1 City Council
Special Meeting
Monday, December 12, 2022
5:00 PM
Council Chamber & Virtual
AMENDED AGENDA
Amended agenda items appear below in Red
Pursuant to AB 361 Palo Alto City Council meetings will be held as “hybrid” meetings with the option to attend by teleconference/video conference or in person. To maximize public safety while still maintaining transparency and public access, members of the public can choose to participate from home or attend in person. Information on how the public may observe and participate in the meeting is located at the en1 of the agenda. Masks are strongly encouraged if attending in person.
HOW TO PARTICIPATE
VIRTUAL PARTICIPATION
CLICK HERE TO JOIN (https://cityofpaloalto.zoom.us/j/362027238) Meeting ID: 362 027 238 Phone:1(669)900-6833
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TIME ESTIMATES
Time estimates are provided as part of the Council's effort to manage its time at Council meetings. Listed times are estimates only and are subject to change at any time, including while the meeting is in progress. The Council reserves the right to use more or less time on any item, to change the order of items and/or to continue items to another meeting. Particular items may be heard before or after the time estimated on the agenda. This may occur in order to best manage the time at a meeting or to adapt to the participation of the public.
REVISED PUBLIC COMMENTS
Public Comments will be accepted both in per son and via Zoom for up to three minutes or an amount of time determined by the Chair. All requests to speak will be taken until 5 minutes after the staff’s presentation. Written public comments can be submitted in advance to [email protected] and will be provided to the Council and available for inspection on the City’s website. Please clearly indicate which agenda item you are referencing in your email subject line.
PowerPoints, videos, or other media to be presented during public comment are accepted only by email to [email protected] at least 24 hours prior to the meeting. Once received, the City Clerk will have them shar ed at public comment for the specified item. To uphold strong cybersecurity management practices, USB’s or other physical electronic storage devices are not accepted. 2 Special Meeting December 12, 2022
Materials related to an item on this agenda submitted to the Board after distribution of the agenda packet are available for public inspection at www.CityofPaloAlto.org.
CALL TO ORDER
SPECIAL ORDER OF THE DAY
AA1. SOBRATO PHILANTHROPIES (5:00 – 5:10 PM)
CLOSED SESSION (5:10 – 6:30 PM)
1. CONFERENCE WITH LABOR NEGOTIATORS City Designated
Representatives: City Manager and his Designees Pursuant to Merit System Rules and Regulations (Ed Shikada, Kiely Nose, Sandra Blanch, Nicholas Raisch, Mo lly Stump, and Teren ce Howzell) Employee Organization: Service Employees International Union, (SEIU) Local 521, Utilities Management and Professional Association of Palo Alto (UMPAPA)Palo Alto Peace Officer’s Association (PAPOA), Palo Alto Police Management Association (PMA), International Association of Fire Fighters (IAFF) local 1319, Palo Alto Fire Chiefs Association (FCA), ; Authority: Government Code Section 54957.6 (a)
AGENDA CHANGES, ADDITIONS AND DELETIONS
PUBLIC COMMENT (6:30 – 6:50 PM)
Members of the public may speak to any item NOT on the agenda. Council reserves the right to limit the duration of Oral Communications period to 30 minutes.
CONSENT CALENDAR (6:50 – 6:55 PM)
Items will be voted on in one motion unless removed from the calendar by three Council Members.
2. SECOND READING: Adoption of an Ordinance extending the Term of Ordinance No. 5517 by an Additional 18 Months to Expire on June 16, 2024. Ordinance 5517 Amends Title 18 (Zoning) of the Palo Alto Municipal Code to Update Definitions, Broaden Permitted U ses and Provide Limits on Certain Uses through Updates to the Conditional Use Permit Thresholds. Environmental Review: CEQA Exemption 15061(b)(3) (FIRST READING: November 28, 2022 PASSED 6 -1, Cormack No)
3. Utilities Advisory Commission Recommend the City Council Affirm the Continuation of the REC Exchange Program
4. Approval of Amendment No. 1 to Contract C09124501 with GreenWaste of Palo Alto for Collection and Processing Services to Implement Domestic Recycling of Mixed Paper and Mixe d Rigid Plastics with Program Annual Costs Not to Exceed $1.2M; and Approval of Budget Amendment in the Refuse Fund Supplemental Report Added Public Letter
3 Special Meeting December 12, 2022
Materials related to an item on this agenda submitted to the Board after distribution of the agenda packet are available for public inspection at www.CityofPaloAlto.org.
5. Approval of Contract S20178749 Amendment No. 3 with LCT SOFTWARE, LLC in the Amount of $72,924 for a New Not to Exceed Amount of $247,254 for Electronic Document Review Software related to the City’s Land Use and Permitting System Through December 31, 2023
6. Approval of Lease and License of 300 Homer Ave. Roth Building between the City of Palo Alto and the Palo Alto Museum
7. Appointment of Kiely Nose as Assistant City Manager
8. Approval of a Contract with Nomad Transit, LLC (Via) for City of Palo Alto On -Demand Transit Service in a total contract amount not to exceed $2,500,000 for up to two years and Approval of a Budget Amendment in the General Fund (Late Packet Report Added) CITY MANAGER COMMENTS (6:55 – 7:15 PM)
ACTION ITEMS
Include: Reports of Committees/Commissions, Ordinances and Resolutions, Public Hearings, Reports of Officials, Unfinished Business and Council Matters.
9. Approval of Amendment No. 1 to Contract # C21180078 with Blue Rhino Studios, Inc. in the Amount of $234,748 for Design and Fabrication of Additional Dinosaur Sculptures and Exhibits for the Palo Alto Junior Museum & Zoo for a total not -to-exceed amount of $449,464. Environmental Review: CEQA Exemption 15301. (7:15 – 7:45 PM)
10. PUBLIC HEARING/LEGISLATIVE: Adoption of Amendments to Palo Alto Municipal Code Chapter 18.09, Accessory and Junior Accessory Dwelling Units due to State Law Change s and Direction from the California Department of Housing and Community Development.
Environmental Assessment: Exempt from the provisions of the California Environmental Quality Act (CEQA) pursuant to Public Resources Code Section 21080.17 and CEQA Guideli nes sections 15061(b)(3), 15301, 15302 and 15305. Planning and Transportation Commission Recommended Approval of the Ordinance. (7:45 – 8:45 PM) (Supplemental Report Added)
11. Approval of Response to the Grand Jury Report "If You Only Read the Ballot, You're Being Duped" (8:45 – 9:15 PM)
12. Colleagues Memo From Council Members Dubois, Kou, And Stone Regarding: Whole Home Short Term Rentals (9:15 – 10:30 PM) Q&A
Q&A
Public Letter
Presentation
Presentation
4 Special Meeting December 12, 2022
Materials related to an item on this agenda submitted to the Board after distribution of the agenda packet are available for public inspection at www.CityofPaloAlto.org.
COUNCIL MEMBER QUESTIONS, COMMENTS, ANNOUNCEMENTS
Members of the public may not speak to the item(s)
ADJOURNMENT
OTHER INFORMATION
Standing Committee Meetings
Policy & Services Committee Meeting December 13, 2022
Public Comment Letters
Schedule of Meetings
AMENDED AGENDA ITEMS
Items that have been added/modified from the original publication of the agenda are listed below. Any corresponding materials are appended to the end of the initial packet. If full items have been added to the Agenda, they will be denoted with a number staring with AA, meaning Amended Agenda item.
AA1. SOBRATO PHILANTHROPIES (5:00 – 5:10 PM)
4. Approval of Amendment No. 1 to Contract C09124501 with GreenWaste of Palo Alto for Collection and Processing Services to Implement Domestic Recycling of Mixed Paper and Mixed Rigid Plastics with Program Annual Costs Not to Exceed $1.2M; and Approval of Budget Amendment in the Refuse Fund Supplemental Report Added
10. PUBLIC HEARING/LEGISLATIVE: Adoption of Amendments to Palo Alto Municipal Code Chapter 18.09, Accessory and Juni or Accessory Dwelling Units due to State Law Changes and Direction from the California Department of Housing and Community Development.
Environmental Assessment: Exempt from the provisions of the California Environment al Quality Act (CEQA) pursuant to Publ ic Resources Code Section 21080.17 and CEQA Guidelines sections 15061(b)(3), 15301, 15302 and 15305. Planning and Transportation Commission Recommended Approval of the Ordinance. (7:45 – 8:45 PM) Supplemental Report Added
8. Approval of a Contract with No mad Transit, LLC (Via) for City of Palo Alto On -Demand Transit Service in a total contract amount not to exceed $2,500,000 for up to two years and Approval of a Budget Amendment in the General Fund Late Packet Report Added
5 Special Meeting December 12, 2022
Materials related to an item on this agenda submitted to the Board after distribution of the agenda packet are available for public inspection at www.CityofPaloAlto.org.
PUBLIC COMMENT INSTRUCTIONS
Members of the Public may provide public comments to teleconference meetings via email, teleconference, or by phone.
1. Written public comments may be submitted by email to [email protected].
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CLICK HERE TO JOIN Meeting ID: 362 027 238 Phone:1(669)900-6833
City of Palo Alto (ID # 15016)
Office of the City Clerk
City Council CAO Report
Meeting Date: 12/12/2022 Report Type: Consent Calendar
Title: SECOND READING: Adoption of an Ordinance extending the Term of Ordinance No. 5517 by an Additional 18 Months to Expire on June 16, 2024. Ordinance 5517 Amends Title 18 (Zoning) of the Palo Alto Municipal Code to Update Definitions, Broaden Permitted Uses and Provide Limits on Certain Uses through Updates to the Conditional Use Permit Thresholds. Environmental Review: CEQA Exemption 15061(b)(3) (FIRST READING: November 28, 2022 PASSED 6-1, Cormack No)
From: Lesley Milton, City Clerk
This was heard by the City Council on November 28, 2022 for a first reading and was approved 6-1, Cormack No. No changes were made to the Ordinance; it is now before you for a second reading.
ATTACHMENTS:
• Attachment2.a: Attachment A: Ordinance Temporarily Extending Ord 5517 Amending PAMC Ch 18.04 18.16 18.18 18.30 (PDF)
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*NOT YET APPROVED*
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Ordinance No. ____
Ordinance of the Council of the City of Palo Alto Temporarily Extending Ordinance 5517, Amending Palo Alto Municipal Code (PAMC) Title 18 (Zoning), Chapters 18.04 (Definitions), 18.16 (Neighborhood, Community, and Service Commercial (CN, CC and CS) Districts), 18.18 (Downtown Commercial (CD) Districts) and 18.30 (A) and (C) – the Retail and Ground Floor combining districts
The Council of the City of Palo Alto does ORDAIN as follows:
SECTION 1. Findings and Declarations. The City Council finds and declares as follows:
A. On April 5, 2021 the City Council adopted Ordinance 5517 to temporarily relax certain zoning regulations in the City’s commercial zoning districts to address some of the economic challenges created by the COVID-19 pandemic and to spur economic activity.
B. The City Council directed the Planning and Transportation Commission (PTC) to review certain elements of the temporary ordinance and provide a recommendation to the City Council.
C. On March 30, 2022 the PTC recommended that the term of Ordinance 5517 be extended to allow additional time for consideration of whether the temporary relaxation of zoning regulations should remain indefinitely, and whether such regulations should be otherwise amended.
D. On May 16, 2022, the City Council adopted Ordinance 5549, extending the term of Ordinance 5517 to expire on December 16, 2022.
E. On August 31, 2022, the PTC recommended that the term of Ordinance 5517 be further extended for a temporary period of time.
SECTION 2
. The effective date of Ordinance 5517 of the Palo Alto City Council , attached hereto as Exhibit A and incorporated herein, is hereby extended so that the Ordinance shall expire upon the earlier of June 16 , 2024 or adoption of replacement legislation by the City Council. Upon expiration of Ordinance 5517 , the City Clerk sh all direct the City’s codifier to update the Palo Alto Municipal Code as appropriate.
SECTION 3
. Any provision of the Palo Alto Municipal Code or appendices thereto inconsistent with the provisions of this Ordinance, to the extent of such inconsistencies and no further, is hereby repealed or modified to that extent necessary to effect the provisions o f this Ordinance.
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*NOT YET APPROVED*
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SECTION 4. If any section, subsection, sentence, clause, or phrase of this Ordinance is for any reason held to be invalid or unconstitutional by a decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Ordinance.
The City Council hereby declares that it would have passed this Ordinance and each and every section, subsection, sentence, clause, or phrase not declared invalid or unconstitutional without regard to whether any portion of the ordinance would be subsequently declared invalid or unconstitutional.
SECTION 5. The Council finds that the adoption of this ordinance is exempt from the provisions of the California Environmental Quality Act pursuant to CEQA Guideline sections 15061(b)(3) because it can be seen with certainty that temporary relaxation of minor land use regulations will not have a significant, adverse impact on the environment.
SECTION 6. This ordinance shall be effective on the thirty-first date after the date of its adoption.
INTRODUCED:
PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
NOT PARTICIPATING:
ATTEST:
____________________________ ____________________________ City Clerk Mayor
APPROVED AS TO FORM: APPROVED:
____________________________ ____________________________ Assistant City Attorney City Manager
____________________________
Director of Planning & Development
Services
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Ordinance No. 5517
Ordinance of the Council of the City of Palo Alto Amending Palo Alto Municipal Code (PAMC) Title 18 (Zoning), Chapters 18.04 (Definitions), 18.16 (Neighborhood, Community, and Service Commercial (CN, CC and CS) Districts), 18.18 (Downtown Commercial (CD) Districts) and 18.30 (A) and (C) – the Retail and Ground Floor Combining Districts
The Council of the City of Palo Alto does ORDAIN as follows:
SECTION 1. Findings and Declarations. The City Council finds and declares as follows:
A. On March 4, 2020, California Governor Gavin Newsom declared a State of Emergency due to the threat of Coronavirus Disease 2019 (“COVID-19”).
B. As a result of the COVID-19 pandemic and the public health response, restaurant, retail, tourism, and hospitality business has significantly declined and the nation is experiencing a recession.
C. The City Council desires to relax certain zoning regulations in the City’s commercial zoning districts to address some of the economic challenges created by the COVID-19 pandemic and to spur economic activity.
D. The public health, safety, or welfare require that such changes to the City’s zoning regulations be enacted for a temporary period and as expediently as possible, without review by the Planning and Transportation Commission pursuant to Palo Alto Municipal Code section 18.80.090.
SECTION 2. Section 18.04.030 (Definitions) of Ch apter 18.04 (Definitions) of Title 18 (Zoning) of the Palo Alto Municipal Code is amended to read as follows:
18.04.030 Definitions
(a) Throughout this title the following words and phrases shall have the meanings ascribed in this section.
[. . .]
(45) “Drive-in/drive-through service” means a feature or characteristic of a use involving sales of products or provision of services to occupants in vehicles, including drive-in or drive-up windows and drive- through services such as mechanical automobile washing, pharmacy windows, coffee stands, automatic teller machines, etc. [. . .]
EXHIBIT A
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(47) “Eating and drinking service” means a use providing preparation and retail sale of food and beverages with a full menu and providing indoor seating area. Eating and drinking service include presence of a full commercial kitchen and commercial dishwasher. including restaurants, fountains, cafes, coffee shops, sandwich shops, ice cream parlors, taverns, cocktail lounges and similar uses. For establishments with incidental sale alcoholic beverages, a minimum of 50% of revenues from an ‘eating and drinking service’ must be derived from the sale of food. Related definitions are provided in subsections (45) (Drive-in/drive-through service), (125)(B) (Intensive retail service) and (136) (Take-out service). [. . .]
(95) “Medical office” means a use providing consultation, diagnosis, therapeutic, preventive, or corrective personal treatment services by doctors, dentists, medical and dental laboratories, and similar practitioners of medical and healing arts for humans, licensed for such practice by the state of California. Incidental medical and/or dental research within the office is considered part of the office use, where it supports the on-site patient services. Medical office use does not include the storage or use of hazardous materials in excess of the permit quantities as defined in Title 15 of the Municipal Code. Medical gas storage or use shall be allowed up to 1,008 cubic feet per gas type and flammable liquids storage and use shall be allowed up to 20 gallons total (including waste).
(95.1) (A) “Medical research” means a use related to medical and/or dental research, testing and analysis, including but not limited to trial and clinical research. Biomedical and pharmaceutical research and development facilities are not included in this definition. Medical Research does not include the storage or use of quantities of hazardous materials above the exempt quantities listed in Title 15 of the Municipal Code nor any toxic gas regulated by Title
15. Additionally, Medical Research may include storage and use of etiological (biological) agents up to and including Risk Group 2 or Bio Safety Level 2 (Center for Disease Control). (95.2) (B) “Medical support retail” means a retail use providing sales, rental, service, or repair of medical products and services to consumers or businesses, and whose location near hospitals or medical offices facilitates the provision of medical care or medical research.
Examples of medical retail uses typically include, but are not limited to, pharmacies, sale of prosthetics, and sale of eyeglasses or other eye care products. (95.3) (C) “Medical support service” means a use providing administrative support functions for healthcare providers or facilities, intended to support the operations of hospitals or of medical and dental office uses, and whose location near those medical facilities enhances the interaction between medical providers and/or facilitates the provision of medical care or medical research. Examples of medical support service uses typically include, but are not limited to, administration and billing services, public relations, training, and fundraising.
Hospitals and ambulance services are not included in this definition. [. . .]
EXHIBIT A
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(114) “Personal service” means a use providing services of a personal convenience nature, and cleaning, repair or sales incidental thereto, including:
(A) Beauty shops, nail salons, day spas, and barbershops; (B) Self-service laundry and cleaning services; laundry and cleaning pick-up stations where all cleaning or servicing for the particular station is done elsewhere; and laundry and cleaning stations where the cleaning or servicing for the particular station is done on site, utilizing equipment meeting any applicable Bay Area Air Quality Management District requirements, so long as no cleaning for any other station is done on the same site, provided that the amount of hazardous materials stored does not at any time exceed the threshold which would require a permit under Title 17 (Hazardous Materials Storage) of this code; (C) Repair and fitting of clothes, shoes, and personal accessories; (D) Quick printing and copying services where printing or copying for the particular service is done on site, so long as no quick printing or copying for any off-site printing or copying service is done on the same site;
(E) Internet and other consumer electronics services; (F) Film, data and video processing shops, including shops where processing for the particular shop is done on site, so long as no processing for any other shop is done on the same site;
(G) Art, dance or music studios intended for an individual or small group of persons in a class (see “commercial recreation” for other activities); and (H) Fitness and exercise studios, or similar uses, in a space having of 1,800 5,000 square feet or fewer of gross floor area (see “commercial recreation” for uses exceeding 5,000 square feet other activities).
(I) Learning centers intended for individual or small group settings, including tutoring, standardized test preparation, language classes, after-school programs, cooking classes, and similar uses.
[. . .]
(125) “Retail service” means a use open to the public during typical business hours and predominantly engaged in providing retail sale, rental, service, processing, or repair of items primarily intended for consumer or household use.
(A) “Extensive retail service,” as used with respect to parking requirements, means a retail sales use having more than seventy-five percent of the gross floor area used for display, sales, and related storage of bulky commodities, including household furniture and appliances, lumber and building materials, carpeting and floor covering, air conditioning and heating equipment, and similar goods, which uses have demonstrably low parking demand generation per square foot of gross floor area.
EXHIBIT A
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(B) “Intensive retail service” as used with respect to parking requirements, means any retail service use not defined as extensive retail service and including limited food service (i.e. ‘ready-to-eat’ food and/or beverage shops without a full commercial kitchen, where food and/or beverages are ready to consume at the time of sale and any seating area is limited; examples include sandwiches, frozen desserts, non-alcoholic beverages, and baked items). [. . .]
(136) “Take-out service” means a characteristic of an eating or drinking service which encourages, on a regular basis, consumption of food or beverages, such as prepared or prepackaged items, outside of a building, in outdoor seating areas where regular table service is not provided, in vehicles parked on the premises, or off-site. Take-out service does not include intensive retail service uses, as defined in subsection (125)(B). [. . .]
SECTION 3. Section 18.16.040 (Land Uses) of Chapter 18.16 (Neighborhood, Community, and Service Commercial (CN, CC, CS) Districts) of Title 18 (Zoning) of the Palo Alto Municipal Code is amended to read as follows:
The uses of land allowed by this chapter in each commercial zoning district are identified in the following tables. Land uses that are not listed on the tables are not allowed, except where otherwise noted. Where the last column on the following tables ("Subject to Regulations in") includes a section number, specific regulations in the referenced section also apply to the use; however, provisions in other sections may apply as well. (a) Commercial Zones and Land Uses
Permitted and conditionally permitted land uses for each commercial zone are shown in Table 1:
TABLE 1
PERMITTED AND CONDITIONALLY PERMITTED USES
P = Permitted Use CUP = Conditional Use Permit Required LAND USE CN(4) CC, CC(2) CS (4) Subject to Regulations In:
ACCESSORY AND SUPPORT
USES
Accessory facilities and activities
customarily associated with or
essential to permitted uses, and
operated incidental to the principal
use.
P P P 18.42
Drive-in services or take-out
services associated with permitted
uses
(3)
CUP CUP CUP 18.42
EXHIBIT A
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Tire, battery, and automotive service
facilities, when operated incidental to
a permitted retail service or
shopping center having a gross floor
area of more than 30,000 square
feet.
CUP 18.42, 18.40.160
Safe Parking 18.42.160
EDUCATIONAL, RELIGIOUS, AND
ASSEMBLY USES
Business and Trade Schools P P
Churches and Religious Institutions P P P
Private Educational Facilities CUP P P
Private Clubs, Lodges, or Fraternal
Organizations
CUP P P
MANUFACTURING AND
PROCESSING USES
Recycling Centers CUP CUP CUP
Warehousing and Distribution CUP
OFFICE USES
Administrative Office Services P 18.16.050
Medical Offices CUP
(5)
CUP (5) CUP (5) 18.16.050
Professional and General Business
Offices
P P P 18.16.050
PUBLIC/QUASI-PUBLIC USES
Utility Facilities essential to provision
of utility services but excluding
construction or storage yards,
maintenance facilities, or corporation
yards.
CUP CUP CUP
RECREATION USES
Commercial Recreation CUP
(5)
CUP (5) CUP (5) 18.40.160
Outdoor Recreation Services CUP CUP CUP
EXHIBIT A
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RESIDENTIAL USES
Multiple-Family P(1) P(1) P(1) 18.16.060(b) and (c)
Home Occupations P P P
Residential Care Homes P P P
RETAIL USES
Eating and Drinking Services,
excluding drive-in and take-out
services
P P P 18.40.160
Retail Services, excluding liquor
stores
P P P 18.40.160
Liquor stores CUP P P 18.40.160
Shopping Centers P 18.16.060(e), 18.40.160
SERVICE USES
Ambulance Services CUP CUP CUP
Animal Care, excluding boarding
and kennels
P P P
Boarding and Kennels CUP
Automobile Service Stations CUP CUP CUP 18.30(G)
Automotive Services CUP
Convalescent Facilities CUP P P
Day Care Centers P P P 18.40.160
Small Family Day Care Homes P P P
Large Family Day Care Homes P P P
Small Adult Day Care Homes P P P
Large Adult Day Care Homes CUP P P
Banks and Financial Services V CUP P(2) P(2)
General Business Services CUP P
Hotels P P 18.16.060(d), 18.40.160
EXHIBIT A
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Mortuaries CUP P P
Neighborhood Business Services P 18.16.060(f)
Personal Services P P (6) P 18.16.060(f), 18.40.160
Reverse Vending Machines P P P
TEMPORARY USES
Farmer's Markets CUP CUP CUP
Temporary Parking Facilities,
provided that such facilities shall
remain no more than five years.
CUP CUP CUP
TRANSPORTATION USES
Parking as a principal use CUP CUP
Transportation Terminals CUP CUP
P = Permitted Use CUP = Conditional Use Permit Required
(1) Residential is only permitted: (i) as part of a mixed use development, pursuant to the provisions of Section 18.16.060(b), or (ii) on sites designated as housing inventory sites in the Housing Element of the Comprehensive Plan, (iii) on CN or CS sites on El Camino Real, or (iv) on CC(2) sites, all pursuant to the provisions of Section 18.16.060(b) and (c).
(2) Except drive-in services.
(3) So long as drive up facilities, excluding car washes, provide full access to pedestrians and bicyclists. A maximum of two such services shall be permitted within 1,000 feet, and each use shall not be less than 150 feet from one another.
(4) For properties in the CN and CS zone districts, businesses that operate or have associated activities at any time between the hours of 10:00 p.m. and 6:00 a.m. require a conditional use permit. (5) A conditional use permit is not required for medical office or commercial recreation uses up to 5,000 square feet of gross floor area, with the following exceptions, for which a conditional use permit is always required: (A) medical office fronting on California Avenue and in the Midtown Shopping District; (B) commercial recreation uses fronting on California Avenue and in the Town and Country Village Shopping Center.
(6) A conditional use permit is required for the following uses when fronting on California Avenue: (A) Fitness or exercise studios, and similar uses exceeding 1,800 square feet in gross floor area; and (B) Learning centers intended for individual or small group settings. A conditional use permit is required for
EXHIBIT A
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fitness or exercise studios, and similar uses exceeding 1,800 square feet in gross floor area in Town and Country Village Shopping Center.
[. . .]
SECTION 4. Section 18.16.060 (Development Standards) of Chapter 18.16 (Neighborhood, Community, and Service Commercial (CN, CC, CS) Districts) of Title 18 (Zoning) of the Palo Alto Municipal Code is amended to read as follows:
18.16.060 Development Standards
[. . .]
(f) Size of Establishments in the CN District
In the CN district, permitted commercial uses shall not exceed the floor area per individual use or business establishment shown in Table 5. Such uses may be allowed to exceed the maximum establishment size, subject to issuance of a conditional use permit in accord with Section
18.76.010. The maximum establishment size for any conditional use shall be established by the director and specified in the conditional use permit for such use.
TABLE 5
MAXIMUM SIZE OF ESTABLISHMENT
Type of Establishment Maximum Size (sq ft)
Personal Services 2,500 3,000
Retail services, except grocery stores 15,000
Grocery stores 20,000
Eating and drinking services 5,000
Neighborhood business services 2,500 3,000
[. . .]
(h) Outdoor Sales and Storage
(2) In the CC district and in the CC (2) district, the following regulations shall apply to outdoor sales and storage:
(A) Except in shopping centers, all permitted office and commercial activities shall be conducted within a building, except for:
(i) Incidental sales and display of plant materials and garden supplies occupying no more than 2,000 square feet of exterior sales and display area, (ii) Outdoor eating areas operated incidental to permitted eating and drinking services or intensive retail uses,
(iii) Farmers’ markets that have obtained a conditional use permit, and
EXHIBIT A
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(iv) Recycling centers that have obtained a conditional use permit. (B) Any permitted outdoor activity in excess of 2,000 square feet shall be subject to a conditional use permit.
SECTION 5. Sections 18.18.050 (Lan d Uses) of Chapter 18.18 (Commercial Downtown (CD) District) of Title 18 (Zoning) of the Palo Alto Municipal Code is amended to read as follows:
18.18.050 Land Uses
The uses of land allowed by this chapter in each commercial zoning district are identified in the following table. Land uses that are not listed on the tables are not allowed, except where otherwise noted. Where the last column on the following tables ("Subject to Regulations in") includes a section number, specific regulations in the referenced section also apply to the use; however, provisions in other sections may apply as well.
Permitted and conditionally permitted land uses for the CD district are shown in Table 1:
Table 1
CD Permitted and Conditionally Permitted Uses
P Permitted Use • CUP Conditional Use Permit Required CD-C CD-S CD-N Subject to
regulations in
Chapter
:
ACCESSORY USES
Accessory facilities and activities associated with or
essential to permitted uses, and operated incidental
to the principal use
P P P
Drive-in or Take-out Services associated with
permitted uses (2)
CUP CUP CUP
Tire, battery, and automotive service facilities, when
operated incidental to a permitted retail service or
shopping center having a gross floor area of more
than 30,000 square feet
CUP 18.40.160
Safe Parking 18.42.160
EDUCATIONAL, RELIGIOUS, AND ASSEMBLY
USES
Business and Trade Schools P P
Churches and Religious Institutions P P P
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Private Educational Facilities P P CUP
Private Clubs, Lodges, or Fraternal Organizations P P CUP
MANUFACTURING AND PROCESSING USES
Recycling Centers CUP CUP CUP
Warehousing and Distribution CUP
OFFICE USES
Administrative Office Services P 18.18.060(f)
Medical, Professional, and General Business Offices P P P 18.18.060(f)
PUBLIC/QUASI-PUBLIC FACILITY USES
Utility Facilities essential to provision of utility
services but excluding construction or storage yards,
maintenance facilities, or corporation yards
CUP CUP
RECREATION USES
Commercial Recreation CUP
(3)
CUP
(3)
CUP
(3)
Outdoor Recreation Services CUP CUP CUP
RESIDENTIAL USES
Multiple-Family P (1) P (1) P (1) 18.18.060(b)
Home Occupations P P P
Residential Care Homes P P P
RETAIL USES
Eating and Drinking Services, except drive-in or take-
out services
P P P 18.18.060(g) , 1
8.40.160
Retail Services, excluding liquor stores P P P 18.18.060(g) , 1
8.40.160
Shopping Centers P 18.18.060(g) , 1
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8.40.160
Liquor Stores P P CUP 18.40.160
SERVICE USES
Animal Care, excluding boarding and kennels P P P
Ambulance Services CUP CUP CUP 18.30(G)
Automobile Service Stations CUP CUP CUP
Automobile Services CUP
Convalescent Facilities P P CUP
Day Care Centers P P P 18.40.160
Small Family Day Care Homes P P P
Large Family Day Care Homes P P P
Small Adult Day Care Homes P P P
Large Adult Day Care Homes
Financial Services, except drive-up services P P CUP
General Business Services CUP P P
Hotels P P P 18.18.060(d) , 1
8.40.160
Mortuaries P P CUP
Personal Services P (4) P (4) P (4) 18.18.060(g) , 1
8.40.160
Reverse Vending Machines P P P
TRANSPORTATION USES
Parking as a principal use CUP CUP
Passenger Transportation Terminals CUP
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TEMPORARY USES
Indoor Farmers’ Markets CUP CUP CUP
Temporary Parking Facilities, provided that such
facilities shall remain no more than five years
CUP CUP CUP
P Permitted Use CUP Conditional Use Permit Required (1) Residential is only permitted as part of a mixed use development, pursuant to the provisions of Section 18.18.060(b), or on sites designated as Housing Opportunity Sites in the Housing Element of the Comprehensive Plan, pursuant to the provisions of Section 18.18.060(c). (2) Drive-up facilities, excluding car washes, provide full access to pedestrians and bicyclists. A maximum of two such services shall be permitted within 1,000 feet and each use shall not be less than 150 ft from one another.
