. It is not a fee-based service that is being provided to citizens but rather a special program. Similarly, the Community Services program (Division 65) is also providing emergency preparedness training and information to the citizens of Cupertino.

In terms of actual fee-for -service programs and facility rentals the Department is 436
CC 04-19-2022
436 of 632

CITY OF CUPERTINO, CALIFORNIA
Cost of Services (User Fee) Study
Matrix Consulting Group Page 38
recovering approximately 57% of its costs. The highes t cost recovery is associated with sports and fitness and youth and teen programs; while the lowest cost recovery is related to senior programs and facilities and community events.

It is important to note that the cost recovery presented in the table on t he previous page only incorporates direct budgeted expenditures for Recreation & Community Services. However, there are indirect costs associated with managing all of the different divisions and programs for Recreation & Community Services. The following t able shows the cost recovery percentages on a division level based upon comparing FY 14/15 Actual Revenue to FY 15/16 Direct and Indirect Expenditures.

Division Program FY 15
Revenue
Direct +
Indirect Costs
Cost
Recovery %
60 Parks & Recreation $44,295 $564,232 8%
61 Facilities & Community Events $383,485 $1,910,295 20% 62 Youth & Teen Programs $2,004,659 $4,736,604 42% 63 Sports & Fitness $2,566,662 $3,810,764 67%
64 Senior Programs $712,460 $2,573,453 28%
65 Community Services $7,608 $153,106 5%
TOTAL $5,719,171 $13,748,454 42%

As the table above shows that incorporating the indirect costs associated with Recreation & Community Services decreases the cost recovery percentage from 55% to 42%. The 42% cost recovery is still slightly higher than the 20 -40% cost recovery that is seen for many other jurisdictions. The annual subsidy for Recreation & Community services is $8 million. The most drastic impact on cost recovery is for Youth & Teen Programs and Fitness Programs, which declined from 52% to 42% and 85% to 67% respectively. The following subsections provide further information regarding each of the fee-related services and programs.

437
CC 04-19-2022
437 of 632

CITY OF CUPERTINO, CALIFORNIA
Cost of Services (User Fee) Study
Matrix Consulting Group Page 39
(1.1) Facilities & Community Events
The Facilities & Community Events Division primarily oversees facility and park rentals for various Cupertino City Recreation Centers, Halls, and picnic facilities. This program also manages all special eve nts for the city – Cupertino Day, Summer Concert Series, 4
th of July, etc. Currently, the Facilities and Community Events division is recovering 37% of its costs, or providing an annual subsidy of $649,000 in relation to its direct costs. However, once indirect costs are factored this division is only recovering 20% of its costs or providing an annual subsidy of $1.5 million.

While the division charges rental fees to private citizens, a majority of its facilities are rented out and used by city Departments , the Library, or other non-profit entities. As such, the Division currently has a directive to not charge rental fees for those entities, and is unable to recover the costs associated with those rentals. This could help explain some of the subsidy.
(1.2) Youth & Teen Programs
The Youth And Teen Programs divisions oversees all of the recreation activities in the community offered to youth and teens, including summer camps, tutoring services, etc. Currently this program is subsidizing its activities by $1.9 million in relation to direct costs, but this deficit increases to $2.7 million when indirect costs are factored into the calculation. This annual subsidy reflects a cost recovery percentage of 42%.

However, it is important to note that this subsidy is f or the overall program and not for individual activities. Certain premium activities such as Math Olympiad or Science Summer Camps are full cost recovery while other activities are subsidized to either foster participation or due to community benefit such as afterschool programs. 438
CC 04-19-2022
438 of 632

CITY OF CUPERTINO, CALIFORNIA
Cost of Services (User Fee) Study
Matrix Consulting Group Page 40
(1.3) Sports & Fitness Programs
Sports & Fitness Programs refers to not only all of the athletic programs offered by the community but also to the Sports Center membership offered by the City of Cupertino to its residents and non-residents.

Currently, this programing is recovering approximately 85% of its costs or subsidizing its costs annually by $463,000 on a direct cost and revenue level.

Incorporating indirect costs reduces its cost recovery to 67% and increases the annual subsidy to $1.2 million. Similar to youth and teen programs certain programs such as the Sports Center is recovering all of its costs while other programs are being subsidized due to market demand and the burden that can be borne by the community for those services.
(1.4) Senior Programs
Senior Programs comprises of a senior center that is rented for community purposes when it is not being used for senior classes and events. Additionally, it also includes classes and activities, recreation programs, travel, socials, and volunteer opportunities for senior citizens within the community. The Case Management Program is also offered through senior programs, which allows a case manager to service any and all seniors that are members of the Cupertino Senior Center directly in their home.

A portion of this program is funded through an aging grant.

Currently senior programs is recovering about 37% of its costs or providing an annual subsidy of $1.2 million in regards to direct costs and expenditures. Factoring in indirect costs and support reduces the cost recovery to 28% or an annual subsidy of $1.9 million. This cost recovery is pretty typical for senior services, and while some of its 439
CC 04-19-2022
439 of 632

CITY OF CUPERTINO, CALIFORNIA
Cost of Services (User Fee) Study
Matrix Consulting Group Page 41
programs such as trips and classes might be full cost recovery based, other services such as the Case Management Program are deliberately subsidized to provide benefit to the community.

2. FACILITY RENTALS
Currently, the City of Cupertino similar to other cities has a tiered system in relation to the use of its facilities; this means that depending on where an ind ividual falls in the tier system their facility rental charge will vary. The following points highlight each of the six tiers currently in place:
• Group I: City sponsored activities and programs.

• Group II: City co-sponsored clubs or clubs with 51% resident memberships and recreation programs.

• Group III: Cupertino Resident Non-Profit Organization, or non-profit organizations with more than 51% of their membership comprising of Cupertino residents.

• Group IV: Cupertino Residents / Cupertino Businesses – private, special interest or business groups for functions that are not open to the public, but are hosted by either a Cupertino resident or a business that is located in Cupertino.

• Group V: Non-Resident Non-Profit Organization – or non-profit organization whose membership does not comprise of Cupertino Residents, but still meets the criteria of being a non-profit entity.

• Group VI: Non-Residents / Non-Resident Business – private, special interest, or business groups fro functions that are not open to the public, but are hosted by either a non Cupertino Resident or a business not located in Cupertino.

As the points above indicate there are several different tiers in Cupertino, more tiers than are typically seen in other cities. Most other j urisdictions usually max out at five tiers, with the average being between three to four tiers. It is the project team’s recommendation that the Department consider simplifying its tiered system, especially as it relates to Non-profit entities and organizations. 440
CC 04-19-2022
440 of 632

CITY OF CUPERTINO, CALIFORNIA
Cost of Services (User Fee) Study
Matrix Consulting Group Page 42
There are different mechanisms to simplify the tiered system as it relates to Non - profit entities. Other jurisdictions typically will only have one non -profit category and not specify whether the entity is a resident or non -resident. This type of tier, simplifies the process for staff as they no longer have to verify the level of membership of a non -profit entity as it relates to the number of Cupertino residents, but simply whether an organization qualifies as a non-profit or not.

Alternatively, the project team would recommend that if City staff would like to continue to keep the two separate non -profit tiers that these tiers and their criteria should be defined more clearly. Calculating 51% resident participation to determine residency status requires paperwork and documentation verification by Recreation staff.

A different method or basis to qualify as a resident non -profit organization could be to utilize the physical address or location of the non -profit; i.e. if the non-profit is physically in Cupertino it qualifies as a Cupertino Non -Profit. Staff could ask for a utility bill or another form of documentation to verify residency as is done by staff for other categories already.

Both of these methods are valid and could result in either simp lifying the tier system or more clearly defining certain groups and thereby the appropriate discounts those groups will receive. The project team recommends that Recreation & Community Services staff consider altering their current tiered system to be more transparent and clear; along with ensuring that the different tiers represent the different levels of benefit to the community.

441
CC 04-19-2022
441 of 632

CITY OF CUPERTINO, CALIFORNIA
Cost of Services (User Fee) Study
Matrix Consulting Group Page 43

3. SUMMARY
Overall, the project team recommends that the Recreation & Services Department continue its current best management practice of setting fees on an activity- by-activity basis. However, the recreation coordinators should ensure that for all services, programs, and activities the cost per participant incorporates th e citywide overhead rate for Recreation & Community Services. This overhead rate is 32% for recreation & community services.

The overhead rate can be applied to direct costs to determine the total indirect costs for implementing any recreation activity. I ncorporating the overhead rate into the calculation will allow the recreation coordinator to determine the subsidy / premium level of any activity being offered by the Department. Setting fees based upon direct, indirect costs, and market rates, allows the department with the flexibility to assess different cost recovery levels for different activities. For e.g. premium services might be set at full cost recovery, while senior and youth programs might be subsidized and only be set to recover a portion of direct and indirect costs.

This type of methodology is fairly typical for Parks & Recreation services and allows the Department / Division with the greatest flexibility in setting fees to ensure that the needs of their community are being addressed in an affordable manner.

442
CC 04-19-2022
442 of 632

CITY OF CUPERTINO, CALIFORNIA
Cost of Services (User Fee) Study
Matrix Consulting Group Page 44

10. COMPARATIVE MARKET SURVEY

As part of this Cost of Services (User Fee) Study for the City of Cupertino, the Matrix Consulting Group conducted a comparative survey of fees. The City identified six jurisdictions to be included in the comparative survey: Campbell, Milpitas, Mountain View, Palo Alto, Santa Clara, and Sunnyvale.

While this report will provide the City with a reasonable estimate and understanding of the true costs of providing services , many jurisdictions also wish to consider the local “market rates” for services as a means for assessing what types of changes in fee levels their community can bear. However, a comparative survey does not provide adequate or objective information regardi ng the relationship of a jurisdiction’s cost to its fees. Three important factors to consider when comparing fees across multiple jurisdictions are: population, operating budget, and size of workforce.

The following tables provide statistical information r egarding the jurisdictions included in the comparative survey.

Jurisdiction 2013 Census
Campbell 40,584
Cupertino 60,189
Palo Alto 66,642
Milpitas 69,783
Mountain View 77,846
Santa Clara 120,245
Sunnyvale 147,559

Jurisdiction FY 15/16 Budget
Campbell $46,892,127
Cupertino $67,575,053
Milpitas $76,344,332
Mountain View $107,133,730
Sunnyvale $153,226,521
Santa Clara $182,488,000
Palo Alto $185,700,000

443
CC 04-19-2022
443 of 632

CITY OF CUPERTINO, CALIFORNIA
Cost of Services (User Fee) Study
Matrix Consulting Group Page 45
Jurisdiction FY 15/16 FTE
Campbell 164.30
Cupertino 180.75
Milpitas 328.25
Mountain View 590.50
Sunnyvale 877.00
Palo Alto 1,040.10
Santa Clara 1,054.50
Campbell 164.30

Based on the data shown in the above tables, the City of Cupertino ranks below average in regards to population, budget, and total staffing levels . In order to provide additional context, the project team also obtained cost recovery information for the three major fee-related services: Community Development (Building & Planning), Engineering, and Recreation Services. The following tables show the cost recovery percentages for each of the jurisdictions surveyed and how Cupertino ranks in comparison those jurisdictions.

Jurisdiction Community Development Cost Recovery %
Cupertino 62%
Milpitas 69%
Mountain View 73%
Santa Clara 114%
Sunnyvale 115%
Campbell 139%
Palo Alto 200%

Jurisdiction Engineering Cost Recovery %
Santa Clara 17%
Milpitas 30%
Campbell 32%
Cupertino 61%
Sunnyvale 73%
Mountain View 86%

Jurisdiction Parks & Recreation Cost Recovery %
Santa Clara 9%
Palo Alto 17%
Mountain View 29%
Sunnyvale 38%
Campbell 50%
Milpitas 55%
Cupertino 55%

444
CC 04-19-2022
444 of 632

CITY OF CUPERTINO, CALIFORNIA
Cost of Services (User Fee) Study
Matrix Consulting Group Page 46
As the tables on the previous page show Cupertino has the lowest recovery percentage for Community Development Fees as compared to neighboring Cities, while its Engineering cost recovery is slightly above the average seen by other cities.

However, Cupertino has the highest cost recovery per centage or the same level as Milpitas (55%) of all of the cities surveyed.

Along with keeping these statistics in mind, the following issues should also be noted regarding the use of market surveys in the setting of fees for service:
• Each jurisdiction and its fees are different, and many are not based on actual cost of providing services.

• The same “fee” with the same name may include more or less steps or sub - activities. In addition, jurisdictions provide varying levels of service and have varying levels of costs associated with providing services such as staffing levels, salary levels, indirect overhead costs, etc.

In addition to the issues noted above, market surveys can also run the risk of creating a confusing excess of data that will obscure rather than clarify policy issues.

Because each jurisdiction is different, the Matrix Consulting Group recommends that the information contained in the market comparison of fees be used as a secondary decision-making tool, rather than a tool for establishing an acceptable price point for services.

The survey covered Building, Planning and Public Works fees. On average, the survey showed that the City’s fees are in line with the jurisdictions surveyed, with some fees higher than other cities and other fees significantly lower. The results of the survey are shown as an attachment to this report.

445
CC 04-19-2022
445 of 632

CITY OF CUPERTINO, CALIFORNIA
Cost of Services (User Fee) Study
Matrix Consulting Group Page 47

11. CONCLUSION

The City of Cupertino engaged the Matrix Consulting Group to determine the total cost of services provided to its citizens and businesses for fee related services. To calculate the total cost of each Department / Division’s services, the Matrix Consulting Group employed both a widely accepted and defensible methodology, as well as the experience and input of City staff to complete the necessary data collection and discussion to complete the analysis. City leaders can now use this information to m ake informed decisions and set its fees to meet the fiscal and policy goal objectives of the City.

Overall, this Cost of Services Study concluded that the City under -recovers its costs by approximately $1,377,000 year for its fee-related services. While the detailed documentation of the Study will show an over-collection in some departments / divisions and / or certain fees (on a per unit basis), and an under charge for others, overall, the City is providing an annual subsidy to fee payers for all services included in the analysis.

The project team recommends the City lower fees that show an over -recovery in order to comply with state laws. For fees that show an under -recovery, the City should review all circumstances and policy factors and raise fees where feasible. For fees that the City chooses to subsidize, policies should be established to outline target recovery percentages.
446
CC 04-19-2022
446 of 632

PLAN CHECK – NEW CONSTRUCTION FEE SCHEDULE

447
CC 04-19-2022
447 of 632
New Construction - Plan Check Fees

Page 1 of 5 ends

Construction Type Construction Type Construction Type

IA, IB IIA, IIB, IIIA, IIIB, IV VA, VB
IBC
Class IBC Occupancy Type
Project Size
Threshold
Base Cost
@
Threshold
Size
Cost for
Each
Additional
100 sf *
Base Cost
@
Threshold
Size
Cost for
Each
Additional
100 sf *
Base Cost
@
Threshold
Size
Cost for
Each
Additional
100 sf *
A-1 Assembly—Fixed Seating 1,000 $6,427 $42.2750 $5,355 $35.2292 $4,284 $28.1833 - Theater, Concert Hall 5,000 $8,118 $47.3500 $6,765 $39.4583 $5,412 $31.5667 - - 10,000 $10,485 $37.2100 $8,738 $31.0083 $6,990 $24.8067 - - 20,000 $14,206 $7.8967 $11,838 $6.5806 $9,471 $5.2644 - - 50,000 $16,575 $8.1100 $13,813 $6.7583 $11,050 $5.4067 - - 100,000 $20,630 $20.6300 $17,192 $17.1917 $13,753 $13.7533 A-2 Assembly—Food & Drink 250 $4,344 $114.3225 $3,620 $95.2688 $2,896 $76.2150 - Restaurant, Night Club, Bar 1,250 $5,487 $128.0250 $4,573 $106.6875 $3,658 $85.3500 - - 2,500 $7,088 $100.5900 $5,906 $83.8250 $4,725 $67.0600 - - 5,000 $9,602 $21.3450 $8,002 $17.7875 $6,402 $14.2300 - - 12,500 $11,203 $21.9450 $9,336 $18.2875 $7,469 $14.6300 - - 25,000 $13,946 $55.7850 $11,622 $46.4875 $9,298 $37.1900 A-3 Assembly—Worship, Amusement 1,000 $8,144 $53.5763 $6,787 $44.6469 $5,429 $35.7175 - Arcade, Church, Community Hall 5,000 $10,287 $60.0000 $8,573 $50.0000 $6,858 $40.0000 - - 10,000 $13,287 $47.1600 $11,073 $39.3000 $8,858 $31.4400 - - 20,000 $18,003 $9.9900 $15,003 $8.3250 $12,002 $6.6600 - - 50,000 $21,000 $10.2900 $17,500 $8.5750 $14,000 $6.8600 - - 100,000 $26,145 $26.1450 $21,788 $21.7875 $17,430 $17.4300 A-4 Assembly—Indoor Sport Viewing 500 $4,960 $65.2650 $4,133 $54.3875 $3,307 $43.5100 - Arena, Skating Rink, Tennis Court 2,500 $6,265 $73.0800 $5,221 $60.9000 $4,177 $48.7200 - - 5,000 $8,092 $57.4440 $6,744 $47.8700 $5,395 $38.2960 - - 10,000 $10,964 $12.1840 $9,137 $10.1533 $7,310 $8.1227 - - 25,000 $12,792 $12.5280 $10,660 $10.4400 $8,528 $8.3520 - - 50,000 $15,924 $31.8480 $13,270 $26.5400 $10,616 $21.2320 A-5 Assembly—Outdoor Activities 500 $5,248 $69.0600 $4,373 $57.5500 $3,499 $46.0400 - Amusement Park, Bleacher, Stadium 2,500 $6,629 $77.3400 $5,524 $64.4500 $4,420 $51.5600 - - 5,000 $8,563 $60.7650 $7,136 $50.6375 $5,709 $40.5100 - - 10,000 $11,601 $12.8850 $9,668 $10.7375 $7,734 $8.5900 - - 25,000 $13,534 $13.2750 $11,278 $11.0625 $9,023 $8.8500 - - 50,000 $16,853 $33.7050 $14,044 $28.0875 $11,235 $22.4700 A A Occupancy Tenant Improvements 500 $3,304 $43.4738 $2,753 $36.2281 $2,203 $28.9825 - - 2,500 $4,173 $48.6750 $3,478 $40.5625 $2,782 $32.4500 - - 5,000 $5,390 $38.2650 $4,492 $31.8875 $3,594 $25.5100 - - 10,000 $7,304 $8.1100 $6,086 $6.7583 $4,869 $5.4067 - - 25,000 $8,520 $8.3400 $7,100 $6.9500 $5,680 $5.5600 - - 50,000 $10,605 $21.2100 $8,838 $17.6750 $7,070 $14.1400 B Business—Bank 500 $4,480 $58.9388 $3,733 $49.1156 $2,987 $39.2925 - - 2,500 $5,659 $66.0300 $4,716 $55.0250 $3,773 $44.0200 - - 5,000 $7,310 $51.8700 $6,091 $43.2250 $4,873 $34.5800 - - 10,000 $9,903 $11.0050 $8,253 $9.1708 $6,602 $7.3367 - - 25,000 $11,554 $11.3250 $9,628 $9.4375 $7,703 $7.5500 - - 50,000 $14,385 $28.7700 $11,988 $23.9750 $9,590 $19.1800 B Business—Laundromat 200 $3,848 $126.5738 $3,207 $105.4781 $2,565 $84.3825 - - 1,000 $4,860 $141.7650 $4,050 $118.1375 $3,240 $94.5100 - - 2,000 $6,278 $111.3750 $5,232 $92.8125 $4,185 $74.2500 - - 4,000 $8,506 $23.6400 $7,088 $19.7000 $5,670 $15.7600 - - 10,000 $9,924 $24.3000 $8,270 $20.2500 $6,616 $16.2000 - - 20,000 $12,354 $61.7700 $10,295 $51.4750 $8,236 $41.1800 B Business—Clinic, Outpatient 500 $4,616 $60.7275 $3,847 $50.6063 $3,077 $40.4850 - - 2,500 $5,831 $68.0400 $4,859 $56.7000 $3,887 $45.3600 - - 5,000 $7,532 $53.4300 $6,276 $44.5250 $5,021 $35.6200 - - 10,000 $10,203 $11.3300 $8,503 $9.4417 $6,802 $7.5533 - - 25,000 $11,903 $11.6700 $9,919 $9.7250 $7,935 $7.7800 - - 50,000 $14,820 $29.6400 $12,350 $24.7000 $9,880 $19.7600 B Business—Professional Office 1,000 $5,097 $49.7663 $4,247 $41.4719 $3,398 $33.1775 - - 5,000 $7,088 $42.8100 $5,906 $35.6750 $4,725 $28.5400 - - 10,000 $9,228 $30.2700 $7,690 $25.2250 $6,152 $20.1800 - - 20,000 $12,255 $7.1500 $10,213 $5.9583 $8,170 $4.7667 - - 50,000 $14,400 $7.6800 $12,000 $6.4000 $9,600 $5.1200 - - 100,000 $18,240 $18.2400 $15,200 $15.2000 $12,160 $12.1600

CITY OF CUPERTINO, CA
Building Division
Schedule of New Construction Fees

PLAN CHECK FEES ONLY
448
CC 04-19-2022
448 of 632
New Construction - Plan Check Fees

Page 2 of 5 ends

Construction Type Construction Type Construction Type

IA, IB IIA, IIB, IIIA, IIIB, IV VA, VB
IBC
Class IBC Occupancy Type
Project Size
Threshold
Base Cost
@
Threshold
Size
Cost for
Each
Additional
100 sf *
Base Cost
@
Threshold
Size
Cost for
Each
Additional
100 sf *
Base Cost
@
Threshold
Size
Cost for
Each
Additional
100 sf *
B B Occupancy Tenant Improvements 300 $3,534 $77.4900 $2,945 $64.5750 $2,356 $51.6600 - - 1,500 $4,464 $86.7900 $3,720 $72.3250 $2,976 $57.8600 - - 3,000 $5,765 $68.1900 $4,805 $56.8250 $3,844 $45.4600 - - 6,000 $7,811 $14.4600 $6,509 $12.0500 $5,207 $9.6400 - - 15,000 $9,113 $14.8800 $7,594 $12.4000 $6,075 $9.9200 - - 30,000 $11,345 $37.8150 $9,454 $31.5125 $7,563 $25.2100 E Educational— Preschool / School 100 $3,804 $250.2563 $3,170 $208.5469 $2,536 $166.8375 - - 500 $4,805 $280.2600 $4,004 $233.5500 $3,203 $186.8400 - - 1,000 $6,206 $220.2300 $5,172 $183.5250 $4,137 $146.8200 - - 2,000 $8,408 $46.7200 $7,007 $38.9333 $5,606 $31.1467 - - 5,000 $9,810 $48.0300 $8,175 $40.0250 $6,540 $32.0200 10,000 $12,212 $122.1150 $10,176 $101.7625 $8,141 $81.4100 E E Occupancy Tenant Improvements 100 $2,988 $196.5675 $2,490 $163.8063 $1,992 $131.0450 - - 500 $3,774 $220.1700 $3,145 $183.4750 $2,516 $146.7800 - - 1,000 $4,875 $172.9800 $4,063 $144.1500 $3,250 $115.3200 - - 2,000 $6,605 $36.6900 $5,504 $30.5750 $4,403 $24.4600 - - 5,000 $7,706 $37.7400 $6,421 $31.4500 $5,137 $25.1600 - - 10,000 $9,593 $95.9250 $7,994 $79.9375 $6,395 $63.9500 F-1 Factory Industrial—Moderate Hazard 1,000 $4,668 $13.3170 $3,890 $11.0975 $3,112 $8.8780 - - 5,000 $5,200 $21.3000 $4,334 $17.7500 $3,467 $14.2000 - - 10,000 $6,265 $23.0760 $5,221 $19.2300 $4,177 $15.3840 - - 20,000 $8,573 $3.5440 $7,144 $2.9533 $5,715 $2.3627 - - 50,000 $9,636 $2.1360 $8,030 $1.7800 $6,424 $1.4240 100,000 $10,704 $10.7040 $8,920 $8.9200 $7,136 $7.1360 F-2 Factory Industrial—Low Hazard 1,000 $4,800 $31.5825 $4,000 $26.3188 $3,200 $21.0550 - - 5,000 $6,063 $35.3700 $5,053 $29.4750 $4,042 $23.5800 - - 10,000 $7,832 $27.7950 $6,526 $23.1625 $5,221 $18.5300 - - 20,000 $10,611 $5.8800 $8,843 $4.9000 $7,074 $3.9200 - - 50,000 $12,375 $6.0600 $10,313 $5.0500 $8,250 $4.0400 - - 100,000 $15,405 $15.4050 $12,838 $12.8375 $10,270 $10.2700 F F Occupancy Tenant Improvements 1,000 $3,513 $23.1180 $2,928 $19.2650 $2,342 $15.4120 - - 5,000 $4,438 $25.8840 $3,699 $21.5700 $2,959 $17.2560 - - 10,000 $5,732 $20.3400 $4,777 $16.9500 $3,822 $13.5600 - - 20,000 $7,766 $4.3120 $6,472 $3.5933 $5,178 $2.8747 - - 50,000 $9,060 $4.4400 $7,550 $3.7000 $6,040 $2.9600 - - 100,000 $11,280 $11.2800 $9,400 $9.4000 $7,520 $7.5200 H-1 High Hazard Group H-1 100 $3,562 $234.3650 $2,969 $195.3042 $2,375 $156.2433 - - 500 $4,500 $262.5000 $3,750 $218.7500 $3,000 $175.0000 - - 1,000 $5,812 $206.2400 $4,844 $171.8667 $3,875 $137.4933 - - 2,000 $7,875 $43.7567 $6,562 $36.4639 $5,250 $29.1711 - - 5,000 $9,188 $44.9900 $7,656 $37.4917 $6,125 $29.9933 - - 10,000 $11,437 $114.3700 $9,531 $95.3083 $7,625 $76.2467 H-2 High Hazard Group H-2 100 $4,275 $281.2380 $3,562 $234.3650 $2,850 $187.4920 - - 500 $5,400 $315.0000 $4,500 $262.5000 $3,600 $210.0000 - - 1,000 $6,975 $247.4880 $5,812 $206.2400 $4,650 $164.9920 - - 2,000 $9,450 $52.5080 $7,875 $43.7567 $6,300 $35.0053 - - 5,000 $11,025 $53.9880 $9,188 $44.9900 $7,350 $35.9920 - - 10,000 $13,724 $137.2440 $11,437 $114.3700 $9,150 $91.4960 H-3 High Hazard Group H-3 100 $4,664 $306.8175 $3,886 $255.6813 $3,109 $204.5450 - - 500 $5,891 $343.6350 $4,909 $286.3625 $3,927 $229.0900 - - 1,000 $7,609 $270.0000 $6,341 $225.0000 $5,073 $180.0000 - - 2,000 $10,309 $57.2850 $8,591 $47.7375 $6,873 $38.1900 - - 5,000 $12,028 $58.9050 $10,023 $49.0875 $8,019 $39.2700 - - 10,000 $14,973 $149.7300 $12,478 $124.7750 $9,982 $99.8200 H-4 High Hazard Group H-4 100 $3,731 $245.4540 $3,109 $204.5450 $2,487 $163.6360 - - 500 $4,713 $274.9080 $3,927 $229.0900 $3,142 $183.2720 - - 1,000 $6,087 $216.0000 $5,073 $180.0000 $4,058 $144.0000 - - 2,000 $8,247 $45.8280 $6,873 $38.1900 $5,498 $30.5520 - - 5,000 $9,622 $47.1240 $8,019 $39.2700 $6,415 $31.4160 - - 10,000 $11,978 $119.7840 $9,982 $99.8200 $7,986 $79.8560 H-5 High Hazard Group H-5 100 $3,731 $245.4540 $3,109 $204.5450 $2,487 $163.6360 - - 500 $4,713 $274.9080 $3,927 $229.0900 $3,142 $183.2720 - - 1,000 $6,087 $216.0000 $5,073 $180.0000 $4,058 $144.0000 - - 2,000 $8,247 $45.8280 $6,873 $38.1900 $5,498 $30.5520 - - 5,000 $9,622 $47.1240 $8,019 $39.2700 $6,415 $31.4160 - - 10,000 $11,978 $119.7840 $9,982 $99.8200 $7,986 $79.8560 449
CC 04-19-2022
449 of 632
New Construction - Plan Check Fees

Page 3 of 5 ends

Construction Type Construction Type Construction Type

IA, IB IIA, IIB, IIIA, IIIB, IV VA, VB
IBC
Class IBC Occupancy Type
Project Size
Threshold
Base Cost
@
Threshold
Size
Cost for
Each
Additional
100 sf *
Base Cost
@
Threshold
Size
Cost for
Each
Additional
100 sf *
Base Cost
@
Threshold
Size
Cost for
Each
Additional
100 sf *
H H Occupancy Tenant Improvements 100 $2,752 $181.0440 $2,293 $150.8700 $1,835 $120.6960 - - 500 $3,476 $202.7880 $2,897 $168.9900 $2,317 $135.1920 - - 1,000 $4,490 $159.3240 $3,742 $132.7700 $2,993 $106.2160 - - 2,000 $6,083 $33.7840 $5,069 $28.1533 $4,056 $22.5227 - - 5,000 $7,097 $34.7760 $5,914 $28.9800 $4,731 $23.1840 - - 10,000 $8,836 $88.3560 $7,363 $73.6300 $5,890 $58.9040 I-1 Institutional—7+ persons, ambulatory 500 $4,676 $61.5270 $3,896 $51.2725 $3,117 $41.0180 - - 2,500 $5,906 $68.8920 $4,922 $57.4100 $3,937 $45.9280 - - 5,000 $7,628 $54.1440 $6,357 $45.1200 $5,086 $36.0960 - - 10,000 $10,336 $11.4760 $8,613 $9.5633 $6,890 $7.6507 - - 25,000 $12,057 $11.8200 $10,048 $9.8500 $8,038 $7.8800 - - 50,000 $15,012 $30.0240 $12,510 $25.0200 $10,008 $20.0160 I-2 Institutional—6+ persons, non-ambulatory 500 $5,663 $74.5200 $4,720 $62.1000 $3,776 $49.6800 - - 2,500 $7,154 $83.4450 $5,962 $69.5375 $4,769 $55.6300 - - 5,000 $9,240 $65.5800 $7,700 $54.6500 $6,160 $43.7200 - - 10,000 $12,519 $13.9150 $10,433 $11.5958 $8,346 $9.2767 - - 25,000 $14,606 $14.2950 $12,172 $11.9125 $9,738 $9.5300 - - 50,000 $18,180 $36.3600 $15,150 $30.3000 $12,120 $24.2400 I-3 Institutional—6+ persons, restrained 500 $5,210 $68.5575 $4,342 $57.1313 $3,474 $45.7050 - - 2,500 $6,582 $76.7850 $5,485 $63.9875 $4,388 $51.1900 - - 5,000 $8,501 $60.3450 $7,084 $50.2875 $5,668 $40.2300 - - 10,000 $11,519 $12.7850 $9,599 $10.6542 $7,679 $8.5233 - - 25,000 $13,436 $13.1550 $11,197 $10.9625 $8,958 $8.7700 50,000 $16,725 $33.4500 $13,938 $27.8750 $11,150 $22.3000 I-4 Institutional—6+ persons, day care 500 $5,210 $68.5575 $4,342 $57.1313 $3,474 $45.7050 - - 2,500 $6,582 $76.7850 $5,485 $63.9875 $4,388 $51.1900 - - 5,000 $8,501 $60.3450 $7,084 $50.2875 $5,668 $40.2300 - - 10,000 $11,519 $12.7850 $9,599 $10.6542 $7,679 $8.5233 - - 25,000 $13,436 $13.1550 $11,197 $10.9625 $8,958 $8.7700 50,000 $16,725 $33.4500 $13,938 $27.8750 $11,150 $22.3000 I I Occupancy Tenant Improvements 100 $2,755 $181.2420 $2,296 $151.0350 $1,837 $120.8280 - - 500 $3,480 $202.9920 $2,900 $169.1600 $2,320 $135.3280 - - 1,000 $4,495 $159.4920 $3,746 $132.9100 $2,997 $106.3280 - - 2,000 $6,090 $33.8280 $5,075 $28.1900 $4,060 $22.5520 - - 5,000 $7,105 $34.8120 $5,921 $29.0100 $4,736 $23.2080 10,000 $8,845 $88.4520 $7,371 $73.7100 $5,897 $58.9680 M Mercantile 2,000 $7,336 $24.1238 $6,113 $20.1031 $4,890 $16.0825 - - 10,000 $9,266 $27.0450 $7,721 $22.5375 $6,177 $18.0300 - - 20,000 $11,970 $21.2400 $9,975 $17.7000 $7,980 $14.1600 - - 40,000 $16,218 $4.4950 $13,515 $3.7458 $10,812 $2.9967 - - 100,000 $18,915 $4.6350 $15,763 $3.8625 $12,610 $3.0900 - - 200,000 $23,550 $11.7750 $19,625 $9.8125 $15,700 $7.8500 M M Occupancy Tenant Improvements 300 $3,260 $71.4900 $2,717 $59.5750 $2,173 $47.6600 - - 1,500 $4,118 $80.0550 $3,431 $66.7125 $2,745 $53.3700 - - 3,000 $5,319 $62.9250 $4,432 $52.4375 $3,546 $41.9500 - - 6,000 $7,206 $13.3300 $6,005 $11.1083 $4,804 $8.8867 - - 15,000 $8,406 $13.7400 $7,005 $11.4500 $5,604 $9.1600 - - 30,000 $10,467 $34.8900 $8,723 $29.0750 $6,978 $23.2600 R-1 Residential—Hotels & Motels 3,000 $10,880 $4.7700 $9,067 $3.9750 $7,253 $3.1800 - - 15,000 $11,453 $15.2700 $9,544 $12.7250 $7,635 $10.1800 - - 30,000 $13,743 $1.9200 $11,453 $1.6000 $9,162 $1.2800 - - 60,000 $14,319 $2.5400 $11,933 $2.1167 $9,546 $1.6933 - - 150,000 $16,605 $0.3900 $13,838 $0.3250 $11,070 $0.2600 - - 300,000 $17,190 $5.7300 $14,325 $4.7750 $11,460 $3.8200 R-2 Residential—Apartment Building 800 $9,879 $16.2525 $8,232 $13.5438 $6,586 $10.8350 - - 4,000 $10,399 $51.9750 $8,666 $43.3125 $6,932 $34.6500 - - 8,000 $12,478 $6.5100 $10,398 $5.4250 $8,318 $4.3400 - - 16,000 $12,998 $8.6650 $10,832 $7.2208 $8,666 $5.7767 - - 40,000 $15,078 $1.3050 $12,565 $1.0875 $10,052 $0.8700 - - 80,000 $15,600 $19.5000 $13,000 $16.2500 $10,400 $13.0000 R-3 Dwellings—Custom Homes, Models, First Master Plan1,000 $4,950 $14.7750 $4,125 $12.3125 $3,300 $9.8500 - - 2,500 $5,172 $59.1850 $4,310 $49.3208 $3,448 $39.4567 - - 4,000 $6,059 $11.0850 $5,050 $9.2375 $4,040 $7.3900 - - 6,000 $6,281 $44.3850 $5,234 $36.9875 $4,187 $29.5900 - - 8,000 $7,169 $11.0850 $5,974 $9.2375 $4,779 $7.3900 - - 10,000 $7,391 $73.9050 $6,159 $61.5875 $4,927 $49.2700 450
CC 04-19-2022
450 of 632
New Construction - Plan Check Fees

