Agenda packet — Palo Alto City Council, June 12, 2023 (part 2 of 4)

AMENDMENT NO. 2 TO CONTRACT NO. C18170810C

BETWEEN THE CITY OF PALO ALTO AND

GRASSROOTS ECOLOGY

This Amendment No. 2 (this “Amendment”) to Contract No. C18170810C (the “Contract” as defined below) is entered into as of June 12, 2023, by and between the C ITY OF PALO ALTO, a California chartered municipal corporation ( “CITY”), and GRASSROOTS ECOL OGY, a non-profit organization, located at 3921 East Bayshore Road, Palo Alto, CA 94303 (“CONTRACTOR”). CITY and CONTRACTOR 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 ACTERRA, the original contractor (“ORIGINAL CONTRACTOR”) and CITY on May 21, 2018, for services as detailed therein.

B. The Parties entered into Amendment No. 1 to reflect that the CONTRACTOR (1) is GRASSROOTS ECOLOGY as of the Effective Date of the Assignment and Assumption A greement dated September 5, 2018; (2) to attach CONTRACTOR’S insurance documentation and W-9 form to the Contract; and (3) to add CONTRACTOR’S intention of using volunteers pursuant to Labor code section 1720.4, as detailed therein.

C. The Parties now wish to amend the Contract in order to extend the Contract term by three (3) months through September 30, 2023 and increase compensation accordingly by Fifteen Thousand Five Hundred Twenty Dollars ($15,520) from Two Hundred Ninety-Eight Thousand Four Hundred Fifty-Six Dollars ($298,456) to Three Hundred Thirteen Thousand Nine Hundred Seventy- Five Dollars ($313,975), as detailed herein.

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. C18170810C between CONSULTANT and CITY, dated May 21, 2018, as amended by:

Amendment No.1, dated September 10, 2018

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 3 “TERM” of the Contract is hereby amended to read as follows:

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Amendment No. 2 to
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“The term of this Agreement is from July 1, 2018 to September 30, 2023 inclusive, subject to the provisions of Sections R and W of the General Terms and Conditions.”

SECTION 3. Section 5 “COMPENSATION FOR ORIGINAL TERM” of the Contract is hereby amended to read as follows:

“COMPENSATION FOR ORIGINAL TERM. CITY shall pay and CONTRACTOR agrees to accept as not -to-exceed compensation for the full performa nce of the Services and reimbursable expenses, if any:

The total maximum lump sum compensation of dollars ($ ); OR

The sum of dollars ($ ) per hour, not to exceed a total maximum compensation amount of dollars ($ ); OR

A sum calculated in accordance with the fee schedule set forth at Exhibit C, not to exceed a total maximum compensation amount of Three Hundred Thirteen Thousand Nine Hundred Seventy-Five Dollars ($313,975).

CONTRACTOR agr ees that it can perform the Services for an amount not to exceed the total maximum compensation set forth above. Any hours worked or services performed by CONTRACTOR for which payment wo uld result in a total exceeding the maximum amount of compensation set forth above for performance of the Services shall be at no cost to CITY.

CITY has set aside the sum of Fourteen Thousand Nine Hundred Fifty -One Dollars ($14,922) for Additional Services. CONTRACTOR shall provide Additional Services only by advanced, written authorization from the City Manager or designee. CONTRACTOR, at the CITY’s request, shall submit a detailed written proposal including a description of the scope of services, schedule, level of effort, and CONTRA CTOR’s proposed maximum compensation, including reimbursable expense, for such services. Compensation shall be based on the hourly rates set forth above or in Exhibit C (whichever is applicable), or if such rates are not applicable, a negotiated lump su m. CITY shall not authorize and CONTRACTOR shall not perform any Additional Services for which payment would exceed the amount set forth above for Additional Servic es. Payment for Additional Services is subject to all requirements and restrictions in this Agreement.”

SECTION 4. The following exhibit(s) to the Contract is/are hereby amended or added, as indicated below, to read as set forth in the attachment(s) to this Amendment, which is/are hereby incorporated in full into this Amendment and into the Contract by this reference:

a. Exhibit “C” entitled “SCHEDULE OF FEES, AMENDMENT NO. 1”,AMENDED, REPLACES PREVIOUS.

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Amendment No. 2 to
Contract
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SECTION 5. 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 6. Inc orporation of Recitals . The recitals set forth above are ter ms of this Amendment and are fully incorporated herein by this reference.

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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

GRASSROOTS ECOLOGY

Officer 1

By:___________________________

Name:________________________

Title:__________________________

Officer 2

By:___________________________

Name:_________________________

Title:__________________________

Attachments:

EXHIBIT “C” entitled “SCHEDULE OF FEES, AMENDMENT NO. 1 (AMENDED, REPLACES

PREVIOUS)
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Alex Von Feldt
Fran Callan
Business Director
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EXHIBIT C
SCHEDULE OF FEES, AMENDMENT NO. 1
(AMENDED, REPLACES PREVIOUS)

CITY shall pay CONTRACTOR according to the following rate schedule. The maximum amount of compensation to be paid to CONTRACTOR, including both payment for services and reimbursable expenses, shall not exceed the amounts set forth in Sections 5 and 6 of the Agreement. Any services provided or hours worked for which payment would result in a total exceeding the maximum amount of compensation set forth herein shall be at no cost to CITY.

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City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Public Works
Meeting Date: June 12, 2023
Report #: 2303-1193
TITLE
Authorize Amendment No. 2 to Contract No. C20175537 with Kennedy Jenks Consultants, Inc. to extend the term of the contract for the Primary Outfall Line Project (WQ-19002) through December 31, 2027

RECOMMENDATION
Staff recommends that Council approve and authorize the City Manager or their designee to execute Amendment No. 2 to Contract No. C20175537 with Kennedy Jenks Consultants (Kennedy Jenks) (Attachment A) to extend the term of the contract for the Primary Outfall Line (Outfall) Project (WQ-19000) four years through December 31, 2027.

BACKGROUND
The Regional Water Quality Control Plant (RWQCP) discharges treated effluent to the San Francisco Bay through a 54-inch diameter outfall line installed in 1964 that passes beneath the Palo Alto Airport. The RWQCP’s Long Range Facilities Plan accepted by Council in July 2012 1 identified the need for a capital project to replace and rehabilitate the outfall pipeline due to insufficient capacity in the existing outfall line. On October 16, 2016, after completion of a request for proposals process, Council approved a professional services contract 2 for design services with Kennedy Jenks Consultants for the RWQCP Primary Outfall Line Project (WQ- 19000). On December 14, 2022, the contract was amended (Amendment No. 1) to extend the contract duration six months through June 30, 2023, with no cost impact.

1 City Council, July, 2 2012; Agenda Item #7; SR# 2914, https://www.cityofpaloalto.org/files/assets/public/agendas- minutes-reports/reports/city-manager-reports-cmrs/year-archive/2012/id-2914.pdf 2 City Council, October,16,2016; Agenda Item #4; SR#7245, https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-reports/reports/city-manager-reports- cmrs/year-archive/2016/101716-7245-design-services-for-wqcp-primary-outfall-line-design.pdf Item 5
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ANALYSIS
A number of issues related to approvals from regulatory bodies (e.g., State Lands Commission and the Federal Aviation Administration) require significant redesign work for the outfall project, and therefore staff recommends extending the term of the professional services contract with Kennedy Jenks.

The contract with Kennedy Jenks is expiring June 30, 2023 and requires amendment for a new contract expiration date. A further amendment increasing the not-to-exceed value of the contract will also be required when the precise project timeline and scope of new services are determined. The not-to-exceed value of the design contract is $279,660, of which $193,603 has been spent to date.

Kennedy Jenks completed design on the outfall pipeline in September 2020. All permits were obtained, except from the Federal Aviation Administration (FAA). In parallel with the Outfall Pipeline project design, Public Works Department staff had been working with regional and federal agencies on a new elevated flood protection levee, protecting low-lying areas including the airport and the RWQCP. Reconciliation of these issues requires redesign of the outfall. In addition, some project permit applications need to be re-filed. Council approval of the Kennedy Jenks contract term extension will support the redesign and re-permitting efforts for a safer, deeper pipe.

Design and re-permitting are anticipated to take an estimated two years, followed by construction. Construction of the Outfall project is estimated to be completed by December 31, 2027, with engineering services during construction scheduled to be completed by the same date.

FISCAL/RESOURCE IMPACT
While there is no fiscal impact associated with the contract amendment, redesign of the outfall pipeline to be deeper is expected to increase construction cost. Staff cannot provide a precise estimate of ultimate project construction cost at this time, but for context, the pipeline construction cost estimate from the initial design work was approximately $11 million.

The design and construction of the project are included in the Wastewater Treatment Enterprise Fund, Capital Improvement Program using Outfall Design (WQ-19002) and Outfall Pipeline Construction (WQ-19000), respectively. The project costs are shared among the City’s partner agencies, with Palo Alto’s share being 38.16%.

STAKEHOLDER ENGAGEMENT
This project is part of the Plant’s major capital improvement program funded by Palo Alto and its five additional partner agencies. The five partner agencies are regularly updated about both the need for and the progress on wastewater treatment capital work. Updates are provided each year at an annual meeting and at other periodic meetings established to inform partner agency Item 5
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staff about the major capital improvement program. With respect to Palo Alto itself, the open meetings on the budget process serve as the main vehicle for engaging the community on both new projects such as this and associated rate impacts.

ENVIRONMENTAL REVIEW
Because the new outfall alignment will be constructed near the sensitive Baylands environmental habitat, environmental review under CEQA was completed through preparation of an Initial Study/Mitigated Negative Declaration. This project was evaluated in the Outfall Project Mitigated Negative Declaration adopted by Council on May 21, 20183.

Although the pipeline alignment will not change with this re-design, the pipe profile will be deepened. As a result of the deeper profile, a CEQA amendment may be required as part of the re-permitting effort for the project.

ATTACHMENTS
Attachment A: C20175537 Kennedy Jenks Contract Amendment No. 2 APPROVED BY:

Brad Eggleston, Director Public Works/City Engineer
3 City Council, May 21, 2018; Agenda Item #4; SR# 9096, https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-reports/reports/city-manager-reports- cmrs/year-archive/2018/id-9096-council-approval-of-an-mnd-and-design-of-rwqcp-new-outfall-line.pdf Item 5
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AMENDMENT NO. 2 TO CONTRACT NO. C20175537

BETWEEN THE CITY OF PALO ALTO AND
KENNEDY/JENKS CONSULTANTS, INC.

This Amendment No. 2 (this “Amendment”) to Contract No. C20175537 (the “Contract” as defined below) is entered into as of June 12, 2023, by and between the CITY OF PALO ALTO, a California chartered municipal corporation (“CITY”), and KENNEDY/JENKS CONSULTANTS, INC., a California corporation , located at 1500 NE Irving Street, Suite 200 , Portland , OR 97232 (“CONSULTANT”). CITY and CONSULTANT are referred to collectively as the “Part ies” 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 providing engineering design and support services for a new outfall pipeline at the Regional Water Quality Control Plant (RWQCP), as detailed therein.

B. The Parties entered into Amendment No. 1 to extend the contract term by six (6) months through June 30, 2023, at no additional cost to the City, as detailed therein.

C. The Parties now wish to amend the Contract in order to extend the contract term by fifty-five (55) months through December 31, 2027, at no additional cost to the City, as detailed herein.

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. C20175537 between CONSULTANT and CITY, dated August 12, 2019, as amended by:

Amendment No. 1, dated December 14, 2022

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 2 “TERM” of the Contract is hereby amended to read as follows:

“The term of this Agree ment shall be from th e date of its full execution through the earli er of December 31, 2027, or completion of the services in accordance with the Schedule of Performance attached at Exhibit “B” unless terminated earlier pursuant to Section 19 of this Agreement.”

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Attachment A -
C20175537 Kennedy
Jenks Contract
Amendment No. 2

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SECTION 3. The following exhibit(s) to the Contract is/are hereby amended or added, as indicated below, to read as set forth in the attachment(s) to this Amendment, which is/are hereby incorporated in full into this Amendment and into the Contract by this reference:

a. Exhibit “B” entitled “SCHEDULE OF PERFORMANCE, AMENDMENT NO. 2”, AMENDED, REPLACES PREVIOUS.

SECTION 4. 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 5. 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.)

DocuSign Envelope ID: 196CE771-E0D9-4AE5-9657-EBD606D28C35 Item 5
Attachment A -
C20175537 Kennedy
Jenks Contract
Amendment No. 2

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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

KENNEDY/JENKS CONSULTANTS, INC.

Officer 1

By:___________________________

Name:________________________

Title:_________________________

Officer 2

By:___________________________

Name:________________________

Title:__________________________

Attachments:

Exhibit “B” entitled “SCHEDULE OF PERFORMANCE, AMENDMENT NO. 2” (AMENDED, REPLACES

PREVIOUS)
DocuSign Envelope ID: 196CE771-E0D9-4AE5-9657-EBD606D28C35 Mark Minkowski, Vice President
Vice President
Vice President
Patrick Huston, Assistant Secretary
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C20175537 Kennedy
Jenks Contract
Amendment No. 2

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EXHIBIT “B”
SCHEDULE OF PERFORMANCE, AMENDMENT NO. 2
(AMENDED, REPLACES PREVIOUS)

CONSULTANT shall perform the Services so as to complete each milestone within the number of weeks specified below. The time to complete each milestone may be increased or decreased by mutual written agreement of the project managers for CONSULTANT and CITY so long as all work is completed within the term of the Agreement. CONSULTANT shall provide a detailed schedule of work consistent with the schedule below within 2 weeks of receipt of the Notice to Proceed (NTP).

Milestones Completion No. of Weeks from NTP
(NTP issued on August 21, 2019)

1. Design Re-Kickoff Meeting 02

2. Submit 100% Design (Bid Documents) 10

3. Services During Bidding 290

4. Services During Construction 436

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C20175537 Kennedy
Jenks Contract
Amendment No. 2

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Certificate Of Completion
Envelope Id: 196CE771E0D94AE59657EBD606D28C35
Status: Completed
Subject: Complete with DocuSign: C20175537 Kennedy Jenks-Amendment #2 (REV3) Source Envelope:

Document Pages: 4
Signatures: 2
Envelope Originator:

Certificate Pages: 2
Initials: 0
O'Brien, Nanette
AutoNav: Enabled
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Time Zone: (UTC-08:00) Pacific Time (US & Canada)
250 Hamilton Ave
Palo Alto , CA 94301
[email protected]
IP Address: 199.33.32.254
Record Tracking
Status: Original
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C20175537 Kennedy
Jenks Contract
Amendment No. 2

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James Allen
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Manager Water Quality Control Plant
City of Palo Alto
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C20175537 Kennedy
Jenks Contract
Amendment No. 2

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City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Transportation
Meeting Date: June 12, 2023
Report #:2305-1426
TITLE
Approve the Grade Separation Evaluation Criteria For Evaluating Alternatives Under Consideration for Grade Separation Projects. CEQA status – Categorically exempt under CEQA Guidelines section 15262

RECOMMENDATION
Rail Committee and Staff recommend the City Council approve the proposed updates to the Grade Separation Evaluation Criteria and authorize the staff and Rail Committee to use the updated criteria for evaluating alternatives under consideration for grade separation projects.

EXECUTIVE SUMMARY
On March 29, 2023, the Rail Committee discussed the grade separation evaluation criteria adopted by the City Council in 2017 and directed the staff to incorporate elements from the discussion to update the evaluation criteria. The Rail Committee has reviewed the revisions to the evaluation criteria on April 26, 2023, and unanimously recommend approval of the proposed updates to the City Council.

BACKGROUND
In September 2017, the City Council adopted the evaluation criteria in selecting a preferred solution (a preferred alternative for each crossing) that included elements related to East-West connectivity, Traffic congestion, Pedestrian / Bicycle circulation, Rail Operations, Costs, Environmental Impacts, Visual Impacts, Local Access, Right Of Way Cost, and Construction.

The Matrix with a Summary of Evaluation based on Council Adopted Criteria was later developed and refined through the Extended Community Advisory Panel (XCAP) for review of the alternatives in consideration at Churchill Avenue, Meadow Drive, and Charleston Road crossings. This matrix assisted XCAP in making recommendations of preferred alternatives to the City Council. At the March 29, 2023 Rail Committee meeting the evaluation criteria were further discussed to assess the needs for any additional elements. The Committee directed the Item 6
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staff to incorporate elements from the discussion in updating the Council Adopted Evaluation Criteria.

ANALYSIS
The existing Council adopted criteria include ten (10) elements. These elements are reflected in the matrix on the scale indicating their level of impact of the particular element. Based on the discussion and direction of the rail committee the proposed evaluation criteria is listed and edits to the criteria are reflected as underlined text as follows:

Proposed Evaluation Criteria
The Council Adopted Evaluation Criteria provides support in reviewing the various alternatives under consideration for grade separation at each location of crossing or combination of the crossings considered as Project. These criteria will be used with subjective weighting by the reviewer in the context of a given location.

A.East-West connectivity – Facilitate movement and connectedness across the corridor for all modes of transportation
B.Traffic congestion – Reduce automobile delay and congestion for automobile traffic at rail crossings to consider corridor travel times and to reduce traffic inducement
C.Pedestrian / bicycle circulation – Provide clear and safe routes for pedestrians and bicyclists seeking to cross the rail corridor, separate from automobile traffic through and after grade separation construction D. Rail operations – Support continued rail operations and Caltrain service improvements
E. Cost – Consider Project Cost including Utility Relocation, Long Term Maintenance, and Financing of the project with feasible funding sources.

F. Cost Private Property Impacts – Minimize right-of-way acquisition.

G.Environmental impacts – Review Sustainability, Sea Level Rise impacts, and Reduce rail noise and vibration along the corridor.

H.Local access – Maintain or improve access to neighborhoods, parks, schools and other destinations along the corridor while reducing regional traffic on neighborhood streets.

I. Visual impacts – Minimize Consider visual and privacy changes along the rail corridor.

J. Construction – Minimize disruption and the duration of construction The Rail Committee reviewed the updated evaluation criteria on April 26, 2023 (Staff Report Item 6
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2304-1269)1, and unanimously recommended approval of the Agreement to the City Council.

Therefore, staff and Rail Committee recommends Council to approve the updated evaluation criteria

FISCAL/RESOURCE IMPACT
The new elements added to the criteria will require consultant support in performing additional review of the proposed project conditions, performing additional studies, and providing updates to the project materials. Staff is working with the Rail Committee to ascertain the extent of work that the Consultant needs to undertake in order to review additional elements and to narrow down the alternatives under consideration for the selection of preferred alternative(s) at these crossings. Consequently, the required additional consultant support may entail amending the existing contract with AECOM or procuring a new consultant. If deemed necessary, Staff will return to Council and seek approval.

There is adequate funding available in FY24 Capital Improvement Projects for Grade Separations to perform this work.

STAKEHOLDER ENGAGEMENT
The evaluation criteria provide an approach to reviewing alternatives under consideration in a systematic way. The updates to the previously adopted evaluation criteria were discussed at the Rail Committee’s regular meeting on March 29, 2023, and April 26, 2023, where public comment was taken.

ENVIRONMENTAL REVIEW
The proposed action is part of a planning study for a possible future action, which has not been approved, adopted, or funded and is therefore exempt from the California Environmental Quality Act (CEQA) in accordance with CEQA Guidelines Section 15262. The future decision to approve the construction of any one of the identified potential alternatives would be subject to CEQA and require the preparation of an environmental analysis. Environmental review and design for the grade separation project will be performed in the subsequent steps of the project development.

ATTACHMENTS
Attachment A: Existing Matrix Evaluation Criteria and Alternatives in Consideration May 2023 APPROVED BY: Philip Kamhi, Chief Transportation Official 1 Item 2, Action Items
https://cityofpaloalto.primegov.com/Public/CompiledDocument?meetingTemplateId=11352&compileOutputType =1
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Alternative Removed from
Consideration 4/26/2021
Alternative Removed from
Consideration 4/26/2021
Alternative Removed from
Consideration 8/23/2021
Negative Impact Positive Impact
Updated April 2023 to reflect existing criteria and Alternatives in consideration
Item 6
Attachment A - Existing Matrix
Evaluation Criteria and Alternatives
in Consideration May 2023

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Alternative Removed from
Consideration 4/26/2021
Alternative Removed from
Consideration 8/23/2021
Alternative Removed from
Consideration 4/26/2021
Negative Impact Positive Impact
Updated April 2023Updated April 2023 to reflect existing criteria and Alternatives in consideration
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Evaluation Criteria and Alternatives
in Consideration May 2023

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Alternative Removed from
Consideration 4/26/2021
Alternative Removed from
Consideration 4/26/2021
Alternative Removed from
Consideration 8/23/2021
Updated April 2023Updated April 2023 to reflect existing criteria and Alternatives in consideration
Item 6
Attachment A - Existing Matrix
Evaluation Criteria and Alternatives
in Consideration May 2023

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Alternative Removed from
Consideration 11/29/2021
Preferred Alternative
11/29/2021
Backup Alternative
11/29/2021
Negative Impact Positive Impact
Updated April 2023Updated April 2023 to reflect existing criteria and Alternatives in consideration
Item 6
Attachment A - Existing Matrix
Evaluation Criteria and Alternatives
in Consideration May 2023

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City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Human Resources
Meeting Date: June 12, 2023
Report #:2305-1454
TITLE
Adoption of Memorandum of Agreement with Utility Management and Professional Association of Palo Alto (UMPAPA) effective upon adoption through June 30, 2025, and Adopt revised Management and Professional salary schedule; CEQA Status - Not a project

RECOMMENDATION

1. Staff recommends that Council:

Adopt a new Memorandum of Agreement (MOA) between the City of Palo Alto and the Utilities Management and Professional Association of Palo Alto (UMPAPA) effective upon adoption through June 30, 2025 (Attachment A) and corresponding salary schedule (Attachment B), and

2. Adopt revised Management and Professional salary schedules, effective December 31, 2022 through June 30, 2025 (Attachment C, revised from April 17, 2023)

BACKGROUND
In accordance with California state law regulating local public agencies, the City of Palo Alto (City) meets and confers in good faith with our recognized labor organizations. The team of negotiators representing the City met with labor representatives and successfully reached a Tentative Agreement on a successor Memoranda of Agreement (MOA).

The Utilities Management and Professional Association of Palo Alto (UMPAPA) currently has 52 FTE that are covered under the MOA. City employees represented by UMPAPA include assistant directors, managers, supervisors, and high level professional and technical employees within the Utilities Department. The Utilities Department services electricity, natural gas, water, wastewater, and commercial fiber optics and is divided into five divisions including Electric Engineering and Operations, Administration, Water Gas Wastewater Engineering and Operations, Customer Support Services, and Resource Management.

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ANALYSIS
The parties negotiated a successor MOA to improve recruitment and retention for management staffing in a fiercely competitive Utilities market. Consistent with the City’s workforce strategy applied across each labor group, the agreement targets a market placement which will aid the City to maintain and add the managerial staff necessary to provide high quality and effective Utility services. Thus far, the City’s workforce strategy has shown a significant reduction in staff turnover in 2023 and staff expects this agreement to extend that success to this key group of City management.

Utilities Management and Professional Association of Palo Alto The following summarizes the changes to the terms of agreement with UMPAPA. •A 2.5 year contract term ending June 30, 2025.
•Targeted market adjustment upon adoption equivalent to 5% wage increase. •4% general salary increase in the first full pay period following July 1, 2023, and 4% general salary increase in the first full pay period following July 1, 2024. •Flexible Compensation – increase base salary in order to provide more flexibility for employees with different goals and interests allowing choices for employees:
o$100 per month compensation upon adoption
oAdditional $100 per month (for a total of $200/month) effective January 2024 •Standby Pay for Operational Supervisors when assigned to respond to Utilities emergencies such as power outages or storms.
•Pilot Program for a Utility Cost Efficiency Incentive to be explored in the upcoming months.
•Addition of one floating holiday in recognition of days of historical significance.

This agreement, in conjunction with the labor agreements previously approved by the Council and the steps taken with the Management and Professional unrepresented group in December 2022, continues to solidify the City of Palo Alto strategy to be an employer of choice. Being an employer of choice improves the ability of the City to recruit and retain staff in areas of critical service delivery and priority projects for our community. It also supports the City’s ability to continue basic services that are expected and relied upon by the community.

Management & Professional Salary Schedule Corrections & Revisions:

Staff recommends adopting the revised Management and Professional salary schedule Item 7
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(Attachment C) adopted by Council on December 19, 2022 1 (ID#15004) for the following classifications in the unrepresented Management and Professional group: Manager, Solid Waste, Sr. Technologist, and Office of Emergency (OES) Services Director.

The classifications of Manager Solid Waste and Sr. Technologist supervise the staff in the Service Employees International Union (SEIU) employee group and these two management classification salary ranges were impacted by the corresponding market adjustments. The adjustments to these two ranges are recommended in order to maintain an internal spread between the represented classifications that is consistent with the City’s practices.

Regarding the OES Director, there was a discrepancy found during review of the Management and Professional classification benchmarking study results that this position has been aligned to the Fire Emergency Medical Services Director position for over 10 years due to the similar duties for both of these positions. On December 19, 2022, Council approved a market adjustment for the EMS Director position and this same market adjustment is recommended to be applied to the OES Director.

The City Manager will review and approve staff compensation adjustments as outlined in the Management and Professional Compensation Plan.

FISCAL/RESOURCE IMPACT
Approval of the staff recommendations outlined in this report for UMPAPA will result in cumulative costs of approximately $3.8 million in the Enterprise Funds over the 2.5-year term of the agreements. Ongoing annual costs for these agreements once the contract term ends are estimated at $2.0 million in the Enterprise Funds. The cost increases for this recommendation are slightly higher than the salary and benefit increases assumed as part of the development of the FY 2024 Utility rates; however, these changes will not impact the Utility rates that have been recommended and reviewed as part of the FY 2024 budget process.

Approval of the revised salary schedule for the Management and Professional group will increase authority by $300,000 annually, reflecting the cumulative increase in salary range for 20 full-time budgeted positions in the respective classifications. However, there are minimal instances that require a salary increase to maintain an internal spread between supervisory positions; therefore, staff expects less than $60,000 in additional costs in the coming fiscal year.

1 City Council December 19, 2022, Item #7, Staff Report 15004, https://portal.laserfiche.com/Portal/DocView.aspx?id=59178&repo=r-704298fc Item 7
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STAKEHOLDER ENGAGEMENT
City staff will post the Memoranda of Agreement and salary schedules on the City’s website after Council adoption for public access. Human Resources will communicate the changed to the terms of these agreements to highlight in job postings to attract new talent, fill vacancies and support employee retention.

ENVIRONMENTAL REVIEW
This activity is not a project under California Environmental Quality Act (CEQA) as defined in CEQA Guidelines, section 15378, because it has no potential for resulting in either a direct or reasonably foreseeable indirect physical change in the environment.

ATTACHMENTS
Attachment A: UMPAPA Memorandum of Agreement
Attachment B: UMPAPA Salary Schedule
Attachment C: Revised Management & Professional Salary Schedule APPROVED BY:

Sandra Blanch, Human Resources Director
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Memorandum of Agreement Between Utilities Management and Professional Association of Palo Alto and the City of Palo Alto effective January 1, 2023 to June 30, 2025

1 CITY OF PALO ALTO
Memorandum of
Agreement
City of Palo Alto and Utilities Management and
Professional Association of Palo Alto

Effective dates:

January 1, 2023– June 30, 2025

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2 Table of Contents
PREAMBLE .................................................................................................................................. 4 ARTICLE I – RECOGNITION .................................................................................................. 4 ARTICLE II – NO DISCRIMINATION .................................................................................... 4 ARTICLE III – PAYROLL DUES DEDUCTION .................................................................... 4 ARTICLE IV – WORK STOPPAGE AND LOCKOUTS ........................................................ 4 ARTICLE V – CITY RIGHT TO MANAGE ............................................................................ 4 ARTICLE VI – COMPENSATION ............................................................................................ 5 Section 1 – Job Families and Salary Schedule ............................................................................ 5 Section 2 – Base Salary Increases ............................................................................................... 5 Section 3 – Market Based Adjustments ...................................................................................... 5 ARTICLE VII – HEALTH BENEFITS ..................................................................................... 7 Section 1 – Group Insurance ....................................................................................................... 7 Article VIII – DEFERRED COMPENSATION MATCH ...................................................... 10 ARTICLE IX – LEAVES ........................................................................................................... 10 Section 1 – Sick Leave .............................................................................................................. 10 Section 2 – Management Annual Leave ................................................................................... 11 Section 3 – Vacation ................................................................................................................. 11 Section 4 – Bereavement .......................................................................................................... 12 Section 5 – All Other Leaves .................................................................................................... 12 Section 6 – Vacation Benefits for Deceased Employees .......................................................... 12 Section 7 – Voluntary Leave Program ...................................................................................... 12 ARTICLE X – WORKERS’ COMPENSATION .................................................................... 13 Section 1 – Employees unable to work due to occupational injury, illness or disease ............. 13 Section 2 – Temporary Disability ............................................................................................. 13 ARTICLE XI – RETIREMENT PENSION ............................................................................. 13 ARTICLE XII – MISCELLANEOUS ...................................................................................... 15 Section 1 – Reimbursement for Relocation Expense ................................................................ 15 Section 2 – Meal allowance ...................................................................................................... 15 Section 3 – Reduction in Workforce ......................................................................................... 15 Section 4 - Contracting Out ...................................................................................................... 15 Section 5- Association Security ................................................................................................ 16 Section 6- Notification to the Association ................................................................................ 16 Section 7- Association Representative Access to Work Locations .......................................... 16 Section 8- Release Time ........................................................................................................... 16

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3 Section 9- Personnel Files ......................................................................................................... 16 ARTICLE XIII – GRIEVANCE PROCEDURE ..................................................................... 16 Section 1 - General Provisions .................................................................................................. 16 Section 2 – Definitions.............................................................................................................. 17 Section 3 - Conduct of Grievance Procedure ............................................................................ 17 Section 4 - Grievance and Appeal Procedure ........................................................................... 17 ARTICLE XIV – FULL UNDERSTANDING ......................................................................... 18 Section 1 – Full Understanding................................................................................................. 19 Section 2 – Severability ............................................................................................................ 19 Section 3 – Good Faith ............................................................................................................. 19 Section 4 – Mid-Contract Negotiations .................................................................................... 19 Section 5 – Merit System .......................................................................................................... 19 ARTICLE XV-DURATION ...................................................................................................... 19

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Memorandum of Agreement Between Utilities Management and Professional Association of Palo Alto and the City of Palo Alto effective January 1, 2023 to June 30, 2025

4 PREAMBLE

This memorandum of Agreement between the City of Palo Alto, hereinafter referred to as the “City”, and the Utilities Management and Professional Association of Palo Alto (UMPAPA), hereinafter referred to as the “Association” or “UMPAPA”, has been prepared and entered into in accordance with Title I, Division 4, Sections Chapter 10, 3500-3510 of the California government Code and Chapter 12 of the City of Palo Alto Merit System Rules and Regulations.

ARTICLE I – RECOGNITION

The City recognizes the Association as the exclusive representative of employees occupying positions in the bargaining unit certified by the City in accordance with the decision of Arbitrator Kagel dated April 13, 2011.

ARTICLE II – NO DISCRIMINATION

The Association and the City hereby agree that there shall be no discrimination because of race, color, age, handicap, sex, national origin, sexual or gender orientation, political or religious affiliation under this Agreement. There shall be no discrimination in employment conditions or treatment of employees on the basis of membership or non-membership in the Association, or participation in the lawful activities of the Association.

ARTICLE III – PAYROLL DUES DEDUCTION

The City shall deduct Association member dues, and any other mutually agreed upon payroll deduction from the bi-weekly pay of bargaining unit employees. The dues deduction must be authorized in writing by the employee on an authorization form acceptable to the City and to the Association. City shall remit the deducted dues to the Association as soon as possible after deduction.

ARTICLE IV – WORK STOPPAGE AND LOCKOUTS

The Association, its representa tives or members shall not engage in or cause, instigate, encourage, sanction or condone a work stoppage or sympathy work stoppage, withholding of services, leave of absence abuse or work slowdown of any kind against the City of Palo Alto or its citizens b y its members during the term of this MOA. No Association member shall refuse to cross any picket line in the conduct of the Utility business, nor shall the Association, its representatives or members discriminate in any way towards anyone who refuses to participate in a work stoppage or any of the job actions cited above. The City agrees that it will not lock out Association members.

ARTICLE V – CITY RIGHT TO MANAGE

The City retains and reserves, without limitation, all powers, rights, authority, duties, and responsibilities to manage the City as stated in the City Merit Rules, Chapter 12, Section 1207(d).

Nothing in this Agreement is to be interpreted as constitutin g a waiver of the City’s rights and responsibilities to manage the City and create and maintain programs and services that reflect its public's wishes. The intent of this MOA is to establish wages, working hours, and conditions of employment with the Association.

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5 ARTICLE VI – Compensation

Section 1 – Job Families and Salary Schedule

Effective the first full pay period following adoption of this Memorandum by Council, all salaries of covered classifications shall be as listed in Appendix A.

Appendix A shall clearly outline benchmark classifications for future total compensation surveys and for the purposes of internal alignment of the Association job families and career paths.

The parties agree to continue a jointly-staffed benchmark committee. All recommendations or research conducted by the committee will be included in the next bargaining process.

Section 2 – Base Salary Increases

a) General Salary Increase: Effective the first full pay period following July 1, 2023, salary ranges and salaries of all represented classifications will be increased by four percent (4.0%).
b) General Salary Increase: Effective the first full pay period following July 1, 2024 salary ranges and salaries of all represented classifications will be increased by four percent (4.0%).
c) Effective the first pay period following Council adoption of the MOU, in lieu of additional increases to the City’s medical premiums, hourly wages for all bargaining unit classifications will be increased by $100 per month ($1200 per year). Employees can utilize this cash payment for any purpose, including to cover health insurance premiums or contribute to flexible spending accounts/457 deferred compensation plans.

d) Effective the first pay period of January 2024, all classifications will receive an additional one hundred dollars ($100) monthly flexible compensation payment built into base hourly rate of pay.

Section 3 – Market Based Adjustments

Within the Term of this Agreement, the City will conduct a total compensation study of UMPAPA Benchmarked positions based on the following agencies:

Alameda
Anaheim
Burbank
East Bay MUD
Long Beach
Mountain View
Pacific Gas and Electric
Redwood City
Roseville
Sacramento MUD
San Jose
Santa Clara
Silicon Valley Clean Energy
Sunnyvale
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6 The City’s total compensation study will include a geographic adjustment for agencies which are outside of the immediate region. Those agencies receiving a geographic adjustment are: Anaheim, Burbank, Long Beach, Sacramento MUD and Roseville. For the purposes of recruiting and retaining employees within the Utility market place, the parties will add to the survey universe data from Pacific Gas and Electric (PG&E) Bay Area region where data can be found. For the term of this agreement, where PG&E data cannot be verified or acquired the parties agree to include an above-median comparator for the purposes of calculating benchmarks.

The City’s survey is intended to provide a single source of information regarding compensation paid to bargaining unit employees and its comparison to compensation paid by other entities. The survey data does not obligate the City or the Association to propose or agree to any market-based adjustments. The next total compensation study will be started 180 days prior to expiration of this agreement.

Effective the first full pay period following the adoption of the MOA, salary ranges identified classifications will be increased in an amount sufficient to bring them to market as determined by the City’s market study.

Section 4. Working Above Classification
Where covered employees, on a temporary basis, are assigned to perform all significant duties of a higher classification for a period of one pay period or more, the City Manager or designee may authorize payment within the range of the higher classification for the specified time frame. Working above classification will not exceed six months, unless renewed at the discretion of the City Man ager or designee. On expiration of that timeframe, working above classification pay will cease and the employee will return to their former pay level. Working above classification pay is not to exceed 10% more than the employee’s current salary and shall be documented on a Personnel Action Form, with a description of the additional duties in the higher classification to be performed and an end date. Any disputes with the application of this provision shall be subject to Chapter 11 of the City’s Merit Rules.

Section 5. Standby Compensation
Utility Operations Supervisors in WGW or Electric who are assigned to standby duty shall be compensated at the daily rate of two (2) hours at their base hourly salary on days the employee is assigned to be on standby duty.

Section 6. Utility Cost Efficiency Incentive Pilot Program During the term of this agreement, the parties will meet in an attempt to develop a pilot for a Utility Cost Efficiency Incentive bonus program. The Pilot Program will be implemented only upon mutual agreement of the City and UMPAPA but will have the following general parameters:

1. The Parties must agree on measurable objectives/criteria focused on curbing controllable costs associated with rate increases,

2. If the agreed-upon on “measurable objectives/criteria” are met during the Pilot Program, the City would provide a onetime non-pensionable bonus in an amount agreed to by the parties.

All covered employees who are active at the time of payment will be eligible if the objectives/criteria are met.

3. The Pilot Program will begin and end on dates mutually agreed by the parties. However, the pilot program will end with expiration of the current MOA between the parties unless the parties agree in writing to an extension of the program.

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7 ARTICLE VII – HEALTH BENEFITS

Section 1 – Group Insurance

a) Effective Date of Coverage
For newly-hired regular employees coverage begins on the first day of the month following date of hire for the health plan, dental plan, vision care plan, long term disability and life insurance plans if these benefits are elected. Effective on the first of the calendar month falling sixty (60) days after adoption of this MOA, City health premium contributions (medical, dental and vision) will be prorated for part -time employees based on the number of hou rs per week the part -time employee is assigned to work. Until that time, part-time employees will remain subject to the practice in effect at adoption of this MOA. b) Active Employee Health Coverage

During the term of this MOA, the maximum City contribution towards medical premiums for eligible full time employees per employee category shall be up to a maximum of the following for any plan:

Medical Premium
Category
Maximum City
Contribution
Effective Jan 1, 2021
EE only $871
EE plus one $1742
EE plus family $2260

For the duration of this MOA if the PEHMCA Minimum charges increase they will be included in the City’s maximum contribution and will not result in an increase to the City’s maximum contribution rates. c) Coverage for Domestic Partners.

