Agenda packet — Palo Alto City Council, August 14, 2023 (part 2 of 3)

Limited Hourly Employees are eligible to receive holiday pay only when they work 80 or more hours during the pay period in which the holidays fall. Number of hours of holiday pay is determined by the number of hours regularly scheduled on the day on which the holiday falls (i.e. 8, 9, 10).

Effective January 1, 2024, Limited Hourly employees, excluding retired annuitants, shall be excused with pay for the hours they would otherwise be scheduled to work, for one (1) day within each calendar year, which is mutually agreed to by the employee and their supervisor. The one (1) floating holiday will be deemed forfeited and have no cash value, if not used each calendar year.

B. Paid Leaves
Limited Hourly Employees are not eligible for any paid leaves beyond those required by law.

Other Leaves
Limited Hourly Employees may be granted unpaid leaves of absence in cases of personal emergency, or when such absences would not be contrary to the best interest of the City and comply with City policies and procedures.

Family leave will be granted in accordance with applicable State and Federal laws.

Time off with pay to vote in any general or direct primary election shall be requested by the employee and granted by the City as provided in the State of California Elections Code.

Overtime Pay
Unless designated by the Director of Human Resources as exempt from the provisions of the Fair Labor Standards Act, all classifications of hourly employees are eligible for overtime pay at time and one -half when required to work more than 40 hours in a week (for example: 8 hours/five day week; 9 hours/four and one -half day week or other pre - determined and pre-approved work schedule) or on an official City holiday.

D. Retirement

1. Part Time, Seasonal, Temporary (“PST”) Retirement Plan. All Limited Hourly Employees are required to contribute 7.5% of salary each pay period to the alternative PTS Retirement Plan (instead of contributions toward Social Security), except as described in section D(2) below. Contributions toward Medicare (1.45%) will also be deducted. Contribution and earning toward the PST Retirement Plan is not subject to Federal and State income taxes and are deferred until termination of employment with the City of Palo Alto.

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The PST retirement plan is currently administered by Public Agency Retirement Services (“PARS”).Contributions to the PTS Retirement Plan, in addition to any interest earned, will be refunded upon termination by request, if the request falls within the policy of the PTS Retirement Plan or may be kept in the Public Agency Retirement System (PARS) account if the Limited Hourly Employee elects this option.

2. California Public Employees’ Retirement System (“PERS”).

PERS annuitants are excluded
from participation i n the P.S. T. Retirement Plan. Limited Hourly e mployees who have previously participated in and remain members in the California Public Employee Retirement System (“PERS”) or are otherwise required by law to be enrolled in Cal PERS shall participate in P.E.R.S. to the extent required by law, in lieu of participation in the P.S.T.

Retirement Plan. Enrollment in CalPERS will be completed consistent with CalPERS rules and regulations. Participation in CalPERS shall be under the retirement formula in effect at the time the employee is hired into the Hourly Bargaining Unit unless otherwise required by law. Employees enrolled in the PERS retirement system shall pay the full amount of the applicable employee contribution required by CalPERS for the PERS formula in which the employee is enrolled, as may be changed by CalPERS from time to time. Current contributions are as follows:
a. 2.7% at 55 Formula: eight percent (8%)
b. 2% at 60 Formula: seven percent (7%)
c. 2% at 62 Formula: contribution required by the Public Employees’ Pension Reform Act, calculated at fifty percent (50%) of the normal cost. d. All CalPERS participants will contribute an additional percentage towards the Employer contributions at rates set below:
a. 1% contribution towards the Employer contribution for all miscellaneous plans

SECTION V. TERM OF EMPLOYMENT

Limited Hourly Classifications
The maximum employment term for limited hourly employees shall be less than 1000 hours during any fiscal year unless otherwise approved as provided in section V(B). The maximum hours for a retired PERS employee are 960 hours in a fiscal year. Limited Hourly Employees are “ At-Will “employees and may be terminated at any time without right of appeal.

Limited Hourly employment will not affect the probationary period or the service h ire date of regular classified employment.

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B. Extension of Limited Hourly Employment.

The City Manager may authorize a Limited Hourly Employee to work more than 1000 hours per fiscal year; subject to all applicable rules and regulations. Such authorization, along with a statement of the anticipated duration shall be provided in writing to Human Resources in advance of the extension of limited hourly employment. The duration of the employment assignment shall be reviewed every six months to ensure appropriateness of extension and ability to fund the extension within a department's allocated hourly budget.

SECTION VI. PERFORMANCE REVIEWS AND SALARY INCREASES

A. Performance Reviews

1. Limited Hourly Employees that demonstrate continued development and efficient and effective service reflected in their performance appraisal may be eligible to receive a salary step increase after one year date of hire and annually thereafter . Subsequent salary reviews are based on performa nce appraisals and will depend upon demonstrated satisfactory job performance and will not occur more th an twice annually.

2. Performance Reviews are a tool to recognize and develop employees. Performance Reviews evaluate and document past performance and may provide development plans that will assist employees to realize their full potential. Performance Reviews should be completed on the Limited Hourly Employee Performance Review Form or other form designated by Human Resources.

Salary Increases - General

1. A salary increase is based upon an appraisal of the hourly employee's job performance and such appraisal must be submitted with the salary request. A Limited Hourly Employee must receive a meets requirements rating in order to be c onsidered for a salary increase.

2. The maximum number of salary increases a Limited Hourly Employee may receive in any one twelve-month working period is limited to two (2), regardless of total number of hours accumulated.

Exceptional Leadership Ability and Job Performance
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performance may be given a merit raise, if he/she displays outstanding job performance.

Such exceptional leadership must be documented on a designated performance appraisal form. For those positions with salary steps, salary increases may not exceed the steps set forth in approved salary schedules.

SECTION VII. WORK SCHEDULES AND UNIFORMS

A. Work Week and Work Day

1. The standard workday for limited hourly employees shall be eight hours to be worked within a maximum of nine hours (five-day work week) or ten hours to be worked within a maximum of eleven (four-day work week) or nine hours to be worked within a maximum of ten for four days with a fifth day of four hours (four and one-half day work week); or, within a fourteen-day period (9/80 plan with forty-hour work weeks), or any other schedule that results in a 40-hour work week, or fits within the parameters of an FLSA 20 80 Plan. The “9/80 Plan” may not be used in any application that requires entitlement to FLSA overtime for working the regular work week. With the exception of the “9/80 Plan” as described above, the standard work week shall be forty hours to be worked within five consecutive days. Work schedules shall be determined by departments based on business requirements.

Uniforms

1. When uniforms are required by the City of Palo Alto to be worn by the employee as a condition of employment, such uniforms will be provided by the City of Palo Alto.

SECTION VIII. LIMITED HOURLY CLASSIFICATIONS

Limited Hourly Classifications are reflected on Appendix A of this document.

SECTION IX. MANAGEMENT RIGHTS

Subject to State law and the provisions of the City of Palo Alto Employer-Employee Relations Resolution, the rights of the City through its Council and Management include, but are not limited to: the exclusive right to determine the mission of its constituent departments, commissions and boards; set standards of service; determine the procedures and standards of selection from employment and promotion; establish and enforce dress and grooming standards; direct its employees; determine the methods and means to relieve its employees from duty because of lack of work or other legitimate reasons; maintain the efficiency of Item 2
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governmental operations; determine the methods, means and personnel by which government operations are to be conducted; determine the content and intent of job classifications; determine methods of financing; determine style and/or types of City-issued wearing apparel, equipment or technology to be used; determine and/or change the facilities, methods, technology, means, organizational structure and size and composition of the work force and allocate and assign work by which the City operations are to be conducted; determine and change the number of locations, relocations and types of operations, processes and materials to be used in carrying out all City functions including but not limited to, the right to contract for or subcontract any work or operation of the City; to assign work to and schedule employees in accordance with requirements as determined by the City and assignments upon reasonable notice; establish and modify productivity and performance programs and standards including, but not limited to, quality, and quantity standards; and to require compliance therewith, take all necessary actions to carry out its mission in emergencies; and exercise complete control and discretion over its organization and the technology of performing its work.

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Appendix A
Limited Hourly Employee Job Classifications

Administrative Specialist I
Performs administrative work that requires advanced skills or knowledge in support of a department/division or program.

Administrative Specialist II
Performs more complex administrative work that requires advance skills or knowledge in specialized software programs and data analysis in specialized areas in support of a department/division or program. Two years of experience equivalent to that of an Administrative Specialist I.

Assistant Park Ranger
Positions requiring at least 2 years of experience and specialized skills or advanced certificates for First Aid, CPR, and heavy equipment operation. Prior experience as an open space technician or park aide is essential.

Building Serviceperson
Under limited supervision, performs custodial duties and other related work as required to maintain City buildings and facilities in a clean and orderly condition. Members of this classification may be assigned to perform either public works duties or park duties. Two years of experience equivalent to that of a Custodial Assistant.

Clerical Assistant
Under supervision, performs routine and repetitive computer inputting and clerical tasks, and performs related work as required. May require cash handling.

Custodial Aide
Under close supervision, this entry-level position performs basic custodial duties as required to maintain City buildings and facilities, performs room set-ups and take-downs, and other related work.

Custodial Assistant
Under general supervision, performs custodial duties and other related work as required to maintain City buildings and facilities in a clean and orderly condition. Members of this classification may be assigned to perform either public works duties or parks duties.

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General Laborer – H
Performs general manual tasks. Performs various types of manual labor as needed. Possesses knowledge of commonly-used concepts, practices, and procedures within a particular field.

Performs tasks in conformance within pre-established instructions. Works under general supervision. Uses very limited independent judgment similar to that expected of an apprentice- helper level laborer, consistent with pre-established instructions. May report to a lead worker, but typically reports to a supervisor.

Requires a high school diploma or its equivalent with 1 year of related experience.

Salary to be determined – an hourly rate above $50/hour must be approved by the Director of Human Resources before the City extends an offer of employment.

House Manager
Facility supervisor of special events, productions, concerts, rentals – etc. Involves high public contact and customer service, including enforcement of rules and regulations. May include set- up of events.

Instructor I
Under general supervision, prepares classes, programs and camp curriculum, presents classes and field trips for schools and family audiences, and provides assignments to Instructor Aides and volunteers. Requires previous teaching experience. Requires prior in-depth knowledge of the disciplines to be taught. May require lifting up to 15 pounds.

Instructor II
Under limited supervision, prepares classes, programs and camp curriculum, presents classes and field trips for schools and family audiences, and provides assignments to Instructor Aides and volunteers. Requires at least two years of previous teaching experience. Requires prior in- depth knowledge of the disciplines to be taught. May require lifting up to 15 pounds.

Instructor III
Independently prepares classes, programs and camp curriculum, presents classes and field trips for schools and family audiences, and provides direction and mentoring for Instructor Is and IIs, Aides and volunteers. Serves in a leadership capacity within the department. Requires at least 4 years of teaching experience and in-depth knowledge of the disciplines to be taught. May require lifting up to 15 pounds.

Instructor Aide
Under general supervision, performs administrative work in support of Instructors in areas such as course preparation, classroom assistance and related activities. May require lifting up to 15 Item 2
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pounds.

Librarian
Under supervision, assists customers with reference inquiries, provides instruction in the use of library resources and equipment; shelves materials and assists with core management or organization of materials.

Distinguishing Characteristics:

The Librarian classification is the professional entry level classification within the Library Division.

The Librarian has the professional knowledge to identify, develop, interpret, and evaluate all policies, procedures, programs and services to ensure the best quality of service to public library users. It is a broad classification which covers a variety of work situations which require expertise in areas of primary responsibility, as well as in common areas such as materials selection, public library service and in computerized information systems. Significant portion of workday includes direct public contact. Work hours may include early mornings, evenings and weekends.

ESSENTIAL DUTIES:

Essential and other important responsibilities and duties may include, but are not limited to, the following:

• Performs routine circulation tasks required to directly serve public, including registering and maintaining files of borrowers; interpreting customer accounts and checking in and out library materials via computerized equipment; accepting, payments for fines, bills, fees; assisting customer with inquiries regarding availability and status of items in collections, and interviewing and assisting users regarding circulation accounts and services. Refers circulation problems to circulation staff or manager.
• May conduct library programs for children and adults; conduct tours and classes. • May conduct reference interview and analyze, interpret and answer inquiries utilizing resources in Palo Alto Libraries as well as other libraries and the community, referring unusual questions to a Senior Librarian (Librarian II) or supervisor; assist customers in use of facility including catalog, indexes, reference books and technology. • Performs library programming, including planning, coordination, promotion and the conduct of programs; cooperates with other City departments, community and library groups with program co-sponsorship.
• Prepares displays to market the library’s collection; may write regular newsletter articles, book reviews and program announcements for e-newsletters and publications; assists with social media.
• May update library web pages; update online calendars; contribute calendar items to Item 2
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community organizations and data bases.
• Selects and de-selects library materials in one or more subject areas based on knowledge of budget available, collection size, analysis of community past usage patterns and other criteria; processes discarded materials.
• Assist with recruits, interviews, schedules, trains, initiates and coordinates, work of clerical, paraprofessional, temporary and/or volunteer staff as assigned. • May collect, maintain and report statistical records for a variety of library measures. • As directed, performs copy and original cataloging and classification efficiently utilizing online computerized cataloging system; assigns access points for materials; establishes new bibliographic computer records in accordance with recognized standards. • Maintains specific library collections and equipment including housing, physical maintenance and arrangement.

MINIMUM QUALIFICATIONS:

Sufficient education, training and/or work experience to demonstrate possession of the following knowledge, skills, and abilities which would typically be acquired through:
• Master’s Degree in Library and Information Science or related education preferred.

KNOWLEDGE, SKILLS, AND ABILITIES:
• Ability to work effectively with public and co-workers in variety of circumstances. Ability to work with wide variety of people.
• Knowledge of alphabetical and numerical filing systems. • Knowledge of the library catalog.
• Ability to work varied schedule including early mornings, evenings and weekends • Ability to maintain physical condition appropriate to the performance of assigned duties and responsibilities which may include sitting for extended periods of time and operating assigned library equipment.
• Ability to communicate with others and to assimilate and understand information, in a manner consistent with the essential job functions.
• Ability to operate assigned equipment.
• Ability to make sound decisions in a manner consistent with the essential job functions.

WORKING CONDITIONS / PHYSICAL REQUIREMENTS:

Work in a library environment with the public, maintaining a professional appearance; sustained posture in a standing, walking or seated position for prolonged periods of time; perform bending, lifting, crouching and pushing items weighing up to 50 pounds; perform repetitive small hand and arm motions for prolonged periods of time; may travel to other library facilities; exposed to computer screens for prolonged periods of time.

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Library Clerk
Under close general supervision performs technical and clerical tasks; assists customers with their accounts; shelves materials; performs technical and clerical tasks as assigned.

Distinguishing Characteristics

Library Clerk is a classification found in the Library Department and is distinguished by the performance of various technical and clerical duties under general supervision. Work hours may vary and include nights and weekends. Includes direct public contact. Some previous knowledge of library operations required.

ESSENTIAL DUTIES:

Essential and other important responsibilities and duties may include, but are not limited to, the following:

• May answer customers’ questions.
• Checks in/out items; performs standard, holds, special handling and sorts; issues library cards.
• Works at the Accounts Desk; handles customer accounts and fines; provides computer assistance; performs shelving.
• May assist customers with library technology.
• Maintains computer files for library materials; adds, deletes and updates information. • Data enters bibliographic data into the online library system. • Communicates with vendors to request approved items or to ask questions; refers further communications to the supervisor.
• Accepts and unpacks deliveries and shipments of library materials; checks for accuracy; returns incorrect or damaged materials to vendors.
• Receives and invoices materials into the library’s computer system. • Performs RFID tagging Performs shelf reading.
• Assists in the setup of programs; performs program cleanup. • Processes LINK+ items and locates items listed on hold for the library branch or on reserve for LINK+.
• Assists with special projects and programs.
• May perform mail delivery.
• Provides basic assistance to customers.
• Performs related duties and responsibilities as required.

MINIMUM QUALIFICATIONS:

Sufficient education, training and/or work experience to demonstrate possession of the following knowledge, skills, and abilities which would typically be acquired through:

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• High school diploma or equivalent and 6 months experience working in a library

KNOWLEDGE, SKILLS, AND ABILITIES:
• Ability to work effectively with public and co-workers in variety of circumstances. Ability to work with wide variety of people.
• Knowledge of library procedures and item shelving structure. • Knowledge of alphabetical and numerical filing systems. • Knowledge of a personal computer and various software applications. • Knowledge of effective customer service.
• Ability to use the library catalog.
• Ability to perform cash handling and use a cash register. • Ability to perform basic mathematical calculations.
• Ability to work varied schedule including mornings, evenings and weekends • Ability to maintain physical condition appropriate to the performance of assigned duties and responsibilities which may include sitting for extended periods of time and operating assigned library equipment.
• Ability to work varied schedule including early mornings, evenings, and weekends. Ability to communicate with others and to assimilate and understand information, in a manner consistent with the essential job functions.
• Ability to operate assigned equipment.
• Ability to make sound decisions in a manner consistent with the essential job functions.

WORKING CONDITIONS / PHYSICAL REQUIREMENTS:

Work in a library environment with the public; maintains a professional appearance; sustained posture in a standing, walking or seated position for prolonged periods of time; perform bending, lifting, crouching and pushing items weighing up to 50 pounds; perform repetitive small hand and arm motions for prolonged periods of time; may travel to other library facilities; exposed to computer screens for prolonged periods of time.

Library Page
Under close supervision, shelves materials; performs routine clerical and support tasks as assigned.

Distinguishing Characteristics:

Library Page is a classification found in the Library Department and is distinguished by the performance of routine clerical duties under supervision. Work hours may vary and include nights and weekends. May include direct public contact. No previous knowledge of library operations required.

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ESSENTIAL DUTIES:

Essential and other important responsibilities and duties may include, but are not limited to, the following:

• Shifts collections; pulls or weeds items; performs sweeps. • Returns library materials to the shelves.
• Performs RFID tagging
• Performs shelf reading.
• Assists in the setup of programs; performs program cleanup. • Processes LINK+ and locates items listed on hold for the library branch or on reserve for Link+
• Performs general cleaning and organization of the library’s areas. • Assist with open and close procedures.
• May assist with special projects and programs.
• Performs mail delivery.
• May provide directional assistance to customers.
• Works with Automated Materials Handling machine; moving and sorting bins, and sorting returned items.
• Performs related duties and responsibilities as required.

MINIMUM QUALIFICATIONS:

Sufficient education, training and/or work experience to demonstrate possession of the following knowledge, skills, and abilities which would typically be acquired through:

• No experience necessary.

KNOWLEDGE, SKILLS, AND ABILITIES:
• Ability to work effectively with public and co-workers in variety of circumstances. Ability to work with wide variety of people.
• Knowledge of alphabetical and numerical filing systems. • Knowledge of the library catalog.
• Ability to work varied schedule including early mornings, evenings and weekends • Ability to maintain physical condition appropriate to the performance of assigned duties and responsibilities which may include sitting for extended periods of time and operating assigned library equipment.
• Ability to communicate with others and to assimilate and understand information, in a manner consistent with the essential job functions.
• Ability to operate assigned equipment.
• Ability to make sound decisions in a manner consistent with the essential job functions.

WORKING CONDITIONS / PHYSICAL REQUIREMENTS:

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Work in a library environment with the public, maintains a professional appearance; sustained posture in a standing, walking or seated position for prolonged periods of time; perform bending, lifting, crouching and pushing items weighing up to 50 pounds; perform repetitive small hand and arm motions for prolonged periods of time; may travel to other library facilities; exposed to computer screens for prolonged periods of time.

Maintenance Assistant
Under general supervision, responsible for skilled and semiskilled tasks in one or more of the following areas:

Landscape and turf maintenance of parks and golf courses, including tree maintenance and turf renovation, City building and facilities, City streets, sewers, and storm drains, City vehicles and equipment. Performs related tasks as required. Requires experience with power equipment and a valid California driver’s license. May require drug testing.

Management Specialist
May perform work associated or equal in complexity with responsible City managerial or staff position. Classification may be used for individuals involved in confidential areas involved with employee relations, labor relations, and other discreet/confidential projects. Compensation to be determined according to tasks assigned and qualifications required.

Open Space Technician
Under general supervision performs work assignments in Parks and Open Space areas that assist in the protection, preservation and maintenance of Palo Alto open space lands. Entry- level positions that require familiarity with power tools such as weed whips and chain saws.

Police Reserve I
Reserve officer who has received requisite level of training to operate in a solo capacity.

Police Reserve II
Reserve officer who must be accompanied by a regular sworn officer or a Police Reserve I in performance of duties.

Print Shop Assistant
Under supervision, provides assistance in the Print Shop in duplication, finishing work, mail distribution and other support function duties, often under tight deadlines.

Project Construction Inspector
Inspection of City construction projects to ensure conformance with plan and specifications, documentation of contractor’s daily activities, verification of materials and quantities used, and Item 2
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notification to and contact with the residents in the project area.

Project Specialist
Support for an administrative tasks related to City programs and projects on an ongoing basis, requiring technical and administrative skills such as scheduling, research and report writing, project development and design, ongoing project implementation and administration, and budget tracking and conformance.

Recreation Aide
Provides general clerical and unskilled labor/support of recreational programs.

Recreation Leader I
Entry level positions that do not require previous experience including:

Teen leaders
Gymnastics Instructors
Sports Camp Assistants
Special Event Assistants
Summer Camp Counselors
Coaches

Recreation Leader II
Positions require at least one season of experience and certifications in a related field including:

Sports Camp Leaders (CPR and First Aid)
Sport Officials (CPR and First Aide)
Assistant Pool Manager
Senior Swim Instructor/Lifeguard (Lifeguard Training, First Aid and CPR) Summer Camp Assistants
Coaches

Recreation Leader III
Positions require at least 2 years of experience and specialized skills or advanced certifications in a related field including:

Summer Camp Leaders
Teen Outreach Leaders
Coaches
Substitute Teachers
Sports Camp Leaders (CPR and First Aid)
Sport Officials (CPR and First Aid)
Pool Manager
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Gymnastic/Dance Instructors (Recreation Leader II requirements and Safety Certification and one of the following certifications: Professional Development Program II, Kinder Accreditation for Teachers or Movement Education and Learning Development.)

Stock Clerk
Under supervision, performs a variety of inventory maintenance functions including receiving, storing and delivering supplies. Includes maintaining and reviewing computerized inventory records; performs other related work as required.

Swim Instructor/Lifeguard
Monitors pool activities to enforce regulations and prevent accidents, rescue swimmers in distress, conducts swimming lessons in accordance with American Red Cross or other national recognized aquatics programs and performs other related duties as required. Certificates in Lifeguard Training, First Aid and CPR required.

Technical Specialist
Under general supervision, responsible for work that requires technical skills associated with one or more of the following areas: drafting/CAD, electronics, computer systems, engineering, environmental science, or planning.

Technician I
Performs less advanced technical work than that of the Technician II class. Normally requires some specialized skills such as basic life support/paramedic, drafting, electronics, building maintenance, crafts, etc. and ability to operate associated vehicles or equipment.

Technician II
Under general supervision, responsible for work as performed by advanced technical skills associated with one or more of the following areas: drafting/CAD, electronics computer systems, engineering, environmental science, or planning. Classification may be used for individuals involved in conducting surveys, opinion polls, and other data collection assignments where analysis of data may be required.

Arts & Science Professional I
Under general supervision, performs highly skilled jobs in support of performing and visual arts.

Examples would include exhibit design and installation, graphic design, exhibit mechanical and electrical design, exhibit problem solving, installation and maintenance, materials and parts sourcing for exhibits, managing outsourced custom fabrication of specialty parts, and working with Arts & Sciences Producers on design of exhibits, theater scenery, costume & lighting design and direction, studio supervision, development of educational programs, etc.

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Arts & Science Professional II
Under limited supervision, performs highly specialized jobs in support of performing and visual arts. Examples would include exhibit design and installation, graphic design, exhibit mechanical and electrical design, exhibit problem solving, installation and maintenance, materials and parts sourcing for exhibits, managing outsourced custom fabrication of specialty parts, and working with Arts & Sciences Producers on design of exhibits,theater scenery, costume & lighting design and direction, studio supervision, development of educational programs, etc. Two years of experience equivalent to that of a Arts & Science Professional I.

Arts & Science Professional III - H
Independently performs highly specialized jobs in support of performing and visual arts.

Arts & Science Technician
Under supervision, performs paraprofessional and skilled support to a specific performing or visual arts program area such as lighting, props, building, painting, stitching – etc.

Arts & Science Aide
Under general supervision, performs general unskilled and some semiskilled tasks in support of theater, arts and museum programs.

Zoological Assistant
Under supervision, performs assignments that assist in the maintenance, control, and shelter of animals in the zoo and other City facilities.

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Appendix B
Limited Hourly Salary Schedule

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Compensation Plan
City of Palo Alto

Limited Hourly Employees

Effective Pay Period Including
July 1, 2023 – June 2025

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COMPENSATION PLAN

CITY OF PALO ALTO

Limited Hourly Employees

SECTION I. DEFINITIONS

At-Will Employment: Employee or Employer may terminate employment at any time with or without notice or cause.

Limited Hourly Employee: An “At-Will” employee working full time or part time on a temporary basis (Intermittent), employees who work on an on-call basis or an employee working hours up to six consecutive months in support of a specified seasonal program such as summer camps or Internships (Seasonal). Limited Hourly Employees work less than 1000 hours per fiscal year unless otherwise authorized as provided in Section V of this Plan.

