Agenda packet — East Palo Alto City Council, July 7, 2026 (part 2 of 2)

F. Developer has also been working to design and construct the water tank and pump system to improve the overall water conveyance, supply, and pressure in the neighborhood, as required by Section 5.1.4 of the Original Development Agreement. Condition of Approval #75 implements the Original Development Agreement. It requires that a 1.5 million gallon water tank at 375 Donohoe Street be constructed in accordance with the Development Agreement unless an alternate option is approved by the City based on the proposed tank design providing adequate storage, flow, and pressure to serve the development. Developer would like the flexibility to pursue a different alternative option that would provide adequate storage, flow, and pressure to serve the development Analyses completed since the Original Development Agreement indicate that an alternate option could provide adequate storage, flow, and pressure to serve the development, and the alternate option would have smaller visual effects on the neighborhood than the original design.

G. The Development Agreement contemplates different timeframes for the completion of Community Benefits and the payment of impact fees. It also provides for fee credits against Impact Fees payable by Developer. Given the timing differences, it is not possible to know the fee credit amounts prior to the payment of the Impact Fees.

H. Developer and City enter into this Agreement for the purposes of (i) clarifying the Affordable Housing Plan; (ii) clarifying the obligations regarding the construction of a water tank; (iii) clarifying the timing of the payment of Impact Fees to align with the Fee Credit and Community Benefit provisions; and (iv) making certain other adjustments to the Original Development Agreement to facilitate the construction of the Project. The Original Development Agreement, as amended by the Assignment and this First Amendment, shall be referred to herein as the “Development Agreement.”
NOW, THEREFORE, in reliance on the foregoing and in consideration of the mutual covenants, agreements and conditions contained herein, and other good and valuable 261
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consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:

1. Full Force and Effect; Capitalized Terms. Except as amended hereby, the Development Agreement remains unmodified and in full force and effect. All capitalized terms used but not defined in this First Amendment have the meaning set forth in the Original Development Agreement.

2. Off-Site Affordable Housing Units.
a. The first sentence of Section 4.5.2(a) shall be deleted in its entirety and replaced with the following:

Eden Housing or such other affordable housing developer (or partnership or limited liability company controlled by Eden Housing and/or such other affordable housing developer) (the “AH Developer”) under appropriate contract with Developer to provide AH Units off-site of the Property (“OffSite AH Units”) will construct a total number of Off-Site AH Units equal to or greater than 20% of the Net New Units (the “Minimum Off-Site AH Units”) at one or more off-site parcels in the City owned or controlled partially or entirely by Developer or a Developer Affiliate (the “Off-Site AH Parcel”).
b. Section 4.5.2(c) shall be deleted in its entirety and replaced with the following:

Developer shall donate the Off-Site AH Parcel to the AH Developer no later than the issuance by City to the AH Developer of building permits for construction of the Off-Site AH Units on the Off-Site AH Parcel.

Concurrently with such donation and following review by Developer, the AH Developer shall execute a regulatory agreement with the City pursuant to the City AH Regulations, to be recorded against the Off-Site AH Parcel.

If a regulatory agreement with the City has been recorded against any properties containing Safety Net Units pursuant to Section 4.5.3(g), such regulatory agreement shall be released, in whole or in part, from Safety Net Location title (one for one per AH Unit). Developer also shall provide "gap" financing to the AH Developer ("AH Gap Financing"), with a total value per Off-Site AH Unit (for which building permits have been obtained) equal to the value of the amount of the inclusionary housing in-lieu fee in effect at the time the AH Gap Financing is made to the AH Developer, based on the calculation set forth in the Inclusionary Housing Guidelines in effect as of the Effective Date of this Agreement (the "Guidelines Calculation"), less the amount of the credit set forth in Section 4.5.2(e) below. Developer shall provide the AH Gap Financing prior to or simultaneously with obtaining the first residential building permit. Notwithstanding any provision herein to the contrary, in no event shall Developer be obligated hereunder to construct any Off-Site AH Units. Notwithstanding the foregoing, if the AH 262
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Developer’s planning application for the Off-Site AH Units is for greater than the Minimum Off-Site AH Units, the AH Gap Financing shall be reduced on a proportional basis for each additional AH Unit above the Minimum Off-Site AH Units.
c. Section 4.5.2(d) shall be deleted in its entirety and replaced with the following:

The Parties anticipate that, based on the anticipated estimated size of an OffSite AH Parcel, the AH Developer would construct approximately between 70-89 Off-Site AH Units thereon. If the AH Developer's planning application for the Off-Site AH Units is for fewer than the Minimum OffSite AH Units, then Developer shall be required to pay to the City upon issuance of building permits for dwelling units in the Project, with respect to each Minimum Off-Site AH Unit not then constructed, an in-lieu fee in the amount of the inclusionary housing in-lieu fee amount in effect at the time of issuance of the first building permit for the Project, based on the Guidelines Calculation (the "AH In-Lieu Fee"). If the AH Developer has not submitted planning applications for the Off-Site AH Units before issuance of the first building permit for the Project because of the occurrence of one or more of the types of events described within the definition of Permitted Delay in Section 1.1.29 or Developer’s or AH Developer’s inability to obtain Project or other financing (together, "AH Force Majeure"), Developer shall pay the AH In-Lieu Fee at the time such planning applications are submitted but in no event later than the issuance of the first Certificate of Occupancy for the Project. For avoidance of doubt, the AH In-Lieu Fee is intended to cover the difference between the number of Off-Site AH Units actually constructed on the Off-Site AH Parcel and the number of AH Units that would otherwise be required under the City AH Regulations to meet the requirement for Minimum On-Site AH Units in Section 4.5.2(a). The total amount of AH In-Lieu Fees payable under this Section 4.5.2(d) shall be adjusted to reflect any variance in the number of AH Units actually constructed on the Off-Site AH Parcel at the time that building permits are issued for the Off-Site AH Units and also to reflect any Safety Net Units (defined in Section 4.5.3) that remain occupied by households ineligible to occupy an Off-Site AH Unit. Any adjustment to the AH In-Lieu Fees will be further adjusted once a Safety Net Unit tenant ineligible for an Off- Site AH Unit vacates the Safety Net Unit, or their income exceeds that specified in Section 4.5.3(i).
d. Section 4.5.2(e) shall be deleted in its entirety and replaced with the following:

Developer shall receive, for the transfer of the Off-Site AH Parcel pursuant to Section 4.5.2(c) above, a credit (the “AH Credit”) against the amount of any AH Gap Financing required to be provided by Developer pursuant to Section 4.5.2(c), equal to the cost of all expenses incurred by 263
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Developer to entitle and develop the Off-Site AH Parcel (including without limitation design, engineering and pre-construction costs) plus the Fair Market Value (as defined and determined below) of the Off-Site AH Parcel as of the date of such transfer. City and Developer shall meet and confer commencing not later than fifteen (15) days prior to the then anticipated date of transfer of the Off-Site AH Parcel, or by such other date as may be mutually agreed upon by the Parties and expiring upon such subsequent date that either Pary notifies the other of the termination of such meet and confer process (the “FMV Negotiation Period”), in a good faith effort to reach agreement upon the fair market value of the Off-Site AH Parcel, based upon its highest and best use (the “Fair Market Value”). If City and Developer are unable to agree upon Fair Market Value within the FMV Negotiation Period, City and Developer agree that the Fair Market Value shall be determined by a board of two appraisers (each an "Appraiser"), one of whom shall be named by the City and one of whom shall be named by Developer, both of whom shall appraise the Off-Site AH Parcel based on appraisal instructions mutually agreed upon by the Parties. Developer shall pay the costs of the Appraisers. Each of the Appraisers shall be licensed in the State of California as a real estate appraiser, be a member of the Appraisal Institute, and have at least ten (10) years' experience appraising properties similar to and in the vicinity of the Off-Site AH Parcel. City and Developer agree to make their appointments within fifteen (15) days after the expiration of the FMV Negotiation Period, or by such other date as may be mutually agreed upon by the Parties. Within forty-five (45) days after the expiration of the FMV Negotiation Period, City's Appraiser and Developer's Appraiser shall submit to one another his or her determination of the Fair Market Value. If the determinations by the two Appraisers differ by less than ten percent (10%) of the highest appraisal, then the FMV shall be deemed to be the average of the two determinations. If the preceding sentence does not apply, then City's Appraiser and Developer's Appraiser shall select a third Appraiser (with the same qualifications as set forth above) within fifteen (15) days after the City's Appraiser and Developer's Appraiser submit their determinations to one another. Within ten (10) days after the Third Appraiser is selected, City's Appraiser and Developer's Appraiser shall submit their determinationsto the Third Appraiser in order for the Third Appraiser to select either Developer's or City's Appraisers' determination as closest to the Fair Market Value. The third Appraiser shall make such selection within fifteen (15) days after receipt of the City's Appraiser's and Developer's Appraiser's determinations, and such selection by the third Appraiser shall be deemed the Fair Market Value and shall be binding upon the Parties. The Developer shall pay the full cost of the third Appraiser.

3. [Intentionally Omitted.]

4. Alternative Compliance Option. A new Section 4.5.4 shall be added as follows:

Alternative Compliance Option. Notwithstanding anything to the contrary in Section 4.5.2 or 4.5.3; Developer may elect, no later than the time Developer seeks issuance of the first Certificate of Occupancy for dwelling units in the Project, to pursue the following alternative compliance option to fulfill the City AH Regulations in place of complying with the requirements set forth in Sections 4.5.2 and 4.5.3. Fulfilment of the 264
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following alternative compliance option shall be deemed complete satisfaction of the City AH Regulations.
(a) Alternative Partnership. Developer may enter into an agreement with a non-profit affordable housing developer, developer, or public entity (“Alternative Partner”) for the provision of new AH Units within the City of East Palo Alto. Pursuant to the agreement, Developer shall provide “gap” financing in the amount requested by the Alternative Partner up to a total amount of Fourteen Million Dollars ($14,000,000) of total consideration (including cash and other consideration) to the Alternative Partner to facilitate the construction of AH Units in the City.

For the avoidance of doubt, Developer may not decline to provide "gap" financing if the amount requested by the Alternative Partner is less than or equal to Fourteen Million Dollars. Developer shall provide such gap financing to Alternative Partner in one or more phases, prior to or simultaneously with obtaining the first residential building permit for the alternative project, but in no event after the time that Developer obtains the first Certificate of Occupancy for the Project. In no event shall Developer be obligated hereunder to construct any alternative project. The total number of new AH Units provided by the Alternative Partner shall be equal to or greater than the Minimum Off-Site AH Units. Developer and City intend that it will include 25% of the AH Units at or lower than rents affordable to 35% AMI households, 50% of the AH Units at or lower than rents affordable to 50% AMI households, and 25% of the AH Units at or lower than rents affordable to 60% AMI households. The average affordability levels for the AH Units shall be at or lower than rents affordable to 50% AMI households. No AH Unit shall be affordable to higher than 80% AMI households. To the extent permissible pursuant to applicable law, the City’s local preference shall apply to the AH Units provided by Alternative Partner. The AH Units shall be encumbered by a recorded regulatory agreement. The Alternative Partner, City, and Developer shall enter into an agreement that addresses the allocation of units for each project’s compliance with City AH Regulations (for the avoidance of doubt, it is the City’s position that the Alternative Partner shall be required to independently comply with the City AH Regulations and the Minimum Off-Site AH Units shall only be attributed to the Project's satisfaction of the City AH Regulations) (the "Tri-Party Agreement"). Developer agrees to pursue this alternative compliance option for twelve (12) months after the Effective Date of this First Amendment, unless otherwise agreed in writing by City. Developer and City agree to make good faith efforts for Developer and Alternative Partner to enter into an agreement pursuant to this subsection. Good faith efforts must be demonstrated to the City and may include, without limitation, negotiation and execution of the Tri-Party Agreement or providing to the City evidence of Developer’s commitment to the Alternative Partner. If Developer determines the 265
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Alternative Partnership option is not feasible, Developer shall provide notice to the City laying out its plan to comply with the City AH Regulations and the Development Agreement, as amended by this First Amendment.

5. New Water Infrastructure. Section 5.1.4 of the Original Development Agreement shall be deleted in its entirety and replaced with the following:

Developer will provide a 1.5 million gallon water tank and pump system (and the land it is on), or such other size or system as may be agreed upon in writing by the City Manager, in coordination with the City of East Palo Alto Public Works and Menlo Fire District, to improve the overall water conveyance, supply, and pressure in the neighborhood. Any proposed alternative design shall be confirmed by a fire flow/pressure analysis, based on the proposed water tank design, confirming the water tank provides adequate storage, flow, and pressure. The design will be completed by the Applicant with review and approval by the City and Menlo Park Fire. In accordance with Section 4.3.3, a portion of this new infrastructure will be credited against the water capacity fees and public facilities fees otherwise payable by Developer for the Project. The cost incurred by the Developer in excess of the required water capacity fees and public facilities fees are considered a community benefit, provided, the cost of the water tank and pump station as well as related land exceeds the required water capacity and public facilities fees by at least $2,000,000. If the costs incurred by the Developer for the water tank, pump station and related land is less than the sum of the required water capacity fees, the public facilities fees and $2,000,000, Developer shall pay that difference to the City as a community benefit payment. If for any reason Developer is not required to construct the water tank and pump station, Developer shall be required to pay the required water capacity fees and public facilities fees for the Project and make a community benefit payment to the City of $2,000,000, to be paid at time of issuance of the first certificate of occupancy.

6. Storm Drainage Improvements. The following sentence shall be added to the end of Section 5.1.5:

For the avoidance of doubt, in the event that the construction costs of the storm drainage infrastructure improvements specified herein are anticipated to or do exceed $500,000, as such amount is increased each year by the increase in the ENR (“Storm Drainage Cap”), Developer shall provide written notice of the same to the City. Within thirty (30) days of receipt of such notice, City Manager or designee shall elect whether to (a) reduce the scope of the required storm drainage infrastructure improvements so that the construction costs do not exceed the Storm Drainage Cap, (b) agree to pay directly to contractor(s) any construction costs that exceed the Storm 266
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Drainage Cap, (c) elect for City to construct the storm drainage infrastructure improvements and Developer transfers the Storm Drainage Cap amount to the City; (d) elect for costs greater than the Storm Drainage Cap to be offset from legally allowable fees, or (e) any other solution agreed to in writing between Developer and City Manager or designee. In no event shall Developer have any obligation to pay any construction costs for storm drainage infrastructure improvements that exceed the Storm Drainage Cap.

7. Impact Fees. Subsection 4.3.3(b)(i) shall be deleted in its entirety and replaced with the following:

Subject to the provisions of this Section 4.3.3, Developer shall pay all applicable Impact Fees at the time that Developer obtains the first Certificate of Occupancy for the Project.

8. Right to Assign. The following sentence shall be added to the end of Section 10.2:

Developer may retain a portion of the rights, duties, and obligations created by the Agreement with respect to all or a portion of the Property while assigning a different portion of the rights, duties, and obligations created by the Agreement with respect to all or a portion of the Property so long as all of the rights, duties, and obligations created by the Agreement are held by Developer or any predecessor or successor in interest to Developer.

9. Counterparts. This Assignment may be executed in counterparts, each of which shall be deemed an original, and all of which shall be taken together shall be deemed one document.
[Remainder of page intentionally left blank.]
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IN WITNESS WHEREOF, the parties have executed this First Amendment effective as of the Effective Date.

CITY OF EAST PALO ALTO,
a municipal corporation
By: __________________________
Mayor
Dated: __________________________

WOODLAND PARK PROPERTY OWNER A,
LLC, a Delaware limited liability company
By: __________________________
Name: __________________________
Title: __________________________
Dated: __________________________
ATTEST:
________________________________
City Clerk
Dated: __________________________
APPROVED AS TO FORM:
____________________________________
City Attorney
Dated: __________________________
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ACKNOWLEDGMENT
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.

State of California )
County of_________ )
On ____________, 2026 before me __________________________, a notary public, personally appeared ________________________________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.
___________________________________
Signature of Notary Public
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I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.
___________________________________
Signature of Notary Public
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EXHIBIT A

LEGAL DESCRIPTION OF THE PROPERTY
501 O'Connor Street and 2012 Euclid Avenue

THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF EAST PALO

ALTO, IN THE COUNTY OF SAN MATEO, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS:

Beginning at the intersection of the center line of O'Connor Street with the center line of Euclid Avenue running thence Easterly along the center line of O'Connor Street 187.53 feet; thence North 7° 27' East 210.49 feet; thence Westerly 175.40 feet to a point in the center line of Euclid Avenue which said point is distant Northerly 234.09 feet to the point of beginning; thence southerly along the center line of Euclid Avenue, 234.09 feet to the point of beginning. Said description includes within its boundaries Lots Numbered 1, 2 and 3 in Block 9 as shown on that certain Map entitled "Map of Woodland Place, Subdivision No. One of Ravenswood, San Mateo County, California", filed in the Office of the County Recorder of San Mateo County, State of California on August 1, 1910 in Book 7 of Maps at Page 24.

JPN: 063-028-282-01A and 063-028-282-02A
APN: 063-282-010, 063-282-020
2001 Manhattan Avenue

THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF EAST PALO

ALTO, IN THE COUNTY OF SAN MATEO, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS:

Beginning at the point of intersection of the centerline of O'Connor Street with the centerline of Manhattan Avenue; running thence North 4° 44' East 229.10 feet to the Easterly prolongation of the Southerly line of the lands described in Deed to Jeanette A. Meek, recorded on April 21, 1913 in Book 224 of Deeds at Page 227, Records of San Mateo County, California; thence Westerly along said last mentioned prolongation and Southerly line 174.85 feet to the centerline of an alley way; thence Southerly along the centerline of said alley way 235.61 feet to the centerline of O'Connor Street; thence Easterly along the centerline of O'Connor Street 184.68 to the point of beginning. Being the property described as Lots Nos. 23 and 24 and the Southerly 25 feet of Lot No. 22 in Block 9, according to that certain Map entitled "Map of Woodland Place Subdivision No. 1 of Ravenswood, San Mateo County, Cal.", filed in the Office of the County Recorder of San Mateo County, State of California on August 1, 1910 in Book 7 of Maps at Page 24. Excepting therefrom that portion thereof conveyed to the third road district of San Mateo County, by Agnes M. West, et al, by Deed dated March 12, 1921 and recorded June 6, 1921 in Book 14, of Official Records at Page 237, Records of San Mateo County, California.
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APN: 063-282-090
2021 Euclid Avenue

THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF EAST PALO

ALTO, IN THE COUNTY OF SAN MATEO, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS:

LOT 2 AND THE SOUTHWESTERLY 5 FEET, FRONT AND REAR MEASUREMENTS OF LOT 3, BLOCK 10, MAP OF WOODLAND PLACE, SUBDIVISION NO. ONE OF RAVENSWOOD, FILED AUGUST 1, 1910, BOOK 7 OF MAPS, PAGE 24, SAN MATEO COUNTY RECORDS.

JPN: 063-028-281-02A
APN: 063-281-020
2025 Euclid Avenue

THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF EAST PALO

ALTO, IN THE COUNTY OF SAN MATEO, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS:

The Northeasterly 45 feet, front and rear measurements of Lot 3 in Block 10 as shown on that certain Map entitled "Map of Woodland Place Subdivision No. 1 of Ravenswood, San Mateo County, California", filed in the Office of the County Recorder of San Mateo County, State of California on August 1, 1910 in Book 7 of Maps at Page 24.

JPN: 063-28-281-03A
APN: 063-281-030
2031 Euclid Avenue

THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF EAST PALO

ALTO, IN THE COUNTY OF SAN MATEO, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS:

Lot 4 and the Southerly 1/2, front and rear measurements of Lot 5 in Block 10, as shown on that certain Map entitled "Map of Woodland Place, Subdivision No. 1 of Ravenswood, San Mateo County, California", filed in the Office of the County Recorder of San Mateo County, State of California, on August 1, 1910 in Book 7 of Maps at Page(s) 24.

JPN: 063-028-281-04A
APN: 063-281-040
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2032 Euclid Avenue

THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF EAST PALO

ALTO, IN THE COUNTY OF SAN MATEO, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS:

Portion of Lots 4 and 5 in Block 9 and portions of Euclid Avenue and the alley adjacent thereto, all as shown on that certain Map entitled "Map of Woodland Place, Subdivision No. One of Ravenswood, San Mateo County, California of Ravenswood Investment Co. Inc.", filed in the Office of the County Recorder of San Mateo County, State of California, on August 1, 1910 in Book 7 of Maps at Page(s) 24, described as: Beginning at a point in the centerline of Euclid Avenue distant thereon North 10° 19' East 234.00 feet from the intersection thereof with the centerline of O'Connor Street; running thence along said centerline of Euclid Avenue, North 10° 19' East 50.03 feet; thence leaving said line South 79° 41' East 172.77 feet to the centerline of alley running through said Block 9; thence along said centerline, South 7° 27' West 50.18 feet and thence North 79° 41' West 175.40 feet to the point of beginning. Excepting therefrom the Northwesterly 20 feet thereof for a public highway.

JPN: 063-028-282-03A
APN: 063-282-030
2033 Manhattan Avenue

THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF EAST PALO

ALTO, IN THE COUNTY OF SAN MATEO, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS:

Parcel I:

Portion of Lots 20 and 21 and alley in Block 9, as delineated upon that certain Map entitled "Map of Woodland Place Subdivision No. One of Ravenswood, San Mateo County, California", filed for record in the Office of the Recorder of the County of San Mateo, State of California, on August 1st, 1910 in Book 7 of Maps, at Page 24, more particularly described as: Beginning at a point on the Westerly line of Manhattan Avenue where it is intersected by the line dividing Lots 21 and 22 in said Block 9; thence North 4° 44' East along said Westerly line 28.42 feet to the Southwesterly line of lands described in Deed from Retta J. Donaghu to the State of California, recorded September 7, 1955 in Book 2871, Page 396 of Official Records; thence along said Southwesterly line of a tangent curve to the left with a radius of 60 feet and a central angle of 53° 18' 46" an arc distance of 55.83 feet and North 48° 34' 46" West 117.29 feet to a point in the Northerly line of lands described in Deed from Claude C. Taylor and wife to Retta Donaghu, by Deed recorded November 24, 1942 in Book 1037,

Page 410 ends

87° West 17.27 feet, South 7° 27' West 145.68 feet and South 87° East 142.50 feet to the point of beginning.

Parcel II:

The Northerly 50 feet front and rear measurements of Lot 22 in Block 9, and the adjacent portion of 273
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the Easterly one-half of unnamed alley way, as delineated upon that certain Map entitled "Map of Woodland Place, Subdivision No. One of Ravenswood, San Mateo County, California", filed for record in the Office of the Recorder of the County of San Mateo, State of California, on August 1st, 1910 in Book 7 of Maps, at Page 24.

JPN: 063-028-282-08A
APN: 063-282-080
2036 Euclid Avenue

THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF EAST PALO

ALTO, IN THE COUNTY OF SAN MATEO, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS:

Beginning at a point in the centerline of Euclid Avenue, distant thereon North 10° 19' East 284.12 feet from the point of intersection thereof with the centerline of O'Connor Street; running thence along said centerline of Euclid Avenue, North 10° 19' East 50.03 feet; thence leaving said line South 79° 41' East 170.13 feet to a point in the centerline of the alley running through said Block; thence along said centerline, South 7° 27' West 50.18 feet and thence North 79° 41' West 172.77 feet to the point of beginning. Excepting therefrom the Northwesterly 20 feet thereof. Also excepting therefrom that parcel of land conveyed to Isabel Lang and husband, by Deed from Elmer D. Cole and wife, dated December 22, 1948 and recorded December 2, 1949 in Book 1753, of Official Records at Page 716, Records of San Mateo County, California.

JPN: 063-028-282-04A
APN: 063-282-040
2040-2042 Euclid Avenue

THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF EAST PALO

ALTO, IN THE COUNTY OF SAN MATEO, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS:

PORTION OF LOTS 5 AND 6 IN BLOCK 9, AS DESIGNATED ON THE MAP ENTITLED, "MAP OF WOODLAND PLACE SUBDIVISION NO. ONE OF RAVENSWOOD SAN MATEO COUNTY CALIFORNIA", WHICH MAP WAS FILED IN THE OFFICE OF THE RECORDER OF THE COUNTY OF SAN MATEO, STATE OF CALIFORNIA, ON AUGUST 1, 1910 IN BOOK 7 OF MAPS AT PAGE 24, MORE PARTICULARLY DESCRIBED AS: BEGINNING AT A POINT ON THE CENTERLINE OF EUCLID AVENUE, DISTANT THEREON NORTH 10° 19' EAST 332.15 FEET FROM THE INTERSECTION OF SAID CENTERLINE WITH THE CENTERLINE 274
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OF O'CONNOR STREET, AS SAID AVENUE AND STREET APPEAR ON THE MAP ABOVE REFERRED TO; THENCE RUNNING NORTH 10° 19' EAST AND ALONG SAID CENTERLINE OF EUCLID AVENUE 43.10 FEET, TO THE SOUTHWESTERLY CORNER OF THE LANDS DESCRIBED IN THE DEED FROM DEWEY G. LANG AND WIFE TO ELMER D. COLE AND WIFE, DATED DECEMBER 14, 1948 AND RECORDED DECEMBER 16, 1948 IN BOOK 1604 OF OFFICIAL RECORDS OF SAN MATEO COUNTY, PAGE 3 (67437-H) THENCE SOUTH 79° 41' EAST ALONG THE SOUTHERLY LINE OF THE LAST MENTIONED LANDS 167.99 FEET TO THE WESTERLY LINE OF THE LANDS DESCRIBED IN THE DEED FROM CLAUDE C.

43.02 FEET MORE OR LESS TO A POINT WHICH BEARS SOUTH 79° 41' EAST 170.23 FEET FROM THE POINT OF BEGINNING; THENCE NORTH 79° 41' WEST 170.23 FEET TO THE POINT OF BEGINNING.

JPN: 063-028-282-05A
APN: 063-282-050
2041 Euclid Avenue, also known as 420 E. O'Keefe

THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF EAST PALO

ALTO, IN THE COUNTY OF SAN MATEO, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS:

PORTION OF LOTS 5, 6 AND 7 IN BLOCK 10, AS SHOWN ON THAT CERTAIN MAP ENTITLED "MAP OF WOODLAND PLACE SUBDIVISION NO. ONE OF RAVENSWOOD, SAN MATEO COUNTY, CALIFORNIA, PROPERTY OF RAVENSWOOD INVESTMENT CO., INC.", FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN MATEO COUNTY, STATE OF CALIFORNIA, ON AUGUST 1, 1910 IN BOOK 7 OF MAPS AT PAGE 24, BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS: BEGINNING AT A POINT ON THE WESTERLY BOUNDARY LINE OF SAID BLOCK 10, DISTANT THEREON NORTH 10° 19' EAST 12.87 FEET FROM THE NORTHWESTERLY CORNER OF SAID LOT 6 IN BLOCK 10,

SAID POINT OF BEGINNING BEING ON THE SOUTHERLY BOUNDARY LINE OF O'KEEFE STREET, AS ESTABLISHED BY THAT CERTAIN DEED FROM LLOYD G. SLOAN AND IRENE L. SLOAN, HIS WIFE TO THE COUNTY OF SAN MATEO, DATED SEPTEMBER 15, 1961 AND RECORDED NOVEMBER 6, 1961 IN BOOK 4087 OF OFFICIAL RECORDS AT PAGE 338 (FILE NO. 11817-U), RECORDS OF SAN MATEO COUNTY, CALIFORNIA;

THENCE FROM SAID TO THE POINT OF BEGINNING ALONG SAID SOUTHERLY LINE OF O'KEEFE STREET, SOUTH 79° 41' EAST 59 FEET; THENCE SOUTH 10° 19' WEST 87.87 FEET; THENCE NORTH 79° 41' WEST 59 FEET TO THE ABOVE MENTIONED WESTERLY LINE OF BLOCK 10; THENCE ALONG SAID LAST MENTIONED LINE, NORTH 10° 19' EAST 87.87

FEET TO THE POINT OF BEGINNING
JPN: 063-028-281-11A
APN: 063-281-110
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2043 Euclid Avenue

THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF EAST PALO

ALTO, IN THE COUNTY OF SAN MATEO, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS:

Portion of Lots 5, 6 and 7 in Block 10, as shown on that certain Map Entitled "Map of Woodland Place Subdivision No. One of Ravenswood, San Mateo County, California, property of Ravenswood Investment Co., Inc.", filed in the Office of the County Recorder of San Mateo County, State of California, on August 1, 1910 in Book 7 of Maps at Page 24, being more particularly described as follows: Beginning at a point on the Westerly boundary line of Euclid Avenue, at the intersection thereof with the dividing line between Lots 6 and 7 in said Block 10; thence from said point of beginning along said Westerly line of Euclid Avenue, North 10° 19' East, 12.87 feet to the intersection thereof with the Southerly boundary line of O'Keefe Street, as established by that certain Deed from Laurence R. Hubbard and Leona J. Hubbard, his wife, and Kenneth R. Hubbard, to the County of San Mateo, Dated November 21, 1960 and Recorded July 10, 1961 in Book 4014 of Official Records, at

Page 243 ends

thence leaving said Southerly line of O'Keefe, South 10° 19' West, 87.87 feet; thence parallel with said dividing line between Lots 6 and 7, South 79° 41' East, 61 feet to said Westerly line of Euclid Avenue, thence along said last mentioned line, North 10° 19' East 75 feet to the point of beginning.

JPN: 063-028-281-10A
APN: 063-281-100
2044 Euclid Avenue

THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF EAST PALO

ALTO, IN THE COUNTY OF SAN MATEO, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS:

Beginning at a point in the centerline of Euclid Avenue distant thereon North 10° 19' East 375.25 feet from its intersection with the centerline of O'Connor Street; thence from said point of beginning at right angles with Euclid Avenue, South 79° 41' East 167.99 feet , more or less, to the Westerly line of property now or formerly of Retta J. Donaghu; thence along said boundary North 7° 27' East 55.06 feet, more or less, to the Southerly boundary of property conveyed to Richard Jordan and Lillian Jordan, his wife, by Deed dated January 21, 1942 and recorded January 22, 1942 in Book 1005 of Official Records at Page 42; thence along said Southerly boundary North 79° 41' West 165.24 feet to said centerline of Euclid Avenue; thence along said centerline of Euclid Avenue South 10° 19' West

55.00 feet to the point of beginning. Being a portion of Block 9 as shown on that certain Map entitled "Map of Woodland Place Subdivision No. One of Ravenswood, San Mateo County, California, property of Ravenswood Investment Co., Inc.", filed in the Office of the County Recorder of San Mateo County, State of California on August 1, 1910 in Book 7 of Maps at Page 24. 276
551\95\5023655.3 18
JPN: 063-028-282-06A
APN: 063-282-060
2054 Euclid Avenue

THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF EAST PALO

ALTO, IN THE COUNTY OF SAN MATEO, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS:

Portion of Block 9 as shown on that certain Map entitled "Map of Woodland Place, Subdivision No.

One or Ravenswood, San Mateo County, California", filed in the Office of the County Recorder of San Mateo County, State of California on August 1, 1910 in Book 7 of Maps at Page 24, more particularly described as follows: Beginning at a point on the Easterly line of Euclid Avenue said point being North 10° 19' East 430.25 feet and South 79° 41' East 30 feet from the intersection of the centerline of Euclid Avenue with the centerline of O'Connor Street as said Avenue and Street are shown on the above mentioned map; thence from said point of beginning South 79° 41' East 135.24 feet, more or less, to the Westerly line of property now or formerly of Claude C. Taylor and wife; thence along said boundary North 7° 27' East 37.47 feet to the Southwesterly line of the lands described in the Deed from Nelson D. Gustin and wife to the State of California dated December 27, 1955 and recorded April 29, 1956 in Book 3009 at Page 327 of Official Records (47170-N); thence Northwesterly along said Southwesterly line 156.66 feet to the said Easterly line of Euclid Avenue; thence along said Easterly line South 10° 19' West 118 feet, more or less, more or less, to the point of beginning.

JPN: 063-02-282-07A
APN: 063-282-070
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Ordinance No. _ - 2026 [Page #]
ORDINANCE NO. ____ - 2026

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF EAST PALO ALTO

APPROVING THE FIRST AMENDMENT TO THE DEVELOPMENT AGREEMENT

BETWEEN THE CITY OF EAST PALO ALTO AND WOODLAND PARK PROPERTY

OWNER A, LLC RELATING TO THE DEVELOPMENT OF THE WOODLAND PARK

EUCLID IMPROVEMENTS PROJECT
WHEREAS, to strengthen the public planning process, encourage private participation in comprehensive planning and reduce the economic risk of development, the Legislature of the State of California adopted Government Code Sections 65864 et seq. (the "Development Agreement Statute") which authorizes cities to enter into agreements for the development of real property with any person having a legal or equitable interest in such property in order to establish certain development rights in such property; and
WHEREAS, in accordance with the Development Agreement Statute, the City of East Palo Alto enacted Chapter 18.108 of the East Palo Alto Municipal Code (the "Development Agreement Regulations") to implement procedures for the processing and approval of development agreements in accordance with the Development Agreement Statute; and
WHEREAS, Woodland Park Property Owner, LLC ("Former Developer") submitted an application requesting approval of a General Plan Amendment (GP19- 001) and Development Code and Zoning Map amendments (ZC19-002), Design Review Permit (DR 19-028), Conditional Use Permit (CUP22-003), Tentative Parcel Map (TTM19-001), and Development Agreement to allow for the construction of a mixed-use residential project containing approximately 605 residential units within three buildings ranging in height from 5 to 13 stories with approximately 605 parking spaces in a structured garage and approximately 2,500 square feet of community function space and 2,215 square feet of neighborhood-serving retail space (the "Project"); and WHEREAS, pursuant to the Development Agreement Statute and Development Agreement Regulations, the Planning Commission held a duly noticed public hearing on July 25, 2022, on the proposed Project and found the proposed Development Agreement is consistent with the objectives of the general plan and the Westside Area Specific Plan, in conformity with public convenience and beneficial to the public welfare, and will not adversely impact the orderly development of property; and WHEREAS, the City Council, after published notice, held public hearings on September 6, September 20, October 4, November 1, and November 15, 2022, concerning the proposed Project, including the reports and documents presented by City staff, the Planning Commission’s recommendations, and the written and oral comments presented at the public hearings; and
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WHEREAS, on November 15, 2022, the City Council adopted Ordinance No. 08- 2022 approving the Development Agreement between the City of East Palo Alto and Woodland Park Property Owner, LLC (the "Original Development Agreement"), which was recorded in the Official Records of San Mateo County on June 23, 2023, as Instrument No. 2023-030130; and
WHEREAS, pursuant to an Assignment and Assumption of Development Agreement dated July 21, 2023, and recorded in the Official Records of San Mateo County as Instrument No. 2023-036726, the Original Development Agreement was assigned to Woodland Park Property Owner A, LLC, a Delaware limited liability company ("Developer"), as successor in interest to the Former Developer; and WHEREAS, on October 4, 2022, the City Council certified the Environmental Impact Report ("EIR") (SCH #2020040270), adopted a Mitigation Monitoring and Reporting Plan, and adopted a Statement of Overriding Considerations for the Project; and WHEREAS, on July 16, 2024, the City Council adopted an Addendum to the EIR in connection with a design review amendment for the Project; and WHEREAS, the Developer, through its representative Sand Hill Property Company , has requested a First Amendment to the Development Agreement ("First Amendment") to modify certain provisions of the Original Development Agreement, including but not limited to: (a) Section 4.3.3 regarding the timing of Impact Fee payments; (b) Section 4.5.2 regarding Off-Site Affordable Housing Units; (c) a new Section 4.5.4 regarding an Alternative Compliance Option; (d) Section 5.1.4 regarding Water Infrastructure; (e) Section 5.1.5 regarding Storm Drainage; and (f) Section 10.2 regarding the Right to Assign; and
WHEREAS, the City’s Regional Housing Needs Allocation (RHNA) for the 6th Cycle requires the production of 829 new housing units by 2031, and as of 2025, the City had issued building permits for 221 units towards the 829 units; and WHEREAS, City staff has reviewed the First Amendment and determined that none of the conditions described in Public Resources Code Section 21166 or California Environmental Quality Act ("CEQA") Guidelines Sections 15162 and 15164 requiring preparation of a subsequent or supplemental EIR have occurred; and WHEREAS, specifically, (i) no substantial changes are proposed to the Project that would require major revisions of the EIR due to the involvement of new significant environmental effects or a substantial increase in the severity of previously identified significant effects; (ii) no substantial changes have occurred with respect to the circumstances under which the Project is undertaken that would require major revisions of the EIR due to the involvement of new significant environmental effects or a substantial increase in the severity of previously identified significant effects; and (iii) no new information of substantial importance, which was not known and could not have been known with the exercise of reasonable diligence at the time the EIR was certified, shows the Project will have new or substantially more severe significant effects, that mitigation measures previously found infeasible would in fact be feasible and would 279
Ordinance No. _ - 2026 [Page #]
substantially reduce significant effects, or that mitigation measures or alternatives considerably different from those analyzed in the EIR would substantially reduce significant effects; and
WHEREAS, the City Council has considered the staff report, the First Amendment, the Original Development Agreement, the EIR and its Addendum, and all written and oral testimony presented regarding the proposed First Amendment.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF EAST PALO ALTO DOES ORDAIN AS FOLLOWS:

SECTION 1. Findings and Determination.

The City Council hereby finds and declares the above recitals are true and correct. The City Council further finds that:

1. The provisions of the First Amendment to the Development Agreement are consistent with the City’s General Plan and Westside Area Specific Plan as they exist on the effective date of this Ordinance.

2. The provisions of the Development Agreement, as amended by the First Amendment, that constitute the Project’s Inclusionary Housing Plan are consistent with East Palo Alto Municipal Code Section 18.37.080(D) and the alternative compliance method proposed provides greater public benefit than would provision of the inclusionary units on-site due to the preservation of on-site rent-controlled units, provision of off-site income-restricted units, and the inclusion of alternative compliance options.

3. The First Amendment does not alter the fundamental terms and conditions of the Original Development Agreement but rather modifies certain implementation provisions to facilitate the timely development of the Project and the delivery of community benefits, affordable housing, and critical infrastructure improvements.

4. The development agreement is in the best interests of the City; This finding can be made because the development agreement amendment continues to include significant community benefits with a term length of seven to twelve years (dependent on if an automatic extension is invoked). The development agreement and community benefits are consistent with Westside Area Plan Policy 5.4, which calls for projects requesting increased intensity to enter into a development agreement and/or pay fees to support the development of new parks, open spaces, infrastructure and community facilities necessary to support a higher level of development on the Westside. In addition, Westside Area Plan Policy 8.4, which calls for new community meeting spaces. The community benefits include a 9,300 square feet new public park, community function space of approximately 2,500 square feet, dedication of approximately 20,350 square feet of roadway right-of-way, bus shelter/transit infrastructure improvements, storm drainage improvements, and a 1.5 million gallon water tank and pump system to improve the overall water conveyance, supply, and pressure in the neighborhood.
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5. The development agreement is consistent with the purpose, intent, goals, policies, programs, and land use designations of the General Plan, any applicable specific plan, and the Development Code; This finding can be made because amendment does not propose any changes that would make the project inconsistent. The proposed neighborhood service use is permitted in the Neighborhood Center Overlay Land Use Designation and within the Neighborhood Center zoning district. The multiple family residential use is permitted in the High Density Residential and Urban Residential Land Use Designations in the General Plan and the R-HD and R-UHD Zoning Districts. The purpose of the NCO designation is to support the development of housing at increased intensities with ancillary neighborhood-serving retail uses. The project would provide community space and neighborhood serving retail uses, as well as 605 residential units, 160 of which would be rentcontrolled. The project also includes construction of off-site incomerestricted affordable housing as alternative compliance with the City’s inclusionary housing ordinance, and a Tenant Relocation Plan that is compliant with the City’s ordinances and the Westside Area Plan requirements. Further, the proposed project meets all applicable provisions of the Development Code, including the NCO District, and City ordinances and regulations.

6. The development agreement will promote the public convenience, health, interest, safety and general welfare of the City; This finding can be made because the project was designed to ensure public health, safety and general welfare. The amendment does not propose any changes that would impact this finding. The project includes appropriate project setbacks, circulation, and landscaping. The proposed mixed-use project has been designed to be compatible with the NCO zoning district, and mitigation measures identified in the EIR and MMRP prepared for the project are incorporated to avoid potential environmental effects related to public health and safety.

7. The project will be compatible with the uses authorized in, and the regulations prescribed for, the zone in which the real property is located;
This finding can be made because there are no changes to the uses.

The proposed mixed-use is permitted in the proposed General Plan Neighborhood Center Overlay (NCO) Land Use Designation and within the proposed NCO zoning district. The General Plan and Development Code amendments meet the required findings, as described above. The project site, 2001 Manhattan Avenue, comprises approximately 3.92 acres of land and is occupied 161 existing units and is surrounded by other multiple-family housing development as well as neighborhood 281
Ordinance No. _ - 2026 [Page #]
serving commercial uses. Therefore, the proposed mixed-use building will be compatible with the other authorized uses in the area.

8. The project will not adversely affect the orderly development of property or the preservation of property values;
This finding can be made as the project, inclusive of the General Plan and Development Code amendments, is consistent with both the General Plan and the Development Code which plan for and regulate the development of property and set forth property value expectations. The amendment does not propose any changes that would impact the finding. The General Plan provides a comprehensive framework for the physical development of the City through 2035 and highlights the project area as appropriate for increases in intensity on a project-by-project basis. The project meets the prerequisites for increases in intensity laid out by Westside Area Plan Policy 5.3, supports the development of new parks, open spaces, infrastructure and community facilities set forth by Westside Area Plan Policy 5.4, and meets application requirements set forth by Westside Area Plan Policy 5.5.

9. The project will further important Citywide goals and policies that have been officially recognized by the Council; and
This finding can be made because the proposed project is still consistent with the General Plan and Westside Area Plan, specifically Goals W-1, W-3, and W-5. Westside Area Plan W-1 is to prevent displacement and preserve affordable housing. The project would provide right of return units, temporary units during construction, and other relocation benefits for existing tenants and would include 160 rent-controlled units in the new development. The project would also further Westside Area Plan Goal W-3 by creating new, high-quality affordable housing, both at the project site (rent-controlled units) and at the off-site income restricted affordable housing development. The project would additionally support Westside Area Plan Goal W-5 by developing of new buildings to improve housing opportunities and improve quality of life.