1. Domestic Partnership Registered with the California Secretary of State: Employees may add their domestic partner as a dependent to their elected health plan coverage if the domestic partnership is registered with the Secretary of State.

2. Domestic Partner Not Registered with the California Secretary of State:; Domestic partners who meet the requirements of the City of Palo Alto Declaration of Domestic Partnership , and are registered with the Human Resources Department, will be eligible for a stipend of two hundred and eighty four dollars ($284) per month toward the cost of an individual health plan. Evidence of premium payment will be required with request for reimbursement. d) Alternative Medical Benefit Program

If a regular employee and/o r the employee’s dependent(s) are eligible for medical insurance through another employer-sponsored or association medical plan, the employee may opt for alternative medical insurance coverage through the other employer-sponsored or association plan and wa ives his/her right to the City of Palo Alto’s medical insurance coverage for same individuals. Employees waiving City coverage may receive a stipend of $284 per month.

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8 e) Retiree Health Plan
a. Employees Hired Prior to January 1, 2004
Monthly City-paid premium contributions for a retiree-selected health plan through the CalPERS Health Benefits Program will be made as provided under the Public Employees' Medical and Hospital Care Act.

The City's contribution for an employee hired before January 1, 2004 and whose retirement date is on or after May 1, 2011 shall be the same contribution amount it makes from time to time for active City employees.

b. Post - 1/1/04 Hires
Government Code section 22893 applies to those Unit members hired after January I, 2004, and provides that, upon retirement from the City an employee is eligible for 50% of the specified employer health premium contribution after ten (10) years of service credit, provided at least five of those years were performed at the City of Palo Alto. After ten years of service credit, each additional service credit year increases the employer contribution percentage by 5% until, at twenty (20) years' service credit; the employee will be eligible upon retirement for 100% of the specified employer contribution and 90% of the contribution for their dependent coverage. The City of Palo Alto's health premium contribution for eligible post - 1/1/04 hires shall be the minimum contribution set by PERS under section Government Code section 22893.

For employees hired prior to January 1, 2004 who wish to opt in to Government code section 22893, the City provided a 90 calendar day period, in which employees hired prior to January 1, 2004 will have the opportunity to opt in to Government code section 22893. For a 90 day period following adoption of this agreement by Council, the City will offer a one-time opt in to Government code section 22893 for employees hired prior to 12/1/2013.

f) Dental Plan

1. The City shall pay covered plan charges on behalf of all eligible employees and dependents.

Dependents include eligible domestic partners as defined in Section 1 subsection c of this Article VII, Health Benefits.

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9 iv) For each dental plan member, the percentage of coverage for basic benefits will begin at 70% for the first calendar year of coverage and increase by 10% (up to a maximum of 100%) effective the first day of the next calendar year as long as the member utilizes the plan at least once during the current year. Per the Delta Dental contract effective October 1, 2005, if the member does not use the plan during the current year, the percentage of coverage for the next calendar year shall remain unchanged from the current year.
v) If a dental plan member loses coverage under the plan, the applicable percentage of coverage for basic benefits provided during any future period of coverage will commence at 70% as if the dental plan member was a new enrollee. Examples of when a member might lose coverage under the plan include:
• Employee goes on an unpaid leave of absence and elects not to pay the required dental premiums for his/her family’s coverage during the leave. • Employee elects to drop one or more covered dependents from the plan during an open enrollment period so that they might be covered on a spouse’s non-City of Palo Alto dental plan.
g) Vision Care

1. The City shall provide vision care coverage for employee and dependents. Coverage is administered by Vision Service Plan (VSP). The plan will provide an exam every 12 months; lenses every 24 months; frames every 24 mon ths, all subject to a twenty dollar ($20) co - payment as defined in the Vision Services Benefits Plan A schedule.

2. Dependents include eligible domestic partners as defined in Section 1, Subsection c of this Article VII, Health Benefits.

h) No dual coverage for dental and vision benefits. When a City employee is married to or has a registered domestic partner with the California Secretary of State with another City employee, each shall only be covered once. (as an individual or as a spouse of the other City employees, but not both) and dependent children, if any, shall be covered by only one spouse.

i) Basic Life Insurance
The City shall provide a basic group term life insurance with Accidental Death and Dismemberment (AD&D) coverage, in an amount equal to the employee's annual basic pay (rounded to the next highest $1,000) at no -cost to the employee. AD&D pays an additional amount equal to the employee’s annual basic pay (rounded to the next highest $1,000).

j) Supplemental Life And AD&D Insurance
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10 insurance available to the employee is up to $325,000 and the maximum amo unt of AD&D coverage available is up to $325,000.
k) Long Term Disability Insurance

The City shall provide long term disability (LTD) insurance with a benefit of 2/3 monthly salary, up to a maximum benefit of ten thousand dollars ($10,000) per month. The LTD plan will have a waiting period of sixty days, as provided by the applicable carrier agreement. The City shall pay the premium for the first six thousand dollars ($6,000) of base monthly salary. For employees whose base monthly salary exceeds six thousand dollars ($6,000), the employee shall pay the cost of the required premium based upon their monthly salary between six thousand dollars ($6,000) and fifteen thousand dollars ($15,000).
l) Employee Assistance Plan
The Employee Assistance Plan (EAP) provides employees with confidential personal counseling, work and family related issues, eldercare, substance abuse, etc. In addition, EAP programs provide a valuable tool for supervisors to refer troubled employees to professional outside help. This service staffed by experienced clinicians is available to employees and their dependents by calling a toll-free phone line twenty-four (24) hours a day, seven days a week. Guidance is also available online.

Article VIII – Deferred Compensation Match

Effective January 1, 2019 the City will match employee contributions into their City approved 457 plans up to a maximum of $4000. No combination of Employee and Employer funds can exceed the IRS limits for City approved 457 plans. The table below is for illustrative purposes only:

Employee Contribution Employer Matching Contribution
$1,000
$2,500
$1,000
$2,500
$4,000 $4,000
$11,000 $4,000

ARTICLE IX – LEAVES

Section 1 – Sick Leave
a) Sick leave shall be accrued bi-weekly provided the employee has been in a pay status for 50 percent or more of a bi-weekly pay period. Sick leave shall be accrued at the rate of 3.7 hours per bi- weekly pay period for those employees working a forty-hour duty schedule. Those assigned work schedules, which are greater or lesser than forty hours will accrue sick leave at the ratio of their work schedule to forty hours.

b) Employees may use up to twenty hours of sick leave per calendar year for personal business. The scheduling of such leave is subject to the approval of the appropriate level of Management.

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11 c) Employees leaving the municipal service shall forfeit all accumulated sick leave, except as otherwise provided by law and by Section 609 of the Merit Rules and Regulations. In the event that notice of resignation is given, sick leave may be used only through the day which was designated as the final day of work by such notice.

d) Employees that were hired before December 1, 1983 and who leave the municipal service in good standing, or who die while employed in good standing by the city, and who have fifteen or more years of continuous service shall receive compensation for unused sick leave hours in a sum equal to two and one-half percent of their unused sick leave hours multiplied by their years of continuous service and their basic hourly rate of pay at termination. Full sick leave accrual will be paid in the event of termination due to disability. See Merit System Rules and Regulations, Chapter 6, Section 609.

e) Up to nine days of sick leave per calendar year may be used for illness in the immediate family, including a registered domestic partner.

f) Employees eligible, as specified above if hired before December 1, 1983, to be compensated for sick leave may annually convert sick leave hours in excess of 600 to cash or deferred compensation, according to the formula set forth above, up to a maximum of $2,000 per fiscal year.

Section 2 – Management Annual Leave
At the beginning of each calendar year designated exempt employees will be credited with 80 hours of management annual leave. This leave is granted in recognition of the extra hours exempt employees work over their regular schedule. This leave may be taken as paid time off, added to vacation accrual (subject to vacation accrual limitations), taken as cash or taken as deferred compensation. When time off is taken under this provision, 10-hour shift workers will receive one shift off for each 8 hours charged. Entitlement under this provision will be reduced on a prorated basis for part-time status, or according to the number of months in paid status during the fiscal year; employees who have used more than the pro-rated share at the time they leave City se rvice shall be required to repay the balance or have it deducted from their final check. Unused balances as of the end of the calendar year will be paid in cash unless a different option as indicated above is elected by the employee.

Section 3 – Vacation
Vacation will be accrued when an employee is in pay status and will be credited on a bi-weekly basis. Total vacation accrual at any one time may not exceed three times the annual rate of accrual. Each eligible employee shall accrue vacation at the following rate for continuous service performed in pay status:

a) Less than nine years. For employees completing less than nine years continuous service: 120 hours vacation leave per year; provided that:

The City manager is authorized to adjust the annual vacation accrual of employees hired on or after July 1, 2001, to provide up to 40 additional hours (i.e., to a maximum annual accrual of 160 hours) for service with a prior employer.

b) Nine, but less than fourteen years. For employees completing nine, but not more than fourteen years continuous service; 160 hours vacation per year.

c) Fourteen, but less than nineteen years. For employees completing fourteen, but not more than nineteen years continuous service; 180 hours vacation leave per year.

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12 d) Nineteen or more years. For employees completing nineteen or more years continuous service; 200 hours vacation leave per year.

e) Employees are eligible to cash out vacation accrual balances in excess of 80 hours. An employee may cash out a minimum of eight (8) hours to a maximum of 120 hours of accrued vacation provided the employee has taken 80 vacation hours in the previous 12 months and has followed the election procedures set forth in this section.

Employees must elect the number of vacation hours they will cash-out during the next calendar year, up to the maximum of 120 hours. The election will apply only to vacation hours that are accrued in the next calendar year and that are eligible for cash-out.

The election to cash-out vacation hours in each designated year will be irrevocable. This means that employees who elect to cash -out vacation hours must cash -out the number of accrued hours pre - designated on the election form.

Employees who do not elect a cash -out amount by December 31 of the prior calendar year will be deemed to have waived the right to cash out any leave in the following tax year and will not be eligible to cash-out vacation hours in the next tax year. Employees who elect cash-out amounts may request a cash-out at any time in the designated tax year by submitting a cash-out form to payroll. Payroll will complete the cash -out upon request, provided the requested cash -out amount has accrued and is consistent with the amount the employee pre-designated. If the full amount of hours designated for cash-out is not available at the time of cash -out request, the maximum available will be paid. For employees who have not requested cash -out of the elected amount by Nov ember 1 of each year, Payroll will automatically cash -out the elected amount, or the maximum available amount, in a paycheck issued on or after the payroll date including November 1.

Section 4 – Bereavement
Leave of absence with pay of three days may be granted to an employee by the head of his/her department in the event of death in the employee’s immediate family, which is defined for purposes of this section as wife, husband, son, son -in-law, step -son, daughter, daughter -in-law, step -daughter, mother, mother-in-law, father, father-in-law, brother, brother-in-law, sister, sister-in-law, grandmother, grandmother-in-law, grandfather, grandfather-in-law, grandchild, aunt, uncle, niece, nephew, registered domestic partner, or a close relative residing in the household of employee. Such leave shall be at full pay and shall not be charged against the employee’s accrued vacation or sick leave. Requests for leave in excess of three days shall be subject to the approval of a Council-Appointed Officer for employees under his/her control.

Section 5 – All Other Leaves
For all other leaves of absence refer to Chapters 5 and 8 of the City’s Merit Rules and Regulations.

Section 6 – Vacation Benefits for Deceased Employees
An employee who is eligible for vacation leave and who dies while in the municipal service shall have the amount of any accrued vacation paid to the employee's estate within thirty days. This proration will be computed at the last basic rate of pay.

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13 eligible by virtue of a qualifying catastrophic medical condition. Such participation, when authorized by City- Association agreement, shall be allowed only as long as the donors remain anonymous (unless disclosure is required by law).

Section 8 Floating Holiday – Days of Historical Significance Employees will be provided one floating holiday each calendar year in acknowledgement of days of historical significance. The employee with prior approval from their supervisor can use this floating holiday at any time during the year. This holiday has no cash value and will expire if unused.

ARTICLE X – WORKERS’ COMPENSATION

Section 1 – Employees unable to work due to occupational injury, illness or disease Employees unable to work due to occupational injury, illness or disease will be required to report to management to discuss his or her status and ability to return to work on restricted or unrestricted duty, subject to the limitations imposed by applicable law. This requirement is not meant to unreasonably restrict employee’s activities while off work due to such incapacity as long as such activities are cleared by the treating physician, treating program or alternative treatment program and the employee is available for restricted or unrestricted duty as soon as medical clearance can be received.

Section 2 – Temporary Disability
While temporarily disabled, employees shall be entitled to use accrued sick leave for the first three (3) days following the date of injury and thereafter shall be paid full base salary for a period not to exceed fifty-seven (57) calendar days (including Saturdays, Sundays and Holidays), unless hospitalized, in which case employees shall be paid full base salary for a period not to exceed sixty (60) days from date of injury.

For any temporary disability continuing beyond the time limits set forth above, employees shall be paid two-thirds (66.66%) of their full base salary at the time of injury for the duration of such temporary disability in conformance with State law.

During the period of temporary disability, an employee’s eligibility for health, dental, life, LTD, or other insured program will continue with City contributions at the same rate as for active employees and vacation and sick leave benefits shall continue to accrue. In case of temporary disability beyond the time limits set forth above, sick leave and vacation benefits shall not be accrued.

ARTICLE XI – RETIREMENT PENSION

a) Employees hired before July 17, 2010

1. Retirement formula. Effective pay period inclusive of 1/6/07, the City’s Public Employees’ Retirement System (PERS) benefits changed to the 2.7%@ 55 formula for non -safety members (from 2% @55).

2. Employee contributions. Employees under the 2.7%@55 retirement formula will pay the full eight percent (8%) employee contribution.

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14 3. Final compensation. Final compensation for purposes of retirement shall be as set forth in the City’s contract with CalPERS, including, when applicable, the Government Code Section 20692 Optional Benefit.

b) Employees hired on or after July 17, 2010.

1. Retirement formula. For miscellaneous employees hired on or after July 17, 2010, or on or after January 1, 2013 who are not subject to the pension formula in the Public Employees’ Pension Reform Act (PEPRA), the City offers the CalPERS retirement formula two percent (2.0%) of final salary at age sixty (60).

2. Employee contributions. Employees under the 2%@60 retirement formula will pay the full seven percent (7%) employee contribution.

3. Final compensation. Final compensation for purposes of retirement shall be as set forth in the City’s contract with CalPERS, including, when applicable, the Government Code Section 20692 Optional Benefit or as required by law.
c) New Employees hired on or after January 1, 2013
Employees hired on or after January 1, 2013 who are “new members” as defined by the California Public Employees’ Pension Reform Act (PEPRA), will be subject to the terms of that statute including but not limited to the following provisions:

1. Retirement formula. Effective for employees hired on or after January 1, 2013, the PEPRA requires the City to provide new employees, as defined in that law, the CalPERS retirement formula two percent of final salary at age 62 (2%@62).

2. Employee contributions. Employees under the 2%@62 formula shall pay at least 50 percent of the total no rmal cost or the same contribution rate as “similarly situated” employees, whichever is higher.

3. Final compensation. Final compensation for employees under the 2%@62 benefit shall be as set forth in PEPRA, including calculation based on the average of thre e highest consecutive years and a cap on pensionable compensation (currently $136,440) based on IRS limits for employers that do not participate in social security.
d) Effective as soon as administratively feasible but no sooner than the first full pay period of March 2019, bargaining unit employees shall contribute 1% of their salary toward the employer cost of retirement.

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15 (Currently 6.25%) (Currently 7.25%)
e) Employee CalPERS contributions tax deferred. Employee CalPERS contributions shall be made on a tax deferred basis, in accordance with Section 414(h)(2) of the Internal Revenue Code. All provisions of this subsection are subject to and conditioned upon compliance with IRS regulations.

ARTICLE XII – MISCELLANEOUS

Section 1 – Reimbursement for Relocation Expense
The City of Palo Alto, in rare instances, may, provide a Basic Relocation Benefits Package for new employees, upon the approval of the City Manager or designated subordinate. In addition, the provision of “Optional Benefits”, or portions thereof, may be exten ded for exceptional circumstances and only by approval of the City Manager or designee. The details of the Relocation Expense program are specified in the City’s Relocation Expense policy.

Section 2 – Meal allowance
Employees assigned to attend night meetings or who travel for business purposes are eligible to receive reimbursement as described by City policy. This provision covers only receipted meals actually taken and submitted for reimbursement.

Section 3 – Reduction in Workforce
The City will make every effort to provide written notice of its intent to lay off employees in this unit and will meet with Association upon request to discuss alternatives to layoff.

Section 4 - Contracting Out

a. As provided in subsection b , the City shall provide notice of any planned action(s) that would result in the layoff of one or more Association bargaining unit members and where either of the following apply:

1. The planned City action(s) is to contract out work historically and exclusively performed by Association bargaining unit members;

2. The planned City action is to substantially increase the scope or amount of work historically but not exclusively performed by Association bargaining unit members (e.g. work shared with other C ity employees outside the Association bargaining unit or contractors).

b. The City shall deliver written notice to the Association at least thirty (30) days before it implements any action(s) described in subsection a. Within seven (7) days after it receive s such notice, the Association may deliver to the City’s Chief People Officer a written request to meet and discuss the effects of the City action(s). After the City’s receipt of such request, the parties will promptly meet and undertake discussions. The discussions will conclude no later than the thirtieth (30th) day following the Association’s receipt of the City’s notice of the planned action(s), as described above. Thereafter, the City may implement the action(s) without further discussion as originally planned or as modified as a result of such discussions. If the Association does not deliver timely notice of its desire to meet and discuss the effects of the action(s) identified in the City’s notice, the City may proceed with the planned action(s).

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16 c. The City retains its right to determine the methods, means, and personnel by which services are carried out at its sole discretion in circumstances no covered by subsection a above.

Section 5- Association Security
a) When a person is hired in any of the covered job classifications, the City shall notify that person that the Association is the recognized bargaining representative for the employee in said Association and give the employee a current copy of the Memorandum of Agreement. b) Members of the Association Board may use a reasonable amount of on-duty time without loss of pay to meet with the City specifically related to representation of employees.

For purposes of this section, representation shall include:
(i) Meetings with represented employees or the City related to a grievance or disciplinary action, including investigation and preparation time.
(ii) Any meeting with the City related to benefits, working conditions or other terms and conditions of employment.

Section 6- Notification to the Association
The Association shall be informed in advance in writing by the City before any proposed changes not covered by this Memorandum of Agreement are made in benefits, working conditions, or other terms and conditions of employment which require meet and confer or meet and consult process.

Section 7- Association Representative Access to Work Locations Employee and nonemployee representatives of the Association will be granted access to City work locations to conduct business related to the administration or negotiation of the parties' Memorandum of Agreement, as long as advance arrangements for such visits have been made with the affected department manager and no disruption of work occurs.

Section 8- Release Time
The Association Chair, Vice-Chair or his or her-designee in the representation unit may use a reasonable amount of time without loss of pay for matters related to the bargaining process, labor relations, and administration of the MOA, violations of the MOA, grievances, disciplinary

Section 9- Personnel Files
Records of all disciplinary actions shall be kept in the central personnel file. Employees shall be entitled to sign and date all action forms in their personnel files. Employees are entitled to review their personnel files upon written request or to authorize, in writing, review by their Association representatives. An employee shall be allowed, copies of materials in an employee's personnel file.

ARTICLE XIII – GRIEVANCE PROCEDURE

Section 1 - General Provisions
The City and the Association recognize that early settlement of grievances is essential to sound employee-employer relations. The parties seek to establish a mutually satisfactory method for the settlement of Association grievances as provided for below. In presenting a grievance the aggrieved and/or his or her representative is assured freedom from restraint, interference, coercion, discrimination or reprisal.

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17 Section 2 – Definitions
Grievance means an unresolved complaint or dispute regarding the interpretation or application of this Memorandum of Agreement, excluding however those provisions of this MOA which specifically provide that the decision of any City official shall be final, the interpretation or application of those provisions not being subject to the grievance.

Section 3 - Conduct of Grievance Procedure

a) An aggrieved employee may be represented by the Association or may represent himself/herself in preparing and presenting a grievance at any level of review. No grievance settlement may be made in violation of an existing merit rule or memorandum of agreement.

b) An employee and the representative steward, if any, may use a reasonable amount of work time so long as there is no disruption of work, in conferring about and presenting a grievance. Requests for release time to prepare grievances shall be made in advance and approved by the immediate supervisor.

c) The time limits specified in this Article may be extended by mutual agreement in writing of the aggrieved employee or the Association and the reviewer concerned.

d) Should a decision not be rendered within a stipulated time limit, the grievant may immediately appeal to the next step.

e) The grievance shall be considered settled if the decision of any step is not appealed within the specified time limit.

f) Grievances shall be made in writing and submitted on forms provided by the City. The written grievance shall contain clear, factual and concise language, including: (1) the name of the grievant; (2) a statement of the facts upon which the grievance is based, including relevant dates, times and places; (3) specific provisions of this Agreement the grievant alleges has been violated; (4) a summary of any steps taken toward resolution; and (5) the action the grievant believes will resolve the grievance.

g) Any retroactivity on monetary grievances shall be limited to the date of occurrence, except in no case will retroactivity be granted prior to three months before the grievance was filed in writing.

h) For purposes of time limits, “working days” are considered to be Monday through Friday, exclusive of City holidays.

i) If a mutually agreed solution is reached during any step of this grievance procedure, the agreement shall be placed in writing and signed by the City and the grievant or Association.

j) Upon request of either party, meetings to discuss the grievance shall be held at any step in the grievance procedure.

Section 4 - Grievance and Appeal Procedure

Step I. Informal Discussion
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18 based the aggrieved employee shall present the grievance action to his or her immediate supervisor and attempt to resolve the grievance through informal discussions. Every attempt will be made to settle the issue at this level.

Step II. Formal Grievance
If the grievance is not resolved through the informal discussion in Step 1 the employee will reduce the grievance to writing and submit copies to the Department head or his or her designee within fifteen (15) working days of the discussion with the immediate. The Department Head or designee shall have fifteen (15) working days from the receipt of a written grievance to review the matter and prepare a written statement.

Step III. Human Resources Director
If the grievance is not resolved and/or the aggrieved employee is not satisfied with the Step II decision, the grievant may appeal to the Human Resource Director or his or her designee in writing within fifteen (15) working days of the receipt of the Department Head's response. The written appeal to the Human Resources level shall include a copy of the original grievance, the Department Head’s decision at Step II, and a clear statement of the reasons for appeal. Within fifteen (15) working days, after receiving the written appeal, the Human Resource Director shall review the matter and prepare a written statement.

If a mutually agreed solution is reached during this process the agreement shall be placed in writing and signed.

Step IV. City Manager /Arbitration
If the grievance is not resolved at Step III, the aggrieved employee may choose between final and binding resolution of the grievance through appeal to the City Manager or through appeal to final and binding arbitration. For the term of this Memorandum of Agreement, appeals to final and binding arbitration may be processed only with Association approval. All Step IV appeals must be filed in writing at the Human Resources Department Office within fifteen (15) working days of receipt of the Human Resource Director’s decision at Step 3.

If the grievant or appellant elects final and binding resolution by the City Manager, the City Manager will choose the methods he or she considers appropriate to review and settle the grievance. The City Manager shall render a written decision to all parties directly involved within fifteen (15) working days after receiving the grievant/appellant’s appeal.

If the grievant/appellant elects final and binding arbitration in accordance with this provision, the parties shall mutually select an arbitrator. In the event the parties cannot agree on an arbitrator, they shall mutually request a panel of five arbitrators from the California State Conciliation Service or from the American Arbitration Association if either party objects to the State Conciliation Service, and select an arbitrator by the alternate strike method.

The arbitrator shall have jurisdiction and authority only to interpret, apply, or determine compliance with the provisions of this Memorandum of Agreement. The arbitrator shall be without power to make any decision contrary to, or inconsistent with or modifying in any way, the terms of this Memorandum Of Agreement. The arbitrator shall be without authority to require the City to delegate or relinquish any powers which by State law or City Charter the City cannot delegate or relinquish. Copies of the arbitrator's decision shall be submitted to the City, the aggrieved employee and the Association. All direct costs emanating from the arbitration procedure shall be paid in full by the party in which the decision was found against.

ARTICLE XIV – FULL UNDERSTANDING

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19 Section 1 – Full Understanding
The Memorandum of Agreement contains the full and entire understanding of the parties regarding the matters set forth herein.

Section 2 – Severability
If, at the conclusion of any applicable appeals, any provision of this Memorandum of Agreement is ultimately held invalid and unenforceable by a decision of the relevant Court or Administrative Agency of competent jurisdic tion such holding shall apply only to the provision(s) of this Memorandum of Agreement specified in the decision. Such decision shall not invalidate any other portion of this Memorandum of Understanding, and the unaffected provisions shall remain in full f orce and effect. The Parties agree that within ten (10) days after the date of such decision, they shall meet and confer in an effort to negotiate a substitute for the invalidated provision(s).

Section 3 – Good Faith
Ordinances, resolutions, rules and regulations enacted pursuant to this Memorandum of Agreement that regulate matters within the scope of representation shall, to the extent they are within the scope of representation, be administered in good faith.

Section 4 – Mid-Contract Negotiations
Subjects within the scope of representation that are not covered by this Memorandum of Agreement remain subject to the duty to meet and confer in good faith on timely notice and request. Neither party is obligated to meet and confer over matters within the sco pe of representation covered by this Memorandum of Agreement, except for purposes of negotiating over the terms of a successor to this Memorandum of Agreement.

Section 5 – Merit System
Merit System Rules and Regulations, during the term of this Memorandum of Agreement, Management may propose certain changes in the City Merit System Rules and Regulations. With regard to such changes which pertain to the representation unit, the parties agree to review, and upon request, meet and confer regarding the changes.

ARTICLE XV-DURATION
This Memorandum of Agreement shall become effective once the Memorandum of Agreement is signed by the parties hereto and adopted by the City Council. This Memorandum of Agreement shall remain in effect through June 30, 2025. At the request of either party negotiation of a successor agreement shall commence, however they should begin no sooner than 6 months prior to expiration of this agreement and no later than 3 months prior to the expiration of this agreement.

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1 CITY OF PALO ALTO
Memorandum of
Agreement
City of Palo Alto and Utilities Management and
Professional Association of Palo Alto

Effective dates:

July 1, 2021 – June 30, 2022January 1, 2023– June 30, 2025

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2 Table of Contents
PREAMBLE .................................................................................................................................. 4 ARTICLE I – RECOGNITION .................................................................................................. 4 ARTICLE II – NO DISCRIMINATION .................................................................................... 4 ARTICLE III – PAYROLL DUES DEDUCTION .................................................................... 4 ARTICLE IV – WORK STOPPAGE AND LOCKOUTS ........................................................ 4 ARTICLE V – CITY RIGHT TO MANAGE ............................................................................ 4 ARTICLE VI – COMPENSATION ............................................................................................ 5 Section 1 – Job Families and Salary Schedule ............................................................................ 5 Section 2 – Base Salary Increases ............................................................................................... 5 Section 3 – Market Based Adjustments ...................................................................................... 6 ARTICLE VII – HEALTH BENEFITS ..................................................................................... 7 Section 1 – Group Insurance ....................................................................................................... 7 Article VIII – DEFERRED COMPENSATION MATCH ...................................................... 11 ARTICLE IX – LEAVES ........................................................................................................... 11 Section 1 – Sick Leave .............................................................................................................. 11 Section 2 – Management Annual Leave ................................................................................... 12 Section 3 – Vacation ................................................................................................................. 12 Section 4 – Bereavement .......................................................................................................... 13 Section 5 – All Other Leaves .................................................................................................... 13 Section 6 – Vacation Benefits for Deceased Employees .......................................................... 13 Section 7 – Voluntary Leave Program ...................................................................................... 13 ARTICLE X – WORKERS’ COMPENSATION .................................................................... 13 Section 1 – Employees unable to work due to occupational injury, illness or disease ............. 14 Section 2 – Temporary Disability ............................................................................................. 14 ARTICLE XI – RETIREMENT PENSION ............................................................................. 14 ARTICLE XII – MISCELLANEOUS ...................................................................................... 15 Section 1 – Reimbursement for Relocation Expense ................................................................ 16 Section 2 – Meal allowance ...................................................................................................... 16 Section 3 – Reduction in Workforce ......................................................................................... 16 Section 4 - Contracting Out ...................................................................................................... 16 Section 5- Association Security ................................................................................................ 16 Section 6- Notification to the Association ................................................................................ 17 Section 7- Association Representative Access to Work Locations .......................................... 17

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3 Section 8- Release Time ........................................................................................................... 17 Section 9- Personnel Files ......................................................................................................... 17 ARTICLE XIII – GRIEVANCE PROCEDURE ..................................................................... 17 Section 1 - General Provisions .................................................................................................. 17 Section 2 – Definitions.............................................................................................................. 17 Section 3 - Conduct of Grievance Procedure ............................................................................ 17 Section 4 - Grievance and Appeal Procedure ........................................................................... 18 ARTICLE XIV – FULL UNDERSTANDING ......................................................................... 19 Section 1 – Full Understanding................................................................................................. 19 Section 2 – Severability ............................................................................................................ 19 Section 3 – Good Faith ............................................................................................................. 20 Section 4 – Mid-Contract Negotiations .................................................................................... 20 Section 5 – Merit System .......................................................................................................... 20 ARTICLE XV-DURATION ...................................................................................................... 20

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4 PREAMBLE

ARTICLE I – RECOGNITION

ARTICLE II – NO DISCRIMINATION

ARTICLE III – PAYROLL DUES DEDUCTION

ARTICLE IV – WORK STOPPAGE AND LOCKOUTS

ARTICLE V – CITY RIGHT TO MANAGE

The City retains and reserves, without limitation, all powers, rights, authority, duties, and responsibilities to manage the City as stated in the City Merit Rules, Chapter 12, Section 1207(d).

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5 the Association.

ARTICLE VI – Compensation

Section 1 – Job Families and Salary Schedule

Effective the first full pay period following adoption of this Memorandum by Council, all salaries of covered classifications shall be as listed in Appendix A.

Appendix A shall clearly outline benchmark classifications for future total compensation surveys and for the purposes of internal alignment of the Association job families and career paths.

The parties agree to continue a jointly-staffed benchmark committee. All recommendations or research conducted by the committee will be included in the next bargaining process.

Section 2 – Base Salary Increases

d) Effective the first pay period of January 2024, all classifications will receive an additional one hundred dollars ($100) monthly flexible compensation payment built into base hourly rate of pay.

During the term of this agreement there will be no base salary increase (0%).

For the purpose of reference and discussion the parties may bring whichever relevant data points are available, but both agree that the United States Bureau of Labor Statistics “BLS” provides the most widely accepted and utilized data for determining the cost of living for a given region. The BLS is intended to provide a single source of information regarding inflationary impacts within the local economy. The BLS data does not obligate the City or the Association to propose or agree to any base salary adjustments.

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6 a) The methodology for implementing base salary increases will be to: Increase the top salary range of the benchmarked positions within each job family by the above listed base salary increase, while maintaining a 25% differential between the top and bottom of the selected salary range then
b) Adjust the salary range of the linked positions within each job family based on their differential from the benchmarked position.
c) Each individual’s base salary will be increased by the same percentage that was applied to their position’s salary range in a) or b) above.
d) If an individual’s salary would be reduced based on the implementation of the new salary schedule, then that employee will remain at their current salary until a time when the listed salary is equal to their current pay.
e) For the purposes of this contract only, in implementing changes to the salary range individuals below the new salary minimum will be brought up to the new minimum.

Section 3 – Market Based Adjustments

Within the Term of this Agreement, the City will conduct a total compensation study of UMPAPA Benchmarked positions based on the following agencies:

Alameda
Anaheim
Burbank
East Bay MUD
Long Beach
Mountain View
Pacific Gas and Electric
Redwood City
Roseville
Sacramento MUD
San Jose
Santa Clara
Silicon Valley Clean Energy
Sunnyvale

The City’s total compensation study will include a geographic adjustment for agencies which are outside of the immediate region. Those agencies receiving a geographic adjustment are: Anaheim, Burbank, Long Beach, Sacramento MUD and Roseville. For the purposes of recruiting and retaining employees within the Utility market place, the parties will add to the survey universe data from Pacific Gas and Electric (PG&E) Bay Area region where data can be found. For the term of this agreement, where PG&E data cannot be verified or acquired the parties agree to include an above-median comparator for the purposes of calculating benchmarks.

Section 4. Working Above Classification
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7 classification for a period of one pay period or more, the City Manager or designee may authorize payment within the range of the higher classification for the specified time frame. Working above classification will not exceed six months, unless renewed at the discretion of the City Man ager or designee. On expiration of that timeframe, working above classification pay will cease and the employee will return to their former pay level. Working above classification pay is not to exceed 10% more than the employee’s current salary and shall be documented on a Personnel Action Form, with a description of the additional duties in the higher classification to be performed and an end date. Any disputes with the application of this provision shall be subject to Chapter 11 of the City’s Merit Rules.

1. The Parties must agree on measurable objectives/criteria focused on curbing controllable costs associated with rate increases,

2. If the agreed-upon on “measurable objectives/criteria” are met during the Pilot Program, the City would provide a onetime non-pensionable bonus in an amount agreed to by the parties.

All covered employees who are active at the time of payment will be eligible if the objectives/criteria are met.

ARTICLE VII – HEALTH BENEFITS

Section 1 – Group Insurance

During the term of this MOA, the maximum City contribution towards medical premiums for eligible full time employees per employee category shall be up to a maximum of the following for any plan:

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8 Medical Premium
Category
Maximum City
Contribution
Effective Jan 1, 2021
EE only $871
EE plus one $1742
EE plus family $2260

e) Retiree Health Plan
a. Employees Hired Prior to January 1, 2004
Monthly City-paid premium contributions for a retiree-selected health plan through the CalPERS Health Benefits Program will be made as provided under the Public Employees' Medical and Hospital Care Act.

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9 Code section 22893.

c. For employees hired prior to January 1, 2004 who wish to opt in to Government code section 22893,. tThe City providedwill offer a 90 calendar day period following adoption of this agreement by Council, in which employees hired prior to January 1, 2004 will have the opportunity to opt in to Government code section 22893. For a 90 day period following adoption of this agreement by Council, the City will offer a one-time opt in to Government code section 22893 for employees hired prior to 12/1/2013.

f) Dental Plan

1. The City shall pay covered plan charges on behalf of all eligible employees and dependents.

Dependents include eligible domestic partners as defined in Section 1 subsection c of this Article VII, Health Benefits.

2. The City’s Dental Plan provides the following:
a. Maximum Benefits per Calendar Year- $2,000 per person b. Lifetime Maximum for Orthodontics- The City will pay up to $2,000.00 for orthodontia coverage (not included in annual dental maximum)
c. Major Dental Services 50% UCR*
d. Orthodontics 50% UCR*
e. Basic Benefits (All other covered services)
i) First Calendar Year of Eligibility 70% UCR*
ii) Subsequent Calendar Years 70%-100%
iii) *Usual, Customary, and Reasonable
iv) For each dental plan member, the percentage of coverage for basic benefits will begin at 70% for the first calendar year of coverage and increase by 10% (up to a maximum of 100%) effective the first day of the next calendar year as long as the member utilizes the plan at least once during the current year. Per the Delta Dental contract effective October 1, 2005, if the member does not use the plan during the current year, the percentage of coverage for the next calendar year shall remain unchanged from the current year.
v) If a dental plan member loses coverage under the plan, the applicable percentage of coverage for basic benefits provided during any future period of coverage will commence at 70% as if the dental plan member was a new enrollee. Examples of when a member might lose coverage under the plan include:
• Employee goes on an unpaid leave of absence and elects not to pay the required dental premiums for his/her family’s coverage during the leave.

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Memorandum of
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10 • Employee elects to drop one or more covered dependents from the plan during an open enrollment period so that they might be covered on a spouse’s non-City of Palo Alto dental plan.
g) Vision Care

2. Dependents include eligible domestic partners as defined in Section 1, Subsection c of this Article VII, Health Benefits.

j) Supplemental Life And AD&D Insurance
An employee may, at his/her cost, purchase additional life insurance and additional AD&D coverage equal to one - or two -times his or her annual salary. The maximum amount of life insurance available to the employee is up to $325,000 and the maximum amo unt of AD&D coverage available is up to $325,000.
k) Long Term Disability Insurance

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11 The Employee Assistance Plan (EAP) provides employees with confidential personal counseling, work and family related issues, eldercare, substance abuse, etc. In addition, EAP programs provide a valuable tool for supervisors to refer troubled employees to professional outside help. This service staffed by experienced clinicians is available to employees and their dependents by calling a toll-free phone line twenty-four (24) hours a day, seven days a week. Guidance is also available online.

Article VIII – Deferred Compensation Match

Employee Contribution Employer Matching Contribution
$1,000
$2,500
$1,000
$2,500
$4,000 $4,000
$11,000 $4,000

ARTICLE IX – LEAVES

b) Employees may use up to twenty hours of sick leave per calendar year for personal business. The scheduling of such leave is subject to the approval of the appropriate level of Management.

c) Employees leaving the municipal service shall forfeit all accumulated sick leave, except as otherwise provided by law and by Section 609 of the Merit Rules and Regulations. In the event that notice of resignation is given, sick leave may be used only through the day which was designated as the final day of work by such notice.

e) Up to nine days of sick leave per calendar year may be used for illness in the immediate family, including a registered domestic partner.

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Memorandum of
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12 f) Employees eligible, as specified above if hired before December 1, 1983, to be compensated for sick leave may annually convert sick leave hours in excess of 600 to cash or deferred compensation, according to the formula set forth above, up to a maximum of $2,000 per fiscal year.

a) Less than nine years. For employees completing less than nine years continuous service: 120 hours vacation leave per year; provided that:

b) Nine, but less than fourteen years. For employees completing nine, but not more than fourteen years continuous service; 160 hours vacation per year.

c) Fourteen, but less than nineteen years. For employees completing fourteen, but not more than nineteen years continuous service; 180 hours vacation leave per year.

d) Nineteen or more years. For employees completing nineteen or more years continuous service; 200 hours vacation leave per year.