Page 4 of 5 ends

Construction Type Construction Type Construction Type

IA, IB IIA, IIB, IIIA, IIIB, IV VA, VB
IBC
Class IBC Occupancy Type
Project Size
Threshold
Base Cost
@
Threshold
Size
Cost for
Each
Additional
100 sf *
Base Cost
@
Threshold
Size
Cost for
Each
Additional
100 sf *
Base Cost
@
Threshold
Size
Cost for
Each
Additional
100 sf *
R-3 Dwellings—Production Phase 1,000 $1,922 $6.7400 $1,602 $5.6167 $1,282 $4.4933 - of Master Plan (repeats) 2,500 $2,024 $26.9800 $1,686 $22.4833 $1,349 $17.9867 - - 4,000 $2,428 $5.0850 $2,024 $4.2375 $1,619 $3.3900 - - 6,000 $2,530 $20.2050 $2,108 $16.8375 $1,687 $13.4700 - - 8,000 $2,934 $5.1000 $2,445 $4.2500 $1,956 $3.4000 - - 10,000 $3,036 $30.3600 $2,530 $25.3000 $2,024 $20.2400 R-3 Dwellings—Alternate Materials 1,000 $4,382 $15.3750 $3,651 $12.8125 $2,921 $10.2500 - - 2,500 $4,612 $61.4850 $3,843 $51.2375 $3,075 $40.9900 - - 4,000 $5,534 $11.5500 $4,612 $9.6250 $3,690 $7.7000 - - 6,000 $5,765 $46.1100 $4,805 $38.4250 $3,844 $30.7400 - - 8,000 $6,688 $11.5200 $5,573 $9.6000 $4,458 $7.6800 - - 10,000 $6,918 $69.1800 $5,765 $57.6500 $4,612 $46.1200 R-3 Dwellings—Hillside - Custom Homes, Models 1,000 $5,787 $20.3050 $4,822 $16.9208 $3,858 $13.5367 - First Master Plan 2,500 $6,091 $81.2050 $5,076 $67.6708 $4,061 $54.1367 - - 4,000 $7,309 $15.2400 $6,091 $12.7000 $4,873 $10.1600 - - 6,000 $7,614 $60.9000 $6,345 $50.7500 $5,076 $40.6000 - - 8,000 $8,832 $15.2250 $7,360 $12.6875 $5,888 $10.1500 - - 10,000 $9,137 $91.3650 $7,614 $76.1375 $6,091 $60.9100 R-3 Dwellings—Hillside - Production Phase 1,000 $1,922 $6.7400 $1,602 $5.6167 $1,282 $4.4933 - of Master Plan (repeats) 2,500 $2,024 $26.9800 $1,686 $22.4833 $1,349 $17.9867 - - 4,000 $2,428 $5.0850 $2,024 $4.2375 $1,619 $3.3900 - - 6,000 $2,530 $20.2050 $2,108 $16.8375 $1,687 $13.4700 - - 8,000 $2,934 $5.1000 $2,445 $4.2500 $1,956 $3.4000 - - 10,000 $3,036 $30.3600 $2,530 $25.3000 $2,024 $20.2400 R-3 Dwellings—Hillside - Alternate Materials 1,000 $4,382 $15.3750 $3,651 $12.8125 $2,921 $10.2500 - - 2,500 $4,612 $61.4850 $3,843 $51.2375 $3,075 $40.9900 - - 4,000 $5,534 $11.5500 $4,612 $9.6250 $3,690 $7.7000 - - 6,000 $5,765 $46.1100 $4,805 $38.4250 $3,844 $30.7400 - - 8,000 $6,688 $11.5200 $5,573 $9.6000 $4,458 $7.6800 - - 10,000 $6,918 $69.1800 $5,765 $57.6500 $4,612 $46.1200 R-3 Group Care 1,000 $8,184 $10.7663 $6,820 $8.9719 $5,456 $7.1775 - - 5,000 $8,615 $34.4700 $7,179 $28.7250 $5,743 $22.9800 - - 10,000 $10,338 $4.2900 $8,615 $3.5750 $6,892 $2.8600 - - 20,000 $10,767 $5.7350 $8,973 $4.7792 $7,178 $3.8233 - - 50,000 $12,488 $0.8550 $10,406 $0.7125 $8,325 $0.5700 - - 100,000 $12,915 $12.9150 $10,763 $10.7625 $8,610 $8.6100 R-4 Group Care 100 $4,619 $60.7725 $3,849 $50.6438 $3,079 $40.5150 - - 500 $4,862 $194.4900 $4,052 $162.0750 $3,241 $129.6600 - - 1,000 $5,834 $24.3000 $4,862 $20.2500 $3,890 $16.2000 - - 2,000 $6,077 $32.4200 $5,065 $27.0167 $4,052 $21.6133 - - 5,000 $7,050 $4.8600 $5,875 $4.0500 $4,700 $3.2400 10,000 $7,293 $72.9300 $6,078 $60.7750 $4,862 $48.6200 R R Occupancy Tenant Improvements 80 $2,692 $44.2688 $2,243 $36.8906 $1,794 $29.5125 - - 400 $2,833 $141.6750 $2,361 $118.0625 $1,889 $94.4500 - - 800 $3,400 $17.7150 $2,833 $14.7625 $2,267 $11.8100 - - 1,600 $3,542 $23.6050 $2,951 $19.6708 $2,361 $15.7367 - - 4,000 $4,108 $3.5550 $3,424 $2.9625 $2,739 $2.3700 - - 8,000 $4,250 $53.1300 $3,542 $44.2750 $2,834 $35.4200 S-1 Storage—Moderate Hazard 600 $3,766 $41.2980 $3,139 $34.4150 $2,511 $27.5320 - - 3,000 $4,757 $46.2600 $3,965 $38.5500 $3,172 $30.8400 - - 6,000 $6,145 $36.3480 $5,121 $30.2900 $4,097 $24.2320 - - 12,000 $8,326 $7.7040 $6,938 $6.4200 $5,551 $5.1360 - - 30,000 $9,713 $7.9200 $8,094 $6.6000 $6,475 $5.2800 - - 60,000 $12,089 $20.1480 $10,074 $16.7900 $8,059 $13.4320 S-2 Storage—Low Hazard 10,000 $8,696 $5.7113 $7,246 $4.7594 $5,797 $3.8075 - - 50,000 $10,980 $6.4200 $9,150 $5.3500 $7,320 $4.2800 - - 100,000 $14,190 $5.0400 $11,825 $4.2000 $9,460 $3.3600 - - 200,000 $19,230 $1.0650 $16,025 $0.8875 $12,820 $0.7100 - - 500,000 $22,425 $1.0950 $18,688 $0.9125 $14,950 $0.7300 - - 1,000,000 $27,900 $2.7900 $23,250 $2.3250 $18,600 $1.8600 S S Occupancy Tenant Improvements 600 $3,398 $37.2488 $2,831 $31.0406 $2,265 $24.8325 - - 3,000 $4,292 $41.7450 $3,576 $34.7875 $2,861 $27.8300 - - 6,000 $5,544 $32.7900 $4,620 $27.3250 $3,696 $21.8600 - - 12,000 $7,511 $6.9450 $6,260 $5.7875 $5,008 $4.6300 - - 30,000 $8,762 $7.1550 $7,301 $5.9625 $5,841 $4.7700 60,000 $10,908 $18.1800 $9,090 $15.1500 $7,272 $12.1200 451
CC 04-19-2022
451 of 632
New Construction - Plan Check Fees

Page 5 of 5 ends

Construction Type Construction Type Construction Type

SHELL BUILDINGS
- All Shell Buildings 500 $2,896 $38.1120 $2,413 $31.7600 $1,931 $25.4080 - - 2,500 $3,658 $42.6720 $3,049 $35.5600 $2,439 $28.4480 - - 5,000 $4,725 $33.5400 $3,938 $27.9500 $3,150 $22.3600 - - 10,000 $6,402 $7.1200 $5,335 $5.9333 $4,268 $4.7467 - - 25,000 $7,470 $7.3200 $6,225 $6.1000 $4,980 $4.8800 - - 50,000 $9,300 $18.6000 $7,750 $15.5000 $6,200 $12.4000 * Each additional 100 square feet, or portion thereof, up to the next highest project size threshold. 452
CC 04-19-2022
452 of 632

INSPECTION – NEW CONSTRUCTION FEE SCHEDULE

453
CC 04-19-2022
453 of 632
Inspection - New Construction Fee Schedule

Page 1 of 4 ends

Construction Type Construction Type Construction Type

IA, IB IIA, IIB, IIIA, IIIB, IV VA, VB
IBC
Class IBC Occupancy Type
Project Size
Threshold
Base Cost
@
Threshold
Size
Cost for
Each
Additional
100 sf *
Base Cost
@
Threshold
Size
Cost for
Each
Additional
100 sf *
Base Cost
@
Threshold
Size
Cost for
Each
Additional
100 sf *
A-1 Assembly—Fixed Seating 1,000 $3,557 $28.9450 $2,964 $24.1208 $2,371 $19.2967 - Theater, Concert Hall 5,000 $4,715 $31.4300 $3,929 $26.1917 $3,143 $20.9533 - - 10,000 $6,286 $14.0600 $5,238 $11.7167 $4,191 $9.3733 - - 20,000 $7,692 $4.1433 $6,410 $3.4528 $5,128 $2.7622 - - 50,000 $8,935 $6.9500 $7,446 $5.7917 $5,957 $4.6333 - - 100,000 $12,410 $12.4100 $10,342 $10.3417 $8,273 $8.2733 A-2 Assembly—Food & Drink 250 $3,138 $102.1838 $2,615 $85.1531 $2,092 $68.1225 - Restaurant, Night Club, Bar 1,250 $4,160 $110.9250 $3,467 $92.4375 $2,773 $73.9500 - - 2,500 $5,547 $49.6350 $4,622 $41.3625 $3,698 $33.0900 - - 5,000 $6,788 $14.6000 $5,656 $12.1667 $4,525 $9.7333 - - 12,500 $7,883 $24.5100 $6,569 $20.4250 $5,255 $16.3400 - - 25,000 $10,946 $43.7850 $9,122 $36.4875 $7,298 $29.1900 A-3 Assembly—Worship, Amusement 1,000 $5,335 $43.4175 $4,446 $36.1813 $3,557 $28.9450 - Arcade, Church, Community Hall 5,000 $7,072 $47.1450 $5,893 $39.2875 $4,715 $31.4300 - - 10,000 $9,429 $21.0900 $7,858 $17.5750 $6,286 $14.0600 - - 20,000 $11,538 $6.2150 $9,615 $5.1792 $7,692 $4.1433 - - 50,000 $13,403 $10.4250 $11,169 $8.6875 $8,935 $6.9500 - - 100,000 $18,615 $18.6150 $15,513 $15.5125 $12,410 $12.4100 A-4 Assembly—Indoor Sport Viewing 500 $3,088 $50.2740 $2,573 $41.8950 $2,059 $33.5160 - Arena, Skating Rink, Tennis Court 2,500 $4,094 $54.5880 $3,411 $45.4900 $2,729 $36.3920 - - 5,000 $5,458 $24.4200 $4,549 $20.3500 $3,639 $16.2800 - - 10,000 $6,679 $7.1720 $5,566 $5.9767 $4,453 $4.7813 - - 25,000 $7,755 $12.0600 $6,463 $10.0500 $5,170 $8.0400 - - 50,000 $10,770 $21.5400 $8,975 $17.9500 $7,180 $14.3600 A-5 Assembly—Outdoor Activities 500 $3,389 $55.1775 $2,824 $45.9813 $2,260 $36.7850 - Amusement Park, Bleacher, Stadium 2,500 $4,493 $59.8950 $3,744 $49.9125 $2,995 $39.9300 - - 5,000 $5,990 $26.8050 $4,992 $22.3375 $3,994 $17.8700 - - 10,000 $7,331 $7.8800 $6,109 $6.5667 $4,887 $5.2533 - - 25,000 $8,513 $13.2300 $7,094 $11.0250 $5,675 $8.8200 - - 50,000 $11,820 $23.6400 $9,850 $19.7000 $7,880 $15.7600 A A Occupancy Tenant Improvements 500 $3,389 $55.1775 $2,824 $45.9813 $2,260 $36.7850 - - 2,500 $4,493 $59.8950 $3,744 $49.9125 $2,995 $39.9300 - - 5,000 $5,990 $26.8050 $4,992 $22.3375 $3,994 $17.8700 - - 10,000 $7,331 $7.8800 $6,109 $6.5667 $4,887 $5.2533 - - 25,000 $8,513 $13.2300 $7,094 $11.0250 $5,675 $8.8200 - - 50,000 $11,820 $23.6400 $9,850 $19.7000 $7,880 $15.7600 B Business—Bank 500 $3,515 $57.2288 $2,929 $47.6906 $2,343 $38.1525 - - 2,500 $4,659 $62.1150 $3,883 $51.7625 $3,106 $41.4100 - - 5,000 $6,212 $27.7950 $5,177 $23.1625 $4,142 $18.5300 - - 10,000 $7,602 $8.1700 $6,335 $6.8083 $5,068 $5.4467 - - 25,000 $8,828 $13.7400 $7,356 $11.4500 $5,885 $9.1600 - - 50,000 $12,263 $24.5250 $10,219 $20.4375 $8,175 $16.3500 B Business—Laundromat 200 $3,138 $127.7138 $2,615 $106.4281 $2,092 $85.1425 - - 1,000 $4,160 $138.6750 $3,467 $115.5625 $2,773 $92.4500 - - 2,000 $5,547 $62.0250 $4,622 $51.6875 $3,698 $41.3500 - - 4,000 $6,787 $18.2550 $5,656 $15.2125 $4,525 $12.1700 - - 10,000 $7,883 $30.6450 $6,569 $25.5375 $5,255 $20.4300 - - 20,000 $10,947 $54.7350 $9,123 $45.6125 $7,298 $36.4900 B Business—Clinic, Outpatient 500 $3,578 $58.2338 $2,981 $48.5281 $2,385 $38.8225 - - 2,500 $4,742 $63.2400 $3,952 $52.7000 $3,162 $42.1600 - - 5,000 $6,323 $28.2750 $5,269 $23.5625 $4,216 $18.8500 - - 10,000 $7,737 $8.3200 $6,448 $6.9333 $5,158 $5.5467 - - 25,000 $8,985 $13.9800 $7,488 $11.6500 $5,990 $9.3200 - - 50,000 $12,480 $24.9600 $10,400 $20.8000 $8,320 $16.6400 B Business—Professional Office 1,000 $4,770 $38.8275 $3,975 $32.3563 $3,180 $25.8850 - - 5,000 $6,323 $42.1650 $5,269 $35.1375 $4,216 $28.1100 - - 10,000 $8,432 $18.8550 $7,026 $15.7125 $5,621 $12.5700 - - 20,000 $10,317 $5.5350 $8,598 $4.6125 $6,878 $3.6900 - - 50,000 $11,978 $9.3150 $9,981 $7.7625 $7,985 $6.2100 - - 100,000 $16,635 $16.6350 $13,863 $13.8625 $11,090 $11.0900 B B Occupancy Tenant Improvements 300 $2,762 $74.9250 $2,301 $62.4375 $1,841 $49.9500 - - 1,500 $3,661 $81.3600 $3,051 $67.8000 $2,441 $54.2400 - - 3,000 $4,881 $36.4050 $4,068 $30.3375 $3,254 $24.2700 - - 6,000 $5,973 $10.7050 $4,978 $8.9208 $3,982 $7.1367 - - 15,000 $6,937 $17.9850 $5,781 $14.9875 $4,625 $11.9900 - - 30,000 $9,635 $32.1150 $8,029 $26.7625 $6,423 $21.4100

CITY OF CUPERTINO, CA
Building Division
Schedule of New Construction Fees

INSPECTION FEES ONLY
454
CC 04-19-2022
454 of 632
Inspection - New Construction Fee Schedule

Page 2 of 4 ends

Construction Type Construction Type Construction Type

IA, IB IIA, IIB, IIIA, IIIB, IV VA, VB
IBC
Class IBC Occupancy Type
Project Size
Threshold
Base Cost
@
Threshold
Size
Cost for
Each
Additional
100 sf *
Base Cost
@
Threshold
Size
Cost for
Each
Additional
100 sf *
Base Cost
@
Threshold
Size
Cost for
Each
Additional
100 sf *
E Educational— Preschool / School 100 $2,699 $219.6713 $2,249 $183.0594 $1,799 $146.4475 - - 500 $3,578 $238.5150 $2,981 $198.7625 $2,385 $159.0100 - - 1,000 $4,770 $106.6950 $3,975 $88.9125 $3,180 $71.1300 - - 2,000 $5,837 $31.3800 $4,864 $26.1500 $3,891 $20.9200 - - 5,000 $6,779 $52.7100 $5,649 $43.9250 $4,519 $35.1400 - - 10,000 $9,414 $94.1400 $7,845 $78.4500 $6,276 $62.7600 E E Occupancy Tenant Improvements 100 $2,511 $204.3450 $2,092 $170.2875 $1,674 $136.2300 - - 500 $3,328 $221.8650 $2,773 $184.8875 $2,219 $147.9100 - - 1,000 $4,437 $99.2700 $3,698 $82.7250 $2,958 $66.1800 - - 2,000 $5,430 $29.2000 $4,525 $24.3333 $3,620 $19.4667 - - 5,000 $6,306 $49.0500 $5,255 $40.8750 $4,204 $32.7000 - - 10,000 $8,759 $87.5850 $7,299 $72.9875 $5,839 $58.3900 F-1 Factory Industrial—Moderate Hazard 1,000 $3,994 $28.8450 $3,328 $24.0375 $2,662 $19.2300 - - 5,000 $5,147 $30.1800 $4,290 $25.1500 $3,432 $20.1200 - - 10,000 $6,656 $15.9720 $5,547 $13.3100 $4,438 $10.6480 - - 20,000 $8,254 $4.4280 $6,878 $3.6900 $5,502 $2.9520 - - 50,000 $9,582 $7.4520 $7,985 $6.2100 $6,388 $4.9680 - - 100,000 $13,308 $13.3080 $11,090 $11.0900 $8,872 $8.8720 F-2 Factory Industrial—Low Hazard 1,000 $4,707 $38.3175 $3,923 $31.9313 $3,138 $25.5450 - - 5,000 $6,240 $41.6100 $5,200 $34.6750 $4,160 $27.7400 - - 10,000 $8,321 $18.6150 $6,934 $15.5125 $5,547 $12.4100 - - 20,000 $10,182 $5.4600 $8,485 $4.5500 $6,788 $3.6400 - - 50,000 $11,820 $9.2100 $9,850 $7.6750 $7,880 $6.1400 - - 100,000 $16,425 $16.4250 $13,688 $13.6875 $10,950 $10.9500 F F Occupancy Tenant Improvements 1,000 $3,163 $25.7520 $2,636 $21.4600 $2,109 $17.1680 - - 5,000 $4,193 $27.9480 $3,495 $23.2900 $2,796 $18.6320 - - 10,000 $5,591 $12.5160 $4,659 $10.4300 $3,727 $8.3440 - - 20,000 $6,842 $3.6720 $5,702 $3.0600 $4,562 $2.4480 - - 50,000 $7,944 $6.1920 $6,620 $5.1600 $5,296 $4.1280 - - 100,000 $11,040 $11.0400 $9,200 $9.2000 $7,360 $7.3600 H-1 High Hazard Group H-1 100 $2,260 $183.9175 $1,883 $153.2646 $1,506 $122.6117 - - 500 $2,995 $199.6800 $2,496 $166.4000 $1,997 $133.1200 - - 1,000 $3,994 $89.3200 $3,328 $74.4333 $2,662 $59.5467 - - 2,000 $4,887 $26.2733 $4,072 $21.8944 $3,258 $17.5156 - - 5,000 $5,675 $44.1400 $4,729 $36.7833 $3,783 $29.4267 - - 10,000 $7,882 $78.8200 $6,568 $65.6833 $5,255 $52.5467 H-2 High Hazard Group H-2 100 $2,711 $220.7010 $2,260 $183.9175 $1,808 $147.1340 - - 500 $3,594 $239.6160 $2,995 $199.6800 $2,396 $159.7440 - - 1,000 $4,792 $107.1840 $3,994 $89.3200 $3,195 $71.4560 - - 2,000 $5,864 $31.5280 $4,887 $26.2733 $3,909 $21.0187 - - 5,000 $6,810 $52.9680 $5,675 $44.1400 $4,540 $35.3120 - - 10,000 $9,458 $94.5840 $7,882 $78.8200 $6,306 $63.0560 H-3 High Hazard Group H-3 100 $3,389 $275.8763 $2,824 $229.8969 $2,260 $183.9175 - - 500 $4,493 $299.5200 $3,744 $249.6000 $2,995 $199.6800 - - 1,000 $5,990 $133.9800 $4,992 $111.6500 $3,994 $89.3200 - - 2,000 $7,330 $39.4100 $6,109 $32.8417 $4,887 $26.2733 - - 5,000 $8,513 $66.2100 $7,094 $55.1750 $5,675 $44.1400 - - 10,000 $11,823 $118.2300 $9,853 $98.5250 $7,882 $78.8200 H-4 High Hazard Group H-4 100 $2,711 $220.7010 $2,260 $183.9175 $1,808 $147.1340 - - 500 $3,594 $239.6160 $2,995 $199.6800 $2,396 $159.7440 - - 1,000 $4,792 $107.1840 $3,994 $89.3200 $3,195 $71.4560 - - 2,000 $5,864 $31.5280 $4,887 $26.2733 $3,909 $21.0187 - - 5,000 $6,810 $52.9680 $5,675 $44.1400 $4,540 $35.3120 - - 10,000 $9,458 $94.5840 $7,882 $78.8200 $6,306 $63.0560 H-5 High Hazard Group H-5 100 $2,711 $220.7010 $2,260 $183.9175 $1,808 $147.1340 - - 500 $3,594 $239.6160 $2,995 $199.6800 $2,396 $159.7440 - - 1,000 $4,792 $107.1840 $3,994 $89.3200 $3,195 $71.4560 - - 2,000 $5,864 $31.5280 $4,887 $26.2733 $3,909 $21.0187 - - 5,000 $6,810 $52.9680 $5,675 $44.1400 $4,540 $35.3120 - - 10,000 $9,458 $94.5840 $7,882 $78.8200 $6,306 $63.0560 H H Occupancy Tenant Improvements 100 $2,159 $175.7370 $1,799 $146.4475 $1,439 $117.1580 - - 500 $2,862 $190.8120 $2,385 $159.0100 $1,908 $127.2080 - - 1,000 $3,816 $85.3560 $3,180 $71.1300 $2,544 $56.9040 - - 2,000 $4,670 $25.1040 $3,891 $20.9200 $3,113 $16.7360 - - 5,000 $5,423 $42.1680 $4,519 $35.1400 $3,615 $28.1120 - - 10,000 $7,531 $75.3120 $6,276 $62.7600 $5,021 $50.2080 I-1 Institutional—7+ persons, ambulatory 500 $3,013 $49.0440 $2,511 $40.8700 $2,008 $32.6960 - - 2,500 $3,994 $53.2560 $3,328 $44.3800 $2,662 $35.5040 - - 5,000 $5,325 $23.8200 $4,438 $19.8500 $3,550 $15.8800 - - 10,000 $6,516 $7.0000 $5,430 $5.8333 $4,344 $4.6667 - - 25,000 $7,566 $11.7840 $6,305 $9.8200 $5,044 $7.8560 - - 50,000 $10,512 $21.0240 $8,760 $17.5200 $7,008 $14.0160 I-2 Institutional—6+ persons, non-ambulatory 500 $3,766 $61.3050 $3,138 $51.0875 $2,511 $40.8700 - - 2,500 $4,992 $66.5700 $4,160 $55.4750 $3,328 $44.3800 - - 5,000 $6,656 $29.7750 $5,547 $24.8125 $4,438 $19.8500 - - 10,000 $8,145 $8.7500 $6,788 $7.2917 $5,430 $5.8333 - - 25,000 $9,458 $14.7300 $7,881 $12.2750 $6,305 $9.8200 - - 50,000 $13,140 $26.2800 $10,950 $21.9000 $8,760 $17.5200 455
CC 04-19-2022
455 of 632
Inspection - New Construction Fee Schedule

Page 3 of 4 ends

Construction Type Construction Type Construction Type

IA, IB IIA, IIB, IIIA, IIIB, IV VA, VB
IBC
Class IBC Occupancy Type
Project Size
Threshold
Base Cost
@
Threshold
Size
Cost for
Each
Additional
100 sf *
Base Cost
@
Threshold
Size
Cost for
Each
Additional
100 sf *
Base Cost
@
Threshold
Size
Cost for
Each
Additional
100 sf *
I-3 Institutional—6+ persons, restrained 500 $3,766 $61.3050 $3,138 $51.0875 $2,511 $40.8700 - - 2,500 $4,992 $66.5700 $4,160 $55.4750 $3,328 $44.3800 - - 5,000 $6,656 $29.7750 $5,547 $24.8125 $4,438 $19.8500 - - 10,000 $8,145 $8.7500 $6,788 $7.2917 $5,430 $5.8333 - - 25,000 $9,458 $14.7300 $7,881 $12.2750 $6,305 $9.8200 - - 50,000 $13,140 $26.2800 $10,950 $21.9000 $8,760 $17.5200 I-4 Institutional—6+ persons, day care 500 $3,766 $61.3050 $3,138 $51.0875 $2,511 $40.8700 - - 2,500 $4,992 $66.5700 $4,160 $55.4750 $3,328 $44.3800 - - 5,000 $6,656 $29.7750 $5,547 $24.8125 $4,438 $19.8500 - - 10,000 $8,145 $8.7500 $6,788 $7.2917 $5,430 $5.8333 - - 25,000 $9,458 $14.7300 $7,881 $12.2750 $6,305 $9.8200 - - 50,000 $13,140 $26.2800 $10,950 $21.9000 $8,760 $17.5200 I I Occupancy Tenant Improvements 100 $2,109 $171.6570 $1,757 $143.0475 $1,406 $114.4380 - - 500 $2,796 $186.3600 $2,330 $155.3000 $1,864 $124.2400 - - 1,000 $3,727 $83.3880 $3,106 $69.4900 $2,485 $55.5920 - - 2,000 $4,561 $24.5200 $3,801 $20.4333 $3,041 $16.3467 - - 5,000 $5,297 $41.2080 $4,414 $34.3400 $3,531 $27.4720 - - 10,000 $7,357 $73.5720 $6,131 $61.3100 $4,905 $49.0480 M Mercantile 2,000 $5,335 $21.7200 $4,446 $18.1000 $3,557 $14.4800 - - 10,000 $7,073 $23.5650 $5,894 $19.6375 $4,715 $15.7100 - - 20,000 $9,429 $10.5450 $7,858 $8.7875 $6,286 $7.0300 - - 40,000 $11,538 $3.0950 $9,615 $2.5792 $7,692 $2.0633 - - 100,000 $13,395 $5.2050 $11,163 $4.3375 $8,930 $3.4700 - - 200,000 $18,600 $9.3000 $15,500 $7.7500 $12,400 $6.2000 M M Occupancy Tenant Improvements 300 $3,138 $85.1475 $2,615 $70.9563 $2,092 $56.7650 - - 1,500 $4,160 $92.4450 $3,467 $77.0375 $2,773 $61.6300 - - 3,000 $5,547 $41.3700 $4,622 $34.4750 $3,698 $27.5800 - - 6,000 $6,788 $12.1550 $5,657 $10.1292 $4,525 $8.1033 - - 15,000 $7,882 $20.4450 $6,568 $17.0375 $5,255 $13.6300 - - 30,000 $10,949 $36.4950 $9,124 $30.4125 $7,299 $24.3300 R-1 Residential—Hotels & Motels 3,000 $8,786 $9.1538 $7,322 $7.6281 $5,857 $6.1025 - - 15,000 $9,884 $7.3350 $8,237 $6.1125 $6,590 $4.8900 - - 30,000 $10,985 $5.4750 $9,154 $4.5625 $7,323 $3.6500 - - 60,000 $12,627 $0.8200 $10,523 $0.6833 $8,418 $0.5467 - - 150,000 $13,365 $1.3500 $11,138 $1.1250 $8,910 $0.9000 - - 300,000 $15,390 $5.1300 $12,825 $4.2750 $10,260 $3.4200 R-2 Residential—Apartment Building 800 $6,922 $27.0375 $5,769 $22.5313 $4,615 $18.0250 - - 4,000 $7,787 $21.6450 $6,490 $18.0375 $5,192 $14.4300 - - 8,000 $8,653 $16.2150 $7,211 $13.5125 $5,769 $10.8100 - - 16,000 $9,950 $2.4150 $8,292 $2.0125 $6,634 $1.6100 - - 40,000 $10,530 $3.9450 $8,775 $3.2875 $7,020 $2.6300 - - 80,000 $12,108 $15.1350 $10,090 $12.6125 $8,072 $10.0900 R-3 Dwellings—Custom Homes, Models, First Master Plan 1,000 $5,325 $44.3600 $4,437 $36.9667 $3,550 $29.5733 - - 2,500 $5,990 $44.3700 $4,992 $36.9750 $3,994 $29.5800 - - 4,000 $6,656 $49.9350 $5,547 $41.6125 $4,437 $33.2900 - - 6,000 $7,655 $22.1550 $6,379 $18.4625 $5,103 $14.7700 - - 8,000 $8,098 $61.0200 $6,748 $50.8500 $5,398 $40.6800 - - 10,000 $9,318 $93.1800 $7,765 $77.6500 $6,212 $62.1200 R-3 Dwellings—Production Phase 1,000 $5,325 $44.3600 $4,437 $36.9667 $3,550 $29.5733 - of Master Plan (repeats) 2,500 $5,990 $44.3700 $4,992 $36.9750 $3,994 $29.5800 - - 4,000 $6,656 $49.9350 $5,547 $41.6125 $4,437 $33.2900 - - 6,000 $7,655 $22.1550 $6,379 $18.4625 $5,103 $14.7700 - - 8,000 $8,098 $61.0200 $6,748 $50.8500 $5,398 $40.6800 - - 10,000 $9,318 $93.1800 $7,765 $77.6500 $6,212 $62.1200 R-3 Dwellings—Alternate Materials 1,000 $5,325 $44.3600 $4,437 $36.9667 $3,550 $29.5733 - - 2,500 $5,990 $44.3700 $4,992 $36.9750 $3,994 $29.5800 - - 4,000 $6,656 $49.9350 $5,547 $41.6125 $4,437 $33.2900 - - 6,000 $7,655 $22.1550 $6,379 $18.4625 $5,103 $14.7700 - - 8,000 $8,098 $61.0200 $6,748 $50.8500 $5,398 $40.6800 - - 10,000 $9,318 $93.1800 $7,765 $77.6500 $6,212 $62.1200 R-3 Dwellings—Hillside - Custom Homes, Models 1,000 $5,502 $45.8550 $4,585 $38.2125 $3,668 $30.5700 - First Master Plan 2,500 $6,190 $45.8450 $5,158 $38.2042 $4,127 $30.5633 - - 4,000 $6,878 $51.5700 $5,732 $42.9750 $4,585 $34.3800 - - 6,000 $7,909 $22.9200 $6,591 $19.1000 $5,273 $15.2800 - - 8,000 $8,368 $63.0450 $6,973 $52.5375 $5,578 $42.0300 - - 10,000 $9,629 $96.2850 $8,024 $80.2375 $6,419 $64.1900 R-3 Dwellings—Hillside - Production Phase 1,000 $5,502 $45.8550 $4,585 $38.2125 $3,668 $30.5700 - of Master Plan (repeats) 2,500 $6,190 $45.8450 $5,158 $38.2042 $4,127 $30.5633 - - 4,000 $6,878 $51.5700 $5,732 $42.9750 $4,585 $34.3800 - - 6,000 $7,909 $22.9200 $6,591 $19.1000 $5,273 $15.2800 - - 8,000 $8,368 $63.0450 $6,973 $52.5375 $5,578 $42.0300 - - 10,000 $9,629 $96.2850 $8,024 $80.2375 $6,419 $64.1900 R-3 Dwellings—Hillside - Alternate Materials 1,000 $5,502 $45.8550 $4,585 $38.2125 $3,668 $30.5700 - - 2,500 $6,190 $45.8450 $5,158 $38.2042 $4,127 $30.5633 - - 4,000 $6,878 $51.5700 $5,732 $42.9750 $4,585 $34.3800 - - 6,000 $7,909 $22.9200 $6,591 $19.1000 $5,273 $15.2800 - - 8,000 $8,368 $63.0450 $6,973 $52.5375 $5,578 $42.0300 - - 10,000 $9,629 $96.2850 $8,024 $80.2375 $6,419 $64.1900 456
CC 04-19-2022
456 of 632
Inspection - New Construction Fee Schedule