10.The project will provide the City with important, tangible benefits beyond those that may be required by the City through project conditions of approval
This finding can be made because the proposed project will continue to provide important and tangible benefits including a community function space, public park, 1.5 million gallon water tank, and bus stop and landscaping improvements around the project site.

SECTION 2. CEQA
The environmental effects of the Project subject to the Development Agreement were analyzed in the Environmental Impact Report (EIR) (SCH #2020040270), Mitigation 282
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Monitoring and Reporting Plan, and Statement of Overriding Considerations, which were certified and adopted by the City Council on October 4, 2022, and an Addendum to the EIR adopted on July 16, 2024.

The City Council finds that, based on the whole of the record before it, including but not limited to the EIR, the EIR Addendum, the Original Development Agreement, and the proposed First Amendment:
(a) No substantial changes are proposed in the Project or with respect to the circumstances under which the Project is undertaken that would require major revisions of the EIR due to the involvement of new significant environmental effects or a substantial increase in the severity of previously identified significant effects; (b) No new information of substantial importance, which was not known and could not have been known with the exercise of reasonable diligence at the time the EIR was certified, has been identified that shows: (i) the Project will have one or more significant effects not discussed in the EIR; (ii) significant effects previously examined will be substantially more severe than shown in the EIR; (iii) mitigation measures or alternatives previously found to be infeasible would in fact be feasible and would substantially reduce one or more significant effects of the Project; or (iv) mitigation measures or alternatives that are considerably different from those analyzed in the EIR would substantially reduce one or more significant effects on the environment; and (c) The First Amendment does not change the physical characteristics of the Project, the Project site, the number of residential units, building heights or massing, or any other physical aspect of the Project as previously analyzed in the EIR and EIR Addendum.

SECTION 3. Approval of First Amendment to the Development Agreement Based on the findings herein and in the resolution included in the above recitals, the City Council hereby approves the First Amendment to the Development Agreement attached hereto as Exhibit 1 and incorporated herein by reference, and authorizes the City Manager to execute the First Amendment, subject to such minor, conforming, or clarifying changes consistent with the terms thereof as may be approved by the City Manager prior to execution thereof, and any and all other documents necessary to effectuate the First Amendment.

SECTION 4. Recording
The City Clerk is hereby directed to record the First Amendment with the County Recorder of San Mateo County within ten (10) days after the effective date of this Ordinance, as required by Government Code Section 65868.5.

SECTION 5. Severability
If any section, subsection, sentence, clause or phrase of this Ordinance is for any reason held to be unconstitutional, invalid or ineffective by a court of competent 283
Ordinance No. _ - 2026 [Page #]
jurisdiction, such decision shall not affect the validity or effectiveness of the remaining portions of this Ordinance. The City Council hereby declares that it would have adopted this Ordinance, and each section, subsection, sentence, clause and phrase thereof irrespective of the fact that any one or more sections, subsections, sentences, clauses or phrases be declared unconstitutional, invalid or ineffective.

SECTION 6. Effective Date
This Ordinance shall be in full force and effect thirty (30) days after its adoption.

SECTION 7. Publication
The City Clerk is directed to cause publication of this Ordinance as required by Government Code Section 36933.

INTRODUCED at a regular City Council meeting held __________, 2026, and PASSED AND ADOPTED this ___ day of ____ 2026, by the following vote:

Webster Lincoln, Mayor
ATTEST: APPROVED AS TO FORM:

James Colin, City Clerk John D. Lê, City Attorney
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RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:

City Clerk's Office
City of East Palo Alto
2415 University Avenue
East Palo Alto, CA 94303
Exempt from Recording Fee
Pursuant to Government
Code Section 27383
______________________________________________________________________________ Space above this line for Recorder's Use Only

DEVELOPMENT AGREEMENT
by and between

THE CITY OF EAST PALO ALTO
and

WOODLAND PARK PROPERTY OWNER, LLC
City of East Palo Alto, California
285

TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS ......................................................................................................3

1.1 Definitions:.................................................................................................................3

1.2 Capitalized Terms. .....................................................................................................7 ARTICLE II GENERAL PROVISIONS..................................................................................7

2.1 Parties. ...................................................................................................................7

2.2 Recording. ..................................................................................................................8

2.3 Term. ...................................................................................................................8 ARTICLE III DEVELOPMENT OF THE PROPERTY .......................................................8

3.1 Use of the Property and Applicable Law. ..................................................................8

3.2 No Conflicting Enactments. .......................................................................................9

3.3 Reservations of Authority. .......................................................................................10

3.4 Subsequently Enacted Rules and Regulations. ........................................................10

3.5 Nexus/Reasonable Relationship Waiver. .................................................................10

3.6 Initiatives and Referenda..........................................................................................11

3.7 Compliance With Requirements of Other Governmental Entities...........................11

3.8 City's Police Power. .................................................................................................12

3.9 Subsequent City Approvals for the Property............................................................12

3.10 Life of City Approvals. ..........................................................................................13 ARTICLE IV OTHER RIGHTS AND OBLIGATIONS OF THE PARTIES ...................14

4.1 Generally .................................................................................................................14

4.2 Agreement Controls .................................................................................................14

4.3 Payment of Fees, Taxes and Assessments. ..............................................................14

4.4 Public Improvements................................................................................................16

4.5 Affordability Requirements......................................................................................17 286

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4.6 City Obligations. ......................................................................................................21 ARTICLE V COMMUNITY BENEFITS ..............................................................................21

5.1 Provision by Developer............................................................................................21 ARTICLE VI AMENDMENT OF AGREEMENT AND APPROVALS............................25

6.1 Amendment or Termination by Mutual Consent. ....................................................25

6.2 Minor Modifications and Major Amendments to Agreement..................................25

6.3 Requirement for a Writing. ......................................................................................25

6.4 Amendments to Development Agreement Legislation. ...........................................25

6.5 Modification of City Approvals. ..............................................................................26

6.6 Effect of Termination on Developer's Obligations. .................................................26 ARTICLE VII ANNUAL REVIEW........................................................................................27

7.1 Time of Review........................................................................................................27

7.2 Compliance Letter....................................................................................................27

7.3 Determination of Good Faith Compliance...............................................................27

7.4 No Waiver. ...............................................................................................................28 ARTICLE VIII DEFAULT, REMEDIES, AND TERMINATION.....................................28

8.1 Notice of Breach.......................................................................................................28

8.2 Remedies for Breach. ...............................................................................................28

8.3 Termination by Mutual Consent. .............................................................................29 ARTICLE IX ESTOPPEL CERTIFICATE..........................................................................29 ARTICLE X TRANSFERS, ASSIGNMENTS ......................................................................29

10.1 Agreement Runs With the Land.............................................................................29

10.2 Right to Assign.......................................................................................................30

10.3 Release Upon Assignment. ....................................................................................30 287

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ARTICLE XI MORTGAGEE PROTECTION.....................................................................30

11.1 Mortgage Protection...............................................................................................30

11.2 Mortgagee Not Obligated.......................................................................................30

11.3 Notice of Default to Mortgagee. ............................................................................31

11.4 No Supersession. ....................................................................................................31 ARTICLE XII INDEMNIFICATION....................................................................................31

12.1 No Duty of City; Hold Harmless............................................................................31

12.2 Indemnification. .....................................................................................................31 ARTICLE XIII NOTICES.......................................................................................................32

13.1 Notices. ...................................................................................................32 ARTICLE XIV MISCELLANEOUS......................................................................................33

14.1 Cooperation in the Event of Third-party Legal Challenge.....................................33

14.2 Invalidity. ...............................................................................................................33

14.3 Applicable Law and Venue. ...................................................................................33

14.4 Severability.............................................................................................................33

14.5 Nondiscrimination..................................................................................................33

14.6 Headings.................................................................................................................34

14.7 Agreement is Entire Understanding. ......................................................................34

14.8 Interpretation. .........................................................................................................34

14.9 Further City Actions...............................................................................................34

14.10 Computation of Time; Time of the Essence.........................................................35

14.11 Permitted Delay....................................................................................................35

14.12 Recordation of Termination. ................................................................................35

14.13 Counterparts. ........................................................................................................36 288
551\95\3398553.1

DEVELOPMENT AGREEMENT
This Development Agreement ("Agreement"), dated for reference purposes only as of this ____ day of __________, 20__, and effective as of the Effective Date (as defined herein), is entered into by and between the CITY OF EAST PALO ALTO, a California municipal corporation (the "City"), and WOODLAND PARK PROPERTY OWNER, LLC, a Delaware limited liability company, doing business as Woodland Park Communities (the "Developer"), with reference to the following facts, purposes, and understandings:

RECITALS
A. Section 65864 et seq. of the California Government Code authorizes City to establish procedures for and to enter into binding development agreements with persons having legal or equitable interests in real property located within the City that is the subject of the development agreement.

B. The City's Municipal Code establishes the procedures for review and approval of development agreements in Chapter 18.108. This Agreement is consistent with the City's development agreement provisions.

C. Developer is the fee owner of that certain property in the City located at 2021 Euclid Ave., 2025 Euclid Ave., 2031 Euclid Ave., 2041 Euclid Ave. (previously known as 420 E.

O'Keefe), 2043 Euclid Ave., 2012 Euclid Ave., 2032 Euclid Ave., 2036 Euclid Ave., 2040 Euclid Ave., 2042 Euclid Ave., 2044 Euclid Ave., 2054 Euclid Ave., 501 O'Connor St., 2001 Manhattan Ave., and 2033 Manhattan Ave., designated as Assessor's Parcel Nos. 063282010, 063282020, 063282030, 063282040, 063282050, 063282060, 06328207, 063282080, 063282090, 063281020, 063281030, 063281040, 063281100, and 063281110, and more particularly described in Exhibit A attached hereto and incorporated herein by this reference (the "Property").

D. Developer desires to develop on the Property a project (the "Project") consisting of the replacement of several aging, outdated structures containing, as of the Effective Date, 160 rentstabilized rental apartment units and one single family rental (non-RSO) unit, with new buildings containing up to 605 rental apartment units, 160 of which will be subject to the RSO in accordance with a deed restriction, replacing the existing apartment units one-for-one, together with publicly available private open space, common areas (including meeting room), parking, and associated facilities, in accordance with the provisions of this Agreement, the Project Approvals (defined below), and other applicable regulations of the City of East Palo Alto and other governmental agencies having jurisdiction over the Property.

E. On ____, 20__, City's Planning Commission held a duly noticed public hearing on this Agreement and (i) determined that this Agreement complies in all respects with CEQA, (ii) determined that this Agreement is consistent with the City's General Plan, and, (iii) recommended that the City Council approve this Agreement.

F. The following approvals (including all conditions of approval thereto), entitlements, and findings are being concurrently reviewed and approved herewith by the City with 289
2 551\95\3398553.1
respect to the Property and the Project and, collectively together with this Agreement, constitute the "Existing City Approvals":
(1) The EIR (as defined below) and applicable provisions of the related Mitigation, Monitoring, and Reporting Program ("MMRP"), by City Council Resolution No. __;
(2) General Plan Amendment by City Council Resolution No. __ ("GPA"); (3) Zone Change by City Ordinance No. ___;
(4) Development Code (Zoning Text) Amendment by City Ordinance No. ___; (5) Conditional Use Permit for Merger, Demolition or Elimination of Affordable Dwelling Units by City Council Resolution No. __; (6) Vesting Tentative Parcel Map ____, by City Council Resolution No. __; (7) Design Review Permit, by City Council Resolution No. __; (8) Tree Removal Permit, by City Council Resolution No. __; (9) The Adopting Ordinance (as defined below); and
(10) Relocation Plan, by City Council Resolution No. ____.

G. On ___, 20___, the City examined the environmental effects of the Project in an Environmental Impact Report (State Clearing House # ___), comprised of a Draft Environmental Impact Report and Final Environmental Impact Report (the "EIR") prepared pursuant to CEQA.

On ___, 20__, the City Council reviewed and certified as adequate and complete the EIR by Resolution No. ___ and adopted written findings and approved the MMRP.

H. On ______, 20__, the City Council held a duly noticed public hearing on this Agreement and considered the Planning Commission's recommendations and testimony and information submitted by City staff, Developer, and members of the public, and found this Agreement to be consistent with the City's General Plan and introduced Ordinance No. ____, approving this Agreement.

I. On ___________, 20__, the City Council adopted Ordinance No. ____ enacting this Agreement (the "Adopting Ordinance").

J. The development of the Project also may require certain Subsequent City Approvals (as defined below).

NOW, THEREFORE, in consideration of the foregoing recitals of fact and the mutual covenants and promises set forth herein, the City and Developer hereby agree as follows:
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AGREEMENT

ARTICLE I

DEFINITIONS

1.1 Definitions. In addition to the terms defined elsewhere in this Agreement, the following defined terms are used in this Agreement:

1.1.1 "Adopting Ordinance" shall mean City Council Ordinance No. ___ approving and adopting this Agreement.

1.1.2 "Agreement" shall mean this Development Agreement, as the same may be amended from time to time.

1.1.3 "Applicable City Regulations" shall mean and consist of:
(a) The General Plan of the City in effect as of the Effective Date; (b) The Municipal Code of the City ("Municipal Code") in effect as of the Effective Date;
(c) The City Approvals (including this Agreement) and their terms and conditions;
(d) Other City Regulations applicable to the Property in effect as of the Effective Date, except as provided in Section 3.2.
(e) New City Regulations that apply to the Property as set forth in Section 3.4 ; and
(f) Other City Regulations that apply to the Property as set forth in Section 3.3.

1.1.4 "Applicable Law" shall mean (a) all State and Federal laws and regulations applicable to the Property and the Project as enacted, adopted and amended from time to time and (b) the Applicable City Regulations.

1.1.5 "Approved Plans" shall mean those plans and specifications with respect to the Project, titled "________________", dated _______, prepared by _______, comprised of Sheets ___ through ____, inclusive, and approved by the City by the Design Review Permit for the Project.

1.1.6 "CEQA" shall mean the California Environmental Quality Act (California Public Resources Code Sections 21000-21177) and the implementing regulations promulgated thereunder by the Secretary for Resources (California Code of Regulations, Title 14, section 15000 et seq.).

1.1.7 "City" shall mean the City of East Palo Alto, a municipal corporation, and any successor or assignee of the rights and obligations of the City of East Palo Alto hereunder. 291
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1.1.8 "City Approvals" shall mean, collectively, the Existing City Approvals and the Subsequent City Approvals.

1.1.9 "City Council" shall mean the governing body of the City.

1.1.10 "City Planning Commission" shall mean the duly appointed and constituted planning commission of the City.

1.1.11 "City Regulations" shall mean, individually and collectively, (i) the General Plan and the Municipal Code, as adopted and amended by the City from time to time, and (ii) all other ordinances, resolutions, rules, regulations, requirements, standards, policies, conditions, specifications, and plans of the City, as adopted and amended by the City from time to time, including those governing zoning, subdivisions and subdivision design, land use, rate of development, growth control, density, building size, public improvements and dedications, construction standards, new construction and use, design standards, permit restrictions, development fees or exactions, terms and conditions of occupancy, or environmental guidelines or review, including those relating to hazardous substances.

1.1.12 "Compliance Letter" shall mean a letter submitted by Developer describing Developer's compliance with the terms of the City Approvals and this Agreement.

1.1.13 "Conditions " shall mean any and all conditions, terms, restrictions, or requirements (including dedications, fees, and exactions) imposed by the City on any City Approvals or otherwise imposed by the City on the Project or the Property.

1.1.14 "Developer" shall mean the Developer identified in the first paragraph of this Agreement and any successor or assignee to all or any portion of its right, title, and/or interest in and to ownership of all or a portion of the Property and/or the Project.

1.1.15 "Developer Affiliate" shall mean an entity or person that is directly or indirectly controlling, controlled by, or under common control with Developer. For purposes of this definition, "control" means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of an entity or a person, whether through the ownership of voting securities, by contract, or otherwise, and the terms "controlling" and "controlled" have the meanings correlative to the foregoing.

1.1.16 "Development Agreement Statute" shall mean California Government Code Sections 65864-65869.5, inclusive.

1.1.17 "Director" shall mean the City's Planning Division Manager or his/her authorized designee.

1.1.18 "Effective Date" shall mean the date the Adopting Ordinance becomes effective.

1.1.19 "Exactions" shall mean exactions imposed by the City as a condition of developing the Project, including requirements for acquisition, dedication or reservation of land or provision of tenant relocation benefits (on-site or off-site); and obligations to construct on-site or 292
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off-site public and private infrastructure improvements such as roadways, utilities or other improvements necessary to support the Project, whether such exactions constitute subdivision improvements, mitigation measures in connection with environmental review of the Project, or impositions made under Applicable City Regulations.

1.1.20 "Freeze Period" shall mean the time period from the date Developer submits a complete application for the first building permit until the date such building permit is issued.

The Freeze Period shall not extend beyond the expiration or earlier termination of this Agreement.

1.1.21 "General Plan" shall mean the City's 2035 General Plan adopted by the City Council on October 4, 2016, the final version of which was published in March 2017, as amended by the GPA.

1.1.22 "Mitigation Measures" shall mean the mitigation measures and related monitoring program applicable to the Project as set forth in the MMRP, as may be modified in any required subsequent CEQA review for the Project Approvals.

1.1.23 "Mortgage" shall mean the mortgage, deed of trust, sale and leaseback arrangement, or any other form of conveyance in which the Property, or a part or interest in the Property, is pledged as security and contracted for in good faith and for fair value.

1.1.24 "Mortgagee" shall mean the holder of a beneficial interest under a Mortgage or any successor or assignee of the Mortgagee.

1.1.25 "Net New Units" shall mean the number of net new rental housing units in the Project for which the City issues all necessary City Approvals (including building permits), calculated by subtracting from the total number of new rental housing units approved for the Project the total number of rental housing units existing at the Property as of the Effective Date (which total number of existing rental housing units is 161).

1.1.26 "Other Agency" shall mean any Federal, State, regional, or local governmental agency (other than City) with jurisdiction over the Property or the Project.

1.1.27 "Parks, Recreation, and Open Space Master Plan" shall mean a parks, recreation, and open space master plan, and amendments thereto, as may be adopted by the City prior to the Developer's application for a grading permit for the Project.

1.1.28 "Parties" shall mean Developer and City, and their respective successors and assigns under this Agreement.

1.1.29 "Permitted Delay" shall mean a delay in the performance by any Party of an obligation under this Agreement caused by an event beyond the reasonable control and without the fault of the Party claiming the delay (and despite the good faith efforts of such Party) first arising after the Effective Date, including, but not limited to: (i) acts of God; (ii) civil commotion; (iii) riots; (iv) strikes, picketing or other labor disputes; (v) shortages of materials or supplies; (vi) damage to work in progress by reason of fire, floods, earthquake or other casualties; (vii) a default under this Agreement by the other Party; (viii) as to City only, with respect to completion of the Annual Review or to processing applications for City Approvals, the failure, delay or inability of 293
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Developer to provide adequate information or substantiation as reasonably required to complete the Annual Review or process applications for Subsequent City Approvals; (ix) restrictions imposed or mandated by any Other Agencies, or delays by any Other Agencies in processing or issuing any Other Agency Approvals (including but not limited to any "will serve" letters); (x) enactment of conflicting State or Federal laws or regulations, (xi) judicial decisions or similar legal incapacity to perform, (xii) epidemics and pandemics, including COVID 19 (or variant)-induced restrictions on the ability of any Party to perform its obligations of this Agreement; and (xiii) litigation brought by a third party attacking the validity of this Agreement or any provision thereof or any action to be taken pursuant to this Agreement. Developer's inability to obtain Project or other financing and any Party's inability to make a payment when due shall not be basis of a Permitted Delay.

1.1.30 "Project" shall mean the Project as described and defined in Recital D.

1.1.31 "Project Approvals" shall mean, collectively, the City Approvals and the Other Agency Approvals.

1.1.32 "Property" is defined in Recital C.

1.1.33 "Public Improvements" shall mean all roads, parks, drainage, sewer, water, and utility improvements, and all other infrastructure and improvements for the Project that may or are to be dedicated or otherwise made available for public use pursuant to this Agreement or the Project Approvals.

1.1.34 "RSO" shall mean the Rent Stabilization and Just Cause for Eviction Ordinance of 2010 (Municipal Code Chapter 14.04) in effect as of the Effective Date.

1.1.35 "Subdivision Maps" shall mean any tentative or vesting tentative map, final map, tentative or vesting tentative parcel map, and parcel map, as those terms are defined in the Subdivision Map Act (California Government Code Sections 66410 et seq.) and the Municipal Code, and any amendments or modifications thereto and any lot line adjustments.

1.1.36 "Subsequent City Approvals" shall mean any and all subsequent City land use approvals, entitlements, permits, consents, and agreements (other than the Existing City Approvals), as may be necessary or desirable for implementation of the Project and this Agreement, including without limitation, the following: amendments of the Existing City Approvals, grading permits, building permits, sewer and water connection permits, certificates of occupancy, lot line adjustments, site plans, development plans, land use plans, building plans and specifications, Subdivision Maps, conditional use permits, variances, design review, demolition permits, improvement agreements, encroachment permits, regulatory agreements, TDM plan or program, and any amendments to, or repealing of, any of the foregoing.

1.1.37 "Term" is defined in Section 2.3.

1.1.38 "Third Party Challenge" shall mean any legal action instituted by a third party or other governmental entity or official challenging the validity of any provision of this Agreement.
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1.2 Capitalized Terms. If any capitalized terms contained in this Agreement are not defined above, then any such terms shall have the meaning otherwise ascribed to them in this Agreement.

ARTICLE II

GENERAL PROVISIONS

2.1 Parties.

2.1.1 Developer Representations and Warranties.
(a) Developer represents and warrants that, as of the Effective Date of this Agreement, Developer is:
(i) the sole fee owner of the Property;
(ii) Duly organized and validly existing under the laws of the State of California;
(iii) Qualified and authorized to do business in the State of California and has duly complied with all requirements pertaining thereto; (iv) In good standing and has all necessary powers under the laws of the State of California to own property and in all other respects enter into and perform the undertakings and obligations of this Agreement.
(b) Developer further represents and warrants:
(i) That no approvals or consents of any persons are necessary for the execution, delivery or performance of this Agreement by Developer, except as have been obtained;
(ii) That the execution and delivery of this Agreement and the performance of the obligations of Developer have been duly authorized by all necessary actions and approvals required under any management and operating agreement for the limited liability company constituting Developer; and
(iii) That this Agreement is a valid obligation of Developer enforceable in accordance with its terms.

2.1.2 Relationship of City and Developer.

It is understood that this Agreement is a contract that has been negotiated and voluntarily entered into by City and Developer and that the Developer is an independent contractor and not an agent or partner of City.

City and Developer hereby renounce the existence of any form of joint venture or partnership between them, and agree that nothing contained in this Agreement or in any document executed 295
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in connection with this Agreement shall be construed as making City and Developer joint venturers or partners.

2.2 Recording.

Within ten (10) days after the Effective Date, the City Clerk shall cause recordation of this Agreement with the County Recorder against the Property.

2.3 Term.

The term of this Agreement (the "Term") shall commence upon the Effective Date and shall terminate seven (7) years following the Effective Date, unless sooner terminated as hereinafter provided. Notwithstanding the above Term, if prior to the seventh (7th) anniversary of the Effective Date, the Developer submits to the City a complete application for a building permit for the Project including construction drawings, the Term of this Agreement shall be automatically extended for five (5) years.

ARTICLE III

DEVELOPMENT OF THE PROPERTY

3.1 Use of the Property and Applicable Law.

3.1.1 Subject to Agreement.

The Property is hereby made subject to the provisions of this Agreement. All development of, or on, the Property, or any portion thereof, shall be undertaken only in compliance with the provisions of this Agreement and with Applicable Law.

3.1.2 Vested Rights.

The overall design, development, construction, and use of the Project and all improvements in connection therewith, including without limitation, permitted uses of the Property, the maximum density and/or number of residential units and commercial development, the intensity of use, the maximum height and size of the proposed buildings, provisions for reservation or dedication of land for public purposes, provisions for payment of fees and other exactions, the conditions, terms, restrictions, and requirements for subsequent discretionary actions, the provisions for and financing for Public Improvements, and the other terms and conditions of development applicable to the Property as set forth in:
• This Agreement;
• The City Approvals; and
• The Applicable City Regulations;
are hereby vested in Developer, subject to the provisions of this Agreement (the "Vested Elements"). The intent of this Section 3.1.2 is to cause all development rights which may be 296
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required to develop the Project in accordance with this Agreement and the City Approvals to be deemed to be "vested rights" as that term is defined under California law applicable to the development of land or property and the right of a city to regulate or control such development of land or property. City hereby agrees to be bound with respect to the Vested Elements, subject to Developer's compliance with the terms and conditions of this Agreement and the Project Approvals. By stating that the terms and conditions of this Agreement and the Project Approvals control the overall design, development and construction of the Project, this Agreement is consistent with the requirements of California Government Code Section 65865.2 (requiring a development agreement to state permitted uses of the property, the density or intensity of use, the maximum height and size of proposed buildings and provisions for reservation or dedication of land for public purposes). Notwithstanding the preceding provisions of this Section 3.1.2 or any other provision in this Agreement to the contrary, in the event of any conflict between the terms and conditions of any City Approvals (including Developer's rights and obligations thereunder) other than this Agreement, including without limitation any Subsequent City Approvals, and the terms and conditions of this Agreement (including Developer's rights and obligations hereunder), the terms and conditions of this Agreement (including Developer's rights and obligations hereunder) shall control.

3.1.3 Existing City Approvals and Applicable City Regulations. Prior to the Effective Date, the Developer shall have prepared two (2) sets of the Existing City Approvals and Applicable City Regulations, one (1) set for City and one (1) set for Developer, to which shall be added from time to time, Subsequent City Approvals, so that if it becomes necessary in the future to refer to any of the City Approvals or Applicable City Regulations, there will be a common set available to the Parties. Failure to include in the sets of City Approvals and Applicable City Regulations any rule, regulation, policy, standard or specification that is within the Applicable City Regulations and City Approvals as described in this Agreement shall not affect the applicability of such rule, regulation, policy, standard or specification.

3.2 No Conflicting Enactments.

Except as otherwise expressly provided in this Agreement, any City Regulations that conflict with any Vested Elements shall not apply to the Project or the Property. For purposes of this Section

3.2 and Sections 3.3, 3.4 and 3.9, the word "conflict" means and refers to any City Regulation that has or purports to have any of the following effects: (i) reduces or limits the maximum density and intensity of use (including but not limited to the number, square footage and floor area ratios of buildings, the overall maximum number and square footage of residential units, parking or loading spaces, and the maximum amount of development space), or the maximum height, bulk or size of proposed buildings from that permitted by the City Approvals; (ii) changes any land use designation or permitted use of the Property from that shown in the City Approvals; (iii) limits, controls or delays the rate, timing, phasing or sequencing of the development, or construction of all or any part of the Property except as set forth in the Vested Elements; (iv) limits or restricts any right or use specifically granted by the Vested Elements; (v) limits the location of building sites, grading or other improvements on the Property in a manner that is inconsistent with the Project Approvals; (vi) imposes conditions upon development of the Property other than as permitted by the Vested Elements; (vii) contravenes, precludes or renders infeasible compliance with any provision of the Vested Elements; (viii) applies to the Project or the Property any New City Regulations (as defined in and subject to Section 3.4) that are not uniformly applied on a Citywide 297
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basis to all substantially similar types of development projects and project sites (i.e., to all rental residential projects, to all commercial projects, to all mixed-use projects etc.); (ix) imposes against the Project or the Property any condition, dedication or other Exaction not specifically authorized by the Vested Elements; or (x) imposes against the Project or the Property any obligations regarding affordable housing or relocation not specifically required by the Existing City Approvals.

3.3 Reservations of Authority.

The development of the Project will require Subsequent City Approvals. At the time Subsequent City Approvals are applied for, the following City Regulations shall apply to those Subsequent Approvals:

3.3.1 Subject to Section 4.3.2, all Processing Fees which are in force and effect within the jurisdiction of the City for the class of Subsequent City Approvals being applied for.

3.3.2 Subject to Section 4.3.3, all Impact Fees, other fees, or other monetary and non-monetary exactions imposed by the City which are in force and effect within the jurisdiction of the City for a broadly based class of land, projects, or discretionary or ministerial approvals, or taxpayers, as applicable, on which they are imposed.

3.3.3 Procedural regulations relating to hearing bodies, petitions, applications, notices, findings, records, hearings, reports, recommendations, appeals and any other matter of procedure, which are in force and effect within the jurisdiction of the City for the class of City Permits being applied for.

3.3.4 Regulations governing construction standards and specifications including, without limitation, the City's building code, plumbing code, mechanical code, electrical code, fire code and grading code, all provisions of Title 15 of the East Palo Alto Municipal Code, and all other uniform construction codes which are in force and effect within the jurisdiction of the City for the class of Subsequent City Approvals being applied for.

3.4 Subsequently Enacted Rules and Regulations.

The City may during the term of this Agreement apply such new City Regulations ("New City Regulations") that are in force and effect within the jurisdiction of the City for the class of Subsequent City Approvals being applied for and which are not in conflict with the terms of this Agreement (including the Vested Elements) or the City Approvals. To the extent any New City Regulation conflicts with the terms of this Agreement (including the Vested Elements) or the City Approvals, the terms of this Agreement or the City Approvals, as applicable, shall prevail and to such extent, such New City Regulation shall not apply to the Property or the Project.

3.5 Nexus/Reasonable Relationship Waiver.

Developer consents to, and waives any rights it may have now or in the future, to challenge with respect to the Project or Existing City Approvals, the legal validity of, the conditions, requirements, policies, or programs applicable to the Project pursuant to this Agreement, the Existing City Approvals or Applicable City Regulations, including, without limitation, any claim 298
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that they constitute an abuse of police power, violate substantive due process, deny equal protection of the laws, effect a taking of property without payment of just compensation, or impose an unlawful tax. In the event Developer challenges any newer, subsequently enacted, City Regulation, enacted by City in accordance with and subject to Section 3.4, or any increased or new fee permitted under and subject to Sections 3.3 and 4.3, on any grounds other than the City's breach of the provisions of those Sections, City shall have the right to withhold additional development approvals or permits until the matter is resolved; provided, however, Developer shall have the right to make payment or performance under protest, and thereby receive the additional approval or permit while the matter is in dispute.

3.6 Initiatives and Referenda.

3.6.1 If any City Regulation is enacted or imposed by a citizen-sponsored initiative or referendum, or by the City Council directly or indirectly in connection with any proposed initiative or referendum, which City Law would conflict with this Agreement or the City Approvals, such City Law shall not apply to the Project. The parties, however, acknowledge that the City's approval of this Agreement is a legislative action subject to referendum.

3.6.2 Without limiting the generality of any of the foregoing, no City-adopted moratorium or other limitation (whether growth control or otherwise relating to the rate, timing, phasing or sequencing of development) affecting Subdivision Maps, building permits, or other Subsequent Approvals shall apply to the Project. Developer agrees and understands that the City does not have authority or jurisdiction over another public agency's authority to grant a moratorium or impose any other limitation that may affect the Project.

3.6.3 The timing, sequencing, and phasing of the development is solely the responsibility of Developer so long as it is consistent with Applicable Law. In particular, the parties desire to avoid the result of Pardee Construction Co. v. City of Camarillo (1984) 37 Cal.3d 465, where the failure of the parties therein to consider and expressly provide for the timing of the development resulted in a later adopted initiative restricting the timing of development to prevail over such parties' agreement. While, as of the Effective Date, the Parties anticipate development of the Project in no more than two phases, it may become necessary for financing, marketing, thencurrent market conditions or other reasons to develop the Project in more than two phases. The Parties therefore acknowledge that Developer shall have the right to develop the Project at such time, and in any such phases, as Developer deems appropriate so long as such development is consistent with Applicable Law.

3.6.4 The City shall cooperate with Developer and shall undertake such actions as may be necessary to ensure this Agreement remains in full force and effect.

3.7 Compliance With Requirements of Other Governmental Entities.

3.7.1 During the Term, Developer, at no cost to City, shall comply with lawful requirements of, and obtain all permits and approvals required by Other Agencies in furtherance of this Agreement ("Other Agency Approvals"). Developer shall pay all required fees when due to Other Agencies and acknowledges that City does not control the amount of any such fees. 299
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3.7.2 City shall cooperate with Developer in Developer's effort to obtain Other Agency Approvals, provided that same does not impose any costs on or require the City to incur any costs without compensation or reimbursement, or require the City to amend any of the City's policies, regulations, or ordinances.

3.7.3 As provided in California Government Code § 65869.5, this Agreement shall not preclude the application to the Property and Project of changes in laws, regulations, plans, or policies, to the extent that such changes are specifically mandated and required by changes in State or Federal laws or regulations. In the event changes in the law prevent or preclude compliance with one or more provisions of this Agreement, this Agreement shall be modified or suspended as may be necessary to comply with such State or Federal laws or regulations. The parties shall meet and confer in good faith in order to determine whether such provisions of this Agreement shall be modified or suspended as may be necessary to comply with changes in the law, and City and Developer shall agree to such action as may be reasonably required. It is the intent of the parties that any such modification or suspension be limited to that which is necessary and to preserve to the extent possible the original intent of the parties in entering into this Agreement. This Agreement shall remain in full force and effect to the extent it is not inconsistent with such laws or regulations. Nothing in this Agreement shall preclude the City or Developer from contesting by any available means (including administrative or judicial proceedings) the applicability to the Property or Project of any such State or Federal laws or regulations.

3.7.4 To the extent that any actions of Federal or State agencies (or actions of other governmental agencies, including City, required by Federal or State agencies, or actions of City taken in good faith to prevent adverse impacts upon City by actions of Federal, State or other governmental agencies) have the effect of preventing, delaying, or modifying development of the Property or any portion thereof, City shall not in any manner be liable for any such prevention, delay, or modification. Such actions include, but are not limited to, flood plain or wetlands designations and actions of City or other governmental agencies as a result; the imposition of air quality or transportation measures or sanctions and actions of City or other governmental agencies as a result; or changes to CEQA and actions of City or other governmental agencies as a result.

As a condition to being able to proceed with development, Developer may be required, at its cost, to participate in such regional or local programs and to be subject to such development restrictions as may be necessary or appropriate by reason of actions of Federal, State or other governmental agencies (or action of City taken in order to prevent adverse impacts upon City by actions of Federal, State, or other governmental agencies).

3.8 City's Police Power.

The parties acknowledge and agree that the limitations, reservations, and exceptions contained in this Agreement are intended to reserve to the City that part of its police power which cannot be limited by contract, and this Agreement shall be construed to reserve to the City that part of its police power which cannot be restricted by contract.

3.9 Subsequent City Approvals for the Property.

3.9.1 Processing of Subsequent City Approvals. Applications for Subsequent City Approvals are anticipated to be submitted to the City by Developer. Applications for 300
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Subsequent City Approvals shall be processed and considered in a manner consistent with the rights granted by this Agreement and Applicable Law, including without limitation the Existing City Approvals. At such time as any Subsequent City Approval is approved by the City, then such Subsequent Approval shall become subject to all the terms and conditions of this Agreement applicable to City Approvals and shall be treated as a "City Approval" for all purposes under this Agreement.

3.9.2 Scope of Review of Subsequent City Approvals. By approving the Existing City Approvals, City has made a final policy decision that the development of the Project consistent with the Vested Elements is in the best interests of the public health, safety and general welfare. Accordingly, City shall not use its authority in considering any application for a Subsequent City Approval that is consistent with the Vested Elements to change the policy decisions reflected by the Vested Elements, or otherwise to prevent, delay or render infeasible development of the Project as set forth in the City Approvals. The City shall not deny an application for a Subsequent Project Approval that is consistent with the Vested Elements, unless and to the extent otherwise required pursuant to Section 3.7.3 or Section 3.7.4. Nothing herein shall limit the ability of the City to require the necessary reports, analysis, or studies to assist in determining whether the requested Subsequent City Approvals are consistent with the Vested Elements. Notwithstanding the foregoing, this Agreement shall not prevent the City, in acting on Subsequent City Approvals, from applying land use regulations which do not conflict with the Vested Elements.

3.9.3 Conditions of Subsequent City Approvals. City shall have the right to impose reasonable Conditions upon Subsequent City Approvals; provided, however, such Conditions (a) shall not limit or prevent development of the Property for the uses and to the density and intensity of development included in the Existing City Approvals and any other City Approvals previously granted, (b) shall not require dedications or reservations for, or construction or funding of, Public Improvements beyond those already included or referenced in the Existing City Approvals, the Mitigation Measures (except to the extent required by CEQA in connection with any Subsequent City Approvals) or Section 4.4, and (c) shall not otherwise conflict with the Vested Elements. Developer may protest any Conditions while continuing to develop the Property, provided however, if Developer's protest relates to fees or exactions Developer may pay such fees or exactions under protest pursuant to Section 3.5.

3.9.4 Subdivision Maps. Developer may from time to time file applications for Subsequent City Approvals of Subdivision Maps (including provisions therein for phased Subdivision Maps) with respect to some or all of the Property in accordance with applicable provisions of the Subdivision Map Act and the Municipal Code. All Subdivision Maps may be processed in phases. City shall exercise its discretion in reviewing such Subdivision Map applications in accordance with this Section 3.9.

3.10 Life of City Approvals.

The terms of (a) any Subdivision Maps included within the City Approvals and (b) all other City Approvals shall automatically be extended for the longer of the duration of this Agreement (including any extensions thereof) or the term otherwise applicable to the City Approvals if this Agreement is no longer in effect.
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ARTICLE IV

OTHER RIGHTS AND OBLIGATIONS OF THE PARTIES

4.1 Generally. In addition to any other obligations of Developer set forth herein, in consideration of City entering into this Agreement, Developer has agreed that if Developer commences development of the Property and proceeds to develop the Property, such development shall be in conformance with all of the terms, covenants, and requirements of this Agreement and Applicable Law, and Developer shall perform those specific obligations identified in the Project Approvals. Without limiting the preceding sentence, Developer shall pay when due any and all processing fees, impact fees, and costs which are lawfully imposed with respect to all or any portion of the Project in accordance with and subject to the terms of this Agreement, whether imposed by City or other agencies. As a material inducement to City to enter into this Agreement, Developer further agrees that, as long as this Agreement is in effect, Developer shall comply with all of its payment and other obligations under this Article IV.

4.2 Agreement Controls. To the greatest extent allowed by law, the provisions of this Agreement shall govern and control the City Regulations to be applied to the Project and the Property over any contrary or inconsistent provisions of the Development Agreement Statute. The Parties waive the benefits of the Development Agreement Statute to the extent it may be inconsistent or contrary to the provisions of this Agreement.

4.3 Payment of Fees, Taxes and Assessments.

4.3.1 General. All fees, exactions, dedications, reservations or other impositions to which the Project would be subject, but for this Agreement, are referred to in this Agreement either as "Processing Fees" or "Impact Fees" (as defined below). Developer shall timely pay or perform, as applicable, all Processing Fees and Impact Fees applicable to the Project or the Property in accordance with the terms of this Agreement.

4.3.2 Processing Fees. As used in this Agreement, "Processing Fees" means all fees charged on a City-wide basis to cover the cost of City review and processing of development project applications, including any required supplemental or other further environmental review, plan checking (time and materials) and inspection and monitoring for land use approvals, design review, grading and building permits, General Plan maintenance fees, and other permits and entitlements required to implement the Project, which are in effect at the time those permits, approvals or entitlements are applied for, and which fees are intended to cover the City's actual and reasonable costs of processing the foregoing. Processing Fees are not Impact Fees. Subject to Developer's right to protest and/or pursue a challenge in law or equity to any new or increased Processing Fees, City may charge and Developer agrees to pay all Processing Fees which are in effect on a City-wide basis at the time Subsequent City Approvals are applied for. Processing Fees shall be paid in accordance with any separate reimbursement agreement between the City and Developer ("Reimbursement Agreement") in effect at the time of such payment, the provisions of which shall control in the event of any conflict with the provisions of this Agreement regarding Processing Fees. If no such Reimbursement Agreement is then in effect, Processing Fees shall be paid in accordance with applicable provisions of the Municipal Code and the provisions of this Section. Without limiting the foregoing, Developer shall reimburse City or pay directly all 302
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reasonable and actual costs relating to the hiring of consultants and the performing of studies as may be necessary to review or process any applications for City Approvals or perform any related environmental review.