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Memorandum of
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13 The election to cash-out vacation hours in each designated year will be irrevocable. This means that employees who elect to cash -out vacation hours must cash -out the number of accrued hours pre - designated on the election form.

Section 5 – All Other Leaves
For all other leaves of absence refer to Chapters 5 and 8 of the City’s Merit Rules and Regulations.

Section 7 – Voluntary Leave Program
If permitted by agreement between the City and the Association, members of the Association may participate in the "Voluntary Leave Program" to assist in maintaining the pay of an employee who is eligible by virtue of a qualifying catastrophic medical condition. Such participation, when authorized by City- Association agreement, shall be allowed only as long as the donors remain anonymous (unless disclosure is required by law).

ARTICLE X – WORKERS’ COMPENSATION

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Memorandum of Agreement Between Utilities Management and Professional Association of Palo Alto and the City of Palo Alto effective July 1, 2021 to June 30, 2022January 1, 2023 to June 30, 2025

14 Section 1 – Employees unable to work due to occupational injury, illness or disease Employees unable to work due to occupational injury, illness or disease will be required to report to management to discuss his or her status and ability to return to work on restricted or unrestricted duty, subject to the limitations imposed by applicable law. This requirement is not meant to unreasonably restrict employee’s activities while off work due to such incapacity as long as such activities are cleared by the treating physician, treating program or alternative treatment program and the employee is available for restricted or unrestricted duty as soon as medical clearance can be received.

ARTICLE XI – RETIREMENT PENSION

a) Employees hired before July 17, 2010

2. Employee contributions. Employees under the 2.7%@55 retirement formula will pay the full eight percent (8%) employee contribution.

b) Employees hired on or after July 17, 2010.

1. Retirement formula. For miscellaneous employees hired on or after July 17, 2010, or on or after January 1, 2013 who are not subject to the pension formula in the Public Employees’ Item 7
Attachment A - UMPAPA
Memorandum of
Agreement

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Memorandum of Agreement Between Utilities Management and Professional Association of Palo Alto and the City of Palo Alto effective July 1, 2021 to June 30, 2022January 1, 2023 to June 30, 2025

15 Pension Reform Act (PEPRA), the City offers the CalPERS retirement formula two percent (2.0%) of final salary at age sixty (60).

2. Employee contributions. Employees under the 2%@60 retirement formula will pay the full seven percent (7%) employee contribution.

Pensions Group Pension
Formula
Employee Contribution Contribution to
Employer Side
Total
Contribution from
Employees
Group A 2.7@ 55 8% 1% 9%
Group B & C 2@60 7% 1% 8%
Group D 2@62 50% of the normal Cost
(Currently 6.25%)
1% Will fluctuate
(Currently 7.25%)
e) Employee CalPERS contributions tax deferred. Employee CalPERS contributions shall be made on a tax deferred basis, in accordance with Section 414(h)(2) of the Internal Revenue Code. All provisions of this subsection are subject to and conditioned upon compliance with IRS regulations.

ARTICLE XII – MISCELLANEOUS

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Memorandum of
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Memorandum of Agreement Between Utilities Management and Professional Association of Palo Alto and the City of Palo Alto effective July 1, 2021 to June 30, 2022January 1, 2023 to June 30, 2025

16 Section 1 – Reimbursement for Relocation Expense
The City of Palo Alto, in rare instances, may, provide a Basic Relocation Benefits Package for new employees, upon the approval of the City Manager or designated subordinate. In addition, the provision of “Optional Benefits”, or portions thereof, may be exten ded for exceptional circumstances and only by approval of the City Manager or designee. The details of the Relocation Expense program are specified in the City’s Relocation Expense policy.

Section 4 - Contracting Out

1. The planned City action(s) is to contract out work historically and exclusively performed by Association bargaining unit members;

c. The City retains its right to determine the methods, means, and personnel by which services are carried out at its sole discretion in circumstances no covered by subsection a above.

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Memorandum of
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17 b) Members of the Association Board may use a reasonable amount of on-duty time without loss of pay to meet with the City specifically related to representation of employees.

ARTICLE XIII – GRIEVANCE PROCEDURE

Section 2 – Definitions
Grievance means an unresolved complaint or dispute regarding the interpretation or application of this Memorandum of Agreement, excluding however those provisions of this MOA which specifically provide that the decision of any City official shall be final, the interpretation or application of those provisions not being subject to the grievance.

Section 3 - Conduct of Grievance Procedure

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Memorandum of
Agreement

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Memorandum of Agreement Between Utilities Management and Professional Association of Palo Alto and the City of Palo Alto effective July 1, 2021 to June 30, 2022January 1, 2023 to June 30, 2025

18 a) An aggrieved employee may be represented by the Association or may represent himself/herself in preparing and presenting a grievance at any level of review. No grievance settlement may be made in violation of an existing merit rule or memorandum of agreement.

c) The time limits specified in this Article may be extended by mutual agreement in writing of the aggrieved employee or the Association and the reviewer concerned.

d) Should a decision not be rendered within a stipulated time limit, the grievant may immediately appeal to the next step.

e) The grievance shall be considered settled if the decision of any step is not appealed within the specified time limit.

h) For purposes of time limits, “working days” are considered to be Monday through Friday, exclusive of City holidays.

i) If a mutually agreed solution is reached during any step of this grievance procedure, the agreement shall be placed in writing and signed by the City and the grievant or Association.

j) Upon request of either party, meetings to discuss the grievance shall be held at any step in the grievance procedure.

Section 4 - Grievance and Appeal Procedure

Step I. Informal Discussion
Within fifteen (15) working days after the incident or discovery of the incident on which the grievance is based the aggrieved employee shall present the grievance action to his or her immediate supervisor and attempt to resolve the grievance through informal discussions. Every attempt will be made to settle the issue at this level.

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19 working days of the discussion with the immediate. The Department Head or designee shall have fifteen (15) working days from the receipt of a written grievance to review the matter and prepare a written statement.

If a mutually agreed solution is reached during this process the agreement shall be placed in writing and signed.

ARTICLE XIV – FULL UNDERSTANDING

Section 1 – Full Understanding
The Memorandum of Agreement contains the full and entire understanding of the parties regarding the matters set forth herein.

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Memorandum of Agreement Between Utilities Management and Professional Association of Palo Alto and the City of Palo Alto effective July 1, 2021 to June 30, 2022January 1, 2023 to June 30, 2025

20 competent jurisdic tion such holding shall apply only to the provision(s) of this Memorandum of Agreement specified in the decision. Such decision shall not invalidate any other portion of this Memorandum of Understanding, and the unaffected provisions shall remain in full f orce and effect. The Parties agree that within ten (10) days after the date of such decision, they shall meet and confer in an effort to negotiate a substitute for the invalidated provision(s).

ARTICLE XV-DURATION
This Memorandum of Agreement shall become effective once the Memorandum of Agreement is signed by the parties hereto and adopted by the City Council. This Memorandum of Agreement shall remain in effect through June 30, 20252. At the request of either party negotiation of a successor agreement shall commence, however they should begin no sooner than 6 months prior to expiration of this agreement and no later than 3 months prior to the expiration of this agreement.

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Attachment A - UMPAPA
Memorandum of
Agreement

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City of Palo Alto
Utilities Management and Professional Association of Palo Alto (UMPAPA) Salary Schedule Effecitve 6.17.2023 Market+Ben Offset
Job Code Classifications
Utilities Administrative Assistant
Min Hourly Rate Max Hourly Rate Approx Max Monthly Salary Approx. Max Annual Salary 2076
1002
6 $36.45
$96.63
$105.43
$101.81
$99.40
$64.08
$92.60
$89.43
$87.26
$73.86
$85.92
$88.48
$82.97
$68.44
$70.86
$68.98
$60.06
$80.60
$77.83
$58.50
$75.98
$72.57
$70.08
$80.60
$72.21
$79.48
$62.65
$50.06
$48.60
$128.84
$140.57
$135.74
$132.53
$85.44
$123.46
$119.23
$116.34
$98.48
$117.97
$98.48
$110.62
$91.25
$94.48
$91.97
$80.08
$107.46
$103.77
$77.99
$101.30
$96.76
$93.44
$107.46
$96.27
$105.97
$83.53
$66.75
$8,424
$22,332
$24,365
$23,528
$22,972
$14,810
$21,400
$20,667
$20,166
$17,070
$20,448
$17,070
$19,174
$15,817
$16,377
$15,941
$13,881
$18,626
$17,987
$13,518
$17,559
$16,772
$16,196
$18,626
$16,687
$18,368
$14,479
$11,570
$101,088
$267,987
$292,386
$282,339
$275,662
$177,715
$256,797
$247,998
$241,987
$204,838
$245,378
$204,838
$230,090
$189,800
$196,518
$191,298
$166,566
$223,517
$215,842
$162,219
$210,704
$201,261
$194,355
$223,517
$200,242
$220,418
$173,742
$138,840
Assistant Director, Utilites Customer Support Services
Assistant Director, Electric and Fiber Utilities
Assistant Director, WGW Utilities1003
65 Assistant Director, Utilities Resource Management
Manager, Utilities Public Communications
Engineering Manager, Electric and Fiber Utilities
Engineering Manager, Water, Gas & Wastewater (WGW) Utilities Manager, Utilities Strategic Business Services
Manager, Utilities Customer Service
Operations Manager, Electric and Fiber Utilities
Manager, Utilities Credit & Collection
Operations Manager, WGW Utilities
84 129
120
2025
179
185
1114
156
150
48 Manager, Utilities Program Services
Manager, Fiber Optic Utility
2020
13 Utilities Principal Business Analyst
Utilities Senior Business Analyst
188
2187
2014
25 Principal Engineer, Electric and Fiber Utilities
Principal Engineer, WGW Utilities
Utilities Senior Management Analyst
Senior Planner, Utilities Resources
27 Supervising Project Engineer, Electric and Fiber Utilities Supervising Project Engineer28
1011
114
TBD
2017
2171
Manager, Utilities Compliance
Operations Supervisor, WGW Utilities
Operations Supervisor, Electric and Fiber Utilities
Utilities Safety Officer
Management Analyst - U*
Effective 04/01/2023
Item 7
Attachment B - UMPAPA Salary
Schedule

Item 7: Staff Report
Pg.
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City of Palo Alto
Utilities Management and Professional Association of Palo Alto (UMPAPA) Salary Schedule

07.15.2023 (4%)
Max Hourly Rate Approx Max Monthly SalaryJob Code Classifications Utilities Administrative Assistant
Min Hourly Rate Approx. Max Annual Salary
2076
1002
6 $37.92
$100.50
$109.65
$105.88
$103.38
$66.65
$96.30
$93.00
$90.75
$76.82
$92.02
$76.82
$86.29
$71.18
$73.70
$71.75
$62.46
$83.82
$80.95
$60.84
$79.02
$75.48
$72.89
$83.82
$75.10
$82.66
$65.16
$52.07
$50.55
$134.00
$146.20
$141.17
$137.84
$88.86
$8,762
$23,227
$25,341
$24,469
$23,892
$15,402
$22,256
$21,493
$20,973
$17,753
$21,266
$17,753
$19,942
$16,449
$17,032
$16,581
$14,435
$19,372
$18,708
$14,059
$18,262
$17,444
$16,845
$19,372
$17,356
$19,103
$15,059
$12,033
$105,144
$278,720
$304,096
$293,634
$286,707
$184,829
$267,072
$257,920
$251,680
$213,034
$255,195
$213,034
$239,304
$197,392
$204,381
$198,973
$173,222
$232,461
$224,494
$168,709
$219,149
$209,331
$202,134
$232,461
$208,270
$229,237
$180,710
$144,394
Assistant Director, Utilites Customer Support Services
Assistant Director, Electric and Fiber Utilities Utilities Assistant Director, WGW Utilities1003
65 Assistant Director, Utilities Resource Management
Manager, Utilities Public Communications
Engineering Manager, Electric and Fiber Utilities
Engineering Manager, Water, Gas & Wastewater (WGW) Utilities Manager, Utilities Strategic Business Services
Manager, Utilities Customer Service
84 129
120
2025
179
185
1114
156
150
48 $128.40
$124.00
$121.00
$102.42
$122.69
$102.42
$115.05
$94.90
Operations Manager, Electric and Fiber Utilities
Manager, Utilities Credit & Collection
Operations Manager, WGW Utilities
Manager, Utilities Program Services
Manager, Fiber Optic Utility $98.26
2020
13 Utilities Principal Business Analyst $95.66
Utilities Senior Business Analyst $83.28
188
2187
2014
25 Principal Engineer, Electric and Fiber Utilities
Principal Engineer, WGW Utilities
$111.76
$107.93
$81.11Utilities Senior Management Analyst
Senior Planner, Utilities Resources $105.36
$100.64
$97.18
27 Supervising Project Engineer, Electric and Fiber Utilities Supervising Project Engineer28
1011
114
TBD
2017
2171
Manager, Utilities Compliance $111.76
$100.13
$110.21
$86.88
Operations Supervisor, WGW Utilities
Operations Supervisor, Electric and Fiber Utilities
Utilities Safety Officer
Management Analyst - U $69.42
Item 7
Attachment B - UMPAPA Salary
Schedule

Item 7: Staff Report
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City of Palo Alto
Utilities Management and Professional Association of Palo Alto (UMPAPA) Salary Schedule

01.13.2024 (Ben Offset)
Max Hourly Rate Approx Max Monthly SalaryJob Code Classifications Utilities Administrative Assistant
Min Hourly Rate Approx. Max Annual Salary
2076
1002
6 $38.43
$100.94
$110.09
$106.32
$103.82
$67.08
$96.74
$93.44
$91.19
$77.25
$92.46
$77.25
$86.73
$71.61
$74.13
$72.27
$62.99
$84.26
$81.39
$61.36
$79.46
$75.92
$73.32
$84.26
$75.54
$83.10
$65.60
$52.59
$51.24
$134.58
$146.78
$141.75
$138.42
$89.44
$8,882
$23,327
$25,442
$24,570
$23,993
$15,503
$22,357
$21,594
$21,074
$17,853
$21,367
$17,853
$20,043
$16,550
$17,132
$16,701
$14,557
$19,472
$18,808
$14,180
$18,363
$17,545
$16,945
$19,472
$17,456
$19,204
$15,160
$12,154
$106,579
$279,926
$305,302
$294,840
$287,914
$186,035
$268,278
$259,126
$252,886
$214,240
$256,402
$214,240
$240,510
$198,598
$205,587
$200,408
$174,678
$233,667
$225,701
$170,165
$220,355
$210,538
$203,341
$233,667
$209,477
$230,443
$181,917
$145,850
Assistant Director, Utilites Customer Support Services
Assistant Director, Electric and Fiber Utilities Utilities Assistant Director, WGW Utilities1003
65 Assistant Director, Utilities Resource Management
Manager, Utilities Public Communications
Engineering Manager, Electric and Fiber Utilities
Engineering Manager, Water, Gas & Wastewater (WGW) Utilities Manager, Utilities Strategic Business Services
Manager, Utilities Customer Service
84 129
120
2025
179
185
1114
156
150
48 $128.98
$124.58
$121.58
$103.00
$123.27
$103.00
$115.63
$95.48
Operations Manager, Electric and Fiber Utilities
Manager, Utilities Credit & Collection
Operations Manager, WGW Utilities
Manager, Utilities Program Services
Manager, Fiber Optic Utility $98.84
2020
13 Utilities Principal Business Analyst $96.35
Utilities Senior Business Analyst $83.98
188
2187
2014
25 Principal Engineer, Electric and Fiber Utilities
Principal Engineer, WGW Utilities
$112.34
$108.51
$81.81Utilities Senior Management Analyst
Senior Planner, Utilities Resources $105.94
$101.22
$97.76
27 Supervising Project Engineer, Electric and Fiber Utilities Supervising Project Engineer28
1011
114
TBD
2017
2171
Manager, Utilities Compliance $112.34
$100.71
$110.79
$87.46
Operations Supervisor, WGW Utilities
Operations Supervisor, Electric and Fiber Utilities
Utilities Safety Officer
Management Analyst - U $70.12
Item 7
Attachment B - UMPAPA Salary
Schedule

Item 7: Staff Report
Pg.
46 Packet Pg. 200 of 461

City of Palo Alto
Utilities Management and Professional Association of Palo Alto (UMPAPA) Salary Schedule

07.13.2024 (4%)
Max Hourly Rate Approx Max Monthly SalaryJob Code Classifications Utilities Administrative Assistant
Min Hourly Rate Approx. Max Annual Salary
2076
1002
6 $39.98
$104.98
$114.50
$110.57
$107.97
$69.77
$100.61
$97.18
$94.84
$80.34
$96.16
$80.34
$90.20
$74.48
$77.10
$75.17
$65.51
$87.63
$84.65
$63.81
$82.64
$78.96
$76.26
$87.63
$78.56
$86.43
$68.22
$54.70
$53.30
$139.97
$152.66
$147.42
$143.96
$93.02
$9,239
$24,261
$26,461
$25,553
$24,953
$16,123
$23,251
$22,459
$21,918
$18,567
$22,223
$18,567
$20,845
$17,212
$17,819
$17,371
$15,139
$20,252
$19,562
$14,747
$19,098
$18,247
$17,625
$20,252
$18,155
$19,973
$15,766
$12,641
$110,864
$291,138
$317,533
$306,634
$299,437
$193,482
$279,011
$269,506
$263,016
$222,810
$266,677
$222,810
$250,141
$206,544
$213,824
$208,458
$181,667
$243,027
$234,749
$176,966
$229,174
$218,962
$211,494
$243,027
$217,859
$239,678
$189,197
$151,694
Assistant Director, Utilites Customer Support Services
Assistant Director, Electric and Fiber Utilities Utilities Assistant Director, WGW Utilities1003
65 Assistant Director, Utilities Resource Management
Manager, Utilities Public Communications
Engineering Manager, Electric and Fiber Utilities
Engineering Manager, Water, Gas & Wastewater (WGW) Utilities Manager, Utilities Strategic Business Services
Manager, Utilities Customer Service
84 129
120
2025
179
185
1114
156
150
48 $134.14
$129.57
$126.45
$107.12
$128.21
$107.12
$120.26
$99.30
Operations Manager, Electric and Fiber Utilities
Manager, Utilities Credit & Collection
Operations Manager, WGW Utilities
Manager, Utilities Program Services
Manager, Fiber Optic Utility $102.80
$100.22
$87.34
2020
13 Utilities Principal Business Analyst
Utilities Senior Business Analyst
188
2187
2014
25 Principal Engineer, Electric and Fiber Utilities
Principal Engineer, WGW Utilities
$116.84
$112.86
$85.08Utilities Senior Management Analyst
Senior Planner, Utilities Resources $110.18
$105.27
$101.68
$116.84
$104.74
$115.23
$90.96
27 Supervising Project Engineer, Electric and Fiber Utilities Supervising Project Engineer28
1011
114
TBD
2017
2171
Manager, Utilities Compliance
Operations Supervisor, WGW Utilities
Operations Supervisor, Electric and Fiber Utilities
Utilities Safety Officer
Management Analyst - U $72.93
Item 7
Attachment B - UMPAPA Salary
Schedule

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City of Palo Alto
Management, Professional and Confidential Salary Schedule Effective 12/31/2022 (Market and Benefits Offset)
Hourly Rate
Grade
Annual Salary
MidJob Code FLSA Status Classifications Min Mid Max Min MaxCodes 190
76 Non-Exempt Accountant
Administrative Assistant
690P
750P
405M
100A
165A
630M
20E
$40.52
$32.40
$58.82
$96.40
$73.98
$44.79
$96.15
$79.80
$76.40
$73.88
$68.99
$77.70
$76.80
$44.50
$63.52
$62.29
$75.35
$73.47
$67.39
$57.56
$73.01
$39.36
$42.60
$50.00
$40.66
$87.72
$58.02
$35.08
$76.28
$71.96
$91.38
$92.88
$88.32
$50.65
$40.50
$73.52
$120.49
$92.47
$55.98
$120.18
$99.74
$95.50
$92.34
$86.23
$97.12
$96.00
$55.62
$79.40
$77.86
$94.18
$91.83
$84.23
$71.94
$91.26
$49.20
$53.24
$62.50
$50.82
$109.65
$72.52
$43.85
$95.34
$89.95
$114.22
$116.09
$110.39
$60.78
$48.60
$84,282
$67,392
$105,352
$84,240
$126,422
$101,088
$183,518
$300,747
$230,818
$139,734
$299,978
$248,955
$238,368
$230,485
$215,238
$242,424
$239,616
$138,840
$198,182
$194,355
$235,082
$229,216
$210,246
$179,566
$227,802
$122,803
$132,891
$156,000
$126,859
$273,686
$181,022
$109,450
$237,973
$224,515
$285,106
$289,765
$275,538
Exempt
Exempt
Exempt
Exempt
Exempt
Exempt
Exempt
Exempt
Exempt
Exempt
Exempt
Exempt
Exempt
Exempt
Exempt
Exempt
Exempt
Exempt
Exempt
Exempt
Exempt
Exempt
Exempt
115
132
108
109
107
73 Assistant Chief Building Official
Assistant Chief of Police
$88.23 $122,346
$200,512
$153,878
$93,163
$152,922
$250,619
$192,338
$116,438
$249,974
$207,459
$198,640
$192,067
$179,358
$202,010
$199,680
$115,690
$165,152
$161,949
$195,894
$191,006
$175,198
$149,635
$189,821
$102,336
$110,739
$130,000
$105,706
$228,072
$150,842
$91,208
$144.59
$110.97
$67.18
Assistant City Attorney
Assistant City Clerk
Assistant City Manager $144.22
$119.69
$114.60
$110.81
$103.48
$116.55
$115.20
$66.75
$199,992
$165,984
$158,912
$153,670
$143,499
$161,616
$159,744
$92,560
Assistant Director Administrative Services
Assistant Director Community Services
Assistant Director Human Resources
Assistant Director Library Services
Assistant Director Planning & Community Environment
Assistant Director Public Works
Assistant Fleet Manager
120A
150A
155A
160A
130A
140A
585M
240D
390M
290M
135A
220D
235D
140A
660P
615M
585P
675M
125A
375M
720M
115A
200D
110A
50E
126
1007
2001
10 143
168
102
30 Assistant Manager WQCP
Assistant to the City Manager
Chief Building Official
$95.28 $132,122
$129,563
$156,728
$152,818
$140,171
$119,725
$151,861
$81,869
$93.44
118
2008
112
95 $113.02
$110.20
$101.08
$86.33
Chief Communications Officer
Chief Planning Official
Chief Procurement Officer
82 Chief Transportation Official
Claims Investigator
$109.52
$59.0496
24 Communication Specialist $63.89 $88,608
89 Contracts Administrator $75.00 $104,000
$84,573186
191
11 Non-Exempt Coordinator Library Circulation $60.99
Exempt
Exempt
Exempt
Exempt
Exempt
Exempt
Exempt
Exempt
Fire Marshal $131.58
$87.03
$182,458
$120,682
$72,966
Deputy City Attorney
71 Deputy City Clerk $52.62
55 Deputy City Manager $114.41
$107.94
$137.07
$139.31
$132.47
$158,662
$149,677
$190,070
$193,190
$183,706
$198,307
$187,096
$237,578
$241,467
$229,611
195
20 Deputy Director Technical Services Division
Deputy Fire Chief
81 Director Administrative Services/Chief Financial Officer Director Community Services72 45E

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Attachment C - Revised Management
and Prof Salary Schedule

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Pg.
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City of Palo Alto
Management, Professional and Confidential Salary Schedule Effective 12/31/2022 (Market and Benefits Offset)
Hourly Rate
Grade
Annual Salary
MidJob Code FLSA Status Classifications Min Mid Max Min MaxCodes 1012
133
128
131
2028
2005
49 Exempt
Exempt
Exempt
Exempt
Exempt
Exempt
Exempt
Exempt
Exempt
Exempt
Exempt
Exempt
Exempt
Exempt
Exempt
Exempt
Exempt
Exempt
Exempt
Exempt
Exempt
Exempt
Exempt
Exempt
Exempt
Exempt
Exempt
Exempt
Exempt
Exempt
Exempt
Exempt
Exempt
Director Development Services
Director Human Resources/Chief People Officer
Director Information Technology/Chief Information Officer Director Libraries
145A
55E
$77.59
$88.55
$96.71
$82.69
$69.63
$69.63
$79.80
$93.12
$94.31
$111.29
$60.28
$62.66
$67.39
$36.60
$105.11
$51.51
$34.24
$49.05
$43.14
$44.50
$60.86
$69.86
$64.58
$49.35
$45.88
$49.28
$55.69
$64.31
$55.02
$60.86
$59.86
$52.81
$63.88
$96.98
$110.68
$120.88
$103.36
$87.03
$87.03
$99.74
$116.39
$117.88
$139.11
$75.34
$78.32
$84.23
$45.74
$131.38
$64.38
$42.79
$61.31
$53.92
$55.62
$76.07
$87.32
$80.72
$61.68
$57.34
$61.60
$69.61
$80.38
$68.77
$76.07
$74.82
$66.01
$79.84
$116.38
$132.82
$145.06
$124.04
$104.44
$104.44
$119.69
$139.67
$141.46
$166.94
$90.41
$93.99
$101.08
$54.89
$157.66
$77.26
$51.35
$73.58
$64.71
$66.75
$91.29
$104.79
$96.87
$74.02
$68.81
$73.92
$83.54
$96.46
$82.53
$91.29
$89.79
$79.22
$95.81
$161,387
$184,184
$201,157
$171,995
$144,830
$144,830
$165,984
$193,690
$196,165
$231,483
$125,382
$130,333
$140,171
$76,128
$201,718
$230,214
$251,430
$214,989
$181,022
$181,022
$207,459
$242,091
$245,190
$289,349
$156,707
$162,906
$175,198
$95,139
$242,070
$276,266
$301,725
$258,003
$217,235
$217,235
$248,955
$290,514
$294,237
$347,235
$188,053
$195,499
$210,246
$114,171
$327,933
$160,701
$106,808
$153,046
$134,597
$138,840
$189,883
$217,963
$201,490
$153,962
$143,125
$153,754
$173,763
$200,637
$171,662
$189,883
$186,763
$164,778
$199,285
25E
60E
Director of Emergency Medical Services
Director Office of Emergency Services
Director Office of Management and Budget
Director Planning & Community Environment
Director Public Works/City Engineer
Director Utilities
215D
215D
120A
40E134
135
121
2002
172
2031
1005
139
163
101
90 30E
10E
Division Head Library Services
Division Manager Open Space, Parks & Golf
Division Manager Planning
260D
245D
220D
705M
35E
Executive Assistant to the City Manager
Fire Chief $218,629
$107,141
$71,219
$273,270
$133,910
$89,003
Hearing Officer 480M
735P
510M
755P
585M
235D
210D
360M
Human Resources Representative
Landscape Architect Park Planner
Legal Fellow
$102,024
$89,731
$127,525
$112,154
$115,690
$158,226
$181,626
$167,898
$128,294
$119,267
$128,128
$144,789
$167,190
$143,042
$158,226
$155,626
$137,301
$166,067
2015
171
79 Management Analyst $92,560
Manager Accounting $126,589
$145,309
$134,326
$102,648
$95,430
2007
2023
38 Manager Airport
Manager Budget
Manager Communications 525M
630M
585M
495M
220D
450M
235D
419M
445M
223D
154
169
1013
63 Manager Community Services
Manager Community Services Sr Program
Manager Development Center
Manager Economic Development
Manager Employee Benefits
Manager Employee Relations & Training
Manager Environmental Control Program
Manager Facilities
$102,502
$115,835
$133,765
$114,442
$126,589
$124,509
$109,845
$132,870
44 45
93 1116
2030 Manager Finance

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Attachment C - Revised Management
and Prof Salary Schedule

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Pg.
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City of Palo Alto
Management, Professional and Confidential Salary Schedule Effective 12/31/2022 (Market and Benefits Offset)
Hourly Rate
Grade
Annual Salary
MidJob Code FLSA Status Classifications Min Mid Max Min MaxCodes 127
2018
32 Exempt
Exempt
Exempt
Exempt
Exempt
Exempt
Exempt
Exempt
Exempt
Exempt
Exempt
Exempt
Exempt
Manager Fleet 255D
540M
230D
230D
495M
565M
469M
345M
415M
235D
250D
330M
235D
436M
205D
330M
525M
750P
585M
15E
$53.35
$51.74
$62.22
$58.84
$50.27
$48.66
$49.24
$64.68
$59.10
$57.56
$54.09
$63.77
$59.35
$54.87
$71.70
$64.51
$47.86
$32.40
$44.50
$108.51
$95.65
$61.32
$49.64
$61.08
$50.32
$50.27
$44.50
$53.78
$53.39
$68.72
$52.04
$46.84
$52.00
$66.68
$64.67
$77.77
$73.55
$62.83
$60.82
$61.55
$80.84
$73.87
$71.94
$67.61
$79.71
$74.18
$68.58
$89.62
$80.63
$59.82
$40.50
$55.62
$135.63
$119.56
$76.64
$62.04
$76.34
$62.90
$62.83
$55.62
$67.22
$66.73
$85.89
$65.04
$58.54
$64.99
$80.02
$77.61
$93.33
$88.26
$75.40
$72.99
$73.86
$97.01
$88.65
$86.33
$81.14
$95.66
$89.02
$82.30
$107.55
$96.76
$71.79
$48.60
$66.75
$162.76
$143.48
$91.97
$74.45
$91.61
$75.48
$75.40
$66.75
$80.67
$80.08
$103.07
$78.05
$70.25
$77.99
$110,968
$107,619
$129,418
$122,387
$104,562
$101,213
$102,419
$134,534
$122,928
$119,725
$112,507
$132,642
$123,448
$114,130
$149,136
$134,181
$99,549
$138,694
$134,514
$161,762
$152,984
$130,686
$126,506
$128,024
$168,147
$153,650
$149,635
$140,629
$165,797
$154,294
$142,646
$186,410
$167,710
$124,426
$84,240
$166,442
$161,429
$194,126
$183,581
$156,832
$151,819
$153,629
$201,781
$184,392
$179,566
$168,771
$198,973
$185,162
$171,184
$223,704
$201,261
$149,323
$101,088
$138,840
$338,541
$298,438
$191,298
$154,856
$190,549
$156,998
$156,832
$138,840
$167,794
$166,566
$214,386
$162,344
$146,120
$162,219
Manager Human Services
Manager Information Technology
Manager Information Technology Security
Manager Laboratory Services
Manager Library Services
2006
158
78 92 Manager Maintenance Operations
Manager Transportation Planning26
51 Manager Planning
103
2011
160
57 Manager Real Property
Manager Revenue Collections
Manager Solid Waste
Manager Treasury, Debt & Investments
Manager Urban Forestry
Manager Water Quality Control Plant
Manager Watershed Protection
Office of Emergency Services Coordinator
Performance Auditor I
86 Exempt
Exempt
Exempt
Exempt
Exempt
178
39 1008
2024
100
148
2021
2016
2029
2003
2009
2012
166
117
2013
187
106
157
14 $67,392
Performance Auditor II $92,560 $115,690
$282,110
$248,685
$159,411
$129,043
$158,787
$130,832
$130,686
$115,690
$139,818
$138,798
$178,651
$135,283
$121,763
$135,179
Exempt
Exempt
Exempt
Exempt
Exempt
Exempt
Exempt
Exempt
Exempt
Exempt
Exempt
Exempt
Exempt
Exempt
Exempt
Police Chief $225,701
$198,952
$127,546
$103,251
$127,046
$104,666
$104,562
$92,560
Chief Assistant City Attorney
Principal Business Analyst
Principal Planner
101A
310M
469M
360M
570M
495M
585M
525M
420M
300M
450M
545M
465M
Principal Management Analyst
Project Manager
Public Safety Communications Manager
Public Safety Program Manager
Senior Accountant $111,862
$111,051
$142,938
$108,243
$97,427
Senior Business Analyst - M
Senior Engineer
Senior Executive Assistant
Senior Human Resources Administrator
Senior Management Analyst $108,160

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City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: IT Department
Meeting Date: June 12, 2023
Report #:2304-1291
TITLE
Approval of a Purchase of Panasonic ToughBook Replacement Equipment for Police and Fire in the amount of $422,007 with Datec Incorporated Utilitizing an NCPA Cooperative Agreement; and Approval of a Purchase of Replacement CradlePoint Modems with DiscountCell, Incorporated for Police and Fire in the Amount of $168,801 Utilizing a NASPO Cooperative Agreement; and a Budget Amendment in the Information Technology Fund; CEQA Status—not a project

RECOMMENDATION
Staff recommends that Council:

1. Approve and authorize the City Manager or their designee to execute a purchase order with Datec Incorporated, utilizing an NCPA Cooperative Agreement for replacement Panasonic Toughbook equipment for both Police and Fire in the amount of $422,007; and

2. Approve and authorize the City Manager or their designee to execute a purchase order with DiscountCell, Inc. utilizing a NASPO Cooperative Agreement for CradlePoint in-car modem equipment for both Police and Fire in the amount of $168,801; and

3. Amend (by a 2/3 majority) the Fiscal Year 2023 Budget Appropriation for the Information Technology Fund by:
a. Increasing the expense appropriation for Facilities and Equipment by $590,808; and
b. Decreasing the Information Technology fund balance by $590,808.

EXECUTIVE SUMMARY
Approval will replace the in-vehicle mobile data computer (MDC) hardware for public safety vehicles last replaced in 2018. Computer replacements are on a 4-year lifecycle. Due to the COVID pandemic and both the financial and capacity challenges, replacement cycles were extended for technology replacements. The Fiscal Year 2024 budget anticipates a return to Item 8
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3 0
technology replacement beginning with the replacement of computers that are five years or older, restoring services and funding to pre-pandemic levels.

BACKGROUND
The City has used the Hexagon Computer Aided Dispatch (CAD) and Mobile for Public Safety (MPS) system since 2011. The CAD system will be going through a formal solicitation later in the calendar year to either be upgraded or replaced. Regardless of the system chosen, staff anticipates that this equipment being procured will be compatible, though will also not be a limiting factor in the evaluation of eligible CAD systems for evaluation. The in-vehicle mobile data computer (MDC) hardware supporting the MPS system on average has been upgraded on a five-year cycle as manufacturers of this equipment only provide a warranty for up to 5-years.

After the 5-year warranty is up, the City has to pay out of pocket for any repairs or replacements that might arise. The last MDC upgrade occurred in 2018 for Fire and 2019 for Police. The MPS software components provide an integrated approach for dispatching. MPS allows officers to respond to 911 calls with a map display showing location and best route to scene. MPS also shows the location of other and nearby units. MPS allows officers to run plates and look up persons of interest.

ANALYSIS
Based on compatibility, continuity, and past positive experience with the existing MDCs, staff is recommending the authorization to purchase the desired equipment and warranty through a cooperative purchase agreement. Three other price quotes were requested for this equipment, and this was the best pricing received. During the last refresh back in 2018, other models of hardware were evaluated and ultimately this provider was selected because of its proven stability and reliability for our public safety staff.

During the last Fire/PD refresh in 2018-2019, the combined cost to replace the 94 MDCs was $462,000. This replacement costs $422,000 for the replacement of 69 devices; this is $40,000 lower because we purchased 25 fewer MDCs for Fire. Fire will be using tablets instead of the ruggedized MDCs for the rear of their vehicles for EMS, therefore, Fire MDCs will be replaced by another manufacturer and are expected to be purchased at a late date.

FISCAL/RESOURCE IMPACT
A total of $590,808 of expenditures are anticipated as described previously in this memorandum, which will be funded by the Information Technology Fund. The Information Technology Fund is an internal service fund and collects allocations for the replacement of equipment and technology for the City. The Information Technology Fund has sufficient funding for the identified costs as replacement cycles are anticipated and planned for. A budget amendment is needed as these costs were not identified by the Department or brought forward as part of the annual budget process.

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STAKEHOLDER ENGAGEMENT
Public Safety technical resources along with staff in the Information Technology Department were consulted in order to provide the requirements for the replacement technology.

ENVIRONMENTAL REVIEW
Council action on this item is not a project as defined by CEQA because the purchase of mobile data computer hardware and software is a continuing administrative or maintenance activity.

CEQA Guidelines section 15378(b)(2).

ATTACHMENTS
Attachment A: Toughbook Quote
Attachment B: CradlePoint Quote
APPROVED BY:

Darren Numoto, Chief Information Officer
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Palo Alto Quote B 03-20-23
Contact: Bob Stein
364 Upland Drive, Seattle, WA 98188
206/909-5272 cell: 206/575-1470 Office
Fed TAX ID 91-0930538
Email Po To: [email protected]
Fax PO To: Email Only Please
Quote# Q23C20901
Date: 03/20/23
Payment Terms: Net 30 Days. ACH / Check payments accepted.

