Palo Alto City Council
November 14, 2022

Straight-time Hours: Eight (8) hours per day. A week’s work shall consist of five (5) consecutive days.

Overtime Rate: All work performed in excess of 8 hours per day and on the 6 th day shall be paid at one and one- half times (1½) the basic hourly rate. All work performed on the 7 th day shall be paid double (2x) the straight-time hourly rate. Work on a holiday shall be paid at one and one-half (1½) times the basic hourly rate in addition to the regular day’s pay.

Travel and Subsistence: Employees required to furnish own vehicle between locations shall be reimbursed at the rate of the standard IRS mileage rate.

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City of Palo Alto

COLLEAGUES MEMO
November 14, 2022 Page 1 of 3
(ID # 14928)
DATE: November 14, 2022
TO: City Council Members
FROM: Council Member Stone, Council Member Burt
SUBJECT: RESPONSIBLE CONTRACTING STANDARDS COLLEAGUE'S MEMO (STONE & BURT)
Issue:

On March 21, 2022, speakers at the City Council meeting raised concerns over labor conditions and wages associated with the City’s third-party contract for janitorial services provided to the City of Palo Alto. On July 14, 2022, the San Jose Spotlight released an article detailing allegations of wage theft made by seven janitors that clean City facilities. left unaddressed, the City faces the potential risk for labor disruption, interruption of services, and turnover of its essential workforce. In addition, the city has a moral obligation to assure that the rights are protected of workers performing contracted services to the city.

Background and Discussion:

In 2017, the City awarded its current janitorial services contract. As part of the bidding process, City staff recommended the adoption of evaluation criteria to address issues with turnover and low-quality performance. On March 21, 2022, speakers at the City Council meeting raised concerns over labor conditions and wages associated with the contract. These concerns included failure to pay contract wages, failure to provide a clear “Paid Time Off” or vacation policy, failure to provide necessary materials to perform job duties, failure to reimburse expenses and mileage, failure to provide safety training or personal protective equipment, and failure to provide sufficient staffing.1
On September 15, 2022, Congresswoman Anna Eshoo wrote to Mayor Burt, recognizing “the prevalence of reported exploitation in the janitorial industry, employers must be vigilant to ensure that janitors are treated fairly.” Additionally, Congresswoman Eshoo encouraged the city to “take into consideration the labor practices of any janitorial contractor with which it 1 City of Palo Alto, “Council Consent Agenda Responses,” June 20, 2022. https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-reports/council- questions/20220620cqccs.pdf
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(ID # 14928)
engages.”2 The City also received a letter on June 15, 2022, from State Senator Josh Becker, encouraging an investigation into allegations of wage theft, because “property service industries tend to have track records of high turnover, poor quality of service, and wage theft.

These issues are particularly prevalent in the janitorial industry where exploitation, sexual harassment, and violations of wage and hour laws are commonplace.”3 Assemblymember Berman also urged Palo Alto to “adopt a higher level of standards for these subcontracted services.”4
On July 14, 2022, the San Jose Spotlight released an article detailing the allegations of wage theft made by seven janitors that clean City facilities. The article cited a report by the Maintenance Cooperation and Trust Fund, a janitorial industry watchdog organization, which describes the predominantly female Hispanic janitorial workforce as “especially vulnerable” dealing with “greater hardships than many other types of low-wage”5 workers. The article also made reference to a situation in 2019 at the City of Fremont, which faced a two day labor stoppage after janitors had a dispute over medical benefits. The article also referenced how Mountain View recently adopted stricter standards to protect their subcontracted janitorial workforce.6 On January 28, 2020, the City of Mountain View adopted a motion that required its Janitorial Services RFP to include that the awarded vendor be a firm whose employees are covered by a collective bargaining agreement, janitors receive wages no less than the prevailing wage as listed under the California Public Utilities Code, and that the State Labor Code’s worker retention period be extended from 60 to 90 days.7
Recommendation:

As a City, we have an interest in ensuring we have uninterrupted operations, high quality services, and that contracted workers performing services for the city are treated fairly. We recommend the City Council direct staff to address the issues facing the City’s subcontracted janitors by developing a policy that would heighten standards where needed within the Janitorial Services RFP for the City Council to adopt for the upcoming and future such RFPs. This policy should establish standards similar to those adopted by the City of Mountain View per below:
• “That the successful proposer be a firm whose employees are covered by a collective bargaining agreement prior to the effective date of contract and that any individual 2 Congresswoman Anna Eshoo Letter, September 15, 2022. https://drive.google.com/file/d/1U5fZAzM3u5tLZf- rZFpZZBofUJ8BynO0/view?usp=sharing
3 Senator Josh Becker letter, June 15, 2022.
https://drive.google.com/file/d/14ZFpJNfSYmwT3Wznba3fTJzIC82vmgDc/view?usp=sharing 4 Assemblymember Marc Berman letter, July 20, 2022. https://drive.google.com/file/d/1GeYSYxkrLungCxWg- voHK3bHEuaHtmvL/view?usp=sharing
5 “Janitors: The Pandemic’s Unseen Essential Workers,” Maintenance Cooperation Trust Fund, April 2021 6 Ruth Silver Taube, “Palo Alto janitorial workers shed light on wage theft,” San Jose Spotlight, July 14, 2022. https://sanjosespotlight.com/silver-taube-palo-alto-janitorial-workers-shed-light-on-wage-theft/ 7 City of Mountain View, “Meeting Minutes - Final,” January 28, 2020.

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performing janitorial services for the City be paid no less than the prevailing wage and benefits established for janitorial services pursuant to the California Public Utilities Code and set by the Department of Industrial Relations.
• That the higher wage rates and/or benefits will be paid should the collective bargaining agreement’s wages and benefits and the prevailing wage and benefits differ. • That the State Labor Code’s worker retention period be extended from 60 to 90 days.” Resource Implications:

Independent of this Colleagues Memo, staff has been evaluating options related to wage requirements for the upcoming janitorial services Request for Proposals (RFP). Given the time sensitivity of this issue in order to initiate a new contract for services, staff will present their analysis to the City Council at the same time this Colleagues Memo is considered.

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City of Palo Alto (ID # 14631)
City Council Staff Report
Meeting Date: 11/14/2022 Report Type: Information Reports City of Palo Alto Page 1
Title: Sales Tax Digest Summary Calendar 2022 Q2 (April 2022 -June 2022) From: City Manager
Lead Department: Administrative Services

DISCUSSION
This report transmits information regarding the City of Palo Alto’s sales tax receipts for the second quarter ( April through June) of 2022. This quarter marks two full years from the initial quarter affected by the pandemic.

There are two attachments to this report that provide further level of information:
• City of Palo Alto Sales Tax Digest Summary (Attachment A) • California Legislative Update (Attachment B)
The City’s sales tax cash receipts of $7.7 million for the second quarter (April to June 2022) is $184,000 (2.5 percent) higher than the same quarter of the prior year (see Attachment A, Table 5). In contrast, the second quarter of 2022 compared to the second quarter of 2020 increased by $1.8 million (31.4 percent). It is important to remember that the state offered small businesses 90-day extensions to pay their second quarter of 2020 taxes, and some companie s made little or no payments in Q2 of 2020 due to this program, therefore 2020 Q1 data includes late payment anomalies related to this extension.

For the year ending in the second quarter of 2022, cash receipts (including county pools) for the City increased by 12.1 percent from the prior year. In comparison, the statewide increase was

16.2 percent while Northern California increased by 13.8 percent.

After adjustments for non -period related payments, the overall economic sales tax activity (local busines s excluding pools) in Palo Alto for the year ending the second quarter of 2022 increased by 20.1 percent compared to 2021 , while the state and Northern California experienced a 10.0 percent increase and a 2.4 percent decrease, respectively . The City of Pa lo Alto experienced a much larger decline in the prior year compared to the state, which resulted in the larger increase when comparing year over year totals. In addition, a one -time audit adjustment by the State of California was made to the City’s cash receipts during Q2 2022, reducing the quarter’s total by $612,000. Although additional details of the refund were not 10 Packet Pg. 267

City of Palo Alto Page 2

made available, the assumption was that this was due to a change in the taxable status of a previous payment.

The second quarter of 2022 includes $1.4 million of sales tax receipts from the county pool. The City’s share of the county pool for this quarter is 5.5 percent, a marginal decrease from 5.6 percent in the second quarter of 2021. County pools are primarily from online purchases fro m out of state companies, remote sellers who ship merchandise to California/County destinations, and private vehicle sales that are not directly allocated to a jurisdiction. County pools are allocated to local jurisdictions based on each jurisdiction’s’ share of total sales taxes.

Attachments:
• Attachment10.a: Attachment A: Palo Alto Q2 2022 Digest Summary • Attachment10.b: Attachment B: California Legislature Update 10 Packet Pg. 268
City of Palo Alto
Sales Tax Digest Summary
Collections through August 2022
Sales May through June 2022 (2022Q2)

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California Overview
For the year ending in second quarter of 2022, cash receipts increased 16.2% statewide, 13.8% in Northern California. However, when adjusted for non-period related payments, the overall economic sales tax activity for the year ending in second quarter of 2022 increased by 10.0% statewide, and down

2.4% in Northern California.

City of Palo Alto
For the year ending in the second quarter of 2022, sales tax cash receipts for the city increased by 12.1% from the prior year. However, when adjusted for non-period related payments, the overall economic sales tax activity in Palo Alto for the year ending in second quarter of 2022 increased by 20.1%.

On a quarterly basis, sales tax cash receipts increased by 2.5% from Quarter 2 of 202 1 to Quarter 2 of 2022. However, this increase includes late payment anomalies related to a state sales tax extension program. The period’s cash rece ipts include tax from business activity during the period, payments for prior periods and other cash adjustments. When adjusted for non -period related payments, the overall economic quarter over quarter sales tax activity (Q2 2021 to Q2 2022) in Palo Alto increased by 17.3%.

A large, one -time audit decision of -$612,000 negatively impacted the city’s cash receipts this quarter.

Without the correction, sales tax cash receipts would have increased by approximately 12.4% from Quarter 2 of 2021 to Quarter 2 of 2022. Approximately 3.8% of that adjusted 12.4% Q2 of 2022 over Q2 of 2021 increase might be attributed to inflation, based on increases in the Consumer Price Index, (CPI - U). Very little of Palo Alto’s adjusted 12.4% increase might be attr ibuted to increased economic activity, based on changes in US Real GDP. Roughly 1.7% is attributable to a decrease in payments from prior periods, due to Palo Alto taxpayers getting caught up with payments. The remaining roughly 6.9% is a combination of recovery and other factors (consumers, businesses and organizations getting back to Pre- Pandemic trends along with non -pandemic related business performance changes). Note that some of these factors are based on broad based data and thus, these growth factor s should be treated as rough guidelines for economic activity changes this quarter.

Regional Overview
The first chart on page two shows adjusted economic benchmark year amounts, which means that it shows a full calendar year from the second quarter of 2021 through second quarter of 2022 compared to second quarter of 2020 through second quarter of 2021 (benchmark years are rolling annual comparisons through the current quarter). The decrease is different between the state and Palo Alto because the sales tax from businesses in Palo Alto were more impacted than those statewide.

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% of Total / % Change Palo Alto California
Statewide S.F. Bay Area Sacramento
Valley Central Valley South Coast Inland Empire North Coast General Retail 28.5 / 22.3 28.1 / 11.2 24.2 / -12.5 28.4 / 19.7 37.6 / 11.8 26.4 / 15.4 33.1 / 33.0 26.5 / -25.7 Food Products 15.9 / 49.7 20.1 / 18.9 20.9 / -2.2 15.7 / 19.2 14.1 / 11.5 22.1 / 28.3 17.8 / 20.6 17.3 / -7.1 Transportation 21.6 / 13.6 24.6 / 11.4 20.7 / -21.1 27.7 / 13.1 22.9 / 11.5 25.3 / 21.6 26.2 / 27.7 29.9 / -7.2 Business to Business 30.4 / 12.2 16.2 / 3.7 22.1 / -15.6 13.8 / 11.9 14.4 / 8.6 16.1 / 12.3 10.1 / 9.0 11.2 / 3.7 Misc/Other 3.5 / 10.0 11.1 / 0.1 12.1 / -21.3 14.4 / 13.2 11.0 / 2.1 10.0 / 7.7 12.8 / 5.1 15.1 / -22.4 Total 100.0 / 20.1 100.0 / 10.0 100.0 / -14.4 100.0 / 15.7 100.0 / 10.1 100.0 / 18.2 100.0 / 22.5 100.0 / -14.3 Palo Alto California
Statewide S.F. Bay Area Sacramento
Valley Central Valley South Coast Inland Empire North Coast Largest Segment Leasing Restaurants Restaurants Auto Sales - New
Miscellaneous
Retail Restaurants Miscellaneous
Retail Service Stations
% of Total / % Change 20.1 / 29.8 14.1 / 29.0 15 / 11.2 11.4 / 5.0 13.9 / 43.3 15.9 / 37.9 15.8 / 73.3 11.3 / 21.9 2nd Largest Segment Auto Sales -
New
Auto Sales -
New
Auto Sales -
New
Miscellaneous
Retail
Department
Stores
Auto Sales -
New
Auto Sales -
New
Auto Sales -
New
% of Total / % Change 17.5 / 8.3 11.7 / 3.9 10.2 / -30.4 10.9 / 50.6 11.0 / 0.8 12.9 / 16.7 11.7 / 18.9 11.2 / -21.4 3rd Largest Segment Restaurants Miscellaneous
Retail
Office
Equipment Restaurants Restaurants Department
Stores Restaurants Restaurants
% of Total / % Change 14.1 / 55.8 9.0 / 27.9 7.8 / -10.9 10.6 / 27.0 9.5 / 16.8 8.1 / 13.4 11.1 / 29.3 11.0 / -1.2 BENCHMARK YEAR 2022Q2 COMPARED TO BENCHMARK YEAR 2021Q2