4.3.3 Impact Fees.
(a) Definition. As used in this Agreement, "Impact Fees" means all fees, charges, contributions, exactions, dedications, reservations, or impositions, other than taxes and assessments, whether established for or imposed upon the Project individually or as part of a class of projects, that are imposed by City on the Project in connection with any City Approval for any purpose, including, without limitation, defraying all or a portion of the cost of public services and/or facilities construction, improvement, operation and maintenance attributable to the impact or burden created by the Project. Impact Fees do not include: (a) any Processing Fees; (b) any Mitigation Measure (unless the Mitigation Measure consists of payment of an Impact Fee); (c) any inclusionary or other affordable housing in-lieu fees (which are governed by the provisions of Section 4.5); (d) any Community Benefits to be provided by Developer hereunder (which are governed by the provisions of Article V); (e) taxes or special assessment; (f) any utility connection fees in effect from time to time generally applicable on a City-wide basis to similar land uses as the Project; (g) any fees, taxes, assessments, or impositions imposed by the City or other entities that the City collects on behalf of such other entities, including without limitation school fees or regional transportation impact fees, all of which shall be due and payable by Developer as and when due in accordance with Applicable Law; or (h) any relocation payments or benefits. Without limiting the preceding, the Impact Fees in existence as of the Effective Date are set forth in attached Exhibit B ("Existing Impact Fees").
(b) Payment.
(i) Generally. Subject to the provisions of this Section 4.3.3, Developer shall pay all applicable Impact Fees at the time that Developer obtains the first building permit for the Project.
(ii) Freeze Period. Notwithstanding any provision herein to the contrary, during the Freeze Period no new or increased Impact Fees shall apply to the development of the Project, except that the amounts of the Existing Impact Fees shall be subject to adjustment for inflation pursuant to Municipal Code Section 13.28.100.A in effect as of the start of the Freeze Period. Notwithstanding the foregoing, if the East Palo Alto Sanitary District becomes integrated into the City government, new or increased Impact Fees related to sewer and sanitation are not subject to the Freeze Period.
(c) Fee Credits. Developer shall receive the benefit of the following types and amounts of credits against Impact Fees payable by Developer hereunder:
(i) Water Tank and Pump Station Credit. Developer shall receive a credit against water capacity fees for the cost of the water tank improvements and related land. Developer shall receive a credit against public facilities fees for the cost of pump station improvements and related land. The cost of the water tank, pump station and related land that exceeds the amount of the required fees shall be considered a community benefit provided the 303
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value of the community benefit is not less than $2,000,000. If the cost of the water tank, pump station and related land is less than the sum of $2,000,000 plus the total amount of the required fees, the Developer shall pay the difference to the City as a community benefit payment. If for any reason, Developer is not required to build the water tank, Developer shall be required to pay the full amount of water capacity fees and public facilities fees as well as a community benefit payment of $2,000,000;
(ii) Transportation Infrastructure Credit. Developer shall receive a credit against transportation infrastructure impact fees for specific streetscape or frontage improvements, including on-street parking that increases the number of on-street stalls beyond what would be provided with parallel parking, bike lanes, and other transportation infrastructure, above City standards as stated in Municipal Code Section 15.04.040. Improvements included toward the credit against transportation infrastructure impact fees will include a high-visibility crosswalk with appropriate traffic calming measures at the intersection of O'Connor Street and Manhattan Avenue to connect the Project to the University Circle complex, to facilitate greater neighborhood connection and to provide a convenient path for nearby residents to access the future University Avenue pedestrian and bike overpass. City approval of the crosswalk will be required as part of the building permit review;
(iii) Park Credit. Developer shall receive a credit against parks and trails fees for the cost of constructing the Park Space (including children's play area, gathering area, and fitness area together with associated landscaping and hardscaping) for public use as described in Section 5.1.1. The cost of the Park Space above the required fees shall be considered a community benefit; and
(iv) Storm Drainage Infrastructure Credit. Developer shall receive a credit against storm drainage fees for the cost of storm drainage infrastructure improvements to reduce storm water impacts and discharge rates. The cost of storm drainage improvements above the required fees will be considered a community benefit.

4.3.4 Connection Fees. Developer shall pay connection fees lawfully assessed by utility providers and other agencies assessing such fees at the rates in effect from time to time, including any utility or connection fees assessed by the City.

4.3.5 Other Agency Fees. Nothing in this Agreement shall preclude the City from collecting fees from Developer that are lawfully imposed on the Project by an Other Agency, which the City is required to collect pursuant to Applicable Law.

4.4 Public Improvements. Except as expressly set forth in the Project Approvals or Section 4.3.3(b)(iv) or elsewhere in this Agreement, Developer shall be responsible, at its sole 304
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cost, for the construction and installation of all Public Improvements for the Project required by Applicable Law and the City Approvals.

4.5 Affordability Requirements. Except as otherwise defined herein, all capitalized terms used in this Section 4.4 shall have the meanings ascribed to them in the City Affordable Housing Guidelines (as defined in Section 4.5.1 below).

4.5.1 Affordable Housing Plan. This Section 4.5 shall constitute both the Affordable Housing Plan for the Project required by Municipal Code section 18.38.060 and the Inclusionary Housing Plan required by Municipal Code section 18.37.090.A, as well as the affordable housing agreement required by Municipal Code section 18.37.090.B, which incorporates an alternative compliance option, and shall be deemed to satisfy, and satisfy, any and all of the Project's obligations pursuant to Municipal Code Chapters 18.35 (Affordable Housing - Basic Provisions), 18.37 (Inclusionary Housing) and 18.38 (Affordable Housing Impact Fee - Residential Development) (collectively, together with any and all inclusionary housing guidelines and other City Regulations pertaining to affordable housing, the "City AH Regulations"), including without limitation the obligation to provide any other or additional affordable rental housing units ("AH Units") or pay any Affordable Housing Impact Fee, and no additional Conditions with respect to affordable housing will be imposed by City under the City AH Regulations or otherwise.

4.5.2 Off-Site Affordable Housing Units. It is the mutual intent of the Parties under this Section 4.5 that the AH Developer (defined below) shall construct the Off-Site AH Units (defined below) on an Off-Site AH Parcel (defined below), which Off-Site AH Parcel shall be encumbered by a regulatory agreement to be recorded against the Off-Site AH Parcel and transferred to the AH Developer (as defined below). The City AH Guidelines provide in this instance that, in the absence of an alternative compliance option approved by the City Council, a total number of on-site AH Units (affordable to households meeting the income levels specified in the City AH Guidelines) ("On-Site AH Units") equal to 20% of the Net New Units would be required to be developed on the Property. In accordance with all applicable requirements of the City AH Regulations, the City Council hereby approves the following alternative compliance option (the "Approved Compliance Option"):
(a) Eden Housing or such other nonprofit affordable housing developer (or partnership or limited liability company controlled by Eden Housing and/or such other nonprofit affordable housing developer) (the "AH Developer") reasonably acceptable to City and under appropriate contract with Developer to provide AH Units off-site of the Property ("Off-Site AH Units") will construct a total number of Off-Site AH Units equal to 20% of the Net New Units at one or more off-site parcels in the City owned or controlled by Developer or a Developer Affiliate as of the time of donation of such parcel(s) to the AH Developer pursuant to the provisions hereof (the "Off-Site AH Parcel"). Developer shall notify City in writing of the precise location and description of the anticipated Off-Site AH Parcel no later than the issuance of the first building permit for dwelling units at the Project. The 5% difference between the number of On-Site AH Units (that would otherwise be required in the absence of the Approved Compliance Option) and the number of Off-Site AH Units that would be required under the City AH Regulations will be achieved or exceeded by Developer providing within the Project 160 units subject to the RSO pursuant to a deed restriction recorded against the Property (pursuant to the provisions of the RSO in effect as of the Effective Date) ("RSO Units").
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(b) Affordability levels for the Off-Site AH Units shall be at or lower than the following income levels (based on the standard requirements for On-Site AH Units): (i) 25% of such units available to and rented at rents affordable to 35% AMI households; (ii) 50% of such units available to and rented at rents affordable to Very Low Income Households (up to 50% AMI); and (iii) 25% of such units available to and rented at rents affordable to Low Income Households (up to 60% AMI).
(c) Developer shall donate the Off-Site AH Parcel to the AH Developer no later than the issuance by City to the AH Developer of building permits for construction of the Off-Site AH Units on the Off-Site AH Parcel. Concurrently with such donation, and following review by Developer, the AH Developer shall execute a regulatory agreement with the City pursuant to the City AH Regulations, to be recorded against the Off-Site AH Parcel. If a regulatory agreement with the City has been recorded against any properties containing Safety Net Units pursuant to Section 4.5.3(g), such regulatory agreement shall be released, in whole or in part, from Safety Net Location title (one for one per AH Unit). Developer also shall provide "gap" financing to the AH Developer ("AH Gap Financing"), with a total value per Off-Site AH Unit (for which building permits have been obtained) equal to the value of the amount of the inclusionary housing in-lieu fee in effect at the time the AH Gap Financing is made to the AH Developer, based on the calculation set forth in the Inclusionary Housing Guidelines in effect as of the Effective Date of this Agreement (the "Guidelines Calculation"), less the amount of the credit set forth in Section

4.5.2(e) below. Developer shall provide the AH Gap Financing prior to or simultaneously with obtaining the first residential building permit. Notwithstanding any provision herein to the contrary, in no event shall Developer be obligated hereunder to construct any Off-Site AH Units. (d) The Parties anticipate that, based on the anticipated estimated size of an Off-Site AH Parcel, the AH Developer would construct approximately between 70-89 OffSite AH Units thereon. If the AH Developer's planning application for the Off-Site AH Units is for fewer than 20% of the Net New Units (the "Minimum Off-Site AH Units"), then Developer shall be required to pay to the City upon issuance of building permits for dwelling units in the Project, with respect to each Minimum Off-Site AH Unit not then constructed, an in-lieu fee in the amount of the inclusionary housing in-lieu fee amount in effect at the time of issuance of the first building permit for the Project, based on the Guidelines Calculation (the "AH In-Lieu Fee"), plus an additional five percent (5%) of the AH In-Lieu Fee for each of the Minimum Off-Site Units not constructed. If the AH Developer has not submitted planning applications for the Off-Site AH Units before issuance of the first building permit for the Project because of the occurrence of one or more of the types of events described within the definition of Permitted Delay in Section 1.1.25 (together, "AH Force Majeure"), Developer shall pay the AH In-Lieu Fee at the time such planning applications are submitted but in no event later than the issuance of the first Certificate of Occupancy for the Project. For avoidance of doubt, the AH In-Lieu Fee is intended to cover the difference between the number of Off-Site AH Units actually constructed on the Off-Site AH Parcel and the number of AH Units that would otherwise be required under the City AH Regulations to meet the requirement for 20% On-Site AH Units. The total amount of AH In-Lieu Fees payable under this Section 4.5.2(d) shall be adjusted to reflect any variance in the number of AH Units actually constructed on the Off-Site AH Parcel at the time that building permits are issued for the Off-Site AH Units and also to reflect any Safety Net Units (defined in Section 4.5.3) that remain occupied by households ineligible to occupy an Off-Site AH Unit. Any adjustment to 306
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the AH In-Lieu Fees will be further adjusted once a Safety Net Unit tenant ineligible for an OffSite AH Unit vacates the Safety Net Unit or their income exceeds that specified in Section 4.5.3(i). (e) Developer shall receive, for the transfer of the Off-Site AH Parcel pursuant to Section 4.5.2(c) above, a credit against the amount of any AH Gap Financing required to be provided by Developer pursuant to Section 4.5.2(c), equal to the Fair Market Value (as defined and determined below) of the Off-Site AH Parcel as of the date of such transfer. City and Developer shall meet and confer commencing not later than fifteen (15) days prior to the then anticipated date of transfer of the Off-Site AH Parcel, or by such other date as may be mutually agreed upon by the Parties and expiring upon such subsequent date that either Party notifies the other of the termination of such meet and confer process (the "FMV Negotiation Period"), in a good faith effort to reach agreement upon the fair market value of the Off-Site AH Parcel, based upon its highest and best use (the "Fair Market Value"). If City and Developer are unable to agree upon Fair Market Value within the FMV Negotiation Period, City and Developer agree that the Fair Market Value shall be determined by a board of two appraisers (each an "Appraiser"), one of whom shall be named by the City and one of whom shall be named by Developer, both of whom shall appraise the Off-Site AH Parcel based on appraisal instructions mutually agreed upon by the Parties. Developer shall pay the costs of the Appraisers. Each of the Appraisers shall be licensed in the State of California as a real estate appraiser, be a member of the Appraisal Institute, and have at least ten (10) years' experience appraising properties similar to and in the vicinity of the Off-Site AH Parcel. City and Developer agree to make their appointments within fifteen (15) days after the expiration of the FMV Negotiation Period, or by such other date as may be mutually agreed upon by the Parties. Within forty-five (45) days after the expiration of the FMV Negotiation Period, City's Appraiser and Developer's Appraiser shall submit to one another his or her determination of the Fair Market Value. If the determinations by the two Appraisers differ by less than ten percent (10%) of the highest appraisal, then the FMV shall be deemed to be the average of the two determinations. If the preceding sentence does not apply, then City's Appraiser and Developer's Appraiser shall select a third Appraiser (with the same qualifications as set forth above) within fifteen (15) days after the City's Appraiser and Developer's Appraiser submit their determinations to one another. Within ten (10) days after the Third Appraiser is selected, City's Appraiser and Developer's Appraiser shall submit their determinations to the Third Appraiser in order for the Third Appraiser to select either Developer's or City's Appraisers' determination as closest to the Fair Market Value. The third Appraiser shall make such selection within fifteen (15) days after receipt of the City's Appraiser's and Developer's Appraiser's determinations, and such selection by the third Appraiser shall be deemed the Fair Market Value and shall be binding upon the Parties. The Developer shall pay the full cost of the third Appraiser. (f) The planning application for the Off-Site AH Units shall be submitted to the City prior to issuance of building permits for the Project. Further, building permits for the Off-Site AH Units shall be pulled at or before the City's issuance of the first Certificate of Occupancy, either temporary or permanent, for dwelling units in the Project. (g) To the extent permitted by law and by the requirements of any financing source(s) for development of the Off-Site AH Units, AH Developer shall give a preference in the rental of Off-Site AH Units to households who as a result of the Project were required to or elected to move and are beneficiaries of the Relocation Plan approved by the City as part of the Existing City Approvals, provided such households meet all eligibility requirements 307
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for tenancy in an Off-Site AH Unit. Determination of whether this preference is permitted by law or financing source shall be at the sole and reasonable discretion of the legal counsel for the AH Developer and substantiated in a letter by same counsel.

4.5.3 Safety Net Units.
(a) If, by reason of any AH Force Majeure, building permits for all of the Off-Site AH Units at the Off-Site AH Parcel have not been obtained by the AH Developer by the time Developer seeks issuance of the first Certificate of Occupancy for dwelling units in the Project, Developer shall make the same number of AH Units (for which such building permits have not been pulled) available as On-Site AH Units on any land in the City owned by Developer or a Developer Affiliate (each, a "Safety Net Location"), available to lower income households consistent with the City's 2019 Inclusionary Housing Ordinance (Ord. No. 425) (i.e., 25% of units available to 35% AMI households (or lower); 50% of units available to Very Low Income Households (or lower); 25% of the units available to Low Income Households (or lower), as those terms are defined above) until Off-Site AH Units are available for occupancy ("Safety Net Units"). (b) Developer shall not displace any then-current tenant at any Safety Net Location in order to accommodate the required number of AH Units available to lower income households.
(c) All AH Units shall be in decent, safe and sanitary condition, meeting HUD's Housing Quality Standards and shall not have any code or habitability violations. (d) Safety Net Units may be dispersed throughout one or more Safety Net Locations, including the Property, and also may be clustered within certain buildings at a Safety Net Location at Developer's option.
(e) The City and Developer shall enter into a binding affordability restriction, which will be recorded against title for the Property, which shall be released from title once a Certificate of Occupancy is issued for the Off-Site AH Units and the occupants of the Safety Net Units are relocated to the Off-Site AH Units. Developer shall be required to report to the City annually the rent and household income of the occupants of the Safety Net Units as well as any other information reasonably requested by the City and will be required to provide notice of such units, including the income and reporting requirements to any potential buyer of a building containing such Safety Net Units and provide notice to the City if a building containing such Safety Net Units is sold.
(f) The Safety Net Units shall have the same number of bedrooms as applied for the Off-Site AH Units and besides bedroom counts and size will be comparable to other rental dwelling units in the same building per Municipal Code 18.38.070(D), unless otherwise agreed to in writing by the City.
(g) If building permits for the Off-Site AH Units have not been obtained by the end of the Term of this Agreement due to AH Force Majeure, then the temporary affordability restrictions for the Safety Net Units shall thereupon become permanent, a regulatory agreement restricting the SafetyNet Units in perpetuity shall be recorded against the Safety Net Units (which agreement shall include the ability of Developer to relocate, from time to time and 308
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with City approval, the Safety Net Units to one or more other Safety Net Locations and thereupon the regulatory agreement shall be released from title to the prior location concurrently with a regulatory agreement being recorded against title to the new location), the Developer shall pay, if not already paid, the AH In Lieu Fees, then the Developer shall also pay an amount equal to twentyfive percent (25%) of the AH In Lieu Fee in effect at such time multiplied by twenty percent (20%) of the number of Net New Units and the inclusionary and other affordable housing requirements under the City AH Guidelines with respect to the Project shall thereupon be deemed fully satisfied. (h) Households occupying the Safety Net Units shall be required to meet the occupancy requirements for the Off-Site AH Units with the goal that all such households will be relocated to the Off-Site AH Units once Certificates of Occupancy are issued for such OffSite AH Units. (i) If for any reason a household occupying a Safety Net Unit is ineligible to occupy one of the Off-Site AH Units, or if insufficient Off-Site AH Units are available for all tenants in the Safety Net Units, Developer shall be obligated to maintain the Safety Net Unit as an affordable unit as long as such household continues to occupy such unit and continues to be eligible for an affordable unit at or below 60% of area median income. A household shall be deemed to continue to be eligible to occupy a Safety Net Unit until such household's income exceeds 140% of 60% of the area median income, at which time the rent for such unit may be raised to the extent allowed by law.

4.6 City Obligations.

4.6.1 In addition to any other obligations of City set forth herein, and in consideration of Developer entering into this Agreement, City acknowledges and agrees that the primary purpose of this Agreement is to effectuate the terms of the City Approvals so that the Project is developed.

4.6.2 To the extent that a Subsequent City Approval requires an action to be taken by the City, the City shall timely and promptly process such Subsequent City Approval in accordance with Section 3.9. If requested by Developer, the Parties agree to have their respective staff persons hold regular periodic meetings to discuss the processing of Subsequent City Approvals. If requested by Developer, the City shall consider retaining outside consultants to assist the City in processing Developer's development applications, at Developer's sole cost.

ARTICLE V

COMMUNITY BENEFITS

5.1 Provision by Developer. Developer shall provide the following benefits to the City, which are essential consideration to the City, without which the City would not have entered into this Agreement:

5.1.1 New Public Park Space. An area at the corner of O'Connor Street and Euclid Ave shall be developed with a children's play area, a gathering area, and a fitness area reserved for the benefit of the City and the East Palo Alto community and residents (the "Park Space"), as shown on Sheet L-1.0 of the Approved Plans and otherwise consistent with the Parks, 309
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Recreation, and Open Space Master Plan. This Park Space shall be in addition to the minimum required private, common, and public open space. It will be adjacent or in close proximity to neighborhood-serving retail, community space, and common resident amenity spaces. Pursuant to Section 4.3.3, the cost of constructing the Park Space will be credited against the Project's required parks and trails fees. The Developer's grant of a public access easement (or license) over the Park Space as well as the Developer's obligation to maintain the Park Space will be considered a community benefit. The Developer shall conduct community outreach to finalize the design and programming for the Park Space. The final Park Space design shall be included in the on-site grading and improvement plans submitted to the City prior to building permit issuance for the Project.

Developer will grant a public access easement (or license) over the Park Space to the City to ensure public use and enjoyment of the Park Space as well as to memorialize Developer requirements for upkeep and maintenance. The easement (or license) shall be finalized prior to grading permit issuance for the Project and shall be granted and recorded with the Final Map and prior to issuance of the first grading permit for the Project:
a) The Park Space shall be approximately 9,300 square feet and shall be built out in accordance with the final approved building permit at the Developer's sole cost. b) The Park Space shall be available for use by the public in perpetuity including the East Palo Alto community and residents between 8:00 a.m. and sunset free of charge for activities that conform to the purposes specified in the approved Park Space design.

Use of the Park Space will be operated and managed by the Developer. c) Should the City receive complaints or observe that the Park Space is not sufficiently available for community use, Developer and City shall meet to resolve the issues within seven (7) days of the City providing written notice to the Developer. d) The Developer shall be responsible for all maintenance, repair and replacements necessary to maintain the Park Space to a high quality. The Park Space easement (or license) will include requirements for repair and maintenance of the Park Space. e) Use of the Park Space shall at all times be consistent with the purposes specified in approved design of the Park Space and be conducted in compliance with all City Regulations and all State and Federal laws and regulations applicable to the Park Space and the following rules: use shall be in such a manner as not to interfere with or obstruct (i) any portion of the Property, and (ii) any business operations or other activities being conducted by the Developer or its permittees on the Property; no person shall enter, remain, stay, or camp in the Park Space when it is closed to the public; Developer may temporarily close the Park Space in the event of a risk to the public health or safety created by causes including but not limited to flood, storm, fire, earthquake or other natural disaster, explosion, accident, criminal activity, riot, civil disturbances, civil unrest, or unlawful assembly; Developer may temporarily close that portion of the Park Space as is necessary to undertake repair and maintenance activities of the Park Space in order to make any such necessary repairs and maintenance after 310
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providing notice to the City. If the City desires to have security cameras posted at the Park Space, the Developer shall fund and install security camera's according to the City's direction.
f) The Park Space shall be completed prior to the issuance of the first Certificate of Occupancy for the dwelling units in the Project.

5.1.2 Community Function Space. A portion of an area on the ground floor of Building B on O'Connor Street between Euclid Ave and Manhattan Ave as shown on Sheet A201 of the Approved Plans shall be space reserved for the benefit of the City and the East Palo Alto community and residents (the "Community Function Space"). (a) The Community Function Space shall be approximately 2,500 square feet. The Developer shall pay for and construct the Community Function Space as a multiuse space appropriate for City and community groups to use for meetings, events, educational purposes, cultural celebrations, and similar gatherings. The Community Function Space shall be built out to include: finished flooring, drop down or open concept ceilings, furniture, fixtures and equipment, and other decorations appropriate for the purpose of the space. (b) The Community Function Space may also host art installations of a temporary or permanent nature, provided they do not interfere with the community meeting hosting orientation of the space.
(c) The Community Function Space shall be available for use by the community and City between the hours of 8:00 a.m. and 10:00 p.m. free of charge for events that conform to the purposes specified in Section (a). Use of the space will be operated and managed by the Developer in consultation with the City.
(d) Reservation for the Community Function Space will be through an online reservation system on Developer's website, and also via a link to Developer's online reservation system on the City's website, via USPS mail, email, or in person requests at the property management office. Reservation priority will be given to the community and City up to ten (10) days before the requested time reservation. Inside of the ten (10) day period, and subject to the reasonable discretion of Developer, community groups, City, residents, and other groups may have access to the Community Function Space on a first come first served basis. In the event the City or a community group makes a request for a time when the Community Function Space is not available, Developer shall give the City or community group priority access to the nearest convenient available time slot. Should the City receive complaints or observe that the Community Function Space is not sufficiently available for community use, Developer and City shall meet to resolve the issues within seven (7) days of the City providing notice to the Developer. (e) The Developer shall provide, operate, and pay for the reservation system, and all utility, janitorial, and routine maintenance and repair services to the Community Function Space.
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(f) No fewer than ninety (90) days before the Developer requests final inspection of the Project, Developer shall demonstrate the functionality of the Community Function Space reservation system for City's approval, which shall not be unreasonably withheld.

5.1.3 Bus Shelter / Transit Infrastructure. Developer shall build a high-quality bus shelter, including wind and rain screening and transit schedule information, on O'Connor Street near Euclid Ave. It is intended to be served by SamTrans routes 81, 280, and 281 and Ravenswood City School District school buses.

5.1.4 New Water Infrastructure. Developer will provide a 1.5 million gallon water tank and pump system (and the land it is on), in coordination with City of East Palo Alto Public Works and Menlo Fire District, to improve the overall water conveyance, supply, and pressure in the neighborhood. In accordance with Section 4.3.3, a portion of this new infrastructure will be credited against the water capacity fees and public facilities fees otherwise payable by Developer for the Project. The cost incurred by the Developer in excess of the required water capacity fees and public facilities fees are considered a community benefit, provided, the cost of the water tank and pump station as well as related land exceeds the required water capacity and public facilities fees by at least $2,000,000. If the costs incurred by the Developer for the water tank, pump station and related land is less than the sum of the required water capacity fees, the public facilities fees and $2,000,000, Developer shall pay that difference to the City as a community benefit payment. If for any reason Developer is not required to construct the water tank and pump station, Developer shall be required to pay the required water capacity fees and public facilities fees for the Project and make a community benefit payment to the City of $2,000,000, to be paid at time of issuance of the first building permit.

5.1.5 Storm Drainage Improvements. Developer will build storm drainage infrastructure improvements in the Project-adjacent street segments of Euclid Ave., O'Connor Street, Manhattan Ave, and/or West Bayshore Ave consistent with the existing City of East Palo Alto Storm Drain Master Plan to reduce storm water impacts and discharge rates, up to a maximum cost of $500,000, as such amount is increased each year by the increase in the Engineering News Record Construction Cost Index ("ENR"). Pursuant to Section 4.3.3, a portion of the cost of constructing the storm drainage improvements will be credited against storm drainage fees, and the remainder will be a community benefit.

5.1.6 Dedication of Roadway. Developer will dedicate approximately 20,350 square feet (roughly ½ acre) of land to the City of East Palo Alto, along the entire frontage of O'Connor Street between Manhattan Ave and Euclid Ave, and a portion of the frontage of Euclid Ave between O'Connor Street and West Bayshore Road. This includes existing roadway, sidewalk, and building-related open space. This will be contributed at no cost to the City. The Developer still intends to improve much of this area as part of the Euclid Improvements, consistent with or above the standards in Municipal Code section 15.04.040. Any such improvements to the new frontage dedicated by the Developer shall be made by the Developer to ADA standards. 312
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ARTICLE VI

AMENDMENT OF AGREEMENT AND APPROVALS

6.1 Amendment or Termination by Mutual Consent.

Subject to the provisions of this Article VI, City and Developer by mutual written agreement may terminate or amend, in whole or in part, the terms of this Agreement.

6.2 Minor Modifications and Major Amendments to Agreement.

6.2.1 Minor Modification. The Parties acknowledge that refinement and further implementation of the Project may demonstrate that certain clarifications, minor changes, or minor adjustments may be appropriate with respect to the details and performance of the Parties under this Agreement. The Parties desire to retain a certain degree of flexibility with respect to the details of the Project and with respect to those items covered in the general terms of this Agreement. If and when the Parties find that clarifications, minor changes, or minor adjustments are necessary or appropriate and do not constitute a Major Amendment under Section 6.2.2, they shall effectuate such clarifications, minor changes or minor adjustments as Minor Modifications through a written memorandum of Minor Modification ("Minor Modification Memorandum") approved in writing by the Developer and Director following Directors' consultation with the City Manager and submittal to the Planning Commission on the consent calendar, in conformance with Municipal Code section 18.108.040.A.3. For avoidance of doubt, any Minor Modification Memorandum shall not require any public hearing or any action by the Planning Commission or the City Council as a prerequisite to its execution or effectiveness. As used herein, "Minor Modification" shall mean any clarification, change, or adjustment to this Agreement which, in the context of the overall Project contemplated by this Agreement, does not substantially affect (i) the Term of this Agreement; (ii) permitted uses of the Property; (iii) provisions for the reservation or dedication of land; (iv) Conditions for Subsequent City Approvals; (v) the density or intensity of use of the Property or the maximum height or size of proposed buildings; or (vi) the nature, timing of delivery, or scope of Public Improvements required by the City Approvals.

6.2.2 Major Amendment. Any proposed amendment to this Agreement that does not constitute a Minor Modification under Section 6.2. shall be accomplished in the manner provided under Municipal Code Section 18.108.060.B and subject to approval by the City Council.

6.3 Requirement for a Writing.

No amendment, minor amendment, or cancellation of this Agreement or any provision hereof shall be effective for any purpose unless adopted in the manner set forth in Section 6.2.1 or Section

6.2.2, as applicable, and specifically set forth in a writing, which refers expressly to this Agreement and is signed by duly authorized representatives of the Parties. The City Clerk shall record an appropriate notice of any amendment or cancellation with the County Recorder not later than ten (10) days after the effective date of the action effecting such amendment or cancellation, accompanied by a legal description of the Property.

6.4 Amendments to Development Agreement Legislation.
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This Agreement has been entered into in reliance upon the provisions of the Development Agreement Statute, as those provisions existed at the date of execution of this Agreement. No amendment or addition to those provisions which would materially affect the interpretation or enforceability of this Agreement shall be applicable to this Agreement unless such amendment or addition is specifically required by the California State Legislature, or is mandated by a court of competent jurisdiction. If such amendment or change is permissive (as opposed to mandatory), this Agreement shall not be affected unless the parties mutually agree in writing, after following the procedures in Section 5.1, to amend this Agreement to permit such applicability.

6.5 Modification of City Approvals.

6.5.1 Generally. City Approvals (except for this Agreement, the amendment process for which is set forth in Section 6.2) may be amended or modified from time to time by means of a Subsequent City Approval, but only at the written request of Developer or with the written consent of Developer at its sole discretion. All amendments to the City Approvals shall automatically become part of the City Approvals. The permitted uses of the Property or portion thereof, the maximum density and/or number of residential units, the intensity of use, the maximum height and size of the proposed buildings, provisions for reservation or dedication of land for public purposes, the conditions, terms, restrictions and requirements for subsequent discretionary actions, the provisions for public improvements and financing of public improvements, and the other terms and conditions of development as set forth in all such amendments shall be automatically vested pursuant to this Agreement, without requiring any amendment to this Agreement. City shall not request, process or consent to any amendment to the City Approvals that would affect the Property or the Project, or applicable portion thereof, without Developer's prior written consent.

6.5.2 Minor Changes in Site Plan and Design Review. Notwithstanding the provisions of Section 6.5.1, upon the request of Developer, the Director may administratively approve minor modifications to any Site Plan and Design Review for the Project in accordance with Section 18.86.080 of the Municipal Code, and any such approval shall not require any amendment to this Agreement. Major modifications, as determined by the Planning Manager, shall require review and approval from the Planning Commission at a public hearing, and any such approval shall not require any amendment to this Agreement to the extent such approval does not change the Project as defined in this Agreement or require modification of this Agreement.

6.6 Effect of Termination on Developer's Obligations.

6.6.1 Notwithstanding any other provision to the contrary, termination or cancellation of this Agreement or termination of the rights of Developer as to the entire Property, or any part of the Property, shall not affect any of Developer's rights under or requirement to comply with the Development Approvals, the terms and conditions of any other Subsequent Approval, nor any payments then due and owing to City, nor shall it affect the covenants of Developer specified in Section 6.6.2 below, to continue after the termination or cancellation of this Agreement. Developer understands and agrees that the Development Approvals may be substantially modified in light of the circumstances resulting from the termination or cancellation of this Agreement or Developer's rights under this Agreement, and Developer shall have no rights 314
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to challenge such a modification by reason of this Agreement other than the rights, if any, Developer would have in the absence of this Agreement.

6.6.2 Notwithstanding anything in this Agreement to the contrary, the following provisions of this Agreement shall survive and remain in effect following termination or cancellation of this Agreement for so long as necessary to give them full force and effect with respect to claims or rights of City arising prior to termination or cancellation:
(a) From and following development of the Project, Section 5.1.2 (Community Function Space);
(b) Section 6.6 (Developer's obligations upon termination or cancellation);
(c) Section 8.2 (Remedies; limitation on damages); and
(d) Section 12.2 (Indemnification).

ARTICLE VII

ANNUAL REVIEW

City and Developer shall review all actions taken pursuant to the terms of this Agreement once annually, within sixty (60) days prior to each anniversary of the Effective Date, during each year of the Term unless the City and Developer agree in writing to conduct the review at another time.

Review of compliance with the terms of this Agreement shall be conducted by the Director.

Pursuant to East Palo Alto Municipal Code Section 18.108.070, Developer shall initiate the review by filing an application with the City and provide all the documents and information necessary for the City to complete the annual review and make a determination of whether Developer is in compliance.

7.2 Compliance Letter.

Before each anniversary of the Effective Date, Developer shall submit a letter ("Compliance Letter"), along with all necessary supporting documentation, to the Director describing Developer's compliance with the terms of the Development Approvals and this Agreement during the preceding year. The Compliance Letter shall include a statement that the Compliance Letter is submitted to the City pursuant to the requirements of Government Code Section 65865.1 and of the City's regulations on Development Agreements.

7.3 Determination of Good Faith Compliance.

Within thirty (30) days after receipt of the Compliance Letter, the Director shall determine whether, for the year under review, Developer has demonstrated good faith substantial compliance with the terms of this Agreement. If the Director finds and determines that Developer has complied substantially with the terms of this Agreement, or does not determine otherwise within thirty (30) 315
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days after delivery of the Compliance Letter, the annual review shall be deemed concluded and this Agreement shall remain in full force and effect. Upon its determination of compliance, the Developer may request a recordable certificate confirming Developer's compliance through the year under review. Developer may record the certificate with the San Mateo County Recorder's Office.

If the Director initially determines the Compliance Letter to be inadequate in any respect, the Director shall provide notice to that effect to Developer and schedule a public hearing. If after a duly noticed public hearing, the City Council finds and determines, on the basis of substantial evidence, that Developer has not complied substantially in good faith with the terms of this Agreement for the year under review, the City Council shall give written notice thereof to Developer specifying the noncompliance. If Developer fails to cure the noncompliance within a reasonable period of time as established by the City Council, but in no event less than 60 days from the date of receipt of such notice, the City Council, in its discretion, may (a) grant additional time for Developer's compliance, or, following the hearing, modify this Agreement to the extent necessary to remedy or mitigate the noncompliance, (b) may modify this Agreement pursuant to the provisions of Section 8 below, or (c) terminate the Agreement pursuant to Article VI below.

7.4 No Waiver.

Failure of City to conduct an annual review shall not constitute a waiver by City of its rights to otherwise enforce the provisions of this Agreement nor shall Developer have or assert any defense to such enforcement by reason of any failure to conduct an annual review. City does not waive any claim of defect or breach by Developer if, following periodic review pursuant to this Article VII, City does not propose to modify or terminate this Agreement.

ARTICLE VIII

DEFAULT, REMEDIES, AND TERMINATION

8.1 Notice of Breach.

Failure by either party to perform any material term or provision of this Agreement shall constitute a default hereunder, provided that the party alleging the default shall have given the other party advance written notice thereof and sixty (60) days within which to cure the condition, or, if the nature thereof is such that it cannot be cured within that time, the party receiving notice shall not be in default hereunder if the party promptly commences to perform its obligations hereunder and thereafter diligently completes performance. Written notice hereunder shall specify in detail the nature of the obligation to be performed by the party receiving notice.

8.2 Remedies for Breach.

It is acknowledged by the parties that City and Developer would not have entered into this Agreement if it were to be liable in damages under, or with respect to, this Agreement or the application thereof. The City and Developer shall not be liable in damages to the other party (except for Developer's indemnity obligation to City under Section 12.2), or to any assignee, transferee or any other person, and Developer covenants not to sue for or claim damages, while reserving the right to initiate legal proceedings to specifically enforce this Agreement. Upon 316
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Developer's material default pursuant to Article VIII hereof, City shall be entitled to initiate legal proceedings to specifically enforce this Agreement or the City may terminate this Agreement.

8.3 Termination by Mutual Consent.

This Agreement may be voluntarily terminated in whole or in part by the mutual consent of the parties or their successors in interest, in the sole and absolute discretion of each as to its consent.

ARTICLE IX

ESTOPPEL CERTIFICATE
Either party may, at any time, and from time to time, deliver written notice to the other party requesting such party to certify in writing that, to the knowledge of the certifying party, (a) this Agreement is in full force and effect and is a binding obligation of the parties, (b) this Agreement has not been amended or modified or, if so amended or modified, identifying the amendments or modifications, and (iii) the requesting party is not in default in the performance of its obligations under this Agreement, or if in default, to describe the nature of any defaults. The party receiving a request under this Article IX shall execute and return the certificate within fifteen (15) days following receipt of the request. The Director shall be authorized to execute any certificate requested by Developer. Developer and City acknowledge that a certificate hereunder may be relied upon by transferees and Mortgagees. Developer shall pay the City's reasonable costs involved in providing such estoppel certificate.

ARTICLE X

TRANSFERS, ASSIGNMENTS

10.1 Agreement Runs With the Land.

10.1.1 This Agreement and all of its provisions, agreements, rights, powers, standards, terms, covenants and obligations, shall be binding upon the parties and their respective heirs, successors (by merger, consolidation, or otherwise) and assigns, devisees, administrators, representatives, lessees, and all other persons or entities acquiring the Property or any portion thereof, or any interest therein, whether by sale, operation of law, or in any manner whatsoever, and shall inure to the benefit of the parties and their respective heirs, successors (by merger, consolidation or otherwise) and assigns.

10.1.2 All of the provisions of this Agreement shall be enforceable during the Term as equitable servitudes and constitute covenants running with the land pursuant to applicable law, including, but not limited to Section 1468 of the Civil Code of the State of California. Each covenant to do or refrain from doing some act on the Property hereunder, (a) is for the benefit of the Property and is a burden upon the Property, (b) runs with the Property, and (c) is binding upon Developer and each successive owner during its ownership of the Property or any portion thereof, and each person or entity having any interest in the Property. Every person who now or hereafter owns or acquires any right, title or interest in or to any portion of the Property is and shall be conclusively deemed to have consented and agreed to every provision contained herein, whether 317
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or not any reference to this Agreement is contained in the instrument by which such person acquired an interest in the Property.

10.2 Right to Assign.

10.2.1 Developer shall have the right to assign its rights to develop the Property (by sale, transfer, or otherwise) to any person, business entity, or other similar entity ("Assignee").

Any such transfer shall be deemed to include an assignment of all rights, duties, and obligations created by this Agreement with respect to all or any portion of the Property.

10.3 Release Upon Assignment.

10.3.1 Upon the express written assumption by the Assignee of Developer's rights and interests under this Agreement (the "Assignment Agreement"), Developer shall be free from any and all liabilities accruing on or after the date of assignment with respect to those obligations assumed by the Assignee pursuant to the Assignment Agreement, except to the extent that Developer is in default with respect to any and all obligations at the time of the proposed transfer.

ARTICLE XI

MORTGAGEE PROTECTION

11.1 Mortgage Protection.

This Agreement shall be superior and senior to any lien placed upon the Property or any portion of the Property after the date of recording of this Agreement, including the lien of any deed of trust or mortgage ("Mortgage"). Notwithstanding the foregoing, no breach of this Agreement shall defeat, render invalid, diminish, or impair the lien of any Mortgage made in good faith and for value, but all of the terms and conditions contained in this Agreement (including but not limited to City's remedies to terminate the rights of Developer (and its successors and assigns) under this Agreement, to terminate this Agreement, and to seek other relief as provided in this Agreement) shall be binding upon and effective against any person or entity, including any deed of trust beneficiary or mortgagee ("Mortgagee") who acquires title to the Property, or any portion thereof, by foreclosure, trustee's sale, deed in lieu of foreclosure, or otherwise.

11.2 Mortgagee Not Obligated.

Notwithstanding the provisions of Section 10.1 above, no Mortgagee shall have any obligation or duty under this Agreement to construct or complete the construction of improvements on the Property, or to guarantee such construction or completion; provided, however, that a Mortgagee shall not be entitled to devote the Property to any uses or to construct any improvements on the Property other than those uses or improvements provided for or authorized by this Agreement, or otherwise under Applicable Law. City, upon receipt of a written request from a Mortgagee, shall permit the Mortgagee to succeed to the rights and obligations of Developer under this Agreement, provided that all defaults by Developer hereunder that are reasonably susceptible of being cured are cured by the Mortgagee as soon as is reasonably possible after the Mortgagee takes possession of the Property.
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11.3 Notice of Default to Mortgagee.

If City receives a written notice from a Mortgagee, Developer, or any approved Assignee requesting a copy of any notice of default given Developer or any approved Assignee and specifying the address for service, then City shall deliver to the Mortgagee at Mortgagee's cost (or Developer's cost), concurrently with service to Developer, any notice given to Developer with respect to any claim by City the Developer is in default under this Agreement, and if City makes a determination of default, City shall if so requested by the Mortgagee likewise serve at Mortgagee's cost (or Developer's cost) notice of noncompliance on the Mortgagee concurrently with service on Developer. Each Mortgagee shall have the right during the same period available to Developer to cure or remedy, or to commence to cure or remedy, the event of default claimed or the areas of noncompliance set forth in City's notice.

11.4 No Supersession.

Nothing in this Article X shall be deemed to supersede or release a Mortgagee or modify a Mortgagee's obligations under any subdivision improvement agreement or other obligation incurred with respect to the Property outside this Agreement, nor shall any provision of this Article X constitute an obligation of City to the Mortgagee, except as to the notice requirements of Section

10.3. ARTICLE XII

INDEMNIFICATION

12.1 No Duty of City; Hold Harmless.

It is specifically understood and agreed by the parties that the development contemplated by this Agreement is a private development, that City has no interest in or responsibility for or duty to third persons concerning any of said improvements, and that Developer shall have full power over and exclusive control of the Property subject only to the limitations and obligations of Developer under this Agreement.

12.2 Indemnification.

Developer hereby agrees to and shall indemnify, defend (with counsel approved by the City), and hold harmless City and its elected and appointed representatives, officers, agents, and employees from any loss, liability, fines, penalties, forfeitures, costs, and damages (whether in contract, tort, or strict liability, including but not limited to personal injury, death at any time, and property damage) and from any and all claims, demands, and actions in law or equity (including attorneys' fees and litigation expenses) directly or indirectly arising or alleged to have arisen out of or in any way related to: (a) the approval of this Agreement or the City Approvals; (b) any development or use of the Property under this Agreement or the Project Approvals; and (c) any actions or inactions by the Developer or its contractors, subcontractors, agents, or employees in connection with the construction or improvement of the Property and the Project; excepting to the extent arising from the intentional acts or willful misconduct or gross negligence of City, its elected and appointed representatives, officers, agents, employees, contractors or subcontractors. 319
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This indemnification and hold harmless agreement applies to all damages and claims for damages suffered or alleged to have been suffered by reason of the operations referred to in this Section

12.2, regardless of whether or not City prepared, supplied, or approved plans or specifications for the Property, but does not apply to damages and claims for damages caused by City with respect to public improvements and facilities after City has accepted responsibility for them.

ARTICLE XIII

NOTICES

13.1 Notices.

Any notice, demand, correspondence, or communication required hereunder between the City and Developer ("Notice") must be in writing and shall be sufficiently given if: (a) personally delivered; or (b) dispatched by next day delivery by a reputable carrier such as Federal Express or DHL to the offices of City and Developer indicated below, provided that a receipt for delivery is provided; or (c) if dispatched by certified mail, postage prepaid, to the offices of City and Developer indicated below. Such Notice may be sent in the same manner to such persons and addresses as either party may from time-to-time designate by Notice as provided in this Section. A copy of the Notice should be sent via e-mail as well to the email addresses provided in this Section.