Quote Validity: 90 Days
Part Number Description Qty Unit Price Ext. Price
Panasonic CF-33
CF-33RZ-0EKM Public Sector Specific, Win10 Pro (Win11 DG), Intel Core i5-10310U

1.7GHz vPro (4.4GHz), AMT, 12.0" QHD Gloved Multi
Touch+Digitizer, 16GB, 512GB OPAL SSD, Intel Wi-Fi 6, Bluetooth, 4G LTE Band 14 (EM7511), GPS, Dual Pass (Ch1:WWAN/Ch2:GPS), Infrared Webcam, 8MP Rear Camera, Fingerprint, Barcode, Standard Batteries (2), TPM 2.0, Flat, CF-SVCPDEP3Y - 3 Year Premier Deployment, FZ-SVC512SSD3Y - 3 Year No Return of Defective Drive, FZ-SVCTPNF3YR - 3 Year Protection Plus Warranty, CF-SVCBIOS1 - Custom BIOS, CF-SVCADDPRM12B - 1 Year Absolute Resilience Panasonic Warranty Bundle SKU Only PS/EDU/SLG Bundle SKU Only 45 $4,195.00 $188,775.00
CF-SVCPSY5 4th + 5th year warranty Option 45 $505.00 $22,725.00 CF-VEK333LMP Premium Keyboard for CF-33 Toughbook 45 $475.00 $21,375.00 HA-33LDS2 Havis: CF-33 Laptop Vehicle Dock (dual pass), 3 Yrs warranty 45 $895.00 $40,275.00 TBC33MBBDL-P Toughbook 33 Mobility Bundle (Handle + Should Strap) 45 $43.00 $1,935.00 Panasonic FZ-G2
FZ-G2CFFBBKM Win10 Pro (Win11 DG), Intel Core i5-10310U 1.7GHz vPro (4.4GHz), AMT, 10.1" WUXGA Gloved Multi Touch+Digitizer, 16GB, 512GB OPAL SSD (quick-release), Intel Wi-Fi 6, Bluetooth, 4G LTE Band 14 (EM7511), GPS, Dual Pass (Ch1:WWAN/Ch2:GPS), Infrared Webcam, 8MP Rear Camera, Standard Battery, Bridge Battery, TPM 2.0, Bundle, Keyboard
24 $3,325.00 $79,800.00
FZ-SVCTPNF5Y PROTECTION PLUS WARRANTY - FZ-G2, (YEARS 1 - 5) 24 $575.00 $13,800.00 FZ-VNP026U Replacement Digitizer Pen for FZ-G2. 2-button (Right-click, erase).

Waterproof Meets IP55.
12 $34.00 $408.00
FZ-VZSU1VU Standard Battery for FZ-G2 12 $125.00 $1,500.00 FZ-VCBG21M 4-Bay Battery Charger for FZ-G2 Mk1. Includes 100W AC Adapter. 2 $275.00 $550.00 DS-PAN-1015-2 Docking Station For Panasonic TOUGHBOOK G2 2-In-1 With Standard Port Replication, Dual Pass-Through Antenna Connections & External Power Supply
15 $935.00 $14,025.00
RAM-246U RAM 4.75" square base with VESA 24 $35.00 $840.00 Quote Prepared For:

Arthur Pham
City of Palo Alto

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Attachment A -
Toughbook Quote

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Palo Alto Quote B 03-20-23
RAM-201U-B RAM short arm 12 $29.00 $348.00
CA-EWASTE E-Waste Fee 1 $345.00 $345.00
FREIGHT-PEPPM Standard Ground Shipping / Freight (no charge PEPPM contract) 1 $0.00 $0.00 $386,701.00
35,305.80$
$422,006.80
Terms
1 Datec invoices are sent when items ship
2 Phased shipments/Invoicing is likely to occur
3 Manufacturer warranties are included and apply to all products quoted 4 Manufacturer's shipping / freight fees may apply.
5 Title transfer occurs on delivery to customer specified location 6 P-Cards not accepted for orders > $1000
Contract Ref Links: TD SYNNEX NCPA Landing Page: https://www.synnexcorp.com/us/govsolv/ncpa/ State Statutes: https://www.ncpa.us/Statutes
Due Diligence: https://www.ncpa.us/Vendors/TD%20SYNNEX
End-User Agency NCPA Registration: https://www.ncpa.us/register Total

9.13 % Sales Tax
Sub Total
Contract NCPA Contract number (NCPA 01-97)

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Attachment A -
Toughbook Quote

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Item No Qty DescriptionSales Price DiscTotalQuoteShip To:Bill To:GroundNet 30Sales RepTermsShip Via Customer PO1/17/2023QO-23038C11777Customer NumberCancel DateDate Order NumberDiscountCell, Inc350 West 500 SouthProvo, UT 84601(800) 422-1814(801) 705-0324 FaxPalo AltoBrian [email protected] Forest AvenuePalo Alto, CA 94301(650) 329-2196Palo Alto Attn: Brian [email protected] Forest AvePalo Alto, CA 9430149Cradlepoint IBR1700-1200M-B Router with 1200M Modem and 5 Year NetCloud Essentials Prime93,639.00MA5-1700120B-NNA1,911.00 0%49Cradlepoint Mobile Package for LTE Advanced Pro 1200 Mbps (1200B) Modem26,019.00MA-MC400-1200M-B531.00 0%49PANORAMA 5G 9-1 DOME FOR CRADLEPOINT WHT20,400.66LG-IN2446-W416.34 0%49Panorama 5G 4 x LTE Dome Antenna with 16 foot cable and sma connectors - White13,567.61LP-IN2443-W276.89 0%98Panorama Foam cell pad for installation of LGMM on uneven surfaces3,763.20LGMM-EXT-R38.40 0%1Pricing Based on NASPO Valuepoint Contract PD180-10.000.00 0%Ground shipping included in quoted pricing.Pricing according to NASPO ValuePoint Wireless Contract PD180-1157,389.470.00Subtotal: Tax:Freight:Total:Page 1168,800.2111,410.74 Item 8
Attachment B -
CradlePoint Quote

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City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: City Auditor
Meeting Date: June 12, 2023
Report #:2305-1538
TITLE
Approval of Office of City Auditor Electronic Payment Process and Controls Audit Report; CEQA Status – Not a Project

RECOMMENDATION
The Policy and Services Committee, City Auditor, and Staff recommend that the City Council approve the Electronic Payment Process and Controls Audit Report

BACKGROUND
In 2021, the City of Palo Alto (City) was subject to multiple attempts to misdirect wire payments.

Given the importance of the topic, the Office of the City Auditor (OCA) obtained an approval to start a recommended audit activity, Wire Payment Process and Controls Review project, in February 2022 (ID#13891)1 before finalizing the FY 2022-2023 Audit Plan that included the Wire Payment Process and Controls Review project and was subsequently approved by the City Council in April 2022 (ID#13914)2.

Baker Tilly presented the attached report during the Policy & Service Committee meeting on April 26, 2023, where the report was approved as follows:

MOTION: Council Member Lauing moved, seconded by Council Member Veenker to recommend the City Council accept the Electronic Payment Process and Controls Audit Report.

MOTION PASSED: 3-0

1 https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-reports/agendas-minutes/city-council- agendas-minutes/2022/20220207/20220207pccsm-revised-final.pdf 2 https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-reports/agendas-minutes/city-council- agendas-minutes/2022/20220404/20220404pccsmamendedlinked1.pdf Item 9
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DISCUSSION
The objectives of the review were to:
1) Determine whether adequate controls are in place and working effectively to ensure that all disbursements are valid and properly processed in compliance with City’s policies and procedures
2) Determine whether end user security awareness training is sufficient to prevent erroneous payments
The original scope to review wire payments was changed to review electronic payments that include both wire and Automated Clearing House (ACH) payments due to the similar risks against ACH payments. The OCA’s review included the ACH and wire disbursement processes by the Accounts Payable and Treasury teams, banking information addition and modification, and the user security awareness training to evaluate the design of internal controls. Additionally, the OCA’s testing was conducted by reviewing the selected disbursement transactions to determine whether the controls are operating effectively.

The attached report summarizes the analysis, audit findings, and recommendations.

FISCAL/RESOURCE IMPACT
The corrective action plans and the timeline for implementation are identified within the attached report.

STAKEHOLDER ENGAGEMENT
The Office of the City Auditor worked primarily with Administrative Services Department and engaged with additional stakeholders, including the City Manager’s Office and the City Attorney’s Office, as necessary.

The timeline for implementation of corrective action plans is identified within the attached report.

ATTACHMENTS
Attachment A: OCA - Report on Electronic Payment Process and Controls APPROVED BY:

Adriane D. McCoy, City Auditor
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1 City of Palo Alto
City Auditor’s Office
Electronic Payment Process and
Controls
March 14, 2023

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2 Executive Summary

Purpose of the Audit
Baker Tilly US, LLP (Baker Tilly), in its capacity serving as the Office of the City Auditor (OCA) for the City of Palo Alto (the City), conducted an audit of the electronic payment process and controls based on the approved Task Order 4.12. The objectives of this review were to:
1) Determine whether adequate controls are in place and working effectively to ensure that all electronic payments are valid and properly processed in compliance with City’s policies and procedures. 2) Determine whether end user security awareness training is sufficient to prevent erroneous payments caused by phishing.

Report Highlights
Finding 1: Electronic Payment Instructions
(Page 11) In August 2021, management implemented an internal control by formalizing the existing verbal verification process of all new electronic payment instructions and modifications. This is an important control to prevent wire and ACH fraud, as noted in the Best Practices section of this report. However, the City’s Policy and Procedures 1-06/ ASD, Payment Procedures, has not been revised to include the new requirement.

The OCA reviewed the supporting documents and approvals for two wire templates and 10 randomly selected vendors for ACH and noted that the control activity performed is not documented to evidence a review of changes made to vendor records. This review is not currently included in the policy. An independent person who did not enter the information in the system should review the vendor record added or changed in the system using the supporting documents for validity and accuracy. The review should be evidenced as defined in the policy. In the absence of control activities and requirements defined in the policy, the City cannot ensure that key internal controls are implemented properly and operate effectively.

Key Recommendations
The Administrative Services Division (ASD) management should review and update the City’s Policy and Procedures 1-06/ ASD, Payment Procedures, to ensure that an adequate internal control system is in place to mitigate a risk of potential loss resulting from wire and ACH frauds. The control activities and requirements should be clearly defined and communicated to employees to ensure that controls are implemented properly and executed effectively. The ASD management should also train the appropriate employees on the required control activities to ensure that they execute the controls properly.

Finding 2: ACH Payments
(Page 12) There are three employees in the ADP AP team. The OCA noted that all three AP team members have access to post invoices and process payments in the SAP ERP system and in the bank online portal. The access allows the employees to update the vendor records in the SAP ERP system as well. Because of this lack of segregation of duties issue, effective operation of mitigating controls is important to ensure that all electronic payments are valid and Item 9
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3 properly processed. The mitigating control currently in place is dual authentication of ACH payment batches and bank transactions in the bank online portal.

For one of 25 ACH payments reviewed, the actual ACH bank account number used for this payment was different from the ACH bank account number shown on the vendor invoice. This discrepancy was not identified during the payment process, and the payment was made to an incorrect account. The control to prevent erroneous payments did not operate effectively for this payment although there was no financial loss and all supporting documents and approvals were well documented. The quality and effectiveness of independent reviews are especially crucial due to the existing segregation of duties issue, where all AP team members have the same system access.

The ACH payments are made from the bank online portal. The OCA determined that the application control requiring dual authorization was in place. However, as the City currently does not require the employees to save the reports that are available in the bank portal only for a month, the audit trails evidencing that the dual authorization control is working effectively are not maintained.

Although the mitigating controls such as secondary approver, dual authorization, and bank account reconciliation are in place, ineffective execution of any of the key mitigating controls may lead to invalid and/or inaccurate AP ACH payments.

Key Recommendations
The ASD management should review segregation of duties among creating/updating vendor records, processing vendor invoices, and processing payments and evaluate risks associated with conflicts. The ASD management should work with IT management to identify the ways to improve segregation of duties and mitigate risks.

Until the segregation of duties conflicts are resolved, the ASD management should strengthen mitigating controls over the AP payment process by ensuring that the controls are designed to mitigate risks adequately and operating effectively. The City’s Policy and Procedures 1-06/ ASD, Payment Procedures should be updated to clearly define the controls and communicate to the employees.

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4 Table of Contents
Executive Summary ........................................................................................................................................................... 2 Purpose of the Audit ..................................................................................................................................................... 2 Report Highlights ........................................................................................................................................................... 2 Introduction ......................................................................................................................................................................... 5 Objective........................................................................................................................................................................... 5 Background ..................................................................................................................................................................... 5 Scope................................................................................................................................................................................. 6 Methodology .................................................................................................................................................................... 7 Compliance Statement.................................................................................................................................................. 7 Organizational Strengths ............................................................................................................................................. 7 Detailed Analysis ............................................................................................................................................................... 8 Policies and Procedures .............................................................................................................................................. 8 User Security Awareness Training ............................................................................................................................ 8 Best Practices ................................................................................................................................................................. 9 Audit Results ..................................................................................................................................................................... 11 Finding 1: Electronic Payment Instructions ......................................................................................................... 11 Recommendation ......................................................................................................................................................... 11 Finding 2: ACH Payments .......................................................................................................................................... 12 Recommendation ......................................................................................................................................................... 13 Appendices ........................................................................................................................................................................ 14 Appendix A: Electronic Payments Process and Controls ................................................................................ 15 Appendix B: Management Response ..................................................................................................................... 16

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5 Introduction

1 ACH Costs are a Fraction of Check Costs for Businesses, AFP Survey Shows | Nacha 2022 AFP Payments Cost Benchmarking Survey (afponline.org) Objective The objectives of this review were to:
1) Determine whether adequate controls are in place and working effectively to ensure that all electronic payments are valid and properly processed in compliance with City’s policies and procedures.
2) Determine whether end user security awareness training is sufficient to prevent erroneous payments caused by phishing.

Background The City disburses its funds using electronic payments and paper checks. Electronic payments consists of wire transfers and the Automated Clearing House (ACH) payments. During the period between September 1, 2021, and March 15, 2022, the City recorded 3.8K disbursement transactions totaling $430M in the general ledger cash account. The charts below show the following:
 Wire transfers are only 4% of all disbursement transactions but 29% of total disbursement amount.
 ACH payments processed by the Accounts Payable (AP) team for vendors and employees are just 1% of all disbursement transactions, due to weekly batch processing, but 11% of total disbursement amount.

ACH payments cost much less than checks, according to the 2022 Payment Cost Benchmarking Survey1. A cost for initiating a wire payment can vary widely and generally higher than checks. Similarly, the City’s average costs per unit, not including staff time and processing costs, are approximately $0.22, $0.07, and $4.02 Chart 1-A: Payment Methods by Transaction

Chart 1-B: Payment Methods by Amount

¹ ACH payments are processed in batches from one bank to another through the Automated Clearing House (ACH) system and often used for payroll, vendor payments, recurring payments, etc. ² Wire payments are electronic interbank payments made through a wire system such as FedWire and typically used for higher value, lower volume, time-sensitive transactions. ³ Automatic Withdraws include automatic bank transfers to the City’s three zero balance accounts and other charges withdrawn such as bank and credit card fees based on agreements.

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6 2 Attachment A US Bank and Elavon Contract Extension Agreement and Related Documents (cityofpaloalto.org) 3 2021_IC3Report.pdf by Internet Crime Complaint Center (IC3) - IC3 receives complaints on cyber crimes from the American public and tracks the trends and threats.
4 Suspected Business Email Compromise Ringleader Busted (bankinfosecurity.com) for checks, ACH, and wires, respectively, based on the OCA’s calculation using the estimated monthly unit volume shown in the existing banking and merchant services agreement2.

Electronic payments are more secure method of payments than checks as paper checks are more susceptible to physical loss and check frauds such as forgery and theft. However, no payment method is completely secure. According to the FBI’s 2021 Internet Crime Report3, Business Email Compromise (BEC)/Email Account Compromise (EAC) “is a sophisticated scam targeting both business and individual performing transfers of funds” and “is frequently carried out when a subject compromises legitimate business email accounts through social engineering or computer intrusion techniques to conduct unauthorized transfers of funds.” This FBI’s report states that BEC schemes are among the top incidents reported in 2021 and resulted in almost 20K complaints with losses of nearly $2.4B in total (an increase from approximately $1.8B in 2019). The report also shows California had the most victims and losses (67K, $1.2B, respectively) among all states, American Territory, and the District of Columbia.

There was a significant arrest in May 2021 when Interpol received the intelligence from private sector partners including Unit 42 at Palo Alto Networks4, but a threat of BEC remains. In June 2021, the City became a victim of a BEC scam, resulting in a wire payment of approximately $43K to a fraudster. This incident was identified in late July 2021 when the legitimate vendor inquired about a payment they never received from the City.

The City management subsequently reviewed the wire and ACH payments and vendor record changes made between June 2021 and August 2021 and noted no other similar incident. They also formalized an internal control to verbally confirm the new and modified banking information with a payee to prevent similar incidents, which, in August 2021, actually prevented a loss from a similar scheme called Vendor Impersonation Fraud that is often used for public sector entities as the contracting information is a public record.

Scope The original scope to review wire payments was changed to review electronic payments that include both wire and ACH payments due to the similar risks against ACH payments. The OCA’s review included the ACH and wire disbursement processes by the AP and Treasury teams, banking information addition and modification, and the user security awareness training to evaluate the design of internal controls. Additionally, the OCA’s testing was conducted by reviewing the selected transactions processed between September 1, 2021, and March 15, 2022, to determine whether the controls are operating effectively.

The OCA reviewed the City employees’ access to the bank online portal during this audit. However, for the access to the City’s SAP ERP system, the OCA’s recent assessment results of the segregation of duties in the City’s SAP ERP system (Task Item 9
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7 5 Government auditing standards require an external peer review at least once every three (3) years. The last peer review of the Palo Alto Office of the City Auditor was conducted in 2017. The Palo Alto City Council approved a contract from October 2020 through June 2022 with Baker Tilly US, LLP (Baker Tilly) and appointed Kyle O’Rourke, Senior Consulting Manager in Baker Tilly's Public Sector practice, as City Auditor. Given the transition in the City Audit office, a peer review was not conducted in 2020 and will be conducted after the third year of Baker Tilly’s contract.

Order 4.3), was utilized. A review of cybersecurity risks is covered in a separate cybersecurity audit that is already underway (Task Order 4.14).

Methodology To achieve the audit objectives, the OCA performed the following procedures:
 Reviewed the policies and procedures related to the ACH and wire payment processing.
 Interviewed the appropriate individuals within the Administrative Services Division (ASD), including the Treasury (for wires), Accounts Payable (for ACH payments), and General Ledger teams, to discuss the process and controls for electronic payments, including vendor record creation and modification.  Reviewed the approvals and supporting documents for randomly selected samples of electronic payments as well as new and modified vendor records.  Reviewed the access and controls related to the bank online portal.  Interviewed the key process owners of the electronic payment processes to understand the security awareness training they received.  Inquired with the Information Technology Department and the Human Resources Department regarding the user security awareness training the City offers to the employees.
 Reviewed the employees’ completion status of the latest user security awareness training the City provided.
 Identified the best practices related to electronic payment processing to mitigate risks of wire and ACH frauds.

Compliance
Statement
This audit activity was conducted from March 2022 to July 2022 in accordance with generally accepted government auditing standards, except for the requirement of an external peer review5. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives.

Organizational
Strengths
During this audit activity, we observed certain strengths of the City. Key strengths include:
 Approvals of payments are well documented using e-signature software called DocuSign
 Supporting documents are consistent and well organized  The staff members are devoted and professional and were responsive to the OCA’s questions and requests

The Office of the City Auditor greatly appreciates the support of the Administrative Services Department in conducting this audit activity.

Thank you!
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8 Detailed Analysis

Policies and
Procedures
The City has the Policy and
Procedures 1-06/ ASD, Payment
Procedures (Revised: February
2007). The Policy Statement of this
policy is that the “functionality of
Accounts Payable is to ensure that
all payment requests are properly
authorized, accurately recorded
and promptly disbursed in
accordance with City policies and
contractual terms.”

The City’s nine-page Policy and
Procedures include the sections
shown in the box on this page. The
policy does not include the
following related processes and
controls:
 A verbal verification process of all new electronic payment instructions and modifications that was formalized in August 2021
 The controls and requirements for ACH payments including the vendor record creation and modification
 The controls and requirements for wire payments including the creation and modification of wire templates for recurring payments and the situation where free-form (non-recurring) wire payments are used
 The processes and controls for the bank online portal

There is also a six-page document titled “Internal Controls on Cash Disbursement Cycle” that was updated in May 2021. This Cash Disbursement document contains the similar sections as the City’s policy but provides additional descriptions of procedures for payment requests and ACH payments.

The OCA documented an overview of the wire and ACH processes and controls, based on the understanding obtained during this audit (Appendix A).

User Security
Awareness
Training
The City required all City employees to complete a cybersecurity awareness training by November 25, 2020. This was the latest training provided by the Information Technology (IT) and Human Resources (HR) departments, using a well-established, leading vendor who provides the large library of security awareness training content as well as a simulated phishing campaign tool. The training was delivered through the City’s learning system managed by HR.

The employees’ completion status generated from the City’s learning system shows that over 98% of all employees completed the training by December 31, 2020.

Although all 10 ASD employees who process electronic payments completed this Policy and Procedures 1-06/ ASD*
Payment Procedures
Contents
A. Purchasing Authorization
B. Change Order Process
C. Routine Accounts Payable Payment Process
D. Department Approvals
E. Accounts Payable Editing and Posting
F. Check Printing, Reversal and Re-issuance,
and Wire Transfer
G. Year-end Accruals
H. Reconciliations
I. Quarterly sales tax reporting

* Administrative Services Department
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9 training, some of them did not complete by the due date set by HR. The City does not require those 10 ASD employees to receive additional fraud training courses that are more directly related to AP and cash disbursement. According to the AP and Treasury teams, they share news and articles related to fraud incidents among team members and have taken fraud-related training courses on their own.

Table 1: 2020 Security Awareness Training Completed in 2020-2022

Best Practices As people increasingly conduct business online and communicate digitally, fraud attempts such as phishing are growing. Electronic payments are susceptible to fraud schemes due to the speedy and irrevocable transaction. Fraudsters gather information on target organizations, take advantage of a weak internal control system, and take money from victims using compromised or impersonated methods.

Therefore, an effective internal control system is key to protect an organization from becoming a victim of fraud schemes. Through researches around wire and ACH frauds and best practices to prevent them, the OCA compiled the following best practices.

Practices to guard against wire and ACH fraud
 Educate and train employees on fraud schemes to ensure they recognize red flags and take appropriate actions such as:

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10 o Do not click on links and attachments in an unsolicited e-mail or text message or respond to them before verifying the legitimacy. o Cautiously inspect the e-mail address, URL, and spelling in a message to identify the slightly modified address/URL.
o Be watchful if there is a sense of urgency.
o Do not use “reply” for e-mail communication. Instead, use “forward” and add the correct e-mail address.
 Implement a verbal verification process that uses a phone number used previously or obtained independently from the information provided in the current request.
o Conduct an internet search or compare against reputable databases. o Do not call a phone number provided with a request
o Use a script to verify both the existing account information and the information to be changed.
 Process payments using dual control (two people authorization).  Work with the IT department to ensure that appropriate cybersecurity controls are implemented.
 Review the insurance policy for an appropriate coverage of financial losses due to cybersecurity fraud.
 Periodically review all control procedures to keep them current and relevant to current threats.

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11 Audit Results
Finding 1:

Electronic
Payment
Instructions
In August 2021, the ASD management implemented an internal control by formalizing the existing verbal verification process of all new electronic payment instructions and modifications. The formalized verification process involves the following steps:
1) Calling a phone number independently obtained from the sources such as the signed original instructions and the company website 2) Confirming the banking and relevant information
3) Writing down on the new or modified instructions the name of an individual who confirmed, date, the information verified, and the initials of the staff member who performed the verification.

This is an important control to prevent wire and ACH fraud, as noted in the Best Practices section of this report. However, the City’s Policy and Procedures 1-06/ ASD, Payment Procedures, has not been revised to include the new requirement.

Between September 1, 2021, and March 15, 2022, ASD had two new or modified wire templates (the payee banking information stored in the bank online portal) for the payees with recurring wire payments. ASD also added or changed records for 2,057 vendors, 32 of which had new or modified ACH banking information. The OCA reviewed the supporting documents and approvals for two wire templates and 10 randomly selected vendors for ACH and noted the following:
 The City receives a request to update various payee information such as tax number, payment method, and name. The current practice is that not all changes require documentation of the verbal verification performed. Only the verbal verification of the changes to the banking information is documented, which should be defined in the policy.
 AP Senior Accountant runs a "display changes to vendor" report and review banking changes listed in the report prior to approving a weekly ACH batch.

However, a supervisory review of changes made in the system is not documented, or a report used for a supervisory review is not included in the ACH payment packet that AP Senior Accountant signs off on. Therefore, the control activity performed is not documented to evidence a review of changes made to vendor records. This review is not currently included in the policy.

An independent person who did not enter the information in the system should review the vendor record added or changed in the system using the supporting documents for validity and accuracy. The review should be evidenced as defined in the policy. In the absence of control activities and requirements defined in the policy, the City cannot ensure that key internal controls are implemented properly and operate effectively.

Recommendation The ASD management should review and update the City’s Policy and Procedures 1-06/ ASD, Payment Procedures, to ensure that an adequate internal control system is in place to mitigate a risk of potential loss resulting from wire and ACH frauds. The control activities and requirements should be clearly defined and Item 9
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12 communicated to employees to ensure that controls are implemented properly and executed effectively.

The ASD management should also train the appropriate employees on the required control activities to ensure that they execute the controls properly. Additionally, the ASD management should implement a mechanism (such as periodic meetings, training, e-mail communications, etc.) that is a little more proactive than the current practice to keep appropriate employees informed on wire and ACH fraud schemes and trends in addition to the user security awareness training provided by the City.

Finding 2: ACH
Payments
There are three employees in the ASD AP team. The OCA noted that all three AP team members have access to post invoices and process payments in the SAP ERP system and in the bank online portal. The access allows the employees to update the vendor records in the SAP ERP system as well. The AP segregation of duties issue was reported in the ERP Planning: Separation of Duties audit report dated October 17, 2018. Recently, the SAP Functionality and Internal Control Assessment revealed that:
1) “Process Vendor Invoices” and “AP Payments” are the two of three processes with the most conflicts out of 12 business processes that are part of the SAP Finance and Accounting (FI) module
2) “AP Payments and Process Vendor Invoices” is one of top 10 SAP FI conflicts.

Because of the existing conflicts, effective operation of mitigating controls is important to ensure that all electronic payments are valid and properly processed.

The mitigating control currently in place is dual authentication of ACH payment batches and bank transactions in the bank online portal.

Between September 1, 2021, and March 15, 2022, ASD AP team processed 31 weekly ACH batches totaling approximately $45M. The OCA reviewed approvals for 10 ACH batches and the supporting documents for 25 individual ACH payments selected from those 10 batches.

Each ACH batch payment packet is signed by the following three individuals using DocuSign:
 Preparer (AP Account Specialist) who creates the batch file in the SAP ERP system, assembles a payment packet containing the supporting documents approved by the applicable departments for the batch, and uploads the batch file to the bank online portal
 First Approver (AP Senior Accountant) who reviews and approves a payment packet and approves the uploaded batch file in the bank online portal
 Second Approver (Treasury Manager) who reviews and approves a payment packet

Then OCA compared the bank information in the SAP ERP system to the bank information shown in the supporting documents. For one of 25 ACH payments reviewed, the actual ACH bank account number used for the payment was different from the ACH bank account number shown on the vendor invoice. This discrepancy Item 9
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13 was not identified during the payment process, and the payment was made to an incorrect account. There was no financial loss since the bank returned the payment that was made to the closed account, and the City was able to issue a check to the vendor. However, if the wrong account had not been closed, the error would have gone unnoticed without the vendor’s notification. The control to prevent erroneous payments did not operate effectively for this payment although all supporting documents and approvals were well documented. The quality and effectiveness of independent reviews are especially crucial due to the segregation of duties issue as noted above. The ineffective execution of internal control (a thorough review to detect errors and irregularities) may result in erroneous payments, financial loss, and/or inefficient use of resources.

The ACH payments are made from the bank online portal. The access to this account is limited but all three AP team members can initiate and approve ACH payment batches. According to Manager of Treasury, Debt, Investment, he set the dual authorization requirement in the account setting in the bank online portal around October 2018 so that the same individual cannot approve the transaction he/she initiated. The OCA determined that the application control requiring dual authorization currently in place. The names of the individuals who initiated and approved each ACH batch are listed in the ACH Audit Report and ACH Daily Batch Detail. However, these audit trails are available in the portal only for a month unless a report is generated and saved offline by a user. As the City currently does not require the employees to save the reports, the audit trails evidencing that the dual authorization control is working effectively are not maintained. It took a week for the City to receive the information after submitting a request to the bank’s customer service department. Audit trails are detailed records of financial transactions and are used to verify and track transactions. It is necessary for the City to maintain a complete audit trail to be able to trace back any irregularities and investigate them when they happen.

Recommendation The ASD management should review segregation of duties among creating/updating vendor records, processing vendor invoices, and processing payments and evaluate risks associated with conflicts. The ASD management should work with IT to identify the ways to improve segregation of duties and mitigate risks.

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14 Appendices

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Appendix A: Electronic Payments Process and Controls
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16 Appendix B: Management Response
Recommendation Responsible
Department(s)
Agree, Partially Agree, or Do Not Agree and Target Date and Corrective Action Plan
Finding: Electronic Payment Instructions
The ASD management should review and update the City’s Policy and Procedures 1-06/ ASD, Payment Procedures, to ensure that an adequate internal control system is in place to mitigate a risk of potential loss resulting from wire and ACH frauds. The control activities and requirements should be clearly defined and communicated to employees to ensure that controls are implemented properly and executed effectively.

Administrative
Services
Concurrence: Agree
Target Date: February 2023
Completion Date: February 22, 2023
Action Plan: ASD has drafted revisions to Policy and Procedures 1- 06/ASD, Payment Procedures to align the policy document with staff’s current practices for electronic payments through ACH and wire transfer. Controls already in practice and added to the updated policy include:

ACH Payments
 AP staff verbally confirms bank information on the ACH enrollment form by calling an independently obtained phone number from the company website and/or master vendor
record in SAP.
 ACH batches are signed by three individuals before the batch is processed: preparer (A/P Accounting Specialist); first approver (A/P Senior Accountant); and second approver (Manager,
Treasury, Debt & Investments).

Wire Transfers
 The Manager, Treasury, Debt & Investments, confirms bank information from the ACH enrollment form by calling an
independently obtain phone number from the company
website and/or master vendor record in SAP.
 Wire transactions are entered in U.S. Bank’s online portal. The wire is initiated by the Manager, Treasury, Debt & Investments; a second approval is required to execute the wire.

The revised policy was distributed to City employees in February 2023.

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17 The ASD management should also train the appropriate employees on the required control activities to ensure that they execute the controls properly. Additionally, the ASD management should implement a mechanism (such as periodic meetings, training, e-mail
communications, etc.) that is a little more proactive than the current practice to keep appropriate employees informed on wire and ACH fraud schemes and trends in addition to the user security awareness training provided by the City.

Administrative
Services
Concurrence: Partially Agree
Target Date: March 2023
Completion Date: To be determined during the OCA’s follow-up review Action Plan: Key ASD employees (Finance Manager; AP Senior Accountant, Manager; Treasury, Debt & Investments; and Assistant Director, ASD) stay current control environment and activities through continuing education requirements, government association training opportunities, and news articles on the subject. ASD staff are members of the Government Finance Officers Association and the California Society of Municipal Finance Offers and have access to email distribution lists and discussion groups on these topics. As discussed in Management’s Response, Policy and Procedures 1-06/ASD, Payment Procedures has been revised to the City’s practice of verbally confirming payment information through contact information that is independently obtained through the company’s website or the vendor record in SAP; this is a control activity best practice implemented by staff as a result of cybersecurity and control environment training.

In addition, the City requires cyber security training biennially. Key ASD Staff will continue to actively pursue training opportunities to remain informed of new control environment practices, fraud schemes, and user security awareness.

Finding: ACH Payments
The ASD management should review segregation of duties among creating/updating vendor records, processing vendor invoices, and processing payments and evaluate risks associated with conflicts. The ASD management should work with IT to identify the ways to improve segregation of duties and mitigate risks.

Administrative
Services
Concurrence: Partially Agree
Target Date: March 2023
Completion Date: To be determined during the OCA’s follow-up review Action Plan: As noted previously, ASD has revised Policy and Procedures 1-06/ASD, Payment Procedures to describe mitigating controls that ASD has in place over ACH and wire payments. ASD is aware of the system configuration in the ERP and has implemented Item 9
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18 internal controls to mitigate the risk the system configuration could present. Staff continually to reviews segregation of duties and the internal control structure that is in place with the goal of maximizing use of staff resource and balancing with risk mitigation.

Staff agrees that a technology solution to improve segregation of duties is ideal. As part of phase two of the ERP upgrade, staff will evaluate the cost benefit of system configuration modifications.

Until the segregation of duties conflicts in the City’s ERP system are resolved, the ASD management should strengthen mitigating controls over the AP payment process by ensuring that the controls are designed to mitigate risks adequately and operating effectively. The City’s Policy and Procedures 1-06/ ASD, Payment Procedures should be updated to clearly define the controls and communicate to the employees.

Administrative
Services
Concurrence: Partially Agree
Target Date: February 2023
Completion Date: February 22, 2023
Action Plan: Staff agrees that updates to the City’s Policy and Procedures 1-06/ASD, Payment Procedures will provide clear communication to employees and memorialize the control practices already in place. As listed below, segregation of duties and mitigating control practices exist in the ACH and wire payment process, and updates to 1-06/ASD, Payment Procedures, will ensure clear definition of these controls. Staff believes that the following controls are designed to mitigate risk effectively and operate effectively:
 Verbally confirm vendor banking information through
independently obtained contact information and/or the master vendor record in SAP.
 Invoices cannot be parked and posted by the same AP
employee. In addition, invoices cannot be parked and process by the same AP employee
 Although all three AP employees can post and process ACH batch payments, this control risk it mitigated by requiring three approvers to process the payment. The third approver,
Manager, Treasury, Debt & Investments, has no authorization to park, post, or process payments. Independent review of all Item 9
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19 ACH payments is done by verifying the vendor, dollar amount, and authorized signature(s).
 The AP Senior Accountant reviews banking changes made in the SAP system before approving ACH batch. Documentation of these banking changes began in May 2022.
 The ACH batch cannot be uploaded and approved by the same person in the City’s bank online portal (U.S. Bank).
 AP staff do not have authority to enter goods receipts in SAP (MIGO). Goods receipt is required for all PO related payments.

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City Council
Staff Report
Report Type: CONSENT CALENDAR
Lead Department: City Clerk
Meeting Date: June 12, 2023
Report #:2305-1582
TITLE
SECOND READING: Adoption of a Permanent Ordinance Amending Titles 18 and 21 to Implement State Housing Legislation from the 2021 Legislative Session, Including SB 9.

Environmental Analysis: Exempt from Environmental Analysis under CEQA Guidelines Section 15061(b)(3) and Government Code Sections 66411.7(n) and 65852.21(j). The Planning and Transportation Commission (PTC) has recommended Council adopt the ordinance. (FIRST READING: May 22, 2023 PASSED 7-0)

BACKGROUND
This was heard by the City Council on May 22, 2023 for a first reading and was approved 7-0. No changes were made to the ordinance; it is now before you for a second reading.

ATTACHMENTS
Attachment A: Permanent SB 9 and SB 478 Ordinance
APPROVED BY:

Mahealani Ah Yun, Interim City Clerk
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Ordinance No. ____

Ordinance of the Council of the City of Palo Alto Modifying Chapters 16.65 (Citywide Affordable Housing Requirements), 18.10 (Low-Density Residential, RE, R-2, and RMD Districts), 18.12 (R-1 Single-Family Residential District), 18.13 (Multiple Family Residential, RM20, RM30, RM40), 18.16 (Commercial Districts, CN, CC, CS), 18.18 (Downtown Commercial, CD-C, CD-S, CD-N), 18.40 (General Standards and Exceptions), and 18.42 (Standard for Special Uses) of Title 18 (Zoning) and Adding Chapter 21.10 (Parcel Maps for Urban Lot Splits) of the Palo Alto Municipal Code to Implement Recent State Housing Bills

The Council of the City of Palo Alto ORDAINS as follows:

SECTION 1. Findings and declarations. The City Council finds and declares as follows:

A. On September 16, 2021, Governor Newsom signed into law Senate Bill 9 (SB 9), which requires, among other things, that local agencies ministerially approve both two-unit construction and urban lot splits on single-family zoned lots.

B. SB 9 authorizes the creation of lots as small as 1,200 square feet, and requires approval of two residential units of at least 800 square feet (for a total of 1,600 square feet) each on such lots. This represents a significant departure from existing minimum lot sizes and development standards in Palo Alto’s single-family zones.

C. The increased density and intensity of development authorized by SB 9 has the potential to negatively impact privacy, access for emergency vehicles, and aesthetics of residential neighborhoods. In addition, the ministerial review required by SB 9 could result in the unintentional loss of historic resources in Palo Alto’s single family zones.

D. SB 9 authorizes local jurisdictions to apply objective zoning standards, objective subdivision standards, and objective design standards, subject to certain limitations in statute.

E. On September 16, 2021, Governor Newsom signed into law Senate Bill 478 (SB 478), which requires, among other things, that local agencies provide specified minimum floor area ratios for housing development projects containing 3 to 10 dwelling units.

F. On January 24, 2022 and April 11, 2022, the City Council adopted interim ordinance nos. 5542 and 5546 to address SB 9 and SB 478. Following a recommendation by the Planning and Transportation Commission on February 8, 2023, the City Council now seeks to adopt a permanent ordinance.

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SECTION 2. With the exceptions of Sections 16, 17, 19 and 21, and 23, which were added in their entirety by interim ordinance no. 5542, this ordinance is formatted to show amendments to the Palo Alto Municipal Code as it would read if interim ordinances 5542 and 5546 were to expire. Additions from this baseline are shown in underline, and deletions are shown in strike- through; large portions of text that are unchanged may be omitted through use of ellipses.

SECTION 3. Section 18.10.020 (Applicable Regulations) of Chapter 18.10 (Low-Density Residential (RE, R-2 and RMD) Districts) of Title 18 (Zoning) of the Palo Alto Municipal Code is amended to read as follows:

18.10.020 Applicable Regulations
The specific regulations of this chapter and the additional regulations and procedures established by Chapters 18.52 to 18.80 inclusive shall apply to all low-density residential districts. Such regulations shall apply to construction of two units on an RE-zoned lot pursuant to California Government Code Section 65852.21 (SB 9, 2021), except as modified by Section

18.42.180.