CITY OF PALO ALTO
ECONOMIC CATEGORY ANALYSIS FOR YEAR ENDED 2nd Quarter 2022 ECONOMIC SEGMENT ANALYSIS FOR YEAR ENDED 2nd Quarter 2022 $-
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
$30,000,000
$35,000,000
Quarterly Benchmark Year
Regional Overview Chart (Economic)
Gross Historical Sales Tax Cash Receipts by Benchmark Year and Quarter (Before Adjustments)

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Leasing

20.2%
Auto Sales - New

17.5%
Restaurants

14.1%
Department Stores

6.3%Office Equipment

5.2%
Furniture/Appliance

5.1%
All Other

31.5%
Net Pools & Adjustments

17.2%
Anderson Honda Macy's Department Store Stanford Health Care Apple Stores Magnussen' Toyota Tesla
Arco AM/PM Mini Marts Neiman Marcus Tesla Lease Trust
Audi Palo Alto Nordstrom Department Store Tiffany & Company Bloomingdale's Richemont Union 76 Service Stations
Hermes Rivian Automotive Varian Medical Systems
HP Enterprise Services Shell Service Stations Volvo Cars Palo Alto Louis Vuitton Shreve & Co. Wilkes Bashford
Lucile Packard Children's Hospital
Net Cash Receipts for Benchmark Year second Quarter 2022: $31,535,707 *Benchmark year (BMY) is the sum of the current and 3 previous quarters (2022Q2 BMY is sum of 2022 Q2, 2022 Q1, 2021 Q4, 2021 Q3) TOP 25 SALES/USE TAX CONTRIBUTORS
The following list identifies Palo Alto’s Top 25 Sales/Use Tax contributors. The list is in alphabetical order and represents the year ended second quarter of 2022. The Top 25 Sales/Use Tax contributors generate

60.8% of Palo Alto’s total sales and use tax revenue.

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$-
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
$6,000,000
Benchmark Year 2022Q2 Benchmark Year 2021Q2
Sales Tax from Largest Non-Confidential Sales Tax Segments (Economic)

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Economic Category % 2022Q2 2022Q1 2021Q4 2021Q3 2021Q2 2021Q1 2020Q4 2020Q3 2020Q2 2020Q1 2019Q4 Business To Business 27.4% 2,098,950 2,032,592 1,969,438 1,762,093 1,652,745 1,765,043 2,060,217 2,022,479 1,851,601 2,000,210 2,375,333 Miscellaneous/Other 22.5% 1,719,616 1,695,756 1,682,102 1,702,838 1,620,383 1,467,407 1,679,573 1,322,172 997,005 1,227,541 1,693,416 General Retail 24.7% 1,887,242 1,700,135 2,273,543 1,798,257 1,803,297 1,262,756 1,746,602 1,300,645 660,300 1,450,820 2,579,412 Food Products 16.0% 1,220,923 1,007,507 1,075,263 970,873 897,222 619,501 668,640 650,152 439,540 990,266 1,256,287 Subtotal Economic (Local Business) 90.5% 6,926,731 6,435,991 7,000,346 6,234,061 5,973,646 5,114,708 6,155,031 5,295,448 3,948,447 5,668,837 7,904,447 Net Pools & Adjustments 9.5% 726,751 1,676,665 1,995,234 539,929 1,496,795 1,675,094 1,186,152 1,227,876 1,877,921 -2,287 1,937,461 Total Cash Receipts 100.0% 7,653,481 8,112,655 8,995,580 6,773,990 7,470,441 6,789,802 7,341,183 6,523,324 5,826,368 5,666,550 9,841,908 Economic Segment % 2022Q2 2022Q1 2021Q4 2021Q3 2021Q2 2021Q1 2020Q4 2020Q3 2020Q2 2020Q1 2019Q4 Miscellaneous/Other 52.4% 4,010,713 3,965,301 3,962,070 3,837,648 3,654,707 3,499,781 4,170,752 3,682,918 3,181,367 3,551,274 4,677,431 Restaurants 14.3% 1,090,690 891,656 941,683 857,066 785,086 527,203 552,176 545,728 342,533 867,027 1,105,719 Miscellaneous Retail 6.3% 480,713 429,200 676,701 407,467 456,685 327,729 479,041 326,777 108,953 280,493 499,697 Apparel Stores 6.5% 497,465 401,056 537,479 400,589 395,779 264,322 358,744 263,940 72,307 305,737 552,735 Department Stores 5.5% 418,507 403,604 525,295 388,703 384,763 237,473 315,453 186,316 29,842 245,948 552,822 Service Stations 3.2% 246,847 191,812 190,601 181,448 152,565 116,258 111,241 108,840 70,063 146,291 181,082 Food Markets 1.3% 102,476 91,633 106,315 87,521 89,669 71,321 89,396 81,580 77,803 102,026 118,952 Business Services 1.0% 79,320 61,729 60,203 73,620 54,393 70,621 78,228 99,348 65,579 170,042 216,011 Subtotal Economic (Local Business) 90.5% 6,926,731 6,435,991 7,000,346 6,234,061 5,973,646 5,114,708 6,155,031 5,295,448 3,948,447 5,668,837 7,904,447 Net Pools & Adjustments 9.5% 726,751 1,676,665 1,995,234 539,929 1,496,795 1,675,094 1,186,152 1,227,876 1,877,921 -2,287 1,937,461 Total Cash Receipts 100.0% 7,653,481 8,112,655 8,995,580 6,773,990 7,470,441 6,789,802 7,341,183 6,523,324 5,826,368 5,666,550 9,841,908

Historical Analysis by Calendar Quarter

The chart above shows the categories and segments in quarterly economic basis amounts. The total amount is the net cash recei pts, and it was obtained by adding up the categories/segments with the “Net Pools & Adjustments” amount.

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Economic Category % 2022Q2 2021Q2 2020Q2 2019Q2 2018Q2 2017Q12 2016Q2 2015Q2 2014Q2 2013Q2 Business To Business 26.0% 8,195,422 7,303,276 8,174,951 7,725,974 6,752,093 5,468,567 5,127,974 4,058,599 4,729,674 4,147,225 Miscellaneous/Other 21.5% 6,791,004 6,004,857 4,907,002 8,108,852 6,523,313 5,930,853 5,764,531 5,456,484 5,234,656 9,020,410 General Retail 24.2% 7,629,764 6,184,086 7,107,947 8,392,663 8,421,428 8,469,953 8,163,580 8,075,197 8,042,334 7,801,278 Food Products 13.6% 4,301,415 2,872,869 3,929,889 4,836,194 4,790,559 4,586,985 4,619,620 4,328,363 4,034,231 3,654,839 Subtotal Economic (Local Business) 85.4% 26,917,605 22,365,088 24,119,789 29,063,683 26,487,393 24,456,359 23,675,705 21,918,644 22,040,894 24,623,752 Net Pools & Adjustments 14.6% 4,618,102 5,759,663 5,772,436 7,026,147 3,232,629 4,403,645 4,470,931 4,079,505 3,536,158 3,368,523 Total 100.0% 31,535,707 28,124,751 29,892,225 35,157,160 28,843,483 29,330,293 27,352,428 25,663,665 27,225,597 25,694,375

Economic Segment % 2022Q2 2021Q2 2020Q2 2019Q2 2018Q2 2017Q12 2016Q2 2015Q2 2014Q2 2013Q2 Miscellaneous/Other 50.5% 15,913,445 14,714,564 15,205,260 17,622,166 15,185,514 13,120,157 12,401,431 11,060,511 11,381,249 14,449,359 Restaurants 12.1% 3,805,234 2,442,859 3,420,561 4,258,390 4,180,997 3,984,513 4,021,491 3,768,845 3,517,034 3,124,972 Miscellaneous Retail 6.4% 2,004,212 1,667,625 1,274,089 1,582,705 1,706,594 2,181,912 1,948,750 1,586,722 1,590,538 1,439,855 Apparel Stores 5.9% 1,847,598 1,289,686 1,397,669 1,993,986 1,836,191 1,691,986 1,638,172 1,656,212 1,660,610 1,622,006 Department Stores 5.4% 1,699,648 1,124,054 1,260,329 1,885,539 2,063,684 2,064,256 2,250,115 2,399,208 2,406,244 2,478,617 Service Stations 2.6% 810,672 493,602 572,874 706,172 638,892 587,986 581,619 699,331 776,593 764,774 Food Markets 1.2% 392,807 335,487 409,838 449,440 498,606 506,666 507,919 487,520 447,478 467,478 Business Services 1.4% 443,989 297,210 579,168 565,284 376,915 318,883 326,209 260,295 261,150 276,691 Subtotal Economic (Local Business) 85.4% 26,917,605 22,365,088 24,119,789 29,063,683 26,487,393 24,456,359 23,675,705 21,918,644 22,040,894 24,623,752 Net Pools & Adjustments 14.6% 4,618,102 5,759,663 5,772,436 7,026,147 3,232,629 4,403,645 4,470,931 4,079,505 3,536,158 3,368,523 Total 100.0% 31,535,707 28,124,751 29,892,225 35,157,160 28,843,483 29,330,293 27,352,428 25,663,665 27,225,597 25,694,375

Historical Analysis by Calendar BMY from 2013Q2 to 2022Q2

The chart above shows the categories and segments in benchmark year economic basis amounts. The total amount is the net cash receipts, and it was obtained by adding up the categories/segments with the “Net Pools & Adjustments” amount. Benchmark year (BMY) is the sum of the current and 3 previous quarters (2022Q2 BMY is sum of 2022 Q2, 2022 Q1, 2021 Q4, 2021 Q3).

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General Retail
Food Products
Transportation
Business to Business
Misc/Other
2022/2 Total
2021/2 Total
% Chg
Largest Gain
Second Largest
Gain
Largest Decline
Second Largest
Decline
Campbell 1.5% 21.4% 12.9% 36.6% 2.4% 2,703,651 2,396,183 12.8% Restaurants Service Stations Florist/Nursery Auto Sales - Used Cupertino 0.9% 28.4% 67.8% -13.4% -6.8% 7,970,329 8,734,435 -8.7% Restaurants I.T. Infrastructure Office Equipment Light Industry Gilroy 0.6% 6.9% 18.8% 8.9% -1.4% 4,521,256 4,224,073 7.0% Auto Sales - New Service Stations I.T. Infrastructure Apparel Stores Los Altos 4.3% 16.6% 40.3% -27.2% -12.7% 677,012 600,089 12.8% Restaurants Service Stations Business Services Miscellaneous Retail Los Gatos 4.9% 21.1% 9.8% 8.9% 11.2% 1,548,706 1,385,232 11.8% Restaurants Service Stations Auto Sales - New Heavy Industry Milpitas 11.3% 30.4% -47.5% 22.4% -12.9% 5,312,032 5,071,233 4.7% Electronic Equipment Restaurants Auto Sales - New Bldg.Matls-Whsle Morgan Hill 3.2% 9.1% 11.0% 28.7% 0.6% 2,714,467 2,471,650 9.8% Service Stations Light Industry Misc. Vehicle Sales Electronic Equipment Mountain View -2.3% 34.7% 36.2% 32.9% 24.0% 4,824,704 3,869,815 24.7% Restaurants Auto Sales - New Recreation Products Furniture/Appliance Palo Alto 2.8% 33.9% -2.5% 36.7% 71.4% 7,014,229 5,978,917 17.3% Leasing Restaurants Auto Sales - New Drug Stores San Jose 13.8% 18.6% 15.0% 15.1% 10.9% 48,697,288 42,424,531 14.8% Service Stations Restaurants Heavy Industry Bldg.Matls-Retail Santa Clara -5.8% 36.8% 19.3% -11.9% -19.4% 11,533,794 11,343,956 1.7% Restaurants Auto Sales - New Miscellaneous Retail Heavy Industry County of Santa Clara 27.0% 19.5% 9.9% -12.9% 10.4% 1,266,468 1,137,544 11.3% Restaurants Miscellaneous Retail Electronic Equipment Light Industry Saratoga 20.5% 11.5% 25.3% -58.1% 41.3% 279,818 256,318 9.2% Restaurants Service Stations Business Services Food Processing Eqp Sunnyvale 42.2% 27.2% 11.5% 13.5% 38.8% 7,057,931 5,843,181 20.8% Restaurants Department Stores Leasing Auto Sales - Used Quarterly Analysis by Sales Tax Category: Change from 2021Q2 to 2022Q2 (Economic)

Unlike the chart on page one which showed a ‘benchmark year’ through second quarter of 2022, the chart above shows a comparison of one quarter only – second quarter of 2022 to second quarter of 2021. This chart is for local ‘brick and mortar’ businesses and it excludes county pools and adjustments.