Page 4 of 4 ends

Construction Type Construction Type Construction Type

IA, IB IIA, IIB, IIIA, IIIB, IV VA, VB
IBC
Class IBC Occupancy Type
Project Size
Threshold
Base Cost
@
Threshold
Size
Cost for
Each
Additional
100 sf *
Base Cost
@
Threshold
Size
Cost for
Each
Additional
100 sf *
Base Cost
@
Threshold
Size
Cost for
Each
Additional
100 sf *
R-3 Group Care 1,000 $7,100 $22.1963 $5,916 $18.4969 $4,733 $14.7975 - - 5,000 $7,988 $17.7300 $6,656 $14.7750 $5,325 $11.8200 - - 10,000 $8,874 $13.3200 $7,395 $11.1000 $5,916 $8.8800 - - 20,000 $10,206 $1.9800 $8,505 $1.6500 $6,804 $1.3200 - - 50,000 $10,800 $3.2400 $9,000 $2.7000 $7,200 $2.1600 - - 100,000 $12,420 $12.4200 $10,350 $10.3500 $8,280 $8.2800 R-4 Group Care 100 $4,437 $138.6675 $3,698 $115.5563 $2,958 $92.4450 - - 500 $4,992 $110.9400 $4,160 $92.4500 $3,328 $73.9600 - - 1,000 $5,547 $83.1900 $4,622 $69.3250 $3,698 $55.4600 - - 2,000 $6,379 $12.3300 $5,316 $10.2750 $4,252 $8.2200 - - 5,000 $6,749 $20.3400 $5,624 $16.9500 $4,499 $13.5600 - - 10,000 $7,766 $77.6550 $6,471 $64.7125 $5,177 $51.7700 R R Occupancy Tenant Improvements 80 $3,905 $152.5350 $3,254 $127.1125 $2,603 $101.6900 - - 400 $4,393 $122.0100 $3,661 $101.6750 $2,929 $81.3400 - - 800 $4,881 $91.5150 $4,068 $76.2625 $3,254 $61.0100 - - 1,600 $5,613 $13.5700 $4,678 $11.3083 $3,742 $9.0467 - - 4,000 $5,939 $22.3800 $4,949 $18.6500 $3,959 $14.9200 - - 8,000 $6,834 $85.4250 $5,695 $71.1875 $4,556 $56.9500 S-1 Storage—Moderate Hazard 600 $2,812 $38.1480 $2,343 $31.7900 $1,875 $25.4320 - - 3,000 $3,727 $41.4240 $3,106 $34.5200 $2,485 $27.6160 - - 6,000 $4,970 $18.5160 $4,142 $15.4300 $3,313 $12.3440 - - 12,000 $6,081 $5.4560 $5,068 $4.5467 $4,054 $3.6373 - - 30,000 $7,063 $9.1440 $5,886 $7.6200 $4,709 $6.0960 - - 60,000 $9,806 $16.3440 $8,172 $13.6200 $6,538 $10.8960 S-2 Storage—Low Hazard 10,000 $8,097 $6.5888 $6,748 $5.4906 $5,398 $4.3925 - - 50,000 $10,733 $7.1550 $8,944 $5.9625 $7,155 $4.7700 - - 100,000 $14,310 $3.2100 $11,925 $2.6750 $9,540 $2.1400 - - 200,000 $17,520 $0.9350 $14,600 $0.7792 $11,680 $0.6233 - - 500,000 $20,325 $1.5750 $16,938 $1.3125 $13,550 $1.0500 - - 1,000,000 $28,200 $2.8200 $23,500 $2.3500 $18,800 $1.8800 S S Occupancy Tenant Improvements 600 $3,326 $45.1275 $2,772 $37.6063 $2,218 $30.0850 - - 3,000 $4,410 $49.0050 $3,675 $40.8375 $2,940 $32.6700 - - 6,000 $5,880 $21.9150 $4,900 $18.2625 $3,920 $14.6100 - - 12,000 $7,195 $6.4550 $5,996 $5.3792 $4,796 $4.3033 - - 30,000 $8,357 $10.8150 $6,964 $9.0125 $5,571 $7.2100 - - 60,000 $11,601 $19.3350 $9,668 $16.1125 $7,734 $12.8900 U Accessory—Private Garage / 40 $1,695 $344.8425 $1,412 $287.3688 $1,130 $229.8950 - Agricultural Building 200 $2,246 $374.4000 $1,872 $312.0000 $1,498 $249.6000 - - 400 $2,995 $167.4900 $2,496 $139.5750 $1,997 $111.6600 - - 800 $3,665 $49.2700 $3,054 $41.0583 $2,443 $32.8467 - - 2,000 $4,256 $82.7700 $3,547 $68.9750 $2,838 $55.1800 - - 4,000 $5,912 $147.7950 $4,927 $123.1625 $3,941 $98.5300 - Deferred Submittal - All Except R-3 1,000 $3,578 $29.1150 $2,981 $24.2625 $2,385 $19.4100 - - 5,000 $4,742 $31.6050 $3,952 $26.3375 $3,162 $21.0700 - - 10,000 $6,323 $14.1450 $5,269 $11.7875 $4,215 $9.4300 - - 20,000 $7,737 $4.1600 $6,448 $3.4667 $5,158 $2.7733 - - 50,000 $8,985 $6.9900 $7,488 $5.8250 $5,990 $4.6600 - - 100,000 $12,480 $12.4800 $10,400 $10.4000 $8,320 $8.3200 - Deferred Submittal - R-3 1,000 $3,766 $81.7400 $3,138 $68.1167 $2,511 $54.4933 - - 2,500 $4,992 $110.9200 $4,160 $92.4333 $3,328 $73.9467 - - 4,000 $6,656 $74.4600 $5,547 $62.0500 $4,437 $49.6400 - - 6,000 $8,145 $65.6700 $6,788 $54.7250 $5,430 $43.7800 - - 8,000 $9,458 $183.9300 $7,882 $153.2750 $6,306 $122.6200 - - 10,000 $13,137 $131.3700 $10,948 $109.4750 $8,758 $87.5800 - Standard Comm. Foundation 500 $4,615 $28.8338 $3,846 $24.0281 $3,077 $19.2225 - w/o Podium 2,500 $5,192 $23.0700 $4,326 $19.2250 $3,461 $15.3800 - - 5,000 $5,768 $17.3250 $4,807 $14.4375 $3,846 $11.5500 - - 10,000 $6,635 $2.5700 $5,529 $2.1417 $4,423 $1.7133 - - 25,000 $7,020 $4.2300 $5,850 $3.5250 $4,680 $2.8200 - - 50,000 $8,078 $16.1550 $6,731 $13.4625 $5,385 $10.7700

SHELL BUILDINGS
- All Shell Buildings 500 $2,511 $40.8660 $2,092 $34.0550 $1,674 $27.2440 - - 2,500 $3,328 $44.3880 $2,773 $36.9900 $2,219 $29.5920 - - 5,000 $4,438 $19.8480 $3,698 $16.5400 $2,958 $13.2320 - - 10,000 $5,430 $5.8400 $4,525 $4.8667 $3,620 $3.8933 - - 25,000 $6,306 $9.8160 $5,255 $8.1800 $4,204 $6.5440 - - 50,000 $8,760 $17.5200 $7,300 $14.6000 $5,840 $11.6800 * Each additional 100 square feet, or portion thereof, up to the next highest project size threshold. 457
CC 04-19-2022
457 of 632

MECHANICAL, ELECTRICAL, & PLUMBING FEES

458
CC 04-19-2022
458 of 632
User Fee (Cost of Services) Study
FY 15-16 Budget
City of Cupertino, CA
Building Division
Matrix Consulting Group Page 1 of 3

MECHANICAL, ELECTRICAL & PLUMBING PERMIT FEES

FEE TYPES
Actual
Unit Cost

2.47$
ADMINISTRATIVE AND MISC. FEES
Travel and Documentation Fees: 50.29$ 48.00$ (2.29)$ 95% MECHANICAL PERMIT FEES 49.30$ 48.00$ (1.30)$ 97% Stand Alone Mechanical Plan Check (hourly rate) 147.91$ 143.00$ (4.91)$ 97% UNIT FEES: 0%
Install/Relocate forced air or gravity-type furnace or burner (including attached ducts and vents) up to and including 100,000 Btu/h (each) 147.91$ 143.00$ (4.91)$ 97% Install/Relocate forced air or gravity-type furnace or burner (including attached ducts and vents) over 100,000 Btu/h (each) 147.91$ 143.00$ (4.91)$ 97% Install/Relocate floor furnace, including vent (each) 73.96$ 72.00$ (1.96)$ 97% Install/Relocate suspended heater, recessed wall heater, or floor-mounted unit heater (each) 73.96$ 72.00$ (1.96)$ 97% Install/Relocate suspended heater, recessed wall heater, or floor-mounted unit heater (each) 73.96$ 72.00$ (1.96)$ 97% Install/Relocate/Replace appliance vent installed and not included in an appliance permit (each) 73.96$ 72.00$ (1.96)$ 97% Install/Relocate/Replace appliance vent installed and not included in an appliance permit (each) 73.96$ 72.00$ (1.96)$ 97% Repair/Alter/Add heating appliance, refrigeration unit, cooling unit, absorption unit, or each heating, cooling, absorption, or evaporative cooling system, including installation of controls (each) - Residential 73.96$ 72.00$ (1.96)$ 97% Repair/Alter/Add heating appliance, refrigeration unit, cooling unit, absorption unit, or each heating, cooling, absorption, or evaporative cooling system, including installation of controls (each) - Commercial 147.91$ 143.00$ (4.91)$ 97% Install/Relocate boiler or compressor, up to and including 3HP, or absorption system up to and including 100,000 Btu/h (each) 147.91$ 107.00$ (40.91)$ 72% Install/Relocate boiler or compressor, over 3HP and up to and including 15 HP, or absorption system over 100,000 Btu/h and up to and including 500,000 Btu/h (each) 147.91$ 132.00$ (15.91)$ 89%
Install/Relocate boiler or compressor, over 15 HP and up to and including 30 HP, or absorption system over 500,000 Btu/h and up to and including 1,000,000 Btu/h (each) 184.89$ 156.00$ (28.89)$ 84%
Install/Relocate boiler or compressor, over 30 HP and up to and including 50 HP, or absorption system over 1,000,000 Btu/h and up to and including 1,750,000 Btu/h (each) 184.89$ 179.00$ (5.89)$ 97%
Install/Relocate boiler or compressor, over 50 HP, or absorption system over 1,750,000 Btu/h (each) 221.87$ 203.00$ (18.87)$ 91% Air-handling unit, including attached ducts. (Note: this fee shall not apply to an air- handling unit that is a portion of a factory-assembled appliance, cooling unit, evaporative cooler, or absorption unit for which a permit is required elsewhere) (each) - Residential 73.96$ 72.00$ (1.96)$ 97% Air-handling unit, including attached ducts. (Note: this fee shall not apply to an air- handling unit that is a portion of a factory-assembled appliance, cooling unit, evaporative cooler, or absorption unit for which a permit is required elsewhere) (each) - Commercial 221.87$ 143.00$ (78.87)$ 64% Air-handling unit over 10,000 CFM (each) 147.91$ 143.00$ (4.91)$ 97% Ventilation fan connected to a single duct (each) 73.96$ 25.00$ (48.96)$ 34% Ventilation system that is not a portion of any heating or air-conditioning system authorized by a permit (each) 110.93$ (110.93)$ 0%
Hood installation that is served by mechanical exhaust, including the ducts for such hood (each) - Residential 73.96$ 36.00$ (37.96)$ 49% Hood installation that is served by mechanical exhaust, including the ducts for such hood (each) - Commercial 221.87$ 143.00$ (78.87)$ 64% Appliance or piece of equipment not classed in other appliance categories, or for which no other fee is listed (each) 110.93$ 107.00$ (3.93)$ 96% OTHER FEES: -$ -$ 0%
Other Mechanical Inspections (per hour) 147.91$ 143.00$ (4.91)$ 97%

UNIT COSTS
Cost
Recovery
%
FY 14-15
Average
Current Fee
Subsidy to
Public per
Unit
459
CC 04-19-2022
459 of 632
User Fee (Cost of Services) Study
FY 15-16 Budget
City of Cupertino, CA
Building Division
Matrix Consulting Group Page 2 of 3

FEE TYPES
Actual
Unit Cost

2.47$

UNIT COSTS
Cost
Recovery
%
FY 14-15
Average
Current Fee
Subsidy to
Public per
Unit
PLUMBING/GAS PERMIT FEES 50.29$ 48.00$ (2.29)$ 95% Stand Alone Plumbing Plan Check (hourly rate) 147.91$ 143.00$ (4.91)$ 97% UNIT FEES:

Plumbing fixture or trap or set of fixtures on one trap, including water, drainage piping, and backflow protection (each) 10.35$ 10.00$ (0.35)$ 97% Building or trailer park sewer (each - Residential) 36.98$ 25.00$ (11.98)$ 68% Building or trailer park sewer (each - Commercial) 73.96$ 25.00$ (48.96)$ 34% Rainwater system inside building (per drain) 10.35$ (10.35)$ 0% Cesspool (each) 147.91$ 143.00$ (4.91)$ 97% Private sewage disposal system (each) 147.91$ 143.00$ (4.91)$ 97% Water Heater and/or vent (each) - Residential 36.98$ 29.00$ (7.98)$ 78% Water Heater and/or vent (each) - Commercial 110.93$ 29.00$ (81.93)$ 26% Industrial waste pretreatment interceptor, including its trap and vent, excepting kitchen-type grease interceptors functioning as fixture traps (each) 110.93$ 36.00$ (74.93)$ 32% Install/Alter/Repair water piping and/or water treating equipment (each) 50.29$ 48.00$ (2.29)$ 95% Repair/Alter drainage or vent piping (each fixture) 50.29$ 48.00$ (2.29)$ 95% Lawn sprinkler system on any one meter, including backflow protection devices therefore (each) 73.96$ 72.00$ (1.96)$ 97% Backflow devices not included in other fee services, e.g., building/trailer park sewer (each) 73.96$ 72.00$ (1.96)$ 97% Atmospheric-type vacuum breakers not included in other fee services, e.g., building/trailer park sewer (1-5 units) 73.96$ 72.00$ (1.96)$ 97% Atmospheric-type vacuum breakers not included in other fee services, e.g., building/trailer park sewer (each unit over 5 units) 73.96$ 72.00$ (1.96)$ 97% For each gas piping system of 1-4 outlets 73.96$ 72.00$ (1.96)$ 97% For each gas piping system of 1-4 outlets 73.96$ 72.00$ (1.96)$ 97% For each gas piping system of 5 or more outlets (each) 73.96$ 72.00$ (1.96)$ 97% Water Service (Residential) 36.98$ 25.00$ (11.98)$ 68% Re-pipe per fixture - Residential 14.79$ 14.00$ (0.79)$ 95% Re-pipe per fixture - Commercial 9.86$ 9.00$ (0.86)$ 91% OTHER FEES: -$ -$ 0%
Other Plumbing and Gas Inspections (per hour) 147.91$ 143.00$ (4.91)$ 97% 460
CC 04-19-2022
460 of 632
User Fee (Cost of Services) Study
FY 15-16 Budget
City of Cupertino, CA
Building Division
Matrix Consulting Group Page 3 of 3

FEE TYPES
Actual
Unit Cost

2.47$

UNIT COSTS
Cost
Recovery
%
FY 14-15
Average
Current Fee
Subsidy to
Public per
Unit
ELECTRICAL PERMIT FEES 50.29$ 48.00$ (2.29)$ 95% Stand Alone Electrical Plan Check (hourly rate) 147.91$ 143.00$ (4.91)$ 97% UNIT FEES:

Receptacle, Switch, and Lighting Outlets
Receptacle, switch, lighting, or other outlets at which current is used or controlled, except services, feeders, and meters
First 20 50.29$ 48.00$ (2.29)$ 95%
Each Additional 4.44$ 5.00$ 0.56$ 113% Lighting Fixtures -$ -$ 0%
Lighting Fixtures, sockets, or other lamp-holding devices -$ -$ 0% First 20 73.96$ 72.00$ (1.96)$ 97%
Additional Fixtures, each 5.92$ 6.00$ 0.08$ 101% Pole or platform-mounted lighting fixtures (each) 16.27$ 16.00$ (0.27)$ 98% Theatrical-type lighting fixtures or assemblies (each) 14.79$ 14.00$ (0.79)$ 95% Residential Appliances -$ 0%
Fixed residential appliances or receptacle outlets for same, including wall- mounted electric ovens; counter mounted cooking tops; electric ranges; self- contained room console or through-wall air conditioners; space heaters; food waste grinders; dishwashers; washing machines; water heaters; clothes dryers; or other motor-operated appliances (each) not exceeding one horsepower (HP) in rating (each) 25.14$ 25.00$ (0.14)$ 99% Nonresidential Appliances -$ -$ 0%
Residential appliances and self-contained factory-wired, nonresidential appliances not exceeding one horsepower (HP), kilowatt (kW), or kilovolt- ampere (kVA) in rating, including medical and dental devices; food, beverage, and ice cream cabinets; illuminated show cases; drinking fountains; vending machines; laundry machines; or other similar types of equipment (each) 50.29$ 48.00$ (2.29)$ 95% Power Apparatus
Motors, generators, transformers, rectifiers, synchronous converters, capacitors, industrial heating, air conditioners and heat pumps, cooking or baking equipment, and other apparatus. Rating in horsepower (HP), kilowatts (kW), or kilovolt-amperes (kVA), or kilovolt-amperes-reactive (kVAR) 147.91$ 143.00$ (4.91)$ 97% 1 Unit 36.98$ 36.00$ (0.98)$ 97%
2 through 5 units, each additional 36.98$ 36.00$ (0.98)$ 97% 6 and over, each additional 36.98$ 36.00$ (0.98)$ 97% Busways -$ -$ 0%
Trolley and plug-in-type busways - each 100 feet or fraction thereof 73.96$ 25.00$ (48.96)$ 34% Signs, Outline Lighting, and Marquees -$ -$ 0% Signs, Outline Lighting, or Marquees supplied from one branch circuit (each) 50.29$ 48.00$ (2.29)$ 95% Additional branch circuits within the same sign, outline lighting system, or marquee (each) 25.14$ 25.00$ (0.14)$ 99% Services (Temporary Power) -$ -$ 0%
Services of 600 volts or less, up to 200 amperes in rating (each) 50.29$ 48.00$ (2.29)$ 95% Services of 600 volts or less, 201 to 1000 amperes in rating (each) 73.96$ 72.00$ (1.96)$ 97% Services over 600 volts or over 1000 amperes in rating (each) 87.27$ 84.00$ (3.27)$ 96% Fore services of 600 volts or less and not over 200 amperes in rating, each (Residential) 50.29$ 48.00$ (2.29)$ 95% For services of 600 volts or less and over 200 amperes to 1,000 amperes in rating, each (Residential) 73.96$ 72.00$ (1.96)$ 97% For services over 600 volts over 1,000 amperes in rating, each (Residential) 147.91$ 84.00$ (63.91)$ 57% Miscellaneous Apparatus, Conduits, and Conductors -$ -$ 0% Electrical apparatus, conduits, and conductors for which a permit is required, but for which no fee is herein set forth 147.91$ 143.00$ (4.91)$ 97% OTHER FEES:

Other Electrical Inspections (per hour) 147.91$ 143.00$ (4.91)$ 97% 461
CC 04-19-2022
461 of 632

MISCELLANEOUS BUILDING FEES

462
CC 04-19-2022
462 of 632
User Fee (Cost of Services) Study
FY 15-16 Budget
City of Cupertino, CA
Building Division
Matrix Consulting Group Page 1 of 5

MISCELLANEOUS ITEMS PERMIT FEES

UNIT COSTS
Work Item Unit
Total Actual
Cost
Average
Current Fee
Subsidy to
Public per
Unit
Standard Hourly Rate 147.91$ 143.00$ (4.91)$ 97% Accessibility Hardship Exemption 1 hour 147.91$ 187.00$ 39.09$ 126% Acoustical Review -$
Single Family Home/Duplex—New each 369.78$ 645.00$ 275.22$ 174% Single Family Home/Duplex—Addition/Alteration each 221.87$ 716.00$ 494.13$ 323% Multi-Family/Commercial each 369.78$ 286.00$ (83.78)$ 77% Additions (R3 Occ) - Plan Check Fees -$
Over the counter-(not hillside-has conventional framing- Minimum 2 hours up to 250 sf 295.82$ 286.00$ (9.82)$ 97% Plan Check Fees (not hillside). up to 250 sf 295.82$ 1,091.00$ 795.18$ 369% Plan Check Fees (not hillside). 251-499 sf 591.64$ 1,626.00$ 1,034.36$ 275% each additional hour 1 hour 147.91$ 143.00$ (4.91)$ 97% Additions (R3 Occ) - Inspection Fees -$
Inspection Fees (Not Hillside) up to 250 sf 739.55$ 1,057.00$ 317.45$ 143% Inspection Fees (Not Hillside) 251-499 sf 887.46$ 1,323.00$ 435.54$ 149% Address Assignment per hour 147.91$ 359.00$ 211.09$ 243% Administrative/Clerical Fee - 1/2 hour flat rate 1/2 hour 73.96$ 45.00$ (28.96)$ 61% Alternate Materials and Methods of Construction 1 hour 147.91$ 187.00$ 39.09$ 126% Antenna—Telecom Facility -$
Radio each 369.78$ 431.00$ 61.22$ 117% Cellular/Mobile Phone, free-standing each 813.51$ 1,145.00$ 331.49$ 141% Cellular/Mobile Phone, attached to building each 665.60$ 1,145.00$ 479.40$ 172% Arbor/Trellis each 295.82$ -$ (295.82)$ 0% Awning/Canopy (supported by building) each 295.82$ 359.00$ 63.18$ 121% Balcony Addition each 665.60$ 788.00$ 122.40$ 118% Carport each 517.69$ 645.00$ 127.31$ 125% Certifications
Special Inspector Qualifications (initial review) each 295.82$ 286.00$ (9.82)$ 97% Special Inspector Qualifications (renewal / update) each 147.91$ 143.00$ (4.91)$ 97% Special Inspector Certification Application each 5,028.97$ 4,867.00$ (161.97)$ 97% Materials Testing Lab Certification each 3,106.13$ 3,006.00$ (100.13)$ 97% Chimney each 443.73$ 574.00$ 130.27$ 129% Chimney Repair each 295.82$ 574.00$ 278.18$ 194% Close Existing Openings
Interior wall each 295.82$ 503.00$ 207.18$ 170% Exterior wall each 443.73$ 503.00$ 59.27$ 113% Commercial Coach (per unit) each unit 665.60$ 859.00$ 193.40$ 129% Covered Porch each 517.69$ 1,003.00$ 485.31$ 194% Deck (wood) each 517.69$ 503.00$ (14.69)$ 97% Deck Railing each 295.82$ 503.00$ 207.18$ 170% Deferred Submittal (2 hour minimum) per hour 295.82$ 143.00$ (152.82)$ 48% Cost
Recovery %
463
CC 04-19-2022
463 of 632
User Fee (Cost of Services) Study
FY 15-16 Budget
City of Cupertino, CA
Building Division
Matrix Consulting Group Page 2 of 5

UNIT COSTS
Work Item Unit
Total Actual
Cost
Average
Current Fee
Subsidy to
Public per
Unit
Cost
Recovery %
Demolition
Commercial (up to 3,000 sf) each 369.78$ 574.00$ 204.22$ 155% Commercial (each add'l 3,000 sf) each 3,000 sf 147.91$ 286.00$ 138.09$ 193% Residential (up to 3,000 sf) each 295.82$ 574.00$ 278.18$ 194% Residential (each add'l 3,000 sf) each 3,000 sf 147.91$ 143.00$ (4.91)$ 97% Demolition
Swimming Pool Residential each 295.82$ 329.00$ 33.18$ 111% Swimming Pool Commercial (up to 3,000 sf) each 443.73$ 574.00$ 130.27$ 129% Swimming Pool Commercial (each add'l 3,000 sf) each 3,000 sf 147.91$ 286.00$ 138.09$ 193% Disabled Access Compliance Inspection per hour 147.91$ 143.00$ (4.91)$ 97% Door
New door (non structural) each 221.87$ 286.00$ 64.13$ 129% New door (structural shear wall/masonry) each 295.82$ 431.00$ 135.18$ 146% Duplicate/Replacement Job Card each 73.96$ 72.00$ (1.96)$ 97% Electric Vehicle Charging Station each -$ 109.00$ 109.00$ 0% Extensions
Plan Check Applications (within 180 days of Submittal) 1 hour 147.91$ 187.00$ 39.09$ 126% Permits (within 180 days of Issuance) -$ -$ 0% Start construction, w/o plans 30 min 73.96$ 72.00$ (1.96)$ 97% Resume or complete construction, w/o plans 30 min 73.96$ 72.00$ (1.96)$ 97% Start construction, w/ plans 1 hour 147.91$ 187.00$ 39.09$ 126% Resume or complete construction, w/ plans 2 hours 295.82$ 231.00$ (64.82)$ 78% Fence
Non-masonry, over 6 feet in height up to 100 l.f. 295.82$ 431.00$ 135.18$ 146% Non-masonry, each additional 100 lf each 100 l.f. 73.96$ 72.00$ (1.96)$ 97% Masonry, over 6 feet in height up to 100 l.f. 517.69$ 716.00$ 198.31$ 138% Masonry, each additional 100 lf each 100 l.f. 295.82$ 286.00$ (9.82)$ 97% Fireplace
Masonry each 517.69$ 716.00$ 198.31$ 138% Pre-Fabricated/Metal each 295.82$ 503.00$ 207.18$ 170% Flag pole (over 20 feet in height) each 295.82$ 394.00$ 98.18$ 133% Foundation Repair each 665.60$ $859.00 193.40$ 129% Garage / Agricultural Buildings
Wood frame up to 1,000 sf each 961.42$ $129.00 (832.42)$ 13% Masonry up to 1,000 sf each 1,257.24$ $1,290.00 32.76$ 103% Inspections
Standard Inspection Hourly Rate per hour 147.91$ $143.00 (4.91)$ 97% Outside of normal business hours, 0-2 hours (minimum
charge) up to 2 hrs 295.82$ $430.00 134.18$ 145% Each additional hour or portion thereof 1 hour 147.91$ 214.00$ 66.09$ 145% Reinspection fee—per hour 1 hour 147.91$ 143.00$ (4.91)$ 97% Progress Inspection per hour 147.91$ 143.00$ (4.91)$ 97% Partial Inspection per hour 147.91$ 143.00$ (4.91)$ 97% Courtesy Inspection - 2 hour minimum 2 hours 295.82$ 286.00$ (9.82)$ 97% 464
CC 04-19-2022
464 of 632
User Fee (Cost of Services) Study
FY 15-16 Budget
City of Cupertino, CA
Building Division
Matrix Consulting Group Page 3 of 5

UNIT COSTS
Work Item Unit
Total Actual
Cost
Average
Current Fee
Subsidy to
Public per
Unit
Cost
Recovery %
Inspections for which no fee is specifically indicated—per hour (minimum charge = 1/2 hour) 1 hour 147.91$ 143.00$ (4.91)$ 97% Cancelled inspection w/out advance notice 1 hour 147.91$ 143.00$ (4.91)$ 97% Life Safety Report each 887.46$ 859.00$ (28.46)$ 97% Lighting pole each 369.78$ 431.00$ 61.22$ 117% each add'l pole each 147.91$ 431.00$ 283.09$ 291% Modular Structures each 665.60$ 859.00$ 193.40$ 129% Modification of Technical Code 1 hour 147.91$ 187.00$ 39.09$ 126% Partition—Commercial, Interior (up to 30 l.f.) up to 30 l.f. 443.73$ 503.00$ 59.27$ 113% Additional partition each 30 l.f. 147.91$ 107.00$ (40.91)$ 72% Partition—Residential, Interior (up to 30 l.f.) up to 30 l.f. 295.82$ 503.00$ 207.18$ 170% Additional partition each 30 l.f. 73.96$ 107.00$ 33.04$ 145% Patio Cover/ Sun Room
Wood frame up to 300 sf 369.78$ 716.00$ 346.22$ 194% Metal frame up to 300 sf 369.78$ 716.00$ 346.22$ 194% Other frame up to 300 sf 517.69$ 716.00$ 198.31$ 138% Additional patio each 300 sf 221.87$ 574.00$ 352.13$ 259% Enclosed, wood frame up to 300 sf 517.69$ 859.00$ 341.31$ 166% Enclosed, metal frame up to 300 sf 517.69$ 859.00$ 341.31$ 166% Enclosed, other frame up to 300 sf 517.69$ 859.00$ 341.31$ 166% Additional enclosed patio each 300 sf 295.82$ 716.00$ 420.18$ 242% Photovoltaic System
Residential each 258.84$ 236.00$ (22.84)$ 91% Multi-Family Res/Commercial, up to 8 kilowatts up to 8 kW 369.78$ 572.00$ 202.22$ 155% Multi-Family Res/Commercial, each additional 1 kilowatt each 1 kW 36.98$ 11.00$ (25.98)$ 30% Pile Foundation
Cast in Place Concrete (first 10 piles) up to 10 665.60$ 1,003.00$ 337.40$ 151% Additional Piles (increments of 10) each 10 443.73$ 859.00$ 415.27$ 194% Driven (steel, pre-stressed concrete) up to 10 665.60$ 1,003.00$ 337.40$ 151% Additional Piles (increments of 10) each 10 443.73$ 859.00$ 415.27$ 194% Product Review per hour 147.91$ 143.00$ (4.91)$ 97% Plan Review
Standard Plan Review Hourly Rate per hour 147.91$ 143.00$ (4.91)$ 97% CALGreen Plan Review (minimum 2 hr charge in addition to Plan Check Fees) per hour 295.82$ 143.00$ (152.82)$ 48% Expedite Plan Review (1.5 times plan review) -$ -$ 0% Outside of normal business hours, (minimum 2 hr charge in addition to Plan Check Fees) per hour 295.82$ 214.00$ (81.82)$ 72% Remodel—Residential
Kitchen up to 300 sf 591.64$ 645.00$ 53.36$ 109% Bath up to 300 sf 591.64$ 645.00$ 53.36$ 109% Other Remodel up to 300 sf 443.73$ 431.00$ (12.73)$ 97% Additional remodel each 300 sf 221.87$ 72.00$ (149.87)$ 32% Other Remodel 1000 sf 1,405.15$ 4,320.00$ 2,914.85$ 307% Additional remodel each 300 sf 221.87$ 284.00$ 62.13$ 128% 465
CC 04-19-2022
465 of 632
User Fee (Cost of Services) Study
FY 15-16 Budget
City of Cupertino, CA
Building Division
Matrix Consulting Group Page 4 of 5

