SUMC Development Agreement, Section 5 - SUMC Parties’ Promises Attachment C FY 2022-2023
1 SUMC Development Agreement Compliance: FY 2022-2023
Health Care Benefits
DA
Section Description Summary Activity Complies?
5(a)(ii)
Fund for
Healthcare
Services
Financial assistance
for Palo Alto
residents
SUMC establishment of a $3M fund that will
grow to $5.6M by December 31, 2025. Fund
will be used in even increments over a ten-
year period from 2026-2036 to assist Palo
Alto residents who have self-payment
responsibilities beyond their financial
means, as described in Section 5(a)(ii).
Yes, complies – No activity
required in FY 2022-2023.
SUMC will commence
activity in the Fund for
Healthcare Services for 10
years from 2026 to 2036.
This activity will be
reported in the SUMC
Annual Report for each
fiscal year.
5(a)(iii)
Fund for
Community
Health and
Safety Programs
$4M fund for
selected community
health programs for
Palo Alto residents
First and only payment of $4M on August
25, 2011 to establish City fund. There were
no expenditures from this fund during the
reporting period FY 2022-2023.
Yes, complies - Fund
activity and balances in FY
2022-2023 reported in
Attachment E.
Fiscal Benefits
DA
Section Description Summary Activity Complies?
5(b)(i), (ii)
Payment of
Sales and Use
Taxes
Activities to
maximize sales and
use taxes paid to the
City
SUMC contributes to General Fund Sales and
Use Tax revenues via construction-related
activities. The City reviews the Construction
Sales & Use Tax Monitoring Report that is
submitted by SUMC on June 30 of each year.
Yes, complies - SUMC
timely submitted the
Construction Sales & Use
Tax Monitoring Report for
the previous calendar year.
SUMC Development Agreement, Section 5 - SUMC Parties’ Promises Attachment C FY 2022-2023
2 SUMC Development Agreement Compliance: FY 2022-2023
The City submits a letter to SUMC each year
that notes local tax received from SUMC
project activities for the year. Based upon
the City’s review of the annual Construction
Sales and Use Tax Monitoring Report,
revenues for calendar years 2011 through
2022 have totaled $5,467,628.
The City sent their
required response. This
annual reporting assists in
the process of ensuring
that the City would receive
no less than $8.1M in
construction sales and tax
revenue by December 31,
2025. Section 5(b)(ii) of the
Agreement discusses how
SUMC and the City should
address any surplus or
shortfall in the amount of
construction sales and use
tax received by the City.
Discussion and final
reconciliation of any
surplus or shortfall in the
revenue amount that the
City received would occur
in and after August 2026.
Given the annual decline in
construction sales and use
tax revenue since calendar
year 2020 to present, it is
possible that there might
be a shortfall relative to
the $8.1 million required.
In that case, SUMC would
SUMC Development Agreement, Section 5 - SUMC Parties’ Promises Attachment C FY 2022-2023
3 SUMC Development Agreement Compliance: FY 2022-2023
make a payment to relieve
that shortfall in FY 2026-
2027 from the Fund for
Healthcare Services, as
discussed under
Development Agreement
Section 5(a)(ii)
5(b)(iii)
Funding of
Operating
Deficit /
Expansion Cost
Mitigation
$2.417M fund to
assure City costs
associated with the
project do not
exceed revenues
resulting from
construction and
operation of the
project.
Payment of $2.417M on August 25, 2011 to
establish fund. There were no expenditures
from this fund during the reporting period
FY 2022-2023.
Yes, complies -Fund
activity and balances in FY
2022-2023 reported in
Attachment E.
5(b)(iv) Payment of
Utility Users Tax
5% tax on all
electricity, gas, and
water charges on
new construction
Utilities confirmed that billing accounts
were created in past fiscal years when new
meters were set for new construction,
including NSH, NSH Garage, LPCH, and BMI,
and the Utility Users Tax is paid through the
normal billing process for each site.
Yes, complies.
5(b)(v) School Fees
Payment of PAUSD
fees for net new
square footage
$342,617 fee paid for LPCH and NSH
expansion in 2012. $7,051 fee paid for NSH
and NSH Garage expansion in July 2013.