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California Avenue % CHANGE QoQ 2022Q2 QE 2021Q2 QE 22Q2 % OF TOTAL 21Q2 % OF TOTAL FOOD PRODUCTS 35.4% 56,631 41,831 43.8% 41.8%
GENERAL RETAIL -22.5% 24,579 31,699 19.0% 31.7%
ALL OTHER 81.1% 47,971 26,495 37.1% 26.5%
TOTAL 29.1% 129,181 100,025 100.0% 100.0%
El Camino Real and Midtown % CHANGE QoQ 2022Q2 QE 2021Q2 QE 22Q2 % OF TOTAL 21Q2 % OF TOTAL FOOD PRODUCTS 41.8% 160,814 113,413 40.6% 33.0%
GENERAL RETAIL 3.8% 38,638 37,238 9.8% 10.8%
ALL OTHER 1.8% 196,234 192,834 49.6% 56.1%
TOTAL 15.2% 395,687 343,485 100.0% 100.0%
Greater Downtown % CHANGE QoQ 2022Q2 QE 2021Q2 QE 22Q2 % OF TOTAL 21Q2 % OF TOTAL FOOD PRODUCTS 36.8% 474,375 346,709 59.6% 55.6%
GENERAL RETAIL 21.4% 267,636 220,484 33.6% 35.4%
BUSINESS TO BUSINESS 16.7% 36,733 31,465 4.6% 5.0%
CONSTRUCTION -28.8% 8,235 11,564 1.0% 1.9%
MISCELLANEOUS -41.6% 5,518 9,451 0.7% 1.5%
TRANSPORTATION -19.6% 2,994 3,723 0.4% 0.6%
TOTAL 27.6% 795,491 623,396 100.0% 100.0%
Stanford Shopping Center % CHANGE QoQ 2022Q2 QE 2021Q2 QE 22Q2 % OF TOTAL 21Q2 % OF TOTAL GENERAL RETAIL 4.2% 1,077,335 1,034,345 75.6% 88.3%
FOOD PRODUCTS 16.0% 148,909 128,423 10.4% 11.0%
ALL OTHER 2360.1% 199,660 8,116 14.0% 0.7%
TOTAL 21.8% 1,425,904 1,170,883 100.0% 100.0%
City of Palo Alto Geo Areas & Citywide Chart Data: Change from 2021Q2 to 2022Q2 (Economic)

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City of Palo Alto

www.avenuinsights.com (800) 800-8181 Page 9 Town And Country Shopping Center % CHANGE QoQ 2022Q2 QE 2021Q2 QE 22Q2 % OF TOTAL 21Q2 % OF TOTAL GENERAL RETAIL 4.9% 59,541 56,769 35.6% 38.3%
ALL OTHER 17.6% 107,532 91,405 64.4% 61.7%
TOTAL 12.8% 167,073 148,174 100.0% 100.0%
All Other Geos combined with Balance of Jurisdiction % CHANGE QoQ 2022Q2 QE 2021Q2 QE 22Q2 % OF TOTAL 21Q2 % OF TOTAL BUSINESS TO BUSINESS 37.5% 1,992,152 1,449,328 34.0% 30.1% GENERAL RETAIL -1.6% 1,557,681 1,582,367 26.6% 32.8%
TRANSPORTATION 36.5% 1,199,347 878,633 20.5% 18.2%
FOOD PRODUCTS 33.6% 1,007,924 754,339 17.2% 15.6%
MISCELLANEOUS -46.8% 64,810 121,755 1.1% 2.5%
CONSTRUCTION -1.0% 34,292 34,641 0.6% 0.7%
TOTAL 21.5% 5,856,207 4,821,063 100.0% 100.0%
All Geo Area Totals Comparison 21Q4 & 20Q4 % CHANGE QoQ 2022Q2 QE 2021Q2 QE 22Q2 % OF TOTAL 21Q2 % OF TOTAL Balance of Jurisdiction 20.9% 2,942,871 2,435,100 50.3% 50.5% Stanford Shopping Center 21.8% 1,425,904 1,170,883 24.3% 24.3% Greater Downtown 27.6% 795,491 623,396 13.6% 12.9%
El Camino Real and Midtown 15.2% 395,687 343,485 6.8% 7.1% Town And Country Shopping Center 12.8% 167,073 148,174 2.9% 3.1% California Avenue 29.1% 129,181 100,025 2.2% 2.1%
TOTAL 21.5% 5,856,207 4,821,063 100.0% 100.0%
Palo Alto citywide QE 22Q2 & 21Q2 % CHANGE QoQ 2022Q2 QE 2021Q2 QE 22Q2 % OF TOTAL 21Q2 % OF TOTAL BUSINESS TO BUSINESS 36.7% 2,170,873 1,588,571 30.9% 26.6% GENERAL RETAIL 2.3% 1,887,242 1,844,249 26.9% 30.8%
TRANSPORTATION -2.5% 1,407,563 1,443,160 20.1% 24.1%
FOOD PRODUCTS 33.9% 1,220,923 911,813 17.4% 15.3%
MISCELLANEOUS 86.6% 284,085 152,258 4.1% 2.5%
CONSTRUCTION 12.0% 43,543 38,866 0.6% 0.7%
TOTAL 17.3% 7,014,229 5,978,917 100.0% 100.0%
City of Palo Alto Geo Areas & Citywide Chart Data: Change from 2021Q2 to 2022Q2 (Economic) Cont.

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City of Palo Alto

www.avenuinsights.com (800) 800-8181 Page 10

FOOD PRODUCTS,

35.4% CHANGE, $56,631 ,

43.8% TOTAL
GENERAL RETAIL, -22.5% CHANGE,
$24,579 , 19.0% TOTAL

ALL OTHER,

81.1% CHANGE, $47,971 ,

37.1% TOTAL
California Avenue 2022Q2 SALES TAX AMOUNTS
FOOD PRODUCTS, $41,831 ,

41.8% TOTAL

GENERAL RETAIL,
$31,699 , 31.7% TOTAL
ALL OTHER, $26,495 ,

26.5% TOTAL
California Avenue 2021Q2 SALES TAX AMOUNTS

FOOD PRODUCTS,

41.8% CHANGE, $160,814 ,

40.6% TOTAL

GENERAL RETAIL,

3.8% CHANGE, $38,638 ,

9.8% TOTAL

ALL OTHER,

1.8% CHANGE,
$196,234 ,

49.6% TOTAL
El Camino Real and Midtown 2022Q2 SALES TAX AMOUNTS
FOOD PRODUCTS, $113,413 ,

33.0% TOTAL

GENERAL RETAIL,
$37,238, 10.8% TOTAL
ALL OTHER, $192,834

56.1% TOTAL
El Camino Real and Midtown 2021Q2 SALES TAX AMOUNTS
City of Palo Alto Geo Area Pie Charts

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City of Palo Alto

www.avenuinsights.com (800) 800-8181 Page 11

FOOD PRODUCTS,

36.8% CHANGE, $474,375 ,

59.6% TOTAL

GENERAL RETAIL,

21.4% CHANGE,
$267,636 ,

33.6% TOTAL

BUSINESS TO BUSINESS,

16.7% CHANGE, $36,733 ,

4.6% TOTAL

CONSTRUCTION,
-28.8% CHANGE, $8,235 ,

1.0% TOTAL
MISCELLANEOUS, -41.6% CHANGE,
$5,518 , 0.7% TOTAL TRANSPORTATION,
-19.6% CHANGE, $2,994 ,

0.4% TOTAL
Greater Downtown 2022Q2 SALES TAX AMOUNTS

FOOD PRODUCTS,
$346,709 , 55.6% TOTAL

GENERAL RETAIL,
$220,484 , 35.4% TOTAL

BUSINESS TO BUSINESS,
$31,465 , 5.0% TOTAL
CONSTRUCTION, $11,564 ,

1.9% TOTAL

MISCELLANEOUS,
$9,451 , 1.5% TOTAL
TRANSPORTATION, $3,723 ,

0.6% TOTAL
Greater Downtown 2021Q2 SALES TAX AMOUNTS

GENERAL RETAIL
$1,034,345 ,

88.3% TOTAL
FOOD PRODUCTS, $128,423 ,

11.0% TOTAL
ALL OTHER, $8,116 ,

0.7% TOTAL
Stanford Shopping Center 2021Q2 SALES TAX AMOUNTS

GENERAL RETAIL,

4.2% CHANGE, $1,077,335 ,

75.6% TOTAL

FOOD PRODUCTS,

16.0% CHANGE,
$148,909 ,

10.4% TOTAL
ALL OTHER, 2360.1% CHANGE,
$199,660 , 14.0% TOTAL
Stanford Shopping Center 2022Q2 SALES TAX AMOUNTS
City of Palo Alto Geo Areas Pie Charts

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City of Palo Alto
www.avenuinsights.com (800) 800-8181 Page 12

GENERAL RETAIL,

4.9% CHANGE, $59,541 ,

35.6% TOTAL

ALL OTHER,

17.6% CHANGE,
$107,532 ,

64.4% TOTAL
T own And Country Shopping Center 2022Q2 SALES TAX AMOUNTS GENERAL RETAIL, $56,769 ,

38.3% TOTAL
ALL OTHER, $91,405 ,

61.7% TOTAL
T own And Country Shopping Center2021Q2 SALES TAX AMOUNTS

BUSINESS TO BUSINESS,

37.5% CHANGE,
$1,992,152 ,

34.0% TOTAL

GENERAL RETAIL,
-1.6% CHANGE, $1,557,681,

26.6% TOTAL

TRANSPORTATION,

36.5% CHANGE,
$1,199,347,

20.5% TOTAL

FOOD PRODUCTS,

33.6% CHANGE, $1,007,924 ,

17.2% TOTAL

MISCELLANEOUS,
-46.8% CHANGE, $64,810 ,

1.1% TOTAL
CONSTRUCTION, -1.0% CHANGE,
$34,292 , 0.6% TOTAL
All Other Geos combined with Balance of Jurisdiction 2022Q2

SALES TAX AMOUNTS

BUSINESS TO BUSINESS,
$1,449,328 ,

30.1% TOTAL
GENERAL RETAIL, $1,582,367,

32.8% TOTAL

TRANSPORTATION,
$878,633,

18.2% TOTAL

FOOD PRODUCTS,
$754,339 , 15.6% TOTAL

MISCELLANEOUS,
$121,755 , 2.5% TOTAL

CONSTRUCTION,
$34,641 , 0.7% TOTAL
All Other Geos combined with Balance of Jurisdiction 2021Q2

SALES TAX AMOUNTS
City of Palo Alto Geo Area Pie Charts

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City of Palo Alto

www.avenuinsights.com (800) 800-8181 Page 13 Balance of Jurisdiction,

20.9% CHANGE,
$2,942,871 ,

50.3% TOTAL
Stanford Shopping Center,

21.8% CHANGE, $1,425,904 ,

24.3% TOTAL
Greater Downtown,

27.6% CHANGE, $795,491 ,

13.6% TOTAL
El Camino Real and Midtown,

15.2% CHANGE, $395,687 ,

6.8% TOTAL
Town And Country Shopping Center,

12.8% CHANGE, $167,073 , 2.9% TOTAL California Avenue, 29.1% CHANGE, $129,181 , 2.2% TOTAL
All Geo Area Totals 2022Q2 SALES TAX AMOUNTS
Balance of Jurisdiction,
$2,435,100 , 50.5% TOTAL
Stanford Shopping Center,
$1,170,883 , 24.3% TOTAL
Greater Downtown,
$623,396 ,

12.9% TOTAL
El Camino Real and Midtown,
$343,485 , 7.1% TOTAL
Town And Country Shopping Center,
$148,174 , 3.1% TOTAL
California Avenue,
$100,025 , 2.1% TOTAL
All Geo Area Totals 2021Q2 SALES TAX AMOUNTS

BUSINESS TO BUSINESS,

36.7% CHANGE, $2,170,873 ,

30.9% TOTAL

GENERAL RETAIL,

2.3% CHANGE, $1,887,242 ,

26.9% TOTAL

TRANSPORTATION,
-2.5% CHANGE,
$1,407,563 ,

20.1% TOTAL

FOOD PRODUCTS,

33.9% CHANGE, $1,220,923 ,

17.4% TOTAL
MISCELLANEOUS, 86.6% CHANGE,
$284,085 , 4.1% TOTAL

CONSTRUCTION,

12.0% CHANGE,
$43,543 , 0.6% TOTAL
Palo Alto citywide 2022Q2 SALES TAX AMOUNTS

BUSINESS TO BUSINESS,
$1,588,571 , 26.6% TOTAL

GENERAL RETAIL,
$1,844,249 ,

30.8% TOTAL

TRANSPORTATION,
$1,443,160 ,

24.1% TOTAL

FOOD PRODUCTS,
$911,813 , 15.3% TOTAL

MISCELLANEOUS,
$152,258 , 2.5% TOTAL
CONSTRUCTION, $38,866 ,

0.7% TOTAL
Palo Alto citywide 2021Q2 SALES TAX AMOUNTS
City of Palo Alto Geo Area & Citywide Pie Charts

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California Legislative
Update October 3, 2022
This edition of our policy update provides
information on a variety of bills by subject area and
their current status after Governor Gavin Newsom
acted on all of the measures sent to him by the
legislature this year.

In total, Governor Newsom acted on 1,166 measures
in 2022, signing 997 and vetoing 169 – a 14.5% veto
rate, which is about average in recent years. Prior to
Governor Brown’s latest term, veto rates were a bit
higher:
• During Governor Brown’s (second) 8 years in
office, 870-1,200 bills were sent to him
annually, and he vetoed 10%-15% of them.
• During Governor Schwarzenegger’s 7 years in
office, 890-1,265 bills were sent to him
annually, and he vetoed 22%-35% of them.
• During Governor Davis’ 5 years in office,
965-1,455 bills were sent to him annually, and
he vetoed 6%-25% of them.
• During Governor Wilson’s 8 years in office,
1,075-1,700 bills were sent to him annually,
and he vetoed 8%-24% of them.
• During Deukmejian’s 8 years in office, 1,455-
2,140 bills were sent to him annually, and he
vetoed 9.5%-20% of them.