SECTION 4. Section 18.10.030 (Land Uses) of Chapter 18.10 (Low-Density Residential (RE, R-2 and RMD) Districts) of Title 18 (Zoning) of the Palo Alto Municipal Code is amended to read as follows:

18.10.030 Land Uses

Table 1 shows the permitted and conditionally permitted uses for the low-density residential districts.

TABLE 1

PERMITTED AND CONDITIONALLY PERMITTED LOW-DENSITY RESIDENTIAL USES [P = Permitted Use -- CUP = Conditional Use Permit Required]

RE R-2 RMD Subject to
Regulations in:
[. . .] [. . .] [. . .] [. . .] [. . .]

RESIDENTIAL USES
Single-Family P P P

Two-Family use, under one ownership P (4) P P

Mobile Homes P P P 18.42.100
Residential Care Homes P P P

[. . .] [. . .] [. . .] [. . .] [. . .]
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P = Permitted Use CUP = Conditional Use Permit
Required
Footnotes:
(1) Sale of Agricultural Products: No permanent commercial structures for the sale or processing of agricultural products are permitted.
(2) Accessory Dwelling Units in R-2 and RMD Zones: An accessory dwelling unit or a Junior Accessory Dwelling Unit associated with a single-family residence on a lot in the R-2 or RMD zones is permitted, subject to the provisions of Section 18.42.040, and such that no more than two units result on the lot.
(3) Bed and Breakfast Inns: Bed and breakfast inns are limited to no more than 4 units (including the owner/resident's unit) in the RMD district. (4) Two Unit Development Pursuant to California Government Code Section 65852.21 (SB 9, 2021): Construction of two units is permitted on an RE-zoned lot, subject to the regulations in Section 18.42.180.

SECTION 5. Section 18.10.040 (Development Standards) of Chapter 18.10 (Low-Density Residential (RE, R-2 and RMD) Districts) of Title 18 (Zoning) of the Palo Alto Municipal Code is amended to read as follows:

18.10.040 Development Standards
(a) Site Specifications, Building Size, Height and Bulk, and Residential Density The development standards for the low-density residential districts are shown in Table 2:

TABLE 2

LOW-DENSITY RESIDENTIAL DEVELOPMENT STANDARDS
R-E (6) R-2 RMD Subject to
Regulations in:
[. . .] [. . .] [. . .] [. . .] [. . .]
Footnotes:
(1) Minimum Lot Size: Any lot less than the minimum lot size may be used in accordance with the provisions of Chapter 18.40.
(2) R-2 Floodzone Heights: Provided, in a special flood hazard area as defined in Chapter

16.52, the maximum heights are increased by one-half of the increase in elevation required to reach base flood elevation, up to a maximum building height of 33 feet. (3) R-2 Floodzone Daylight Plane: Provided, if the site is in a special flood hazard area and is entitled to an increase in the maximum height, the heights for the daylight planes shall be adjusted by the same amount.
(4) Exemption from Floor Area for Covered Parking Required for Two-Family Uses: In the R-2 and RMD districts, for two-family uses, floor area limits may be exceeded by a maximum of two hundred square feet, for purposes of providing one required covered parking space.

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(5) Maximum House Size: The gross floor area of attached garages and attached accessory dwelling units and junior accessory dwelling units are included in the calculation of maximum house size. If there is no garage attached to the house, then the square footage of one detached covered parking space shall be included in the calculation. This provision applies only to single-family residences, not to duplexes allowed in the R-2 and RMD districts. (6) Two Unit Development Pursuant to California Government Code Section 65852.21 (SB 9, 2021): Construction of two units on an RE-zoned lot shall be subject to the development standards in this Section 18.10.040, except as modified by Section 18.42.180.

[. . .]

SECTION 6. Table 3 (PARKING REQUIREMENTS FOR R-E, R-2 AND RMD USES) of Section

18.10.060 (Parking) of Chapter 18.10 (Low-Density Residential (RE, R-2 and RMD) Districts) of Title 18 (Zoning) of the Palo Alto Municipal Code is amended to read as follows:

[. . .]

TABLE 3
PARKING REQUIREMENTS FOR R-E, R-2 AND RMD USES
Use Minimum Off-Street Parking Requirement
Single-family residential use (excluding
accessory dwelling units)
2 spaces per unit, of which one must be covered.

Two family in the RE district, pursuant to
California Government Code Section
65852.21 (SB 9, 2021)
1 space per unit. No spaces required if located
within one-half mile walking distance of either a
high-quality transit corridor or a major transit stop,
or located within one block of a car share vehicle.

Two family (R2 & RMD districts) 3 spaces total, of which at least two must be covered
Accessory dwelling unit, attached or
detached:

No parking required
Junior accessory dwelling unit No parking required
Other Uses See Chapter 18.40

[. . .]

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SECTION 7. Section 18.10.070 (Accessory and Junior Accessory Dwelling Units) of Chapter

18.10 (Low-Density Residential (RE, R-2 and RMD) Districts) of Title 18 (Zoning) of the Palo Alto Municipal Code is amended to read as follows:

18.10.070 Accessory and Junior Accessory Dwelling Units Accessory Dwelling Units and Junior Accessory Dwelling Units are subject to the regulations set forth in Chapter 18.09 Section 18.42.040.

SECTION 8. Section 18.12.020 (Applicable Regulations) of Chapter 18.12 (R-1 Single Family Residential District) of Title 18 (Zoning) of the Palo Alto Municipal Code is amended to read as follows:

18.12.020 Applicable Regulations
The specific regulations of this chapter and the additional regulations and procedures established by Chapters 18.52 to 18.80 inclusive shall apply to the R-1 district including the R-1 subdistricts. Such regulations shall apply to construction of two units on an R1-zoned lot pursuant to California Government Code Section 65852.21 (SB 9), except as modified by Section

18.42.180.

SECTION 9. Section 18.12.030 (Land Uses) of Chapter 18.12 (R-1 Single Family Residential District) of Title 18 (Zoning) of the Palo Alto Municipal Code is amended to read as follows:

18.12.030 Land Uses
The permitted and conditionally permitted uses for the single family residential districts are shown in Table 1:

Table 1
PERMITTED AND CONDITIONAL R-1 RESIDENTIAL USES
R-1 and all R-1
Subdistricts
Subject to
Regulations in:
[. . .] [. . .] [. . .]

RESIDENTIAL USES
Single-Family P

Two-Family use, under one ownership P 18.42.180
Mobile Homes P 18.42.100
Residential Care Homes P

[. . .] [. . .] [. . .]
P = Permitted Use CUP = Conditional Use Permit Required

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SECTION 10. Section 18.12.040 (Site Development Standards) of Chapter 18.12 (R-1 Single Family Residential District) of Title 18 (Zoning) of the Palo Alto Municipal Code is amended to read as follows:

18.12.040 Site Development Standards

(a) Site Specifications, Building Size, Height and Bulk, and Residential Density The development standards for the R-1 district and the R-1 subdistricts are shown in Table 2, except to the extend such standards may be modified by Section 18.42.180 for two-family uses pursuant to California Government Code Section 65852.21 (SB 9, 2021):

[. . .]

SECTION 11. Section 18.12.060 (Parking) of Chapter 18.12 (R-1 Single Family Residential District) of Title 18 (Zoning) of the Palo Alto Municipal Code is amended to read as follows:

18.12.060 Parking
Off-street parking and loading facilities shall be required for all permitted and conditional uses in accord with Chapters 18.52 and 18.54 of this title. The following parking requirements apply in the R- 1 districts. These requirements are included for reference purposes only, and in the event of a conflict between this Section 18.12.060 and any requirement of Chapters 18.52 and 18.54, Chapters 18.52 and 18.54 shall apply, except in the case of parcels created pursuant to Section 18.10.140(c) (subdivision incentive for historic preservation).

(a) Parking Requirements for Specific Uses

Table 4 shows the minimum off-street automobile parking requirements for specific uses within the R-1 district.

Table 4
Parking Requirements for Specific R-1 Uses
Use Minimum Off-Street Parking Requirement
Single-family residential use
(excluding accessory dwelling units)
2 spaces per unit, of which one must be covered.

Two family use pursuant to
California Government Code Section
65852.21 (SB 9, 2021)
1 space per unit. No spaces required if located
within one-half mile walking distance of either a
high-quality transit corridor or a major transit stop,
or located within one block of a car share vehicle.

Accessory dwelling unit, attached or
detached
No parking required
Junior accessory dwelling unit No parking required
Other Uses See Chs. 18.52 and 18.54
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[. . .]

SECTION 12. Section 18.12.070 (Accessory and Junior Accessory Dwelling Units) of Chapter

18.12 (R-1 Single Family Residential District) of Title 18 (Zoning) of the Palo Alto Municipal Code is amended to read as follows:

18.12.070 Accessory and Junior Accessory Dwelling Units Accessory Dwelling Units and Junior Accessory Dwelling Units are subject to the regulations set forth in Chapter 18.09 Section 18.42.040.

SECTION 13. Section 18.40.160 (Replacement Project or Discretionary Review Required) of Chapter 18.40 (General Standards and Exceptions) of Title 18 (Zoning) of the Palo Alto Municipal Code is amended to read as follows:

18.40.160 Replacement Project or Discretionary Review Required (a) No permit required under Title 2 (Administrative Code), Title 12 (Public Works and Utilities), or Title 16 (Building Regulations) shall be issued for demolition or deconstruction of a single family residence or duplex in the Low-Density Residential District (Chapter 18.10) or Single Family Residential District (Chapter 18.12), except for deconstruction pursuant to Section 16.14.130 or where necessary for health and safety purposes (as determined by the City's Building Official), unless building permit plans for a replacement project have been approved. This subsection shall also apply to demolition of a single family residence or duplex in the Multiple Family Residential District (Chapter 18.13) when the replacement project does not require discretionary review.
(b) No permit required under Title 2 (Administrative Code), Title 12 (Public Works and Utilities), or Title 16 (Building Regulations) shall be issued for any project requiring discretionary review under Title 18 or Title 21, unless the application for discretionary review has been approved.

SECTION 14. Section 18. 52.020 ( Definitions) of Chapter 18. 52 (Parking and Loading Requirements) of Title 18 (Zoning) of the Palo Alto Municipal Code is amended to read as follows:

18.52.020 Definitions
For purposes of this chapter:

[. . .]

(h) “Within one block of a car share vehicle” means within 600 feet of a parking space permanently reserved for use by a car share vehicle.
(h)(i) Definitions for other parking-related terms can be found in Section 18.04.030(a) (Definitions), including “Parking as a principal use,” “Parking facility,” and “Parking space.”

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SECTION 15. Table 1 (Minimum Off-Street Parking Requirements of Section 18.52.040 (Off- Street Parking, Loading, and Bicycle Facility Requirements) of Chapter 18.52 (Parking and Loading Requirements) of Title 18 (Zoning) of the Palo Alto Municipal Code is amended to read as follows:

18.52.040 Off-Street Parking, Loading and Bicycle Facility Requirements

[. . .]

Table 1
Minimum Off-Street Parking Requirements
Use Vehicle Parking Requirement
(# of spaces)
Bicycle Parking Requirement

Spaces Class 1 Long
Term (LT) and
Short Term (ST)

RESIDENTIAL USES
[. . .] [. . .] [. . .] [. . .]
Two-Family
Residential
(R-2 & RMD Districts)

1.5 spaces per unit, of which at least
one space per unit must be covered
Tandem Parking Allowed, with one
tandem space per unit, associated
directly with another parking space
for the same unit
1 space per
unit
100% - LT
(R-1 and RE Districts,
pursuant to Section

18.42.180)
At least one space per unit. No
spaces required if the unit is located
within one-half mile walking
distance of either a high-quality
transit corridor or a major transit
stop, as defined in California Public
Resources Code Sections 21155 and
21064.3 respectively, or located
within one block of a car share
vehicle.
1 space per
unit
100% - LT
[. . .] [. . .] [. . .] [. . .]

[. . .]

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SECTION 16. Section 18.42.180 (Standards for Two Units on Single Family Zoned Lots Pursuant to Senate Bill 9) of Chapter 18.42 (Standards for Special Uses) of Title 18 (Zoning) of the Palo Alto Municipal Code is added to read as follows:

18.42.180 Standards for Two Units on Single Family Zoned Lots Pursuant to Senate Bill 9.

(a) Purpose. This section sets forth special regulations applicable to the construction of two dwelling units on single family lots in the R-1 (and R-1 subdistricts) and R-E zone districts, pursuant to California Government Code Sections 65852.21 and 66411.7 (SB 9, 2021). In the event of a conflict between the provisions of this section and the generally applicable regulations of Chapters 18.10, 18.12, and 18.52-18.80, inclusive, the provisions of this section shall prevail.

(b) Definitions. As used in this section:
(1) “Specific, adverse impact” means a significant, quantifiable, direct, and unavoidable impact, based on objective, identified written public health or safety or physical environmental standards, policies, or conditions as they existed on the date the application was deemed complete. Inconsistency with the zoning ordinance or general plan land use designation shall not constitute a specific, adverse, impact.
(2) “Sufficient to allow separate conveyance” means the two dwelling units constitute clearly defined, separate, and independent housekeeping units without interior access points to the other dwelling unit. (3) “Two dwelling units” means the development proposes two new units on a vacant lot or proposes to add one new unit to one existing unit on a lot. This does not include the development of a single dwelling unit on a vacant lot. (4) “Unit” means any dwelling unit, including, but not limited to a primary dwelling unit, an accessory dwelling unit, or a junior accessory dwelling unit.

(c) Applicability. When an application is submitted that includes both (1) the construction of two dwelling units under this section and (2) other redevelopment work that is not integral to creation of a new dwelling unit and would generally require discretionary review, only the portions required for construction of dwelling units shall be reviewed ministerially. In addition, this section shall not apply in any of the following circumstances:
(1) Parcels described California Government Code Section 65913.4, subdivisions (a)(6)(B) through (a)(6)(K) inclusive. Such parcels include, for example, parcels located in wetlands, in very high fire severity zones (unless the site has adopted certain fire hazard mitigation measures), and in special flood hazard areas or regulatory floodways (unless the site meets certain federal requirements for development).
(2) Parcels on which an owner of residential real property has exercised the owner’s rights under state law to withdraw accommodations from rent or lease within the past 15 years.

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(3) The development would require alteration or demolition of any of the following types of housing
(A) Housing that is subject to a recorded covenant, ordinance, or law that restricts rents to levels affordable to persons and families of moderate, low, or very low income.
(B) Housing that is subject to any form of rent or price control through a public entity’s valid exercise of its police power.
(C) Housing that has been occupied by a tenant in the last three years. (4) The development would result in the demolition of more than 25 percent of the existing exterior structural walls of a site that has been occupied by a tenant in the last three years.
(5) The development is located within a historic district or property included on the State Historic Resources Inventory, as defined in California Public Resources Code Section 5020.1, or within a site that is designated or listed on the City’s historic inventory.
(6) The building official finds that the development would have a specific, adverse impact on public health and safety or the physical environment that cannot be feasibly mitigated or avoided.

(d) Application Process.
(1) The Director is authorized to promulgate regulations, forms, and/or checklists setting forth application requirements for the development of dwelling units under this section.
(2) The City shall ministerially approve or disapprove an application pursuant to this section.

(e) Development Standards.
(1) A project proposing two dwelling units on a parcel in the R-1 or RE districts shall be subject to the development standards set forth in Chapters 18.12 and 18.10, respectively except as provided herein.
(2) All construction pursuant to this section shall comply with objective design standards adopted by the City Council. However, an applicant seeking to deviate from the objective design standards (except to the extent necessary to construct a unit of 800 square feet) may elect to submit an application under the base requirements of Chapters 18.10, or 18.12, including, if applicable, Single Family Individual Review.
(3) If the application of any development standard or design standard would necessarily require that one or more proposed units be less than 800 square feet, such standard shall be relaxed to the minimum extent necessary to allow construction of a unit or units of at least 800 square feet. The Director may publish regulations governing the order in which objective standards shall be waived or relaxed in such circumstances.
(4) Setbacks from side and rear property lines, including street-side property lines, shall be no less than four feet, except in the case of existing non-complying Item 10
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structures or structures reconstructed in the same location and to the same dimensions as an existing structure, in which case existing setbacks less than four feet may be maintained. No setback is required from an internal lot line newly created pursuant to Chapter 21.10, for adjacent or connected structures separated by the new lot line, provided that the structures meet building code safety standards and are sufficient to allow separate conveyance. (5) Off-street parking shall be provided pursuant to Chapters 18.52 and 18.54. (6) In the event that a project is proposed on a site that has been subject to an Urban Lot Split under Chapter 21.10, and the project would result in three or more detached units across the two parcels created by the urban lot split, any new units shall not exceed 800 square feet.
(7) Accessory structures, such as garages and shed are permitted consistent with the provisions of the zoning district; however, no accessory structure shall have a floor area exceeding 500 square feet.
(8) The Director of Public Works may promulgate standards for adjacent public improvements, such as curb cuts and sidewalks, in relation to development pursuant to this Section.

(f) General Requirements.
(1) A maximum of two units may be located on any parcel that is created by an Urban Lot Split under Chapter 21.10. Accessory dwelling units and junior accessory dwelling units shall not be permitted on any such parcel already containing two units.
(2) On parcels that are not the result of an Urban Lot Split under Chapter 21.10, accessory dwelling units may be proposed in addition to the primary dwelling unit or units, consistent with Chapter 18.09, provided, however, that ADUs associated with projects proceeding under this Section shall not receive any exemption from Floor Area Ratio except to the minimum extent required by California Government Code Section 65852.2.
(3) A rental of any unit created pursuant to this Section shall be for a term longer than 30 consecutive days.
(4) For residential units connected to an onsite wastewater treatment system, a percolation test completed within the last 5 years, or, if the percolation test has been recertified, within the last 10 years.
(5) Each unit shall have a permanent street address.
(6) The owner and all successors in interest in the subject property shall agree to participate in any City survey of properties that have constructed dwelling units pursuant to this Section.

(g) Effective Dates. This section shall remain in effect until such time as Government Code Section 65852.21 is repealed or superseded or its requirements for ministerial approval of no more than two units on a single family zoned lot are materially amended, whether by legislation or initiative, at which time this section shall become null and void.

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SECTION 17. Chapter 21.10 (Urban Lot Splits) of Title 21 (Subdivisions and Other Divisions of land) of the Palo Alto Municipal Code is added to read as follows:

Chapter 21.10

PARCEL MAPS FOR URBAN LOT SPLITS IN SINGLE-FAMILY ZONES

Section 21.10.010 Purpose
Section 21.10.020 Definitions
Section 21.10.030 Applicability
Section 21.10.040 General Requirements
Section 21.10.050 Application and Review of an Urban Lot Split Section 21.10.060 Effective dates

Section 21.10.010 Purpose
This chapter sets forth special regulations applicable to the subdivision of a single family lot in the R-1 district (and R-1 subdistricts) or R-E district into two new lots, pursuant to California Government Code Section 66411.7 (SB 9, 2021).

Section 21.10.020 Definitions
As used in this chapter:
(a) “Acting in concert” means pursuing a shared goal to split adjacent lots pursuant to an agreement or understanding, whether formal or informal. (b) “Specific, adverse impact” means a significant, quantifiable, direct, and unavoidable impact, based on objective, identified written public health or safety or physical environmental standards, policies, or conditions as they existed on the date the application was deemed complete. Inconsistency with the zoning ordinance or general plan land use designation shall not constitute a specific, adverse, impact. (c) “Unit” means any dwelling unit, including, but not limited to, a unit or units created pursuant to Section 18.42.180, a primary dwelling unit, an accessory dwelling unit, or a junior accessory dwelling unit.
(d) “Urban Lot Split” means the subdivision of an existing legal parcel in the R-1 district (and R-1 subdistricts) or R-E district to create no more than two new parcels of approximately equal area, pursuant to this Chapter and California Government Code Section 66411.7.

Section 21.10.030 Applicability
The provisions of this chapter shall apply only to lots in the R-1 district (and R-1 subdistricts) or R-E zone district. Except as modified by this Chapter, all provisions of Title 21 shall apply to an application for urban lot split. An Urban Lot Split is not available in any of the following circumstances:
(a) A parcel described California Government Code Section 65913.4, subdivisions (a)(6)(B) through (a)(6)(K) inclusive. Such parcels include, for example, parcels located in wetlands, in very high fire severity zones (unless the site has adopted certain fire hazard mitigation measures), and in special flood hazard areas or regulatory floodways (unless the site meets certain federal requirements for development).

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(b) A parcel on which an owner of residential real property has exercised the owner’s rights under state law to withdraw accommodations from rent or lease within the past 15 years.
(c) A parcel that was created by prior exercise of an Urban Lot Split. (d) A parcel adjacent to a parcel that was created by prior exercise of an Urban Lot Split by the owner, or a person acting in concert with the owner of the parcel sought to be split. (e) The Urban Lot Split would require alteration or demolition of any of the following types of housing
(1) Housing that is subject to a recorded covenant, ordinance, or law that restricts rents to levels affordable to persons and families of moderate, low, or very low income.
(2) Housing that is subject to any form of rent or price control through a public entity’s valid exercise of its police power.
(3) Housing that has been occupied by a tenant in the last three years. (f) The Urban Lot Split is located within a historic district or property included on the State Historic Resources Inventory, as defined in California Public Resources Code Section 5020.1, or within a site that is designated or listed on the City’s historic inventory. (g) The building official finds that the development would have a specific, adverse impact on public health and safety or the physical environment that cannot be feasibly mitigated or avoided.

Section 21.10.040 General Requirements
(a) The minimum size for a parcel created by an Urban Lot Split is 1,200 square feet. (b) The lots created by an Urban Lot Split must be of approximately equal area, such that no resulting parcel shall be smaller than 40 percent of the lot area of the original parcel proposed for subdivision.
(c) Where existing dwelling units on the property are to remain, no lot line may be created under this Chapter in a manner that would bisect any structure or that would result in more than two dwelling units on any resulting parcel.
(d) Newly created lot lines shall not render an existing structure noncomplying in any respect (e.g. floor area ratio, lot coverage, parking), nor increase the degree of noncompliance of an existing noncompliant structure.
(e) Each parcel shall comply with any objective lot design standards for Urban Lot Splits adopted by the City Council.
(f) Utility easements shall be shown on the parcel map, and recorded prior to, or concurrent with final parcel map recordation.
(g) A covenant necessary for maintenance of stormwater treatment facilities shall be recorded prior to, or concurrent with final map recordation. (h) Existing driveways to be demolished shall follow the procedure(s) in 12.08.090 Elimination of abandoned driveway.
(i) A maintenance agreement shall be recorded to ensure shared maintenance of any shared access easements, stormwater treatment, landscaping and private utilities, prior to final parcel map recordation.

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Section 21.10.050 Application and Review of an Urban Lot Split (a) The director of planning is authorized to promulgate regulations, forms, and/or checklists setting forth application requirements for a parcel map for an Urban Lot Split under this Chapter. An application shall include an affidavit from the property owner, signed under penalty of perjury under the laws of California, that:
(1) The proposed urban lot split would not require or authorize demolition or alteration of any of the housing described in Section 21.10.030, subdivision (e). (2) The proposed urban lot split is not on a parcel described in Section 21.10.030. (3) The owner intends to occupy one of the housing units located on a lot created by the parcel map as their principal residence for a minimum of three years from the date of the recording of the parcel map.
(4) The rental of any unit on the property shall be for a term longer than 30 consecutive days.
(5) The resulting lots will be for residential uses only. (b) A parcel map for an Urban Lot Split must be prepared by a registered civil engineer or licensed land surveyor in accordance with Government Code sections 66444 – 66450 and this Chapter. Unless more specific regulations are adopted by the director of planning, the parcel map shall be in the form and include all of the information required of a Preliminary Parcel Map by Chapter 21.12, as well as any additional information required of a Parcel Map by Chapter 21.16. In addition, the face of the Parcel Map shall contain a declaration that:
(1) Each lot created by the parcel map shall be used solely for residential dwellings. (2) That no more than two dwelling units may be permitted on each lot. (3) That rental of any dwelling unit on a lot created by the parcel map shall be for a term longer than 30 consecutive days.
(4) A lot created by a parcel map under this Chapter shall not be further subdivided. (c) Upon receipt of a parcel map for an Urban Lot Split, the director of planning shall transmit copies to the city engineer, chief building official, director of utilities, chief of police, fire chief, director of transportation, and such other departments of the city, and any other agencies, as may be required by law or deemed appropriate.

(d) The director of planning shall cause a notice of the pending application to be posted at the site of the proposed Urban Lot Split and for notice to be mailed to owners and residents of property within 600 feet of the property.
(e) The director of planning shall ministerially review and approve a parcel map for Urban Lot Split if they determine that the parcel map application meets all requirements of this Chapter. The director of planning shall deny a parcel map application that does not meet any requirement of this Chapter.
(f) The Director of Planning shall determine the appropriate fee required for an application for parcel map for an Urban Lot Split, which may be the fee currently established for a Preliminary Parcel Map or Parcel Map.

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Section 21.10.060 Effective Dates.

This chapter shall remain in effect until such time as Government Code Section 66411.7 is repealed or superseded or its requirements for ministerial approval of an Urban Lot Split on a single family zoned lot are materially amended, whether by legislation or initiative, at which time this chapter shall become null and void.

SECTION 18. Section 18.13.040 (Development Standards) of Chapter 18.13 (Multiple Family Residential (RM-20, RM-30 and RM-40) Districts) of Title 18 (Zoning) of the Palo Alto Municipal Code is amended to read as follows:

18.13.040 Development Standards
(a) Site Specifications, Building Size and Bulk, and Residential Density

[. . .]

Table 2
Multiple Family Residential Development Table

RM-20 RM-30 RM-40 Subject to
regulations in:
[. . .] [. . .] [. . .] [. . .] [. . .]
Maximum Floor
Area Ratio
(FAR)(4)

0.5:1 0.6:1 1.0:1 18.13.045
[. . .] [. . .] [. . .] [. . .] [. . .]

SECTION 19. Section 18.13.045 (Increased Floor Area for Housing Developments of 3-10 Units) of Chapter 18.13 (Multiple Family Residential (RM-20, RM-30 and RM-40) Districts) of Title 18 (Zoning) of the Palo Alto Municipal Code is added to read as follows:

18.13.045 Increased Floor Area for Housing Developments of 3-10 Units

(a) A housing development project, as defined in California Government Code Section 65589.5, that is in an RM-20, RM-30 or RM-40 District shall be allowed to increase its floor area ratio as follows:
(i) A housing development project of three to seven units shall have a maximum floor area ratio of 1.0:1.
(ii) A housing development project of eight to ten units shall have a maximum floor area ratio of 1.25:1.
(b) This section shall not apply within a historic district or property included on the State Historic Resources Inventory, as defined in California Public Resources Code Section 5020.1, or within a site that is designated or listed on the City’s historic inventory.

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SECTION 20. Section 18.16.060 (Development Standards) of Chapter 18.16 (Neighborhood, Community, and Service Commercial (CN, CC and CS)) of Title 18 (Zoning) of the Palo Alto Municipal Code is amended to read as follows:

(a) Exclusively Non-Residential Uses

[. . .]

(b) Mixed Use and Residential
Table 4 specifies the development standards for new residential mixed use developments and residential developments. These developments shall be designed and constructed in compliance with the following requirements and the context-based design criteria outlined in Section 18.16.090, provided that more restrictive regulations may be recommended by the architectural review board and approved by the director of planning and development services, pursuant to Section 18.76.020.

Table 4
Mixed Use and Residential Development Standards
CN CC CC(2) CS Subject to
regulations in
Section
[. . .] [. . .] [. . .] [. . .] [. . .] [. . .]
Maximum
Residential
Floor Area
Ratio (FAR)

0.5:1 (4) See sub-
section (e)
below

0.6:1 0.6:1 18.16.065
Maximum
Nonresidential
Floor Area
Ratio (FAR)

0.4:1 2.0:1 0.4:1
Total Mixed
Use Floor Area
Ratio (FAR)

0.9:1 (4) 2.0:1 1.0:1 18.16.065
[. . .] [. . .] [. . .] [. . .] [. . .] [. . .]

[. . .]

SECTION 21. Section 18.16.065 (Increased Floor Area for Housing Developments of 3-10 Units) of Chapter 18.16 (Neighborhood, Community, and Service Commercial (CN, CC and CS)) of Title 18 (Zoning) of the Palo Alto Municipal Code is added to read as follows:

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18.16.065 Increased Floor Area for Housing Developments of 3-10 Units

(a) A housing development project as defined in paragraph (2) of subdivision (h) of Section 65589.5 of the Government Code of the State of California that is in a CN, CC or CS District shall be allowed to increase its floor area ratio as follows:
(i) A housing development project of three to seven units shall have a maximum floor area ratio of 1.0:1.
(ii) A housing development project of eight to ten units shall have a maximum floor area ratio of 1.25:1.
(b) This bonus shall not apply within a historic district or property included on the State Historic Resources Inventory, as defined in Section 5020.1 of the Public Resources Code of the State of California, or within a site that is designated or listed as a city or county landmark or historic property or district pursuant to a city or county ordinance. (c) For mixed use development, total mixed use floor area ratio shall be increased to the extent necessary to accommodate a non-residential floor area ratio of 0.4:1 for retail and retail-like uses only.

SECTION 22. Section 18.18.060 (Development Standards) of Chapter 18.18 (Downtown Commercial (CD) District) of Title 18 (Zoning) of the Palo Alto Municipal Code is amended to read as follows:

(a) Exclusively Non-Residential Use

[. . .]

(b) Mixed Use and Residential
Table 3 specifies the development standards for new residential mixed use developments and residential developments. These developments shall be designed and constructed in compliance with the following requirements and the context-based design criteria outlines in Section 18.18.110, provided that more restrictive regulations may be recommended by the architectural review board and approved by the director of planning and development services, pursuant to Section 18.76.020:

TABLE 3

MIXED USE AND RESIDENTIAL DEVELOPMENT STANDARDS
CD-C CD-S CD-N Subject to
regulations in
Section:
[. . .] [. . .] [. . .] [. . .] [. . .]
Maximum Residential
Floor Area Ratio (FAR)

1.0:1(3) 0.6:1(3) 0.5:1(3) 18.18.065,

18.18.070
Maximum Nonresidential
Floor Area Ratio (FAR)

1.0:1(3) 0.4:1 0.4:1

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Total Floor Area Ratio
(FAR)(3)

2.0:1(3) 1.0:1(3) 0.9:1(3) 18.18.065,

18.18.070
[. . .] [. . .] [. . .] [. . .] [. . .]
Footnotes:
(1) Required usable open space: (1) may be any combination of private and common open spaces; (2) does not need to be located on the ground (but rooftop gardens are not included as open space except as provided below); (3) minimum private open space dimension 6; and (4) minimum common open space dimension 12 For CN and CS sites on El Camino Real, CS sites on San Antonio Road between Middlefield Road and East Charleston Road and CC(2) sites that do not abut a single- or two-family residential use or zoning district, rooftop gardens may qualify as usable open space and may count as up to 60% of the required usable open space for the residential component of a project. In order to qualify as usable open space, the rooftop garden shall meet the requirements set forth in Section 18.40.230.
[. . .]
(3) FAR may be increased with transfers of development, increased floor area for housing development projects with 3-10 residential units and/or bonuses for seismic and historic rehabilitation upgrades, not to exceed a total site FAR of 3.0:1 in the CD-C subdistrict or

2.0:1 in the CD-S or CD-N subdistrict.
[. . .]
(5) The weighted average residential unit size shall be calculated by dividing the sum of the square footage of all units by the number of units. For example, a project with ten 800- square foot 1-bedroom units, eight 1,200-square foot 2-bedroom units, and two 1,800- square foot 3-bedroom units would have a weighted average residential unit size of ((10x800)+(8x1,200)+(2x1,800)) ÷ (10+8+2) = 1,060 square feet.

[. . .]

SECTION 23. Section 18.18.065 (Increased Floor Area for Housing Developments of 3-10 Units) of Chapter 18.18 (Downtown Commercial (CD) District) of Title 18 (Zoning) of the Palo Alto Municipal Code is added to read as follows:

18.16.065 Increased Floor Area for Housing Developments of 3-10 Units

(a) A housing development project as defined in paragraph (2) of subdivision (h) of Section 65589.5 of the Government Code of the State of California that is in a CD Districts shall be allowed to increase its floor area ratio as follows:
(i) A housing development project of three to seven units shall have a maximum residential floor area ratio of 1.0:1.
(ii) A housing development project of eight to ten units shall have a maximum residential floor area ratio of 1.25:1.
(b) This bonus shall not apply within a historic district or property included on the State Historic Resources Inventory, as defined in Section 5020.1 of the Public Resources Code Item 10
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of the State of California, or within a site that is designated or listed as a city or county landmark or historic property or district pursuant to a city or county ordinance. (c) For mixed use development in the CD-N and CD-S subdistricts, total floor area ratio shall be increased to the extent necessary to accommodate a non-residential floor area ratio of 0.4:1 for retail and retail-like uses only.
(d) In no event shall total floor area ratio exceed 3.0:1 in the CD-C subdistrict, or 2.0:1 in the CD-N and CD-S subdistricts.

SECTION 24. Section 16.65.025 (Exemptions) of Chapter 16.65 (Citywide Affordable Housing Requirements) of Title 16 (Building Regulations) of the Palo Alto Municipal Code is amended to read as follows (new text underlined and deletions struck-through; omissions are noted with [. . .] for large sections of unchanged text):

16.65.025 Exemptions.

The following development projects are exempt from the provisions of this chapter:
(a) Residential projects consisting of the construction of one or two units, other than accessory dwelling units and junior accessory dwelling units, unless: (1) included in a mixed use project, (2) constructed on a lot created by an Urban Lot Split under Chapter

21.10; or (3) resulting in a two-family use on a single-family zoned lot; (b) Accessory dwelling units, unless: (1) constructed on a lot created by an Urban Lot Split under Chapter 21.10; or (2) the accessory dwelling unit is constructed on a single-family zoned lot containing a two-family use;
(c) Junior accessory dwelling units and, notwithstanding subsection (b), all accessory dwelling units less than 750 square feet;

[. . .]

SECTION 25. If any section, subsection, clause or phrase of this Ordinance is for any reason held to be invalid, such decision shall not affect the validity of the remaining portion or sections of the Ordinance. The Council hereby declares that it should have adopted the Ordinance and each section, subsection, sentence, clause or phrase thereof irrespective of the fact that any one or more sections, subsections, sentences, clauses or phrases be declared invalid.

SECTION 26. The City Council finds that this Ordinance is statutorily exempt from the requirements of the California Environmental Quality Act (CEQA) for the following reasons. Under Government Code Sections 66411.7(n) and 65852.21(j), an ordinance adopted to implement the requirements of SB 9 shall not be considered a project under CEQA. Additional sections of this ordinance implementing SB 478 are exempt pursuant to Section 15061 of the State CEQA Guidelines because they simply reflect pre-emptive state law that will be effective January 1, 2022. As such, this ordinance does not reflect a change from the status quo and it therefore can be seen with certainty that there is no possibility that the ordinance will have a significant effect on the environment.

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SECTION 27. This ordinance shall be effective on the thirty -first day after the date of its adoption.

INTRODUCED:

PASSED:

AYES:

NOES:

ABSENT:

ABSTENTIONS:

ATTEST:

____________________________ ____________________________ City Clerk Mayor

APPROVED AS TO FORM: APPROVED:

____________________________ ____________________________ Assistant City Attorney City Manager

____________________________
Director of Planning
and Development Services
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City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: City Manager
Meeting Date: June 12, 2023
Report #:2305-1589
TITLE
Approval of a Protocol for Council Member Co-Hosting of Neighborhood Town Hall Meetings

RECOMMENDATION
Staff recommends approval of a Protocol for Council Member Co-Hosting of Neighborhood Town Hall Meetings

BACKGROUND
In the fall of 2022, the City launched a reimagined and retooled Neighborhood Town Halls effort, in partnership with Palo Alto Neighborhoods leadership and former Mayor and current Council Member Pat Burt and Mayor Lydia Kou. Based on Council input, Neighborhood Town Halls are being held each quarter, for a total of four in a given calendar year. Based on the experience gained to date, staff and the Council Members co-hosting the next Neighborhood Town Hall have discussed issues associated with Council Member participation as co-hosts, and are proposing a protocol to clarify this going forward.

Two Neighborhood Town Hall meetings have occurred to date:

October 2022: Included Barron Park, Barron Square, Greenacres I, Greenacres II, Palo Alto Orchards and Monroe Park and co-hosted by former Mayor Pat Burt and Mayor Lydia Kou.

March 2023: Included Greenmeadow, Greendell, Walnut Grove, Fairmeadow, Charleston Meadow, Charleston Garden, Greenhouse, Charleston Village, Adobe Meadow, Meadow Park, and San Alma HOA and co-hosted by Vice Mayor Greer Stone, Council Members Greg Tanaka and Pat Burt.

A third meeting is set for June 11, 2023 to include College Terrace, Evergreen, Mayfield, Ventura and Palo Alto Central and will be co-hosted by Council Members Ed Lauing, Julie Lythcott-Haims and Vicki Veenker.

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To date, Council Members have volunteered to co-host the Neighborhood Town Hall meetings, except for the March meeting where neighborhood leaders requested a third Council Member to participate. Following the June 2023 Neighborhood Town Hall, all current Council Members will have co-hosted at least one Neighborhood Town Hall meeting.

ANALYSIS
Getting organized with City Council participation helps to advance the planning efforts of each Neighborhood Town Hall meeting. Staff has seen tremendous value in the pre-planning and hosting of the Neighborhood Town Hall meetings where both Palo Alto neighborhood leaders and City Council Members co-host and offer input into the planning process.

The following outlines a proposed protocol for City Council co-hosting of future Neighborhood Town Halls. This protocol as drafted was developed through discussions with Council Members Ed Lauing, Julie Lythcott-Haims and Vicki Veenker to provide a clear Council co-hosting structure for future Neighborhood Town Hall meetings and generally offers two co-hosting opportunities per Council Member over a two-year period.