CITY: City Manager
City of East Palo Alto
2415 University Avenue
East Palo Alto, CA 94303
email: [email protected]
With copy to: City Attorney
City of East Palo Alto
2415 University Avenue
East Palo Alto, CA 94303
email: [email protected]
DEVELOPER: Michael Kramer
Woodland Park Property Owner, LLC
2600 El Camino Real Suite 410
Palo Alto, CA 94306
email: [email protected]
With copy to: Corinne Calfee
Opterra Law, inc.

P.O. Box 2369
Davis, CA 95616
[email protected]
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ARTICLE XIV

MISCELLANEOUS

14.1 Cooperation in the Event of Third-party Legal Challenge.

In the event of any legal action instituted by a third party or other governmental entity or official challenging the validity of any provision of this Agreement or the Project Approvals or otherwise relating to the Project ("Third Party Challenge"), the Parties shall mutually cooperate with each other relating to the Third Party Challenge.

14.2 Invalidity.

If any part of this Agreement is held by a court of competent jurisdiction to be invalid or unlawful, the parties shall use their best efforts to cure any inadequacies or deficiencies identified by the court in a manner consistent with the express and implied intent of this Agreement, and then to adopt or re-enact such part of this Agreement as necessary or desirable to permit implementation of this Agreement.

14.3 Applicable Law and Venue.

This Agreement shall be construed and enforced in accordance with the laws of the State of California. Any action at law or in equity arising under this Agreement or brought by any Party for the purposes of enforcing, construing, or determining the validity of any provision of this Agreement shall be filed and tried in the County of San Mateo, or the United States District Court for the Northern District of California

14.4 Severability.

In addition to and without limiting the provisions of Section 14.1.1, if any provision(s) of this Agreement is (are) held invalid, then to fullest extent feasible, the remainder of this Agreement shall not be modified, reformed, or otherwise affected except as may be necessarily required or permitted by the determination of invalidity, and shall remain in full force and effect in accordance with its terms as may be so modified, reformed, or otherwise affected, unless further amended or modified by mutual consent of the Parties. For avoidance of doubt, the Parties acknowledge their mutual intent and agreement that, in the event of any such determination of invalidity, this Agreement shall be appropriately reformed to the extent necessary in order to achieve the mutual primary goals, purposes and intent of the Parties as set forth in this Agreement.

14.5 Nondiscrimination.

Developer covenants by and for itself and any successors in interest that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, ancestry, or national origin in the development of the Property in furtherance of this Agreement. The foregoing covenant shall run with the land. 321
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14.6 Headings.

The language in this Agreement in all cases shall be construed as a whole and in accordance with its fair meaning. Section and subsection headings in this Agreement are for convenience only and are not intended to be used in interpreting or construing the terms, covenants, or conditions of this Agreement.

14.7 Agreement is Entire Understanding.

This Agreement is executed in one original, which constitutes the entire understanding and agreement of the parties. The parties acknowledge and agree that neither of them has made any representation with respect to the subject matter of this Agreement or any representations inducing the execution and delivery hereof, except representations set forth herein, and each party acknowledges that it has relied on its own judgment in entering this Agreement. The parties further acknowledge that, except for those contained in Applicable City Regulations, all statements or representations that heretofore may have been made by either of them to the other are void and of no effect, and that neither of them has relied thereon in its dealings with the other. To the extent that there is any conflict between the Applicable Law and this Agreement, this Agreement shall govern the parties' respective rights and obligations.

14.8 Interpretation.

Each party to this Agreement has had an opportunity to review the Agreement, confer with legal counsel regarding the meaning of the Agreement, and negotiate revisions to the Agreement.

Accordingly, neither party shall rely upon Civil Code Section 1654 in order to interpret any uncertainty in the meaning of the Agreement. As used herein: (a) the singular shall include the plural (and vice versa) and the masculine or neuter gender shall include the feminine gender (and vice versa) where the context so requires; (b) locative adverbs such as "herein," "hereto," "hereof," and "hereunder" shall refer to this Agreement in its entirety and not to any specific section or paragraph; (c) the terms "include," "including," and similar terms shall be construed as though followed immediately by the phrase "but not limited to;" (d) "shall" and "must" are mandatory and "may" is permissive; and (e) "or" is not necessarily exclusive. Each reference in this Agreement to this Agreement shall be deemed to refer to this Agreement as amended from time to time pursuant to the provisions of this Agreement, as applicable, whether or not the particular reference refers to such possible amendment.

14.9 Further City Actions.

Except as may be otherwise specifically provided herein, whenever any approval, notice, direction, consent, request, waiver or other action by the City is required or permitted under this Agreement, such action may be given, made, or taken by the City Manager on behalf of the City, or by any person who shall have been designated in writing to Developer by the City Manager, without further approval or authorization required by the City Council, and any such action shall be in writing; provided, however, that the City Manager may seek such authorization when he or she deems it appropriate in his or her sole and absolute discretion. In addition to the provisions of Section 6.2 and without limiting the provisions of this Section 14.8, the City Manager may also, 322
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at his or her discretion, agree in writing to modification of the dates by which actions are to be completed or to waive non-substantive terms and conditions of this Agreement, to make nonsubstantive amendments to this Agreement in furtherance of the goals and objectives of this Agreement, or to make reasonable modifications to this Agreement requested by Mortgagees. The City Manager or his or her designee is authorized to execute and deliver, on behalf of the City, any ancillary documents and to take any action necessary or desirable to effectuate the provisions and intent of this Agreement.

14.10 Computation of Time; Time of the Essence.

All references in this Agreement to "days" shall mean calendar days unless expressly referred to as "business days." The time in which any act is to be done under this Agreement is computed by excluding the first day, and including the last day, unless the last day is a Saturday, Sunday or holiday, and then that day is also excluded. If the day for performance of any obligation under this Agreement is a Saturday, Sunday or holiday, then the time for performance of that obligation shall be extended to the first following day that is not a Saturday, Sunday or holiday. The term "holiday" shall mean all holidays as specified in Sections 6700 and 6701 of the California Government Code. If any act is to be done by a particular time during a day, that time shall be Pacific Time Zone time. Time is of the essence in the performance of each and every covenant and obligation to be performed by the Parties under this Agreement.

14.11 Permitted Delay.

Subject to the limitations set forth below, the Term of this Agreement and the City Approvals and the time within which either Party shall be required to perform any act under this Agreement shall be extended by a period of time equal to the number of days during which performance of such act is delayed by a Permitted Delay. An extension of time for any Permitted Delay shall commence to run from the time of the commencement of the cause of such Permitted Delay, if Notice by the Party claiming such extension is sent to the other Party within thirty (30) days of the commencement of the cause and the Party receiving such notice does not object to such extension in writing within fifteen (15) days after receiving notice. Upon such an objection, the Parties shall meet and confer within thirty (30) days after the date of the objection in good faith to resolve their disagreement as to the existence and length of the Permitted Delay. If no mutually acceptable solution can be reached either Party may take action as permitted pursuant to Section 8.2. Except for any Permitted Delay attributable to a Third Party Challenge or a failure of the East Palo Alto Sanitary District to issue a "will serve" letter or certification for the Project, in no event shall this Agreement be extended for a single Permitted Delay for longer than one hundred eighty (180) days or for all Permitted Delays cumulatively for eighteen (18) months. Times of performance under this Agreement may also be extended in writing by the mutual agreement of the City Manager and Developer.

14.12 Recordation of Termination.

Upon completion of performance of the parties or termination of this Agreement, a written statement acknowledging such completion or termination shall be recorded by City in the Official Records of San Mateo County, California.
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14.13 Counterparts.

This Agreement may be executed in counterparts, each of which shall be deemed to be an original, but the counterparts together shall constitute only one Agreement. 324
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IN WITNESS HEREOF, the parties have executed this Agreement effective as of the Effective Date.

CITY OF EAST PALO ALTO,
a municipal corporation
By: __________________________
Mayor
Dated: __________________________

WOODLAND PARK PROPERTY OWNER,
LLC, a Delaware limited liability company
By: __________________________
Name: __________________________
Title: __________________________
Dated: __________________________
ATTEST:
________________________________
City Clerk
Dated: __________________________
APPROVED AS TO FORM:
____________________________________
City Attorney
Dated: __________________________
325
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STATE OF CALIFORNIA )
)
COUNTY OF __________________ )
On ____________________, before me, ___________________________, Notary Public, personally appeared ______________________________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

I certify UNDER PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.
______________________________________
Name: ______________________________
Notary Public
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. 326
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I certify UNDER PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

EXHIBIT A
-1-
551\95\3398553.1

EXHIBIT A

LEGAL DESCRIPTION OF THE PROPERTY
501 O'Connor Street and 2012 Euclid Avenue

THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF EAST PALO

ALTO, IN THE COUNTY OF SAN MATEO, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS:

JPN: 063-028-282-01A and 063-028-282-02A
APN: 063-282-010, 063-282-020
2001 Manhattan Avenue

THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF EAST PALO

ALTO, IN THE COUNTY OF SAN MATEO, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS:

EXHIBIT A
-2-
551\95\3398553.1
APN: 063-282-090
329

EXHIBIT A
-3-
551\95\3398553.1
2021 Euclid Avenue

THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF EAST PALO

ALTO, IN THE COUNTY OF SAN MATEO, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS:

JPN: 063-028-281-02A
APN: 063-281-020
2025 Euclid Avenue

THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF EAST PALO

ALTO, IN THE COUNTY OF SAN MATEO, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS:

JPN: 063-28-281-03A
APN: 063-281-030
2031 Euclid Avenue

THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF EAST PALO

ALTO, IN THE COUNTY OF SAN MATEO, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS:

JPN: 063-028-281-04A
APN: 063-281-040
330

EXHIBIT A
-4-
551\95\3398553.1
2032 Euclid Avenue

THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF EAST PALO

ALTO, IN THE COUNTY OF SAN MATEO, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS:

JPN: 063-028-282-03A
APN: 063-282-030
2033 Manhattan Avenue

THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF EAST PALO

ALTO, IN THE COUNTY OF SAN MATEO, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS:

Parcel I:

Parcel II:

The Northerly 50 feet front and rear measurements of Lot 22 in Block 9, and the adjacent portion 331

EXHIBIT A
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551\95\3398553.1
of the Easterly one-half of unnamed alley way, as delineated upon that certain Map entitled "Map of Woodland Place, Subdivision No. One of Ravenswood, San Mateo County, California", filed for record in the Office of the Recorder of the County of San Mateo, State of California, on August 1st, 1910 in Book 7 of Maps, at Page 24.

JPN: 063-028-282-08A
APN: 063-282-080
2036 Euclid Avenue

THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF EAST PALO

ALTO, IN THE COUNTY OF SAN MATEO, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS:

Portion of Lots 5 and 6 in Block 9 and portion of Euclid Avenue and the alley adjacent thereto, all as shown on the Map entitled "Map of Woodland Place Subdivision No. One of Ravenswood, San Mateo County, California", filed in the Office of the County Recorder of San Mateo County, State of California on August 1, 1910 in Book 7 of Maps at Page 24, more particularly described as follows: Beginning at a point in the centerline of Euclid Avenue, distant thereon North 10° 19' East 284.12 feet from the point of intersection thereof with the centerline of O'Connor Street; running thence along said centerline of Euclid Avenue, North 10° 19' East 50.03 feet; thence leaving said line South 79° 41' East 170.13 feet to a point in the centerline of the alley running through said Block; thence along said centerline, South 7° 27' West 50.18 feet and thence North 79° 41' West 172.77 feet to the point of beginning. Excepting therefrom the Northwesterly 20 feet thereof. Also excepting therefrom that parcel of land conveyed to Isabel Lang and husband, by Deed from Elmer D. Cole and wife, dated December 22, 1948 and recorded December 2, 1949 in Book 1753, of Official Records at Page 716, Records of San Mateo County, California.

JPN: 063-028-282-04A
APN: 063-282-040
2040-2042 Euclid Avenue

THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF EAST PALO

ALTO, IN THE COUNTY OF SAN MATEO, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS:

AT A POINT ON THE CENTERLINE OF EUCLID AVENUE, DISTANT THEREON NORTH 10° 19' EAST 332.15 FEET FROM THE INTERSECTION OF SAID CENTERLINE WITH THE 332

EXHIBIT A
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551\95\3398553.1

CENTERLINE OF O'CONNOR STREET, AS SAID AVENUE AND STREET APPEAR ON THE MAP ABOVE REFERRED TO; THENCE RUNNING NORTH 10° 19' EAST AND ALONG SAID CENTERLINE OF EUCLID AVENUE 43.10 FEET, TO THE

SOUTHWESTERLY CORNER OF THE LANDS DESCRIBED IN THE DEED FROM DEWEY G. LANG AND WIFE TO ELMER D. COLE AND WIFE, DATED DECEMBER 14, 1948 AND RECORDED DECEMBER 16, 1948 IN BOOK 1604 OF OFFICIAL RECORDS OF SAN MATEO COUNTY, PAGE 3 (67437-H) THENCE SOUTH 79° 41' EAST ALONG THE SOUTHERLY LINE OF THE LAST MENTIONED LANDS 167.99 FEET TO THE WESTERLY LINE OF THE LANDS DESCRIBED IN THE DEED FROM CLAUDE C.

TAYLOR AND WIFE TO ROTTA J. DONAGHU, DATED NOVEMBER 20, 1942 AND RECORDED NOVEMBER 24, 1942 IN BOOK 1037 OFFICIAL RECORDS OF SAN MATEO AT PAGE 410 (69331-E); THENCE ALONG THE LAST MENTIONED LINE SOUTH 7° 27' WEST 43.02 FEET MORE OR LESS TO A POINT WHICH BEARS SOUTH 79° 41' EAST 170.23 FEET FROM THE POINT OF BEGINNING; THENCE NORTH 79° 41' WEST 170.23 FEET TO THE POINT OF BEGINNING.

JPN: 063-028-282-05A
APN: 063-282-050
2041 Euclid Avenue, also known as 420 E. O'Keefe

THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF EAST PALO

ALTO, IN THE COUNTY OF SAN MATEO, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS:

PORTION OF LOTS 5, 6 AND 7 IN BLOCK 10, AS SHOWN ON THAT CERTAIN MAP ENTITLED "MAP OF WOODLAND PLACE SUBDIVISION NO. ONE OF RAVENSWOOD,

SAN MATEO COUNTY, CALIFORNIA, PROPERTY OF RAVENSWOOD INVESTMENT CO., INC.", FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN MATEO COUNTY, STATE OF CALIFORNIA, ON AUGUST 1, 1910 IN BOOK 7 OF MAPS AT PAGE 24, BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS: BEGINNING AT A POINT ON THE WESTERLY BOUNDARY LINE OF SAID BLOCK 10, DISTANT THEREON NORTH 10° 19' EAST 12.87 FEET FROM THE NORTHWESTERLY CORNER OF SAID LOT 6 IN BLOCK 10, SAID POINT OF BEGINNING BEING ON THE SOUTHERLY BOUNDARY

LINE OF O'KEEFE STREET, AS ESTABLISHED BY THAT CERTAIN DEED FROM LLOYD G. SLOAN AND IRENE L. SLOAN, HIS WIFE TO THE COUNTY OF SAN MATEO, DATED SEPTEMBER 15, 1961 AND RECORDED NOVEMBER 6, 1961 IN BOOK 4087 OF OFFICIAL RECORDS AT PAGE 338 (FILE NO. 11817-U), RECORDS OF SAN MATEO COUNTY, CALIFORNIA; THENCE FROM SAID TO THE POINT OF BEGINNING ALONG SAID SOUTHERLY LINE OF O'KEEFE STREET, SOUTH 79° 41' EAST 59 FEET; THENCE SOUTH 10° 19' WEST 87.87 FEET; THENCE NORTH 79° 41' WEST 59 FEET TO THE ABOVE MENTIONED WESTERLY LINE OF BLOCK 10; THENCE ALONG SAID LAST MENTIONED LINE, NORTH 10° 19' EAST 87.87 FEET TO THE POINT OF BEGINNING JPN: 063-028-281-11A
333

EXHIBIT A
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551\95\3398553.1
APN: 063-281-110
2043 Euclid Avenue

THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF EAST PALO

ALTO, IN THE COUNTY OF SAN MATEO, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS:

12.87 feet to the intersection thereof with the Southerly boundary line of O;'Keefe Street, as established by that certain Deed from Laurence R. Hubbard and Leona J. Hubbard, his wife, and Kenneth R. Hubbard, to the County of San Mateo, Dated November 21, 1960 and Recorded July 10, 1961 in Book 4014 of Official Records, at Page 243 (File No. 74244-T); thence along said last mentioned line, North 79° 41' West 61 feet; thence leaving said Southerly line of O'Keefe, South 10° 19' West, 87.87 feet; thence parallel with said dividing line between Lots 6 and 7, South 79° 41' East, 61 feet to said Westerly line of Euclid Avenue, thence along said last mentioned line, North 10° 19' East 75 feet to the point of beginning.

JPN: 063-028-281-10A
APN: 063-281-100
2044 Euclid Avenue

THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF EAST PALO

ALTO, IN THE COUNTY OF SAN MATEO, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS:

EXHIBIT A
-8-
551\95\3398553.1
of the County Recorder of San Mateo County, State of California on August 1, 1910 in Book 7 of Maps at Page 24.

JPN: 063-028-282-06A
APN: 063-282-060
2054 Euclid Avenue

THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF EAST PALO

ALTO, IN THE COUNTY OF SAN MATEO, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS:

Portion of Block 9 as shown on that certain Map entitled "Map of Woodland Place, Subdivision No. One or Ravenswood, San Mateo County, California", filed in the Office of the County Recorder of San Mateo County, State of California on August 1, 1910 in Book 7 of Maps at Page 24, more particularly described as follows: Beginning at a point on the Easterly line of Euclid Avenue said point being North 10° 19' East 430.25 feet and South 79° 41' East 30 feet from the intersection of the centerline of Euclid Avenue with the centerline of O'Connor Street as said Avenue and Street are shown on the above mentioned map; thence from said point of beginning South 79° 41' East 135.24 feet, more or less, to the Westerly line of property now or formerly of Claude C. Taylor and wife; thence along said boundary North 7° 27' East 37.47 feet to the Southwesterly line of the lands described in the Deed from Nelson D. Gustin and wife to the State of California dated December 27, 1955 and recorded April 29, 1956 in Book 3009 at Page 327 of Official Records (47170-N); thence Northwesterly along said Southwesterly line 156.66 feet to the said Easterly line of Euclid Avenue; thence along said Easterly line South 10° 19' West 118 feet, more or less, more or less, to the point of beginning.

JPN: 063-02-282-07A
APN: 063-282-070
335

EXHIBIT B
-1-
551\95\3398553.1

EXHIBIT B

EXISTING IMPACT FEES
Fee
No. Fee Name Unit / Data Input Required
Notes
Fee Level /
Deposit
Development Impact Fees & In-Lieu Fees
1 Housing
Commercial Linkage (Office/Medical/R&D) Square Foot $12.81 2 Parks and Trails
Detached ADU Dwelling Unit [1,2] $1,885.61
Other Non-Residential Peak Service Population $1,047.18 Single-Family Dwelling Unit (Rental) $4,714.61
Townhouse Dwelling Unit (Rental) $4,714.61
Multi-Family Housing Dwelling Unit (Rental) $3,247.64
Office/Research & Development Square Foot $1.32
Industrial Square Foot $0.52
Retail Square Foot $0.87
3 Public Facilities
Detached ADU Dwelling Unit [1,2] $3,306.96
Single-Family Dwelling Unit $8,267.96
Townhouse Dwelling Unit $8,267.96
Multi-Family Housing Dwelling Unit $5,695.63
Other Non-Residential Peak Service Population $1,837.71 Office/Research & Development Square Foot $2.29
Industrial Square Foot $0.93
Retail Square Foot $1.52
4 Storm Drainage
Detached ADU within RBD Dwelling Unit [1,2,3] $2,208.45 Single-Family within RBD Dwelling Unit [3] $5,521.10
Detached ADU outside RBD Dwelling Unit [1,2,3] $1,277.61 Single-Family outside RBD Dwelling Unit [3] $3,194.03
All other Land Uses within RBD Impervious acre [3] $138,027.50 All other Land Uses outside RBD Impervious acre [3] $79,850.62 5 Transportation
Detached ADU Dwelling Unit [1,2] $1,075.70
Single-Family Dwelling Unit $2,689.83
Townhouse Dwelling Unit $2,689.83
Multi-Family Housing Dwelling Unit $2,024.79
Other Non-Residential PM Peak Hour Vehicle Trips
& Internal Trips Percentage $7,868.71
Office/Research & Development Square Foot $8.36
Industrial Square Foot $5.45
Retail Square Foot $8.36
6 Water Capacity
336

EXHIBIT B
-2-
551\95\3398553.1
Single-Family Dwelling Unit $9,293.47
Townhouse Dwelling Unit $9,293.47
Multi-Family Housing Dwelling Unit $5,719.58
Detached ADU Dwelling Unit [2] $5,719.58
Other Non-Residential Meter Size - 3/4" $13,582.59
Other Non-Residential Meter Size - 1" $22,637.65
Other Non-Residential Meter Size - 1.5" $45,276.45
Other Non-Residential Meter Size - 2" $72,441.62
Other Non-Residential Meter Size > 2",
Gallons Per Day
$35.74
[Notes]
[1]
Fee is exempt for Accessory Dwelling Units (ADUs) equal to or smaller than 750 square feet.

For ADUs greater than 750 square feet, fee proportional.

Proportion allocated on square footage of ADU relative to primary residence. [2] The lessor of this amount or the maximum allowed by law. [3] RBD - Ravenswood Business District
337

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1 MEMORANDUM OF UNDERSTANDING
Ravenswood City School District and Woodland Park Communities / Sand Hill Property Company
With Regards to
100% Affordable Staff Housing at 2120 Euclid Avenue

RECITALS
WHEREAS, Ravenswood City School District (“District”) has less base funding than nearly any other District in San Mateo County;
WHEREAS, this gap has made it difficult for the District to offer competitive compensation, resulting in significant teacher turnover and long-term harm to educational continuity and student outcomes;
WHEREAS, the development of 100% affordable workforce housing (the “Project”) at the District-owned site at 2120 Euclid Avenue (“Site”) represents a critical strategy for the District’s long-term financial sustainability and ability to recruit and retain qualified staff in one of the most expensive housing markets in the nation;
WHEREAS, approximately 85% of District employees are income-eligible to reside in the proposed housing, making this a direct and material benefit to the District workforce; WHEREAS, the East Palo Alto region faces an acute housing affordability crisis, and the development of deeply affordable housing at this Site would provide meaningful relief to low- and moderate-income households in the community;
WHEREAS, the District has engaged The Pacific Companies (“TPC”) to complete the development of this housing; and
WHEREAS, the Project has a significant funding gap and without additional monies, the development of 2120 Euclid will be indefinitely delayed or may not be able to proceed; WHEREAS, an affiliate of Sand Hill Property Company, Woodland Park Property Owner A, LLC (“Woodland Park”), has proposed and obtained entitlements for a residential housing project (the “Euclid Improvements”) within the City of East Palo Alto (“City”); WHEREAS, Woodland Park has an obligation to provide for affordable housing within the City in connection with the Euclid Improvements;
WHEREAS, the City of East Palo Alto has land use authority over development within the City; Docusign Envelope ID: 04C48732-A326-8DDA-81AD-0546C3389EAF 340
2 NOW, THEREFORE, the Parties enter into the following memorandum of understanding (“MOU”):

1. INTENT OF THE PARTIES. This MOU is intended to review the status of the Parties’ negotiations concerning a potential contribution of gap financing toward the 2120 Euclid affordable housing project. It reflects the Parties’ present understanding of the discussions to date about the terms and conditions of the proposed relationship. It is not intended to be or to evidence any legally binding agreement on the part of either party. No agreement shall be binding unless and until the City has amended the entitlements for the Euclid Improvements and each party has reviewed, approved (in its sole discretion), and executed, after review by counsel, a definitive written agreement. The legal rights and obligations of each Party shall then be only those that are set forth in the definitive agreement. Each party agrees to act in good faith to negotiate toward execution of a definitive agreement.

2. EXCLUSIVE PERIOD. If the City and Woodland Park amend the development agreement governing the Euclid Improvements to accommodate the possibility of a contribution of gap financing as a mechanism for satisfying the City’s inclusionary housing requirements for the Euclid Improvements (the “First Amendment”), the Parties intend to negotiate a contribution of gap financing by Woodland Park to the District or TPC. If the City approves the First Amendment, Woodland Park intends to work exclusively and aggressively with the District and TPC for one (1) year (the “Exclusive Period”) to negotiate a contribution of gap financing. The one-year period would commence upon the execution of the First Amendment by City and Woodland Park. During the Exclusive Period, Developer would not consider, pursue, or negotiate alternative mechanisms for complying with the City’s inclusionary housing requirements for the Euclid Improvements without the mutual written agreement of both Parties.

3. AMOUNT. The Parties anticipate that the gap financing would be available in an amount up to $12,000,000 in total consideration, which may consist of cash and other consideration. If the funding gap for the 2120 Euclid Project is less than this amount, a lesser contribution is acceptable to the District and Woodland Park. If the funding gap is greater than this amount, the Parties would discuss possible solutions.

4. AFFORDABILITY MIX. If Woodland Park provides gap financing to 2120 Euclid, then the 2120 Euclid project would target the following affordability mix for at least 78 units within the development:
• 25% of 78 units at 35% Area Median Income (AMI)
• 50% of 78 units at 50% AMI
• 25% of 78 units at 60% AMI
• A minimum of 78 units shall average 50% AMI or below; no unit among the 78 units shall be restricted at greater than 80% AMI.
• The City’s Local Preference Policy would apply to the 78 units. • The 78 units would not be considered to satisfy the City’s inclusionary housing requirements for the 2120 Euclid project.

Docusign Envelope ID: 04C48732-A326-8DDA-81AD-0546C3389EAF 341
3 5. GOOD FAITH NEGOTIATION. The District intends to actively support and pursue this gap financing negotiation, including providing timely cooperation, access to necessary information, and participation in all required planning, entitlement, and financing processes. The Parties intend to work in good faith to advance the gap financing negotiations within the Exclusive Period.

6. NONBINDING NATURE OF MOU. This MOU is intended to establish the Parties’ shared intent and does not constitute a binding or enforceable agreement or commitment. There is no legally binding or enforceable contract between the Parties pertaining to the subject matter of this MOU and statements of intent or understandings in this MOU do not constitute an offer, acceptance, or legally binding agreement and do not create any rights or obligations for or on the part of any Party to this MOU.

7. DEFINITIVE AGREEMENT. If the City approves the First Amendment and the Parties reach an agreement regarding gap financing, then all terms and conditions of such gap financing will be stated in a definitive agreement subject to the approval of the Parties. This MOU is not a definitive agreement and shall not be construed as such.

IN WITNESS WHEREOF, the Parties have executed this Memorandum of Understanding as of the date indicated below.

RAVENSWOOD CITY SCHOOL

DISTRICT
_________________________
Superintendent
Date: ___________________

SANDHILL PROPERTY COMPANY
_________________________
Authorized Representative
Date: ___________________
Docusign Envelope ID: 04C48732-A326-8DDA-81AD-0546C3389EAF 6/15/2026
342
EPASD CONSENT CALENDAR 11.1

EAST PALO ALTO

SANITARY DISTRICT

STAFF REPORT
DATE: July 7, 2026
TO: East Palo Alto Sanitary District Board Members
VIA: Melvin E. Gaines, General Manager
BY: Matthew Vining, Utility Manager
Humza Javed, District Engineer
SUBJECT: Award of Contract for Design Services - CIP 1.1 & 1.2 Recommendation
Adopt a resolution:

1. Authorizing the City Manager to award, negotiate and execute a contract for Consulting and Design Services for EPASD CIP projects 1.1 & 1.2, with Freyer & Laureta, in the amount of $826,676; and a 10% contingency of $82,667.60, for a total not-to-exceed budget of $909,343.60; and

2. Finding the project exempt from CEQA pursuant to section 15378 because this is not a “project” as the activity does not have the potential to result in either a direct physical change in the environment or a reasonably foreseeable indirect physical change.

Alignment with City Council Strategic Plan
This recommendation is primarily aligned with:

Priority No 3: Promote Health & Public Safety.

Priority No. 4: Public Infrastructure and Utilities
Background
The East Palo Alto Sanitary District is advancing Capital Improvement Projects (CIP) 1.1 and

1.2 as part of its Sewer System Master Plan. These projects include the installation of new 343
EPASD CONSENT CALENDAR 11.1
sewer mains to improve system capacity, address aging infrastructure, and accommodate future growth.

CIP 1.1 includes improvements along Menalto Avenue, Poplar Avenue, Bay Road, Elliot Drive, East Bayshore Road, and Ralmar Avenue.

CIP 1.2 includes improvements along Larkspur Drive, Gardenia Way, Beech Street, and the Bay Creek Trail Trunk Line.

The combined projects include approximately:
 4,833 linear feet of sewer main and 19 manholes (CIP 1.1)  2,668 linear feet of sewer main and 14 manholes (CIP 1.2) Analysis
Staff prepared and issued a request for proposals (RFP) to solicit qualified civil engineering firms to provide design, bidding, and construction support services for CIP 1.1 and 1.2.

The RFP was released on April 14, 2026, and includes a scope of work consisting of:
 Project management and coordination
 Survey and potholing
 Utility investigation
 Preparation of Plans, Specifications, and Estimates (PS&E)  Environmental and permitting coordination
 Bidding and construction support
The current project schedule targets:
 Design completion by November 2026
 Construction starts in April 2027
 Construction completion in December 2027
The proposal deadline was May 5, 2026. Two technical firms submitted proposals: Freyer & Laureta (F&L) and Harris & Associates. A scoring committee of three Public Works staff evaluated proposals based on qualifications, experience, project approach, schedule, and references, consistent with the criteria outlined in the RFP. F&L was the highest rated proposer.

This EPASD Advisory Committee reviewed this item at its June 24, 2026, meeting and determined by a unanimous vote to recommend the EPASD adopt a resolution and award the design contract to Freyer & Laureta.

Fiscal Impact
344
EPASD CONSENT CALENDAR 11.1
Design consultant services quoted in the request for proposal from Freyer & Laureta are $387,203 for EPASD CIP 1.1 and $439,473 for EPASD CIP 1.2, plus a 10% contingency. The total fiscal impact is $909,344.

Public Notice
The public was provided notice by making the agenda and report available on the City’s website and on a bulletin board located at City Hall: 2415 University Avenue, East Palo Alto.

Environmental
Awarding this contract is not a project under The California Environmental Quality Act (Section 21000, et. seq. of the California Public Resources Code, hereafter CEQA) because the action has no potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment.

Government Code § 84308
Applicability of Levine Act: Yes.

Analysis of Levine Act Compliance: The signatory for the application is Richard Laureta, President, and Jeffrey Tarantino, Executive Vice President of Freyer & Laureta, Inc. Staff is unaware of any other parties or participants relevant to the Commission’s consideration of this item.
.

Attachment

1. Resolution

2. Request for Proposals

3. F&L Proposal

4. F&L Cost Proposal
345
Resolution No. XX-2026 1 of 2
RESOLUTION NO. XX– 2026

A RESOLUTION OF THE CITY COUNCIL

OF THE CITY OF EAST PALO ALTO

A RESOLUTION AUTHORIZING THE CITY MANAGER TO AWARD, NEGOTIATE AND

EXECUTE A CONTRACT FOR CONSULTING AND DESIGN SERVICES FOR EPASD CIP PROJECTS 1.1 & 1.2, WITH FREYER & LAURETA, IN THE AMOUNT OF $806,678; AND A 10% CONTINGENCY OF $80,667.80, FOR A TOTAL NOT-TO-EXCEED BUDGET OF $887,345.80; AND FINDING THE PROJECT EXEMPT FROM CEQA PURSUANT TO SECTION 15378.

WHEREAS, the East Palo Alto Sanitary District (EPASD) is implementing Capital Improvement Projects (CIP) 1.1 and 1.2 identified in the Sewer System Master Plan to improve sewer system capacity, replace aging infrastructure, and accommodate future growth; and WHEREAS, CIP 1.1 includes sewer system improvements along Menalto Avenue, Poplar Avenue, Bay Road, Elliot Drive, East Bayshore Road, and Ralmar Avenue; and WHEREAS, CIP 1.2 includes sewer system improvements along Larkspur Drive, Gardenia Way, Beech Street, and the Bay Creek Trail Trunk Line; and
WHEREAS, the combined projects include approximately 7,501 linear feet of sewer main improvements and 33 manholes; and
WHEREAS, on April 14, 2026, EPASD issued a request for proposals (RFP) seeking qualified firms to provide consulting and design services, including project management, survey and potholing, utility investigation, preparation of plans, specifications and estimates, environmental and permitting coordination, and bidding and construction support services for CIP 1.1 and CIP 1.2; and WHEREAS, proposals were due on May 5, 2026, and two firms submitted responsive proposals; and
WHEREAS, staff evaluated the proposals in accordance with the criteria identified in the RFP, including qualifications, experience, project approach, schedule, and references; and WHEREAS, Freyer & Laureta received the highest overall score and was determined to be the most qualified firm to perform the required services; and WHEREAS, the proposed agreement amount consists of $387,203 for CIP 1.1 and $439,473 for CIP 1.2, plus a ten percent (10%) contingency, for a total amount not to exceed $909,343.60; and WHEREAS, funding for the agreement will be provided from the EPASD Reserve Fund; and WHEREAS, the City Council finds that authorization of this professional services agreement is not a project under the California Environmental Quality Act (CEQA) pursuant to Public Resources Code Section 21065 and CEQA Guidelines Section 15378 because the action will not result in a direct or reasonably foreseeable indirect physical change in the environment. 346
Resolution No. XX-2026 2 of 2

NOW, THEREFORE, BE IT RESOLVED THAT THE CITY COUNCIL OF THE CITY OF EAST PALO ALTO HEREBY:

1. The foregoing recitals are true and correct and are incorporated herein by this reference.; and

2. The City Council authorizes the City Manager to award and execute a professional services agreement with Freyer & Laureta for consulting and design services related to EPASD Capital Improvement Projects 1.1 and 1.2 in a total amount not to exceed Nine Hundred Nine Thousand Three Hundred Forty-Three Dollars and Sixty Cents ($909,343.60), in a form approved by the City Attorney.

3. The City Council authorizes the amount of $82,667.60 for contingency on this project.

4. The City Manager, or designee, is authorized to take all actions necessary and appropriate to implement this Resolution and administer the agreement, including approval of contingency expenditures within the authorized not-to-exceed amount.

5. This Resolution shall take effect immediately upon its adoption.

PASSED AND ADOPTED this 7
th day of July 2026, by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

Ruben Abrica, Board President
ATTEST: APPROVED AS TO FORM:

James Colin, Secretary John D. Lê, District Council
347
East Palo Alto Sanitary District
A Subsidiary of the City of East Palo Alto

REQUEST FOR PROPOSAL (RFP)
For
Consulting Services for the Design of
New Sewer Mains in the East Palo Alto Sanitation
District:

CIP 1.1 & 1.2
East Palo Alto Sanitation District
901 Weeks St.

East Palo Alto, CA 94303
Issued: April 14
th,2026
Due: May 5
th, 2026
Contact: Matt Vining, Utility Manager
[email protected]
650-853-3117
348

TABLE OF CONTENTS
I. GENERAL INFORMATION ............................................................................1 Background: ...........................................................................................................1 Project Goal............................................................................................................1 II. SCOPE OF WORK...........................................................................................2 III. SCHEDULE .......................................................................................................5 IV. PROPOSAL REQUIREMENT AND FORMAT............................................8

ATTACHMENTS
Exhibit A – CIP 1.1 Project Location Map
Exhibit B – CIP 1.2 Project Location Map
Exhibit C -- Sample Cost Proposal
349
I. GENERAL INFORMATION
East Palo Alto Sanitary District (EPASD) is soliciting proposals for the design of several new sewer main installations for its capital improvement program, Projects 1.1 and 1.2. It is the Respondent's responsibility to read the entire RFP and to comply with all requirements herein.

The purpose of this RFP is to invite pre-qualified professional civil engineering firms to provide professional services for the design and preparation of bid documents and construction support for EPASD CIP 1.1 and 1.2. The scope of work generally includes preparation of preliminary design, design documents, and engineering support during bidding and construction.

Background:

East Palo Alto is located in the southeast portion of the San Francisco Peninsula, approximately 30 miles southeast of San Francisco and 18 miles northwest of San Jose.

US Highway 101 crosses through the southeast of East Palo Alto. The City is bordered to the south of Palo Alto and to the west and north by Menlo Park. The San Francisco Bay forms the city’s eastern boundary.

The proposed project sites are located within the City of East Palo Alto (See Exhibit A & B, Project Location Maps). EPASD CIP 1.1 is located along sections of Menalto Avenue, Elliot Drive, Poplar Avenue, and Ralmar Avenue. EPASD CIP 1.2 is located along sections of Larkspur Drive, Gardenia Avenue, Beech St., and a major section of the Bay Creek Trail Trunk Line.

Project Goal
The primary goal of implementing the Projects is to meet current and future wastewater flow demands, upgrade aging infrastructure, and address flow requirements for developments as required by the East Palo Alto Sanitary District Sewer System Master Plan. Construction of a new sewer main will improve system reliability, increase flow, and increase capacity for future development.

All questions and communications, whether of a substantive nature or otherwise, regarding this Request for Proposal (RFP) must be submitted via email with the subject line “RFP for Consulting Services for the Design of EPASD 1.1 & 1.2.” Inquiries must be submitted via email to Matt Vining, Utility Manager at [email protected].

The District reserves the right to waive technicalities or to accept or reject any proposal or combination of proposals based upon the District’s determination of its best interest.

Request For Proposal for Capital Improvement Project Page 1 of 6 350
CIP Project 1.1 by Street and Diameter*
Street Length 8" Pipe Length 10" Pipe Length 12" Pipe Total (LF) (LF) (LF) (LF)
Menalto Ave - 1,453 1,388 2,841
Poplar Ave 501 - - 501
Bay Rd - - 277 277
Elliot Dr** 449 - - 449
E Bayshore Rd - 265 - 265
Ralmar Ave - 500 - 500
Total 950 2,218 1,665 4,833
*All pipe is DR 17 HDPE Pipe unless specified otherwise **Eliot Dr. is within Menlo Park City limits. All appropriate plans and permit applications must be submitted to the City of Menlo Park, as well as coordination with their Engineering, Public Works, and Utility Departments as required.

CIP Project 1.2 Description by Street and Diameter*
Street Length 8" Pipe Length 12" Pipe Length 16" Pipe Length 30" Pipe Total (LF) (LF) (LF) (LF) (LF)
Larkspur Dr 272 - 533 - 805
Gardenia Wy - 179 - - 179
Trunk Line - - - 1,441 1441
Beech St** - - - 243 243
Total 272 179 533 1,684 2668
*All pipe is DR 17 HDPE Pipe unless specified otherwise **There is an underground conflict with a large diameter PGE transmission on Beech St. Project coordination for this portion of the project will be needed with PGE, including settling agreements on project variances or relocating of PGE lines.

II. SCOPE OF WORK
The East Palo Alto Sanitary District (“District”) is seeking proposals for professional services from Civil Engineering consulting firms (Consultant) for consulting services for the design of the proposed EPASD Capital Improvement Projects 1.1 & 1.2. The qualified Consultant will be responsible for preliminary design, including survey and potholing, underground utility investigation, preparation of Plans, Specifications, and Estimates (PS&E) package, and bidding/construction support.

Request For Proposal for Capital Improvement Project Page 2 of 6 351
The proposed projects consist of installing approximately 4,833 feet (DR 17 HDPE) of sewer main and 19 manholes for CIP 1.1, and 2,668 feet (DR 17 HDPE) of sewer main and 14 manholes for CIP 2.2. The consultant will perform all engineering and project management-related work necessary to prepare plans and specifications suitable for Public Works bidding. Consultant services shall include, but are not limited to: Project management, Preliminary design (survey and potholing), design development, bidding and construction support services, environmental and permitting, as further detailed below. Any project innovations are to be discussed during the preliminary design phase prior to the submittal of the 50% plans.
 Task 1: Project Management
Perform general project management tasks to plan, direct, coordinate, and report progress of the work. This task includes but is not limited to: monitoring the project progress in conformance to the schedule and budget, report project progress, coordination with inter-agencies or stakeholders, monitor and coordinate the work of sub-consultants, prepare progress reports and invoices, communicate any project updates to the District, attend an initial kick-off meeting and subsequently bi-weekly project meetings to review project progress or stakeholder’s meetings, and prepare meeting notes and action items.
 Task 2: Survey
The preliminary design phase shall include a field or topographic survey to properly lay out the sewer line.
 Task 3: Potholing
The consultant should survey and pothole existing utility elevations prior to design and construction of the water main profile, which will go above or below the existing utilities. Consultant shall include an allowance of up to 30 (30) potholes during the preliminary design phase. Potholing should also include necessary soil testing for construction off-hauling to landfill and existing pavement thickness information.

The potholing data shall be included on the plans.
 Task 4: Design Development
A. 50% Plan Set Submittal: Prepare 50% plan set, specification, and engineering estimate for City review.

Deliverable: (2) 24” x 36” plan sets and Electronic Copy B. 100% PS&E
After the review of the 50% plan set by the City, the Consultant shall submit Request For Proposal for Capital Improvement Project Page 3 of 6 352
a 100% plan set along with the 100% specifications and the engineer’s estimate.

Deliverables: (2) 24” x 36” plan sets, (1) Printed Set of Specifications, Electronic Copy of the Plan Set and Specifications, and Engineer’s Estimate C. Bid Package
The bid package shall be finalized upon incorporation of the District’s final comments from the 100% submittal. After final approval of the plan sets, an original set of stamped and signed plans, along with the final engineer’s estimate, specifications, and construction schedule, will be submitted to the District for its use in soliciting Bids. The Consultant will also provide the quantity schedule necessary to administer the bids and contract.

Additionally, the plan set and specifications shall include a staged construction plan and traffic control plan.

Deliverables: (2) 24” x 36” plan sets, (1) Printed Set of Specifications, Electronic (CAD and pdf) Copy of the Plan Set and Specifications, Engineer’s Estimate, Bid Schedule, and Construction Schedule  Task 5: Bid Support and Construction Support
The consultant shall provide assistance before and during the bid advertisement, which includes preparation of final bid quantities, the engineer’s estimate, responding to bidders’ questions, and preparation of addenda.