Many of the governor’s veto messages this year cited
waning revenues, and indeed, for the first two months
of the 2022-23 fiscal year, revenues are running $2
billion lower than estimated in the Budget Act. The
Legislative Analyst’s Office recently announced that
California is highly unlikely to meet anticipated
revenues for the fiscal year, and instead projects a $5 billion revenue shortfall.

After wrapping up action on legislation, the
administration has turned its attention to preparing
for the 2023-24 January budget proposal, which is
likely to be very focused on revenue concerns. Last
week, Governor Newsom proposed requiring
companies engaged in the extraction, production, and
refining of oil to pay a higher tax rate on their
earnings above a set amount each year. Revenue from
windfall profits would be returned to taxpayers in the
form of rebates and refunds. Legislative leadership
responded to the governor’s announcement with
openness, and will likely consider the proposal as part of the budget process beginning in January.

We hope that this update is helpful. Please reach out
to us with any questions.

Government Relations Contact
[email protected] / 559.288.7296
Administration
AB 2647 (Levine): Local Government: Open
Meetings. Allows writings that have been distributed
to members of a legislative body of a local agency less than 72 hours before an open, regular meeting to be
exempt from specified requirements of the Ralph M.

Brown Act, if the agency meets certain requirements.

Status: Chapter 971, Statutes of 2022
Cal Cities Position: Requested Signature
SB 379 (Wiener): Residential solar energy
programs: permitting. This bill requires most cities
and counties to adopt an automated, online
permitting system for solar energy systems and energy
storage.

Status: Chapter 356, Statutes of 2022
Cal Cities Position: Watch
SB 1338 (Umberg): Community Assistance,
Recovery, and Empowerment (CARE) Court
Program. Establishes the CARE Act, which must be
implemented by Glenn, Orange, Riverside, San
Diego, San Francisco, Stanislaus, and Tuolumne
counties by October 1, 2023, and the remaining

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counties by December 1, 2024. The CARE Act would
allow civil courts to order those suffering from certain mental illnesses into treatment programs at the
community level, similar to today's Assisted
Outpatient Treatment under the Lanterman Petris
Short Act, with more community-based supports and
services, and more court oversight.

Status: Chapter 319, Statutes of 2022
Cal Cities Position: Requested Signature
Cannabis
AB 195 (Committee on Budget): Cannabis. This
budget trailer bill reduces state taxes on cannabis,
simplifies the tax collection framework, and reduces
barriers to entry into the legal cannabis marketplace.

Several provisions are also included to boost
enforcement, including efforts to address unlicensed
cannabis facilities and illegal water diversion, as well as ensure greater tax compliance.

Status: Chapter 56, Statutes of 2022
Cal Cities Position: Watch
AB 2188 (Quirk): Discrimination in employment:
use of cannabis. Provides, with certain exceptions,
that it is unlawful for an employer to discriminate
against a person in hiring, termination, or terms and
conditions of employment based on a drug screening
test finding the presence of nonpsychoactive cannabis
metabolites in their system or for off the job use of
cannabis.

Status: Chapter 392, Statutes of 2022
Cal Cities Position: Watch
SB 1186 (Wiener): Medicinal Cannabis Patients’
Right of Access Act. Prohibits local governments,
beginning January 1, 2024, from banning, or
effectively banning, the delivery of medicinal cannabis to patients or primary caregivers within their
jurisdictions, enforceable through an action for writ
of mandate.

Status: Chapter 395, Statutes of 2022
Cal Cities Position: Requested Veto
SB 1326 (Caballero): Cannabis: interstate
agreements. Allows the state to enter into an
interstate cannabis agreement to allow cannabis or
cannabis products to be transported across state lines.

Status: Chapter 396, Statutes of 2022
Cal Cities Position: Requested Signature
Finance
SB 852 (Dodd): Climate resilience districts:
formation: funding mechanisms. This bill allows
cities and counties to create climate resilience districts and provides these new districts various financing
powers.

Status: Chapter 266, Statutes of 2022
Cal Cities Position: Watch
Franchises
AB 676 (Holden): Franchises. This bill requires a
franchisor to provide specified information to a
prospective franchisee seeking to buy an ownership
interest in an existing franchise business and makes
additional revisions to laws that apply to franchise
investments and franchisor-franchisee relationships.

Status: Chapter 728, Statutes of 2022
Cal Cities Position: Watch
Housing/Land Use
AB 2097 (Friedman): Residential and commercial
development: parking requirements. Prohibits
public agencies from imposing minimum automobile
parking requirements on specified residential,
commercial, and other developments located within
one-half mile of public transit.

Status: Chapter 459, Statutes of 2022
Cal Cities Position: Requested Veto
AB 2011 (Wicks): Affordable Housing and High
Road Jobs Act of 2022. Creates a ministerial,
streamlined approval process for 100% affordable

10.b
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housing projects in commercial zones and for mixed-
income housing projects along commercial corridors,
as specified. The bill would also impose specified
labor standards on those projects, including
requirements that contractors pay prevailing wages,
participate in apprenticeship programs, and make
specified healthcare expenditures.

Status: Chapter 647, Statutes of 2022
Cal Cities Position: Requested Veto
AB 2234 (Rivas, Robert): Planning and zoning:
housing: postentitlement phase permits. This bill
requires a local agency to post information related to
postentitlement phase permits for housing
development projects, process those permits in a
specified time period depending on the size of the
housing development, and establish a digital
permitting system if the local agency meets a specific
population threshold.

Status: Chapter 651, Statutes of 2022
Cal Cities Position: Requested Veto
SB 6 (Caballero): Middle Class Housing Act of
2022. Enacts, until January 1, 2033, the Middle-Class
Housing Act of 2022, which establishes housing as an
allowable use on any parcel zoned for office or retail
uses.

Status: Chapter 659, Statutes of 2022
Cal Cities Position: Requested Veto
SB 897 (Wieckowski): Accessory Dwelling Units.

Makes numerous changes to the laws governing
accessory dwelling units and junior accessory dwelling
units.

Status: Chapter 664, Statutes of 2022
Cal Cities Position: Requested Veto
SB 1373 (Kamlager): Surplus land disposal. This
bill extends by two years (until December 31, 2024)
the deadlines in the Surplus Land Act to complete
disposition of a property subject to an exclusive
negotiating agreement for a charter city with a
population of over two million people.

Status: Chapter 724, Statutes of 2022
Cal Cities Position: Watch
Privacy and Security
AB 1711 (Seyarto): Privacy: breach. This bill
requires agencies to report data breaches on their
website when a person or business operating a system
on behalf of an agency is required to disclose a breach of that system.

Status: Vetoed
Veto Message: This bill requires a public agency to post a notice on its website when a person or business
operating a system on behalf of that agency is
required to issue a security breach notification for that system.

Current law requires both private businesses and
public agencies to immediately notify individuals
impacted by a data breach of the systems they
operate, allowing appropriate action to mitigate or
prevent financial losses due to fraudulent activity.

The stated intent of this bill is to provide additional transparency with respect to data breach notifications
provided in the event a contractor operating a system
on behalf of an agency is breached. Requiring public
agencies to display every instance of a security breach on its website will highlight vulnerable information
technology systems shortly after a breach occurs. This
could substantially increase the risk of additional
attacks on these systems.

The author's objective could be more effectively
achieved through other means, such as specifying
breach notifications to individuals must come from
the agency, or requiring notices from a contractor to
conspicuously include the agency on behalf of which
they are operating.

Cal Cities Position: Watch
Property Tax
AB 1206 (Bennett): Property taxation: affordable
housing: welfare exemption. Requires, for the
2022-23 fiscal year (FY) through the 2027-28 FY that

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a residential unit continue to be treated as occupied
by a lower income household, if the owner is a
community land trust whose land is leased to low-
income households, subject to a contract that
complies with specified requirements.

Status: Chapter 636, Statutes of 2022
Cal Cities Position: Watch
AB 1707 (Boerner Horvath): Property tax
postponement: Senior Citizens and Disabled
Citizens Property Tax Postponement Fund.

Requires that money be transferred from the General
Fund to the Senior Citizens and Disabled Citizens
Property Tax Postponement Fund when the Fund
balance is less than $15 million.

Status: Vetoed
Veto Message: This bill requires annual transfers from
the General Fund to the Senior Citizens and Disabled
Citizen Property Postponement (PTP) Fund to ensure
the balance each June 30 is $15 million.

The Property Tax Postponement Program allows
income-eligible homeowners who are seniors, blind,
or disabled to defer their property taxes, secured by a lien against the property that is later repaid when the property is sold or refinanced.

By design, the PTP Fund is structured to be self-
sustaining. Although recent changes in law have
expanded eligibility for the program, the State
Controller's Office does not project a shortfall until
the 2025-26 fiscal year.

My administration supports this program and its role
in helping our most vulnerable homeowners remain
in their homes. Therefore, I am directing the
Department of Finance to conduct an analysis of the
Program to identify any fiscal stability concerns and
propose appropriate solutions for consideration.

I am returning AB 1707 without my signature until
additional information on the viability of the program
has been determined.

Cal Cities Position: Watch
AB 1933 (Friedman): Property taxation: welfare
exemption: nonprofit corporation: low- and
moderate-income families. Expands the property
tax welfare exemption to eligible nonprofit
corporations that build and rehabilitate affordable
housing units for sale, subject to certain limitations, to low-income families, as defined.

Status: Chapter 643, Statutes of 2022
Cal Cities Position: Watch
AB 2651 (Petrie-Norris): Property taxes: welfare
exemption: community land trust. Extends the
sunset date for the property tax welfare exemption for
community land trusts from January 1, 2025, to
January 1, 2027.

Status: Chapter 656, Statutes of 2022
Cal Cities Position: Watch
Sales and Use Taxes
AB 1951 (Grayson): Sales and use tax:
exemptions: manufacturing. This bill expands,
from January 1, 2023, to January 1, 2028, the existing
partial sales and use tax exemption for manufacturing
and research and development by making the
expenditure a full exemption and removing the $200
million cap on qualifying purchases per individual
purchaser.

Status: Vetoed
Veto Message: This bill replaces the current partial
manufacturing sales tax exemption with a full
exemption until January 1, 2028.

This change would result in substantial revenue loss
to local governments, which impacts essential health,
safety, welfare, and transportation services. Assuming
there are no changes in taxpayer behavior, local
agencies are estimated to lose over half a billion
dollars each year.

As a strong supporter of California's business climate
and manufacturing industry, I agree with the intent of
this bill to invest in California's economy, incentivize innovation, and spur a manufacturing marketplace

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that is competitive nation-wide. However, we cannot
ask our local governments to bear this loss in revenue.

With our state facing lower-than-expected revenues
over the first few months of this fiscal year, it is
important to remain disciplined.

The Legislature sent measures with potential costs of
well over $20 billion in one-time spending
commitments and more than $10 billion in ongoing
commitments not accounted for in the state budget.

Bills with significant cost pressures, such as this
measure, should be considered as part of the annual
budget process.

For these reasons, I cannot sign this bill. I look
forward to working with the Legislature and
stakeholders to propose something on this topic next
year.

Cal Cities Position: Requested Veto
AB 2622 (Mullin): Sales and Use Tax: Zero
Emission Bus Exemption. Extends the partial Sales
and Use Tax Law exemption for specified zero-
emission technology transit buses until January 1,
2026.

Status: Chapter 353, Statutes of 2022
Cal Cities Position: Requested Signature
AB 2887 (Garcia, Eduardo): Public resources:

Sales and Use Tax Law: exclusions. Increases,
from $100 million to $150 million, the limit on annual
sales and use tax exclusions under the California
Alternative Energy and Advanced Transportation
Financing Authority Act.

Status: Chapter 248, Statutes of 2022
Cal Cities Position: Requested Veto
SB 1041 (Atkins): Sales and use taxes: general
exemptions. This bill removes the sunset date for
the sales and use tax exemption for goods sold by
thrift stores that are both located on a military
installation and operated by a "military welfare
society.”
Status: Chapter 225, Statutes of 2022
Cal Cities Position: Watch
SB 1312 (Ochoa Bogh): Marketplace facilitators:
passenger vehicle rental companies. This bill
amends the Marketplace Facilitator Act to provide
that an operator of a marketplace is not a marketplace
facilitator with regard to any portion of its
marketplace that provides car rental services.

Status: Chapter 228, Statutes of 2022
Cal Cities Position: Watch

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City of Palo Alto (ID # 14773)
City Council Staff Report
Report Type: Information Reports Meeting Date: 11/14/2022 City of Palo Alto Page 1
itle: Community Development Block Grant (CDBG) FY2022 Year-end Report - Consolidated Annual Performance and Evaluation Report (CAPER) From: City Manager
Lead Department: Planning and Development Services
Recommendation:

This is an informational report and no action is required.

Executive Summary:

The City is required to report annually to the U.S. Department of Housing and Urban Development (HUD), accomplishments for the Community Development Block Grant (CDBG) program. This report, the Consolidated Annual Performance and Evaluation Report (CAPER), summarizes the City’s CDBG accomplishments and expenditures for the Fiscal Year (FY) 2021-22 CDBG funding cycle. The City funded a total of eight projects, summarized below, in FY2021-22.