(3) A conditional use permit is not required for commercial recreation uses up to 5,000 square feet of gross floor area, with the following exceptions, for which a conditional use permit is always required: (A) medical office fronting on University Avenue; (B) commercial recreation uses fronting on University Avenue.
(4) A conditional use permit is required for the following uses when fronting on University Avenue: (A) Fitness or exercise studios, and similar uses; and (B) Learning centers intended for individual or small group settings.
SECTION 6. Section 18.18.060 (Development Standards) of Chapter 18.18 (Commercial Downtown (CD) District) of Title 18 (Zoning) of the Palo Alto Municipal Code is amended to read as follows:
[. . .]
(g) Restrictions on Size of Commercial Establishments in CD-N Subdistrict In the CD-N subdistrict, permitted commercial uses shall not exceed the floor area per individual use or business establishment shown in Table 4. Such uses may be allowed to exceed the maximum establishment size, subject to the issuance of a conditional use permit in accordance with Chapter 18.76. The maximum establishment size for any conditional use shall be established by the director and specified in the conditional use permit for such use. //
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TABLE 4
MAXIMUM SIZE OF ESTABLISHMENT
Type of Establishment Maximum Size (ft 2 )
Personal Services 2,500 3,000
Retail services, except grocery stores 15,000
Grocery stores 20,000
Eating and drinking services 5,000
(h) Outdoor Sales and Storage.
The following regulations shall apply to outdoor sales and storage in the CD district:
(1) CD-C Subdistrict
In the CD-C subdistrict, the following regulations apply:
(A) Except in shopping centers, all permitted office and commercial activities shall be conducted within a building, except for:
(i) Incidental sales and display of plant materials and garden supplies occupying no more than 2,000 square feet of exterior sales and display area, (ii) Outdoor eating areas operated incidental to permitted eating and drinking services or intensive retail uses,
(iii) Farmers' markets which have obtained a conditional use permit, and (iv) Recycling centers that have obtained a conditional use permit. (B) Any permitted outdoor activity in excess of 2,000 square feet shall be subject to a conditional use permit.
(C) Exterior storage shall be prohibited, except recycling centers which have obtained a conditional use permit.
(2) CD-S Subdistrict
In the CD-S subdistrict, outdoor sales and display of merchandise, and outdoor eating areas operated incidental to permitted eating and drinking services and intensive retail uses shall be permitted subject to the following regulations:
(A) Outdoor sales and display shall not occupy a total site area exceeding the gross building floor area on the site, except as authorized by a conditional use permit.
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(B) Areas used for outdoor sales and display of motor vehicles, boats, campers, camp trailers, trailers, trailer coaches, house cars, or similar conveyances shall meet the minimum design standards applicable to off-street parking facilities with respect to paving, grading, drainage, access to public streets and alleys, safety and protective features, lighting, landscaping, and screening.
(C) Exterior storage shall be prohibited, unless screened by a solid wall or fence of between 5 and 8 feet in height.
(3) CD-N Subdistrict
In the CD-N subdistrict, all permitted office and commercial activities shall be conducted within a building, except for:
(A) Incidental sales and display of plant materials and garden supplies occupying not more than 500 square feet of exterior sales and display area, and (B) Farmers' markets that have obtained conditional use permits. [. . .]
SECTION 7. Section 18.30(A).040 (Permitted Uses) of Chapter 18.30(A) (Retail Shopping (R) Combining District Regulations) of Title 18 (Zoning) of the Palo Alto Municipal Code are amended to read as follows:
Except to the extent a conditional use permit is required pursuant to Section 18.30(A).050, the following uses shall be permitted in an R district:
(a) Eating and drinking services, except drive-in and take-out services. (b) Personal services, except the following on California Avenue: beauty shops; nail salons; barbershops; and laundry and cleaning services as defined in Section 18.04.030(114)(B); fitness or exercise studios exceeding 1,800 square feet in gross floor area; and learning centers intended for individual or small group settings.
(c) Retail services.
(d) All other uses permitted in the underlying commercial district, provided they are not located on a ground floor.
SECTION 8. Section 18.30(A).050 (Conditional Uses) of Chapter 18.30(A) (Retail Shopping (R) Combining District Regulations) of Title 18 (Zoning) of the Palo Alto Municipal Code are amended to read as follows:
The following uses may be conditionally permitted in an R district, subject to the issuance of a conditional use permit in accord with Chapter 18.76 (Permits and Approval):
(a) Financial services, except drive-in services, on a ground floor. (b) All other conditional uses allowed in the underlying commercial district provided they are not located on a ground floor.
(c) Formula retail businesses on California Avenue.
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(d) Beauty shops, nail salons, and barbershops, fitness or exercise studios exceeding 1,800 square feet in gross floor area; and learning centers intended for individual or small group settings.
SECTION 9. Section 18.30(C).020 (Permitted Uses ) of Chapter 18.30(C) (Ground Floor (GF) Combining District Regulations) of Title 18 (Zoning) of the Palo Alto Municipal Code are amended to read as follows:
(a) The following uses shall be permitted in the GF combining district, subject to restrictions in Section 18.40.160180:
(1) Eating and drinking;
(2) Hotels;
(3) Personal services, except for parcels with frontage on University Avenue, where uses defined in Section 18.04.030(114)(B), (G), and (H), and (I) are not permitted; (4) Retail services;
(5) Theaters;
(6) Travel agencies;
(7) Commercial Recreation up to 5,000 square feet in gross floor area, except for parcels with frontage on University Avenue;
(78) All other uses permitted in the underlying district, provided such uses are not on the ground floor.
(b) Elimination or conversion of basement space currently in retail or retail-like use or related support purposes is prohibited.
(c) Entrance, lobby, or reception areas serving non-ground floor uses may be located on the ground floor to the extent reasonably necessary, provided they do not interfere with the gound ground floor use(s), and subject to the approval of the Director.
SECTION 10. Section 18.30(C).030 (Conditional Uses) of Chapter 18.30(C) (Ground Floor (GF) Combining District Regulations) of Title 18 (Zoning) of the Palo Alto Municipal Code are amended to read as follows:
(a) The following uses may be conditionally allowed on the ground floor in the GF ground floor combining district, subject to issuance of a conditional use permit in accord with Chapter 18.76 (Permits and Approvals) and with the additional finding required by subsection (b), subject to restrictions in Section 18.40.160:
(1) Business or trade school;
(2) Commercial recreation over 5,000 square feet in gross floor area or with frontage on University Avenue;
(3) Day care;
(4) Financial services, except drive in services;
(5) General business service;
(6) Learning centers intended for individual or small group settings;
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(7) All other uses conditionally permitted in the applicable underlying district, provided such uses are not on the ground floor.
(b) The director may grant a conditional use permit under this section only if he or she makes the following findings in addition to the findings required by Chapter 18.76 (Permits and Approvals):
(1) The location, access or design of the ground floor space of the existing building housing the proposed use, creates exceptional or extraordinary circumstances or conditions applicable to the property involved that do not apply generally to property in the same district. (2) The proposed use will not be determined to the retail environment or the pedestrian-oriented design objectives of the GF combining district. (c) Any use conditionally permitted pursuant to this section shall be effective only during the existence of the building that created the exceptional circumstance upon which the finding set forth in subsection (b) was made.
SECTION 11. Any provision of the Palo Alto Municipal Code or appendices thereto inconsistent with the provisions of this Ordinance, to the extent of such inconsistencies and no further, is hereby repealed or modified to that extent necessary to effect the provisions of this Ordinance.
SECTION 12. If any section, subsection, sentence, cl ause, or phrase of this Ordinance is for any reason held to be invalid or unconstitutional by a decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Ordinance. The City Council hereby declares that it would have passed this Ordinance and each and every section, subsection, sentence, clause, or phrase not declared invalid or unconstitutional without regard to whether any portion of the ordinance would be subsequently declared invalid or unconstitutional.
SECTION 13. The Council finds that the adoption of this ordinance is exempt from the provisions of the California Environmental Quality Act pursuant to CEQA Guideline sections 15061(b)(3) because it can be seen.
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SECTION 14. This ordinance shall be effective on the thirty-first date after the date of its adoption and shall expire upon the earlier of June 30, 2022 or adoption of replacement legislation by the City Council. Upon expiration of this ordinance, the City Clerk shall direct the City’s codifier to update the Palo Alto Municipal Code as appropriate.
INTRODUCED: March 8, 2021
PASSED: April 12, 2021
AYES: BURT, DUBOIS, FILSETH, KOU, STONE
NOES: CORMACK, TANAKA
ABSENT:
ABSTENTIONS:
NOT PARTICIPATING:
ATTEST:
____________________________ ____________________________ City Clerk Mayor
APPROVED AS TO FORM: APPROVED:
____________________________ ____________________________ Assistant City Attorney City Manager
____________________________
Director of Planning & Development
Services
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Certificate Of Completion
Envelope Id: 2FFD3DF938C64D8A8AAD4B626E119FA7 Status: Completed Subject: Please DocuSign: ORD 5517 Ordinance Amending PAMC Title 18 Ch 18.04 Definitions 18.16 Neighborh...
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250 Hamilton Ave
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City of Palo Alto (ID # 14735)
City Council Staff Report
Meeting Date: 12/12/2022 Report Type: Consent Calendar
City of Palo Alto Page 1
Title: Utilities Advisory Commission Recommend the City Council Affirm the Continuation of the REC Exchange Program
Council Priority: Climate Change: Protection & Adaption From: City Manager
Lead Department: Utilities
Recommendation
The Utilities Advisory Commission (UAC) and staff recommend that the City Council:
1) Affirm the continuation of the “REC Exchange Program,” whereby the City exchanges bundled RECs from its long -term renewable resources (Bucket 1 RECs) for Renewable Portfolio Standard (RPS) eli gible, unbundled RECs (Bucket 3 RECs), 1 to the maximum extent possible, while maintaining compliance with the State’s RPS regulations, in order to provide additional revenue for local decarbonization efforts; and 2) Direct staff to return to the UAC and City Council in 202 5 to provide another review of the program’s impacts.
Executive Summary
This action, if approved, would continue the REC Exchange Program, estimated to yield net earnings of about $1.9 million per year over the next five years (CYs 2023 -2027). Over time, the REC Exchange program net revenue is projected to gradually decline, due to: (a) the gradual ramping up of the state’s RPS requirement levels, which reduces the volume of supplies the City can sell, and (b) some of the City’s older renewab le energy contracts expiring. To date, the program has yielded net earnings of $6.73 million (about $2.24 million per year), with $3.38 million of the se earnings being allocated toward local decarbonization efforts and the balance being used to offset oper ational costs and provide for general customer rate reduction . Going forward, all the Program’s net earnings are planned to be directed towards local decarbonization initiatives.
Background
In order to achieve the aggressive greenhouse gas (GHG) emissions reduction goals it has set, in March 2013, through Resolution No. 9322 , the City adopted a Carbon Neutral Plan for the
1 See Attachment A for a more detailed description of the different types of RECs. 3 Packet Pg. 28
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electric supply portfolio, with a goal of achieving carbon neutrality by 2013. The City has achieved its Carbon Neutral Plan objectives each year starting in 2013, and due to its pursuit of these objectives, the City’s electric supply portfolio currently far exceeds the procurement requirements of the State’s Renewable Portfolio Standard (RPS) mandate, and all of the City’s current RPS resources are classified as Bucket 1 RECs.
In August 2020, the City Council adopted a resolution allowing for REC Exchanges 2 to take advantage of th e significant cost difference between Bucket 1 and Bucket 3 RECs 3 to generate additional revenue for the City’s electric utility ( Resolution 9 913, Staff Report 11556 ) and for local decarbonization. The amendments permitted the exchange of Bucket 1 (primarily in-state) RECs for Bucket 3 (primarily out -of-state) RECs, provided the City maintains compliance with State Renewable Portfolio Standard (RPS) regulations. The Council also directed that for 2020 and 2021, the earnings from this progra m would be split, with two -thirds of proceeds going to electric operating cost reductions and mitigating the economic impacts of the coronavirus pandemic and one-third toward local decarbonization (GHG emission reduction) programs, and that thereafter all of the earnings would be devoted to emission reduction programs.
Since then, staff has purchased and sold RECs for Calendar Years (CYs) 2020 through 2022 in accordance with the Carbon Neutral Plan amendments, resulting in net earnings of $6.73 million, o r about $2.24 million per year. Actual earnings are slightly lower than the amounts that staff projected at the time the program was approved (about $3 million per year) due to a narrowing of the Bucket 1 vs Bucket 3 price spread.
The Council authorized t hese REC Exchanges without a specific end date; however, they directed staff to return prior to the end of 2022 to provide a review of the policy. That program review is the focus of this report.
Discussion
REC Exchange Program Results (2020-2022) and Projections (2023-2027) Since approving the REC Exchange Program in August 2020, staff has sold a total of approximately 802,000 Bucket 1 RECs for CYs 2020 -2022 and purchased an equal number of Bucket 3 RECs for that period, as summarized in Table 1 below. 4 These REC Exchange transactions have yielded a total of $6.73 million in net revenue, or about $2.24 million per year.
2 The exchange of bundled RECs from the City’s in-state, long-term renewable resources (Bucket 1 RECs) for RPS- eligible, unbundled RECs (Bucket 3 RECs), which usually come from out of state sources. 3 Due to limitations on the use of Bucket 3 RECs for compliance with the state’s RPS mandate (only 10% of a utility’s RPS procurement may consist of Bucket 3 RECs), a significant financial premium currently exists for in -state bundled renewable energy resources (Bucket 1 RECs).
4 Staff has purchased additional Bucket 3 RECs and sold additional Bucket 1 RECs during this time period (96,198 additional RECs purchased and 49,814 additional sold); however, these are RECs that would have been bought or sold anyway—purchased in order to satisfy the City’s Carbon Neutral Plan goals during the ongoing drought (in 2021 and 2022), and sold because the City had a surplus of carbon neutral supplies (in 2020). The analysis in this report includes only the REC transactions that were the direct result of the approval of the REC Exchange Program. 3 Packet Pg. 29
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Table 1: Summary of REC Exchange Transactions and Revenue, CY 2020-2022 CY 2020 CY 2021 CY 2022 (est.)
Bucket 1 REC Sales Volume (MWh) 325,186 287,210 190,000 Bucket 3 REC Purchase Volume (MWh) 325,186 287,210 190,000 Bucket 1 REC Sales Revenue ($M) $3.59 $4.01 $2.74
Bucket 3 REC Purchase Cost ($M) $1.10 $1.47 $1.03
Net Revenue ($M) $2.48 $2.54 $1.71
RPS Level (%) 20.8% 35.0% 38.5%
When presenting the REC Exchange Program to Council for approval in 2020, staff estimated it would generate roughly $3.0 million per year in net revenue for FY 2021-2025, with a significant tapering off thereafter due to the steady increases in the state wide RPS requirement level.
Actual net revenues have thus far come in lower than this initial estimate due to a tightening of the differential between Bucket 1 and Bucket 3 REC prices compared to the staff estimate at the time.
Over the next five years, s taff estimates that the Program will yield approximately $9.3 million in total net revenue, or $1.9 million per year, as shown in Table 2 below. The REC Exchange Program’s earnings are projected to gradually decline in future years, primarily due to the ramping up of the State’s RPS requirement levels, which reduces the volume of Bucket 1 supplies the City is able to sell. In addition, some of the City’s older (and smaller) renewable energy contracts are set to expire, starting in 2026, which further reduce s the supply of Bucket 1 RECs the City has available to exchange.
Table 2: Projected REC Exchange Transactions and Revenue, CY 2023-2027 CY 2023 CY 2024 CY 2025 CY 2026 CY 2027
Bucket 1 REC Sales Volume (MWh) 224,000 188,000 174,000 138,000 124,000 Bucket 3 REC Purchase Volume
(MWh) 224,000 188,000 174,000 138,000 124,000
Bucket 1 REC Sales Revenue ($M) $3.81 $3.20 $2.96 $2.35 $2.11 Bucket 3 REC Purchase Cost ($M) $1.35 $1.13 $1.05 $0.83 $0.74 Net Revenue ($M) $2.47 $2.07 $1.92 $1.52 $1.36
RPS Level (%) 41% 44% 46% 50% 52%
Impact on Palo Alto’s Supply Portfolio
As discussed in Staff Report 11556, although exchanging in-state RECs for out-of-state RECs has no real impact on the City’s total electricity -related carbon emissions (see Attachment A for more discussion on this topic), the downside of this strategy is that it has a negative impact on the City’s reported portfolio make -up and carbon emissions. California’s RPS law gives 3 Packet Pg. 30
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preferential treatment to in -state renewable resources over out -of-state resources, and the same is true of how such resources are reported to customers on the annual Power Content Label (PCL). The California Energy Commission’s (CEC’s) PCL regu lations require that utilities report their out -of-state (Bucket 3) REC purchases as “unspecified sources of power” rather than under the appropriate renewable energy technology category. Furthermore, utilities are now required to report the annual average GHG emissions intensity of their electric supply on their PCLs—and again, rather than being treated as carbon -free resources like other forms of renewable energy, Bucket 3 RECs are treated as having an emissions intensity equivalent to generic market powe r purchases (428 kilograms (kg) of CO2 per MWh, which is almost 20% greater than the average emissions intensity of natural gas generation).
As a result, rather than reporting a supply mix that is over 60% renewable and nearly carbon - free on average, 5 under the REC Exchange Program the City must report a portfolio mix that is less than 40% renewable and is responsible for a moderate amount of carbon emissions. Figure 1 below depicts the City’s projected electric supply portfolio mix in CY 2022, before and after accounting for the REC Exchange Program transactions. Meanwhile, the estimated annual average GHG emissions intensities that the City would report on its PCL for these two portfolios are 114 and 209 kg CO2 per MWh, respectively.6
5 Although the City’s baseline portfolio mix is entirely comprised of renewables and hydroelectric resources, the CEC’s PCL regulations assign a small emission intensity to all biomass generation such as landfill gas generation, which currently accounts for about 10% of the City’s supply mix. 6 For reference, the statewide average GHG emissions intensity for CY 2021 was 207 kg CO2 per MWh. In CY 2021, the City’s average GHG emissions intensity as reported on its PCL (and accounting for the REC Exchange Program transactions) was 124 kg CO2 per MWh. The City’s emissions in tensity is projected to be significantly higher for CY 2022 than for CY 2021 because of the significant decline in hydroelectric generation this year due to the ongoing drought.
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Figure 1: Projected Electric Supplies in CY 2022, with and without REC Exchange Transactions
Use of REC Exchange Funds
Of the $6.73 million in net revenue that the REC Exchange Program has brought in since 2020, $3.35 million of it has been directed towards general elect ric operating cost reductions (in accordance with Council’s direction that two -thirds of the net proceeds should be used in this way for 2020 and 2021, to offset the impacts of the pandemic) and $3.38 million has been (or soon will be) used towards local d ecarbonization programs. If the recommendation to continue the REC Exchange Program is approved, all of the net revenue from the program (whose estimates are shown in Table 2) would be used for these decarbonization efforts. To date, the programs that this funding has supported include the Advanced heat -pump water heater (HPWH) pilot, the Home Efficiency Genie program, and multi -family building electrification efforts.
Next Steps
Upon the approval of the Recommendation, staff will continue to execute trans actions to sell the City’s in -state renewable resources and purchase out -of-state renewables for 2023 and beyond. In addition, staff will continue to report on the portfolio’s total GHG emissions under both an hourly and an annual carbon accounting framewo rk in the annual report to the City Council on the City’s Renewable Procurement Plan, Renewable Portfolio Standard Compliance, and Carbon Neutral Electric Supplies (usually presented in Q4 of each year).
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Stakeholder Engagement
The UAC reviewed staff’s discussion of the REC Exchange Program’s impacts and its recommendation to reauthorize the program at its November 2, 2022 meeting (Linked Document). The UAC expressed general approval of the program’s structure and its results to - date, and were pleased to learn that staff hav e so far received no comments or questions from the public about the changes to the City’s PCL caused by the program.
The UAC voted to approve a slightly updated version of staff’s recommendation 6-0 (with Chair Segal, Vice Chair Johnston, and Commissione rs Forssell, Metz, Smith, and Scharff voting yes, and Commissioner Bowie absent) (Attachment B ). The one update the UAC made to staff’s recommendation was to indicate that staff should return to the Council for another review of the program in 2025, rather than 2027.
Resource Impact
Staff estimates that continuing the REC Exchange prog ram will generate an average of approximately $1.9 million in additional revenue per year for the next five fiscal years (2023 – 2027), which will be used to support the City’s decarbonization efforts.
Policy Impact
This report supports the Sustainability and Climate Action Plan goals of continuing to lower the carbon footprint of the community.
Environmental Review
The City Council’s review of the REC Exchange Program does not meet the definition of a project because it is an administrative government ac tivity that will not result in any direct or indirect physical change to the environment (CEQA Guidelines section 15378(b)(5), therefore California Environmental Quality Act (CEQA) review is not required.
Attachments:
• Attachment3.a: Attachment A: REC Background Information • Attachment3.b: Attachment B: Action Minutes of November 2022 UAC Meeting 3 Packet Pg. 33
Attachment A
In-State vs. Out-of-State Renewable Energy Credits
In-state, Bundled Renewable Energy (Bucket 1 RECs) vs. Out-of-state, Unbundled Renewable Energy (Bucket 3 RECs)
The fundamental difference between bundled renewables (or “Bucket 1 RECs”) and unbundled (“Bucket 3”) RECs, as the diagram in Figure 1 illustrates, is that with bundled renewables both the energy and the REC (which represents the environmental value of the energy) are sold together to the same entity. With unbundled RECs, the energy and the REC are sold separately to different entities. Practically speaking though, Bucket 1 RECs are almost always produced by in -state renewable generators, while Bucket 3 RECs are produced by out -of-state renewable generators.
Also, because of limitations placed on the use of Bucket 3 RECs for compliance pu rposes in the state’s RPS legislation, and because of strong demand for Bucket 1 resources as Community Choice Aggregators ( CCAs) ramp up their energy purchases, Bucket 1 RECs currently carry a significant price premium relative to Bucket 3 RECs, in spite of the fact that these two resources represent equivalent amounts of renewable energy.
Figure 1: Bundled (Bucket 1) vs. Unbundled (Bucket 3) RECs Diagram 1 1 Source: Pinkel, D., and Weinrub, A., “What the Heck is a REC?” October 2013. http://www.localcleanenergy.org/files/What%20the%20Heck%20is%20a%20REC.pdf BundedRECs
I
Load Serving
Erffly
Electrlc
Gerwating
Facllty
Unbu died RECs
Enmgy REC.
\
L..oad Sining
Entity
Load SeM,g Entity
(for RPS compliance)
01'
REC Consumer
(for renew bragging
rights)
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UTILIT
IES ADVISORY COMMISSION MEETING
ACTION MINUTES OF NOVEMBER 2, 2022 SPECIAL MEETING
CALL TO ORDER
Chair Segal called the meeting of the Utilities Advisory Commission (UAC) to order at 6:01p.m.
Present: Chair Segal, Vice Chair Johnston, Commissioners Forssell, Metz, Commissioner Smith (arrived at 6:03 pm) and Scharff
Absent: Commissioner Bowie
AGENDA REVIEW AND REVISIONS
None
ORAL COMMUNICATIONS
None
APPROVAL OF THE MINUTES
Chair Segal noted the October 12, 2022 draft minutes were not ready for review and will be available at the December 7, 2022 UAC meeting.
UNFINISHED BUSINESS
None
UTILITIES DIRECTOR REPORT
Dean Batchelor, Utilities Director, delivered the Director's Report
NEW BUSINESS
ITEM 1 : ACTION: Adoption of a Resolution Authorizing Use of Teleconferencing for Utilities Advisory Commission Meetings During Covid-19 State of Emergency Attachment B
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ACTION: Vice Chair Johnston moved Staff recommendation that the Utilities Advisory Commission (UAC) Adopt a Resolution (Attachment A) authorizing the use of teleconferencing under Government Code Section 54953(e) for meetings of the Utilities Advisory Commission (UAC) and its committees due to the COVID-19 declared state of emergency.
Seconded by Commissioner Metz
Motion carries 6 -0 with Chair Segal, Vice Chair Johnston, and Commissioners Forssell, Metz, Smith, and Scharff voting yes.
Commissioner Bowie absent
ITEM 2: ACTION: Staff Recommends the Utilities Advisory Commissioner Consider and Adopt an Attendance Policy
ACTION: Commissioner Metz moved Staff recommendation that the Utilities Advisory Commission (UAC) Adopt an Attendance Policy as amended.
Seconded by Vice Chair Johnston
Motion carries 6 -0 with Chair Segal, Vice Chair Johnston, and Commissioners Forssell, Metz, Smith, and Scharff voting yes.
Commissioner Bowie absent
ITEM 3: ACTION: Staff Recommendation That the Utilities Advisory Commissioner Review and Recommend the City Council Affirm the Continuation of the RED Exchange Program
ACTION: Vice Chair Johnston moved Staff recommend ation that the Utilities Advisory Commission (UAC) recommend that the City Council as amended:
1) affirm the continuation of the “REC Exchange Program,” whereby the City exchanges bundled RECs from its long -term renewable resources (Bucket 1 RECs) for Renewable Portfolio Standard (RPS) eligible, unbundled RECs (Bucket 3 RECs),1 to the maximum extent possible, while maintaining compliance with the state’s RPS regulations, in order to provide additional revenue for local decarbonization efforts; and
2) direct staff to return to the UAC and City Council in 202 75 to provide another review of the program’s impacts.
Seconded by Commissioner Forssell
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Motion carries 6 -0 with Chair Segal, Vice Chair Johnston, and Commissioners Forssell, Metz, Smith, and Scharff voting yes.
Commissioner Bowie absent
ITEM 4: ACTION: Staff Recommends the Utilities Advisory Commission Recommend the Finance Committee Recommend That the City Council Adopt a Resolution Amending the E -HRA (Electric Hydro Rate Adjuster) Rate Schedule, Increasing the Current E-HRA Rate to $0.026/kWh Effective January 1, 2023.
ACTION: Vice Chair Johnston moved Staff recommend ation that the Utilities Advisory Commission (UAC) recommend the Finance Committee recommend that Council adopt a resolution amending the Electric Hydro Rate Adjuster (E -HRA), effective January 1, 2023, to reflect current hydrological conditions and market purchase costs. This would double the existing E-HRA surcharges and discounts across all levels, increasing the current E -HRA rate from $0.013/kwh to $0.026/kwh.
Seconded by Commissioner Forssell
Motion carri es 6 -0 with Chair Segal, Vice Chair Johnston, and Commissioners Forssell, Metz, Smith, and Scharff voting yes.
Commissioner Bowie absent
The UAC took a break at 7:26 and returned at 7:40 pm
ITEM 5: ACTION: Changes to the Utilities Rules and Regulations and Rate Schedules for AMI Implementation
ACTION: Vice Chair Johnston moved Staff recommendation that the UAC recommend Council adopt the attached Resolution (Attachment A) amending Utilities Rules and Regulations 2, 8, 9 (change request was to ensure that the notices for physical disconnect/reconnect also apply to remote disconnect/reconnect.), 10, 15, 18, 20, and Utilities Rate Schedules C-1 and C-4, as amended.
Seconded by Commissioner Metz
Motion carries 6 -0 with Chair Segal, Vice Chair Johnston, and Commissioners Forssell, Metz, Smith, and Scharff voting yes.