PERS-Retiree: An individual that has retired from the Public Service System and returns to work on an intermittent or seasonal basis in a Limited Hourly classification not to exceed 960 hours within a fiscal year. Hiring of PERS retirees and work assignments for such employees must comply with PERS rules and regulations for such employment.

Intern: An individual who has earned or completed course work toward an Associate Bachelor’s or Master’s Degree and offers his or her services for a limited and specific period of time in exchange for gaining actual work experience. Internships may be paid or unpaid depending on the assignment and budget of the requesting department. Summer internships typically consist of 6-12 week assignments between June and September. Assignments for interns working during the school year may be for the entire duration of a course or semester.

PERS-Exempt Employee: An employee working full-time or part-time with no established career path or promotional ladder and the position is funded through capital improvement, one time projects or temporary accounts. Employment is expected to end at the conclusion of the project and at no time shall employment exceed five consecutive years. PERS exempt designation is subject to Human Resources Department approval.

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SECTION II. EMPLOYMENT REQUIREMENTS AND DOCUMENTATION

All hourly appointments require preauthorization and approvals by designated Management personnel. No limited hourly or seasonal employee shall be assigned to regular employment for the duration of the hourly assignment.

Release of Information
The City will only release information to creditors or other persons upon prior identification of the inquirer and acceptable reasons for the inquiry. Information given from personnel files is limited to verification of employment, length of employment and verification and disclosure of salary range information unless otherwise required by law.

SECTION III. SALARY AND CLASSIFICATIONS

It is the intent of the City of Palo Alto to compensate Limited Hourly Employees at a rate of pay similar to that of regular employees performing like work.

Effective the first full pay period following Council adoption of this plan, all classifications will receive a four percent (4%) salary increase. Effective the first pay period following Council adoption of this plan classifications will receive targeted market adjustments as represented in the salary schedule.

Effective the first full pay period including July 1, 2024, all classifications will receive a four percent (4%) salary increase.

Classifications
Limited Hourly Employees are to be hired within the classifications framework, as presented in the Attachment A, that is closest to a corresponding regular classification in both level of work performed and rate of pay. This compensation plan applies only to Limited Hourly Employees not those included in the SEIU Hourly Unit.

In the event a Limited Hourly Employee is required to assume duties significantly above or below the level of those originally required when first hired, for a period of more than one pay period, the employee is to be reclassified into a new classification and into a higher or lower pay rate that most adequately corresponds to the new duties.

SECTION IV. SPECIAL COMPENSATION

A. Holiday Pay
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B. Paid Leaves
Limited Hourly Employees are not eligible for any paid leaves beyond those required by law.

Family leave will be granted in accordance with applicable State and Federal laws.

Time off with pay to vote in any general or direct primary election shall be requested by the employee and granted by the City as provided in the State of California Elections Code.

C. Overtime Pay
Unless designated by the Director of Human Resources as exempt from the provisions of the Fair Labor Standards Act, all classifications of hourly employees are eligible for overtime pay at time and one -half when required to work more than 40 hours in a week (for example: 8 hours/five day week; 9 hours/four and one -half day week or other pre - determined and pre-approved work schedule) or on an official City holiday.

D. Retirement

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2. California Public Employees’ Retirement System (“PERS”). PERS annuitants are excluded from participation i n the P.S. T. Retirement Plan. Limited Hourly e mployees who have previously participated in and remain members in the California Public Employee Retirement System (“PERS”) or are otherwise required by law to be enrolled in CalPERS shall participate in P.E.R.S. to the extent required by law, in lieu of participation in the P.S.T.

SECTION V. TERM OF EMPLOYMENT

A. Limited Hourly Classifications
The maximum employment term for limited hourly employees shall be less than 1000 hours during any fiscal year unless otherwise approved as provided in section V(B). The maximum hours for a retired PERS employee are 960 hours in a fiscal year. Limited Hourly Employees are “ At-Will “employees and may be terminated at any time without right of appeal.

Limited Hourly employment will not affect the probationary period or the service h ire date of regular classified employment.

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B. Extension of Limited Hourly Employment.

SECTION VI. PERFORMANCE REVIEWS AND SALARY INCREASES

A. Performance Reviews

1. Limited Hourly Employees that demonstrate continued development and efficient and effective service reflected in their performance appraisal may be eligible to receive a salary step increase after one year date of hire and annually thereafter . Subsequent salary reviews are based on performance appraisals and will depend upon demonstrated satisfactory job performance and will not occur more th an twice annually.

B. Salary Increases - General

2. The maximum number of salary increases a Limited Hourly Employee may receive in any one twelve-month working period is limited to two (2), regardless of total number of hours accumulated.

C. Exceptional Leadership Ability and Job Performance
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performance may be given a merit raise, if he/she displays outstanding job performance.

SECTION VII. WORK SCHEDULES AND UNIFORMS

A. Work Week and Work Day

B. Uniforms

1. When uniforms are required by the City of Palo Alto to be worn by the employee as a condition of employment, such uniforms will be provided by the City of Palo Alto.

SECTION VIII. LIMITED HOURLY CLASSIFICATIONS

Limited Hourly Classifications are reflected on Appendix A of this document.

SECTION IX. MANAGEMENT RIGHTS

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Appendix A
Limited Hourly Employee Job Classifications

Administrative Specialist I
Performs administrative work that requires advanced skills or knowledge in support of a department/division or program.

Clerical Assistant
Under supervision, performs routine and repetitive computer inputting and clerical tasks, and performs related work as required. May require cash handling.

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Requires a high school diploma or its equivalent with 1 year of related experience.

Salary to be determined – an hourly rate above $50/hour must be approved by the Director of Human Resources before the City extends an offer of employment.

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pounds.

Distinguishing Characteristics:

The Librarian classification is the professional entry level classification within the Library Division.

ESSENTIAL DUTIES:

Essential and other important responsibilities and duties may include, but are not limited to, the following:

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MINIMUM QUALIFICATIONS:

KNOWLEDGE, SKILLS, AND ABILITIES:
• Ability to work effectively with public and co-workers in variety of circumstances. Ability to work with wide variety of people.
• Knowledge of alphabetical and numerical filing systems. • Knowledge of the library catalog.
• Ability to work varied schedule including early mornings, evenings and weekends • Ability to maintain physical condition appropriate to the performance of assigned duties and responsibilities which may include sitting for extended periods of time and operating assigned library equipment.
• Ability to communicate with others and to assimilate and understand information, in a manner consistent with the essential job functions.
• Ability to operate assigned equipment.
• Ability to make sound decisions in a manner consistent with the essential job functions.

WORKING CONDITIONS / PHYSICAL REQUIREMENTS:

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Library Clerk
Under close general supervision performs technical and clerical tasks; assists customers with their accounts; shelves materials; performs technical and clerical tasks as assigned.

Distinguishing Characteristics

ESSENTIAL DUTIES:

Essential and other important responsibilities and duties may include, but are not limited to, the following:

MINIMUM QUALIFICATIONS:

Sufficient education, training and/or work experience to demonstrate possession of the following knowledge, skills, and abilities which would typically be acquired through:

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• High school diploma or equivalent and 6 months experience working in a library

KNOWLEDGE, SKILLS, AND ABILITIES:
• Ability to work effectively with public and co-workers in variety of circumstances. Ability to work with wide variety of people.
• Knowledge of library procedures and item shelving structure. • Knowledge of alphabetical and numerical filing systems. • Knowledge of a personal computer and various software applications. • Knowledge of effective customer service.
• Ability to use the library catalog.
• Ability to perform cash handling and use a cash register. • Ability to perform basic mathematical calculations.
• Ability to work varied schedule including mornings, evenings and weekends • Ability to maintain physical condition appropriate to the performance of assigned duties and responsibilities which may include sitting for extended periods of time and operating assigned library equipment.
• Ability to work varied schedule including early mornings, evenings, and weekends. Ability to communicate with others and to assimilate and understand information, in a manner consistent with the essential job functions.
• Ability to operate assigned equipment.
• Ability to make sound decisions in a manner consistent with the essential job functions.

WORKING CONDITIONS / PHYSICAL REQUIREMENTS:

Library Page
Under close supervision, shelves materials; performs routine clerical and support tasks as assigned.

Distinguishing Characteristics:

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ESSENTIAL DUTIES:

Essential and other important responsibilities and duties may include, but are not limited to, the following:

MINIMUM QUALIFICATIONS:

Sufficient education, training and/or work experience to demonstrate possession of the following knowledge, skills, and abilities which would typically be acquired through:

• No experience necessary.

KNOWLEDGE, SKILLS, AND ABILITIES:
• Ability to work effectively with public and co-workers in variety of circumstances. Ability to work with wide variety of people.
• Knowledge of alphabetical and numerical filing systems. • Knowledge of the library catalog.
• Ability to work varied schedule including early mornings, evenings and weekends • Ability to maintain physical condition appropriate to the performance of assigned duties and responsibilities which may include sitting for extended periods of time and operating assigned library equipment.
• Ability to communicate with others and to assimilate and understand information, in a manner consistent with the essential job functions.
• Ability to operate assigned equipment.
• Ability to make sound decisions in a manner consistent with the essential job functions.

WORKING CONDITIONS / PHYSICAL REQUIREMENTS:

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Maintenance Assistant
Under general supervision, responsible for skilled and semiskilled tasks in one or more of the following areas:

Police Reserve I
Reserve officer who has received requisite level of training to operate in a solo capacity.

Police Reserve II
Reserve officer who must be accompanied by a regular sworn officer or a Police Reserve I in performance of duties.

Print Shop Assistant
Under supervision, provides assistance in the Print Shop in duplication, finishing work, mail distribution and other support function duties, often under tight deadlines.

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notification to and contact with the residents in the project area.

Recreation Leader I
Entry level positions that do not require previous experience including:

Teen leaders
Gymnastics Instructors
Sports Camp Assistants
Special Event Assistants
Summer Camp Counselors
Coaches

Recreation Leader II
Positions require at least one season of experience and certifications in a related field including:

Recreation Leader III
Positions require at least 2 years of experience and specialized skills or advanced certifications in a related field including:

Summer Camp Leaders
Teen Outreach Leaders
Coaches
Substitute Teachers
Sports Camp Leaders (CPR and First Aid)
Sport Officials (CPR and First Aid)
Pool Manager
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Accreditation for Teachers or Movement Education and Learning Development.)

Arts & Science Professional I
Under general supervision, performs highly skilled jobs in support of performing and visual arts.

Arts & Science Professional II
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Under limited supervision, performs highly specialized jobs in support of performing and visual arts. Examples would include exhibit design and installation, graphic design, exhibit mechanical and electrical design, exhibit problem solving, installation and maintenance, materials and parts sourcing for exhibits, managing outsourced custom fabrication of specialty parts, and working with Arts & Sciences Producers on design of exhibits,theater scenery, costume & lighting design and direction, studio supervision, development of educational programs, etc. Two years of experience equivalent to that of a Arts & Science Professional I.

Arts & Science Professional III - H
Independently performs highly specialized jobs in support of performing and visual arts.

Arts & Science Aide
Under general supervision, performs general unskilled and some semiskilled tasks in support of theater, arts and museum programs.

Zoological Assistant
Under supervision, performs assignments that assist in the maintenance, control, and shelter of animals in the zoo and other City facilities.

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Appendix B
Limited Hourly Salary Schedule

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Job Code FLSA Job Title Step Effective 1/1/2023 (Min
Wage)
Effective Upon Council
Adoption 8/26/2023 (4%
Increase +Target Adj)
Effective 7/16/2024 (4%
Increase)
1 $25.56 $26.84 $27.91
2 $26.90 $28.25 $29.38
910 Non-exempt Administrative Specialist I3 $28.32 $29.74 $30.93 4 $29.81 $31.30 $32.56
5 $31.38 $32.95 $34.27
1 $30.50 $32.02 $33.32
2 $32.10 $33.71 $35.07
913 Non-exempt Administrative Specialist II3 $33.79 $35.48 $36.92 4 $35.57 $37.35 $38.86
5 $37.44 $39.32 $40.90
1 $25.56 $27.87 $28.98
2 $26.90 $29.34 $30.50
915 Non-exempt Assistant Park Ranger3 $28.32 $30.88 $32.11 4 $29.81 $32.50 $33.80
5 $31.38 $34.21 $35.58
1 $23.59 $24.79 $25.77
2 $24.83 $26.09 $27.13
916 Non-exempt Building Service Person3 $26.14 $27.46 $28.56 4 $27.52 $28.90 $30.06
5 $28.97 $30.42 $31.64
1 $20.69 $21.75 $22.61
2 $21.78 $22.89 $23.80
917 Non-exempt Clerical Assistant 3 $22.93 $24.09 $25.05 4 $24.14 $25.36 $26.37
5 $25.41 $26.69 $27.76
1 $17.25 $18.38 $19.12
2 $18.16 $19.35 $20.13
918 Non-exempt Custodial Aide 3 $19.12 $20.37 $21.19
4 $20.13 $21.44 $22.31
5 $21.19 $22.57 $23.48
1 $19.57 $20.84 $21.69
2 $20.60 $21.94 $22.83
919 Non-exempt Custodial Assistant 3 $21.68 $23.09 $24.03 4 $22.82 $24.31 $25.29
5 $24.02 $25.59 $26.62
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Job Code FLSA Job Title Step Effective 1/1/2023 (Min
Wage)
Effective Upon Council
Adoption 8/26/2023 (4%
Increase +Target Adj)
Effective 7/16/2024 (4%
Increase)
1 $19.24 $20.49 $21.32
2 $20.25 $21.57 $22.44
920 Non-exempt House Manager 3 $21.32 $22.71 $23.62
4 $22.44 $23.90 $24.86
5 $23.62 $25.16 $26.17
1 $17.25 $18.38 $19.12
2 $18.16 $19.35 $20.13
921 Non-exempt Instructor Aide 3 $19.12 $20.37 $21.19
4 $20.13 $21.44 $22.31
5 $21.19 $22.57 $23.48
1 $24.16 $25.73 $26.77
2 $25.43 $27.08 $28.18
922 Non-exempt Instructor I 3 $26.77 $28.51 $29.66
4 $28.18 $30.01 $31.22
5 $29.66 $31.59 $32.86
1 $29.41 $31.32 $32.58
2 $30.96 $32.97 $34.29
923 Non-exempt Instructor II 3 $32.59 $34.70 $36.09
4 $34.30 $36.53 $37.99
5 $36.10 $38.45 $39.99
1 $33.85 $36.05 $37.50
2 $35.63 $37.95 $39.47
982 Non-exempt Instructor III 3 $37.50 $39.95 $41.55
4 $39.47 $42.05 $43.74
5 $41.55 $44.26 $46.04
1 $31.05 $32.60 $33.92
2 $32.68 $34.32 $35.70
924 Non-exempt Librarian 3 $34.40 $36.13 $37.58
4 $36.21 $38.03 $39.56
5 $38.12 $40.03 $41.64
1 $23.13 $25.21 $26.23
2 $24.35 $26.54 $27.61
925 Non-exempt Library Clerk 3 $25.63 $27.94 $29.06
4 $26.98 $29.41 $30.59
5 $28.40 $30.96 $32.20
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Job Code FLSA Job Title Step Effective 1/1/2023 (Min
Wage)
Effective Upon Council
Adoption 8/26/2023 (4%
Increase +Target Adj)
Effective 7/16/2024 (4%
Increase)
1 $17.25 $18.82 $19.58
2 $18.16 $19.81 $20.61
930 Non-exempt Library Page 3 $19.12 $20.85 $21.69
4 $20.13 $21.95 $22.83
5 $21.19 $23.10 $24.03
1 $18.61 $19.82 $20.62
2 $19.59 $20.86 $21.71
935 Non-exempt Maintenance Assistant3 $20.62 $21.96 $22.85 4 $21.71 $23.12 $24.05
5 $22.85 $24.34 $25.32
1 $18.61 $20.29 $21.10
2 $19.59 $21.36 $22.21
936 Non-exempt Open Space Technician3 $20.62 $22.48 $23.38 4 $21.71 $23.66 $24.61
5 $22.85 $24.91 $25.91
1 $23.13 $24.28 $25.27
2 $24.35 $25.56 $26.60
937 Non-exempt Print Shop Assistant 3 $25.63 $26.91 $28.00 4 $26.98 $28.33 $29.47
5 $28.40 $29.82 $31.02
1 $33.46 $35.12 $36.55
2 $35.22 $36.97 $38.47
938 Non-exempt Project Construction
Inspector 3 $37.07 $38.92 $40.49
4 $39.02 $40.97 $42.62
5 $41.07 $43.13 $44.86
1 $25.56 $26.84 $27.91
2 $26.90 $28.25 $29.38
939 Non-exempt Project Specialist 3 $28.32 $29.74 $30.93 4 $29.81 $31.30 $32.56
5 $31.38 $32.95 $34.27
1 $17.25
2 $18.16
940 Non-exempt Recreation Aide 3 $19.12
4 $20.13
5 $21.19
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Job Code FLSA Job Title Step Effective 1/1/2023 (Min
Wage)
Effective Upon Council
Adoption 8/26/2023 (4%
Increase +Target Adj)
Effective 7/16/2024 (4%
Increase)
1 $17.25 $18.38 $19.12
2 $18.16 $19.35 $20.13
941 Non-exempt Recreation Leader I 3 $19.12 $20.37 $21.19 4 $20.13 $21.44 $22.31
5 $21.19 $22.57 $23.48
1 $19.12 $20.37 $21.19
2 $20.13 $21.44 $22.31
942 Non-exempt Recreation Leader II 3 $21.19 $22.57 $23.48 4 $22.31 $23.76 $24.72
5 $23.48 $25.01 $26.02
1 $21.19 $22.57 $23.48
2 $22.31 $23.76 $24.72
943 Non-exempt Recreation Leader III 3 $23.48 $25.01 $26.02 4 $24.72 $26.33 $27.39
5 $26.02 $27.72 $28.83
1 $18.51 $19.71 $20.49
2 $19.48 $20.75 $21.57
948 Non-exempt Stock Clerk 3 $20.50 $21.84 $22.71
4 $21.58 $22.99 $23.91
5 $22.72 $24.20 $25.17
1 $20.69 $21.75 $22.61
2 $21.78 $22.89 $23.80
950 Non-exempt Technical Specialist 3 $22.93 $24.09 $25.05 4 $24.14 $25.36 $26.37
5 $25.41 $26.69 $27.76
1 $17.25 $18.38 $19.12
2 $18.16 $19.35 $20.13
954 Non-exempt Arts & Science Aide 3 $19.12 $20.37 $21.19 4 $20.13 $21.44 $22.31
5 $21.19 $22.57 $23.48
1 $24.16 $25.73 $26.77
2 $25.43 $27.08 $28.18
951 Non-exempt Arts & Science Professional
I 3 $26.77 $28.51 $29.66
4 $28.18 $30.01 $31.22
5 $29.66 $31.59 $32.86
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Job Code FLSA Job Title Step Effective 1/1/2023 (Min
Wage)
Effective Upon Council
Adoption 8/26/2023 (4%
Increase +Target Adj)
Effective 7/16/2024 (4%
Increase)
1 $29.41 $31.32 $32.58
2 $30.96 $32.97 $34.29
952 Non-exempt Arts & Science Professional
II 3 $32.59 $34.70 $36.09
4 $34.30 $36.53 $37.99
5 $36.10 $38.45 $39.99
1 $33.85 $36.05 $37.50
2 $35.63 $37.95 $39.47
983 Non-exempt Arts & Science Professional
III 3 $37.50 $39.95 $41.55
4 $39.47 $42.05 $43.74
5 $41.55 $44.26 $46.04
1 $17.32 $18.45 $19.19
2 $18.23 $19.42 $20.20
953 Non-exempt Arts & Science Technician3 $19.19 $20.44 $21.26 4 $20.20 $21.52 $22.38
5 $21.26 $22.65 $23.56
1 $25.56 $27.22 $28.31
2 $26.90 $28.65 $29.80
955 Non-exempt Zoological Assistant 3 $28.32 $30.16 $31.37 4 $29.81 $31.75 $33.02
5 $31.38 $33.42 $34.76
1 2
960 Non-exempt Police Reserve I 3 $53.50 $55.64
4 5
1 2
961 Non-exempt Police Reserve II 3 $47.95 $49.87
4 5
1 $18.61 $19.36 $20.14
2 $19.59 $20.38 $21.20
962 Non-exempt Technician I 3 $20.62 $21.45 $22.32
4 $21.71 $22.58 $23.49
5 $22.85 $23.77 $24.73
$51.87
$57.87
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Job Code FLS A Job Title S te pMin Ma x Min Ma x Min Ma xTBD Non- Exe mpt Ge ne ra l La bore r$1 7.25 $68.88 $1 7.69 $71 .64 $1 8.40 $74.51TBD Non- Exe mpt Inspe c tor$1 7.25 $68.88 $1 7.69 $71 .64 $1 8.40 $74.51TBD Non- Exe mpt Journe y Le ve l La bore r$1 7.25 $68.88 $1 7.69 $71 .64 $1 8.40 $74.51TBD Non- Exe mpt S ta ff S pe c ialist$1 7.25 $68.88 $1 7.69 $71 .64 $1 8.40 $74.519 72 Non- Exe mpt Ma nage me nt S pe c ia list$1 7.25 $1 30.00 $1 7.69 $1 30.00 $1 8.40 $1 30.00Efft 1/1/2 0 2 3 (Min wa ge )Effe c tive upon Counc il Adoption 8 /26 /2 3 (4 % Incre a se + Ta rge t Adj)Effec tive 7 /16 /2 0 2 4 (4 % Incre a se )Limited Hourly Group Salary Schedule Item 2
Attachment D - Limited Hourly Salary
Schedule 2023 - 2025

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Job Code FLSA Status Classifications Grade
Codes Min Mid Max Min Mid Max
190 Non-ExemptAccountant 690P $42.15 $52.68 $63.22 $87,672 $109,574 $131,498 76 Exempt Administrative Assistant 750P $33.70 $42.12 $50.55 $70,096 $87,610 $105,144 115 Exempt Assistant Chief Building Official 405M $61.18 $76.47 $91.77 $127,254 $159,058 $190,882 132 Exempt Assistant Chief of Police 100A $100.25 $125.31 $150.38 $208,520 $260,645 $312,790 108 Exempt Assistant City Attorney 165A $76.94 $96.17 $115.41 $160,035 $200,034 $240,053 109 Exempt Assistant City Clerk 630M $46.58 $58.22 $69.87 $96,886 $121,098 $145,330 107 Exempt Assistant City Manager 20E $100.00 $124.99 $149.99 $208,000 $259,979 $311,979 73 Exempt Assistant Director Administrative Services 120A $82.99 $103.73 $124.48 $172,619 $215,758 $258,918 126 Exempt Assistant Director Community Services 150A $79.46 $99.32 $119.19 $165,277 $206,586 $247,915 1007 Exempt Assistant Director Human Resources 155A $76.84 $96.04 $115.25 $159,827 $199,763 $239,720 2001 Exempt Assistant Director Library Services 160A $71.75 $89.68 $107.62 $149,240 $186,534 $223,850 10 Exempt Assistant Director Planning & Community Environment 130A $80.81 $101.01 $121.22 $168,085 $210,101 $252,138 143 Exempt Assistant Director Public Works 140A $79.88 $99.84 $119.81 $166,150 $207,667 $249,205 168 Exempt Assistant Fleet Manager 585M $46.28 $57.85 $69.42 $96,262 $120,328 $144,394 102 Exempt Assistant Manager WQCP 240D $66.07 $82.58 $99.10 $137,426 $171,766 $206,128 30 Exempt Assistant to the City Manager 390M $64.79 $80.98 $97.18 $134,763 $168,438 $202,134 118 Exempt Chief Building Official 290M $78.36 $97.95 $117.54 $162,989 $203,736 $244,483 2008 Exempt Chief Communications Officer 135A $76.41 $95.51 $114.62 $158,933 $198,661 $238,410 112 Exempt Chief Planning Official 220D $70.08 $87.60 $105.12 $145,766 $182,208 $218,650 95 Exempt Chief Procurement Officer 235D $59.86 $74.82 $89.79 $124,509 $155,626 $186,763 82 Exempt Chief Transportation Official 140A $75.94 $94.92 $113.91 $157,955 $197,434 $236,933 96 Exempt Claims Investigator 660P $40.94 $51.17 $61.41 $85,155 $106,434 $127,733 24 Exempt Communication Specialist 615M $44.30 $55.37 $66.45 $92,144 $115,170 $138,216 89 Exempt Contracts Administrator 585P $52.00 $65.00 $78.00 $108,160 $135,200 $162,240 186 Non-ExemptCoordinator Library Circulation 675M $42.29 $52.86 $63.44 $87,963 $109,949 $131,955 191 Exempt Fire Marshal 125A $91.24 $114.04 $136.85 $189,779 $237,203 $284,648 11 Exempt Deputy City Attorney 375M $60.35 $75.43 $90.52 $125,528 $156,894 $188,282 71 Exempt Deputy City Clerk 720M $36.49 $45.61 $54.74 $75,899 $94,869 $113,859 55 Exempt Deputy City Manager 115A $79.33 $99.16 $119.00 $165,006 $206,253 $247,520 195 Exempt Deputy Director Technical Services Division 200D $74.84 $93.55 $112.26 $155,667 $194,584 $233,501 20 Exempt Deputy Fire Chief 110A $95.04 $118.79 $142.55 $197,683 $247,083 $296,504 81 Exempt Director Administrative Services/Chief Financial Officer 50E $96.60 $120.74 $144.89 $200,928 $251,139 $301,371 72 Exempt Director Community Services 45E $91.85 $114.81 $137.78 $191,048 $238,805 $286,582 City of Palo Alto
Management, Professional and Confidential Salary Schedule Effective 07/01/2023 (4% Increase)
Hourly Rate Annual Salary