The CAPER (Attachment A) was submitted to HUD by the September 28, 2022 deadline.

Background:

The City of Palo Alto receives funds annually from HUD as an entitlement city under the CDBG program. As a recipient of CDBG funds,
the City is required to prepare a Consolidated Annual
Performance and Evaluation Report (CAPER) at the end of the fiscal year. The CAPER describes the City’s progress implementing the activities identified in the Annual Action Plan1 and the goals and objectives of the Consolidated Plan2.
1 Annual Action Plan: An annual report listing the activities the City intends to undertake with CDBG funds to address the needs and implement the strategies identified in the Consolidated Plan. 2 Consolidated Plan (Con Plan): A five-year strategic plan that addresses the housing and non-housing community development needs of lower income persons and establishes annual goals and obj ectives to meet the identified needs. https://www.cityofpaloalto.org/civicax/filebank/blobdload.aspx?t=68967.94&BlobID=76579 11 Packet Pg. 287

City of Palo Alto Page 2

Discussion:

During FY2021 -22, the City’s CDBG subrecipients continued to provide vital services to extremely low, very low, low, and moderate -income households while addressing the priorities and needs of the commun ity and the City’s funding priorities; including strategies to address COVID-19 related impacts, using funds from the CDBG CARES Act (CDBG-CV).

The City achieved several goals as outlined in the 2021 Annual Action Plan (AAP) through CDBG and CDBG -CV fund ing. A total of $746,715 was available for funding projects and programs during the 2021 program year. The City received $536,756 from the federal CDBG program, approximately $136,049 in program income, and $73,910 in reallocated funds from previous years.

Through the combination of CDBG and CDBG -CV funds, in total, 935 persons were assisted in this program year. Of the 935 persons, 383 were extremely low -income, 421 were low income and 131 were moderate income. Approximately 40 % of all persons were ass isted through the COVID-19 related activities. The CAPER, Attachment A, provides a detailed description of the programs and project accomplishments. The major accomplishments include the following:

1. Catholic Charities , through the Long -Term Care Ombudsman Program, assisted 262 mostly low- or moderate - income elderly residents at the Palo Alto long -term care facilities that mainly serve low -income residents. Additionally, the Long -Term Care Ombudsman Program resolved 47 complaints made by, or on behalf of, l ow-income elderly residents of the facilities. [Goal: Assist 50 individuals]

2. Alta Housing had on-site counseling services available to the residents of the 131 units of the Single-Room Occupancy (SRO) Resident Support Program at Alma Place (25 units) and Barker Hotel (106 units). Services were provided to 151 residents. [Goal: Assist 131 individuals]

3. LifeMoves, at the Opportunity Services Center, provided case management services including assistance with housing and job searches, referrals, and mentor ing to 56 homeless and/or very low-income Palo Alto residents. [Goal: Assist 30 individuals]

4. Project Sentinel (Fair Housing Services) assisted 17 individuals in investigating their fair housing complaints; 21 residents received individual consultation re lating to specific fair housing questions. [Goal: Assist 15 individuals]

5. Silicon Valley Independent Living Center (SVILC) (Housing and Emergency Services) assisted 26 adults with disabilities in developing an independent living plan for housing 11 Packet Pg. 288
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that resul ted in improved accessibility to decent affordable housing. [Goal: Assist 24 individuals]

6. Rebuilding Together Peninsula (Safe at Home) assisted six households with home rehabilitation. [Goal: Assist five households]

7. Downtown Streets Team (Workforce Devel opment) connected employers with seven individuals who were meaningfully employed. [Goal: Assist 14 individuals] The Workforce Development program was eligible for CDBG funding for July and August 2021 only, due to a change in the organization’s Communit y Based Development Organization (CBDO) status. The City agreed to assist the program with reimbursements for the remaining CDBG-related costs for FY2022 and FY 2023. At year-end, the program assisted 15 individuals with job placement.

8. Ravenswood Family Health Network requested a time extension to complete the project for a new ADA Accessible Clinic Entrance and Exit at the Palo Alto Clinic. The new completion timeline is June 2023.

Other CDBG Program Updates
The Ravenswood Family Health Network Mobile Clinic was put into service in September 2021 and has been used to provide vaccination and booster COVID-19 vaccines. The Mobile Clinic has assisted 403 individuals. This was a CV funded project in FY2021.

Timeline:

As required by HUD, the FY2021-22 CAPER was submitted by the September 28th deadline.

Stakeholder Engagement:

An advertisement was published in The Daily Post on August 24, 2022 announcing the availability of the draft CAPER for public review and comment. The draft CAPER was posted on the City’s CDBG webpage3 (https://www.cityofpaloalto.org/cdbg) from August 24, 2022 through September 7, 2022. On September 8, 2022 the Human Relations Commission (HRC) conducted a public hearing to review the CAPER and allow for public comment.

There were two speakers that provided the following comments at the meeting:
3 The City’s CDBG webpage https://www.cityofpaloalto.org/cdbg 11 Packet Pg. 289
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• Alexis Crews -Holloway, a Project Manager with Downtown Streets Team , stated Downtown Streets exceeded their goal by 107% of the contract goal by serving 15 individuals for the entire fiscal year and believed the CAPER did not reflect this.4 • Carol Conn, the E xecutive Director at Project Sentinel, wanted to reiterate that they have a robust landlord/tenant mediation program that assists in keeping people housed and living in harmony; this a very big component of what Project Sentinel does for the City of Palo Alto.

Environmental Review:

Council action on this item is not a considered a project as defined by CEQA because the Consolidated Annual Performance and Evaluation Report is for information al purposes only with no action required by the Council.

Attachments:

Attachment11.a: Attachment A: CDBG CAPER 2021-2022 (PDF) 4 The accomplishments reported in the CAPER reflect the two months that this program was eligible for CDBG funding.
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CONSOLIDATED ANNUAL PERFORMANCE AND EVALUATION

REPORT (CAPER)
PROGRAM YEAR: JULY 1, 2021 THROUGH JUNE 30, 2022
PUBLIC COMMENT PERIOD: AUGUST 24, 2022 THROUGH SEPTEMBER 7, 2022 ADMINISTERED BY: PLANNING AN D DEVELOPMENT SERVICES
DRAFT - SEPTEMBER 2022

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1 Table of Contents
CR-05 - Goals and Outcomes ........................................................................................................................ 2 CR-10 - Racial and Ethnic composition of families assisted .......................................................................... 8 CR-15 - Resources and Investments 91.520(a) ............................................................................................. 9 CR-20 - Affordable Housing 91.520(b) ........................................................................................................ 12 CR-25 - Homeless and Other Special Needs 91.220(d, e); 91.320(d, e); 91.520(c) .................................... 14 CR-30 - Public Housing 91.220(h); 91.320(j) ............................................................................................... 17 CR-35 - Other Actions 91.220(j)-(k); 91.320(i)-(j) ........................................................................................ 18 CR-40 - Monitoring 91.220 and 91.230 ....................................................................................................... 22 CR-45 - CDBG 91.520(c) .............................................................................................................................. 23 CR-58 – Section 3 ........................................................................................................................................ 24 Public Comments ........................................................................................................................................ 26 ANNUAL ACTION PLAN FY2020-21: CDBG-CV SUBSTANTIAL AMENDMENT .............................................. 27

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CR-05 - Goals and Outcomes
Progress the jurisdiction has made in carrying out its strategic plan and its action plan. 91.520(a) This could be an overview that includes major initiatives and highlights that were proposed and executed throughout the program year.

Below, as shown in Table 1 - Accomplishments – Program Year & Strategic Plan to Date, is a description of the progress the City of Palo Alto has made in achieving the goals outlined in its strategic plan and annual action plan. In Program Year 2021-22, the City achieved the majority of its annual goals and is on track to meet most of the five-year goals outlined in the Consolidated Plan.

1. Catholic Charities, through the Long-Term Care Ombudsman Program, assisted 262 mostly low- or moderate- income elderly residents at the P
alo Alto long-term care facilities thatmainly serve low-income residents.

2. Alta Housing had on-site counseling services available to the residents of the 131 units of the Single-Room Occupancy (SRO) Resident Support Program at Alma Place (25 units) and Barker Hotel (106 units). Services were provided to 151 residents.

3. LifeMoves, at the Opportunity Services Center, provided case management services including assistance with housing and job searches, referrals, and mentoring to 56 homeless and/or very low-income Palo Alto residents.

4. Project Sentinel (Fair Housing Services) assisted 17 individuals in investigating their fair housing complaints; 21 residents received individual c
onsultation relating to specific fair housing questions.]

5. Silicon Valley Independent Living Center (SVILC) (Housing and Emergency Services) assisted 26 adults with disabilities in developing an independent living plan for housing that resulted in improved accessibility to decent affordable housing.

6. Rebuilding Together Peninsula (Safe at Home) assisted six households with home rehabilitation.

7. Downtown Streets Team (Workforce Development) connected employers with seven individuals who were meaningfully employed, expending $27,408 in first quarter. The Workforce Development program was eligible for CDBG funding for July and August 2021 only, due to a

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change in the organization’s Community Based DevelopmentOrganization (CBDO) status. The City has agreed to assist the program with reimbursements for the remaining CDBG-related costs for FY2022; the program assisted eight more individuals with job placement, for a total of

15. 8. Ravenswood Family Health Network requested a time extension to complete the project for a new ADA Accessible Clinic Entrance and Exit at the Palo Alto Clinic. The new completiontimeline is June 2023.

Program Year 2020-21 Annual Action Plan Substantial Amendment The City was informed by the CDBG subrecipient LifeMoves that they no longer needed the remaining funds allocated to them in Program Year 2020-21. These funds supported a Rental Assistance Program and specifically came from CDBG-Coronavirus (CDBG-CV) grants. The remaining funds totaled $194,501. Staff investigated other funding opportunities for eligible CDBG-CV activities for the reallocation of the $194,501 and plan to fund $160,300 for Move Mountain View to support a safe parking program and $34,201 for LifeMoves to administer a COVID-19 testing program.

Comparison of the proposed versus actual outcomes for each outcome measure submitted with the consolidated plan and explain, if applicable, why progress was not made toward meeting goals and objectives. 91.520(g) Categories, priority levels, funding sources and amounts, outcomes/objectives, goal outcome indicators, units of measure, targets, actual outcomes/outputs, and percentage completed for each of the grantee’s program year goals.

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CAPER 2021-2022 4
Goal Category Source /
Amount
Indicator Unit of
Measure
Expected
–
Strategic
Plan
Actual –
Strategic
Plan
Percent
Complete
Expected
–
Program
Year
Actual –
Program
Year
Percent
Complete
Affordable
Housing
Affordable
Housing CDBG: $0 Rental units rehabilitated
H
oushold
Housing
Unit
107 0 0.
00% 0 0 0
Affordable
Housing
Affordable
Housing
CDBG:
$65,340
Homeowner Housing
Rehabilitated
H
ousehold
Housing
Unit 40 6 15.
00% 6 6 100

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Economic
Development
Non-Housing
Community
Development
CDBG: $0
Public service activities
other than
Low/Moderate Income
Housing Benefit

Persons
Assisted

0 0
Economic
Development
Non-Housing
Community
Development
CDBG: $ Homeless Person
Overnight Shelter
Persons
Assisted 0 0 0 0
Economic
Development
Non-Housing
Community
Development
CDBG:
$160,477 Jobs created/retained Jobs 150 28 18.00% 15 7 46.67% Fair Housing
Non-Housing
Community
Development
CDBG:
$33,698
Public service activities
other than
Low/Moderate Income
Housing Benefit
Persons
Assisted 75 41 22.67% 16 24 105%
Homelessness Homeless
CDBG:
$48,556 /
CDBG-CV:
$
Public service activities
other than
Low/Moderate Income
Housing Benefit
Persons
Assisted 850 222 26.12% 167 222 132.93%
Homelessness Homeless
CDBG: $0
/ CDBG-
CV: $
Tenant-based rental
assistance / Rapid
Rehousing
Households
Assisted 60 54 90.00% 90.00%
Homelessness Homeless CDBG:
$31,545 /
Homeless Person
Overnight Shelter
Persons
Assisted 100 99 99.00% 38 56 147%

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Table 1 - Accomplishments – Program Year & Strategic Plan to Date Please note, these activities and the goals listed in the table are related to the City’s 5 -Year Consolidated Plan. Where there is funding listed in the table above, these goals were set as priorities for PY2021-22.

Assess how the jurisdiction’s use of funds, particularly CDBG, addresses the priorities and specific objectives identified in the plan, giving special attention to the highest priority activities identified.During Program Year 2021, the City’s CDBG subrecipients continued to provide vital services to extremely low, very low, low and moderate-income households while addressing: (1) the priorities and needs of the CDBG-CV:
$
Homelessness Homeless
CDBG: $0
/ CDBG-
CV: $
Overnight/Emergency
Shelter/Transitional
Housing Beds added
Beds 0 0 0 0
Homelessness Homeless
CDBG: $0
/ CDBG-
CV: $
Homelessness Prevention Persons
Assisted 0 0
Strengthen
Neighborhoods
Non-Homeless
Special Needs
Non-Housing
Community
Development
CDBG: $ /
CDBG- CV:
$300,000
Public Facility or
Infrastructure Activities
other than
Low/Moderate Income
Housing Benefit
Persons
Assisted 1200 0 0.00%
Strengthen
Neighborhoods
Non-Homeless
Special Needs
Non-Housing
Community
Development
CDBG: $ /
CDBG-CV:

Public service activities
other than
Low/Moderate Income
Housing Benefit
Persons
Assisted 1345 1286 95.00% 403

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community as explained in the City’s adopted 2020-25 Consolidated Plan; and (2) the City’s funding priorities and strategies to address COVID-19 related impacts, using funds from the CDBG CARES Act (CDBG-CV).