The consultant shall assist the District during construction by providing responses to RFI’s, field inspection and meetings (as necessary), final inspection, review of change orders, and preparation of punch list items.

Nothing in this RFP shall obligate the City to select a Consultant or enter into any agreement with a Consultant. Projects shall be contingent on a mutually agreed scope of work, a fee proposal, and the availability of budgeted funds.

Reimbursables shall have a “not to exceed” allowance of $1000 per task.

Request For Proposal for Capital Improvement Project Page 4 of 6 353
III. SCHEDULE
Responses to the RFP must be submitted to the East Palo Alto Sanitary District as outlined in this section.

Responses are due no later than
Thursday, May 5
th, 2026, 3:00 p.m.

Responses received after this date and time will not be considered

PROPOSED SCHEDULE FOR THE REVIEW AND SELECTION PROCESS

AND DESIRED TIMELINES FOR DELIVERABLES

MILESTONE DATE
Release RFP April 14, 2026
Deadline for questions, clarifications/addenda April 28, 2026 Proposal due date May 5, 2026, 3:00 p.m.

Review and scoring of submittals May 27, 2026
Award of contract June 2026
Kickoff meeting July 2026
Final Design November 2026
Bid Advertisement January 2027
Construction Contract Award March 2027
Start Construction April 2027
Construction Completion December 2027
The District reserves the right to modify the schedule at its sole discretion.

To be considered for selection, submittals must arrive at 901 Weeks Street by the date and time specified in the RFP. Proposers who mail packages should allow ample delivery time to ensure timely arrival. Submittals shall be placed in a clearly marked envelope, titled “RFP for Consulting Services for the Design of EPASD CIP 1.1 & 1.2” and handdelivered or mailed to:

East Palo Alto Sanitary District
Attention: Matt Vining, Utility Manager
901 Weeks Street
East Palo Alto, CA 94303
Request For Proposal for Capital Improvement Project Page 5 of 6 354
IV. PROPOSAL REQUIREMENT AND FORMAT
If interested in this RFP, please notify Utility Manager, Matt Vining, by email at [email protected]. All submittals must follow the format described in this section.

Respondents are encouraged to submit clear and concise responses to the RFP. The East Palo Alto Sanitary District reserves the right to reject all proposals or include or exclude any part of the submittals in the final agreement with the selected consultant.

Email submission is acceptable. If submitting a hard copy, deliver:

One hard copy of the submittal, one (1) unbound, reproducible must be submitted.

Each submittal shall contain no more than 10 (ten) 8½” x 11” total pages (not counting dividers, exhibits, and any relevant appendices). Font shall be no less than 12pt. All pages shall be numbered.

It is the sole responsibility of the Proposer to ensure timely delivery. Late proposals shall not be considered. Proposals will not be accepted at any other location other than the address specified above. Faxed or emailed proposals without hard copies will not be accepted. Submittals must include the following components in the order listed below:
● Part 1: Cover Letter/Executive Summary (10 points)
 Name of key members of the team, contact information, and qualifications ● Part 2: Experience and Qualifications of Consultant/Team Members (35 points)  Detailed experience of staff assigned in delivering similar projects ● Part 3: Project understanding, Approach, and Innovations (35 points)  Brief outline of proposed implementation plan to accomplish tasks Work is expected to be billed monthly based on actual work performed. ● Part 4: Delivery Schedule and Timeline (15 points)
 Outline the delivery schedule and timeline of each task ● Part 5: Reference Review (5 points)
● Total Possible: 100 points
 Please include three references of similar or related work Request For Proposal for Capital Improvement Project Page 6 of 6 355
www.freyerlaureta.com
May 5, 2026
F&L Proposal
East Palo Alto
Sanitary District
Consulting Services for the Design of
New Sewer Mains in the East Palo Alto
Sanitary District: CIP 1.1 & 1.2
356
1 Matthew Vining, Utility Manager
East Palo Alto Sanitary District
901 Weeks St.

East Palo Alto, CA 94303
May 5, 2026
Dear Mr. Vining,
Freyer & Laureta, Inc. (F&L) is pleased to submit this proposal to provide consulting engineering services for the design of EPASD Capital Improvement Projects 1.1 and 1.2. F&L has supported EPASD since the firm’s founding in 1997 - a nearly three-decade relationship that now includes direct technical leadership on the 2025 Sewer System Master Plan that identifies these projects as the District’s highest-priority capital investments. The team we are proposing has not only designed sewer mains of this type and scale across the Peninsula, but has also developed the design flows, capacity criteria, and alignment assumptions that will govern CIP 1.1 and 1.2.

Greg Arifian, P.E., will serve as Project Manager and EPASD’s primary day-to-day contact. Greg supported the development of the EPASD Sewer Master Plan and understands the District’s infrastructure priorities, operational constraints, and project objectives from the inside. As Principal-inCharge, I will provide executive oversight and senior technical leadership throughout design, bidding, and construction. Our proposed team brings deep, direct experience with EPASD’s system, the Peninsula’s regulatory environment, and the specific technical challenges these two projects present.

Together, CIP 1.1 and 1.2 represent approximately 7,501 linear feet of new DR 17 HDPE sewer main and 33 manholes across two project areas. F&L understands that these are not generic sewer main installations - they include a multi-diameter, multi-street program crossing into the City of Menlo Park (CIP 1.1), a 30-inch trunk line requiring coordination with the City’s SAFER Bay project, a large-diameter PG&E transmission conflict on Beech Street, and potential contaminated soil conditions along the Bay Creek Trail corridor (CIP 1.2). Each of these challenges is addressed directly in our technical approach and reflected in the sub-consultant team we have assembled, which includes ROMIG Engineers for geotechnical services, BESS TestLabs for utility potholing, and EKI Environment & Water in an advisory capacity for environmental support along the CIP 1.2 corridor.

Per Addendum 1, F&L will deliver CIP 1.1 and CIP 1.2 as two separate, clearly labeled PS&E packages, advancing on parallel tracks under unified project management to meet the District’s November 2026 final design milestone and January 2027 bid advertisement target. Monthly invoices will be submitted based on actual work performed, with reimbursables maintained within the not-to-exceed allowance of $1,000 per task.

The decisions made in this design program, which segments to burst, how to stage construction on Menalto Avenue’s 2,841-linear-foot run, how to sequence the pipe bursting scope crossing under US101, and how to address the PG&E conflict on Beech Street before it becomes a change order, have real consequences for the District’s system and its ratepayers. F&L takes that responsibility seriously, and our team has the institutional knowledge, technical depth, and direct EPASD experience to deliver.

Very truly yours,
Jeffrey J. Tarantino, P.E., Executive Vice President
150 Executive Park Blvd., Ste. 4200 | San Francisco, CA 94134 (415) 534-7070 x201 (O) | (650) 619-3226 (M)
[email protected]
Greg Arifian, P.E., Senior Project Manager
150 Executive Park Blvd., Ste. 4200 | San Francisco, CA 94134 (415) 534-7070 x204 (O) | (707) 339-3954 (M)
[email protected]
357
2 2 EXPERIENCE & QUALIFICATIONS
2A. FIRM OVERVIEW
F&L is a 37-person Bay Area civil engineering and surveying firm with nearly three decades of continuous service to public agencies across the San Francisco Peninsula and Northern California. Sewer system design, rehabilitation, and capital improvement program delivery are core services, with an active portfolio spanning sanitary districts, municipalities, and regional agencies throughout San Mateo County and the greater Bay Area. F&L has served the City of East Palo Alto as its water system engineer of record since 2016 and is currently engaged by EPASD as one of two engineering consultants supporting the District’s infrastructure program. Collectively, the proposed team has been responsible for approximately 200,000 linear feet of similar pipeline work — spanning gravity sewer design, pipe bursting, multijurisdiction coordination, and PS&E delivery. Every member has worked directly with EPASD, contributing to the system assessments, hydraulic modeling, and capital improvement planning that define CIP 1.1 and 1.2 today. 2B. KEY TEAM MEMBERS
Our key team members and their proposed roles are identified in the table below. Detailed resumes for individual are provided in the Appendix B, along with relevant project experience.

Name Role Relevant Experience
Jeffrey J. Tarantino, P.E. Principal-In-Charge EPASD Master Plan; Pacifica Sewer Rehabilitation; WBSD Point Repair; Basin D Rehabilitation
Greg Arifian, P.E. Project Manager EPASD Sewer Master Plan; Las Gallinas Valley Sanitation District Lorraine Htoo, P.E., LEED AP QA/QC Officer CVSan DP95; WBSD Point Repair; Pacifica Sewer Rehabilitation Rheanna Ostera, E.I.T. Project Engineer - CIP 1.1 EPASD Master Plan; Pacifica Sewer Rehabilitation; WBSD FERRF Zoe Gnass, E.I.T. Project Engineer - CIP 1.1 EPASD Master Plan; City of San Mateo CIP Jason Feudale Project Engineer - CIP 1.2 EPASD CIP 2007, 2008 & 2010; EPASD Master Plan; City of EPA Water Main Toni Steko, E.I.T. Project Engineer - CIP 1.2 City of East Palo Alto Water Main; Coyote Point Sanitary Sewer; Pacifica WWFEB Subconsultant Role Relevant Experience
ROMIG Engineers Geotechnical Geotechnical investigation, trench design, and soil classification for underground utility installation across the Bay Area
BESS TestLabs Potholing Subsurface utility investigation and potholing for public infrastructure projects throughout Northern California
EKI Environment &
Water
Environmental
Advisory
30+ years of environmental engineering expertise; soil testing for off-haul and landfill disposal decisions, hazardous waste determination, & special waste designation FREYER & LAURETA, INC. Civil Engineers · Surveyors · Construction Managers 358 FREYER & LAURETA, INC. Civil Engineers · Surveyors · Construction Managers 3 2D. RELEVANT PROJECT EXAMPLES
The following three projects represent F&L’s most directly comparable recent work to EPASD CIP 1.1 and

1.2. Additional relevant sewer and utility experience is summarized on the following page.

P R O J E CT 1
City of Pacifica Vallemar & Rockaway Beach Sanitary Sewer Rehabilitation, Phases I, II & III Pacifica, CA | 2024–Present | City of Pacifica
F&L is delivering engineering design services for rehabilitation of Pacifica’s 1940s-era sewer collection system — approximately 38,000 LF of sewer mains and manholes across two bid packages: systemwide replacement via pipe bursting, and three creek crossings using horizontal directional drilling (HDD).

Services include CCTV condition assessment, trenchless bore layout and construction detailing, PS&E preparation, CalTrans and multi-agency coordination, PG&E coordination (gas and electric), private easement access, and bid and construction support.

Similarities: Directly mirrors CIP 1.2’s pipe bursting program and sewer pipeline design within a drainage channel. Same core team proposed.

P R O J E CT 2
West Bay Sanitary District Point Repair Phases I, II, IIIA & IIIB Menlo Park, Atherton, Portola Valley & Unincorporated San Mateo County, CA | 2024–Present | West Bay Sanitary District
F&L has designed over 26,500 LF of sewer replacement and rehabilitation across four phases using pipe bursting with HDPE pipe, open-cut full segment replacement, point repairs, and sag corrections. Work spans five jurisdictions — City of Menlo Park, Town of Atherton, Town of Portola Valley, unincorporated San Mateo County, and CalTrans — requiring coordinated permit submittals across all agencies. 89% of work is located in public rights-of-way.

Similarities: Largest HDPE sewer replacement scope in F&L’s portfolio. Multi-jurisdiction coordination, including Menlo Park, directly mirrors CIP 1.1’s Elliot Drive challenge.

P R O J E CT 3
City of San Mateo Basin D Sanitary Sewer Collection System Rehabilitation San Mateo, CA | 2022–Present | City of San Mateo
F&L is providing comprehensive sewer system rehabilitation services for the City of San Mateo’s Basin D sewer shed - beginning with cleaning, CCTV inspection, and PACP-based condition assessment of over 200,000 LF of collection system. Using condition assessment results, F&L developed a prioritized capital improvement program recommending a combination of pipe bursting, CIPP lining, and opentrench replacement. Services span the full program lifecycle: inspection planning and phasing, public outreach, GIS-integrated condition reporting, construction document preparation, and engineering support during construction.

Similarities: Demonstrates F&L’s ability to move from system assessment directly into CIP design and delivery – precisely the trajectory EPASD is now executing under its 2025 Master Plan. The multi-method construction approach mirrors the pipe bursting and open-cut toolkit required for CIP 1.1 and 1.2. 359
FREYER & LAURETA, INC. Civil Engineers · Surveyors · Construction Managers 4 The chart below summarizes F&L’s broader sewer and utility project portfolio, highlighting the range of services delivered and the proposed team members who contributed to each assignment. Projects involving EPASD are highlighted, reflecting nearly three decades of continuous service to the District.

PROJECT

GRAVITY SEWER
DESIGN

PIPE BURSTING
PG&E

COORDINATION
MULTIJURISDICTIONAL

CCTV/CONDITION

ASSESSMENT
PS&E

CONSTRUCTION

SUPPORT
City of Pacifica Vallemar &
Rockaway Beach Sewer Rehab • • • • • • •
WBSD Point Repair Phases I-IIIB • • • • • • •
City of San Mateo Basin D
Sanitary Sewer Rehab • • • • •
CVSan Gravity Sewer Repair • • • • • •
City of Pacifica Pedro Point
Sanitary Sewer Rehab • • • • • • •
EPASD CIP 2007, 2008 & 2010
Sanitary Sewer Improvements • • • • • •
WBSD North Bay & Ringwood
Ave. Sanitary Sewer Pipeline • • • • • •
City of San Mateo 25th Ave.

Sanitary Sewer Relief Life • • • • •
SVCW RESCU Program • • • • •
Los Altos Hills Sanitary Sewer
Capital Improvements • • • • •
City of East Palo Alto University
Ave. & Weeks St. Water Main • • • •
San Mateo County Coyote Point
Sanitary Sewer Improvements • • • • • •
360
FREYER & LAURETA, INC. Civil Engineers · Surveyors · Construction Managers 5 3 PROJECT UNDERSTANDING, APPROACH & INNOVATION
3A. PROJECT UNDERSTANDING
CIP 1.1 and CIP 1.2 are the first major capital projects identified in the 2025 Sewer System Master Plan — a plan F&L is already familiar with through its current District engagement. Together, the two projects address capacity deficiencies, aging infrastructure, and anticipated development flows across approximately 7,500 linear feet of new DR 17 HDPE sewer main and 33 manholes. Getting both projects designed on schedule and bid-ready by January 2027 is the critical near-term deliverable. Per Addendum 1, F&L will deliver each project as a separate, clearly labeled PS&E package.

CIP 1.1 is a multi-street, multi-diameter design program with pipe sizes ranging from 8-inch to 12- inch. The Menalto Avenue segment at 2,841 LF is the longest continuous run and will require careful construction phasing and traffic management. The Menalto Avenue work is broken up by an existing Highway 101 crossing that will require coordination with CalTrans. Elliot Drive falls within the City of Menlo Park, requiring a full permit submittal to Menlo Park Engineering, Public Works, and Utilities – a process F&L has navigated on dozens of West Bay Sanitary District annual sewer replacement and rehabilitation project over the last two decades.

The table documents the existing pipe diameter and proposed pipe diameter with F&L’s initial opinion on the probable construction method for each segment included in CIP 1.1.

Street Length
(LF)
Existing Diameter
(in)
Proposed
Diameter (in)
Construction
Method
Menalto Ave. (South of 101) 1,249 6 10 Open Trench
101 Crossing 204 8 10 Pipe Bursting
Menalto Ave. (North of 101) 1,388 8 12 Open Trench
E Bayshore Rd. 265 6 10 Open Trench
Ralmar Ave. 500 6 10 Open Trench
Bay Rd. 277 10 12 Pipe Bursting
Poplar Ave. 501 6 8 Pipe Bursting
Elliot Dr. 449 6 8 Pipe Bursting
CIP 1.2 is the more technically complex of the two projects. The 30-inch trunk line constitutes 1,444 LF of the scope and will require close coordination with the City’s SAFER Bay project that will be extending existing levee to enhance sea level rise protection. Beech Street will require coordination with PG&E due to the presence of a large-diameter gas transmission and potential variance or relocation agreements.

Portions of the project area fall within zone known to have historical evidence of contamination that, if not properly identified, could affect the future contractor’s means and methods for soil handling, transportation, and disposal.

The table documents the existing pipe diameter and proposed pipe diameter with F&L’s initial opinion on the probable construction method for each segment included in CIP 1.2. 361
FREYER & LAURETA, INC. Civil Engineers · Surveyors · Construction Managers 6 Street Length
(LF)
Existing
Diameter (in)
Proposed
Diameter (in)
Construction
Method
Beech St. 243 18 30 Open Trench
Trunk Line 1,441 21 30 Open Trench
Larkspur Dr. (North of O’Connor St.) 272 6 8 Pipe Burst Gardenia Way 179 10 12 Pipe Burst
Larkspur Dr. (South of O’Connor St.) 533 10 16 Open Trench 3B. KEY CHALLENGES & INNOVATIONS
F&L has extensive history with sanitary sewer improvement projects and other water utility projects through both East Palo Alto and Menlo Park. We understand the various challenges that must be considered when developing the proposed construction documents for each project package. We also understand that various construction methods that can be utilized for sanitary sewer replacement projects like this project.

We have identified some key challenges our team will consider and address as part of the detailed design effort.

Maximizing Pipe Bursting — Both Projects
Where alignment, existing pipe diameter, depth, and soil conditions allow, pipe bursting with DR 17 HDPE will be the preferred installation method to minimize pavement disruption and reduce construction duration in active residential neighborhoods. F&L has made an initial assessment to identify the pipeline segments most likely to be replaced by pipe bursting in the previous tables. We understand the limitations of pipe bursting so that we do not move forward with a trenchless approach that may need to be modified in the field resulting in unnecessary delays and cost impacts. We will evaluate feasibility reach-by-reach during initial design through CCTV review, with findings documented in the 50% submittal. F&L has executed pipe bursting programs on the Pacifica, WBSD, and CVSan DP95 projects – this methodology is a genuine area of technical depth for this team.

US-101 Crossing (CIP 1.1)
The two Menalto Road segments are bifurcated by Highway 101. F&L’s initial review of the approximately 200 linear foot long section crossing 101 is that pipe bursting will likely be the most cost effective and schedule efficient strategy. Utilizing pipe bursting will minimize the footprint on the north and south sides of Highway 101 while maintaining the similar vertical and horizontal alignment. Pipe bursting can be completed with minimal risk of soil uplift thereby addressing one potential CalTran’s concern to avoid negatively impacting the travel lanes.

Menlo Park Jurisdiction – Elliot Drive and Menalto Road South of 101 (CIP 1.1) F&L has an established working relationship with Menlo Park Engineering and Public Works staff through the West Bay Sanitary District Point Repair program, active portions of which fall within Menlo Park city limits. F&L in the last five years has also developed several water main replacement projects for Menlo Park. We understand the Menlo Park’s requirements for new utility installation including the paving restoration requirements that, if not properly planned and documented, may not be properly captured in the initial bids. F&L will prepare and submit all required plan sets and permit applications to the City of Menlo Park concurrently with EPASD’s design review process, keeping the Elliot Drive segment and Menalto Road South of 101 segment on schedule with the broader CIP 1.1 package. 362
FREYER & LAURETA, INC. Civil Engineers · Surveyors · Construction Managers 7 PG&E Transmission Conflict — Beech Street (CIP 1.2)
F&L will initiate early coordination with PG&E following contract award to characterize the conflict and identify the path to resolution – whether through design variance, minor sewer realignment, or a settled agreement. This coordination will be tracked as a schedule-critical item, with outcomes incorporated into the CIP 1.2 50% design submittal. F&L is uniquely positioned because we have previously coordinated with PG&E for work adjacent to the same gas transmission main with earlier phases of pipe replacement between the end of Beech Street the trunk sewer. We will build off our local experience and knowledge to develop strategies for constructing a new pipeline that conforms with PG&E Greenbook requirements while providing the necessary sanitary sewer capacity needed to meet current and future needs.

Hazardous Materials / Environmental — Trunk Line Corridor (CIP 1.2) The trunk’s sewer alignment runs adjacent to areas with known soil contamination, increasing the potential for encountering contaminated material during construction. If risk for encountering contaminated soils is not properly identified during the design phase, the District may be at an elevated risk for potential construction change orders. To mitigate the potential risk, F&L has included EKI to support an initial data review concurrently with our geotechnical investigation program. EKI will advise F&L and ROMIG on key constituents to be analyzed to develop a risk profile for soil contamination. The risk profile will inform the District and F&L team members on whether a more comprehensive sampling effort would be required to properly manage the potential disposal costs. If necessary and under a separate scope, EKI would develop a pre-construction soil sampling plan and waste characterization protocol, ensuring that contractor off-haul requirements and environmental protections are built into the CIP 1.2 bid documents before contractor procurement, avoiding costly change orders in the field. 3C. TECHNICAL APPROACH BY TASK
TASK 1 - PROJECT MANAGEMENT
Perform general project management tasks to plan, direct, coordinate, and report progress of the work.

This task includes regular progress updates through biweekly virtual meetings, summary reports with monthly invoices, and clear documentation with meeting agendas and minutes.

Deliverables
• Kickoff meeting agenda and minutes
• Bi-weekly meeting agendas and summaries
• Monthly progress reports and invoices
TASK 2 - SURVEY
F&L will perform topographic surveys along proposed sewer alignments to support design development, including field verification of surface features and utility appurtenances. Topographic survey will extend the full right of way limits based on recorded map information. We will located visible utility appurtenances and dip all gravity manholes.

Deliverables
• Topographic base map in CAD and PDF
• Survey control report
• Utility mapping based on surface evidence and available records 363
FREYER & LAURETA, INC. Civil Engineers · Surveyors · Construction Managers 8 TASK 3 - POTHOLING
F&L will engage a specialty subcontractor to conduct up to 30 utility potholes to supplement the existing utility investigation to verify utility elevations and reduce design and construction risk. Prior to proceeding with potholing, F&L will present the proposed potholing locations during a biweekly meeting, including identifying the encroachment permit requirements and the proposed surface restoration.

Each pothole will be assigned a GPS location and elevation for the purpose of optimizing the proposed pipeline alignment.

Deliverables
• Potholing logs and photo documentation
• Utility elevation data incorporated and shown on plans • Summary of findings and identified conflicts
TASK 4 - DESIGN DEVELOPMENT
F&L will prepare two separate, clearly labeled Plans, Specifications, and Estimates (PS&E) packages – one for CIP 1.1 and one for CIP 1.2 – each advancing through the same milestone sequence on parallel tracks.
• Geotechnical & Environmental Investigation to include up to six total borings split between CIP 1.1 and CIP 1.2. The investigation will provide sufficient data for the future construction contractor’s shoring design for open trench. The environmental analysis will inform our risk assessment to understand the potential for restrictive soil off-haul and disposal for the portions of CIP 1.2. Finally, a groundwater desktop study will allow the final bid documents to highlight potential groundwater levels for the future construction contractor’s dewatering approach planning. • 50% Submittal: F&L will submit 50% plans, specifications, and engineer’s estimates for both packages for District review. Each 50% submittal will include a construction method recommendation matrix – open-cut vs. pipe bursting by segment – informed by CCTV data, potholing results, and Bennett Trenchless’ feasibility input. Any project innovations will be identified and discussed at this phase prior to advancing to 100% design. • 100% Submittal: Following District review, F&L will incorporate all comments and submit complete 100% plans, specifications, and updated engineer’s estimates for both packages. • Bid Package: Each final bid package will include stamped and signed plans, specifications, engineer’s estimate, bid schedule, construction schedule, staged construction plan, and traffic control plan. Both packages will be finalized concurrently to support a unified January 2027 bid advertisement.

F&L will prepare for and facilitate a technical review workshop for each PS&E package following both the 50% and 100% submittals. The purpose of the workshop is to review the proposed design, discuss District questions and comments, document potential revisions, and allow for final approval to proceed with the next submittal. F&L will prepare meeting agendas and minutes for each work.

Deliverables
• Geotechnical Technical Memorandum and Environmental Risk Assessment • 50% PS&E electronically delivered in PDF
• 100% PS&E electronically delivered in PDF
• Two technical review workshops including agendas and minutes • Final stamped bid set electronically delivered in PDF 364
FREYER & LAURETA, INC. Civil Engineers · Surveyors · Construction Managers 9 TASK 5 - BID & CONSTRUCTION SUPPORT
F&L will respond to bidder questions, and issue one addendum for both packages. During construction, the team will respond to RFIs, attend field meetings, review change orders, and prepare punch list items through project closeout.

Deliverables
Bid Phase
• Meeting minutes and notes for one prebid meeting
• Prepare up to one bid addendum for each of the design packages Construction Phase
• The level of effort for both projects is estimated to include fifteen RFIs, fifteen submittals, and six change order reviews
• Up to ten engineer site visits are included.
• One Set of record drawings for each project will be produced and delivered in PDF format.

ASSUMPTIONS & EXCLUSIONS
• Assumes one (1) kickoff meeting and bi-weekly coordination meetings conducted virtually. • Assumes up to two meetings with the Safer Bay team to coordinate their adjacent project work with CIP 1.1 Trunk Sewer
• Survey limits confined to project corridors identified in the RFP. • A total of three days of geotechnical borings is included. • Boundary determination, legal descriptions, and right-of-way engineering are not required. • Hazardous materials handling, if encountered, is excluded. • Environmental and Biological permitting, if required, will be performed by others. • F&L will review the front-end specification documents and will prepare bid item descriptions • District responsible for front-end documents.
• RFI responses are limited to clarification of design intent and do not include preparation of revised plans, specifications, or significant redesign.
• Submittal reviews are for general conformance with the design intent only and do not include a detailed review of contractor means and methods, fabrication techniques, or construction sequencing. • Change order reviews are limited to technical evaluation and do not include cost negotiation, detailed cost estimating, or claims/dispute resolution support.
• Field inspections and meetings are assumed to be periodic and as-needed, not full-time or resident engineering services.
• Excludes Full-time construction management or inspection, material testing or special inspection, construction staking
365
FREYER & LAURETA, INC. Civil Engineers · Surveyors · Construction Managers 10 4 DELIVERY SCHEDULE & TIMELINE
Per Addendum 1, CIP 1.1 and CIP 1.2 will be delivered as two separate, clearly labeled PS&E packages advancing on parallel tracks under unified project management. The schedule below reflects concurrent delivery of both packages to the same milestone dates, maintaining clean separation of deliverables for bidding and construction administration without compromising quality.

Task Description Duration
(Calendar Days) Comment
Notice to Proceed 0 City Issues NTP on July 6, 2026
1 Project Management 146 Task begins with NTP
2 Survey 21 Task begins with NTP
3 Potholing 14 Task completed concurrently with 50% design 4 50% Submittal 60 Task begins following Task 2 completion 4 EPASD Review 14 Task begins following 50% Submittal
4 100% Submittal 30 Task begins following EPASD Review
4 EPASD Review 14 Task begins following 100% Submittal
4 Bid Package 7 Task Begins following EPASD Review
Based on an assumed Notice to Proceed (NTP) of July 6, 2026, and the durations presented in the table above, F&L will deliver two complete bid packages by the end of November 2026 in accordance with the RFP requirements.
5 REFERENCES
The following references represent clients for whom F&L has delivered similar sewer design and rehabilitation services. Each can speak directly to our technical approach, responsiveness, and quality of deliverables.

Sergio Ramirez, General Manager, West Bay Sanitary District (650) 321-0384 | [email protected]
Louis Sun, P.E., Former City of Pacifica Public Works Director - Wastewater (650) 851-6790 | [email protected]
Laura Webb, P.E., Senior Civil Engineer, City of San Mateo (650) 522-7322 | [email protected]
366
Project Client Role
Hines Clearview Way Campus Exterior
Improvements, San Mateo
Hines Clearview Way Campus Exterior
Improvements, San Mateo
Civil Engineer
Treasure Island Redevelopment Stage 2/3,
San Francisco
Treasure Island Development Group,
Lennar,Wilson Meany
Prime Consultant
Uber World Headquarters, San Francisco Uber Civil Engineer Google Campus Improvements, Sunnyvale Google Civil Engineer Alexandria Real Estate Headquarters, San
Francisco
Alexandria Real Estate Equities Civil Engineer
Mission Bay Redevelopment, San Francisco Mission Bay Development Group Civil Engineer UCSF Mission Bay & Parnassus Campuses,
San Francisco
University of California, San Francisco Master Civil Engineer Project Name and
Client Company Project Type Description of Services Provided Reference

CITY OF SAN MATEO
25th Avenue Sanitary
Sewer Relief Line
Project
F&L • Prepared construction documents for the
25th Avenue Sanitary Sewer Relief Line
Project including all utility location, survey,
geotechnical, environmental investigations,
and encroachment permit coordination with
both CalTrans and CalTrain.
• Performed all survey and utility research
including development of base maps.
• Designed for placement of 24-inch and
30-inch pipe by both open trench and
trenchless (jack and bore) methods.

Cathi Zammit
Clean Water
Program
Manager City of
San Mateo
(650) 522-7306
czammit@
cityofsanmateo.org

Cathi Zammit
Clean Water
Program
Manager City of
San Mateo
(650) 522-7306
czammit@
cityofsanmateo.org
Appendix
367
Project Client Role
Hines Clearview Way Campus Exterior
Improvements, San Mateo
Hines Clearview Way Campus Exterior
Improvements, San Mateo
Civil Engineer
Treasure Island Redevelopment Stage 2/3,
San Francisco
Treasure Island Development Group,
Lennar,Wilson Meany
Prime Consultant
Uber World Headquarters, San Francisco Uber Civil Engineer Google Campus Improvements, Sunnyvale Google Civil Engineer Alexandria Real Estate Headquarters, San
Francisco
Alexandria Real Estate Equities Civil Engineer
Mission Bay Redevelopment, San Francisco Mission Bay Development Group Civil Engineer UCSF Mission Bay & Parnassus Campuses,
San Francisco
University of California, San Francisco Master Civil Engineer Project Name and
Client Company Project Type Description of Services Provided Reference

Cathi Zammit
Clean Water
Program
Manager City of
San Mateo
(650) 522-7306
czammit@
cityofsanmateo.org

Cathi Zammit
Clean Water
Program
Manager City of
San Mateo
(650) 522-7306
czammit@
cityofsanmateo.org
Appendix A
Signed
Addendum
368
FREYER & LAURETA, INC. Civil Engineers · Surveyors · Construction Managers 13 4/28/2026
ADDENDUM No.1, ACKNOWLEDGMENT
(To be submitted with the RFP, Attachment A of RFP)
REQUEST FOR PROPOSAL – CIP 1.1 &1.2
EPASD PROJECT – CIP 1.1 & 1.2
Proposer acknowledges receipt of this addendum, which shall be attached to the proposal.

Acknowledgement of receipt of this addendum is required in the space provided below.

Failure to acknowledge the addendum may subject the proposal to disqualification.

I, , representing have
carefully read this addendum, understand it, acknowledge receipt of it and will comply with its terms.

CONTRACTOR SIGNATURE DATE
Jeffrey Tarantino, P.E. Freyer & Laureta, Inc.
5/5/26
369
Project Client Role
Hines Clearview Way Campus Exterior
Improvements, San Mateo
Hines Clearview Way Campus Exterior
Improvements, San Mateo
Civil Engineer
Treasure Island Redevelopment Stage 2/3,
San Francisco
Treasure Island Development Group,
Lennar,Wilson Meany
Prime Consultant
Uber World Headquarters, San Francisco Uber Civil Engineer Google Campus Improvements, Sunnyvale Google Civil Engineer Alexandria Real Estate Headquarters, San
Francisco
Alexandria Real Estate Equities Civil Engineer
Mission Bay Redevelopment, San Francisco Mission Bay Development Group Civil Engineer UCSF Mission Bay & Parnassus Campuses,
San Francisco
University of California, San Francisco Master Civil Engineer Project Name and
Client Company Project Type Description of Services Provided Reference

Cathi Zammit
Clean Water
Program
Manager City of
San Mateo
(650) 522-7306
czammit@
cityofsanmateo.org

Cathi Zammit
Clean Water
Program
Manager City of
San Mateo
(650) 522-7306
czammit@
cityofsanmateo.org
Appendix B
Resumes
370

EDUCATION
• Bachelor of Science in Civil
Engineering
• Santa Clara University, Santa
Clara, CA

CONTACT
(650) 619-3226
[email protected]
150 Executive Park Blvd., Ste 4200
San Francisco, CA 94134

CERTIFICATIONS
Civil Engineer CA No. 63936

KEY EXPERIENCE
• Principal-In-Charge for over
$100 Million in infrastructure
improvements over the last 10
years
• Experienced with planning,
design, and construction of
infrastructure improvement
projects.
• Project Manager Pedro Point
Sanitary Sewer Rehabilitation
and Replacement Project that
was selected for the APWA &
ASCE Project of Year.
• Alameda County Water District, Hidden Valley Tank Seismic Upgrade, Fremont, CA • City of Los Altos CIPP Corrosion Rehabilitation Project, Los Altos, CA • North Marin Water District Hydropneumatic Tank Replacement, Novato, CA • North Marin Water District Lynwood Pump Station Replacement, Novato, CA • North Coast County Water District Vallemar Tank Condition Assessment, Pacifica, CA • SVCW Regional Environmental Sewer Conveyance Upgrade (RESCUE), Redwood City, CA
• SVCW Owners Advisor Front of Plant, Redwood City, CA
• City of Pacifica Pedro Point Sanitary Sewer Rehab & Replacement, Pacifica, CA • City of Pacifica Wet Weather Flow Equalization Basin, Pacifica, CA • City of Pacifica Linda Mar Pump Station Rehab, Pacifica, CA • SFPUC Treasure Island Water Resource Recovery Facility, San Francisco, CA • Great Oaks Water District PG&E Metcalf Rd. Extention Project, San Jose, CA • India Basin Shoreline Park Redevelopment, San Franciscco, CA • Las Gallinas Valley Sanitary District Marin Lagoon Pump Station Control Panel & ATS Improvements, San Rafael, CA
• Mission Bay Blocks 29-34 Infrastructure, San Francisco, CA • San Mateo County Coyote Point Sewer System Project, San Mateo, CA • San Mateo 25th Avenue Sanitary Sewer, San Mateo, CA
Jeffrey J. Tarantino, P.E

EXECUTIVE VICE PRESIDENT
Jeff Tarantino has an extensive civil engineering design and construction background developed during his 27 years of civil and environmental work experience. He has served as project manager and QA/QC on numerous program management,
planning, design, permitting, and construction management projects, with a focus on civil site development, water supply treatment and distribution, wastewater treatment and collection, water reuse treatment and distribution, flood control, groundwater extraction and treatment systems, and water quality.

Jeff serves as the primary point of contact with permitting and environmental resources agencies on behalf of clients to facilitate open dialogue with the agencies. Jeff has demonstrated a unique ability to assist clients in bridging technical and non-technical challenges to deliver multi-beneficial projects within budget and on schedule.

RELEVANT PROJECTS
Infrastructure Design Projects
FREYER & LAURETA, INC. Civil Engineers · Surveyors · Construction Managers 371
• San Lorenzo Valley Foreman Grading Stabilization Project, Boulder Creek, CA • Stanford University Bowdoin Storm Drain Replacement Project, Stanford, CA • Stanford University Faculty Housing Sewer Replacement, Stanford, CA • Harry Tracy Water Treatment Plant to Town Water Pipeline, Hillsborough, CA • City of Burlingame Neighborhood Storm Drain Capital Improvements, Burlingame, CA • City of Cupertino Memorial Park Ponds Repurposing Project, Cupertino, CA • City of Menlo Park On-Call Annual Water Main Replacement Engineering Design, Menlo Park, CA • City of San Bruno Spyglass Hill Storm Drain Project, San Bruno, CA • City of San Mateo Columbia Dr. & Crystal Springs Rd. Storm Drain Improvements, San Mateo, CA • City of San Mateo Sanitary Sewer Rehabilitation, Basin D, San Mateo, CA • Coastside County Water District Nunes Water Treatment Plant Upgrades, Half Moon Bay, CA • WBSD Belle Haven Phase 3, Menlo Park, CA
• WBSD Flow Equalization & Resource Recovery Facility Levee Improvements (FERRF), Menlo Park, CA
• WBSD Bayfront Recycled Water Facility (BRWF), Menlo Park, CA • WBSD North Bay & Ringwood Ave. Sanitary Sewer Pipeline Project, Menlo Park, CA • Laguna Honda Hospital Potable Water Tank Replacement Project, San Francisco, CA • Presidio Trust Risk & Resiliency Planning, San Francisco, CA • Villa Del Monte Mutual Water Company Water Storage Tank Replacement, Los Gatos, CA Program & Project Management
• Daly City 10 MG Reservoir 5B Seismic Performance Improvement, Daly City, CA • Daly City Reservoir 8 Seismic Reliability, Daly City, CA • City of East Palo Alto Utility & Water System Improvements, East Palo Alto, CA • City of Menlo Park On-Call Pipeline Design, Menlo Park, CA • Daly City Water System Risk & Resiliency Report, Daly City, CA • North Marin Water District, 2024 Master Plan, Novato, CA • City of San Carlos Pulgas Creek Watershed Study & Management Plan, San Carlos, CA • City of East Palo Alto, Plan Review, East Palo Alto, CA • City of East Palo Alto, Engineering & On-Call Staff Augmentation, East Palo Alto, CA • City of Half Moon Bay On-Call Map Review, Half Moon Bay, CA • City of San Mateo Smooth Streets & Pavement Management, San Mateo, CA • City of Pacifica Plan Review, Pacifica, CA
• Great Oaks Water District, District Engineer, San Jose, CA • Los Altos Hills County Fire District, District Engineer, Los Altos, CA • Town of Los Altos Hills Engineering Analysis of the Adobe Creek Sewer System, Los Altos, CA • Treasure Island Sanitary Sewer Collection System Condition Assessment, San Francisco, CA • City of Oakley Regional Park Planning, Oakley, CA
• San Lorenzo Valley 5-Mile Water Pipeline Study, Boulder Creek, CA FREYER & LAURETA, INC. Civil Engineers · Surveyors · Construction Managers 372

EDUCATION
• Bachelor of Science in Civil
Engineering
• Worcester Polytechnic Institute,
Worcester, MA
• Civil Engineer CA No. 72523
• Passive House Institute US
(Builder)

CONTACT
(415) 534-7070, ext. 204
[email protected]
505 San Marin Dr., Ste A220
Novato, CA 94945

CERTIFICATIONS
Civil Engineer CA No. 72523

KEY EXPERIENCE
• Experienced project manager
with a track record in highprofile public and private
projects across California and
internationally.
• Oversaw engineering design
and construction for major
pipeline projects, conducting
hydraulic analyses and utility
conflict routing.
• Directed solar PV projects,
including a 1-MW cogeneration
station and feasibility studies
for water treatment facilities,
focusing on sustainability and
innovative energy solutions.

SENIOR PROJECT MANAGER
Greg is an experienced project manager with over 26 years in the construction operations, and engineering sectors. He has played a significant role in various high-profile projects across the San Francisco Bay Area and Southern California, focusing on water-energy nexus projects.

His expertise encompasses project management for pipeline design, recycled water infrastructure, and customer retrofits resulting in conversion of over 2,000 AFY of demand to new, local, reused water. He has also spearheaded energy management strategies and solar projects for major water districts, focusing on innovative approaches to renewable energy integration. With a solid foundation in environmental engineering and project oversight, Greg is dedicated to promoting sustainable practices in infrastructure development. Additionally, he has successfully led construction activities for prestigious wineries and residential projects, effectively managing subcontracts, schedules, and budgets.

RELEVANT PROJECTS
Infrastructure Design & Planning
• East Palo Alto Sanitation District Sewer Master Plan, East Palo Alto, CA • Estero Municipal Improvement District Emergency Generator Replacement, Foster City, CA • Las Gallinas Valley Sanitation District, Marin Lagoon Pump Station Upgrade, Marin County, CA
• Alameda County Water District, Hidden Valley Tank Seismic Retrofit, Alameda County, CA • Great Oaks Water District, District Engineering, San Jose, CA • 7th and 8th Street Basin Pipeline, San Antonio Channel Pipeline Segments A and B, Inland Empire Utilities Agency, Chino, CA
• Energy Management and Reliability Study, Metropolitan Water District of Southern California
• Recycled Water Customer Retrofits, (40 sites for recycled water conversion), Los Angeles and San Bernardino Counties
• Multi-Facility Solar PV Preliminary Design and Finance Report (10-13MW), Metropolitan Water District of Southern California
• Skinner Water Treatment Plant (WTP) - 1-MW Solar Cogeneration Station, MWDSC, CA • 1-MW Solar Cogeneration Station at the Weymouth Water Treatment Plant and Feasibility Study for Full Scale PV at all WTPs, MWDSC, CA
• Water Reclamation Demonstration Plant, City of Anaheim, CA • Lake View Wastewater Treatment Plant, Town of Lake View, OR Greg Arifian, P.E.

FREYER & LAURETA, INC. Civil Engineers · Surveyors · Construction Managers 373

EDUCATION
• Master of Science, Engineering
- California Polytechnic
University, Pomona
• Bachelor of Science,
Environmental Resources
Engineering - California
Polytechnic University,
Humboldt

CONTACT
(510) 937-2310, x301
[email protected]
1101 Marina Village Pkwy., Ste 104
Alameda, CA 94501

CERTIFICATIONS
Civil Engineer CA No. 79542

KEY EXPERIENCE
• 20+ years of design and
construction experience
delivering water, wastewater,
and sewer infrastructure for
Bay Area public agencies and
special districts
• Project Manager for CVSan’s
Gravity Sewer Repair Project
DP95, delivering multi-location
pipe bursting and sewer
upsizing across residential
areas on schedule and within
budget
• Experienced leading
multidisciplinary teams and
providing QA/QC oversight
across concurrent capital
improvement assignments for
cities and sanitary districts

VICE PRESIDENT
Lorraine brings over 23 years of civil engineering experience delivering planning, design, and construction support for public infrastructure projects throughout the Bay Area. She has led multidisciplinary teams on wastewater collection, gravity sewer repair and replacement, recycled water systems, and pump station improvements for Bay Area public agencies and special districts.