Commissioner Bowie absent
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ITEM 6: ACTION: Staff Recommends That the Utilities Advisory Committee (UAC) Approve a Recommendation That Council Recommend Building the Fiber Backbone and Options for Fiber - to-the-Premises (FTTP)
ACTION: Commissioner Scharff moved Staff recommend ation that the Utilities Advisory Commission ( UAC) approve a recommendation that Council recommend building the fiber backbone and the following option for Fiber-to-the- Premises (FTTP):
Option 2. Build fiber backbone and FTTP under a phased approach without new bond financing.
Use $34M from the Fiber fund and $13M from the El ectric fund to build the fiber backbone and build phase 1 of the FTTP distribution network in a phased approach.
Seconded by Vice Chair Johnston
Motion carries 6 -0 with Chair Segal, Vice Chair Johnston, and Commissioners Forssell, Metz, Smith, and Scharff voting yes.
Commissioner Bowie absent
COMMISSIONER COMMENTS and REPORTS from MEETINGS/EVENTS
FUTURE TOPICS FOR UPCOMING MEETINGS:
NEXT SCHEDULED MEETING: December 7, 2022
Meeting adjourned at 10:05 p.m.
Respectfully Submitted
Jenelle Kamian
City of Palo Alto Utilities
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City of Palo Alto (ID # 14834)
City Council Staff Report
Meeting Date: 12/12/2022 Report Type: Consent Calendar
City of Palo Alto Page 1
Title: Approval of Amendment No. 1 to Contract C09124501 with GreenWaste of Palo Alto for Collection and Processing Services to Implement Domestic Recycling of Mixed Paper and Mixed Rigid Plastics with Program Annual Costs Not to Exceed $1.2M; and Approval of Budget Amendment in the Refuse Fund
From: City Manager
Lead Department: Public Works
Recommendation
Staff recommends that Council:
1. Approve and authorize the City Manager or their designee to execute Amendment No. 1 to Contract Number C09124501 A with GreenWaste of Palo Alto to implement Domestic Recycling of Mixed Paper and Mixed Rigid Plastics with program costs not to exceed a total of $1,200,000 annually; and
2. Amend (by a 2/3 majority) the Fiscal Year 2023 Budget Appropriation for the Refuse Fund by:
a. Increasing Utilities Purchase funding for Collection/Hauling/Disposal Administration by $500,000; and
b. Decreasing the Rate Stabilization Reserve Balance by $500,000.
Executive Summary
Prior to a three-month pilot program at the end of Fiscal Year 2022, approximately 60 percent of Palo Alto’s recyclables were sent to international markets where their fate and any negative impacts were largely unknown. In 2021 , Council directed staff to work on finding alternative solutions to sending recyclable materials t o be marketed and processed internationally . Since then, staff and the City’s contracted refuse hauler, GreenWaste of Palo Alto (GWPA), found domestic markets for mixed paper (MP) and mixed rigid plastics (MRP) and conducted a three - month pilot program to utilize these U.S. markets. The pilot program was successful, and staff is recommending that Council approve a contract amendment and the associated costs to continue this program through June 30, 2026, when the Contract with GWPA ends. This action for MP and MRP will lead to about 61 percent of the City’s total recyclable materials staying in the United States, reducing the amount being exported to 39 percent, with mostly cardboard being sent internationally. Staff believes this will place the City in a le adership role nationally in preventing unintended consequences of shipping plastic and mixed paper recyclables internationally. 4 Packet Pg. 39
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Background
GreenWaste of Palo Alto (GWPA) is the City’s refuse hauler for collecting recyclable, compostable, and landfill mat erials, and processing recyclable and compostable materials. On January 22, 2019, Council approved the Second Amended and Restated Agreement with GWPA (Staff Report #9752). This amendment facilitated the implementation of multiple initiatives identified in the 2018 Zero Waste Plan , replaced old waste collection vehicles, and extended the agreement five years to end June 30, 2026. The amendment also designated a new cost methodology for the processing of recyclable materials to be based on tonnage collected and processed and for a new profit -sharing procedure on the recyclable materials which began in Fiscal Year 2022.
Palo Alto’s recyclable materials are processed at the GreenWaste Materials Recovery Facility in San Jose, wher e they are combined with recyclables from other communities, separated by type, baled, and marketed. The City requires GWPA to report on the disposition of recyclable materials as well as to gather information on the environmental and social implications associated with the further offsite marketing and processing of Palo Alto’s recyclable materials.
For Fiscal Year 2021, GWPA reported ( Staff Report #13535 ) that approximately 14,000 tons of recyclable materials were collected from Palo Alto, with about 40 percent staying in the United States and 60 percent being exported to India, Indonesia, Korea, Malaysia, Mexico, Taiwan, Thailand, Vietnam, Mexico and other cou ntries. For the last three years, GWPA has provided the City with traceability reports; however, the reports do not explain exactly which shipments go to which cities or facilities within those countries. GWPA has tried to ascertain from its recyclable materials brokers which international facility is receiving and processing Palo Alto’s recyclables, but the market information is considered confidential. Therefore, it has not been possible to determine with certainty how much of the materials are being recy cled, if the materials are being managed in an environmentally sound way, or whether the conditions at the international locations are causing any human health or social problems. The GWPA Traceability Report for Fiscal Year 2022 is consistent with past reports and provides updates on the GWPA and City collaborated pilot programs.
Council discussed these concerns on May 24, 2021 (Staff Report #11632) as part of the new solid waste processing contract and directed staff to:
1) Pursue, with other cities, a greater accounting of GreenWaste’s secondary markets;
2) Return to Council with an amendment to the GWPA Contract to authorize a quick response to opportunities to utilize domestic mixed paper recycling; 3) Provide GreenWaste reports to the public and City Council on a regular basis; 4) Work with other cities on legislation to spur domestic or in-state recycling; and 5) If GreenWaste is unable to provide additional secondary market accounting, return to Council for consideration of further actions.
Staff provided an update to Council on each of these directives on January 24, 2022 ( Staff Report #13535 ). On May 2, 2022, Staff Report #141 69 outlined a three-month pilot program 4 Packet Pg. 40
City of Palo Alto Page 3
conducted where MP and MRP were processed in Northern Louisiana and Southern California respectively, instead of being sent to international markets. MP includes a mixture of paper collected curbside from residents and businesses such as magazines, colored paper, and cereal boxes. MRP are primarily plastics # 2 through #7 including milk crates, buckets, and toys.
Cardboard was not selected as a material to be kept domestically since it is high quality, contains low co ntaminants, is desired by processing facilities, and has consistent market demand. The pilot was quite successful, and GreenWaste’s private sector processors are willing to continue the arrangements.
As directed by Council in #1) above, staff has worked w ith other cities in an attempt to obtain definitive information about the disposition and impacts of recyclables overseas. Few cities have spent the time and energy that Palo Alto and GWPA have on this issue, and it is now apparent that GWPA , and other hau lers, are unable to obtain this information due to recyclables brokers and processors considering it to be trade secrets and confidential.
Therefore, staff return ed to Council on June 6, 2022 ( Staff Report #14464 ) to propose further action, as directed above. Staff proposed, and Council di rected, that staff negotiate a contract amendment with GWPA for to $1.2 million annually to provide domestic processing and management of MP and MRP materials.
Discussion
GWPA has identified domestic processing facilities to take Palo Alto’s MP and MRP where they will bec ome new products, rather than sending them to international markets where their processing, disposition and impacts are uncertain. It has been very difficult for GWPA to find domestic markets for several recyclables, including cardboard, mixed paper, and p lastic, since capacity at U.S. processing facilities for these recyclables is very limited. In addition, as staff continues its engagement with other cities, jurisdictions, and legislators to increase the awareness of the environmental and social concerns with shipping and processing of recyclable materials internationally, demand on domestic capacity for processing of recyclables will increase.
Staff and GWPA developed a n ongoing program to take MP and MRP to processing facilities within the United States and negotiated a corresponding contract amendment (Attachment A) .
MP is going to a pulp and paper mill in Louisiana to be combined with other wood products and made into paperboard, printing paper, and other paper products within the U.S. MRP is being cleaned, processed, and becoming part of a feedstock for making bits of plastic often called “nurdles” which are then made into various plastic products in southern California including paint buckets, vehicle parts, and woven plastic items such as upholstery, bags, and rope. These are the same domestic markets and materials accepted in the Fiscal Year 2022 three-month pilot program, which excluded cardboard. Cardboard is also not included in the ongoing program because it is less likely to be mismanaged since it is a commonly high-quality product with little contamination and a high recyclability. T he added cost would have also been too great at this time. In Fiscal Year 2023, it is estimated that approximately 3,800 tons of MP and 230 tons of MRP will be sent to these domestic processors instead of international markets. 4 Packet Pg. 41
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This action for MP and MRP will lead to about 61 percent of the City’s total recyclable materials staying in the United States , reducing the amount being exported from 59 percent to 39 percent, with almost all of the exported material being cardboard.
Most importantly, international shipments of plastics, the recyclable of greatest concern, are essentially being eliminated. Virtually all plastics will be processed in North America. Table 1 provides a list of the common recyclable materials categories, breakdown percentages estimated for Fiscal Year 2023 based on Fiscal Year 2022 numbers and destination of where they are being marketed for processing . Of all the types of plastic, only clamshell food containers (a subset of # 1 PET Plastic) are still being managed outside the U .S. in Mexico at known processing locations where problems can be identified. The exception to these destinations will be any short-term market disruptions due to economy di sfunctions and when shipment of materials to target locations cannot be made due to uncontrollable circumstances.
Table 1: Recyclable Materials Breakdown & Processing Destination, Estimated for Fiscal 2023 based on Fiscal Year 2022 Data
Material Type Material
Breakdown Domestic Export
Aluminum 1.3% 100% 0%
Other Metals 8.0% 100% 0%
Glass 22.4% 100% 0%
Plastic 7.7% 92% 8%
Mixed Rigid Plastic 1.5% 100% 0%
Mixed Paper 16.8% 100% 0%
Cardboard 42.2% 10% 90%
E-Waste 0.1% 100% 0%
Resource Impact
The program cost for domestic processing of MP and MRP is estimated not to exceed $1,200,000 annually. The Fiscal Year 2023 Adopted operating budget for the Refuse Fund included a placeholder of $ 700,000 to support the domestic recyclables processing. To meet the not -to-exceed annual amount of $1,200,000, staff recommends a n appropriation of $500,000 in Fiscal Year 2023 in the Refuse Fund as part of this report. Staff also recommends continuing this program during the remaining term of the GWPA contract which ends in June 2026, with the associated annual expense of $1,200,000 for the subsequent years to be subject to appropriation of funds through the annual budget process.
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Table 2 indicates the approximate average cost per customer for domestic processi ng of MP and MRP. For the typical residential customer, this equates to 5.5 percent of the monthly bill.
The last increase to Refuse Rates occurred in 2017, and staff is currently analyzing whether an increase will be proposed for Fiscal Year 2024.
Table 2: Estimated Average Additional Cost per Residential and Commercial Customer
Estimated Additional Cost Residential Commercial
Subtotal based on tonnage $600,000 $600,000
Average cost per customer per year $33.46 $323.10
Average cost per customer per month $2.79 $26.93
Stakeholder Engagement
The current stakeholder engagement includes conducting several virtual forums with other cities and jurisdictions focusing on increasing the knowledge of the environmental and social issues that internat ional shipping of recyclables may be causing, sharing information as well as exploring solutions. These forums were initiated by Palo Alto staff and are being co -sponsored by the City of San Jose. City Council Meetings have also proven to be important comm unity engagement vehicles with m embers of the public express ing concerns about international shipments of recyclables and Council and staff have responded with actions.
Policy Implications
The program is also consistent with the City’s Environmentally Pr eferred Purchasing Policy, which states that the City shall incorporate environmental, economic and social stewardship criteria into its purchases of products and services, and more specifically minimizing the City’s contributions to global warming, solid waste, local and global pollution, and toxic chemical exposures to people and the environment. In addition, the program aligns with the Sustainability and Climate Action Plan (S/CAP) Update, which proposes a Zero Waste Key Action to prioritize domestic processing of recyclable materials.
Environmental Review
Council action on this item is exempt from review under the California Environmental Quality Act (CEQA) because it can be seen with certainty that redirecting recyclables from international to domestic facilities will not have a significant effect on the environment, i.e., a substantial or potentially substantial adverse impact on the environment. CEQA Guidelines Section 15061(b)(3)
Attachments:
• Attachment4.a: Attachment A - Amendment 1 to GWPA Contract No C09124501A 4 Packet Pg. 43
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Amendment No. 1 TO CONTRACT NO. C09124501A
SECOND AMENDED AND RESTATED AGREEMENT FOR SOLID WASTE, RECYCLABLE MATERIALS,
AND COMPOSTABLE MATERIALS COLLECTION AND PROCESSING SERVICES
BETWEEN THE CITY OF PALO ALTO AND
GREENWASTE OF PALO ALTO, LLC
This Amendment No. 1 (“Amendment”) to Contract No. C09124501A (the “Contract” as defined below), is effective as of December 12, 2022 by and between the CITY OF PALO ALTO, a California chartered municipal corporation (“CITY”), and GREENWASTE OF PALO ALTO, LLC, a California limited liability company (“Contractor” or “GWPA”), located at 610 E. Gish Road, San Jose, CA 95112. The City and Contractor are occasionally herein referred to each as a “Party” and collectively as the “Parties.”
RECITALS
This Agreement is entered into on the basis of the following facts, understandings and intentions of the Parties:
1. The City of Palo Alto and GreenWaste of Palo Alto entered into the Contract entitled "the Second Amended and Restated Agreement for Solid Waste, Recyclable Material, and Compostable Materials Collection and Processing Services" on January 22, 2019.
2. The Contract contains a number of provisions intended to implement initiatives in the City's 2018 Zero Waste Plan, including an annual report on the disposition of recyclable materials and related information on the environmental and social implications of the processing and sale of recyclable materials collected from solid waste customers in the city.
3. On June 6, 2022 the Palo Alto City Council directed City staff to negotiate a contract amendment under which GWPA would implement a program to prioritize the processing, marketing, and selling mixed paper and mixed rigid plastic to domestic, rather than international, markets.
4. The purpose of this Amendment is to implement a new program to maximize the use of domestic markets, as opposed to international markets, for sorted recyclables from Palo Alto. This Amendment contains additional definitions, additional compensation to Contractor for this new program, and new reporting requirements to document the materials management. The program enhances the City’s ability to be informed of environmental, human health, or social impacts occurring during materials management downstream of the Contractor.
OPERATIVE PROVISIONS
NOW, THEREFORE, in consideration of the mutual promises, covenants, and conditions contained in this Amendment and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Parties agree to amendment the Contract as follows:
SECTION 1. Interpretation. Capitalized terms used in this Amendment will have the same meanings specified in Attachment A of the Contract unless expressly provided otherwise in this Amendment.
SECTION 2. Amendment Definitions. The following definitions shall apply to this Amendment:
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a) “Processing” or “Processed” shall mean the sorting of Recyclable Materials by the Contractor.
b) “Sorted Recyclables” shall mean Recyclable Materials sorted and produced by the Contractor which can be recycled by a downstream provider c) “Materials Management” shall mean the handling and use of the Sorted Recyclables after Processed by Contractor at its Facilities as specified in Section 3 of this Amendment. d) “Mixed paper” or “MP” shall mean magazines, catalogues, envelopes, junk mail, paperboard, shredded paper, non-metallic wrapping paper, Kraft brown bags and paper, paper egg cartons, office ledger paper, self-stick notes, and telephone books. e) “Mixed Rigid Plastic” or “MRP” shall mean plastic containers (#1-7 including containers made of HDPE, LDPE, PET, or PVC), kids toys, buckets.
f) “International” shall mean territory outside the United States of America. g) “Domestic” shall mean territory inside the United States of America.
SECTION 3. Materials Management.
a) Market and sale of MP and MRP. Contractor shall undertake commercially reasonable efforts to market and sell the City’s MP and MRP materials domestically. If no Domestic markets exist, Contractor will notify City of alternative markets and proposed new destinations. The proposed destinations may be International. City will then provide direction to Contractor as needed on the recommended selected destination. In providing direction with respect to International destinations, City will consider the use of best environmental practices, the ability to trace the new Material Management destination, and price. Contractor will determine the amount of MP and MRP materials to market and sell domestically on (1) the actual tonnage of single stream Recyclable Materials delivered from the City to the GreenWaste MRF, and (2) the percentage of MP and MRP, respectively; based on the rolling average of the last three waste characterization audits of single stream Recyclable Materials from the City’s material that are delivered for Processing at the GreenWaste MRF. b) Single Stream Recyclable Materials Waste Characterization Audit. Contractor shall perform a minimum of two waste characterization audits per year on single stream Recyclable Materials from the City that are delivered for Processing at the GreenWaste MRF. Waste characterization audits shall be performed in accordance with the methodology provided in Section 3(c) of this Amendment at a time determined by mutual agreement between Contractor and the City and/or the City consultant.
Contractor will coordinate and schedule these audits with the City. Representatives from the City, the Contractor, and/or City’s consultants may also participate and observe the audits. Audits shall be performed one in spring and one in fall of each year. Once a date has been selected, the Contractor and City will collaborate to identify route(s) in order to secure a target volume of 30 tons per audit. Loads will be taken from different routes or truck numbers representing a typical breakdown between both commercial and residential sectors and different Collection days.
c) Single Stream Recyclables Waste Characterization Audit Methodology. Contractor will conduct waste characterization audits using the following methodology:
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1. Prior to each waste characterization audit, all bunkers at the GreenWaste MRF will be cleaned out such that they are free of material; and the selected volume of single stream Recyclable Materials from City will be delivered by the Contractor and weighed on the inbound scale.
2. The single stream Recyclable Materials from Contractor’s collection vehicles will be unloaded on the floor of the GreenWaste MRF.
3. Recyclable Materials will then be “fed” onto the Processing line.
4. Recyclable Materials, by type, and residue will be sorted out and are placed in the appropriate bunker(s) and/or bin(s).
5. Recyclable Materials from bunker(s) and/or bin(s) will be removed and weighed individually.
6. Contractor will compile the data into a report that may include, but not be limited to, the tonnage information by commodity. The commodities include paper, cardboard, plastic, glass, metal, e-waste, residue, and any other categories as applicable. d) Use of Audit Data; Residue. The data from audits provided herein shall be used to calculate the percentage of MP and MRP in the City’s single stream recyclables. The residue within the MP amount will be kept to a minimum and not more than 2%.
e) Targeted Tons. The MP and MRP individual percentages from waste characterization audits hereunder will be used to determine the target tonnage for MP and MRP that Contractor will attempt to deliver to domestic markets calculated as follows:
1. 𝑇𝑎𝑟𝑔𝑒𝑡𝑒𝑑 𝑀𝑃 𝑇𝑜𝑛𝑠 𝑡𝑜 𝑏𝑒 𝐷𝑒𝑙𝑖𝑣𝑒𝑟𝑒𝑑 𝑡𝑜 𝐷𝑜𝑚𝑒𝑠𝑡𝑖𝑐 𝑀𝑎𝑟𝑘𝑒𝑡𝑠 = 𝐴𝑐𝑡𝑢𝑎𝑙 𝑇𝑜𝑛𝑠 𝑜𝑓 𝑆𝑖𝑛𝑔𝑙𝑒 𝑆𝑡𝑟𝑒𝑎𝑚 𝑅𝑒𝑐𝑦𝑐𝑙𝑎𝑏𝑙𝑒𝑠 𝑐𝑜𝑙𝑙𝑒𝑐𝑡𝑒𝑑 𝑓𝑟𝑜𝑚 𝐶𝑖𝑡𝑦 × 𝑃𝑒𝑟𝑐𝑒𝑛𝑡𝑎𝑔𝑒 𝑜𝑓 𝑀𝑃
2. 𝑇𝑎𝑟𝑔𝑒𝑡𝑒𝑑 𝑀𝑅𝑃 𝑡𝑜 𝑏𝑒 𝑇𝑜𝑛𝑠 𝐷𝑒𝑙𝑖𝑣𝑒𝑟𝑒𝑑 𝑡𝑜 𝐷𝑜𝑚𝑒𝑠𝑡𝑖𝑐 𝑀𝑎𝑟𝑘𝑒𝑡𝑠 = 𝐴𝑐𝑡𝑢𝑎𝑙 𝑇𝑜𝑛𝑠 𝑜𝑓 𝑆𝑖𝑛𝑔𝑙𝑒 𝑆𝑡𝑟𝑒𝑎𝑚 𝑅𝑒𝑐𝑦𝑐𝑙𝑎𝑏𝑙𝑒𝑠 𝑐𝑜𝑙𝑙𝑒𝑐𝑡𝑒𝑑 𝑓𝑟𝑜𝑚 𝐶𝑖𝑡𝑦 × 𝑃𝑒𝑟𝑐𝑒𝑛𝑡𝑎𝑔𝑒 𝑜𝑓 𝑀𝑅𝑃
SECTION 4. Compensation.
a) General. Contractor shall be entitled to additional compensation for the increased expense associated with Domestic Materials Management. The parties acknowledge that Domestic and International prices for MP and MRP are determined by multiple factors including proximity to ports, quality of material, currency exchange, length of contract period, and market availability; and that actual prices Contractor receives from processors or brokers is affected by all these factors. Notwithstanding the foregoing, except as provided herein, this Amendment will not be construed as affecting compensation to Contractor described in Section 9.06 of the Contract, Compensation for Recyclable Materials or Attachment U, Recyclable Materials Profit (Loss) Methodology.
b) Mixed Paper (MP). Compensation to Contractor will be computed by the formulas below for MP.
A = (IP) (T)
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Description Variable
Contractor’s Adjusted Opportunity Cost A
International Price
($/ton from actual Contractor sales)
($150 for July 2022)
IP
Actual MP Tons Delivered to Domestic Markets T
B = -(DP) (T)
Description Variable
Cost to Deliver to Domestic Mill B
Domestic Price
($/ton from actual Contractor costs)
(-$125 for July 2022)
DP
Actual MP Tons Delivered to Domestic Markets T
MP Compensation to Contractor = A + B, or
MP Compensation to Contractor = (IP - DP) * (T)
For Fiscal Year 2023, the Domestic price for MP is the difference between the Mixed Paper Price from the Pulp & Paper Producer Price Index published monthly by Fastmarkets RISI in Pulp & Paper Week (PPI) and the Brokerage fee. In subsequent Fiscal years this method of calculation of the Domestic Price may be changed by mutual agreement between City and Contractor. For illustrative purposes, in August 2022, the Southeast Mixed Paper price PPI published was $45, given that MP was sent to Louisiana. The maximum brokerage fee for Fiscal Year 2023 is $170/ton. Resulting in -$125 per ton for Domestic Price for the previous month, July 2022.
The International price shall be determined monthly by the actual sales of materials. If there are no International sales in a particular month, the International price shall be determined by the sales from the previous month.
Example for July 2022:
International Price = $150; Domestic Price = -$125;
Actual MP Tons Delivered to Domestic Markets = 313.605 tons MP Compensation to GW = $150 - (-$125) * 313.605 tons = $86,241.38 Contractor shall report the actual tonnages delivered to Domestic markets and calculate the City’s compensation to Contractor on a monthly basis and itemize it in the monthly invoice. The actual MP Tons Delivered to Domestic markets in the compensation calculation shall not exceed the targeted MP Tons as determined in Section 3(e) of this Amendment. Contractor shall indicate the appropriate MP prices used based on location from PPI for the compensation calculation. Contractor shall provide the City:
(1) Copies of purchase orders and proof of monthly payment received from the International sale of MP
(2) Copies of monthly invoices and payments to the domestic mill for MP delivered (3) Copies of the complete PPI for both the Domestic and export indexes on a monthly basis
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(4) Copies of documentation indicating the Domestic brokerage fee, if applicable
c) Mixed Rigid Plastics (MRP). Compensation to Contractor will be computed by the formulas below for MRP.
A = (IP) (T)
Description Variable
Contractor’s Adjusted Opportunity Cost A
International Price
($/ton from actual Contractor sales)
($220 for July 2022)
IP
Actual MRP Tons Delivered to Domestic Markets T
B = -(DP) (T)
Description Variable
Cost to Deliver to Domestic Processor B
Domestic Price
($/ton from actual Contractor cost)
($220 for July 2022)
DP
Actual MRP Tons Delivered to Domestic Markets T
MRP Compensation to GW = A + B, or
MRP Compensation to GW = (IP - DP) (T)
The International price shall be determined monthly by the actual sales of Recyclable Materials.
If there are no International sales in a particular month, the International price shall be determined by the sales from the previous month. The Domestic Price shall be determined monthly by the actual sales of materials.
Example for July 2022:
International Price = $220; Domestic Price = $220;
Actual MP Tons Delivered to Domestic Markets = 11.615 tons MRP Compensation to GW = $220 - ($220) * 11.615 tons = $0 Contractor shall report the tonnages delivered and calculate the City’s compensation to Contractor on a monthly basis and itemize it in the monthly invoice. The actual MRP Tons Delivered to Domestic Markets in the compensation calculation shall not exceed the Targeted MRP Tons as determined in Section 3(e) of this Amendment. Unless the actual MRP Tons delivered to Domestic markets is zero and the City has been notified, then the tonnages may be carried over to a subsequent month for delivery and compensation calculation.
Contractor shall provide the City:
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(1) Copies of purchase orders and proof of monthly payment received from the international sale of MRP.
(2) Copies of monthly invoices and payments to the domestic processor for MRP.
d) Annual Limit on Additional Compensation. Contractor’s additional compensation for the Domestic Materials Management program specified in this Amendment is subject to an annual limit to be established by the City. City, in its sole discretion, may evaluate and adjust the limit on additional compensation on an annual basis via the City’s budget development process, as approved by City Council. If the limit is not adjusted in a given Fiscal Year, then the limit from the previous Fiscal Year shall apply. The limit for Fiscal Year 2023 is $1,200,000. If this limit is not adjusted, the limit shall remain at $1,200,000 per fiscal year for the remainder of the Contract term. If this limit, or the established limit in subsequent Fiscal Years, is reached during any single Fiscal Year, Contractor will have the right to redirect MP and MRP materials in International markets until City provides notice of and establishes a new limit.
SECTION 5. Advance Notice to City Regarding Contractor’s Ability to Implement Program. Contractor shall notify City, at the earliest time practicable, of any occurrence that materially affects the Contractor’s ability to implement the Domestic Materials Management program specified in this Amendment, including:
(1) If, by March 31 of each Fiscal Year, the annual limit on additional compensation will not be reached through the MP and MRP tonnage, Contractor shall notify the City and maximize the use of Domestic markets for cardboard, or other Sorted Recyclables approved by the City, with the remaining funds if so directed by the City.
(2) Contractor anticipates reaching the annual limit on additional compensation before the end of the Fiscal year
(3) Contractor becomes aware that Domestic markets are not available for MP, MRP, cardboard, or other Sorted Recyclables or if markets are anticipated to not become available on any upcoming fiscal year.
SECTION 6. Full Force and Effect. Except as provided herein, all other provisions of the Contract shall remain in full force and effect. In the event of any conflict between the Agreement and this Amendment, this Amendment shall apply.
SECTION 7. Due Execution. The person(s) executing this Amendment on behalf of a Party hereto warrant(s) that (i) such Party is duly organized and existing; (ii) such person(s) are duly authorized to execute and deliver this Amendment on behalf of said Party; (iii) by so executing this Amendment, such Party is formally bound to the provisions of this Amendment; and (iv) entering into this Amendment does not violate any provision of any other agreement to which said Party is bound.
SECTION 8. Counterparts. This Amendment may be executed in counterparts, each of which shall be considered an original.
[SIGNATURES ON FOLLOWING PAGE]
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SIGNATURES OF THE PARTIES
IN WITNESS WHEREOF, the Parties have by their duly authorized representatives executed this Amendment effective as of the date first above written.
CITY OF PALO ALTO
_____________________________
City Manager
APPROVED AS TO FORM:
__________________________
City Attorney or Designee
GREENWASTE OF PALO ALTO, LLC
Officer 1
By:___________________________
Name:__Tracy M. Adams_________
Title:___Chief Executive Officer____
Officer 2
By:___________________________
Name:___Greg Ryan_____________
Title:____Vice President & COO____
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City of Palo Alto (ID # 14967)
City Council Staff Report
Report Type: Consent Calendar Meeting Date: 12/12/2022
City of Palo Alto Page 1
Summary Title: Approval of Contract S20178749 Amendment No. 3 with LCT
SOFTWARE
Title: Approval of Contract S20178749 Amendment No. 3 with LCT SOFTWARE, LLC in the Amount of $72,924 for a New Not to Exceed Amount of $247,254 for Electronic Document Review Software related to the City’s Land Use and Permitting System Through December 31, 2023 From: City Manager
Lead Department: Planning and Development Services
Recommendation
Staff recommends that City Council approve and authorize the City Manager or their designee to execute Contract S20178749 Amendment No. 3 With LCT SOFTWARE, LLC in the amount of $72,924 for a new not to exceed amount of $247,254 for electronic document review software related to the city’s land use and permitting system through December 31, 2023.
Background
This staff report presents Amendment No. 3 to Contract S20178749 with LCT SOFTWARE, LLC (LTC) for a 12-month extension. The software enables electronic document and plan set review and processing of permit and entitlement applicati ons in conjunction with the City’s land use and permitting software (Accela). This amendment is required for the continuity of services as staff complete the RFP process before the summer of 2023. The City will not have to pay the entire $72,924 as LCT will bill the City on a quarterly basis should the City transition to another firm within the calendar year 2023.