The City has achieved a number of goals as outlined in the 2021 Annual Action Plan (AAP) through CDBG and CDBG-CV funding. A total of $746,715 is available for funding projects and programs during the 2021 Program Year. The City received $536,756 from the federal CDBG program, approximately $136,049 in program income and $73,910 in reallocated funds from previous years. At the time of this reporting, the City has spent approximately $186,934. However, this will significantly increase in the next few months. Due to turnover and lack of staffing, three of the organizations have requested an extension of the reporting deadline and in one case an extension in contract.

Through the combination of CDBG and CDBG-CV funds, in total, 935 persons were assisted in this Program Year. Of the 935 persons, 383 were extremely low-income, 421 were low income and 131 were moderate income of the total. Approximately 40 percent of all persons were assisted through the COVID-19 related activities.

With the CDBG annual formula grant, Catholic Charities, through the Ombudsman Program, assisted 262 senior residents through visitation and phone outreach at the local long-term facilities, and LifeMoves, at the Opportunity Services Center, provided case management services including assistance with housing and job searches to 56 homeless/very low-income community residents. Project Sentinel provided fair housing and tenant/landlord mediation services to 24 local residents. Additionally, through the CDBG funds, Alta Housing was able to offer on-site counseling services to 151 residents of the Single-Room Occupancy (SRO) Resident Support Program. Additionally, Rebuilding Together Peninsula was able to assist six households (eight persons) with home rehabilitation to help assist in the City’s goal of affordable housing.

Ravenswood Family Health Network, a local health clinic, administered COVID-19 tests for 403 community residents through the CDBG annual formula grant through the pop-up vaccination events and booster COVID-19 vaccines.

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CR-10 - Racial and Ethnic composition of families assisted Describe the families assisted (including the racial and ethnic status of families assisted).

91.520(a)
CDBG
White 416
Black or African American 109
Asian 146
American Indian or American Native 2
Native Hawaiian or Other Pacific Islander 3
Total 676
Hispanic 54
Not Hispanic 622
Table 2 – Table of assistance to racial and ethnic populations by source of funds

Narrative
Table 2 generated in IDIS has only five racial categories and does not reflect all of the racial categories served by the City's CDBG funded activities. To accurately report the racial and ethnic breakdown, Table 2 is edited and provided as an attachment in the “Narrative” section. The updated table shows the accurate racial and ethnic categories of total individuals served in PY2021-22 through CDBG and CDBG- CV funds. Total number (935) also includes 403 individuals assisted through the COVID-19 related activities. In total, the City’s CDBG program served 935 individuals in PY2021-22. Of those individuals, approximately 44% were White; 27% were African American; 36% were Asian; less than 1% were either American Indian/American Native, Native Hawaiian, American Indian/Alaskan Native and Black, American Indian/Alaskan Native and White, Black or African American/White. Fifty six percent of individuals reported as “Other.”

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CR-15 - Resources and Investments 91.520(a)
Identify the resources made available
Source of Funds Source Resources Made
Available
Amount Expended
During Program Year
CDBG public - federal 746,715 186,934
Other public - federal 0
Table 3 - Resources Made Available

Narrative
Almost all of the City’s CDBG subrecipients were able to utilize all of their grant funds in PY2021-22 with the exception of Silicon Valley Independent Living Center (SVILC) Rental Assistance Program and Ravenswood Family Health Network: ADA Accessible Clinic Entrance and Exit at the Palo Alto Clinic; both COVID-19 (CARES-ACT) projects.
• Silicon Valley Independent Living Center (SVILC) Rental Assistance Program has $47,085 remaining in this grant. SVILC has continued to face challenges with the shutdown due to the COVID-19 pandemic and their inability to provide in-person services to residents at the Palo Alto Opportunity Services Center. Additionally, the State’s extended eviction moratorium has postponed many residents’ acute concerns about being behind on rent. The City has worked with SVILC and provided them an extension of six additional months, through December 2021, to utilize the remaining grant funds because the agency expects that after the state's eviction moratorium ends, there will be an increase demand for rental assistance. SVILC reported that they have assisted 6 people and their goal was 10 for the year. • For Ravenswood Family Health Network (ADA Accessible Clinic Entrance and Exit at the Palo Alto Clinic), the project was funded $300,000 but the project had a number of issues in regards to architectural design and plan check approval. They are nearing completion for all of the preliminary items and will be putting the project out to bid soon. Once a contractor is chosen and construction begins, they estimate the work to last about 2-3 months. A combination of County plan check delays and supply chain issues were causing the overall delay of the project resulting is a request for a time extension to June 2023 to complete the work.

Every year, the City tracks a sub-recipient’s spending with the goals that have been established. In some cases, a sub-recipient/organization is not able to spend the remaining funds. These funds are then added to the City’s unused funds from previous years and are considered roll over funds to be allocated as part of the following program year. The anticipated rollover funds from program year 2021 were included in the planning process for program year 2022. The Notice of Availability of Funding (NOFA) was published in Winter 2021.

In the case that SVILC and Ravenswood are not able to spend the remaining funds, these funds will be added to the City’s unused funds from previous years and will be allocated as part of the 2023-24 Notice

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of Availability of Funding (NOFA) to be published in Winter 2022.

In October 2020, Staff published NOFA for the second round of available CDBG-CV funds ($451,504) and received two applications Ravenswood Vaccination Van, and LifeMoves Hotel De Zink Program. • Hotel De Zink provided emergency shelter to homeless clients from January 2021 through June 2021.

After fully funding the two requests, the City still had $43,000 to allocate to an activity/project. In February 2021, staff re-published NOFA for the remaining $43,000 and received only one application from LifeMoves for the same Hotel De Zink program (provide emergency shelter to homeless clients from July 2021 through December 2021). Staff amended the original contract and added $43,000 and extended the term of performance from June 2021 to December 2021. The organization fully utilized the additional $43,000 by December 2021.
• Ravenswood Vaccination Van was funded through a combination of PY2020 CDBG annual formula grant ($149,950) and CDBG-CV ($204,600) funds. This activity’s goals were achieved. According to their reporting, the Ravenswood organization assisted 403 persons with vaccination and or testing in program year 2021-2022.

Identify the geographic distribution and location of investments Target Area Planned Percentage of
Allocation
Actual Percentage of
Allocation
Narrative Description

Table 4 – Identify the geographic distribution and location of investments

Narrative
The City considers the provisions of all types of housing assistance on a citywide basis consistent with the policies of the Comprehensive Plan. Palo Alto does not have specific target areas for housing activities; instead, the City attempts to provide affordable housing to lower-income persons throughout the City. Minority concentration includes areas in the City where the concentration of racial and ethnic minority population is 10% or higher than their total citywide representation. There are only a few areas that are considered to have a concentration of minority populations or low-income residents in Palo Alto. The CDBG Program defines low-income concentration as any census block group where 51% or more residents earn 80% of Median Family Income (MFI) or less. An exception exists for a jurisdiction that does not have any areas meeting this definition, such as Palo Alto, which includes the highest quartile of all areas in the City in terms of degree of concentration, is used. However, Palo Alto does not qualify activities under the low- and moderate- income (LMI) area benefit category.

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Leveraging
Explain how federal funds leveraged additional resources (private, state and local funds), including a description of how matching requirements were satisfied, as well as how any publicly owned land or property located within the jurisdiction that were used to address the needs identified in the plan.

Palo Alto leverages federal and private housing funds to the greatest extent feasible consistent with the goals identified in the 2020-2025 Consolidated Plan. Moreover, the City continues to encourage non- profit organizations to seek other local, state, and federal funding for both housing and non-housing community development activities.

HUMAN SERVICES RESOURCE ALLOCATION PROCESS (HSRAP): The City of Palo Alto provided $549,306 in General Funds during PY2021-22 to address primary human service needs in the community. These funds include multi-year agreements allocated by HSRAP and administered by the Office of Human Services in the Community Services Department. Funded projects addressed the Human Relations Commission’s priority needs in the following categories: early childcare and education, youth programs, senior nutrition and social services, homelessness, and basic needs such as health care and mental health.

HOUSING IN-LIEU: The City of Palo Alto maintains a local housing fund consisting of two sub funds: the “Commercial Housing Fund” and the “Residential Housing Fund.” Palo Alto, under Chapter 16.65 of the Municipal Code, requires commercial and industrial development projects to pay a housing mitigation fee. The fees are deposited in the “Commercial Housing Fund”, and the accumulated fees and interest earned on the fund are made available for the creation of new low and moderate-income housing units under the “Affordable Housing Fund Guidelines” adopted by the City Council. As of April 12, 2022, the Commercial Housing Fund had a preliminary available balance of approximately $1,451,109.

Pursuant to Program H-3.1.2, the Below Market Rate Program of the City’s Housing Element, Palo Alto collects housing in-lieu fees from residential development when it is infeasible to provide below market rate units on-site. The accumulated fees and interest earned on the fund and other miscellaneous revenues related to housing, are placed in a special fund: “Residential Housing Fund.” This fund is used to provide funding for acquisition or rehabilitation of low and moderate-income housing but may also be used for assistance to new housing construction projects. As of April 12, 2022, the Residential Housing Fund had a preliminary available balance of approximately $731,838.

These are the only local sources of funding and subsidies available for affordable housing within the City.

They are used to provide matching funds, pay for expenses which exceed HUD income and cost limits, to fund the cost of features and amenities classified as ineligible under federal housing programs, predevelopment expenses, feasibility studies, site acquisition, and other similar purposes.

No publicly owned land or property was used to address needs identified in the Annual Action Plan.

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CR-20 - Affordable Housing 91.520(b)
Evaluation of the jurisdiction's progress in providing affordable housing, including the number and types of families served, the number of extremely low-income, low-income, moderate-income, and middle-income persons served.

One-Year Goal Actual
Number of Homeless households to be
provided affordable housing units 0 0
Number of Non-Homeless households to be
provided affordable housing units 0 0
Number of Special-Needs households to be
provided affordable housing units 0 0
Total 0 0
Table 5 – Number of Households

One-Year Goal Actual
Number of households supported through
Rental Assistance 0 0
Number of households supported through
The Production of New Units 0 0
Number of households supported through
Rehab of Existing Units 6 6
Number of households supported through
Acquisition of Existing Units 0 0
Total 6 6
Table 6 – Number of Households Supported

Discuss the difference between goals and outcomes and problems encountered in meeting these goals.

The City has partnered with Rebuilding Together - Peninsula and introduced a “Safe at Home” Program.

Through this program, critical health and safety related home repair needs were provided to six low- income homeowners. This is the first year that this program has been implemented and had trouble initially establishing environmental process through the City. However, despite these initial setback, Rebuilding Together – Peninsula was able to exceed their initial goals and will also be funded in the next program year.

Discuss how these outcomes will impact future annual action plans.

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The City has partnered with Rebuilding Together - Peninsula and introduced a “Safe at Home” Program.

Through this program, critical health and safety related home repair needs were provided to six low- income homeowners. All six households served were extremely low-income. As previously mentioned, the City has decided to continue to support Rebuilding Together – Peninsual in the upcoming program year. The organization has continued to provide essential services to residents and this partnership will continue to support the affordable housing goals contained in both the Consolidated Plan and Action Plans.

Include the number of extremely low-income, low-income, and moderate-income persons served by each activity where information on income by family size is required to determine the eligibility of the activity.

Number of Households Served CDBG Actual HOME Actual
Extremely Low-income 6 0
Low-income 0 0
Moderate-income 0 0
Total 6 0
Table 7 – Number of Households Served

Narrative Information

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CR-25 - Homeless and Other Special Needs 91.220(d, e); 91.320(d, e); 91.520(c) Evaluate the jurisdiction’s progress in meeting its specific objectives for reducing and ending homelessness through:

Reaching out to homeless persons (especially unsheltered persons) and assessing their individual needs
Providing services for the unhoused in Palo Alto and ultimately ending homelessness has been a long- standing local concern. As the COVID-19 pandemic continues to be present, the strain on individuals and households has increased the number of people experiencing homelessness, challenged service providers to find new ways to deliver services, and makes this topic even more relevant.

Every two years, during the last ten days of January, communities across the United States conduct comprehensive counts of the local population experiencing homelessness. The last Point-in-Time Count was done in 2019 and it showed 313 Total Unhoused in Palo Alto (299 unsheltered and 14 sheltered) which is an increase from 2017, when the count was 276. The County was unable to complete a count in PY 2021 due to COVID-19; a Point-in-Time Count was completed in 2022 and County is working on finalizing 2022 numbers.

The City of Palo Alto supports services to the unhoused as well as homelessness prevention through three main funding sources: HSRAP, CDBG, and Emerging Needs Fund. At a high level, funding for the unhoused is geared towards unhoused support and homelessness prevention. Unhoused Support includes: workforce development, basic needs stipends for work experience, food, seasonal homeless shelter, school supplies for homeless children, case management, tele-medicine equipment, and shower/laundry services.

Homelessness Prevention Support includes: Provision of emergency rent and utility funding assistance through LifeMoves and Silicon Valley Independent Living Center. Additionally, there are local and State rental assistance programs available to local residents during the COVID pandemic. LifeMoves – Opportunity Center is designated by the County as the Emergency Assistance Network Agency for financial assistance for Palo Alto.