The following protocol reinforces the Neighborhood Town Hall meeting cadence of one per quarter and equitable Council co-hosting opportunities:

A. The City will offer to co-host one Neighborhood Town Hall meeting each quarter, working with Palo Alto Neighborhoods (PAN) to set the sequence of neighborhoods.

B. Each Neighborhood Town Hall will be co-hosted by 2-3 Council Members.

C. Staff will solicit interest from all Council Members to volunteer for upcoming Neighborhood Town Halls, and confirm assignments using the following order:
a. Each Council Member has the opportunity (but not the obligation) to host at least two Town Halls over the course of two years.
b. Council Members living in a participating neighborhood have the first priority to co-host the respective Neighborhood Town Hall meeting.

D. The neighborhood leaders involved in planning a Town Hall may request 1 or 2 Council Members in addition to the volunteers, up to a total of 3. For example, the request may be based on a Council Member’s assignment on a particular committee or regional body. a. If any of the Councilmembers requested has already hosted more than other Councilmembers, staff will advise the neighborhood leaders that their request does not fit with our Councilmember rotation.
b. If the neighborhood leaders would still like an additional Councilmember, staff will first share the invitation with other Councilmembers next in the rotation.

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E. Given the mismatch between seven Council Members and eight meetings, while the protocol may not all come out exactly equal, the goal is to establish a clear and more equitable process with everyone having the opportunity to host at least two meetings every two years.

FISCAL/RESOURCE IMPACT
There are no fiscal impacts associated with this recommendation.

STAKEHOLDER ENGAGEMENT
The proposed process as outlined helps to advance the Neighborhood Town Hall effort and supports the City’s community engagement activities presented to the City Council on April 10, 2023. Previous Neighborhood Town Hall meeting materials is available online. •April 10, 2023 Community Engagement Study Session Staff Report, https://cityofpaloalto.primegov.com/Portal/viewer?id=1680&type=0 •Neighborhood Town Hall meeting materials are posted on the City’s website at www.cityofpaloalto.org/engage.

ENVIRONMENTAL REVIEW
Council action on this item is not a project as defined by CEQA because approval of this protocol is a continuing administrative activity. CEQA Guidelines section 15378(b)(2).

ATTACHMENTS
Attachment A: Neighborhood Town Hall Meeting Reference Materials APPROVED BY:

Ed Shikada, City Manager
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ATTACHMENT A

The following table is for reference and summarize the completed Neighborhood Town Hall meetings by quarter to date, those in the planning stages, and a proposed rotation through the end of 2024.

Table 1
Quarter Council Co-hosts Neighborhood Town Hall
Grouping
Neighborhood Town
Hall Date
2022
Q4: October -
December
Mayor Pat Burt
Vice Mayor Lydia
Kou

Group 6:

Barron Park
Barron Square
Greenacres I
Greenacres II
Palo Alto Orchards
Monroe Park
October 12, 2022
2023
Q1: January –
March
Vice Mayor Greer
Stone
Council Members
Greg Tanaka, Pat
Burt

Group 7:

Greenmeadow
Greendell
Walnut Grove
Fairmeadow
Charleston Meadow
Charleston Garden=
Greenhouse
Charleston Village
Adobe Meadow
Meadow Park
San Alma HOA
March 26, 2023
Q2: April-June Council Members
Vicki Veenker, Ed
Lauing, Julie
Lythcott-Haims

Group 4:

College Terrace
Evergreen
Mayfield
Ventura
Palo Alto Central*
Confirmed: June 11,
2023
Q3: July-
September
Group 2
Downtown North
University South (Plus
Professorville)
Sand Hill Corridor

Tentative: Either set in
this quarter or would
need to host two
meetings in Q4 as a
result of Midtown/Palo
Verde requesting
October meeting date.*
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Q4: October-
December
Group 5:

Midtown
Palo Verde
Mid-October

2024

Q1: January -
March
Group 1:

Crescent Park
Duveneck/St. Francis
Community Center
Triple El
February/March
Q2: April- June Group 8
Palo Alto Hills
Esther Park
Miranda
May or June
Q3: July –
September
Group 3
Old Palo Alto
Southgate
Leland Manor
September To Avoid
Summer
Q4: October-
December
Rotation Starts Again
Group 6:

Barron Park
Barron Square
Greenacres I
Greenacres II
Palo Alto Orchards Monroe
Park
Tentative: Late
October/Early Nov. To
Avoid Holidays

*To hold a fourth meeting in the calendar year, another meeting could be set either in Q3 (July- September) or a second meeting in Q4 (likely November-December).

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City Council
Staff Report
Report Type: CONSENT CALENDAR
Lead Department: City Clerk
Meeting Date: June 12, 2023
Report #:2305-1590
TITLE
Approval of 2023-2024 Boards, Commissions and Committees Work Plans:

A. Architectural Review Board
B. Historic Resources Board
C. Park and Recreation Commission
D. Planning and Transportation Commission
E. Public Art Commission
F. Stormwater management Oversight Committee
G. Utilities Advisory Commission

RECOMMENDATION
Staff recommends Council review and approve the 2023-2024 Board and Commission work plans for the Architectural Review Board, Historic Resources Board, Parks and Recreation Commission, Planning and Transportation Commission, Public Art Commission, Stormwater Management Oversight Committee, and Utilities Advisory Commission.

DISCUSSION
On November 30, 2020, the City Council adopted the Boards, Commissions and Committees (BCC) Handbook, which implemented an annual review and approval of BCC work plans.

Each BCC is required to prepare an annual work plan for review and approval by the Council by second quarter of the calendar year. The annual report should include the results of the prior year’s plan and should consist of up to three priorities. When applicable, the City Council would like to see metrics of community involvement and participation in meetings and activities included in the work plan.

Council may refer additional items to the BCCs in response to new developments. BCCs should work on the items outlined in the approved workplans over the course of the year and should refrain from expending their time and staff resources on items that have not been approved by the City Council.

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In the event a BCC would like to add an item to the workplan for review after an annual workplan has been approved by the City Council, a prompt request by the BCC Chair to the City Council is required and the item will then be addressed by the City Council as a whole.

At this meeting, Council will review the workplans for Architectural Review Board, Historic Resources Board, Parks and Recreation Commission, Planning and Transportation Commission, Public Art Commission, Stormwater Management Oversight Committee, and Utilities Advisory Commission. The Human Relations Commission work plan will be presented at the June 19, 2023 meeting.

FISCAL/RESOURCE IMPACT
There is no fiscal impact associated with the review and approval of the BCC workplans. Any fiscal resources that will be necessary for the implementation of these workplans can be incorporated into the FY 2024 budget discussions at the Council’s discretion.

ATTACHMENTS
Attachment A: Architectural Review Board Work Plan
Attachment B: Historic Resources Board Work Plan
Attachment C: Parks and Recreation Commission Work Plan Attachment D: Planning and Transportation Commission Work Plan Attachment E: Public Art Commission Work Plan
Attachment F: Stormwater Management Oversight Committee Work Plan Attachment G: Utilities Advisory Commission Work Plan
APPROVED BY:

Mahealani Ah Yun, Interim City Clerk
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Architectural Review Board
2023-2024 Workplan
Staff Liaison: Claire Raybould, AICP, Senior Planner
Lead Department: Current Planning, Planning and Development Services Division About the Board
The Architectural Review Board is composed of five members, at least three of whom are architects, landscape architects, building designers or other design professionals. Terms are for three years. See Palo Alto Municipal Code (PAMC) Chapter

2.21. Residency is not required. For the ARB webpage go to bit.ly/paloaltoARB.

Current Boardmembers
•Peter Baltay (Chair)
•Kendra Rosenberg (Vice Chair)
•Osma Thompson
•Yingxi Chen
•David Hirsch
Mission Statement
The Architectural Review Board reviews and makes recommendations to the Planning Director on the building design, site planning, landscape planning, massing and facades, material selection, lighting, signage and other related issues for most major new construction including additions and renovations that alter the exterior building face. The type of buildings reviewed include commercial, industrial, and multiple-family residential. In addition, the ARB is a resource as knowledgeable observers of many varied urban environments, to assist Palo Alto as it develops area plans to accommodate additional housing.

The ARB Scope of Review is fully noted in Title 18 of the Municipal Code, Chapter 18.76 under Section 18.76.020 Prior Year
Accomplishments
•The ARB takes prides in its collaborative process of review, where members meld their individual opinions and experience into one democratic summary that improves proposed projects and therefore the quality of the Palo Alto built environment. This past year, the ARB reviewed over 20 projects including 10 major multi-family housing and commercial projects as well as larger retail modifications in Stanford Shopping Center, meeting Goal 1 of the annual work plan for 2022-2023. •The ARB provided valuable feedback to assist Council with respect to the permanent parklet program as well as updates to the city’s tree protection ordinance. The feedback assisted Council in adopting permanent parklet standards related to a new ordinance related to a permanent parklet program. This work was consistent with Goal 2 of the fiscal year 2023 work plan. •The ARB used its expertise in coordination with staff and their consultant to develop Objective Standards from the City’s existing subjective guidelines and findings that are unique to the City. This will help to ensure that housing development projects continue to meet the City’s high-quality design standards while also going through the City’s streamlined review process. This work satisfied Goal 3 of the 2022-2023 work plan.

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Board Work Plan

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•The ARB held an awards ceremony on September 21 st to celebrate outstanding projects that have been built in the city between 2015 and 2020, meeting objective 4 of the annual Work Plan for 2022-2023. •The ARB adopted updates to its by-laws to conform with Council’s new handbook and again more recently to address new changes to the Brown Act in accordance with Council’s direction, meeting Goal 5 of the 2022-2023 annual work plan. •The ARB provided feedback for the Homekey project, prioritizing this critical housing project for the homeless. The ARB’s feedback ensured that the project is well designed to address the residents needs and is appropriate to its location within the Baylands with respect to colors and massing.
•The ARB reviewed and swiftly approved amendments to the Stanford Medical Center Master Signage program to accommodate new directional signage, ensuring ease in locating needed medical services.

PROJECT/GOAL 1: Review Planning applications for conformance with ARB Findings and Objective Standards

BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL LAW /

COUNCIL-APPROVED
This is the Board's main mission
and serves to ensure the City
develops high quality projects
On-Going Planning staff prepare staff reports,
packets and presentations. They
ensure paper plan sets and
material boards are ready for ARB
review. Other departments, such
as, City Attorney, Urban Forestry,
Transportation, etc., may be
required from time to time.

Consultants, including CEQA
consultants, may also be required.

Issuance of recommendations
on projects and high-quality
architecture throughout the City.

Yes

HIGH PRIORITY LOWER PRIORITY COUNCIL-DIRECTED

POLICY UPDATE
Projects that include new housing units that will help with City reach its regional housing needs allocation (RHNA)
N/A
PROJECT/GOAL 2:

Assist the City as it considers modifications to various Objective Standards; Provide feedback based on research from projects as they go through the objective standards ministerial processes; Suggest ways to better address different housing typology and address Objective Standards applicability to Coordinated Area Plans.

BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL LAW /

COUNCIL-APPROVED
Streamline the objective
standard review process and
ensure that projects using the
streamlined review
process/objective standards
conform to the City’s
Comprehensive Plan, Goals and
Policies, including its high-quality
design standards
Provide high level modifications to
objective standards to Council by
Fall 2023; If directed by Council,
work with staff to propose specific
code language for Council
adopted by the end of FY 2024
Additional staff at Planning so that
the quality and completeness of
the work is maintained.

Council Approval No

HIGH PRIORITY LOWER PRIORITY COUNCIL-DIRECTED

POLICY UPDATE
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Attachment A - Architectural Review
Board Work Plan

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In order of priority:
•Modifications to address townhome projects
•Modifications to address SB 9
•Modifications to address SOFA I and SOFA II areas
Modifications based on implementation of the objective standards for projects under review (addition of standards or modifications to existing standards based on experience implementing the standards)
No
PROJECT/GOAL 3:

Discuss specific Comprehensive Plan Goals, Policies, Programs or Design Guidelines the ARB would like to further explore/implement; If the City Council directs outreach to boards and commissions, provide comments on a preliminary schedule for the development of new Coordinated Area Plans for San Antonio, California Avenue, Downtown, El Camino Real areas.

BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL LAW /

COUNCIL-APPROVED
This project would enhance
implementation of the City's
Comprehensive Plan
On-going Planning staff to help research
policies and programs;
coordination with long range
planning section staff.

Increased adherence to
Comprehensive Plan policies
No

HIGH PRIORITY LOWER PRIORITY COUNCIL-DIRECTED

POLICY UPDATE
•Provide input on development standards for the GM Zoned properties between San Antonio and Fabian Way, which will be required to rezone to allow multi-family housing in accordance with the proposed Housing Element
•Explore modifications to zoning code and/or land use as needed to facilitate and encourage mixed-use development of surface parking lots in the downtown area without loss of parking and on Stanford lands
•Modifications to the El Camino Real and South El Camino Real Design Guidelines
•Coordinated Area Plan for the San Antonio Area
•Bird-friendly design guidelines
No
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Historic Resources Board
2023-2024 Workplan
Staff Liaison: Amy French, Chief Planning Official
Lead Department: Planning and Development Services
About the Commission
Palo Alto, a Certified Local Government (CLG), is responsible to identify, evaluate, register, and preserve historic properties within its jurisdiction and promote the integration of local preservation interests and concerns into local planning and decision-making processes. Staff prepares an annual CLG report of the activities and submits these to the State Office of Historic Preservation. This HRB Work Plan covers May 2022 - April 2023. The HRB is 7 members (no vacancies currently) with terms of 3 years, staggered per Palo Alto Municipal Code (PAMC) Section 2.27.020. Residency is only required for one member: owner/occupant of a category 1 or 2 historic structure, or of a structure in a historic district. HRB webpage:https://www.cityofpaloalto.org/City-Hall/Boards-Commissions/Historic-Resources-Board. PDS historic preservation webpages: https://www.cityofpaloalto.org/Departments/Planning-Development-Services/Historic-Preservation Current Commissioners
•Caroline Willis (Chair)
•Christian Pease (Vice Chair)
•David Bower
•Margaret Wimmer
•Gogo Heinrich
•Mike Makinen
•Alisa Eagleston-Cieslewicz
Mission Statement
Per Palo Alto Municipal Code Chapter 2.27 Historic Resources Board, Section 2.27.040 Duties, HRB purview is:
(a) Render advice and guidance to a property owner upon the owner's application for alteration of any historic single family or duplex building in the downtown area and any such building designated as significant elsewhere in the city (b) Inform the ARB of the historical and/or architectural significance of historic commercial and multiple-family structures in the downtown area and any such buildings designated as significant elsewhere in the City that are under review by the ARB. Submit recommendations to the ARB regarding proposed exterior alterations of such historic structures (c) Recommend to the council the designation of additional buildings and districts as historic. Research available information and add historical information to the inventory sheets of historic structures/sites. This inventory is maintained in the department of planning and development services.
(d) Perform such other functions as may be delegated from time to time to the HRB by the City Council.

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Board Work Plan

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Prior Year
Accomplishments
The City submitted the CLG report for the October 2019 through September 2020 reporting period by the deadline in 2021.

During the 20-21 work plan period, from June 2021 through April 14, 2022, the HRB met nine times in public hearings. The HRB reviewed and provided recommendations for exterior alterations of historic resources. The staff and preservation consultant continued to implement policy L7.2 as an ongoing activity. In Fall 2021, the HRB learned about recently adopted state legislation and partnered with staff to propose initiation of Comprehensive Plan program L7.1.1 during several HRB public hearings including the January 27, 2022 HRB retreat and March 10.

PROJECT/GOAL 1:

Ongoing Goal 1: Review alterations to historic resources. Review and provide recommendations on exterior alterations to historic resources in the Downtown (including SOFA) and on exterior alterations to Significant buildings (Inventory categories 1 and 2, and in Historic Districts) outside Downtown; Support owner-initiated inventory nominations and category upgrades; Update Review Bulletin previously approved by the HRB for use in October 2016, but which now needs adjustment.

BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL LAW /

COUNCIL-APPROVED
HRB's purview includes review of
exterior alterations, support
inventory category upgrades,
and make nominations to our
local inventory. Review of and
clarifications to update the 2016
Review Bulletin will benefit the
community's understanding of
how the City reviews alterations
to historic resources.

Ongoing - historic reviews and
category upgrades are performed
pursuant to PAMC 16.49;
Consideration of bulletin changes
will be taken up by the HRB
during the first quarter of the
workplan. Bulletin will support
outreach.

Staff, the city's qualified historic
preservation consultant, and the
HRB review alterations and
category upgrades to certain
historic resources. Staff and the
HRB will partner in the Bulletin
update effort.

Listed historic resources
undergoing exterior alterations
subject to HRB review
presented to the HRB. Bulletin
updated and posted to the City's
historic preservation program
webpages so homeowners can
better understand impacts of
being on the Inventory.

Yes. PAMC 16.49 sets
forth which resources
shall be reviewed by the
HRB.

HIGH PRIORITY LOWER PRIORITY COUNCIL-DIRECTED

POLICY UPDATE
Review of alteration projects is high priority as primary work of the HRB per PAMC 16.49.

Bulletin revisions are a medium priority - clarifications would help staff and the community.

N/A
PROJECT/GOAL 2:

Ongoing Goal 2: Support implementation of Comp Plan Policy 7.2. Continue to support Policy L7.2 implementation (prepare historic evaluations to determine eligibility for the California Register of Historical Resources and associated tracking).

BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL LAW /

COUNCIL-APPROVED
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Board Work Plan

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Continuing Policy L7.2
implementation allows the City to
learn historic status of buildings
prior to major changes or proposed
demolitions.

Policy 7.2 is ongoing activity;
property owners request historic
evaluations.

Policy L7.2: Case by case
evaluations funded by property
owners.

Policy 7.2: City gradually finds
properties previously
unevaluated to be either
ineligible or eligible for California
Register.

Certified Local
Government activities -
evaluate properties for
historic status and
nominate properties for
listing on local inventory

HIGH PRIORITY LOWER PRIORITY COUNCIL-DIRECTED

POLICY UPDATE
High priority for the HRB to implement Comprehensive Plan policies related to historic resources; G2 Policy 7.2 began implementation in early 2018.

N/A
PROJECT/GOAL 3:

NEW GOAL 3: Launch implementation of Policy L7.1.1. March 21, 2022, Council directed staff to "work with the HRB to review the approximately 165 properties deemed eligible previously and make recommendations for listing on the City's local inventory in accordance with the process set forth in PAMC 16.49 and collaborate with the HRB for community engagement."

BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL LAW /

COUNCIL-APPROVED
The impact of a Policy 7.1.1
launch is community
engagement regarding values of
preservation. Previously
prepared forms will assist HRB,
Council to consider nominations
to our local inventory; listed
properties gain access to
existing preservation incentives.

Policy L7.1.1 implementation will
begin with outreach to owners of
historic properties. Staff will begin
following consultant contract
execution (no deadline/no grant
funding has been requested for
this effort to date).

Policy L7.1.1: Qualified historic
preservation consultant needed to
ascertain whether previously
eligible properties remain and
retain integrity. Consultant
assistance needed to help staff
with outreach and reports to the
HRB and Council.

Policy 7.1.1: City makes strides
toward addiing new properties
on its local Inventory, as well as
updating current listings. More
owners have access to existing
incentives for historic resources.

Certified Local
Government activities -
evaluate properties for
historic status and
nominate properties for
listing on local inventory

HIGH PRIORITY LOWER PRIORITY COUNCIL-DIRECTED

POLICY UPDATE
Implementation of Policy L7.1.1 has not begun. Local Inventory placement of properties previously found eligible for the National and California Registers became a priority followig passage of State legislation.

N/A
PROJECT/GOAL 4:

ONGOING GOAL 4: Improve outreach, review incentives, and develop work program for the next year. Review and recommend improvements to outreach materials regarding the program, including incentives for rehabilitation. With work program development, consider implementing additional historic preservation policies in the Comprehensive Plan, such as L7.1.2:

Reassess Historic Preservation Ordinance

BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL LAW /

COUNCIL-APPROVED
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Board Work Plan

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Outreach and incentives review
will help the community
understand benefits to historic
designation. Reviewing and
reassessing PAMC 16.49 (Policy
L7.1.2) could enable Council to
consider/make decisions
regarding the City's program.

Outreach materials improvements
are contemplated for the first half
of the work program year.

Reassessment of the ordinance
could begin during the second half
of the work program year unless
other projects/goals are
unfinished.

Staff is working to fill current
planning vacancies. HRB Staff
Liaison will seek assistance from
on-call preservation consultant.

Outreach materials updated and
posted. Work program
developed for following year.

Ordinance evaluation completed
and presented to City Council.

Comp Plan Policy
L7.1.2

HIGH PRIORITY LOWER PRIORITY COUNCIL-DIRECTED

POLICY UPDATE
Outreach materials improvement. Reassessing PAMC 16.49 N/A PROJECT/GOAL 5: ONGOING GOAL: Tailored Mills Act Program discussion. Finalize outreach approach and bring forward program report to City Council

BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL LAW /

COUNCIL-APPROVED
A tailored program can be a real
incentive to historic preservation
and result in rehabilitation of
significant resources.

This is targeted as a third quarter
activity, unless other
projects/goals are unfinished.

HRB Ad Hoc committee worked
on a draft of a tailored Mills Act
program. Additional work to
consider a pilot program outreach
approach would require staff time
and consultant assistance.

A report is sent to Council
describing a Tailored Mills Act
program.

N/A (many CLGs in
California have Mills Act
Programs)

HIGH PRIORITY PRIORITY DISCUSSION COUNCIL-DIRECTED

POLICY UPDATE
Finish the work previously drafted - Ad Hoc Committee effort This project might benefit the Inventory update. Board would like Council feedback.

N/A
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Parks and Recreation Commission
2023-2024 Workplan
Staff Liaison: Daren Anderson, Assistant Director
Lead Department: Community Services
About the Commission
The purpose of the Parks and Recreation Commission is to advise the City Council on matters pertaining to the activities of the Open Space & Parks, Golf, and Recreation divisions of the Community Services Department, excluding daily administrative operations.

Timeframe covered by Work Plan: June 5, 2023 – March 31, 2024. The Commission is composed of seven members. See Palo Alto Municipal Code (PAMC) 2.25 Sections 2.25.010, 2.25.030, 2.25.040, 2.25.050, and 2.25.060. Residency is required. Further requirements are that members shall not be Council Members, officers or employees of the City of Palo Alto. Each member of the Commission shall have a demonstrated interest in parks, open space and recreation matters.

For more information about the Parks and Recreation Commission please visit our webpage .

Current Commissioners
•Jeff Greenfield (Chair)
•Amanda Brown (Vice Chair)
•Anne Warner Cribbs
•Nellis Freeman
•Shani Kleinhaus
•Joy Oche
•Bing Wei
Mission Statement The purpose of the Parks and Recreation Commission is to advise the City Council on policy matters pertaining to the activities of the Open Space, Parks and Golf Division, and the Recreation Division of the Community Services Department.

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Commission Work Plan

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Prior Year
Accomplishments
•Racquet Court Policy
oAd Hoc reviewed existing policy and received community feedback through stakeholder meetings and site visits. oPRC recommended an update to the Racquet Court usage policy, increasing pickleball access, on November 22, 2022. oInitiated a racquet court stakeholder advisory group with pickleball and tennis users. oBegan research into the cost and feasibility of adding lights to City-owned tennis courts. •Recreation Projects/Opportunities
Gym/Wellness Center
oWeekly ad hoc meetings (with occasional staff participation) on stakeholder outreach and research on wellness center need, potential locations, facilities, programs and activities. oWorked with City staff on stakeholder outreach and research of wellness center facilities, programs and activities. oHosted a community meeting on March 7, 2023 to discuss the proposed Recreation Wellness Center and issued a community survey to collect additional feedback.
oOrganized “Friends of Palo Alto Recreation Wellness Center” Board of Directors submitting bylaws and articles of incorporation, achieving 501.c3 status and constructing a web site www.parwc.org. oProvided status updates to the PRC during monthly ad hoc updates and at a March 28, 2023 presentation.

Skatepark
oAd hoc worked with staff and skatepark stakeholders and broader skateboarding community on potential skatepark conceptual design that incorporates and honors existing historic skate bowl. oEstablished a partnership with Friends of Palo Alto Parks to serve as the repository for skatepark donations, following PRC recommendation on September 1, 2022, and City Council authorization on October 24, 2022. oFirst draft conceptual design completed by pro-bono designer and staff is working on parking analysis.

First Tee partnership at Baylands Golf Links
oEncouraged completion of the LOI signed with City of Palo Alto and First Tee to allow First Tee to raise funding for this public private partnership.
oFeasibility study report provided by First Tee on January 27, 2023. •E-Bike and Electric Conveyance Device Policy
oPRC ad hoc met throughout the year reviewing policy and regulations regarding the use of e-bikes and electric conveyances in parks and open space areas. This included Palo Alto and neighboring cities, regional, state, and national jurisdictions. oDiscussed policy considerations including parks vs. open spaces, types of e-bikes, and state policy implications with CSD, Transportation and Safe Routes staff, and PABAC, including their E-Bike subcommittee. oPRC discussed balancing competing interests and priorities including wildlife and ecosystem protection, recreation, bicycle transportation corridors, public access, equity, safety, enforceability, ADA requirements, and clarity and communication of rules on October 25, 2022.
oAfter considerable public comment and discussion, PRC unanimously recommended an e-bike and electric conveyances policy and regulations for parks and open space on November 22, 2022 •Fundraising
oDeveloped process for recreation, open space, and community service advertisements to be placed on a regular basis in Enjoy! catalog.
oIncreased regular communication between Friends of Palo Alto Parks, Palo Alto Recreation Foundation, and the PRC.

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Commission Work Plan

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oCreated a webpage for City of Palo Alto Community Services Department, increasing awareness of how to donate to various programs within Community Services.
oEncouraged City staff and partners to pursue grants, which may be available to Community Services, Parks, and Open Space agencies.
•Urban Forestry
oAnnual State of the Urban Forest report presented to PRC on December 15, 2022. oReviewed implementation status of significant changes associated with the Title 8 Tree Ordinance update including new tree protections, tree removal and maintenance processes, public communication, and new staffing. oProvided periodic updates on the roll-out of new Tree Ordinance processes, communication, and staffing. oPRC feedback centered on clarification, communication, timing, and transparency of the associated changes. City web pages continue to evolve. Roll-out is proceeding despite staffing challenges. •Parkland Dedication
oThe PRC ad hoc reviewed the 10-acre Measure E site at the Baylands Nature Preserve / Byxbee Park for potential rededication as parkland, and consulted with Public Works, Utilities, and City Attorney departments, and Utilities Advisory Commission leadership. oPRC discussed permitted development under the ballot measure, absence of current project proposals, and potential benefits of a recreational connector trail, wildlife corridor, and support for the ecological integrity of the Baylands on September 27, 2022. oPRC voted 4-2 to recommended dedication of the Baylands Measure E site as park land on October 25, 2022. oThe ad hoc reviewed other potential sites for Parkland Dedication and is working with staff to move forward with dedicating a small area at Greer Park where a sewer easement is being released (February 28, 2023). •Capital Improvement Plan (CIP) Review
oThe ad hoc met with staff on November 7, 2022 to review the FY 2024 - 2028 CSD Capital Plan for Parks, Open Space, and Golf projects.
oThe ad hoc recommended updates to the CIP project list, including providing more specific details of "On-going CIPs" and adding Foothills Comprehensive Conservation Plan and Cubberley synthetic turf replacement projects, and perhaps the Roth Building restroom.
oThe PRC reviewed and provided feedback on the CIP plan on November 22, 2022.

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Commission Work Plan

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PROJECT/GOAL 1:

Parks Master Plan Process Review
Review the process for planning and implementation of the Parks, Trails, Natural Open Space, and Recreation Master Plan (Parks Master Plan) for consistency and coordination with the annual CIP process. Identify scope of work and high-level process for a comprehensive Parks Master Plan review.

BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL LAW /

COUNCIL-APPROVED
Optimize implementation of the
Parks Master Plan
FY24-Q1&Q2 Low to moderate staff time •Report on the planning and implementation
process since adoption
of the Master Plan
•Optimize FY25 CIP
process for consistency
with the Parks Master
Plan
•New work plan item
created for
comprehensive Parks
Master Plan review
(lower priority items)
Yes: Parks Master
Plan (Policy 2.G,

6.A)

HIGH PRIORITY LOWER PRIORITY COUNCIL-DIRECTED

POLICY UPDATE
Phase 1
•High level review of Parks Master Plan – understand and clarify best practices for utilization, implementation, etc. •Evaluate the potential use of the Action Plan to optimize annual CIP processes moving forward
•Establish scope, details, and timeline of a comprehensive Parks Master Plan review
Phase 2: A new work plan item will outline a comprehensive Parks Master Plan review, which will likely include:
•Detailed status review of projects and programs
•Engage community feedback to understand community
priorities and needs
•Quantitative evaluation of demand and capacity of major recreation facilities (Policy 2.G)
•Review demographic trends and interests by segment for and adjust programs and plans accordingly (Policy 6.A)
•Establish annual and periodic review best practices
Yes: Parks Master
Plan (Chapter 5:

Progress
Reporting)
PROJECT/GOAL 2:

Recreation Program Review
Review existing recreation programs, categorize offerings (age group, program type, capacity and availability, fee reduction use, etc.), and review program offerings of neighboring agencies.

BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL LAW /

COUNCIL-APPROVED
Compile data to understand the
needs, challenges, and gaps in
existing programming for our
diverse community.

FY24-Q1&Q2 Moderate staff time •Report on successes and challenges of existing
program offerings.
•Identify potential new
program offerings.

Yes: Parks Master
Plan (Program

1.H.1)

HIGH PRIORITY LOWER PRIORITY COUNCIL-DIRECTED

POLICY UPDATE
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Commission Work Plan

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Work with the community and staff to assess the current program offerings and current City program offerings and
Identify programing gaps and potential solutions, including new Enjoy Catalog offerings.

Yes: Parks, Master
Plan (Chapter 5:

Progress
Reporting)
PROJECT/GOAL 3:

Recreation Wellness Center
Work with staff to facilitate progress on a new Palo Alto Recreation Wellness Center.

BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED /

LOCAL LAW /

COUNCIL-

APPROVED
Recreation and wellness facilities
provide active and healthy
recreation opportunities for
current and future generations.

Increase social engagement and
well-being.

FY24 Moderate staff time
Utilize professional expertise in our
community, working with the
Friends of Palo Alto Recreation
Wellness Center.
•Providing feedback to City
Council on a new
Recreation Wellness Center
as directed by City Council.
•Recommendation for a
Letter of Intent.

Yes: Parks Master
Plan (Policy 5.G;
and major project
Chapter 5)

HIGH PRIORITY LOWER PRIORITY COUNCIL-DIRECTED

POLICY UPDATE
As directed by City Council:
•Conduct public outreach on a new gym, including and location, siting, gym features, cost estimates, funding timeline, demand assessment, and prioritization of projects
•Investigate fundraising.

Recommend approval of a Letter of Intent for a new Recreation Wellness Center.

Yes. Council
Motion)
PROJECT/GOAL 4:
er
Bicycle/E-Bike Policy and Access
Proceed with City Council direction from 2/27/23 to: Review policy and access for all bikes, electric bikes and other electronic coasting devices in the Baylands and Pearson-Arastradero preserves to consider 1. Reduction of speed limit; 2. Whether and where to restrict bicycle and horse access; 3. Adding bike racks at trail heads to the open space where lacking.

BENEFICIAL IMPACTS TIMELINE RESOURCES
NEEDED

MEASURE OF SUCCESS STATE MANDATED / LOCAL LAW /

COUNCIL-APPROVED
The project implements City
Council direction from 2/27/23 with
the benefit of providing access to
nature while protecting habitat and
wildlife, with consideration of
community interests, staff and
infrastructure resources and
ensuring safe use of trails.

FY24 Low to moderate staff time
Funding for signage and
bike racks.
•Develop signage
•Identify bike rack locations
•Consider whether and on
what trails to restrict bicycle
and horse access and make
recommendations
•Consider speed limit and
make recommendations
Yes: Parks Master
Plan (Program

1.G.2, and 2.A.7)
Item 12
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Commission Work Plan

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HIGH PRIORITY LOWER

PRIORITY

COUNCIL-DIRECTED

POLICY UPDATE
Implement Council direction from 2/27/23, including:

For all bikes in the Baylands and Arastradero Preserves consider and recommend policy to address:
•Reduction of speed limit
•Whether and where to restrict bicycle and horse access •Adding bike racks at trail heads in open space, where lacking r all bikes in Baylands and Arastradero Preserves consider and recommend policy to address:1. Reduction of speed limit2. Whether and where to restrict bicycle and horse access3. Adding bike racks at trail heads to the open space where lackingdr all bikes in Baylands and Arastradero Preserves consider and recommend policy to address:1. Reduction of speed limit2. Whether and where to restrict bicycle and horse access3. Adding bike racks at trail heads to the open space Continue monitoring of evolving bicycle/e-bike issues,
including: technology, impacts, and state and local policies.

Assess how the current e-bike policy is working.

Yes
PROJECT/GOAL 5:

Playing Fields Policy and Programs Review
Review and recommend updates to playing fields policy and programs including synthetic turf replacement strategy and field reservation policy

BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL LAW /

COUNCIL-APPROVED
Efficient and successful
replacement of end-of-life
synthetic turf fields.

Optimized access to City playing
fields.

Proactive field management.

FY24-Q1&Q2: Complete synthetic
turf replacement strategy review.

FY24-Q3&Q4: Complete review of
field reservation policy.

Low to moderate staff time •Meet with playing field
stakeholders
•Successful replacement of
end-of-life synthetic turf field,
contingent upon CIP funding
•Field reservation policy
update recommendation if
warranted
Yes: Parks Master
Plan (Programs

1.F.1; 2.A.3; 2.C.3)

HIGH PRIORITY LOWER PRIORITY COUNCIL-DIRECTED

POLICY UPDATE
Work with staff to review and recommend optimum synthetic turf replacement strategy including materials, process, and timing.

Meet with stakeholders periodically for feedback.

Meet with stakeholders for feedback and review field reservation and use policy and recommend an update as appropriate.

No
PROJECT/GOAL 6:

Park Dedication FY24
Conduct a broad review and assessment of potential sites within our community to recommend dedicating as parkland.

BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL LAW /

COUNCIL-APPROVED
Increase dedicated parkland to
provide recreational opportunities,
promote the health and well-being
of the community, and support
biodiversity. Advance goals of 4
acres of parkland per 1,000
residents, and within 1/2 mile of
homes.

FY24 Low staff time (CSD, CAO,
Planning, PWE, Real Estate)
Recommendation of one or
more sites for dedication as
parkland.

Yes: Parks Master
Plan (Goals and
Policies 1.B, 1.C,
4,D, 5.C) and
Comprehensive
Plan (Policy L-8.1).

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HIGH PRIORITY LOWER PRIORITY COUNCIL-DIRECTED

POLICY UPDATE
Work with staff to assess the suitability of potential sites for parkland dedication, including a review of existing list of previously identified locations. Pursue dedication of Greer Park sewer easement associated with the 2850 W. Bayshore Road development project.

Establish best practices for future review and assessment of potential sites to be dedicated as parkland.

Yes
PROJECT/GOAL 7:

Grant Opportunities
Consider how to increase funding for Parks, Open Space, and Recreation programs and projects through grants.

BENEFICIAL IMPACTS TIMELINE RESOURCES
NEEDED

MEASURE OF SUCCESS STATE MANDATED / LOCAL LAW /

COUNCIL-APPROVED
Obtaining new grants increases
funding for programs and
projects.

FY24 Low to moderate staff time • Report on recommendations to increase grant funding
• Recommend new grants to
pursue
Yes: Parks Master
Plan (Program

5.G.4)

HIGH PRIORITY LOWER

PRIORITY

COUNCIL-DIRECTED

POLICY UPDATE
Work with staff to assess how to use grants more effectively to increase funding for programs and projects. Review current grant application process, associated resources, and recent grant applications.

Consider what new resources and partnerships may be
effective to increase grant funding.

No
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Planning and Transportation Commission
2023-2024 Workplan
Staff Liaison: Amy French, Chief Planning Official
Lead Department: Planning and Development Services (PDS), Office of Transportation (OOT) About the Commission
The Planning & Transportation Commission's work plan covered April 2022 - April 2023. The members and chairs are listed below. Members serve 4-year terms. The PTC has 7 members. For more information about Planning & Transportation Commission (PTC) please visit our webpage, go to http://www.cityofpaloalto.org/gov/boards/ptc/default.asp Current Commissioners
• Doria Summa (Chair)
• Bryna Chang (Vice Chair)
• Bart Hechtman
• Keith Reckdahl
• Carolyn Templeton
• Allen Akin
• George Lu
Mission Statement
The Planning & Transportation Commission advises the City Council, Planning Director, and Transportation Director on land use and transportation matters, including the Comprehensive Plan, zoning, transportation programs, and related matters. The Commission's primary responsibilities include:
• Preparing and making recommendations to the City Council on the City's Comprehensive Plan and applying the Comprehensive Plan to proposed development, public facilities, and transportation in Palo Alto • Considering and making recommendations to the City Council on zoning map and zoning ordinance changes; any changes to Title 18 of the Palo Alto Municipal Code must be reviewed by the PTC and the City Council • Reviewing and making recommendations to the City Council on subdivisions and Site and Design Reviews, on appeals on variances and use permits
• Considering other policies and programs affecting development and land use in Palo Alto for final City Council action • Reviewing and making recommendations on individual projects as described in the Municipal Code, and Open Space development;
• Reviewing and making recommendations to the City Council on transportation, parking, and other related mobility issues • Ensuring robust community engagement and dialogue regarding planning, land use, and transportation and providing recommendations to the City Council regarding these matters and incorporating the public discussion. The PTC hearings provide a forum for public comment and public interaction
Item 12
Attachment D - Planning and
Transportation Commission Work
Plan

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Prior Year
Accomplishments
The PTC addressed many items on the 2022-2023 PTC work plan including considering ordinances, providing feedback during study sessions, and recommending policy direction on a variety of topics. That plan can be found here:
https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-reports/agendas-minutes/planning-and-transportation- commission/planning-and-transportation-commission-2022-work-plan.pdf. Accomplishments the PTC contributed to include Housing Element draft and EIR addendum, completing Tenant Relocation Assistance Ordinance Amendment, NVCAP preferred plan Council endorsement, Admin draft NVCAP, ADU ordinance update to align with SB897 and AB2221, SB9 ordinance, electrification ordinance, retail interim ordinance extension (CUP thresholds), Project Homekey Comp Plan amendment, 3200 Park Boulevard, 1700 Embarcadero, 660 University Comp Plan and PHZ, traffic safety, annual reports.