Discussion
The Planning and Development Services Department (PDS) entered into a contract with LTC SOFTWARE, LLC for technology related to enabling electronic document review s in April 2020, allowing for the electronic processing of plans and permit applications. An 5 Packet Pg. 51
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initial request for proposal (RFP) was executed in August 2021; however, the City received a protest against the intent to award i n Oct 2021 and made the determination to cancel the RFP. On December 13, 2021, City Council approved Amendment No. 2 with LCT SOFTWARE, LLC , in the amount of $70,800 for the continuity of services through the calendar year 2022. Further information, backgr ound, and discussion can be found online.1
On August 22, 2022, the City re -issued a request for proposal for these services. The City received four responses and is in the process of reviewing and evaluating the proposals. Staff anticipates that the RFP p rocess will conclude in Spring 2023. Staff will bring forward the results to the City Council with a new multi-year contract based on the outcome of the RFP process.
At this time, for the continuity of city services, staff recommends Amendment No. 3 to extend the contract through December 31, 2023. LCT SOFTWARE, LLC will bill the City on a quarterly basis , and should the City transition to another firm within the calendar year 2023, the City will not pay the entire $72,924.
Resource Impact
Funding for this service is available in the FY 2023 Adopted Operating Budget. Costs are offset by revenue from planning and permit fees.
Environmental Review
This project is exempt from environmental review under Section 15061 of the California Environmental Quality Act Guidelines.
Attachments:
Attachment5.a: Attachment A: LCT SOFTWARE, LLC Contract; S20178749 Amendment No. 3 (PDF)
1 City Council, December 13, 2021, Staff Report: https://www.cityofpaloalto.org/files/assets/public/agendas - minutes-reports/agendas-minutes/city-council-agendas-minutes/2021/12-december/20211213/20211213pccs- amended-linked.pdf#page=155
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AMENDMENT NO. 3 TO CONTRACT NO. S20178749
BETWEEN THE CITY OF PALO ALTO AND LCT SOFTWARE LLC. (DigEplan)
This Amendment No. 3 (this “Amendment”) to Contract No. S20178749 (the “Contract” as defined below) is entered into as of December 12, 2022, by and between the CITY OF PALO ALTO, a California chartered municipal corporation ( “CITY”), and LCT Software, LLC aka DigEplan , a California corporation, located at 4500 140th Avenue North, Suite 101, Clearwater, Florida, 33762 (“CONSULTANT”). CITY and CONSULTANT are referred to collectively as the “Parties” in this Amendment.
R E C I T A L S
A. The Contract (as defined below) was entered into by and between the Parties hereto for the provision of subscription to software applications and platforms, as detailed therein.
B. The Parties now wish to amend the Contract in order to extend the term of the contract by one year to December 31, 2023 and increase the compensation by $72,924.00, from $174,330.00 to $247,254.00.
NOW, THEREFORE, in consideration of the covenants, terms, conditions, and provisions of this Amendment, the Parties agree:
SECTION 1. Definitions. The following definitions shall apply to this Amendment:
a. Contract. The term “Contract” shall mean Contract No. S20178749 between CONSULTANT and CITY, dated April 13, 2020, as amended by:
Amendment No.1, dated April 1, 2021
Amendment No.2, dated December 13, 2021
b. Other Terms. Capitalized terms used and not defined in this Amendment shall have the meanings assigned to such terms in the Contract.
SECTION 2. Section “Subscription Fees and Term” of the Contract is hereby amended to read as follows:
1. Subscription Fees
Subscription Fees for the 1st year (April 1, 2020 to March 31, 2021) shall amount to a total of $59,160 for an enterprise license for unlimited users. The 2nd year Subscription Fees shall be $44,370 for a 9- month renewal (April 1, 2021 to December 31, 2021) for the DigiEPlan V4 Enterprise at a quantity of 9. The 3rd year Subscription Fee shall be $70,800 for a 12 -month renewal (January 1, 2022 to December 31, 2022) for the DigEplan V4 Enterprise on 100 User DocuSign Envelope ID: 26715BB9-C092-40B5-9273-3FA8A4104269
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Subscriptions. Additional subscr iptions may be purchased for $59 per User Subscription per month. The 4th year Subscription Fee shall be $72,924 for a 12-month renewal (January 1, 2023 to December 31, 2023) for the DigEplan V4 Enterprise on 100 User Subscriptions.
2. Subscription Term: extended to December 31, 2023.
3. Contract not to exceed $247,254.00.
SECTION 3. Legal Effect. Except as modified by this Amendment, all other provisions of the Contract, including any exhibits thereto, shall remain in full force and effect.
SECTION 4. Incorporation of Recitals . The recitals set forth above are terms of this Amendment and are fully incorporated herein by this reference.
(SIGNATURE BLOCK FOLLOWS ON THE NEXT PAGE.)
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SIGNATURES OF THE PARTIES
IN WITNESS WHEREOF, the Parties have by their duly authorized representatives executed this Amendment effective as of the date first above written.
CITY OF PALO ALTO
City Manager
APPROVED AS TO FORM:
City Attorney or designee
LCT SOFTWARE, LLC. (aka DigEplan)
Officer 1
By:
Name:
Title:
Officer 2 (Required for Corp. or LLC)
By:
Name:
Title:
Attachments: None
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Chief Channel Officer
Chief Financial Officer
Jay Mayne
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City of Palo Alto (ID # 15017)
City Council Staff Report
Meeting Date: 12/12/2022 Report Type: Consent Calendar
City of Palo Alto Page 1
Title: Approval of Lease and License of 300 Homer Ave. Roth Building between the City of Palo Alto and the Palo Alto Museum
From: City Manager
Lead Department: Administrative Services
Recommendation
Staff recommends that the City Council review and approve the following:
1) Approve and authorize the City Manager or their designee to execute the lease agreement by and between the City of Palo Alto as landlord and Palo Alto History Museum as tenant (“Lease Agreement”) for the use of 300 Homer Ave. (Roth Buildin g) for a term of 40 years in an amount not to exceed $40.
a. Approve and authorize the City Manager or their designee to execute the License Agreement, Exhibit C to the Lease Agreement , for the use of the City Archives Room, to house and service the City -owned Historic Archives, to be built as part of the rehabilitation of 300 Homer Ave. with the City contributing to 9.6% of annual facility maintenance and operations including annualized capitalized investment costs of 300 Homer Ave. over the term of the Lease Agreement.
Executive Summary
Approval of the Lease Agreement and License Agreement will begin a 40-year agreement for the rehabilitation and use of the Roth Building (300 Homer Ave.) by the Palo Alto History Museum (“the Museum”) for the development and provision of a history museum for community use. This action reflect s approval of two of the three necessary documents for construction to begin on this rehabilitation. These documents provide for the use of the facility at a rental cost of $1 per year wi th the City responsible for its fair share (9.6%) of the operating and maintenance costs of the building as a result of the City’s use of 1,305 square feet for the City-owned Historic Archives . Community facilities will be provided upon completion of the rehabilitation of the facility including three rooms of various size and use, ranging from a multipurpose room, classroom, and conference room. The Museum, upon completion of the rehabilitation work, will open within 12 months of substantial construction c ompletion, and will be open to the public for a minimum of 20 hours per week.
The third and final document, a Tenant Work Letter, is in progress and provides the terms and conditions for the Museum’s rehabilitation and capital improvements to the site. This is 6 Packet Pg. 56
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expected to be brought for Council consideration as soon as feasible. Staff and the Museum are working on final language, updated construction costs, and the expected Museum Contribution, specifically related to inclusion of the federal earmark of $3 million that is expected to support this project.
Background
In April 2000, the City Council approved the $1,957,000 purchase of the Roth Building and its
0.41 acre site for potential development as a “public facility or alternative use if a public fa cility is not feasible,” in conjunction with the South of Forest Avenue Coordinated Area Plan (SOFA CAP). On May 20, 2002, Council approved a Request for Proposals (RFP) and directed staff to solicit proposals for the lease of the Roth Building. The RFP sp ecified that preference be given to non -profit groups located in or serving Palo Alto, that the property be improved and operated at no cost to the City, and that public access to the Roth Building restrooms by users of the neighboring park be provided.
In response to the RFP, one proposal was received in November 2003 from the Palo Alto Museum (The Museum or PAM). The Museum proposed to restore, preserve, and improve the historic Roth Building for use as a history museum. The Museum’s proposal was accept ed by the Council in April 2004, at which time staff sent the Museum a draft Option and Lease Agreement for its review. On May 14, 2007, Council authorized the Mayor to execute the Option Agreement. The Option Agreement (2007 Lease Option) was executed on June 22, 2007 with a twenty-four-month term.
Since 2007, The Museum personnel and City staff have examined a variety of proposals to fund the capital and operating needs of the Roth Building Museum. Although the City Council extended the 2007 Lease Option several times, in late 2018 the 2007 Lease Option lapsed and is no longer in effect. Additional background information is provided by prior staff reports listed in Attachment B.
On June 21, 2021, as part of the FY 2022 budget adoption, the Council approved various actions related to the use and funding of the Roth Building and long term lease ( CMR:12307, Minutes).
Council directed staff to use a combination of the following funds to finance the rehabilitation of the building: Stanford University Medical Center Fund, Parks Impact Fees , and Community Center Impact Fees. In addition, as part of the FY 2023 budget adoption, the Council approved a Roth Building Rehabilitation Phase 1 capital project (PF-23001). Below is a summary table of the City’s contributions for the $10.5 million remaining project costs of the $12.3 million Roth Building rehabilitation1 as approved by the Council in June 2021. This work is intended to produce a “warm shell” at 300 Homer Avenue for further development and use by the Museum as a history museum.
• TDR proceeds + $1.0 million contribution from the General Fund $5.1 M
1 This figure reflects the estimated cost by the Museum previously. This does not reconcile to include City costs for the restoration of the public art, City staff or City contractual services resources for this project. 6 Packet Pg. 57
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• Library impact fees designated for the establishment of the City archives $0.3 M • Stanford University Medical Center (SUMC) Funds – Community & Infrastructure $2.0 M • Community Center Impact Fees $1.65 M
• Parks Impact Fees $0.35 M
Since August 2021, City staff has been meeting with representatives of the Museum including their legal team. The parties mutually a greed that it was essential to work out the key lease terms in order to begin preparing a new lease agreement structured on those key terms. As an interim check-in staff met with Council in closed session on August 21, 2021. Council provided input on draf t key lease terms. Pursuant to Council’s input during closed sesssion, staff has continued to meet with representatives of the Museum on the draft terms, which are outlined below. The parties reached tentative agreement on many of the key terms for a new l ease agreement. On November 15, 2021 2, the Council reviewed a list of key terms and provided City staff and the Museum direction on areas including: expectations for fee -setting, financial responsibilities for a security deposit, long -term maintenance, Cit y fees, prevailing wage compliance, and payment and performance bonds.
MOTION: Mayor DuBois moved, seconded by Council Member Kou to:
A. Direct Staff to complete lease negotiations with Palo Alto History Museum in alignment with terms outlined in the staff report with following additional guidance:
i. $10,000 security deposit;
ii. Museum is responsible for long term maintenance;
iii. Proceed with principles outlined in the presentation on the community room/facilities;
iv. Reimburse the permit and processing fees and the City to pay for the payment/performance bonds;
v. Museum is responsible for prevailing wage compliance payment of $15,000; vi. Staff to develop a contingency plan in the event that the museum does not meet its operating commitment (to be defined), which would allow the City to find other uses of the building;
B. Request Staff to return with a lease and budget amendment within 90 days or sooner; and C. Extend the permit approvals when requested.
MOTION SPLIT FOR THE PURPOSE OF VOTING PART A – ii, iii, v, vi AND PART C OF MOTION PASSED: 6-1, Tanaka no PART A – i, iv AND PART B OF MOTION PASSED: 5-2, Cormack, Tanaka no
Staff brought forward a status update for Council as part of a closed session item, and an ad hoc committee was created by the Mayor to assist in finalizing discussions between parties. Mayor Burt and Councilmember Stone were assigned to the ad hoc committee in June 2022.
2 City Council, November 15, 2021; Agenda Item #14, https://www.cityofpaloalto.org/files/assets/public/agendas - minutes-reports/agendas-minutes/city-council-agendas-minutes/2021/11-november/20211115/20211115pccsm- amended-linked.pdf
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Discussion
Over the past year, City staff and the Museum have been corresponding regularly regarding three legal documents to formalize the current and long-term relationship between the parties:
1) Lease Agreement: This is a Lease Agreement by and between the City of Palo Alto as landlord and Palo Alto History Museum as tenant at the Roth Building 300 Homer Ave. 2) License Agreement: This is an exclusive License Agreement for the City Archives Room, referenced as Exhibit C to the Lease Agreement, and grants the City the license to use the “archives room.”
3) Tenant Work Letter: This is a Tenant Work Letter (TWL) for the Roth Building Warm Shell rehabilitation, referenced as Exhibit D to the Lease Agreement, and sets forth the terms and conditions for planned Phase 1 “warm shell” rehabilitation of the building including project funding.
Each of these agreements provide direction over different components of the relationship between the parties and their authorized representatives. Below is a summary of terms included in the two agreements recommended for approval in this item. The agreements, containing the full terms and conditions, can be found in the attachments.
As an exhibit to the Lease Agreement, a Tenant Work Letter is in progress that provides the terms and conditions for the museum’s rehabilitation and capital improvements to the site.
This is a similar agreement structure to that used for the building of the new Palo Alto Museum and Zoo, however, the terms have been adjusted to reflect the unique parameters of this partnership. This is expected to be brought for Council consideration as soon as feasible. Staff and the Museum are working on final language, estimated costs, and the expected Museum Contribution, namely the federal earmark of $3 million that is expected to support this project.
Roth Building –Lease Agreement
Lease Provision
(Section #) Summary of Key Terms
2. Premises Roth Building (300 Homer Avenue); Museum will lease entire building, including exclusive use and control of the surrounding premise
• City will have exclusive use of the restrooms on the northeast side for restrooms for Heritage Park (“Heritage Park
Restroom”).
3. Tenant Use Restore, preserve and improve the Building as an historic asset and make available to the Palo Alto community through displays; exhibits; interactive demonstrations; workshops; classes and lectures.
• Open to the public within 12 months of substantial
completion of initial tenant improvements (outlined in the 6 Packet Pg. 59
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Roth Building –Lease Agreement
Lease Provision
(Section #) Summary of Key Terms
TWL).
• Open to the public for a minimum of 20 hours per week • Fee schedule to be approved by City and not unreasonably withheld or delayed
• Museum may use facilities for fundraising activities and rental for corporate/private events
• “Community Rooms” are areas for community center use and to be managed by mutual agreement between parties
• City will not be charged a use fee by Museum for City events other than direct costs attributable to the City’s use
• Parties may mutually agree to discuss repayment of
Community Center Impact Fees in the future to the extent legally permissible and enter into a separate agreement to complete this.
4. Lease Term: 40-years, commencing upon mutual execution of the lease.
5. Rent: $1 per year.
7. Annual Reporting Museum will file the Form 990 (or the applicable successor form) with the IRS as required by law and concurrently deliver a copy to City Manager or City Manager’s designee.
• Museum will provide City with annual reporting documents necessary to comply with restricted funds and grants used to fund the Initial Tenant Improvements.
9. Security Deposit: Per Council Direction, $10,000 security deposit
10. Initial Tenant
Improvements:
Complete the Initial Tenant Improvements per the terms and conditions specified in the TWL.
12. Assurance Of
Construction
Completion
Payment and performance bond are to be obtained as outlined in the TWL
16. Maintenance
Obligation of the
Museum
Museum responsible for all maintenance costs and repair, including provision of a maintenance plan. Costs exclude those outlined in section 17.
• Cost may include but are not limited to: landscaping, electrical, plumbing, the roof, security system, windows, 6 Packet Pg. 60
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Roth Building –Lease Agreement
Lease Provision
(Section #) Summary of Key Terms
walls, the HVAC system, painting
17. Maintenance
Obligation of City
City responsible for the maintenance, repair and replacement, of the Public Parkside Restroom and the City Archives Room. Costs include
• the repair and replacement of fixtures, wall and floor coverings, and doors.
• public sidewalks, trees and landscaping between the public sidewalk and street
• public Parkside restroom and archives facilities
• maintenance and removal, as necessary, of trees immediately adjacent to the Building, including the oak tree in the Building’s courtyard.
• maintenance, repair, protection, and any required restoration of the City’s Arnautoff Frescoes, including protection during construction of the Initial Tenant Improvements. The Parties acknowledge and agree that City’s foregoing obligations relate solely to the surface of the wall. City will complete any necessary refurbishment and repair of the Arnautoff Frescoes. • maintenance and repair of the water, electric and sewer lines serving the Public Parkside Restroom.
18. Utilities Museum responsible for all charges for utilities supplied to the Premises during the Lease Term
• City is responsible for: obligations pursuant to the License Agreement and all utilities supplied to the Public Parkside Restroom and archives on a pro rata basis.
21. Tenant Sublease
Rights
• Subleasing space for office purposes is permitted subject to compliance with City ordinances, rules and regulations, including the CUP.
• Museum has right to sublease up to 25% of the useable space in the Premises for a for-profit food service operator and/or a for-profit gift/book shop operator.
• Museum will have the right to assign its interest in this Lease to a non-profit organization who agrees to abide by the Lease terms and conditions if approved by City.
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As an exhibit to the Lease Agreement, there is a license agreement that provides the terms and conditions for the City’s exclusive use of the City Archives room, a 1,305 square foot room on the second floor. This space is intended to store the City’s historical documents and items that are currently in various locations such as Cubberley or storage rooms at City facilities. The City’s archive materials are owned by the City and currently managed by a contract between the Library Department and the Palo Alto Historical Association (PAHA). No change in the current operations of the City’s archives is expected, the only change expected is the location of the storage of the archives. The new storage will be a temperature-controlled room to assist in the preservation of the archive contents. Below is a summary of the license agreement, authorizing the City use of the archives room.
Roth Building –License Agreement, Exhibit C to Lease Agreement License Provision
(Section #) Summary of Key Terms
1. Archives
Room
Guy Miller Archives room, on the 2nd floor, occupying 1,305 sq feet as designated on the drawings.
• City will have access to necessary entry and exit common areas including but not limited to hallways, stairwells, restrooms etc.
2. Term This is linked with the termination of the Lease Agreement, 40-year term. There is no annual rent as the City is the owner of the facility.
3. Use Facility will be used for storage and/or display of the City’s official archives and records and any ancillary, legal related uses • Available during standard hours Monday – Friday (consistent with Exhibit C) and at other times that do not unreasonably interfere with Museum’s use
• Public access to the Archives Room will be limited to those times the Museum is open to the public
8. Maintenance City will maintain, replace, and repair the interior of the Archives Room and any systems exclusively serving
9. Operating
Expense
Reporting &
Audit
City will pay to Museum City’s proportionate share (“City’s Share”) of the Operating Expenses. City’s initial share is 9.6%.
• Operating expenses are subject to annual reporting, audit at the City’s request and cost.
10. Operating
Expense
(Definition &
Operating expenses include utilities and expenses for the repair, replacement and maintenance of the Building and the Building’s Exterior Common Areas with controllable expenses not to exceed a 3% 6 Packet Pg. 62
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Roth Building –License Agreement, Exhibit C to Lease Agreement License Provision
(Section #) Summary of Key Terms
Allowable
Costs)
increase annually. Examples of allowable costs include:
• replacement and repair of building systems and equipment such as the HVAC system, elevator, life safety, sprinkler systems and roof • the cost of utilities: water and sewer charges, electricity, trash pick- up, janitorial services, ventilation, supplies
• access control/security costs,
• establishment of reasonable reserves for capital
• the cost of all capital improvements or replacements, provided that, if any such improvement or replacement constitutes a capital expenditure under generally accepted accounting principles.
Stakeholder Engagement
Staff met with representatives of the Museum including their counsel to discuss and negotiate the lease terms. Over these final 4 months, teams have maintained a weekly cadence to ensure continued progress including support and meeting with the ad hoc City Council members.
Resource Impact
The City and the Museum have spent significant resources to reach these agreements. Over the past year or so, staff have dedicated significant staffing resources and outside legal support. A FY 2023 Mid-Year budget amendment is expected recommending appropriation of $100,000- $200,000 to fund the legal contractual services needed to complete these documents.
More significantly, there are varied impacts associated with the execution of these agreements.
A) capital investment, B) maintenance and operations, and C) other miscellaneous costs.
(A) Capital Investment: Council approved the Roth Building Rehabilitation Phase 1 capital project (PF-23001) as part of the FY 2023 adopted budget with $11 million in funding to complete the rehabilitation of the Roth Building based on estimated costs at the time. Funding was identified from various sources including impact fees, Stanford University Medical Fund, General Fund/Infrastructure Reserve, grant funds (as applied for by the Museum), and proceeds from the sale of transfer of development rights (TDRs). Construction costs are estimated to have increased over $1.3 million due to inflation since the approval of the prior funding plan. The forthcoming TWL in progress will reflect revised funding allocations which recognize and allocate additional grant funding from the County of Santa Clara and most significantly, an additional $3 million received through a federal earmark with the assistance of Congresswoman Anna Eshoo. These federal funds are to be used for the restoration and 6 Packet Pg. 63
City of Palo Alto Page 9
rehabilitation of the Museum and will be critical to enabling the completion of this warm shell phase 1 of the project.
(B) Maintenance and Operations City Share: The City is responsible for ongoing costs associated with the following items during the lease term. The cost for these services are unknown at this time but will be reported out through the annual budget process once the facility is rehabilitated and open.
- City is solely responsible for the cost of the public sidewalks and landscaping between the sidewalk and street, trees including the trees immediately adjacent to the Roth building, public restroom, and Arnautoff frescos (public art). This includes utility costs, janitorial costs, and supplies.
- City is responsible for a proportional share of operating expenses, as allocated by the Museum in alignment with allowable expenses in the license and subject to annual audit, for use of the City Archives facility (9.6%) based on square footage. These costs will be paid to the Museum on a monthly basis.
These ongoing maintenance and operating costs will be brought forward as part of the base budget development, pending approval of these agreements, once these spaces are ready for occupancy.
(C) Other Miscellaneous Costs: The City Council has provided some direction for the City to cover some costs already, including reimbursement of permit and processing fees and the City to pay for the payment/performance bonds (total cost estimated at $175,000). Staff anticipate bringing a recommended budget amendment to appropriate these funds in the FY 2023 Mid- Year Budget Review with funding to be taken from the Budget Stabilization Reserve. In addition, the City will either be responsible or need to partner with the Museum in the purchase of fixtures and furnishings for “community facilities” spaces such as the community room and the Guy Miller Archives Rooms. Upon completed rehabilitation, these spaces will be provided to the City in the form of a “warm shell” and will need to be further outfitted for productive use.
Timeline
Palo Alto Museum will assume responsibility for the property upon execution of these documents. It is expected that the history museum and their contractor Vance Brown will begin construction work as soon as practicable.
Environmental Review
Approval of the lease and license agreements is categorically exempt from the requirements of the California Environmental Quality Act under Article 19, Section 15301, existing facilities.
Attachments:
• Attachment6.a: Attachment A - Lease Agreement
• Attachment6.b: Attachment B - License Agreement
6 Packet Pg. 64
LEASE AGREEMENT
BY AND BETWEEN
CITY OF PALO ALTO
AS LANDLORD
AND
PALO ALTO HISTORY MUSEUM
AS TENANT
ROTH BUILDING
Attachment A - Lease Agreement
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i
TABLE OF CONTENTS
PAGE
1. D EFINITIONS ........................................................................................................... 2
2. L EASE OF PREMISES ............................................................................................... 4
3. R EQUIRED, PERMITTED, AND OPTIONAL SERVICES AND USES .................................... 5
4. T ERM ..................................................................................................................... 8
5. C ONSIDERATION/RENT ............................................................................................ 8
6. C HARGE FOR UNAUTHORIZED SERVICES AND USES .................................................. 9
7. M USEUM ORGANIZATIONAL DOCUMENTS AND MEMBERSHIP; ANNUAL REPORTING ...... 9
8. B ASE RENT PAYMENT PROCEDURE.......................................................................... 9
9. S ECURITY DEPOSIT ............................................................................................... 10
10. T ENANT WORK LETTER; INITIAL TENANT IMPROVEMENTS ........................................ 10
11. A DDITIONAL CONSTRUCTION AND/OR ALTERATION BY MUSEUM .............................. 11
12. M USEUM’S ASSURANCE OF CONSTRUCTION COMPLETION ....................................... 13
13. D AMAGE TO OR DESTRUCTION OF IMPROVEMENTS................................................. 14
14. R ECORD DRAWINGS PLANS ................................................................................... 15
15. O WNERSHIP OF IMPROVEMENTS ............................................................................ 15
16. M AINTENANCE OBLIGATIONS OF MUSEUM .............................................................. 16
17. M AINTENANCE OBLIGATIONS OF CITY .................................................................... 17
18. U TILITIES ............................................................................................................. 18
19. I NSURANCE .......................................................................................................... 18
20. H OLD HARMLESS .................................................................................................. 20
21. A SSIGNING, SUBLETTING, AND ENCUMBERING PROHIBITED ..................................... 21
22. D EFAULT BY MUSEUM .......................................................................................... 22 Attachment A - Lease Agreement
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23. T AXES AND ASSESSMENTS .................................................................................... 23
24. E MINENT DOMAIN ................................................................................................. 23
25. H AZARDOUS SUBSTANCES .................................................................................... 24
26. N OTICES .............................................................................................................. 26
27. C ERTIFIED ACCESS SPECIALIST DISCLOSURE ......................................................... 27
28. G OVERNING LAW .................................................................................................. 28
29. V ENUE ................................................................................................................. 28
30. T IME ................................................................................................................. 28
31. S IGNS ................................................................................................................. 28
32. C ONSTRUCTION .................................................................................................... 28
33. E NTIRE AGREEMENT; AMENDMENT ....................................................................... 29
34. N ONDISCRIMINATION ............................................................................................. 29
35. I NSPECTION .......................................................................................................... 29
36. S UCCESSORS IN INTEREST .................................................................................... 29
37. F ORCE MAJEURE .................................................................................................. 29
38. P ARTIAL INVALIDITY .............................................................................................. 30
39. W AIVER OF RIGHTS .............................................................................................. 30
40. A TTORNEY FEES ................................................................................................... 30
41. R ESERVATIONS TO CITY ........................................................................................ 30
42. H OLDING OVER .................................................................................................... 30
43. D ISPOSITION OF ABANDONED PERSONAL PROPERTY .............................................. 31
44. Q UITCLAIM OF MUSEUM’S INTEREST UPON TERMINATION ........................................ 31
45. C ITY’S RIGHT TO RE-ENTER .................................................................................. 31
46. C ONFLICT OF INTEREST ........................................................................................ 31 Attachment A - Lease Agreement
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47. A LL COVENANTS ARE CONDITIONS ........................................................................ 32
48. P ARTIES OF INTEREST ........................................................................................... 32
49. R ECORDATION OF LEASE ...................................................................................... 32
50. Q UIET POSSESSION .............................................................................................. 32
51. A UTHORITY .......................................................................................................... 32
52. E XHIBITS TO LEASE .............................................................................................. 32
53. C OUNTERPARTS ................................................................................................... 33 Attachment A - Lease Agreement
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1 Project: Roth Building
300 Homer Avenue
LEASE AGREEMENT #
This Lease Agreement is made this ______ day of ____ _____, 2022 (the “Effective Date”), by and between the City of Palo Alto, a California chartered municipal corporation (“City”), and the Palo Alto History Mus eum, a California nonprofit public benefit corporation (“Museum”) (individually, a “Party” and, collectively, the “Parties”).
RECITALS:
A. In April 2000, City purchased the real property and improvements located at 300 Homer Avenue, Palo Alto, Santa Clara County, California, which includes the building commonly referred to as th e “Roth Building” as depicted on Exhibit A attached hereto (the “Building”).
B. On May 20, 2002, City’s City Council (the “ Council”) approved a request for proposals for leases of the Building. T he RFP specified that preference be given to non-profit groups located in or serving Pa lo Alto, that the Building be improved and operated at no cost to the City and that public access to the Building’s Public Parkside Restroom (as defined below) be provided to users of the neighboring City park.
C. In November 2003 Museum submitted a proposal to lease the Building for the purpose of (a) developing and operating the Building for use as a history museum and (b) restoring and preserving the Building. Council ultimately accepted Museum’s proposal. Pursuant to the terms of a lease option agreement between City and Museum dated June 22, 2007 (the “Lease Option”), City granted Museum an exclusive option to lease the Building. During the 24-month period during which Museum could exercise its option (the “ Original Option Term ”), Museum was to develop specific plans, obtain financing, and satisfy other covenants, terms and conditions set forth therein prior to exercising the option and implementing the project described in the foregoing proposal.
D. Following execution of the Lease Option, Museum and City staff examined a variety of proposals to fund the capital and operating needs of the project described therein. During this period, the Original Option Term was extended multiple times by the Parties to provide Museum additional time to satisfy the conditions to proceed with such project. The Museum did not exercise the option and the Lease Option ultimately expired on November 30, 2018. The Lease Option is of no further force or effect.