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Job Code FLSA Status Classifications Grade
Codes Min Mid Max Min Mid Max
City of Palo Alto
Management, Professional and Confidential Salary Schedule Effective 07/01/2023 (4% Increase)
Hourly Rate Annual Salary
1012 Exempt Director Development Services 145A $80.69 $100.86 $121.04 $167,835 $209,789 $251,763 133 Exempt Director Human Resources/Chief People Officer 55E $92.09 $115.11 $138.14 $191,547 $239,429 $287,331 128 Exempt Director Information Technology/Chief Information Officer 25E $100.58 $125.72 $150.87 $209,206 $261,498 $313,810 131 Exempt Director Libraries 60E $86.00 $107.50 $129.00 $178,880 $223,600 $268,320 2028 Exempt Director of Emergency Medical Services 215D $72.42 $90.52 $108.63 $150,634 $188,282 $225,950 2005 Exempt Director Office of Emergency Services 215D $72.42 $90.52 $108.63 $150,634 $188,282 $225,950 49 Exempt Director Office of Management and Budget 120A $82.99 $103.73 $124.48 $172,619 $215,758 $258,918 134 Exempt Director Planning & Community Environment 40E $96.84 $121.05 $145.26 $201,427 $251,784 $302,141 135 Exempt Director Public Works/City Engineer 30E $98.08 $122.60 $147.12 $204,006 $255,008 $306,010 121 Exempt Director Utilities 10E $115.75 $144.68 $173.62 $240,760 $300,934 $361,130 2002 Exempt Division Head Library Services 260D $62.69 $78.36 $94.04 $130,395 $162,989 $195,603 172 Exempt Division Manager Open Space, Parks & Golf 245D $65.17 $81.46 $97.76 $135,554 $169,437 $203,341 2031 Exempt Division Manager Planning 220D $70.08 $87.60 $105.12 $145,766 $182,208 $218,650 1005 Exempt Executive Assistant to the City Manager 705M $38.06 $47.57 $57.09 $79,165 $98,946 $118,747 139 Exempt Fire Chief 35E $109.32 $136.64 $163.97 $227,386 $284,211 $341,058 163 Exempt Hearing Officer 480M $53.57 $66.96 $80.36 $111,426 $139,277 $167,149 101 Exempt Human Resources Representative 735P $35.61 $44.51 $53.42 $74,069 $92,581 $111,114 90 Exempt Landscape Architect Park Planner 510M $51.02 $63.77 $76.53 $106,122 $132,642 $159,182 2015 Exempt Legal Fellow 755P $44.87 $56.08 $67.30 $93,330 $116,646 $139,984 171 Exempt Management Analyst 585M $46.28 $57.85 $69.42 $96,262 $120,328 $144,394 79 Exempt Manager Accounting 235D $63.30 $79.12 $94.95 $131,664 $164,570 $197,496 2007 Exempt Manager Airport 210D $72.66 $90.82 $108.99 $151,133 $188,906 $226,699 2023 Exempt Manager Budget 360M $67.16 $83.95 $100.74 $139,693 $174,616 $209,539 38 Exempt Manager Communications 525M $51.32 $64.15 $76.98 $106,746 $133,432 $160,118 154 Exempt Manager Community Services 630M $47.72 $59.64 $71.57 $99,258 $124,051 $148,866 169 Exempt Manager Community Services Sr Program 585M $51.26 $64.07 $76.89 $106,621 $133,266 $159,931 1013 Exempt Manager Development Center 495M $57.92 $72.40 $86.88 $120,474 $150,592 $180,710 63 Exempt Manager Economic Development 220D $66.88 $83.60 $100.32 $139,110 $173,888 $208,666 44 Exempt Manager Employee Benefits 450M $57.23 $71.53 $85.84 $119,038 $148,782 $178,547 45 Exempt Manager Employee Relations & Training 235D $63.30 $79.12 $94.95 $131,664 $164,570 $197,496 93 Exempt Manager Environmental Control Program 419M $62.26 $77.82 $93.39 $129,501 $161,866 $194,251 1116 Exempt Manager Facilities 445M $54.93 $68.66 $82.40 $114,254 $142,813 $171,392 2030 Exempt Manager Finance 223D $66.44 $83.04 $99.65 $138,195 $172,723 $207,272

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Job Code FLSA Status Classifications Grade
Codes Min Mid Max Min Mid Max
City of Palo Alto
Management, Professional and Confidential Salary Schedule Effective 07/01/2023 (4% Increase)
Hourly Rate Annual Salary
127 Exempt Manager Fleet 255D $55.48 $69.35 $83.22 $115,398 $144,248 $173,098 2018 Exempt Manager Human Services 540M $53.81 $67.26 $80.72 $111,925 $139,901 $167,898 32 Exempt Manager Information Technology 230D $64.72 $80.89 $97.07 $134,618 $168,251 $201,906 2006 Exempt Manager Information Technology Security 230D $61.20 $76.50 $91.80 $127,296 $159,120 $190,944 158 Exempt Manager Laboratory Services 495M $52.28 $65.35 $78.42 $108,742 $135,928 $163,114 78 Exempt Manager Library Services 565M $50.61 $63.26 $75.92 $105,269 $131,581 $157,914 92 Exempt Manager Maintenance Operations 469M $51.22 $64.02 $76.83 $106,538 $133,162 $159,806 26 Exempt Manager Transportation Planning 345M $67.27 $84.08 $100.90 $139,922 $174,886 $209,872 51 Exempt Manager Planning 415M $61.47 $76.83 $92.20 $127,858 $159,806 $191,776 103 Exempt Manager Real Property 235D $59.86 $74.82 $89.79 $124,509 $155,626 $186,763 2011 Exempt Manager Revenue Collections 250D $56.26 $70.32 $84.39 $117,021 $146,266 $175,531 160 Exempt Manager Solid Waste 330M $65.84 $82.30 $98.76 $136,947 $171,184 $205,421 57 Exempt Manager Treasury, Debt & Investments 235D $61.72 $77.15 $92.58 $128,378 $160,472 $192,566 86 Exempt Manager Urban Forestry 436M $57.07 $71.33 $85.60 $118,706 $148,366 $178,048 178 Exempt Manager Water Quality Control Plant 205D $74.57 $93.21 $111.86 $155,106 $193,877 $232,669 39 Exempt Manager Watershed Protection 330M $67.09 $83.86 $100.64 $139,547 $174,429 $209,331 1008 Exempt Office of Emergency Services Coordinator 525M $49.78 $62.22 $74.67 $103,542 $129,418 $155,314 2024 Exempt Performance Auditor I 750P $33.70 $42.12 $50.55 $70,096 $87,610 $105,144 100 Exempt Performance Auditor II 585M $46.28 $57.85 $69.42 $96,262 $120,328 $144,394 148 Exempt Police Chief 15E $112.85 $141.06 $169.28 $234,728 $293,405 $352,102 2021 Exempt Chief Assistant City Attorney 101A $99.48 $124.35 $149.22 $206,918 $258,648 $310,378 2016 Exempt Principal Business Analyst 310M $63.77 $79.71 $95.66 $132,642 $165,797 $198,973 2029 Exempt Principal Planner 469M $51.63 $64.53 $77.44 $107,390 $134,222 $161,075 2003 Exempt Principal Management Analyst 360M $63.52 $79.40 $95.28 $132,122 $165,152 $198,182 2009 Exempt Project Manager 570M $52.34 $65.42 $78.51 $108,867 $136,074 $163,301 2012 Exempt Public Safety Communications Manager 495M $52.28 $65.35 $78.42 $108,742 $135,928 $163,114 166 Exempt Public Safety Program Manager 585M $46.28 $57.85 $69.42 $96,262 $120,328 $144,394 117 Exempt Senior Accountant 525M $55.93 $69.91 $83.90 $116,334 $145,413 $174,512 2013 Exempt Senior Business Analyst - M 420M $55.52 $69.40 $83.28 $115,482 $144,352 $173,222 187 Exempt Senior Engineer 300M $71.47 $89.33 $107.20 $148,658 $185,806 $222,976 106 Exempt Senior Executive Assistant 450M $54.12 $67.65 $81.18 $112,570 $140,712 $168,854 157 Exempt Senior Human Resources Administrator 545M $48.72 $60.89 $73.07 $101,338 $126,651 $151,986 14 Exempt Senior Management Analyst 465M $54.08 $67.59 $81.11 $112,486 $140,587 $168,709

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Job Code FLSA Status Classifications Grade
Codes Min Mid Max Min Mid Max
City of Palo Alto
Management, Professional and Confidential Salary Schedule Effective 07/01/2023 (4% Increase)
Hourly Rate Annual Salary
130 Exempt Senior Performance Auditor 510M $51.02 $63.77 $76.53 $106,122 $132,642 $159,182 53 Exempt Senior Project Manager 300M $71.47 $89.33 $107.20 $148,658 $185,806 $222,976 33 Exempt Senior Technologist 420M $60.52 $75.65 $90.78 $125,882 $157,352 $188,822 155 Exempt Superintendent Animal Services 540M $48.59 $60.73 $72.88 $101,067 $126,318 $151,590 83 Exempt Superintendent Community Services 480M $58.01 $72.51 $87.02 $120,661 $150,821 $181,002 1117 Exempt Superintendent Recreation 480M $58.01 $72.51 $87.02 $120,661 $150,821 $181,002 2022 Exempt Supervising Librarian 675M $42.45 $53.06 $63.68 $88,296 $110,365 $132,454 161 Exempt Supervisor Facilities Management 600M $45.25 $56.56 $67.88 $94,120 $117,645 $141,190 113 Exempt Supervisor Inspection and Surveying 540M $48.59 $60.73 $72.88 $101,067 $126,318 $151,590 146 Exempt Supervisor Warehouse 660M $40.94 $51.17 $61.41 $85,155 $106,434 $127,733 181 Exempt Supervisor Water Quality Control Operations 525M $49.78 $62.22 $74.67 $103,542 $129,418 $155,314 2027 Exempt Utilities Chief Operating Officer 60E $83.41 $104.26 $125.12 $173,493 $216,861 $260,250 327 Exempt Supervisor Code Enforcement TBD $51.29 $64.11 $76.94 $106,683 $133,349 $160,035 905 Non-ExemptHuman Resources Technician 830C $29.85 $37.31 $44.78 $62,088 $77,605 $93,142 903 Non-ExemptLegal Secretary-Confidential 820C $30.60 $38.24 $45.89 $63,648 $79,539 $95,451 67 Exempt Secretary to City Attorney 800C $36.26 $45.32 $54.39 $75,421 $94,266 $113,131 1004 Non-ExemptSenior Legal Secretary - Confidential 810C $33.70 $42.12 $50.55 $70,096 $87,610 $105,144 Confidential Classifications

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City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Administrative Services
Meeting Date: August 14, 2023
Report #:2307-1779
TITLE
Adoption of a Resolution and Approving an Easement Relocation Agreement Relocating and Vacating a 25 Foot Public Service Easement at 220 Embarcadero Road

RECOMMENDATION
Staff recommends that Council:

1. Approve and authorize the City Manager or designee to execute the Easement Relocation Agreement relocating a public service easement on the commercial property located at 220 Embarcadero Road; and

2. Adopt a resolution summarily vacating a public service easement on the commercial property located at 220 Embarcadero Road after the relocated easement has been recorded.

ANALYSIS
On April 20, 1992, the City Council introduced and passed a resolution ordering the vacation of a street easement on a portion of Melville Avenue between Bryant and Emerson Streets, while reserving a 25-foot easement benefitting the City for underground and overhead public utilities purposes.1 This Public Utility Easement (“PUE”) is associated with the property owned by the Castilleja School Foundation (“Castilleja”). 2
On June 6, 2022, the City Council approved Castilleja’s applications for Architectural Review with Parking Adjustment, Conditional Use Permit, and Variance, and made several findings, determination and declarations.3 In connection with those applications, the City Council made it 1 General Vacation, Resolution No. 7086, recorded as Recording Number 11386298, Book M218, Page 0593 of Official Records of Santa Clara County.
2 https://www.cityofpaloalto.org/City-Hall/Hot-Topics/Castilleja-School 3 https://www.cityofpaloalto.org/files/f65eb77d-4d17-41a6-8158-44f1df3b649f/Casti-Signed-ROLUA-and- Exhibit.pdf
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a Condition of Approval that Castilleja relocate the existing 25-foot PUE to be within the boundaries of the driveway that is proposed near the Emerson Street and Melville Avenue intersection. Castilleja has agreed to relocate the existing 25-foot public utility easement. To relocate the easement, the City will execute an Easement Relocation Agreement creating a 25- foot PUE within the proposed new driveway and adopt a resolution to vacate the existing easement in accordance with Section 8333 of the California Streets and Highways Code.

FISCAL/RESOURCE IMPACT
The property owner paid the summary easement vacation fee in FY 2023, which amounts to $1,842 as set forth in the FY 2023 Municipal Fee Schedule.

ENVIRONMENTAL REVIEW
Council action to relocate the public service easement is within the scope of the Environmental Impact Report prepared for the Castilleja School Project and adopted by the Council on June 6, 2022 (SCH #2017012052).

ATTACHMENTS
Attachment A: Summary Vacation Resolution & Easement Relocation Agreement APPROVED BY:

Kiely Nose, Assistant City Manager
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Recorded at no charge in accordance with
Streets & Highways Code Section 8336 at
the request of and when recorded return to:

City of Palo Alto
Real Estate Division
250 Hamilton Avenue
Palo Alto, CA 94301
SPACE ABOVE LINE FOR RECORDER’S USE
APN: 124-12-034
Address: 220 Embarcadero Road
Palo Alto, CA 94301

RELOCATION AND SUMMARY VACATION
RESOLUTION NO. _____

RESOLUTION OF THE COUNCIL OF THE CITY OF PALO ALTO

RELOCATING AND SUMMARILY VACATING A PUBLIC SERVICE EASEMENT AT 220 EMBARCADERO ROAD, PALO ALTO, CA
WHEREAS, under General Vacation, Resolution No. 7086, recorded as Recording Number 11386298, Book M218, Page 0593 of Official Records of Santa Clara County, the City of Palo Alto reserved a 25-foot easement for public utilities purposes benefitting the City, and any right necessary to construct, maintain, operate, replace, remove, renew or enlarge any underground public utility facilities, existing overhead public utility facilities, sanitary sewers, storm drains and appurtenant structures in, upon, over, under or across the easement area; and WHEREAS, in connection with ACTION NO. 2022-02 RECORD OF THE COUNCIL OF THE CITY OF PALO ALTO LAND USE ACTION 1310 BRYANT STREET (CASTILLEJA) ARCHITECTURAL REVIEW 19PLN-00116 WITH PARKING ADJUSTMENT CONDITIONAL USE PERMIT AND VARIANCE 16PLN-00238, the City imposed Condition 28 (EASEMENT RELOCATION): “Applicant shall relocate the existing 25- foot Public Utility Easement (PUE) to be within the boundaries of the driveway that is proposed near the Emerson Street and Melville Avenue intersection”; and WHEREAS, the City Council of the City of Palo Alto intends to approve the Easement Relocation Agreement in Attachment “A” attached to this resolution to accept the relocated easement to supersede and summarily vacate the existing easement as more particularly described and depicted in the exhibits of that agreement; and
WHEREAS, Section 8333 of the Streets and Highways Code authorizes the City Council to summarily vacate a public service easement in any of the following cases: (a) the easement has not been used for the purpose for which it was dedicated or acquired for five consecutive years immediately preceding the proposed vacation, (b) the date of dedication or acquisition is less than five years, and more than one year, immediately preceding the proposed vacation, and the easement was not used continuously since that date, (c) the easement has been Item 3
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superseded by relocation, or determined to be excess by the easement holder, and there are no other public facilities located within the easement; and NOW, THEREFORE, the City Council does hereby RESOLVE as follows:

SECTION 1. The public service easement for utilities and incidental purposes described in Exhibit “A” and depicted in the plat map as Exhibit “B” in Attachment “A” will be relocated to the area described in Exhibit “C” and depicted in the plat map as Exhibit “D” in Attachment “A” from and after the date of recordation of the documents identified in Section 3 of this Resolution.

1. The public service easement described on Exhibit “A” and depicted on the plat map as Exhibit “B” of Attachment “A” (Easement Relocation Agreement) will be superseded by relocation as described on Exhibit “C” and depicted on the plat map as Exhibit “D”; and SECTION 2. Upon the relocation of public service easement described in Section 1 to the area described in Exhibit “C” and depicted in the plat map as Exhibit “D” in Attachment “A”, the former public service easement described in Exhibit “A” and depicted in the plat map as Exhibit “B” in Attachment “A” will be vacated under the authority of California Streets and Highways Code Chapter 4 of part 3 of Division 9, commencing at Section 8330 et. seq.

SECTION 3. Based upon the provisions of Section 8333 of the Streets and Highways Code, the City Council does hereby order that public service easement as shown on the said Exhibits “A” and “B” of Attachment “A” shall be summarily vacated and relocated as shown on the said Exhibits “C” and “D” of Attachment “A”.

SECTION 4. The City Clerk, acting by and through the Real Property Manager, is hereby directed to record at the Santa Clara County Clerk-Recorder’s Office a certified copy of this Resolution, including the Maps.

SECTION 5. Council action to relocate the public service easement is within the scope of the Environmental Impact Report prepared for the Castilleja School Project and adopted by the City Council on June 6, 2022 (SCH #2017012052).

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ATTACHMENT A

EASEMENT RELOCATION AGREEMENT
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City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Public Works
Meeting Date: August 14, 2023
Report #:2306-1707
TITLE
Approval of Contract with Enterprise Roofing Service, Inc. for the Lucie Stern Community Center Roof Underlayment Replacement Project; CEQA status - exempt under CEQA Guideline Sections 15301 and 15302

RECOMMENDATION
Staff recommends that Council:

1. Approve and authorize the City Manager or their designee to execute construction contract C24187808 with Enterprise Roofing Service, Inc. in the amount of $386,986 for the Lucie Stern Community Center Roof Underlayment Replacement Project, Capital Improvement Program Roofing Replacement Project PF-00006; and

2. Authorize the City Manager or their designee to negotiate and execute one or more change orders to the contract with Enterprise Roofing Service, Inc. for related, additional but unforeseen work which may develop during the contract period, the total value of which shall not exceed $38,698.

BACKGROUND
The existing Lucie Stern Community Center roof has been in service since the construction of the building in 1934. The Spanish clay tile is still in good condition, but the underlayment has reached the end of its life and has been patched several times in various locations. To avoid the potential for larger leaks and structural damage to the building, staff has determined that the roof needs a complete underlayment replacement. Under the recommended contract1, 1Enterprise Roofing Service Inc., C24187808, Lucie Stern Community Center Roof Underlayment Contract; https://www.cityofpaloalto.org/files/assets/public/public-works/public-services/contracts/c24187808-lscc-roof- underlayment-contract.pdf
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Enterprise Roofing Service Inc., will be responsible for replacing the roof underlayment at Lucie Stern Community Center.

ANALYSIS
Scope Overview
Staff recommends approval of Contract No. C24187808 to replace the roof underlayment at Lucie Stern Community Center. This project will remove the existing Spanish clay tile roofing, which will be reinstalled. The old gutters will be removed. The copper gutters will be saved for reuse. The old underlayment will be removed and disposed of. Dry rot repairs will be made to the roof surface and fascia boards. New underlayment system will be installed. Rain gutter system will be reinstalled. The old Spanish clay tiles will be reinstalled along with some new tiles due to existing broken tiles and some expected breakage during removal. All fascia boards and any new exposed eave boards will be repainted.

Bid Process
On May 24, 2023, a notice inviting formal bids for the Lucie Stern Community Center Roof Underlayment Replacement Project was posted on the OPENGOV Procurement website. The bidding period was 30 days. Bids were received from four qualified contractors on June 22, 2023, as listed on the attached Bid Summary (Attachment A).

Summary of Bid Process
Bid Name/Number
Lucie Stern Community Center Roof Underlayment
Replacement Project
IFB #187808
Proposed Length of Contract 45 days
Total Days to Respond to Bid 30
Number of Bids Received 4
Bid Price Range $386,986 to $656,850
Staff has reviewed the submitted bids and recommends that the bid of $386,986 submitted by Enterprise Roofing Service, Inc. be accepted and that Enterprise Roofing Service, Inc. be declared the lowest responsible bidder. The award of contract includes the base bid. The change order amount of $38,698 (which equals 10 percent of the total contract) is requested for related, additional but unforeseen work which may develop during the contract term. Staff confirmed with the Contractor's State License Board that the contractor has an active license on file. Staff also confirmed with the California Department of Industrial Relations (DIR) that the contractor has an active DIR registration.

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FISCAL/RESOURCE IMPACT
Funding for the Lucie Stern Community Center Roof Underlayment Replacement Project contract has been appropriated in the Fiscal Year 2024 Capital Improvement Fund Roofing Replacement Project (PF-00006).

STAKEHOLDER ENGAGEMENT
The Lucie Stern Community Center Roof Underlayment Replacement Project was coordinated with the Community Services staff working at the Community Center. Notices will be placed at the Community Center announcing this upcoming project.

ENVIRONMENTAL REVIEW
This contract is categorically exempt from the California Environmental Quality Act (CEQA) under Sections 15301 and 15302 of the CEQA guidelines as an alteration to an existing facility and no further environmental review is necessary.

ATTACHMENTS
Attachment A: Bid Summary for Lucie Stern Community Center Roof Underlayment Replacement Project
APPROVED BY:

Brad Eggleston, Director Public Works/City Engineer
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Bid Summary
Lucie Stern Community Center Roof Underlayment Replacement Project IFB187808
Vendor Name Bid Amount
Enterprise Roofing Service $386,986.00
Roofing Constructors, Inc. dba Western Roofing
Service
$525,836.00
Waterproofing Associates $638,768.00
Alcal Specialty Contracting, Inc. $656,850.00
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Summary for Lucie Stern
Community Center Roof
Underlayment
Replacement Project

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City Council
Staff Report
From: City Manager
Report Type: ACTION ITEMS
Lead Department: City Manager
Meeting Date: August 14, 2023
Report #:2305-1416
TITLE
Adoption of a Comprehensive Economic Development Strategy to Guide City Priorities, Initiatives, and Project Outcomes. CEQA Status - Not a Project.

RECOMMENDATION
Staff recommends that the City Council receive the Comprehensive Economic Development Strategy developed by the City’s consultant Streetsense and approve this report to guide and inform City priorities, initiatives, projects, to support outcomes in support of economic vitality.

EXECUTIVE SUMMARY
Approval of the Comprehensive Economic Development Strategy will provide guiding principles and a framework to inform and guide continued work to support and actively promote the City’s economic vitality. This report reflects over a year of work with stakeholders, data analysis and City Council discussions. These actions will inform future resource allocation, policy, and programming decisions for the City of Palo Alto and partners toward achieving a balanced and competitive future. Adoption of this report completes the Council priority Economic Recovery and Transition (ER&T) objective to adopt a comprehensive economic development strategy, a milestone in the continued actions to support the outcomes desired. Although adoption of this report does not have an immediate financial impact, it is expected that implementation will require resources and will be brought forward as programs and projects take shape.

BACKGROUND
Streetsense was brought on to “develop a market-informed economic development strategy that will ensure Palo Alto's post-COVID competitiveness by identifying impactful public sector interventions, policies and investments for which there is both need and consensus for action.” This session is the third and final planned discussion between Streetsense and the City Council presenting a comprehensive economic development strategy based on the prior discussions with the Council and community stakeholders as well as diagnostics findings.

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On November 7, 20221, Streetsense presented their in-progress work to City Council. At that meeting, they discussed the purpose and goals of the comprehensive economic development strategy, the phases and timeline of their project, and preliminary considerations and findings from their work to date.

On March 13th, 2023, Streetsense presented a ‘diagnostic’ and facilitated a discussion and feedback on the diagnostic findings and draft Guiding Principles to establish general consensus of the City Council through its discussion for the final product, this report on economic development strategies for Palo Alto.

ANALYSIS
Streetsense and HdL Companies were engaged in the fall of 2022 to develop market-informed economic development strategies to ensure Palo Alto’s ongoing regional competitiveness by identifying impactful public sector interventions and investments for which there is both need and consensus for action. The strategies presented in the attached Comprehensive Economic Development Strategy aim to reflect the delicate ecosystem that drives the vibrancy of the City’s downtown and commercial centers with a focus on the retail and hospitality sectors significantly affected by the COVID-19 pandemic and resulting hybrid work environment. The economic development strategies to follow will inform future resource allocation, policy and programming decisions for the City of Palo Alto and their partners to take toward achieving a balanced and competitive future.

This final report focuses on areas within Palo Alto where there is existing concentration of retail activity and representative of the diverse scale of retail offerings found throughout the City.

The following descriptions include three categories of shopping districts according to shopping industry classifications. These classifications are intended to group “like” classifications of shopping commercial districts, while recognizing that activity centers have individual characteristics that make each unique.