PROJECT/GOAL 1:

Road Safety
Several safety-related reports will come to PTC, specifically the Crescent Park Traffic Calming pilot, the Caltrain Corridor Quiet Zone Project, the Lincoln Avenue and Middlefield project, a study of collision issues, and a Federally-funded Safe Streets for All Safety Action Plan.

BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL LAW /

COUNCIL-APPROVED
Opportunity to investigate an
area of considerable public
concern.

Reports will be shared as they are
drafted or completed.

The Police Department may need
to provide additional
data/information.

Substantive and informative
discussion.

HIGH PRIORITY LOWER PRIORITY COUNCIL-DIRECTED

POLICY UPDATE
Safety for pedestrians, cyclists, and motorists is important. Reducing and/or eliminating injury and death resulting from collisions is an important priority for many residents. A public dialogue at the PTC is welcomed by those concerned members of the public.

The challenges in this area are addressed through existing committees and active projects. The work continues regardless.

No
PROJECT/GOAL 2:

Retail Recovery
Retail Recovery, the Future of Retail, and Retail Preservation: This project consists of several interrelated and overlapping topics and council assignments. The high-level study contract PDS is overseeing has an expanded scope for 2023 to consider state legislation AB2097 and include further outreach beyond the efforts in 2022. The PTC will eventually resume discussion of a permanent ordinance regarding conditional use permit thresholds and may take up the Council referral to evaluate the retail preservation ordinance. The City’s economic development staff oversaw a contract to develop an economic development strategy which was presented to City Council in March 2023. Efforts are aligned and done in coordination with broader economic development efforts. The PTC is slated to discuss the changes to Title 18 this summer, to implement the permanent parklet program for recommendation to City Council.

BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL LAW /

COUNCIL-APPROVED
Item 12
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Transportation Commission Work
Plan

Item 12: Staff Report
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Overall, this project aims to
ensure a strong climate for
retail businesses in Palo Alto
that can allow Palo Altans to
meet their daily needs and
have a high quality of life.

The high-level reviews of trends
and best practices in retail are
underway; In March, Council
reviewed a retail strategy
document and parklet
standards. The PTC review of
CUP thresholds in 2022 resulted
in the extension of the interim
ordinance.

Consultant work, staff oversight
and meetings preparation, and
participation from the local retail
community.

These interrelated projects
may result in the development
of new ordinances and/or
broader policy
recommendations to the City
Council.

Yes - Council assigned.

HIGH PRIORITY LOWER PRIORITY COUNCIL-DIRECTED

POLICY UPDATE
The recovery from the pandemic as well as any shifts in retail trends that will endure beyond the pandemic are occurring and can benefit from further and refined action by the City.

While this is an impactful body of work, the need to get it right and coordinate with existing and new resources outweighs the need to quickly pursue the work.

Yes
PROJECT/GOAL 3:

CAP Planning
Coordinated Area Plan Planning – This updated goal carries forward the prior year goal regarding neighborhood planning approaches and overall effectiveness of various approaches to neighborhood planning. The staff and PTC will consider new neighborhoods that may result from the 6th cycle Housing Element sites and demand for public facilities/services. Council directed staff to construct a preliminary for starting new coordinated area plans for San Antonio Road; California Ave; Downtown; and El Camino Real. This macro discussion will likely involve study sessions with the Architectural Review Board jointly with the PTC about the scope of work. This w will include process analysis – to study how a CAP process can be different (more efficient) than the NVCAP process.

BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL LAW /

COUNCIL-APPROVED
Development of preliminary
schedule for new CAPs will
enable City Council to provide
direction
By December 2023 Staff time to research and prepare
a staff report to PTC and ARB
Successful conversation and
possible identification of an
approach (or approaches) to
guide the City's future.

HIGH PRIORITY LOWER PRIORITY COUNCIL-DIRECTED

POLICY UPDATE
Council directed work on a preliminary schedule by the end of 2023 It would be timely to hold study sessions after the Housing Element has been certified
Yes
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PROJECT/GOAL 4:

NVCAP
North Ventura Coordinated Area Plan - Finalizing the plan to return to the PTC and City Council for adoption

BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL LAW /

COUNCIL-APPROVED
Transit oriented neighborhood June 2023 is targeted for return to PTC
Consultant resources to complete
the project
An adopted area plan. Yes

HIGH PRIORITY LOWER PRIORITY COUNCIL-DIRECTED

POLICY UPDATE
Per grant requirements, the project must be completed by June 2025.

However the goal is still to complete the plan in 2023 in part to keep within budget.

N/A Yes
PROJECT/GOAL 5:

Housing Element
Housing Element Adoption and Implementation - The PTC reviewed the draft Housing Element the city submitted to HCD on March 8. Council and PTC will jointly review and potentially adopt the 6th cycle HE incorporating responses to HCD comments on May 8, 2023. Then staff begins preparing the required zone changes and Comp Plan amendments to achieve the RHNA housing yields. Housing Incentive Program expansion & adjustments The next step is the phased implementation of the Housing Element programs that include implementing ordinances - Citywide rezoning, by-right housing, allowing/increasing residential density in GM/ROLM, Housing Incentive Program ordinance – expansion to other zones, Objective Standards in SOFA ordinance.

BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL LAW /

COUNCIL-APPROVED
Compliant housing element and
programs to encourage housing
development
PTC and Council review May 8th,
submittal of final draft for HCD
certification
Staff and consultant resources
employed
Compliant Housing Element
that meets the needs of current
and future Palo Altans
Yes - State Mandated
Policy Development

HIGH PRIORITY LOWER PRIORITY COUNCIL-DIRECTED

POLICY UPDATE
City subject to Builder’s Remedy - Compliance with state law is necessary to prevent invalidation of the local ordinance.

N/A Yes
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PROJECT/GOAL 6A:

State Law Implementation
2021-2023 Laws
SB9 and AB2097 Implementation and related policy considerations. SB9 standards - Standards will be further studied in 2023 with PTC assistance and SB9 adjustment legislation at state level in process may be acted upon and further adjustments to standards or the ordinance may be needed. AB2097 policy related discussions and including development of map, handout, and amendment to Title 18 parking regulations. Development of policy considerations related to TDRs in Downtown and SOFA, parking district policies and in lieu parking fees, alternative parking facilities, loading zone and ride-share passenger loading; AB2097 went into effect January 2023.

BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL LAW /

COUNCIL-APPROVED
Provide clarity to property
owners and potential
developers.

Spring 2023 through November
2023
Staff resources have been
assigned.

Adoption of ordinance
amendments
Yes - State

HIGH PRIORITY LOWER PRIORITY COUNCIL-DIRECTED

POLICY UPDATE
N/A Possibly - direction in
April
PROJECT/GOAL 6B:

State Law Implementation
2023-2024 Laws
AB2011/SB6 Implementation: July 2023 effective, Ordinances implementing affordable/mixed-income housing by-right in commercial zones, other state legislation to pass in fall 2023 becoming effective in 2024

BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL LAW /

COUNCIL-APPROVED
Meet state law regarding
housing development.

Draft ordinance AB2011-SB6
should be considered by the
PTC in summer 2023
Need to assign resources (staff) Adopted ordinance Yes

HIGH PRIORITY LOWER PRIORITY COUNCIL-DIRECTED

POLICY UPDATE
Prior to July 1, 2023 effective date for state laws AB2011 and SB6 Laws adopted fall 2023 that may have a July 2024 effectiveness date
No
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Plan

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PROJECT/GOAL 7:

Parking Programs
The PTC will receive an update regarding options for improving the City’s parking programs. This includes a Roadmap for Residential Parking Permit Program improvements and commercial parking improvements. Parking Data Portal - PTC will receive an update regarding parking availability data. The new license plate reader technology allows for regular collection and reporting of parking availability.

BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL LAW /

COUNCIL-APPROVED
Improved parking operations. Ongoing. Ongoing. Feedback from PTC and continued engagement from
the public.

Yes

HIGH PRIORITY LOWER PRIORITY COUNCIL-DIRECTED

POLICY UPDATE
The staff work behind the project continues; proposed updates help advance the work. Additionally, the public welcomes opportunities to engage w/the PTC on this topic.

This project represents a large body of ongoing work to manage parking supply and parking policy.

Yes
PROJECT/GOAL 8:

On-Demand Transit
Program
Staff expects to bring a one-year evaluation of the Palo Alto Link on-demand transit service to PTC in Spring of 2024.

BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL LAW /

COUNCIL-APPROVED
On-demand transit program to
provide service, understanding,
and insight into future transit
programs.

Spring 2024 Grant money has been awarded
for the project. Additional funding
is needed to extend the service
and is being pursued.

Feedback, knowledge, and
insight.

Council accepted
grant award.

HIGH PRIORITY LOWER PRIORITY COUNCIL-DIRECTED

POLICY UPDATE
Grant project to be executed w/in prescribed timeline. Must unfold as resources are procured. No Item 12
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Plan

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PROJECT/GOAL 9:

Bike and Ped
Transportation Plan
Update
A citywide evaluation of the bicycle network and pedestrian network. The plan will identify opportunities to enhance and connect the network.

BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL LAW /

COUNCIL-APPROVED
Updated bike and ped
transportation plan
Study sessions on visioning, needs
and concerns in 2023. Final plan
update in 2024
Consultant resources are being
procured.

Updated bike and ped plan. Yes -
Council

HIGH PRIORITY LOWER PRIORITY COUNCIL-DIRECTED

POLICY UPDATE
N/A Update is timely, but not mandated by any state laws. No PROJECT/GOAL 10:

Car Free Streets
California Avenue and Ramona Street. Planning and design of alternatives for permanent closures.

BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL LAW /

COUNCIL-APPROVED
Evaluate alternatives for street
closures to improve
placemaking and provide
economic benefit to local
businesses.
2023-2024. Funds for consultant resources
must be appropriated and a
consultant procured.

Recommendation made to
Council.

Yes - Council

HIGH PRIORITY LOWER PRIORITY COUNCIL-DIRECTED

POLICY UPDATE
The study and subsequent recommendation/decision needed for local businesses to plan effectively.

The temporary closure can continue while the study takes place. Yes - Council Item 12
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Plan

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PROJECT/GOAL 11: RPP Rental Registry Program

BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL LAW /

COUNCIL-APPROVED
The ordinance enables the city
to establish a rental registry to
learn about the Palo Alto rental
landscape; make data-informed
policy decisions that protect
public health, safety and
welfare of residents and
support stability, certainty, and
fairness in the rental market for
renters and landlords. In
addition, the program would
provide awareness to the public
of renter protections.

PTC to review in late May 2023 Staff time to draft reports to the PTC, HRC, Policy & Services
Committee and City Council
Will need budget for
implementation of registry
software and ongoing
maintenance of program.

Adopted ordinance enabling
registry program. Procurement
of vendor to establish registry
software and launch of registry
by end of year.

Yes - Council

HIGH PRIORITY LOWER PRIORITY COUNCIL-DIRECTED

POLICY UPDATE
Adoption of an ordinance. Other aspects of the project are occurring concurrently, such as the request for proposals.

Yes - Council
PROJECT/GOAL 12: Bird Safe Glass/Construction and Dark Skies Ordinance

BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL LAW /

COUNCIL-APPROVED
A Council objective is to protect
birds in Palo Alto; set new
standards for development,
rather than rely on general
policies or subjective guidelines
TBD Staff is reaching out to consultant
to perform this work
Ordinance adoption No

HIGH PRIORITY LOWER PRIORITY COUNCIL-DIRECTED

POLICY UPDATE
Item 12
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Plan

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Meet with a consultant and identify budget, prepare draft ordinance for PTC review and recommendation to City Council
Complete the work with Council adoption of ordinance Yes - Council
PROJECT/GOAL 13:

Comprehensive Plan Policy Implementation. This includes Streamside Corridor changes in Title 18 and other Comp Plan policies that lead to Title 18 revisions.

BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL LAW /

COUNCIL-APPROVED
Work through the relevant
remaining Comprehensive Plan
policies and programs to
completion
TBD – need to work through the
list and identify priorities; Staff
identifies these tasks in annual
reports
Staff and consultant assistance –
during a year when staff resources
will be focused on implementation
of the Housing Element
Adopted ordinances to amend
Title 18
No

HIGH PRIORITY LOWER PRIORITY COUNCIL-DIRECTED

POLICY UPDATE
Some of the programs and policies are higher priority Some of the programs and policies are lower priority Yes – Comprehensive Plan
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Plan

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Public Art Commission
2023-2024 Workplan
Staff Liaison: Elise DeMarzo, Public Art Program Director, Nadya Chuprina, Program Coordinator Lead Department: Community Services / Arts & Sciences

About the Commission

Public Art Commission is composed of five (5) members. The terms are three (3) years in length and commence on April 1. Residency is not required. There are no vacancies as of April 1, 2023. The Public Art Commission oversees Palo Alto's temporary and permanent public art programs. The Commission's primary duties are:

● To advise the city in matters pertaining to the quality, quantity, scope, and style of art in public places ● To periodically review the capital improvement program with the staff for inclusion of works of art in various projects
● To devise methods of selecting and commissioning artists with respect to the design, execution, and placement of art in public places and to advise staff on the selection and commissioning of artists, and the amounts to be expended on art in public places
● To advise and assist staff in obtaining financial assistance for art in public places from private, corporate, and governmental sources
● To review plans for the installation of art in public places and review the inventory of art in public spaces

Current Commissioners

Hsinya Shen (Chair)
Loren Gordon (Vice Chair)
Ben Miyaji
Nia Taylor
Lisa Waltuch

Item 12
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Mission Statement

The Palo Alto Public Art Program promotes the highest caliber of artwork, commissioning memorable public artworks and experiences that stimulate discussion and thoughtful reflection, celebrating Palo Alto’s character and enhancing civic pride and sense of place.

PAC’s 2023 Adopted Priorities are:

Building Community Priority: Develop public art that encourages playing, belonging, community participation and that promotes shared experiences in and around Palo Alto Neighborhoods and commercial corridors.

Social Justice Priority: Develop public art projects that will continue to advance ethnic and cultural inclusion and social, racial, and gender equity.

Public Art Education Priority: Widen and strengthen education and advocacy for public art, including through the roll-out and implementation of the California Avenue District Master Plan and the Baylands Art Plan, and PAMP long- term goals, while responding to current issues and supporting a wider network of artists.

Prior Year
Accomplishments

1. Artlift Microgrants 2022: fulfilling the PAC’s first goal of 2022, ten microgrants of $4,000 each were given.

The projects were selected and commissioned in the summer / fall of 2022. All projects were completed throughout 2022. The projects created a sense of community and connection. Examples: Pets of Palo Alto A Family Portrait Project showcased community pets and their people; Small Gestures – postcards featuring original images by artist Victoria Heilweil and PA Camera Club; and Factronauts, a series of four pop-up events where artists asked the public questions and providing answers by a “computer” created by the Factronauts.

2. King Artist Residency Pilot: artist Rayos Magos completed his community engagement and created a beautiful seven-foot-tall yellow, three-sided structure titled I See You, I Hear You, I Honor You. The artwork remains on display through October 2023 in King Plaza.

3. California Avenue Public Art Master Plan: activating the Cal Ave corridor with public art. Four murals were installed on the walls of the Public Safety Building Site. Public art staff offered public tours of the murals.

4. Five sculptures by artist Susan Zoccola have been installed along the Charleston-Arastradero Corridor.

Zoccola's colorful compositions are highlighting the pedestrian and bicycle traffic at key places along the corridor.

5. Each year the Public Art Program receives funding from the City to maintain and care for the City’s growing permanent art collection. The staff is diligent about maintenance, examples include repairing Joyce Hsu’s Birdie and Beth Nybeck’s Wild, the conservation treatment of Nathan Oliveira’s Universal Woman and the midtown community’s Poetry Wall mural.

PROJECT/GOAL 1:

Code:ART 2023 (October 12-14, 2023, 5 - 10 p.m.)
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The City of Palo Alto Public Art Program will launch its third interactive media art festival, Code:ART, a three -evening event that re-imagines Palo Alto’s underutilized plazas, alleys, and public spaces through interactive light, sound, and motion. The festival will feature a major interactive media artwork anchoring the festival and six Urban Interventions activating or reimagining downtown storefronts, alleys, parking lots or blank walls in new and inventive ways. The ar tworks will invite play and participation, engaging area locals in an event that outwardly reflects the creative community and culture that thrives here.

BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL LAW /

COUNCIL-APPROVED
This project promotes two of the
PAC 2023 priorities: Building
Community Priority and Public Art
Education Priority.

This event requires extensive
planning and execution beforehand.

Actual event: October 12-14, 2023, 5 -
10 p.m.

Municipal Percent for Art, Public Art
Fund, collaboration with multiple city
departments and community
stakeholders.

Community and stakeholder
feedback
N/A

HIGH PRIORITY LOWER PRIORITY

COUNCIL-DIRECTED

POLICY UPDATE
Code:ART 3 - high priority for building community, educating community on public art and implementing long-term goals.

N/A
PROJECT/GOAL 2: The 2023 King Artist Residency: Artist Kirti Bassendine Artist Kirti Bassendine has begun her role as the next Artist-in-Residence with the City of Palo Alto Public Art Program in February 2023. The Artist’s Residency project focuses on diverse underserved communities residing and/or working in Palo Alto and experiencing socio-economic or housing instability. The project goal is to spark conversations about inclusion, equity, and a sense of belonging, and will result in a final temporary artwork displayed on King Plaza.

BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL LAW /

COUNCIL-APPROVED
Racial Justice Priority: Develop
public art projects that will continue
to advance cultural inclusion and
social and racial equity. Stimulating
important conversation in the
community about equity and
belonging in Palo Alto. Ongoing
collaboration with HRC. Racial
justice, community building and
public art education priorities.

Funds are available through percent
for art Municipal funds. Staff resources
and time will be used for artist call and
the selection processes. Staff will work
with the artist during the design
development and implementation.

Artist will use a studio at the
Cubberley Campus.

The Public Art Commission is
committed to a platform for ongoing
conversations about equity,
inclusion, and belonging in Palo Alto
through the arts. As a result, the
King Artist Residency Program was
established. Community
participation will be measured.

Council referral to the Public
Art Commission

HIGH PRIORITY LOWER PRIORITY

COUNCIL-DIRECTED

POLICY UPDATE
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Commission Work Plan

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High priority for racial justice, building community and public art education. Yes Item 12
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PROJECT/GOAL 3:

California Avenue Murals Festival 2023
PAC approved the initiation of a murals festival to increase new mural opportunities in Palo Alto. Staff launched a call for muralists to create a roster of qualified artists. This Muralists Roster will be used for the festival as well as made publicly available. Staff secured 2 wall sites on California Ave for this festival. Artists Olivia Losee-Unger, Paz de la Calzada, and Nicole Ponsler have been selected to paint vibrant temporary murals in the California Avenue District in June 2023.

BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL LAW /

COUNCIL-APPROVED
This project promotes two of the
PAC 2023 priorities: Building
Community Priority and Public Art
Education Priority.

Project commenced in November
2022 when Staff launched call for
artists. New murals scheduled for
summer 2023.

Funds are available through percent
for art Municipal funds. Staff resources
and time will be used for artist calls
and the selection processes. Staff will
work with the artists during the design
development and implementation.

Community and stakeholder
feedback
N/A

HIGH PRIORITY LOWER PRIORITY

COUNCIL-DIRECTED

POLICY UPDATE
Implementing the California Avenue District Master Plan.

Enhancing the “closed street,” art that invites Palo Altans and visitors to gather on Cal Ave. The artists that create the murals often use Cal Ave history as inspiration.

Building community in the Cal District neighborhood, way finding, enlivening the space Yes
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PROJECT/GOAL 4 :

Integrate Public Art in capital improvement projects (CIP) citywide, such as:
● Fire Station 4: PAC approved the project budget in September 2022. The selection panel recommended Stephen Galloway for the commission. The PAC approved Galloway as the project artist March 16, 2023. ● Public Safety Building: Artist Peter Wegner has completed fabrication and has the artworks in storage to be installed when the building is ready.
● Boulware Park Public Art Project: The PAC has approved the Los Angeles-based award-winning art and design studio UrbanRock Design for the Boulware Park Public Art Project. The artist team has visited Palo Alto and conducted meetings with the community to inform their design development.

BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL LAW /

COUNCIL-APPROVED
Enhancing new buildings, and public
parks with art. Collaborating with the
public on the location, interactivity of
the projects and inspiration for the
art.

Ongoing Municipal Percent for Art,
collaboration with Public Works,
architects, and key stakeholders.

Community and stakeholder
feedback
N/A

HIGH PRIORITY LOWER PRIORITY

COUNCIL-DIRECTED

POLICY UPDATE
Building Community - the artists have engaged the public for their input on Boulware Park.

Social Justice Priority and Public Art Education Priority. N/A PROJECT/GOAL 5:

Ongoing Maintenance and Care of the Collection. With a collection of more than 300 artworks, preventative maintenance and restoration of these valuable City assets are an essential part of a public art program, including the comprehensive restoration of the historically significant Arnautoff frescoes at the Roth Building will begin this year.

BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL LAW /

COUNCIL-APPROVED
This project promotes two of the
PAC 2023 priorities: Building
Community Priority and Public Art
Education Priority. Ensuring that
these valuable assets are
maintained properly and reflect well
on the City.

Ongoing The annual maintenance allocation of
$30,000 is spent down each year.

Staff oversees the contractors and
work being performed
Additional funding was committed by
the County for the restoration of the
Arnautoff frescoes. A conservator has
been hired for this project.

A collection of artworks that reflect
well on Palo Alto and have not
fallen into such disrepair that more
costly repairs are necessary or the
artwork cannot be saved.

Having
artworks fall
into disrepair
may leave the
City open to
legal action by
the artists
under the
Visual Artists
Rights Act.

HIGH PRIORITY LOWER PRIORITY

COUNCIL-DIRECTED

POLICY UPDATE
Public Art Education N/A
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Public Art Commission – 2023/24 Workplan Image Samples

King Artist Residency Program
Artist Rayos Magos was approved by the PAC is the first artist-in-residence with the City of Palo Alto Public Art Program. His residency, Rituals of Resilience, included a six-month community engagement process sparking conversations about culture, identity, belonging, and resilience, with a special focus on amplifying voices of Latinx and BIPOC community members and mental health service providers.

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Magos Rayos'
documentation of personal
stories and learned
experiences has resulted in
a final temporary sculptural
artwork called Te Veo, Te
Escucho, Te Honro (I see
you, I hear you, I honor you)
and will temporarily remain
on view on King Plaza for
approximately nine months
through October 2023.

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Public Art in Municipal Development
Passage, 2022 by artist Susan Zoccola, a series of sculptures installed along Charleston -Arastradero corridor in Palo Alto, is inspired by diatoms, a single -celled algae forming a silica-based cell wall, also resembling a bike wheel.

Informed by the intent of the project – a heavily trafficked corridor in which the streetscape project is intended to enhance bike and pedestrian safety, Zoccola created colorful wheel-based compositions marking entrances and key places along the corridor that would be dynamic for drivers, pedestrians and cyclists alike.

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Mapping Palo Alto Together by Palo Alto-based artist Perry Meigs Public Workshops: July - August 2022 Mural on Display: October 22 - November 19, 2022 Mapping Palo Alto Together by artist Perry Meigs included a series of free public workshops for youth and adults. Participants used vellum paper over a neighborhood map to draw their most common everyday routes of travel during the pandemic and post-pandemic. Each participant's drawing was scanned and overlapped onto one map that reflected the community as a whole. This drawing process offered participants the chance to visualize how their daily patterns changed during the pandemic. The workshops concluded in two outdoor murals showcasing the participants' work on display at the Rinconada Library.
2022 Microgrant Projects - The program funded ten Microgrant projects and encouraged play, belonging, community participation, and shared experiences taking advantage of unique locations across Palo Alto. Through funding temporary art projects and experiences in our commercial corridors and our residential neighborhoods, ArtLift Microgrants fostered safe and creative ways to remain engaged in the arts, reconnect with each other, and come together as a resilient community. ArtLift was presented in support of the city-wide Uplift Local efforts with the purpose of connecting the community.

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The Factronauts
Artists: Peter Foucault, Bryan Hewitt,
Vita Hewitt, Chris Treggiari
Four Pop-up performances September
- November 2022
The Factronauts are intrepid explorers
sent by their parent agency, Nor-Cal
Artists Seeking America (NASA) into
the unknown and unfamiliar world of
the contemporary United States. Their
mission is to collect, analyze and
interpret the facts they encounter
while maintaining their good humor
and belief in the effectiveness of their
process. A nation they no longer
recognize as a familiar and safe
landscape becomes other-worldly, a
surreal and at times a hostile place.

The Microgrant project included four
pop-up performances across Palo Alto
including in Lytton Plaza, University
Avenue, Cubberley Community Center,
and California Avenue.

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Pets of Palo Alto – A Family Portrait Project
On Display: October 2022 outside Mitchell Park Community Center Arts professional Harriet Stern in collaboration with photographer Federica Armstrong held a series of community photo sessions across various outdoor locations in Palo Alto to photograph families with their pets. This Microgrant project concluded with an exhibition of the photographs at the Mitchell Park Community Center Basketball Court displayed during October 2022.

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Universal Woman, by Nathan Oliveira, 2008
Before and after conservation treatment, March 2023
The City collection of public art is comprised of
approximately 100 permanently sited works and
over 200 portable works of art in a diverse range
of media.

The City of Palo Alto Public Art Program is
committed to ongoing maintenance and
restoration projects for the City’s fast-growing
permanent art collection. Supported through an
annual allocation of fund designated for the
collection care and maintenance, permanent and
temporary artworks are regularly cleaned and
receive preventative treatments to protect them
from the elements. Occasionally, artworks
receive more extensive conservation and repair
treatments.

Here, a six-foot tall bronze sculpture by acclaimed
artist Nathan Oliveira and permanently installed
at the Palo Alto Art Center sculpture garden is
shown before and after its cyclical conservation
treatment it received in March 2023.

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California Avenue District Temporary Murals
A series of four site-specific murals by California-based artists, commissioned for the construction safety barriers at 250 Sherman Ave, got installed in August 2022. Artists Alice Lee, Deborah Aschheim, Eva Struble, and Judy Lew Loose draw their inspiration from the unique character of Palo Alto’s California Avenue District, its diverse community, rich history, and iconic landmarks that make this neighborhood distinct. The murals, that together equal to over 900 linear feet of art, will remain on display through September 2023.

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Artist Deborah Aschheim spent two days on California Ave and met with local community members, including many people who live, work in the California District, or come visit its local restaurants, cafes, and shop. The artist created original artworks depicting over 60 people from the community.

Digitized images printed on vinyl remain on display along Jacaranda Lane through September 2023, while all the participants received copied of their portraits signed by the artist.

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4/6/2023
Prior Year Accomplishments The Stormwater Oversight Committee reviews the budget and status of capital projects and that they are in line with the ballot initiative.

About the Commission
The Stormwater Oversight Committee's workplan is included for FY 23; the current Chair is Hal Mickelson and the Vice Chair is Dena Mossar; the committee members include David Bower, Marilyn Keller, Catherine Perman, Ron Owes, and Bob Wenzlau. The terms for David Bower, Marilyn Keller, Catherine Perman and Ron Owes end on May 31, 2023. The Commission was established by Resolution 8573 and amended by Resolution 9677 and is composed of 7 members, who serve terms of 4 years. Each Committee member shall be a resident, employee, or property owner within the City of Palo Alto. For more information about The Stormwater Oversight Committee please visit our webpage, go to https://www.cityofpaloalto.org/City-Hall/Boards-Commissions/Storm-Water-Management-Oversight-Committee.

Stormwater Management Oversight Committee
2023-2024 Workplan Overview
Staff Liaison: Karin North, Assistant Director
Lead Department: Public Works
Mission Statement The Stormwater Oversight Committee reviews the projects, programs and expenditures that are funded by the Stormater Management Fees including proposed stormwater management capital improvement and confirms their conformity to the 2017 ballot measure.

Current Commissioners
Please list the names of the members that were appointed at the time this workplan was created:
• Hal Mickelson (Chair)
• Dena Mossar (Vice Chair)
• David Bower, Marilyn Keller, Catherine Perman, Ron Owes, and Bob Wenzlau Date approved by Stormwater Oversight Committee
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TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL

LAW / COUNCIL-APPROVED
Workplan over the next 2 years Need contractor support to install the upgraded pipeline and pump stations
Reduction in the amount of ponding and
flooding in the future; confirm that
expenditures are in conformity
provisions of ballot meausure.

YES

COUNCIL-DIRECTED

POLICY UPDATE
No
Stormwater Oversight Committee
PROJECT/GOAL 1 :

BENEFICIAL IMPACTS
Track and monitor 2017 Ballot Measure, which covers 13 Capital Projects. This workplan focuses on 3 projects and 1 completed project.

Staff Liaison: Karin North, Assistant Director
Lead Department: Public Works
PURPOSE STATEMENT:

The Stormwater Oversight Committee reviews the projects, programs and expenditures that are funded by the Stormater Management Fees including proposed stormwater management capital improvement and confirms their conformity to the 2017 ballot measure. The Stormwater Oversight Committee's goals and purposes are to provide fiscal oversight for the projects funded by the 2017 ballot measure.

HIGH PRIORITY
2024-2025 Workplan
Reduce ponding and flooding
High priority to complete the upgrades listed in the Stormwater Fee which will reduce the amount of flooding and ponding of stormwater; track and monitor contruction progress on corporation way system upgrades and pump station (SD-21000)

LOWER PRIORITY
Track and monitor construction progress on W Bayshore Road Pump Station (SD- 20000). Track and monitor construction
progress on W Bayshore Road Trunk Line Improvements (SD- 23000).

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TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL

LAW / COUNCIL-APPROVED
New 5 year Municipal Regional Stormater
Permit effective July 1, 2022.

Utilize staff and consultant support to meet
requirements listed in the stormwater
permit.

City is in compliance with stormwater
permit; reduction of trash and an
increase installation of GSI features
throughout the City
Yes

COUNCIL-DIRECTED

POLICY UPDATE
N/A

TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL

LAW / COUNCIL-APPROVED
Ongoing Leverage money allocated for GSI through
the Stormwater Management Fund
Increased acreage of watershed treated
through GSI Yes

COUNCIL-DIRECTED

POLICY UPDATE
PROJECT/GOAL 2:

BENEFICIAL IMPACTS
Environmental protection and sustainability including regulatory and compliance goals.

Track and monitor implementation of Green Stormwater Infrastructure (GSI) Plan.

BENEFICIAL IMPACTS
PROJECT/GOAL 3:

Regulatory compliance in the alignment with
the City's policy on sustainablity
High priority for the City to stay in compliance with State mandates on stormwater compliance; which benefits the environment
Improved water quality and environmental
enhancement

HIGH PRIORITY LOWER PRIORITY

HIGH PRIORITY LOWER PRIORITY
Leverage the work to improve water quality entering the Bay.

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N/A

TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL

LAW / COUNCIL-APPROVED
FY23-FY24
Project lead by Utilities Staff; resources
shared throughout the City; the Stormwater
Management Fund will contribute
resources for this project
Receive Updates N/A

COUNCIL-DIRECTED

POLICY UPDATE
Yes
PROJECT/GOAL 4: Review One Water Plan

BENEFICIAL IMPACTS
One water plan will analyze using the right
water for the correct purpose and how to
leverage existing water supplies

HIGH PRIORITY LOWER PRIORITY
The City should analyze all water resources within the City. Implementation of the One Water Plan will be the next step in the process.

1. R
eview GSI feature at Hopkins near Rinconada Park 2. Review EPA grant -funded G
reening Parking Lots Project with staff.
1) Review and comment on tool to measure impervious surface throughout City. 2) Review and comment on GSI specifications for the GSI Maintenance and
M
onitoring Manual.

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Utilities Advisory Commission
2023-2024 Workplan
Staff Liaison: Dean Batchelor, Director of Utilities
Lead Department: Utilities
About the Commission
The Utilities Advisory Commission (UAC) is charged with providing advice and making recommendations on planning and policy matters, acquisition, development, rate-setting, operating budgets and related reserves, Capital Improvement Projects and financial review of electric, gas and water resources; joint action projects with other public or private entities which impact electric, gas or water resources; environmental implications of proposed electric, gas or water utility projects; and conservation and demand management. Additionally, the UAC is charged with providing advice on the acquisition, development and financial review of the dark fiber network and wastewater collection utilities. As a highly regulated industry, there may be matters not listed below that will be presented to the UAC in accordance with current or future (local, state or federal) legislative requirements.

The Commission is composed of 7 members.

Terms are for 3 years and commence on the first meeting in April.

See Palo Alto Municipal Code (PAMC) Sections 2.23.010 (Membership), 2.23.030 (Term of Office), 2.23.040 (Officers), 2.23.050 (Purpose and Duties), and 2.23.060 (Meetings).

Current Commissioners
•Lauren Segal (Chair) – may change once the Commission is full •Greg Scharff (Vice Chair) – set to select at the next fully seated Commission meeting •Lisa Forssell
•Phil Metz
•Rachel Croft
•Meagan Mauter
•Bob Phillips
Mission Statement
The purpose of the Utilities Advisory Commission shall be to advise the City Council on present and prospective long-range planning, policy, major program, and project matters relating to the electric, gas, water, wastewater collection, fiber optics utilities, and recycled water matters, and environmental implications of electric, gas or water utility projects, and conservation and demand management.

The Utilities Advisory Commission shall have the following duties:
• Advise the City Council on long-range planning and policy matters pertaining to:

Joint action projects with other public or private entities which involve, affect or impact the utilities; Environmental aspects and attributes of the utilities; Water and energy conservation, energy efficiency, and demand side management; and Recycled water matters not otherwise addressed in the preceding subparagraphs; Item 12
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• Review and make recommendations to the City Council on the consistency with adopted and approved plans, policies, and programs of any major utility;
• Formulate and review legislative proposals regarding the utilities, to which the city is a party, in which the city has an interest, or by which the city may be affected; • Review the utilities’ capital improvement programs, operating budgets and related reserves and rates, and the recycled water program, budget, rate, and thereafter forward any comments and recommendations to the finance committee or its successor or to City Council; • Provide advice upon such other matters as the City Council may from time-to-time assign.

The Utilities Advisory Commission shall not have the power or authority to cause the expenditure of city funds or to bind the city to any written, oral or implied contract.

Metrics of Community Involvement and Participation
Between January 2022 and December 2022, the UAC held Twelve (12) hybrid meetings via In-Person/Zoom.

The average community attendance was 2 (in-person) and 3 (zoom).

Prior Year
Accomplishments
Heat Pump Water Heater (HPWH) Pilot:
400 customers have been signed up to participate
5 customers have had completed installs
Advanced Meter Infrastructure (AMI) Beta and Electrification 353 gas customers have completed installs
359 water customers have completed installs
440 electric customers have completed installs
Outage Management System (OMS)
RFP issued on 3/2/2022
Contract approved by City Council on 9/27/2022
Anticipate install/integration complete by the end of Q2 FY24 CA Renewable Energy Credits (REC's)
Yielded $1.75 million in net revenue in calendar year 2022 Approved by Council on 12/12/2022 to continue the program and return to the UAC and Council in 2025 Fiber to the Premises (FTTP)
Completed engineering design of the FTTP network which includes construction cost estimates and the number of customers by route
Defined financial models of the new ISP business in order to make it sustainable Contract amendment 4 with Magellan is to assist with construction management; vendor selections, IT network support, and an engineering make-ready analysis
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STANDING TOPIC 1:

Annual Budget - Rate changes to Water, Gas, Electric, Wastewater collection, and Fiber services.

BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL LAW /

COUNCIL-APPROVED
The community will have an
understanding of the rates and
why they are set at the levels
they are being charged.
compliance of laws and
regulation with equitable rate.

Rates are reviewed annually and
each rate change is determined
by the COSA reports. UAC review
is in February, FCM review is in
April and CCM approval is in June
Staff time, Legal team review time,
Consultant time to create the
COSA reports, UAC budget
subcommitttee.

Council approval of rate
changes, Utilities budget., and
cpau financial solvency.

Maintain rate ranges consistent
with historical differences to
other public agencies.

N/A

HIGH PRIORITY LOWER PRIORITY COUNCIL-DIRECTED

POLICY UPDATE
Rates are always a high priority. The change has an impact on the community and economy.

N/A N/A
STANDING TOPIC 2:

Water Supply: Water infrastructure and potential future sources of water supply. This includes recycled water, demand management programs, grey water, treatment efforts, and use of effluent.

BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL LAW /

COUNCIL-APPROVED
The benefit to the community is
to have ample water sources and
supply for basic uses and when
needed in the event of a drought
or other water reduction events
or population shifts
This is not a single effort or
project; however, a year-round
and multi-year effort
Staff time, Legal team review time,
Consultant time for development
of the One Water Plan which is a
holistic 20-year water portfolio
Council approval of the One
Water Plan which includes
adaptable, dynamic, water
supply portfolios. Safe and
hygienic water supply under
normal circumstances and
sufficient resources in an
emergency situation.

N/A

HIGH PRIORITY LOWER PRIORITY COUNCIL-DIRECTED

POLICY UPDATE
Understanding the sources of the City's water supply and how we maintain that supply is a maintained priority.