E. Following expiration of the Lease Option, the Pa rties continued informal discussions about the lease of the Building and implementation of the foregoing project.
This included completion of right to entry agreements with the Museum in February 2019, amended in May 2019 and January 2020 and a new right of entry entered into October 14, 2021 for up to six months.
Attachment A - Lease Agreement
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2 F. As part of the FY 2022 Adopted B udget process, on June 21, 2021 Council approved a new path forward for the Project (defined below) directing City staff to use a combination of funding sources, including funds raised by the Museum, restricted impact fees and certain grant funding, to provide $10.5 million towards the anticipated $12.3 million cost to rehabilitate the Building to produce a “warm shell” for Museum to occupy and use the Building. The Partie s acknowledge that City’s contribution of such funds is conditioned upon Museum’s compliance with requirements necessary to support the use of certain restricted funds for the Project.
G. To effectuate the Project and City’s goals for the Building in accordance with the FY 2022 Adopted Budget, City desires to lease the Building to Museum and provide funds for the Project in accordance with the covenants, terms and conditions set forth below.
H. The exterior front wall of the Building that faces the courtyard contains the Victor Arnautoff Frescoes depicting the history of medicine (the “Arnautoff Frescoes”).
These frescoes have been accessioned into the City Art Collection and will be protected, repaired and maintained by City as its sole cost in accordance with this Lease.
NOW, THEREFORE, in consideration of the covenants, terms and conditions, the Parties mutually agree, as follows:
1. DEFINITIONS
“Alterations” has the meaning set forth in Section 11(A) of this Lease. “Arnautoff Frescoes” has the meaning set forth in Recital H of this Lease. “Arnautoff Frescoes Grant” means the January 27, 2022 $105,150.00 grant from Santa Clara County HGP (Historic Grant Progr am) for the rehabilitation of the Arnautoff Frescoes.
“Base Rent” has the meaning set forth in Section 5(A) of this Lease. “Building” has the meaning set forth in Recital A of this Lease. “Building’s Exterior Common Areas” has the meaning set forth in Section 16(A) of this Lease.
“City” has the meaning set forth in the introductory paragraph of this Lease. “City Archives Room” has the meaning set forth in Section 3(A) of this Lease. “City Manager” means the then serving City Manager of the City.
Attachment A - Lease Agreement
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3 “Commencement Date ” means the date that the Parties mutually execute the Tenant Work Letter in accordance with Section 10 of this Lease. “Community Rooms” has the meaning set forth in Section 3(A) of this Lease. “Council” has the meaning set forth in Recital B of this Lease. “County Grant Agreements” means the grants awarded and established for the rehabilitation of the Building are set forth in Exhibit F attached hereto which will be used to partially fund the Project. The Parties acknowledge that the Arnautoff Frescoes Grant is not part of the Project.
“CUP” means the Minor Architectural Review and Conditional Use Permit Approval 18PLN-00321.
“Effective Date” has the meaning set forth in the introductory paragraph of this Lease.
“Hazardous Materials” has the meaning set forth in Section 25(A) of this Lease. “Initial Tenant Improvements” means Museum’s rehabilitation and improvement of the Premises performed in accordance with the Tenant Work Letter. “Lease” means this Lease Agreement, including all exhibits and schedules hereto, and any amendments thereto.
“Lease Option” has the meaning set forth in Recital C of this Lease. “Lease Term” has the meaning set forth in Section 4 of this Lease. “License Agreement” means the License Agreement attached hereto as Exhibit C and incorporated herein by reference.
“Maintenance Plan” has the meaning set forth in Section 16(B). “Museum” has the meaning set forth in the introductory paragraph of this Lease. “Original Option Term” has the meaning set forth in Recital C of this Lease. “Party” and “Parties” have the meaning set forth in the introductory paragraph of this Lease.
“Premises” means the Building, provided that, upon completion of the construction of the Public Parkside Restroom, the Prem ises shall expressly exclude the Public Parkside Restroom.
Attachment A - Lease Agreement
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4 “Project” means the rehabilitation of the Buil ding contemplated by the Tenant Work Letter.
“Public Parkside Restroom” has the meaning set forth in Section 3(A). “Real Property Manager” means the then serving Real Property Manager of the City.
“Rent” means Base Rent and any other amounts payable hereunder from Museum to City unless otherwise specified herein.
“Security Deposit” means the sum of Ten Thousand Dollars ($10,000) to be held by City in accordance with Section 9.
“Tenant Work Letter” has the meaning set forth in Section 10 of this Lease.
2. LEASE OF PREMISES
A. In consideration for the obligations of Museum hereunder, and for other consideration as specified herein, City does hereby lease to Museum and Museum does hereby hire and take from City the Prem ises upon the terms and conditions of this Lease. The purpose of this Lea se is to allow Museum to undertake the Project and the construction of the Initial Tenant Improvements in acco rdance with the Tenant Work Letter, and upon completion of the Initial T enant Improvements, to develop and operate the Premises as a history museum open to the public, according to the covenants, terms and conditions of this Lease.
B. Landlord will tender posse ssion of the Premises to Museum on the Commencement Date. Notwithstanding the foregoing, during normal business hours or as otherwise reasonably agree d to in advance by City, Museum and its agents and representatives may enter the Premises in accordance with this Section 2 to inspect the Premises and/or if related to the preparation of the Tenant Wo rk Letter. Prior to such entry Museum will deliver to City certificates of insurance for all insurance that Museum is required to maintain under this Lease. If Museum enters the Premises before the Commencement Date under this Section 2, all of the terms and provisions of this Lease will apply to Museum’s entry on and use of the Premises, and Museum will abide by all of such terms and provisions, provided that Museum will owe no Base Rent for the period of such early access.
C. Museum accepts the Premises in “AS IS, WHERE IS” condition and configuration without any representations or warranties by City, and subject to all matters of record and all applicable laws, ordinances, rules and regulations, with no obligation of City to make repairs, alterations or improvem ents to the Premises except as expressly provided in this Lease. Mus eum acknowledges that it has had a right of access to the Premises under the Lease Option and via right of entry agreements and prior to execution Attachment A - Lease Agreement
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5 of this Lease and has therefore been afforded a full opportunity to inspect all aspects of the Premises, its state of maintenanc e and repair, and based thereon, accepts possession of the Premises in its current condition.
D. Upon completion of the constr uction of the Public Parkside Restroom, the Museum will turn over the Public Parkside Restroom to the City, and thereafter, the Premises will expressly exclude the Public Parkside Restroom, and, except to the extent caused by the gross negli gence or willful misconduct of Museum or Museum’s Agents (as defined below), City will be solely responsible and liable for the use, operation, repair, maintenance and replacement of the Public Parkside Restroom.
3. REQUIRED, PERMITTED, AND OPTIONAL SERVICES AND USES Museum enters into this Lease with a desire to restore, preserve and improve the Building as an historic asset and make that asset available to the Palo Alto community in the following ways: through displays; exhibi ts; interactive demonstrations; workshops; classes and lectures. Museum further desires to use the Buil ding to provide a place to learn about the people, places and events that played a part in Palo Alto history. In furtherance of the foregoing, during the Lease Term the following required, permitted, and optional services and uses will be provided, permitted or prohibited on the Premises, including any additions or modifications to the Premises as may be approved by City.
A. Required Services and Uses. Throughout the Lease Term, Museum will provide the following services and engage in the following uses at the Premises:
1. Rehabilitation, pr eservation and improvement of the Building as contemplated by the Tenant Work Letter.
2. As part of the Initial T enant Improvements, Museum will construct a restroom on the northeast side of the Building as shown on Exhibit B that will be made available and accessible by the City at no charge to the public, including users of the adjacent City park commonly known as Heritage Park, which is accessible from the exterior of the Building (the “ Public Parkside Restroom ”) (subject to City’s responsibilities for maintenance and repair set forth in Section 17 hereof).
3. Displays, exhibits and demonstrations relating to local history.
4. Subject to force majeure delays as described in Section 37 below, within twelve (12) months following the date of substantial completion of the Initial Tenant Improvements in accordance with the Tenant Work Letter, Museum will be open to the public for a minimum of twenty (20) hours per week, except as otherwise provided or permitted under this Lease. Subject to City’s prior written approval of the fee schedule to be used by Museum (including prior writ ten approval of any changes to a previously approved fee schedule), with such approval not unreasonably withheld or delayed, during the Lease Term Museum may charge (i) admission fees to the Premises operated as a Attachment A - Lease Agreement
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6 museum, (ii) membership fees to members of the Museum and (iii) fees to members and non-members for their special private use events held at the Premises.
5. As part of the Initial T enant Improvements, Museum will construct the portion of the Building to be used as a community meeting room(s) identified as “Community Center Use” areas on Exhibit B which will be made available for use by neighborhood/community groups and the City (“ Community Rooms”). The terms and policies of such use (including reservation procedures and use fees and charges) will be determined by mutual agreement of the City and Museum prio r to the opening of such Community Rooms for the uses described her ein and may be reasonably adjusted by mutual agreement of the City an d Museum from time to ti me. When establishing and subsequently modifying the foregoing terms and policies, the Parties will endeavor to ensure that such terms and policies are consistent with the principles set forth in Exhibit E attached hereto.
While in no way limiting City’s rights under the License Agreement, the Parties acknowledge and agree that Cit y may reserve and use Community Rooms and other rooms in the Premises for City sponsored events and other City purposes and City will not be charged a use fee by Museum for such use provided that City will reimburse Museum for any direct costs attr ibutable to City’s use which are not included in the Premises’ general O perating Expenses (as defined in the License Agreement), such as additional janitorial or security services incurred for the specific use.
Notwithstanding the foregoing, if City intends to reserve and use any portion of the Premises not deemed part of the Community Rooms, City will provide reasonable prior notice to Museum of City’s proposed use and Museum will have the right to refuse such use by City if Museum use of such non-Comm unity Room space at the time of City’s proposed use will conflict with City’s use, as the Parties acknowledge that Museum’s use of the non-Community Room space will take priority over City use.
6. As part of the Initial T enant Improvements, Museum will construct the portion of the second floor of the Building to be used for the storage and display of City’s official archives identified on Exhibit B (the “ City Archives Room ”).
During the Lease Term, City will have the exclusiv e right to use the City Archives Room in accordance with the terms of License Agreement.
7. The use of the Premises by Museum and its agents and representatives will at all times comply with the requi rements and conditions associated with the impact fees (pursuant to California Government Code Section 66000 et seq. and Palo Alto Municipal Code chapter 16.58) and grants used by t he Parties to contribute to the cost of the Project in cluding without limitati on the requirements and conditions of County Grant Agreements. Mu seum and the City will mutually cooperate to take all actions reasonably required (i) to ensur e compliance with such requirements and conditions, (ii) to obtain reimbursement from the County und er the County Grant Agreements, and (iii) to address any legal challenge to use of such funds related to the Attachment A - Lease Agreement
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7 Project or use of the Building; provided, t hat the foregoing shall not be interpreted to require the Museum to repay to the City any impact fees.
The Parties acknowledge and agree that the Arnautoff Frescoes Grant requires a fundraising match from the community in the amount of $110,150 and Museum will be solely responsible for providing such funds in accordance with the Arnautoff Frescoes Grant.
B. Permitted Services and Uses. In addition to the required services and uses set forth above, during the Lease Term the following services and uses will be permitted, but only as they may be incidental to the required services and uses:
1. Workshops, classes and lectures associated with museum purpose;
2. Administrative offices and storage space to support the required services and uses under this Lease;
3. Fund-raising activities only to support the required services and uses, including, but not limited to, sale s of goods and gifts related to the museum use, operation of a cafe and the hosting of benefits and social activities; and/or
4. Periodic rental of rooms and ot her portions of the Premises by community groups and individuals, but in no event will such rental inte rfere with or limit the required services and uses of the Premises as set forth above. Notwithstanding the foregoing, Museum may periodically rent porti ons of the Premises to organizations and individuals for events unrelated to the required services and uses for the purpose of fund- raising to support the required services and uses so long as the timing and frequency of such events do not interfere with the obligat ion of Museum to provide the required services and uses (for example, and not by way of limitation, Museum may rent the facilities for evening corporate events).
C. Additional Services and Uses. Subject to the prior written approval of the City Manager or the City Manager’s designee, Museum may also use the Premises to provide additional services and uses whic h are ancillary to and compatible with the required services and uses stated above and not in conflict with the required services and uses. In addition, and also subject to the prior written approval of the City Manager or designee, Museum may also use the Premises to conduct revenue-generating events or operations so long as (i) such uses do not materially interf ere with Museum’s ability to provide the required services and uses described in Section 3(A) hereof, (ii) such services and uses will not result in dam age to the Premises or materially impair the operations conducted on the Premises, and (iii) all net revenue generated by such services and uses are devoted exclusively to funding the activities of Museum conducted at the Premises.
In each case, the approval of the City Manager or designee wil l not be unreasonably withheld.
Attachment A - Lease Agreement
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8 D. Prohibited Uses. The above listed required, permitted and optional services and uses will be the only services and uses permitted upon or from the Premises.
Museum agrees that no activity will be conducted or carried on, in or around the Premises in violation of the terms of th is Lease, or any regulation, orde r of law, statute, ordinance or permit of a governmental agency having jurisdiction ov er Museum’s use of the Premises, including without limitation the CUP.
E. Special Uses. Museum will have the following rights:
1. The Parties acknowledge that Museum will have the exclusive right to use the Building Exterior Common Areas (defined below) as part of the Premises and such areas and their use are otherwise subject to the covenants, terms and conditions of this Lease.
2. Museum will have the right to temporarily close the Museum operations to conduct repairs, make alterations, change exhibits, and observe holidays.
F. Repayment of Community Cent er Impact Fees. The Parties acknowledge that City will contribute Community Center Impact Fees to fund a portion of the City Contribution (as defined in the Tenant Work Letter) in conjunction with the construction of the Community Rooms as part of the Project. If during the Lease Term Museum desires to convert a Community Room(s) to areas of exclusive use for Museum programming, Museum will notify City of its desire to convert such Community Room(s) and the Parties will meet and confer to discuss the possibility of such conversion including the repayment to City of a portion of the Community Center Impact Fees included in the City Contribution. If the Part ies mutually agree (at each Part y’s sole discretion) to the terms of such conversion, the Parties will enter into a s eparate agreement to effectuate the conversion and amend this Lease as applic able to reflect su ch change to the Community Rooms.
4. TERM
The term of this Lease (“Lease Term”) will be four hundred eighty (480) months, beginning on the Commencement Date and will te rminate at midnight on the last day of the four hundred eightieth (480th) full calendar month following the Commencement Date.
5. CONSIDERATION/RENT
A. Rent. As partial consideration for the Lease, Museum will pay to City One Dollar ($1.00) per year as “ Base Rent ” in accordance with Section 8 hereof.
Museum alternatively may pay City the sum total of all Base Rent that would be due and payable over the Lease Term thereof in ad vance at the commencement of the Lease Term. All items of Rent other than Base Rent will be due and payable by Museum within thirty (30) days after billing by City.
Attachment A - Lease Agreement
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9 B. Non-Monetary Consider ation. In addition to the rent set forth in Section 5(A) hereof, Museum will develop and operate the Premises at no cost to City as a museum consistent with the terms of this Lease (subject to City’s contribution to costs of the Initial Tenant Improvements in accordance with the Tenant Work Letter and City’s maintenance and cost reimbursement obligations related to the Public Parkside Restroom and the City Archives Room set forth herein and in the License Agreement).
6. CHARGE FOR UNAUTHORIZED SERVICES AND USES
Museum will pay City a sum equal to one hundred percent ( 100%) of the net receipts (determined after deduction of all costs reasonably incurred by Museum for conducting the activity in question) for any service or use that is not permitted or authorized by Section 3 hereof. The existence of such charge or the payment or receipt of money under this Section does not constitu te an authorization of a particular service or use and does not constitute a waiver of City’s right to terminate such service or use.
7. MUSEUM ORGANIZATIONAL DOCUMENTS AND MEMBERSHIP; ANNUAL
REPORTING
A. Changes in restrictions, rules, arti cles of incorporation or bylaws of Museum which change or modify the essential character or membership requirements of Museum will, prior to being put into effect, be reviewed and approved by the City Manager and the City’s City Attorney, which approval will not be unreasonably withheld. Museum’s rules, articles of incorporation and byla ws, and any amendments ther eto, will be on file with the Real Property Manager during the Lease Term.
B. On or before its due date, Museum will file the Form 990 (or the applicable successor form) with the IRS as r equired by law and concurrently deliver a copy of such Form 990 to City Manager or City Manager’s designee. Upon prior reasonable notice, Museum will provide City with annual reporting and other documents necessary to comply with any requirements associated with restricted funds and grants used to fund the Initial Tenant Improvements or the Buil ding’s operation, including requirements established by any applicable granting agency and/or City’s third-party auditors.
8. BASE RENT PAYMENT PROCEDURE
A. Payment of Base Rent. Except as otherwise provided in Section 5(A), on or before each annual anniversary date of the Lease Term, Museum will pay to City the Base Rent as set forth in Section 5 hereof.
B. Commencement of Obligation. Mu seum’s obligation to pay the Base Rent will commence upon the Commencement Date.
Attachment A - Lease Agreement
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10 C. Place of Payment. Rental pay ments will be delivered to the Revenue Collections Division, 250 Hamilton Avenue, P. O. Box 10250, Palo Alto, CA 94303. The designated place of payment may be changed at any time by City upon ten (10) days’ prior written notice to Museum. Rental pa yments may be made by check or draft made payable to the City of Palo Alto. Museum assumes all risk of loss if payments are delivered by mail but are not received by City.
9. SECURITY DEPOSIT
On the Commencement Date, Museum will deliver to City the Security Deposit and said Security Deposit will be held by City without liability for interest (unless required by law) as security for the performance of Museum’s obligations. The Security Deposit is not an advance payment of rent or a measure of damages. City may from time to time and without prejudice to any other remedy provided in this Leas e or by law, use all or a portion of the Security Deposit to the extent necessary to satisfy past due rent or to satisfy or partially satisfy Museum’s default under this Lease or to reimburse or compensate City for any liability, expense, loss or damage which City may suffer or incur by reason thereof. The Security Deposit will be retained by City as a debtor and not as a trustee.
City will not be required to keep said Security Deposit separate from its general accounts.
If City so uses or applies any portion of the Security Deposit, then within fifteen (15) days after demand thereof, Museum will deposit cash with City in an amount sufficient to restore the deposit to its full amount thereof, and Museum’s failure to do so will constitute a default under this Lease. If there are no payments to be made from the Security Deposit as set forth in this Section, or if there is any balance of the Security Deposit remaining after all payments have been made, the Secu rity Deposit, or such balance thereof remaining, will be refunded to Museum after expiration or earlier termination of this Lease and Museum’s vacation of the Premises. No trust relationship is created herein between City and Museum with respect to said Securi ty Deposit. Museum’s payment of the Security Deposit will not limit Museum’s liability to City for the payment of amounts due to City by Museum in excess of the amount of the Security Deposit. Museum hereby waives the benefit of the provisions of California Civil Code §1950.7, or any successor statute.
10. TENANT WORK LETTER; INITIAL TENANT IMPROVEMENTS
To document the Parties’ additional obligations related to the construction of the Initial Tenant Improvements, following the Effective Date the Parties will endeavor in good faith to agree upon a mutually a cceptable tenant work letter (“ Tenant Work Letter”).
Upon mutual agreement of the Tenant Work Letter, the Parties will execute the Tenant Work Letter and attach a copy of the executed Tenant Work Letter hereto as Exhibit D.
If the Parties fail to execute a Tenant Work Letter within 60 days following the Effective Date or as otherwise mutua lly agreed, this Lease will autom atically terminate and be of no further force or effect.
Attachment A - Lease Agreement
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11 Commencing upon the execution of the Te nant Work Letter, Museum will in an efficient, good, and workmanlike manner complete the Initial Tenant Improvements to the extent required by and in accordance with the terms and conditions specified in the Tenant Work Letter. If the Tenant Work Lette r is terminated at no fault of City, City may at its option terminate this Lease upon written notice to Museum.
11. ADDITIONAL CONSTRUCTION AND/OR ALTERATION BY MUSEUM A. City’s Consent. Except for the Init ial Tenant Improvem ents, no additional structures, improvements, or facilities (collectively, “ Alterations”) will be constructed, erected, altered, or made on or within the Premis es without the prior written consent of the Council (if the same is required by any City policy, procedur e or ordinance), or otherwise by the City Manager or the City Manager’s designee, which consent will not be unreasonably withheld. Museum understands that any cons ents granted by City under this Lease will be deemed to be granted by the City in its proprietary capacity as City and not in its regulatory capacity as the City of Palo Alto. Notwithstanding anything to the contrary herein, Museum shall not be required to obtain consent of the City, Counsel or City Manager to any of the following (“Permitted Alterations”): (1) the design, location, configuration, installation or display of Museum’s exhi bits and artifacts and alterations required in connection therewith, (2) purely cosmetic Alterations, such as painting, carpeting or floor coverings or (3) non-structural alterations, additions and improvements in the Premises, if the cost of any such project does not exceed Fifty Thousand Dollars ($50,000). Museum will deliver to City reasonable prior written notice of any Permitted Alterations under clause (3) of the definitio n thereof, including a reasonable description of such Permitted Alterations and the proposed schedule for the work.
B. Strict Compliance with Development Plans and Construction Drawings. Any Alterations constructed by Museum within th e Premises will be constructed in an efficient and workmanlik e manner and in strict compliance with (1) except for Permitted Alterations, detailed plans and specifications approved by the Council (if the same is required by any City policy, procedure or ordinance), or otherwise by the City Manager or City Manager’s designee, and (2) all applicable laws. All Alterations will be performed by contractors who have and will maintain during the course of such work all current licenses required by the State of California and such contractors will maintain insurance in amounts and in such form as City may reasonably require.
C. Asbestos and Lead Paint. The Partie s are aware of lead paint and asbestos-laden materials in the Building. Museum will be solely responsible for any lead and asbestos abatement or containment on the Premises to the extent required under all applicable federal, state and local building and safety codes and regulations, and will fully comply with any applicable as bestos notification requirem ents under California Health and Safety Code §§25915 et seq., as amended.
D. Compliance with Law. Museum wa rrants that all construction or improvement of the Pr emises will comply with all applicable laws, including without Attachment A - Lease Agreement
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12 limitation the federal Americans with Disabilities Act of 1990, as amended, including the Act’s implementing regulations, as amended (collectively, the “ ADA”). To the extent feasible, Museum will be entitled to utilize t he California State Historic Building Code to achieve compliance with the ADA.
E. Certificate of Inspection. Upon completion of construction of any substantial Alterations to the Premises, Museum will submit to the Real Property Manager a Certificate of Inspection, verifying that the construction was completed in conformance with Title 24 of the California Code of Regulations for non-residential construction. To the extent feasible, Museum will be entitled to utilize the California State Historic Building Code to achieve compliance with the aforementioned Title 24.
F. Liens. Except to the ex tent caused by City’s default of its obligations under the Tenant Work Letter, Museum will at all times indemnify and save City harmless from all claims for labor or materials supp lied in connection with construction, repair, alteration, or installation of structures, im provements, equipment, or facilities within the Premises, and from the cost of defending against such claims, including attorney’s fees.
G. Prevailing Wages. Museum ack nowledges and agrees any work or improvements (including any Alterations) m ade by or on behalf of Museum to the Premises, or any portion thereof , will constitute “[c]onstructio n, alteration, demolition, installation, or repair work done under contract and paid for in whole or in part out of public funds…”. (California Labor Code section 1720.) Museum will comply with any applicable laws, rules and regulations related to construction wages and other construction matters, if and to the extent applicable to the Prem ises after the Commencement Date including, but not limited to, the provision of Labor Code Section 1720 et seq. From and after the Commencement Date, Museum will indemnify, defend (with counsel reasonably acceptable to City), and hold harmless the City and its officers, agents and employees against any claim for damages, compensation, fi nes, penalties or other amounts arising out of the failure or alleg ed failure of any person or ent ity (including Museum and its contractors) to pay prevailing wages as determined pursuant to Labor Code Sections 1720 et seq., to employ apprentices pursuant to Labor Code Sections 1777.5 et seq., to require any contractor or subcontractor listed on a bid proposal for a public works project be registered with the Department of Industrial Relations pursuant to Labor Code Section 1725.5, to comply with the other applicable provisions of Labor C ode Sections 1720 et seq. and 1777.5 et seq., to m eet the conditions of Section 1771.4 of the Labor Code, to require the general contractor for any prevailing wage work to furnish electronic certified payroll records directly to the Labor Commissioner at:
https://apps.dir.ca.gov/ecpr/das/altlogin, or to comply with any other regulation related to public contracts. Museum’s obligation to indemnify, defend and hold harmless under this Section will survive termination of this Leas e, and will be interpreted broadly so as to apply to any legal or administrative proceeding, arbitration, or enforcement action.
Attachment A - Lease Agreement
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13 H. Access to Premises During Alterations. During construction of any Alterations by Museum, Museum will endeavor to limit any material interference with City’s or the public’s use of the Community Rooms and/or the Archives Room hereunder.
12. MUSEUM’S ASSURANCE OF CONSTRUCTION COMPLETION
Prior to commencement of any Alterati ons (excluding Permitted Alterations), Museum will furnish the Real Property Manager with satisfactory evidence that sufficient funds will be available to complete the appr oved construction. The amount of such assurance will be not less t han one hundred percent (100%) of the total estimated construction cost for the Alterations submitted to and approved by City. Evidence of such assurance will take one of the forms descr ibed below and will guarantee Museum’s full and faithful performance of all of the covenants, terms, and conditions of this Lease:
A. Completion bond naming City as beneficiary;
B. Performance and payment bonds, s upplied by Museum’s contractor or contractors, provided t he bonds are issued with both Museum and City named as beneficiaries;
C. Irrevocable letter of credit from a financial institution naming City as beneficiary; or
D. Any combination of the above.
Notwithstanding the foregoing, City acknowledges and agrees that with respect to the Initial Tenant Improvement s only, the performance and pay ment bonds provided by Museum’s contractor in accordance with the Tenant Work Letter satisfy Tenant’s obligations under this Section 12.
All bonds and letters of credit must be issued by a company qualified to do business in the State of California, must be in a form a cceptable to the City’s Director of Administrative Services and the City’s City Attorney, and must ensure the faithful and full observance and performance by Museum of a ll of the covenants, terms, and conditions relating to the construction of improvements in accordance with the development plans and construction plans approved by City as set forth in this Lease. To the extent a letter of credit is utilized, the amount of the letter of credit will be substantially equal to the estimated cost to complete all approved construction, and City will cooperate with Museum to structure the letter of credit so that its amount may be periodically reduced to reflect the remaining cost to complete all approved construc tion, to permit Museum to recover from the issuer of the letter of cr edit any collateral to actually pay for the construction in progress with such collateral that is no longer needed.
Attachment A - Lease Agreement
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14 City may request, and Museum will provide promptly, a revised estimated construction cost estimate upon the comp letion of each new set of construction documents. Museum will furnish this revised estimate to the Real Property Manager.
13. DAMAGE TO OR DESTRUCTION OF IMPROVEMENTS
Subject to the Parties’ rights and obligat ions under Section 20, prior to the Commencement Date City shall have the sole obligation to operate, maintain, repair and replace the Building and the Bu ilding Exterior Common Areas, including, without limitation, performing all obligations of Museum set forth in this Section 13 with respect to repair and restoration of any damage or destruction to the Building. Commencing on the Commencement Date and prior to the completi on of the Initial Tenant Improvements, in the event of damage to or destruction of the Building, facilities, or improvements located within the Premises, the Parties’ obligations to repair such damage or destruction will be governed by the Tenant Work Letter.
After completion of the Initial Tenant Impr ovements, in the event of damage to or destruction of the Building, facilities, or improvements located within the Premises, or in the event the Building, facilities, or im provements located withi n the Premises are declared unsafe or unfit for use or occupancy by a public entity with the authority to make and enforce such declaration, Museum will, within thirty (30) days, commence and diligently pursue to completion the repair, replacement, or reconstruction of improvements necessary to permit full use and occupancy of the Premises for the purposes required by this Lease. Repair, replacement, or reconstruction of improvements within the Premises will be accomplished in a manner and according to plans approved by the City Engineer, the Chief Building Official and the Real Property Manager. Except as otherwise provided herein, the termination of this Lease will not reduce or nullify Museum’s obligation under this Section.
Notwithstanding the foregoing, should the Building and other improvements on the Premises be more than fifty percent (50% ) destroyed or damaged by an insured loss during the last ten (10) years of the Lease Term, Museum will have the option of rebuilding or repairing such damage or terminating this Lease. In addition, Museum will have the option of rebuilding or repairing such damage or termi nating this Lease if insurance proceeds actually recovered by Museum on account of the loss are less than ninety percent (90%) of the estimated cost to restore the damage. Museum will notify the Real Property Manager in writing of its decision within thirty (30) days of the occurrence of such damage or destruction. In the event that Museum elects to terminate this Lease and not rebuild or repair such damage, Museum wil l demolish any remaining structures or portions of structures not desired by Cit y and clean up any and all debris and (after deducting such demolition and cleanup costs) will pay to City the remaining insurance proceeds received by Museum provided that Museum will retain the “Museum Portion” of such proceeds as calculated in accordance with the following formula:
Museum Portion = C(R/T)
Attachment A - Lease Agreement
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15 Where:
C = Total amount of the Museum Co ntribution (as defined in the Tenant Work Letter) expended to complete the Initia l Tenant Improvements in accordance with the Tenant Work Letter plus the cost of any other Alterations (excluding Permitted Alterations) paid for by the Museum thereafter as of the date of such casualty.