As Project Manager on CVSan’s 2021 Gravity Sewer Repair Project DP95, Lorraine delivered a multi-location pipe bursting and sewer upsizing program on schedule and within budget. Her milestonedriven approach, rigorous QA/QC oversight, and direct client engagement ensure every project moves from field investigation to biddable construction documents without losing momentum.

RELEVANT PROJECTS
Wastewater Collection & Sewer Rehabilitation
• Gravity Sewer Repair Project DP95, Castro Valley Sanitary District, Castro Valley, CA • Point Repair Phases I, II, IIIA, and IIIB, West Bay Sanitary District, Menlo Park, CA • Vallemar & Rockaway Beach Sanitary Sewer Rehabilitation, City of Pacifica, Pacifica, CA
• Canyon Heights Sewer Replacement, Union Sanitary District, CA • Corte Alegre Sewer Improvements, City of Millbrae, Millbrae, CA • Sewer Line and Manhole Rehabilitation, City of Brisbane, Brisbane, CA • Phase II Trunk Sewer Improvements, City of Antioch, Antioch, CA Recycled Water Infrastructure
• SFO Recycled Water Design-Build Project, San Francisco, CA • Recycled Water Line Project, Silicon Valley Clean Water, Redwood City, CA • Recycled Water Pump Station R200A and Pipeline, MCWD / City of San Ramon, CA Water & Wastewater Conveyance
• HTWTP to Town Water Pipeline, Town of Hillsborough, CA • Casanova Pump Station Replacement, City of San Mateo, CA • Pump Station and Water Tank Storage Improvements, City of Brisbane, CA On-Call Program & Facility Support
• FERRF Levee Improvements, West Bay Sanitary District, Menlo Park, CA • FERRF Warehouse Improvements, West Bay Sanitary District, Menlo Park, CA • Belle Haven Phase III, West Bay Sanitary District, Menlo Park, CA • Easement Stabilization Study, West Bay Sanitary District, Menlo Park, CA Lorraine Htoo, P.E., LEED AP
FREYER & LAURETA, INC. Civil Engineers · Surveyors · Construction Managers 374

EDUCATION
• Bachelor of Science in Civil
Engineering
• University of California, Davis

CONTACT
(415) 534-7070, x118
[email protected]
150 Executive Park Blvd., Ste 4200
San Francisco, CA 94134

KEY EXPERIENCE
• Experienced in hydraulic
modeling and system
analysis, supporting effective
engineering solutions and
coordination with local
agencies.
• Extensive expertise in civil
infrastructure design,
including water and sanitary
sewer systems, stormwater
management, and private
redevelopment planning.
• Proficient in preparing
construction documents
and performing construction
inspection for a wide range
of public infrastructure and
private development projects.

STAFF ENGINEER
Rheanna is an experienced civil design professional with over six years of expertise in construction inspection, preparation of construction documents, and the design of public infrastructure and private development projects. Her technical background includes extensive work in water system analysis and modeling, sanitary sewer system design and evaluation, and engineering planning for private redevelopment infrastructure. Rheanna is well-versed in coordinating with public agencies, developing detailed design documents, and delivering cost-effective, constructible solutions.

She has served as a staff engineer on a wide range of project types for F&L, including:

RELEVANT PROJECTS
Public Works
• Great Oaks WD - PG&E Metcalf Road Water Main Extension, San Jose • Stafford Lake Park Water Service Replacement, Novato
• WBSD FERRF Levee Improvements, Menlo Park
• East Palo Alto Master Plan Update, East Palo Alto
• Columbia/Crystal Springs Storm Drain Improvements, San Mateo • Lloyden Park Lane Sanitary Sewer Relocation, San Mateo • Great Oaks WD - Kaiser Permanente, San Jose
• Great Oaks WD - Equinix SV18 Dev., San Jose
• NCCWD Vallemar Tank Condition Assessment, Pacifica
• La Cresta Tank Replacement Project, Petaluma
• SVCW SWPP, Redwood City
• Vallemar Tank Condition Assessment, Petaluma
• Silicon Valley Clean Water SWPPP, Redwood City
• City of San Mateo Crystal Springs, San Mateo
• Great Oaks WD On-Call Fire Flow Analysis, San Jose
• Estero Municipal Improvements Emergency Generator Replacement, Foster City
• Los Altos Hills County Fire District Parcel Improvement, Los Altos Rheanna Ostera, E.I.T
FREYER & LAURETA, INC. Civil Engineers · Surveyors · Construction Managers 375

EDUCATION
• Bachelor of Science in Civil
Engineering
• University of California, Davis

CONTACT
(415) 534-7070 x 114
[email protected]
150 Executive Park Blvd., Ste 4200
San Francisco, CA 94134

KEY EXPERIENCE
• Progressive public works and
infrastructure experience
across transportation, utility,
and site development projects
• Skilled in roadway
rehabilitation, sanitary sewer
design, and stormwater
compliance to support resilient
community infrastructure
• Proficient in grading, earthwork
calculations, utility layout, and
hydrologic analysis for both
conceptual planning and
detailed design phases
• Technical capabilities span
design documentation, digital
mapping, field assessment,
and construction support for
public agency and mixed-use
development projects

STAFF ENGINEER
Zoe is a civil engineer with focused experience in public works infrastructure design, including sanitary sewer, stormwater, roadway, and utility projects across the Bay Area. They support pipeline rehabilitation, storm drain improvements, utility layout, grading design, and site development infrastructure with a strong background in GIS-based asset management and condition
assessment programs. Their work includes preparing detailed design plans, integrating field data into design, and coordinating with agencies to deliver constructible, cost-effective solutions for both public agencies and private developments.

Zoe’s background spans master planning, infrastructure
rehabilitation, and redevelopment projects, allowing them to provide technical design, plan production, and field coordination for a wide range of municipal capital improvement efforts.

RELEVANT EXPERIENCE
Zoe Gnass, E.I.T.

Public Works
• Columbia/Crystal Springs Storm Drain Improvements, San Mateo • City of San Mateo CIP Management, San Mateo
• Pulgas Creek Watershed Study & Management Plan, San Carlos • On-Call Fire Flow Analysis, San Jose
• East Palo Alto Sanitary District Master Plan Update, East Palo Alto • La Cresta Tank Replacement Project, Petaluma
Infrastructure
• Mission Bay Park P2 - P8, San Francisco
• 1450 Owens, San Francisco
• Laguna Honda Hospital Tank Replacement, San Francisco • SFO RW Pipeline, Millbrae
• India Basin Redevelopment, San Francisco
• Presidio Master Specifications, San Francisco
• 6373 San Ignacio, San Jose
• Kaiser Permanente - Great Oaks Water Company, San Jose • PG&E Metcalf Road Extension, San Jose
• India Basin H1A, San Francisco
FREYER & LAURETA, INC. Civil Engineers · Surveyors · Construction Managers 376

EDUCATION
• Bachelor of Science in Civil
Engineering
• California State University, Chico

CONTACT
(408) 516-1090, x405
[email protected]
20863 Stevens Creek Blvd., Ste 275
Cupertino, CA 95014

KEY EXPERIENCE
• Contruction inspector for West
Bay Sanitary District, East
Palo Alto Sanitary District, and
erosion Control Inspector for the
town of Portola Valley
• Areas of expertise include
construction engineering,
grading, drainage, erosion
control, utility design, and
construction inspection
• OSHA #7410 Managing
Excavation Hazards; MUTCD
Traffic Work Zone

CONSTRUCTION & ENGINEERING SERVICES MANAGER
Jason brings over 24 years of experience in civil infrastructure design, utility coordination, and field inspection. His background bridges engineering design and hands-on construction oversight, enabling him to deliver practical, buildable solutions across public works and private development projects. Jason specializes in grading, drainage, utility design, and pump station planning, with extensive experience supporting capital improvement programs and redevelopment efforts throughout the Bay Area.

He has led and supported multidisciplinary design teams, prepared civil plan sets for complex utility and site infrastructure systems, and served as an on-site construction inspector for sanitary sewer, storm drain, and water system installations. His unique combination of design fluency and field expertise ensures constructibility, compliance, and streamlined project delivery across agencies and jurisdictions.

RELEVANT PROJECTS
Infrastructure Planning & Design
• City of East Palo Alto University Ave. & Weeks Street 12-Inch Water Main, East Palo Alto • City of East Palo Alto Woodland Ave, Waterline & Palo Alto Interconnect, East Palo Alto • East Palo Alto Sanitary District, 2025 Master Plan Update, East Palo Alto • Town of Los Altos Hills Engineering Analysis of Adobe Creek Sewer System, Los Altos Hills
• Mission Bay Development (Various Private Clients), San Francisco • Britannia Development Oyster Point, South San Francisco • WBSD Village Square Pump Station & Cervantes Rd. Grinder Pump Force Main, Portola Valley
• WBSD, Stowe Lane Pump Station, San Mateo County
• City of San Leandro Wicks & Blue Dolphin Pump Stations, Sewer Pipeline Replacement, and Point Repair Projects, San Leandro
• City of Palo Alto Foothills Park Maintenance and Parking Lot Improvements, Palo Alto • City of Burlingame Neighborhood Storm Drain Projects #1 & #2, Burlingame • EPASD CIP 2007 & 2008, 2010 Sanitary Sewer Improvement Project, East Palo Alto • WBSD Illinois Pump Station, East Palo Alto
• WBSD Office Building Design, Menlo Park
• WBSD Belle Haven Phases I–III Pump Station, Menlo Park • WBSD Sausal Vista Sanitary Sewer Pump Station, Menlo Park • Stanford University SandHill Road Waterline Replacement (Phase 1 & 2), Stanford • Stanford University Kappa Sigma & Lomita Residences Sewer Replacement, Stanford Jason Feudale
FREYER & LAURETA, INC. Civil Engineers · Surveyors · Construction Managers 377
• Stanford University Residential Housing Area Water Main Replacement (Basis of Design), Stanford • Stanford University Bowdin Storm Drain Replacement, Stanford • Stanford University Lomita & Mayfield Water Main Replacement, Stanford • Stanford University Upper Mayfield Water & Sewer Replacement, Stanford • Stanford University Escondido Lake Water Replacement, Stanford • Stanford University Salvatierra Street Sewer Extension, Stanford • Stanford University Campus Drive Water Replacement, Stanford Construction Inspection
• Town of Portola Valley, Grinder Pump and Sewer Projects (Kebcenell Residence Driveway, Peak Lane, Cervantes Road, Westridge Drive), Portola Valley • West Bay Sanitary District, Sewer Improvements (Veterans Hospital, Royal Oak, Lane Woods, Heritage Oaks, Morgan Lane I & II, Pope Street Emergency Repair), Menlo Park • San Mateo County, Los Trancos Sewer Project, San Mateo County • Town of Los Altos Hills, 2016 Sanitary Sewer Capital Improvements, Los Altos Hills • Villa Del Monte Mutual Water Company, Skyview Tarrance Tank & Chloramine Modification, Santa Cruz County
• West Bay Sanitary District, On-call inspection, San Mateo County • City of East Palo Alto, Gloria Way Well, East Palo Alto • Stanford University, On-call inspection, Stanford
• Stanford University, Lasuen Mall Utility Replacement Project, Stanford • Los Altos Hills County Fire District, Hydrant Inspection, Los Altos Hills FREYER & LAURETA, INC. Civil Engineers · Surveyors · Construction Managers 378

EDUCATION
• Bachelor of Science in
Construction Engineering
• North Dakota State University,
Fargo, ND

CONTACT
(408) 516-1090, x407
[email protected]
20863 Stevens Creek Blvd., Ste 275
Cupertino, CA 95014

KEY EXPERIENCE
• Experience in construction
inspection, materials testing,
and QA/QC
• Skilled in stormwater, water, and
sewer system observation for
public infrastructure projects
• Proficient in construction plan
interpretation, below-grade
utility inspection, and safety
compliance

CERTIFICATIONS
• OSHA 10-Hour Safety Certification
• Nuclear Gauge Safety Certification, ANGA, 15292
• Concrete Field Testing Technician - Grade I (CFTT), American Concrete Institute, 01539079
• Construction Quality Management for Contractors, US Army Corps of Engineers, SPK-USACE-02-24-00242

STAFF ENGINEER
Toni brings 6 years of experience to the team, having worked on a wide variety of project designs for stormwater, drinking water, and sanitary sewer systems. With a background in the construction industry, he has developed a strong skill set through hands-on experience in inspecting and testing construction materials, conducting laboratory analyses, and monitoring construction sites to ensure safety compliance. With a keen focus on quality control and assurance, Toni excels at reading and interpreting construction plans, guaranteeing that projects meet the highest standards. His expertise also includes geotechnical observation and soil inspection, along with meticulous attention to belowgrade utilities.

Throughout his career, Toni has successfully contributed to a diverse range of projects, including:

Toni Steko, E.I.T.

RELEVANT PROJECT
Public Works
• East Palo Alto Woodland Ave. Waterline & Interconnect, East Palo Alto • City of East Palo Alto University Ave. & Weeks 12-Inch Watermain, East Palo Alto • San Mateo Crystal Springs Road Storm Drain Improvements, San Mateo • West Bay Sanitary District Willow Road Pump Station Rehabilitation, Menlo Park • West Bay Sanitary District Telemetry Systems Replacement, San Mateo County • Silicon Valley Clean Water Pump Station Improvements, San Mateo County • UCSF Parnassus Heights Campus Fire Water System, San Francisco • UCSF Aldea Paving and Sidewalk, San Francisco
• Chemeketa Park Mutual Water Company Drought Relief Water Storage Capacity, Los Gatos • Stanford University Cul-De-Sac Water and Sanitary Replacement, Stanford • Stanford University Lomita and Mayfield Water Main Replacement, Stanford • County of San Mateo Coyote Point Sanitary Sewer Improvements, San Mateo • Bayshore Sanitary District Carlyle Pump Station, Brisbane • San Lorenzo Valley Water District Foreman Pressure Break, Boulder Creek • San Mateo Clombia Dr. & Crystal Springs Rd. Stormdrain Improvements, San Mateo • San Carlos Pulgas Watershed Study, San Carlos
• Town of Atherton El Camino Real Corridor Stormwater, Atherton • City of Pacifica Wet Weather Flow Equalization Basin (WWFEB), Pacifica • West Valley Sanitation District Curtner Ave. Sewer Extension, Campbell FREYER & LAURETA, INC. Civil Engineers · Surveyors · Construction Managers 379

Jonathan J. Fone, PE
Associate Engineer/Vice President of Strategy and Growth

EDUCATION
Bachelor of Science, Civil Engineering, Rose-Hulman Institute of Technology, Terre Haute, IN, 2008

REGISTRATION
Registered Professional Civil Engineer, California License No. 80875

LICENSED
C-57 Well Drilling Contractor, California License No. 1124453

EXPERIENCE OVERVIEW
Jonathan J. Fone, P.E. has more than 18 years of geotechnical engineering and drilling experience in the San Francisco Bay Area. He is an Owner and Principal of the firm, providing leadership in strategy and growth. His responsibilities include overseeing business development, marketing, human resources, talent management, and construction operations. As an Associate Engineer, Mr. Fone leads complex geotechnical investigations and report preparation, delivering practical engineering solutions, timely communication, and critical technical support to multidisciplinary project teams, including architects, structural and civil engineers, contractors, landuse attorneys, and environmental consultants. Mr. Fone has managed and been responsible for many of the firm’s most complex and high-profile projects, ranging from large hillside developments involving active deep-seated landslides and undocumented man-made fill slopes to major public projects, including city recreation and aquatic centers throughout the San Francisco Peninsula. He has also served as lead geotechnical consultant for one developer overseeing more than 100 individual single-family residential projects across the Bay Area. His technical expertise spans a wide range of earthwork and foundation systems, including engineered fill slopes, soil nails, tiebacks, instrumentation (piezometers and inclinometers), shallow and deep foundations, auger-cast piles, retaining wall systems (including mechanically stabilized earth walls), and temporary shoring and dewatering for deep basement excavations.

PROJECT EXPERIENCE
A representative selection of projects includes:
• Foster City Recreation Center, Foster City, CA
• San Bruno Recreation and Aquatic Cener, San Bruno, CA • Burlingame Community Center, Burlingame, CA
• Millbrae Recreation Center, Millbrae, CA
• On-Call Geotechnical Consulting Services, City of Fremont • Landslide Investigation, Highlands Recreation Center, San Mateo, CA • Vineyard Hill Development (Complex Hillside Development) Saratoga, CA • Rockaway Highlands Development (Complex Hillside Development) Pacifica, CA • Apanolio Creek Ranch Improvements (Complex Hillside Improvements) Half Moon Bay, CA • One Client/Developer, over 100 individual single family home developments throughout the Bay Area • 36-lot and 24-lot Subdivisions, Hayward, CA
• 7-story Hotel, Foster City, CA
• 6-story Hotel, San Francisco, CA

PROFESSIONAL ACTIVITIES
Past President, American Council of Engineering Companies (ACEC), Peninsula Chapter Member, American Society of Civil Engineers (ASCE)
Affiliate Member, American Institute of Architects (AIA), San Mateo Count 380

Lucas J. Ottoboni, PE, GE
Principal Engineer/President

EDUCATION
Master of Science, Geotechnical Engineering, University of California, Berkeley, Berkeley, CA 2013 Bachelor of Science, Civil Engineering, Loyola Marymount University, Los Angeles, CA, 2012

REGISTRATION
Registered Geotechnical Engineer, California No. 3266
Registered Professional Civil Engineer, California No. 84234

EXPERIENCE OVERVIEW
Lucas J. Ottoboni, P.E., G.E., has more than 13 years of geotechnical experience in the Bay Area. Mr. Ottoboni is the second generation leader of the firm, succeeding Mr. Glenn Romig (founder). In addition to his leadership role, Mr. Ottoboni is one of the three reviewing principal engineers responsible for overseeing technical review and analysis of the firm’s deliverables. Throughout his career, Mr. Ottoboni has been recognized for delivering thoughtful engineering solutions, timely communication, and effective collaboration with architects, structural engineers, civil engineers, and contractors.

At Romig Engineers, Mr. Ottoboni has managed geotechnical investigations for a wide range of commercial and residential projects and has followed his designs through multiple phases of construction. His foundation and earthwork experience includes spread footings, pier foundations, retaining walls, soil nails, tiebacks, drilled piers, auger-cast piles, pre-cast concrete piles, and shoring and dewatering systems for basement excavations.

PROJECT EXPERIENCE
A partial list of projects Mr. Ottoboni has worked on is presented below:
• Palo Alto 12kv Line Replacement – Colorado Substation • Palo Alto Transformer Replacement – Colorado Substation • Midpeninsula Regional Open Space – Structure Stabilization for 3 Remote Structures • Hadron Therapy Facility –Large Healthcare Structure with Low Settlement Tolerance • San Carlos Airport Hangars and Office Space – Bay Margin Environment • Monterey Firestation #12 – City of Monterey Firestation Improvement • Morgan Autism Center – School Structure
• Burlingame 8- Story Office Building – Bay Margin Environment • Menlo Gateway 6-Story Office Building – Deep Foundations • Menlo Gateway 5-Story Parking Structure – Deep Foundations • Hotel Nia 6-Story Hotel – Deep Foundations
• Belmont Townhomes – Hillside Development Including Soil Nails, Large Grading • Bolinas Affordable Housing – Hillside Housing + Fault Study in Downtown Bolinas • Los Gatos Office Building – Fault Investigation Using 5 Fault Trenches • San Francisco 4-Lot Subdivision – Steep Hillside Reviewed by Structural Advisory Committee • Private Residence Landslide Remediation – Portola Valley (5,000 cy) • Seton Coastside Medical Facility – Moss Beach

PROFESSIONAL ACTIVITIES
Member of the American Society of Civil Engineers
Member of Structural Engineers Association of Northern California Member of the Redwood City Chamber of Commerce
381
Education
Fresno State – BA
Business Graduated 2004
Professional
Registrations
and/or Licenses
OSHA Certified
Confined Spaces Safety
Project Management
Skills
Utility Locating
CAD Technician
Survey
Drone Application
Potholing
Project Management
Contract Negotiations
Competent Person Training
First Responder Certified
Contact
Information
Hayward office
2463 Tripaldi Way,
Hayward, CA 94545
P: 408-988-0101
F: 408-988-0103
[email protected]
Total Years
Experience
10 years, 5 years with BESS
Andrew has over 10 years of combined technical and management experience in the field of Civil and Public Works. As a project manager for a large utility design-build construction company, Andrew has managed work on large-scale projects throughout California including the High-Speed Rail project. Andrew takes his experience from each job and applies lessons learned to improve future projects' safety and reliability. Andrew has gained the organizational, accountability, budgeting, and production skills that help him excel in this position. What Andrew enjoys most about his job is the direct interactions with Clients and co-workers and working collaboratively to come up with solutions that lead to better outcomes. With each new project comes new possibilities and personalities, but at the end of the day, it’s all about working with people to come up with educated solutions for complex problems. Andrew’s experience reflects being a solutiondriven individual and a manager focused and cultured in workplace safety. His track record of successful projects reflects his dedication and adherence to safety and his passion to embed this culture with each new project he manages
.

Project Experience
Caltrans District 6 (North)
BESS provided a full series of coordinated services for this project. Traffic Control, Utility locating, and Potholing for positive verification.

Client Contact: Michelle Hernandez Associate Right of Way Agent [email protected]
Project Value $1,900,000.00
Duration: 10/15/22 – Ongoing
Caltrans District 6 (South)
BESS provided a full series of coordinated services for this project. Traffic Control, Utility locating, and Potholing for positive verification.

Client Contact: Michelle Hernandez Associate Right of Way Agent [email protected]
Project Value $2,130,000.00
Duration: 10/15/22 – Ongoing
TPZP California High-Speed Rail (HSR-06) | Fresno | PM
BESS provided Locating, Potholing, Lidar Mapping, Surveying, and Traffic Control services throughout various locations for this project. Bess Role: Subcontractor | Underground Utility Services Client Contact: Krit M. Weerachartkul, P.E. | Sr. Project Manager | 626-240-8837 |[email protected]
Project Construction Value” $630,183
Duration: 6/2020 – Ongoing
Hayward (Corporate) | Fresno | Los Angeles | T. (408) 988-0101 | F. (408) 988-0103 - www.besstestlab.com Andrew Duarte
Project Manager
382
1-1
Ryan J. Ford, PG
Geologist
Mr. Ford is a geologist with extensive experience conducting subsurface investigations and waste characterization programs for construction and remediation projects involving a wide range of contaminants, including chlorinated solvents, petroleum hydrocarbons, agricultural pesticides, PCBs, and metals. He specializes in contractor-supported waste characterization during active excavation and utility installation projects, with expertise in designing field sampling programs and coordinating compliant soil disposal logistics to maintain construction schedules.

Mr. Ford is experienced in a broad range of field and characterization methods, including soil borehole logging; preparation and interpretation of geologic cross-sections; and soil and groundwater sampling using hollow-stem auger, sonic, and direct-push drilling. Mr.

Ford has significant experience evaluating hydrogeologic conditions at contaminated sites throughout the Bay Area and coordinating with regulatory agencies including DTSC and county environmental health departments.

Relevant Experience
• Waste Characterization Sampling Program for the Remediation of Former Manufacturing Facilities. East San Francisco Bay, California. Project Geologist and Deputy Project Manager. Mr. Ford designed and implemented an in-situ sampling program to pre-characterize over 13,000 BCY of potentially contaminated soil to support direct-load and offhaul operations at a 2-acre former electromechanical calculator and valve manufacturing facility with chlorinated solvent impacts. Mr.

Ford coordinated with the client’s contractors to facilitate timely soil sampling, waste classification, and offhaul logistics, ensuring contaminated soil was managed in compliance with applicable regulations while maintaining the project redevelopment schedule. This experience is directly analogous to waste characterization support required during active sewer installation trenching operations, where rapid field turnaround and contractor coordination are critical to avoiding construction delays.
• Construction Observation, Confirmation Sampling, and Waste Characterization During Utility Installation, Waterfront Redevelopment Project, Northern California. Project Geologist. Mr. Ford provided embedded construction support to a private developer during remediation and redevelopment of a 17-acre collection of former industrial properties along the San Francisco Bay waterfront, under a DTSC-approved remedial action plan. During utility installation activities Mr. Ford supported the client’s contractor by characterizing trenched soils encountered in previously unexcavated areas, and coordinated preparation of waste profiles and managed chain-of-custody documentation to support compliant disposal.

Education
• B.S., Geology, San
Francisco State University,
2014
Registrations/Certifications
• Professional Geologist in
California (#9634)
• 40-hour HAZWOPER
Training Course
• 8-hour Health and Safety
Training Course for
Supervisors
383
www.freyerlaureta.com

HEADQUARTERS
150 Executive Park Blvd.

Suite 4200
San Francisco, CA 94134
(415) 534-7070

EAST BAY
1101 Marina Village Pkwy
Suite 104
Alameda, CA 94501
(510) 937-2310

NORTH BAY
505 San Marin Dr.

Suite A220
Novato, CA 94945
(415) 534-7070

SOUTH BAY
20863 Stevens Creek Blvd.

Suite 275
Cupertino, CA 95014
(408) 516-1090
384
www.freyerlaureta.com
May 5, 2026
F&L Cost Proposal
East Palo Alto
Sanitary District
Consulting Services for the Design of
New Sewer Mains in the East Palo Alto
Sanitary District: CIP 1.1 & 1.2
385
1 Matthew Vining, Utility Manager
East Palo Alto Sanitary District
901 Weeks St.

East Palo Alto, CA 94303
May 5, 2026
Dear Mr. Vining,
Freyer & Laureta, Inc. (F&L) is pleased to submit the following cost proposal for consulting engineering services for the design of EPASD Capital Improvement Projects 1.1 and 1.2.

Per Addendum 1, F&L has prepared two separate cost proposals for CIP 1.1 and CIP 1.2. Both proposals are based on F&L’s 2026 charge rate schedule and reflect the scope of work, tasks, deliverables, and assumptions outlined in our technical proposal.

F&L has developed our estimated level of effort based on the schedule included in Section 4 of our proposal, which allows our team to create both bid packages in parallel. We also reviewed the estimated project costs, including estimated budgets for engineering services, included in Appendix E of the Master Plan. Our proposed total engineering budget for both Project 1.1 and Project 1.2 is less than the initial estimated costs. In fact, our proposed fee for Project 1.1 is 14% less than the Master Plan estimate, and for Project 1.2 is 54% less than the Master Plan estimate. We have achieved the potential savings through assigning the right staff to the project, accelerating the design schedule, and having both our teams work in tandem without impacting the overall work quality.

F&L proposes to perform all work on a time-and-materials basis, billed monthly based on actual work performed, with reimbursables not to exceed $1,000 per task as specified in the RFP.

Cathi Zammit
Clean Water
Program
Manager City of
San Mateo
(650) 522-7306
czammit@
cityofsanmateo.org

Cathi Zammit
Clean Water
Program
Manager City of
San Mateo
(650) 522-7306
czammit@
cityofsanmateo.org
CIP 1.1
Cost Proposal
387
3 CIP 1.1 COST PROPOSAL
FREYER & LAURETA, INC. Civil Engineers · Surveyors · Construction Managers East Palo Alto Sanitary District
RFP for EPASD CIP 1.1 Sewer Main Project
Consultant Name: Freyer & Laureta, Inc.

ODCs Total
Project
Manager
Principal-InCharge QA/QC Survey Crew Project
Engineer
Project
Engineer Geotech. Potholing Environ.

Greg Arifian,
P.E.

Jeffrey
Tarantino, P.E.

Lorraine Htoo,
P.E. Two Man Crew Rheanna Ostera, E.I.T. Zoe Gnass, E.I.T. Romig Engineers BESS EKI $275 $300 $300 $600 $205 $175 LS LS LS
Basic Services
1 Project Management 20 12 32 $ 9,100 $ - $ 9,100
2 Survey 4 40 40 80 164 $ 47,300 $ - $ 47,300
3 Potholing (15 Potholes) 8 16 16 40 $ 8,280 $ 58,833 $ 58,833 $ 67,113 4 Design Development
a. Geotechnical & Environmental 4 2 2 8 16 $ 3,700 $ 21,450 $ 21,450 $ 25,150 b. 50% Submittal 60 8 8 160 320 556 $ 110,100 $ - $ 110,100 c. 100% Submittal 60 4 4 80 160 308 $ 63,300 $ - $ 63,300 d. Bid Package 8 2 1 8 8 27 $ 6,140 $ - $ 6,140
5 Bid and Construction Support 40 8 4 80 160 292 $ 59,000 $ - $ 59,000 Proposal Subtotal - Basic Services 204 36 19 384 752 1,435 $ 306,920 $ 21,450 $ 58,833 0 $ 80,283 $ - $ 387,203 Optional Services
A 0 $ - $ - $ -
B 0 $ - $ - $ -
C 0 $ - $ - $ -
D 0 $ - $ - $ -
Total Optional Services 0 0 0 0 0 0 $ - $ - $ - 0 $ - $ - Total Including Optional Services 204 36 19 384 752 1,435 $ 306,920 $ 21,450 $ 58,833 0 $ 80,283 $ - $ 387,203 1 2
3 Other Direct
Costs Total Fee
Notes:

Subconsultant costs include 10% markup.

Tasks Labor Subconsultants
Task # Task Description Total Hours Total Labor
Costs
Total
Subconsultant
Costs
388
Project Client Role
Hines Clearview Way Campus Exterior
Improvements, San Mateo
Hines Clearview Way Campus Exterior
Improvements, San Mateo
Civil Engineer
Treasure Island Redevelopment Stage 2/3,
San Francisco
Treasure Island Development Group,
Lennar,Wilson Meany
Prime Consultant
Uber World Headquarters, San Francisco Uber Civil Engineer Google Campus Improvements, Sunnyvale Google Civil Engineer Alexandria Real Estate Headquarters, San
Francisco
Alexandria Real Estate Equities Civil Engineer
Mission Bay Redevelopment, San Francisco Mission Bay Development Group Civil Engineer UCSF Mission Bay & Parnassus Campuses,
San Francisco
University of California, San Francisco Master Civil Engineer Project Name and
Client Company Project Type Description of Services Provided Reference

Cathi Zammit
Clean Water
Program
Manager City of
San Mateo
(650) 522-7306
czammit@
cityofsanmateo.org

Cathi Zammit
Clean Water
Program
Manager City of
San Mateo
(650) 522-7306
czammit@
cityofsanmateo.org
CIP 1.2
Cost Proposal
389
5 CIP 1.2 COST PROPOSAL
FREYER & LAURETA, INC. Civil Engineers · Surveyors · Construction Managers East Palo Alto Sanitary District
RFP for EPASD CIP 1.2 Sewer Main Project
Consultant Name: Freyer & Laureta, Inc.

ODCs Total
Project
Manager
Principal-InCharge QA/QC Survey Crew Project
Engineer
Project
Engineer Geotech. Potholing Environ.

Greg Arifian,
P.E.

Jeffrey
Tarantino, P.E.

Lorraine Htoo,
P.E. Two Man Crew Jason Feudale Toni Steko, E.I.T.

Romig
Engineers BESS EKI
$275 $300 $300 $600 $205 $175 LS LS LS
Basic Services
1 Project Management 20 12 32 $ 9,100 $ - $ 9,100
2 Survey 4 24 40 80 148 $ 37,700 $ - $ 37,700
3 Potholing (15 Potholes) 8 16 16 40 $ 8,280 $ 58,833 $ 58,833 $ 67,113 4 Design Development
a. Geotechnical & Environmental 16 8 2 8 34 $ 8,800 $ 16,500 $ 4,000 $ 20,500 $ 1,000 $ 30,300 b. 50% Submittal 60 12 12 256 320 660 $ 132,180 $ - $ 132,180 c. 100% Submittal 60 4 4 128 160 356 $ 73,140 $ - $ 73,140 d. Bid Package 8 2 1 8 8 27 $ 6,140 $ - $ 6,140
5 Bid and Construction Support 60 12 4 100 240 416 $ 83,800 $ - $ 83,800 Proposal Subtotal - Basic Services 236 50 23 548 832 1,713 $ 359,140 $ 16,500 $ 58,833 $ 4,000 $ 79,333 $ 1,000 $ 439,473 Optional Services
A 0 $ - $ - $ -
B 0 $ - $ - $ -
C 0 $ - $ - $ -
D 0 $ - $ - $ -
Total Optional Services 0 0 0 0 0 0 $ - $ - $ - $ - $ - $ - Total Including Optional Services 236 50 23 548 832 1,713 $ 359,140 $ 16,500 $ 58,833 $ 4,000 $ 79,333 $ - $ 439,473 1 2
3 Tasks Labor Subconsultants
Task # Task Description Total Hours Total Labor
Costs
Total
Subconsultant
Costs
Other Direct
Costs Total Fee
Notes:

Subconsultant costs include 10% markup.

ODC for Geotechnical & Environmental is an allowance to perform supplemental laboratory analysis to support the environmental soil disposal risk assessment. 390
www.freyerlaureta.com

HEADQUARTERS
150 Executive Park Blvd.

Suite 4200
San Francisco, CA 94134
(415) 534-7070

EAST BAY
1101 Marina Village Pkwy
Suite 104
Alameda, CA 94501
(510) 937-2310

NORTH BAY
505 San Marin Dr.

Suite A220
Novato, CA 94945
(415) 534-7070

SOUTH BAY
20863 Stevens Creek Blvd.

Suite 275
Cupertino, CA 95014
(408) 516-1090
391

EPASD BOARD PUBLIC HEARINGS

13.1 EAST PALO ALTO

SANITARY DISTRICT

STAFF REPORT

DATE: July 7, 2026
TO: East Palo Alto Sanitary District Board Members
VIA: Melvin E. Gaines, General Manager
BY: Hanson Hom, Deputy Manager, Special Projects
Humza Javed, Public Works Director
Tomohito Oku, Finance Director
Matthew Vining, Utility Manager
SUBJECT: Acceptance of East Palo Alto Sanitary District Sewer Capacity Fee Update Study and Adoption of Updated Sewer Capacity Fees Recommendation

1. Conduct a public hearing to receive public comments.

2. Adopt a resolution:
a. Finding that the proposed action is exempt from the requirements of the California Environmental Quality Act (“CEQA”) because it is not a project as it has no potential to result in direct or reasonably foreseeable indirect physical change to the environment (14 Cal. Code Regs. §15378(a)); the project does not create a funding mechanism or other government fiscal activity that involve any commitment to a specific project which may result in a potentially significant physical impact on the environment (14 Cal. Code Regs. §15378(b)(4)); and projects that may receive funding with sewer capacity fees would be required to comply with applicable project-specific CEQA requirements at the time such projects are proposed for implementation;
b. Accepting the East Palo Alto Sanitary District (EPASD) Sewer Capacity Fee Update Study;
c. Approving the updated EPASD sewer capacity fees as recommended by staff, or 392

EPASD BOARD PUBLIC HEARINGS

13.1 with amendments as directed by the Board; and
d. Directing staff to file a Notice of Exemption for the updated sewer capacity fees.

Executive Summary
Following adoption of the EPASD Sewer System Master Plan in 2025, a Final Draft Sewer Capacity Fee Update Study (“Study”) was prepared to update the existing sewer capacity fee. Collected fees would fund sewer facilities and infrastructure improvements that are necessary to meet the needs of new development. The fees would also include a charge to “buy into” the existing available capacity at Palo Alto Regional Water Quality Control Plant. The Study establishes the maximum justifiable sewer capacity fees that EPASD can charge based on the proportional fair share that can be assigned to new development. The calculated maximum fees are approximately five (5) percent less than the current EPASD sewer connection fee. Staff recommends adopting the maximum justifiable fees, which represents a slight fee reduction. The EPASD Board also has the option to further reduce the fees.

Background
On October 1, 2024, the East Palo Alto Sanitary District (EPASD) became a subsidiary district of the City of East Palo Alto. This action was approved by the San Mateo Local Agency Formation Commission (LAFCo) on November 23, 2023, and finalized on September 16, 2024. EPASD’s service area covers most of the area within the City of East Palo Alto, except for the northernmost area, and includes a small area located within the City of Menlo Park southwest of State Highway 101 (see Study, p.10).

EPASD contracts with the West Bay Sanitary District for the day-to-day operations of the collection system, which is regulated by the State Water Resources Control Board and Regional Water Quality Control Board (RWQCB). Wastewater from the collection system is conveyed to the Palo Alto Regional Water Quality Control Plant (PARWQCP) for treatment and disposal, which is located next to the Palo Alto Municipal Airport and is owned and operated by the City of Palo Alto.

Following transfer of governance to the City of East Palo Alto, direction was provided to update the EPASD Sewer System Master Plan (“Master Plan”), which was previously adopted in 2015, with a 2021 addendum. Additionally, following a preliminary analysis, the EPASD Board initially reduced the sewer connection fee from $14,464 per EDU to $10,621 per EDU.1 The fee was to be further refined following adoption of an updated Capital Improvement Program (CIP) through the Master Plan process.

1 EDU or “Equivalent Dwelling Unit” is a standard unit of measure representing the typical wastewater generated by a single-family home. It acts as a baseline for calculating capacity charges and connection fees for different types of land uses. For the EPASD service area, 1.0 EDU is equivalent to 200 gallons of wastewater flow per day (GPD).
393

EPASD BOARD PUBLIC HEARINGS

13.1 The Master Plan was adopted on July 29, 2025, by the East Palo Alto City Council, acting as the governing body of EPASD. It contains an updated CIP and includes a preliminary estimate of rate charges and capacity fees. Along with reflecting the latest hydraulic modeling and monitoring data, the Master Plan also incorporates land use updates, such as the Ravenswood Business Park/4 Corners Specific Plan that was adopted by the City Council in 2024.

After adoption of the Master Plan, staff engaged Willdan Financial Services to prepare a capacity fee study to update EPASD’s sewer capacity fee. Willdan previously completed a nexus study in 2025 to update the City’s development impact fees for parks and recreation, public facilities, transportation, storm drainage, and water system improvements. A Final Draft Sewer Capacity Fee Update Study (“Study”), dated May 13, 2026, was completed by Willdan and was released for public review and posted on the EPASD Master Plan website on May 22, 2026,
The EPASD Advisory Committee considered the Study on June 24, 2026, and forwarded a recommendation to the EPASD Board to accept the Study and adopt the maximum justifiable sewer capacity fee of $10,115 per EDU. The Committee expressed that the fees should be reassessed if the growth projections that the fee calculations are based on are not realized or changes in the future.

Analysis
Overview
The objective of a capacity fee study (or nexus study) is to enable an agency to collect development impact fees to fund public improvements to accommodate the facility demands of new development. The sewer capacity fees calculated in this Study are onetime fees that are subject to Government Code Section 66013 and other applicable state laws. Also known as “capacity charges,” they are defined as:
“a charge for public facilities in existence at the time a charge is imposed or charges for new public facilities to be acquired or constructed in the future that are of proportional benefit to the person or property being charged, including supply or capacity contracts for rights or entitlements, real property interests, and entitlements and other rights of the local agency involving capital expense relating to its use of existing or new public facilities.”
It should be noted that, in addition to a sewer capacity fee (currently labeled a “connection fee” but will be renamed a capacity fee for clarity,) EPASD also charges one-time fees related to making a physical connection to the collection system, such plan check and inspection fees. Revisions to these additional fees are not being considered as part of this analysis and will remain in effect.

The Study is based on the sewer facilities identified in that are necessary to support future development in EPASD through the year 2045. The purpose is to determine the maximum 394

EPASD BOARD PUBLIC HEARINGS

13.1 justifiable fees that can be charged to new development to fund these sewer facilities.

Adopting the maximum justifiable fees achieves the objective of ensuring that new development pays its proportional fair share of capital costs associated with growth.

Alternatively, lower fees than the maximum justified can be adopted to incentivize development. If the EPASD Board chooses to adopt lower fees, other funding sources would eventually have to be identified to fully cover the infrastructure needs of new development, or else service standards would decrease over time. Existing residents and businesses within EPASD would in effect be subsidizing a portion of the capital costs to serve new development.

Methodology
The Study completes the following steps for analyzing and arriving at the maximum justifiable sewer capacity fees:

1. Estimate existing development and future growth;

2. Identify facility standards;

3. Determine facilities required to serve new development;

4. Determine the cost of facilities required to serve new development; and

5. Calculate the fee schedule.

The sewer capacity fees that are calculated in the Study cover planned collection system improvements as identified in the EPASD Master Plan, planned PARWQCP facility updates, and the adjusted valuation of the treatment plant. The fees are determined using two methodologies: 1) a planned facilities approach based on the cost of identified facilities and improvements that are solely or partially necessary to serve new development; and 2) specific to the existing treatment plant, a buy-in approach where the existing capacity is sufficient to accommodate future growth, and new development “buys into” a proportional share of the available capacity based on the current value of the facilities.

The land use and development growth forecasts for the Study are consistent with the projections that were used for the 2025 Nexus Study Update to update the City’s development impact fees. Sewer demand or flow generation rates are differentiated by land uses: single-family and multi-family housing; retail; office and research and development (R&D); and industrial development. The flow generation rate for an average size single-family dwelling (based on 1,700 square feet), referred to as “Equivalent Dwelling Unit” (EDU), is used to express the sewer demand for each land use category. 2 Based on growth forecasts, Table 3.2 of the Study (p. 16) indicates that the total sewer demand within the EPASD service area could increase from 9,049 EDU in 2025 to 15,869 EDU in 2045, a potential 75 percent increase at full build-out.

2 EDU is expressed as per dwelling unit for residential uses, and per 1,000 square feet of floor area for non-residential uses.) The average wastewater flow from a single-family dwelling is 200 gallons per day (GPD) or 1.00 EDU. The average wastewater flow from an office/R&D land use is 186 GPD for each 1,000 square feet of floor area, which translates to 0.83 EDU for each 1,000 square feet of floor area.

Refer to Table 3.1 of the Study (p. 15) for other land use equivalents. 395

EPASD BOARD PUBLIC HEARINGS

13.1 Sewer System
Derived from the adopted Master Plan, Table 3.3 of the Study (p. 17) identifies the sewer system improvements that are partially (Category 1) or solely (Category 2) needed to serve new development. These improvements consist of pipeline replacement and upgrade projects totaling $70,156,000. Applying the planned facilities methodology using flow generation rates, the proportional responsibility of new development is $57,138,250.