Regional/Super Regional Centers: Downtown & Stanford Shopping Center •Most significant tax base contributors; Face the greatest competition for visitors within the region; Must maintain "best in class" status to remain competitive Community Serving Centers: California Ave & Town & Country Village •Moderate tax base impacts; Employs local promotion and marketing strategies, if any; Tend to benefit from activations that meet community interests and needs Neighborhood Serving: Midtown & Charleston Shopping Center 1 City Council Staff Report November 2, 2022 https://www.cityofpaloalto.org/files/assets/public/agendas-minutes- reports/agendas-minutes/city-council-agendas-minutes/2022/20221107/20221107pccsm-amended-linked-q.a-

2.pdf#page=8
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•Minimal tax base impacts; Least affected by the COVID-19 pandemic and typically the most stable asset class; Local customer base with little need for promotion Guiding principles were identified through stakeholder engagement including multiple study session discussions with the City Council and the final report recommendations are organized around these.
1) Reinforce each district's distinct scale and offerings by stabilizing and reinforcing Downtown as a destination, embracing California Avenue as a community and neighborhood serving place, and supporting existing Neighborhood Centers
2) Improve accessibility by embracing walking and biking solutions to/from/within all of the City's commercial districts and addressing parking policies and systems 3) Adopt policies that reflect changing market conditions by easing the regulatory burden for businesses, removing outdating restrictions that create hurdles to tenancy, and focus retail and retail like uses in places where they are market supported.

Organized by each of these principles, this comprehensive strategy identifies 10 recommendations with action items recommended within each. Below is a summary table of the recommendations and action items. The full report can be found in Attachment A. The full report is organized as follows:

Each guiding principle has recommended strategies accompanied by one or more distinct actions with associated champions, the entity recommended to lead implementation efforts, and partners and city staff who are helpful as support.

Each strategy and associated actions apply to classifications of retail and Downtown Palo Alto, California Avenue, Neighborhood Centers, or a combination thereof, and may also apply to other retail areas in the City as the studied districts are representative, not exclusive.

Each recommendation is explained with a summary of why it is critical and how it aligns with existing city efforts, if applicable. Lastly, most are validated with a best practice example from around the country. The following At A Glance Recommendations inform prioritization with classifications
•Tier 1 In support/coordination of ongoing city efforts •Tier 2 New near medium term and low medium budget
•Tier 3 New long term and medium high budget
Guiding Principle 1
1) Upgrade highly used and visible public and private realm spaces to promote district definition and encourage activation.

1.1 Redesign University Avenue streetscape to provide wider sidewalk space for walking, gathering, and outdoor dining through a construction project to be funded by property owners. [Tier 1]
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1.2 Continue exploring the Car-Free Streets Initiative for California Avenue and Ramona Street to optimize a balanced future. [Tier 1]

1.3 Support outdoor dining and gathering options on sidewalks and within on-street parklets with by-right allowances within two feet of storefronts and creating a consolidated street activation resource. [Tier 1]

1.4 Invest in cohesive district branding through wayfinding, signage, public art, and gateway features within the district and along the district boundaries to better define and announce the area as a collective destination. For Neighborhood Centers, encourage public art, like murals and other community-centered installations. [Tier 2] These align with Council priority outcomes, specifically ER&T focus on Commercial Corridors, Downtown and California Ave. objectives e, h, i, and j. Each of these objectives are in progress with milestones expected to be reached by the end of the calendar year. Objectives: Begin implementation of next phase of parklet regulations to the community. Select consultant to conduct a study that informs the development of a permanent car-free streets ordinance (ERT6&7); Approve concept plan for University Ave streetscape and provide direction on capital project funding (ERT 5); Extend temporary closure for car free streets (ERT6&7). 2) Encourage the creation of and support District Management Entities (DMEs) for district promotion, programming, and increased maintenance.

2.1 Create a task force to explore successful regional DMEs of various scales and structures to inform an appropriate DME for Downtown Palo Alto, one that enables property and business owners to advocate and act (with resources) on their own behalf. [Tier 2]

2.2 Formalize a DME, like the California Avenue Business Association/Merchants of California Avenue and encourage membership of a California Main Street Program. [Tier 2]
3) Pursue business retention, development, and attraction initiatives for local and small businesses.

3.1 Create a public private small and local business incubation and vacant storefront program connecting landlords experiencing vacancy with small and local businesses seeking brick and mortar space and local artists to aid in activation. [Tier 2]

3.2 Consider allocating funds towards a shop local eGift card program to incentivize patronage of local business. [Tier 2]
These aligns directly with a Council Priority outcome, specifically ER&T focus on Commercial Corridors, Downtown and California Ave. objective g, align Business Improvement District (BID) priorities and investments to the Comprehensive Economic Development Strategy (ERT1). This objective is in progress in partnership with the Chamber of Commerce and former members of the Palo Alto Downtown Business Association (PADBA).
4) Promote tourism city wide to increase longer business "bleisure" travel and grow hotel weekend occupancy rates with non-business travel.

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4.1 Provide Palo Alto Chamber of Commerce the resources to promote tourism citywide to accurately highlight and consistently update Palo Alto's destination offerings, hotels, restaurants, events, and ways to get around in an easy-to-use online platform and app. [Tier 2]
This would be a new initiative though a light to medium financial impact. City provides funding annually as a member of the Chamber of Commerce. In addition, staff partner with the Chamber to support activities and ensure collaboration and coordination often resulting in specific financial support at Council’s behest such as the grant of funding to support “3rd Thursdays” on California Avenue.

Guiding Principle 2
5) Fix broken pedestrian and cycling links to increase accessibility to, from, and within commercial districts.

5.1 Include more signage, wayfinding and bicycle lane markings along critical bike routes to aid safe and easy travel to/from shopping districts by biking and walking. [Tier 1]

5.2 Include mid-block pedestrian crossings and/or raised traffic tables where desire paths lack safe crossings and deemed safe to do so. [Tier 3]

5.3 Consider removing free rights at major intersections to aid in safe intersections for all modes of transport. [Tier 3]
This aligns in part with a capital project to enhance wayfinding in these corridors and will be supported by Council Objective m, which advances the Bike and Pedestrian Transportation Plan. Remaining actions would be new long-term investments. 6) Invest in first and last mile transportation options that increase equitable access to, from, and within commercial districts.

6.1 Incorporate a micro mobility (bike and/or scooter share) program that engages all shopping districts and destinations across the City of Palo Alto. [Tier 1]

6.2 Participate in advanced regional micro mobility options. [Tier 2]

6.3 Incentivize e-mobility using local resources. [Tier 2]

6.4 Support and incentivize on demand transit service and ridership through promotional programming within shopping districts. [Tier 1]
The City has implemented a pilot for demand transit services through its Palo Alto Link (PAL) service. As with the above goal, Council Objective m. would also inform and advance pedestrian and transportation strategies. Remaining actions would be new near to medium term actions with a medium financial impact.
7) Reinforce walkability within districts to encourage longer duration of stay and activation.

7.1 Select specific public alleyways with high visibility and at least 20 feet in width to improve for increased permeability and place making. [Tier 2]

7.2 Create a mural competition or program for select side and rear building facades garnering the most visibility from main streets. [Tier 2] Item 5
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7.3 Limit new curb cuts and aim to remove overly redundant curb cuts with any future redevelopment along public right of way of neighborhood centers. [Tier 3] These actional all reflect new projects or initiatives ranging from near term and low budget impact to longer term with significant investment needs. Staff have initiative some pilot programs such as the murals on California Avenue, however, these have been adhoc in nature. 8) Update and simplify parking policies, systems, and signage to ease navigation to and use of parking.

8.1 Embrace technology by incorporating digital signage for easier navigation to available parking within and outside of parking areas and tie information into an app-based parking management system to ease use and parking predictability. [Tier 1]

8.2 Consider a small business employee access program that offers reduced employee parking fees, easily transferrable employee parking permits, and/or incentivized use of transit, micro mobility options, and carpooling. [Tier 1] All of these actions are in support of ongoing projects already in progress. Capital projects such as the parking wayfinding in City garages and pilot adjustments to parking programs such as the new lower daily parking permit fee of $8 from the previous $25, and the implementation of the new parking permit system are all examples of projects and programs that directly support these actions.

Guiding Principle 3
9) Streamline, update and/or remove unnecessary use restrictions and pursue regulatory reform to enable tenancy and competitiveness.

9.1 Consider removing or consolidating zoning overlays, incorporating an at a glance permitted use table and design standards, and an interactive online map with quick links to relevant regulations. [Tier 1]

9.2 Consider amending Section 18.76.20, Architectural Review, of the municipal code to enable more over the counter approvals for minor changes. [Tier 2]

9.3 Reevaluate the city-wide Retail Preservation Ordinance and consider refocusing its applicability to targeted areas of existing retail concentration while also allowing flexibility in non-street facing portions of buildings. [Tier 1]

9.4 Enable growth in Neighborhood Goods and Services along California Avenue by updating the Formula Retail Ordinance and easing use restrictions on in demand neighborhood serving uses that are currently heavily regulated or prohibited. [Tier 2] These align in part with a Council Priority outcome, specifically ER&T focus on Commercial Corridors, Downtown and California Ave. objective k, to provide direction on citywide retail zoning code changes including preservation and neighboring commercial district specific regulations and conditional use permit thresholds. However, this specific outcome is not expected to be completed in 2023.

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10) Grow the market by enabling residential development in select areas of Downtown Palo Alto and California Avenue

10.1 Consider increasing allowable height and floor area ratio to accommodate residential in mixed use projects. [Tier 2]

10.2 Allow exclusively residential projects, including the ground floor where currently restricted in the California Avenue district. [Tier 2]

10.3 Prioritize residential development on underutilized property as identified in the 2023- 31 Housing Element. [Tier 1]
These reflect a majority of new initiatives, however a re in alignment with the Council Priority, specifically ER&T focus on Commercial Corridors, Downtown and California Ave. objective f, which reflects continued exploration of new parking facilities in the University Avenue Downtown with a preference for affordable housing development.

Administrative Capacity
Important for implementation of the following strategy recommendations is adequate internal administrative capacity to facilitate responsibilities and to track and report progress.

Recommended is formation of a scaled Office of Economic Development with adequate resources from a staffing and budget perspective to execute the strategy recommendations of this Plan. As noted in the resource impact section, some staff augmentation has been approved in the FY 2024 Adopted budget, dedicating two staff members to these efforts.

Also recommended is the creation of an Interagency Economic Development Committee, led by the Office of Economic Development, and consisting of key partners and city staff who will champion, advance, and track implementation of recommended strategies herein over the next five-year period. This Committee would meet as an internal group and present progress to City Council on an annual basis. The Committee should discuss and evaluate budget and resource needs on an ongoing basis and make recommendations and requests to City Council, as needed. This structure would communicate commitment to executing the strategies herein and ultimately the health of Palo Alto’s Downtown and commercial districts including consistently reporting publicly to City Council ensures interagency accountability, reinforcing community trust in the process and means by which the envisioned outcomes are achieved.

FISCAL/RESOURCE IMPACT
Adoption of the Comprehensive Economic Development Strategy document itself will not impact resource needs, however, the implementation and use of these recommendations to guide future projects, focus areas, and ultimately implementation will require resources. As the City refines the scope of its economic development function through Streetsense’s work, scaling resources to align with that scope will require further resources and budgetary actions. Staff recommend that the Council allocate resources as opportunities to make progress on these recommendations arise to appropriately scale the City’s economic development function in alignment with Council’s priorities and objectives.

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The resources allocated to Economic Development are an important consideration for ongoing work. The City has ongoing funding for the Economic Development coordinator role, a newly created support role for the coordinator role and economic development initiatives (Approved in the FY 2024 Adopted Budget) and some ongoing funding for limited consultant support (less than $25,000 annually).

STAKEHOLDER ENGAGEMENT
Community stakeholders, including residents and representatives from various business sectors, including restaurants, retailers, hoteliers, property owners, and others, have been engaged consistently through the City’s recent work on economic development.

Throughout the 12-month process, the Consultants engaged the City Council to ground truth findings and ultimately shape the final guiding principles and strategies.

The strategies were informed by a multi-phased process with robust stakeholder engagement:
- Field work and a tour of the City’s commercial districts and destination assets, focus group discussions with residents, business and property owners, and hoteliers, and discussions with partners, including the Chamber of Commerce, Urban Village Farmer’s Markets, and several interdepartmental city staff. Within the initial phase, the Consultants performed background research and a trends assessment.
- A diagnostic was completed and presented to the Council in March 2023, consisting of 1) a retail market assessment of regional/local competition and supply/demand 2) a business environment assessment including a tax analysis and hospitality/tourism assessment, 3) an administrative assessment which analyzed existing policy and zoning requirements and organizational capacity, and 4) a physical assessment of all study area commercial districts. - This final report was posted publicly on the City’s website in June 2023. A session for resident feedback to help identify their priorities in this comprehensive strategy was advertised through the City’s communication channels and held on June 29, 2023.

General feedback from the resident feedback session on June 29, 2023 demonstrated that neighborhood centers remain of interest among participants, with public realm signage, public art, lighting, landscaping, crosswalks, and funding sources for each as main focus/concern. Specifically, for the California Avenue area, participants expressed wanting increased tenant visibility and measures to increase safety in alleyways. Also participants expressed the need for regulatory reform though the specific types of reform were diverse.

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Participants were asked to participate in a virtual prioritization exercise to identify any recommendations in the comprehensive report they wish to prioritize, below are the results:

Recommendation(s)

1.1-1.4
involving upgrades to public and private spaces in Downtown Palo Alto, California Avenue, and neighborhood centers, supporting outdoor dining on sidewalks and within parklets, and district branding through wayfinding, signage, and art
Recommendation(s)

2.1-2.2
involving the creation of and support for District Management Entities for Downtown Palo Alto and California Avenue
Recommendation(s)

3.1-3.2
involving business retention, development, and attraction initiatives for local and small businesses
Recommendation(s)

5.1-5.2
addressing pedestrian and cycling infrastructure
Recommendation(s)

6.4 supporting and incentivizing the on-demand transit service Recommendation(s)

7.1-7.2
addressing walkability in alleyways and supporting a mural program
Recommendation(s)

8.1 supporting digital signage and wayfinding associated with downtown parking
Recommendation(s)

9.1-9.4
advocating for the regulatory reform to enable tenancy and competitiveness
Recommendation(s)

10.1-10.3
addressing the enablement of residential development in select areas of Downtown and California Avenue
Staff will continue to engage residents and businesses in meaningful dialogue to help inform and maintain the City’s economic vibrancy and through the projects and programs that will be guided by the recommendations within.

ENVIRONMENTAL REVIEW
Council action on this item is not project as defined by the California Environmental Quality Act (CEQA) because adoption of the study and its recommendations is a administrative activity that will not directly or indirectly cause physical changes to the environment. CEQA Guidelines Section 15738(b)(5). Projects and initiatives informed by this study, including but not limited to Council priorities such as carfree streets, will be brought to the Council as separate actions and include the appropriate level of CEQA analysis at that time.

ATTACHMENTS
Attachment A: Comprehensive Economic Development Strategy APPROVED BY:

Ed Shikada, City Manager
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PALO ALTO, CA —————————— ECONOMIC DEVELOPMENT STRATEGIES

PALO ALTO ECONOMIC

DEVELOPMENT

STRATEGIES
PHASE 3 DELIVERABLE

PREPARED FOR PALO ALTO, CALIFORNIA
JULY 25, 2023
Downtown Palo Alto
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ACKNOWLEDGEMENTS
STAFF
Ed Shikada, City Manager
Kiely Nosé, Assistant City Manager
Jonathan Lait, Planning and Development Services Director Brad Eggleston, Public W orks Director
Philip Kamhi, Chief Transportation Official
Ozzy Arce, Senior Transportation Planner
Nathan Baird, Parking Manager
Holly Boyd, Assistant Director, Public W orks
Amy French, Chief Planning Official
Jodie Gerhardt, Manager of Current Planning
Steve Guagliardo, Assistant to the City Manager
Sylvia Star-Lack, Transportation Planning Manager
641 S ST NW
WASHINGTON, DC 20001
STREETSENSE.COM
@REALSTREETSENSE

CITY OF PALO AL TO CITY COUNCIL
Mayor Lydia Kou
Vice Mayor Greer Stone
Council Member Pat Burt
Council Member Ed Lauing
Council Member Julie Lythcott-Haims
Council Member Greg Tanaka
Council Member Vicki V eenker

STAKEHOLDER INTERVIEWS
John Aikin, Executive Director, Palo Alto Junior Museum & Zoo Shweta Bhatnagar, Director, Government Affairs, Stanford University Andrea Boca, Director of Operations, Urban Village Farmers’ Market Michael Bordoni, Director of Asset Management,
Stanford University Real Estate
Nancy Coupal, Coupa Café
Brad Ehikian, Premier Properties
Bruce Fukuji, Founding Principal, Urban Design Innovations Sheri Furman, Palo Alto Neighborhoods
Annete Glanckopf, Palo Alto Neighborhoods
Tiffany Griego, Managing Director of Asset Management,
Stanford Research Park
Karen Holman, Director, Midpeninsula Regional Open Space District and former Mayor of Palo Alto
Karen Kienzle, Director, Palo Alto Art Center
Jamie Jarvis, Stanford Research Park
Steve Levy , Center for Continuing Study of the California Economy Ron Pardini, Executive Director, Urban Village Farmers’ Market Roxy Rapp, Founder/President, Rapp Development
John Shenk, Thoits Brothers
Terry Schuchat
Greg St. Claire, Nola’s
Chris Suarez, Sales Manager, Nobu Hotel Palo Alto
Vikram Vinjay , Former Hotel General Manager, Graduate Hotels Charlie W eidanz, Palo Alto Chamber of Commerce
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PALO ALTO, CA —————————— ECONOMIC DEVELOPMENT STRATEGIES 3 v

TABLE OF CONTENTS
01 INTRODUCTION…………………………………………………….

Purpose
Trends and Opportunities
Study Area
Process

02 DIAGNOSTIC OVERVIEW………………………………………….

Retail Market Assessment
Business Environment Assessment
Administrative Assessment
Physical Environment Assessment
03 STRATEGIES………………………………………………………….

Stakeholder Engagement, Guiding Principles and Strategy Organization At-A-Glance Strategy Recommendations
Strategy Implementation and Best Practices
641 S ST NW
WASHINGTON, DC 20001
STREETSENSE.COM
@REALSTREETSENSE
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PALO ALTO, CA —————————— ECONOMIC DEVELOPMENT STRATEGIES 5 PURPOSE
Washington D.C.-based Streetsense and Brea, California-based HdL Companies (the Consultants) were engaged in the fall of 2022 to develop market-informed economic development strategies that will ensure Palo Alto’s on-going regional competitiveness by identifying impactful public sector interventions and investments for which there is both need and consensus for action. The strategies presented herein aim to reflect the delicate ecosystem that drives the vibrancy of the City’s Downtown and commercial centers with a focus on the retail and hospitality sectors, those significantly affected by the COVID-19 pandemic and resulting hybrid work environment.

TRENDS and OPPORTUNITIES
Global and national retail trends suggest major changes to traditional retail relationships due to on-line sales, changes to the shopping experience, and hybrid work. The COVID-19 pandemic has accelerated these changes resulting in:
• Reduced demand for storefront space as use of the internet and home delivery increases in popularity;
• Smaller format retail spaces in higher quality locations due to streamlined inventory made possible by advances in technology and more sophisticated supply chain; • Changes in how tenants value the ‘flagship’ store as social media diminishes the need for a physical presence;
• Increasing resident and visitor desire for memorable experiences unable to be replicated in on-line environments;
• More demand for non-traditional business hours and locations as the former nine to five work routine is no longer the norm; and
• Reinforced neighborhood scale shopping and gathering for daily essential needs.

Notably, brick and mortar retail of various scales and offerings is here to stay but in enduring places that guarantee a strong customer base. For Palo Alto, residents are among the most affluent and educated in the region. These discerning customers have high expectations and many local and regional options for spending their time and money, which may or may not be inside Palo Alto’s borders. Significantly, retail tenants are increasingly more selective about where they decide to locate to reach that customer base. Ultimately, Palo Alto’s Downtown and commercial centers must aim to reinvent themselves to remain competitive, and Palo Alto must strive to be supportive in an effort to maintain and grow the tax base.

As such, the economic development strategies to follow will inform future resource allocation, policy and programming decisions for the City of Palo Alto and their partners to take toward achieving a balanced and competitive future.

INTRODUCTION
Downtown Palo Alto
Source: Streetsense
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PALO ALTO, CA —————————— ECONOMIC DEVELOPMENT STRATEGIES 6 STUDY AREA
The study focuses on areas within Palo Alto where there is existing concentration of retail activity and representative of the diverse scale of retail offerings found throughout the City.

The following descriptions include three categories of shopping districts according to shopping center industry classifications.

REGIONAL/SUPER-REGIONAL CENTERS
DOWNTOWN and STANFORD SHOPPING CENTER
• Most significant tax base contributors
• Face the greatest competition for visitors within the region • Must maintain "best-in-class" status to remain competitive

COMMUNITY-SERVING CENTERS
CALIFORNIA AVE and TOWN & COUNTRY VILLAGE
• Moderate tax base impacts
• Employs local promotion and marketing strategies, if any • Tend to benefit from activations that meet community interests and needs

NEIGHBORHOOD-SERVING
MIDTOWN and CHARLESTON SHOPPING CENTER
• Minimal tax base impacts
• Least affected by the COVID-19 pandemic and typically the most stable asset class • Local customer base with little need for promotion
PROCESS and METHODOLOGY
The strategies were informed by a multi-phased process with robust stakeholder engagement, starting with field work and a tour of the City’s commercial districts and destination assets, focus group discussions with residents, business and property owners, and hoteliers, and discussions with partners, including the Chamber of Commerce, Urban Village Farmer’s Markets, and several interdepartmental city staff. Within the initial phase, the Consultants performed background research and a trends assessment. A diagnostic followed consisting of 1) a retail market assessment of regional/local competition and supply/demand, 2) a business environment assessment including a tax analysis and hospitality/tourism assessment, 3) an administrative assessment which analyzed existing policy and zoning requirements and organizational capacity, and 4) a physical assessment of all study area commercial districts.

Throughout the 12-month process, the Consultants engaged the City Council to ground truth findings and ultimately shape the final guiding principles and strategies.

INTRODUCTION
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DIAGNOSTIC OVERVIEW
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PALO ALTO, CA —————————— ECONOMIC DEVELOPMENT STRATEGIES 9 RETAIL MARKET ASSESSMENT
The economic development strategies outlined herein represent a practical roadmap for public and private interventions that advance the City’s post-pandemic recovery of retail shopping districts. The following is a summary of the diagnostic conclusions that ultimately informed the guiding principles and recommended strategies. The full diagnostic can be found in the March 13, 2023 City Council Work Session Staff Report.

REGIONAL and LOCAL RETAIL COMPETITION
Regionally-serving, experience-based retail centers, including malls, power centers, and walkable downtowns and lifestyle centers, are characterized by a dominant mix of good-based retail. These retail centers attract customers from a larger regional trade area and feature a cluster of full-service restaurants and entertainment. There are five regional malls of varying quality closer to San Jose and only one traditional mall to the west, Hillsdale Shopping Center. Even with steep competition, the top performing mall in the region is Stanford Shopping Center. The region is also rich with competitive Downtown retail environments, including Downtown Menlo Park, Mountain View, Redwood City, Los Altos, and Burlingame, which also compete with malls and lifestyle centers. Locally, Downtown Palo Alto not only competes with Stanford Shopping Center but also California Avenue, a more community serving retail environment, spreading retail quite thin across the City.

Neighborhood serving retail centers are characterized by a dominant mix of Neighborhood Goods & Services (NG&S) tenants, often grocery-anchored. These retail centers primarily meet the need for convenience-based shopping trips competing on a geographically smaller scale. Grocery competition is strong throughout the region.

Big box retailers are not permitted in Palo Alto by regulation but are concentrated along the periphery of Palo Alto, cannibalizing the retail offerings within the City. Target and Costcoare particularly prevalent in the region, with nine and seven stores respectively within the studied area.

RETAIL VACANCY and RENTS
Vacancy among the six retail districts totals 243,000 square feet, or about 8% vacancy rate, as of year-end 2022. A majority of vacant space is concentrated in Downtown Palo Alto, accounting for about 88,000 square feet. California Avenue has the highest vacancy rate among all districts at 15%, accounting for 31,000 square feet.

There is about 57,000 square feet currently vacant within Stanford Shopping Center, which equates to a low vacancy of 4%, due to the mall's large size. This
vacancy is caused by smaller tenants inside the
mall rather than by the loss of an anchor. Most
importantly, Stanford Shopping Center captures
spending that might otherwise be spent in other
Palo Alto districts, especially Downtown Palo Alto,
by offering attractive co-tenancy opportunities, a
high-amenity environment, and retail-appropriate
spaces.

Retail rents in the region are high with average
asking rent at $63.52 per square foot, 130% higher
than the national average of $27.55 per square foot Source – REIS, Loopnet, Michael Baker, CoStar 2022 for malls and downtown environments. Stanford Shopping Center has the highest average asking rents in Palo Alto at just over $77.00. Town & Country Village and Downtown Palo Alto are comparable with average rents at between roughly $72.00 and $76.00 per square foot, respectively.

DEMAND
Retail demand is based on resident, employee, overnight guest, and daytime visitor spending, local and regional competition, and projected population growth. Importantly, hybrid work has reduced the demand for retail in Palo Alto by over 100,000 square feet, roughly equivalent to the amount of retail space at Midtown and Charleston Shopping Center combined. The reduction in Palo Alto's daytime population means less spending available to support retailers. That said, there is a significant development pipeline in the surrounding markets. At full build out, these projects will add 17,700 residential units, 15.8 million square feet of office/life science space, and 2,300+ hotel keys. The additional density and daytime population will improve these competitive markets, making them more compelling locations for retailers.