R = Remaining number of mont hs of the Lease Term following completion of the demolition and debris removal by Museum pursuant to this Section 13.
T = The total Lease Term.
Museum’s liability for demolition and clea nup will be limited to insured losses including any deductible amount.
In case of destruction to the improvements located on the Premises, there will be no abatement or reduction of Rent as a result thereof. Museum waives the provisions of California Civil Code Sections 1932(2) and 1933( 4), or any successor statute thereto or similar statute hereinafter enacted, which relate to terminati on of leases when the thing leased is destroyed and agrees that any such event will be governed solely by the terms of this Lease.
14. RECORD DRAWINGS PLANS
Upon completion of any Alterations, Mu seum will provide t he Real Property Manager with a complete set of reproducible record drawings plans, reflecting the actual construction, building construction and site improvements within or upon the Premises.
These record drawings plans will be made ava ilable in electronic AutoCAD format, or in another form reasonably requested by City, and delivered to the Real Property Manager.
Museum will also provide the Real Property Manager with a statement signed by Museum under penalty of perjury certif ied as to accuracy and of actual construction costs for all such improvements.
15. OWNERSHIP OF IMPROVEMENTS
All improvements constructed, erected or installed upon the Premises must be free and clear of all liens, claims, or liability for labor or material and will become the property of City, at its election, upon t he expiration or earlier termination of this Lease and, upon City’s election, will remain upon the Premises upon the termination of this Lease.
Title to all equipment, furniture, furnis hings and trade fixtures placed by Museum upon the Premises will remain in Museum, and replacements, substitutions and modifications thereof may be made by Mu seum throughout the Lease Term. Museum may remove such fixtures and furnishings upon termination of this Lease if Museum is not then in default under this Lease, provided that Museum will repair to the satisfaction Attachment A - Lease Agreement
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16 of City any damage to the Pr emises and improvements caused by such removal and provided that usual and customary lighting, plumbing and heating fixtures will remain upon the Premises upon termination of this Lease.
16. MAINTENANCE OBLIGATIONS OF MUSEUM
A. General Obligations. During the Lease Term, Museum, at its sole expense, will perform all regular and extraor dinary maintenance and repairs to the Premises and the Building’s Exterior Common Areas. “ Building’s Exterior Common Areas” will mean: (i) the Building’ s front courtyard (includi ng landscaping), (ii) the Building’s adjacent rear paved patio and arcade area (which will be constructed as part of the Initial Tenant Improvements) as such areas are more fully depicted on Exhibit B, and (iii) the landscaping located between the Building and Homer Avenue and Bryant Street, respectively (but the Museum has no obligations with respect to the public sidewalks or the trees and landscaping between the public sidewalks and the street).
Such maintenance and repair obli gations shall include, but not be limited to, electrical, plumbing, the roof, security system (if any), windows, walls and the HVAC system, including all painting necessary to keep the Premises and the Building’s Exterior Common Areas in first-class order, r epair and condition. Notwithst anding the foregoing, City will be responsible for the maintenance and repair of the Public Parkside Restroom, the Arnautoff Frescoes in accordance with Section 17(C) below, and the City Archives Room in accordance with the License Agreement. E xcept for City’s obligations regarding trees stated in Section 17(B) hereof, Museum will maintain the landscaping in the Building’s front courtyard. In addition, Museum will maintain, at its sole expense, all equipment, furnishings and trade fixtures upon the Pr emises required for the maintenance and operation of the Museum. Museum waives the right to make repairs at the expense of City and for the benefit of the provisions of Sections 1941 and 1942 of the Civil Code of California, as amended, relating thereto; and further agrees that if and when any repairs, alterations, additions or betterments will be made by it as required by this paragraph, it will promptly pay for all labor done or materials furnished and will keep the Premises free and clear of any lien or encumbrance of any kind whatsoever.
B. Maintenance Plan. For purposes of continued historic preservation of the Premises, following completion of th e Initial Tenant Improv ements, Museum will comply with the long-term maintenance plan and schedule for the Premises (“Maintenance Plan”) approved and modified from time to time in accordance with this Section 16(B). Within sixt y (60) days following the Comm encement Date, Museum will deliver to City a written copy of Museum ’s proposed initial Maintenance Plan and thereafter the Parties will collaborate in good faith to agree upon a mutually acceptable Maintenance Plan. Upon mutual agreement of the initial Maintenance Plan, the Parties will attach the approved Ma intenance Plan hereto as Exhibit G. After approval of the initial Maintenance Plan, the Parties will meet and confer not less than every five (5) years during the Lease Term to evaluate the adequa cy of the then existing Maintenance Plan with the City authorized to make changes to the Maintenance Plan as City deems Attachment A - Lease Agreement
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17 reasonable. Any changes to the Maintenance Plan will be promptly memorialized in writing and signed by the Parties and attached hereto as a new Exhibit G superseding the prior version of Exhibit G.
C. City’s Performance Due to Mus eum Failure. Should Museum fail to make any repairs or perform any maintenance work for which it is liable, City will have the option to make the repairs and Museum, within ten (10) days of receipt of a bill therefor from the Real Property Manager, will reimburse City for the cost of such repairs, plus a fifteen percent (15%) administrative overhead fee. The making of such repairs or performance of maintenance by City will not be construed as a waiver of the duty of Museum to make repairs or perform maintenance as provided herein.
17. MAINTENANCE OBLIGATIONS OF CITY
Following Tenant’s completi on of the Public Parksi de Restroom and the City Archives Room as part of the Initial Tenant Improvement s, City will have the following obligations with respect to the Building which it will undertake at its sole cost and expense, without the right of reimbursement from Museum:
A. City will be responsible for the maintenance, repair and replacement, as necessary, of the Public Parkside Re stroom and the City Archives Room (in accordance with the License Agreement), including the repair and replacement of fixtures, wall and floor coverings, and doors;
B. City will be responsible for the maintenance and removal, as necessary, of trees immediately adjacent to the Building, including the oak tree in the Building’s courtyard.
C. City will be responsible for the maintenance, repair, protection and any required restoration of the Arnautoff Frescoes, in cluding protection during construction of the Initial Tenant Improvements. The Parties acknowledge and agree that City’s foregoing obligations relate solely to the surface of the wall and that Museum is solely responsible for the infrastructure and integrity of the underlying wall upon which the Arnautoff Frescoes have been painted. City will complete any necessary refurbishment and repair of the Arnautoff Frescoes follo wing completion of the Initial Tenant Improvements and in a manner so as to minimize interference with the construction of the Initial Tenant Improvement s and/or Museum’s subsequent use of the Premises, as applicable.
D. City will be responsible for the ma intenance and repair of the water, electric and sewer lines serving the Public Parkside Restroom.
E. Except to the extent caused by the gross negligence or willful misconduct of Museum or any of the Mus eum’s Agents, City will be responsible for property damage and personal injury occurring on or about the Public Parkside Restroom.
Attachment A - Lease Agreement
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18 Except to the extent caused by the gross negligence or willful misconduct of Museum or any of the Museum’s Agents, City hereby agrees to protect, indemnify, hold harmless and defend Museum, its officers, agents, and empl oyees against any and all claims, liability, demands, damages, cost, expenses or attorneys’ fees arising out of the use, operation or maintenance of the Public Parkside Restroom or the City’s performance or nonperformance of the terms of this Lease with respect to the Public Parkside Restroom.
In the event Museum is named as co-defendant, Museum will notify City of such fact and City will represent Museum in such legal action with counsel reasonably approved by Museum, unless Museum undertakes to represent itself as co-defendant in such legal action, in which event City will pay to Museum its litigation costs, expenses and attorneys’ fees.
18. UTILITIES
Museum will be solely responsible for and will pay, prior to delinquency, all charges for utilities supplied to the Premises during the Lease Term, subject to the reimbursement obligations of the City pursuant to the License Agreement. City will pay for all utilities supplied to the Public Parkside Restroom. Museum may elect to install a FLOW meter to measure water consumption from the Public Parkside Restroom and City will pay for any such consumption as determined by such me ter. Each Party will be responsible for the cost of procuring, installing, maintaining and repairing the meters for their respective utility service.
19. INSURANCE
During the Lease Term, Museum, at its sole expense, will obtain and maintain the following insurance acceptable to City in full force and effect.
A. Minimum Scope of Insurance Coverage will be at least as broad as:
1. Commercial General Liability coverage (occurrence
Insurance Services Office form CG 0001);
2. Workers’ Compensation insurance as required by the State of California and Employer’s Liability Insurance; and/or
3. If applicable, Course of Construction insurance form providing coverage for “all risks” of loss.
The policy or policies of insurance maintained by Museum will provide the following minimum limits and coverages:
P O L I C Y MINIMUM LIMITS OF LIABILITY
A. WORKERS’ COMPENSATION Statutor y
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19 EMPLOYER’S LIABILITY $1,000,000 each occurrence
Bodily Injury $2,000,000 each Person
$2,000,000 each Occurrence
Property Damage $4,000,000 aggregate
$2,000,000 each Occurrence
B. COMMERCIAL GENERAL
LIABILITY, including products
and completed operations, broad
form contractual, and personal
injury.
C. PROPERTY INSURANCE All risks of loss to any tenant personal property, equipment, fixtures, improvements or
betterments, at full replacement cost with no
coinsurance penalty provision. The property
insurance is to be endorsed to include Damage
to Premises Rented to You Coverage (ISO
Form CP 00 40 04 02 or equivalent) with a limit
equal to the replacement cost of the leased
property.
D. FIRE & EXTENDED
COVERAGE
Not less than one hundred percent (100%) of
the replacement cost of all insurable
improvements within or upon the Premises.
Such policies must include water damage and
debris cleanup provisions. Additional fire and
extended coverage must be obtained in
accordance with this clause upon completion of
construction or installation of any major
insurable improvement of the Premises
including the Initial Tenant Improvements.
E. COURSE OF CONSTRUCTION Completed value of the Initial Tenant Improvements or subsequent Alterations, as
applicable.
B. Other Insurance Provisions. Insu rance will be in full force and effect commencing on the Commencement Date. Each insurance policy required by this Lease will comply with the following requirements:
1. Museum will not suspend, void , cancel or reduce coverage below the limits set forth above except after thirty (30) days’ prior written notice by certified mail, return receipt requested, has been given to the City.
Attachment A - Lease Agreement
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20 2. With respect to property insurance, Museum shall waive any right to subrogation which any insurer of Mu seum may acquire against City by virtue of the payment of any loss under such insuranc e. Museum agrees to use commercially reasonable efforts to obtain any endorsement that may be necessary to affect this waiver of subrogation, but this pr ovision applies regardless of whether or not Museum has received a waiver of subrogation endorsement from the insurer.
3. The City of Palo Alto wil l be named as a loss payee on the property insurance policy and, if applicable, course of construction insurance policy described above.
4. The City of Palo Alto, its elec tive and appointive officials, and officers are to be covered as additional insur eds as respects to liability arising out of activities performed by or on behalf of Museum; products and completed operations of Museum; premises owned, occupied or us ed by Museum; or automobiles owned, subleased, hired or borrowed by Museum . The coverage will contain no special limitations on the scope of pr otection afforded to the City, its elective and appointive officials, officers, employees, agents or volunteers.
5. For any claims related to this Lease, Museum’s insurance coverage will be primary insuranc e as respects the City of Pa lo Alto, its elective and appointive officials, officers, employees, agent s and volunteers. Any insurance or self- insurance maintained by City, its elective and appointive officials, officers, employees, agents or volunteers will be excess to Museum’s insurance and will not contribute with it.
6. Any failure to comply with repor ting or other provisions of the policies including breaches of warranties will not affect coverage provided to the City of Palo Alto, its elective and appointive officials, officers, employees, agents or volunteers.
C. Acceptability of Insurers
Insurance will be placed with insurers with a current A.M. Best’s rating of not less than A-VII.
Museum agrees to deposit with the R eal Property Manager, on or before the effective date of this Lease, ce rtificates of insurance necessary to satisfy City that the insurance provisions of this Lease have been complied with, and to keep such insurance in effect and the certificates therefor on deposit with City during the Lease Term.
City will retain the right at any time to review the coverage, form, and amount of the insurance required hereby. If, in the opinion of City’s Risk Manager, the insurance provisions in this Lease do not provide adeq uate protection for City and for members of the public using the Premises, the Real Property Manager may require Museum to obtain insurance sufficient in coverage, form, and amount to provide adequate protection as determined by the Risk Manager, to the extent such coverage is commercially reasonable Attachment A - Lease Agreement
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21 and available at a commercially reasonable cost. City’s requirements will be reasonable and will be designed to assure protection from and against the kind and extent of risk which exists at the time a change in insurance is required.
The Real Property Manager wi ll notify Museum, in writing, of changes in the insurance requirements. If Museum does not deposit copies of acceptable insurance policies or certificates with City incorporating such changes within sixty (60) days of receipt of such notice, or in the event Museum fails to ma intain in effect any required insurance coverage, Museum will be in default under this Lease without further notice to Museum. Such failure will constitute a material breach and will be grounds for immediate termination of this Lease at the option of City.
The procuring of such required policy or policies of insurance will not be construed to limit Museum’s liability hereunder or to fulfill the indemnification provision and requirements of this Lease. Notwithstanding anything to the contrary herein, the Parties hereto release each other and their respective agents, employees, successors, assignees and subtenants from all liability for damage to any property that is caused by or results from a risk which is actually insured against, which is required to be insured against under this Lease, or which would normally be cover ed by all risk property insurance, without regard to the negligence or willful misconduct of the entity so released. All of City’s and Museum’s repair and indemnity obligations under this Lease shall be subject to the waiver contained in this paragraph.
20. HOLD HARMLESS
Museum hereby waives all claims, liability and recourse against City including the right of contribution for loss or damage of or to persons or property to the extent growing out of or arising from Museum’s use or occupancy of the Premises or from any activity undertaken by Museum or Museum’s Agents (as defined below) which is related to this Lease and/or the License Agreement. Except to the extent resulting from the negligence or willful misconduct of City or City’s Agents (as defined below), Museum agrees to protect, indemnify, hold harmless and defend City and City’s Agents against any and all claims, liability, demands, damages, costs, expenses or attorneys’ fees arising out of the negligence of Museum or Museum’s Agents or resulting from a default by Museum of its obligations under this Lease and/ or the License Agreement. In the event City is named as co-defendant, Museum will notify City of such fact and will represent City in such legal action with counsel reasonably approved by City, unless City undertakes to represent itself as a co-defendant in su ch legal action, in which event Museum will pay to City its litigation costs, expenses and attorneys’ fees. “Museum’s Agents” will mean Museum’s officers, directors, agents and employees. “ City’s Agents” will mean City’s officers, agents and employees.
City hereby waives all claims, liability and recourse against Museum including the right of contribution for loss or damage of or to persons or property to the extent growing out of or arising from City’s use of the City Archives Room or from any activity undertaken Attachment A - Lease Agreement
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22 by City or City’s Agents which is related to this Lease and/or the License Agreement.
Except to the extent resulting from the negligence or willful misconduct of Museum or Museum’s Agents, City agrees to protect, indemnify, hold harmless and defend Museum and Museum’s Agents against any and all cl aims, liability, demands, damages, costs, expenses or attorneys’ fees arising out of the negligence of City or City’s Agents or resulting from a default by City of its obligati ons under this Lease and/or the License Agreement. In the event Museum is nam ed as a co-defendant, City will notify Museum of such fact and will represent Museum in such legal action with counsel reasonably approved by Museum, unless Museum undertakes to represent itself as co-defendant in such legal action, in which event City will pay to Museum its litigation costs, expenses and attorneys’ fees.
21. ASSIGNING, SUBLETTING, AND ENCUMBERING PROHIBITED
As City has relied on the qualifications of Museum in awarding this Lease, except as set forth under Section 3 hereof, any mortgage, pledge, hypothecation, encumbrance, transfer, or assignment (collectively, “ Encumbrance”) of Museum’s interest in the Premises, or any part or portion thereof, is prohibited. Any attempted Encumbrance will be null and void and will confer no right, title, or interest in or to this Lease or the Premises.
Subleasing space in the Building for o ffice purposes will be permitted subject to compliance of the use with City ordinances, rules and regulations, including the CUP, and to approval by the City Manager or the City Manager’s designee, which approval will not be unreasonably withheld. In addition, Museum will have the right to sublease up to twenty-five percent (25%) of the useable spac e in the Premises to one or both of the following: (A) a for-profit food service operator; and (B) a for-profit gift/book shop operator; provided, however, these uses will be in s upport of Museum’s obligation to provide the required services and uses specified in Section 3(A) hereof. If Museum commences proceedings to dissolve or otherwise c ease doing business during the Lease Term, Museum will have the right to assign its interest in this Lease to a non-profit organization who agrees to abide by the covenants, terms and conditions of the Lease and provide the required, permitted and optiona l services and uses so long as such assignment is approved by City.
22. DEFAULT BY MUSEUM
A. City’s Remedies on Default. Except as otherwise provided under this Lease, should Museum default in the perform ance of any covenant, term or condition contained in this Lease, including, but not limited to, those specified in Section 3, 10, and 16, and such default is not corrected within sixty (60) days of receipt of a notice of default from City, City may:
1. Terminate this Lease, and all rights of Museum and those who claim under Museum, stemming from this Lease, will end at the time of such termination; Attachment A - Lease Agreement
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23 2. At City’s sole option, cure any such default by performance of any act, including payment of money, and the cost th ereof, plus all reasonable administrative costs, will become immediately due and payable by Museum to City;
3. Seek an action or suit in equity to enjoin any acts or things which may be unlawful or in violation of the rights of City;
4. Seek a mandamus or other su it, action or proceeding at law or in equity to enforce its rights against Museum, and to compel Museum to perform and carry out its duties and obligations under the law and under Museum’s covenants, terms and conditions with City as provided herein; or
5. Pursue any other remedy avai lable by law or specifically provided in other provisions of this Lease.
B. Cumulative Remedies. However, in the event of a default which cannot reasonably be cured within sixty (60) days, Museum will have a reasonable period of time to cure the default. The remedies given to City hereunder, or by any law now or hereafter enacted, are cumulative and the exercise of one right or remedy will not impair the right of City to exercise any or all other remedies. In case any suit, action or proceeding to enforce any right or exercise any remedy will be brought or taken and then discontinued or abandoned, then, and in every such case, City and Museum will be restored to its and their former position and rights and remedies as if no such suit, action or proceedings had been brought or taken.
C. Additional Defaults of Museum. In addition to a violation or breach of any other provision of this Lease, Museum will be considered to be in default under this Lease in the event that:
1. Museum is adjudicated bankrupt or makes a general
assignment for the benefit of creditors; or
2. Museum is in default under the Tenant Work Letter.
23. TAXES AND ASSESSMENTS
This Lease may create a possessory interest which is subject to the payment of taxes levied on such interest. Museum acknowledges that all taxes and assessments (including but not limited to the possessory interest tax) which may become due and payable upon the Premises or u pon fixtures, equipment, or other property installed or constructed thereon, will be the full responsib ility of Museum (subject to City’s reimbursement obligations under the License Agreement) and Museum will pay the taxes and assessments prior to delinquency.
24. EMINENT DOMAIN
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24 In the event the whole or any part of the Premises is condemned by a public entity in the lawful exercise of its power of eminent domain, this Lease will cease as to the part condemned. The date of such termination will be the effective date of possession of the whole or part of the Premises by the condemning public entity.
If only a part is condemned and the c ondemnation of that part does not substantially impair the capacity of the remainder to be used for the purposes required by this Lease, Museum will continue to be bound by the terms, covenants and conditions of this Lease. If the condemnation of a part of the Prem ises substantially impairs the capacity of the remainder to be used for th e purposes required by this Lease, Museum may: (A) terminate this Lease and thereby be absolved of obligations under this Lease which have not accrued as of the date of possession by the condemning public entity; or (B) continue to occupy the remaining Premises and thereby continue to be bound by the terms, covenants and conditions of this Leas e. Museum will prov ide City with written notice advising City of Museum’s choice within thirty (30) days of possession of the part condemned by the condemning public entity.
City will be entitled to and will receiv e all compensation related to the condemnation of all or part of the Premises by the exer cise of eminent domain.
Notwithstanding the foregoing, so long as such award does not reduce or delay City’s award, Museum may seek a separate award if permitted by state law for loss of its personal property, fixtures, or relocation expenses.
25. HAZARDOUS SUBSTANCES
A. Definition. As us ed herein, the term “Hazardous Materials” means any substance or material which has been det ermined by any state, federal or local governmental authority to be ca pable of posing risk of injury to health, safety, and property, including petroleum and petroleum products and all of those materials and substances designated as hazardous or toxi c by the U.S. Environmental Protection Agency, the California Water Quality Control Board, the U.S. Department of Labor, the California Department of Industrial Relati ons, the California Department of Health Services, the California Health and Welfar e Agency in connection with the Safe Water and Toxic Enforcement Act of 1986, the U.S. Department of Transportation, the U.S.
Department of Agriculture, the U.S. Consumer Product Safety Commission, the U.S.
Department of Health and Human Services, the U.S. Food and Drug Administration or any other governmental agency now or hereafter authorized to regulate materials and substances in the environment. Without limiting the generality of the foregoing, the term “Hazardous Materials” will include all of those materials and substances defined as “toxic materials” in Sections 66680 through 66685 of Title 22 of the California Code of Regulations, Division 4, Chapter 20, as the same may be amended from time to time.
B. Museum’s Use of Premises. During the Lease Term, Museum will abide and be bound by all of the following requirements:
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25 1. Museum will comply with all laws now or hereafter in effect during the Lease Term relating to the use of Hazardous Materials on, under or about the Premises, and Museum will not contaminate t he Premises, or its subsurface, with any Hazardous Materials;
2. Museum will restrict its use of Hazardous Materials at the Premises to those kinds of materials that are normally used in constructing and operation of the Premises. Disposal of any Hazardous Materials at the Premises are strictly prohibited. Storage of such permissible Hazardous Materials is allowed only in accordance with all applicable laws now or hereafter in effect. All safety and monitoring features of any storage facilities will be approved by City’s Fire Chief in accordance with all laws;
3. Museum will be solely and fully responsible for the reporting of all Hazardous Materials releases that occur during the Lease Term, to the appropriate public agencies, when such releases are caused by or result from Museum’s activities on the Premises. Museum will immediately in form City of any release of Hazardous Materials, whether or not the release is in quantities that would otherwise be reportable to a public agency;
4. Museum will be solely and fully responsible and liable for such releases at the Premises, or into City’s sewage or storm drainage systems. Museum will take all necessary precautions to prevent any of its Hazardous Materials from entering into any storm or sewage drain system or from being released on the Premises. Museum will remove releases of its Hazardous Materials in accordance with all laws. In addition to all other rights and remedies of City hereunder, if the release of Hazardous Materials caused by Museum is not removed by Museum within ninety (90) days after discovery by Museum, City or any other th ird party, City may pay to have the same removed and Museum will reimburse City for such costs within five (5) days of City’s demand for payment;
5. Museum will protect, defend, indemnify and hold harmless City from and against all loss, damage, or liability (i ncluding all foreseeable and unforeseeable consequential damages) and expenses (including, without limitation, the cost of any cleanup and remediation of Hazar dous Materials) which City may sustain as a result of the presence or cleanup of Hazardous Materials on the Premises;
6. Museum’s obligations to City under this Section will include Museum’s obligation and responsibility to abate or contain any asbestos containing material or lead paint that may be present in the building on the Premises;
7. Museum’s obligation under this Section will survive the expiration or earlier termination of this Lease;
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26 8. Notwithstanding anything cont ained herein, Museum will not be responsible for the following, all of whic h will be the sole respons ibility of City: (a) releases of Hazardous Materials caused by Cit y or any of City’s agents; (b) releases of Hazardous Materials occurring prior to t he commencement of th e Lease Term, or any Hazardous Materials existing on, in or under the Premises as of the commencement of the Lease Term; and
9. This Section will exclus ively establish and govern the obligations of City and Museum with respec t to Hazardous Materi als located on the Premises.
26. NOTICES
All notices, statements, demands, requests , consents, approvals, authorizations, offers, agreements, appointments or designations hereunder given by either party to the other, will be in writing and will be sufficiently given and served upon the other party if (1) personally served, (2) sent by United States Postal Serv ice certified mail, postage, prepaid, or (3) sent by expr ess delivery service. Pers onal service will include, without limitation, service by delivery service. Delivery of notices properly addressed will be deemed complete when the notice is physically delivered to t he Real Property Manager or to [Museum’s designee].
All notices pursuant to this Lease will be addressed as set forth below or as either Party may subsequently designate by written notice.
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27 TO: City TO: Museum
Real Property Manager Palo Alto History Museum
City of Palo Alto P.O. Box 676
250 Hamilton Avenue Palo Alto, CA 94302
Palo Alto, CA 94303
with a copy to:
City Clerk, City of Palo Alto
250 Hamilton Avenue
Palo Alto, CA 94303
and
City Attorney, City of Palo Alto
250 Hamilton Avenue
Palo Alto CA 94303
Each Party may, at any time, change its notice address (other than to a post office box address) by giving the other Party written notice of the new address.
27. CERTIFIED ACCESS SPECIALIST DISCLOSURE
In accordance with Civil Code Section 1938, City hereby discloses that the Premises have not undergone inspection by a Certified Access Specialist for purposes of determining whether the property has or does not meet all applicable construction related accessibility standards pursuant to Civil Code Section 55.53. City hereby provides the following notification to Museum: “A Certified Access Specialist (CASp) can inspect the subject premises and determine whether the subject premises comply with all of the applicable construction-related accessibility standards under state law. Although state law does not require a CASp inspection of the subject premises, the commercial property owner or lessor may not prohibit the lessee or tenant from obtaining a CASp inspection of the subject premises for the occupancy or potential occupancy of the lessee or tenant, if requested by the lessee or tenant. The Parties will mutually agree on the arrangements for the time and manner of the CASp inspection, the payment of the fee for the CASp inspection, and the cost of making any repai rs necessary to correct violations of construction-related accessibility standards within the premises.” The forgoing notwithstanding, the Parties agree that Museum will be solely responsible for the payment of all fees for any CASp inspection requested by Museum and Museum will pay the cost of making any repairs necessary to correct violations of construction related accessibility standards identified in any C ASp inspection report requested by the Museum within the Premises with such repairs completed as Al terations in accordance with this Lease; Attachment A - Lease Agreement
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28 provided, that, the City, rat her than the Museum, shall per form and pay for any such repairs with respect to the Public Parkside Restroom.
28. GOVERNING LAW
This Lease will be governed by and interpreted in accordance with the laws of the State of California and the Char ter of the City of Palo Alto and the Palo Alto Municipal Code. The Parties will comply with all app licable federal, state and local laws in the exercise of their rights and the performance of their obligations under this Lease.
29. VENUE
In the event that an action is brought, the Parties agree that trial of such action will be vested exclusively in the state courts of California or in the United States District Court for the Northern District of California in the County of Santa Clara, State of California.
30. TIME
Time is of the essence of this Lease.
31. SIGNS
Museum agrees not to construct, maintain, or allow any permanent sign to be placed upon the exterior of the Building except as may be approved by City Manager or designee, which approval will not be unreasonably withheld, provided that all such signs must be in accordance with all applicable la ws, including without limitation City’s sign ordinance in Palo Alto Munici pal Code Chapter 16.20 et seq., as amended from time to time (the “Sign Ordinance”). Museum will be entitled to place temporary signs, banners or similar items on the exteri or of the Building without the foregoing approval of the City Manager or designee so long as such tem porary signs, banners or similar items are related to Museum activities and/or operations and such signs comply with all applicable laws, including without limitation the Sign Or dinance. In addition to any other remedies, City at the Museum’s cost may remove any signs in violation of this Section.
32. CONSTRUCTION
This Lease will not be construed more strictly against one party than against the other merely by virtue of the fact that it may have been prepared by counsel for one of the parties, it being recognized that all Parties have contributed substantially and materially to the preparation of this Lease. The headings of various sections in this Lease are for convenience only, and are not to be utilized in construing the content or meaning of the substantive provisions hereof. The Parties further intend that this Lease be broadly construed to achieve its stated purposes.
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29 33. ENTIRE AGREEMENT; AMENDMENT
This Lease represents the entire agreement between the Parties and supersedes all prior negotiations, representations and contra cts, whether written or oral. This Lease may be amended by an instrument, in writing, signed by the Parties.
34. NONDISCRIMINATION
Museum and its officers, employees and agents will not discriminate against any person because of race, skin color, gender, age, religion, disability, national origin, ancestry, sexual orientation, housing status, marital status, familial status, weight or height, consistent with Palo Alto Municipal Code Section 9.73.010 et seq. Museum will not discriminate against any employee or applicant for employment because of attributes mentioned in the previous sentence. Museum covenants to meet all requirements of the Palo Alto Municipal Code pertaining to nondiscrimination in employment, consistent with Palo Alto Municipal Code se ction 2.30.510. If Museum is found in violation of the nondiscrimination provision of t he State of California Fair Em ployment Practices Act or similar provisions of federal law or executive order in the conduct of its activities under this Lease by the State of California Fair Employment Practices Commission or the equivalent federal agency or officer, it will be a default under this Lease subject to the applicable notice and cure period in accordance with Section 22.