$16,119 fee paid for Hoover Medical Office
Yes, complies - SUMC
made payments to PAUSD
for all net new square
footage for which school
SUMC Development Agreement, Section 5 - SUMC Parties’ Promises Attachment C FY 2022-2023
4 SUMC Development Agreement Compliance: FY 2022-2023
Building expansion in May 2014. $461.16 fee
paid to account for incremental square
footage for the New Stanford Hospital
Garage. Additional PAUSD school fees were
paid in FY 2021-2022 for the Nursing Pod
Extension project due to OSHPD requiring
these payments prior to issuance of a
construction shoring permit.
fees apply at the time
permit receipt. Staff will
reconfirm SUMC payment
of PAUSD school fees for
the Nursing Pod Extension
project when the City
issues this permit in a
future fiscal year.
Traffic Mitigation and Reduced Vehicle Trips
DA
Section Description Summary Activity Complies?
5(c)(ii)
Menlo Park
Traffic
Mitigation
$3,699,000 payment
for traffic mitigation,
infrastructure,
sustainable
neighborhoods,
affordable housing
First of three $1.23M payments made on
August 19, 2011. Second payment of
$1.23M made on December 5, 2012. Third
and final payment of $1.23M made on
December 14, 2017, which was within 30
days from issuance of the first Hospital
Occupancy Permit (LPCH).
Yes, complies - SUMC
made all required
payments to Menlo Park,
including the last and final
payment in FY 2017-2018.
5(c)(iii)
East Palo Alto
Voluntary
Mitigation
$200K for roadway
and signal
improvements on
University Ave.
$200K payment made on
August 19, 2011. Yes, complies.
SUMC Development Agreement, Section 5 - SUMC Parties’ Promises Attachment C FY 2022-2023
5 SUMC Development Agreement Compliance: FY 2022-2023
5(c)(iv) Contributions
to AC Transit
U-line capital
improvements, low
load factor ratios,
parking spaces at
Ardenwood Park &
Ride
$250K payment made to AC Transit on
January 5, 2018.
SUMC is also invoiced by AC Transit for
payments throughout the year that total
over the $50K per year discussed in the
SUMC Development Agreement. Payments
to AC Transit are required for the life of the
project.
Since May 2014 and until April 30, 2018,
SUMC Parties leased a park-and-ride facility
on Kaiser Drive near the Ardenwood Park &
Ride. SUMC used an interim temporary
facility through FY 2019-2020. In FY 2020-
2021 and FY 2021-2022, and FY 2022-2023,
SUMC leased 100 parking spaces in Newark
(35263 Fircrest Drive).
Yes, complies.
5(c)(v) Opticom
Payments
$11,200 payment
for Opticom traffic
control system at 7
intersections
$11.2K payment made to the City in FY
2017-2018 within 30 days from issuance of
the first Hospital Occupancy Permit (LPCH).
As the City has upgraded systems, the City
and SUMC agreed through a letter exchange
that the payment could be used for the new
coordinated prioritization signaling at City-
maintained traffic signals.
Yes, complies.
SUMC Development Agreement, Section 5 - SUMC Parties’ Promises Attachment C FY 2022-2023
6 SUMC Development Agreement Compliance: FY 2022-2023
5(c)(vi) Caltrain Go
Passes
SUMC purchase of
passes for all
existing and new
hospital employees
working
>20hrs/week
Go Passes have been purchased per the
Development Agreement since January 1,
2012, including for FY 2022-2023.
Yes, complies.
5(c)(vii) Marguerite
Shuttle Service
Purchase of
additional shuttles
to meet demand
Since 2011, SUMC purchased additional
shuttle buses for the Marguerite Shuttle
service which now includes five renewable
diesel-electric hybrid buses and 23 all-
electric buses. Additional all-electric buses
also came online in FY 2017-2018. Shuttles
were running in FY 2022-2023.
Yes, complies.
5(c)(viii)
SUMC
Transportation
Demand
Management
(TDM)
Coordinator
SUMC hires
coordinator to
promote alternative
transportation
options
TDM Coordinator was hired in March 2012.
This position has since been elevated to a
TDM Program Manager position and the
position remains filled.
Yes, complies.