At this time, 2032 projections suggest that Palo Alto can support approximately 2.7 million square feet, with 15% of total retail demand in Neighborhood Goods & Services (NG&S), 22% in Food & Beverage (F&B), and 63% in General Merchandise, Apparel, Furniture, and Other (GAFO). More specifically:
• GAFO makes up more than half of demand, driven by Stanford Shopping Center, which consumes 80%, with a remaining 321,730 square feet of GAFO demand to be distributed among the other districts. • Neighborhood-serving retail demand is constrained by the presence of big box retailers just outside the City’s boundaries. However, given the population density and high spending levels, the market may be able to support additional neighborhood-serving retail on a small scale. • Food & Beverage is seeing healthy demand in fast casual serving student and employee populations, as well as full-service, sit-down restaurants.

Source: Michael Baker; Streetsense analysis 2022
Retail demand will steadily increase;
however, without intervention, demand will
not reach parity with the existing retail
supply over the next 10 years. Because of the
460,000 square feet of projected oversupply,
vacancy will continue to rise among lower
quality or poorly positioned space.

OPPORTUNTIIES
To better support Palo Alto’s retail districts, a
more balanced ecosystem of uses should be
introduced to increase daytime population,
activation, duration of stay, and spending. A
broader mix of uses including residential,
office space for sectors requiring more in-
person work, entertainment, civic, and
cultural uses are recommended.

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PALO ALTO, CA —————————— ECONOMIC DEVELOPMENT STRATEGIES 10 POST-PANDEMIC SALES TAX RECOVERY vs. SMALL BUSINESS RECOVERY Sales tax revenues are mostly back to pre-pandemic (FY 2018-19) numbers as of the end of FY 2021-22 at just 6% below. Sales tax recovery, alone, however, is not an absolute reflection of recovery and profitability. Many small, locally owned businesses, particularly restaurants, retailers, and personal service providers, were the hardest hit during the COVID-19 pandemic and are not yet back to pre-pandemic cash flow and required revenue margins. Inflation and the increasing costs of doing business, supply chain and manufacturing disruptions, rising interest rates, employment and labor shortages, the rise of online shopping, and hybrid work preferences all affect small business operations and overall recovery. Hybrid work environments are proliferating significantly in areas like Palo Alto where many small businesses previously relied upon the daytime population, primarily in the technology sector. The area encompassing the City of Palo Alto, including Stanford University and Stanford Research Park, have an average return to the office rate of 40% according to January 2023 Kastle Systems. While there is no “crystal ball”, credible experts suggest that the San Jose Metro area may not return to pre-pandemic in- office levels. The impact to small businesses and sales tax will be felt for years to come without strategic intervention.

SALES TAX ANALYSIS TAKEAWAYS
Although total sales tax revenues are bouncing back from the pandemic, the local economy is not fully recovered and key tax generating districts are experiencing uneven recovery, as follows:
• Neighborhood Serving Centers, Charleston Shopping Center and Midtown, were the least impacted during the pandemic as spending on essential needs found in grocery stores, pharmacies, and personal services remained strong. Together, they show the highest percentage of Neighborhood Goods & Services (NG&S) relative to the total sales tax revenue in those districts at 40% and 54% respectively. Because NG&S are not big sales tax producers – a grocery store’s taxable sales, for example, are roughly 25-30% of their total sales – these centers combined only made up about 1% of the City's total sales tax revenue in FY 2021-22.
• California Avenue makes up 2.2% of total sales tax in the City and is 12.8% below pre-pandemic sales in FY 2018-19 and 9% below FY 2016-17. A majority of California Avenue’s sales tax comes from Food & Beverage (F&B) at 74%, with nearly equal revenue from NG&S, General Merchandise, Apparel, Furniture & Other (GAFO), and Non-Retail establishments like business services and entertainment. This suggests an opportunity to diversify offerings to aid in sales tax recovery. • Downtown Palo Alto, which makes up 12% of total sales tax revenue in the City, was in decline prior to the pandemic and has been the slowest to recover from the pandemic with FY 2021-22 sales tax revenues 25% below pre-pandemic FY 2016-17 sales. Among the six districts, Downtown Palo Alto produces the highest value of Food & Beverage (F&B) sales tax revenue, the retail category making up 11.4% of total sales tax for the City. It also brings in the second highest GAFO sales tax at $1.1 million, second only to Stanford Shopping Center.
• Town & Country Village experienced a 21% decrease in sales tax in FY 2019-20, though the shopping

BUSINESS ENVIRONMENT ASSESSMENT
area is recovering from the pandemic. As a community serving retail center offering a fairly equal mix of NG&S and F&B, and a small amount of GAFO, Town & Country Village sales tax make up 3% of the total sales tax revenue in Palo Alto for FY 2021-22.
• Stanford Shopping Center has seen successful pandemic recovery with FY 2021-22 sales 25% above pre- pandemic FY 2016-17 sales tax revenues. It’s majority GAFO offerings contributed $5.1 million, the highest among the six districts, to the City’s 24% of total sales tax from GAFO. In total, Stanford Shopping Center makes up 25% of the City’s total sales tax revenue, mainly from retail sales.

Source: HdL Companies
$0
$1
$2
$3
$4
$5
$6
$7
FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
Millions
Sales Tax Revenues for Fiscal Years
2016-17 to 2021-22
Charleston Shopping Center Midtown
California Ave Town & Country Village
Downtown Palo Alto Stanford Shopping Center
RETAIL SALES and COMPETING CITIES
An analysis of retail sales dollar per capita (SDPC) for FY 2021/22 was performed for Palo Alto and competing cities, including Redwood City, Mountain View, Burlingame, Menlo Park, and Los Altos. Palo Alto has the lowest NG&S SDPC, even lower than Burlingame and Los Altos who bring in less NG&S sales tax revenue compared to Palo Alto. Menlo Park has the highest SDPC in the NG&S category even though Redwood City and Mountain Item 5
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PALO ALTO, CA —————————— ECONOMIC DEVELOPMENT STRATEGIES 11 BUSINESS ENVIRONMENT ASSESSMENT (cont.)
View receive a significantly higher amount of NG&S sales tax revenue. This suggests that Palo Alto residents are likely shopping for neighborhood goods and services in competing areas, a conclusion shared by the locally- serving retail competition analysis.

Palo Alto is doing better than most competing cities in bringing people to the City for F&B, and it has the highest SDPC in the GAFO category, largely due to the Stanford Shopping Center. As such, Palo Alto is likely bringing consumers from outside the area to shop for GAFO, mostly at Stanford Shopping Center, as well as non-retail sales tax producing goods and services, like auto and transportation and those from Stanford Research Park.

Source: HdL Companies
HOSPITALITY/TOURISM: LODGING, VISITORS, and OPPORTUNTIES Globally and domestically, business travel is returning to pre-pandemic levels despite hybrid work. Palo Alto’s lodging industry is recovering at the national pace and is currently approaching 2019 levels. Palo Alto’s Occupancy Rate is highest mid-week but slightly lower than either U.S. or California Average, overall. Palo Alto’s largest contributors to occupancy are medical, education, and business travelers who fill approximately 2,200 hotel rooms, including about 300 in Palo Alto’s two new Marriott properties.

International travel recovery is slow nation-wide and will continue to impact Palo Alto more than most cities.

Chinese visitors, in particular, were the largest source of international visitors to Palo Alto pre-pandemic, but China’s slow recovery lags all other major inbound traveler sources to California. Palo Alto’s largest audience sector for hospitality spending (restaurants, attractions, shopping) and tax revenue is a combination of residents and the workforce. Its next largest includes residents and workforce from neighboring Bay Area communities, such as Mountain View, Menlo Park, Sunnyvale, Redwood City, Burlingame, and Los Altos. That Source: Tourism Economics; Streetsense
said, weekend occupancy rates have
historically remained low as Palo Alto is
not a typical, overnight
tourist destination with major destination
attractions. However, there are
unique local destinations to celebrate and
promote for both domestic and extended
business travel, or “bleisure” travel.

Under-the-radar local assets, like the
Palo Alto Junior Museum & Zoo, the
Palo Alto Art Center, Stanford Theater,
and the Baylands Nature Preserve, and
the Municipal Golf Course and Airport,
could be comprehensively promoted to
attract longer visitation in the City.

Baylands Nature Preserve
Source: Streetsense
Palo Alto Junior Museum & Zoo
Source: Streetsense
Source: Streetsense, Stanford Theatre
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PALO ALTO, CA —————————— ECONOMIC DEVELOPMENT STRATEGIES 12 REGULATORY ASSESSMENT
The regulatory assessment considers, first, Palo Alto’s 2030 Comprehensive Plan as it is the primary guide for preservation and development across the City. There are three sections in the Comprehensive Plan which provide economic development directives, and which recommended strategies aim to achieve:
• Business & Economics – strive to be "business friendly“; • Land Use – Updates to the municipal code that support a "diversification of land uses", including "retail that caters to daily needs of residents"; "stimulates housing near retail"; and allows for the "conversion of non-retail commercial FAR [floor area ratio] to residential FAR, where appropriate“; and • Transportation – Improve walkability and bikability by "improving connectivity between businesses, parking and transit stops", including "public art in alleyways" to encourage walking.

To effectuate implementation of this policy guidance, the City has the tool of zoning. However, municipal zoning codes often evolve as a hodgepodge of regulatory solutions aimed at solving specific challenges at a given point in time. Although the code is periodically amended, it is often reactionary and not easily adaptable to swifter market changes. Palo Alto’s zoning code is representative of these characteristics. For example, rendering some sections of Palo Alto’s code outdated based on recent trends in retail and changing work patterns include:
• Growth in on-line shopping – retailers are increasingly using stores for local distribution, which may be restricted as “warehousing & distribution”;
• Technology advances – breweries, specialty food manufacturing and maker spaces may be restricted as “manufacturing & processing”; and
• Demographic and lifestyle – wellness and medical services may be restricted as “medical office”.

There are opportunities to make the code more “business friendly”. Downtown Palo Alto, California Avenue, and Neighborhood Centers, Midtown and Charleston Shopping Center, have between two and five zoning overlays of distinct regulations on top of base zone regulations, whereas Stanford Shopping Center and Town & Country Village only have one overlay.

ADMINISTRATIVE ASSESSMENT
The layers of regulation cause confusion among property owners, developers, and tenants when trying to understand what they are allowed to do on their property, which adds time to approval and permitting processes, increases risk, and may prevent improvements and/or occupancy entirely. It is no surprise that the commercial districts experiencing the most difficulty recovering from the pandemic and experiencing the most vacancy include Palo Alto’s two most heavily regulated environments, Downtown Palo Alto and California Avenue.

The Retail Preservation Ordinance, created in 2015 to restrict ground floor retail conversions city-wide to non- retail uses, is one example of a blunt rule that was created in response to temporary market conditions. The Ordinance was written as a response to concerns that higher paying office tenants were displacing ground floor retail, undermining Palo Alto’s retail businesses, who found it hard to compete. Market conditions at the time reflected record high commercial rental rates and low office vacancy rates at around 2.8%. In contrast, Silicon Valley’s and Palo Alto’s office market today is vastly different, with nearly 18% vacancy and 14% vacancy, respectively. With office occupancy rates not expected to fully recover to post-pandemic levels in the foreseeable future, the threat of retail space conversion to office is minimal, and the Ordinance and its geographic applicability should be reevaluated, especially in districts experiencing higher vacancy than others.

ORGANIZATIONAL CAPACITY and STEWARDSHIP
Palo Alto is well served by arts, culture, and entertainment agencies and organizations at both the city and district level, but Palo Alto’s economic development service delivery mechanisms are limited to the City and the Palo Alto Chamber, a city-wide membership organization. Destination Palo Alto, a potentially effective website for city-wide destinations, restaurants, shops, and lodging, is defunct and no longer being updated. Because the website still exists, however, people can still visit it but will not be given accurate or up-to-date information, which in turn hurts the City’s brand and does little to uplift local, small, and new businesses.

Furthermore, currently, neither Downtown Palo Alto nor California Avenue have active stewards to lead marketing, promotion, event coordination, enhanced sanitation and maintenance, or security above and beyond what the City is obligated to provide. Although suspended, there is an established charter for the Downtown Palo Alto Business Improvement District (BID). Similarly, the California Avenue Business Association/Merchants of California Avenue is defunct.

Internally, economic development is addressed across many departments as it is ingrained among many divisions, but there is only one dedicated economic development staff person among all city staff. The 2024 City Budget includes one additional full-time dedicated position constituting formation of a potential future Office of Economic Development, one that will need to grow to meet the demand for economic development efforts.

Internal partners will be key to executing programs and initiatives recommended by strategies presented herein, but more dedicated staff are needed to execute executive, administrative and operating functions, and program implementation both from a leadership and support role.

DISTRICT BASE DISTRICT OVERLAY 1 OVERLAY 2 OVERLAY 3 OVERLAY 4 OVERLAY 5 CALIFORNIA AVE CC – Community
Commercial
Retail
Preservation
R – Retail
Shopping
P – Pedestrian
Shopping
PTOD – Cal Ave
Pedestrian and
Transit Oriented
Cal Ave Parking
Assessment
District

MIDTOWN &

CHARLESTON

SHOPPING CENTER
CN – Neighborhood
Commercial
Retail
Preservation
GF – Ground
Floor
P – Pedestrian
Shopping
Special Regulations
governing proximity
to Residential

DOWNTOWN
(University Ave)
CD – Downtown
Commercial
Retail
Preservation
GF – Ground
Floor
P – Pedestrian
Shopping

DOWNTOWN
(Lytton)
CD – Downtown
Commercial
Retail
Preservation
P – Pedestrian
Shopping

TOWN & COUNTRY

VILLAGE
CC – Community
Commercial
Retail
Preservation

STANFORD SHOPPING
CENTER
CC – Community
Commercial
Retail
Preservation
Highly Regulated
Environments
Source: Streetsense
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PALO ALTO, CA —————————— ECONOMIC DEVELOPMENT STRATEGIES 13 PHYSICAL ASSESSMENT

RE-INVESTMENT LIFECYCLE
Physical attributes contributing to the look and feel of thriving commercial districts include multi-modal transportation networks that ensure equitable and safe accessibility, well-designed, pedestrian-friendly sidewalks, passageways, and gathering spaces, visibility and identification of place through thoughtful wayfinding and signage, well-maintained buildings and public spaces, and, finally, apparent overall cleanliness. The investments in such attributes over time closely correlates to a shopping environment’s growth, decline, and rebirth, or, more plainly, it’s lifecycle.

A district’s lifecycle consists of an initial capital investment followed by about 10 years of sales growth to a point at which those sales mature. This general timeframe and sales growth might fluctuate with changes endured by macro-economic conditions like recessions, online shopping, growth in competition, or unexpected events like natural disasters or pandemics. At maturity, 10 to 15 years after the initial investment, another significant investment is often required to avoid decline. Of the commercial districts studied, two are in decline: Midtown, Initial
Investment
built in 1956, has seen only periodic upgrades over
the years, and Downtown Palo Alto where the last
significant streetscape improvements to University
Avenue were in 1998. The City replaced gas and
water lines along University Avenue in 2018/2019
and followed up with cosmetic upgrades to
sidewalks, lighting, signage, landscaping, and
bulb-out repair. California Avenue, on the other
hand, falls in the middle of the lifecycle after
receiving substantial streetscape improvements in
2014 that reimagined the street as a place people
could leisurely gather and spend time.

Improvements included lane reductions with
widened sidewalks, an at-grade plaza space, new
and consistent looking lighting, bike racks, and
seating, landscaping, and art installations. Also in
the middle is Charleston Shopping Center. Having
single ownership allows more control of the
frequency with which upgrades are employed.

This shopping center does just enough for the cost-
conscious neighborhood-focused tenant base it
serves. Unsurprisingly, the larger, single-owner shopping environments, Stanford Shopping Center and Town & Country Village, have seen more regular and substantial upgrades to common areas, wayfinding and signage, lighting, access, art, and to the buildings themselves. In these instances, there is a return on investment required of shareholders, so there is motivation to keep these assets in a state of sales growth. The physical assessment of the study areas identified strengths, weaknesses, opportunities, and threats (SWOT) related to each of these critical elements. The key takeaways are as follows.

RE-INVESTMENT LIFECYLE
Source: Streetsense
The SWOT analyses revealed that Stanford Shopping Center and Town & Country Village have few needed improvements, which is a reflection of single-ownership, cohesive design, and regular maintenance and upgrades.

Most of the weaknesses challenging these centers involves pedestrian and bicycle connectivity within the surrounding public right-of-way. Districts that showed the most need for improvements were those with bifurcated ownership and/or lack of stewardship, lack of physical/visual cohesion, and need for public and private realm improvements to buildings, gathering spaces, and sidewalks. Districts in the most need for improvement and where city-led efforts could have the most potential impact include, Downtown Palo Alto, California Avenue, and Neighborhood Centers. A thorough breakdown of each district’s SWOT analysis can be found in the March 13, 2023 City Council Work Session Staff Report.

ACCESSIBILITY and CONNECTIVITY
This assessment focused on city-wide access and connectivity of transit and bike networks as these systems provide an alternative source of access to the single occupant vehicle as well as a first, last, and/or only mile link to destinations, especially for locals. There is a robust regional bus network, but there is a lack of bus redundancy in parts of the City around neighborhood serving districts. This gap is being addressed to some degree with the recently instated on-demand transit
service pilot program. While there is a
robust bicycle network, some critical
routes connecting commercial districts
with neighborhoods and other
destinations lack adequate signage and
lane markings. Lastly, there is no
micromobility program for shared
bicycles and/or scooters, which are
now common and widely used services
for people of vastly ranging ages and
socioeconomic status.

DISTRICT SWOT ANALYSES
For each commercial district, strengths
and weaknesses related to access and
connectivity, parking, wayfinding and
signage, sidewalks and street furniture,
gathering spaces, and alleyways were
initially assessed and evaluated further
as either an opportunity, or element
that could be exploited to its
advantage, or a threat, an element that
could be troublesome if unaddressed.

Source: Streetsense
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PALO ALTO, CA —————————— ECONOMIC DEVELOPMENT STRATEGIES 14 PALO ALTO, CA —————————— ECONOMIC DEVELOPMENT STRATEGIES Midtown
Source: Streetsense
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PALO ALTO, CA —————————— ECONOMIC DEVELOPMENT STRATEGIES 15 03

STRATEGIES
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PALO ALTO, CA —————————— ECONOMIC DEVELOPMENT STRATEGIES 16 STAKEHOLDER INPUT
Stakeholder input was garnered through numerous in-person and virtual interviews and focus group discussions with residents, business and property owners, and partners, bi-weekly meetings with city staff, and regular engagement with City Council, including the March 13, 2023 Council Work Session. The Consultants presented findings and facilitated informative discussions at critical points of the three-part process. Stakeholder feedback focused primarily on the following topics:
• Obtaining an understanding of the physical, operational, and tenant characteristics of local and regional competition;
• Enhancing accessibility to, from, and within commercial districts, with a particular interest in first and last mile transportation options and parking accessibility and affordability;
• Supporting lower price point neighborhood serving retail options primarily for residents; and
• Addressing vacancies, tenant mix, and quality of outdoor spaces in Downtown Palo Alto and California Avenue.

GUIDING PRINCIPLES
As a result of the stakeholder engagement process and the diagnostic, three guiding principles were identified. Moving forward, in partnership with other agencies, organizations, and private property and business owners, city staff should engage in critical regulatory reform, physical and accessibility improvements, programming, and marketing and branding strategies to ensure Palo Alto’s commercial districts maintain competitiveness. Guiding principles include the following:

1. Reinforce each district's distinct scale and offerings by stabilizing and reinforcing Downtown as a destination, embracing California Avenue as a community and neighborhood serving place, and supporting existing Neighborhood Centers.

2. Improve accessibility by embracing walking and biking solutions to/from/within all of the City's commercial districts and addressing parking policies and systems.

3. Adopt policies that reflect changing market conditions by easing the regulatory burden for businesses, removing outdating restrictions that create hurdles to tenancy, and focus retail and retail-like uses in places where they are market-supported.

Source: Streetsense
* Note: While referenced throughout, an Office of Economic Development is not currently formalized as an Office.

STAKEHOLDER INPUT, GUIDING PRINCIPLES, and STRATEGIES

RECOMMENDED ADMINISTRATIVE CAPACITY
Important for implementation of the following strategy recommendations is adequate internal administrative capacity to facilitate responsibilities and to track and report progress. Recommended is formation of a scaled Office of Economic Development with adequate resources from a staffing and budget perspective to execute the strategy recommendations of this Plan*. Also recommended is the creation of an Interagency Economic Development Committee, led by the Office of Economic Development, and consisting of key partners and city staff who will champion, advance, and track implementation of recommended strategies herein over the next five-year period.

This Committee should meet at least quarterly as an internal group and present progress to City Council on an annual basis. This Committee will be responsible for consistently tracking progress of recommendation actions outlined in this Plan using prescribed methods, including data metric tracking software, Customer Relations Management (CRM), surveys, and other qualitative and quantitative means. The Committee should discuss and evaluate budget and resource needs on an on-going basis and make recommendations and requests to City Council, as needed.

Establishing this administrative entity from the outset communicates commitment to executing the strategies herein and ultimately the health of Palo Alto’s Downtown and commercial districts. Further, consistently reporting publicly to City Council ensures interagency accountability, reinforcing community trust in the process and means by which the envisioned outcomes are achieved.

STRATEGY ORGANIZATION
The following strategies are accompanied by one or more distinct actions with associated champions, the entity recommended to lead implementation efforts, and partners and city staff who are helpful as support. Each strategy and associated actions apply to Downtown Palo Alto, California Avenue, Neighborhood Centers, or a combination thereof, and may also apply to other retail areas in the City as the studied districts are representative, not exclusive. Each recommendation is explained with a summary of why it is critical and how it aligns with existing city efforts, if applicable. Lastly, most are validated with a best practice example from around the country. The following At-A-Glance Recommendations inform prioritization with classifications:
• Tier 1: In support/coordination of on-going city efforts • Tier 2: New near-medium term and low-medium budget
• Tier 3: New long-term and medium-high budget
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PALO ALTO, CA —————————— ECONOMIC DEVELOPMENT STRATEGIES 17 GUIDING PRINCIPLE 1: Reinforce each district's distinct scale and offerings by stabilizing and reinforcing Downtown as a destination, embracing California Avenue as a community and neighborhood serving place, and supporting existing Neighborhood Centers.

AT-A-GLANCE STRATEGY RECOMMENDATIONS
Tier 1: In support/coordination of on-going efforts
01 Upgrade highly used and visible public and private
realm spaces to promote district definition and
encourage activation.

1.1 Redesign University Avenue streetscape to provide wider sidewalk space for walking, gathering, and outdoor dining through a construction project to be funded by property owners.

1.2 Continue exploring the Car-Free Streets Initiative for California Avenue and Ramona Street to optimize a balanced future.

2.2 Formalize a DME, like the California Avenue Business Association/Merchants of California Avenue and encourage membership of a California Main Street Program. 03 Pursue business retention, development, and
attraction initiatives for local and small businesses.

3.1 Create a public-private small and local business incubation and vacant storefront program connecting landlords experiencing vacancy with small and local businesses seeking brick- and-mortar space and local artists to aid in activation.

3.2 Consider allocating funds towards a shop local eGift card program to incentivize patronage of local business.
04 Promote tourism city-wide to increase longer
business "bleisure" travel and grow hotel weekend
occupancy rates with non-business travel.

4.1 Provide Palo Alto Chamber of Commerce the resources to promote tourism city-wide to accurately highlight and consistently update Palo Alto's destination offerings, hotels, restaurants, events, and ways to get around in an easy-to-use online platform and app.

Tier 2: New near-medium term and low-medium budget
Tier 3: New long-term and medium-high budget
Recommendation Action By Priority
GUIDING PRINCIPLE 1
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PALO ALTO, CA —————————— ECONOMIC DEVELOPMENT STRATEGIES 18 AT-A-GLANCE STRATEGY RECOMMENDATIONS
Tier 1: In support/coordination of on-going efforts
05 Fix broken pedestrian and cycling links to increase
accessibility to, from, and within commercial
districts.

5.1 Include more signage, wayfinding and bicycle lane markings along critical bike routes to aid safe and easy travel to/from shopping districts by biking and walking.

5.2 Include mid-block pedestrian crossings and/or raised traffic tables where desire paths lack safe crossings and deemed safe to do so.

5.3 Consider removing free rights at major intersections to aid in safe intersections for all modes of transport.
06 Invest in first and last mile transportation options that increase equitable access to, from, and within
commercial districts.

6.1 Incorporate a micro-mobility (bike and/or scooter share) program that engages all shopping districts and destinations across the City.

6.2 Participate in advanced regional micro-mobility options. 07 Reinforce walkability within districts to encourage
longer duration of stay and activation.

7.1 Select specific public alleyways with high visibility and at least 20 feet in width to improve for increased permeability and place-making.
08 Update and simplify parking policies, systems, and
signage to ease navigation to and use of parking.

6.3 Incentivize e-mobility using local resources.

6.4 Support and incentivize on-demand transit service and ridership through promotional programming within shopping districts.

7.2 Create a mural competition or program for select side and rear building facades garnering the most visibility from main streets.

7.3 Limit new curb cuts and aim to remove overly redundant curb cuts with any future redevelopment along public right of way of neighborhood centers.

Tier 2: New near-medium term and low-medium budget
Tier 3: New long-term and medium-high budget
Recommendation Action By Priority
GUIDING PRINCIPLE 2: Improve accessibility by embracing walking and biking solutions to/from/within all of the City's commercial districts and addressing parking policies and systems.