35. INSPECTION
City’s employees and agents will have the right at all reasonable times to inspect the Premises to determine Museum’s compliance with the provisions of this Lease.
36. SUCCESSORS IN INTEREST
Unless otherwise provided in this Lease, the covenants, terms, and conditions contained herein will apply to and bind the heirs , successors, executors, administrators, and assigns of all the parties hereto, all of whom will be jointly and severally liable hereunder.
37. FORCE MAJEURE
If either Party will be delayed or prevented from the performance of any act required hereunder by reason of acts of God, restrictive governmental laws or regulations, or other cause without faul t and beyond the control of the Party obligated (financial inability excepted), performance of such ac t will be excused for the period of the delay and the period for the performance of any such act will be extended for a period equivalent to the period of such delay.
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30 38. PARTIAL INVALIDITY
If any provision or provisions of this Lease will be held in a judicial proceeding to be invalid, illegal or void, or unenforceable, the validity, legality and enforceability of the remaining provisions will not in any way be affected or impaired thereby, provided the purposes of this Lease remain legal and enforceable.
39. WAIVER OF RIGHTS
The failure of City or Museum to insi st upon strict performance of any of the covenants, terms, or conditions of this Lease will not be deemed a waiver of any right or remedy that City or Museum may have, and wil l not be deemed a waiver of the right to require strict performance of all the covenants, terms, and conditions of the Lease thereafter, nor a waiver of any remedy for the subsequent breach or default of any term, covenant, or condition of the Lease.
40. ATTORNEY FEES
In the event of any litigation between t he Parties with respect to the Lease, the performance of their respective obligations hereunder or the effect of a termination under this Lease, the losing party will pay all costs and expenses incurred by the prevailing party in connection with such litigation, including, but not limited to, reasonable attorneys’ fees of counsel selected by the prevailing party.
41. RESERVATIONS TO CITY
City reserves the right to install, lay, construct, maintain, repair, and operate such sanitary sewers, drains, storm water se wers, pipelines, manholes, and connections; water, oil, and gas pipelines ; telephone and telegraph power lines; and the applications and appurtenances necessary or convenient for connection therewith, in, over, upon, through, across and along the Pr emises or any part thereof, respecting the National Register of Historic Places status of the Building, and to enter the Premises for any and all such purposes. City also reserves the ri ght to grant franchises, easements, rights of way, and permits, in, over, upon, through, ac ross, and along any and all portions of the Premises. No right reserved by City in this section will be so exercised as to interfere unreasonably with Museum’s operation hereunder and City will pay all costs reasonably incurred by Museum in connection with the exercise by City of the rights granted to it by this section. City agrees that rights granted to third parties by reason of this section will contain provisions that the surface of the land will be restored as nearly as practicable to the original condition upon the completion of any construction.
42. HOLDING OVER
In the event Museum will c ontinue in possession of the Premises after the Lease Term expires or is terminated, such possession will not be considered a renewal of this Attachment A - Lease Agreement
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31 Lease but a tenancy from mont h to month and will be gover ned by the conditions and covenants contained in this Lease.
43. DISPOSITION OF ABANDONED PERSONAL PROPERTY
If Museum abandons the Premis es or is dispossessed thereof by process of law or otherwise, title to any personal property belonging to Museum and remaining on the Premises forty-five (45) days after such abandonment or dispossession will be deemed to have been transferred to City. City will have the right to remove and to dispose, at the cost of the Museum, of such property without liability therefor to Museum or to any person claiming under Museum, and will have no need to account therefor.
44. QUITCLAIM OF MUSEUM’S INTEREST UPON TERMINATION
Upon termination of this Lease for any reason, including but not limited to termination because of default by Museum, Mu seum will, at City's request execute, acknowledge and deliver to City within five (5) days after receipt of written demand thereof, a good and sufficient deed whereby all rights, title, and interest of Museum in the Premises, is quitclaimed to City. Should Museum wrongfully fail or refuse to deliver the required deed to City, City may prepare and record a notice reciting the failure of Museum to execute, acknowledge and deliver such deed and the notice will be conclusive evidence of the termination of this Lease, and of all rights, title and interest of Museum or those claiming under Museum in and to the Premises.
45. CITY'S RIGHT TO RE-ENTER
Museum agrees to yield and peaceably deliver possession of the Premises to City on the date of termination of this Lease, whatsoever the reason for such termination.
Upon giving written notice of termination to Museum, City will have the right to re-enter and take possession of the Premises on the date such termination becomes effective without further notice of any kind and without institution of regular legal proceedings.
Termination of the Lease and re- entry of the Premises by City will in no way alter or diminish any obligation of Museum under the Lease terms and will constitute an acceptance or surrender. At the expiration or earlier terminati on of the Lease, the Museum shall surrender possession of the Pr emises in broom-clean condition and in good repair, normal wear and tear, casualties , condemnation, Hazardous Materials (for which Tenant is not responsib le under Section 25), alterations or other interior improvements which it is permitted to surre nder at the termination of this Lease and repairs that the Museum is not responsible for under this Lease, excepted.
46. CONFLICT OF INTEREST
Museum warrants and covenants that no offi cial, officer or employee of City nor any business entity in which any official, officer or employee of City is interested: (1) has been employed or retained to solicit or aid in the procuring of this Lease; or (2) will be Attachment A - Lease Agreement
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32 employed in the performance of this Lease without the divulgence of such fact to City. In the event that City determines that the employment of any such official, officer employee or business entity is not compatible with such official’s, officer’s or employee’s duties as an official, officer or employee, respective ly, of City, Museum upon request of City will immediately terminate such employment.
47. ALL COVENANTS ARE CONDITIONS
All provisions of this Lease are expressly made conditions.
48. PARTIES OF INTEREST
Nothing in this Lease, expressed or implied, is intended to, or will be construed to, confer upon or to give to any person or party other than City and Museum the covenants, terms, or condition hereof. All covenants, terms, and conditions in this Lease will be for the sole and exclusive benefit of City and Museum.
49. RECORDATION OF LEASE
Neither City nor Museum will record this Lease; however, a short-form memorandum of Lease may be recorded at City’s request.
50. QUIET POSSESSION
Upon Museum paying the Rent reserved hereunder and observing and performing all of the covenants, conditions and provisions on Museum’s part to be observed and performed hereunder, Museum will have quiet possession of the Premises for the entire Lease Term subject to all the provisions of this Lease.
51. AUTHORITY
City and Museum each represents and warrants that the individuals executing this Lease on its behalf are duly authorized to exec ute and deliver this Lease on behalf of such party and that this Lease is binding upon such party in accordance with its terms.
52. EXHIBITS TO LEASE
This Lease includes the following exhibits, which are attached hereto and by this reference incorporated into this Lease:
Exhibit A – Depiction of Building
Exhibit B – Depiction of Premises, Comm unity Room and Public Parkside Restroom
Exhibit C – License Agreement for City Archives Room
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33 Exhibit D – Tenant Work Letter
Exhibit E – Community Room Principles
Exhibit F – County Grant Agreements
Exhibit G – Maintenance Plan
53. COUNTERPARTS
This Lease may be executed in multiple counterparts, each of which will be an original and all of which together will constitute one instrument. [The remainder of the page is intentionally blank.]
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34 IN WITNESS WHEREOF, the parties have executed this Lease as of the Commencement Date.
City:
CITY OF PALO ALTO
B y :
City Manager
Museum:
PALO ALTO HISTORY MUSEUM
B y :
I t s :
B y :
I t s :
APPROVED AS TO FORM:
B y :
Assistant City Attorney
RECOMMENDED FOR APPROVAL:
B y :
Director of Administrative Services
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EXHIBIT A
DEPICTION OF THE BUILDING
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EXHIBIT B
DEPICTION OF PREMISES, COMMUNITY ROOM AND PUBLIC PARKSIDE
RESTROOM
[SEE ATTACHED]
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EXHIBIT C
LICENSE AGREEMENT FOR CITY ARCHIVES ROOM
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EXHIBIT D
TENANT WORK LETTER
[To be prepared, approved and attached by the Parties in accordance Section 10 following the Effective Date.]
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EXHIBIT E
COMMUNITY ROOM PRINCIPLES
• Community Rooms will be available for community use and will comprise the areas designated as “Community Center Use” in the color-coded floor plans of the Building attached as Exhibit B of this Lease.
• Use and hours of Community Rooms shoul d be consistent with other community center spaces within the City.
• Use of Community Rooms should not j eopardize the security or safety of Museum’s exhibits.
• Set-up and cleanup standards will seek to ensure that after events space is returned to pre-existing condition and order. Such standards will be determined based on the needs of the user of the Community Room(s), availability of resources to assist, and nature of the user. The Partie s’ intent is to confirm that the Community Rooms are common space and with that comes a mutual respect for use of and state of the space. • Fee revenues will be allocated annually on a pro rata and/or proportional basis between City and Museum based on the costs borne by the organizations for the total cost of the community use of the spaces (for example, sta ffing for operations, cost of minor repairs, and replacement of FF&E based on the original purchaser). • Revenues in excess of the total cost to support the use of the Community Rooms as allocated above will be used exclusively to fund the operations and maintenance of activities conducted by Museum at the Premises.
• City and Museum will meet at least annually to revise operations among the Parties and revisit proportional allocation of revenues (including but not limited to maintenance of a master calendar to ensure symbiotic coordination of space usage). • Users of the Community R ooms will have access to central facilities for restrooms etc. when using the Community Rooms.
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EXHIBIT F
COUNTY GRANT AGREEMENTS
Below is a listing of the grant agreements followed by the executed agreements:
Roof Grant 1
Grant Cycle 201
9 Amount: $102,992
Date Signed: 1/27/2020
Roof Grant 2
Grant Cycle 2019
Amount: $200,000
Date Signed: 1/27/2022
Elevator Grant
Grant Cycle 2022
Amount: $350,000
Date Signed: 9/15/2022
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GRANT FUNDING AGREEMENT
for the City of Palo Alto for the Roth Building Clay Tile Roof Restoration Project Fiscal Year 2019 HISTORIC HERITAGE GRANT FUNDS
GRANT FUNDING AGREEMENT
between the County of Santa Clara and the City of Palo Alto for the Roth Building Clay Tile Roof Restoration Project
(Fiscal Year 2019 HISTORIC HERITAGE GRANT FUNDS, $102,992)
This Grant Funding Agreement (“Agreement”), is made and entered into, as of the last date signed below by all parties (“Effective Date”) by and between the COUNTY OF SANTA CLARA, a political subdivision of the State of California (hereinafter referred to as the “County”), and the City of Palo Alto, a California municipality, with its primary offices located at 250 Hamilton Ave, Palo Alto, CA 94301 (“Grantee”).
RECITALS
WHEREAS, the Grantee submitted an application to the County’s Historical Heritage Commission (“Historical Heritage Commission”) for funding of the Roth Building Clay Tile Roof Restoration Project located at 300 Homer Avenue, Palo Alto, CA 94301, as more fully described in Attachment A “Scope of Work” incorporated and made a part of this Agreement by reference herein (“Project”);
WHEREAS, the Historical Heritage Commission, on May 16, 2019, reviewed the merits of the Grantee’s application and forwarded its recommendation to the Board of Supervisors that it approve the allocation of $102,992 from the Fiscal Year 2019 Historical Heritage Park Charter Development Funds (the “Grant”) to assist the Grantee with the Project;
WHEREAS, the Board of Supervisors reviewed the information provided in support of the Project and finds that the Project meets the requirements for use of Park Charter Development funds in Section 604 (b) of the County Charter; and,
WHEREAS, the Board of Supervisors on August 27, 2019, reviewed and approved the recommendation of the Historical Heritage Commission to allocate Grant funding to assist with the Project, which will acknowledge, preserve and commemorate the historical and cultural heritage of the Santa Clara Valley.
NOW, THEREFORE, in consideration of the mutual promises, covenants and conditions herein, the County and Grantee agree to the foregoing and as follows:
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GRANT FUNDING AGREEMENT
for the City of Palo Alto for the Roth Building Clay Tile Roof Restoration Project Fiscal Year 2019 HISTORIC HERITAGE GRANT FUNDS
SECTION I
GRANTEE RESPONSIBILITIES
Grantee warrants, represents and agrees that:
1. Recitals.
All Recitals contained herein above are incorporated into and made a part of this Agreement as terms and conditions.
2. General.
Grantee, at Grantee’s sole cost and expense, will perform or cause to be performed the Scope of Work described in Attachment A, and the Grantee shall act promptly and without delay with respect to such matters in relation to the Project. In performing the Project, the Grantee shall:
a) Prepare all environmental documents and take all other actions required for approval and completion of the Project pursuant to the California Environmental Quality Act, National Environmental Policy Act, and any rules and/or regulations promulgated thereunder and any other applicable laws. Grantee warrants, represents and agrees that, except where otherwise expressly prohibited by state or federal law, Grantee, as the applicant for any discretionary land use permit, development permit, license, authorization, entitlement or other approval from the County, will defend, indemnify and hold harmless the County and its officers, agents, employees, boards and commissions from, for and against any claim, action or proceeding brought by any person or entity ("third party") other than the Grantee against the County or its officers, agents, employees, boards or commissions that arises from or is in any way related to the approval, including but not limited to claims, actions or proceedings to attack, set aside, void or annul the approval. If a third party claim, action or proceeding is filed, the County will notify the applicant of the claim, action or proceeding and will cooperate fully in the defense. Notwithstanding the above, the County has the right to participate in the defense of any claim, action or proceeding. This indemnity shall not apply to the gross negligence or willful misconduct of the County, or of its agents, officers, employees, boards or commissions.
b) Secure all required approvals, including approvals from government agencies required for completion of the Project.
c) Publicly ac knowledge the Grant by providing a plaque permanently affixed to the building exterior, or on a prominent location on the Project site, visible to the public. The acknowledgement credit shall read: “Restoration made possible in part by a grant from the County of Santa Clara Parks and Recreation Department’s Historical Heritage Grant Program.” Grantee will obtain County Parks and Recreation Department review and approval of the plaque/sign prior to manufacture and installation.
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GRANT FUNDING AGREEMENT
for the City of Palo Alto for the Roth Building Clay Tile Roof Restoration Project Fiscal Year 2019 HISTORIC HERITAGE GRANT FUNDS
d) Publicly acknowledge the Grant by giving credit to the County in project-related materials including newsletters, brochures, and internet messages.
e) Submit a written progress report for the Project to the County Parks and Recreation Department no later than November 1 and May 1 of each year, until the Project is completed, and reimbursement received.
f) Provide any re quested documentation about the Project to the Historical Heritage Commission. This includes request for documents before construction work begins in order to ensure that the proposed Project is consistent with the United States Secretary of the Interior’s standards for rehabilitation, preservation and restoration of historic properties.
g) Make a presentation at a regularly scheduled Historical Heritage Commission meeting discussing the completed Project within three (3) months of Project completion. The Grantee shall print and distribute the same photos that were submitted with the final reimbursement request to the Commission members at the presentation.
3. Capital Contributions.
a) Grantee shall expend the Grant exclusively for third party expenses arising from services, permits, fees, labor, materials and equipment required for the Scope of Work specified in Attachment A (“Eligible Costs”), and consistent with Attachment B, Itemized Project Budget for completion of the Project. No contribution made by the County shall be used for Grantee’s internal salary or administrative expenses, including office overhead or expenses.
b) Grantee must successfully demonstrate expenditure of Grantee’s cash contribution funds to the County’s satisfaction prior to reimbursement through the Grant. Additional funds needed to complete the Project shall be identified in Attachment B, Itemized Project Budget.
c) County recognizes that the Project Budge t identified in Attachment B is an estimate and may include a contingency. To the extent Eligible Costs vary from this budget:
(i) For work to be performed that is funded by both Grantee and Grantor as reflected in Attachment B, if Grantee's Cash Contribution for any itemized work to be performed is reduced, then the Grant contribution shall be reduced by the same percentage; and
(ii) Costs between Project elements may be adjusted to reflect actual costs, however material changes (even if there is minor or no change in cost) that will affect the restoration or preservation of a historical element, or changes that would necessitate County Attachment A - Lease Agreement
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GRANT FUNDING AGREEMENT
for the City of Palo Alto for the Roth Building Clay Tile Roof Restoration Project Fiscal Year 2019 HISTORIC HERITAGE GRANT FUNDS
funding of a non-preservation element that the Grantee was financing with other funds, shall require Historical Heritage Commission approval. Grantee is solely responsible for
expenditures that may exceed the Grant amount.
4. Prevailing Wages.
The Project is a public work within the meaning of Labor Code Section 1720, to which the provisions of Labor Code Section 1770 et seq. apply. The Grantee shall comply with all of the applicable provisions of the Labor Code, including, but not limited to, payment, or cause payment to be made, of prevailing wages. The Grantee shall include prevailing wage requirements in all agreements with third parties for work or services needed to complete the Project. Grantee is hereby notified that the Director of Industrial Relations has ascertained the general prevailing rate of per diem wages and the rates for overtime and holiday work in the locality in which the work is to be performed for each craft, classification or type of worker needed to perform the work. Grantee is further notified that this project is subject to compliance monitoring and enforcement by the Department of Industrial Relations. Further information on Compliance Monitoring Unit requirements can be found at https://www.dir.ca.gov/dlse/cmu/cmu.html.
The Labor Code was recently amended to now require Grantee’s compliance with the Department of Industrial Relations (DIR) electronic certified payroll reporting (eCPR) requirements which took effect on January 1, 2016. No contract can be awarded unless the public works project has been registered with the Department of Industrial Relations.
Subcontractors used on the project must also comply. Additional information is available at http://www.dir.ca.gov/Public-Works/PublicWorks.html.
Grantee agrees to comply with all related provisions of the Labor Code, including but not limited to, the provisions of Labor Code Section 1775 relating to the payment of prevailing wages, Section 1777.5 relating to the employment of apprentices, Section 1811-1813 relating to the payment of Overtime and provisions pertaining to eCPR compliance.
4. Project Conformance with the Secretary of the Interior’s Standards.
The Project and the property upon which the Project is located must at all times conform to the Secretary of the Interior’s Standards for the Treatment of Historic Properties.
5. Timeline for Project Completion.
The Project must be completed before the expiration of the Term. If the Project cannot be completed within the required timeframe, Grantee may be required, at County’s sole election, to forfeit any and all unexpended Grant funds.
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GRANT FUNDING AGREEMENT
for the City of Palo Alto for the Roth Building Clay Tile Roof Restoration Project Fiscal Year 2019 HISTORIC HERITAGE GRANT FUNDS
6. Changes to Project Agreement Term.
Grantee must complete the Project and demonstrate the Project to be fully usable within the Term. The County may but is not required to, at its sole discretion, approve an extension for demonstrated delays not within the control of Grantee. The Grantee must request the extension in writing no later than three (3) months prior to the expiration of the Term. If the Project cannot be completed within the required timeframe, the Grantee shall not be entitled to receive unexpended Grant funds and the County has the sole discretion to terminate at the expiration of the Term.
SECTION II
OPERATION AND MAINTENANCE
Upon completion of the Project, the Grantee represents and warrants that it shall open the property upon which the Project is located to the public, and continuously operate and maintain the property and the Project for the benefit of the public for a period of at least twenty (20) years. On-going maintenance is solely the responsibility of the Grantee.
SECTION III
COMPENSATION / REIMBURSEMENT
1. Reimbursement Amount.
The County will reimburse the Grantee in an amount not to exceed the maximum Grant amount of $102,992 for Eligible Costs. County’s obligation to pay is expressly conditioned upon the Grantee’s demonstrated compliance with all of the conditions of this Agreement and the availability of Grant funds.
2. Invoice Requirements.
Grantee must keep accurate accounting records of all Project expenditures. Grant funds are issued on a reimbursement basis only, based upon completion of the Agreement requirements.
Grantee shall provide County a detailed, itemized invoice requesting reimbursement of Eligible Costs containing information noted below. The County shall only reimburse for approved costs.
If a reimbursement request is not complete, the County will return the request for payment with deficiencies noted. The County, in its sole discretion, may pay that part of the reimbursement request that is complete, or decline payment until the reimbursement request is complete. All reimbursement requests shall include the following information:
a) A letter itemizing Eligible Costs being claimed for reimbursement. Itemizations must clearly show the relationship between the Eligible Cost and the matters listed in Attachment A, Scope of Work.
b) Clear copies of invoices that are for the Project and addressed to the Grantee.
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GRANT FUNDING AGREEMENT
for the City of Palo Alto for the Roth Building Clay Tile Roof Restoration Project Fiscal Year 2019 HISTORIC HERITAGE GRANT FUNDS
c) Evidence that all invoices have been paid. For example, a clear copy of the front side of the check or warrant issued to pay said invoices, or a receipt evidencing such payment. Account statements will not be accepted.
d) Evidence that Grantee’s cash contribution identified in the recitals were provided and expended.
e) A report on the status of the Project, which shall include construction inspection reports.
Grantee may submit requests for reimbursement any time that Grantee has claimable expenditures exceeding $1,000. However, Grantee must send the County reimbursement requests on a quarterly basis when Grantee has claimable expenditures during that quarter that exceed $1,000. No advances of Grant funds will be issued. The quarterly submittal dates are January 1, April 1, July 1, and October 1. Upon Project completion, the Grantee may submit a final Grant payment request that must include all the items required in a standard reimbursement request and the following:
a) At least six (6) different photos of the Project; and, b) Demonstration of compliance with the acknowledgement required under Section I, Paragraph 2. c) (a photograph of the installed sign will suffice); and, c) A statement of how each one of the conditions noted in Section I, Paragraph 1. g) have been met.
If the County approves the reimbursement request, the County will provide payment to the Grantee within thirty (30) days of receipt of the request for reimbursement. The County of Santa Clara Parks and Recreation Department must have received Grantee’s request for reimbursement within the Term of this Agreement, or any written extension thereof. Upon expiration of the Term of this Agreement, any remaining unexpended Grant funds will remain with the County. It is the Grantee’s responsibility to keep track of the expiration of the Term of this Agreement and to ensure that the Project is completed, and reimbursements submitted in accordance with the terms of the Agreement.
3. Project Records, County Audit, and Inspection.
Grantee is responsible for maintaining fiscal controls and fund accounting procedures that shall show the following:
a) The disposition of the proceeds of Grant funds provided to Grantee;
b) The total costs of the Project;
c) The amount and nature of that portion of the Project cost supplied by other sources; and,
d) Any other records and controls that will facilitate an effective audit.
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GRANT FUNDING AGREEMENT
for the City of Palo Alto for the Roth Building Clay Tile Roof Restoration Project Fiscal Year 2019 HISTORIC HERITAGE GRANT FUNDS
Grantee will maintain Project financial records for audit purposes for three (3) years after completion of the Project or until all claims are settled, whichever occurs last. All records and data shall be available to County upon reasonable notice within five (5) working days of a request by County. Grantee shall repay County with interest at the rate earned on County’s investments for any unauthorized activities disclosed by audit or inspection, including the cost of the audit, within thirty (30) days of demand by the County.
Grantee will maintain Project records related to maintenance and access for audit purposes for twenty (20) years after completion of the Project. All records and data shall be available to the County upon reasonable notice within five (5) working days of a request by the County.
Audits may be conducted at the discretion of the County. The audits may take two forms; a walk through inspection of the Project and informal review of the Project records by County staff, and/or a formal audit conducted by either County staff or a consultant. Grantee should be prepared for either or both types of audits. A walk through inspection may occur at the beginning of a Project, prior to approval of the final reimbursement request, or at periodic intervals during construction and the period of time during which the playground must remain open and accessible to the public. A formal audit may occur as deemed necessary by the County.
SECTION IV
INDEMNIFICATION, INSURANCE AND RELEASE
1. During the construction phase, the Grantee, at its sole cost and expense, shall provide the insurance set forth in the Attachment C, Insurance. As insurance requirements may differ from those in effect at time of grant application, Grantee shall comply with requirements in effect at time of execution of this Project Agreement.
2. Except to the extent of Claims (defined below) resulting from the sole active gross negligence or willful misconduct of County, Grantee warrants, represents and agrees to protect, defend (with counsel reasonably acceptable to County) and hold County and County’s agents, directors, officers, Board of Supervisors, employees, representatives, contractors, successors and assigns and each of their respective partners, members, directors, officers, employees, representatives, agents, contractors, heirs, successors and assigns (collectively, the “County Indemnitees”) harmless and indemnify the County Indemnitees from and against all liabilities, damages, demands, penalties, costs, claims, losses, judgments, charges and expenses (including reasonable attorneys' fees, costs of court and expenses necessary in the prosecution or defense of any litigation including the enforcement of this provision) (collectively, “Claims”) arising from or in any way related to, directly or indirectly, (i) Grantee’s or Grantee’s Representatives’ use of the Grant funds, (ii) the conduct of Grantee’s operations or business, (iii) from any activity, work or thing done, permitted or suffered by Grantee in or about Grantee’s property wherever located, (iv) Grantee’s failure to perform any covenant or obligation under this Agreement, and/or (v) the Project.
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GRANT FUNDING AGREEMENT
for the City of Palo Alto for the Roth Building Clay Tile Roof Restoration Project Fiscal Year 2019 HISTORIC HERITAGE GRANT FUNDS
3. Except to the extent of Claims resulting from the sole active gross negligence or willful misconduct of County, to the fullest extent permitted by law, Grantee agrees that neither Grantee nor any of the Grantee’s Indemnitees shall at any time or to any extent whatsoever be liable, responsible or in any way accountable for any loss, liability, injury, death or damage to persons or property which at any time may be suffered or sustained by Grantee or by any person(s) whomsoever who may at any time be using, occupying or visiting the Grantee’s property wherever located. Notwithstanding any provision to the contrary contained in this Agreement, at no time shall County be responsible or liable to Grantee or its representatives for any lost profits, lost economic opportunities, or any form of consequential damage as the result of any actual or alleged breach by County of its obligations under this Agreement.
SECTION V
TERM OF AGREEMENT
This Agreement is effective on the Effective Date as stated above and shall remain in effect for twenty (20) years following project completion. The Agreement shall then expire on an agreed upon date by the parties or as otherwise determined by County in its sole discretion. County reserves the right to cancel or terminate this Agreement at any time without any additional obligation or liability.
SECTION VI
GRANTEE AUTHORIZED SIGNATURES
Ed Shikada, City Manager has been authorized to execute this Agreement on behalf of the Grantee.
SECTION VII
NOTICES
Any notices provided pursuant to this Agreement shall be sent by regular mail to the respective parties addressed as follows:
COUNTY OF SANTA CLARA GRANTEE
Don Rocha, Director
Parks and Recreation Department
298 Garden Hill Drive
Los Gatos, CA 95032
Phone: (408) 355-2220
Ed Shikada
City Manager
250 Hamilton Ave, Palo Alto, CA 94301
650-329-2280
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GRANT FUNDING AGREEMENT
for the City of Palo Alto for the Roth Building Clay Tile Roof Restoration Project Fiscal Year 2019 HISTORIC HERITAGE GRANT FUNDS
SECTION VIII
MISCELLANEOUS
1. Entire Agreement . This Agreement, including its attachments as referenced herein, contains the entire agreement by and between the Parties respecting the matters herein set forth and supersedes all prior agreements between the Parties hereto respecting such matters, if any, there being no other oral or written promises, conditions, representations, understandings, warranties or terms of any kind as conditions or inducements to the execution hereof and none have been relied upon by either Party.
2. Headings . Section headings shall not be used in construing this Agreement.
3. No Waiver . Except as herein expressly provided, no waiver by a Party of any breach of this Agreement by the other Party shall be deemed to be a waiver of any other breach by such other Party (whether preceding or succeeding and whether or not of the same or similar nature), and no acceptance of payment or performance by a Party after any breach by the other Party shall be deemed to be a waiver of any breach of this Agreement or of any representation or warranty hereunder by such other Party whether or not the first party knows of such breach at the time it accepts such payment or performance.
4. Governing Law . This Agreement, and all the rights and duties of the Parties arising from or relating in any way to the subject matter of this Agreement contemplated by it, shall be governed by, construed and enforced in accordance with the laws of the State of California (excluding any conflict of laws provisions that would refer to and apply the substantive laws of another jurisdiction). Any suit or proceeding relating to this Agreement, including mediation or other alternative dispute resolution proceedings, shall be brought only in Santa Clara County, California. EACH OF THE PARTIES CONSENT TO THE EXCLUSIVE PERSONAL
JURISDICTION AND VENUE OF THE COURTS, STATE AND FEDERAL, LOCATED IN SANTA CLARA COUNTY, CALIFORNIA.
5. Written Modifications . No agreement, amendment, modification, understanding or waiver of or with respect to this Agreement or any term, provision, covenant or condition hereof, nor any approval or consent given under or with respect to this Agreement, shall be effective for any purpose unless agreed to in writing and signed by both Parties to this Agreement.