UNIT COSTS
Work Item Unit
Total Actual
Cost
Average
Current Fee
Subsidy to
Public per
Unit
Cost
Recovery %
Other Remodel 2500 sf + 1,848.89$ 5,739.00$ 3,890.11$ 310% Additional remodel each 300 sf 221.87$ 205.00$ (16.87)$ 92% Re-roof
Residential (max $400 per building) each 100 sf 15.68$ 17.00$ 1.32$ 108% Multi-Family Dwelling (max $400 per building) each 100 sf 15.68$ 17.00$ 1.32$ 108% Commercial (first 5,000 sf) each 369.78$ 394.00$ 24.22$ 107% Commercial (each add'l 2,500 sf) each 2,500 sf 147.91$ 179.00$ 31.09$ 121% Retaining Wall (concrete or masonry)
Standard (up to 50 lf) up to 50 l.f. 665.60$ 859.00$ 193.40$ 129% Additional retaining wall each 50 l.f. 443.73$ 716.00$ 272.27$ 161% Special Design, 3-10' high (up to 50 lf) up to 50 l.f. 961.42$ 1,003.00$ 41.58$ 104% Additional retaining wall each 50 l.f. 591.64$ 859.00$ 267.36$ 145% Special Design, over 10' high (up to 50 lf) up to 50 l.f. 1,109.33$ 1,074.00$ (35.33)$ 97% Additional retaining wall each 50 l.f. 739.55$ 930.00$ 190.45$ 126% Gravity/Crib Wall, 0-10' high (up to 50 lf) up to 50 l.f. 961.42$ 1,074.00$ 112.58$ 112% Additional Gravity/Crib Wall each 50 l.f. 591.64$ 930.00$ 338.36$ 157% Gravity/Crib Wall, over 10' high (up to 50 lf) up to 50 l.f. 1,109.33$ 1,074.00$ (35.33)$ 97% Additional Gravity/Crib Wall each 50 l.f. 739.55$ 930.00$ 190.45$ 126% Revisions
Commercial New each 665.60$ 859.00$ 193.40$ 129% Tenant Improvement each 665.60$ 859.00$ 193.40$ 129% SFDWL each 369.78$ 859.00$ 489.22$ 232% Addition each 369.78$ 716.00$ 346.22$ 194% Remodel each 295.82$ 716.00$ 420.18$ 242% Sauna—steam each 517.69$ 788.00$ 270.31$ 152% Siding
Stone and Brick Veneer (interior or exterior) up to 400 sf 369.78$ 645.00$ 275.22$ 174% All Other up to 400 sf 295.82$ 431.00$ 135.18$ 146% Additional siding each 400 sf 73.96$ 215.00$ 141.04$ 291% Signs
Directional each 295.82$ 286.00$ (9.82)$ 97% Each additional Directional Sign each 147.91$ 143.00$ (4.91)$ 97% Ground/Roof/Projecting Signs each 295.82$ 359.00$ 63.18$ 121% Master Plan Sign Check each 295.82$ 359.00$ 63.18$ 121% Rework of any existing Ground Sign each 295.82$ 359.00$ 63.18$ 121% Other Sign each 295.82$ 359.00$ 63.18$ 121% Reinspection Fee each 73.96$ 72.00$ (1.96)$ 97% Wall/Awning Sign, Non-Electric each 221.87$ 286.00$ 64.13$ 129% Wall, Electric each 295.82$ 286.00$ (9.82)$ 97% Shed over 120 square feet each 665.60$ 430.00$ (235.60)$ 65% Skylight
50 sf or less (cumulative area) each 369.78$ 431.00$ 61.22$ 117% Greater than 50 sf or structural each 517.69$ 788.00$ 270.31$ 152% 466
CC 04-19-2022
466 of 632
User Fee (Cost of Services) Study
FY 15-16 Budget
City of Cupertino, CA
Building Division
Matrix Consulting Group Page 5 of 5

UNIT COSTS
Work Item Unit
Total Actual
Cost
Average
Current Fee
Subsidy to
Public per
Unit
Cost
Recovery %
Solar Water Heating each 147.91$ 109.00$ (38.91)$ 74% Stairs—First Flight first flight 295.82$ 359.00$ 63.18$ 121% Each additional flight per flight 147.91$ 215.00$ 67.09$ 145% Storage Racks
0-8' high (up to 100 lf) first 100 lf 369.78$ 359.00$ (10.78)$ 97% each additional 100 lf each 100 lf 73.96$ 72.00$ (1.96)$ 97% over 8' high (up to 100 lf) first 100 lf 369.78$ 394.00$ 24.22$ 107% each additional 100 lf each 100 lf 73.96$ 107.00$ 33.04$ 145% Stucco Applications up to 400 sf 295.82$ 503.00$ 207.18$ 170% Additional Stucco Application each 400 sf 73.96$ 36.00$ (37.96)$ 49% Supplemental Inspection Fee—If a project requires significantly more inspections than average, the Building Official may charge additional inspection fees -$ -$ 0% First 1/2 hour minimum first 30 min 73.96$ 72.00$ (1.96)$ 97% Each Additional hour per hour 147.91$ 143.00$ (4.91)$ 97% Overtime Plan Check Fee per hour 221.87$ 214.00$ (7.87)$ 96% Supplemental Plan Check Fee (after 2nd review)
First 1/2 hour minimum first 30 min 73.96$ 72.00$ (1.96)$ 97% Each Additional hour per hour 147.91$ 143.00$ (4.91)$ 97% Swimming Pool/Spa
Vinyl-lined (up to 800 sf) each 665.60$ 1,003.00$ 337.40$ 151% Fiberglass each 665.60$ 716.00$ 50.40$ 108% Gunite (up to 800 sf) each 961.42$ 1,574.00$ 612.58$ 164% Additional pool (over 800 sf) each 100 sf 221.87$ 215.00$ (6.87)$ 97% Commercial pool (up to 800 sf) each 1,627.02$ 2,004.00$ 376.98$ 123% Commercial pool (over 800 sf) each 443.73$ 251.00$ (192.73)$ 57% Spa or Hot Tub (Pre-fabricated) each 295.82$ 359.00$ 63.18$ 121% Temporary Occupancy Permit - flat rate 2 hours 295.82$ 286.00$ (9.82)$ 97% Temporary Structures each 443.73$ 430.00$ (13.73)$ 97% Tenant Improvement Preparation each 295.82$ 417.00$ 121.18$ 141% Window or Sliding Glass Door
Replacement (first 8 windows) first 8 221.87$ 431.00$ 209.13$ 194% Replacement (each add'l 8 windows) each 8 73.96$ 143.00$ 69.04$ 193% New Window (non structural) each 184.89$ 503.00$ 318.11$ 272% New window (structural shear wall/masonry) each 258.84$ 859.00$ 600.16$ 332% Bay Window (structural) each 258.84$ 859.00$ 600.16$ 332% 467
CC 04-19-2022
467 of 632

COMPARATIVE SURVEY

468
CC 04-19-2022
468 of 632

CITY OF CUPERTINO, CALIFORNIA

BUILDING COMPARATIVE FEE SURVEY
Matrix Consulting Group Page 1
Single Family Home - New
Occupancy Type: R3
Square Footage: 3,100 sqft.

Valuation: $371,165
BP Fee PC Fee Total
Cupertino - Current - Square Footage 3,060$ 3,088$ 6,147$ Cupertino @ 100% Cost Recovery 4,171$ 3,685$ 7,856$ 78% Santa Clara - Valuation 2,530$ 1,897$ 4,427$ Mountain View - Valuation 3,899$ 2,535$ 6,434$ Milpitas - Square Footage 5,461$ 3,580$ 9,041$ Sunnyvale - Valuation 3,622$ 2,536$ 6,158$ Palo Alto - Valuation 4,348$ 3,478$ 7,826$ Average 3,972$ 2,805$ 6,777$
$-
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
$9,000
$10,000
Cupertino -
Current - Square
Footage
Cupertino @
100% Cost
Recovery
Santa Clara -
Valuation
Mountain View -
Valuation
Milpitas - Square
Footage
Sunnyvale -
Valuation
Palo Alto -
Valuation
Permit Fees
Single Family Home - New
Permit and Plan Check Fees
Plan Check
Permit
Average
469
CC 04-19-2022
469 of 632

CITY OF CUPERTINO, CALIFORNIA

BUILDING COMPARATIVE FEE SURVEY
Matrix Consulting Group Page 2
Retail Shell Building
Occupancy Type: M
Square Footage: 20,000 sqft.

Valuation: $1,841,000
BP Fee PC Fee Total
Cupertino - Current - Square Footage 9,908$ 5,484$ 15,392$ Cupertino @ 100% Cost Recovery 6,286$ 7,980$ 14,266$ 108% Santa Clara - Valuation 8,691$ 6,518$ 15,209$ Mountain View - Valuation 13,445$ 8,739$ 22,185$ Milpitas - Square Footage 5,195$ 13,199$ 18,394$ Sunnyvale - Valuation 11,770$ 8,239$ 20,009$ Palo Alto - Valuation 15,154$ 12,123$ 27,277$ Average 10,851$ 9,764$ 20,615$
$-
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
Cupertino -
Current -
Square
Footage
Cupertino @
100% Cost
Recovery
Santa Clara -
Valuation
Mountain View
- Valuation
Milpitas -
Square
Footage
Sunnyvale -
Valuation
Palo Alto -
Valuation
Permit Fee
Retail Shell Building
Permit and Plan Check Fees
Plan
Check
Permit
Average
470
CC 04-19-2022
470 of 632

CITY OF CUPERTINO, CALIFORNIA

BUILDING COMPARATIVE FEE SURVEY
Matrix Consulting Group Page 3
Office - Tenant Improvement
Occupancy Type: B
Square Footage: 3,000 sqft.

Valuation: $388,476
BP Fee PC Fee Total
Cupertino - Current - Square Footage 2,613$ 2,377$ 4,990$ Cupertino @ 100% Cost Recovery 3,844$ 3,254$ 7,098$ 70% Santa Clara - Valuation 2,627$ 1,970$ 4,596$ Mountain View - Valuation 4,050$ 2,633$ 6,683$ Milpitas - Square Footage 2,037$ 1,611$ 3,648$ Sunnyvale - Valuation 3,759$ 2,632$ 6,391$ Palo Alto - Valuation 4,515$ 3,612$ 8,128$ Average 3,398$ 2,491$ 5,889$
$-
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
$9,000
Cupertino -
Current -
Square
Footage
Cupertino @
100% Cost
Recovery
Santa Clara -
Valuation
Mountain View
- Valuation
Milpitas -
Square
Footage
Sunnyvale -
Valuation
Palo Alto -
Valuation
Permit Fees
Office - Tenant Improvement
Permit and Plan Check Fees
Plan Check
Permit
Average
471
CC 04-19-2022
471 of 632

CITY OF CUPERTINO, CALIFORNIA

BUILDING COMPARATIVE FEE SURVEY
Matrix Consulting Group Page 4
Restaurant - New
Occupancy Type: A-2
Square Footage: 10,000 sqft.

Valuation: $2,713,600
BP Fee PC Fee Total
Cupertino - Current - Square Footage 11,109$ 7,192$ 18,301$ Cupertino @ 100% Cost Recovery 5,012$ 7,114$ 12,125$ 151% Santa Clara - Valuation 11,876$ 8,907$ 20,783$ Mountain View - Valuation 18,375$ 11,944$ 30,319$ Milpitas - Square Footage 6,878$ 7,779$ 14,657$ Sunnyvale - Valuation 15,670$ 10,969$ 26,640$ Palo Alto - Valuation 20,817$ 16,653$ 37,470$ Average 14,723$ 11,251$ 25,974$
$-
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
$40,000
Cupertino -
Current -
Square
Footage
Cupertino @
100% Cost
Recovery
Santa Clara -
Valuation
Mountain View
- Valuation
Milpitas -
Square
Footage
Sunnyvale -
Valuation
Palo Alto -
Valuation
Permit Fees
Restaurant - New
Permit and Plan Check Fees
Plan Check
Permit
Average
472
CC 04-19-2022
472 of 632

CITY OF CUPERTINO, CALIFORNIA

BUILDING COMPARATIVE FEE SURVEY
Matrix Consulting Group Page 5
Warehouse - New
Occupancy Type: S-1
Square Footage: 20,000 sqft.

Valuation: $1,234,600
BP Fee PC Fee Total
Cupertino - Current - Square Footage 11,898$ 8,262$ 20,160$ Cupertino @ 100% Cost Recovery 4,345$ 5,962$ 10,307$ 196% Santa Clara - Valuation 6,477$ 4,858$ 11,335$ Mountain View - Valuation 10,019$ 6,512$ 16,531$ Milpitas - Square Footage 5,195$ 13,199$ 18,394$ Sunnyvale - Valuation 9,059$ 6,341$ 15,401$ Palo Alto - Valuation 11,218$ 8,974$ 20,193$ Average 8,394$ 7,977$ 16,371$
$-
$5,000
$10,000
$15,000
$20,000
$25,000
Cupertino -
Current -
Square
Footage
Cupertino @
100% Cost
Recovery
Santa Clara -
Valuation
Mountain View
- Valuation
Milpitas -
Square
Footage
Sunnyvale -
Valuation
Palo Alto -
Valuation
Permit Fees
Warehouse - New
Permit and Plan Check Fees
Plan Check
Permit
Average
473
CC 04-19-2022
473 of 632
Planning Comparative Survey
Matrix Consulting Group Page 1 of 5
Current Full Cost
Up to one Acre
$7,300
One Acre+
$12,200
Tentative: Tentative:

Up to one Acre
$4,300
One Acre+
$5,200
Vesting:

Up to one Acre
$6,000
One Acre+
$6,900
Use Permit / Development Permit - Major $15,974 $21,343 $7,800 Use Permit / Development Permit - Minor $7,461 $12,809 $2,500 Amendment to Use Permit / Development Permit - Major $7,988 $10,746 N / A Amendment to Use Permit / Development Permit - Minor $3,730 $5,884 $961 Architectural and Site Approval - Major $7,461 $13,189 $5,800 $3,712 deposit Architectural and Site Approval - Minor $3,609 $8,862 $5,800 $2,896 Architectural and Site Approval - Minor Duplex / Residential $3,609 $5,768 $610 $1,448 Environmental Impact Report (Plus State & County Filing Fees) $27,948 $27,948 $16,000 Cost + 15% N / A N / A Negative Declaration - Major (Plus State & County Filing Fees) $4,299 $4,299 $12,500 Negative Declaration - Minor (Plus State & County Filing Fees) $2,149 $2,149 $9,000 Categorical Exemption (Plus County Filing Fee) $250 $230 N / A N / A N / A $324 Fence Exception $716 $2,891 N / A $526 N / A N / A $ 1,193 Single Family Detached Single Family: Residential
$1,300 $375 $2,436
All Others Non Residential: Commercial
$4,300 $3,000 deposit $5,138
Conditional Use Permit - Administrative $3,730 $4,676 N / A $3,858 $3,000 deposit N / A N / A Tree Removal Permit $0 $0
First Tree $180 $1,362 $279
Each Additional Tree $92 $160
Heritage Tree Designation $107 $2,630 $526 $161
Temporary Use Permit $1,439 $2,824 N / A $368 N / A $161 $190 Temporary Sign Permit $211 $319 $ 50 N / A N / A $0 $61 Individual:
$300
Master:
$453
Planning
Commission
$7,834
City Council
$8,239
Zoning Verification Letter $190 $338 $300 N / A $40 N / A N / A Public Convenience & Necessity Letter (Alcohol Beverage License) $190 $169 N / A $1,333 N / A N / A N / A Single Family: 500 Ft:
$330 $309
All Other: 1,000 Ft:
$5,600 $972
2,000 Ft:
$1,989
Renoticing:
$143
$161 N / A
Noticing $0 $368 N / A N / A N / A
Appeals $182 $360 50% of original fee $100
N / A
$5,000 deposit

N / A N / A N / A
N / A
N / A

N / A N / A N / A
$440
$788
$770 $3,309
$5,905 Deposit
$1,077
$3,799
Category Santa Clara Mountain View Milpitas Sunnyvale Palo Alto N / A
$1,947
$2,889
Cupertino
N / A
Sign Program $721 $2,582
Tentative Map (Five or More Parcels)
Parcel Map (0-4 Parcels)
Variance $2,813 $5,167
$7,461 $12,732
$15,974 $21,179
$579
$2,457
$2,973 $20,000 deposit
$10,000 deposit

N / A N / A
N / A
474
CC 04-19-2022
474 of 632
Planning Comparative Survey - Charts
Matrix Consulting Group Page 2 of 5
$0
$5,000
$10,000
$15,000
$20,000
$25,000
Cupertino
- Current
Cupertino
- Full Cost
Santa
Clara -
Average
Mountain
View -
Average
Milpitas -
Average
Palo Alto -
Average
Tentative Map (Five or More Parcels)
Average
$0
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
Cupertino
- Current
Cupertino
- Full Cost
Santa
Clara -
Average
Mountain
View -
Average
Milpitas -
Average
Palo Alto -
Average
Parcel Map (0-4 Parcels)
Average
$0
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
Cupertino -
Current
Cupertino - Full
Cost
Santa Clara -
Average
Palo Alto -
Average
Use Permit
Average
$0
$2,000
$4,000
$6,000
$8,000
$10,000
Cupertino -
Current
Cupertino - Full
Cost
Santa Clara -
Average
Palo Alto -
Average
Architectural and Site Approval
Average
475
CC 04-19-2022
475 of 632
Planning Comparative Survey - Charts
Matrix Consulting Group Page 3 of 5
$0
$5,000
$10,000
$15,000
$20,000
$25,000
Environmental Review
Average
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
Cupertino -
Current
Cupertino - Full
Cost
Mountain View -
Average
Palo Alto -
Average
Fence Exception
Average
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
Variance
Average
$0
$1,000
$2,000
$3,000
$4,000
$5,000
Cupertino -
Current
Cupertino - Full
Cost
Mountain View -
Average
Milpitas -
Average
Conditional Use Permit - Administrative
Average
476
CC 04-19-2022
476 of 632
Planning Comparative Survey - Charts
Matrix Consulting Group Page 4 of 5
$0
$500
$1,000
$1,500
$2,000
$2,500
Cupertino -
Current
Cupertino - Full
Cost
Mountain View -
Average
Sunnyvale -
Average
Tree Permits
Average
$0
$50
$100
$150
$200
$250
$300
$350
Cupertino -
Current
Cupertino -
Full Cost
Santa Clara -
Average
Sunnyvale -
Average
Palo Alto -
Average
Temporary Sign Permit
Average
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
Cupertino -
Current
Cupertino -
Full Cost
Mountain
View -
Average
Sunnyvale -
Average
Palo Alto -
Average
Temporary Use Permit
Average
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
Cupertino -
Current
Cupertino -
Full Cost
Santa Clara -
Average
Mountain
View -
Average
Sunnyvale -
Average
Sign Program
Average
477
CC 04-19-2022
477 of 632
Planning Comparative Survey - Charts
Matrix Consulting Group Page 5 of 5
$0
$50
$100
$150
$200
$250
$300
$350
$400
Cupertino -
Current
Cupertino -
Full Cost
Santa Clara -
Average
Milpitas -
Average
Average
Zoning Verification Letter
Average
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
Cupertino -
Current
Cupertino - Full
Cost
Santa Clara -
Average
Sunnyvale -
Average
Noticing
Average
478
CC 04-19-2022
478 of 632
Public Works Comparative Survey
Matrix Consulting Group Page 1 of 3
Current Fee Full Cost
Block Party $ - $ 533 $ 25 $ - Certificates of Compliance $ 1,540 $ 2,461 $ 1,840 $ 575 Actual Cost $ 700 Certificates of Correction $ 169 $ 703 $ 550 N / A $ 3,122 N / A $ 1,157
per lot
$ 49
$ 3,850
per lot
$ 83
5-10 lots
$ 4,949
11-50 lots
$ 5,774
50+ lots
$ 8,660
Plus Each lot (Tract Map
Only) $ - $ - $ 114 N / A $ 289 $ 60 Summary $ 603 $ 1,882 $ 1,930 $ 1,596 Full $ 603 $ 2,997 $ 3,012 Minor Utility Permit
$ 263 $ 272 $ 385 Construction less than 50 feet Processing Fee
Debris Box /
Temporary Storage
Container
Minor $ 263 $ 394 $ 220 $301 $ 242 $ 118 Major $ 525 $ 678 $ 385 50+ ft in length All Others Non-Residential $301 + $181 / 100 ft $320 min or 8% of
cost $ 2,034
Field Marking -
Sanitary Sewer or
Storm Drain
Encroachment
Residential
0-50 ft $ 1,112
$ 161 Temporary
50+ ft $ 874
$161 + $1.32 / foot
Review of building permit only $ 655 $ 741 $ 455 $0-$250,000 $0 to $10,000 $0-$50,000
14% of Cost $4,030 7.5% of Construction
Cost
$250,000-$550,000 $10,001-$50,000 $50,001-$500,000
$4,030 + 35% of cost $3,750 + 4.5% of
Construction Cost
$50,001-$1,000,0000 $500,001+
$550,001+ $18,030 + 4% of cost $24,000 + 3.5% of
Construction Cost
$55,000 + 7% of Cost $1,000,001+
$56,030 + 1% of cost
Lot Line Adjustment $ 3,012 $ 2,477 $ 1,856 $ 6,948 $ 2,350 FEE CATEGORY Cupertino Campbell Sunnyvale Santa Clara Mountain View Parcel Map / Tract Map (Map Checking Fees):

Parcel Map (1-4 lots) $ 4,254 $ 4,973 $ 3,093 $ 17,855 $ 2,908 Vacation of Street of Right-of-Way

N / A N / A
Tract Map (>4 lots) $ 8,831 $ 8,165 $ 4,681 $ 19,972 $ 4,907 Commercial $4,498 or 6% of
cost $ 6,266
N / A
Encroachment Permits
Other Categories N / A N / A
Plan Check & Inspection - Review of Public / Private Improvement Plans:

Residential $2,788 or 5% of
cost $ 3,349
N / A $35,000 + 8% of Cost
479
CC 04-19-2022
479 of 632
Public Works Comparative Survey - Charts
Matrix Consulting Group Page 2 of 3
$-
$500
$1,000
$1,500
$2,000
$2,500
$3,000
Cupertino -
Current Fee
Cupertino -
Full Cost
Campbell Sunnyvale Mountain
View
Fee Amount
Certificates of Compliance
Average
$-
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
Cupertino -
Current Fee
Cupertino - Full
Cost
Campbell Santa Clara
Certificate of Correction
Average
$-
$5,000
$10,000
$15,000
$20,000
Cupertino
- Current
Fee
Cupertino
- Full Cost
Campbell Sunnyvale Santa
Clara
Mountain
View
Parcel Map (0-4 lots)
Average
$-
$5,000
$10,000
$15,000
$20,000
$25,000
Cupertino
- Current
Fee
Cupertino
- Full Cost
Campbell Sunnyvale Santa
Clara
Mountain
View
Tract Map (4+ lots)
Average
480
CC 04-19-2022
480 of 632
Public Works Comparative Survey - Charts
Matrix Consulting Group Page 3 of 3
$-
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
Cupertino
- Current
Fee
Cupertino
- Full Cost
Campbell Sunnyvale Santa
Clara
Mountain
View
Lot Line Adjustment
Average
$-
$500
$1,000
$1,500
$2,000
$2,500
Cuper.no -
Current Fee
Cuper.no - Full
Cost
Sunnyvale Mountain View
Vacation
Average
481
CC 04-19-2022
481 of 632

ATTACHMENT L
RESOLUTION NO: 22-XXX

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CUPERTINO

AMENDING PREVIOUS FEE SCHEDULES
W
HEREAS, the State of California requires fees charged for service rendered not to exceed the cost of delivering said services; and
W
HEREAS, a public hearing has been held to review user fees; and WH
EREAS, In 2016 the City conducted a Cost of Service (User Fee) Study and conducts annual updates pursuant to economic factors discussed in the staff report for this item to ensure that the fees charged do not exceed the cost of delivering the services.

NOW
, THEREFORE, BE IT RESOLVED that:

1. User fees are amended per attached Schedules A, B, C, D, and E to this Resolution, effective July 1, 2022.

P
ASSED AND ADOPTED at a regular meeting of the City Council of the City of Cupertino this 19th day of April, 2022 by the following vote:

Vote Members of the City Council
A
YES:

NOES:

ABSENT:

ABSTAIN:

SIGNED:
________
Darcy Paul, Mayor
City of Cupertino
________________________
Date
ATTEST:
____
____________________
Kirsten Squarcia, City Clerk
____
____________________
Date
482
CC 04-19-2022
482 of 632

CITY OF CUPERTINO
Agenda Item
22-10741 Agenda Date: 4/19/2022
Agenda #: 25.

Subject: Internal Audit - Procurement Operational Review Final Report Consider accepting the Procurement Operational Review Final Report Presenter: Thomas Leung, Senior Management Analyst
CITY OF CUPERTINO Printed on 4/14/2022Page 1 of 1
powered by Legistar™
483
CC 04-19-2022
483 of 632

CITY COUNCIL STAFF REPORT
Meeting: April 19, 2022

Subject
Internal Audit – Procurement Operational Review Final Report

Recommended Action
Consider accepting the Procurement Operational Review Final Report

Discussion
Background
In Fiscal Year (FY) 2019-20, the City began an internal audit program and issued a Request for Proposal ( RFP). After reviewing the proposals, the evaluation committee selected Moss Adams as the City’s internal auditor. Moss Adams reports to the City Council’s Audit Committee, who oversees the work and approves the annual internal audit plan.

Enterprise Risk Assessment
In 2020, Moss Adams conducted an Enterprise Risk Assessment (ERA) and identified procurement (purchasing and contracting) as an area of overall high risk due to the inherent vulnerability of the function, high level of decentralization, and the potential consequences of risk occurrences.

Internal Audit Work Plan
In 2021, Moss Adams developed an internal audit work plan to guide activities for FY 2021-22. The Audit Committee and City Council approved the FY 2021-22 internal audit work plan, which included the following projects:
• Procurement Operational Review,
• Policy Inventory and Plan,
• Capital Program Effectiveness Study, and
• Fraud, Waste, and Abuse Program.

The work plan began with a consultative procurement operational review to identify opportunities for improvement in service delivery, internal controls, organization, operations, and process efficiency. A s internal auditors, Moss Adams was tasked with assessing the quality of the City’s procurement framework and its procurement processes for adequacy in design and operations.
484
CC 04-19-2022
484 of 632

Procurement Operational Review
The Procurement Operational Review assessed the City’s procurement operations , including their alignment with:
• City goals, policies, and business plans,
• Industry best practices, and
• Applicable laws and regulations.

For this engagement, Moss Adams focused on the structure, function, and role of procurement people, processes, and systems.

As part of the assessment, Moss Adams conducted planning, data collection, and analysis to understand the existing environment, identify opportunities for improvement, and provide practical recommendations.

Procurement Operational Review Observations and Recommendations The City’s procurement model is currently highly decentralized, with department heads and their staff primarily responsi ble for conducting and managing purchasing and contracting activity with support from the Finance Division and the City Attorney’s Office (CAO).

This decentralized procurement structure is the primary driver behind many of the report’s observations and recommendations. Moss Adams noted several opportunities to improve the efficiency and coordination of procurement activities. Therefore, their primary recommendation is to consider a centralized procurement model. T he attached report lists all ten recommendations.

Next Steps
Following the approval of the Procurement Operational Review, staff will develop an implementation plan, including timelines, to implement the report’s recommendations.

On a regular basis, staff will report to the Audit Committee on the status of the implementation. The implementation pl an and status reports will be available on the City’s website at cupertino.org/budget under Internal Audit.

Sustainability Impact
No sustainability impact.

Fiscal Impact
No fiscal impact. The City’s Internal Audit contract is included in the contracts category of the Accounting program on pages 331-332 of the FY 2021-22 Adopted Budget.

_____________________________________

Prepared by: Thomas Leung, Senior Management Analyst
485
CC 04-19-2022
485 of 632

Reviewed by: Kristina Alfaro, Director of Administrative Services Approved for Submission by: Jim Throop, City Manager
Attachments:

A – Procurement Operational Review

486
CC 04-19-2022
486 of 632

This report is intended for the internal use of the City of Cupertino , and may not be provided to, used, or relied upon by any third parties.

Proprietary & Confidential

FINAL REPORT
City of Cupertino

PROCUREMENT OPERATIONAL REVIEW
March 17, 2022
Moss Adams LLP
999 Third Avenue, Suite 2800
Seattle, WA 98104
(206) 302-6500

487
CC 04-19-2022
487 of 632

Procurement Operational Review

FOR INTERNAL USE OF THE CITY OF CUPERTINO ONLY

Table of Contents
Executive Summary 1
A. Introduction 1
B. Commendations Summary 1
C. Summary of Observations and Recommendations 1
Introduction 4
A. Project Overview 4
Internal Audit Overview 4
Public Procurement Overview 5
Approach and Methodology 7
B. Commendations 8
Observations and Recommendations 9
A. Primary Recommendation 9

1. Procurement Model 9
B. Enterprise Considerations 12

2. Roles and Responsibilities 12

3. Onboarding and Training 14

4. Position Backup and Cross Training 16

5. Change Management 18

6. Alignment with Goals 20
C. Policies, Procedures, and Processes 22

7. Procurement Processes 22

8. Purchasing Methods and Thresholds 27

9. Purchasing Data and Reporting 30

10. Documentation and Governance 32
Appendix A: Procurement Roles and Responsibilities 35
Stakeholder Roles 35
488
CC 04-19-2022
488 of 632
Table of Contents – Continued

Procurement Operational Review

FOR INTERNAL USE OF THE CITY OF CUPERTINO ONLY

Procurement Roles 36
Appendix B: Staff Survey Results 37
Employee Tenure, Department, and Roles 37
Systems 39
Structure 41
Processes 43
Training 44
Appendix C: Vendor Survey Results 46
Vendor History, Roles, and Relationships 46
Description of Procurement Activities 47
Stages of Procurement 48
Appendix D: Peer Benchmarking 50
City Statistics and Procurement Type 50
Purchasing Thresholds and Authority 51
Legend 51
Sunnyvale 51
City of Milpitas 52
City of Los Altos 54
City of Gilroy 55

489
CC 04-19-2022
489 of 632

Procurement Operational Review | 1

FOR THE INTERNAL USE OF THE CITY OF CUPERTINO ONLY

EXECUTIVE SUMMARY

This procurement operational review provides the City of Cupertino (the City) with an assessment of its procurement operations and their alignment with City goals, policies, business plans, industry best practices, and applicable laws and regulations. For this engagement, Moss Adams focused on the structure, function, and role of procurement people, processes, and systems.

As part of the assessment, we conducted planning, data collection, and analysis to gain an understanding of the existing environment, identify opportunities for improvement, and provide practical recommendations in this report.

Based on insights gathered through interviews and document review, it is evident that City staff and leadership have many commendable organizational attributes. These include:
• Employee engagement
• Collaboration and innovation
• Committed work ethic
Commendations are discussed in detail in Section II.B
of this report. We would like to commend the City
and leadership for their willingness to assist us in this assessment process. The City’s strengths provide a strong foundation that may improve the outcomes of implemented recommendations.

The City’s procurement model is currently highly decentralized, with department heads and their staff primarily responsible for conducting and managing purchasing and contracting activity with support from the Finance Division and the City Attorney’s Office (CAO).

This decentralized procurement structure is the primary driver behind many of our observations and recommendations. While we did not identify individual points of failure or deficiency within the City’s procurement processes and systems, we noted several opportunities to improve the efficiency and coordination of procurement activities. Therefore, our primary recommendation, as highlighted on the next page, is to consider a centralized procurement model.

490
CC 04-19-2022
490 of 632

Procurement Operational Review | 2

FOR THE INTERNAL USE OF THE CITY OF CUPERTINO ONLY

OBSERVATIONS AND RECOMMENDATIONS

PRIMARY RECOMMENDATION

1. Observation
The City’s current procurement activities are highly decentralized, leading to increased inefficiencies as departments create customized processes for common procurement practices.