This amount is incorporated into the calculation of the maximum justifiable sewer capacity fee. The portion of the capacity fee pertaining to sewer system improvements is $41.89 per gallon per day (GPD) of sewer flow or $8,377 per EDU as shown in Table 3.4 of the Study (p. 18).

Wastewater Treatment Plant (PARWQCP)
A separate analysis was performed for the PARWQCP to determine the responsibility of new development. The sewer capacity fee for this facility consists of two components to determine the proportional benefit and contribution of new development:

1. A “buy-in” component based on the excess capacity at the treatment plant, which is currently sufficient to accommodate projected new development; and

2. A future facilities component based on planned upgrades so that the plant can continue its current level of service.

The current total asset valuation of the treatment plant is $113,280,662 (replacement cost new, less depreciation). For determining the “buy-in” fee, this valuation needs to exclude the outstanding debt that will be repaid by ratepayers through monthly services charges.

After subtracting the outstanding debt principal, the net asset valuation is $71,603,678.

Additionally, the City of Palo Alto has identified planned upgrades totaling $252,900,000 for secondary treatment upgrades to meet required service standards and an advanced water purification system. The combined value and cost of both treatment plant components is $324,503,678.

Determining the sewer capacity fee for the treatment plant is partially predicated on flow generation (GPD) but should also account for wastewater strength factors - biochemical oxygen demand (BOD) and total suspended solids (SS) - to reflect the higher or lower level of treatment required from the wastewater generated from different land uses. The methodology for calculating the sewer capacity fee for both treatment plant components is shown in Tables 3.9 and 3.10 of the Study (p. 21).

Maximum Justifiable Sewer Capacity Fees – Residential Uses The Residential Sewer Capacity Fee Schedule from Table 3.11 of the Study (p. 22), is summarized below, which includes an added one (1) percent administrative charge. The fee for an “average” single family dwelling is $10,115, which is equivalent to the fee for one (1) EDU. The Study determined that EPASD’s current sewer capacity fee of $10,621 for an average dwelling unit slightly exceeds the maximum justifiable fee by about 5.0%. 396

EPASD BOARD PUBLIC HEARINGS

13.1 Consistent with the City’s impact fees for transportation, parks and recreation, and public facilities, enacting a per square foot fee for residential uses is suggested to recognize that the wastewater flow from larger and smaller dwelling units generally varies due to differences in average household size.
3 Setting the fee by square footage means that
larger units might pay a higher fee than the current fee, but smaller units would pay a lower fee.

Maximum Justifiable Residential Sewer Capacity Fee
Maximum Fee1
($ per sf)
Maximum Fee
($ total)
Current Fee2
($ total)
Single-family Dwelling
(based on 1,700 sf) 5.95 10,115 10,621
Multi-Family Dwelling
(based on 850 sf) 9.25 8,092 10,621
1 The per square-foot fee for a multi-family unit is higher than for a single-family unit because the average multi-family unit creates roughly 80% of the sewer flow as an average single-family unit, while the average multi-family unit is considerably smaller than an average single-family unit. The total fee for a multi-family unit will generally be lower than for a single-family dwelling. 2 Currently called a “Connection Fee” (to be relabeled a Sewer Capacity Fee), it can be adjusted on a project-by-project basis.

Accessory Dwelling Units
Pursuant to Government Code Section 66324 (formerly Section 65852.2(f)), ADUs 750 square feet or smaller are exempt from development impact fees, while larger ADUs can be charged impact fees proportional to the square footage of the primary single-family dwelling unit. However, this exemption does not apply to capacity charges levied by a local agency or special district such as EPASD. Therefore, EPASD can assess a sewer capacity fee on all ADUs with one exception. Per state law, a capacity charge cannot be assessed on an ADU converted from existing space within an existing single-family dwelling or accessory structure, with allowance for adding up to 150 square feet beyond the physical dimensions of the accessory structure to accommodate ingress and egress.

Impact fees can be a significant financial obstacle to constructing an ADU. With the desire to encourage ADUs as a form of affordable housing and recognizing the financial barriers, the City Council adopted reduced development impact fees in 2025 for larger ADUs.

Instead of levying an impact fee proportional to the fee that would be charge to the primary single-family dwelling, only new living space beyond 750 square feet are subject to impact fees. Below are sample sewer capacity fee calculations for three alternatives: 1) full fee; 2) reduced fee (50 percent); and 3) large ADUs (fee on portion over 750 square feet only).

The example uses construction of a new 1,000 square-foot ADU for illustration.

3 Storm drainage fees are based on area of impervious surfaces, and water capacity fees are based on meter size. 397

EPASD BOARD PUBLIC HEARINGS

13.1 Sewer Capacity Fee Alternatives for ADUs
(Example: New construction - 1,000-square-foot ADU)
Square Feet Fee/SF1 Total Fee
Alternative 1: Full Fee 1,000 $5.95 $5,950.00
Alternative 2: Reduced Fee 1,000 $2.982 $2,980.00
Alternative 3: Large ADUs 2503 $5.95 $1,487.50
1 Fee/SF = $10,115 per EDU / 1,700 sf for average single-family dwelling = $5.95 per sf 2 Charged at 50 percent of maximum justifiable fee
3 Charged on portion of ADU over 750 sf: 1,000 sf – 750 sf = 250 sf Consistent with the methodology for calculating City impact fees for ADUs, staff suggests applying a similar methodology for sewer capacity fees.4 The draft fee resolution reflects Alternative 3: Large ADUs. However, the EPASD Board can choose to adopt Alternatives 1, 2, or a variation thereof, pursuant to the Study and applicable state laws.

Maximum Justifiable Sewer Capacity Fees – Non-Residential Uses For non-residential land uses (retail, office/R&D, and industrial), the maximum justifiable sewer capacity fee is calculated to reflect the industrial flow and strength characteristics of various development projects. The fee would be based on the estimated wastewater flow and strength loadings from each sewer connection for a development project according to the formula below from Figure 1 of the Study (p. 22), which was derived from the analysis in the Study.

Maximum Justifiable Non-Residential Sewer Capacity Fee
Number of EDUS = (0.8917 x Flow/200 gpd) + (0.0513 x BOD/200 mg/l) + (0.057 x SS/200mg/l) x $10,115 per EDU = Sewer Capacity Fee
Applying the above formula to prototypical non-residential projects results in the following maximum justifiable fees, which are compared with current fee estimates. It should be emphasized that these examples are estimates only, and the actual fee would depend on an analysis of the flow characteristics of each development project.

The following details the calculation of the maximum justified capacity fees for a prototypical restaurant. The calculation of nonresidential fees is driven by three components. The project characteristics are compared to the characteristics of an EDU and weighted by component. The table below shows the calculation. Under the current

4 Currently, the combined City development impact fees for a 1,000 square-foot ADU are estimated to be $8,032 for an ADU located within the Ravenswood Business District (RBD) and $6,771 for an ADU located outside the RBD.

The combines impact fees include the fees for parks and recreation, public facilities, transportation, storm drainage (based on impervious area), and water capacity (assumes a new meter). 398

EPASD BOARD PUBLIC HEARINGS

13.1 fee schedule, the fee for the restaurant prototype would be $40,763. The maximum justified fees represent a reduction of 4.8% compared to the current fee.

Nonresidential Fee Example: 80 Seat Restaurant Prototype, Maximum Justified Fee Schedule Share
of Total
Project
Characteristics
EDU
Characteristics EDUs
A B C D = A x B / C
Cost Components
Flow 89.17% 800 GPD 200 GPD 3.5668
BOD 5.13% 600 mg/L 200 mg/L 0.1539
SS 5.70% 400 mg/L 200 mg/L 0.114
Total EDUs 3.8347
Fee per EDU $ 10,115
Total Fee (Total EDUs x Fee per EDU) $ 38,788
The next example shows the maximum justified fees for a 50,000 square-foot office building. In this case, the maximum justified fees for this prototype would be $420,504, compared to $442,651 under the current fee schedule, representing a decrease of 5.0%.

Nonresidential Fee Example: Office Prototype, Maximum Justified Fee Schedule Share of
Total
Project
Characteristics
EDU
Characteristics EDUs
A B C D = A x B / C
Cost Components
Flow 89.17% 9300 GPD 200 GPD 41.46405
BOD 5.13% 200 mg/L 200 mg/L 0.0513
SS 5.70% 200 mg/L 200 mg/L 0.057
Total EDUs 41.57235
Fee per EDU $ 10,115
Total Fee (Total EDUs x Fee per EDU) $ 420,504
Possible Fee Adjustments
The maximum justifiable sewer capacity fees calculated in the Study are not required to be adopted by EPASD. The Board may choose to adopt lower fees to accomplish other policy goals. Reducing fees for a particular land use type would require EPASD to subsidize that development type by covering a greater share of facilities and infrastructure costs. EPASD would need to secure additional funding to offset this increased fiscal obligation. Adjustments could be considered, however, to accomplish economic development goals and community benefits, such as to incentivize employment, housing, and retail/restaurants opportunities.
399

EPASD BOARD PUBLIC HEARINGS

13.1 Although not an adjustment to the fee schedule, for affordable or inclusionary housing units, the City Council could consider offsetting the impact fees on a project-by-project basis with financial assistance. This assistance could be available through the City’s commercial linkage fees, inclusionary housing in-lieu fees, or Measure HH revenue.

The EPASD Board can also consider the sewer capacity fees charged by surrounding cities and adjust its fees accordingly. Below is a fee comparison with surrounding cities that was compiled by Willdan. A key factor affecting the calculation of the Fee per EDU is the cost of required sewer improvements to accommodate new development relative to the development potential in the service area. Additionally, where the fees are lower (e.g., Palo Alto), it could reflect a situation where the fees have not been updated for a while.

The adopted sewer capacity fees would be adjusted annually based on the Construction Cost Index for the region. Additionally, EPASD should periodically reevaluate and adjust its sewer capacity fees, as needed, to reflect updates to its Master Plan and CIP, changes in development conditions, and updates to the City’s land use plans.

Fee Payment
Effective January 1, 2025, impact fees and capacity charges for qualifying residential developments, as defined by Government Code Section 66007 (SB 937), are not required to be paid until final inspection or issuance of a certificate of occupancy, whichever occurs first. However, the payment can be required at building permit issuance if a facility or improvement has been completed, is under construction, or will be under construction before the anticipated occupancy date of the development. Impact fees for non-residential developments will continue to be due prior to building permit issuance. However, the fee resolution includes a provision that allows the City Council to approve or authorize the 400

EPASD BOARD PUBLIC HEARINGS

13.1 City Manager to approve alternative payment terms for a specific project, such as through a development agreement,
Fiscal Impact
The Sewer Capacity Fee Schedule in the recommended resolution would ensure that new development will assume its fair share allocation for sewer system and wastewater treatment plant improvements that are necessary to meet the demands of new development as identified in the Study and EPASD Master Plan. Additionally, a “buy-in” component is included in the fee to cover the fair share allocation for new development that will benefit from the existing excess capacity available at the PARWQCP.

The Master Plan identifies CIP projects totaling $70,156,000 that respond to the service demands of new development. The Study has determined the fair share allocation to new development is $57,138,750, which leaves a remaining balance of $13,017,250 that would have to be funded through other sources. As a policy matter, EPASD can consider lessening the impact on new development by shifting the cost allocation and reducing sewer capacity fees. The fiscal implication is that EPASD would bear a larger share of the cost of the CIP projects.

Staff is recommending a reduction of sewer capacity fees for ADUs (Alternative 3). As opposed to impact fees, only ADUs created from existing space are exempt from capacity charges or fees under state law. Staff estimated the potential fiscal impact of not assessing sewer capacity fees for ADUs under 750 square feet. In the past year, 27 ADUs have been permitted with average size of approximately 647 square feet, with 16 ADUs consisting of new construction. Assuming a similar number are constructed in future years, the City would be foregoing capacity fees of approximately $30,800 annually in Alternative 2 and approximately $61,600 annually in Alternative 3.

Sewer capacity fees are placed in a dedicated capital improvement fund. The collected fees can only be used for the purposes identified in the Study and cannot be used for general government services or other projects. However, a one (1) percent administrative charge would be added to fee calculations to cover administrative, monitoring. and reporting requirements.

Pursuant to Government Code Section 66013(d), an annual report on the status of the sewer capacity must be made available to the public within 180 days of the end of the fiscal year. The report must include information on the fund balance, fees collected, expenditures, and any interfund transfers during the fiscal year. The reporting requirements are very similar to the AB 1600 requirements under the Mitigation Fee Act for the City’s development impact fees.

Public Notice
On May 23, 2026, the Study was distributed to property owners, developers, and other interested parties for review and comment. On June 10, 2026, pursuant to Government 401

EPASD BOARD PUBLIC HEARINGS

13.1 Code Section 66016, notice of the scheduled EPASD Board of Directors public hearing on the Study and updated sewer capacity fees was published in the local newspaper and posted on the bulletin board at City Hall, 2415 University Avenue, East Palo Alto. The notice also informed interested parties of the EPASD Advisory Committee meeting on June 24, 2026, to discuss the Study and accept public comments.

Environmental
Approval of this Resolution is exempt from the requirements of the California Environmental Quality Act (“CEQA”) because: it is not a project as it has no potential to result in direct or reasonably foreseeable indirect physical change to the environment (14 Cal. Code Regs. §15378(a)); and the project does not create a funding mechanism or other government fiscal activity that involve any commitment to a specific project which may result in a potentially significant physical impact on the environment (14 Cal. Code Regs. §15378(b)(4)). Projects that may receive funding with development impact fees would be required to comply with applicable project-specific CEQA requirements at the time such projects are proposed for implementation.

Government Code § 84308
Applicability of Levine Act: No, as the proposed action does not involve an entitlement within the meaning of the Levine Act.

Analysis of Levine Act Compliance: Not applicable.

Attachments

1. Resolution

2. EPASD Sewer Capacity Fee Study Update, May 13, 2026
402
RESOLUTION NO. ___

A RESOLUTION OF THE BOARD OF DIRECTORS OF THE EAST PALO ALTO

SANITARY DISTRICT TO ACCEPT A SEWER CAPACITY FEE UPDATE STUDY AND

ADOPT UPDATED SEWER CAPACITY FEES
WHEREAS, on October 1, 2024, the East Palo Alto Sanitary District (“EPASD”) became a subsidiary district of the City of East Palo Alto, which was approved by the San Mateo Local Agency Formation Commission on November 23, 2023, and finalized on September 16, 2024; and
WHEREAS, EPASD contracts with the West Bay Sanitary District to operate the collection system within its service area, and wastewater from the collection system is conveyed to the Palo Alto Regional Water Quality Control Plant (“PARWQCP”); and WHEREAS, on July 29, 2025, an update of the EPASD Sewer System Master Plan (“Master Plan”) was prepared and adopted by the East Palo Alto City Council as the governing body of EPASD; and the Master Plan includes an updated Capital Improvement Program (“CIP”) that identifies necessary sewer system improvements to serve new development within its service area; and
WHEREAS, the Master Plan was determined to be exempt from the California Environmental Quality Act (“CEQA”) because it will implement management operations programs and plans to enhance and protect the environment by limiting the occurrence of sewer system overflows (“SSO”) in the service area (CEQA Guideline Section 153038); and
WHEREAS, the EPASD has determined that failure to upgrade and expand the sewer collection system will result in substandard conditions, will overburden existing infrastructure, and will lead to unacceptable operating conditions; and although the PARWQCP has existing excess capacity to accept the projected sewer flow from new development, planned upgrades to treatment facilities will be necessary; and WHEREAS, the EPASD has determined that capacity sewer fees, along with other existing and future revenue sources, are necessary to fund the public facilities and infrastructure improvements identified in its Master Plan and CIP, and these facilities and improvements are critical for meeting the needs of new development in the EPASD service area; and
WHEREAS, California Government Code Section 66013 et seq and other applicable state laws authorize local agencies and utility districts to enact reasonable capacity fees or charges for developers to contribute their proportional fair share cost of facility and infrastructure improvements that will be necessary to serve new development; and
403
WHEREAS, the EPASD Board of Directors has previously established a sewer capacity fee schedule, but has determined that a fee update study is necessary to adjust the fee schedule to align with the updated Master Plan and CIP; and WHEREAS, pursuant to California Government Code Section 66013 et seq and other applicable state laws, a Final Draft Sewer Capacity Fee Update Study (“Study”), attached hereto as Exhibit A and incorporated by reference, was prepared by Willdan Financial Services to: 1) identity the proportional fair share obligation of developers to contribute to required sewer system improvements that are identified the Master Plan to meet the demands of new development; 2) determine the obligation of new development to “buy into” the existing excess capacity and contribute to planned facility updates at the PARWQCP; and 3) calculate the maximum justifiable sewer capacity fee for new residential, office, research and development, industrial, and retail development; and WHEREAS, pursuant to California Government Code Sections 66016, on May 22, 2026, the Study was posted on the EPASD’s website and interested parties were notified about the availability of the Study for public review and comment; and a notice of a EPASD Board of Directors public hearing to consider the Study and adopt updated sewer capacity fees was published in the local newspaper on June 15, 2026, and was posted at East Palo Alto City Hall and emailed to interested parties; and
WHEREAS, on June 24, 2026, the EPASD Advisory Committee considered the Study and forwarded a recommendation to the EPASD Board of Directors to accept the Study and adopt the maximum justifiable sewer capacity fee; and WHEREAS, on July 7, 2026, the EPASD Board of Directors held a duly noticed public hearing to receive public comments on the Study and recommended updated sewer capacity fees; and

NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE EAST PALO ALTO SANITARY DISTRICT, as follows:

1. FINDINGS. The recitals set forth in this resolution are incorporated as findings and determinations by the EPASD Board of Directors.

2. CALIFORNIA ENVIRONMENTAL QUALITY ACT. The proposed action is exempt from the requirements of the California Environmental Quality Act (“CEQA”) because it is not a project as it has no potential to result in direct or reasonably foreseeable indirect physical change to the environment (14 Cal. Code Regs. §15378(a)); the project does not create a funding mechanism or other government fiscal activity that involve any commitment to a specific project which may result in a potentially significant physical impact on the environment (14 Cal. Code Regs. §15378(b)(4)); and projects that may receive funding with sewer capacity fees would be required to comply with applicable project-specific CEQA requirements at the time such projects are proposed for implementation
404

3. SEWER CAPACITY FEE UPDATE STUDY. The EPASD Board of Directors hereby accepts the Final Draft Sewer Capacity Fee Update Study, dated May 13, 2026, attached hereto as Exhibit A and incorporated by reference.

4. UPDATED SEWER CAPACITY FEES. Pursuant to California Government Code Section 66013 et seq and other applicable state laws, the EPASD Board of Directors hereby replaces the current “sewer connection fee” with the updated sewer capacity fee schedule, attached hereto as Exhibit B and incorporated by reference, with collected fees to be expended solely and exclusively for the capital improvement projects identified in the Master Plan and Study.

5. EFFECTIVE DATE. The updated sewer capacity fees shall be effective sixty (60) days after the adoption of this fee resolution and shall apply to all qualifying development projects, except for projects that have been issued a valid and active building permit or are recognized as a vested project by the before the effective date. Impact fees shall apply to new development projects, expansion of existing buildings or structures, or a change of use that requires a planning approval or building permit.

6. ANNUAL FEE ADJUSTMENT. Beginning on July 1, 2027, and annually thereafter on July 1, development impact fees shall be automatically adjusted by the General Manager or designee, without further action necessary from the EPASD Board of Directors, by a percentage equal to the change in the Construction Cost Index (CCI) as most recently published by the Engineering New Record (20-Cities Average).

7. REPORTING REQUIREMENTS. In compliance with California Government Code 66013(d) and other applicable state laws, an annual report on the sewer capacity fund shall be made available to the public, within 180 days after the last day of each fiscal year, that describes the fees collected during the fiscal year, beginning and ending balance, funds expended or anticipated for public improvements and, if applicable, any interfund transfer or loan made from the fund.

8. SEVERABILITY. If any section, subsection, clause or phrase of this Resolution is for any reason held to be unconstitutional, or otherwise invalid, such decision shall not affect the validity of the remaining sections hereof.

9. NOTICE OF EXEMPTION. The General Manager is authorized to file a Notice of Exemption for the updated development impact fees with the San Mateo County Clerk within five (5) working days of the date of the adoption of this fee resolution.

PASSED AND ADOPTED this 7th day of July, 2026, by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:
405
(signatures next page)

________________________

Ruben Abrica, Board President
ATTEST: APPROVED AS TO FORM:
___________________ _____________________
James Colin, Secretary John D. Lê, District Council
406

EXHIBIT A

EAST PALO ALTO SANITARY DISTRICT

FINAL DRAFT SEWER CAPACITY FEE UPDATE STUDY
Prepared by Willdan Financial Services
May 13, 2026
407

EXHIBIT B

EAST PALO ALTO SANITARY DISTRICT

1. SEWER CAPACITY FEE SCHEDULE
Land Use Category Unit Fee
Residential Uses
Accessory Dwelling Unit*
(applies to new livable space
exceeding 750 square feet only)
Square Foot $5.95
Single-family/Townhouse Square Foot $5.95
Multi-family Housing Square Foot $9.25
Non-Residential
Number of EDUs =

0.8917 x Flow/200 gallons per day (gpd) +

0.0513 x BOD/200 milligrams/liter (mg/l) +

0.057 x SS/200 milligrams/liter (mg/l)
x $10,115 per EDU = Sewer Capacity Fee
EDU = Equivalent Dwelling Unit (1 EDU = 200 gpd)
BOD = Biochemical Oxygen Demand
SS = Total Suspended Solids
 Pursuant to Government Code Section 66324, a sewer capacity fee is not charged to an ADU converted from existing space within an existing single-family dwelling or accessory structure, with additional allowance for up to 150 square feet beyond the physical dimensions of an accessory structure to accommodate ingress and egress.

Notes for Non-Residential Uses:
a. An applicant shall provide an analysis of sewer flow (FLOW), biochemical oxygen demand (BOD), and total suspended solids (SS) to arrive at the number of EDUs for the project. The EDUs are then multiplied by $10,115 per EDU to arrive at the sewer capacity fee for the project.
b. An applicant may be required to either obtain an independent analysis of the flow demand and wastewater strength for the project, or fund the EPASD to conduct this analysis.
408

2. POTENTIAL FEE CREDITS, ADJUSTMENTS, OR REDUCTIONS
a. Subject to EPASD approval, a reduction in the sewer capacity fee can be considered when a project will fund or construct public sewer capacity improvements that exceed the required sewer capacity fees in effect at the time a complete planning application is filed. The allowable credit can be based on the estimated value of the improvements or another methodology acceptable to the City.
b. Credit is available for permitted or legally conforming land uses that are/were on the project site during the two-year period (24 months) prior to filing a complete planning or building permit application, whichever date is earlier. Credit shall be calculated based on the prior or existing use(s) and the above fee schedule. c. In addition to the potential fee adjustments mentioned above, the EPASD may authorize other fee adjustments or reductions for development projects when substantial economic or community benefits will be provided to address infrastructure, facility, or other community needs.

3. CONVERSION OR EXPANSION OF EXISTING USE
When an existing building is proposed for conversion or expansion with a change of use that requires a planning approval or building permit (e.g. from an industrial warehouse to an office use), the development impact fees shall be calculated based on the above fee schedule.

The total amount of impact fees shall be calculated as follows:

Fee for Proposed Use – Fee for Existing Use = Total Impact Fee

4. ADMINISTRATIVE CHARGE
An administrative charge of 1.0 percent shall be added to the calculated sewer capacity impact fee to cover: a) legal, accounting, and other administrative support, and b) impact fee program administrative costs including revenue collection, revenue and cost accounting, mandated public reporting, and fee justification analysis.

5. PAYMENT OF FEES
Impact fees for development projects shall be calculated and paid at building permit issuance. However, sewer capacity fees for “designated residential development projects,” as defined by Government Code Section 66007, and accessory dwelling units shall be calculated at building permit issuance and shall be paid prior to final inspection or issuance of a temporary or final certificate of occupancy, whichever occurs first. The EPASD may also approve or authorized the General Manager to approve alternative payment terms.
409

EAST PALO ALTO SANITARY

DISTRICT

SEWER CAPACITY FEE UPDATE
STUDY

FINAL DRAFT
MAY 13, 2026
Oakland Office Corporate Office Other Regional Offices
66 Franklin Street 27368 Via Industria Aurora, CO
Suite 300 Suite 200 Orlando, FL
Oakland, CA 94607 Temecula, CA 92590 Phoenix, AZ
Tel: (510) 832-0899 Tel: (800) 755-6864 Plano, TX
Fax: (888) 326-6864 Seattle, WA
Washington, DC
www.willdan.com
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411
i

TABLE OF CONTENTS
EXECUTIVE SUMMARY .......................................................................... 3 Background and Study Objectives 3
Facility Standards and Costs 3
Use of Fee Revenues 4
Capacity Fee Schedule Summary 4

1. INTRODUCTION ........................................................................... 5 Organization of the Report 5
Public Facilities Financing in California 5
Study Objectives 6
Guiding Documents 6
Fee Program Maintenance 6
Administrative Costs 6
Study Methodology 7
Types of Facility Standards 7
New Development Facility Needs and Costs 8
Fee Geography 8

2. GROWTH FORECASTS ............................................................... 11 Land Use Types 11
Existing and Future Development - Districtwide 12

3. SEWER CAPACITY FEE .............................................................. 14 Sewer Demand 14
EDU Generation by New Development 15
Facility Needs and Costs 16
Sewer Facilities Cost per Gallon per Day 18
Projected Fee Revenue 18
Current Treatment Plant Asset Valuation 19
Adjusted System Valuation 19
Treatment Facilities Cost 20
Wastewater Treatment Component 20
Total Cost per EDU 21
Residential Fee Schedule 21
Nonresidential EDU Calculation 22

4. IMPLEMENTATION...................................................................... 23 Capacity Fee Program Adoption Process 23
Inflation Adjustment 23
Reporting Requirements 23
CEQA 24
APPENDIX ......................................................................................... 25 412
East Palo Alto Sanitary District Sewer Capacity Fee Update Study ii
Debt Service Schedules 25
California Government Code 66013 28
California Government Code §65852.2 (f) 31
413
3 Executive Summary
This report summarizes an analysis of sewer capacity fees needed to support future development in the East Palo Alto Sanitary District (EPASD) through 2045. This study calculates the maximum justifiable fee schedule that can be charged to new development to pay for the sewer facilities demand by new development within EPASD. The EPASD boundaries include the City of East Palo Alto, and a small residential area within the City of Menlo Park.

As a policy decision to incentivize development, the District could choose to implement fees that are less than the maximum justified amounts in this study. Should the District adopt fees lower than the maximum justified amounts then either the District would need to use other funding sources to subsidize the facility needs of new development, or else service standards would decrease over time. Under this scenario existing residents and businesses within EPASD would in effect be subsidizing the capital costs to serve new development.

Background and Study Objectives
The primary policy objective of a capacity fee program is to ensure that new development pays the capital costs associated with growth. The primary purpose of this report is to calculate fees that will enable the District to expand its inventory of public facilities, as new development creates increases in service demands.

The sewer facility fees calculated in this report are also known as capacity charges and are subject to the requirements of Government Code Section 66013, which defines a capacity charge as “a charge for public facilities in existence at the time a charge is imposed or charges for new public facilities to be acquired or constructed in the future that are of proportional benefit to the person or property being charged, including supply or capacity contracts for rights or entitlements, real property interests, and entitlements and other rights of the local agency involving capital expense relating to its use of existing or new public facilities. A “capacity charge” does not include a “commodity charge.” Capacity charges based on the buy-in method are a reimbursement for past capital costs. Government Code Section 66013 is reproduced in the appendix for reference.

EPASD also charges a connection fee that pays for the cost of the physical connection to the District’s facilities. The connection fees are not being updated as part of this study.

Facility Standards and Costs
This study uses two approaches to calculate facilities standards and allocate the costs of planned facilities to accommodate growth in compliance with the statutory requirements.

The planned facilities approach allocates costs based on the ratio of planned public facilities that are necessitated by the increase in demand associated with new development. This approach is appropriate when specific planned facilities that only benefit new development can be identified, or when the specific share of facilities benefiting new development can be identified.

Examples include street improvements to avoid deficient levels of service or a sewer trunk line extension to a previously undeveloped area. This approach is used for the sewer facilities component and part of the wastewater treatment component of the sewer capacity fees in this report.

The buy-in method is typically used when the existing system has sufficient capacity to serve new development now and into the future. Under the buy-in methodology, new development “buys” a proportionate share of existing capacity at the current value of the existing facilities. This approach is typically used for utility fees, where existing facilities are built with excess capacity to serve future development. This approach is used for a part of the wastewater treatment component in this report pertaining to the existing wastewater treatment plant assets. 414
East Palo Alto Sanitary District Sewer Capacity Fee Update Study 4 Use of Fee Revenues
Capacity fee revenue can be spent on new facilities or expansion of current facilities to serve new development. It can also be used to repay the agency who built facilities with excess capacity that new development is “buying into.” Facilities can be generally defined as capital acquisition items with a useful life greater than five years.

Capacity Fee Schedule Summary
Table E.1 summarizes the residential capacity fees that meet the District’s identified needs and comply with the requirements of the Government Code 66013. The Table also The maximum justifiable capacity fee for multifamily units is higher than single family units on a per square footage basis. This is because although the average multifamily unit creates roughly 80 percent of the sewage flow as a single family home, the average multifamily unit is nearly half as small (875 square feet) as the average single family home (1,700 sq ft.). The fee calculations also include fixed costs with do not vary with the size of a dwelling unit. Additionally, while the calculations assume that sewer use scales proportionally to water demand, single family residences are assumed to include irrigation uses that divert water flow from the sewer system, while multifamily units are assumed to have de minimis irrigation water demand.

Nonresidential fees are calculated on a case-by-case basis based on the amount and characteristics of wastewater flow generated by a nonresidential project. The fees are scaled based on the wastewater generation characteristics compared to those of a typical single family dwelling unit. Refer to the “Nonresidential EDU Calculation” section of Chapter 3 for further discussion.

Table E.1: Maximum Justified Capacity Fee Schedule
Land Use
Fee per
Square
Foot
Fee per
Average
Sized Unit
Current
Fee per
EDU
Single Family $ 5.95 $ 10,115 $ 10,621
Multifamily 9.25 8,092
Source: Table 3.11.

Note: Nonresidential fees are calculated on a case by case basis based on a cost per equivalent dw elling unit (EDU) of $10,115. The fees are scaled for a land use compared to the w astew ater generation characteristics of a typical single family 415
5 1. Introduction
This report presents an analysis of the need for public facilities to accommodate new development in the EPASD. This chapter provides background for the study and explains the study approach under the following sections:
• Organization of the Report;
• Public Facilities Financing in California;
• Study Objectives;
• Fee Program Maintenance; and
• Study Methodology.

Organization of the Report
The determination of a capacity fee begins with the selection of a planning horizon and development of growth projections for population and employment. These projections are used throughout the analysis of different facility categories and are summarized in Chapter 2.

Chapters 3 identifies facility standards and planned facilities, allocates the cost of planned facilities between new development and existing development, and identifies the maximum justified sewer capacity fee.

Chapter 4 details the procedures that the District must follow when implementing a capacity fee program. Capacity fee adoption procedures are found in California Government Code Sections 66016 through 66018.

Public Facilities Financing in California
The changing fiscal landscape in California during the past 45 years has steadily undercut the financial capacity of local governments to fund infrastructure. Four dominant trends stand out:
• The passage of a string of tax limitation measures, starting with Proposition 13 in 1978 and continuing through the passage of Proposition 218 in 1996; • Declining popular support for bond measures to finance infrastructure for the next generation of residents and businesses;
• Unfunded state and federal mandates; and
• Steep reductions in federal and state assistance.

Faced with these trends, many cities and counties have had to adopt a policy of “growth pays its own way.” This policy shifts the burden of funding infrastructure expansion from existing ratepayers and taxpayers onto new development. This funding shift has been accomplished primarily through the imposition of assessments, special taxes, and capacity fees also known as public facilities fees or impact fees. Assessments and special taxes require the approval of property owners (or voters, in some cases) and are appropriate when the funded facilities are directly related to the real property. Capacity fees, on the other hand, are an appropriate funding source for facilities that benefit all development within the identified service area. 416
East Palo Alto Sanitary District Sewer Capacity Fee Update Study 6 Study Objectives
The primary policy objective of a public facilities fee program is to ensure that new development pays the capital costs associated with growth. Policy 3.1 of the City of East Palo Alto’s General Plan states “New development. Require new development to pay its fair share of required improvements to public facilities and services through impact fees or other financial and regulatory mechanisms.” The primary purpose of this report is to update the sewer capacity in EPASD, serving the City of East Palo Alto, based on the most current available facility plans, project cost estimates, and growth projections. The proposed fees will enable the District and City to expand its inventory of public facilities necessitated by new development. This report supports the General Plan policy stated above. The District imposes capacity fees under California Government Code Section 66013, as recently amended.

East Palo Alto is forecast to have moderate growth through this study’s planning horizon of 2045, particularly within the Ravenswood Business District/4 Corners Specific Plan area. This growth will create an increase in demand for public services and the facilities required to deliver them.

Given the revenue challenges described above, EPASD updated its sewer capacity fees in 2018 and 2022 This report makes use of the most current available growth forecasts and capital facilities planning documents to update the existing capacity fee program to ensure that the fee program accurately accounts for the facility needs resulting from new development.

Guiding Documents
This analysis uses but is not limited to data from the following documents as the basis of the fee calculations:
• General Plan (2016): Informs land use assumptions and provides policy guidance. • Ravenswood Business District (RBD) / 4 Corners Specific Plan Update (2024): Informs land use assumptions and provides policy guidance.
• East Palo Alto Sanitary District Sewer System Master Plan (2025): Identifies capital needs related to sewer facilities.
• City of East Palo Alto, Development Impact Fee Nexus Study Update (2025): Informs common land use assumptions and growth projections.

Fee Program Maintenance
Once a fee program has been adopted it must be properly maintained to ensure that the revenue collected adequately funds the facilities needed by new development. To avoid collecting inadequate revenue, the inventories of existing facilities and costs for planned facilities must be updated periodically for inflation, and the fees recalculated to reflect the higher costs. The use of established indices for each facility included in the inventories (land, buildings, and equipment), such as the California Construction Cost Index, is necessary to accurately adjust the fees.

While fee updates using inflation indices are appropriate for annual or periodic updates to ensure that fee revenues keep up with increases in the costs of public facilities, it is recommended to conduct more extensive updates of the fee documentation and calculation (such as this study) when significant new data on growth forecasts and/or facility plans become available. For further detail on fee program implementation, see Chapter 4.

Administrative Costs
The administration of a capacity fee program to comply with the requirements of the Government Code 66013 imposes costs on the District for capital budgeting, fee adjustments, mandated annual reports associated with the capacity fee program, as well as periodic fee update studies 417
East Palo Alto Sanitary District Sewer Capacity Fee Update Study 7 and legal review. It is common practice in California for agencies to add a small administrative charge to capacity fees to cover those costs. These costs are primarily District staff costs necessary to administer the fee program.

This study assumes 1% of the maximum justified fee to estimate the administrative costs associated with the fee program. To validate this assumption, Willdan reviewed the administrative costs associated with other cities in California in FY2022-23. Those costs ranged from 1.32% to

1.52% of collected impact fee revenue in the other jurisdictions. The assumed 1.0% of fee revenue is below the range.

Study Methodology
Capacity fees are calculated to fund the cost of facilities required to accommodate growth. The six steps followed in this fee study include:

1. Estimate existing development and future growth: Identify a base year for existing development and a growth forecast that reflects increased demand for public facilities;

2. Identify facility standards: Determine the facility standards used to plan for new and expanded facilities;

3. Determine facilities required to serve new development: Estimate the total amount of planned facilities, and identify the share required to accommodate new development;

4. Determine the cost of facilities required to serve new development: Estimate the total amount and the share of the cost of planned facilities required to accommodate new development net of other identified funding;

5. Calculate fee schedule: Allocate facilities costs per unit of new development to calculate the fee schedule; and

6. Identify alternative funding requirements: Determine if any non-fee funding is required to complete projects.

The key public policy issue in fee studies is the identification of facility standards (step #2, above).

Facility standards document a reasonable relationship between new development and the need for new facilities. Standards ensure that new development does not fund deficiencies associated with existing development.

Types of Facility Standards
There are three separate components of facility standards:
 Demand standards determine the amount of facilities required to accommodate growth, for example, park acres per thousand residents, square feet of library space per capita, or gallons of water per day. Demand standards may also reflect a level of service such as the vehicle volume-to-capacity (V/C) ratio used in traffic planning.  Design standards determine how a facility should be designed to meet expected demand, for example, park improvement requirements and technology infrastructure for public office space. Design standards are typically not explicitly evaluated as part of an impact fee analysis but can have a significant impact on the cost of facilities. In this case, our approach incorporates the estimated cost of planned facilities built to satisfy the facility design standards in accordance with EPASD’s Sanitary Sewer Master Plan.
 Cost standards are an alternate method for determining the amount of facilities required to accommodate growth based on facility costs per unit of demand, such as 418
East Palo Alto Sanitary District Sewer Capacity Fee Update Study 8 service population, vehicle trips, sewer flow generation or impervious surface. Cost standards are useful when demand standards were not explicitly developed for the facility planning process. Cost standards also enable different types of facilities to be analyzed based on a single measure (cost or value) and are useful when different facilities are funded by a single fee program. Examples include facility costs per capita, cost per vehicle trip, or cost per gallon of sewer flow per day.

New Development Facility Needs and Costs
A number of approaches are used to identify facility needs and costs to serve new development.

This is often a two-step process: (1) identify total facility needs, and (2) allocate to new development its fair share of those needs.

This study uses two common methods for calculating capacity fees: the planned facilities method, and the buy in method. The formula used by each approach and the advantages and disadvantages of each method is summarized below:

Planned Facilities Method
The planned facilities method allocates costs based on the ratio of planned facility costs to demand from new development as follows:

Cost of Planned Facilities
New Development Demand
This method is appropriate when planned facilities will entirely serve new development, or when a fair share allocation of planned facilities to new development can be estimated. An example of the former is a wastewater trunk line extension to a previously undeveloped area. An example of the latter is a portion of a roadway that has been identified as necessary to mitigate the impact from new development through traffic modeling analysis. Under this method new development will fund the expansion of facilities at the standards used in the applicable planning documents. This approach is used for the sewer facilities component and part of the wastewater treatment component of the sewer capacity fees in this report.

Buy-In Method
The buy-in method is based on the value of the existing system’s capacity. This method is typically used when the existing system has sufficient capacity to serve new development now and into the future. Under the buy-in methodology, new development “buys” a proportionate share of existing capacity at the current value of the existing facilities.

The buy-in fee is determined by taking the current value of assets (replacement cost new, less depreciation) divided by the current capacity provided by the system. Responsibility for new capital improvements is then shared equally by all customers. A simplified version of the calculation equation is:

Present Value of Existing Facilities
Existing System Capacity
This approach is typically used for utility fees, where existing facilities are built with excess capacity to serve future development. This approach is used for a part of the wastewater treatment component in this report pertaining to the existing wastewater treatment plant assets.

Fee Geography
Fees are calculated uniformly throughout the entire EPASD service area, including the City of East Palo Alto and a small portion of the City of Menlo Park. The City of East Palo Alto’s recent Development Impact Fee Nexus Study Update (2025) calculated some impact fees at different = cost per unit of demand
= cost per unit of demand
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East Palo Alto Sanitary District Sewer Capacity Fee Update Study 9 levels within the RBD/4 Corners Specific Plan area compared to other areas of the City to reflect a different level of facility needs within the Specific Plan Area. Based on the EPASD Sewer System Master Plan, the identified sewer facilities and treatment facilities provide a similar level of benefit to all development within EPASD, so a single fee zone is appropriate for this fee update study. Figure 1 displays the EPASD boundaries.
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East Palo Alto Sanitary District Sewer Capacity Fee Update Study 10 Figure 1: EPASD Boundaries
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11 2. Growth Forecasts
Growth projections are used as indicators of demand to determine facility needs and allocate those needs between existing and new development. This chapter explains the source for the growth projections used in this study based on a 2025 base year and a planning horizon of 2045.

Estimates of existing development and projections of future growth are critical assumptions used throughout this report. These estimates are used as follows:
• The estimate of existing development in 2025 is used as an indicator of existing facility demand and to determine existing facility standards. • The estimate of total development at the 2045 planning horizon is used as an indicator of future demand to determine total facilities needed to accommodate growth.
• Estimates of growth from 2025 through 2045 are used to (1) allocate facility costs between new development and existing development, and (2) estimate total fee revenues.

The demand for sewer facilities is based on the sewer flow generation associated with residential and nonresidential development creating the need for the facilities.

Land Use Types
To ensure proportionality between each fee and the impact of development by type of development, growth projections distinguish between different land use types. The land use types used to estimate demand for facilities are described below. • Single Family Residential: Detached and attached one-unit dwellings. Fees are calculated per square foot of living space. Capacity fees can be charged to accessory dwelling units that meet certain requirements. Refer to the California Government Code §65852.2 (f) text in the appendix for a discussion regarding capacity fees and accessory dwelling units. When applicable, ADUs would be charged the single family rate per square foot of living space. • Multifamily Residential: All attached multifamily dwellings including duplexes and condominiums. Fees are calculated per square foot of living space, excluding common areas and garages.
• Retail: All commercial, retail, and educational development. Fees are calculated on a case-by-case basis based on the average daily flow generation, and strength loadings of the wastewater generated by the development project. • Office and Research & Development: All general, professional, medical, and R&D office development. Fees are calculated on a case-by-case basis based on the average daily flow generation, and strength loadings of the wastewater generated by the development project.
• Industrial: All manufacturing and other industrial development, warehouse and distribution center development Fees are calculated on a case-by-case basis based on the average daily flow generation, and strength loadings of the wastewater generated by the development project.

As mentioned about, nonresidential fees are calculated on a case-by-case basis based on the average daily flow generation, and strength loadings of the wastewater generated by the development project. Refer to the “Nonresidential EDU Calculation” section of Chapter 3 for further discussion.
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East Palo Alto Sanitary District Sewer Capacity Fee Update Study 12 Capacity fees can be charged to accessory dwelling units that meet certain requirements. Refer to the California Government Code §65852.2 (f) text in the appendix for a discussion regarding capacity fees and accessory dwelling units.