6. Successors and Assigns . The provisions of this Agreement shall be binding upon and inure to the benefit of both parties and their successors and assigns.
7. Construction . This Agreement shall not be construed more strongly against either party regardless of who is more responsible for its preparation.
8. Illegality or Unenforceability . If any provision of this Agreement, or the application of it to any person or circumstances, shall to any extent be invalid, void or unenforceable, the remainder of this Agreement, or the application of this provision to any person or circumstances other than those as to which it is invalid, void or unenforceable, shall not be affected, and each Attachment A - Lease Agreement
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GRANT FUNDING AGREEMENT
for the City of Palo Alto for the Roth Building Clay Tile Roof Restoration Project Fiscal Year 2019 HISTORIC HERITAGE GRANT FUNDS
provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law except where such illegal, invalid, void or unenforceable provision is material to the Agreement in which case this Agreement shall be void.
9. Conflict of Interest . Grantee represents, warrants and agrees that it shall comply, and require its employees, agents, representatives, contractors, consultants, sub-consultants and subcontractors to comply, with all applicable (i) requirements governing avoidance of impermissible client conflicts; and (ii) federal, state and local conflict of interest laws and regulations including, without limitation, California Government Code section 1090 et. seq., the California Political Reform Act (California Government Code section 87100 et. seq.) and the regulations of the Fair Political Practices Commission concerning disclosure and disqualification (2 California Code of Regulations section 18700 et. seq.). Failure to do so constitutes a material breach of this Agreement and is grounds for immediate termination by County of this Agreement.
10. Funding Contingency. This Agreement is contingent upon the appropriation of sufficient funding by County for the obligations and responsibilities of County covered by this Agreement. If funding is reduced or deleted by the County for the obligations or responsibilities of County covered by this Agreement, then County may terminate this Agreement at its election without liability or obligation.
11. California Public Records Act . County is a public agency subject to the disclosure requirements of the California Public Records Act (“CPRA”). If Grantee’s proprietary information is contained in documents submitted to County, and Grantee claims that such information falls within one or more CPRA exemptions, then Grantee must clearly mark such information “CONFIDENTIAL AND PROPRIETARY,” and identify the specific lines containing the information. In the event of a request for such information, County will use reasonable efforts to provide notice to Grantee prior to such disclosure. If Grantee contends that any documents are exempt from the CPRA and wishes to prevent County disclosure, Grantee is required to obtain a protective order, injunctive relief or other appropriate remedy from a court of law in Santa Clara County before County responds to the CPRA request. If Grantee fails to obtain such remedy, Grantee will have forever waived its right to dispute the disclosure and County will disclose, at its election, the requested information even if marked “CONFIDENTIAL AND PROPRIETARY”, in which case neither Grantee nor any third parties will have any right or claim against County for such disclosure. If County elects to not disclose the information or is precluded from disclosing the information because of a court order or other remedy obtained by Grantee or any Grantee representative, then Grantee represents, warrants and agrees that it will defend, indemnify and hold harmless the County for and against all claims, causes of action, liabilities, relief, injunctions, penalties, attorneys’ fees, court costs, costs of litigation including discovery, settlement, and other remedies obtained or sought by any third party claiming such information should have or are required to be disclosed.
12. Relationship of Parties . The Parties acknowledge and agree that nothing set forth in this Agreement shall be deemed or construed to render the Parties as joint venturers, partners, agents, a joint enterprise, employer-employee, lender-borrower or contractor. Grantee shall have no authority to employ any person as employee or agent on behalf of County for any purpose. Neither Grantee nor any person using or involved in or participating in any actions or Attachment A - Lease Agreement
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GRANT FUNDING AGREEMENT
for the City of Palo Alto for the Roth Building Clay Tile Roof Restoration Project Fiscal Year 2019 HISTORIC HERITAGE GRANT FUNDS
inactions relating to this Agreement shall be deemed an employee or agent of County, nor shall any such person or entity represent himself, herself or itself to others as an employee or agent of County.
13. No Third Party Rights . The Parties intend not to create rights in, or to grant remedies to, any third party as a beneficiary of this Agreement or of any duty, covenant, obligation, or undertaking established herein. This Agreement shall not be construed as nor deemed to be an agreement for the benefit of any third party or parties, and no third party or parties shall have any right of action herein for any cause whatsoever.
14. Counterparts. This Agreement may be executed in several counterparts, and all of such counterparts so executed together shall be deemed to constitute one and the same agreement, and each such counterpart shall be deemed to be an original. Facsimile or electronic signatures shall have the same legal effect as original or manual signatures.
15. Survival . Those provisions which by their nature should survive termination, cancellation or expiration of this Agreement, shall so survive.
16. Equal Opportunity/Non-Discrimination. No party contracting with the County will discriminate against any subcontractor, employee, or applicant for employment, because of age, race, color, national origin, ancestry, religion, sex/gender, sexual orientation, mental disability, physical disability, medical condition, political beliefs, organizational affiliations, or marital status. It is further the policy of the County that no party contracting with the County may discriminate in the provision of services under the contract because of age, race, color, national origin, ancestry, religion, sex/gender, sexual orientation, mental disability, physical disability, medical condition, political beliefs, organizational affiliations, or marital status.
//
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Attachment A - Lease Agreement
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GRANT FUNDING AGREEMENT
for the City of Palo Alto for the Roth Building Clay Tile Roof Restoration Project Fiscal Year 2019 HISTORIC HERITAGE GRANT FUNDS
17. Signatories. The undersigned signatories each represent and warrant that they are authorized to execute this Agreement for the party on whose behalf they are signing.
IN WITNESS WHEREOF , the parties have executed this Historical Heritage Project Agreement as of the Effective Date as provided above.
SIGNATORIES:
CITY OF PALO ALTO
__________________________ ____________________
ED SHIKADA
City Manager Date
APPROVED AS TO FORM
__________________________
Sandra Lee
City Attorney or designee
COUNTY OF SANTA CLARA
__________________________ ____________________
JEFFREY V. SMITH, M.D., J.D. Date
County Executive
APPROVED AS TO FORM & LEGALITY
__________________________
TONY LOPRESTI
Deputy County Counsel
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GRANT FUNDING AGREEMENT
for the City of Palo Alto for the Roth Building Clay Tile Roof Restoration Project Fiscal Year 2019 HISTORIC HERITAGE GRANT FUNDS
ATTACHMENT A
SCOPE OF WORK
GENERAL PROJECT DESCRIPTION
Restore and Repair the Original Tile Roof of the Historic Roth Building.
ITEMIZED SCOPE OF WORK BEING FUNDED BY GRANT
The Project Applicant shall:
WORK TO BE PERFORMED
Remove, repair and replace clay tiles. Replacement tiles, if needed, to be acquired from those salvaged from other Palo Alto-owned Birge Clark buildings or a compatible modern fabricator.
All work will be performed to meet the terms of the Historical Heritage Project Agreement, and the Historical Heritage Grant Program Application and Procedures, including any and all revisions thereto.
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GRANT FUNDING AGREEMENT
for the City of Palo Alto for the Roth Building Clay Tile Roof Restoration Project Fiscal Year 2019 HISTORIC HERITAGE GRANT FUNDS
ATTACHMENT B
ITEMIZED PROJECT BUDGET CORRESPONDING WITH ATTACHMENT A
WORK TO BE
PERFORMED
GRANTEE
CASH
CONTRIBUTION
GRANT TOTAL
Remove, repair and replace
clay roof tiles. $0 $102,992 $102,992
TOTAL PROJECT
AMOUNT $0 $102,992 $102,992
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GRANT FUNDING AGREEMENT
for the City of Palo Alto for the Roth Building Clay Tile Roof Restoration Project Fiscal Year 2019 HISTORIC HERITAGE GRANT FUNDS
ATTACHMENT C
CURRENT CERTIFICATE OF INSURANCE
The Project Applicant shall provide evidence of meeting the insurance requirements as shown in the County’s Insurance Exhibit attached.
The Project Applicant shall attach an insurance certificate to the Project Agreement when submitting their signed Agreement to the County for execution.
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INSURANCE REQUIREMENTS FOR
GRANT AGREEMENT
Indemnity
The Grantee shall indemnify, defend, and hold ha rmless the County of Santa Clara (hereinafter “County”), its officers, agents and employees from a ny claim, liability, loss, injury or damage arising out of, or in connection with, performance of this Agreement by Grantee and/or its agents, employees or sub-contractors, excepting only loss, injury or damage caused by the sole negligence or willful misconduct of personnel empl oyed by the County. It is the intent of the parties to this Agreement to provide the broadest possible coverage for the County. The Grantee shall reimburse the County for all costs, attorneys' fees , expenses and liabilities incurred with respect to any litigation in which the Grantee con tests its obligation to indemnify, defend and/or hold harmless the County under this Agreement and does not prevail in that contest.
Insurance
Without limiting the Grantee's indemnification of the County, the Grantee shall provide and maintain at its own expense, during the term of this Agreement, or as may be further required herein, the following insurance coverages and provisions:
A. Evidence of Coverage
Prior to commencement of this Agreement, the Grantee shall provide a Certificate of Insurance certifying that coverage as required herein has been obtained. Individual endorsements executed by the insurance carrier shall accompany the certificate. In addition, a certified copy of the policy or policies shall be provided by the Grantee upon request.
This verification of coverage shall be sent to the requesting County department, unless otherwise directed. The Grantee shall not receive a Notice to Proceed with the work under the Agreement until it has obtained all insurance required and such insurance has been approved by the County. This approval of insurance shall neither relieve nor decrease the liability of the Grantee.
B. Qualifying Insurers
All coverages, except surety, shall be issued by companies which hold a current policy holder's alphabetic and financial size category rating of not less than A-V, according to the current Best's Key Rating Guide or a company of equal financial stability that is approved by the County's Insurance Manager.
C. Notice of Cancellation
All coverage as required herein shall not be canceled or changed so as to no longer meet the specified County insurance requirements without 30 days' prior written notice of such cancellation or change being delivered to the County of Santa Clara or their designated agent.
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D. Insurance Required
1. Commercial General Liability Insurance - for bodily injury (including death) and property damage which provides limits as follows:
a. Each occurrence - $1,000,000
b. General aggregate - $1,000,000
c. Products/Completed Operations aggregate - $1,000,000
d. Personal Injury - $1,000,000
2. General liability coverage shall include:
a. Premises and Operations
b. Produc ts/Completed
c. Personal Injury liability
d. Severability of interest
3. General liability coverage shall include the following endorsement, a copy of which shall be provided to the County:
Additional Insured Endorsement, which shall read:
“County of Santa Clara, and members of the Board of Supervisors of the County of Santa Clara, and the officers, agents, and employees of the County of Santa Clara, individually and collectively, as additional insureds.”
Insurance afforded by the additional insured endorsement shall apply as primary insurance, and other insurance maintained by the County of Santa Clara, its officers, agents, and employees shall be excess only and not contributing with insurance provided under this policy. Public Entities may also be added to the additional insured endorsement as applicable and the Grantee shall be notified by the contracting department of these requirements.
4. Fidelity Bond
Before receiving any reimbursement under this Agreement, Grantee will furnish County with evidence that all officials, employees, and agents handling or having access to funds received or disbursed under this Agreement, or authorized to sign or countersign checks, are covered by a BLANKET FIDELITY BOND in an amount Attachment A - Lease Agreement
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of AT LEAST fifteen percent (15%) of the maximum financial obligation of the County cited herein. If such bond is canceled or reduced, Grantee will notify County immediately, and County may withhold further payment to Grantee until proper coverage has been obtained. Failure to give such notice may be cause for termination of this Agreement, at the option of County.
E. Special Provisions
The following provisions shall apply to this Agreement:
1. The foregoing requirements as to the types and limits of insurance coverage to be maintained by the Grantee and any approval of said insurance by the County or its insurance consultant(s) are not intended to and shall not in any manner limit or qualify the liabilities and obligations otherwise assumed by the Grantee pursuant to this Agreement, including but not limited to the provisions concerning indemnification.
2. The County acknowledges that some insurance requirements contained in this Agreement may be fulfilled by self-insurance on the part of the Grantee. However, this shall not in any way limit liabilitie s assumed by the Grantee under this Agreement. Any self-insurance shall be approved in writing by the County upon satisfactory evidence of financial capacity. Grantees obligation hereunder may be satisfied in whole or in part by adequately funded self-insurance programs or self- insurance retentions.
3. Should any of the work under this Agreement be sublet, the Grantee shall require each of its subcontractors of any tier to carry the aforementi oned coverages, or Grantee may insure subcontractors under its own policies.
Attachment A - Lease Agreement
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ANY PROPRIETOR/PARTNER/EXECUTIVE
OFFICER/MEMBER EXCLUDED?
INSR ADDL SUBR
LTR INSD WVD
PRODUCER CONTACT
NAME:
FAXPHONE
(A/C, No):(A/C, No, Ext):
E-MAIL
ADDRESS:
INSURER A :
INSURED INSURER B :
INSURER C :
INSURER D :
INSURER E :
INSURER F :
POLICY NUMBER POLICY EFF POLICY EXPTYPE OF INSURANCE LIMITS(MM/DD/YYYY) (MM/DD/YYYY)
AUTOMOBILE LIABILITY
UMBRELLA LIAB
EXCESS LIAB
WORKERS COMPENSATION
AND EMPLOYERS' LIABILITY
DESCRIPTION OF OPERATIONS / LOCATIONS / VEHICLES (ACORD 101, Additional Remarks Schedule, may be attached if more space is required)
AUTHORIZED REPRESENTATIVE
EACH OCCURRENCE $
DAMAGE TO RENTEDCLAIMS-MADE OCCUR $PREMISES (Ea occurrence) MED EXP (Any one person) $
PERSONAL & ADV INJURY $
GEN'L AGGREGATE LIMIT APPLIES PER: GENERAL AGGREGATE $
PRO-POLICY LOC PRODUCTS - COMP/OP AGGJECT
OTHER: $
COMBINED SINGLE LIMIT
$(Ea accident)
ANY AUTO BODILY INJURY (Per person) $
OWNED SCHEDULED
BODILY INJURY (Per accident) $AUTOS ONLY AUTOS
HIRED NON-OWNED PROPERTY DAMAGE
$AUTOS ONLY AUTOS ONLY (Per accident)
$
OCCUR EACH OCCURRENCE
CLAIMS-MADE AGGREGATE $
DED RETENTION $
PER OTH-
STATUTE ER
E.L. EACH ACCIDENT
E.L. DISEASE - EA EMPLOYEE $
If yes, describe under
E.L. DISEASE - POLICY LIMITDESCRIPTION OF OPERATIONS below INSURER(S) AFFORDING COVERAGE NAIC #
COMMERCIAL GENERAL LIABILITY
Y / N
N / A
(Mandatory in NH)
SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE
THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORDANCE WITH THE POLICY PROVISIONS.
THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS
CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS.
THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS
CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER.
IMPORTANT: If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must have ADDITIONAL INSURED provisions or be endorsed.
If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s).
COVERAGES CERTIFICATE NUMBER: REVISION NUMBER:
CERTIFICATE HOLDER CANCELLATION
© 1988-2015 ACORD CORPORATION. All rights reserved.ACORD 25 (2016/03)
CERTIFICATE OF LIABILITY INSURANCE
DATE (MM/DD/YYYY)
$
$
$
$
$The ACORD name and logo are registered marks of ACORD
10/3/2019
(858) 677-9409 (603) 875-1213
XXXXXX
Palo Alto History Museum
P O Box 676
Palo Alto, CA 94302
A 1,000,000
X 2019-22041 10/10/2019 10/10/2020 500,000
20,000
1,000,000
2,000,000
2,000,000
LIQUOR 1,000,000
1,000,000
A
2019-22041 10/10/2019 10/10/2020
A Directors & Officers 2019-22041-DO 10/10/2019 Occur 1M/ Agg 2,000,000 County of Santa Clara, and members of the Board of Supervisors of the County of Santa Clara, and the officers, agents, and employees of the County of Santa Clara, individually and collectively, are named Additional insured as respects to General Liability so long as a written contract or agreement to such exists with the named insured prior to a loss, per attached endorsement CG 20 26 04 13.
County of Santa Clara
Attn: Santa Clara County Clerk
70 W. Hedding
San Jose, CA 95110
PALOALT-01 ABIGAILTARVER
NFP Property & Casualty Services, Inc.
160 West Santa Clara Street
Suite 575
San Jose, CA 95113
Tami O'Neill
[email protected]
Nonprofts' Insurance Alliance of California Inc.
10/10/2020
X
X
X
XX
Attachment A - Lease Agreement
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POLICY NUMBER: COMMERCIAL GENERAL LIABILITY
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.
ADDITIONAL INSURED – DESIGNATED
PERSON OR ORGANIZATION
CG 20 26 04 13
2019-22041
Named Insured: Palo Alto History Museum
Any person or organization that you are required to add as an additional insured on this policy, under a written contract or agreement currently in effect, or becoming effective during the term of this policy. The additional insured status will not be afforded with respect to liability arising out of or related to your activities as a real estate manager for that person or organization.
Name Of Additional Insured Person(s) Or Organization(s):
SCHEDULE
COMMERCIAL GENERAL LIABILITY COVERAGE PART
This endorsement modifies insurance provided under the following:
Information required to complete this Schedule, if not shown above, will be shown in the Declarations.
Section II – Who Is An Insured is amended to
include as an additional insured the person(s) or
organization(s) shown in the Schedule, but only
with respect to liability for "bodily injury", "property damage" or "personal and advertising injury"
caused, in whole or in part, by your acts or
omissions or the acts or omissions of those acting
on your behalf:
1. In the performance of your ongoing operations;
or
2. In connection with your premises owned by or
rented to you.
However:
1. The insurance afforded to such additional
insured only applies to the extent permitted by
law; and
2. If coverage provided to the additional insured is
required by a contract or agreement, the
insurance afforded to such additional insured
will not be broader than that which you are
required by the contract or agreement to
provide for such additional insured.
A. B. With respect to the insurance afforded to these
additional insureds, the following is added to
Section III – Limits Of Insurance:
If coverage provided to the additional insured is
required by a contract or agreement, the most we
will pay on behalf of the additional insured is the
amount of insurance:
1. Required by the contract or agreement; or
2. Available under the applicable Limits of
Insurance shown in the Declarations;
whichever is less.
This endorsement shall not increase the
applicable Limits of Insurance shown in the
Declarations.
© Insurance Services Office, Inc., 2012 Page 1 of 1CG 20 26 04 13 Attachment A - Lease Agreement
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HISTORIC GRANT PROGRAM FUNDING AGREEMENT
BY AND BETWEEN
THE CITY OF PALO ALTO AND THE COUNTY OF SANTA CLARA
This Funding Agreement (“Agreement”) is made and entered into by and between the County of Santa Clara, a political subdivision of the State of California (hereinafter referred to as the “County”) and the City of Palo Alto, a municipal corporation (hereinafter referred to as “Grantee”). County and Grantee are each a “Party” and collectively the “Parties” to this Agreement.
RECITALS
WHEREAS, Grantee signed and submitted a Historic Grant Program application (“Application”) to the County requesting grant funding for Restoration of the Original Clay Tile Roof of the Historic Roth Building (“Project”), which is incorporated herein and made a part of this Agreement by this reference (Exhibit B).
County materially relies upon the statements and documentation submitted by Grantee in said Application in its entirety and based upon this material reliance County is willing to enter into this Agreement with Grantee;
WHEREAS, Grantee represents and warrants to County that Grantee, by itself and through its contractors and consultants, has experience, expertise, financial capability and ability to complete the Project contemplated herein and to fully perform all obligations and responsibilities under this Agreement to completion;
WHEREAS, the Board of Supervisors, wishes to assist Grantee in completing the Project which serves as a capital improvement to the Historic Roth Building, home to the Palo Alto History Museum on a continuous uninterrupted basis for at least twenty (20) years (collectively, the “Public Purpose”);
WHEREAS, the Board of Supervisors has approved the award of Grant Funds (as defined herein below) to Grantee provided Grantee complies with all terms and conditions of this Agreement and has found that the Project will serve a public purpose of general County interest as a capital improvement to the Historic Roth Building, home to the Palo Alto History Museum; and,
WHEREAS, the award of the Grant Funds is contingent upon Grantee complying with all terms and conditions of this Agreement, which includes Grantee satisfying all of the Grant Scope/Cost Estimate Form representations contained in Appendix D (as amended) of Grantee’s Application, which is included within Exhibit B herein below.
Attachment A - Lease Agreement
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Historic Grant Agreement (Program One-Round 1) CAPITAL
By and between the City of Palo Alto and the County of Santa Clara for the ‘Restoration of the Original Clay Tile Roof of the Historic Roth Building’ Project
NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledge, County and Grantee agree to the foregoing and as follows:
1. All Recitals contained herein above are incorporated into and made a part of this Agreement as terms and conditions.
2. Grantee may utilize the Grant Funds specified in Section 4 of this Agreement to complete the Project within three years from the Effective Date of this Agreement and shall return any unspent funds at the end of this three-year period to County.
3. Grantee warrants and represents that it shall expend all Grant Funds in accordance with the terms of this Agreement and the Historic Grant Program Procedural Guide (“Guide”) (Exhibit A) attached and incorporated herein by this reference. In the event that there are any inconsistencies between the Agreement and the Guide, the provisions of this Agreement shall control.
4. Grantee shall acknowledge County’s contribution to the Project in accordance with the requirements of the Guide; the acknowledgement shall first be reviewed and approved by County before it is installed or displayed.
SECTION 1. PUBLIC PURPOSES
If applicable, Grantee represents and warrants that it will use best efforts to secure all the requisite rights and entitlements from public agencies, local government, and the property owner (if any) to carry out the Project. Grantee further represents and warrants that it will ensure that at all times applicable to the Project, it will be open and available to the public on an equal basis, and accessible by all members of the public.
SECTION 2. GRANTEE RESPONSIBILITIES
County funding is subject to the following conditions, as applicable to the Project:
(1) Responsibilities of Grantee. Grantee shall ensure that the Project is completed and operated in compliance with all requirements of the Guide. The Project shall be fully completed and operational within three years from the date of execution of this Agreement. Grantee shall act promptly and without delay with respect to such matters in relation to the Project in accordance with the following (as applicable to the Project):
a. Comply with all laws and Guide requirements, including but not limited to all environmental, health, and safety laws and all provisions of the California Public Contracts Code and Labor Code.
b. Comply with best industry practices and manufacturer design and construction specifications.
Attachment A - Lease Agreement
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Historic Grant Agreement (Program One-Round 1) CAPITAL
By and between the City of Palo Alto and the County of Santa Clara for the ‘Restoration of the Original Clay Tile Roof of the Historic Roth Building’ Project
c. Prepare plans and specifications and construction of the Project using qualified persons with the requisite skills and expertise to complete the Project. d. Prepare all environmental documents required for completion of the Project pursuant to the California Environmental Quality Act, National Environmental Policy Act, and any rules and/or regulations promulgated thereunder, where applicable. No funds will be dispersed until these environmental requirements have been fully met.
e. Secure all approvals, permits, and certifications by government agencies required for completion of the Project
f. Secure performance and payment bonds in 100% of the amount of any construction contract to assure satisfactory completion of the Project, and the payment of laborers and suppliers of material.
g. Each year, during completion of the Project, Grantee shall cause a report to be made to the County Board of Supervisors showing progress made towards completion of the Project.
(2) Capital Contributions by Parties to Agreement
a. Grantee shall ensure that any funds in excess of the Grant Funds needed to complete the Project are secured by Grantee and not by County.
b. No Grant Funds may be used for office space, salary, or administrative expenses incidental to the Project.
(3) Budget Contingency. Performance and/or payment by County pursuant to this Agreement is contingent upon the appropriation of sufficient funds by County for the work covered by this Agreement. If funding is reduced or eliminated by County for the work covered by this Agreement, the County may, at its option and without penalty or liability, terminate this Agreement or offer an amendment to this Agreement indicating the reduced amount. County is under no obligation to fund the Project.
SECTION 3. OPERATION AND MAINTENANCE
Upon completion of Project, Grantee warrants, represents, and agrees that it, or its authorized representatives, will operate, manage, and maintain the Project for a period of at least twenty (20) consecutive years from the effective date of this Agreement, for Public purposes, open to the public and for the benefit of the general public. Ongoing operation, management, and maintenance is solely the responsibility of the Grantee acting by itself or through its authorized representatives.
Attachment A - Lease Agreement
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Packet Pg. 136
Historic Grant Agreement (Program One-Round 1) CAPITAL
By and between the City of Palo Alto and the County of Santa Clara for the ‘Restoration of the Original Clay Tile Roof of the Historic Roth Building’ Project
SECTION 4. COMPENSATION
(1) County shall provide Grantee Two Hundred Thousand Dollars ($200,000) (“Grant Funds”) only in accordance with the reimbursement provisions of the Guide. Grantee shall thoroughly review and develop an understanding of the obligations set out in the Guide, including but not limited to the “Reimbursements” and “Final Reimbursement” sections.
The Compensation in this Agreement shall be subject to the Budget Contingency in Section 2, paragraph 3.
(2) If the amount of compensation in Section 4.1 of this Agreement varies from the Project budget identified in Appendix D of the Application, then a revised grant scope and cost estimate form shall be attached hereto as “Amended Appendix D” and “Amended Appendix E” to Exhibit B. Amended Appendix D shall set forth the grant scope and cost estimate based on the Grant Funds awarded. Amended Appendix D and Amended Appendix E shall replace Appendix D and Appendix E to Exhibit B.
(3) Any Grant Funds not expended pursuant to the terms and conditions of this Agreement shall be returned to County immediately. In addition, if, for whatever reason, the Grantee is unable to ensure the completion of the Project or is unable to ensure that the Project is carried out, operated, managed, or maintained for the time period specified in this Agreement, Grantee shall immediately refund to the County all the Grant Funds, even if some or all of such Grant Funds have already been expended for the Project.
(4) At the sole discretion of the County, advance funding may be provided in accordance with the terms of the Guide.
SECTION 5. RECORDS RETENTION AND AUDIT
(1) Grantee shall maintain Project records for audit purposes for three (3) years after completion of the Project or until all claims are settled, whichever occurs last. All records and data shall be available to County upon reasonable notice within five (5) working days of a request by County. Grantee shall repay County with interest at the rate earned on County investments for any unauthorized activities disclosed by audit or inspection, including the cost of the audit, within thirty (30) calendar days of demand by County.
(2) Audits may be conducted at the discretion of the Santa Clara County Parks and Recreation Department (“Department”). The audits may take two forms; a walk-through inspection of the Project premises, if any, and informal review of the Project records by Department staff, and/or a formal financial audit conducted by either County staff or a consultant. Grantee shall be prepared for either or both types of audits. A walk-through inspection may occur at the beginning of a Project, prior to approval of the final reimbursement request, or at periodic intervals throughout the Project. A formal financial audit may occur as deemed necessary by the Department.
Attachment A - Lease Agreement
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Historic Grant Agreement (Program One-Round 1) CAPITAL
By and between the City of Palo Alto and the County of Santa Clara for the ‘Restoration of the Original Clay Tile Roof of the Historic Roth Building’ Project
SECTION 6. INDEMNIFICATION.
Grantee covenants, warrants, represents, and agrees that it shall indemnify, defend, save, and hold harmless the County and all of its employees, officers, directors, attorneys, agents, contractors, successors, and assigns in accordance with the indemnification provision of Exhibit C, which is incorporated herein and made a part of this Agreement by this reference.
SECTION 7. TERM OF AGREEMENT
This Agreement is effective as of the date of its full execution and shall terminate three (3) years following date of full execution, unless otherwise terminated earlier pursuant to the terms of this Agreement.
SECTION 8. NOTICES
Any notices provided herein shall be deemed received when mailed or delivered to the respective parties addressed as follows:
County of Santa Clara City of Palo Alto
Director
County of Santa Clara Parks and
Recreation Department
298 Garden Hill Drive
Los Gatos, CA 95032
Phone: (408) 355-2220
Ed Shikada
City Manager
City of Palo Alto
250 Hamilton
Palo Alto, CA 94301
Phone: (650) 329-2634
SECTION 9. MISCELLANEOUS
(1) Entire Agreement. This document represents the entire agreement between the parties in relation to the subject matter contained herein. All prior negotiations and written and/or oral agreements between the Parties with respect to the subject matter of the Agreement are merged into this Agreement.
(2) Amendments. This Agreement may only be amended by a written instrument signed by authorized representatives of both parties.
(3) Conflict of Interest. Grantee shall comply, and require its contractors, employees, agents, representatives, subcontractors and consultants to comply, with all applicable (i) requirements governing avoidance of impermissible client conflicts; and (ii) federal, state and local conflict of interest laws and regulations including, without limitation, California Government Code section 1090 et. seq., the California Political Reform Act (California Government Code section 87100 et. seq.) and the regulations of the Fair Political Practices Commission concerning disclosure and disqualification (2 California Code of Regulations section 18700 et. seq.). Failure to do so constitutes a material breach of this Agreement and is grounds for immediate termination of this Agreement by the County.
Attachment A - Lease Agreement
6.a
Packet Pg. 138
Historic Grant Agreement (Program One-Round 1) CAPITAL
By and between the City of Palo Alto and the County of Santa Clara for the ‘Restoration of the Original Clay Tile Roof of the Historic Roth Building’ Project