5(c)(ix) Monitoring of
TDM Programs
Yearly report
regarding
The SUMC parties found that the alternative
mode share milestone target of 33%
outlined in SUMC DA Section 5(c)(ix) was not
met for FY 2022-2023, nor was it above the
Yes, complies -
SUMC timely submitted
their annual Alternative
Mode Share report for FY
SUMC Development Agreement, Section 5 - SUMC Parties’ Promises Attachment C FY 2022-2023
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alternative transit
mode use
2018 milestone target of 30%. The FY 2022-
2023 alternative mode share rate rose to
25.6% from 19.9% in FY 2021-2022.
2022-2023. A failure to
meet the alternative mode
share targets during a
reporting period is not
itself a default under the
Agreement, as the
Agreement outlines next
steps if a target was not
achieved, such as the
payment of fees, and
contains a Force Majeure
clause. SUMC filed a
Development Agreement
amendment application on
September 7, 2022. At the
close of the FY 2022-2023
reporting period, SUMC’s
application was still under
active review.
Subsequently in FY 2023-
2024, the SUMC Parties
and City Council reached
mutual agreement
regarding an updated
timeline for SUMC to meet
the alternative mode share
targets.
SUMC Development Agreement, Section 5 - SUMC Parties’ Promises Attachment C FY 2022-2023
8 SUMC Development Agreement Compliance: FY 2022-2023
Linkages
DA
Section Description Summary Activity Complies?
5(d)(i) Intermodal
Transit Fund
$2.25M payment to
improve pedestrian
linkages to PA
Intermodal Transit
Center
First and only payment of $2.25M on August
25, 2011 to establish City fund. City
constructed temporary improvements prior
to the issuance of the first Hospital
Occupancy Permit (LPCH) to serve the
linkage goal and functional requirements.
There were no expenditures from this fund
during the reporting period FY 2022-2023.
Yes, complies -Fund
activity and balances in FY
2022-2023 reported in
Attachment E.
5(d)(ii) Quarry Road
Fund
$400K payment to
improve pedestrian
linkages along
Quarry Road
First and only payment of $400K on August
25, 2011 to establish City fund. City
constructed the improvements prior to the
issuance of the first Hospital Occupancy
Permit (LPCH) to serve the linkage goal and
functional requirements.
Yes, complies - As of
FY2019, there is no longer
a fund balance in this
category.
5(d)(iii) Stanford Barn
Connection
SUMC budgets up to
$700K for
connections in the
vicinity of barn
SUMC constructed the Stanford Barn
Connection prior to the issuance of the first
Hospital Occupancy Permit (LPCH) to serve
the linkage goal and facilities are fully
operational.
Yes, complies.
SUMC Development Agreement, Section 5 - SUMC Parties’ Promises Attachment C FY 2022-2023
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Infrastructure, Sustainable Neighborhoods and Communities, and Affordable Housing DA
Section Description Summary Activity Complies?
5(e)
Infrastructure,
Sustainable
Neighborhoods
and
Communities,
and Affordable
Housing Fund
$23.2M payment for
these uses
First of three $7,733,333 payments made on
August 19, 2011. Second payment of
$7,733,333 made on December 5, 2012. The
third and final payment of $7,733,333 made
on December 12, 2017, which was within 30
days from issuance of the first Hospital
Occupancy Permit (LPCH). There were no
expenditures from this fund during the
reporting period FY 2022-2023.
Of the funds in the Infrastructure,
Sustainable Neighborhoods and
Communities, and Affordable Housing Fund,
$1,720,488 was to be used for support of
affordable housing. SUMC funding
supported the Stevenson House project in
FY 2013 and the remaining affordable
housing funds were fully exhausted in FY
2020 to support the Wilton Court Housing
Project.
Yes, complies -Fund
activity and balances in FY
2022-2023 reported in
Attachment E.
SUMC Development Agreement, Section 5 - SUMC Parties’ Promises Attachment C FY 2022-2023
10 SUMC Development Agreement Compliance: FY 2022-2023
Climate Change
DA
Section Description Summary Activity Complies?
5(f)
Climate Change
– Sustainability
Programs
Benefit Fund
$12M payment for
climate change-
related projects and
programs
First of three $4M payments made on
August 19, 2011. Second payment of $4M
made on December 5, 2012. The third and
final payment of $4M made on December
12, 2017, which was within 30 days from
issuance of the first Hospital Occupancy
Permit (LPCH). There were expenditures
from this fund during the reporting period
FY 2022-2023.
Yes, complies -Fund
activity and balances in FY
2022-2023 reported in
Attachment E.