GUIDING PRINCIPLE 2
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PALO ALTO, CA —————————— ECONOMIC DEVELOPMENT STRATEGIES 19 AT-A-GLANCE STRATEGY RECOMMENDATIONS
Tier 1: In support/coordination of on-going efforts
09 Streamline, update and/or remove unnecessary
use restrictions and pursue regulatory reform to
enable tenancy and competitiveness.

9.1 Consider removing or consolidating zoning overlays, incorporating an at-a-glance permitted use table and design standards, and an interactive online map with quick links to relevant regulations.
10 Grow the market by enabling residential
development in select areas of Downtown Palo Alto
and California Avenue.

10.1 Consider increasing allowable height and floor area ratio (FAR) to accommodate residential in mixed-use projects..

9.2 Consider amending Section 18.76.20, Architectural Review, of the municipal code to enable more over-the-counter approvals for minor changes.

9.4 Enable growth in Neighborhood Goods and Services along California Avenue by updating the Formula Retail Ordinance and easing use restrictions on in-demand neighborhood serving uses that are currently heavily regulated or prohibited.

10.2 Allow exclusively residential projects, including the ground floor where currently restricted in the California Avenue district.

10.3 Prioritize residential development on underutilized property as identified in the 2023-31 Housing Element.

Tier 2: New near-medium term and low-medium budget
Tier 3: New long-term and medium-high budget
Recommendation Action By Priority
GUIDING PRINCIPLE 3: Adopt policies that reflect changing market conditions by easing the regulatory burden for businesses, removing outdating restrictions that create hurdles to tenancy, and focus retail and retail-like uses in places where they are market-supported.

GUIDING PRINCIPLE 3
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PALO ALTO, CA —————————— ECONOMIC DEVELOPMENT STRATEGIES 20 01

GUIDING PRINCIPLE
→ Reinforce each district's distinct scale and offerings by stabilizing and reinforcing Downtown as a destination,
embracing California Avenue as a community and
neighborhood serving place, and supporting existing
Neighborhood Centers.

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PALO ALTO, CA —————————— ECONOMIC DEVELOPMENT STRATEGIES 21 California
Avenue
Neighborhood
Centers

RECOMMENDATIONS
Upgrade highly used and visible
public and private realm spaces to
promote district definition and
encourage activation.
01 ACTIONS

1. Redesign University Avenue streetscape to
provide wider sidewalk space for walking,
gathering, and outdoor dining through a
construction project to be funded by property
owners.

2. Continue exploring the Car-Free Streets Initiative
for California Avenue and Ramona Street to
optimize a balanced future.

ESTIMATED TIME + COST
High (>$100k)
Short (<1 year) Long (>5 years)
Low (<$50k)

WHY THIS MATTERS
The streetscape plays a significant role as the foundation of the “main street” environment, the common infrastructure upon which many businesses and properties rely, in attracting tenants, visitors, and spending. People ultimately want to visit places that are safe, clean, designed with a comfortable human scale, and rich with texture and things to do and see. When a place can support critical activation in mass, businesses, visitors, and spending follow.

University Avenue is an established retail main street forming the heart of Downtown Palo Alto. Although it saw underground infrastructure upgrades and cosmetic improvements in 2018/2019, the last major street design considerations were completed more than 25 years ago. Its physical design and condition is declining at the same time as it competes for both tenants and customers with many other high-quality local and regional options. California Avenue and Ramona Street were both closed to cars during the pandemic and are currently being evaluated through the Car-Free Streets Initiative. Both have different street designs and dimensions, level of improvements, opportunities, and challenges, but both have played a significant role in business retention. Their future design and functionality will absolutely impact the business environment.

In either case, the street widths are ideal for accommodating many uses and functions from two-way multi-modal traffic, efficient on-street parking, areas for entertainment, and wide sidewalks for walking, window shopping, gathering, and outdoor dining in a tree-lined and activated built environment. The COVID-19 pandemic tested many uses of the existing right-of-way, its programmatic flexibility, and the role it can play in business retention. Now, there is an opportunity to examine what works well in balancing the many roles of these important and iconic public spaces, including their part in economic resiliency among competing main street environments.

RESOURCES and HOW IT’S DONE
This effort aims to support the University Avenue Streetscape Project being led by the City’s Public Works Department and the Car-Free Streets Initiative being led by the Office of Transportation. With support of the Office of Transportation, the Office of Economic Development, and Planning & Development Services, critical design improvements needed to compete with other main street environments comparable in scale can be comprehensively addressed through the on-going public processes. Strong urban design features including multi-purpose spaces with easy

DISTRICTS
Downtown
Palo Alto

CHAMPION
Public Works

SUPPORT
Office of Economic Development
Office of Transportation
Planning & Development Services
Property Owners
Source: ennistx.com
transition for small and large events and markets will support businesses and help the streets stand out from the competition. Each street will need to consider the unique needs of the district as well as their scale among each other. University Avenue, for example, will likely function differently than California Avenue and Ramona Street due to its scale and prominence as a regionally serving district. Construction funding sources, including adjacent private property owners for University Avenue, will need to be identified and considered upon final design approval.

KEY PERFORMANCE INDICATORS and OUTCOMES
The successful outcome will be lively streets where people and businesses easily use the public right-of-way for many purposes to the extent necessary to ensure economic prosperity. A lower vacancy rate will be partially due to successful street designs that welcome everyone and could be measured through Certificate of Occupancy tracking.

BEST PRACTICE: DALLAS STREET, DOWNTOWN ENNIS, TX
Upon approval of the Downtown Master Plan, which identified 33 catalyst projects for downtown revitalization, the City of Ennis secured $11 million in public and private capital to fund infrastructure and streetscape improvements along it’s main street, Dallas Street, several secondary streets, and
alleyways. Included improvements were
underground infrastructure upgrades
(power, water, sewer, combined grease
traps, and trash collection), removal of
steps and curbs to create seamless
transitions from storefront to street, and
conversion of all on-street angled parking
to parallel parking to widen sidewalk space
for pedestrian maneuvering and
gathering/seating, canopy street trees,
landscaping, and lighting with integrated
wayfinding/signage/branding, public wi-fi,
and sound system. Upon implementation,
the City saw an increase in applications for
Façade Restoration and Historic
Preservation Grants. Of the buildings that
have renovated using the grants, their
taxable value has more than tripled with a
5:1 private investment to grant value.

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PALO ALTO, CA —————————— ECONOMIC DEVELOPMENT STRATEGIES 22 “We were able to revitalize Dallas Street and reclaim it as the heart of our City.”
– Marty Nelson, City Manager, Ennis, Texas
Source: Map data ©2013 Google, Dallas Street, Ennis, Texas – Pre-renovation Source: Dallas St. / Ennis, TX | Economic Development Corp. (ennistx.com) Source: ennistx.com Source: ennistx.com
Source: ennistx.com
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PALO ALTO, CA —————————— ECONOMIC DEVELOPMENT STRATEGIES 23 California
Avenue
Neighborhood
Centers

RECOMMENDATIONS
Upgrade highly used and visible
public and private realm spaces to
promote district definition and
encourage activation.
01 ACTIONS

3. Support outdoor dining and gathering options on
sidewalks and within on-street parklets by:
a. Allowing as-of-right merchandise display,
benches, bistro tables, and signage within two
feet of any storefront within the store’s
frontage.
b. Creating a consolidated, user-friendly resource
that includes existing guidelines and standards
for street activation, and the parklet standards,
once complete.

ESTIMATED TIME + COST
High (>$100k)
Short (<1 year) Long (>5 years)
Low (<$50k)
WHY THIS MATTERS and HOW IT’S DONE
Street activation and vibrancy relies on business spill over into the public right-of- way. Unique signage, merchandise displays, seating, artwork, and potted plants all catch the attention of the passersby and propel their interest from one unique environment to another within the district.

Downtown Palo Alto and California Avenue already perform well with food and beverage, from a tax revenue perspective, but these and other small businesses could use the associated time and money for other things burdening their on-going success, like the increasing costs of doing business and employee retention. Making it easier for businesses to activate the street aids in their individual economic resiliency and the entire district’s. The public sector’s role should, therefore, be to guide safe, easy, and effective private sector activation of the public right-of-way.

One way is to allow easy to move furniture, like bistro tables, merchandise displays, and A-frame signs by-right within two feet of the storefront for the extent of the establishment’s frontage. Most, if not all, sidewalks in Downtown Palo Alto and California Avenue are large enough to accommodate this type of free encroachment without compromising adequately clear paths for walking and ADA compliance.

The business would be responsible for bringing the items indoors after hours.

Further, consolidating the street activation guidelines and standards and the soon to be completed parklet standards into one user-friendly resource will make it much easier for tenants and owners to know what they are permitted to do in the public right-of-way, with or without a permit, quickly and easily without fear of citation.

With heightened education and awareness, code enforcements’ need to cite is lessened, opening up resources for other priorities.

KEY PERFORMANCE INDICATORS and OUTCOMES
With more by-right areas for activation and a more streamlined resource of activation standards and guidelines, more businesses should be seen proactively engaging the street, more people should be frequenting establishments with activation, and citations for incompliance should decrease over time.

RESOURCES
The City’s Public Works Department should lead this effort with support of the Office of Transportation, Planning & Development Services, and the Office of Economic Development, as needed. Upon Council approval, District Management Entities should aid in educating property and business owners of the resource.

DISTRICTS
Downtown
Palo Alto

CHAMPION
Public Works

SUPPORT
Office of Economic Development
Office of Transportation
Planning & Development Services
District Management Entities
Source: Map data ©2022 Google, Greenwich Ave., New York, NY Source: Open Storefronts (nyc.gov)
BEST PRACTICE: NEW YORK CITY OPEN STOREFRONTS

PROGRAM
New York City’s Open Storefronts Program includes easy to understand diagrams identifying areas for by-right activation along with straightforward siting criteria that ensures clear walking paths and unobstructed public facilities like fire hydrants. It also simply describes eligible uses, including retail trade, food service, repair stores, personal care services, and dry-cleaning and laundry services. According to a 2022 study prepared by the NYC Departments of Transportation and Finance and Bloomberg Associates, restaurants and bars along open streets, averaged sales 19% above their pre-pandemic baseline while near-by control corridors were 29% below.

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PALO ALTO, CA —————————— ECONOMIC DEVELOPMENT STRATEGIES 24 California
Avenue
Neighborhood
Centers

RECOMMENDATIONS
Upgrade highly used and visible
public and private realm spaces to
promote district definition and
encourage activation.
01 ACTIONS

4. Invest in cohesive district branding through
wayfinding, signage, public art, and gateway
features within the district and along the district
boundaries to better define and announce the area
as a collective destination. For Neighborhood
Centers, encourage public art, like murals and
other community-centered installations.

ESTIMATED TIME + COST
High (>$100k)
Short (<1 year) Long (>5 years)
Low (<$50k)

WHY THIS MATTERS
District identity and cohesion in the built environment is essential to the active promotion of a group or collection of uses, events, spaces, and buildings. A unified identity can be expressed consistently in the physical realm through district defining features like gateway features at major entrances and exits of the district, public art, wayfinding, and signage. Gateway features and public art express the unique, local culture while district branding incorporated into wayfinding, signage, website, and apps offer quickly recognizable identification that reassures visitors and tenants of where they are, what to expect, and overall customer awareness.

Outside of the thresholds created by the train stations in both Downtown Palo Alto and California Avenue, there are few gateway features, announcement of arrival or exit from the districts, or cohesive and consistent district branding. There are several highly visible blank walls in California Avenue and Downtown Palo Alto that could host large, district defining murals. As a neighborhood center, Midtown could benefit greatly from more district definition and announcement at either end and along the Middlefield right-of-way. There is potential to incorporate public art and cohesive branding on banners or signage on light poles and bus shelters, for example. Blank walls in neighborhood centers are also wonderful opportunities to incorporate locally sourced murals that tie back to the surrounding neighborhoods.

RESOURCES and HOW IT’S DONE
The best-case scenario for Downtown Palo Alto and California Avenue is for the District Management Entities (DMEs) to champion such efforts (reference Recommendation 2). They would raise funds to hire a branding consultant to develop a branding campaign to include physical and digital products. The DMEs should work closely with the City’s Public Works Department to identify locations in the public right-of-way appropriate for installations. The DMEs would also be the best stewards to champion a public art program or competition in partnership with Palo Alto Arts & Culture Organizations and independent local artists to advance local artists’ work in prominent public areas and select, volunteer private properties.

Funding could be garnered through the California Arts Council in partnership with Palo Alto Arts & Cultural Organizations. Public art within the California Avenue District should consider the California Avenue Public Art Plan.

In the event the DMEs are unable to form or organize in a timely manner, the Office of Economic Development (OED) could serve as a temporary steward for each district to facilitate both a branding campaign and a public art program or

DISTRICTS
Downtown
Palo Alto
Source: Center City District | Signs & Banners (centercityphila.org) competition on public and private property. The OED would partner with the Public Works Division, Palo Alto Arts & Culture Organizations, and property owners to identify ideal public and private property locations and secure funding.

BEST PRACTICE: CENTER CITY DISTRICT (CCD)
PHILADELPHIA, PA WAYFINDING and BRANDING
The CCD, a business improvement district, the Central Philadelphia Development Corporation (CPDC), and the Center City District Foundation (CCDF) work together to enhance downtown Philadelphia’s economic competitiveness through a number of public improvement projects and maintenance, including colorful, highly visible, and easily recognizable wayfinding and signage provided on every corner and park located within the CCD to orient and direct residents and visitors.

CHAMPION
District Management
Entities or Public
Works & Office of
Economic Development

SUPPORT
Palo Alto Arts & Culture
Organizations
Property Owners
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PALO ALTO, CA —————————— ECONOMIC DEVELOPMENT STRATEGIES 25 salary for a coordinator to get the Association up and running using the Main Street Program as a framework.

BEST PRACTICE: DOWTOWN SAN LUIS OBISPO, CA
Downtown San Luis Obispo is managed by Downtown SLO, a non-profit, consisting of fee-paying businesses within a defined Business Improvement Area, voluntary members, other organizations, residents, and visitors. They pride themselves as the advocate of Downtown offering events, like Concerts in the Plaza and farmer’s markets, as well as enhanced maintenance, beautification and public art programs, tree protection, and homeless outreach. They have a clean and easy to navigate website with easily recognizable branding which serves as a platform for district promotion.

They also publish an annual report implying a level of tracking and analysis expertise and operational capacity. They are an accredited California Main Street which allows access to a network of additional resources, programs, and regional partnerships.

California
Avenue
Neighborhood
Centers

RECOMMENDATIONS
Encourage the creation of and support
District Management Entities (DMEs)
for district promotion, programming,
and increased maintenance.
02 ACTIONS

1. Create a task force to explore successful regional
DMEs of various scales and structures to inform
an appropriate DME for Downtown Palo Alto, one
that enables property and business owners to
advocate and act (with resources) on their own
behalf.

2. Formalize a DME, like the California Avenue
Business Association/Merchants of California
Avenue and encourage membership of a
California Main Street Program.

ESTIMATED TIME + COST
High (>$100k)
Short (<1 year) Long (>5 years)
Low (<$50k)

WHY THIS MATTERS
District Management Entities (DMEs) are organized groups of merchants and /or property owners that collectively and autonomously decide how to best promote, program, and maintain their district beyond base city services. Importantly, publicly sanctioned DMEs like Business Improvement Districts (BIDs) collect assessments from stakeholders that provide sustainable annual resources for things like events, marketing, promotion, enhanced cleaning and safety, etc. Their non-profit status also enables fundraising through philanthropic and corporate grants. In some ways, these organizations are akin to a Shopping Center or Mall Management Company funded through a Common Area Maintenance (CAM) charge that is often folded into a businesses lease. Downtown currently has a BID that was formed in 2004 with a budget of approximately $200k, but the organization has been suspended since 2021 and a number of stakeholders have mixed feelings about reinstating it.

Several competing Downtowns in the region are managed by DMEs, whether through a BID or other non-profit association, such as a State-sanctioned “Main Street” program. To remain competitive, Downtown Palo Alto has a particular need to increase maintenance of the public realm beyond what the City provides, including, but not limited to, sidewalk power washing, trash pick-up, and removal of broken or unused news stands. It needs regular programming, events, large and small, and promotion to draw crowds and reestablish its footing as a regional destination. California Avenue could also benefit from a DME for district promotion and regular programming beyond what is currently provided on a neighborhood scale.

RESOURCES and HOW IT’S DONE
An exploratory task force consisting of downtown property owners, merchants, Palo Alto Chamber of Commerce staff, and city staff should be created to inform the right approach for a DME in Downtown Palo Alto. This should begin by visiting other successful BIDs, including Redwood City and San Luis Obispo. Although currently suspended, Downtown Palo Alto’s BID exists and could be reinstated if it were determined as a recommended path forward by the task force.

There is a defunct California Avenue Business Association/Merchants of California Avenue that could be reinvigorated and supported by becoming a member of a California Main Street Program which offers training, access to resources, partnership opportunities, and best practices. The City could provide a three-year grant that decreases in amount every year to help the Association hire and provide a

DISTRICTS
Downtown
Palo Alto

CHAMPION
Office of Economic
Development
California Avenue
Merchant’s Association

SUPPORT
Downtown property owners
Palo Alto Chamber of
Commerce
Notably, fees contributed by property owners account for only 19% of the BID organization's $1.2 million budget. The assessment fees are augmented by earned income and contributions enabled by the organization's non-profit status. One example of earned income includes a 17-day roller rink installation that raised $34k in sponsorships and sold 1,524 tickets. The benefits of well-run BIDs include leveraged funds significantly beyond that collected by the BID assessment.

Downtown San Luis Obispo Annual Income (2022)
Source: Downtown SLO Annual Report, 2021-2022
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PALO ALTO, CA —————————— ECONOMIC DEVELOPMENT STRATEGIES 26 California
Avenue
Neighborhood
Centers

RECOMMENDATIONS
03 ACTIONS

1. Create a public-private small and local business
incubation and vacant storefront program
connecting landlords experiencing vacancy with
small and local businesses seeking brick-and-
mortar space and local artists to aid in activation.

2. Consider allocating funds towards a shop local
eGift card program to incentivize patronage of
local business.

ESTIMATED TIME + COST
High (>$100k)
Short (<1 year) Long (>5 years)
Low (<$50k)

WHY THIS MATTERS
Retail vacancy across the six districts studied is 8%, with Downtown Palo Alto and California Avenue experiencing the highest vacancies, 10% and 15% respectively.

Vacant storefronts erode market confidence, especially if the storefronts appear inactive for extended periods of time. It then becomes difficult for the area to attract quality tenants at asking rents, which may be justifiably difficult for landlords to lower considering increasing costs, interest rates and loan and/or investor obligations unique to their property.

The Consultant advises against a vacancy tax. The reasons behind vacancies are often numerous and multi-faceted and often related to conditions entirely beyond the control of a property owner. Additionally, in cities where such taxes have been levied, hardship exemptions are legally required and are not uncommon, creating yet another administrative hurdle for owners who may already be struggling.

Furthermore, the tax itself may simply become a new cost of doing business in Palo Alto, one that does not meaningfully change behavior or have an impact on the overall vacancy rate.

Alternatively, there are opportunities to address vacancies through strategies that are more “carrot” than “stick” – eliminating hurdles to market entry and supporting both temporary and permanent business activity in vacant spaces – which requires a partnership, rather than adversarial role, with landlords.

RESOURCES and HOW IT’S DONE
One way to encourage tenancy of vacant retail spaces while also supporting, growing, and retaining local businesses is to develop a public-private small and local business incubation and vacant storefront program to connect property owners experiencing vacancy with small businesses looking to test or expand their business in a brick-and-mortar location in a temporary (three to six months) or long-term format. This program could be developed by the Office of Economic Development in partnership with District Management Entities (DMEs) and/or district property owners, Palo Alto Chamber of Commerce, and the Urban Village Farmer’s Market Association (UVFM), a Bay Area non-profit and ambassador for local farmers and small businesses operating 10 regional farmer’s markets.

The UVFM has organically provided incubation space for small and local businesses where their products are market tested. The farmer’s markets in the California Avenue district organized, curated, and run by the UVFM are well attended, and tent

DISTRICTS
Downtown
Palo Alto

CHAMPIONS
Office of Economic
Development (Action 1)
Palo Alto Chamber of
Commerce (Action 2)

SUPPORT
District Management Entities
and/or Property Owners
Urban Village Farmer’s
Market Association (UVFM)
Palo Alto Arts & Culture
Organizations
space is in high demand. Often successful farmer’s market vendors launch from their humble tent environment to a brick-and-mortar space located somewhere in the region.

There is opportunity here to aid in retaining those market tested businesses within Palo Alto and even the districts they derived.

To aid in making the connection between property owners and businesses, the program will need to engage the UVFM and also reach independent entrepreneurs with services critical to ensuring business success and prolonged tenancy. The program will need to offer financial and technical assistance addressing leases, insurance, permitting, interior finish out, exterior improvements, including store front design and installation, scalable business plan development, and assistance navigating licensure. Processing applications, managing the program, facilitating connections, and educating all parties involved will need to be thoughtfully assigned among all supporting partners.

The program could also consider storefront activation between leases through art displays by local artist either through a grant or competition in partnership with Palo Alto Arts & Culture Organizations (reference Recommendation 1.4). It could also encourage temporary installation of district branding, once complete (reference Recommendation 1.4), in windows to market the district. This is particularly important in Downtown where regional competition for destination experiences is high.

Lastly, to support sales through spending while the daytime population is restored (reference Recommendations 9 and 10), it would be advantageous to follow the small and local business incubation and vacant storefront program with a shop local campaign to entice support sales. The Palo Alto Chamber of Commerce could champion development and execution of a shop local eGift card program to incentivize patronage of local businesses at no cost to businesses. The City of Upland, CA (population 79K) saw over $1.6 million in card redemptions at local participating businesses, and the City of Angels Camp (population is 3,836) brought in over $56K with an eGift program. Funding for program development, likely using an established eGift card service, and execution would come from the City through a budget approval process.

KEY PERFORMANCE INDICATORS and OUTCOMES
These programs should result in fewer vacancies, more consistent street activation, increased tax revenue, and more local and small businesses in Palo Alto’s retail districts. All can be evaluated through tenant and property owner surveys, foot traffic tracking via third party programs (i.e. Placer.ai), and Certificate of Occupancy tracking.

Pursue business retention,
development, and attraction initiatives
for local and small businesses.

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PALO ALTO, CA —————————— ECONOMIC DEVELOPMENT STRATEGIES 27 Source: Cult-favorite pastry purveyor finally
opens first Oakland bakery (sfgate.com)
Source: Urban Village Farmer’s Market – Starter Bakery
Source: Vacant to Vibrant (vibrantsf.org)
BEST PRACTICE: VACANT TO VIBRANT

PROGRAM, SAN FRANCISCO, CA
Vacant to Vibrant, is a city-funded program of SF New Deal and in partnership with the San Francisco Office of Economic and Workforce Development. It aims to bring economic
recovery to downtown San Francisco through pop-up
activation of vacant spaces with small local businesses and art.

SF New Deal will provide activators with grants ranging from $3,000 to $8,000 and technical, marketing, permitting,
compliance, and operations assistance. Activators also receive three months of free rent through the program. Participating property owners will be provided up to $5,000 from SF New Deal to cover tenant improvements and utility expenses, marketing material, permitting assistance, and one primary tenant. BEST PRACTICE: UVFM LOCAL BUSINESS

RETENTION, STARTER BAKERY, OAKLAND, CA
Starter Bakery launched in 2010 from UVFM’s Temescal
Farmer’s Market in Oakland. With UVFM support, the business successfully expanded in 2023 into a brick-and-mortar space within one mile of the market in which it formed.

CRUZ, CA
As a pilot program through the Santa Cruz Economic
Development Department, Downtown Pops! aims to lower the barrier to entry for businesses looking to open in brick-and- mortar locations and reduce risk for property owners to lease to new tenants during this time of economic recovery. The program involves the City entering a master lease with a commercial property owner experiencing vacancy, provides a guaranteed minimum rent, and sub-leases the space temporarily, up to six months, to a business with a lease term set at 5% of monthly sales.

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PALO ALTO, CA —————————— ECONOMIC DEVELOPMENT STRATEGIES 28 California
Avenue
Neighborhood
Centers

RECOMMENDATIONS
Promote tourism city-wide to increase
longer business "bleisure" travel and
grow hotel weekend occupancy rates
with non-business travel.
04 ACTIONS

1. Provide Palo Alto Chamber of Commerce the
resources to promote tourism city-wide to
accurately highlight and consistently update Palo
Alto's destination offerings, hotels, restaurants,
events, and ways to get around in an easy-to-use
online platform and app.

ESTIMATED TIME + COST
High (>$100k)
Short (<1 year) Long (>5 years)
Low (<$50k)

WHY THIS MATTERS
Palo Alto’s largest contributor to hotel occupancy are medical, education and business travelers who fill approximately 2,200 hotel rooms mostly on the weekdays with Tuesday night occupancy leading the week at 80.4%. Friday, Saturday and Sunday occupancy dips to between 60-70%, suggesting opportunities to encourage business travelers to stay longer and support higher weekend occupancy rates with non-business travelers, including regional residents and day- trippers.