The Opportunity Services Center (OSC) in Palo Alto exclusively serves homeless individuals. LifeMoves at the OSC, provides intake services to all the clients they serve to assess their needs and provide the appropriate resources and referrals. They also provide basic need services such as access to restrooms, showers, laundry, used clothing, hygiene supplies, health care, mail/telephone services, food, transportation assistance, information and referral services, counseling, and other critical services. As a result, through support from CDBG and funding from the County’s office of supportive housing, in PY2021-22, they have served 56 unduplicated individuals.

Palo Alto will continue to explore its funding strategy and collaborate with other South County cities to ensure that limited federal and local resources are targeted to pressing community needs such as homelessness.

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Addressing the emergency shelter and transitional housing needs of homeless persons The following activity received funding from the City of Palo Alto to provide emergency shelter and/or transitional housing for homeless persons
LifeMoves – Hotel De Zink, CDBG $ 31,545: Through the Hotel de Zink activity, LifeMoves, offered longer hours of support to the homeless population of Palo Alto. The hours of operations of the Hotel de Zink emergency shelter were extended by 55% from 9 PM through 6 AM, to 5PM through 7 AM. This allowed these vulnerable clients to have a greater portion of their day in a safe and supportive environment where they could receive the assistance they so desperately needed. The longer Hotel de Zink hours, and increased communication via the electronic signage are a few factors attributed to not having a widespread outbreak of COVID-19 within the Opportunity Services Center and/or Hotel de Zink emergency shelter. The organization is continuing the extended hours of operations.

Helping low-income individuals and families avoid becoming homeless, especially extremely low-income individuals and families and those who are: likely to become homeless after being discharged from publicly funded institutions and systems of care (such as health care facilities, mental health facilities, foster care and other youth facilities, and corrections programs and institutions); and, receiving assistance from public or private agencies that address housing, health, social services, employment, education, or youth needs The following agencies received funding from the City of Palo Alto to help low income individuals and families avoid becoming homeless.

Alta Housing; CDBG $24,535: Alta Housing had on-site counseling services available to residents of the 131 units of the Single-Room Occupancy (SRO) Resident Support Program at Alma Place and Barker Hotel. Majority of the residents are low-income, disabled, elderly, veterans, and formerly homeless adults. Many residents have difficulty managing daily living skills, such as managing finances, maintaining their heath (mental and physical) and apartments, and gettingalong with others. Without onsite support, such issues can become so severe that tenants risk losing their housing. Case management was provided to 151 residents.

LifeMoves; Case Management; CDBG $31,545: The organization provided 1:1 case management service including assistance with housing and job searches, referrals, and mentoring to 56 unduplicated homeless and/or very low-income Palo Alto residents.

Silicon Valley Independent Living Center; Rental Assistance Program; CDBG $58,233: Through this grant, the organization was able to address rent increases, utility payments, emergency situations, and other market forces due to COVID-19 to 6 residents. The target population of this activity were the lower income (80% or less AMI) residents with disabilities, veterans and older adults, aged 55 and over.

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The City follows the guidance of Santa Clara County's CoC as it relates to individuals who may be discharged from publically funded institutions and systems of care. Currently, neither the CoC nor the City have a written policy that specifically addresses discharges, but the CoC actively works with health care facilities, hospitals, and correction programs and institutions when individuals are discharged to provide referrals to shelters.

Helping homeless persons (especially chronically homeless individuals and families, families with children, veterans and their families, and unaccompanied youth) make the transition to permanent housing and independent living, including shortening the period of time that individuals and families experience homelessness, facilitating access for homeless individuals and families to affordable housing units, and preventing individuals and families who were recently homeless from becoming homeless again
The following agencies received funding from the City of Palo Alto to help homeless persons make the transition to permanent housing and independent living.

Silicon Valley Independent Living Center; Case Management; CDBG $14,021: SVILC is highly recognized for its Housing Workshops. The Housing Workshops cover many important topics such as: credit readiness and credit repair; types of low-income housing and eligibility; application and interview preparation; tenant and landlord rights and responsibilities; fair housing and home modifications laws and resources; security deposit and rental assistance programs; long term services and supports.

Through the PY2021-22 CDBG funding, 26 unduplicated Palo Alto residents with disabilities received one-on-one assistance and developed an independent living plan for housing which resulted in improved accessibility to decent affordable housing. Their annual goal was 24.

Project Sentinel; Fair Housing Services; CDBG $33,698: Project Sentinel provided community education and outreach regarding fair housing law and practices, investigation, counseling and legal referral for victims of housing discrimination. In total, 17 fair housing complaints were investigated by Project Sentinel and 24 residents were provided individual consultation relating to specific fair housing questions.

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CR-30 - Public Housing 91.220(h); 91.320(j)
Actions taken to address the needs of public housing
Not applicable. The Housing Authority of the County of Santa Clara (HACSC) owns and manages four (4) public housing units, which are all located in the City of Santa Clara. There is no public housing in Palo Alto.

Actions taken to encourage public housing residents to become more involved in management and participate in homeownership
While the majority of their units have been converted to affordable housing stock, HACSC is proactive in incorporating resident input into the agency’s policy-making process. An equitable and transparent policy-making process that includes the opinions of residents is achieved through the involvement of two tenant commissioners, one being a senior citizen, on the HACSC board.

Actions taken to provide assistance to troubled PHAs
Not applicable.

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CR-35 - Other Actions 91.220(j)-(k); 91.320(i)-(j)
Actions taken to remove or ameliorate the negative effects of public policies that serve as barriers to affordable housing such as land use controls, tax policies affecting land, zoning ordinances, building codes, fees and charges, growth limitations, and policies affecting the return on residential investment. 91.220 (j); 91.320 (i) The City of Palo Alto has undertaken a number of actions to eliminate barriers to the development of affordable housing including participation in a county-wide effort to provide additional affordable housing units; programs in the 2015-2023 Housing Elementto increase the supply of affordable housing; and increase the development impact fees for housing.

Housing Trust Silicon Valley (Housing Trust): The Housing Trust, formerly the Housing Trust Fund of Santa Clara County (HTSCC), was created to provide additional financial resources to address the County’s affordable housing deficit. The Housing Trust’s mission is to make Silicon Valley a more affordable place to live. Loans and grants are issued to increase the supply of affordable housing, assist first-time home buyers, prevent homelessness and stabilize neighborhoods. Palo Alto was among the contributors during its founding and has continued to allocate funding. A provision was added to ensure the City’s funds be used exclusively for qualifying affordable housing projects within the City of Palo Alto.
2015-2023 Housing Element Update: The Palo Alto Housing Element, which is part of the City’s Comprehensive Plan, is the chief policy document describing the City’s housing needs and the policies and programs the City will use to meet those needs. The 2015-2023 Housing Element Update has been certified by the California State Department of Housing and Community Development.

Development Impact Fees for Housing: The City’s impact fees are comprised of four categories: Housing, Traffic, Community Facilities, and Parkland Dedication. The City has completed Nexus Studies for Residential and Commercial Development. The studies served as a basis for an update to both residential and non-residential housing fees and became effective on June 19, 2017. The housing impact fees are updated anuually. Full payment is required at building permit issuance with some exemptions including hospitals and convalescent facilities, private education facilities, public facilities and private clubs, lodges and fraternal organizations.

Actions taken to address obstacles to meeting underserved needs. 91.220(k); 91.320(j) The City’s CDBG program diligently works with other purveyors of funding to provide the most value per dollar. This is actualized by partnering with other City resources such as HSRAP and leveraging dollars invested in site acquisition for low-income housing with a multitude of other funding sources. However, Palo Alto is at a disadvantage in removing or eliminating obstacles to meeting underserved needs due to the consistently shrinking amount of CDBG funds available in recent years. To address this, the City supplements its CDBG funding with other resources and funds, such as:

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• During PY2021-22, the City’s Human Service Resource Allocation Process (HSRAP) provided approximately $549,306 from the General Fund in support of human services. The HSRAP funds, in conjunction with the CDBG public service funds, are distributed to local non-profit agencies; • The Palo Alto Commercial Housing Fund is used primarily to increase the number of new affordable housing units for Palo Alto’s work force. It is funded with mitigation fees required from developers of commercial and industrial projects;
• The Palo Alto Residential Housing Fund is funded with mitigation fees provided under Palo Alto’s BMR housing program from residential developers and money from other miscellaneous sources, such as proceeds from the sale or lease of City property;
• The City’s Below Market Rate Emergency Fund was authorized in 2002 to provide funding on an ongoing basis for loans to BMR owners for special assessment loans and for rehabilitation and preservation of the City’s stock of BMR ownership units; and • HOME Program funds are available on an annual competitive basis through the State of California HOME program, and the County’s HOME Consortium.

Actions taken to reduce lead-based paint hazards. 91.220(k); 91.320(j) Lead poisoning can cause permanent damage to the brain and many other organs, and can result in reduced intelligence and behavioral problems in young children. More than 80,000 children younger than six years old living in the United States have lead in their blood that is above the level of concern set by the Centers for Disease Control and Prevention (CDC). A significant number of these children are in families of low income and are living in old homes with heavy concentration of lead-based paint and lead-contaminated dust and soil in the environment.

The City’s housing and CDBG staff provides information and referrals to property owners, developers, and nonprofit organizations rehabilitating older housing about lead-based paint (LBP) hazards. Any house to be rehabilitated with City financial assistance is required to be inspected for the existence of LBP hazards. The City will provide financial assistance for the abatement of LBP hazards in units rehabilitated with City funding. The City also requires that contractors are trained and certified in an effort to decrease the risk of potential use of LBP innew units. All development and rehabilitation projects must be evaluated according to HUD’s Lead Safe Housing Rule 24 CFR Part 35.[1] Actions taken to reduce the number of poverty-level families. 91.220(k); 91.320(j) The City, in its continuing effort to reduce poverty, prioritized funding agencies that provide direct assistance to the homeless and those in danger of becoming homeless. In PY2021-2022, these programs included the following:

Catholic Charities of Santa Clara County, through the Ombudsman Program, assisted 262 senior residents through visitation and phone outreach at the local long-term facilities.

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LifeMoves, at the Opportunity Services Center, provided case management services including assistance with housing and job searches to 56 homeless/very low-income community residents LifeMoves provides basic necessities for persons who are homeless or at risk of becoming homeless. The Opportunity Services Center is a comprehensive, one-stop, multi-service, day drop-in center that provides critical services for homeless Palo Alto residents. Specifically, the facility provides showers, laundry, clothing, snacks, case management, and shelter/housing referral services.

Alta Housing provided counseling and supportive case management services for low-income residents of single-room occupancy facilities to help them maintain housing stability. Activities included financial counseling, health maintenance, information and referral, problem solving, employment assistance, crisis intervention, and case management. Alta Housing was able to provide services to 151 individuals.

Downtown Streets Team is a nonprofit in the City that works to reduce homelessness through a “work first” model. Downtown Streets Team utilized their community connections to provide training and job opportunities to homeless people, specifically in the downtown area. The Workforce Development Program provided transition from unemployment and homelessness to regular employment and housing through case management, job training, mentoring, housing, and transportation assistance. The Downtown Streets Team connected seven individuals who were meaningfully employed.

As mentioned previously, the City provided LifeMoves with $31,545 in CDBG funds in PY2021-22. During the fiscal year 56 homeless and/or very low-income Palo Alto residents received case management services including assistance with housing/job search, referral and mentoring.

Actions taken to develop institutional structure. 91.220(k); 91.320(j) The City is striving to improve intergovernmental and private sector cooperation to synergize efforts and resources and develop new revenues for community service needs and the production of affordable housing. Collaborative efforts include:
• Regular bi-weekly meetings between entitlement jurisdictions at the CDBG Coordinators; • Meeting and Regional Housing Working Group;
• Joint jurisdiction Request for Proposals and project review committees; • Coordination on project management for projects funded by multiple jurisdictions; and • HOME Consortium meetings between member jurisdictions for affordable housing projects.

Actions taken to enhance coordination between public and private housing and social service agencies. 91.220(k); 91.320(j)
The City benefits from a strong jurisdiction and region-wide network of housing and community development partners, such as the County and the Continuum of Care (CoC). To improve intergovernmental and private sector cooperation, the City participated with other local jurisdictions and developers in sharing information and resources. In addition to the actions listed above, the City will

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continue to coordinate with the City’s HSRAP funding efforts to comprehensively address community needs.

Identify actions taken to overcome the effects of any impediments identified in the jurisdictions analysis of impediments to fair housing choice. 91.520(a) The City makes every effort to affirmatively further fair housing in compliance with the adopted Analysis of Impediments. The following is a list of actions taken to affirmatively further fair housing:
• The Department of Housing and Community Development has certified the City’s 2015-2023 Housing Element update;
• The City targeted the majority of its local housing funds to increase and preserve the supply of affordable housing;
• The Office of Human Services regularly met with the County of Santa Clara Housing Authority to place homeless individuals with Section 8 vouchers;
• Affordable housing information and referral services were provided by the Office of Human Services; and
• In a joint effort with the County of Santa Clara and Cities, the City is currently updating its Assessment of Fair Housing (AFH) Plan. The Palo Alto AFH Plan Is expected to be completed in Winter/Spring 2023.