Recommendation
Take steps towards greater centralization of procurement activities and elevate procurement to a strategic function with the installation of a Procurement Officer or Procurement Division.

The lack of a dedicated, and centralized point of procurement leadership, oversight, and management has created challenges for City employees. However, to their best of their abilities, in the current environment, staff have made significant efforts to optimize processes, procedures, and systems. Key areas of opportunity to increase coordination, unite resources, and formalize policies and procedures are discussed further in the observations below.

Observations and recommendations are summarized here, and, with greater details and actionable recommendations, listed in Section III of this report.

OBSERVATIONS AND RECOMMENDATIONS

ENTERPRISE CONSIDERATIONS

2. Observation Procurement roles and responsibilities are not clearly understood among City staff and the Council, which can hinder organizational effectiveness.

Recommendation Develop a matrix outlining the roles and responsibilities for all stakeholders engaged in procurement at various levels.

3. Observation The City does not provide consistent, regular training on purchasing activities to all employees engaged in purchasing activities.

Recommendation
A. Develop an onboarding program for staff who are responsible for procurement within the City.

B. Supplement the current training catalog published by Human Resources (HR) with procurement-specific training opportunities.

C. Evaluate the current training program content, audience, and frequency to maximize the impact of current training activities.

4. Observation
The City’s procurement processes often rely on a single individual to maintain continuity of operations. This places the City at an increased risk of institutional knowledge loss if those individuals are not present.

Recommendation
Establish and document backups for processes managed by a single individual.

Conduct cross-training among employees to ensure adequate and consistent coverage of key functions and duties.

491
CC 04-19-2022
491 of 632

Procurement Operational Review | 3

FOR THE INTERNAL USE OF THE CITY OF CUPERTINO ONLY

5. Observation There are gaps in the City’s ability to effectively manage and communicate change related to procurement within the organization.

Recommendation Adopt a standardized change management process to promote communication, adoption, and accountability.

6. Observation There are instances where procurement practices do not align with established policies or City values regarding inclusion and sustainability.

Recommendation
Standardize and communicate assistance opportunities for small businesses to meet the City’s insurance requirements; where possible, update templates to modify insurance requirements for small business contracts.

POLICIES, PROCEDURES, AND PROCESSES

7. Observation
Increased complexity within the operating environment, along with the COVID-19 pandemic, have presented the City with an opportunity to evaluate and modernize its procurement processes to suit its current operating conditions.

Recommendation
A. Explore and implement modern procurement processes and supporting technologies.

B. Conduct robust training with all employees and establish annual refresher training for employees who are highly involved with these business processes.

C. Formalize and develop procurement toolkits and comprehensive self-service guidance for all business functions.

D. Establish targeted coordination meetings for employees who are highly involved in specific functions to proactively resolve issues and support continuous improvement.

8. Observation The City’s procurement methods and thresholds have not been updated since 2013.

Recommendation
A. Review and update City purchasing method guidance as appropriate.

B. Assess the efficacy of the current purchasing methods and thresholds; assess opportunities to streamline processes and generate clarity.

9. Observation
Although procurement data, including budget data, is generally available to City staff, some users report difficulty in properly accessing and/or interpreting this data.

Additionally, some procurement-related data is inconsistently named.

Recommendation
Consider surveying staff to determine common and essential project information and create improved self-serve options, such as report templates or user training guides. Ensure ongoing data accuracy, completeness, and consistency through developing a data management strategy and processes.

10. Observation
Many procurement processes at the City are not well documented and are subsequently performed inconsistently across City departments. Current purchasing policies and procedures are out of date, hindering a consistent employee understanding of requirements, processes, and protocols.

Recommendation Develop a prioritization plan for updating or developing comprehensive, clear, and concise procurement policies and procedures.
492
CC 04-19-2022
492 of 632

Procurement Operational Review | 4

FOR THE INTERNAL USE OF THE CITY OF CUPERTINO ONLY

INTRODUCTION

Moss Adams serves as the outsourced internal auditor for the City of Cupertino (the City), and reports to the City Council’s Audit Committee who oversees our work and approves the annual internal audit plan.

In 2020, Moss Adams conducted an Enterprise Risk Assessment (ERA) and identified procurement (purchasing and contracting) as an area of overall high risk due to the inherent vulnerability of the function, high level of decentralization, and the potential consequences of risk occurrences. Public procurement involves significant financial interests, numerous transactions, and close interaction with third parties. These characteristics make the function inherently vulnerable to inefficiency (waste), bias, abuse, corruption, and fraud. Negative impacts of these risks often also include public backlash, reputational harm, and damage to public trust.

The Audit Committee approved the 2021–2022 internal audit work plan, beginning with a consultative procurement operational review to identify opportunities for improvement in service delivery, internal controls, organization, operations, and process efficiency. In our role as internal auditors, we are tasked with assessing the quality of the City’s procurement framework and its procurement processes for adequacy in design and operations.

The Institute of Internal Auditors (IIA)1 articulates that the mission of internal auditor is “to enhance and protect organizational value by providing risk-based and objective assurance, advice, and insight.” The definition from the IIA is that “internal auditing is an independent, objective assurance and consulting activity designed to add value and improve an organization's operations. It helps an organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes.” Internal auditors must consider several factors that can impact the balance of serving the public and addressing the interests if other stakeholders within a political context. These include:
• Accountability in Public Funding
• Nature of Politics
• Public Sector Governance
• Public Good and Public Interest
• Transparency, Ethics, and Integrity
• Legal, Regulatory, and Fiscal Compliance
• Efficiency, Effectiveness, and Equity in Public Service Delivery

1 The international professional association that serves as the internal audit profession's recognized authority. 493
CC 04-19-2022
493 of 632

Procurement Operational Review | 5

FOR THE INTERNAL USE OF THE CITY OF CUPERTINO ONLY

Procurement, the act of obtaining goods or services, is an essential component of any City’s operating functions. In the public sector, procurement activities are expected to be performed in a way that ensures such goods and services are appropriate, are obtained effectively, and are readily available to achieve the organizational mission and objectives.

Public procurement relies on taxpayer money. Therefore, community members want to be assured that City revenues are spent efficiently and effectively―that the money achieves the goals promised by City officials. By its nature, procurement may be risky and complex, making strong governance and risk management practices especially critical.

While every city operates under its own purchasing practices, systems, and procedures, all cities share common practices and operations stemming from state and federal regulatory requirements. Common procurement models are as follows:
• Decentralized Procurement Model: Individual departments are responsible for: (a) identifying the need for a good or service, (b) conducting the appropriate vendor selection process, and (c) placing a purchase order for the good or negotiating a contract for services. • Centralized Procurement Model: Individual departments identify the need for a good or service, and a dedicated functional team/group is responsible for conducting the appropriate vendor selection process, contract development, negotiating, and the transactional purchasing of goods and services. • Shared Services Procurement Model: While often confused with the centralized model, the shared services model is designed to provide services to “customers” — internal stakeholders such as other employees and departments. A shared service model typically operates more like a private-sector business, with a defined set of service-level agreements and pricing structure.

PROCUREMENT

MODEL POTENTIAL BENEFITS POTENTIAL RISKS
Decentralized May be easier to:
● Empower departments to operate
with greater flexibility and increased
speed
● Identify requirements/specifications
for specialized procurement needs
● Reduce administrative overhead
costs
May increase risk of:
● Insufficient training provided to
employees who conduct purchasing as a
secondary responsibility
● Missing opportunities to purchase a wide
range of products at lower prices
● Insufficient purchasing expertise to
identify and benefit from strategic and
tactical opportunities
● Noncompliance with city policy and other
procurement requirements
494
CC 04-19-2022
494 of 632

Procurement Operational Review | 6

FOR THE INTERNAL USE OF THE CITY OF CUPERTINO ONLY

PROCUREMENT

MODEL POTENTIAL BENEFITS POTENTIAL RISKS
Centralized May be easier to:
● Ensure adherence to procurement
policy and standard procedures
● Track compliance with regulations
● Hire and develop employees with
greater specific purchasing
knowledge and expertise
● Identify and pursue savings
opportunities
● Collect, analyze, and report in a
timely fashion on purchasing activity
May increase risk of:
● Higher administrative and overhead
costs
● Fewer incentives to keep service costs
low when procurement group costs are
not explicitly tracked or charged
● Experiencing slowdowns in delivery of
service if processes do not have built-in
flexibility to accommodate varying
procurement needs
● Disconnects in the development of
technical requirements and
specifications
Shared Services May be easier to:
● Set very clear expectations around
service delivery
● Track procurement service-related
costs and return on investment
● Ensure greater transparency for the
business processes
● Align customers’ expectations
● Foster a culture of continuous
improvement
May increase risk of:
● Higher administrative and overhead
costs
● Favoring a one-size-fits-all approach that
may not be responsive enough for the
needs of different groups
Maintaining a system of effective, efficient, and ethical procurement is fundamental to the economical delivery of quality goods and services to the public. Ethical goals for procurement may include considering social issues, such as ensuring equal opportunities for and equitable treatment of all potential vendors. Another concern for public sector procurement projects may be environmental sustainability and compliance with related environmental laws and regulations.

Because governments have such substantial buying power, they may leverage public procurement as a strategic instrument to pursue complementary policy objectives, such as stimulating innovation, pursuing environmental sustainability, supporting small- and medium-sized organizations, and promoting responsible business conduct. When governments pursue these goals, they must weigh the benefits against potentially increasing the costs and complexity of procurement.

Purchases generally consist of the following categories, for which different procurement methods may apply:
• Goods: The purchase of goods includes materials, equipment, and supplies needed by any department.
• Services: City staff may require contracts for services, which fall into two categories:
○ General Services: Services rendered such as custodial services, building/equipment maintenance, and machinery/equipment rental.
495
CC 04-19-2022
495 of 632

Procurement Operational Review | 7

FOR THE INTERNAL USE OF THE CITY OF CUPERTINO ONLY

○ Professional Services: Services provided by a person or firm engaged in a profession based on highly specialized and/or technical knowledge or skill. • Construction and Public Works Projects: Projects pertaining to the construction, alteration, repair, or improvement of any public structure, building, road, or other public improvement of any kind, including demolitions, and the construction and installation of drainage systems, lighting and signaling systems, sewer and water systems, and park and recreational facilities.

Moss Adams conducted this engagement between September 2021 and January 2022. For this engagement, Moss Adams focused on the City’s procurement function, evaluating the structure, function, and role of procurement personnel in order to identify opportunities to improve the operational effectiveness and efficiency of procurement processes and to emphasize important procurement principles such as ethics, equity, fair competition, quality, and sustainability. We assessed the alignment of procurement services with:
• City goals, policies, and business plan
• Industry best practices
• Applicable laws and regulations
Moss Adams is able to fulfill the objectives of the engagement and independently assess and report on operations and provide objective feedback on how well goals are met due to the ability to remain independent from management. To ensure high quality work, Moss Adams follows professional standards, which provides support for the conclusions shared in this report. The project consisted of four major phases.

PHASE DESCRIPTION
1 Start-Up and
Management
 Project initiation consisted of collaborative project planning with the City and project management, including developing our scope of work and final work plan.
2 Fact-Finding and
Data Collection
 In the second phase, we conducted our fieldwork, including documentation review, peer benchmarking, focus groups, interviews, and employee and vendor surveys.
3 Analysis  Based on the information gained during our fieldwork phase, we performed a gap analysis of current conditions and identified opportunities for improvement. Leveraging best practice information, and our own experience from working with similar entities, we developed practical recommendations. 4 Reporting Results  We communicated the results of our analysis with observations and recommendations presented first in a draft report that was reviewed with management to confirm the practicality and relevance of recommendations before finalizing the report.

496
CC 04-19-2022
496 of 632

Procurement Operational Review | 8

FOR THE INTERNAL USE OF THE CITY OF CUPERTINO ONLY

The purpose of this section is the highlight the hard work and continued efforts of City staff to act on opportunities to optimize procurement activities across functions and levels within the City. Despite working in a resource-constrained environment with fewer employees compared to benchmarked Cities, staff remained responsive, collaborative, and committed.

This assessment took place during a particularly busy time for the City, yet employees made time to participate in interviews and surveys and responded to questions and requests for information in a timely and thorough manner. In our experience, staff engagement can vary widely. The experience with Cupertino staff remained positive for the duration of the engagement and across functions and levels within the City. Not only were staff responsive to Moss Adams, interviewed staff also remarked on the high degree of availability to one another. There were several instances where staff noted that they rely on emails and phone calls to accomplish tasks, and these staff consistently praised the reachability and responsiveness of their peers.

The current success of the decentralized procurement program is due to the careful, collaborative efforts of City staff across functions and throughout the organization. In particular, Finance Division staff have worked to ensure that current procurement processes are designed with strong internal controls to mitigate risk. Across departments, interviewed staff were quick to acknowledge a collaborative foundation built on trust, communication, and continuous improvement. New, recently promoted, or recently transferred employees positively reflected on their ability to ask questions of their peers, who readily provide feedback and guidance. Peers were observed collaborating on improvement opportunities and sharing best practices and resources.

Throughout this engagement, Moss Adams was frequently updated on continuous improvement projects throughout the City. As noted in Observation 10
, the CAO has launched an effort to update all contract documents and guidance on developing contracts, and is hosting this information in a shared, self-serve location. Additionally, Finance Division staff have implemented several process improvement initiatives including budget training and resources to help staff better develop and access financial information. It is evident, based on interviews, document review, and the staff survey that City employees are committed to doing their best.

We would like to commend City staff and leadership for their willingness to assist us in this assessment process. The City’s strengths provide a strong foundation that may improve the outcomes of implemented recommendations.

497
CC 04-19-2022
497 of 632

Procurement Operational Review | 9

FOR THE INTERNAL USE OF THE CITY OF CUPERTINO ONLY

OBSERVATIONS AND RECOMMENDATIONS
Based on the input gathered from interviews, document review, focus groups, and surveys, as well as comparisons to best practices, we prepared the following set of observations and recommendations. We have grouped our observations and recommendations in this report by primary recommendation, enterprise considerations, and policies, procedures, and processes. The observations and recommendations are detailed below.

Our aim is to provide the City’s leadership with actionable information on opportunities for improvement.

Our recommendations are intended positively impact the operational effectiveness and efficiency in the City’s procurement activities—its governance, risk management, and control processes. While we encourage management to implement the recommendations contained in this report, the City must assess its own degree of risk tolerance and the cost/benefit of implementing each recommendation.

1. Observation The City’s current procurement activities are highly decentralized, leading to increased inefficiencies as departments create customized processes for common procurement practices.

Recommendation Take steps towards greater centralization of procurement activities and elevate procurement to a strategic function with the installation of a Procurement Officer or Procurement Division.

As noted in the 2020 ERA, the City’s procurement model is highly decentralized, with individual departments primarily responsible for conducting and managing purchasing and contracting activity with support from the Finance Division and the CAO. To operate effectively in a decentralized environment, the City should have up-to-date training (see Observation 3), comprehensive policies and procedures (see Observation 10), and robust engagement with the City’s contracting and financial systems. In the absence of the elements previously mentioned, City staff report greater challenges maintaining standardized practices and streamlined processes.

In addition to challenges experienced by staff, the highly decentralized environment also impacts the City’s ability to:
• Take advantage of economies of scale or cooperative purchasing with other agencies • Reduce duplicate purchases of materials
• Develop and share specialized knowledge held by procurement staff • Plan, implement, monitor, and control standardized procurement practices • Facilitate enhanced levels of cooperation and coordination among various City departments 498
CC 04-19-2022
498 of 632

Procurement Operational Review | 10

FOR THE INTERNAL USE OF THE CITY OF CUPERTINO ONLY

A strategy to achieve efficiency must include consideration of how procurement is structured on an organizational level. As the City continues to grow, these challenges related to the decentralized procurement model are likely to continue unless the City evolves its procurement practices to maintain balance between operational flexibility and standardization.

When interviewed, several staff noted their desire to remain agile in their purchasing ability and were concerned about the possibility of delays in approvals if the City moved towards centralized purchasing activities. However, nearly all staff reported a desire for help with contracting and purchasing activities when interviewed, and several noted the desire for centralized services in the employee survey.

Recommendation
Procurement may be centralized or decentralized, or a hybrid approach can be used. Centralization typically reduces risks related to purchasing processes and contract administration and can empower a City to leverage its purchasing power to maximize value. However, centralization may hinder efficiency through increased bureaucracy, cause employees to feel unempowered, or hinder the City’s ability to adapt to changing circumstances. Another factor that must be considered is whether the administrative costs of implementing different strategies are beneficial.

Taking steps toward or implementing elements of a centralized model does not necessarily require complete centralization. Purchasing is on a spectrum, with complete centralization on one end and complete decentralization on the other. Organizations can be anywhere along that spectrum based on their needs, desired outcomes, and available resources.

The City should establish a procurement framework that includes a strategic function led by a Procurement Officer with adequate authority to institute and enforce adherence to procurement policies and procedures across the City. According to the Institute for Public Procurement, regardless of entity type or size:
“Public procurement systems are the means through which critical and strategic services, supplies, and construction are purchased to support essential public functions. To operate effectively, it is imperative in those systems that there be central leadership to provide direction and cohesion.” The authority for procurement decisions in the City should be developed to balance approval responsibilities between the Procurement Officer, City Attorney, City Manager, and the Council and should be informed by the needs of operational departments. When determining the level of authority for the Procurement Officer, the City can consider one that is commensurate with other executive positions, including placement on the City’s leadership team. This can ensure procurement strategies are aligned with organizational goals and capitalize on opportunities to improve financial outcomes. This placement, and authority, provides several strategic benefits to the City, including:
• Increased cost effectiveness and efficiency by leveraging spending, competition, negotiations, and increasing contract success
• Cross-agency collaboration and planning
• Maximized competition, resulting in reduced costs and improved quality • Increased transparency and accountability to key stakeholders, including management, elected officials, existing and potential vendors, and the community 499
CC 04-19-2022
499 of 632

Procurement Operational Review | 11

FOR THE INTERNAL USE OF THE CITY OF CUPERTINO ONLY

• Decreased risks associated with failed contracts, protests, and possible legal actions • Streamlined operations, supporting efficient and effective operations Additionally, by elevating this position, the Procurement Officer will be able to maximize working relationships with other departments across the City, which can assist with interdepartmental planning and support greater user satisfaction. According to the National Association of State Procurement Officials (NASPO), lack of visibility and authority is considered the greatest impediment to optimizing the procurement function.

The Procurement Officer may delegate procurement authority to departments that employ skilled procurement professionals and are frequent users. Appendix A presents the five most common positions
found in public procurement and outlines the potential framework for implementing dedicated purchasing roles. Delegated tasks should continue to be overseen by department directors while allowing departments to make moderate sized purchases that are integral and common to their specific services and activities. The decision to delegate authority should be contingent upon the availability of skilled, experienced procurement professionals in user departments and should only be considered for departments that procure a significant amount of goods and services in the course of their operations.

Appendix D provides peer city data to consider when evaluating procurement models and structure of procurement staff.

Of note, many peer cities identified use a centralized purchasing model. In the City of Gilroy, where purchasing is decentralized, the finance department still maintains responsibility for:
• Purchasing materials, supplies, and equipment (goods) and services for use by all departments when appropriate
• Preparing standard specifications for goods and services wherever possible • Maintaining a purchase order system and issuing purchase orders as required • Verifying that all bids and proposals are in accordance with policy requirements • Establishing and operating a system of stores for the bulk purchase of commonly used items • Selling surplus personal property of the City, subject to the determinations and approval of department heads, the City Administrator, and the City Council

500
CC 04-19-2022
500 of 632

Procurement Operational Review | 12

FOR THE INTERNAL USE OF THE CITY OF CUPERTINO ONLY

2. Observation Procurement roles and responsibilities are not clearly understood among City staff and the Council, which can hinder organizational effectiveness.

Recommendation Develop a matrix outlining the roles and responsibilities for all stakeholders engaged in procurement at various levels.

City employees report that roles and responsibilities are sometimes unclear or misunderstood. A decentralized model can increase the risk of unclear or misunderstood roles and responsibilities amongst staff when procurement activities are secondary or infrequent job responsibilities. Fluctuating or inconsistent expectations and management practices can create confusion and operational inefficiencies.

When surveyed, only 51% of respondents reported good or excellent clarity in roles and responsibilities, suggesting a significant opportunity for improvement in this area.

Differing roles and responsibilities for procurement across City departments can contribute to the lack of understanding regarding the appropriate resource for general procurements. For example, small procurements for goods and services are managed across a variety of roles including administrative staff, management analysts, project managers, and supervisors. While most staff have a clear understanding of how to obtain items, several reported varying levels of knowledge about who they needed to coordinate with for various types of contracting or purchasing methods. For example, it can be unclear if the CAO or the department director is the best resource is for up-to-date contracting exhibits. This lack of clarity was most often noted among staff who were recently hired, were newly promoted, had changed departments, or used contracting or purchasing processes infrequently.

The City Council is responsible for setting policy direction and delegating the authority to implement adopted policies and manage procurement operations. However, due in part to an embezzlement that occurred from 2000–2014 and was discovered in 2018, the Council has shown elevated levels of interest in City operational matters and tactical activities and has engaged in detail level work such as reviewing credit card statements. This practice is not the best use of Council time, and the insertion of Council into day-to-day matters can perpetuate a sense of doubt among City staff, hindering operational efficiency.

Such an environment weakens the authority and expertise of City leadership to develop and implement strategic updates to procurement practices. The following table identifies high-level distinctions between the roles of the City Council and City staff.

501
CC 04-19-2022
501 of 632

Procurement Operational Review | 13

FOR THE INTERNAL USE OF THE CITY OF CUPERTINO ONLY

CITY COUNCIL CITY STAFF
Govern, Guide, and Direct Administer and Operate
● Decide what to implement
● Request information
● Consider issues
● Create, review, and adopt strategic policy
● Monitor progress
● Represent public interests
● Operate ethically and with integrity
● Decide how to implement
● Seek and provide information
● Develop recommendations
● Recommend and implement policy
● Report on progress
● Act in public interest
● Operate ethically and with integrity
The role of Council is NOT to: The role of City staff is NOT to:
● Carry out policies
● Set administrative policies and procedures
● Direct any staff other than the City Manager and
chartered officers
● Abdicate Council responsibility
● Set strategic policies
● Direct the Council
● Assume Council responsibilities
● Circumvent City or Council policies
In the City’s decentralized purchasing environment, employees within departments are involved in several procurement activities including developing specifications, obtaining quotes, utilizing templates to prepare contract documents, and making purchases. Staff noted the desire to improve role and responsibility clarity. Greater clarity could lead to increased transparency into procurement processes, which could contribute to trust-building efforts between the Council and City leadership.

Recommendation
Effective procurement requires clearly defined roles and responsibilities for each participant in the contract or purchasing process. The City should develop a matrix that clarifies roles responsibilities for all key stakeholders in the City’s procurement function. Appendix A provides the recommended industry
standard for roles and responsibilities among procurement functions within a city.

The benefits of establishing clear roles and responsibilities include greater consistency and predictability throughout the procurement process, a standard set of criteria against which to evaluate personnel, and greater transparency and clarity for operating departments and vendors. A Procurement Officer with authority and responsibility over the contracting process will have experience effectively utilizing systems and complying with requirements and can increase procurement efficiency and avoid duplication of effort.

Refocusing operating department personnel toward project management better leverages their skills and abilities to effectively deliver the goods or services and can lower overall administrative costs.

Overall, the goal of the roles and responsibilities matrix should be to define and standardize expectations.

Relevant contract administration and project management responsibilities should be incorporated in job descriptions and annual performance reviews.
502
CC 04-19-2022
502 of 632

Procurement Operational Review | 14

FOR THE INTERNAL USE OF THE CITY OF CUPERTINO ONLY

3. Observation The City does not provide consistent, regular training on purchasing activities to all employees engaged in purchasing activities.

Recommendation A. Develop an onboarding program for staff who are responsible for procurement within the City.

B. Supplement the current training catalog published by Human Resources (HR) with procurement-specific training opportunities.

C. Evaluate the current training program content, audience, and frequency to maximize the impact of current training activities.

The lack of standardized training regarding procurement processes and procedures, which is primarily a function of the decentralized procurement model, has led to staff reliance on peer mentoring and on outreach to partner departments to successfully undertake various procurement practices including contract development, purchasing, and approvals. Historically, this has provided sufficient opportunities for staff to gain the necessary expertise to carry out contracting and purchasing activities. However, in the last few years, the City has seen an increase in the number of new employees without a corresponding increase in procurement-related training and supporting documents such as job guides. In the absence of a formalized training program, the variable knowledge among contracting staff places the City at heightened risk of contract errors, increases the likelihood of rework, and can hinder process improvement opportunities.

When surveyed, 86% of respondents reported that they had not received procurement-related training in the last two years. While this could also be a byproduct of a disrupted working environment due to COVID-19, as the City continues to normalize operations and experience additional growth and change within and among departments, it would be beneficial to prioritize procurement training opportunities, the development of job aids, and/or centralized resources for employees.

Across departments and levels, training was the most noted opportunity to improve procurement operations among staff interviewed and surveyed. Specifically, staff requested additional training for contract development and procurement fundamentals including new functions, budgeting, and purchasing.

Recommendation
Onboarding Program
Many studies have shown that a well-designed training program can have huge benefits, including increased employee retention, productivity, morale, confidence, job satisfaction, and achievement. The City should create a systematic training program for procurement to increase employee proficiency, reduce risk, and streamline contracting and purchasing processes. According to best practices, City onboarding programs should include the following components:
503
CC 04-19-2022
503 of 632

Procurement Operational Review | 15

FOR THE INTERNAL USE OF THE CITY OF CUPERTINO ONLY

• Socialization: This should include an explanation of procurement expectations, training or shadowing, evaluation criteria, and a discussion of policies, procedures, and key partners, including CAO and Finance.
• Support programs: A buddy program pairs new hires with veteran employees for a specified period ranging between a few weeks to the first year of employment. Buddies can answer questions and help build camaraderie.
• Checklist: Information that is specific to anticipated procurement activities should be guided by supervisors who may benefit from sharing a comprehensive checklist. • Review of policies, procedures, and technology: Any checklists should include a review and discussion of relevant policies, procedures, and guidelines. • Communication processes: This may include what information is expected to be communicated including contract or purchase order (PO) initiation notices, approvals, and requests for items, as well as how information should be communicated both informally (email or chat) and formally (Cobblestone, New World, DocuSign).
• Significant program length: Training is a comprehensive process that is expected to last between one month to the entire first year. It is not uncommon to host semi-annual or annual trainings to refresh skills and present new topics.
• Unique activities identified by individual departments: Each position is unique and may require additional focused training activities.

Additionally, when City employees are promoted into a new role, especially if that role includes additional or different procurement responsibilities, the City should provide relevant training opportunities to support their success.

Ongoing Training
Training in purchasing and contract administration establishes a baseline of knowledge and increases the likelihood that staff will administer and monitor contracts consistently and reliably. Training should be mandatory for employees responsible for procurement activities, and regular refreshers should be offered, especially as processes and policies change. A baseline level of training and understanding of the purchasing and contract administration process, roles and responsibilities, and City policies should be required for project managers and department directors. The City should consider requiring procuring employees to attend a quarterly training to stay up to date with procurement policy and law. Likewise, all contract administrators should be trained to an adequate level of expertise on the use of reports to support day-to-day operations. Short, accessible online training videos and quick reference guides could be developed at a low cost to help employees comply with policies and procedures.

Currently, the City’s HR department publishes a catalog of ongoing training opportunities that does not include a procurement category. The City should consider developing a section of the catalog that includes continuing education opportunities. Departments across the City including Public Works, Community Development, and others should inform the training activities included in the catalog to increase the knowledge within their unique procurement environment. 504
CC 04-19-2022
504 of 632

Procurement Operational Review | 16

FOR THE INTERNAL USE OF THE CITY OF CUPERTINO ONLY

Training Program Evaluation
Of the surveyed staff who participate in procurement training opportunities, 56% reported that the quality of training was average, presenting an opportunity for improvement. Where training does exist, the City could benefit from an evaluation of the training content, target audience, and frequency. This can help the City maximize its current program. Assessing the content for relevance should ensure that the knowledge areas needed for participants to successfully carry out their roles is included in the training materials.

Evaluating the target audience will also ensure that the training offered is reaching the correct individuals.

Development of the roles and responsibilities matrix (see Recommendation 2 ) should assist with this
evaluation. Lastly, as growth and turnover continue, it may be necessary to adjust the frequency of any established training programs. This will benefit those who are new, switch roles, or conduct procurement practices infrequently. Increased frequency in training could also be supplemented by developing self- serve, up-to-date comprehensive guides.

4. Observation The City’s procurement processes often rely on a single individual to maintain continuity of operations. This places the City at an increased risk of institutional knowledge loss if those individuals are not present.

Recommendation Establish and document backups for processes managed by a single individual. Conduct cross-training among employees to ensure adequate and consistent coverage of key functions and duties.

A single point of failure (SPOF) refers to a person or other resource for which there is no redundancy in place, meaning if the resource disappears, any system or processes of which it is an essential part will fail. A decentralized procurement model can increase the likelihood of SPOFs. Departmental SPOFs related to procurement within the City include individuals in the role of departmental management analyst or administrative staff who are solely responsible for processing, assisting with, or executing key tasks related to procurement functions in their departments. This places the City at a greater risk of service disruption if these individuals are absent due to vacation, prolonged absence, or shift in employment.

During interviews, several staff noted their reliance on these key contributors; however, not all departments had a contingency plan in place to mitigate the risk of disruption. Staff in these positions also noted their inability to take time off, due to their essential role in the contract development or purchasing process, and the lack of backups for their position.

In a decentralized environment, it is difficult for departments to have redundancies in place by providing staff with the necessary backups to maintain operations (see Observation 1). This is reflected in the staff survey where only 26% of respondents reported good or excellent backup for their positions. Several staff noted lack of resources as a constraint to providing cross-training opportunities.

Recommendation
Cross-training is a best practice and helps to provide intradepartmental support when an employee is unable to complete their assigned tasks because they are out of the office or focused on other project 505
CC 04-19-2022
505 of 632

Procurement Operational Review | 17

FOR THE INTERNAL USE OF THE CITY OF CUPERTINO ONLY

work. Without cross-training or backup staffing, it can be a challenge to deliver a consistent level of service throughout the year. Cross-training for key functions offer the following benefits:
• Durability: When only one person knows how to handle a key area, the City isn’t positioned for sustainability. Cross-training helps ensure that if an essential team member quits or takes a vacation, procurement operations won’t suffer or need to be re-created. • Agility: Cross-training creates a more agile workforce by providing on-the-job professional development. It can result in several benefits to employees by providing them with additional skillsets, a chance to learn different things, uncover hidden talents, and prepare for advancement. • Flexibility: Functions that cross-train are better equipped to recover quickly from disruptions and handle transitions gracefully. This means they can deliver seamless service to key stakeholders, even in times of disruption.
• Efficiency: Cross-training often inspires teams to refine processes. Teaching current processes to others provides an opportunity for employees to answer questions, explain desired outcomes, and see the tasks they perform daily through a fresh set of eyes. This critical reevaluation of process effectiveness and design can lead to increased efficiencies. • Teamwork: Cross-training gives employees a chance to build new relationships with people they might otherwise not have regular contact with. These relationships will help the Department work more effectively and increase employees’ understanding of the big picture.

When implementing a cross-training program, considering the following factors can help to build a durable, agile, and efficient plan:
• Create a culture of collective success: For some employees, being indispensable is a point of pride. Department leadership should make it clear that the department values people’s ability to support each other and that single points of failure are a department-wide weakness. Employees should be assured that their capacity to help their co-workers in times of need will benefit them when they need additional support.
• Set formal expectations: Departments should require employees to have at least one person who can step into their role at a moment’s notice. Make it mandatory, give clear instructions, and provide time for people to cross-train effectively.
• Test success: To support long-term success, employees should run simulations to ensure cross- training meets expectations. See whether a key employee can go away on vacation with absolutely no team contact or commit that employee to another project and make sure they aren’t pulled in to help the person performing their role. If someone is able to step in in this person’s absence, it’s covered.
• Develop a feedback mechanism: Employees should be provided an opportunity to provide feedback on the impact of cross-training activities, and this information should be leveraged to continuously improve efforts.

Although cross-training may result in some short-term loss in productivity, it will ultimately benefit long- term risk mitigation and increased efficiency.
506
CC 04-19-2022
506 of 632

Procurement Operational Review | 18

FOR THE INTERNAL USE OF THE CITY OF CUPERTINO ONLY

5. Observation There are gaps in the City’s ability to effectively manage and communicate change related to procurement within the organization.

Recommendation Adopt a standardized change management process to promote communication, adoption, and accountability.