N/A N/A
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STANDING TOPIC 3:

Electric Supply: Consider updates to the electric supply portfolio, environmental impacts of the electric supply portfolio, electric infrastructure, electrification, and issues relating thereto.

BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL LAW /

COUNCIL-APPROVED
Reliability for customers, health
benefits, and clean energy
responsible for the vast carbon
reduction the City has achieved
over the past decade
This is an ongoing regularly
monitored effort and does not
have a start or completion time
Approved budget, staff time, legal
review time, consultants as
needed, and technology
Release of RFP for more
renewable energy supply
options in the Integrated
Resource Plan (IRP). Have the
IRP near completion to present
to the UAC for review and
approval. Maintaining the zero
emissions portion of the portfolio
and carbon neutral plan.

N/A

HIGH PRIORITY LOWER PRIORITY COUNCIL-DIRECTED

POLICY UPDATE
The health and well being of the community is a high priority for Council and Utilities

N/A N/A
STANDING TOPIC 4:

Gas Supply: Consider aspects of the gas infrastructure and supply portfolio; environmental impacts of the gas portfolio such as the carbon offset program.

BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL LAW /

COUNCIL-APPROVED
Gas is a type of energy used to
provide some residence and
businesses in Palo Alto with heat
for their facilities and some
cooking appliances.

This is not a single effort or
project; however, a year-round
effort
Staff time, Legal team review time,
Consultant time when necessary
Utilities on average are 10%
below local comparison rates
year round
N/A

HIGH PRIORITY LOWER PRIORITY COUNCIL-DIRECTED

POLICY UPDATE
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The health and well being of the community is a high priority for Council and Utilities

N/A N/A
STANDING TOPIC 5:

Utilities Capital Improvement Programs (CIP): Discuss and advise on CIP projects.

BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL LAW /

COUNCIL-APPROVED
There are multiple CIP's
throughout the Utilities, each with
their own benefits to the City and
the community from rebuilding
the water reservoirs, repairing
and replacing sewer lines or
water mains, maintaining street
lights, building out the fiber
backbone, upgrading and
replacing the electric and gas
systems, upgrading the meter
system, and installing a new
outage management system(*)
Utilities has multiple projects in
their Council approved CIP
budget. Most of these projects are
multiyear.
• Anticipate install/integration
complete by the end of Q2
FY23
Staff time, Legal review time,
Procurement time for setting up
contracts, contractors for work
completion
•IT time
•Staff time
Utilities CIP success is
completion of the project within
the timeline and budget that was
approved by Council.
•To increase outward
communication to
community
N/A

HIGH PRIORITY LOWER PRIORITY COUNCIL-DIRECTED

POLICY UPDATE
Maintaining quality of life for the community creates the priority for Utilities projects

N/A N/A
STANDING TOPIC 6:

Reliability and Resiliency: Ongoing evaluations and discussions regarding the reliability and resiliency of the utilities.

BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL LAW /

COUNCIL-APPROVED
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This matter encompasses a
number of situations including
but not limited to the S/CAP
program and power outages.

The benefit of any of the
reliability or resiliency projects is
to support the City and
community now and into the
future with reliable, resilient and
safe connections and
provisioning of water, electricity,
fiber and natural gas
These programs and projects are
year-round and do not have a
beginning or an end. For example,
the S/CAP is projected to
accomplish its goal by 2030
Budget approval, staff time,
additional staff, and some use of
consultants
Maintaining a high level of
efficient, safe, and reliable
services with an emphasis on
moving forward with a pilot
program of converting homes to
electric.

YES

HIGH PRIORITY LOWER PRIORITY COUNCIL-DIRECTED

POLICY UPDATE
This is a Council priority and therefore a High priority for the Utilities Advisory Commission

N/A N/A
STANDING TOPIC 7:

Legislative Initiatives: The Utility tracks many local, state and federal bills that touch on utilities. Should any new laws, regulations, ordinances, or funding opportunities be proposed or passed during the year, the UAC may need to discuss the implications.

BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL LAW /

COUNCIL-APPROVED
Staff tracks the possible changes
in laws and regulations and
presents the proposed changes
to the UAC for review and
consideration to the Council.

Legislature meets throughout the
year and possible changes can
occur at any point that affect
utilities
Staff time, travel, and legal review
time
Measurable by the bills being in
favor of the CPAU and CPAU
not getting caught off-guard by
an initiative
State
Mandated

HIGH PRIORITY LOWER PRIORITY COUNCIL-DIRECTED

POLICY UPDATE
N/A The level of priority is based on the legislation being proposed and how it affects the regulated utilities
N/A
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STANDING TOPIC 8:

Council Driven Initiatives: The UAC will address any matter assigned to it by the City Council.

BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL LAW /

COUNCIL-APPROVED
The UAC is made up of a diverse
group with insight of the
innerworkings of and vast
knowledge in the utilities arena.

Timeline will be addressed once
assigned
UAC, Staff and legal review time Council approval of completed task
YES

HIGH PRIORITY LOWER PRIORITY COUNCIL-DIRECTED

POLICY UPDATE
Typically, when Council requests a review of an item it is considered a priority

N/A N/A
FY2024 Topic 1:

S/CAP Support: Discuss community engagement, technology (current & emerging), financing/funding, and community scaling of S/CAP plans to meet the City’s
goals for sustainability and climate action. This includes electrification efforts, energy efficiency, demand management, and grid modernization, possible code modifications, potential full or partial retirement of the gas distribution system, and electrification of gas appliances. It also includes permitting and inspection processes for customers wishing to upgrade panels, electrify appliances, or install solar PV, energy storage, and/or EV charging systems, and future technology for sustainability, resilience, and reliability

BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL LAW /

COUNCIL-APPROVED
UAC expertise will help the
Council S/CAP Committee make
progress on achieving S/CAP
goals with benefits to reducing
the impacts of climate change.

Ongoing support to the S/CAP
Committee
Staff time The development of clear plans
for building electrification,
including concrete
improvements to the utility or
permitting processes resulting
from UAC actions.

Enhance reliability of cpau grid
transmission that supplies for
future local renewables,
progress toward achieving the
goals
YES

HIGH PRIORITY LOWER PRIORITY COUNCIL-DIRECTED

POLICY UPDATE
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Support S/CAP Committee goals to develop plans and improve processes for building electrification
Discussions of other forms of emissions reduction beyond building electrification
YES
FY2024 Topic 2:

Advanced Metering Infrastructure Project: Launch and deployment of the utility’s AMI project.

BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL LAW /

COUNCIL-APPROVED
Empower customers to more
efficiently utilize utility supplies,
facilitate customer adoption of
distributed energy resources
(DER) such as solar
photovoltaics, energy storage,
and electric vehicles, and enable
the timely detection of water
leaks
The initial small-scale testing of
meters will take place over 12
months between CYQ3- 2022 to
CYQ2-2024. The full rollout is
scheduled to commence during
CYQ3-2023 and expected to be
completed by CYQ4-2024,
according to the current timeline
Staff, Legal, and Contractor time
and budget,
Implementing the fully deployed
AMI system
YES

HIGH PRIORITY LOWER PRIORITY COUNCIL-DIRECTED

POLICY UPDATE
Having a fully implemented system provides time of use rates, identifies gas and water leaks, restores outages quicker and more efficiently, enables energy efficiency for residents

N/A N/A
FY2024 Topic 3:

Electric Integrated Resource Plan

BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL LAW /

COUNCIL-APPROVED
Long term supply planning A report is required every 5 yrs., the most recent due date is
December 31, 2023
Staff and legal review time and
budget
State approved report YES
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N/A Mandated by the state energy commission N/A
FY2024 Topic 4:

One Water Plan

BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL LAW /

COUNCIL-APPROVED
Community will have a 20 – year
adaptable roadmap for
implementation of prioritized
water supply and conservation
portfolio alternatives that can be
used as a water supply plan.

For Council approval in Fall 2023 Staff time, budget for consultant time, Legal team review time
Council approval of the One
Water Plan which includes an
adaptable, dynamic water
supply portfolio.

N/A

HIGH PRIORITY LOWER PRIORITY COUNCIL-DIRECTED

POLICY UPDATE
The One Water Plan will serve as a long-term guide to prepare the City’s water supply for future uncertainties like changes in population, multi-year drought, and climate change.

N/A N/A
FY2024 TOPIC 5:

Undergrounding: Discuss the progress and potential acceleration of undergrounding electric infrastructure.

BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL LAW /

COUNCIL-APPROVED
Reduces the impact to visual
nuisances, increased reliability,
especially during severe
weather, safer for staff and the
public
Districts are designated for
undergrounding and have been
selected based on the age of the
system in place
Staff time, contractor time, and
budget, outreach to the community
Removal of overhead lines in
the designated districts
YES
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HIGH PRIORITY LOWER PRIORITY COUNCIL-DIRECTED

POLICY UPDATE
Because of the impact on safety, reliability, and the continuity between utilities as with grid modernization

N/A N/A
FY2024 Topic 6:

Security: Discuss issues related to the physical and cybersecurity of utility operations.

BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL LAW /

COUNCIL-APPROVED
Protect and secure Utility data at
risk and in transit. Utilities
created a SCADA cybersecurity
team to set a policy to prevent
outside attempts to infiltrate our
systems.

Ongoing IT staff, Utility staff, budget Zero data loss, zero infrastructure damage
N/A

HIGH PRIORITY LOWER PRIORITY COUNCIL-DIRECTED

POLICY UPDATE
Due to the sensitive nature of the Utilities, cybersecurity protects against theft, destruction, economic impacts, public health risks, financial loss (ransomware), and data (community, commercial and residential) information available in our systems, protecting it from attacks is critical

N/A N/A
FY2024 Topic 7:

Water Quality: Discuss community concerns with water quality of suspended solvents, additional testing

BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL LAW /

COUNCIL-APPROVED
CPAU regularly collects and
tests water samples from
reservoirs and designated
sample points throughout the
city.

Ongoing Staff time CPAU customers will have
access to high quality water
flowing from the faucet - the
pristine snowmelt from Hetch
Hetchy
State Water Resource
Control Board
regulated
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POLICY UPDATE
N/A Palo Alto maintains high quality control with frequent testing of its water to maintain a higher than state standard
N/A
FY2024 Topic 8:

Tesla Project - $10M Upgrade to Hanover Substation

BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL LAW /

COUNCIL-APPROVED
Upgraded substation increases
capacity to facilitate
electrification process.

Start October 2023, completion
anticipated end of 2nd quarter
2024
CPAU design review (1 FTE),
construction resource manager
(FTE), engineering support and
inspection (1FTE each)
2 Fully upgraded 50 mva
transformers
N/A

HIGH PRIORITY LOWER PRIORITY COUNCIL-DIRECTED

POLICY UPDATE
Electrification and an increase of load by 30-50 mva. N/A N/A FY2024 Topic 9:

Sanitary Sewer Replacement Project 31

BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL LAW /

COUNCIL-APPROVED
Replacement of aging
infrastructure to prevent sewer
back ups, sink holes, and lessen
the need to take up newly paved
streets
Construction start July 2023,
anticipated duration is 9 months
Utility staff, budget Changed out 11,000 linear feet
of sewer main
YES
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HIGH PRIORITY LOWER PRIORITY COUNCIL-DIRECTED

POLICY UPDATE
Due to the timing of collaboration with Caltrans repaving work on El Camino Real

N/A N/A
FY2024 Topic 10:

Heat Pump Water Heater customer installation program

BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL LAW /

COUNCIL-APPROVED
Reduces the use of natural gas
thereby reducing carbon
emissions and improving indoor
air quality
December 31, 2023 Staff, Consultant, and Contractor
time, budget, and S/CAP
Committee time
1,000 HPWH’s installed by the
end of 2023
YES

HIGH PRIORITY LOWER PRIORITY COUNCIL-DIRECTED

POLICY UPDATE
This is the 1st program for the community to start on the achievement to electrification by eliminating most gas appliances in CPA which is needed to reach the S/CAP 80/30 goals
N/A S/CAP policy
FY2024 Topic 11:

Electric Rate Design Review including the hydro adjuster

BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL LAW /

COUNCIL-APPROVED
Evaluate cost of service and set
rates accordingly and in
alignment with policy objectives
wherever possible.

Anticipated completion December
31, 2023
Staff time, budget, legal review.

And possible additional resources
completion of study and
adoption of any rate changes.

N/A
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POLICY UPDATE
Because rate design can impact customer investment choices related to electrification

N/A N/A
FY2024 Topic 12:

Evaluate the Gas Supply Hedging for the Winter months

BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL LAW /

COUNCIL-APPROVED
Lowers the risk to the city by
decreasing the volatility of
extreme high market pricing that
would be passed on to the
customer
UAC approval in August
Council approval in September
Completion by October
Staff and Consultant time, and
budget
Execution of hedges for the
appropriate winter months, if it
makes sense
Council approval
needed

HIGH PRIORITY LOWER PRIORITY COUNCIL-DIRECTED

POLICY UPDATE
Due to the need to have this implemented in order to execute the transactions in October for the winter months

N/A N/A
FY2024 Topic 13:

Gas Rate Design Review

BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL LAW /

COUNCIL-APPROVED
Gas rates that are cost-based,
constitutionally compliant and
with an eye toward
competitiveness with gas rates in
neighboring communities.

Council approval in September
2023
Staff time, budget for consultant
time, legal review time.

Gas rates that are competitive
with neighboring communities
across customer classes.

N/A
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HIGH PRIORITY LOWER PRIORITY COUNCIL-DIRECTED

POLICY UPDATE
Rate impacts on Palo Alto residents and businesses. N/A N/A FY2024 Topic 14:

Fiber to the Premises (FTTP)

BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL LAW /

COUNCIL-APPROVED
FTTP brings City-owned high
speed broadband internet,
reliable connection, and
competitive pricing in Palo Alto.

Public investment in broadband
infrastructure will create
competition, improve services,
and keep internet rates
affordable.

Phase one construction will make
Palo Alto Fiber accessible to
approximately 25%-30% of
residents and businesses.

Construction and provision of
services will take about 18 months
to begin offering Palo Alto Fiber
service (Dec 2024). Total
construction will take between 18
– 36 months depending on
construction coordination with
other capital projects such as
electric grid modernization.

Staff and Consultant time, and
budget
Attaining a take rate or the
percentage of Palo Alto Fiber
subscribers of 27%-30% to
break even for FTTP.

Council
Approved

HIGH PRIORITY LOWER PRIORITY COUNCIL-DIRECTED

POLICY UPDATE

N/A N/A
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City Council
Staff Report
From: City Manager
Report Type: ACTION ITEMS
Lead Department: Community Services
Meeting Date: June 12, 2023
Report #:2304-1313
TITLE
Direction on Operating Model for Palo Alto Animal Shelter, Which May Include: Negotiating A New Agreement with Pets In Need; Moving to In-House Service Delivery; and/or Issuing a New Request For Proposals. CEQA Review – Not a Project

RECOMMENDATION
Staff recommends the City Council discuss and provide direction to staff on future operations of the Palo Alto Animal Shelter, which may include negotiating a new agreement with Pets in Need; moving to in-house service delivery; and/or issuing a new request for proposals.

EXECUTIVE SUMMARY
In February 2022, the City Council directed staff to work with Pets-in-Need (PIN) toward development of a new Agreement that would result in a long-term partnership for shelter operations. City staff and PIN have been working collaboratively to develop a Term Sheet that, if approved by the Council and PIN Board of Directors, would be the basis for a new five-year Agreement for the period 2023 - 2027. Council discussed and provided feedback to staff on the draft Term Sheet and overall animal shelter operations during a Study Session on March 27, 20231.

The terms included represent increased staffing and associated compensation to PIN with proposed net cost of $1.3 million for the first year with an annual escalator equivalent to the Consumer Price Index (CPI). The current Fiscal Year 2023 compensation is $0.7 million, the new terms represent an increase of approximately $100%. The FY 2024 Proposed Operating Budget anticipated increased cost for services and included additional funding of $0.5 million in FY 2024 for a total of $1.2 million. Based on the current term sheet, additional funding may be needed.

Other terms include an increase in the City’s capital investment to improve the shelter facility 1 City Council, March 27, 2023; Agenda Item #3; SR #2302-0940, https://portal.laserfiche.com/Portal/DocView.aspx?id=65785&repo=r-704298fc Item 13
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and a minor reduction in scope of services. The FY 2024 Proposed Capital Budget included additional funding of $1.5 million in the Animal Shelter Renovation capital project (PE-19002) for estimated capital investment based on the current terms.

Staff, along with Pets in Need, are returning to Council with additional information, including responses to Council’s questions and a more detailed cost estimate for returning animal shelter operations to an in-house model. To provide Council a point of comparison to the PIN term sheet, staff has created estimates for the costs of operating the shelter with City staff. Staff recommends that Council provide direction on a path forward for future, long-term operations of the animal shelter.

BACKGROUND
California requires that cities and counties provide animal control and sheltering services for the purpose of ensuring the safety of people and animals, providing for the proper care, and sheltering of abandoned or neglected domestic animals, licensing domestic animals and providing humane disposal of animals when necessary. There are several ways local jurisdictions meet these requirements; some agencies manage their own animal shelters and animal control services, while others partner with other agencies to take advantage of economies of scale and to reduce costs. Prior to 2019, Palo Alto maintained its own shelter and provided animal services to other neighboring cities. Since 2019, Palo Alto has provided animal sheltering services for Palo Alto and two partner cities, Los Altos and Los Altos Hills, through a partnership with Pets in Need.

Animal Control is provided by the Palo Alto Police Department’s Animal Control Officers (ACOs).

Summary of Current (2019-2023) Agreement
City Council approved a Professional Services Agreement (Agreement) with the nonprofit Pets in Need on November 26, 20182 to operate the Palo Alto Animal Shelter. The term and compensation of the current Agreement (Attachment A) include:
• Five-year term commencing January 17, 2019
• Compensation to be paid to PIN for performance of the Scope of Services in a not to exceed amount $3,440,626 over the five-year term
• A Contingency Fund of $200,000
• A Compensation for Renovation Delays Fund of $60,000
• Completion by City of capital improvement projects not to exceed $3.4 million 2 City Council, November 26, 2018; Agenda Item #13; SR #9822, https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-reports/reports/city-manager-reports- cmrs/year-archive/2018/id-9822-pets-in-need.pdf?t=62179.92 Item 13
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Key responsibilities of Pets in Need include:
• Animal Shelter Services including sheltering stray, abandoned, and owner surrendered animals
• Medical Services including veterinarian services to shelter animals, vaccination clinics, micro-chipping, and a low cost spay and neuter clinic • Animal adoptions and foster program
• Operating schedules for shelter services, emergency veterinary

On November 15, 2021, Pets in Need (PIN) provided formal notification to the City that it would exercise its right to terminate the Agreement without cause in 12 months’ time as allowed in Section 19.2 of the Agreement. PIN stated that delays in completing the capital improvement projects, particularly the new dog kennel building influenced their decision to terminate the Agreement.

The City and PIN staff discussed how best to operate the Animal Shelter for the remaining term of the Agreement and began exploring how to continue the partnership beyond the termination date. On February 14, 20223, the City Council passed the following motion unanimously:

A. That as a condition for continuing good faith negotiations, that Pets in Need would agree to extend the notice of termination six months beyond the current date; B. Proceed with negotiations with Pets in Need for a long-term contract agreement for animal services in Palo Alto;
C. Evaluate the necessary kennel size for community partners that we serve; D. Include some form of trap and neuter program;
E. Include a small animal area in the renovation plans; F. Assure that the contract agrees upon hours of operation and services provided; G. That the parties agree to pursue a fundraising program to supplement existing capital commitments for the shelter; and
H. Explore the transition to a new database.

The PIN Board supported extending the termination date for six additional months to end on May 15, 2023. At the Council Study Session4 on March 27, 2023, staff provided Council an update on the status of contract negotiations with PIN and an opportunity for the Council to provide feedback on a draft Term Sheet. As a point of comparison, City staff included a preliminary estimate of the cost and revenue associated with bringing operations of the Animal Shelter back to an in-house model. PIN and City staff continue to refine the Term Sheet and mutually agreed to extend the current agreement to terminate on September 30, 2023. City Staff have completed a more detailed analysis of an in-house model.
3 City Council, February 14, 2022; Agenda Item #9; SR #13952, https://portal.laserfiche.com/Portal/DocView.aspx?id=59364&repo=r-704298fc 4 City Council, March 27, 2023; Agenda Item #3; SR #2302-0940, https://portal.laserfiche.com/Portal/DocView.aspx?id=65785&repo=r-704298fc Item 13
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ANALYSIS
March 27 Study Session
The City Council discussed and provided feedback on the draft term sheet during a study session on March 27, 2023. The Council requested information on the following:
•A breakdown of PIN’s costs showing the increased compensation from the original Agreement.
•The percentage of PIN’s operating budget that is for animals covered in Palo Alto, Los Altos, and Los Altos Hills.
•A comparison chart of PIN’s fees with other municipal shelters’ fees. •A more detailed and accurate comparison of PIN’s services to the Peninsula Humane Society.
•PIN’s revenue over the previous five years.
•Consideration of a minimum and maximum number of surgeries and events. •A side-by-side comparison of PIN’s proposal and the in-house model. •A more defined capital plan identified in the Agreement. •Additional information on feral cats and the method by which they are handled.

PIN has prepared responses to the Council’s questions, which are included as Attachment B. An analysis of the costs and resources needed to move back to an in-house shelter operation is described below, along with a comparison of the two operating scenarios. Additional information on shelter improvements and feral cats are also included.

Term Sheet with Pets in Need, as revised
The Term Sheet that was presented to Council at the March 27th Study Session has been revised to reflect re-negotiated terms since receiving feedback from the City Council. The revisions included are shown in Attachment C as either underline or strikethrough and include updated language related to developing a policy on how feral cats will be handled, and more specificity on prioritization of capital improvements.

PIN has added an additional term to address City compensation for additional services rendered each month beginning June 1, 2023 until a new contract is executed. PIN calculates this as the difference between the monthly fee (1) specified for Year 5 in Exhibit B of the 2019 Agreement and (2) the monthly fee specified for Year 1 in the proposed new Agreement, effective June 1, 2023. This cost equates to $55,535 per month in additional compensation beginning June 1, 2023 and each month until a new Agreement is executed.

The total annual compensation proposed by PIN for operations of the Animal Shelter is $1.4 million with an annual escalator based on the Consumer Price Index. A summary of the Term Sheet as compared to the current Agreement is below.

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2019-2023 PIN
Agreement
2023-2027 PIN
Proposed
Increased Cost to
City
Expense / (Revenue)
Compensation
Shelter Services and 60
spay/neuter surgeries per month
$703,580
in year 5 (2023)
$1,373,400/
year (year 1)
$669,820/
year
Annual Escalator 2% Annual CPI rate To be negotiated
Additional Interim Compensation None $55,535/ month
as of June 2023
$55,535/ month as
of June 2023
Capital Improvements
City investment $3.4M
(approx. $1M
remaining)
$2.5M +$1.5M one-time
investment
Limit on PIN investment in
additional projects
Up to $10,000 No limit, must
follow prevailing
wage and other
laws, and obtain
City approval
$0
Staff time to
review and
approve
Renovation Delays $60,000 $0 $0
Scope of Work Changes
After-hours veterinary care for
stray hold animals
Included in scope Not in scope $15,000/
year
Veterinary services for cruelty
investigations
Included in scope PIN has
discretion
$10,000/
year
Licensing Included in scope Not in scope,
Add 0.48 City
staff
$40,000/
year
Licensing revenue To PIN To City ($180,000)/
year
Net Annual Cost to the General
Fund (excluding capital, annual
escalator and interim
compensation)
$773,580 $1,373,400 $554,820
Analysis of an In-house Operating Model
The City Council requested that staff further evaluate the cost of returning shelter operations in- house as a service delivery alternative to PIN. Attachment D summarizes the costs, services, and implementation strategy for both operating models (PIN and In-House) and a third alternative, to issue a new Request for Proposals.

The proposed staffing model needed to safely operate the animal shelter requires the addition of 7.00 full-time positions and two 0.48 FTE (total 0.96 FTE) hourly positions. The costs for these Item 13
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positions and the recommended position classifications are based on staff research of expected pay ranges based on regional market surveys modeled with the City’s benefit rate cost assumptions. The organizational chart in Attachment E includes:

PROPOSED STAFFING MODEL SHELTER SERVICES*
Position FTE Hourly Estimated Cost
(Salary and Benefits)
Superintendent 1.00 225,000
Kennel Attendant 1.00 105,000
Kennel Attendant (Hourly) 2 x

0.48 FTE 64,000
Veterinarian 1.00 282,000
Vet Technician 2.00 242,000
Administrative Associate I/II 2.00 228,000
Assistant Director 10% of existing position** 20,000
Total 7.00 2 staff
(0.96 FTE) $1,166,000
* The position classifications previously used by the City to perform in-house services are not maintained in the City's current salary schedules. Staff expects to refine these estimates upon formal review by the Human Resources Department.
**This would not be an additional new cost; this is a reallocation of existing management resources to support oversight.

Three Animal Control Officers would also be part of the Animal Services Division, though not reflected in the cost estimate since they are existing positions in the Police Department’s Animal Control Division. The Assistant Director costing reflects management needed to oversee the new division and assumes reallocation of a portion of an existing position in the Community Services Department, not a new cost to the City.

The total estimated non-personnel operating cost is $280,000. This cost is based on historical trends and includes overhead, utilities, training and safety, tools and equipment, pet food and medical supplies, as well as outside services such as pet disposal and emergency after hours veterinarian care.

In total, staff estimates an annual cost of $1,446,000 to operate the animal shelter in-house. The in-house model is estimated to cost roughly the same as proposed by PIN operating expenses; $12,400 less adjusted for the additional $65,000 to be incurred by the City outside of the PIN contract due to the updated terms and the $20,000 already funded for the Assistant Director position. This is an annual expense estimate, and additional work to reestablish, recruit, and support staffing, as well as develop a transition plan with PIN will be necessary.

On the revenue side, staff estimates that the shelter would generate up to $400,000 in revenue from service contracts, adoptions, medical procedures, and licensing among other fees. The estimate is based on average historical revenue trends from FY 2014-2018. In coordination with Item 13
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PIN, the City has maintained and updated the animal services fees in the municipal fee schedule for their operations. Should operations return to the in-house model, staff expect a fee study will be needed to ensure charges are up to date and in line with other municipal shelters and City costs.

Comparison of Annual Cost Net Impact to the General Fund In terms of net annual impact to the General Fund, year one of the PIN contract is estimated at $1.3 million ($1.4 million of contract expenses and $65,000 of non-contracted service expenses to be incurred by the City, offset by $0.2 million of City revenue) while in-house operations are estimated at $1.0 million (operating costs of $1.4 million, offset by $0.4 million of City revenue).

FY 2024
Budget
2023-2027 PIN
Proposed
In-House Operating
Model
Operating Revenue 0 180,000 400,000
Operating Costs $1.2M
Salary Costs - 65,000 1,166,000
Contract Costs - 1,373,400 280,000
Capital Costs $2.5M 2,500,000 0
Net Cost $3.7M $3,758,400
($1.3M ongoing)
$1,046,000

Organizational impacts of In-House model
The prior in-house model was organized and staffed entirely within the Police Department.

Should Council direct returning animal shelter services in-house, staff will conduct a contemporary evaluation of whether the shelter operation should return to the Police Department or be organized under another department such as Community Services.

Considerations include factors such as alignment with broader departmental focus and synergy with other programs; ability to build community, volunteer, and donor engagement; opportunities for career development as it affects staff attraction and retention; and management capacity and budgetary requirements. The expected timeline to implement an in- house model is roughly 12-18 months. Proceeding in this direction would therefore be best served through a transition developed collaboratively with PIN in order to ensure continuous service as well as addressing workforce needs.

Comparison of Services Provided
This section compares services provided for basic shelter operations between PIN and an in- house model.

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Scope of Services
•Public Hours of Operation: Both PIN and the In-House model propose about 80 hours biweekly of public serving hours.
oPIN opens to the public M-F 12:30PM-6PM, Sat 10AM-6PM, Sun 12:30-6PM. oIn-House model schedule would be M-F 8AM-5PM, 9/80 Friday closed. •Impounds/Intakes: Both PIN and the In-House model would not have a cap or additional fees incurred for impounds or intakes.
•Licensing: In both scenarios, the City would provide licensing services requiring the City to hire part-time staffing to support this at an estimated cost of $40,000. Revenues from these services would be returned to the City to defray costs.

Medical Services
•Spay/Neuter: Both PIN and the In-House model will support some level of spay/neuter services.
oPIN states that it will provide spay/neuter services to the best of its ability prioritizing residents of Palo Alto, Los Altos, and Los Altos Hills. The Term Sheet assumes PIN will complete a minimum of 60 surgeries per month for cats and dogs only. The 2019 Agreement did not include a metric for the number of surgeries to be completed by PIN.
oIn-House model proposes about 150 spay/neuter surgeries per month, made possible by having a full-time Veterinarian on staff and includes cats, dogs, and other small pets. This number is based on the number of surgeries completed when the City previously operated the shelter.
•Vaccine Clinics: Both PIN and In-House model propose weekly vaccine clinics available to Palo Alto residents.
•After Hours Vet Care: Neither PIN nor the In-House model have a Veterinarian on staff 24 hours a day, therefore after-hour emergencies would require outside services at cost, currently estimated at $15,000.
•Cruelty Investigations:
oPIN would provide veterinary care for live animals impounded as part of cruelty investigations; however, PIN would not have the obligation to provide additional services related to cruelty investigations including post-mortem examinations of deceased animals. If PIN does not provide these services, the City would contract out these services at an estimated cost estimated at $10,000 annually.
oIn-House model includes cruelty investigations and post-mortem services at no additional cost.

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Capital Improvements to Shelter
The Draft Term Sheet dated March 16, 2023 stated that a prioritized list of capital improvements would be agreed upon by both parties within 60 days of Agreement execution. This term was included because PIN did not have a permanent Executive Director/Chief Executive Officer (CEO) appointed and neither the City nor PIN wanted to commit to a prioritized list before the permanent position was filled. Since that time, PIN has hired a permanent CEO and the term has been revised. Improvements to the small animal area will be prioritized and could include an addition to the existing facility or construction of a new structure. Further work related to site feasibility, Federal Emergency Management Association (FEMA) flood plain requirements, and cost estimates need to be resolved before deciding on the final placement and design. Additional improvements to the existing kennel building and retrofits to the medical suite to accommodate recovery of large animals would be prioritized next as funding allows. It is estimated that the $2.6 million recommended in FY 2024 Proposed Capital Budget in the Animal Shelter Renovation project (PE-19002) would be used to fund these improvements. (These funds include $1.0 million in prior year unexpended funds, $1.5 million in new funds, and $0.1 million for staff salaries and benefit to support projects.)
Feral Cat Policy
The current Agreement (2019-2024) included a term that required PIN to “Develop, in cooperation with CITY, a feral cat plan. The plan shall include how PIN handles feral cats, spay/neuter provisions, and release of feral cats. CONSULTANT shall not release feral cats within the City of Palo Alto or any of its Partner Cites”. To alleviate concerns with trap-neuter-release programs and the impact on wildlife, staff proposes to keep the same term if a new Agreement is approved by Council. This would maintain the current practice of offering rental of humane cat traps for public use, partnering with cat rescue groups for spay and neuter opportunities, and impounding feral cats for placement or euthanasia. PIN has requested that both parties work together to develop a humane feral cat program reflective of municipal best practices. City staff are agreeable to working on this with PIN and appropriate language has been added to the Term Sheet.

Implementation Strategy
Another important factor to consider when comparing PIN and the In-House model is the timing of implementation. As the current operator, PIN can continue operations as defined by the contract upon approval. On the other hand, it could take the City about one year to 18 months to take over operations, due to the need to create new positions, meet and confer with bargaining units, hire multiple staff, establish contractual relationships, and ultimately transition the day-to-day operations.

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Other Considerations
A third alternative is also included in Attachment D, which would explore issuing a Request for Proposals (RFP). Staff is not confident a new RFP would be successful due to the low number of responses received during the previous RFP, but it is presented here for Council consideration.

Based on the prior experience, it is likely that an alternative service would require shelter operations to be located outside Palo Alto relying on the efficiency provided through an established shelter elsewhere.

Overall considerations for PIN include:
•A slightly lower shelter operational cost, but higher infrastructure needs. •With services and staffing being contracted out, there would be no liability or pension obligations to the City.
•PIN has an extensive network, including partner organizations, which can be leveraged for donations.
•With broader reach, serving the Bay Area and beyond, PIN could maximize use of the shelter; however, careful consideration should be given to Palo Alto residents and its contract cities.
•Policy decisions are a collaboration between PIN and the City.

Overall Considerations for the In-House model include:
•Slightly higher estimated operational cost than PIN, including pension costs and liability. •An In-House model returns animal welfare and shelter operation policy decisions to the City.
•City would have control over shelter operations including public service hours, vaccine clinics, and spay/neuter surgeries.
•Services focused on the needs of Palo Alto residents and those of its contract cities. •Increased revenue to partially offset shelter estimated operation costs

FISCAL/RESOURCE IMPACT
If Council directs staff to continue developing a new operating agreement with PIN, the net annual cost to the City to operate the shelter is expected to be $1,258,400. This is based on annual compensation to PIN ($1,373,400) and additional services the City would need to provide approximately ($65,000) less revenue the City would accrue from licensing ($180,000). This is an increase in net annual operating costs of $554,820 for the first year of a new Agreement as compared to the FY 2023 contract costs.

If the City Council directs proceeding with an In-House operating model, the estimated expected net annual operating costs are approximately $1,046,000. This includes operating costs ($1,446,000) less revenues generated by services ($400,000).

The FY 2024 Proposed Operating Budget includes $1.2 million for contract costs for the coming year, subject to City Council approval of the budget, scheduled for June 19, 2023. Approximately $170,000 in additional funding is expected beyond proposed budget levels to align with the new Item 13
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operating agreement at $1.4 million. This expense is expected to be offset by adjustments to increase revenue estimates by $180,000 to recognize licensing fees. Staff expects to bring forward budget amendments as necessary in subsequent staff reports or budget processes.

The FY 2024 Proposed Capital Budget includes $2.8 million for the Animal Center Renovation Project (PE-19002), including $1.6 million for anticipated increases for the new PIN agreement, subject to City Council approval of the FY 2024 Capital Budget, scheduled for June 19, 2023. To date, a total of $4.4 million has been allocated to this project and $3.2 million has been expended on shelter improvements.

STAKEHOLDER ENGAGEMENT
Staff from the City Manager’s Office, Community Services Department, and Police Department have worked closely with PIN staff and members of the Pets in Need Board of Directors to develop the Term Sheet and conduct an analysis of the various operating models.

ENVIRONMENTAL REVIEW
Council action on this item is not considered a Project within the requirements of CEQA.

ATTACHMENTS
Attachment A: Professional Services Agreement Between Pets in Need and City of Palo Alto 2019-2023
Attachment B: Pets in Need Response to Council Questions March 27, 2023 Attachment C: Proposed Term Sheet between Pets in Need and City of Palo Alto for a new Five-year Agreement, Revised May 31, 2023
Attachment D: Comparison of Shelter Operating Models
Attachment E: Organizational Chart for In-House Model for Shelter Operations APPROVED BY:

Kristen O'Kane, Community Services Director
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CITY OF PALO ALTO CONTRACT NO. _C_1_9_17_4_4_9_3 __ _

AGREEMENT BETWEEN THE CITY OF PALO ALTO AND PETS IN NEED

FOR PROFESSIONAL SERVICES
This Professional Services Agreement ("Agreement") is entered into on this ..1.L day of January .~by and between the CITY OF PALO ALTO, a California chartered municipal corporation ("CITY'' or "City of Palo Alto"), and PETS IN NEED, a California non-profit public benefit corporation, located at 871 Fifth Ave, Redwood City, CA 94063 C'CONSULTANT' or "Pets In Need").

RECITALS
The following recitals are a substantive portion of this Agreement and are hereby incorporated herein by this reference.

A. CITY intends to provide animal sheltering and veterinary care, as more fully described in Exhibit "A" (Scope of Services), attached to and made a part of this Agreement, for the City of Palo Alto, and for the City of Los Altos and the Town of Los Altos Hills (the "Contract Cities"), at the Palo Alto Animal Shelter, 3281 East Bayshore Road, Palo Alto, CA 94303 (the "Palo Alto Animal Shelter" or the "Premises").

B. CITY and CONSULTANT desire for CONSULTANT to perform the Services {as defined below) at the Palo Alto Animal Shelter pursuant to the terms and conditions set forth in this Agreement.

C. CITY acknowledges that CONSUL TANT is entering into this Agreement in furtherance of its no-kill mission, and that, to the extent permitted by law, CONSUL TANT will operate the Palo Alto Animal Shelter as a no-kill shelter.

D. CITY and CONSUL TANT are entering into this Agreement with the intention of establishing a long -term partnership to offer exceptional shelter services for Palo Alto and its partner cities of Los Altos and Los Altos Hills, while working together towards building a new Pets in Need Palo Alto animal shelter facility.

NOW, THEREFORE, in consideration of the recitals, covenants, terms, and conditions, in this Agreement, the parties agree:

AGREEMENT
SECTION 1. SCOPE OF SERVICES. CONSUL TANT shall perform the services described at Exhibit "A· ("Services") in accordance with the terms and conditions contained in this Agreement.

SECTION 2. TERM. The term of this Agreement shall be from the date of its full execution (the "Effective Date") and continuing for five (5) years from the Effective Date, unless terminated earlier pursuant to Section 19 of this Agreement. The term of this Agreement may be renewed or extended upon the mutual written agreement of the parties. One year prior to the expiration of the term (or other such timeline as may be mutually agreed upon by the parties), either party may request the parties to begin negotiating in good faith a renewal or extension of this Agreement.

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Palo Alto City CouncilJune 12, 2023

Palo Alto City Council
June 12, 2023