Growing “bleisure” and non-business traveler spending will require recasting Palo Alto’s offerings and exploring opportunities to improve the marketing of restaurants, destinations, like the Palo Alto Junior Museum & Zoo, the Palo Alto Art Center, Stanford Theater, and the Baylands Nature Preserve, the Municipal Golf Course and Airport, the Foster Museum, the Museum of American Heritage, and more, and events, including those associated with Stanford University (graduation, sports events, etc.). When paired together, Palo Alto’s offerings could warrant more than a weekend stay. However, the current Destination Management Organization (DMO), Destination Palo Alto, is defunct and no longer updating their website.

Therefore, it’s recommended the Destination Palo Alto website be removed and replaced or updated to promote tourism city-wide.

RESOURCES and HOW IT’S DONE
The Office of Economic Development should aid in securing funding for the Palo Alto Chamber of Commerce to hire a consultant to create a user-friendly website and app to promote tourism city-wide that accurately highlights Palo Alto's destination assets, hotels, restaurants, events, and travel options (including micromobility programs referenced in Recommendation 6) with a business directory, itineraries, photography, and business owner interviews. The website should be managed and consistently updated by the Chamber.

BEST PRACTICE: VISIT LOS GATOS, LOS GATOS, CA
Visit Los Gatos is an elegantly simple, yet informative website created in partnership with the Los Gatos Chamber of Commerce connecting residents and visitors to the City (population just under 34,000) with restaurants, bars, shopping, hotels, events, and places to visit. What’s more is it provides curated itineraries that could fill a day, a weekend, or longer for people of many interests, ages, and abilities. It highlights all that should and can be celebrated and visited in the City, big and small, from winery tours to city parks, all with a simple compilation that truly keeps the many different users in mind.

DISTRICTS
Downtown
Palo Alto

CHAMPION
Palo Alto Chamber of
Commerce

SUPPORT
Office of Economic
Development
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PALO ALTO, CA —————————— ECONOMIC DEVELOPMENT STRATEGIES 29 02

GUIDING PRINCIPLE
→ Improve accessibility by embracing walking and biking solutions to/from/within all of the City's commercial districts and addressing parking policies and systems.

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PALO ALTO, CA —————————— ECONOMIC DEVELOPMENT STRATEGIES 30 California
Avenue
Neighborhood
Centers

RECOMMENDATIONS
Fix broken pedestrian and cycling
links to increase accessibility to, from,
and within commercial districts.05

ACTIONS

1. Include more signage, wayfinding and bicycle
lane markings along critical bike routes to aid safe
and easy travel to/from shopping districts by
biking and walking.

2. Include mid-block pedestrian crossings and/or
raised traffic tables where desire paths lack safe
crossings and deemed safe to do so.

3. Consider removing free rights at major
intersections to aid in safe intersections for all
modes of transport.

ESTIMATED TIME + COST
High (>$100k)
Short (<1 year) Long (>5 years)
Low (<$50k)

WHY THIS MATTERS
Equitable accessibility by many modes of travel to and from Palo Alto’s retail districts is critical to capturing local and regional spending. Complete streets, those that adequately and safely accommodate many modes of travel, often see positive economic returns. Brooklyn’s Vanderbilt Avenue, for example, saw a doubling in retail sales in the three years following installation of bicycle lanes and a tree-lined median, which significantly outperformed borough-wide and city-wide trends, according to the New York City Department of Transportation’s 2018 study on the Economic Benefits of Sustainable Streets.

Palo Alto’s bicycle and pedestrian network plays a crucial role within the overall transportation network in business and district success through its offering as a reliable alternative in what is a relatively well-knit environment. However, several areas within the pedestrian and bicycle network are challenged by a lack of informative and directional signage, markings, and safe crossings. While the bicycle network is rich with paths that parallel busy streets, some abruptly stop with little or no signage leading the user to the next protected path. Other times, markings have faded, or routes are overwhelmed with other infrastructure like on-street parking and bus lanes making it confusing and potentially unsafe all around. Considerations for highly visible and separated bicycle lanes/paths as well as appropriately placed and safe mid-block pedestrian crossings where people intuitively want to cross along highly traversed roadways are also recommended to be studied and implemented where deemed safe to do so. In some instances, it may be advantageous to consider intersection modifications like the removal free-right turns to increase pedestrian and bicycle safety and desirability as a means of travel.

RESOURCES and HOW IT’S DONE
The Office of Transportation should champion this effort in coordination with the pending Bicycle and Pedestrian Transportation Plan Update, which will involve a robust study of the existing network to comprehensively identify all gaps across the system and viable and timely solutions. The Plan will invite stakeholders to be a part of the project prioritization process, which will include community-validated criteria such as safety, connectivity, and level of pedestrian or bicyclist stress.

Regular Plan updates would benefit from the input of the recommended Interagency Economic Development Committee led by the Office of Economic Development.

KEY PERFORMANCE INDICATORS and OUTCOMES
More options for more and different people to access goods, services, and events at

DISTRICTS
Downtown
Palo Alto

CHAMPION
Office of
Transportation

SUPPORT
Public Works
Office of Economic Development
Palo Alto’s retail districts should result in more visitation and patronage, overall. A survey performed a year from implementation of improvements could be undertaken by either the Office of Transportation or the Office of Economic Development and shared through the recommended Interagency Development Committee and disseminated publicly with other performance outcome measures.

BEST PRACTICE: RECLAIMED FREE RIGHT TURNS, SAN

DIEGO, CA
Per San Diego’s Vision Zero goals, shorter walking distances at intersections were implemented through tighter turn radii and reclaimed free right turns, reducing pedestrian crossing distances by 65% at some intersections. “In 2019, there was a modest decrease for combined serious injuries and fatalities compared to 2018, and 2020 showed a further decline, compared to 2019.” (San Diego Vision Zero).

Source: Map data ©2022 Google, Reclaimed Free Right Turn, San Diego, CA Item 5
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PALO ALTO, CA —————————— ECONOMIC DEVELOPMENT STRATEGIES 31 California
Avenue
Neighborhood
Centers

RECOMMENDATIONS
Invest in first and last mile
transportation options that increase
equitable access to, from, and within
commercial districts.
06 ACTIONS

1. Incorporate a micro-mobility (bike and/or scooter
share) program that engages all shopping districts
and destinations across the City.

2. Participate in advanced regional micro-mobility
options.

3. Incentivize e-mobility using local resources.

4. Support and incentivize on-demand transit service
and ridership through promotional programming
within shopping districts.

ESTIMATED TIME + COST
High (>$100k)
Short (<1 year) Long (>5 years)
Low (<$50k)

WHY THIS MATTERS
Increasingly, shared mobility and low-speed vehicles (e-scooters and bikes) have grown in popularity as a form of first and last-mile transportation due to their convenience and ease of use, as well as for their ability to help cities meet sustainability and equity goals without significant infrastructure investment. A 2022 study published by Emory University entitled “Wheels to Meals: Measuring Impact of Micromobility on Restaurant Demand” stated that 98 U.S. cities covering 2.2 million individuals and 391 companies found that the introduction of e-scooters “significantly impacts restaurant spending, increasing spending by approximately

5.2% for e-scooter users, driving incremental spending of at least $1.13 million annually across all cities that allowed e-scooters to operate over summer 2018.” This growth in local spending – e-scooter users are predominantly local – has meaningful implications for the local tax base.

The impacts of improved non-automobile access are not limited to shared mobility and low-speed vehicles. Bike lanes have been found to boost local sales in many cities, including San Francisco, Los Angeles and Minneapolis. E-bike and scooter usage in Palo Alto is increasing, according to the City’s Pedestrian and Bike Committee, which has also prioritized education, noting that “e-bike use has outpaced education efforts” (4/4/2023).

RESOURCES and HOW IT’S DONE
The Office of Transportation should champion this effort and build upon the shared mobility transportation policies reflected in the City’s 2030 Comprehensive Plan aimed at providing “facilities that encourage and support biking and walking” as well as those embedded within numerous recommendations of the Palo Alto Pedestrian and Bicycle Advisory Committee, such as bike parking at Charleston Shopping Center, which was recently installed. Additionally, this effort advances the City’s 2022 Climate and Sustainability Plan guiding policy to increase mode share to 40% by 2030.

Pending Federal and State tax credit and incentives for e-bikes promise to further lower the cost of entry to the e-bike market by $1,500 or more. Some cities are already embracing subsidies for e-bikes, including Washington, DC, Berkely, California, and Denver, Colorado, citing studies that have shown that a 10% shift from cars to bikes results in a 40% reduction in traffic.

Additionally, the California Air Resources Board (CARB) is developing an e-bike

DISTRICTS
Downtown
Palo Alto

CHAMPION
Office of
Transportation

SUPPORT
Office of Economic Development
Palo Alto Chamber of Commerce
District Management Entities
incentive program that will launch in late 2023 for e-bike vouchers for California residents, yet another reason to support infrastructure for safe riding.

Lastly, the Office of Transportation should work with District Management Entities, property and business owners, and the Palo Alto Chamber of Commerce to promote all forms of shared mobility programs within each commercial district.

KEY PERFORMANCE INDICATORS and OUTCOMES
Shared mobility operators can track usage and impacts, and the City can track sales tax as well as business owner satisfaction through survey tools.

BEST PRACTICE: REDWOOD CITY, CA MICROMOBILITY

PROGRAM
In October 2021 Redwood City adopted a new ordinance to allow a shared micromobility operation. The shared mobility company, Bird, currently services Redwood City and offers a Community Pricing Program which offers a 50% discount to low-income riders. Early data suggests strong usage within downtown – most rides start in downtown and end in downtown. The highest usage is between 7 to 10 pm – evening hours – which correlate to popular dining out hours. Scooter parking areas are defined, and scooters are restricted from side walks. By all accounts, the program has been heralded as a success.

City’s such as Dallas, Texas addressed rental scooter and bike “littering” by providing a 311 service request category allowing members of the public to report issues, defined parking corrals, and established pick-up agreements with operators.

Source: walkingredwoodcity.com
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PALO ALTO, CA —————————— ECONOMIC DEVELOPMENT STRATEGIES 32 California
Avenue
Neighborhood
Centers

RECOMMENDATIONS
Reinforce walkability within districts
to encourage longer duration of stay
and activation.07

ACTIONS

1. Select specific public alleyways with high
visibility and at least 20 feet in width to improve
for increased permeability and place-making.

2. Create a mural competition or program for select
side and rear building facades garnering the most
visibility from main streets.

3. Limit new curb cuts and aim to remove overly
redundant curb cuts with any future
redevelopment along public right of way of
neighborhood centers.

ESTIMATED TIME + COST
High (>$100k)
Short (<1 year) Long (>5 years)
Low (<$50k)

WHY THIS MATTERS
Downtowns and retail centers rely on the thousands of pedestrians that walk from establishment to establishment for business success. To accommodate prolonged visitation and patronage, safe and comfortable, human-scale pedestrian infrastructure is critical to get right, especially in places built at a scale prioritizing the vehicle. Two areas pedestrians could be better accommodated include select alleyways in Downtown Palo Alto and the California Avenue district and along primary roads in Neighborhood Centers.

For Downtowns and similar main street environments, tree-lined and amenitized streets provide the primary pedestrian framework. However, in Downtown Palo Alto and the California Avenue district, there is a secondary network of alleyways that not only serve their utilitarian duties like trash pick-up, but they also provide a quicker route for pedestrians to parking and/or access to quaint areas to take a break from a shift and/or gather in a small, less busy outdoor environment. Alleyways, therefore, present a unique opportunity to increase safe walkability and placemaking while aiding in destination setting.

Pedestrians experiencing Neighborhood Centers in Palo Alto are more challenged than in Downtown or California Avenue in that the areas’ design prioritizes the vehicle. The Midtown district along Middlefield, for example, includes at least one curb cut off of Middlefield Road for nearly every commercial building. This creates additional points at which pedestrians and vehicles must interact increasing the potential for a collision. For some, an environment like this is too hostile to consider walking in and potentially limit their intended duration of stay in the district.

Therefore, it’s recommended that new curb cuts off of primary roads be limited and/or consolidated with any future redevelopment.

RESOURCES and HOW IT’S DONE
With future development projects of neighborhood centers, the Planning & Development Services and the Office of Transportation should review and recommend from a united point of view and work with applicants in the approval process to limit and/or consolidate curb cuts to the extent possible.

The Office of Transportation, with the aid of the Public Works Department, should lead an effort that first identifies appropriate public alleyways capable of accommodating increased pedestrian usage, as places to gather and/or passthrough, as guided by Comprehensive Plan Policy T-1.21. In either instance, trash will need

DISTRICTS
Downtown
Palo Alto

CHAMPION
Office of Transportation
(Actions 1 & 3)
Office of Economic
Development (Action 2)
Source: Map data ©2022 Google,
Dansville, Livingston County, NY
to be properly stored, preferably indoors, before pick-up, and standards ensuring safe access and lighting should be addressed in coordination with Public Works and Planning & Development Services.

Considering a mural competition or program for alleyway activation could span across several retail districts, including Neighborhood Centers and others, it’s recommended the Office of Economic Development champion Action 2. District Management Entities (DMEs), property owners, and Palo Alto Arts & Culture Organizations could support the effort by connecting artists with participating properties to paint murals on select facades. Similar to Recommendation 1.4, funding could be garnered through the California Arts Council in partnership with Palo Alto Arts & Cultural Organizations. Murals within the California Avenue District should consider the California Avenue Public Art Plan.

BEST PRACTICE: LivCo WALLS, LIVINGSTON COUNTY, NY
The Livingston County Office of Economic Development created a county-wide mural program based on recommendations from their Downtown 2.0 Plan, prepared

SUPPORT
Public Works
Planning & Development
Services
District Management Entities
Palo Alto Arts & Culture
Organizations
by Streetsense. The program
welcomed nine international
artists to paint large scale murals
in each of Livingston County’s
nine villages on the sides and
rear walls of existing buildings
along side streets and alleyways
with the goal of activating
underutilized spaces and drawing
visitors. In 2022, the County
hosted a county-wide mural
festival that brought thousands of
visitors. Visit Livingston County
(LivCo) - the County’s official
tourism agency with a mission to
drive the County’s economic
growth through travel –
highlights the murals, the artist,
and their stories as destination
attractions on their Visit
Livingston website.

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PALO ALTO, CA —————————— ECONOMIC DEVELOPMENT STRATEGIES 33 Source: Streetsense, Geneseo, Livingston County, NY
Source: LivCo Walls (visitlivco.com), Caledonia, Livingston County, NY Source: LivCo Walls (visitlivco.com), Avon, Livingston County, NY Source: Streetsense, Lima, Livingston County, NY
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PALO ALTO, CA —————————— ECONOMIC DEVELOPMENT STRATEGIES 34 California
Avenue
Neighborhood
Centers

RECOMMENDATIONS
Update and simplify parking policies,
systems, and signage to ease
navigation to and use of parking.08

ACTIONS
ESTIMATED TIME + COST
High (>$100k)
Short (<1 year) Long (>5 years)
Low (<$50k)

WHY THIS MATTERS
During the diagnostic exercise, downtown business owners made clear their frustration with the current parking system, which makes it difficult to attract and retain low-wage, often part-time workers who do not live in Palo Alto and must travel by car to work. Because the current public transportation system is not conducive to typical later evening hours for those in the Food & Beverage industries – the anchor industry for both Downtown Palo Alto and California Avenue – it is particularly difficult for businesses that are driving the bulk of economic activity in both of those districts. Additionally, the current parking system does not allow part- time workers to share parking permits, which would help distribute the costs and benefits among more downtown employees, without increasing the number of vehicles in downtown at any given time.

From the consumer perspective, the perception of limited parking may exist, but data suggested that parking remains available -- utilization in existing downtown lots following the pandemic remains below 50%. Additionally, the most recent Palo Alto Community Survey found that 60% of respondents rated "Ease of Parking" to be either good (46%) or excellent (14%), suggesting that major changes to parking, such as the construction of new lots, are not necessary to meet consumer needs at this time. However, a comparison with best-in-class regional retail environments suggests opportunities to improve the parking experience on the margins, such as digital signage that helps drivers navigate quickly and seamlessly to available parking spaces within Downtown. At this time, digital countdown signage efforts are underway at individual lots and structures, but it may be worth exploring countdown signs at key gateways as well.

RESOURCES and HOW IT’S DONE
The Office of Transportation, with the support of the Public Works Department, should explore opportunities in public right-of-way for digital parking space availability and directional signage that coordinates with the digital signage effort currently underway for individual lots. For the small business employee access program, close coordination with business owners will be critical to ensure that any solution meet the needs of employees. The Office of Transportation could engage businesses with the help of the District Management Entity and the Palo Alto Transportation Management Association that already works to provide transportation options to small business employees in Downtown and California Avenue. The Office of Economic Development could support the effort by facilitating internal discussions through the recommended Interagency Economic Development Committee.

DISTRICTS
Downtown
Palo Alto

CHAMPION
Office of
Transportation

SUPPORT
Public Works
District Management Entities/
Business Owners
Office of Economic Development

1. Embrace technology by incorporating digital
signage for easier navigation to available parking
within and outside of parking areas and tie
information into an app-based parking
management system to ease use and parking
predictability.

2. Consider a small business employee access
program that offers reduced employee parking
fees, easily transferrable employee parking
permits, and/or incentivized use of transit, micro-
mobility options, and carpooling.

KEY PERFORMANCE INDICATORS and OUTCOMES
Such efforts should result in improved employee retention and business satisfaction, which could be measured by an annual survey, akin to City of Palo Alto Community Survey.

BEST PRACTICE: LOW-WAGE EMPLOYEE PARKING

PERMIT, SANTA ROSA, CA
Helping low-wage employees address their parking needs is a focus of a number of city parking policies. The City of Santa Rosa, CA has created a “Low Wage Employee Parking Permit” which offers service industry employees reduced rate parking passes for two of the City's municipal lots. Eligible employees must submit verification letters and provide a copy of recent pay stubs. Verification of eligibility is required every six months. Employees can be reimbursed these fees by participating businesses.

BEST PRACTICE: DIGITAL PARKING SIGANGE, SANTANA
ROW, SAN JOSE, CA and REDWOOOD CITY, CA
Parking countdown signs are a strategy employed to help customers more easily navigate downtown parking options at key decision making points – notably at gateways to the district. Both public and private sector examples include Redwood City, CA and Santana Row, San Jose, CA,
respectively. In Redwood City, the installation of
sensors above light poles further helps identify
spaces on city streets. This is the first system of
its kind to be installed in the U.S. and aims to
reduce search time by customers by 45% while
also reducing emissions from idling vehicles.

Source: Map data ©2022
Google, Redwood City, CA
Source: RWCPulse.com,
Redwood City, CA
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PALO ALTO, CA —————————— ECONOMIC DEVELOPMENT STRATEGIES 35 03

GUIDING PRINCIPLE
→ Adopt policies that reflect changing market conditions by easing the regulatory burden for businesses, removing
outdating restrictions that create hurdles to tenancy, and focus retail and retail-like uses in places where they are market- supported.

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PALO ALTO, CA —————————— ECONOMIC DEVELOPMENT STRATEGIES 36 Source: Prince George’s County, MD Online Zoning Ordinance and Subdivision Regulations Interactive Map and Consolidated Use Table
California
Avenue
Neighborhood
Centers

RECOMMENDATIONS
Streamline, update and/or remove
unnecessary use restrictions and
pursue regulatory reform to enable
tenancy and competitiveness.
09 ACTIONS

1. Consider removing or consolidating zoning
overlays, incorporating an at-a-glance permitted
use table and design standards, and an interactive
online map with quick links to relevant
regulations.

ESTIMATED TIME + COST
High (>$100k)
Short (<1 year) Long (>5 years)
Low (<$50k)
WHY THIS MATTERS and HOW IT’S DONE
Palo Alto’s current zoning code is complicated and involves layers of regulations with base zones, supplementary zones (like “combined districts”), and overlay ordinances (like the Retail Preservation Ordinance). Business and property owners find it difficult to understand the use, development, and design requirements that apply to their sites. Layers of regulation create further uncertainty and prolong the approval and permitting processes, which increases risk and cost of doing business, as compared to other municipalities within the region. In an environment where tenants have options, these policies make Palo Alto less appealing to tenants who can open stores in other cities with lower hurdles to market entry. Notably, Palo Alto’s most heavily regulated retail environments struggle the most with vacancies.

The City can play a role in mitigating risk and uncertainty while building trust through streamlining and clarifying use, development, and design regulations with a few adjustments and additional tools, including:
• Removing or consolidating zoning overlays to avoid confusion and added time, especially where multiple zones double down on the same regulation or where contradictory or circular regulations exist.
• Incorporating a consolidated use table making it quick and easy to see what uses are permitted, prohibited, or allowed with a special use permit or supplemental design standards.
• Developing an interactive online map that allows the user to toggle layers on and off for legibility and easy access to relevant regulations with a few clicks.

KEY PERFORMANCE INDICATORS and OUTCOMES
Increased understanding and usability of regulations should make it easier for all users and aid in building trust in city staff and the public process. A public survey could be administered after one year of implemented adjustments to measure satisfaction.

RESOURCES
The Planning & Development Services Department is well equipped to conduct an in-house evaluation (or engage appropriate subject matter experts) and consolidation of the various use tables that exist throughout the code into a single use table for ease of interpretation. In final form, this use table and applicable regulations can be prepared as an interactive online map for both public and private sector users. The Office of Economic Development could support the effort from an administrative standpoint facilitating internal discussions through the recommended Interagency Economic Development Committee.

DISTRICTS
Downtown
Palo Alto

CHAMPION
Planning &
Development
Services

SUPPORT
Office of Economic Development
BEST PRACTICE: PRINCE GEORGE’S COUNTY, MD ONLINE
ZONING ORDINANCE and SUBDIVISION REGULATIONS
INTERACTIVE MAP and CONSOLIDATED USE TABLE
Prince George’s County
offers an easy-to-use
interactive online zoning
map developed by a
company that partners with
ESRI. The left side panel
provides general quick links
to regulations, including one
to the consolidated use table
where the use definition
appears by hovering over the
land use, itself. By clicking
on a parcel, the user
immediately receives a
district summary, a parcel
summary, and a customized
list of use allowances and
restrictions, and development
and design standards
applicable only to that site.

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PALO ALTO, CA —————————— ECONOMIC DEVELOPMENT STRATEGIES 37 California
Avenue
Neighborhood
Centers

RECOMMENDATIONS
Streamline, update and/or remove
unnecessary use restrictions and
pursue regulatory reform to enable
tenancy and competitiveness.
09 ACTIONS

2. Consider amending Section 18.76.20,
Architectural Review, of the municipal code to
enable more over-the-counter approvals for minor
changes.

ESTIMATED TIME + COST
High (>$100k)
Short (<1 year) Long (>5 years)
Low (<$50k)

WHY THIS MATTERS
Removing some of the regulatory barriers to market entry aids in decreasing vacancy and business success, especially for small (and local) businesses entering the market for the first time. Many of Palo Alto’s existing retail spaces could be improved in short order for new tenants with minimal minor changes. However, the Palo Alto Municipal Code requires architectural review and approval for major and minor projects and changes, including landscaping, signage, exterior remodeling, parking improvements, and interior finish outs that are not part of a major project.

Each of the above-mentioned minor changes must adhere to standards and guidelines outlined elsewhere in the code, and, if met, are justifiably approvable over the counter by capable city staff. Signage, for example, is protected by the First Amendment to the United States Constitution, so there is not much, if any, discretion lawfully acceptable beyond location, size and amount regulations. This questions why signage is among the items required an additional discretionary architectural review process if it meets applicable regulations.

For small businesses, the time and cost savings with over-the-counter approvals for minor changes potentially reduces uncertainty and risk, which may increase investor interest and contribution to a project. Further, it opens staff and board capacity to focus on larger projects with more substantial impact to design and overall aesthetic of a district while also proving commitment to being business friendly, a goal expressed in the 2030 Comprehensive Plan.

RESOURCES and HOW IT’S DONE
An amendment to Section 18.76.20 of the Municipal Code to allow for more over- the-counter approvals of proposed minor changes, as recommended, may require an internal study of the code by Planning & Development Services staff with input from critical stakeholders including the Architectural Review Board, property and business owners, and Downtown Palo Alto and California Avenue District Management Entities. With administrative support from the Office of Economic Development, Planning & Development Services would make a recommendation to City Council for approval.

KEY PERFORMANCE INDICATORS and OUTCOMES
More permits for trades associated with landscaping, signage, exterior remodeling, and interior finish-outs and the frequency with which they are issued could be reviewed annually to assess the amendments’ efficacy and a review of the number of Certificates of Occupancy would indicate impact on vacancy.

DISTRICTS
Downtown
Palo Alto

CHAMPION
Planning &
Development
Services

SUPPORT
Office of Economic Development
Property Owners
District Management Entities
(DMEs)
Source: Streetsense, Downtown Palo Alto
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PALO ALTO, CA —————————— ECONOMIC DEVELOPMENT STRATEGIES 38 California
Avenue
Neighborhood
Centers

RECOMMENDATIONS
Streamline, update and/or remove
unnecessary use restrictions and
pursue regulatory reform to enable
tenancy and competitiveness.
09 ACTIONS

3. Reevaluate the city-wide Retail Preservation
Ordinance and consider refocusing its
applicability to targeted areas of existing retail
concentration while also allowing flexibility in
non-street facing portions of buildings.

ESTIMATED TIME + COST
High (>$100k)
Short (<1 year) Long (>5 years)
Low (<$50k)
WHY THIS MATTERS and HOW IT’S DONE
The Retail Preservation Ordinance was adopted in 2015 to prevent retail space conversion to office use – at a time when the office market was very strong. The post-pandemic office market, however, remains in flux and is likely to remain so for some time. That said, according to local brokers, in-demand office is Class A space in highly amenitized and activated areas, often with a mix of uses including concentrated retail.