City staff and leadership report challenges in effectively managing and communicating change within the organization. When interviewed, staff noted that a primary driver of procurement process change has been changes in the CAO. As noted in the 2020 ERA report, the City has experienced turnover at multiple levels and has undergone organizational restructuring. In 2021, the City returned to an in-house attorney model. Staff reported positive changes as a result of the stability and consistency of having an in-house attorney; however, this transition also resulted in new changes to procurement processes and practices.

Currently the City does not have a standardized process for designing, implementing, or enforcing change. This impacts the ability of City staff to respond to changes that are currently underway or planned. The Finance Division and the CAO distribute comprehensive communication about changes to purchasing, budgeting, and contracting process to impacted City department staff, along with context about how the change might impact their operations. Despite this, some staff report learning about changes through the grapevine or retroactively as a correction to a current task.

Some possible reasons for the disconnect between information communicated and staff uptake or adoption may include:
• Lack of a single, centralized source of guidance related to procurement • Staff frustration with current communication methods
• Current communication materials are not always in a self-serve format – for example, searchable, centralized resources, templates, guides, and checklists that can be referenced along with recorded trainings
• Information on change is not being cascaded within City departments to the appropriate individuals • Staff perform certain procurement or contracting related tasks infrequently • Staff are experiencing change fatigue
Various departments are in the process of creating their own FAQs or loading information onto the City’s intranet (the HUB) to communicate with and train others when changes to procurement occur. For example, the CAO has created a Contracting FAQ and contracting instructions, which have been loaded to the HUB. This is a positive first step in rolling out change; however, the process for communicating and adopting change could be enhanced with greater alignment between departments and formalized processes.

In addition, employees have not been consistently held accountable to adopt new changes, leading to attempted changes not achieving their targeted outcomes. For example, when interviewed, several staff noted the presence of a sustainability policy and its impact on purchasing and disposal of surplus goods.

Staff were encouraged by the policy and its goals; however, they noted that some peers were unaware of 507
CC 04-19-2022
507 of 632

Procurement Operational Review | 19

FOR THE INTERNAL USE OF THE CITY OF CUPERTINO ONLY

the policy due the lack of accountability for subsequent adoption. As a result, it’s possible that the targeted outcomes of the policy may not be met. A key step in change management is the reinforcement of implemented changes. When this does not occur, it places the City at risk of backsliding, where employees revert to old ways of doing things, or of changes that do not achieve their intended outcomes.

Recommendation
To improve the overall adoption of procurement changes, the City should establish a standardized change management process focusing on awareness, training, and accountability. Wherever possible, employees should be notified of upcoming changes to generate awareness. This will also create an opportunity for staff to provide input on potential concerns and suggestions to improve implementation.

Training or additional resources specifically highlighting what is changing and the impact to procurement activities should be developed to accompany upcoming changes. This will help employees adopt new processes and reduce the likelihood of rework and delayed timelines due to error.

The following are elements can help the City increase its awareness, training, and accountability practices when implementing changes to procurement:
• Align key stakeholders: Although a change may not result in significant improvements for every department, this presents an opportunity to exercise enterprise-wide thinking and consider the impact of the change on other facets of the organization.
• Communicate the change: Excellent communication is critical to change management. The leaders initiating the change should ensure clear and open lines of communication throughout the change management process and advocate for two-way dialogue to provide answers and inform stakeholders.
• Plan for and understand the ramifications of the change: Clearly identify what is changing, how it is changing, who will be affected, how users will be affected, and when the change will occur. Change should occur in a multi-step, well-communicated process that includes ample training and no surprises to staff.
• Reinforce change: Once updates or changes to procurement have been made and training provided, it will be important for department leaders to hold their staff accountable for incorporating changes into their workflows.

Accountability
As change takes place within the organization, the City can experience improved outcomes by holding employees accountable to newly established processes. Accountability measures will help make sure that changes meet the targeted outcomes.

Creating an organizational culture of accountability leads to high performing teams through increased engagement and ownership, reduced confusion, and increased growth at the individual and organizational level. Successful accountability requires clear expectations and trust.

508
CC 04-19-2022
508 of 632

Procurement Operational Review | 20

FOR THE INTERNAL USE OF THE CITY OF CUPERTINO ONLY

Leadership should consider the following to achieve greater accountability:
• Set clear expectations and be specific on what is required of an individual • Be transparent in what processes are followed
• Create trust where staff feel supported and comfortable providing feedback without retaliation or judgment
• Communicate with those who are accountable for specific tasks or projects Increasing accountability across the City will strengthen the culture, build better compliance monitoring, and improve performance.

6. Observation There are instances where procurement practices do not align with established policies or City values regarding inclusion and sustainability.

Recommendation Standardize and communicate assistance opportunities for small businesses to meet the City’s insurance requirements; where possible, update templates to modify insurance requirements for small business contracts.

Inclusive Procurement
Employees reported concerns around the City’s current insurance requirements and indemnification terms in contract templates. While the City has strengthened its contracting templates over the last few years, the current levels of insurance and risk management requirements may be in conflict with the City's values related to diversity of its vendors. For example:
• If the City wants to contract with small, locally owned businesses, and/or Minority, Women, and Disadvantaged Business Enterprises (MWDBEs), the current requirements create increased risk that the City will exclude these vendors. Access to bonding, insurance, and capital remains a legacy supply-side problem for MWDBEs and may require more hands-on coaching and pooling of capital in innovative ways.
• Employees report that vendors who wish to provide lower-dollar amount services often spend more time doing the preparation work to meet the contracting requirements of the City than the amount of time they are proposing to contract for the City.
• The City does not have contract templates (and adjusted requirements/terms) that effectively allow for these low-dollar value contracting scenarios.

Employees gave examples of vendors who no longer work with the City because they found it was not economically feasible for them to purchase the required levels of insurance. In addition to providing a more efficient system, the reduction of bureaucratic burdens for small and medium size enterprises, when feasible, can increase fairness, foster integrity, and decrease corruption. 509
CC 04-19-2022
509 of 632

Procurement Operational Review | 21

FOR THE INTERNAL USE OF THE CITY OF CUPERTINO ONLY

Sustainability
On the City’s website, “Green in the City,” there are several references to policies in place to support green practices, and a statement that the City leads by example, enacting these policies in municipal operations. When interviewed, staff agreed that there were robust policies in place; however, due to a lack of accountability, there was inconsistent adherence to those policies in practice.

The City’s green policies related to procurement include:
• Zero waste policy
• Utility Conservation Policy and Procedure
• State Law 1383 regulations, which require the City to procure recycled content paper products and keep organics out of waste streams
Recommendation
The largest hurdle when contracting with small businesses or MWDBEs appears to be the City’s current insurance requirements and indemnification terms in standard contract templates. There are workarounds in place where the City purchases gap insurance to help small businesses meet the insurance requirements of the City; however, this is not widely known among staff or contractors. Generating awareness will be an important first step in generating accessibility of contracts to smaller businesses.

The City should also evaluate the volume of instances where this workaround takes place and consider opportunities to consult the City’s risk management team and revise insurance requirements for certain types of professional services contracts. The City could also make changes to its definition of a “small contractor” for purposes of a supplier diversity program to create a more rational, data-driven process to simplify and expedite the process.

The City has sustainability policies in place that have been thoughtfully developed by the City’s sustainability team. According to interviewed employees, the rollout of new sustainability policies suffered from a lack of circulation and accountability. In both situations, information regarding processes for working with small businesses to help bridge insurance and indemnity requirements, and sustainability initiatives and their impact to procurement practices, would benefit from a structured rollout (see Recommendation 5
).

510
CC 04-19-2022
510 of 632

Procurement Operational Review | 22

FOR THE INTERNAL USE OF THE CITY OF CUPERTINO ONLY

7. Observation Increased complexity within the operating environment, along with the COVID-19 pandemic, have presented the City with an opportunity to evaluate and modernize its procurement processes to suit its current operating conditions.

Recommendation A. Explore and implement modern procurement processes and supporting technologies.

B. Conduct robust training with all employees and establish annual refresher training for employees who are highly involved with these business processes (see Recommendation 3).

C. Formalize and develop procurement toolkits and comprehensive self- service guidance for all business functions (see Recommendation 10).

D. Establish targeted coordination meetings for employees who are highly involved in specific functions to proactively resol ve issues and
support continuous improvement.

Many of the procurement processes of local governments across the country have evolved from procedures and practices created years, if not decades, ago. Leaders in local government have begun to rethink procurement approaches because of innovations in modern technology solutions, changing operational environments as a result of a multi-year global pandemic, and an expanding vendor landscape. Since March 2020, local governments like Cupertino have faced an urgent need for expedited procurement processes as they sought to adjust to the rapidly changing conditions caused by the COVID- 19 pandemic. In addition, the growing size and complexity of City operations has resulted in the common growing pains of other local governments, including the inconsistent documentation (see Observation 10 ),
confusion about roles and responsibilities (see Observation 2), and a growing need for re-engineering core business processes.

At the City, there are often manual touchpoints within departmental processes--for example, using emails and stand-alone spreadsheets to capture, execute, reconcile, and report on purchases. Although the Finance Division and CAO have developed effective, standardized procurement processes and accompanying internal controls related to budgeting, contracting, and invoice processing, manual procurement touchpoints within an operational department can introduce increased risk of error into procurement workflows. When a department relies on non-standard forms, email approvals, or tracking activity in spreadsheets to facilitate its procurement activities, a risk for inefficiencies or inaccuracies will result.

When surveyed, 55% of respondents rated procurement review and approval processes as good or excellent, and when interviewed, staff noted key opportunities to streamline review and approval processes. Only 42% of survey respondents rated overall effectiveness of the City’s contracting process as good or excellent. The top area for improvement noted by staff who participated in the survey was 511
CC 04-19-2022
511 of 632

Procurement Operational Review | 23

FOR THE INTERNAL USE OF THE CITY OF CUPERTINO ONLY

greater clarity, standardization, and accountability to purchasing methods (see Observation 8). Additional areas that may represent opportunities for improvement are called out in the table below:

FUNCTIONAL AREA PAIN POINTS AND INCONSISTENT PRACTICES Inventory Management City departments often acquire supplies without coordinating with other departments, leading to custom, one-off purchases for common items including office supplies and other commodities. As a result, multiple departments buy similar items from a variety of vendors, such as for pens, paper, coffee, and uniforms. The City does not have a mechanism for procurement, tracking, and distribution of these common supplies, handheld tools, and other general materials across departments or divisions, meaning the City is unable to effectively share items across groups.

Similarly, without citywide inventory processes and procedures, departments like IT and Public Works have created their own inventory tracking systems, which often do not get shared back into a centralized location.

Vendor Management The City relies on third parties to provide the goods and services required for many of its operations, from multi-million-dollar construction projects to ongoing custodial contracts. The City conducts vendor management activities; however, there is not a comprehensive vendor management policy and framework in place to manage the lifecycle of vendor relationships, including strategic procurement, management, and disposition of vendor services. This can lead to increased risk of:
● Expired vendor documentation or information.
● Lack of tracking vendor performance across departments. ● Inconsistent vendor experience when engaging with the City to provide goods and services.

Like many public-sector organizations, the City lags in applying outcome- based performance measures and establishing effective performance assessment and reward systems for their vendors.

Contract Management Individuals across the City are currently using Cobblestone for contract development and approval tracking. Although this system is more characteristic of document management than contract management in its current use, the Cobblestone system has allowed the City to automate some contract review and approval workflow steps. In some cases, however, staff still rely heavily on email approvals within departments in addition to available in-system workflows. Cobblestone is equipped to send contract renewal notifications; however, this is not consistently a common practice across departments. There is not currently a system- driven method for the City to monitor contract terms for cost escalators and automatic renewals that can cause increases.

Additionally, Cobblestone is not integrated into the City’s financial system.

Business Accounts

Business accounts represent an area of potential opportunity for improvement. For these credit accounts, the City has internal control measures in place including receipt requirements and monthly reconciliations. Typically, the following process and approvals occur:
512
CC 04-19-2022
512 of 632

Procurement Operational Review | 24

FOR THE INTERNAL USE OF THE CITY OF CUPERTINO ONLY

A supervisor pre-approves items for purchase.

The vendor has a list of employees that can charge to the business account. For example, at Home Depot the employee shows a City ID during the purchase.

The employee purchases goods.

After purchase, the physical receipt is validated by the employee’s supervisor and reviewed; the receipt is subsequently reconciled against the monthly business account statement.

There is agreement that approvals should take place in advance of purchases; however, this first step does not always take place.

Additionally, receipts should be turned in daily by those making purchases, in order to prevent delays of the monthly reconciliation process and in order to quickly detect any unauthorized or unexpected purchase activity.

This is not always the case.

CAL-Cards The City is a participating member of the California Purchase Card (CAL- Card) Program, which the City’s Finance department initiated in order to help improve the way the City does business. The Program provides a means to pay vendors for small dollar purchases more efficiently and can facilitate increased transparency and oversight over small dollar purchasing. The City’s credit card policy, last updated in 2018, outlines the eligibility, use, and review procedures for CAL-Card holders. CAL-Card users sign this agreement, which serves as their CAL-Card training.

Staff reported the CAL-Card program has provided increased efficiencies and convenience. However, the City has identified and corrected some CAL-Card use instances when the use of purchase orders may have been more appropriate, such as to pay for vendor services, subscriptions, and equipment. The root cause of this was likely a lack of understanding or training regarding the appropriate use of different procurement methods.

Invoice Processing The management analyst position within a department is typically responsible for entering the invoices sent to the City by vendors into the City’s financial system. Staff in Finance then review documentation and coding and prepare vendor payments.

When surveyed, 90% of vendors rated the invoicing and payment process as good or excellent. This is supported by the majority of staff interviewed.

There was an outlier incident in which a department believed they had received an invoice in error, resulting in delayed payment. This is most common in departments that process a low volume of invoices. If invoices are not entered in a timely fashion by departments into the financial system, it can create multiple pain points down the road related to budgeting, fiscal close, operational decisions, and timely payments.

Recommendation
Process Modernization
Procurement modernization steps including improving workflows, enhancing supplier relationships, providing better training (see Recommendation 3), implementing remote work technologies, incorporating data analytics, and improving vendor diversity. Modern procurement technologies can help automate and simplify purchasing processes while protecting taxpayer dollars and ensuring fair competition. Any technology solution that the City should chose to implement in the future should include features such as 513
CC 04-19-2022
513 of 632

Procurement Operational Review | 25

FOR THE INTERNAL USE OF THE CITY OF CUPERTINO ONLY

streamlining workflows, data analysis, report generation, user experience records and compliance tracking along with dashboard screens showing every key module in an easy-to-use format. To meet the objective of improved controls while increasing efficiency, the City can take advantage of opportunities to improved automation, standardization, and accountability within procurement processes.

Some of the government sector changes that have emerged in the wake of the pandemic include the revision of procurement policies to accelerate procurement processes, increase cross-department collaboration, and allow for more flexible contract terms. Other changes have involved introducing exceptions to policies for specific procurements, increased delegation of purchasing, changes in contract award methodology, expanded cooperative purchasing, and centralization of procurement for non-IT goods and services. The City could make it easier to enter into certain types of contracts for innovative technology, processes or products that can promote efficiency or reduce burdens. Sector-wide, some local governments have shifted contract award criteria in response to urgent needs. And some governments have now assigned the vetting of their suppliers to other jurisdictions.

The City should establish a working group consisting of employees who are highly involved in procurement processes that meet regularly, such as quarterly, to review and update procurement practices as needed. These meetings provide a key opportunity to update staff on regulatory changes, address issues with procurement processes, and review policies and procedures. To help support a consistent and efficient procurement processes, staff should design these meetings appropriately and use the time to identify potential issues and support continuous improvement.

By following the suggestions in Recommendation 5
, the City can increase awareness, support use
through training, and improve accountability, which can increase the consistency of employee understanding of procurement functions. This, in coordination with Recommendation 4, providing
guidance on backups for key positions, should help the City streamline and standardize its processes.

The combination of recommendations throughout this report, including the update and reinforcement of prescribed purchasing methods and increased accountability to adhere to established policies, procedures should work together to help strengthen the City’s internal controls and positively impact processes.

In addition, see specific recommendations by functional area below:

FUNCTIONAL AREA RECOMMENDATION
Inventory Management The City should standardize a mechanism for procurement, tracking, and distribution of commonly used office supplies, handheld tools, and other general materials across departments or divisions, when feasible.

Vendor Management The City should consider drafting a written framework for vendor management, which includes outcome-based performance measures, a process for ensuring up-to-date vendor data, and steps for disposition of vendor services.

Contract Management The City is planning to undergo an enterprise resource planning (ERP) software upgrade in the next few years; in that upgrade, there is an opportunity to acquire a robust and well-designed modern ERP that integrates with a full lifecycle contract management system and/or with the City’s existing contracting software, which will serve to increase the City’s ability to develop, execute, and renew contracts as well as to manage 514
CC 04-19-2022
514 of 632

Procurement Operational Review | 26

FOR THE INTERNAL USE OF THE CITY OF CUPERTINO ONLY

FUNCTIONAL AREA RECOMMENDATION
purchases against contracts and vendor relationships over time. Until that transition happens, the City should ensure that relevant contract documents are accessible to individuals who perform procurement-related tasks primarily within the ERP system, such as those who process purchase orders or vendor payments.

Business Accounts

Business accounts are an area where standardization of pre-approval protocol and agreed upon accountability measures, perhaps under the authority of centralized procurement leadership, would help to mitigate the risk of fraud, waste, and abuse. In addition, consideration of more strategic or centralized inventory management processes (see Inventory Management section above) may eliminate some of the just-in-time purchasing that business accounts are often used to facilitate, thereby decreasing the City’s supply costs over time.

CAL- Cards The Finance Division has taken steps to review CAL-Card purchases and to transition vendors from CAL-Card to purchase order when appropriate.

As a next step, the City could ensure that individuals in possession of CAL-Cards receive appropriate, intermittent refresher training on the proper use of CAL-Cards as an alternative to purchase orders and potential risks related to CAL-Card purchasing. Additionally, the City should periodically review cardholder limits for appropriateness and adjust as needed.

Invoice Processing The City should ensure that departmental staff with procurement responsibilities receive sufficient, intermittent training on the importance of timely invoice entry into the financial system. (See also Recommendation

3.)
Emergency Procurement
Procurement necessitated by emergencies can be exempt from normal procedures in order to protect the public from an interruption of services. Typically, these procurement activities may only be exempt if there is imminent danger to the public health or safety or because there is an imminent threat of loss of an essential governmental service. Emergency procurement policies typically include a provision for the review of purchases following the event to provide assurance that purchases were made in good faith.

While the City does not currently have an emergency procurement policy in place, it has recently undertaken emergency procurement for COVID-19 related items. The City should document these established procedures to standardize and expedite future situations that require emergency procurement.
515
CC 04-19-2022
515 of 632

Procurement Operational Review | 27

FOR THE INTERNAL USE OF THE CITY OF CUPERTINO ONLY

8. Observation The City’s procurement methods and thresholds have not been updated since 2013.

Recommendation A. Review and update City purchasing method guidance as appropriate.

B. Assess the efficacy of the current purchasing methods and thresholds; assess opportunities to streamline processes and generate clarity.

In the City’s current environment, departments are directly responsible for purchasing, soliciting bids or proposals, and placing orders with suppliers, subject to the appropriate authority. The City uses several methods for the acquisition of goods and services including CAL-Cards, purchase orders, contracts for single transactions, and master service agreements. Although the City has a purchasing policy, it was last updated in 2013 (see Observation 10), and interviewed staff noted challenges in determining the best purchasing method for their needs. A lack of understanding regarding optimal purchasing methods, or a lack of up to date guidance related to purchasing methods, increases the risk of project inefficiencies including increased contracting times, delayed reviews and approvals, and difficulty building comprehensive project reporting.

The following table shows the City’s current purchasing thresholds and methods, as well as the level authorization required for each:

TYPE FORM CATEGORY PROCESS AUTHORIZATION
● General Supplies
(Operating or
maintenance supplies
and materials,
general meeting
expenses, licenses,
subscriptions,
memberships,
mileage
reimbursements,
tools, furniture,
equipment)
● General Services
(Operating or
maintenance
services, recurring
services, essential or
emergency services
or purchases from
public agencies)
● Petty Cash
Voucher (up to $75)
● Check Request
● Partial Receipt of
Purchase Order
with or without
contract
Up to
$45,000
No specific
requirements.

Muni Code Sec

3.22.060A
Form authorized by
designated
supervisor. Note:

Services of
temporary personnel
authorized by HR
Manager.
$45,001 to
$175,000
Informal
competitive
bidding process or
RFP. Code Sec

3.22.060D
Form authorized by
department head.

Note: Services of
temporary personnel
authorized by HR
Manager.

Greater than
$175,000
Formal competitive
bidding or RFP
with approval from
the City Manager.

Code Sec

3.22.060B.

Form authorized by
department head.

Contract approved
by City Manager/City
Council.
516
CC 04-19-2022
516 of 632

Procurement Operational Review | 28

FOR THE INTERNAL USE OF THE CITY OF CUPERTINO ONLY

TYPE FORM CATEGORY PROCESS AUTHORIZATION
Utility Payments Invoices Up to
$175,000
Summarized and
paid by Finance;
copies sent to
Public Works
Supervisor.

Payment authorized
by PW Supervisor
(may be after
payment process).

Amounts greater
than $175,000
require Council
approval.

Construction Contracts ● Contract
● Construction
documents and
specifications
approved by Dir. of
Public Works or
designee
Up to
$45,000
No bidding
required. Code
Sec 3.23.130D
Contract authorized
by designated
supervisor
$45,001 to
$175,000
Informal
competitive
bidding process.

Code Sec

3.23.120
Contract authorized
by department head.

Greater than
$175,000
Formal competitive
bidding approved
by department
head. Formal
construction
documents
approved by
Director of Public
Works. Code Sec

3.23.030 through

3.23.120
Contract approved
by City Manager/City
Council.
● Professional Services
(including but not
limited to lawyers,
architects, engineers,
land surveyors, artists
and accountants)
● OR from another
Public Agency
created under
California or US laws
● Petty Cash
Voucher (up to
$75)
● Check Request
● Partial Receipt of
Purchase Order
with or without
contract
Up to
$45,000
No bidding
required. Code
Sec 3.22.070D
and

3.23.130A
Form authorized by
designated
supervisor.
$45,001 to
$175,000
No bidding
required. Code
Sec 3.22.070D
and 3.23.130A
Form authorized by
department head.

Greater than
$175,000
No bidding
required. Code
Sec 3.22.070D
and 3.23.130A
Form authorized by
department head.

Contract approved
by City Manager/City
Council.
517
CC 04-19-2022
517 of 632

Procurement Operational Review | 29

FOR THE INTERNAL USE OF THE CITY OF CUPERTINO ONLY

TYPE FORM CATEGORY PROCESS AUTHORIZATION
Expense
Reimbursements and
Advance Payment
● Petty Cash
Voucher (up to
$75)
● Check Request
● Reimbursement of
Expenses
Any amount See Administrative
Procedure I-12
and
Unrepresented
Employees’
Compensation
Program
Policy No. 3.

Form authorized by
designated
supervisor.

Educational
Reimbursements
Request for
Educational
Reimbursement of
Expenses
Up to $2,500
per year
See Administrative
Procedure II-2;
Memorandum of
Understandings
with CEA
and OE3.

Authorized by
Human Resources
and department
head.

Recommendation
Purchasing thresholds provide guidance on the most efficient method of procurement while protecting the City from potential fraud, waste, and abuse. As the City continues to grow in size and complexity, purchasing methods and thresholds will need to be updated periodically to maintain an optimized balance between efficiency and effective internal controls. The City should finalize and publish an updated purchasing method/threshold matrix.

Purchasing Methods
In response to changing operational needs, the City should assess its current purchasing methods and determine whether they continue to be the most effective means for procuring goods or services. For example, a lowest-bid model, based on specific dollar thresholds is often sufficient when primarily used to procure commodity products with well-defined specifications and pricing structures. However, the model breaks down when the City needs to procure higher volumes of materials or complex services. This is most notable when assessing divisions who process a high volume of similar agreements like Facilities or Fleet.

When evaluating the efficacy of establish procurement methods, the City should consider the following areas:
• Price: The lowest price is not always the best deal if the City can't rely on the supplier to offer it consistently. It could benefit the City to instead establish long-term relationships with excellent suppliers that will provide top value at competitive prices on a continuous basis. Effective purchasing involves evaluating all available suppliers for performance, financial stability, and efficiency, and identifying two or more preferred suppliers. Such suppliers quote consistently low prices, and the way they process orders doesn't generate extra costs for the City. These purchasing practices are important for planning.
• Quality: Purchasing procedures should consider the importance of evaluating the quality of products.

There is an opportunity for the City to align quality standards across departments to generate consistency and greater efficiency. Purchasing policies could also include procedures for qualifying suppliers.
518
CC 04-19-2022
518 of 632

Procurement Operational Review | 30

FOR THE INTERNAL USE OF THE CITY OF CUPERTINO ONLY

• Quantity: The City should consider the volume of goods or services procured and where opportunities exist to execute a master services agreement rather than individual contracts. This will become more important as the City grows and needs larger quantities of materials. • Delivery: If the City is flexible or relies on substantial inventories, contracts may include longer delivery times, possibly at a better price. Often the City uses just-in-time deliveries, which can increase costs. The current planning practices of procurement staff, and opportunities to increase the ability to plan ahead should be exploited and aligned with appropriate purchasing method to maximize value.

Purchasing Thresholds
Peer city purchasing threshold and authority information is provided in Appendix D of this report. The type of information provided in purchasing policies can vary greatly. When compared to available peer city data, the City’s current thresholds did not deviate significantly from standards outlined by those represented cities. However, the larger public sector environment continues to evolve and adapt procurement practices. For example, the micro-purchase threshold and simplified acquisition threshold for procurement set by the Federal Acquisition Regulation (FAR) officially increased in 2020. The micro- purchase threshold increased from $3,500 to $10,000, and the simplified acquisition threshold—for the small purchase threshold—increased from $150,000 to $250,000. The City’s purchasing thresholds should be evaluated every few years for both alignment with regulatory guidance as well as appropriateness of operational needs.

9. Observation Although procurement data, including budget data, is generally available to City staff, some users report difficulty in properly accessing and/or interpreting this data. Additionally, some procurement-related data is inconsistently named.

Recommendation Consider surveying staff to determine common and essential project information and create improved self-serve options, such as report templates or user training guides. Ensure ongoing data accuracy, completeness, and consistency through developing a data management strategy and processes.

Detailed budget-level spending information allows a City to monitor budgetary performance against committed contract values and can serve as an early warning indicator for potential problems. At Cupertino, spending activity is currently tracked against budgets, and that data is available to operational department personnel. However, several staff report difficulty with understanding how to efficiently track purchasing activity and contract spending, and/or how to properly access and interpret the available real- time budget data. This may be a result of multiple factors, including staff lacking additional capacity to learn new systems, lack of knowledge about available resources, or simply change fatigue (see Observation 5
). Some project managers noted that they depend on departmental management analysts to run and share budget reports, creating additional work for analysts and potentially slowing down timely access to this information. Newer employees also report difficulty in knowing how to access detailed project budgets.
519
CC 04-19-2022
519 of 632

Procurement Operational Review | 31

FOR THE INTERNAL USE OF THE CITY OF CUPERTINO ONLY

Management analysts noted that they often export report information into spreadsheets to share among the project team; this is an inefficient process that can result in outdated data, an increased risk of data inconsistencies, and an inability to efficiently make data-driven decisions. From a departmental perspective, critical data about procurement activities, such as contract invoices, transactions, spending amounts, and negotiated amounts must be gathered from multiple sources, including the City’s core financial systems, non-integrated systems, and manual sources such as spreadsheets. Manual processes, legacy software, disconnected systems and other technology constraints limit real-time decision support and diminish the support required for a shift to modern procurement processes.

Additionally, the City does not have a defined data management strategy for its procurement data. This can lead to gaps in staff understanding and adherence to practices such as following standardized naming convention guidelines to support data integrity for consistent reporting. For example, the naming conventions for City vendors are inconsistent, with some individuals listed “Last name, First name” in the system, and others are listed “First name Last name.” This leads to poor data integrity and places reports and information at an increased risk of being outdated or incorrect.

Recommendation
Efficient and effective operations rely on efficient and effective procurement data, which can also increase accuracy in planning, forecasting costs, responding to market volatility, and decision-making. Accurate and timely data on available funds, existing contracts in place, and other procurement-related information is required in order to make both financial and operational decisions, especially in the circumstances where speedy action is needed (such as HVAC system failures, extreme weather events, etc.).

Project reports are an important source of information for managers and stakeholders to monitor project progress. Detailed budget level information allows the City to monitor budgetary performance against committed contract values and can serve as an early warning indicator for potential problems. This information provides decision makers time to consider actions that may be needed if major deviations in budget-to-actual results become evident. The City currently hosts training for budgeting and reporting; there is also an effort underway to requisition software to create budget dashboards. In order to address the disconnect between the availability of budget data and user ease in accessing this data, the City should consider whether the budget training information is readily available in a self-serve capacity to those who may have missed initial trainings or who may need additional assistance (see Recommendation 3
) and should reinforce training using the established change management methods and accountability measures (see Recommendation 5).

The goal is to help make budgeting data more accessible and easily understood while limiting the amount of manual intervention required by business analysts to report on budget data to project managers. This is a positive step towards facilitating access to key information given differing levels technical ability and interest.

Effectively collecting, analyzing, and reporting regularly on procurement data allows an organization to evolve from a tactical function to a strategic role. Standard elements exist in public procurement in order to analyze procurement data. The City should implement a data management strategy and supporting processes to guide adoption of these practices to capture all City data related to the creation, storing, processing, and sharing of procurement actions. These practices, shown in the following table, will allow the City to increase its data reliability and completeness related to purchasing activity analysis, performance measurement, and regular reporting.
520
CC 04-19-2022
520 of 632

Procurement Operational Review | 32

FOR THE INTERNAL USE OF THE CITY OF CUPERTINO ONLY

ELEMENT DESCRIPTION
Identify and Collect Data ● Work to identify all relevant procurement data, internal and external, for the City ● Collect and automate data after sources are identified Cleanse, Group, and
Categorize Data
● Cleanse data to remove any duplicates and errors
● Group and categorize data
● Model and store data
● Identify data relationships
Create Repeatable
Processes
● Create and document repeatable processes to support data extraction, classification, enhancement, and analysis activities
Analyze Data ● Regularly analyze collected data to support management decision and improve oversight
This practice would also allow the City to develop more meaningful and practical performance measures at the appropriate reporting levels to demonstrate how the City’s procurement aligns with the Council’s key objectives. This will be increasingly important as the City moves to replace its ERP system, since if software is adopted without the right data strategies and considerations, technology implementations can fail to achieve their full potential in terms of return on investment and process improvements.

10. Observation Many procurement processes at the City are not well documented and are subsequently performed inconsistently across City departments.

Current purchasing policies and procedures are out of date, hindering a consistent employee understanding of requirements, processes, and protocols.

Recommendation Develop a prioritization plan for updating or developing comprehensive, clear, and concise procurement policies and procedures.

Written policies and procedures serve as a guide to employees to ensure consistent, high-quality service.

The City operates with an outdated procurement policy, as well as largely undocumented procurement procedures. A desire for more consistent and clearly defined processes was a primary concern mentioned during staff and interviews and in the survey, where 43% of respondents rated the quality of documented technical resources as good or excellent. Many staff interviewed maintain their own individual process documents or how-to guides for personal reference. As such, it is likely that there may be a significant volume of procedural documentation that has already been created, but not yet shared, organized, formalized, or stored in an accessible, centralized manner.

There are multiple factors that have created barriers for City to establish consistent, documented processes. A decentralized procurement structure allows departments more autonomy and flexibility to meet their unique needs, but this decentralized model also creates a greater risk in staff developing their own solutions and procedures, which can vary widely across departments, if the decentralized environment is not accompanied by robust policies and procedures, strong onboarding practices, frequent 521
CC 04-19-2022
521 of 632

Procurement Operational Review | 33

FOR THE INTERNAL USE OF THE CITY OF CUPERTINO ONLY

training, and accountability mechanisms. In addition, only 33% of staff rated the sustainability of their workload as good or excellent. As is common in organizations with high workloads, staff report that they have limited capacity to develop policy and procedure documentation and undertake training efforts.

A lack of clear, accessible, and up-to-date policy and procedure documents has multiple impacts, including:
• Lack of process consistency, so processes may be more cumbersome or time-consuming than necessary and employees may perceive issues of fairness • Risk of losing institutional knowledge when employees exit the organization • Cross-departmental communication challenges when roles and responsibilities are unclear • Lack of accountability among departments to abide by established procedures Recommendation
Well-developed and properly applied policies and procedures can help increase employee accountability, reduce miscommunication and confusion, smooth employee transitions, and ultimately improve ability of departments to serve the City. For critical policies, the City should also develop a step-by-step guide to ensure processes are performed appropriately, consistently, and in a timely manner. In conjunction with this engagement, the City is currently undergoing a Policy Gap Analysis, the results of which can be used set the foundation of policy and procedure development moving forward.