During PY2021-22, the City continued to support actions to affirmatively further fair housing choice through a subrecipient agreement with Project Sentinel, a non-profit organization dedicated to assisting individuals with housing problems. Project Sentinel exceeded their goal of 15 individuals served through case work. They served 24 individuals via casework. They also exceeded their goal of 12 consultations.

They completed 16 extended fair housing consultations, and reached 1,147 Palo Alto residents and service providers through outreach. They updated their fair housing manual for housing providers and is readily available on their website. They also met their goal of distributing a minimum of 1000 pieces of literature. They exceeded their goal of reaching 50 people through intake and referral and instead reached 53 people.

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CR-40 - Monitoring 91.220 and 91.230
Describe the standards and procedures used to monitor activities carried out in furtherance of the plan and used to ensure long-term compliance with requirements of the programs involved, including minority business outreach and the comprehensive planning requirements
The City continues to actively monitor all subrecipients and projects ensuring compliance with program and comprehensive planning requirements. Monitoring involves review of semiannual and annual performance reports, review of reimbursement requests and submitted backup documentation, agency’s audit reports etc. Biennial on-site monitoring is carried out for all CDBG subrecipients and consists of reviewing client files, project objectives and conformance with agreement, administrative management, financial management/internal controls etc.

For the program year 2021-22, the City anticpiates completing the monitoring in by end of 2022.

Citizen Participation Plan 91.105(d); 91.115(d)
Describe the efforts to provide citizens with reasonable notice and an opportunity to comment on performance reports.

The program year 2021-2022 Draft CAPER was made available on the City website (https://www.cityofpaloalto.org/CDBG) for the required 15 days public comment period from August 24th through September 7, 2022. An advertisement was placed in The Daily Post, a newspaper of general circulation, on August 24, 2022, advertising the availability of the CAPER for public review and comment. The draft CAPER was posted on the City’s website on August 24, 2022. Due to COVID-19, copies of the CAPER were available electronically. The Human Relations Commission held a virtual public hearing on September 8, 2022 to discuss the CAPER and to allow the public an opportunity to comment on the CAPER. Public comments were not received during the 15-day public review/comment period.

Two (2) public comments were received during the HRC meeting held on September 12, 2022 (see page 26 of this document).

Per the City’s adopted Citizen Participation Plan, the City offers translation services when a significant number of non-English speaking residents can be reasonably expected to participate, or when a reasonable request for such an accommodation is made. Non-English speaking residents requiring translation assistance or residents requiring any accommodations are advised to submit their request as soon as possible but no later than 48 hours in advance of a scheduled meeting, program, or service.

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CR-45 - CDBG 91.520(c)
Specify the nature of, and reasons for, any changes in the jurisdiction’s program objectives and indications of how the jurisdiction would change its programs as a result of its experiences.

Not applicable. The City does not plan to change the CDBG program objectives.

Does this Jurisdiction have any open Brownfields Economic Development Initiative (BEDI) grants?
No
[BEDI grantees] Describe accomplishments and program outcomes during the last year.

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CR-58 – Section 3
Identify the number of individuals assisted and the types of assistance provided Total Labor Hours CDBG HOME ESG HOPWA HTF
Total Number of Activities 0 0 0 0 0
Total Labor Hours
Total Section 3 Worker Hours
Total Targeted Section 3 Worker Hours
Table 8 – Total Labor Hours

Qualitative Efforts - Number of Activities by
Program

CDBG HOME ESG HOPWA HTF
Outreach efforts to generate job applicants who are
Public Housing Targeted Workers
Outreach efforts to generate job applicants who are
Other Funding Targeted Workers.

Direct, on-the job training (including
apprenticeships).

Indirect training such as arranging for, contracting
for, or paying tuition for, off-site training.

Technical assistance to help Section 3 workers
compete for jobs (e.g., resume assistance,
coaching).

Outreach efforts to identify and secure bids from
Section 3 business concerns.

Technical assistance to help Section 3 business
concerns understand and bid on contracts.

Division of contracts into smaller jobs to facilitate
participation by Section 3 business concerns.

Provided or connected residents with assistance in
seeking employment including: drafting
resumes,preparing for interviews, finding job
opportunities, connecting residents to job
placement services.

Held one or more job fairs.

Provided or connected residents with supportive
services that can provide direct services or referrals.

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Provided or connected residents with supportive
services that provide one or more of the following:
work readiness health screenings, interview
clothing, uniforms, test fees, transportation.

Assisted residents with finding child care.

Assisted residents to apply for, or attend
community college or a four year educational
institution.

Assisted residents to apply for, or attend
vocational/technical training.

Assisted residents to obtain financial literacy
training and/or coaching.

Bonding assistance, guaranties, or other efforts to
support viable bids from Section 3 business
concerns.

Provided or connected residents with training on
computer use or online technologies.

Promoting the use of a business registry designed to
create opportunities for disadvantaged and small
businesses.

Outreach, engagement, or referrals with the state
one-stop system, as designed in Section 121(e)(2) of
the Workforce Innovation and Opportunity Act.

Other.

Table 9 – Qualitative Efforts - Number of Activities by Program

Narrative

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Public Comments

Human Relations Commission
Meeting – September 8, 2022
FY 2021-2022 CAPER

Public comments were not received during the 15-day public review/comment period.

Two (2) public comments were received during the HRC meeting held on September 12, 2022.

Speaker #1 – Alexis Crews-Holloway, Project Manager with Downtown Streets Team • First off, I would like to thank HRC, City staff and the City’s CDBG consultants Maria and Maria for all their hard work on this and our continued partnership. We are so appreciative of you all. I would like to call to everyone’s attention to the memo that will be attached to the CAPER as a separate attachment when it is submitted to HUD. It does state that our program assisted 15 individuals with job placement at year end, which is accurate and that we have achieved 107% of our contract goal. Our goal was to assist 14 individuals, so we actually have exceeded our contract goal even though what is reported in the CAPER does not reflect this. I’m here if anyone has questions, although we still have questions ourselves hoping to have answered soon from City’s CDBG consultants. So, thank you to the HRC and everyone involved in this reporting process. I hope you all have a good evening.

Speaker #2 – Carol Conn, Executive Director Project Sentinel • Just want to thank the HRC Commission and otherwise all the s taffing that goes into the work to make the fair housing piece of the services sing. We are thankful for the partnership with the City of Palo Alto. We, in addition to f air housing and the significant work we put forward there. We also have a very robust landlord/tenant mediation program that the goal for which is to keep people housed and living in harmony and that is also a very big component of what Project Sentinel does for the City of Palo Alto. Just wanted to reiterate our appreciation and thanks to the City for the continued support.

Thank you.

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CITY OF PALO ALTO - CDBG
ANNUAL ACTION PLAN FY2020-21: CDBG-CV SUBSTANTIAL AMENDMENT City Council Approved June 20, 2022

INTRODUCTION:

The City of Palo Alto’s Annual Action Plan details the funding strategy for the Community Development Block Grant (CDBG) program each year. Through the Annual Action Plan, the City implement its Five -Year Consolidated Plan. The City’s Cit izen Participation Plan (CPP) describes the efforts that the City will take to encourage its residents to participate in developing these plans. It also provides requirements for public process when a “substantial amendment” to the Annual Action Plan is pr oposed. The follow ing changes constitute a substantial amendment and require public notice as described in the CPP:

• A change in the use of CDBG funds from one eligible activity to another; • The implementation of an activity not previously identified in suf ficient detail to provide affected citizens an opportunity to submit comments; or • A change in an activity’s program budget which exceeds ten percent of the City’s latest annual entitlement grant.

The information provided in this attachment qualifies as a substantial amendment because it meets all three criteria of a substantial amendment as described in the City’s CPP.

BACKGROUND:

The United States Congress passed the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) on March 27, 2020. The CA RES Act expedites the use of CDBG funds to prevent and respond to COVID -19. Through the CARES Act, the City received a total of $746,413 in two separate grant allocations. These funds are to be used specifically for responding to the COVID- 19 pandemic.

On June 15, 2020, Council allocated a portion of the first allocation of CARES Act funding (CDBG-CV1) in the amount of $294,900 to LifeMoves to provide rental assistance to eligible low-income Palo Alto families (i.e. 80% Area Media Income and below) who have suffered documented income loss due to COVID- 19. Of this amount, LifeMoves was able to spend $99,499.50, and is now giving the remaining $194,500.50 back to the City to reallocate.

The purpose of this substantial amendment to the City of Palo Alto’s FY 2020-21 Annual Action Plan is to reallocate a portion of the CDBG -CV funds that was returned by a subrecipient to two new COVID- 19 related projects and provide a summary of the recommended projects/activities.

DISCUSSION:

The City will re -allocate $194,500.50 in CDBG -CV funds that was returned from LifeMoves Rental Assistance Program. The LifeMoves Rental Assistance Program was funded in FY 2020-

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21 under the CDBG public services category to provide eligible households who are unable to meet their monthly financial obligations as a result of the COVID-19 emergency with rental assistance. Individuals and families in danger of becoming homeless or losing their homes, will be able to remain in their homes. LifeMoves informed the City that they would be unable to spend the remaining funds that they received for this program and are therefore returning the funds to the City to be reallocated towards different COVID- related activities. Table 1 provides an overview of the recommended re-allocation of the $194,500 .50 from the FY 20/21 program year.

Table 1. Staff Recommendation for the Reallocation of CDBG-CV Funds Agency – Name of Program Amount

1. MOVE Mountain View – Safe Parking Program

$160,300

2. LifeMoves – COVID-19 Testing Program $34,200.50
TOTAL $194,500.50

Public Outreach Process for the Reallocation of CDBG-CV Funds The City circulated the amendment to the FY 2020-21 Annual Action Plan for a 30-day public comment period from May 20, 2022 through June 20, 2022. After the public comment period concludes, the City Council will hold a public hearing on June 20, 2022.

A brief description of programs that will be funded with the City’s reallocated CDBG-CV funds is provided below. The CDBG-CV funds will provide a valuable funding source for the City and its non -profit partners to address the community needs in the wake of the COVID- 19 pandemic.

Project Name MOVE Mountain View – Safe Parking Program
Goals Supported and Needs
Addressed
COVID-19 Response
Funding Amount CDBG-CV: $160,300
Description The program provides reserved off -street parking for participants, as well as permanent housing solutions through intensive case management. The Geng Road Safe Parking Lot is where MMV will utilize the grant. There are 12 RV safe parking spaces with eight spaces for client commuter car parking. A unique resource on this lot is the presence of two buildings. A library, laundry, kitchen, showers, and office spaces will create many options for service to the clients in the program.

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Estimate the number and type
of families that will benefit from
the proposed activities
Approximately eight Palo Alto residents will be served.

Location Description Citywide (Palo Alto)

Project Name LifeMoves – COVID-19 Testing Program

Goals Supported and Needs
Addressed:

COVID-19 Response
Funding Amount CDBG-CV: $34,200.50

Description LifeMoves will use this funding to purchase CUE Health Tests that test for COVID- 19 and deliver accurate results in 20 minutes. They can be administered to anyone at any time that the Opportu nity Services Center is open, whether the client is symptomatic or asymptomatic.

Estimate the number and type
of families that will benefit
from the proposed activities
Approximately 450 Palo Alto residents will be served.

Location Description Citywide (Palo Alto)

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Schedule of Meetings
Published November 3, 2022
This is a courtesy notice only. Meeting dates, times, and locations are subject to change. Almost all Palo Alto Council and some Standing Committee meetings are cablecast live on Channel 26. If there ha ppens to be concurrent meetings, one meeting will be broadcast on Channel 29.

Persons with disabilities who require auxiliary aids or services in using City facilities or programs, or who would like information on the City’s compliance with the Americans with Disabilities Act (ADA) of 1990, may contact: ADA Coordinator, City of Palo Alto, 650-329-2550 (voice) or 329-1199 (TDD), [email protected]. Listening assi stive devices are available in th e Council Chambers. S ign language interpreters will be provided upon request with 72 hours advance notice. Please advise the City Clerk's Office (650-329-2571) of meetings or changes by 3:00 p.m. on Wednesdays for inclusion in the following week’s schedule.

Meetings are held in-person and virtually unless otherwise noted THURSDAY, November 3
Architectural Review Board, 8:30 a.m. Council Chambers Policy & Services Committee, 7:00 p.m. Council Chambers

MONDAY, November 7
City Council, 5:00 p.m. Council Chambers

TUESDAY, November 8
Policy & Services Committee, 7:00 p.m. CANCELLED

THURSDAY, November 10
Historic Resources Board, 8:30 a.m. Council Chambers
Human Relations Commission, 6:00 p.m. Council Chambers

MONDAY, November 14
City Council, 5:00 p.m. Council Chambers

TUESDAY, November 15
Finance Committee, 5:30 p.m. Community Meeting Room

WEDNESDAY, November 16
Planning & Transportation Commission, 6:00 p.m. Council Chambers

THURSDAY, November 17
City/School Liaison Committee, 8:30 a.m. Virtual Only
Architectural Review Board, 8:30 a.m. Council Chambers Public Art Commission, 7:00 p.m. Community Meeting Room

FRIDAY, November 18
Rail Committee, 1:00 p.m. Community Meeting Room

MONDAY, November 21
City Council, 5:00 p.m. CANCELLED

TUESDAY, November 22
Parks & Recreation Commission 7:00 p.m. Council Chambers

MONDAY, November 28
City Council 5:00 p.m. Council Chambers

TUESDAY, November 29
Finance Committee 5:30 p.m. Community Meeting Room

WEDNESDAY, November 30
Planning & Transportation Commission 6:00 p.m. Council Chambers a
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