Currently, the Retail Preservation Ordinance applies city-wide, prohibiting conversion of retail or retail-like uses to other uses including office. This discourages the right-sizing of the City’s overall retail footprint, resulting in retail in areas with weaker market conditions and spreading the City’s retail footprint thin.

Further, even with a steady increase in retail demand over the next 10 years, projections suggest a retail oversupply of approximately 460k square feet, meaning there will be too much existing retail space than businesses able to fill those spaces.

Retail preservation across the entire City is therefore an impediment to normal market correction. As an alternative, narrowing the geographic applicability of the ordinance and reserving it for established retail districts will enable the market to right-size itself across the City while concentrating retail activity where it makes sense – in the City’s existing commercial districts.

A level of flexibility could also be considered for the Retail Preservation Ordinance to allow portions of former retail/retail-like spaces to be occupied by non- retail/retail-like uses as long as the street side is reserved for retail/retail-like activating uses. Traditional retail footprints are shifting. Global and national trends show that retail tenants are recalibrating tenant models toward smaller formats, including complete downsizing or, for tenants in existing leases, repurposing excess space for small-scale fulfillment to gain a competitive advantage over online competitors. Landlords in Downtown Palo Alto and the California Avenue district are challenged to rent out the full ground floor to retail/retail-like uses that typically prefer ample street exposure but not as much depth. This is especially true for historically narrow (<25 feet) and long (>90 feet) lot size/building footprints in established districts. This leaves long and narrow buildings with limited ability to meet requirements of the ordinance as the rear portion of the building/lot is better positioned for office and residential use rather than a second retail tenant. Rarely do retail/retail-like uses prefer spaces without visibility from the street. In addition to leasing vacant space, the street would be activated by a retail/retail-like tenant in an appropriately sized space for today’s needs while contributing to the restoration of a consistent spending base of daytime and/or nighttime population.

DISTRICTS
Downtown
Palo Alto

CHAMPION
Planning &
Development
Services

SUPPORT
Office of Economic Development
Palo Alto Chamber of Commerce
Property Owners
KEY PERFORMANCE INDICATORS and OUTCOMES
Ideally, existing established retail districts, including those not studied as part of this effort, would experience less vacancy, overall. Likewise, struggling retail spaces outside of established retail districts would experience less vacancy with the ability to consider uses for which there is demand. A landlord/property owner survey following adopted ordinance revisions could inquire about the ease in which vacancies were filled. Additionally, tracking Certificates of Occupancy annually could offer a quantitative summary of use trends across the City.

RESOURCES
The Planning & Development Services Department should champion this effort in coordination with the on-going study of the ordinance by Michael Baker International.

The Office of Economic Development, the Palo Alto Chamber of Commerce, and retail property owners could be supportive stakeholders offering on-the-ground business insight.

Source: Streetsense, Midtown
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PALO ALTO, CA —————————— ECONOMIC DEVELOPMENT STRATEGIES 39 California
Avenue
Neighborhood
Centers

RECOMMENDATIONS
Streamline, update and/or remove
unnecessary use restrictions and
pursue regulatory reform to enable
tenancy and competitiveness.
09 ACTIONS

4. Enable growth in Neighborhood Goods and
Services along California Avenue by:
a. Updating the Formula Retail Ordinance and
b. Easing use restrictions on in-demand
neighborhood serving uses that are currently
heavily regulated or prohibited.

ESTIMATED TIME + COST
High (>$100k)
Short (<1 year) Long (>5 years)
Low (<$50k)

WHY THIS MATTERS
California Avenue is experiencing the highest vacancy rate among all districts studied at 15%, accounting for 31k square feet. Given the small size of the district, vacancy is strongly felt and noticeable. Although referred to as Palo Alto’s “second downtown”, California Avenue is primarily community and neighborhood serving, reliant on surrounding resident spending and what was once reliable and robust spending from near-by workers at Stanford Research Park. With return-to-office rates currently around 40%, post-pandemic spending will shift more towards residents, with opportunities for California Avenue to meet their needs with goods and services that cannot be found or accomplished on-line.

Currently, several neighborhood serving uses are heavily regulated or prohibited within the district, adding to the difficulty landlords face in securing tenants.

Neighborhood serving uses requiring conditional use permits (CUPs), a regulatory barrier to entry, in the California Avenue district include:
• Beauty Salons exceeding 1,800 square feet
• Nail Salons exceeding 1,800 square feet
• Barber Shops exceeding 1,800 square feet
• Fitness or Exercise exceeding 1,800 square feet
• Learning Centers for Individual or Small Group Settings • Laundry & Dry Cleaning
• Financial Services (Except Drive-In) on ground floor
• Medical Offices when fronting California Avenue
• Commercial Recreation Uses when fronting California Avenue • Formula Retail Business (with more than 10 stores nationally with standardized characteristics)
Outright prohibited in the district are light manufacturing or maker spaces for the production/fabrication/repair/servicing and selling of small items, uses that could be unintrusive and compatible with other uses in the district if provided at a neighborhood scale.

RESOURCES and HOW IT’S DONE
To enable growth of Neighborhood Goods and Services along California Avenue and decrease vacancy, regulations should be eliminated or significantly eased for the above-mentioned uses. This effort can be conducted in-house and led by the Planning & Development Services Department. For consideration is the square footage threshold alignment with current concepts. Fitness uses, for example, are

DISTRICTS
Downtown
Palo Alto

CHAMPION
Planning &
Development
Services

SUPPORT
Office of Economic Development
Palo Alto Chamber of Commerce
Property Owners
District Management Entity (DME)
increasingly coupled with retail concepts. The average size of a personal training/small group fitness studio is 2,970 square feet, according to the Fitness Business Association.

Here, the 1,800 square foot threshold for a CUP could be increased to enable by-right tenant options around fitness in their most current format. The Formula Retail Business ordinance could also be considered for an update, narrowing the focus to Food & Beverage tenants rather than all retail chains with 10 or more stores nationwide. In fact, the restriction may eliminate retail concepts that may be new to the region. These formula retail concepts help drive customer interest and, more importantly, foot traffic, which helps all businesses in the district.

The Office of Economic Development could support Planning & Development Services in a public process for consideration of easing restrictions on neighborhood- serving uses through internal administrative efforts. Critical stakeholders include the Palo Alto Chamber of Commerce, property owners, and the District Management Entity.

BEST PRACTICE: FORMULA RETAIL ORDINANCE and

FORMULA RESTAURANT ORDINANCE, CORONADO, CA
In an effort to maintain the City’s unique retail base and space for small, local businesses, the City of Coronado implemented two formula ordinances. Allowed with a special use permit, formal businesses must demonstrate compatibility with surrounding uses in terms of design and size and may not occupy more than 50 linear feet of street frontage or a street corner. The Formula Restaurant Ordinance primarily applies to formula fast food restaurants with 15 or more locations, and the Formula Retail Ordinance limits location and size to a single story for formula businesses, except for grocery stores, banks, savings and loans, full-service restaurants, and theaters.

Source: Map data ©2022 Google, Orange Avenue, Coronado, CA Item 5
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PALO ALTO, CA —————————— ECONOMIC DEVELOPMENT STRATEGIES 40 California
Avenue
Neighborhood
Centers

RECOMMENDATIONS
Grow the market by enabling
residential development in select areas
of Downtown Palo Alto and California
Avenue.
10 ACTIONS

1. Consider increasing allowable height and floor
area ratio (FAR) to accommodate residential in
mixed-use projects..

2. Allow exclusively residential projects, including
the ground floor where currently restricted in the
California Avenue district.

3. Prioritize residential development on underutilized
property as identified in the 2023-31 Housing
Element.

ESTIMATED TIME + COST
High (>$100k)
Short (<1 year) Long (>5 years)
Low (<$50k)

WHY THIS MATTERS
Before the pandemic, retail districts enjoyed a stable daytime population of office workers, including those from Stanford Research Park and many others within and around Palo Alto. However, with an average return to the office rate of 40%, Downtown Palo Alto and California Avenue will need to restore a stable daytime population by other means including increased residential use within the districts themselves. Enabling capture of residential density in districts where density is appropriate and needed to sustain retail also contributes to the City’s obligation to meet State mandated affordable housing goals.

Currently in Downtown Palo Alto and California Avenue residential is difficult to develop because of the mismatch between lot size, allowable height and floor area ratio (FAR), restrictions on ground floor use within certain zones and spaces protected by supplemental zones and overlays, as well as restrictions on exclusively residential use in certain zones. To explain:
• Height and FAR: Increasing allowable height and FAR Downtown and in the California Avenue district could enable a greater mix of uses that includes residential on traditionally small lots. For Downtown, additional height over 50 feet, even if just an additional 10 to 12 feet, could enable taller floor to ceiling heights per floor, which, according to landlords and brokers, is more desirable among tenants. It may also result in a shift in construction type from only wood to concrete and wood increasing costs, but the project could be large enough to host more lucrative space for retail/retail-like and office uses – uses that historically pay rent and operating costs in triple net leases common in the region – that then subsidize the residential units, whether market rate or affordable – the uses that historically only pay rent and a share of utilities for their leasable space. Without the extra height and FAR, projects may not be able to justify, financially, the addition of residential use, but retail/retail-like uses and office at this time, and for the foreseeable future, may not be able to fill enough above ground floor space to justify a project. What’s left is stagnation and decline unless more flexible options are considered.

Along California Avenue and the surrounding area, heights are capped at 37 feet within the CC(2) zone, which is likely not tall enough to justify a mixed-use project with required ground floor retail. If mixed-use projects are the envisioned and market supported future, the code must be amended to increase height and FAR, accordingly, to enable implementation of that vision.

DISTRICTS
Downtown
Palo Alto

CHAMPION
Planning &
Development
Services

SUPPORT
Office of Economic Development
Property Owners
• Ground Floor Restrictions: Ground floor space in Downtown’s CD-C (GF) zone and in California Avenue’s CC(2) (R) zone is required to be exclusively retail/retail- like uses as prescribed, and the Retail Preservation Ordinance restricts retail/retail- like conversions regardless of zone. This means that residential is not allowed to any extent on the ground floor, even in parts of the CD-C zone in Downtown outside of the Ground Floor (GF) combing district that allows exclusively residential. • Exclusively Residential Restriction: The California Avenue area is layered with zoning restrictions that inevitably result in residential use being limited to mixed- use projects with ground floor non-residential or retail/retail-like use. Although appropriate for properties lining California directly, these requirements span well beyond those properties into areas along secondary streets that may be well suited for exclusively residential from the ground floor up.

Lastly, there are several underutilized properties identified in the City’s adopted 2023-31 Housing Element that would be well suited for residential use. Lots within Downtown and the California Avenue area should be prioritized to ensure critical day- time population is restored in these districts.

KEY PERFORMANCE INDICATORS and OUTCOMES
Ideally, Downtown Palo Alto and the California Avenue district would see more residential density and therefore more reliable spending. Certificate of Occupancy tracking for residential units and business sales tax tracking in both districts could offer a quantitative summary of residential density over time and related retail sales.

RESOURCES and HOW IT’S DONE
The Planning & Development Services Department should champion this effort in coordination with on-going Housing Element studies and updates. It should involve a public engagement process with ample input from Downtown and California Avenue property owners and developers. The Office of Economic Development could support the effort by facilitating internal discussions through the recommended Interagency Economic Development Committee.

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PALO ALTO, CA —————————— ECONOMIC DEVELOPMENT STRATEGIES 41 Item 5
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City Council
Staff Report
From: City Manager
Report Type: ACTION ITEMS
Lead Department: Community Services
Meeting Date: August 14, 2023
Report #:2306-1712
TITLE
Approval of a revised Term Sheet with Pets in Need for Operations of the Palo Alto Animal Shelter and an Interim Payment in the Amount of $55,535 per month beginning June 1, 2023 until a new Agreement is executed; CEQA status - not a project.

RECOMMENDATION
Staff recommends the Council approve:

1. a proposed Term Sheet with Pets in Need for operations of the Palo Alto Animal Shelter and direct staff to return to Council for approval of an Agreement reflecting these terms, and

2. an interim payment to Pets in Need in the amount of $55,535 per month beginning June 2023 and each month until a new Agreement is executed, and authorize the City Manager to execute any contract amendment necessary.

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. The Council discussed the proposed terms at a Study Session on March 27, 2023 1 and provided direction and feedback to staff June 12, 2023 2. The direction received from Council and additional input provided by the PIN Board of Directors on July 20, 2023 resulted in a revised Term Sheet (Attachment A) that staff is recommending for approval.
1 City Council, March 27, 2023; Agenda Item #3; SR #2302-0940, https://portal.laserfiche.com/Portal/DocView.aspx?id=65785&repo=r-704298fc 2 City Council, June 12, 2023, Agenda Item #13,
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The terms included represent increased staffing and associated compensation to PIN with proposed net cost of $1.4 million for the first year with an annual escalator equivalent to the Consumer Price Index (CPI). This reflects an increase from the Fiscal Year 2023 compensation of $0.7 million. The FY 2024 Adopted Operating Budget anticipated increased costs for services and includes additional funding of $0.5 million in FY 2024 for a total of $1.2 million. Based on the current term sheet, additional funding will be needed. Other terms include an increase in the City’s capital investment to improve the shelter facility and a minor reduction in scope of services.

The FY 2024 Adopted Capital Budget includes funding of approximately $2.8 million in the Animal Shelter Renovation capital project (PE-19002) for estimated capital investment based on the current terms. PIN is also requesting an interim payment of $55,535 per month beginning June 1, 2023 and continuing until a new Agreement is finalized. The fee represents the per month difference between the Year 5 compensation in the current Agreement (Attachment B) and the first-year compensation in the proposed new Agreement (Attachment A).

Staff, along with Pets in Need, are returning to Council with a revised Term Sheet that includes revised language on handling of feral cats, more specificity on level of service and metrics for spay/neuter surgeries, and updated reporting requirements.

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. Historically, Palo Alto has 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 public/private 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, 20183 to operate the Animal Shelter. The term and compensation of the current Agreement (Attachment B) include:
• Five-year term commencing January 17, 2019 through January 17, 2024 • 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
3 City Council, November 26, 2018; Agenda Item #13, SR#9822, https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-reports/reports/city-manager- reportscmrs/year-archive/2018/id-9822-pets-in-need.pdf?t=62179.92 Item 6
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• 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 • 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 delays in completing the capital improvement projects, particularly the new dog kennel building as the primary reason for terminating the Agreement.

Development of a new Agreement
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, 20224, 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 March 15, 2023. On March 27, 2023 5, a Council Study Session provided an update on the status of contract negotiations with PIN and an opportunity for the Council to provide feedback on a draft Term Sheet. 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 4 City Council, February 14, 2022; Agenda Item #9; SR #13952, https://portal.laserfiche.com/Portal/DocView.aspx?id=59364&repo=r-704298fc 5 City Council, March 27, 2023; Agenda Item #3; SR #2302-0940, https://portal.laserfiche.com/Portal/DocView.aspx?id=65785&repo=r-704298fc Item 6
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continued to refine the Term Sheet and mutually agreed to extend the current agreement to terminate on September 30, 2023.

The City Council discussed and provided feedback on the draft term sheet during the 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 PINs 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 PINs proposal and the in-house model. •A more defined capital plan identified in the Agreement. •Additional information on feral cats, including the method by which they are handled, how many cats are in Palo Alto, where cats are released.

PIN prepared responses to the Council’s questions and presented them to Council on June 12, 2023. The responses are included as Attachment C to the June 12 th staff report 6. During this meeting, an additional term was introduced that would provide PIN additional compensation of $55,535 for services rendered since June 1, 2023 and continuing until a new Agreement 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.

Staff and PIN received valuable feedback from Council at the June 12th meeting and Council passed the following motion unanimously:

Direct staff to negotiate an agreement with Pets in Need (PIN) and bring back to Council in August with the following amendments and review:

1. No Trap/Neuter/Return (TNR) changes, through language such as: “Both parties will work together to develop a transparent and humane feral cat program reflective of municipal best practices and the impact on public health and wildlife, and that maintains the current practice where PIN does not release feral cats or cause them to be released.”

2. Review on the number of surgeries
6 City Council, June 12, 2023, Agenda Item #13,
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3. Higher revenue opportunities

4. Consider a possible 3-year contract

5. Level of service and termination clause

6. Reporting and oversight

7. Spayed and neutered metrics

ANALYSIS
Since the June 12th Council meeting, staff from the City and PIN have been meeting regularly to revise the Term Sheet in response to the Motion and other comments received during the meeting. The Term Sheet (Attachment A) has been revised to reflect the Council’s comments and direction to staff as described below. In some instances, where staff recommend not changing the term, an explanation is provided.

No Trap/Neuter/Return (TNR) changes – The language included in the revised Term Sheet is generally consistent with the language proposed in the motion. The language reads, “Both parties will work together to develop a transparent and humane feral cat program that reflects municipal best practices and takes into account the impact on public health and wildlife. The program will continue the current practice of not releasing feral cats or causing them to be released.” Number of surgeries – It is difficult to do a direct comparison of the number of in-jurisdiction 7 spay/neuter surgeries performed by the City prior to 2019 and the number of in-jurisdiction surgeries performed by PIN because the City’s records did not track that information. Moving forward, the focus will be meeting demand of in-jurisdiction animals. Wait times for surgery for in-jurisdiction animals will be no more than one month, except in the event of unexpected and exceptional circumstances.

Higher revenue opportunities – Staff from the City and PIN discussed where opportunities might exist to bring in more revenue. PIN may inform customers of the full cost of a service and invite customers to voluntarily cover all or a portion of the full cost. Donations received via adoption and veterinary services at the Palo Alto Animal Shelter will be used exclusively for the Palo Alto Animal Shelter. Staff explored a revenue share with the City and PIN; however, due to requirements to honor donor intent, as well as intensive non-profit accounting requirements, the option for fundraising collaboration is not considered a feasible option. This has also resulted in a modification to how capital improvements are funded. In the Term Sheet, the City’s commitment for future capital investments is $2.5M. In previous versions, any amount over that would be funded by PIN. Since the funds PIN would need to contribute would come from donations, PIN has determined this is not feasible for the same reasons described above. The City and PIN would need to renegotiate any additional capital funds needed beyond the allocated amount in the agreement.
7 In-jurisdiction is defined as animals originating from Palo Alto, Los Altos, or Los Altos Hills.

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Contract term – Council directed staff to consider a three-year term for a new Agreement. Staff from both the City and PIN prefer to maintain the five-year term, which is consistent with the term in the current Agreement. The capital project would likely not be completed until well into that three-year period, leaving PIN with little opportunity to demonstrate their ability to operate the shelter with the additional space improvements before the Agreement expires. Also, staff is hopeful that the revised agreement will provide better clarity in roles and responsibilities resulting in a successful, long-term partnership with PIN. The Agreement will include a termination clause that allows either party to terminate the Agreement similar to the current Agreement.

Level of service – PIN and the City have agreed to service levels provided at the shelter. These include shelter hours, surgery wait times, and number of vaccine clinics. These are included in the Term Sheet in Attachment A.

Reporting and oversight – PIN has been submitting monthly reports to the City, and an annual financial report as required in the current Agreement. Staff reviewed the current reporting requirements and made some minor modifications. Reporting requirements will include medical statistics for both in-jurisdiction and out of jurisdiction animals, and number of animals in and out of the shelter, and city of origin of animals brought into the shelter. In the new Agreement, PIN would submit quarterly financial reports to include revenues from services received at the shelter, expenditures, and pending board approval, the amount of reduced fees provided.

Spayed and neutered metrics – The Term Sheet focuses on wait time for in-jurisdiction animals rather than the number of surgeries performed. As stated above, wait times for surgery for in- jurisdiction animals will be no more than one month, except in the event of unexpected and exceptional circumstances.

Since the Council last reviewed the Term Sheet in June, there have been additional modifications.

These include: more specificity on the capital improvements; adding a contingency in the amount of $20,000 per year for unforeseen ancillary expenses; and clarifying who is responsible for disposal of dead wildlife.

The PIN Board of Directors reviewed and approved the new Term Sheet as revised on July 20, 2023. With Council’s approval, Staff will work with the City Attorney’s Office to draft an Agreement that will be brought back to Council for consent approval.

FISCAL/RESOURCE IMPACT
The FY 2024 Adopted Operating Budget includes $1.2 million for contract costs to manage the Animal Shelter. Approximately $170,000 in additional funding is expected beyond proposed budget levels to align with the new operating agreement at $1.4 million. This expense is expected to be offset by adjustments to increase revenue estimates to recognize licensing fees. The FY 2024 Adopted 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. To date, a Item 6
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total of $6.0 million has been allocated to this project and $2.9 million has been expended on shelter 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. This additional compensation is part of the annual $1.4 million estimated PIN costs for FY 2024. Once a revised term sheet is accepted by the Council, staff will return with a new agreement with PIN along with budget amendments for FY 2024 to align the budget with the agreement.

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 and revise the Term Sheet. Several Council discussions have provided the community the opportunity to follow the negotiations and provide comments.

ENVIRONMENTAL REVIEW
Council action on this item is not considered a Project within the requirements of CEQA.

ATTACHMENTS
Attachment A: Proposed Term Sheet between Pets in Need and City of Palo Alto for a new Five- year Agreement, Revised July 20, 2023
Attachment B: Professional Services Agreement Between Pets in Need and City of Palo Alto 2019- 2023
APPROVED BY:

Kristen O'Kane, Community Services Director
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Term Sheet DRAFT
for
Revised Professional Services Agreement
between Pets in Need (PIN) and City of Palo Alto (City) (Agreement)
Dated July 18, 2023
This Term Sheet sets forth certain mutually agreed business terms that shall be included in any revised Agreement the parties may elect to enter into. This Term Sheet is binding on the parties.

However, it does not create any obligation whatsoever on the part of either party to enter into any revised Agreement.

Term:

A. Five years with ability to mutually extend an additional five years.

Improvements to Premises:

B. City will allocate $2,500,000 in one lump sum in Fiscal Year 2024 for the shelter capital improvements to be specified in the Agreement. If these funds are unspent in Fiscal Year 2024, the balance will be reappropriated to the same project in the Fiscal Year 2025 capital budget, subject to City Council approval. The following conditions apply:
•Final budget is subject to City Council approval.
•City will manage all phases of capital improvement projects to include planning, design, and construction, with input from PIN.
•City will contract with a reputable animal environment specialty architecture firm for design of any building improvements.

C. Improvements will be prioritized in the following order:
•New cat and small animal area to include a specific intake area and meet and greet space.
•Additional dog kennel improvements to include large guillotine doors and any needed safety retrofitting.
•Retrofit medical suite to better accommodate large animals.

D. PIN may undertake additional capital improvements not specified in the Agreement at its own cost with City review and approval. PIN will comply with all public agency and other legal requirements for capital projects, including prevailing wage laws.

E. If PIN is no longer the City’s operator of the Palo Alto Animal Shelter, any improvements funded by PIN that are not attached to an existing building, and that can be easily removed will be the property of PIN. Building or room additions, stand-alone buildings and other permanent fixtures will remain the property of the City.

Compensation:

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F. Annual compensation to PIN will start at $1.37M for Year 1 and increase annually at a minimum of the CPI cost-of-living increase for each year plus an annual contingency of $20,000 for ancillary expenses.

G. City will cover all costs of delivering any additional services City requires of PIN above and beyond the original 2019 Agreement (such as additional spay neuter requirements).

H. PIN may also provide additional services not specified in the new Agreement at its own expense. Services must comply with all applicable laws and City policies. PIN will notify City staff 14 days before providing such services.

I. In addition to the monthly fee due to PIN under the new Agreement, City shall pay to PIN 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 new Agreement, retroactive from the effective date of the new Agreement to June 1, 2023. By way of example only, if the Agreement is effective October 1, 2023, City shall pay to PIN the difference between the new monthly fee and the amounts due under the 2019 Agreement for the months of June, July, August, and September 2023. Based on the compensation agreed in this Term Sheet, the monthly additional fee shall be $55,535.

Scope of Services:

PIN will provide the services specified in the current Agreement, with the following modifications:

J.Shelter hours. PIN will maintain public access hours to the shelter seven days per week, for a minimum of 40 hours per week. The shelter may be closed to the public on PIN observed holidays.

K.Spay/neuter. PIN will provide low-cost, high-quality spay/neuter services to dogs and cats to the best of its ability, prioritizing residents of Palo Alto, Los Altos, and Los Altos Hills.

Wait times for surgery for in-jurisdiction animals will be no more than one month, except in the event of unexpected and exceptional circumstances.

L.Vaccine Clinics. PIN will provide low-cost vaccination clinics in Palo Alto a minimum of one time per week. PIN will work toward providing one after-hours or weekend clinic per month.

M.After-hours emergency vet care. For animals on stray hold, City will pay for any after- hours emergency vet services.

N.Cruelty investigations. PIN will provide veterinary care, including appropriate medical records, for live animals that are impounded as part of cruelty investigations. However, PIN will not have an obligation to provide additional services related to cruelty investigations, including after-hours emergency veterinary care, post-mortem examinations of animals that are deceased upon arrival at PIN, and off-site crime scene investigations, but may do so at its sole discretion.

O.Disposal of Dead Wildlife. Costs for disposal and cremation of dead wildlife will be the responsibility of the City.

P.Reporting. PIN will submit monthly activity reports to include the following information:

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20, 2023

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Palo Alto City CouncilAugust 14, 2023

Palo Alto City Council
August 14, 2023