In addition to the recommendations referenced above, City staff involved in procurement processes would benefit from the development of self-service resources and checklists. The Finance Division and CAO or centralized procurement leadership, in collaboration with experienced procurement staff, should develop the content of self-service resources and checklists to address common issues and provide clear guidance for those who may be new to key procurement processes. This will allow the City to capitalize on any preexisting documents that have been independently developed by department staff. Checklist items should work together to reduce the likelihood of rework due to error or delays due to insufficient approvals or backup documentation.

At the time of this report, the City had already taken steps to provide easily accessible standardized resources for contracting. For example, the CAO has developed a Contracting FAQ and Contract Instructions, which have been uploaded to the City’s intranet, the HUB. This is an important step that achieves the dual purpose of providing readily accessible resources that are also up to date.

Procurement and Contracting Manual
A comprehensive, clear, and concise Procurement and Contracting Policy Manual (PCPM) should explain the applicable laws and policies enables procurement staff, staff, vendors, and other stakeholders to understand the proper procedures and rules to follow throughout the process. The absence of comprehensive guidance presents opportunities for inconsistency, complexity, and confusion, resulting in likely frustration, delays, and overall suboptimal utilization of scarce sources. The PCPM should include clearly defined authority, responsibility, and guidelines to follow. As such, the manual should, at a minimum, incorporate the following elements:
• Purchasing authority, including dollar threshold limits and delegation • Roles and responsibilities
522
CC 04-19-2022
522 of 632

Procurement Operational Review | 34

FOR THE INTERNAL USE OF THE CITY OF CUPERTINO ONLY

• Conflict of interest and ethics
• Competitive solicitation and waivers
• Supplier evaluation and selection
• Emergency purchases
• Special considerations, including use of bonds, prevailing wages, warranties, insurance, and preferences for certain vendor types
• Purchasing classifications, such as IT, goods, and services • Use of contracts and contractor performance
• Protests and post-award dispute
• How employees will be held accountable for adhering to standards.

Key components of procurement process that should be delineated in the PCPM include:
• Procurement oversight: A high-level summary of planned and completed activities that can be used throughout procurement process for oversight and reporting. It should detail the methods and performance measures that departments and project manager will use to monitor procurement activity, including purchasing activity, vendor performance, and compliance with procedures. • Change management procedures: It is important to note that while policies and procedures are critical to consistency and effectiveness, they must be formalized, training must be provided, and personnel must be held accountable to adhering to them. As procurement processes evolve over time, training should be revised and redelivered to ensure consistency (see Recommendation 5).

Once policies and procedures are updated, they should be available in a centralized location, such as the HUB, for employees to easily reference. City leadership should ensure all staff are sufficiently trained on any major changes and are held accountable for implementing them (see Recommendation 3). 523
CC 04-19-2022
523 of 632

Procurement Operational Review | 35

FOR THE INTERNAL USE OF THE CITY OF CUPERTINO ONLY

APPENDIX A: PROCUREMENT ROLES AND

RESPONSIBILITIES
Effective oversight requires clear organizational roles and responsibilities to enable accountability. This table represents best practices for role responsibility definitions.

STAKEHOLDER ROLE RESPONSIBILITIES
City Council ● Set strategic policy
● Approve contracts and amendments for procurements not delegated Chief Procurement
Officer2
● Provide leadership, policy development, oversight, and management of City procurement
● Create citywide forms and guidance manuals
● Review departmental requirements and specifications
● Solicit bids and other offers, review evaluation, and provide contractor services ● Monitor contractor compliance with City social equity and other procurement- related programs
● Resolve contractual and administrative issues arising related to procurements Departments ● Identify need for procurement
● Determine requirements
● Verify sufficient funding exists
● Prepare specifications
● Act as technical representative or advisor during solicitation and contracting process
● Manage contract administration, including contract changes ● Review and approve vendor invoices
Finance Division ● Ensure all finance-related approvals are obtained ● Confirm requested payments are within dollar amount of contract/agreement ● Perform three-way matching (purchase order, receiving, and invoice) ● Maintain documentation of payments
● Provide regular reporting to departments
City Attorney ● Review and approve all contracts for legality City Clerk ● Verify signers have authority
● Record contracts

2 Presented as if the City implements the recommendation to create the Chief Procurement Officer role. 524
CC 04-19-2022
524 of 632

Procurement Operational Review | 36

FOR THE INTERNAL USE OF THE CITY OF CUPERTINO ONLY

The following roles descriptions for public procurement are sourced in part from the NIGP Institute for Public Procurement (NIGP).

POSITION NATURE OF ROLE
Chief Procurement
Officer
Consistent with the strategic priorities of the City, performs professional work of unusual difficulty in the planning, organization, development, and coordination of the procurement activities for the entire organization. This executive management position serves as the principal public procurement official for the City and is responsible for all procurement of goods, supplies, and services in accordance with applicable federal, state, and local laws, ordinances, rules, and regulations.

Responsibilities include providing professional support and sound contractual advice to all stakeholders involving contractual services, consultants, equipment, supplies, construction, capital improvements, and other applicable activities. Supervision is exercised over professional, technical, and clerical staff engaged in procurement activities.

Procurement Manager Under general direction of the Chief Procurement Officer, the Procurement Manager provides general supervision over professional, technical, and clerical staff engaged in purchasing activities, including planning, directing, and coordinating the purchasing activities for the organization.

Responsibilities include the development and implementation of annual contracts, strategic procurement planning, procurement policies and procedures, delegated procurements, quality control, procurement training, electronic procurement systems, and procurement card administration.

Purchasing Agent Under supervised direction, performs professional work of advanced difficulty in the technical and administrative functions of the purchasing activities of the City, including purchasing and contract administration. This position is responsible for the procurement of construction, supplies, and professional services that are to be conducted in accordance with applicable federal, state, and local laws, ordinances, rules, and regulations. Direction is received from the Procurement Manager.

Government Buyer Under direction, performs traditional purchasing work including the development, supervision, and related functions of the purchasing activities for the City. This position is responsible for all aspects of purchasing within the dollar limits prescribed by law.

Purchasing Technician Under direction, acquires services, supplies, and goods as required by the assigned department at a competitive price in a time-efficient manner and provides basic routine administrative support work relating to the purchasing function. Position is responsible for the submission of invitations to bid; review, analysis, and purchase of supplies, services, and goods; review of methods of acquisition; and preparation of purchase orders and related documentation.

525
CC 04-19-2022
525 of 632

Procurement Operational Review | 37

FOR THE INTERNAL USE OF THE CITY OF CUPERTINO ONLY

APPENDIX B: STAFF SURVEY RESULTS
A survey was sent to City employees who were involved in procurement practices. Employees who met one of the following criteria were surveyed: have a CAL-card, have access to Cobblestone or New World, or were otherwise identified by management as being involved in City procurement activities.

Submissions were open between November 3, 2021 and November 15, 2021. Out of 106 employees who were invited to take the survey, 75 individuals submitted either full or partial responses (a strong participation rate of 70%).

0 5 10 15 20 25 30
Less than 1 year
1 to 3 years
4 to 6 years
7 to 9 years
More than 10 years
Tenure of Respondents
Count of respondents
0 5 10 15 20 25 30
Administrative Services
City Attorney's Office
City Manager's Office
Community Development and Planning
Innovation and Technology
Parks and Recreation
Public Works
Department of Respondents
Count of respondents
526
CC 04-19-2022
526 of 632

Procurement Operational Review | 38

FOR THE INTERNAL USE OF THE CITY OF CUPERTINO ONLY

ROLE IN PROCUREMENT ACTIVITIES
Other procurement processes 2%
Publishing and managing bids / proposals 7%
Approving purchase requests 8%
Drafting and developing contract documents 8%
Developing requirements/specifications/scopes of work 10% Placing orders and buying products 12%
Receiving orders (goods, materials, supplies) 12%
Overseeing contract execution for projects and services 13% Reviewing and authorizing payments to vendors 14%
Requesting purchases of products/goods/supplies 15%
Other
• Send requests for outside agencies for plan review
• Request Bond Payments
• Approve PO entries
• Review contract drafts submitted by staff from start to completion

Do you have a CAL -card (P -card)?

55% 45%
Yes No
527
CC 04-19-2022
527 of 632

Procurement Operational Review | 39

FOR THE INTERNAL USE OF THE CITY OF CUPERTINO ONLY

In this section, participants were asked for information about their use of the following procurement systems.

Which systems do you most regularly use when purchasing and/or contracting?

Other
• Excel
• Vendor sites (i.e., Amazon, Staples)
• Request purchase order or use credit card
• Emails
• OneNote
• Net30
• The Hub

How would you rate the systems you use for procurement? New World

How would you rate the systems you use for procurement? Cobblestone

37% 13% 22% 14% 13%
New World (Finance System) Cobblestone (Contracts) Excel / Other Tracking Method Other (please identify): None of these
10% 62% 26% 2%
Excellent Good Average Poor Terrible
20% 60% 13% 7%
Excellent Good Average Poor Terrible
528
CC 04-19-2022
528 of 632

Procurement Operational Review | 40

FOR THE INTERNAL USE OF THE CITY OF CUPERTINO ONLY

Do you have any comments or suggestions for ways the City could improve its use of systems and/or technology related to procurement?
• Hire someone dedicated to developing and managing contracts for Public Works. • New World ERP has limited functionality in tracking CAL-card purchases. • The Business Analyst Excel reports don't match what is in New World sometimes, even though they are supposed to.
• Cobblestone and NWS do not interface. I do double entry in these systems. • Have some connection between Cobblestone and New World, i.e., to generate a Purchase Order once a contract is fully executed.
• More character space for item descriptions. We are told speciﬁc details help Finance and the department in the long run when reviewing past purchases. • I hope to see a good tracking system that will allow us to track payments from applicants, invoices billed to that deposit amount collected and all changes to that applicant account, so we know how much balance is left from the original deposit.
• I think we need more licenses for the Cobblestone software so staﬀ have more access and can better monitor contracts/insurance.
• Using Cobblestone to produce a draft of a contract for review. • It would be great if we could improve the way we process invoices. • Clarify purchasing processes and policies. Provide ongoing training on the New World platform.

Deﬁne the baseline "view" into the system to base budgeting and planning processes. • A centralized procurement section to consistently apply policies and procedures city-wide. • Expand the use of CAL-cards to those responsible for ordering oﬃce supplies. • The City's I&T Department elected not to move forward with the contract management module within New World and went with Cobblestone. While Cobblestone provides value, an apparent disconnect with the City's ﬁnancial system remained. With the City's ERP exploration project, I would recommend a more integrated solution/process.
• Connect the two systems to communicate with each other and share information. Also, utilize Cobblestone to its fullest capabilities, to help in streamlining the entire procurement process.

529
CC 04-19-2022
529 of 632

Procurement Operational Review | 41

FOR THE INTERNAL USE OF THE CITY OF CUPERTINO ONLY

In this section, participants were asked to rate the following procurement and contracting areas.

Clearly deﬁned roles and responsibilities

Appropriate levels of authority given to employees

Sustainable volume of work

Quality documentation and technical resources

3% 48% 28% 17% 3%
1%
Excellent Good Average Poor Terrible Does Not Exist
6% 51% 33% 9% 1%
Excellent Good Average Poor Terrible Does Not Exist
4% 29% 46% 18% 3%
Excellent Good Average Poor Terrible Does Not Exist
3% 40% 37% 17% 3%
Excellent Good Average Poor Terrible Does Not Exist
530
CC 04-19-2022
530 of 632

Procurement Operational Review | 42

FOR THE INTERNAL USE OF THE CITY OF CUPERTINO ONLY

Established backup for key positions

What is one way that the City could better support staff involved in procurement activities? Administration
• Defined roles, responsibilities, and expectations
• Thresholds for PO purchases
• Standardized procurement procedures
• Centralized procurement, or a designated alternate for review, and approval • Reporting with budgeted vs actual activities
City Manager’s Office
• Training for all managers to align all divisions on procurement procedures • Central purchasing officer and procurement staff
• Defined roles and responsibilities based on task
• Procurement policy governance
• Backups for key procurement positions
• Provide a reference sheet of contacts and processes
Community Development and Planning
• Training
• Improved contract guidance
• Policy and procedure updates
1% 25% 42% 25% 3% 4%
Excellent Good Average Poor Terrible Does Not Exist
Initial and ongoing training opportunities

7% 22% 45% 17% 4% 4%
Excellent Good Average Poor Terrible Does Not Exist
531
CC 04-19-2022
531 of 632

Procurement Operational Review | 43

FOR THE INTERNAL USE OF THE CITY OF CUPERTINO ONLY

• Defined roles and responsibilities
• Contract tracking and reporting
• A procurement department or additional support staff
Innovation and Technology
• RFP development and buyer assistance
Parks and Recreation
• Procurement coordination among key staff
• Improved communication regarding changes to procurement processes and required approvals • Published and consistent timelines for approvals
• Updated policies, procedures, and accountability methods Public Works
• Training, and mentoring
• POs for services
• Defined roles and responsibilities by task
• Improved communication during key procurement, contracting, and budgeting processes • Purchasing Policy alignment with the California Contract Code • Consider central procurement officer/employee
In this section, participants were asked to rate the overall effectiveness City's procurement processes.

Processes related to purchasing (goods, materials, supplies)

4% 51% 39% 4%
1%
Excellent Good Average Poor Terrible
532
CC 04-19-2022
532 of 632

Procurement Operational Review | 44

FOR THE INTERNAL USE OF THE CITY OF CUPERTINO ONLY

Processes related to contracting (services, projects)

Review and approval processes

In this section, participants were asked for information about procurement training practices.

Have you attended or received training related to procurement within the last two years?

5% 37% 48% 9% 2%
Excellent Good Average Poor Terrible
14% 41% 39% 6%
Excellent Good Average Poor Terrible
14% 86%
Yes No
533
CC 04-19-2022
533 of 632

Procurement Operational Review | 45

FOR THE INTERNAL USE OF THE CITY OF CUPERTINO ONLY

How would you rate the training you received related to procurement processes?

Are there any other challenges or opportunities for improvement related to procurement? • Assistance with contract development.
• Centralized purchasing or procurement department or person. • Coordinated payment tracking including POs, Invoicing, and Credit Cards. • Standardized processes for purchasing approvals across departments. • Streamlined approval processes with automated notifications and published timelines for expected turnaround.
• Regular training including basics, new functions (as applies), budgeting, and purchasing. • Comprehensive contract reporting including contract amount, payments, remaining, and change orders.
• Cross-training and backups for key positions.
• Updated and enforced purchasing and contract policies and procedures. • Defined procurement roles and responsibilities.
• Consideration of additional business memberships including Costco. • Create a Sustainable Purchasing program which is inclusive of services, goods, and CIP programs. 44% 56%
Excellent Good Average Poor Terrible
534
CC 04-19-2022
534 of 632

Procurement Operational Review | 46

FOR THE INTERNAL USE OF THE CITY OF CUPERTINO ONLY

APPENDIX C: VENDOR SURVEY RESULTS
A survey was sent to select City vendors. Vendors who had submitted a bid to the City in the last three years were included in the distribution list. Submissions were open between November 3, 2021 and November 15, 2021. Out of 63 vendors who were invited to take the survey, 12 individuals submitted either full or partial responses (a suboptimal participation rate of 19%).

0 0.5 1 1.5 2 2.5 3 3.5 4 4.5
Less than 1 year
1 to 3 years
4 to 6 years
7 to 9 years
More than 10 years
Vendor History
Count of respondents
0 1 2 3 4 5 6 7 8
Sole Proprieter
Project Manager
Administrative Support
Vendor Role
Count of respondents
535
CC 04-19-2022
535 of 632

Procurement Operational Review | 47

FOR THE INTERNAL USE OF THE CITY OF CUPERTINO ONLY

Other
• Tires
• Fire extinguishers
• Printing

0 1 2 3 4 5 6 7
Public Works
Community Development and Planning
Parks and Recreation
Other
Administrative Services
Contracting City Departments
Count of respondents
Please select the relevant types of service/work you have performed for the City:

Have you participated in a formal bidding process at the City?

9% 18% 36% 36%
Software/Technology Construction/Construction-related services Supplier of materials/supplies Professional services
Other
20% 80%
Yes No
536
CC 04-19-2022
536 of 632

Procurement Operational Review | 48

FOR THE INTERNAL USE OF THE CITY OF CUPERTINO ONLY

In this section of the survey, respondents were asked to rate their experience with the following stages of procurement.

The process to respond to a proposal/formal bid at the City

The City's communication during the bidding/contracting process

The contract negotiation and development process

100%
Excellent Good Average Poor Terrible
100%
Excellent Good Average Poor Terrible
100%
Excellent Good Average Poor Terrible
537
CC 04-19-2022
537 of 632

Procurement Operational Review | 49

FOR THE INTERNAL USE OF THE CITY OF CUPERTINO ONLY

The systems and technologies used by the City related to procurement (website, reporting, payment processing, etc.)

The City's invoicing and payment processes

The City's communications related to procurement opportunities

13% 50% 37%
Excellent Good Average Poor Terrible
10% 80% 10%
Excellent Good Average Poor Terrible
33% 33% 17% 17%
Excellent Good Average Poor Terrible
538
CC 04-19-2022
538 of 632

Procurement Operational Review | 50

FOR THE INTERNAL USE OF THE CITY OF CUPERTINO ONLY

APPENDIX D: PEER BENCHMARKING
For this engagement, Moss Adams focused on seven peer cities identified by Cupertino as common partners for peer benchmarking. Peer benchmarking focused on two main areas: 1) the type of procurement within each city (whether procurement is centralized or decentralized); and 2) city policies and guidelines used for purchasing thresholds and authority. Results are informed by direct outreach, FY 2020 Annual Comprehensive Financial Reports, the most recently adopted operational budgets, and city websites, including budget and reporting tools. Information from our peer benchmarking research is provided in the table below.

DESCRIPTION CUPERTINO GILROY LOS ALTOS MILPITAS MOUNTAIN VIEW PALO ALTO SARATOGA SUNNYVALE CAMPBELL Population 66,274 57,084 30,504 88,660 84,757 65,550 30,697 155,565 42,047 General Fund
Expenses $89,767,034 $56,138,838 $48,552,964 $110,729,648 $146,412,350 $183,331,789 $25,002,139 $202,415,809 $57,130,551 General Fund–
Supplies and Services $30,412,644 $6,127,681 N/A $9,890,016 $22,159,200 $39,979,791 $2,813,845 $74,582,221 $17,241,224 Ratio: Supplies
(Materials) and
Services/Total General
Fund Expenses
34% 11% N/A 9% 15% 22% 12% 37% 30%
Procurement Type Decentralized Decentralized/Hybrid Decentralized Centralized Centralized Centralized Decentralized Centralized Decentralized City FTEs (Budgeted) 203.8 284 136 237.3 642.8 1,035.0 60 998.0 231.7 Purchasing FTEs 0 0 0 2.5 6 7 0 9 N/A
Ratio: General
Fund/Purchasing FTE N/A N/A N/A $44,291,859.20 $24,402,058.33 $26,190,255.57 N/A $22,490,645.44 N/A Ratio: City
FTE/Purchasing FTE N/A N/A N/A 94.9 107.1 147.9 N/A 110.9 N/A Number and titles of
procurement staff
N/A N/A N/A 1 – Purchasing Agent

1.5 – Buyer
1 – Purchasing &
Support services
manager
2 – Senior management
analysts
1 – Supervising buyer
2 – Assistant
buyer/buyer
1 – Manager purchasing
& contract administration
3 – Contract
administrators
2 – Senior Buyer
1 – Buyer
N/A 1 – Purchasing Officer
1 – Principal Buyer
1 – Senior Buyer
1 – Senior Buyer
(vacant)
2 – Buyer II
1 – Management Analyst
2 – Office Assistant
N/A

539
CC 04-19-2022
539 of 632

Procurement Operational Review | 51

FOR THE INTERNAL USE OF THE CITY OF CUPERTINO ONLY

● IFB Invitation for Bid
● NIB Notice Inviting Bid
● RFP Request for Proposal
● RFQ Request for Quote
● RFQ Request for Qualifications
● CUPCCAA California Uniform Public Construction Cost Accounting Act ● Agreement Maintenance, Professional, Master, General
● Contract For construction jobs only

SUNNYVALE
Purchase Amount
For Purchases Of
Purchasing Process Competitive Bid/Proposal Requirements Executing Authority Goods Services
$1 – $100 x Employee Reimbursement None The City manager shall be the awarding authority for every procurement of goods and/or services for
which the cost to the city is two hundred fifty
thousand dollars or less in any one transaction.

The City manager shall be the awarding authority
for every procurement of goods and/or services,
the cost of which will be fully paid or reimbursed to
the city, regardless of amount.

The city council shall be the awarding authority for
every procurement of goods and/or services for
which the cost to the city is greater than two
hundred fifty thousand dollars in any one
transaction.
$1 – $1,000 x Off Site Purchasing Card or Purchase Order None $1 – $5,000 x On Site Field Purchase Order None
$1,001 – $15,000 x x Purchase Requisition Submitted
Purchase Order Issued
One quote necessary
$15,001 – $25,000 x x Purchase Requisition Submitted
Purchase Order Issued
Three written quotes solicited
$25,001 – $100,000 x x Purchase Requisition Submitted
Purchase Order Issued
Written request for quotations prepared by purchasing or department (pilot up to $50,000)
Over $100,000 x x Purchase Requisition Submitted
Purchase Order Issued
Invitation for bids or request for proposals prepared by purchasing. Public bid opening. Awarded by council if over $250,000)

540
CC 04-19-2022
540 of 632

Procurement Operational Review | 52

FOR THE INTERNAL USE OF THE CITY OF CUPERTINO ONLY

CITY OF MILPITAS

SUPPLIES, MATERIALS, AND EQUIPMENT
Purchase Amount Minimum Solicitation per MCC Procurement Method Executing Authority $0.01 – $10,000.00 One Quote PO or use P-card Department Head $10,000.01 – $50,000.00 RFQ PO or use P-card City Manager $50,000.01 – $100,000 IFB or RFP contract or PO City Manager $100,000.01+ IFB or RFP contract or PO City Council

MAINTENANCE/GENERAL SERVICES AGREEMENT
Purchase Amount Minimum Solicitation per MCC Procurement Method Executing Authority $0.01 – $1,000.00 One Quote PO or use P-card Department Head $1,000.01 – $10,000.00 One Quote PO or use P-card Department Head $10,000.01 – $50,000.00 RFQ Contract and Insurance City Manager 50,000.01 – $100,000 IFB or RFP Contract and Insurance City Manager $10,000.01 – $100,000.00 IFB or RFP Contract and Insurance City Manager $100,000.01+ IFB or RFP Contract and Insurance City Council

PROFESSIONAL SERVICES AGREEMENT
Purchase Amount Minimum Solicitation per MCC Procurement Method Executing Authority $0.01 – $1,000.00 One Quote PO or use P-card Department Head $1,000.01 – $10,000.00 One Quote PO or use P-card Department Head $10,000.01 – $50,000.00 One Quote PO or use P-card Department Head $50,000.01 – $100,000.00 RFP or RFQ Contract and Insurance City Manager $100,000.01+ RFP or RFQ Contract and Insurance City Council

CONSTRUCTION CONTRACTS/CUPCCAA
Purchase Amount Bid/Quote Requirement Procurement Method Executing Authority $0.01 – $60,000.00 One Quote Direct contract (on-call or short form) with Contractor City Manager $60,000.01 – $100,000.00 Informal IFB Short Form Construction Document and Short-Form Bid Documents City Manager $100,000.01 – $200,000.00 Informal IFB Short Form Construction Document and Short-Form Bid Documents City Council $200,000.01+ Formal IFB (NIB) Long-Form Construction Contract and Bid Documents City Council 541
CC 04-19-2022
541 of 632

Procurement Operational Review | 53

FOR THE INTERNAL USE OF THE CITY OF CUPERTINO ONLY

CITY OF MILPITAS

AMENDMENTS (CMO AWARDED CONTRACTS)
Description Individual Amendment Authority Cumulative Amendment Authority Amendment Execution Authority Time Extension n/a n/a City Manager
Revisions to Scope of Services or Schedule n/a n/a City Manager Clerical Corrections n/a n/a City Manager
Total Not-To-Exceed: $0.01 – $50,000.00 Any percentage or amount not-to-exceed $100,000 total contract value
Any percentage or amount not-to-exceed $100,000 total contract value
Purchasing Agent
Total Not-To-Exceed: $50,000.00 – $100,000.00 Any percentage or amount not-to-exceed $100,000 total contract value
Any percentage or amount not-to-exceed $100,000 total contract value
City Manager
Total Contract Exceeds $100,000.01+ n/a n/a City Council Minor Revisions to Scope of Services, Schedule, Compensation n/a n/a Purchasing Agent Major Revisions to Scope of Services, Schedule, Compensation n/a n/a City Council Clerical Corrections n/a n/a Purchasing Agent
Time Extensions Up to 12 Months, indefinite for City Council Actions Up to 12 Months, indefinite for City Council Actions Purchasing Agent/CMO (not to exceed twelve consecutive months from the last Council-approved expiration date) or City Council— PA/CMO and CC may alternate approval up to 12 consecutive months at a time
Total Not-To-Exceed: $0.01 – $100,000.00 10% of Award or $10,000.00; whichever is less 15% of Award or $15,000.00; whichever is less Purchasing Agent Total Contract Exceeds $100,000.01+ 10% of Award or $20,000.00; whichever is less 15% of Award or $40,000.00; whichever is less Purchasing Agent CHANGE ORDERS (CUPCCAA)*
Purchase Amount Individual Change Order Authority Cumulative Change Order Authority Change Order Execution Authority Total Not-To-Exceed: $60,000.00 Up to $60,000.00 Up to $60,000.00 City Manager Total Not-To-Exceed: $60,000.01 – $100,000.00 Up to $100,000.00 Up to $100,000.00 City Manager Total Not-To-Exceed: $100,000.01 – $200,000.00 10% of Award or $20,000.00 whichever is less (cannot exceed $200,00.00)**
15% of Award or $40,000 whichever is less (cannot exceed $200,000.00)**
Purchasing Agent
Total Not-To-Exceed: $100,000.01 – $200,000.00 Up to $200,000.00 (greater than 10% but not to exceed $200,000)**
Up to $200,000 (greater than 15% but not to exceed $200,000)** City Council Total Contract Exceeds $200,000.01+ 10% of Award or $20,000.00; whichever is less 15% of Award or $40,000.00; whichever is less Purchasing Agent Total Contract Exceeds $200,000.01+ Unlimited Unlimited City Council * These change order thresholds do not preclude administrative change order authorization authority if so provided by City Council action to the Purchasing Agent, Department Head, or City Manager. ** All other change orders outside the parameters defined in this section must be approved by the City Council.

542
CC 04-19-2022
542 of 632

Procurement Operational Review | 54

FOR THE INTERNAL USE OF THE CITY OF CUPERTINO ONLY

PURCHASING BID POLICY

MATERIALS, GOODS, MAINTENANCE SERVICES
Order Type Cost Point Feature
Materials, Goods, Maintenance Service
These include supplies, equipment, operating or
maintenance services and projects. Excludes Public Works Projects and Professional Services
Less than $5,000 (No bids required) Prudent judgment should be used along with obtaining comparative pricing whenever practical. Orders require department head or designee approval. $5,000 to $50,000 (Informal bid) At least 2 quotes required but 3 recommended. Written bids/quotes are preferred but may be verbal with documentation. City Manager and Department head-approved Purchase Order (PO) required. City Attorney approval, Risk Manager approval, and CPO required for contracts. $5,000 to $50,000 (Informal bid) Obtain at least 2 formal quotes - 3 recommended with bid publication for purchases of $1075,000 or over. City Manager and Department Head approved Purchase Order (PO) required. City Attorney approval, Risk Manager approval, and CPO required for contracts. City Council approval is required before award.
$100,000 or more (Published advertised
sealed bid)
Materials, Goods, and Maintenance Service contract costs of any dollar value must adhere to pre-defined signature approval limits. All Information Technology (IT) purchases require approval of the IT Manager for network compliance. Any IT Purchase for a service department must be authorized via an IT Work Order authorized by a department head or designee.

PROFESSIONAL SERVICES
Order Type Cost Point Feature
Professional Services
These services include those of a highly technical nature requiring extended training and certification.

Include legal, accountancy, technology, and specialty
consulting services.

These are general guidelines. The evaluation and selection of consultant services may vary on a case-by case basis. $0 to $25,000 (RFP Highly Recommended) Prudent judgment should be exercised and obtaining comparative pricing if practical. Orders require department head or designee approval. Price proposals not required but three are recommended and must include a City Manager, City Attorney, Department Head and Finance Director approved CPO and service contract.

Over $25,000 (RFP Required) RFP required with three bids are encouraged and must include a City Manager, City Attorney, Department Head, Finance Director and City Council- approved (Over $100,000), or City Council authorized, CPO and service contract.

PURCHASING CARD POLICY

MATERIALS, GOODS, MAINTENANCE SERVICES
Order Type Cost Point Process
Small Dollar, Materials, Goods, Non-Professional
Services
Includes materials, supplies, equipment, operating or
nonprofessional services excluding Public Works Projects and Professional Services
● Less than department head set single
purchase limits - must be under $5,000
(No Bids Required);
● Also, within the monthly total dollar
volume limit established by the
department head;
● Cannot be used for: Personal Use Cash
Advances Cash Refunds Professional
Services.
● Calcards can only be issued to City employees authorized by Department heads. ● Calcards can only be used for City business and never personal use. ● Calcards must be used directly by the employee named on the card and never by other individual. ● The employee must execute a formal approved "Purchase Card Employee Agreement" and comply with its requirements. ● Monthly statements are received directly by the employee and must be reconciled and sent to Finance within 10 days mail delivery. ● Monthly statement packets sent to Finance must include a required "Purchase Card Log," or Allocations made on the banks Calcard site. ● Department head monthly purchase logs are to be approved by the City Manager and Finance Director prior. ● Finance will process payments within the required due date. Late fees caused by untimely or incomplete submission will be charged to the subject department
● Hardware and software IT purchases must be approved by the IT manager before an order is placed.

3 City of Los Altos. 2021. “City of Los Altos Purchasing Policy.” https://www.losaltosca.gov/sites/default/files/fileattachments/financial_commission/meeting/76411/purch_policy_revision-_2021_redline_fc.pdf 543
CC 04-19-2022
543 of 632

Procurement Operational Review | 55

FOR THE INTERNAL USE OF THE CITY OF CUPERTINO ONLY

1. General Categories of Purchases
City purchase categories generally consist of the following categories, for which different procurement methods may apply (see Section 4, Procurement Methods, page 11):
a. Goods. The purchase of goods consists of materials, equipment and supplies needed by any department.
b. Services. City staff may require contracts for services, which fall into two categories:
i. General Services. Services rendered such as custodial services, building/ equipment maintenance, and machinery/equipment rental, excluding contracts for public works projects or professional services.
ii. Professional Services. Services provided by a person or firm engaged in a profession based on highly specialized and/or technical knowledge or skill, such as the professions of accountant, attorney, artist, architect, landscape architect, construction manager, engineer, environmental consultant, dentist, physician, training or educational consultant, or land surveyor, and whose services are considered distinct and unique to such a degree that bidding of such services may not be feasible, if appropriately justified and documented (see Subsection 4.9, Exemptions from Competitive Bidding, page 20). c. Public Works Projects. Public works pertain to the construction, alteration, repair, or improvement of any public structure, building, road, or other public improvement of any kind, including demolitions, and the construction and installation of drainage systems, lighting and signaling systems, sewer and water systems, and park and recreational facilities.

Maintenance required to preserve a public improvement is not considered a public work.

2. Authority to Award Contracts
The following section outlines the various contract award authorities established under the decentralized Purchasing System.
a. Award Authority. Contract award authority is established by dollar threshold for each of the following entities:
i. City Council. Purchases or contracts for goods and services of $100,000 or more, and public works contracts exceeding $35,000, must be awarded by the City Council. ii. City Administrator. Purchases or contracts up to $99,999 may be awarded by the City Administrator, with the exception of public works contracts exceeding $35,000. iii. Department Heads. As authorized by the City Administrator, department heads may make purchases and enter into contracts for goods and services up to $49,999, and for public works construction contracts up to $34,999.
iv. Staff. Purchases up to $2,999 may be made at the staff level as designated by department directors.
b. Authority to Legally Bind City. Unless specifically authorized as established in this section or elsewhere in City policy, staff other than the City Administrator and department heads cannot enter into contractual arrangements to purchase goods or services or otherwise legally bind the City for such purchases.