Some developments may include more than one land use type, such as a mixed-use development with both residential and commercial uses. Another similar situation would be a warehousing facility that contains office space. In those cases, the facilities fee would be calculated separately for each land use type included within the building.

The District has the discretion to determine which land use type best reflects a development project’s characteristics for purposes of imposing a capacity fee and may adjust fees for special or unique uses to reflect the impact characteristics of the use.

In situations where an existing building is being converted to a more intensive use from a wastewater perspective, then EPASD can charge the net increase in fees compared to the existing use to that project.

Existing and Future Development - Districtwide
Table 2.1 shows the estimated number of dwelling units, employees, and building square feet in the EPASD, both in 2025 and in 2045. The base year estimates of dwelling units come from the California Department of Finance for the City of East Palo Alto. These figures are supplemented with an estimate of 388 residential units within the City of Menlo Park and EPASD, identified using ERSI Business Analyst.

The increase in dwelling units and nonresidential building square feet to 2045 is consistent with the City’s recently adopted Development Impact Fee Nexus Study Update (2025), which relies on the City of EPA’s General Plan and Ravenswood Business District/4 Corners Specific Plan. This analysis assumes that all growth within EPASD will occur within the City of East Palo Alto, and that any growth in the portion of the District within Menlo Park is de minimis.

Base year employees were estimated based on data obtained from the U.S. Census Bureau’s OnTheMap Application. Total jobs in 2045 are consistent with the City’s recently adopted Development Impact Fee Nexus Study Update (2025).

Base year nonresidential building square feet estimated were by Raimi and Associates as part of the RBD Specific Plan Update. Total nonresidential building square footage in 2045 is consistent with the City’s recently adopted Development Impact Fee Nexus Study Update (2025). 423
East Palo Alto Sanitary District Sewer Capacity Fee Update Study 13 Table 2.1: Existing and New Development in EPASD
2025 2045 Increase
Dwelling Units 1
Single Family 5,104 6,094 990
Multifamily 3,557 5,719 2,162
Total 8,661 11,813 3,152

Employment 2
Retail 1,905 2,356 451
Office and R&D 2,975 12,658 9,683
Industrial 332 648 316
Total 5,212 15,661 10,449
Building Square Feet (000s) 3
Retail 550 883 333
Office and R&D 725 4,764 4,039
Industrial 200 525 325
Total 1,475 6,172 4,697
Sources: California Department of Finance, Table E-5, 2025; ESRI Business Analyst; City of East Palo Alto, Development Impact Fee Nexus Study Update (2025); Willdan Financial Services.
1 2025 dw elling units for East Palo Alto identified in Table E-5, from the California Department of Finance. Also includes 369 single family dw elling units, and 19 multifamily dw elling units in Menlo Park that are w ithin the EPASD boundaries, estimated using ESRI Business Analyst. The projected increase in dw elling units to 2045 is identified in City's adopted 2025 Development Impact Fee Nexus Study Update, and assumes no increase in dw elling units w ithin Menlo Park. 2 Current estimates of primary jobs from the US Census' OnTheMap. Assumes all nonresidential land uses w ithin EPASD are w ithin the City of East Palo Alto.

Projected employment consistent w ith 2045 projection from 2025 Development Impact Fee Nexus Study Update.
3 Base year building square feet estimated by Raimi and Associates. Projected building square feet consistent w ith 2045 projection from 2025 Development Impact Fee Nexus Study Update.
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14 3. Sewer Capacity Fee
This chapter details an analysis of the need for water facilities to accommodate growth within EPASD. The projects and associated costs in this chapter were identified in the District’s Sewer System Master Plan (2025). This chapter documents a reasonable relationship between new development and a sewer capacity fee to fund facilities that serve new development.

Sewer Demand
Estimates of new development and its consequent increased sewer demand provide the basis for calculating the sewer capacity fee. The need for sewer facilities improvements is based on the sewer demand placed on the system by development. A typical measure of demand is a flow generation rate, expressed as the number of gallons per day generated by a specific type of land use. Flow generation rates are a reasonable measure of demand for the District’s system of sewer improvements because they represent the average rate of demand that will be placed on the system per land use designation.

Table 3.1 shows the calculation of equivalent dwelling unit (EDU) demand factors based on flow generation by land use category. EDU factors express sewer flow from each land use in terms of the flow generated by a single-family dwelling unit.

The flow generation factors are based on data from the EPASD Sewer System Master Plan and have been adjusted to reflect differences in water flow generation from the City’s 2025 water capacity fee study. This was done to refine the estimate for future sewer demand based on differences in assumed wastewater flow generation, by land use. The factors all assume that sewer use scales proportionally to water demand. The one exception to this is that it is assumed that water demand is equal to sewer demand for multifamily properties. This assumes that irrigation uses (which divert water flow from the sewer system) are de minimis for multifamily properties, but not for other land uses.
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East Palo Alto Sanitary District Sewer Capacity Fee Update Study 15 Table 3.1: Sewer Demand by Land Use
Land Use Type
Average Flow
Generation per DU or
1,000 Sq. Ft.1
Equivalent
Dwelling Unit
(EDU)
Residential Dwelling Unit
Single Family 200 1.00
Multifamily 160 0.80
Nonresidential - per 1,000 Sq. Ft. 2
Retail 124 0.62
Office and R&D 186 0.93
Industrial 84 0.42
Sources: Appendix C, East Palo Alto Sanitary District Sewer System Master Plan , June 20, 2025.; Table 4-5, East Palo Alto Water System Master Plan, 2023 Willdan Financial Services. 2 Sew er Master Plan assumed 0.1 gallons per day per square foot of nonresidential space based on Section B1.03.3 for Office and Retail of the East Palo Alto Sanitary District Standard Specifications for Design and Construction of Sanitary Collection and Conveyance Facilities dated June 6, 2002 to identify needed facilities. EDU calculation and cost allocation based on flow generation assumptions show n in this table.
1 Average flow generation factors are based on w ater flow generation from City's w ater impact fee, scaled based on 200 gallons per day per dw elling unit. Multifamily rate assumes de minimis irrigation use.

EDU Generation by New Development
Table 3.2 shows the estimated EDU generation from new development through 2045 for the City of East Palo Alto. The EDU factors from Table 3.1 are multiplied by the land use assumptions from Chapter 2 to estimate total EDUs in the base year, at the planning horizon and for new development. It is assumed that all future growth within EPASD will occur within the City of East Palo Alto, and not within the portions of Menlo Park. However, should development occur within Menlo Park, that development would benefit from the sewer and wastewater treatment facilities examined in this study, and can be charged the capacity fees. 426
East Palo Alto Sanitary District Sewer Capacity Fee Update Study 16 Table 3.2: Sewer Facilities Equivalent Dwelling Units Land Use
EDU
Factor
DU or 1,000
Sq. Ft. EDUs
DU or 1,000
Sq. Ft. EDUs
DU or 1,000
Sq. Ft. EDUs
Residential - per Dwelling Unit
Single Family 1.00 5,104 5,104 990 990 6,094 6,094
Multifamily 0.80 3,557 2,846 2,162 1,729 5,719 4,575
Subtotal 8,661 7,950 3,152 2,719 11,813 10,669
Nonresidential - per 1,000 Sq. Ft.

Retail 0.62 550 341 333 207 883 548
Office and R&D 0.93 725 674 4,039 3,757 4,764 4,431
Industrial 0.42 200 84 325 137 525 221
Subtotal 1,475 1,099 4,697 4,101 6,172 5,200
Total 9,049 6,820 15,869
Sources: Tables 2.1 and 3.1.
2025 Growth 2025 to 2045 2045
Facility Needs and Costs
Table 3.3 identifies the planned sewer facilities to be funded by the fee. Projects were identified in EPASD’s Sewer System Master Plan. All projects are located within the EPASD boundaries.

The criteria for “Category 1” and “Category 2” are explained after the table. 427
East Palo Alto Sanitary District Sewer Capacity Fee Update Study 17 Table 3.3: Sewer Facilities Projects
Project
No. Improvement Description Proposed Pipe Sizes
Approximate
Length
of Pipe (LF)
Projected
OPPC ($)
Category 1 Projects

1.1 Pipeline Replacement on Menalto Avenue, Poplar Avenue, Bay Road, and Elliot Drive 8", 10", 12" HDPE DR 17 4,833 $ 6,042,000

1.2 Pipeline Replacement on Trunk Line in Creek, Beech Street, Larkspur Drive, and Gardenia Ave 8", 12", 16", 30" HDPE DR 17 2,668 11,315,000 Subtotal - Category 1 7,501 $ 17,357,000
Category 2 Projects

2.1 Pipeline Replacement on Bayshore Road, Donohoe Street, Cooley Ave, and O'Connor Street 8", 10", 12", 24" HDPE DR 17 3,460 $ 7,466,000

2.2 Pipeline Replacement on University Avenue, Runnymede Street, Clarke Avenue, and Beech Street 10", 12" HDPE DR 17 4,188 9,795,000

2.3 Pipeline Replacement on Trunk Line in Creek 30" HDPE DR 17 2,981 17,635,000

2.4 Pipeline Replacement on Bay Road and Pulgas Avenue 8", 10", 24", 30" HDPE DR 17 2,799 9,293,000

2.5 Pipeline Replacement on Maple Lane 10" HDPE DR 17 1,161 1,401,000

2.6 Pipeline Replacement on O'Connor Street. Project will also include 11 Smart Cover Meters to be installed similar to the subbasin locations notated in V&A Flow Monitoring Study. 12" HDPE DR 17 841 1,377,000

2.7 New Parallel Trunk Line within San Francisquito Creek on Palo Alto Golf Course 24" HDPE DR 17 1,569 5,832,000 Subtotal - Category 2 16,999 $ 52,799,000
Grand Total 24,500 $ 70,156,000
Abbreviations:

DR: dimension ration
HDPE: high density polyethylene
LF: linear feet
OPPC: opinion of probable project cost
Sources: Tables 7.1 and 7.3, East Palo Alto Sanitary District Sewer System Master Plan , June 20, 2025. 428
East Palo Alto Sanitary District Sewer Capacity Fee Update Study 18 Sewer Facilities Cost per Gallon per Day
The allocation of project costs to new development were estimated as follows:

Category 1 costs are partially needed to serve new development and partially needed to serve existing development. Through sewer flow modeling, the Master Plan identified that 25% of category 1 costs are attributable to the increased demands associated with new development.

Category 2 projects are solely needed due to increased demand from growth throughout the entire District. Accordingly, these costs are allocated 100% to the capacity fee.

Table 3.4 shows the calculation of the cost per gallon per day needed to fund new development’s share of sewer facilities from the Master Plan. The total cost allocated to new development is divided by the increase in EDUs from Table 3.2 to determine a cost per EDU. The result is divided by the assumption of 200 GPD per EDU to determine the cost per GPD, which will drive the sewer facilities component of the capacity fee calculation.

Table 3.4: Sewer Facilities Cost per GPD
Total Project
Costs
Allocation to
New
Development
Growth Related Capital
Category 1 Costs1$ 17,357,000 25% $ 4,339,250
Category 2 Costs 52,799,000 100% 52,799,000
Total $ 70,156,000 $57,138,250
Growth in EDUs (2025 to 2045) 6,821
Cost per EDU $ 8,377
GPD per EDU 200
Cost per GPD $ 41.89
1 Per the Sewer System Master Plan , 25% of Category 1 costs associated w ith existing capacity assurance improvements are also anticipated to provide capacity benefits for future grow th. The developer-associated cost w as determined through aflow -based analysis. It evaluated the projected increase in sew er system flow contributed bynew development relative to total system demand.

Sources: East Palo Alto Sanitary District Sewer System Master Plan , June 20, 2025; Tables 3.2 and 3.3.

Projected Fee Revenue
Table 3.5 shows the projected fee revenue for the sewer facilities component of the fee. The difference between the total project cost and the projected fee revenue is existing development’s share of the planned facilities, often referred to as an existing deficiency. This existing deficiency cannot be funded through the capacity fees. The City can use any funding source other than the fees to pay for the existing deficiency.
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East Palo Alto Sanitary District Sewer Capacity Fee Update Study 19 Table 3.5: Projected Fee Revenue
Total Project Cost $ 70,156,000
Projected Fee Revenue 57,138,250
Existing Deficiency $ 13,017,750
Source: Table 3.4.

Current Treatment Plant Asset Valuation
The District’s sewage is conveyed to the Palo Alto Regional Water Quality Control Plant (PARWQCP) for treatment and disposal. The PARWQCP is a regional wastewater treatment plant owned and operated by the City of Palo Alto on behalf of several regional agencies.

The wastewater plant treatment component of the sewer capacity fee is comprised of two components:

1. A “buy-in” component where new development “buys in” to the excess capacity of the existing PARWQCP facilities.

2. A future facility component, where new development funds its proportional share of upgrades needed at the PARWQCP so that the plant can continue to provide its current level of service.

In this case, Replacement New Cost Less Depreciation (RCNLD) is the appropriate method to determine the current value of the existing systems for calculation of the treatment buy-in component. The RCNLD approach accounts for depreciation and consequently addresses the fact that the system reflects its current condition. This approach reflects the value of the remaining useful life of the existing facilities.

Table 3.6 presents the RCNLD of the PARWQCP wastewater treatment system assets.

Table 3.6: Existing Water System Assets
Description Acquisition Value
Replacement
Cost New Depreciation
Replacement
Cost New
Less
Depreciation
Asset Class 500603 WWT-CIP $ 23,299,605 $ 28,326,411 $ - $ 28,326,411 Asset Class 500650 WWT-Equip-Treat&Disp 147,977,672 324,717,910 243,075,677 81,642,234 Asset Class 500655 WWT-Pipelines 4,038,770 6,659,781 3,625,780 3,034,001 Asset Class 500660 WWT-Valves 268,059 442,019 240,648 201,371 Asset Class 500665 WWT-Hydrants 69,031 113,829 37,183 76,646 Grand Total $ 175,653,136 $ 360,259,949 $ 246,979,287 $ 113,280,662 Sources: City of Palo Alto; Engineering New s Record; Willdan Financial Services.

Adjusted System Valuation
The PARWQCP has over $41.7 million in outstanding debt principal. This amount represents debt that ratepayers will pay back through monthly service charges on an ongoing basis, so this amount is subtracted from total asset value in calculating the total to be recovered as a buy-in 430
East Palo Alto Sanitary District Sewer Capacity Fee Update Study 20 component. Subtracting the outstanding debt principal from the current asset valuation yields the total adjusted system value. This calculation is shown below in Table 3.7.

Table 3.7: Adjusted System Valuation
Asset Valuation $ 113,280,662
Outstanding Debt Principal 41,676,984
Net Valuation $ 71,603,678
Sources: Appendix Tables A.1 through A.4, Table 3.6, Willdan Financial Services.

Treatment Facilities Cost
The City of Palo Alto, who owns the regional treatment plant which provides service to EPASD, is pursuing two capital improvement projects necessary for the PARWQCP to be able to continue to provide its current level of service: secondary treatment upgrades and an advanced water purification system. Table 3.8 summarizes the costs of these capital improvements.

Table 3.8: Treatment Facilities Costs
Secondary Treatment Upgrades (WQ-19001) $ 193,000,000
Advanced Water Purification System (WQ-19903) 59,900,000 Total $ 252,900,000
Sources: City of Palo Alto.

Wastewater Treatment Component
Every capacity fee consists of a dollar amount, representing the value of facilities, divided by a measure of demand. In this case, buy-in fees are first calculated as the system value per gallon per day (GPD), and per pound biochemical oxygen demand (BOD) and of total suspended solids (SS). BOD and SS are two industry‐standard measures of wastewater strength used in rate and fee setting. Charging new connections based on sewer strength ensures that new customers with wastewater that contains higher‐strength concentrations of BOD and SS will pay for their proportionate share of facility costs related to wastewater treatment. Then these amounts are translated into fees per housing unit (fee per unit) or employment space by multiplying the cost per GPD and per pound by the flow generation rate and strength factors for each land use category. These amounts become the fee schedule.

The calculation of the buy-in fee per GPD for wastewater treatment capacity is shown in Table

3.9. Consistent with the 2018 and 2022 Capacity Charge study, the treatment costs are allocated 34 percent to flow, 33 percent to BOD, and 33 percent to SS. Also consistent with the prior capacity fee studies, it is assumed that the average strength of flow at the PACWQCP is 250 mg/L of BOD and 225 mg/L of SS.

Using the PACWQCP average daily flow capacity of 40 million gallons and the average strength factors cited above, yields a capacity of 83,454 pounds per day of BOD and 75,109 pounds per 431
East Palo Alto Sanitary District Sewer Capacity Fee Update Study 21 day of SS. Costs allocated to each component (flow, BOS and SS) are divided by the capacity respectively to determine the cost per unit per day that drives the capacity fee schedule.

Table 3.9: Wastewater Treatment Component
Flow BOD SS Total
Cost Allocation (%) 34% 33% 33% 100%
Treatment Plant Upgrades $ 85,986,000 $ 83,457,000 $ 83,457,000 $ 252,900,000 Treatment Plant Buy-In 24,345,250 23,629,214 23,629,214 71,603,678 Total $ 110,331,250 $ 107,086,214 $ 107,086,214 $ 324,503,678 Wastewater Strength at PARWQCP 250 mg/L 225 mg/L
Total Capacity 40,000,000 gpd 83,454 lbs/day 75,109 lbs/day Cost per Unit $ 2.76 per gpd $ 1,283.18 per lb $ 1,425.75 per lb Sources: Tables 3.7 and 3.8.

Total Cost per EDU
Table 3.10 calculates a cost per EDU, which includes a sewer facilities component, and a treatment plan component, comprised of a buy-in subcomponent, and facilities upgrade subcomponent. The EDU loadings are multiplied by the cost components, which are all expressed as a cost per unit per day of capacity. The totals are summed, resulting in the total cost per EDU which drives the fee calculation. Using this approach the capital costs are allocated proportionally across all development served by the 40 million GPD of capacity at the PACWQCP.

Table 3.10: Cost per EDU
Total
EDU Loadings 200 gpd 0.4006 lbs/day 0.4006 lbs/day
Cost Components
Sewer Facilities $41.89 per gpd $ - per lb $ - per lb
Treatment Plant Capacity 2.76 per gpd 1,283.18 per lb 1,425.75 per lb Total $44.65 per gpd $ 1,283.18 per lb $1,425.75 per lb Capacity Charge per EDU $8,930 per EDU $ 514 per EDU $ 571 per EDU $10,015 Share of Total 89.17% 5.13% 5.70%
Sources: East Palo Alto Sanitary District Capacity Charge Study, 2022; Tables 3.1, 3.4 and 3.9, Willdan Financial Services.

Flow BOD SS
Residential Fee Schedule
The maximum justified sewer capacity fees for residential development are shown in Table 3.11.

The total cost per EDU is converted to a fee per average residential unit of new development based on the EDU factors from Table 3.1. The total charge includes a 1% administrative charge to fund the non-capital costs associated with maintaining a capacity fee program. The resulting fees per average unit are divided by the average square feet per type of unit to determine the fee per square foot of living space. The assumptions for average square foot per unit were developed 432
East Palo Alto Sanitary District Sewer Capacity Fee Update Study 22 by the City in its recent Development Impact Fee Nexus Study Update (2025), and reflect the assumed size of typical single family and multifamily dwelling units to be built in the City.1 Table 3.11: Residential Sewer Capacity Fee Schedule
A B C = A x B D = C x 1% E = C + D F = E / Average
Cost per EDU Base Admin Fee per
EDU Factor Fee1 Charge1, 2 Total Fee Sq. Ft.3
Residential Dwelling Unit
Single Family $10,015 1.00 $10,015 $ 100 $ 10,115 $ 5.95 Multifamily 10,015 0.80 8,012 80 8,092 9.25
1 Fee per average sized dw elling unit.
3 Assumes 1,700 square feet per single family unit and 875 square feet per multifamily unit.

Sources: Tables 3.1 and 3.10.
² Administrative charge of 1.0 percent for (1) legal, accounting, and other administrative support and (2) impact fee program administrative costs including revenue collection, revenue and cost accounting, mandated public reporting, and fee justification analyses.

Nonresidential EDU Calculation
The sewer capacity fee for nonresidential land uses is calculated to reflect the individual flow and strength characteristics of various nonresidential uses relative to the flow characteristics of a typical EDU. Capacity Charges are assessed to non-residential accounts based on the number of EDUs assigned to the connection, which are derived based on the estimated wastewater flow and strength loadings of each connection according to the formula shown in Figure 1. The fractions shown in Figure 1 (which effectively “weight” the relative importance of flow vs. BOD vs. SS) are taken from the percentages shown in Table 3.10.

The resulting number of EDUs is multiplied by the fee per EDU of $10,115 to determine the total fee per nonresidential development project.
1 City of East Palo Alto, Development Impact Fee Nexus Study Update, March 4, 2025, Table

2.3, page 19.

Figure 1:

Number of EDUs = 0.8917 x Flow / 200 gpd + 0.0513 x BOD / 200 mg/l + 0.057 x SS / 200 mg/l
433
23 4. Implementation
Capacity Fee Program Adoption Process
Capacity program adoption procedures are found in the California Government Code section 66016. Adoption of a capacity fee requires the adopting agency to follow certain procedures including holding a public hearing. That public hearing must be noticed at least 14 days in advance. Data, such as a capacity fee report, must be made available at least 10 days prior to the public hearing. The District’s legal counsel should be consulted for any other procedural requirements as well as advice regarding adoption of an enabling ordinance and/or a resolution.

After adoption there is a mandatory 60-day waiting period before the fees go into effect.

Inflation Adjustment
The District can keep its fee program up to date by periodically adjusting the fees for inflation.

Such adjustments should be completed regularly to ensure that new development will fully fund its share of needed facilities. We recommend that the Engineering News Record’s Construction Cost Index (CCI) be used for adjusting fees for inflation.

While fee updates using inflation indices are appropriate for periodic updates to ensure that fee revenues keep up with increases in the costs of public facilities, the District will also need to conduct more extensive updates of the fee documentation and calculation (such as this study) when significant new data on growth forecasts and/or facility plans become available.

Reporting Requirements
Annual reporting requirements for capacity fees are identified in Government Code 66013 (d). A local agency shall make available to the public, within 180 days after the last day of each fiscal year, the following information for that fiscal year:
• A description of the charges deposited in the fund.
• The beginning and ending balance of the fund and the interest earned from investment of moneys in the fund.
• The amount of charges collected in that fiscal year.
• An identification of all of the following:
o Each public improvement on which charges were expended and the amount of the expenditure for each improvement, including the percentage of the total cost of the public improvement that was funded with those charges if more than one source of funding was used.
o Each public improvement on which charges were expended that was completed during that fiscal year.
o Each public improvement that is anticipated to be undertaken in the following fiscal year.
• A description of each interfund transfer or loan made from the capital facilities fund. The information provided, in the case of an interfund transfer, shall identify the public improvements on which the transferred moneys are, or will be, expended. The information, in the case of an interfund loan, shall include the date on which the loan will be repaid, and the rate of interest that the fund will receive on the loan. 434
East Palo Alto Sanitary District Sewer Capacity Fee Update Study 24 CEQA
The approval of the Sewer Capacity Fee Update Study and the proposed Capacity Fee Schedule would not have a significant impact on the environment and would be exempt from the California Environmental Quality Act (“CEQA”) pursuant to Section 15061(b)(3) of the State CEQA Guidelines because these actions would involve only the adoption of a study and fee schedule, and no specific development would be authorized. No physical activity would occur until all required environmental review is conducted at the time the physical improvements are undertaken at a future date. Therefore, the approval and adoption of the Sewer Capacity Fee Update Study and the proposed Capacity Fee Schedule does not have the potential for causing a significant effect on the environment. In addition, the adoption of a resolution approving and setting forth a procedure for determining fees for the purpose of obtaining funds for capital projects and equipment necessary to maintain service within existing service areas and is statutorily exempt from CEQA pursuant to State CEQA Guidelines 15273(a)(4). 435
25 Appendix
Debt Service Schedules
Federal FundsAdmin Fee Principal
Payment # Date Component Component Payment
1 (paid) 6/30/2010 $ 374,999 $ 75,002 $ 450,000
2 (paid) 6/30/2011 374,999 75,002 450,000
3 (paid) 6/30/2012 374,999 75,002 450,000
4 (paid) 6/30/2013 374,999 75,002 450,000
5 (paid) 6/30/2014 374,999 75,002 450,000
6 (paid) 6/30/2015 374,999 75,002 450,000
7 (paid) 6/30/2016 374,999 75,002 450,000
8 (paid) 6/30/2017 374,999 75,002 450,000
9 (paid) 6/30/2018 374,999 75,002 450,000
10 (paid) 6/30/2019 374,999 75,002 450,000
11 (paid) 6/30/2020 374,999 75,002 450,000
12 (paid) 6/30/2021 374,999 75,002 450,000
13 (paid) 6/30/2022 374,999 75,002 450,000
14 (paid) 6/30/2023 374,999 75,002 450,000
15 (paid) 6/30/2024 374,999 75,002 450,000
16(paid) 6/30/2025 374,999 75,002 450,000
17 6/30/2026 374,999 75,002 450,000
18 6/30/2027 374,999 75,002 450,000
19 6/30/2028 374,999 75,002 450,000
20 6/30/2029 374,999 75,002 450,000
Total $ 7,499,970 $ 1,500,030 $ 9,000,000
Remaining Principal $ 1,800,000
Source: City of Palo Alto.

Appendix Table A.1: 2007 Palo Alto, Mountain View / Moffett Area Reclaimed Water Pipeline Project Debt Service Schedule 436
East Palo Alto Sanitary District Sewer Capacity Fee Update Study 26 Pmt# Date Principal Interest Repayment
1 (paid) 11/30/2011 $ 346,228 $ 209,498 $ 555,726
2 (paid) 11/30/2012 341,241 214,485 555,726
3 (paid) 11/30/2013 350,113 205,613 555,726
4 (paid) 11/30/2014 359,216 196,510 555,726
5 (paid) 11/30/2015 368,556 187,171 555,726
6 (paid) 11/30/2016 378,138 177,588 555,726
7 (paid) 11/30/2017 387,970 167,757 555,726
8 (paid) 11/30/2018 398,057 157,669 555,726
9 (paid) 11/30/2019 408,406 147,320 555,726
10 (paid) 11/30/2020 419,025 136,701 555,726
11 (paid) 11/30/2021 429,920 125,807 555,726
12 (paid) 11/30/2022 441,098 114,629 555,726
13(paid) 11/30/2023 452,566 103,160 555,726
14(paid) 11/30/2024 464,333 91,393 555,726
15(paid) 11/30/2025 476,405 79,321 555,726
16 11/30/2026 488,792 66,934 555,726
17 11/30/2027 501,501 54,226 555,726
18 11/30/2028 514,540 41,187 555,726
19 11/30/2029 527,918 27,809 555,726
20 11/30/2030 541,643 14,083 555,726
Total $ 8,595,665 $ 2,518,860 $ 11,114,525
Remaining Principal $ 2,574,393
Source: City of Palo Alto.

Appendix Table A.2: 2009 Ultraviolet Disinfection Facility Project Project Debt Service Schedule
437
East Palo Alto Sanitary District Sewer Capacity Fee Update Study 27 Payment # Date Principal Repayment
1 (paid) 5/31/2020 696,854 395,007 1,091,862
2 (paid) 5/31/2021 650,852 441,010 1,091,862
3 (paid) 5/31/2022 662,567 429,295 1,091,862
4 (paid) 5/31/2023 674,493 417,368 1,091,862
5 (paid) 5/31/2024 686,634 405,228 1,091,862
6(paid) 5/31/2025 698,994 392,868 1,091,862
7 5/31/2026 711,575 380,286 1,091,862
8 5/31/2027 724,384 367,478 1,091,862
9 5/31/2028 737,423 354,439 1,091,862
10 5/31/2029 750,696 341,165 1,091,862
11 5/31/2030 764,209 327,653 1,091,862
12 5/31/2031 777,965 313,897 1,091,862
13 5/31/2032 791,968 299,894 1,091,862
14 5/31/2033 806,223 285,638 1,091,862
15 5/31/2034 820,735 271,126 1,091,862
16 5/31/2035 835,509 256,353 1,091,862
17 5/31/2036 850,548 241,314 1,091,862
18 5/31/2037 865,858 226,004 1,091,862
19 5/31/2038 881,443 210,419 1,091,862
20 5/31/2039 897,309 194,553 1,091,862
21 5/31/2040 913,461 178,401 1,091,862
22 5/31/2041 929,903 161,959 1,091,862
23 5/31/2042 946,641 145,220 1,091,862
24 5/31/2043 963,681 128,181 1,091,862
25 5/31/2044 981,027 110,835 1,091,862
26 5/31/2045 998,686 93,176 1,091,862
27 5/31/2046 1,016,662 75,200 1,091,862
28 5/31/2047 1,034,962 56,900 1,091,862
29 5/31/2048 1,053,591 38,271 1,091,862
30 5/31/2049 1,072,556 19,306 1,091,862
Total $ 25,197,408 $ 7,558,443 $ 32,755,851
Remaining Principal $ 21,127,013
Source: City of Palo Alto.

Appendix Table A.3: 2017 Sludge Dewatering and Loadout
Facility Project (Project No.: C-06-8190-110; Agreement No.:

D1601034-550-0) Debt Service Schedule
438
East Palo Alto Sanitary District Sewer Capacity Fee Update Study 28 Payment # Date Principal Interest Repayment
1(Paid) 7/31/2025 496,423 139,801 636,224
2 7/31/2026 490,643 145,580 636,224
3 7/31/2027 495,059 141,164 636,224
4 7/31/2028 499,515 136,709 636,224
5 7/31/2029 504,010 132,213 636,224
6 7/31/2030 508,546 127,677 636,224
7 7/31/2031 513,123 123,100 636,224
8 7/31/2032 517,741 118,482 636,224
9 7/31/2033 522,401 113,822 636,224
10 7/31/2034 527,103 109,121 636,224
11 7/31/2035 531,847 104,377 636,224
12 7/31/2036 536,633 99,590 636,224
13 7/31/2037 541,463 94,761 636,224
14 7/31/2038 546,336 89,887 636,224
15 7/31/2039 551,253 84,970 636,224
16 7/31/2040 556,214 80,009 636,224
17 7/31/2041 561,220 75,003 636,224
18 7/31/2042 566,271 69,952 636,224
19 7/31/2043 571,368 64,856 636,224
20 7/31/2044 576,510 59,713 636,224
21 7/31/2045 581,699 54,525 636,224
22 7/31/2046 586,934 49,290 636,224
23 7/31/2047 592,216 44,007 636,224
24 7/31/2048 597,546 38,677 636,224
25 7/31/2049 602,924 33,299 636,224
26 7/31/2050 608,351 27,873 636,224
27 7/31/2051 613,826 22,398 636,224
28 7/31/2052 619,350 16,873 636,224
29 7/31/2053 624,924 11,299 636,224
30 7/31/2054 630,549 5,675 636,224
Total $ 16,672,001 $ 2,414,706 $ 19,086,707
Remaining Principal $ 16,175,578
Source: City of Palo Alto.

Appendix Table A.4: 2021 Primary Sedimentation Tank
Rehabilitation (Project No.: C-06-8490-110; Agreement No.:

D200109-550-0) Debt Service Schedule
California Government Code 66013
(a) Notwithstanding any other provision of law, when a local agency imposes fees for water connections or sewer connections, or imposes capacity charges, those fees or charges shall not exceed the estimated reasonable cost of providing the service for which the fee or charge is imposed, unless a question regarding the amount of the fee or charge imposed in excess of the estimated reasonable cost of providing the services or materials is submitted to, and approved by, a popular vote of two-thirds of those electors voting on the issue. (b) As used in this section:
439
East Palo Alto Sanitary District Sewer Capacity Fee Update Study 29 (1) “Sewer connection” means the connection of a structure or project to a public sewer system.
(2) “Water connection” means the connection of a structure or project to a public water system, as defined in subdivision (h) of Section 116275 of the Health and Safety Code. (3) “Capacity charge” means a charge for public facilities in existence at the time a charge is imposed or charges for new public facilities to be acquired or constructed in the future that are of proportional benefit to the person or property being charged, including supply or capacity contracts for rights or entitlements, real property interests, and entitlements and other rights of the local agency involving capital expense relating to its use of existing or new public facilities. A “capacity charge” does not include a commodity charge. (4) “Local agency” means a local agency as defined in Section 66000. (5) “Fee” means a fee for the physical facilities necessary to make a water connection or sewer connection, including, but not limited to, meters, meter boxes, and pipelines from the structure or project to a water distribution line or sewer main, and the estimated reasonable cost of labor and materials for installation of those facilities bears a fair or reasonable relationship to the payor's burdens on, or benefits received from, the water connection or sewer connection.
(6) “Public facilities” means public facilities as defined in Section 66000. (c) A local agency receiving payment of a charge as specified in paragraph (3) of subdivision (b) shall deposit it in a separate capital facilities fund with other charges received, and account for the charges in a manner to avoid any commingling with other moneys of the local agency, except for investments, and shall expend those charges solely for the purposes for which the charges were collected. Any interest income earned from the investment of moneys in the capital facilities fund shall be deposited in that fund.
(d) For a fund established pursuant to subdivision (c), a local agency shall make available to the public, within 180 days after the last day of each fiscal year, the following information for that fiscal year:
(1) A description of the charges deposited in the fund. (2) The beginning and ending balance of the fund and the interest earned from investment of moneys in the fund.
(3) The amount of charges collected in that fiscal year. (4) An identification of all of the following:
(A) Each public improvement on which charges were expended and the amount of the expenditure for each improvement, including the percentage of the total cost of the public improvement that was funded with those charges if more than one source of funding was used.
(B) Each public improvement on which charges were expended that was completed during that fiscal year.
(C) Each public improvement that is anticipated to be undertaken in the following fiscal year.
(5) A description of each interfund transfer or loan made from the capital facilities fund. The information provided, in the case of an interfund transfer, shall identify the public improvements on which the transferred moneys are, or will be, expended. The information, in the case of an interfund loan, shall include the date on which the loan will be repaid, and the rate of interest that the fund will receive on the loan. (e) The information required pursuant to subdivision (d) may be included in the local agency's annual financial report.
(f) The provisions of subdivisions (c) and (d) shall not apply to any of the following:
440
East Palo Alto Sanitary District Sewer Capacity Fee Update Study 30 (1) Moneys received to construct public facilities pursuant to a contract between a local agency and a person or entity, including, but not limited to, a reimbursement agreement pursuant to Section 66003.
(2) Charges that are used to pay existing debt service or which are subject to a contract with a trustee for bondholders that requires a different accounting of the charges, or charges that are used to reimburse the local agency or to reimburse a person or entity who advanced funds under a reimbursement agreement or contract for facilities in existence at the time the charges are collected.
(3) Charges collected on or before December 31, 1998.
(g) Any judicial action or proceeding to attack, review, set aside, void, or annul the ordinance, resolution, or motion imposing a fee or capacity charge subject to this section shall be brought pursuant to Section 66022.
(h) Fees and charges subject to this section are not subject to the provisions of Chapter 5 (commencing with Section 66000), but are subject to the provisions of Sections 66016, 66022, and 66023.
(i) Subdivisions (c) and (d) only apply to capacity charges levied pursuant to this section. 441
East Palo Alto Sanitary District Sewer Capacity Fee Update Study 31 California Government Code §65852.2 (f)
(1) Fees charged for the construction of accessory dwelling units shall be determined in accordance with Chapter 5 (commencing with Section 66000) and Chapter 7 (commencing with Section 66012).
(2) An accessory dwelling unit shall not be considered by a local agency, special district, or water corporation to be a new residential use for purposes of calculating connection fees or capacity charges for utilities, including water and sewer service, unless the accessory dwelling unit was constructed with a new single-family dwelling.
(3)
(A) A local agency, special district, or water corporation shall not impose any impact fee upon the development of an accessory dwelling unit less than 750 square feet. Any impact fees charged for an accessory dwelling unit of 750 square feet or more shall be charged proportionately in relation to the square footage of the primary dwelling unit. (B) For purposes of this paragraph, “impact fee” has the same meaning as the term “fee” is defined in subdivision (b) of Section 66000, except that it also includes fees specified in Section 66477. “Impact fee” does not include any connection fee or capacity charge charged by a local agency, special district, or water corporation. (4) For an accessory dwelling unit described in subparagraph (A) of paragraph (1) of subdivision (e), a local agency, special district, or water corporation shall not require the applicant to install a new or separate utility connection directly between the accessory dwelling unit and the utility or impose a related connection fee or capacity charge, unless the accessory dwelling unit was constructed with a new single-family home.
(5) For an accessory dwelling unit that is not described in subparagraph (A) of paragraph (1) of subdivision (e), a local agency, special district, or water corporation may require a new or separate utility connection directly between the accessory dwelling unit and the utility. Consistent with Section 66013, the connection may be subject to a connection fee or capacity charge that shall be proportionate to the burden of the proposed accessory dwelling unit, based upon either its square feet or the number of its drainage fixture unit (DFU) values, as defined in the Uniform Plumbing Code adopted and published by the International Association of Plumbing and Mechanical Officials, upon the water or sewer system. This fee or charge shall not exceed the reasonable cost of providing this service.
442

CITY OF EAST PALO ALTO
Mayor & City Council
MAYOR
Webster Lincoln

VICE MAYOR
Ruben Abrica

COUNCIL
Martha Barragan, Mark Dinan, Carlos Romero
2415 University Avenue
East Palo Alto, CA 94303
Phone: (650) 853- 3100
Fax: (650) 853-3136
Web: www.cityofepa.org
Email: [email protected]
Wednesday, June 24, 2026
To the Ecumenical Hunger Program Board of Directors and Community:

For fifty years, the Ecumenical Hunger Program has been a cornerstone of the safety net in East Palo Alto. Long before I was Mayor, EHP was the place our neighbors turned to when things got hard, for food, for clothing, for furniture, for a hand up when there was nowhere else to turn.

That track record, and the thousands of families who can point to a moment EHP helped them get through, matters, and it shouldn't be lost in a single news cycle.

I've seen this week's reporting on EHP's tax filings, and I understand why it raised questions in our community. I've also seen EHP's response to its community, explaining that the expenditures in question were part of a COVID-era Family Sustainability Program, a program built quickly, under real pressure, to get emergency help to local families during the worst of the pandemic.

EHP's Board has acknowledged that program's design and oversight fell short of what it should have been, has discontinued it, and has said it is continuing to review the matter. I take that acknowledgment, and that ongoing review, seriously, and I expect EHP to follow through on it with full transparency to its donors and this community.

What I don't want to see is EHP's full history, and the people it serves every day, get erased by questions about one discontinued program. EHP's core work, the work that has fed and clothed East Palo Alto families for half a century, continues, and our community continues to need it.

Especially right now, with so many of our residents facing real economic pressure and real fear in this political moment, an organization like EHP is not a luxury, it's essential infrastructure for this city.

I support EHP's stated commitment to strengthening its internal controls and governance. I also want to be clear: accountability and support are not in conflict. Holding EHP to a high standard and continuing to stand behind its mission are both things East Palo Alto can do at the same time, and both are the right thing to do.

EHP has shown up for this city for fifty years. I'm not going to stop showing up for them now.

Sincerely,
Webster Lincoln
Mayor, City of East Palo Alto
443
June 17, 2026
To: EHP Community Members
Re: EHP Family Sustainability Program
For half a century, the Ecumenical Hunger Program (EHP) has been deeply committed to serving the East Palo Alto community and providing critical assistance to individuals and families in need. We are aware of the recent media coverage regarding our tax filings and the questions it may have raised. We want to address the concerns of our donors, partners, and community with complete clarity and transparency.

In the summer of 2021, when many, many Americans were suffering from the effects of the COVID-19 pandemic, EHP observed that a large number of its own community members were negatively affected by the pandemic shutdown and were in dire financial need. EHP worked quickly to develop and introduce its Family Sustainability Program.

The proposed $2 million program was designed as a 2-year, Safety-Net Resource Distribution with the intent to assist as many people as possible and as quickly as possible. The program was to provide individualized resource distribution in many areas, including but not limited to housing, food resources for those with special needs, prescriptions, utilities, gasoline, vehicle repairs, critical home repairs, critical medical supplies not covered by insurance, essential school supplies for children, including technology, and more. A primary program goal was to target local families and individuals in need of critical emergency support while the country rebounded from the effects of COVID-19. Program funding would come from unrestricted donations received by EHP.

The Family Sustainability Program ultimately distributed $1,223,373 to 252 local individuals and families between 2022 and 2024. Emergency grants provided to applicants were used towards personal expenses, mortgages, rent, utilities, vehicle loans, traffic tickets, car repairs, medical bills, dental costs, past-due credit card balances, phone bills, unpaid debt, and numerous other items. Individuals and families seeking financial grants from EHP were required to submit an application. Program applicants included community members, but also included EHP employees and some family members of our Executive Director, Lesia Preston. All applications were subject to the same program standards, and all applications from Lesia’s family members were reviewed/approved by an independent Board member. Neither Lesia, nor any of her 444
family members was involved in the decision-making process relating to grants issued to Lesia’s family members.

In 2024, the EHP Board reviewed its Family Sustainability Program. Results were not dissimilar to other Covid-era financial assistance programs (i.e., PPP, SBA EIDL, etc.) in this country. In their haste to quickly provide relief, programs experienced weakness in oversight and internal controls. The EHP Board decided not to renew the Family Sustainability Program and instead focus EHP resources on the foundational programs traditionally offered by EHP (i.e., food resources, clothing, household essentials, holiday distributions, back-to-school distributions, etc.). EHP’s Family Sustainability Program weaknesses are reflected in the organization's financial statements and tax filings.

As an organization dedicated to service, EHP is always learning and striving to improve our governance. We acknowledge that the urgency of the pandemic led us to move as swiftly as possible to prevent our community members from falling through the cracks.

However, in retrospect, more research should have been done before implementing the Family Sustainability Program, and more parameters should have been put in place before implementing this program.

We take our fiduciary responsibilities seriously and are using this moment to strengthen our internal controls and effectiveness. We remain fully dedicated to our 50-year mission of fighting hunger and poverty, and we are deeply grateful for the community's continued trust and support.

EHP helps everyone!
445

East Palo Alto City CouncilJuly 7, 2026

East Palo Alto City Council
July 7, 2026