4 City of Gilroy. 2020. “Purchasing System Authorities and Responsibilities.” https://www.cityofgilroy.org/DocumentCenter/View/10774/Gilroy-Purchasing-Policy-. 544
CC 04-19-2022
544 of 632

Procurement Operational Review | 56

FOR THE INTERNAL USE OF THE CITY OF CUPERTINO ONLY

c. Award Authority Determined by One Transaction. For the purpose of determining the appropriate award authority, contract amounts are defined by what constitutes a single or one transaction. This rule also applies to competitive bidding (the estimate of dollar value of the transaction dictates the level of bidding required).
i. One-Time Purchases. Each discrete, one-time purchase is a single transaction. ii. Blanket Purchase Orders. The contract term of a blanket purchase order is generally considered a single transaction, subject to total contract length requirements established in a competitive bidding process. See also Subsection 3.7.6.b on page 9.

Examples: A blanket order in the amount of $10,000 that is issued for vehicle parts for a one-year period is a single transaction. Subsequent annual renewals of the blanket order are considered separate, single transactions.

A five-year blanket order for on-call maintenance work in the amount of $25,000 each year (for a total of $125,000) requires Council approval. iii. Contract Amendments. Dollar increases to existing contracts require the sum of the original contract to be added to the amount of the amendment to determine the single transaction value.
iv. Example: The City Administrator awards a contract for $75,000 and a $30,000 amendment is required. The resulting transaction is $105,000, now requiring Council approval.

3. Responsibilities of Purchasing Division
a. Purchasing Function. As established in Section 2.43(c) of the City Code, the Purchasing Division is responsible for:
i. Purchasing materials, supplies, and equipment (goods) and services for use by all departments when appropriate.
ii. Preparing standard specifications for goods and services wherever possible. iii. Maintaining a purchase order system and issuing purchase orders as required. iv. Verifying that all bids and proposals are in accordance with policy requirements. v. Establishing and operating a system of stores for the bulk purchase of commonly used items.
vi. Selling surplus personal property of the City, subject to the determinations and approval of department heads, the City Administrator and the City Council.

4. Responsibilities of City Staff
a. Responsibilities of All Employees. As keepers of the public trust, all City employees are required to discharge their duties fairly, impartially and with the highest degree of integrity. In support of these concepts as they apply to the purchase of goods and services, City staff shall:
i. Clearly identify procurement needs and the availability of funding. ii. Work with the purchasing coordinator to develop suitable competitive specifications. iii. Participate in the evaluation of bids and proposals as required. iv. Inspect goods delivered and services performed to determine conformity with established requirements and contractual obligations.
v. Authorize payment for conforming goods and services. vi. Notify the purchasing coordinator of non-conforming goods or services. 545
CC 04-19-2022
545 of 632

Procurement Operational Review | 57

FOR THE INTERNAL USE OF THE CITY OF CUPERTINO ONLY

vii. Document tangible or intangible value to the city when requisitioning goods or services without competition.
viii. Recognize that fair and open competition results in better value to the city. ix. Understand and be accountable for the policies and procedures established for purchasing goods and services.
b. Purchasing Requisition Required. Goods and services purchases that will require a contract, purchase order, or blanket purchase order, including public works construction, must be initiated with a properly documented and approved purchase requisition which includes:
i. Concise description of the purchase which adequately communicates need. ii. Actual or estimated dollar amount.
iii. Valid charge/project and object number.
iv. Verification of available funding or identification that funding is needed. v. Price quotes with recommended vendor selection and appropriate award justification. vi. Bid exemption documentation as required.

546
CC 04-19-2022
546 of 632

Procurement Operational Review | 58

FOR THE INTERNAL USE OF THE CITY OF CUPERTINO ONLY

This is a sample of key items from the City of Campbell Purchasing Procedures and Payment Methods- Policy 1.8. This is not an all-inclusive representation of policies in place at the City.

POLICY/PROCEDURES
In accordance with the regulations established through Chapter 3.20 of the Campbell Municipal Code, the following payment methods will be utilized as appropriate in the purchase of goods or services for the City of Campbell.

I. REQUISITIONS
All purchases totaling $5,000 or more, including tax and delivery, must be requested by submission of a Requisition prior to purchase.

II. PURCHASE ORDERS
Upon approval of the purchase order, department and Finance copies will be distributed, the vendor copy mailed. Upon receipt of merchandise or completion of services, the receiving copy (e.g. "golden-rod" copy) of the purchase order will be properly endorsed by the department and forwarded to Finance for final payment along with the invoice. Partial payments against a purchase order require approval on the invoice with account numbers, purchase order number and authorized signature included.

III. COMPETITIVE BIDS
Departmental representatives will secure competitive informal and formal bids as required for each purchase being made per the requirements listed below:

a. SUPPLIES/SERVICES/EQUIPMENT
i. < $5,000
Purchases up to $5,000 shall not be subject to competitive bidding. ii. $5,001 to $50,000
Purchase or Rental of Supplies, Services and Equipment: Requires three informal quotations/bids. Bids/quotations may be solicited by email, fax, phone, letter, or informal Requests for Bid/Quotations. Whenever possible, bids/quotations should be obtained in writing, via email or facsimile (fax). All bids/quotations must be documented with the name, address and telephone number of the individual providing the bid. The award will be made to the lowest responsible bidder, which shall include all costs including tax and delivery.

If the item(s) to be procured are available only through a sole source; if fewer than three sources can be identified following a reasonable effort on the part of the originating department; or if a vendor other than the vendor submitting the lowest bid is 547
CC 04-19-2022
547 of 632

Procurement Operational Review | 59

FOR THE INTERNAL USE OF THE CITY OF CUPERTINO ONLY

selected, written documentation must be provided by the originating department in support of the requested purchase. Travel time costs may be considered in selecting bidders other than those offering the lowest bid if delivery is not offered. Exceptions to the above are as follows:
iii. Daily purchases of Asphaltic Concrete in an amount not to exceed $5,000 for routine street maintenance may be made from local asphalt plants based on availability of material.
iv. Purchases of landscaping plant materials in an amount not to exceed $5,000 may be made from local suppliers based on quality and availability of plant materials. v. Purchases of supplies and equipment from vendors at or lower than the State of California's annual "State Bid" price for equivalent products is acceptable. vi. Gasoline, diesel and lubricants may be purchased from a Council approved vendor selected through a competitive bid process whereby a low bidder is selected based on an approved industry price index.
b. PUBLIC PROJECTS

i. $60,000 to $200,000
The California Public Contract Code, Section 22032(b) and 22034(d)(f), authorize certain informal bidding procedures (listed below) for public projects ranging from $60,000 to $200,000, but up to $212,500 may be awarded to the lowest responsible bidder with passage of a resolution by a 4/5 vote of the governing body of the public agency, if it determines the cost estimate of the public agency was reasonable.

Public Projects are defined under this law as:

1. Construction, reconstruction, erection, alteration, renovation, improvement, demolition and repair work involving any publicly owned, leased or operated facility,

2. Painting or repainting of any publicly owned, leased or operated facility.

3. Routine, recurring and usual work for the preservation or protection of any publicly owned or publicly operated facility for its intended purposes,

4. Minor repainting,

5. Resurfacing of streets and highways at less than one inch,

6. Landscape maintenance, including mowing, watering, trimming, pruning, planting, replacement of plants and servicing of irrigation and sprinkler systems.

Over $212,500:

Public projects of more than $212,500 require formal bidding procedures as outlined in Section 3.20.090 of the Campbell Municipal Code. Additionally, if a public project is funded in part or entirely by federal funds, formal bidding is required if over $10,000. c. CONSULTANTS

Over $50,000:
548
CC 04-19-2022
548 of 632

Procurement Operational Review | 60

FOR THE INTERNAL USE OF THE CITY OF CUPERTINO ONLY

The retaining of a consultant by the City at a fee in excess of $50,000 shall be approved by the City Council as outlined in Section 3.20.091(Request for Proposals [RFP]) of the Campbell Municipal Code

IV. SHORT FORM CONTACT/AGREEMENT
In certain instances involving the purchase of supplies, services or equipment under $50,000, or the use of a contractor within the definition of public projects ($60,000 to $212,500) pursuant to Section 20161 of California Public Contracts Code, the responsible department may require the use of a short form contract (see Exhibit A) that is signed by both the department head and vendor/contractor.

After the short form contract has been signed by both the department head and vendor/contractor, it shall be returned to the originating department for tracking purposes. The term of the contract shall last no more than 24 months.

Generally, the short form contract should be used if the vendor/contractor is expected to perform a number of deliveries over time to City facilities, or if the vendor/contractor will be spending time on City property or public rights-of-way so that contractual insurance is necessary to protect the City. Examples include: tenant improvements; painting; remodeling; new installations of irrigation systems; small public works projects; equipment installation in vehicles; roofing; transport and moving services; blueprinting; photocopying; data entry; signage; etc.

V. PETTY CASH
Purchases of less than $200 may be paid in cash by the employee, who will be reimbursed through the Petty Cash fund upon presentation of the sales receipt to the City Clerk. The Petty Cash fund is not to be used for reimbursement of individual travel or meeting expenses or for the purchase of office supplies available through the city’s designated office supply vendor.

Purchases of less than $5,000 for supplies or services may be paid by check request, as outlined in Section VIII of this policy.

VI. BLANKET PURCHASE ORDERS
Blanket Purchase Orders have been placed with suppliers of repetitively purchased items, where purchases may be made by authorized personnel. A listing of these vendors is available through the City Manager's Office. When merchandise is picked up or delivered, the invoice must be properly signed, with the account number indicated, and forwarded to Finance where it will be reconciled with the monthly statement.

All requests for establishment of a Blanket Purchase Order will be reviewed and evaluated by the City Manager's Office on a case-by-case basis. Purchases on blanket purchase orders are subject to all the normal purchasing procedures established in this policy (e.g. bid/quote requirements, etc.).

VII. CHECK REQUESTS
Check requests are used to initiate payment for supplies or services that do not require a purchase order. Check requests are also appropriately used for payment of the following items:
549
CC 04-19-2022
549 of 632

Procurement Operational Review | 61

FOR THE INTERNAL USE OF THE CITY OF CUPERTINO ONLY

a. Refunds of deposits,
b. Subscription renewals,
c. Personal property damage payments,
d. Expense advances (which are subject to full accounting on expense sheet upon return), e. Membership dues,
f. Special service remittances (e.g. grants and referral services, etc.), g. When a payment is required and there is no invoice.

VIII. EMERGENCY PURCHASES
As emergency (confirming) purchases are contrary to the best interests of economy and service, they should be made only in the event of an emergency. When an emergency purchase is made, a check request or requisition should be prepared as soon as possible. The transaction must be substantiated by a vendor's receipt, and subsequently processed in the same manner as any routine purchase.

IX. CITY CREDIT CARDS
City credit cards may be used to pay vendors who do not accept purchase orders, (e.g., conference or seminar reservations, travel costs, and hotel or rental car expenses), or when it is not practical to wait through the normal purchase order process. Credit cards may also be used to pay for emergency or non-recurring expenses. All credit card uses must comply with Administrative Policy #15-43 (Credit Card Policy).

X. DEPARTMENT HEAD AUTHORIZATION
The signature of the department head or designated management employee must be affixed to each Requisition (and electronically approved), Check Request, Expense Statement, Petty Cash Voucher, billing invoice, and credit card statement or receipt.

XI. ENVIRONMENTALLY PERFERABLE PROCUREMENT
The City of Campbell supports conservation of resources and protection of the environment through vendors and service providers that participate in programs to reduce, reuse, recycle, and dispose of discarded material. By incorporating environmental considerations in public purchasing, the City helps improve the environmental quality of the region and protects public health.

To this end, and as part of this Purchasing Procedures and Payment Methods Administrative Policy, City purchases should consider replacing disposables with reusable or recyclables.

Nothing in this section shall be construed as requiring a City department or contractor to procure products that do not perform adequately for their intended use or are not available at a reasonable price in a reasonable period of time.
550
CC 04-19-2022
550 of 632

551
CC 04-19-2022
551 of 632

CITY OF CUPERTINO
Agenda Item
22-10716 Agenda Date: 4/19/2022
Agenda #: 26.

Subject: Consider conducting the first reading of an Ordinance related to regulation of single-use plastic foodware and single-use carryout bags (continued from April 5, 2022) Conduct the first reading of Ordinance No. 22-2239: “An Ordinance of the City Council of the City of Cupertino amending City Code to change the name of section 9.15, adopt new sections 9.15.090 and

9.15.125, and amend sections 9.15.100, 9.15.110, 9.15.120, 9.15.130, 9.17.130, and 9.17.140 to regulate the use of single-use food service ware by food providers, regulate sale of single-use food service ware and expanded polystyrene foam coolers, and regulate single-use carryout bags” (Attachment A), which includes a finding that adoption of the Ordinance is exempt from the California Environmental Quality Act (CEQA.)
Presenter: Ursula Syrova, Environmental Programs Manager CITY OF CUPERTINO Printed on 4/14/2022Page 1 of 1
powered by Legistar™
552
CC 04-19-2022
552 of 632

CITY COUNCIL STAFF REPORT
Meeting: April 19, 2022

Subject
Consider conducting the first reading of an Ordinance related to regulation of single-use plastic foodware and single-use carryout bags.

Recommended Action
Conduct the first reading of Ordinance No. 22-xxx “An Ordinance of the City Council of the City of Cupertino amending City Code to change the name of section 9.15, adopt new sections 9.15.090 and 9.15.125, and amend sections 9.15.100, 9.15.110, 9.15.120,

9.15.130, 9.17.130, and 9.17.140 to regulate the use of single-use food service ware by food providers, regulate sale of single-use food service ware and expanded polystyrene foam coolers, and regulate single-use carryout bags” (Attachment A,) which includes a finding that adoption of the Ordinance is exempt from the California Environmental Quality Act (CEQA.)

Background
Due to concern for the negative environmental impact of litter, chemical migration into food, waste reduction, and conservation of natural resources, the City of Cupertino seeks to further reduce the use of single-use plastics through regulation of food service ware. The City’s Zero Waste Policy, adopted in 2017, acknowledges that reusable foodware is generally preferred to single-use items and particularly seeks to reduce the production of unnecessary plastic food service ware. City Council made single-use plastics a City Work Program item in 2020 and Cupertino’s Sustainability Commission recommended restrictions on single-use plastic foodware at their meeting on January 20.

While there are many single-use plastic items, both recyclable and not recyclable used in everyday life, the scope of this Ordinance is limited to single-use plastic food service ware used by food and beverage providers and non-durable expanded polystyrene foam coolers. City Municipal Code currently bans the use of expanded polystyrene (EPS) foam foodware and bans single-use plastic carryout bags (with an exemption for restaurants bagging takeout food orders).

City Council conducted a Study Session on this topic on March 1 and directed staff to:
 Develop Ordinance language and return in April for a first reading 553
CC 04-19-2022
553 of 632

 Include temporary waivers to reduce impacts to businesses  Reach out to the business community, including larger corporate interests  Gather information on consultants with restaurant operation and food service experience able to provide technical and financial assistance to food businesses during transition
 Explore collaboration with local schools, which would not be covered under this proposed Ordinance
 Research reusable solutions for boba tea, which is very popular locally and is often very reliant on single-use plastic for serving and presentation  Explore a pilot of reusable food service ware for takeout food and beverages  Explore coordinating similar efforts with surrounding cities  Explore amending Cupertino’s single -use carryout bag Ordinance to require compostable or recyclable produce bags
 Compare the greenhouse gas (GHG) impact of plastic v ersus compostable foodware
 Clarify the concerns about bio-plastics and allow for future changes that may make those materials acceptable to the compost processors

Discussion

Foodware Ordinance Amendments
Environmental Programs Division staff prepared proposed amendments to Municipal Code Chapter 9.15 that would enact a shift away from single-use plastic foodware and toward compostable and reusable foodware.

Cupertino currently prohibits food service providers from using EPS foam foodware.

The amended language (Attachments A and B) proposes to expand on that by requiring foodware accessories to be provided only when requested, banning the use of single-use plastic foodware, banning sale of bio-plastic foodware, and requiring reusables for dining in. The Ordinance enacts these prohibitions in two phases. The elements of those phases are summarized below and presented in Attachment C, which serves as an index to the draft Ordinance itself.

The first phase of the Ordinance mirrors the requirements of State law Assembly Bill (AB) 1276 and requires that food service ware accessories such as utensils, chopsticks, condiment cups and packets, straws, stirrers, splash sticks, and cocktail sticks be provided only upon request by customers. These requirements become effective on June 1, 2022.

The second phase of the proposed Ordinance includes elements that are proposed to go into effect one year later, on June 1, 2023:

1. Prohibit the use of certain types of food service ware by food providers:
 Continue to prohibit use of expanded polystyrene foam food service ware 554
CC 04-19-2022
554 of 632

 Prohibit use of single-use plastic items (even if accepted as recyclable.)  Prohibit use of compostable food service ware that contains PFAS (a group of chemicals used to make a coating for products that resist heat, oil, strains, grease, and water) (as required by AB 1200.)
 Prohibit use of bio-plastics (compostable plastics.)

2. Require reusable food service ware for dining on site:
 Reusable food service ware must be provided for customers dining on site at the food provider’s location. This would require sufficient dishwashing capacity or a contract with a dishwashing service.

3. Prohibit the sale of certain non-compliant foodware:
 Ban local sale of expanded polystyrene foam foodware.  Ban local sale of bio-plastic foodware.
 Continue to allow local sale of traditional plastic foodware and accessories1.

4. Exempted items:
 Paper, wood, bamboo, and other fiber -based compostable foodware items accepted in the City’s compost program.
 Containers made entirely from aluminum and aluminum foil.  Plastic straws for those with medical need.
 Food prepared and packaged outside of the City.
 Compliant single-use food service used for taking home leftovers from dine- in situations.
 Temporary exemptions allowed if additional time needed to comply.  Temporary exemptions allowed for significant economic hardship.  Temporary exemptions allowed for unique packaging hardship.

Why Compostable “Bio-Plastics” Are Not the Answer
Foodware containers and utensils made from polylactic acid (PLA,) or other “bio- plastics” made from corn or potato starch are not allowed in Cupertino’s organics recycling program, even if labeled as certified compostable. The one exception is that Biodegradable Products Institute (BPI) certified compostable plastic bags are still allowed for collecting food scraps. Problems with bio-plastics:
 They d o not break down fast enough . A 60 -day timeframe is typical at California composting facilities , which is different from the 180 days allowed by American Society for Testing and Materials (ASTM) standards.
 Considered a contaminant which must be screened out and sent to landfill.  Bio-plastics in landfill create methane as they degrade.  People confuse bio-plastics with recyclable traditional plastic.  Bio-plastic foodware is usually more expensive than other types.  Currently there is no place for bio-plastics in Cupertino’s waste streams.

1 Plastic food service ware and accessories includes plastic cups, plates, bowls, utensils, stir sticks, etcetera.
555
CC 04-19-2022
555 of 632

There are currently no solutions to the various issues above, however, if technological advances occur in production, processing, or sorting, and these advances changes what is allowed in Cupertino’s local composting program, the Ordinance could be amended.

Single-Use Carryout Bags Ordinance Amendments
City Municipal Code (CMC) currently bans the use of single-use plastic carryout bags at all retail locations with an exemption for restaurants bagging takeout food orders. It requires a fee of ten cents for each paper bag provided at point of checkout and allows reusable bags to be provided with no fee.
 At the recommendation of the Sustainability Commission, a proposed amendment would remove the exemption allowing thin single-use carryout plastic bags for restaurants. If adopted, staff recommends an effective date of June 1, 2023, to align with the new proposed single-use plastic foodware requirements.
 Another amendment to the bag Ordinance would require a ten-cent charge for reusable bags, which would bring Cupertino Code into alignment with State law.

As an observational survey showed grocery stores are already charging for both paper and reusable carryout bags, this is more of a Code cleanup issue, but other retailers will be informed for education and compliance.  In neither the current form of the CMC nor the proposed amended form would restaurants be required to charge a fee for carryout bags containing takeout food orders.
 A further amendment was suggested by City Council which would require compostable bio-plastic or paper produce bags at local supermarkets and farmers markets. This is not currently recommended due to uncertainty from Cupertino’s compost processors about the role of bio-plastic bags and because there is a State bill contemplating a similar requirement. Staff advises considering this issue when more information is available.

Environmental Comparison Between Types of Foodware
While single-use foodware is highly visible and often non-essential, it is not a significant contributor of GHG in Cupertino, when compared to transportation or energy sources.

While there are lifecycle analyses of the various types of single-use foodware, they do not take into consideration the impacts of items that are littered and end up in the oceans; the concern is over chemicals leaching into food, or that plastic single-use foodware is unlikely in actual practice to be clean enough to be recycled. They also do not take into consideration what has been called the “carrier benefit” of compostable foodware, which is something that does not need to be emptied or wiped clean of food scraps before being placed in a green bin and thus may carry more food scraps into the compost stream. Setting aside those gaps, most of the GHG production and water use are from resource extraction and manufacturing – fossil fuels for plastics, trees for paper, crops for bio-plastics and mining aluminum. Based purely on climate change impact, 556
CC 04-19-2022
556 of 632

there is not a clear best choice among single-use items.2 Meanwhile, reusable items made from ceramic, steel, or glass consistently result in a lower carbon footprint after they have been reused and washed a number of times. Washing processes that are energy and water-efficient can reduce the break-even point considerably.3

Outreach to Schools and Large Corporations
Staff interviewed several large institutional food service providers in Cupertino during the summer of 2021 about their use of foodware. Common concerns included being able to quickly transition to reusables for dining in given needed structural changes and labor shortages. Conversations with representatives from Cupertino Union School District (CUSD) revealed concerns over product availability due to supply chain issues and cited a lack of dishwashing capacity and funding shortfalls. While CUSD would not be subject to the City’s Ordinance, they are open to collaborating for change and have already made choices to unbundle foodware available to students, have eliminated straws, and already use paper-based trays to hold food. Fremont Union High School District (FUHSD) has members of the Silicon Valley Youth Climate Action organization actively working on issues of climate change with leaders in the District and are requesting to form an advisory group to include representatives from the cities in FUHSD, climate groups, and students to act on a variety of topics, including waste reduction. Staff has also reached out to De Anza College to discuss this topic.

Assistance for Businesses During Transition
If the Ordinance is adopted, staff recommends contracting for technical and financial assistance to help Cupertino’s food service businesses understand and adjust to the requirements, including sourcing foodware and connecting businesses with mini grants.

A consultant who is deeply knowledgeable about food service business requirements, regulations, supplies, and challenges who also has experience with making these types of transitions will best be able to provide such assistance. A request for proposal is under development.

The Challenge of Bubble Tea
There are at least 14 locations in Cupertino that serve bubble “boba” tea as a primary item and others that serve bubble tea on their menu. Seeing the tea and tapioca pearls through the cup and shaking the drink to mix it are part of the expected experience, and out of the 14 boba-focused tea places, 13 used clear single-use plastic cups and a machine to heat-seal film plastic across the top to cover the drinks. From a limited online search, the heat-sealing machinery can cost around $2000, and for franchised shops the presentation and packaging could be required. Understanding these concerns, City Council is interested in reusable alternatives. Staff talked to one reusable takeout

2 “Food Service Ware LCA Harmonization.” State of Oregon Department of Environmental Quality accessed at https://www.oregon.gov/deq/FilterDocs/FoodLCAreport.pdf 3 “Reusable Food Service Ware.” State of Oregon Department of Environmental Quality and Franklin Associates, a Division of Eastern Research Group accessed at https://www.oregon.gov/deq/FilterDocs/reusable-fsw.pdf
557
CC 04-19-2022
557 of 632

foodware solutions company operating out of Mountain View that is specifically piloting a clear cup alternative that would work for boba. Staff also purchased specialized mason jar lids, reusable straws, and travel cups as a demonstration and giveaway items for events such as Earth Day. A readily available solution does not currently exist to replace the experience of the heat-sealed transparent to-go cups. In recognition of this, the proposed Ordinance includes a “unique packaging exemption” that could be employed while reusable and fiber-based compliant options are encouraged.

Piloting Reusables for Takeout
Reusables for takeout food and drinks is a business model that is already gaining some traction in the Bay Area and elsewhere around the country and the world. A common method is to charge a deposit for a reusable to-go container which is refunded once the container is returned to a drop-off site, usually via a smart phone app. The returned containers are cleaned, sanitized, and returned to the food providers. In other models the containers are returned to participating businesses and washed and sanitized by the businesses themselves. City Council and Sustainability Commission were both interested to learn more about such possibilities, as were more than 60% of businesses and customers when asked in surveys. Staff has reached out to two providers for more information. Meanwhile, as a timely indicator that this is a topic of interest more widely, Starbucks announced on March 15, that it is planning to provide easy access to personal and other reusable to-go cups in café, drive-thru, and mobile orders by 2025. This plan includes making use of a double-window for drive-thru orders to enable customers to bring their own cups and a reusable and returnable borrowing cup model like what has already been described. Staff will continue to reach out to companies that provide this service and make a future recommendation to City Council for consideration of a possible local pilot.

Coordinating with other Cities
City Council was interested in the pace and interest of nearby cities to adopt similar restrictions on single-use plastics. While it would be ideal to move together as a region similar to what happened with plastic bags and expanded polystyrene, a model Ordinance effort at the County level was derailed by COVID-19 and a few cities have advanced on their own in the meantime. Pausing this effort in Cupertino to attempt to coordinate efforts more broadly across the County would delay implementation beyond Fiscal Year (FY) 22-23. Acting now will place Cupertino as a leader, paving the way for other jurisdictions considering similar Ordinances. Figure one below shows the current and planned regulations of neighboring jurisdictions.

Figure 1: Comparison of Foodware Ordinances in Neighboring Jurisdictions 558
CC 04-19-2022
558 of 632

Impact on Food Providers
Economically, the impact of the Ordinance could be mixed. With the implementation of the first phase per AB 1276 to offer utensils and accessories only on demand, providers could see cost savings from not giving out unwanted items. When the additional foodware requirements go into effect, providers using single-use plastic or bio-plastic food ware will need to use compliant PFAS-free fiber-based compostable or aluminum to-go foodware. The cost of transitioning to use compliant products could vary widely and is not universally more expensive. Food service providers surveyed in summer 2021 were using a combination of products. Transitioning to reusables for dine-in will require 559
CC 04-19-2022
559 of 632

some businesses to purchase washable items and either make use of available dishwashing capacity or increase that capacity. Understanding that this may not be financially or practically possible in some cases, temporary waivers for additional time needed and financial hardship are included. Figure 2 below shows the range of food provider categories in Cupertino and anticipated impact.

Figure 2: Summary of Common Food Provider Types in Cupertino and Potential Impacts (based on business license data)

Type of Food Provider Number of
Businesses
% of
Total Expected Impacts
Dine-in
(Full-service restaurants) 73 49%
Moderate:

 Over half of full-service
restaurants that offer dine-
in provide reusables, but
some provide only single-
use plastic or a combination
of both
Fast-food/casual
(Includes locations that also
offer dine-in with limited
seating, but operates primarily
through takeout orders)

34 23%
High:
 Majority of fast-food/casual
locations offer only single-
use items or a combination
of products such as single-
use plastics and paper/fiber-
based items
Café/bakery/dessert 22 15%
Moderate:
 Majority offer only single-
use disposables
Boba tea 13 9%
High:
 High-usage of single-use
plastic cups and straws
Grocery/Supermarkets 6 4%
Low:
 Single-use items not
primarily given out
Catering Trucks 2 1% Moderate:
 Use only disposables

California Environmental Quality Act
This Ordinance is not a project under the requirements of the CEQA, together with related State CEQA Guidelines (collectively, “CEQA”) because it has no potential for resulting in physical change in the environment. In the event that this Ordinance is found to be a project under CEQA, it is subject to the CEQA exemption contained in CEQA Guidelines section 15061(b)(3) because it can be seen with certainty to have no possibility that the action approved may have a significant effect on the environment. 560
CC 04-19-2022
560 of 632

CEQA applies only to actions which have the potential for causing a significant effect on the environment. Where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA. In this circumstance, the proposed action to regulate the use of single- use foodware by food providers and local sale of prohibited foodware and other expanded polystyrene products would have no or only a de minimis effect on the environment because reducing disposable plastic foodware items such as straws, utensils, and stirrer sticks and having compostable alternatives offered only upon request and other provisions of the Ordinance would not have the potential for causing a significant effect on the environment. In addition, if the proposed Ordinance were a project under CEQA, the project would be exempt from CEQA under CEQA Guidelines section 15307, which exempts from CEQA actions taken by regulatory agencies for the protection of the environment. The foregoing determination is made by the City Council in its independent judgment.

Next Steps
If adopted, the Ordinance will be brought before Council for a second reading on May 3.

Sustainability Impact
The proposed Ordinance is consistent with two actions in the Cupertino Climate Action Plan as well as California State law. The proposed Ordinance encourages a push towards more reusable foodware which is consistent with Climate Action Plan Measure C-SW-1: Zero Waste Goal. The proposed Ordinance promotes the collection of organics from the local waste stream, which will reduce GHG emissions from the landfill consistent with Climate Action Plan Measure C-SW-2: Food Scrap and Compostable Paper Diversion. Enabling organic items to reach the compost stream supports the diversion requirements of California Senate Bill (SB)1383, the State’s short-lived climate pollutant reduction regulations.

Fiscal Impact
If the Ordinance is adopted, staff recommends contracting for technical and financial assistance to help Cupertino’s food service businesses understand and adjust to the requirements. The cost to hire technical assistance as described is expected to be approximately $100,000 to cover support both before and after the implementation of the most significant changes, including offering a defined number of small grants to help cover the costs of switching to reusables or purchasing compliant foodware. Of the money budgeted to the Single-Use Plastics Ordinance and Mayor’s Cup Challenge City Work Program Item under 520-81-802 750-084, page 469 of the FY21-22 Adopted Budget, it is anticipated that approximately $60,000 will be available that could be allocated for a technical assistance contract. The balance of $40,000 would be drawn from the Resource Recovery Enterprise Fund and has been requested as part of the FY 22-23 proposed budget. Ongoing compliance monitoring and support can be performed by existing staff conducting inspections and outreach for stormwater pollution prevention program and SB 1383.
561
CC 04-19-2022
561 of 632

_____________________________________

Prepared by: Ursula Syrova, Environmental Programs Manager Reviewed by: Matt Morley, Director of Public Works
Approved by: Dianne Thompson, Assistant City Manager
Approved for Submission by: Jim Throop, City Manager
Attachments:

A – Single-Use Plastics and Bags Draft Ordinance – Blackline Version B – Single-Use Plastics and Bags Draft Ordinance – Clean Version C – Single-Use Plastics Ordinance Elements and Phasing Summary 562
CC 04-19-2022
562 of 632
Attachment A
1 ORDINANCE NO. __________________

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF CUPERTINO AMENDING CITY CODE TO CHANGE THE NAME OF CHAPTER 9.15, ADOPT NEW SECTIONS 9.15.090 AND 9.15.125, AND AMEND SECTIONS 9.15.100, 9.15.110,

9.15.120, 9.15.130, 9.17.130 AND 9.17.140 TO REGULATE THE USE OF SINGLE‐USE FOOD SERVICE WARE BY FOOD PROVIDERS AND REGULATE THE SALE OF SINGLE‐USE FOOD SERVICE WARE AN
D EXPANDED POLYSTYRENE FOAM
COOLERS, AND REGULATE SINGLE‐USE CARRYOUT BAGS

1. The City Council of the City of Cupertino finds that:

WHEREAS, on February 5, 2014, the City of Cupertino adopted an ordinance to prohibit food vendors from providing prepared food using food packaging containing polystyrene foam, currently codified as Chapter 9.15 of the City Code; and WHEREAS, this ordinance continues to prohibit the sale and use of polystyrene foam food service ware and also further regulates single‐use food service ware and food service war
e accessories in Cupertino; and
WHEREAS, the State adopted AB 619 in July 2019, which allows consumers to supply their own reusable containers for filling or refilling and requires that food establishments have an established pro
cedure for safely accepting reusable
containers; and
WHEREAS, the State recently adopted Assembly Bill 1200, which prohibits the sale or distribution of food packaging made primarily from paper, paperboard, or other natural fiber that contains per‐ and polyfluoroalkyl substances (PFAS) in California beginning J
anuary 1, 2023; and
WHEREAS, Assembly Bill 1200 does not include a verification mechanism to assist food providers in identifying whether the food packaging contains PFAS; and WHEREAS, this ordinance requires that food service ware used by a food provider in Cupertino be certified as PFAS‐free by an independent thi rd‐party certifying organization to assist Cupertino food providers in identifying PFAS‐free food service ware; and
WHEREAS, the State also recently adopted Assembly Bill 1276, which prohibits the distribution of single‐use food service ware accessories and standard condiments packaged for single use by food providers except upon request by the consumer; and 563
CC 04-19-2022
563 of 632
Ordinance No. __________

Page 2 ends

Cupertino City CouncilApril 19, 2022

Cupertino City Council
April 19, 2022